ProVen VCT plc
Half-Yearly Report for the Six Months Ended 31 August 2012
Financial Summary
31 Aug 2012 | 29 Feb 2012 | 31 Aug 2011 | |
Pence | Pence | Pence | |
Ordinary Shares | |||
Net asset value per share ("NAV") | 50.8 | 49.4 | 55.9 |
Dividends paid per share since launch | 114.0 | 114.0 | 107.7 |
Total return (NAV plus dividends paid since launch) | 164.8 | 163.4 | 163.6 |
'C' Shares | |||
Net asset value per share ("NAV") | 93.6 | 87.4 | 82.0 |
Dividends paid per share since issue | 4.8 | 4.8 | 4.8 |
Total return (NAV plus dividends paid since issue) | 98.4 | 92.2 | 86.8 |
'D' Shares | |||
Net asset value per share ("NAV") | 88.6 | 86.4 | 88.8 |
Dividends paid per share since issue | - | - | - |
Total return (NAV plus dividends paid since issue) | 88.6 | 86.4 | 88.8 |
Chairman's Statement
Introduction
I am pleased to present my report for the six months ended 31 August 2012. In a difficult period for the economy, the performance of the Company's investment portfolio has been robust, with increases in net asset values of all three share classes.
Net asset values
Ordinary Shares
As at 31 August 2012, the net asset value ("NAV") per Ordinary Share stood at 50.8p, an increase of 1.4p per share or 2.8% since the year end.
'C' Shares
As at 31 August 2012, the NAV per 'C' Share stood at 93.6p, an increase of 6.2p per share or 7.1% since the year end.
'D' Shares
As at 31 August 2012, the NAV per 'D' Share stood at 88.6p, an increase of 2.2p per share or 2.5% since the year end.
Venture capital investments
Ordinary Share portfolio
The Ordinary Share pool made three follow-on investments in the period at a total cost of £372,000. Additionally, the Company received a new investment in Vigilant Application Limited as part of the administration of the failed investment, Overtis Group Limited.
The investment in Ashford Colour Press Limited was sold in the period, producing a small realised gain. There were also two small partial loan stock redemptions.
In reviewing the investment valuations at the period end, the Board has agreed a number of movements. The net effect of the movements was an unrealised gain of £865,000 alongside net realised gains of £144,000.
'C' Share portfolio
The 'C' Share portfolio has a high proportion of its assets invested in venture capital investments limiting its ability to make further venture capital investments. It completed one follow-on investment during the period at a cost of £40,000.
The net effect of investment valuation movements over the period was an unrealised gain of £413,000.
'D' Share portfolio
The 'D' Share pool completed four follow-on investments during the period at a cost of £588,000.
The net effect of investment valuation movements over the period was an unrealised gain of £232,000.
Further details of the developments within the investment portfolios are included in the Investment Manager's Report.
Results and dividends
The Income Statement shows a return on ordinary activities after taxation for the Company during the period of £2,019,000 (£698,000 revenue return and £1,321,000 capital return). Details of how this is analysed between the various share pools is shown in the detailed Income Statement. No interim dividends will be paid.
'C' Share Tender Offer
On 20 June 2012, the Company issued a circular detailing proposals for a tender offer in which the Company would purchase up to 3,338,475 'C' Shares at a price of 87.4p per 'C' Share. Applications to tender 1,198,996 'C' Shares were received by the deadline of 3 August 2012 and these shares were subsequently purchased for cancellation on 30 August 2012 for a total of £1,048,000.
Fundraising
The Company's Ordinary Share offer for subscription which opened on 8 December 2011 continued to raise new funds during the period. The offer closed on 30 August 2012, having raised gross proceeds of £12.5 million. These new funds ensure that the Company remains in a position to take advantage of new investment opportunities as they arise, as well as providing a larger asset base over which the Company's fixed running costs are spread.
Ordinary Share consolidation, 'C' Share conversion and 'D' Share conversion
Shareholders will be aware of the recent proposals to convert the 'C' Shares and 'D' Shares into Ordinary Shares to give all groups of Shareholders exposure to a more diversified portfolio and simplify the structure of the Company.
Following Shareholder approval at the AGM and Shareholder meetings on 24 October 2012, the share conversions took place on 30 October 2012. Immediately prior to the conversions, the Ordinary Shares were consolidated such that Ordinary Shareholders received one New Ordinary Share for every two original Ordinary Shares. As a result, the net asset value of the New Ordinary Shares is double that of the original Ordinary Shares. The pro-forma NAV of the New Ordinary Shares as at 31 August 2012 was therefore 101.6p per share.
