British Smaller Companies VCT Reports Strong Q4 with 8.1x Return on Teraview Exit

Q4 2025 snapshot: NAV, total return and dividend

British Smaller Companies VCT plc has posted a steady quarter. Total Return per share – that is, NAV change plus dividends – rose by 0.65 pence, equivalent to 0.8% of the opening NAV per share. After paying a 2.00 pence dividend in the quarter, the NAV per share ended at 78.70 pence (30 September 2025: 80.05 pence). Add the dividend back and NAV before dividends was 80.70 pence.

Cumulative dividends since launch now stand at 188.15 pence per share, taking Total Return to 266.85 pence per share. Portfolio valuations moved up £2.5 million, partially offset by £0.3 million of operating costs.

Exits led by Teraview’s 8.1x multiple – what sold and for how much

The quarter featured several realisations, with one eye-catching multiple. Teraview completed an oversubscribed listing on the Korean Stock Exchange in December. The VCT sold 34% of its holding before year end for £1.2 million and exited the balance in January 2026 for a further £1.8 million. On the VCT’s reported figures, that is an 8.1x return on an original £0.4 million cost – a small ticket, but a big win.

Elucidat and SharpCloud: clean exits with deferred upside

Elucidat was realised in October for £5.5 million upfront, with £0.7 million deferred over the next 18 months. That equates to 1.3x on the £4.3 million original cost today, potentially 1.45x if the earn-out lands in full.

SharpCloud followed in December, delivering £8.7 million upfront and £0.9 million deferred over two years. That is 2.0x on the £4.3 million original cost now, rising to a potential 2.2x including the deferred piece.

Vuealta and Sipsynergy: tidying up at year end

Post period, the VCT sold its remaining holding in Vuealta for £0.7 million, in line with the year-end valuation, locking in a 1.5x on the £3.6 million original cost.

Sipsynergy was also exited after the year end for total expected proceeds of around £0.9 million, in line with the year-end valuation. That represents a 0.3x on the £2.8 million original cost – a disappointing outcome, but one that was already reflected in the valuation.

New investments and follow-ons: backing the winners

Deployment continued despite the exit activity. In the quarter, £2.7 million went into new investment TeamFeePay, a platform name worth watching. A further £4.1 million supported existing holdings Plandek, Xapien, Ohalo and Sipsynergy. After the period, another £3.0 million was invested into Summize. Total investment so far this financial year stands at £18.5 million.

The portfolio as a whole saw a £2.5 million uplift, driven by companies delivering strong underlying revenue growth. That is encouraging in a market that remains cautious on software valuations.

Balance sheet strength: cash pile and share movements

Net assets were £278.5 million at 31 December 2025. The balance sheet is liquid, with £113.8 million in cash and money market funds – 40.9% of NAV. Unquoted investments represent 57.6% of NAV, giving substantial firepower for new and follow-on deals without relying on market conditions.

On 19 December, 1,498,811 shares were issued via the dividend reinvestment scheme, while 2,231,911 shares were bought back at 74.65 pence and placed in treasury. That buyback price sat below the period-end NAV of 78.70 pence – roughly a 5% discount – which is typically accretive for continuing shareholders. Shares in issue ended the quarter at 353,931,149.

Fundraise progress: fuel in the tank for 2026

The joint offer with British Smaller Companies VCT2 plc has reached the £85 million aggregate target, with approximately £53 million relating to this Company. The first allotment took place on 7 January 2026, bringing in £15.6 million and issuing 19,484,289 shares. Post-allotment, there were 373,415,438 ordinary shares in issue and 39,260,029 held in treasury. The second and final allotment is due between 1 and 2 April 2026.

Why it matters: with nearly 41% of NAV in cash and fresh funds from the offer, the VCT has ample capacity to support portfolio leaders and add new names at today’s more attractive deal valuations.

Top holdings snapshot

The ten largest disclosed positions total £105.5 million of value. Notable names include Matillion (£19.6 million), Unbiased (£16.6 million), Xapien (£14.3 million), Vypr (£11.3 million) and Summize (£10.0 million). The breadth here helps balance single-asset risk, while follow-on capability supports compounding in the winners.

What this means for shareholders: positives and watch-outs

• Positives: NAV before dividends edged up, exits were active and largely profitable, and Teraview’s 8.1x multiple shows the upside from smaller early bets. The cash position is strong, and the fundraise is progressing well, giving the manager options.
• Watch-outs: the manager notes a more cautious market view of software businesses, which could pressure valuations in the near term. The Sipsynergy exit underlines that not every investment works. High cash levels can be a drag if not deployed, although they also reduce risk in choppy markets.
• Big picture: the portfolio is being positioned for an AI-led world, according to the VCT, with several companies demonstrating strong revenue growth. If deployment continues into quality assets at sensible prices, the current liquidity could be a tailwind for future returns.

Key numbers at a glance

Period	Quarter to 31 December 2025
NAV per share	78.70 pence
Total Return per share (quarter)	+0.65 pence (+0.8% of opening NAV)
Dividend paid (quarter)	2.00 pence per share
Net assets	£278.5 million
Portfolio valuation movement	+£2.5 million
Cash and money market funds	£113.8 million (40.9% of NAV)
Invested in quarter