Investors

The issued share capital of the Company is 8,115,376 Ordinary Shares, none of which were held in treasury. The Ordinary Shares are in registered form, are freely transferable and there is no current offer for subscription in relation to the Company’s Ordinary Shares.

There are also 12,507,694 B Shares in issue. Therefore, the total number of voting rights in the Company is 20,623,070.

The B Shares are in registered form and will be freely transferable in both certificated and uncertificated form and there is a current open offer for subscription in relation to the Company’s B shares, which can be accessed here.

The B Share Dividend Data is as follows:

Financial Year End 31 December

Current net asset value per share: 106.1p as at 11 June 2021

Cumulative tax-free dividends paid: 7.5p

Please find up to date share price information for Seneca Growth Capital VCT Plc by visiting the London Stock Exchange website using the links below.

CLICK HERE: Ordinary Shares (HYG)

CLICK HERE: B Class Shares (SVCT)

You will find up to date RNS (Regulatory News Service) announcements and Market Data for Seneca Growth Capital VCT Plc by visiting the London Stock Exchange website using the links below.

CLICK HERE: Ordinary Shares (HYG)

CLICK HERE: B Class Shares (SVCT)

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Seneca VCT Shareholder Update Presentation March 2021

Q1: Do you still think valuations are being impacted by Covid-19 for new deals and are you still seeing the same volume of opportunities?

A1: If anything, we are seeing more opportunities than we were pre-Covid. The issue is that you have two categories – the good and the bad side of these opportunities. There are more stressed opportunities coming in at lower valuations and there will be opportunities in there, but you have to be careful. Whereas, with businesses that are doing better because of Covid are coming in at higher valuations. The key is to then try and normalise what those businesses are doing – to take out the impact of Covid wherever possible to then get down to the true value of those opportunities within those businesses.

Q2: How has Covid-19 impacted on the funding opportunities available to the types of businesses in which the VCT invests?

A2: The pandemic has presented a mixture of challenges but also opportunities for growing companies who have been able to be nimble and reactive. Seneca have in turn been highly reactive and adapted to the current situation and therefore been able to support companies as evidenced by the number of deals and opportunities in the pipeline. Seneca’s strong relationships and network have enabled businesses seeking funding to connect with Seneca, and likewise for Seneca to be able to pick up on those opportunities.

Q3: AIM has seen increased volatility given Brexit and Covid-19; do you still see this as a good place to get returns?

A3: Absolutely, but as always and especially in light of the current climate, our view is to proceed with caution. We’ve had a good period on AIM over the last 12-15 months in particular, but Seneca’s investment in AIM quoted companies goes back much further. Seneca was founded in 2010 and has been investing in AIM with EIS funds for many years now and through various market cycles and economic conditions and the returns are there but you do need to proceed with caution. Volatility can, on the other hand, provide opportunities for returns – that is what enables good businesses to access funds. Investors are looking to back and find those exciting growth capital businesses and that is what drives demand and the corresponding increase in share prices. So, if you can get in at the right time within that volatility, as educated by your due diligence, review of the opportunity and the strength of the management team – those core themes we focus on – then the answer is yes, there is opportunity to make some good returns as long as you are proceeding with caution.

Seneca exercises this caution as evidenced by the sheer scale of those opportunities we turn down versus those that we believe have that potential to generate returns. We mentioned how we have £30m in investment opportunities and obviously we wouldn’t be executing against that number of companies but within that, as part of the commercial due diligence, we take out those that we do not believe have the return potential and only transact on those where we have a strong belief in the business and management team.

Ultimately, you need an investment manager with the right skill set. It takes a different skill set to be investing on AIM and trying to generate returns and Seneca has proven over the last 10 years that it has that skill set with their AIM exit track record – a track record which is now also emerging for the VCT with profitable AIM exits building.

Q4: What’s the Board’s view on their intentions to realise the Scancell shares given the recent improvements in the Scancell share price?

A4: We are currently monitoring the price of Scancell very closely, but the price appears to be stable (as at 8 March 2021), which is in part as a result of the Redmile investment, so the Board is not currently focusing on raising more money for the moment. Therefore, we do not intend to sell any further shares at this time at the current price but we will continue to monitor it.

We understand a number of our shareholders from the Ordinary share pool are keen for us to liquidate our Scancell shares but the majority of our shareholders want us to retain the Scancell shares because they believe that it is a significant investment that still has plenty of mileage to go. We have liquidated about 16% of our holding over the last year, which gave us liquidity to pay further dividends, but we have retained the majority of our holding. We believe that there are plenty of opportunities within Scancell, all of which could represent a significant uplift in value for the business. The recent uplift in value was a result of the development of the SN14 vaccine and should this clinical trial succeed, this too could create further value in the business and as such there are no further plans at the current value to realise any more shares in Scancell.