Under the share conversions, 'C' Shareholders received approximately 0.9213 New Ordinary Shares for each 'C' Share held previously and 'D' Shareholders received approximately 0.8720 New Ordinary Shares for each 'D' Share held previously.
The value of Shareholders' investments in the Company has not changed as a result of the Ordinary Share consolidation and the share conversions. New share certificates will be sent to all Shareholders shortly.
Share buybacks
The Company continues to have a policy of purchasing its own shares that become available in the market in order to help provide liquidity to those Shareholders that need it. The current policy is to purchase New Ordinary Shares at a price equivalent to a 10% discount to the latest published NAV.
During the period, the Company purchased 136,350 Ordinary Shares at an average price of 44.1p per share; 523,598 'C' Shares at an average price of 78.8p per share (in addition to those purchased under the tender offer as described above); and 21,893 'D' Shares at an average price of 82.9p per share. These shares were subsequently cancelled.
Shareholders who are considering selling their shares are reminded that the Company's Administrator, Downing LLP, is able to provide details of close periods and of the prices at which the Company has bought in shares.
Shareholder event
On 22 October 2012, some one hundred Shareholders attended the annual Shareholder event for Beringea-managed VCTs at which portfolio company, Think, talked about its progress since investment by the Company. A number of other portfolio companies were also in attendance to talk about their businesses with Shareholders. The event seems to have been well received and I would like to thank those Shareholders who made time to attend.
Outlook
Following the successful offer for subscription, the Company now has a significant level of funds available for investment. The Manager reports a strong pipeline of potential investment opportunities and so we expect to see further new investment activity over the remainder of the year.
With just one share class, the format of the Company's reports to Shareholders in future will be simpler and should allow investors to track the ongoing performance of their investment more easily. The Board and the Manager believe that the combined portfolio of venture capital investments has the potential to deliver good returns to Shareholders, in line with the Company's investment objectives.
Andrew Davison
Chairman
31 October 2012
Investment Manager's Report
Introduction
We set out below our half yearly report to 31 August 2012 for ProVen VCT plc. Despite an economic background which continues to be challenging, the overall performance of the companies in the investment portfolio has been resilient and we continue to see a good flow of companies looking for equity investment.
Portfolio activity and valuation
Ordinary Share pool
At 31 August 2012, the Company's Ordinary Share portfolio comprised holdings in 15 companies, of which 13 were unquoted and 2 were quoted, at a valuation of £13.3 million and original acquisition cost of £10.2 million. In addition, the Ordinary Share pool held £13.4 million in cash and liquidity funds, most of this from the recent fundraising which closed at the period end.
Further funding was provided to Campden Media £167,000, Fjordnet £100,000 and Senselogix £105,000 during the period. Ashford Colour Press was sold to its management in June, generating a modest capital profit on the initial investment but with an overall return since investment of 8% per annum including interest received on loan notes. Overtis Group went into administration during the period and is therefore treated as realised although, as mentioned in the Chairman's Statement, the Company received an investment in Vigilant Applications Limited as part of the administration process.
The Ordinary Share portfolio showed an overall gain of £1.0 million over the period with Espresso and Think accounting for the majority of the uplift following continued strong performance from both companies.
'C' Share pool
At 31 August 2012, the Company's 'C' Share portfolio comprised 20 unquoted holdings with a cost of £8.5 million and a valuation of £11.5 million. In addition, the 'C' Share pool held £0.4 million in cash and liquidity funds.
Activity on the 'C' Share portfolio was limited to a further investment of £40,000 in Utility Exchange and the administration/investment in Overtis/Vigilant Applications described above. The portfolio showed an overall gain of £413,000 over the period.
'D' Share pool
At 31 August 2012, the Company's 'D' Share portfolio comprised 10 unquoted holdings with a cost and valuation of £2.8 million. In addition, the 'D' Share pool held £4.5 million in cash and liquidity funds.
Further funding was provided to APM Healthcare £238,000, Utility Exchange £146,000, Fjordnet £140,000 and Senselogix £64,000. In addition, the Company received founder shares in Long Eaton Healthcare, a GP centre pharmacy, by virtue of its original investment in APM Healthcare.
