Last checked at 
27 Apr 2020 07:00
INTERNATIONAL BIOTECHNOLOGY TRUST PLC (the Company)
Half Yearly Report for the six months ended 29 February 2020
This announcement contains regulated information.
Chairman's Statement
Summary
Since the end of International Biotechnology Trust's (the Company's) first interim period ended 29 February 2020, the coronavirus pandemic (COVID-19) has had a profound effect on the world. Whilst the results for the period largely predate and are therefore little affected by the pandemic, in the two months since the period end, we have seen periods of extreme volatility in world markets. We comment on this further below and in the Fund Managers' Review.
For the six months ended 29 February 2020, the net asset value (NAV) per share returned 3.6%. By comparison, the NASDAQ Biotechnology Index (NBI) returned 6.0% and the FTSE All-Share Index returned -5.5%. Over the same period, the ordinary share price of the Company returned -13.4%. The Company continues to outperform the NBI by 2.5% over a 5-year period. All figures are on a sterling-adjusted total return basis, with dividends reinvested.
The six months ended 29 February 2020 were marked by a series of macroeconomic events and market disruptions, each of which had a significant impact on global equity markets. The approaching US Presidential election and the drug price reform debate, COVID-19 and the Brexit process have all contributed to stock market volatility. However, despite these, the fundamental drivers of demand and supply in the biotechnology sector remain intact.
Quoted portfolio
The quoted portfolio returned 4.5% for the six months ended 29 February 2020 (gross of management and performance fees). The Investment Manager has continued to identify value creating opportunities in the market, both in stock pricing for NAV growth and in benefiting from M&A activity in the sector. During the period under review, the quoted portfolio has slightly underperformed the NBI due to a small number of investments that did not perform well which we comment on further in the Fund Managers' Review. However, the quoted portfolio has outperformed the FTSE All-Share Index.
Unquoted portfolio
The Company continues to enjoy success through its access to an unquoted element of the biotechnology and healthcare sectors, a unique differentiating feature of the Company which allows investors exposure to returns unavailable from quoted markets.
SV Life Sciences Fund VI's (SV Fund VI) average investment has a currency-adjusted internal rate of return (IRR) of 18.1% per annum, since inception of the fund. During the six months ended 29 February 2020, SV Fund VI made three distributions to the Company after successfully exiting investments and thus crystallising some of these impressive gains.
Our investment in SV Fund VI will continue to increase slowly towards the $30.0m commitment, of which we have now invested 71.3%. We expect the increasing investment to overlap with both the exits of our existing unquoted companies and the distributions received from SV Fund VI. The Board expects the unquoted portfolio (including both SV Fund VI and directly-held unquoted investments) to remain within our guideline range of 5-15% of total investments.
Our directly-held unquoted portfolio continues to yield positive results, with a fair value gain of 14.4% (gross of management and performance fees) during the six months ended 29 February 2020 which was driven predominantly by unrealised gains, providing stability to the Company's performance during this period of volatility in the market.
Performance fee
No performance fee has been generated by the portfolio for the period under review.
Dividends, discounts and share buybacks
The Company's dividend policy (approved at the Annual General Meeting) is to make dividend payments equivalent to 4 per cent of the Company's NAV as at the last day of the preceding financial year (31 August), through two equal semi-annual distributions. The first dividend for the year of 12.4 pence per share was paid in January and the Board intends to make the declaration of the second dividend for the year, in accordance with the above policy, in July for payment in August 2020.
The severe market volatility in the first half of the year, triggered in part by COVID-19 fears, caused the discount to widen to 15.0% as at 29 February 2020 from a premium of 1.9% as at 31 August 2019. This has resulted in the Company buying back 195,846 shares as at 23 April 2020 after a period of no buybacks since September 2016. Since the interim period end, the discount has reduced to 4.6%. The Board remains committed to both reducing the discount through buybacks should the discount continue to widen and, re-issuing treasury shares at a premium to the NAV, when demand permits.
Outlook
Notwithstanding the extreme volatility in the financial markets, we continue to believe that the biotechnology sector's long-term prospects are not diminished, since the need to treat patients is not related to stock market sentiment.
