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Key points in the period include:

• continued fundraising for the Company’s B share pool with a further 2,534,817 B shares allotted raising £2.5m;

• deployment of £2.1m into four new investments from the B share pool;

• good commercial progress made by a number of B share unquoted investee companies;

• generation of £0.7m in realisation proceeds for the B share pool from one full and one partial exit; and

• payment of a further dividend of 1.5p per B share taking the total B share dividends paid since launch to 10.5p per B share and resulting in a B share Total Return of 98.0p as at 30 June 2022.
  
  

The Company’s B share pool has now raised a total of £17m and we expect to issue a further prospectus shortly to enable the Company to continue to raise funds for the ongoing development of the B share portfolio.

Further details in relation to the Company’s B share and Ordinary share portfolios are set out below.

B share portfolio

Results

There has been a reduction in the Net Asset Value (“NAV”) per B share during the period principally as a result of a reduction in the share prices of the B share pool’s AIM quoted investments, the dividend of 1.5p per B share and the impact of the B share pool’s share of the Company’s running costs.

Seneca continues to believe that the best returns for shareholders can be generated through investing in both quoted and unquoted companies as this provides the ability for Seneca to add to the B share portfolio what it believes to be the best and most exciting growing investee companies regardless of their private or public status. With its headquarters in the North West of England, Seneca believes it is well placed to identify attractive private company investment opportunities from its strong regional network in addition to continuing to see a strong flow of AIM quoted investment opportunities from its extensive professional and broker network. Whilst the Board has noted some volatility in the share prices of AIM quoted companies in recent months, they believe that the benefits offered by AIM quoted investments, including access to capital markets, improved liquidity and stronger reporting and governance requirements, will continue to generate attractive investment returns for investors over the medium and longer-term.

The B share pool also held £7.4m in cash as at 30 June 2022. With 49% of the B share pool’s NAV as at 30 June 2022 represented by cash, the Company’s B share pool is well placed to take advantage of some of the current AIM quoted and private company investment opportunities being reviewed by Seneca.

Portfolio review

Key points for the Company’s B share investment portfolio during the period include:

• four new investee companies totalling £2.1m:

  • Clean Power Hydrogen Plc (“CPH2”) – Manufacturer in the Hydrogen power generation sector - £0.50m invested;

  • Verici Dx Plc – developing and commercialising tests to understand how a patient will and is responding to organ transplant, with an initial focus on kidney transplants - £0.28m invested;

  • Celadon Pharma Plc – a UK-based pharmaceutical company that has obtained a Schedule 1 Controlled Drugs licence from the UK Home Office, focusing on growing indoor hydroponic, high-quality cannabis initially for the chronic pain market - £0.53m invested; and

  • ProBiotix Health Plc (“Probiotix”) – a company established by OptiBiotix Health Plc, a B share pool existing investment, to develop probiotics to tackle cardiovascular disease and other lifestyle conditions which are affecting growing numbers of people across the world - £0.74m invested.
    
    

Whilst their carrying values are unchanged, the B share unquoted portfolio continues to progress well:

• SilkFred, the online women’s fashion retailer, has continued its robust recovery from the impact of Covid-19 delivering strong year on year growth with near record monthly sales during the first half of 2022.

• Qudini, the queue management software provider, continues its upward momentum with profitable trading, increasing ARR, a strong cash position and an increasing client bank of world leading retailers and banks.

• Old Street Labs, the corporate collaboration software provider, has seen new contract wins in the period driving further increases in ARR and with the launch of its new ESG module scheduled for H2 2022 the company hopes to continue this positive momentum.

• Bright Network, the talent attraction and recruitment business focussed on the graduate sector, continues its impressive development returning record trading results for the year to March 2022 with turnover and profits materially up on the prior year.

• Solascure, an innovative chronic wound care business, commenced first in human studies in the period which is a significant milestone for the business. Initial read outs are anticipated later this year.
  
  

• reduction in the price of the B share pool’s AIM quoted investments:
  
  

  • Whilst the value of the B share pool’s AQUIS (“AQSE”) investment in Probiotix is unchanged in the period, there have been reductions in the value of all of the B share pool’s AIM quoted investments in the period. By example, the two largest B share pool holdings by value at the start of the period were AIM quoted SkinBioTherapeutics Plc (“SkinBio”) and Polarean Imaging Plc (“Polarean”). These two investments represented a combined 12% of the B share NAV as at 31 December 2021 and have seen reductions in their share prices of 53% and 20% respectively during the period. Seneca believes this, and indeed the reduction in the remainder of the B share pool AIM quoted investments, to be a result of wider volatility in the public markets resulting from recent macro-economic headwinds rather than any company specific matters. Both SkinBio and Polarean remain well funded and have significant commercial opportunities ahead of them and as such we remain optimistic about the longer term future for these businesses and indeed the wider B share pool AIM quoted investee companies.