Q5: From reading the Annual Report, it’s clear that the VCT has supported SkinBio from an early stage and that the company is doing very well, so why has 40% of the VCT’s holding been sold?

A5: Seneca’s role as Investment Manager is to try to de-risk our investments as we go along and the right thing to do is to take profits on the way up and that is exactly what we have been doing. SkinBio’s share price was down to 6p at one-point last year and it is now up at the time of the presentation to around 35p-40p. Similarly to Scancell, SkinBio has several potential ongoing opportunities, all of which could represent significant uplift in the Company’s value, but likewise, those opportunities if not realised could have a detrimental impact on value. Whilst we are optimistic that the latter is unlikely to be the case, we still need to bear in mind that these businesses are early stage and represent a certain level of risk as a result and as such we have always taken the approach to try and de-risk those businesses where possible during the course of our investment.

We have already realised over a 2x return from our shareholding in Skinbio and we still have a significant holding in the company to benefit from any further uplift in the share price.

Q6: Regarding the Company’s decision to steer clear of start-ups as part of its investment strategy – which I do not dispute the wisdom of, however, as government regs are trending to ensure VCTs have an early-stage portfolio, does this risk losing the VCT status? How close to the bar is the current portfolio and does this need to account for both the Ordinary and B share pool’s holdings as one overall Risk ratio?

A6: Maintaining our VCT status is of the upmost importance to us and we work diligently to ensure that the various qualifying tests are met, including the permitted age limit restrictions, as detailed on page 4 of our Annual Report. The VCT retains specialist tax advisers who assist with the monitoring of these tests on an ongoing basis. The HMRC VCT conditions continue to be fully met by the VCT, with sufficient forward looking headroom. The Ordinary share pool and the B share pool are not subject to all of the same VCT qualifying tests and as such do not form part of one overall ‘risk ratio’ with regard to the VCT qualifying tests as the Ordinary share pool pre-dates a number of the newer HMRC VCT conditions.

Whilst we do avoid start-ups as a means to mitigate our risk, our B share portfolio is still very much an early stage portfolio and all of the investments are qualifying as detailed on pages 12 and 39 of the Annual Report and we ensure alongside our tax advisers that any new investments also meet the HMRC VCT conditions in order to safeguard our VCT status.

Seneca Growth Capital VCT – 3 September 2020 Shareholder Update Presentation

Q1: There has been some confusion as to which share pool was receiving the latest dividend payment made on 28 August 2020. Could the Board please consider revising the format of future correspondence and consider providing only combined information to those Shareholders invested in both the Ordinary Shares and B Shares?

A1: We apologise for any confusion the formatting of the most recent Shareholder letter might have caused in relation to which share pool was receiving the 28 August 2020 dividend payment. We are very conscious of this and will take it on board.

Going forward we will ensure that the formatting and information provided is presented differently in order to minimise any possible confusion.

In terms of separate share pool communications, we feel it is in the best interests of all Shareholders to be kept informed of all developments relating to each share class, and we will endeavour to improve the clarity of the communications in order to avoid any further confusion.

Q2: The B Share pool seems to have done relatively well recently with regard to its AIM quoted investments – do Seneca expect the flow of similarly attractive AIM quoted investment opportunities to continue?

A2: We have a fantastic relationship with the vast majority of brokers in the UK, providing us with access to the majority of VCT qualifying investment opportunities available on AIM. Whether it’s IPOs or existing AIM deals, we are continuing to see a steady flow of opportunities. So yes, we are expecting to see and are currently looking at attractive AIM quoted investments.

AIM has always played and will continue to play a key role in Seneca’s investment philosophy as evidenced by some of the successful quoted company exits we have achieved through our EIS investing and also the successful full and partial quoted company VCT exits that we have already achieved to date.

Q3: Will existing Ordinary and B Shareholders be given an incentive to invest in the upcoming B Share offer?

A3: Yes, we have always provided enhanced incentives for all existing Shareholders to further support the B Share pool and it will be something that we will continue to provide under the new B Share offer. We are keen to see investment from all Shareholders in the company regardless of the share class they currently own, so it will be available to all existing Shareholders.  Further details will be provided when we launch the prospectus pertaining to our next offer.

Our existing Shareholders are very important to us, and  we are keen to reward their loyalty through the provision of enhanced incentives.

Q4: How is Seneca finding deal flow at the moment? Has Covid-19 had an impact on pricing and investee company funding requirements?

A4: We are still seeing the same number of deals that we saw pre-Covid-19; however, we are seeing a marginal decrease in valuations in terms of the opportunities we receive. For some companies the decrease in valuation is driven by the need for funds to support  them through Covid-19. Whereas others, where valuations have remained steady, are raising funds to support growth strategies that have been enhanced by Covid-19, which is one of our key areas of focus for our future investment activities.

