Oxford Technology 2 VCT plc : 3rd Quarter Results

Oxford Technology 2 VCT PLC

Update for the quarter ending 30 November 2017

Oxford Technology 2 VCT PLC presents its quarterly update for the period commencing 1 September 2017. 

The Directors have recently reviewed the valuation of its entire portfolio and the unaudited net asset value per ordinary share was 40.8p as at 30 November 2017.  This is an increase of 1.9p from the previously published NAV per share for the period ending 31 August 2017. The total return to shareholders who remain on the register is now 53.8p per share, including previous dividends of 13.0p per share.

On 5 December 2017 - post the quarter end - we paid a further dividend of 8p per share, with a corresponding reduction in the above quoted NAV per share.

During the period under review, we concluded the Tender Offer, which was taken up by over 20% of our shareholders, and as a result, the Company cancelled 1,461,034 Ordinary Shares, reducing its total issued share capital from 6,792,923 to 5,331,889 Ordinary Shares. The 15% level of discount was set to ensure a fair balance between those shareholders who chose to participate in the Tender Offer, and those wishing to retain their shareholding in the Company. This resulted in a 1.4p per share increase in net asset value, which is in part to compensate remaining shareholders who are liable to incur a greater proportion of running costs per share going forward, given the fixed nature of these expenses.

At the end of November 2017, we made a £200k follow-on investment into Arecor, making it the largest holding in the Company's portfolio of eight remaining investees at 30 November 2017.  Arecor (www.arecor.com) is a potentially world class pharmaceutical research company based in Cambridge and has a very advanced diabetes drug formulation technology. This is the type of investment that Oxford Technology 2 VCT PLC has supported for the last 17 years and appears to be exactly the sort of VCT investment envisaged and encouraged by the government in the recent autumn budget.

This investment was the maximum permitted by the 15% VCT rule, and was only made possible by deferring the 8p per share dividend payment for as long as possible to enable this investment to proceed.  Following the sale of OC Robotics in June 2017, Oxford Technology 2 VCT PLC had six months to return funds to shareholders or make further investments of the money or it would lose VCT qualifying status.  We are pleased to confirm that with the return of nearly £900k to shareholders, and the investment in Arecor, we have completed our requirements under the VCT rules and remain VCT compliant.

The Board of Oxford Technology 2 VCT PLC welcomes the recent budget changes with respect to VCTs and the government's response to the Patient Capital Review. We welcome the extension of the six month VCT rule to twelve months as providing a greater level of future re-investment flexibility. We also appreciate the rationale for the increase of the level of qualifying investments to 80% (up from 70%) from April 2019. However, as a very small VCT, we believe this may give us some administrative problems - an unintended consequence of the proposed revised legislation. With all of our investments being unquoted and with no short term method of realisation, we require a cash reserve for administrative expenses. Corporate liquidity tests will therefore become much tighter once the new regime is in force. We will take up this issue with HMRC while the Finance Bill passes through its reviews. We hope that a simple amendment is possible.

The Directors are not aware of any other events or transactions that have taken place between 30 November 2017 and the publication of this statement that have had a material effect on the financial position of the Company.

19 December 2017

Enquiries:
Lucius Cary, Oxford Technology Management
01865 784466

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Source: Oxford Technology 2 VCT plc via Globenewswire