• further realisations:

  • we sold in full the B share pool’s holding in CPH2 for £0.67m realising a gain of £0.17m (1.3x return on investment); and

we also sold a further 2.7% of the B share pool’s original shareholding in SkinBio, selling 125,000 shares generating a gain of £0.04m on the disposal (3.2x return on investment).

Ordinary share portfolio

Results and Portfolio Review

There has been a reduction in the NAV per Ordinary share during the period principally as a result of the impact of a reduction in the share prices of the Ordinary share pool’s AIM quoted investments and the Ordinary share pool’s portion of the Company’s running costs.

Cumulative dividends per Ordinary share are unchanged during the period and total 69.3p which, when added to the 30 June 2022 NAV, results in a Total Return per Ordinary share of 99.2p as at 30 June 2022 (June 2021: 108.3p).

94% of the Ordinary share pool NAV as at 31 December 2021 was represented by the Ordinary share pool’s two AIM quoted investments with Scancell Holdings Plc (“Scancell”) being the largest of these holdings representing 68% on its own. As such the Ordinary share pool NAV moves in line with movement in the share prices of these two AIM quoted companies and in line with the Scancell share price in particular.

The bid price of Scancell continues to see significant volatility, with a decrease from 19.50p as at 31 December 2021 to 12.75p as at 30 June 2022. Arecor Therapeutics Plc has remained up since its admission to AIM and has remained relatively stable, having decreased slightly from 370p as at 31 December 2021 to 320p as at 30 June 2022.

The Ordinary share pool also held £0.33m in cash as at 30 June 2022. It is the Board’s policy that the Ordinary share pool retains a modest amount of cash to support investee companies in very limited circumstances but also to cover the Ordinary share pool’s contribution to the running costs of the VCT. It remains our intention to continue to return the proceeds of any further realisations to shareholders via dividends.

Fundraising

The Company has raised £17m to date for the B share pool, including £2.5m raised in the six-month period to 30 June 2022 under the current Offer.

The Company will shortly launch the next offer for B shares to raise a further £10 million (with an overallotment facility of an additional £10 million) to enable Seneca to continue to increase the number and diversity of investments in the B share pool.

Information on how to invest under the current Offer can be found on the Company’s website: https://senecavct.co.uk/current-offer/.

Investors are recommended to consult their financial adviser before making any investments.

Share buybacks

The Company operates a policy of buying in its own B shares that become available in the market at no more than a 5% discount to NAV (subject to liquidity and any regulatory restrictions). During the period, the Company purchased 27,793 shares (equal to 0.16% of the opening number of B shares in issue) at a price of 90.4p per share.

The Company does not currently operate a share buyback scheme for its Ordinary shares.

Presentation of half-year report

As previously noted, in order to simplify this report and to reduce costs, we are making the half-year report available exclusively online and have omitted details of the Company’s Advisers and Registrars and how to buy and sell shares in the Company. These details are all included in the latest Annual Report and can be accessed on the Company’s website at www.senecavct.co.uk along with a copy of this report.

In order to ensure that shareholders receive regular information in respect of their investment in the Company, we intend to continue to provide a virtual presentation of the interim and annual results as well as a general portfolio update at least twice annually. The details of this year’s virtual interim results shareholder update presentation will be made available on our website in due course. Please visit www.senecavct.co.uk to find out more information.

Pipeline and Outlook

The first six months of the Company’s financial year have seen material market volatility as a result of macroeconomic pressures. The disruption in global supply chains, materials and labour availability issues as a result of the Covid-19 pandemic, Brexit and the unfolding geopolitical events have contributed to inflationary pressures and continued market uncertainties which have impacted equity markets.

Despite these headwinds, we are pleased to report that many of the Company’s B share pool portfolio companies have reported positive trading updates in the period, although the valuation of our AIM holdings have not escaped the recent market volatility.

We remain satisfied with the progress being made by both the B share and Ordinary share pool investee companies. We are encouraged by the number of investments which Seneca has added to the B share portfolio in the period and the further diversification that this brings. We were also pleased to see Seneca continuing to sell B share portfolio investments at a profit where the opportunity arises. Funds from these realisations and from the continued allotment of new B share under the current Offer sees the B share pool with a cash balance of more than £7.4m as at 30 June 2022 and well placed to continue to both support existing investee companies and also add new and exciting growth capital investments to the portfolio.

We continue to monitor the Ordinary share portfolio for opportunities to continue to provide profitable returns for Ordinary shareholders through dividends following the realisation of holdings.

