The Lemon Fool

Ok - I have had a closer look at the online documentation, and it appears (although I maybe misreading the info) that a direct application will be subject to a 2.5% initial charge and an application via an execution only broker will be subject to a 4.5% initial charge, with an illustrative example suggesting that the broker may return 2% to the purchaser - so making it identical to a direct application.

Essentially correct, but Weath Club offer a smallish rebate on trail commission, on top of the up front 2% rebate to compete with a direct application. That is why I said they were better. I have not yet seen any other broker go this far, but I live in hope (if not expectation).

There is no commission on the DRIS - the shares are actually issued at a discount to NAV!

I decided to go ahead with a minimum investment into British Smaller Cos (BSV), and sent off a direct application last week, which should (if my reading of the costs is correct) result in a 2.5% charge. My cheque has been cashed.
I have just received an email from HL, telling me about the British Smaller Companies offers, and referring me to their (HL) website. And yes - the offers now appear on the HL website - but with the full 4.5% charge quoted - and no HL discount.

On 4/12/18 I posted my direct application for British Smaller Cos shares. On 11/12/18 my cheque was cashed. Today (18/12/18) I received an email from Link Asset Services, which are handling the applications, indicating that they have received my application, and stating:-
Please note that this acknowledgement does not confirm acceptance of any application, which is dependent upon both verification of a valid application form and the receipt of cleared funds.
Clearly their wheels turn slowly - they have the cash, but they apparently haven't yet looked at the application. But I suppose they don't feel in any way hurried, since:-
The timetable of events outlined in the Prospectus dated 27 November 2018 anticipates one allotment of shares on 5 April 2019 and the Offer may close earlier if it is fully subscribed by an earlier date.

It would however be nice to know before April whether or not my application has been successful.

And today (20/12/18) I received another email letter acknowledging my application - which seems to be identical to the acknowledgement of 18/12/18, with the repeated statement
Please note that this acknowledgement does not confirm acceptance of any application, which is dependent upon both verification of a valid application form and the receipt of cleared funds.
It is certainly taking them some time to digest my application! Maybe they are having an extended Christmas Party.

scotia wrote: Maybe they are having an extended Christmas Party.

I wonder if your cheque covers the cost of their festivities? Let alone postage!

Just to be clear, are you dealing entirely with Link Asset Services here, or have you had correspondence from YFM or anyone else? And do you have a yardstick: is this your first time applying direct as opposed to through a discount broker?

UncleEbenezer wrote:Just to be clear, are you dealing entirely with Link Asset Services here, or have you had correspondence from YFM or anyone else? And do you have a yardstick: is this your first time applying direct as opposed to through a discount broker?

I usually go through HL - but this time I applied directly. I'm already a British Smaller Cos shareholder. And as the application is for the minimum £3000, with a personal cheque, there should be no problems. Both responses are from Link Asset Services - they do contain the message:- You can also contact Tracey Nice at the Investment Adviser, YFM Private Equity Limited on 0113 261 6478 or by email to tracey.nice@yfmep.com
I find the duplicated responses on the 18th and 20th surprising. I had rather hoped that the second response would have noted that they had indeed read my application - and with the cheque firmly cashed, they could have indicated that my application was accepted.
And yes - I'm sure my cheque would have been totally inadequate as a source of finance for a Christmas Party in the Financial Industry

scotia wrote:The timetable of events outlined in the Prospectus dated 27 November 2018 anticipates one allotment of shares on 5 April 2019 and the Offer may close earlier if it is fully subscribed by an earlier date.

I decided not to apply for BSV but would find it annoying waiting for an allotment on 5th April if the issue fills in January. Three months holding one's money instead of issuing shares that would be eligible for any dividends declared and three months delay to the five year holding period and the six month sell/buy restriction.

Having received no further communication as to whether or not my application for BSV shares had been accepted, I emailed Link Asset Services and YFM. I received the following response from Link Asset Services

I can confirm that we have received both your funds and application form so you have been processed.
A date for allotment has not yet been announced by the Company so I am unable to confirm when certificates will be sent out. However, once an allotment date is announced, we will aim to get certificates dispatched within 10 working days of this date.

So I have been "processed". I guess I'll have to wait until 10 days after 5th April before I find out that "processed" means that my application has been accepted. And I'll miss the juicy 7p dividend just announced with an ex dividend date of 18th January - which would have been DRISed ( at a 5% discount to NAV).

scotia wrote: And I'll miss the juicy 7p dividend just announced with an ex dividend date of 18th January - which would have been DRISed ( at a 5% discount to NAV).

