The firm made the decision in light of the partial exit of the BSC VCT’s stake in outdoor clothing and equipment retailer Go Outdoors in April. The sale to 3i Group generated proceeds of £6.54 million.
YFM Equity Partners reports that since March last year the BSC VCT’s total return has increased by 22 per cent and net asset value has soared 34 per cent. In the past 15 years, the VCT has yielded about 5.1 per cent a year.
David Hall, managing director of the firm, comments, ‘We are delighted to be making what I believe to be one of the largest VCT dividend payment in the last ten years to our shareholders.’
In announcing the dividend pay-out, Hall backed recent government moves to increase support for the VCT investing. In the 2011 Budget, the Chancellor George Osborne announced changes to the EIS and VCTs, which included raising the rate of EIS income tax relief to 30 per cent. The proposals are hoped to make the scheme, which aims to improve access to capital for small and medium-sized enterprises in growing industries, more attractive.
Hall adds, ‘BSC VCT demonstrates that investing in the UK’s smaller businesses can both deliver strong investment returns as well as delivering economic growth. The government is seeking to focus its policies on just these businesses which we think is wholly justified by results such as these.’
According to the YFM statement, the firm will pay two dividends in August. The first is the final year-end dividend of three pence a share, which is subject to shareholder approval, and a second special dividend of 18 pence a share that will be paid as a result of the successful partial realisation of the BSC VCT investment in Go Outdoors.
YFM invests between £100,000 and £10 million of equity and has a current portfolio of 200 companies in the UK.