John Hustler
Chair
14 July 2022

Investment Policy

The Company's investment objective is to provide shareholders with an attractive income and capital return by investing its funds in a portfolio of both unquoted and AIM/AQSE quoted UK companies which meet the relevant criteria under the VCT rules.

The Company will target well managed businesses with strong leadership that can demonstrate established and proven concepts and which are seeking an injection of growth capital to support their continued development.

At least the minimum required percentage of the Company's assets will be invested in qualifying investments as required by the VCT rules, with the remainder held in cash and money market securities.

Dividend Policy

The Company aims to maintain dividends of at least 3p per annum in relation to the Company’s B shares with an ambition to increase this to c.5% per annum of the B share NAV by 2023 (subject to B share pool investment performance and an intention to also maintain a relatively stable NAV per B share). The Company also seeks to return to Ordinary shareholders over time the proceeds from any Ordinary share pool realisations in the form of dividends or by means of a return of capital.

Investment Portfolio – B Shares

¹ Includes 194,135 shares received as a dividend in specie on 31 March 2022 (“Dividend Shares”) as a result of the spin out and listing on AQSE of the ProBiotix division of B share pool investee company OptiBiotix Health Plc (“OptiBio”) as a standalone entity in addition to the 3,528,310 shares purchased by the B share pool as part of the same transaction. These Dividend Shares were received as a result of the B share pool’s shareholding in OptiBio at the point of the ProBiotix IPO.

²  The cost of the B share pool’s remaining holding in OptiBio at the point of the ProBiotix IPO has been split between the Dividend Shares and the remaining OptiBio shares pro-rata to their respective values on 31 March 2022. As a result, the £140k original investment cost of the B share pool’s remaining holding in OptiBio has been reduced by the amount allocated to the Dividend Shares of £37k.

Investment Portfolio – Ordinary Shares

Responsibility Statement

Directors’ Statement of Principal Risks and Uncertainties
The important events that have occurred during the period under review and the key factors influencing the financial statements are set out in the Chair’s Statement on pages 4 to 8.

In accordance with DTR 4.2.7, the Directors consider that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the year ended 31 December 2021.

The principal risks faced by the Company include, but are not
limited to:

• VCT qualifying status risk

• Investment risk

• Financial risk

• Cash flow risk

• Liquidity risk

• Regulatory risk

• Reputational risk

• Internal control risk

A more detailed explanation of these risks and the way in which they are managed can be found in the Business Review on pages 37 and 38 and in the Notes to the Financial Statements on page 94 of the 2021 Annual Report and Accounts – a copy of which can be found via the Company’s website: https://senecavct.co.uk/.

Macroeconomic events
Recent material market volatility, as a result of macroeconomic pressures, has caused disruption in global supply chains, materials and labour availability issues as a result of the Covid-19 pandemic, Brexit and the unfolding geopolitical events have contributed to inflationary pressures, cost of living rises and continued market uncertainties which have impacted equity markets. The military invasion of Ukraine by Russian forces has caused various countries to announce the imposition of sanctions on Russia. These sanctions may lead to unpredictable reactions from Russia, particularly in relation to the provision of, or access to, energy resources which may have a consequential impact on economic conditions globally, including the costs of living which could potentially impact labour costs for investee companies and the availability (and increased cost) of raw materials which may adversely affect the performance of some companies in which the Company has invested or may invest and may negatively impact on the number or quality of investment opportunities available to the Company.

Directors’ Statement of Responsibilities in Respect of the Financial Statements
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, the Directors John Hustler, (Chair), Alex Clarkson, Richard Manley and Richard Roth (Chair of the Audit Committee) confirm that to the best of their knowledge:

• the condensed set of financial statements, which have been prepared in accordance with FRS 104 “Interim Financial Reporting”, give a true and fair view of the assets, liabilities, financial position and loss of the Company for the period ended 30 June 2022, as required by DTR 4.2.4;

• this half-yearly report includes a fair review of the information required as follows:

  • the interim management report included within the Chair’s Statement and the Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7 being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties facing the Company for the remaining six months of the year; and

  • the related party transactions in the first six months  of the current financial year are disclosed in note 6 in accordance with DTR 4.2.8.

Cautionary Statement
This report may contain forward looking statements regarding the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

This half-yearly report was approved by the Board of Directors on 14 July 2022 and the above responsibility statement was signed on its behalf by:

John Hustler
Chair
14 July 2022

Income Statement - Combined

There was no other Comprehensive Income recognised during the period.

• The ‘Total’ column of the Income Statement is the profit and loss account of the Company; the supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies.

• All revenue and capital items in the above statement derive from continuing operations.

• The Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.
  
  

The Company has no recognised gains or losses other than the results for the period as set out above.

The accompanying notes are an integral part of the Financial Statements.