Post period end developments
Following the half year end, an investment of £365,000 from the 'D' Share portfolio, as part of total funding of £1.8 million from Beringea managed VCTs, was made into Inskin Media. Inskin Media is a UK based company that has developed a range of technologies for the rapidly growing area of online video advertising. The company has established itself as a significant player in the UK market by its ability to provide innovative technology formats which have been proven to drive higher yields for online media owners and strong returns for advertising campaigns. With its established strong network of premium publishers, the company is planning to extend its reach into additional digital platforms such as mobile, tablets and connected TVs and into new geographies. A further investment of £610,000 (Ordinary Share £372,000, 'D' Share £238,000) was also made into Speed-Trap Holdings to support the company's further development.
We are pleased that Shareholders approved the merger of the Company's three share classes into one share class after the period end. At the date of this report there is one investment portfolio, in which all Shareholders have an interest, at a cost and valuation of £21.5 million and £27.6 million respectively. This gives all Shareholders access to a broader range of unquoted investments and lowers the overall risk profile of their investment. In addition, the cash and liquid funds available following the recent fundraising ensures that the Company is able to take advantage of new investment opportunities.
Outlook
As some Shareholders may be aware, the VCT regulations under which the Company operates changed during the period. These changes included an increase in the maximum VCT qualifying investment in any one company in any 12 month period to £5 million and an increase in the gross assets and maximum employees of a VCT qualifying company. These changes mean that the Company can invest in larger, and therefore potentially lower risk, businesses and also invest further funds in established and successful portfolio companies which may have outgrown the previous VCT limits. We are also pleased with progress made by a number of the portfolio companies during what has been, and continues to be, a difficult period for businesses in general and smaller companies in particular. We are optimistic that, with stable economic conditions, the investment portfolio has the potential to deliver strong realised returns for Shareholders.
Beringea LLP
31 October 2012
Unaudited Balance Sheet
as at 31 August 2012
Company Total
31 Aug 2012 | 31 Aug 2011 | 29 Feb 2012 | |||
£'000 | £'000 | £'000 | |||
Fixed assets | |||||
Investments | 27,648 | 23,062 | 25,556 | ||
Current assets | |||||
Debtors | 151 | 193 | 242 | ||
Current investments | 6,200 | 9,200 | 6,200 | ||
Cash at bank and in hand | 12,160 | 2,310 | 5,942 | ||
18,511 | 11,703 | 12,384 | |||
Creditors: amounts falling due within one year | (390) | (251) | (1,506) | ||
Net current assets | 18,121 | 11,452 | 10,878 | ||
Net assets | 45,769 | 34,514 | 36,434 | ||
Capital and reserves | |||||
Called up share capital | 5,874 | 5,066 | 5,053 | ||
Capital redemption reserve | 751 | 269 | 313 | ||
Share premium account | 21,216 | 10,139 | 10,413 | ||
Share capital to be issued | - | - | 3,206 | ||
Special reserve | 9,311 | 13,801 | 11,763 | ||
Capital reserve - realised | 2,310 | 2,890 | 2,442 | ||
Revaluation reserve | 6,137 | 2,640 | 3,756 | ||
Revenue reserve | 170 | (291) | (512) | ||
Equity shareholders' funds | 45,769 | 34,514 | 36,434 | ||