It would not have been quite so juicy if it had to be shared with new shareholders. They did the right thing by declaring it early so that only existing shareholders got it.

Anyone got any idea how much cash they are sitting on?

scotia wrote:Having received no further communication as to whether or not my application for BSV shares had been accepted, I emailed Link Asset Services and YFM. I received the following response from Link Asset Services

I can confirm that we have received both your funds and application form so you have been processed.
A date for allotment has not yet been announced by the Company so I am unable to confirm when certificates will be sent out. However, once an allotment date is announced, we will aim to get certificates dispatched within 10 working days of this date.

So I have been "processed". I guess I'll have to wait until 10 days after 5th April before I find out that "processed" means that my application has been accepted. And I'll miss the juicy 7p dividend just announced with an ex dividend date of 18th January - which would have been DRISed ( at a 5% discount to NAV).

And finally today (5th March) I received an email telling me that my application (of 4th December) has been successful and that the offer is now closed. Shares will be allotted on 1st April. The note says "thank you for your support". I assume that's a thank you for the free loan I provided them with in December.
The note goes on to say that the results to 31st December will be announced soon, and that these results will be used to set the Offer Price. I trust they will reduce the December NAV by the Juicy Dividend paid in February!

Both VCTs have announced results

BSV (half year) can be found here https://www.investegate.co.uk/british-s ... 03147109T/

BSC (full year) here : https://www.investegate.co.uk/british-s ... 48387511T/

Both OK (ish) :

BSV total shareholder return up 2.5 pence in six months : no proposed dividend Cash and cash equivalents £29,371 or 33.6%
BSC total shareholder return up 4.1 pence in 12 months : proposed final dividend of 1.5 pence : Cash and cash equivalents £23,115 or 36%

Cash seems a very high proportion and they might have to invest quite quickly to keep within the rules. Also acting a quite a drag bearing in mind the sky high interest rates available.

British Smaller Cos (BSV) payed an interim Dividend of 4p today. They have a generous DRIS price which is 5% below NAV (adjusted for the Dividends) - so not surprisingly 29% of the Dividends went back into the DRIS scheme

BSC (Smaller 2) announced interim results to day - not brilliant

NAV £64 million : Cash and cash equivalents : £23,534,000

investment of £6.9 million into four new and five follow-on investments during the period. (£1.75 million from disposals and repayments of loans). So net about £5 million

Total return : Static

Dividend of 1.5 pence announced

46% of investments made under new rules

On Total Return they said this

Total Return for the six months was unchanged at 118.4 pence per ordinary share. There was a positive gain from the portfolio of 0.3 pence per ordinary share which was offset by the impact of the fundraising and net income after expenses.

so now existing shareholders are paying for new ones to come on board as well as giving them a slice of the profits from existing holdings!

BBB
Agreed, pretty glum reading this morning !
Good bye to those big divis of the past, I fancy, possibly the only reason to hold the 2 BSC vct's now is the 5% discount on the dris.
Realistically that is really worthwhile when the nav is increasing but at present time it doesn't really justify a holding, other than for a bit of diversification possibly.

barchid wrote:... possibly the only reason to hold the 2 BSC vct's now is the 5% discount on the dris

that does rather assume that a dividend is paid cos 5% of nowt is just that - nowt. I stopped my DRIS for these sometime back and will start unloading as soon as the (successive) 5 years are up.

BSV posted an update today : see https://www.investegate.co.uk/british-s ... 7s%20Alert

Very similar to BSC - no forward movement at all

Does anyone know if there is a big difference between BSC and BSV? Performance in recent years looks similar, but not identical. I’m struggling to find a list of their individual holdings online. Is it simply a case of them listing two VCTs to help with the 6 month rule, or is there a real difference?

whatafool wrote:Does anyone know if there is a big difference between BSC and BSV? Performance in recent years looks similar, but not identical. I’m struggling to find a list of their individual holdings online. Is it simply a case of them listing two VCTs to help with the 6 month rule, or is there a real difference?

Historically - going back long before there was a six month rule - they were indeed substantially different. But like most VCT families they've been converging: differences over the past decade or so are likely to be historic, or perhaps small circumstantial differences - as in, who happens to have more cash at the time of an investment.

The Big Difference that springs to mind was the profitable disposal of Go Outdoors in 2016.