Since the low point in mid March 2020, the Company's share price has now recovered and is now close to 1% of the preceding 12-month high.
We continue to believe that the biotechnology sector has strong fundamentals and good growth prospects, with the potential to create value for investors. Persons over the age of 65 comprise the fastest growing age group in the US, with this segment of the population expected to double between now and 2050. The growing elderly population accounts for over half of US health spend, securing future demand and innovation in the biotechnology sector.
The Fund Manager is well equipped to work remotely and therefore the current restrictions associated with COVID-19 have not radically changed the working practices for the Company. However, the investment landscape has been affected. The Investment Manager anticipated the likely global impact of the virus relatively early in its trajectory and made appropriate adjustments to the portfolio. I expect that there will be more volatility to come as Shareholder sentiment is affected by the progress of the pandemic, but the fundamentals of the biotech sector remain intact, and should deliver growth over the long-term.
John Aston
Chairman
24 April 2020
Fund Manager's Review
Summary
As at 29 February 2020, the Company's NAV amounted to £244.2m, representing a return of 3.6% on the NAV per share for the period under review. By comparison, the NBI increased by 6.0% over the same period.
For financial reporting purposes, the quoted portfolio represented 85.4% of the NAV (excluding cash and other net assets) as at 29 February 2020, while the unquoted portfolio represented 14.6% of the NAV. For performance purposes, companies that were first invested in from the unquoted pool and have now become quoted but continue to be managed by the unquoted Investment Managers, are included within the unquoted portfolio.
By subsector, 86.8% of the portfolio was invested in therapeutics, 1.3% in life sciences, tools, diagnostics and services and 8.2% in a venture capital fund, SV Fund VI. The three largest specialty areas within therapeutics were oncology (23.0%), rare diseases (31.0%) and central nervous system diseases (17.0%). SV Fund VI invests in unquoted companies across three sectors - biotechnology, healthcare services and medical devices. Cash and other short-term assets amounted to 3.7% of NAV.
Global equity markets are experiencing an extreme period of volatility as a result of COVID-19. We were quick to anticipate the likely impact of COVID-19 on the market and adapted the Company's investment strategy by increasing cash at the end of January, providing the necessary stability through the market volatility that followed. Towards the middle of March, the markets experienced a strong retraction and we deployed some of this cash to take advantage of investments with high value prospects. The majority of the Company's portfolio is made up of liquid assets and therefore funds can be easily raised if required.
Quoted portfolio
For the six months ended 29 February 2020, the quoted portfolio returned 4.5% (gross of management and performance fees). By comparison, the NBI returned 6.0% and the FTSE All-Share Index returned -5.5%. All figures are on a sterling-adjusted total return basis, with dividends reinvested.
There has been significant market volatility during the period under review. We attribute the market volatility to general macro-economic concerns, particularly considering the Brexit process, the upcoming 2020 US Presidential election and the drug pricing debate. The effect of these concerns was further compounded by the evolving COVID-19 pandemic which continues to rock the global equity markets and affected the second quarter performance.
Mergers and acquisitions
Mergers and acquisitions (M&A) continue to be a key feature of both the sector and the Company's portfolio. Smaller companies have, historically, been more attractively valued and therefore make them prime targets for M&A deals and the six-month period under review has been no different.
Most notably, the Medicines Company was acquired by Novartis AG in November 2019 and ArQule was acquired by Merck in December 2019. Both acquired companies are in the Company's portfolio and the bid premiums were 45% and 107% respectively. Despite the impacts of COVID-19, we do not foresee this pace of M&A activity slowing in the second half of the year and the Company is well positioned to take advantage of any future M&A gains.
Positive contributors to the NAV
The top three contributors to the NAV were Vertex, Regeneron and Acceleron.