Net asset value per Ordinary Share: | 50.8p | 55.9p | 49.4p | ||
Net asset value per 'C' Share: | 93.6p | 82.0p | 87.4p | ||
Net asset value per 'D' Share: | 88.6p | 88.8p | 86.4p | ||
Ordinary Shares
31 Aug 2012 | 31 Aug 2011 | 29 Feb 2012 | |||
£'000 | £'000 | £'000 | |||
Fixed assets | |||||
Investments | 13,266 | 11,806 | 12,442 | ||
Current assets | |||||
Debtors | 91 | 128 | 98 | ||
Current investments | 2,350 | 3,400 | 900 | ||
Cash at bank and in hand | 11,098 | 124 | 3,681 | ||
13,539 | 3,652 | 4,679 | |||
Creditors: amounts falling due within one year | (207) | (117) | (410) | ||
Net current assets | 13,332 | 3,535 | 4,269 | ||
Net assets | 26,598 | 15,341 | 16,711 | ||
Capital and reserves | |||||
Called up share capital | 2,619 | 1,371 | 1,367 | ||
Capital redemption reserve | 268 | 225 | 261 | ||
Share premium account | 13,431 | 2,354 | 2,628 | ||
Share capital to be issued | - | - | 3,206 | ||
Special reserve | 5,497 | 7,238 | 6,146 | ||
Capital reserve - realised | 1,725 | 2,926 | 1,675 | ||
Revaluation reserve | 3,099 | 1,262 | 1,738 | ||
Revenue reserve | (41) | (35) | (310) | ||
Equity shareholders' funds | 26,598 | 15,341 | 16,711 | ||
Net asset value per Ordinary Share | 50.8p | 55.9p | 49.4p |
'C' Shares
31 Aug 2012 | 31 Aug 2011 | 29 Feb 2012 | |||
£'000 | £'000 | £'000 | |||
Fixed assets | |||||
Investments | 11,544 | 9,382 | 11,090 | ||
Current assets | |||||
Debtors | 31 | 45 | 123 | ||
Current investments | - | 1,350 | 450 | ||
Cash at bank and in hand | 425 | 1,144 | 1,963 | ||
456 | 2,539 | 2,536 | |||
Creditors: amounts falling due within one year | (118) | (81) | (1,032) | ||
Net current assets | 338 | 2,458 | 1,504 | ||
Net assets | 11,882 | 11,840 | 12,594 | ||
Capital and reserves | |||||
Called up share capital | 3,173 | 3,612 | 3,604 | ||
Capital redemption reserve | 482 | 43 | 51 | ||
Share premium account | - | - | - | ||
Share capital to be issued | - | - | - | ||
Special reserve | 3,814 | 6,563 | 5,617 | ||
Capital reserve - realised | 929 | 201 | 1,059 | ||
Revaluation reserve | 3,043 | 1,485 | 2,255 | ||
Revenue reserve | 441 | (64) | 8 | ||
Equity shareholders' funds | 11,882 | 11,840 | 12,594 | ||
Net asset value per 'C' Share | 93.6p | 82.0p | 87.4p |
'D' Shares
31 Aug 2012 | 31 Aug 2011 | 29 Feb 2012 | |||
£'000 | £'000 | £'000 | |||
Fixed assets | |||||
Investments | 2,838 | 1,874 | 2,024 | ||
Current assets | |||||
Debtors | 29 | 20 | 21 | ||
Current investments | 3,850 | 4,450 | 4,850 | ||
Cash at bank and in hand | 637 | 1,042 | 298 | ||
4,516 | 5,512 | 5,169 | |||
Creditors: amounts falling due within one year | (65) | (53) | (64) | ||
Net current assets | 4,451 | 5,459 | 5,105 | ||
Net assets | 7,289 | 7,333 | 7,129 | ||
Capital and reserves | |||||
Called up share capital | 82 | 83 | 82 | ||
Capital redemption reserve | 1 | 1 | 1 | ||
Share premium account | 7,785 | 7,785 | 7,785 | ||
Share capital to be issued | - | - | - | ||
Special reserve | - | - | - | ||
Capital reserve - realised | (344) | (237) | (292) | ||
Revaluation reserve | (5) | (107) | (237) | ||
Revenue reserve | (230) | (192) | (210) | ||
Equity shareholders' funds | 7,289 | 7,333 | 7,129 | ||
Net asset value per 'D' Share | 88.6p | 88.8p | 86.4p |
Unaudited Income Statement
for the six months ended 31 August 2012
Company Total
Six months ended 31 Aug 2012 | Six months ended 31 Aug 2011 | Year ended 29 Feb 2012 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Income | 981 | - | 981 | 488 | - | 488 | 844 | ||
Gains on investments | - | 1,654 | 1,654 | - | 1,321 | 1,321 | 2,245 | ||
981 | 1,654 | 2,635 | 488 | 1,321 | 1,809 | 3,089 | |||
