Pembroke VCT

[127tolmers]

Long delay to share buyback

https://www.investegate.co.uk/pembroke- ... 15575433Q/

Notice of dividend

The Company has declared a 5.0p per share interim dividend (£8.3m). The record date is 8 July 2022, the ex-dividend date is 7 July 2022 and the payment date is 29 July 2022 . The last date for receipt of elections in respect of the interim dividend under the Company's dividend re-investment scheme is 15 July 2022.

The Directors are pleased to announce their decision to increase the average annual dividend payment per share target from 3.0p per share to 5.0p per share with effect from the year ending 31 March 2023.

Share buyback programme

The VCT rules allow £44m of the Company's special reserves to become distributable in April 2023. Accordingly, the Board intends a share buyback in April 2023 and will consider further share buybacks every six months thereafter.

[Kidman]

I'm pleased to see the 5p dividend plan and we have averaged over 3p when taking into account the special dividends that have been paid.

As to buybacks, no problem for me as I'm planning to buy more in the next offer rather than think of selling any.
I believe that the rules mean getting on for four years from the sale of new shares before the share premia can be used for buy-backs so understand the delay before the next buy-back. All credit to them for making the buy-back plans public, with most VCTs one just has to wait and hope.

[Kidman]

I've received the Pembroke VCT 'B' share prospectus in the post as a shareholder, but have also received a letter from Chelsea Financial Services telling me that if I apply for Pembroke 'B' shares through them I will get a better deal than from anyone else.

Has anyone else received such a letter and does anyone have a view whether this really is the best deal?

[sinterklaas]

What’s the “better deal” consist of?

Discount on initial charge, presumably? Or … free lollipop?

[Kidman]

Apologies for not giving the details before. I didn't have them to hand and hoped/assumed others would have received the letter.

The special discounts on the initial charge are existing shareholder 3% and new shareholder 2.5%
but:
"There is also an exclusive and upfront 0.5% cashback. To the best of our knowledge this is the best discount currently available on the market."

I can see that may make it a good deal at day 1, but perhapss WealthClub's trail commission rebate gives a better return over time?

[Kidman]

After further research, I think Chelsea's claim may be correct.

I believe WealthClub pay a 0.15% trail commission rebate for three years which is taxable.
Hence 0.45% less income tax.

Chelsea is offering a flat 0.5% which is more regardless of the tax situation.

[scotia]

Long delay to share buyback

https://www.investegate.co.uk/pembroke- ... 15575433Q/

Accordingly, the Board intends a share buyback in April 2023 and will consider further share buybacks every six months thereafter.

Yes - I have just discovered this. I have started to sell off a number of VCTs, and they now seem to be a lot less liquid that they were some years ago. I am using HL, and it now requires a telephone order, which will be filled whenever there is a buy back - and this seems to take around 1-2 months, however with Pembroke the next buy back date is indeed quoted as April 2023.
What has caused this change in the liquidity of VCT sales? Some years ago, when I was regularly selling after a 5 year hold, I can't remember any delays - a next day sale was the norm.

[Kidman]

What has caused this change in the liquidity of VCT sales?

I suspect there are several factors at play.
Rules changes some time ago mean new cash has to be invested quicker, I think the target has to be reached in two years rather than the prior three. Furhermore I think the target is higher but I can't remember the details, perhaps 85% instead of 75%.
To make share buy-backs a VCT has to have enough distributable reserves and such reserves are often created by converting share issue premia to reserves. However these reserves may not be used until three years after the conversion.
Hence I surmise there is less cash available for share buy-backs at a time when the growing number of shares past their five year holding time and the growing age of their holders mean that demand is increasing.

[Vulgaris]

The more concerning possibility is that prices (& NAVs) are becoming a matter of fantasy, with - in the absence of trading - no price discovery. Rising interest rates (with a long way to go) work to reduce the value put upon prospective returns that are long into the future. This must cut the valuation of the early stage companies into which VCTs invest, and the prices that others are prepared to pay for them. AIM is down 33% on the year - and that's based on the index, which includes some sizeable profitable companies making profits and paying dividends. Such falls are reflected in the pricing of AIM VCTS, but not yet in those of VCTs that largely invested in unquoted companies.

