Northern 2 VCT PLC Cancels 2.26 Million Shares Following Market Buyback Program

Details of the Share Buyback and Cancellation

On 27 July 2026, Northern 2 VCT PLC purchased 2,260,845 ordinary shares in the open market at 51.87p per share, reflecting the market price on the transaction date. These shares were subsequently cancelled, permanently removing them from the Company’s capital base rather than holding them in treasury. This permanent cancellation decreases the total voting shares and alters the Company’s capital structure on a lasting basis.

The buyback and cancellation were conducted under an existing shareholder authority, evidencing prior approval by shareholders for such transactions. The Company’s announcement complies with the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (DTRs), ensuring timely market notification. This transaction underscores the Company’s commitment to capital management initiatives aimed at enhancing shareholder value.

Effect on Capital Structure and Shareholder Dilution

The cancellation of 2,260,845 shares equates to approximately 0.84% of the issued ordinary share capital before the buyback. Following this action, the total ordinary shares outstanding stand at 267,125,701, each with a nominal value of 5p and equal voting rights. Shareholders who retained their holdings during this process have experienced a proportional increase in ownership percentage.

Unlike treasury shares, which are held but not cancelled, these shares have been permanently removed, reducing the denominator used in earnings per share and other per-share calculations. This structural change is particularly important for venture capital trusts like Northern 2 VCT, where per-share valuation metrics and share price performance are closely monitored. The Company holds no ordinary shares in treasury; thus, all issued shares represent active claims on assets and income.

Venture Capital Trust Framework and Share Features

Northern 2 VCT PLC operates as a venture capital trust under UK tax legislation, subject to regulatory requirements promoting investment in small and medium-sized UK enterprises. Its ordinary shares represent equity interests with equal voting and economic rights, each with a nominal value of 5p, common among UK-listed investment trusts.

As a VCT, Northern 2 VCT offers investors tax-efficient exposure to a diversified portfolio of emerging UK companies. The share capital structure directly influences per-share net asset value and shareholder returns. By managing share capital through buybacks and cancellations, the Company aims to maintain an efficient capital structure and potentially improve returns. The voting rights attached to all ordinary shares mean buybacks can affect voting percentage thresholds triggering mandatory disclosures under the DTRs.

Regulatory Compliance and Market Disclosure

The share cancellation announcement adheres to the FCA’s Disclosure Guidance and Transparency Rules, which mandate UK-listed companies to notify the market of changes affecting voting rights. Northern 2 VCT disclosed the updated total voting rights as 267,125,701 shares, enabling shareholders and investors to accurately assess whether their holdings cross disclosure thresholds.

These rules require companies to report capital structure changes impacting voting rights calculations. By confirming the current number of voting shares, Northern 2 VCT provides the necessary denominator for shareholders to determine notification obligations. The Company also confirmed it holds no shares in treasury, ensuring all issued shares carry live voting rights.

Management and Administration by Mercia Fund Management

Mercia Fund Management Limited manages and administers Northern 2 VCT PLC, overseeing daily operations. For enquiries, Mercia can be contacted at 0330 223 1430, with Sarah Williams and James Sly as principal contacts. Mercia is responsible for investment decisions, portfolio management, and administrative duties. Additional information is available at www.mercia.co.uk/vcts.

Mercia’s role is vital, as VCTs depend on specialist managers to identify and monitor investments in line with regulatory and investment policies. The fund manager’s capital deployment and portfolio oversight directly impact shareholder returns. The share buyback announcement likely reflects Mercia’s strategy to optimize capital efficiency and shareholder value. Investors seeking further details on investment strategy or performance should contact Mercia or review published materials.

Share Price Context at Time of Purchase

The shares were repurchased at 51.87p each on 27 July 2026, reflecting the market price on that date. Buybacks executed below net asset value (NAV) per share can be accretive to shareholders, while those above NAV may dilute value. The 51.87p price provides a benchmark for investors assessing the Company’s valuation at the time.

The immediate impact on share price was not disclosed. Investors should consult the Company’s latest interim or annual financial reports to compare the purchase price with NAV per share. Buybacks are often viewed positively when below NAV, potentially increasing per-share value, though market responses vary depending on conditions and sentiment. The Company did not specify whether the purchase price was at a discount or premium to NAV in the announcement.

Capital Management Strategy and Shareholder Authorization

The buyback and cancellation were conducted under a shareholder-approved authority granted at a general meeting. This indicates that Northern 2 VCT’s board secured prior shareholder consent for ongoing share repurchases within defined limits, including maximum share quantities, price ranges, and timeframes. The continuation of buybacks under this authority suggests it remains valid and unexhausted.

Share buyback authorities are common among UK-listed investment companies seeking dynamic capital structure management. For VCTs, such tools help optimize the relationship between NAV and share price premiums or discounts. By adjusting shares outstanding, the Company influences per-share metrics closely watched by investors. While the announcement confirms ongoing capital management, it does not disclose plans for future buyback activity.

Implications for Voting Rights and Disclosure Thresholds

The updated total voting rights of 267,125,701 shares affect the calculation of disclosure thresholds under the FCA’s DTRs. Shareholders must notify the Company and market when holdings cross thresholds such as 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50%, 75%, and 90%. The reduced share count means that percentage ownership corresponds to fewer shares, altering notification requirements.

Shareholders and investors should use the updated voting rights figure to reassess whether their holdings trigger disclosure obligations. Northern 2 VCT’s announcement ensures transparency and compliance by providing the current denominator for these calculations.