In terms of the new opportunities arising as a result of Covid-19, we believe that we are well placed  in the market due to our ability to unlock certain deals that perhaps others are unable to unlock.

In general, the funding requirements of the investment opportunities we are receiving remains relatively unchanged.

Q5: Is there a deadline for investing the c. £3m which has not yet been deployed?

A5: Yes, at least 30% of funds raised must be invested in qualifying investments by the anniversary of the end of the accounting period in which those funds were raised. The most immediate test is at 31 December 2020. Based on funds raised in the accounting period ended 31 December 2019, c.£685,000 must be invested by 31 December 2020. As at 30 June 2020, c.£900,000 (39%) had been invested so we are already through the required investment threshold. In respect to funds raised in the accounting period ending 31 December 2020, as at 30 June 2020 the Company had invested £235,000, 28% of the monies required to be invested by 31 December 2021. As such, we are not driven by any pending deadlines for the deployment of new funds raised and will continue to support the existing B Share investment portfolio and add attractive new private and AIM quoted growth capital investments to the B Share portfolio from the strong pipeline of opportunities currently in due diligence. In addition, there are other VCT qualifying tests that the Company continually monitors, and we are comfortable that there is sufficient headroom and time to meet those other tests given the pipeline of investment opportunities and the make-up of the existing portfolio.

Q6: Why did you make the full exit when the company value had grown by more than 100% in less than two years?

A6: We have assumed that this question is in relation to the Company’s B Share pool exit from Genedrive Plc. Given the volatility in the company’s share price, coupled with the execution risk of the company’s strategy, we considered a 2x return to be a good result for the VCT.

Q7: Please explain what the Chairman John Hustler meant by ‘will continue to be realised’.

A7: The Ordinary Share pool’s objective is to continue to identify realisation opportunities as they arise, in order to maximise value for investors. This has been the Ordinary Share pool’s strategy for the last few years, long before the introduction of the B Share pool and will continue to be so until the Ordinary Share pool has been fully realised. A good example of this strategy is the sale of the majority of the Company’s shares in Omega Diagnostics Group Plc after it gained significant traction following its involvement in a partnership to develop a C-19 antibody tests. The share price rose substantially since December 2019 when it was 14p, enabling us to sell at an average share price of 36.5p, which allowed the Company to realise some long-awaited gains. This then enabled the Company to pay out the 8p per Ordinary Share dividend on 28 August 2020.

Q8: On the question of merging Ordinary and B class shareholdings, what would that mean for Ordinary Shareholders? Will shares get converted to B class?

A8: It is possible that one way of concluding the life of the Ordinary share pool would be to merge it with the B share pool. Under the existing articles however this is only likely to be considered when the NAV per Ordinary share is below 5p. It follows therefore that this would only be possible once the Ordinary share pool investments have been substantially realised as the latest published NAV of the Ordinary Shares was 30.2p per share, less the dividend of 8p per Ordinary Share you will have received in August 2020.

At present, therefore, the merger is not anticipated in the foreseeable future.

We set out below the Article of Association which is relevant to the conversion.

The Articles also provide that Ordinary Shares may convert, on a relative net asset value basis in accordance with the provisions of the Articles, into New “B” Shares. The conversion will be at the absolute discretion of the Directors, and will be subject to either (i) the latest published NAV per Ordinary Share being less than 5p per Share; or (ii) a special resolution (proposed by the Board) being passed at a separate class meeting of the Ordinary Shareholders confirming that is in the interests of the Ordinary Shareholders for the conversion of the Ordinary Shares to commence.

Q9: Thank you for the informative webinar. I have one question. If the prospects for Qudini sound so positive, why was it necessary to make such a big write down of the value

A9: We are excited and encouraged by the opportunities in the current market for Qudini, which have significantly increased as a result of a softening of lockdown rules. However, we remain cautious of exposure to the uncertainties in the wider retail market and the impact that could have on Qudini’s customer base when Government support decreases/ends and the potential for further periods of lockdown/high street closures if Covid-19 cases significantly increase. In summary, we are optimistic about Qudini’s proposition and believe the business is in a good place; however based on the macro-factors noted above we believed it is prudent to maintain provisions at their current levels at 30 June 2020 and we will continue to review them on an ongoing basis.

Q10: How do you ensure Cyber resilience of investments and IP protection in case of any open source reciprocal licensing?

A10: Cyber security and IP protection is a Board agenda point for most companies these days and forms part of our overall due diligence process, where applicable. Cyber resilience is an evolving risk and forms part of our ongoing monitoring along with any developments which may impact an investment’s IP.