Investment management fee | (112) | (333) | (445) | (86) | (259) | (345) | (704) | ||
Performance incentive fees | - | - | - | - | (293) | (293) | (582) | ||
Other expenses | (171) | - | (171) | (150) | - | (150) | (288) | ||
Return on ordinary activities before taxation | 698 | 1,321 | 2,019 | 252 | 769 | 1,021 | 1,515 | ||
Tax on ordinary activities | - | - | - | - | - | - | - | ||
Return attributable to equity shareholders | 698 | 1,321 | 2,019 | 252 | 769 | 1,021 | 1,515 | ||
Basic and diluted return per Ordinary Share | 0.6p | 1.8p | 2.4p | 0.6p | 0.8p | 1.4p | 1.1p | ||
Basic and diluted return/(loss) per 'C' Share | 3.0p | (2.2p) | 5.5p | 0.9p | 4.2p | 5.1p | 10.5p | ||
Basic and diluted loss per 'D' Share | (0.0p) | (2.2p) | (2.2p) | (0.4p) | (0.9p) | (1.3p) | (3.6p) |
Ordinary Share pool
Six months ended31 Aug 2012 | Six months ended31 Aug 2011 | Year ended 29 Feb 2012 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Income | 416 | - | 416 | 254 | - | 254 | 418 | ||
Gains on investments | - | 1,009 | 1,009 | - | 640 | 640 | 891 | ||
416 | 1,009 | 1,425 | 254 | 640 | 894 | 1,309 | |||
Investment management fee | (63) | (187) | (250) | (40) | (120) | (160) | (315) | ||
Performance incentive fees | - | - | - | - | (293) | (293) | (582) | ||
Other expenses | (85) | - | (85) | (62) | - | (62) | (121) | ||
Return on ordinary activities before taxation | 268 | 822 | 1,090 | 152 | 227 | 379 | 291 | ||
Tax on ordinary activities | - | - | - | - | - | - | - | ||
Return attributable to equity shareholders | 268 | 822 | 1,090 | 152 | 227 | 379 | 291 |
'C' Share pool
Six months ended31 Aug 2012 | Six months ended31 Aug 2011 | Year ended 29 Feb 2012 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Income | 520 | - | 520 | 210 | - | 210 | 368 | ||
Gains on investments | - | 413 | 413 | - | 698 | 698 | 1,501 | ||
520 | 413 | 933 | 210 | 698 | 908 | 1,869 | |||
Investment management fee | (32) | (94) | (126) | (28) | (84) | (112) | (242) | ||
Performance incentive fees | - | - | - | - | - | - | - | ||
Other expenses | (56) | - | (56) | (52) | - | (52) | (104) | ||
Return on ordinary activities before taxation | 432 | 319 | 751 | 130 | 614 | 744 | 1,523 | ||
Tax on ordinary activities | - | - | - | - | - | - | - | ||
Return attributable to equity shareholders | 432 | 319 | 751 | 130 | 614 | 744 | 1,523 |
Analysed by share class:
'D' Share pool
Six months ended31 Aug 2012 | Six months ended31 Aug 2011 | Year ended 29 Feb 2012 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Income | 45 | - | 45 | 24 | - | 24 | 58 | ||
Gains/(losses) on investments | - | 232 | 232 | - | (17) | (17) | (147) | ||
45 | 232 | 277 | 24 | (17) | 7 | (89) | |||
Investment management fee | (17) | (52) | (69) | (18) | (55) | (73) | (147) | ||
Performance incentive fees | - | - | - | - | - | - | - | ||
Other expenses | (30) | - | (30) | (36) | - | (36) | (63) | ||
Return/(loss) on ordinary activities before taxation | (2) | 180 | 178 | (30) | (72) | (102) | (299) | ||
Tax on ordinary activities | - | - | - | - | - | - | - | ||
Return/(loss) attributable to equity shareholders | (2) | 180 | 178 | (30) | (72) | (102) | (299) |
Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 August 2012
31 Aug 2012 | 31 Aug 2011 | 29 Feb 2012 | |||||||||
Ordinary Shares | 'C' Shares | 'D' Shares | Total | Total | Total | ||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
Opening shareholders' funds | 16,711 | 12,594 | 7,129 | 36,434 | 33,966 | 33,966 | |||||
Proceeds from share issues | 12,764 | - | - | 12,764 | 1,537 | 1,860 | |||||
Share issue costs | (702) | - | - | (702) | (84) | (101) | |||||