Vertex's strong performance followed the Food and Drug Administration's (FDA's) approval of Trikafta, a triple combination therapy used to treat cystic fibrosis, which came five months earlier than expected. Trikafta sales are expected to exceed $6bn by 2025, while the approval means the company's portfolio of cystic fibrosis treatments will now cover 90% of patients suffering from the disease. Vertex's share price rose further when it announced it would make cystic fibrosis treatments available to patients in the UK after the company reached a reimbursement agreement with the National Health Service (NHS) in the United Kingdom. Vertex has remained in our "Top 10" ever since and is our largest quoted holding as at 29 February 2020.
Regeneron's share price increased when a competitor to its Eylea franchise, Novartis' Beovu - a treatment for visual impairment, discovered adverse events during trial studies which was likely to dampen its uptake and minimise competitive risk.
Acceleron reported positive phase 2 data for Sotatercept, a candidate for Pulmonary Arterial Hypertension (PAH), which is a rare disorder in which patients have high blood pressure in the arteries of the lungs. In addition to meeting its primary endpoint for the phase 2 trials, the study also achieved multiple secondary endpoints, promising a positive outlook for phase 3 trial success.
Detractors from NAV
The quoted NAV was negatively impacted by share price falls for Stemline, Sage and Amarin.
Following the FDA approval of Stemline's Elzonris, a drug used to treat Blastic Plasmacytoid Dendritic Cell Neoplasm (BPDCN), in December 2018, investors looked favourably upon Stemline. However, disappointing sales data as a result of fewer patients being diagnosed and lower than expected demand for the drug has caused Stemline's share price to reduce significantly in the second quarter. The Company has responded by reducing its investment in Stemline to a nil position.
Sage's share price was significantly reduced in December 2019 following an announcement that the company's treatment for depression failed in a late-stage trial. The study was part of Sage's development program, SAGE- 217, to treat major depressive disorders in adults, such as postpartum depression and other mood disorders and didn't meet its primary endpoint of a statistically significant improvement in a scale that tracks 17 parameters, including anxiety and paranoia, at day 15. This study is the first time SAGE-217 has missed on a major depression trial and came as a major surprise to investors. The Company held a neutral position going into the results of the clinical trial but has since then significantly reduced its holdings in Sage.
Amarin's patent litigation against potential generic competitor drugs to Vascepa has seen Amarin's share price weakening and therefore has seen our NAV negatively impacted.
Unquoted portfolio
The Company's investment in SV Fund VI continues to be a success, with a currency adjusted IRR of 18.1% since inception of the fund. The draw down to date on the commitment of $30.0 million is $21.4 million which represents 71.3% of the total committed capital. SV Fund VI's investee companies continue to be diversified between biotechnology, healthcare services and medical devices similar to our existing unquoted investments, but with smaller allocations to each individual company, allowing for greater diversification.
The fair value gain on the directly-held unquoted portfolio for the six months ended 29 February 2020 was 14.4% (gross of performance and management fees). No performance fee has been earned for the period under review.
The largest contributor to the performance for the six months ended 29 February 2020 is an uplift in the valuation of a single unquoted investment from £3.2 million to £7.5 million to reflect improved projected sales data on one of its prescription drugs.
The largest detractor from performance for the period under review is TopiVert, which is in the process of winding down operations. TopiVert is currently being valued at £0.1 million, the residual amount the Company is expecting to receive once operations have been fully wound down. This represents a decrease of £1.1 million to the valuation as at 31 August 2019.
Summary of unquoted investments
Number of investments | Fair value at 29 February 2020 (£'m) | Percentage of NAV | |
Unquoted | 6 | 5.1 | 2.1% |
Exited with contingent milestones | 5 | 10.4 | 4.3% |
SV Fund VI | 23* | 19.9 | 8.2% |
Total unquoted | 34 | 35.4 | 14.6% |
Previously unquoted, now listed** | 3 | 3.4 | 1.4% |
Total unquoted for performance measurement | 37 | 38.8 | 16.0% |
* The number of investments listed within SV Fund VI represents the number of investments into underlying individual portfolio companies.
** For performance purposes, companies that were first invested in from the unquoted pool and have now become quoted but continue to be managed by the unquoted Investment Managers, are included within the unquoted portfolio.