Income Statement – Ordinary Shares

Income Statement – B Shares

Balance Sheet - Combined

Balance Sheet – Ordinary Shares

Balance Sheet – B Shares

Statement of Changes in Equity - Combined

Statement of Changes in Equity – Ordinary Shares

Statement of Changes in Equity – B Shares

Statement of Cash Flows – Combined

Statement of Cash Flows – Ordinary Shares

Statement of Cash Flows – B Shares

Notes to the Half-Yearly Report

1.        Basis of preparation

The unaudited half-yearly results which cover the six months to 30 June 2022 have been prepared in accordance with the Financial Reporting Council’s (FRC) Financial Reporting Standard 104 Interim Financial Reporting (‘FRS 104’) and the Statement of Recommended Practice (SORP) ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts (revised 2019)’. Details of the accounting policies and valuation methodologies are included within the Annual Report on Pages 80-95.

2.        Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 30 June 2022 do not constitute statutory accounts within the meaning of Section 415 of the Companies Act 2006. The comparative figures for the year ended 31 December 2021 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The independent auditor’s report on those financial statements, in accordance with chapter 3, part 16 of the Companies Act 2006, was unqualified. This half-yearly report has not been reviewed by the Company’s auditor.

3.        Earnings per share
The earnings per Ordinary share at 30 June 2022 is calculated on the basis of 8,115,376 shares (31 December 2021: 8,115,376 and 30 June 2021: 8,115,376) being the weighted average number of shares in issue during the period.

The earnings per B share at 30 June 2022 is calculated on the basis of 15,740,900 (31 December 2021: 12,002,312 and 30 June 2021: 10,729,105) being the weighted average number of shares in issue during the period.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant.

4.        Net asset value per share
The net asset value per Ordinary share is based on Ordinary share pool net assets as at 30 June 2022 divided by 8,115,376 (31 December 2021: 8,115,376 and 30 June 2021: 8,115,376) Ordinary shares in issue at that date.

The net asset value per B share is based on B share net assets as at 30 June 2022 divided by 17,095,683 (31 December 2021: 14,588,659 and 30 June 2021: 12,507,694) B shares in issue at that date.

5.         Principal risks and uncertainties

The Company’s assets consist of equity and fixed interest investments, cash and liquid resources. Its principal risks are therefore market risk, credit risk and liquidity risk. Other risks faced by the Company include economic, loss of approval as a Venture Capital Trust, investment and strategic, regulatory, reputational, operational and financial risks. These risks, and the way in which they are managed, are described in more detail in the Company’s Annual Report and Accounts for the year ended 31 December 2021.

In addition to the above, the Company is also facing risks resulting from the impact of macroeconomic events and inflationary pressures. The Company’s Board and Investment Manager are focused on ensuring that investee companies are taking the required actions to minimise the potential impact that the Covid-19 pandemic, the war in Ukraine and subsequent market headwinds could have on them.

The Board and Seneca will continue to review risks posed by these macroeconomic events and keep those risks under regular review.

6.         Related party transactions

Certain Directors are entitled to participate in a performance bonus as detailed in note 6 of the Annual Report. Those Directors are entitled to receive a performance incentive fee, of up to 20% of sums returned to shareholders by way of dividends and capital distributions of whatever nature, which in aggregate exceeds the sum of 80p per share (including dividends paid to date, i.e. 69.25p per Ordinary share, but excluding any sums returned to shareholders from HMRC in the year of subscription). Full details are included in the Directors’ Remuneration Report and in Notes 5 and 6 of the 2021 Annual Report and Accounts, which can be viewed on the Company’s website.

The management fee payable to Seneca is calculated as 2% of the weighted average net assets of the B share portfolio. As a result, Seneca would have earned £153k in management fees in the current period, however this is reduced to £137k as a result of the 3% cost cap (31 December 2021: reduced to £211k, 30 June 2021: reduced to £69k).

Seneca accrued £4,500 (30 June 2021: £nil) in accounting and administration service fees from the Company and an accrual of £7,500 is also included in the period for Richard Manley’s Director’s Fee. Seneca also accrued £20k (30 June 2021: £46k) in transaction fees, monitoring and directors’ fees from investee companies in the period. Seneca may also become entitled to a performance fee. See note 3 to the Annual Report for more information on these fees.

As detailed in the offer for subscription document dated 29 October 2021, Seneca (as promoters of the Offer) are entitled to charge the Company up to 5.5% of investors’ subscriptions. A total of £13k has been paid to Seneca for the period ended 30 June 2022 (31 December 2021: £35k, 30 June 2021: £26k).

7.         Events after the Balance Sheet Date
The Directors are not aware of any post balance sheet events which need to be brought to the attention of shareholders.

8.        Further Information
Copies of this statement are available on the Company’s website – www.senecavct.co.uk.