Purchase of own shares | (59) | (1,463) | (18) | (1,540) | (196) | (572) | |||||
Share capital to be issued | (3,206) | - | - | (3,206) | - | 3,206 | |||||
Total recognised gains for the year | 1,090 | 751 | 178 | 2,019 | 1,021 | 1,515 | |||||
Dividends | - | - | - | - | (1,730) | (3,440) | |||||
Closing shareholders' funds | 26,598 | 11,882 | 7,289 | 45,769 | 34,514 | 36,434 |
Unaudited Cash Flow Statement
for the six months ended 31 August 2012
Six months ended 31 Aug 2012 | Six months ended 31 Aug 2011 | Year ended 29 Feb 2012 | ||||
Note | £'000 | £'000 | £'000 | |||
Net cash outflow from operating activities | A | (659) | (781) | (914) | ||
Capital expenditure | ||||||
Purchase of investments | (1,000) | (935) | (3,613) | |||
Disposal of investments | 561 | 685 | 1,792 | |||
Net cash outflow from capital expenditure | (437) | (250) | (1,821) | |||
| ||||||
Equity distributions paid | - | (1,730) | (3,440) | |||
| ||||||
Management of liquid resources | ||||||
Purchase of current investments held as liquidity funds | - | - | - | (400) | ||
Withdrawal from liquidity funds | - | - | 3,400 | |||
Net cash inflow from liquid resources | - | - | 3,000 | |||
| ||||||
Net cash outflow before financing | (1,096) | (2,761) | (3,175) | |||
Financing | ||||||
Proceeds from share issue | 12,764 | 1,537 | 1,861 | |||
Share issue costs | (702) | (84) | (101) | |||
Purchase of own shares | (1,542) | (196) | (572) | |||
Share capital to be issued | (3,206) | - | 3,206 | |||
Proceeds received on behalf of a co-investor | - | - | 909 | |||
Net cash inflow from financing | 7,314 | 1,257 | 5,303 | |||
Increase/(decrease) in cash | B | 6,218 | (1,504) | 2,128 | ||
Notes to the cash flow statement: | ||||||
A Net cash flow from operating activities | ||||||
Return on ordinary activities before taxation | 2,019 | 1,021 | 1,515 | |||
Gains on investments | (1,654) | (1,321) | (2,245) | |||
Decrease in debtors | 92 | 94 | 46 | |||
Decrease in creditors | (1,116) | (575) | (230) | |||
Net cash outflow from operating activities | · | (659) | (781) | (914) | ||
B Analysis of net funds | ||||||
Beginning of period | 5,942 | 3,814 | 3,814 | |||
Net cash inflow/(outflow) | 6,218 | (1,504) | 2,128 | |||
End of period | 12,160 | 2,310 | 5,942 |
Summary of Investment Portfolio
as at 31 August 2012
Ordinary Share pool | Cost | Valuation | Valuation movement in the period | % of portfolio by value |
£'000 | £'000 | £'000 | ||
Top ten venture capital investments (by value) | ||||
Espresso Group Limited | 1,317 | 3,964 | 397 | 14.8% |
Think Limited | 803 | 2,640 | 446 | 9.9% |
SPC International Limited | 1,619 | 1,757 | 2 | 6.6% |
Campden Media Limited | 1,456 | 1,316 | 216 | 4.9% |
Eagle Rock Entertainment Group Limited | 1,010 | 1,120 | (38) | 4.2% |
Donatantonio Limited | 582 | 926 | (69) | 3.5% |
Tossed Limited | 578 | 690 | 68 | 2.6% |
Fjordnet Limited | 300 | 387 | 52 | 1.4% |
Pilat Media Global plc | 173 | 225 | (52) | 0.8% |
Senselogix Limited | 94 | 94 | - | 0.4% |
7,932 | 13,119 | 1,022 | 49.1% | |
Other venture capital investments | 2,235 | 147 | (157) | 0.6% |
10,167 | 13,266 | 865 | 49.7% | |
Liquidity fund investments | 2,350 | 8.8% | ||
Cash at bank and in hand | 11,098 | 41.5% | ||
Ordinary Share pool total | 26,714 | 100.0% |
Other venture capital investments at 31 August 2012 comprise: UBC Media Group plc, Sports Holdings Limited, Isango! Limited, Baby Innovations S.A. t/a Steribottle and Vigilant Applications Limited.
With the exclusion of Pilat Media Global plc and UBC Media Group plc which are quoted on AIM, all venture capital investments are unquoted.