Outlook
Severe market volatility in the wake of the COVID-19 pandemic has significantly impacted the growth and earnings potential of the global economy. This has added to the uncertainty in an already volatile market caused by Brexit and the upcoming US Presidential election.
Despite this recent market volatility, the biotechnology sector continues to have strong fundamentals. It is our view that the biotechnology sector is undervalued. The number of new clinical studies increased from 30,978 in 2018 to 32,524 in 2019 and the FDA approved a record 59 new drugs in 2018 with 48 approved in 2019, demonstrating its commitment to innovation and medical advancement.
The upcoming 2020 US Presidential election and Democratic primaries have shone a light on US drug pricing with Healthcare reform being at the centre of the Democratic primaries debate. Pricing concerns are likely to remain a focus, throughout 2020, for established drugs in competitively crowded areas, such as diabetes and inflammatory conditions, which make up a large proportion of the overall cost burden of prescription drugs. As a result, we continue to expect that the biotechnology sector will trade sideways until the market has gained more clarity regarding the COVID-19 outbreak and certainty regarding the outcome of the US Presidential election in November 2020.
Our industry leading team of investment managers continue to respond to recent market developments, adapting our investment strategy, where required. We apply a thorough, bottom-up stock selection process, combined with a top down overlay to ensure diversification, driving long-term outperformance and investment growth for our investors.
Carl Harald Janson
SV Health Managers LLP
Lead Investment Manager
24 April 2020
Directors' Responsibility Statement
In respect of the Interim Report for the six months ended 29 February 2020, we confirm that, to the best of our knowledge:
· the interim financial information contained within has been prepared in accordance with IAS 34 "Interim Financial Reporting"; and gives a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as at 29 February 2020, as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.4R;
· the Interim Report includes a fair review, as required by Disclosure Guidance and Transparency Rule 4.2.7R, of important events that has occurred during the six months ended 29 February 2020 and their impact on the interim financial information and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
· the Interim Report includes a fair review of the information concerning related party transactions as required by Disclosure Guidance and Transparency Rule 4.2.8R.
The Interim Report has not been reviewed or audited by the Company's auditors.
The Interim Report for the six months ended 29 February 2020 was approved by the Board and the above Responsibility Statement has been signed on its behalf by:
John Aston
Chairman
24 April 2020
Statement of Comprehensive Income
for the six months ended 29 February 2020
(Unaudited) For the six months ended 29 February 2020 | (Unaudited) For the six months ended 28 February 2019 | (Audited) For the year ended 31 August 2019 | ||||||||
Notes | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
Income | ||||||||||
Gains/(losses) on investments held at fair value | - | 9,841 | 9,841 | - | (21,056) | (21,056) | - | (13,940) | (13,940) | |
Exchange gains/(losses) on currency balances | - | 589 | 589 | - | 14 | 14 | - | (517) | (517) | |
Other Income | 2 | 486 | - | 486 | 214 | - | 214 | 669 | - | 669 |
Expenses | ||||||||||
Management fee | (844) | - | (844) | (798) | - | (798) | (1,610) | - | (1,610) | |
Performance fee | - | - | - | - | (821) | (821) | - | (970) | (970) | |
Administrative expenses | (520) | - | (520) | (376) | - | (376) | (862) | - | (862) | |
Profit/(loss) before finance costs and tax | (878) | 10,430 | 9,552 | (960) | (21,863) | (22,823) | (1,803) | (15,427) | (17,230) | |
Finance costs | ||||||||||
Interest payable | (203) | - | (203) | (31) | - | (31) | (214) | - | (214) | |
Profit/(loss) on ordinary activities before tax | (1,081) | 10,430 | 9,349 | (991) | (21,863) | (22,854) | (2,017) | (15,427) | (17,444) | |
Taxation | (71) | - | (71) | (28) | - | (28) | (96) | - | (96) | |
Profit/(loss) for the period attributable to Shareholders | (1,152) | 10,430 | 9,278 | (1,019) | (21,863) | (22,882) | (2,113) | (15,427) | (17,540) | |
Profit/(loss) per Ordinary share (pence) | 3 | (3.0) | 27.1 | 24.1 | (2.7) | (58.1) | (60.8) | (5.6) | (40.7) | (46.3) |
All revenue and capital items in the above statement are derived from continuing operations.