[barchid]

Vulgaris
You make a very good point, I recall that during the first 6 months of covid share buy backs were few & far between, and then all the revaluations donwards of the nav's came from mid summer on, with buy backs at the lower levels.
Of course that was an exceptional occasion but if one were to be cynical, or just thinking out loud, it could be that we won't see many downgrades until most of the offers in the just commencing vct season are close to being full ?

[UncleEbenezer]

Vulgaris
You make a very good point, I recall that during the first 6 months of covid share buy backs were few & far between, and then all the revaluations donwards of the nav's came from mid summer on, with buy backs at the lower levels.
Of course that was an exceptional occasion but if one were to be cynical, or just thinking out loud, it could be that we won't see many downgrades until most of the offers in the just commencing vct season are close to being full ?

Wouldn't it be sharp practice - perhaps even fraud - to issue new shares at a price that's no longer realistic?

I can't speak for Pembroke in particular, but I think I've seen in VCTs that revaluations, either up or down, often come at the point of issuing new shares. It's what you'd expect.

[Kidman]

I can't speak for Pembroke in particular, but I think I've seen in VCTs that revaluations, either up or down, often come at the point of issuing new shares. It's what you'd expect.

We probably notice revaluations more when we are waiting for a new share allocation especially if they go down.
Most new issues tend towards the end of the financial year whereas many VCTs end their financial year at the end of the calendar year. This means that the end of VCT FY calculation will typically be published after new share allocations have finished.

It may be nice to have more frequent NAV calculations but realistically this is not possible except for AiM VCTs.
Revaluation due a new funding round only happen if such a round takes place.
Revaluations based on profits and P/E can only be calculated once a year when the year's profits are known.
There is only way to get the 'correct' asset value and that is what is received when the investment is exited!

[Kidman]

Released 07:00:04 06 February 2023

Dividend
The Board of Pembroke VCT plc has resolved to pay an interim dividend of 2.5 pence per B Ordinary Share on 30 May 2023. The record date for the interim dividend is 28 April 2023, the ex-dividend date is 27 April 2023 and the last date for receipt of elections in respect of the interim dividend under the Company's flexible dividend re-investment scheme is 16 May 2023.

Net Asset Value per B Ordinary Share
The Company announces that the unaudited net asset value per B Ordinary Share as at 31 December 2022 is 118.8 pence per B Ordinary Share.

[whatafool]

Has anyone heard any updates on Pembroke buy backs? They previously said April 2023, but I can’t seem to find any confirmation of that anywhere. Is it still happening?

[scotia]

Has anyone heard any updates on Pembroke buy backs? They previously said April 2023, but I can’t seem to find any confirmation of that anywhere. Is it still happening?

HL put some of my Pembroke shares on the buy-back list in October, and told me that their best information was that it was likely to be April - but I have had no further updates.

[Boots]

I have no information about the Pembroke buy-back. I did sell my ProVen VCT to a buy-back last year. The timeline was:

January Contacted house broker and asked to go on the buy-back list. Was advised the buy-back would probably be at the end of February.
March Chased and was told there might be more information in April, or June.
June Sale finally completed 27th June

I hope that helps

[pbarne]

I've had a limit order set up with Jarvis for my PEMB holding. They 'phoned me to ask if I wanted to take part in the buy-back. Price offered was 112 and a bit if I remember correctly. Date for the buy-back is Friday 14th. Hope that's useful.

[scotia]

I've had a limit order set up with Jarvis for my PEMB holding. They 'phoned me to ask if I wanted to take part in the buy-back. Price offered was 112 and a bit if I remember correctly. Date for the buy-back is Friday 14th. Hope that's useful.

I just left them with HL - and instructions to sell them at the buy-back price in April. So thanks for the update.
Its a pity Pembroke didn't carry out the buy-back before 5th April - then I could have transferred the cash into my tax year 22/23 ISA.

[barchid]

It seems to be going through now at 112.36.
I had my limit order left on since early March & if I do receive about that price will be quite happy.

[oxmatt]

Its a pity Pembroke didn't carry out the buy-back before 5th April - then I could have transferred the cash into my tax year 22/23 ISA.

I'm glad they didn't as 5th April was exactly 6 months after the first allotment date of last years offer so I would not have been able to sell my older holding.