'C' Share pool | Cost | Valuation | Valuation movement in the period | % of portfolio by value |
£'000 | £'000 | £'000 | ||
Top ten venture capital investments (by value) | ||||
Think Limited | 803 | 2,640 | 446 | 22.1% |
Donatantonio Limited | 885 | 1,410 | (106) | 11.8% |
Cross Solar PV Limited | 1,016 | 1,016 | - | 8.5% |
Fjordnet Limited | 800 | 1,150 | 210 | 9.6% |
Blis Media Limited | 482 | 875 | (192) | 7.3% |
Charterhouse Leisure Limited | 700 | 788 | 48 | 6.6% |
Tossed Limited | 425 | 507 | 50 | 4.2% |
Chess Technologies Limited | 600 | 481 | (250) | 4.0% |
Monica Vinader Limited | 224 | 473 | (37) | 3.9% |
Campden Media Limited | 227 | 454 | - | 3.8% |
6,162 | 9,794 | 169 | 81.8% | |
Other venture capital investments | 2,338 | 1,750 | 244 | 14.6% |
8,500 | 11,544 | 413 | 96.4% | |
Cash at bank and in hand | 425 | 3.6% | ||
| ||||
'C' Share pool total | 11,969 | 100.0% |
Other venture capital investments at 31 August 2012 comprise: SPC International Limited, Speed-Trap Holdings Limited, Senselogix Limited, Eagle Rock Entertainment Group Limited, Cinergy International Limited, MatsSoft Limited, Dianomi Limited, Utility Exchange Online Limited, Vigilant Applications Limited and Isango! Limited.
All venture capital investments are unquoted.
'D' Share pool | Cost | Valuation | Valuation movement in the period | % of portfolio by value |
£'000 | £'000 | £'000 | ||
Venture capital investments | ||||
MatsSoft Limited | 650 | 669 | 19 | 9.1% |
APM Healthcare Limited | 425 | 425 | - | 5.8% |
Utility Exchange Online Limited | 380 | 380 | - | 5.2% |
Monica Vinader Limited | 138 | 292 | (23) | 4.0% |
Tossed Limited | 223 | 266 | 26 | 3.6% |
Fjordnet Limited | 416 | 281 | 39 | 3.8% |
Senselogix Limited | 196 | 231 | 173 | 3.2% |
Speed-Trap Holdings Limited | 300 | 184 | - | 2.5% |
Cinergy International Limited | 115 | 104 | (8) | 1.4% |
Long Eaton Healthcare Limited | - | 6 | 6 | 0.1% |
2,843 | 2,838 | 232 | 38.7% | |
Liquidity fund investments | 3,850 | 52.6% | ||
Cash at bank and in hand | 637 | 8.7% | ||
| ||||
'D' Share pool total | 7,325 | 100.0% |
All venture capital investments are unquoted.
Summary of Investment Movements
for the six months ended 31 August 2012
Additions | Cost |
£'000 | |
Ordinary Share pool | |
Campden Media Limited | 167 |
Senselogix Limited | 105 |
Fjordnet Limited | 100 |
372 | |
| |
'C' Share pool | |
Utility Exchange Online Limited | 40 |
40 | |
| |
'D' Share pool | |
APM Healthcare Limited | 238 |
Utility Exchange Online Limited | 146 |
Fjordnet Limited | 140 |
Senselogix Limited | 64 |
588 |
Disposals
Market | |||||
value at | Gain/(loss) | Realised | |||
Cost | 1 March 2012 | Disposal proceeds | against cost | gain in period | |
£'000 | £'000 | £'000 | £'000 | £'000 | |
Ordinary Share pool | |||||
Ashford Colour Press Limited | 500 | 382 | 526 | 26 | 144 |
Overtis Group Limited | 379 | - | - | (379) | - |
Sports Holdings Limited | 19 | 19 | 19 | - | - |
Senselogix Limited | 10 | 10 | 10 | - | - |
908 | 411 | 555 | (353) | 144 | |
'C' Share pool | |||||
Overtis Group Limited | 376 | - | - | (376) | - |
376 | - | - | (376) | - | |
'D' Share pool | |||||
Senselogix Limited | 6 | 6 | 6 | - | - |
6 | 6 | 6 | - | - |
Notes to the Unaudited Financial Statements
1. The unaudited half-yearly results cover the six months to 31 August 2012 and have been prepared in accordance with UK Generally Accepted Accounting Practice ("UK GAAP"). Where presentational guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised January 2009 ("SORP") is consistent with the requirements of UK GAAP, the Directors have sought to prepare the financial statements on a consistent basis compliant with the recommendations of the SORP.
2. All revenue and capital items in the Income Statement derive from continuing operations.
3. There are no recognised gains or losses other than those disclosed in the Income Statement.
4. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits.