The total column of this statement represents the Company's Statement of Comprehensive Income prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).
The Company does not have any other comprehensive income and hence the net profit/(loss) for the period, as disclosed above, is the same as the Company's total comprehensive income.
The revenue and capital columns are supplementary information and are prepared under guidance published by the Association of Investment Companies (AIC).
The accompanying notes form part of these Financial Statements.
Statement of Changes in Equity
(Unaudited) For the six months ended 29 February 2020 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserves £'000 | Revenue reserve £'000 | Total £'000 | |||
Balance at 1 September 2019 | 10,335 | 19,993 | 31,482 | 216,525 | (38,756) | 239,579 | |||
Total Comprehensive Income: | |||||||||
Profit/(loss) for the period | - | - | - | 10,430 | (1,152) | 9,278 | |||
Transactions with owners, recorded directly to equity: | |||||||||
Dividend paid in the period | - | - | - | (4,781) | - | (4,781) | |||
Ordinary shares issued from treasury | - | 214 | - | 767 | - | 981 | |||
Ordinary shares bought back into treasury | - | - | - | (805) | - | (805) | |||
Balance at 29 February 2020 | 10,335 | 20,207 | 31,482 | 222,136 | (39,908) | 244,252 | |||
(Unaudited) For the six months ended 28 February 2019 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserves £'000 | Revenue reserve £'000 | Total £'000 | |||
Balance at 1 September 2018 | 10,335 | 18,805 | 31,482 | 238,494 | (36,643) | 262,473 | |||
Total Comprehensive Income: | |||||||||
Loss for the period | - | - | - | (21,863) | (1,019) | (22,882) | |||
Transactions with owners, recorded directly to equity: | |||||||||
Dividend paid in the year | - | - | - | (5,267) | - | (5,267) | |||
Ordinary shares issued from treasury | - | 405 | - | 1,438 | - | 1,843 | |||
Balance at 28 February 2019 | 10,335 | 19,210 | 31,482 | 212,802 | (37,662) | 236,167 | |||
(Audited) For the year ended 31 August 2019 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserves £'000 | Revenue reserve £'000 | Total £'000 | |||
Balance at 1 September 2018 | 10,335 | 18,805 | 31,482 | 238,494 | (36,643) | 262,473 | |||
Total Comprehensive Income: | |||||||||
Loss for the year | - | - | - | (15,427) | (2,113) | (17,540) | |||
Transactions with owners, recorded directly to equity: | |||||||||
Dividend paid in the year | - | - | - | (10,616) | - | (10,616) | |||
Ordinary shares issued from treasury | - | 1,188 | - | 4,074 | - | 5,262 | |||
Balance at 31 August 2019 | 10,335 | 19,993 | 31,482 | 216,525 | (38,756) | 239,579 | |||
The accompanying notes form part of these Financial Statements.
Balance Sheet
as at 29 February 2020
Notes | (Unaudited) At 29 February 2020 £'000 | (Unaudited) At 28 February 2019 £'000 | (Audited) At 31 August 2019 £'000 | |
Non-current assets | ||||
Investments held at fair value through profit or loss | 234,980 | 239,668 | 237,360 | |
234,980 | 239,668 | 237,360 | ||
Current assets | ||||
Trade and other receivables | 4,844 | 142 | 2,616 | |
Cash and cash equivalents | 8,014 | 10,424 | 886 | |
12,858 | 10,566 | 3,502 | ||
Total assets | 247,838 | 250,234 | 240,862 | |
Current liabilities | ||||
Bank overdraft | (407) | - | - | |
Trade and other payables | (3,179) | (14,067) | (1,283) | |
(3,586) | (14,067) | (1,283) | ||
Net assets | 244,252 | 236,167 | 239,579 | |
Equity attributable to equity holders | ||||
Called up share capital | 10,335 | 10,335 | 10,335 | |
Share premium account | 20,207 | 19,210 | 19,993 | |
Capital redemption reserve | 31,482 | 31,482 | 31,482 | |
Capital reserves | 4 | 222,136 | 212,802 | 216,525 |
Revenue reserve | (39,908) | (37,662) | (38,756) | |
Total equity | 244,252 | 236,167 | 239,579 | |
NAV per Ordinary share (pence) | 5 | 635.6 | 624.0 | 623.9 |
The accompanying notes form part of these Financial Statements.
Cash Flow Statement
(Unaudited) For the six months ended 29 February 2020 £'000 | (Unaudited) For the six months ended 28 February 2019 £'000 | (Audited) For the year ended 31 August 2019 £'000 | |
Cash flows from operating activities | |||
Profit/(loss) before tax | 9,349 | (22,854) | (17,444) |
Adjustments for: | |||
Decrease in investments | 2,380 | 23,357 | 25,665 |
Increase in trade and other receivables | (2,228) | (92) | (2,566) |
Increase in trade and other payables | 1,896 | 13,697 | 913 |
Taxation | (71) | (28) | (96) |
Net cash flows generated from operating activities | 11,326 | 14,080 | 6,472 |
Cash flows used in financing activities | |||
Ordinary shares bought back into treasury | (805) | - | - |
Ordinary shares issued from treasury | 981 | 1,843 | 5,262 |
Dividend paid | (4,781) | (5,267) | (10,616) |
Net cash used in financing activities | (4,605) | (3,424) | (5,354) |
Net increase in cash and cash equivalents | 6,721 | 10,656 | 1,118 |
Cash and cash equivalents at beginning of period | 886 | (232) | (232) |
Cash and cash equivalents at end of period | 7,607 | 10,424 | 886 |
The accompanying notes form part of these Financial Statements.
Notes to the Financial Statements
1. Accounting policies
The interim financial information has been prepared on a going concern basis, in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the accounting policies set out in the Annual Report of the Company for the year ended 31 August 2019. Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the AIC in October 2019 is consistent with the requirements of IFRS, the accounts have been prepared on a basis compliant with the recommendations of the SORP.
The interim financial information for each of the six month periods ended 29 February 2020 and 28 February 2019 comprises non-statutory accounts within the meaning of Sections 434 - 436 of the Companies Act 2006 (the Act). The financial information for the year ended 31 August 2019 has been extracted from the published Annual Report that has been delivered to the Registrar of Companies and on which the report of the auditors was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) or (3) of the Act.
The Company has reviewed the guidance issued by the Financial Reporting Council (FRC) in order to determine whether the going concern basis should be used in preparing the interim financial information for the six months ended 29 February 2020. Considering the impact of COVID-19, the Directors have reviewed the Company's portfolio composition and the potential impact on the Company's NAV and gearing position, including debt covenants and liquidity requirements, in the event that further share buy backs are required. The Directors have also reviewed assessments of operational costs and cashflows for the Company for the 12 months from the date of this Interim Report and are of the opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Directors believe that it is appropriate to adopt the going concern basis in the preparation of the Interim Report as there are no material uncertainties related to events or conditions that may cast significant doubt about the Company's ability to continue as a going concern.
The Directors have reviewed the Company's principal risks and uncertainties as described in the Annual Report for the year ended 31 August 2019 and while COVID-19 has not had a significant impact on these principal risks, the Directors will continue to assess any potential impact as the pandemic unfolds.
These include strategy/performance risk, investment related risks, operational risks and tax, legal and regulatory risks. These risks, and the way in which they are managed, are described in more detail under the heading "Principal risks and uncertainties" within the Strategic Report in the Company's Annual Report for the year ended 31 August 2019.