5. The comparative figures were in respect of the period ended 31 August 2011 and the year ended 29 February 2012.
6. Return per share for the period has been calculated on the following:
Ordinary Shares | 'C' Shares | 'D' Shares | |||
Revenue return per share based on: | |||||
Net revenue profit/(loss) after taxation (£'000) | 268 | 432 | (2) | ||
Capital return per share based on: | |||||
Net revenue profit after taxation (£'000) | 822 | 319 | 180 | ||
Weighted average number of shares in issue | 45,600,622 | 14,283,838 | 8,238,692 |
7. NAV per share for the period has been calculated on the following:
Ordinary Shares | 'C' Shares | 'D' Shares | |||
Net assets (£'000) | 26,598 | 11,882 | 7,289 | ||
Number of shares in issue at period end | 52,373,714 | 12,691,629 | 8,227,508 |
8. Dividends
Six months to 31 Aug 2012 | Six months to 31 Aug 2011 | Year ended 29 Feb 2012 | ||||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | ||||
Pence | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Ordinary Share dividends paid in period | ||||||||||
2012 Interim | 6.25 | - | - | - | - | - | - | 1,711 | ||
2011 Interim | 6.25 | - | - | - | 498 | 1,232 | 1,730 | 1,729 | ||
- | - | - | 498 | 1,232 | 1,730 | 3,440 | ||||
No dividends were paid on the 'C' Share pool or 'D' Share pool during the period.
9. Reserves
Capital redemption reserve | Share premium account | Share capital to be issued | Special reserve | Capital reserve - realised | Revaluation reserve | Revenue reserve | ||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||
At 1 March 2012 | 313 | 10,413 | 3,206 | 11,763 | 2,442 | 3,756 | (512) | |||
Expenses capitalised | - | - | - | - | (333) | - | - | |||
Share issue | - | 11,208 | - | - | - | - | - | |||
Share issue costs | - | (405) | - | - | - | - | - | |||
Share capital to be issued | - | - | (3,206) | - | - | - | - | |||
Purchase of own shares | 438 | - | - | (1,524) | - | - | (16) | |||
Gains on investments | - | - | - | - | 144 | 1,510 | - | |||
Retained revenue | - | - | - | - | - | - | 698 | |||
Dividends paid | - | - | - | - | - | - | - | |||
Transfer between reserves | - | - | - | (928) | 57 | 871 | - | |||
At 31 August 2012 | 751 | 21,216 | - | 9,311 | 2,310 | 6,137 | 170 | |||
The Special reserve, Capital reserve-realised and Revenue reserve are all distributable reserves. The Revaluation reserve includes losses of £3,557,000 which are included in the calculation of distributable reserves. Total distributable reserves are £8,234,000.
10. Contingent liabilities, guarantees and financial commitments
The Company has guaranteed bank borrowings on one of its investments, Donatantonio Limited, amounting to £225,000. A third party has provided a guarantee to the Company amounting to £112,500 in respect of the above guarantee such that the Company's net exposure is £112,500.
Apart from the above, the Company has no contingent liabilities, guarantees and financial commitments.
11. The unaudited financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended 29 February 2012 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified.
12. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with the "Statement: Half-Yearly Financial Reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, 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 for the remaining six months of the year; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.
13. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required, in the Company's half-yearly results, to report on principal risks and uncertainties facing the Company over the remainder of the financial year.
The Board has concluded that the key risks facing the Company over the remainder of the financial year are as follows:
i. investment risk associated with a large proportion of the Ordinary Share assets being invested in a single investment;
ii. investment risk associated with investing in small and immature businesses;
iii. investment risk arising from extremely volatile stock market conditions and their potential effect on investment valuation; and
iv. failure to maintain approval as a VCT.
Although having a large proportion of the Ordinary Share assets invested in a single investment involves additional risks, this situation is not unusual within the venture capital industry and has arisen as a result of strong growth in the value of one investment. The Board regularly reviews the position.
In the case of (ii), the Board is also satisfied with the Company's approach. The Investment Manager follows a rigorous process in vetting and careful structuring of new investments and, after an investment is made, close monitoring of the business. In respect of (iii), the Company seeks to hold a diversified portfolio. However, the Company's ability to manage this risk is quite limited, primarily due to the restrictions arising from the VCT regulations.
The Company's compliance with the VCT regulations is continually monitored by the Administrator, who reports regularly to the Board on the current position. The Company also retains PricewaterhouseCoopers to provide regular reviews and advice in this area. The Board considers that this approach reduces the risk of a breach of the VCT regulations to a minimal level.
14. Going concern
The Company has sufficient financial resources at the period end, and holds a diversified portfolio of investments. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they believe that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements.
15. Copies of the unaudited half-yearly results will be sent to Shareholders. Further copies can be obtained from the Company's Registered Office and will be available for download from www.provenvcts.com and www.downing.co.uk.