2. Other Income
(Unaudited) For the six months ended 29 February 2020 £'000 | (Unaudited) For the six months ended 28 February 2019 £'000 | (Audited) For the year ended 31 August 2019 £'000 | |
Dividend Income | 481 | 189 | 642 |
Bank interest | 5 | 25 | 27 |
486 | 214 | 669 |
3. Net earnings/(losses) per Ordinary shares
(Unaudited) For the six months ended 29 February 2020 £'000 | (Unaudited) For the six months ended 28 February 2019 £'000 | (Audited) For the year ended 31 August 2019 £'000 | |
Net revenue loss | (1,152) | (1,019) | (2,113) |
Net capital profit/(loss) | 10,430 | (21,863) | (15,427) |
9,278 | (22,882) | (17,540) | |
Weighted average number of Ordinary shares in issue* | 38,530,405 | 37,601,945 | 37,853,827 |
Revenue loss per Ordinary share (pence) | (3.0) | (2.7) | (5.6) |
Capital (loss)/profit per Ordinary share (pence) | 27.1 | (58.1) | (40.7) |
Total earnings/(losses) per Ordinary share (pence) | 24.1 | (60.8) | (46.3) |
* Excludes treasury shares (29 February 2020: 2,916,476; 28 February 2019: 3,495,000; 31 August 2019: 2,945,000).
4. Capital reserves
The capital reserve account comprises both realised gains on investments sold and unrealised gains and losses on investments held, which are analysed as follows:
(Unaudited) At 29 February 2020 £'000 | (Unaudited) At 28 February 2019 £'000 | (Audited) At 31 August 2019 £'000 | |
Capital reserve - on investments sold | 204,718 | 201,371 | 204,506 |
Capital reserve - on investments held | 17,418 | 11,431 | 12,019 |
222,136 | 212,802 | 216,525 |
5. NAV per Ordinary share
(Unaudited) At 29 February 2020 | (Unaudited) At 28 February 2019 | (Audited) At 31 August 2019 | |
Net assets attributable to Ordinary Shareholders (£'000) | 244,252 | 236,167 | 239,579 |
Ordinary shares in issue at end of period* | 38,426,187 | 37,847,663 | 38,397,663 |
NAV per Ordinary share (pence) | 635.6 | 624.0 | 623.9 |
* Excludes treasury shares (29 February 2020: 2,916,476; 28 February 2019: 3,495,000; 31 August 2019: 2,945,000).
6. Related Party transactions
(a) Transactions with the Fund Manager
Details of the management fee arrangement are given in the Directors' Report on page 26 of the Annual Report for the year ended 31 August 2019. Following the investment into the SV Fund VI venture capital fund on 3 October 2016, a portion of the management fee has been paid via fees due on this investment, with the remaining fees charged directly to the Company. The amounts paid can be seen in the table below and continue to total 0.9% of NAV. In the prior year, fees of £1,051,930 were paid in the six months to 28 February 2019.
(Unaudited) At 29 February 2020 £ | (Unaudited) At 28 February 2019 £ | (Audited) At 31 August 2019 £ | |
Management fees paid by the Company directly to SV Fund VI | 225,806 | 253,870 | 525,909 |
Management fees paid by the Company directly to the Fund Manager | 844,521 | 798,060 | 1,610,022 |
Total | 1,070,327 | 1,051,930 | 2,135,931 |
A performance fee of £nil has been accrued as at 29 February 2020 (28 February 2019: £821,000; 31 August 2019: £970,000).
(b) Related Party transactions
The Directors of the Company are key management personnel. The total remuneration payable to Directors in respect of the six months ended 29 February 2020 was £66,500 (28 February 2019: £66,500; 31 August 2019: £133,000) of which £32,250 (28 February 2019: £66,500; 31 August 2019: £33,250) was outstanding at the period end.
7. Interim Report
The Company's Interim Report for the six months ended 29 February 2020 will be posted to Shareholders in May 2020. A copy of the Interim Report will shortly be available on the Company's website, www.ibtplc.com, which is a website maintained by the Company's Fund Manager, SV Health Managers LLP. A copy of the Interim Report for the six months ended 29 February 2020 has been submitted to the National Storage Mechanism of the Financial Conduct Authority and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
For further information, please contact:
Carl Harald Janson
Investment Manager
SV Health Managers LLP
Telephone: 020 7421 7070
Email: IBT-IR@svhealthinvestors.com
Susan Gledhill
Company Secretary
BNP Paribas Secretarial Services Limited
Telephone: 020 7410 3878
27 APRIL 2020