TIDMCRWN
RNS Number : 9745N
Crown Place VCT PLC
26 February 2009
26 February 2009
Crown Place VCT PLC
Half-yearly Financial Report for the six months ended 31 December 2008.
Crown Place VCT PLC ("the Company"), managed by Albion Ventures LLP, today
announces the half-yearly results for the six months ended 31 December 2008. The
announcement was approved by the Board of Directors on 26 February 2009.
You may view the Half-yearly Financial Report at www.albion-ventures.co.uk by
clicking on the 'Our Funds' section.
Investment Objectives
The investment objective and policy of the Company is to achieve long term
capital and income growth principally through investment in smaller unquoted
companies in the United Kingdom.
Financial Calendar
+----------------------------------------------------------------+-------------------+
| Record date for second dividend (subject to approval from HM | Estimated March |
| Revenue & Customs) | 2009 |
+----------------------------------------------------------------+-------------------+
| Payment of second dividend | Estimated April |
| | 2009 |
+----------------------------------------------------------------+-------------------+
| Financial year end | 30 June 2009 |
+----------------------------------------------------------------+-------------------+
Directors
Patrick Crosthwaite, Chairman
Rachel Beagles
Sir Andrew Cubie
Vikram Lall
Geoffrey Vero
Financial Highlights
+--------------------+--------------------+--------------------+--------------------+
| | Six months to | Six months to | Year to |
| | 31 December 2008 | 31 December 2007 | 30 June 2008 |
+--------------------+--------------------+--------------------+--------------------+
| | (pence per share) | (pence per share) | (pence per share) |
+--------------------+--------------------+--------------------+--------------------+
| Net asset value | 36.29 | 43.56 | 41.11 |
| per share | | | |
+--------------------+--------------------+--------------------+--------------------+
| Dividends paid | 1.25 | 1.25 | 2.50 |
+--------------------+--------------------+--------------------+--------------------+
| Revenue return per | 0.53 | 0.74 | 1.27 |
| share | | | |
+--------------------+--------------------+--------------------+--------------------+
| Capital return per | (4.14) | (0.86) | (2.67) |
| share | | | |
+--------------------+--------------------+--------------------+--------------------+
Shareholder returns and shareholder value
+-------------------------------------------------------------------+----------------+----------------+----------------+
| | Proforma (i) | Proforma (i) | |
| | Murray | Murray | Crown Place |
| | VCT PLC | VCT 2 PLC | VCT PLC* |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Shareholder returns from launch to April 2005 (date that Albion | | | |
| Ventures (previously Close Ventures) was appointed investment | | | |
| manager): | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Dividends paid to 6 April 2005 (ii) | 30.36 | 30.91 | 24.93 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Decrease in net asset value | (69.90) | (64.50) | (56.60) |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Total shareholder return to 6 April 2005 | (39.54) | (33.59) | (31.67) |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Shareholder return from April 2005 to 31 December 2008: | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Total dividends paid | 6.02 | 7.00 | 8.05 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Decrease in net asset value | (4.27) | (4.62) | (7.11) |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Total shareholder return to 31 December 2008 | 1.75 | 2.38 | 0.94 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Shareholder value since launch: | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Total dividends paid to 31 December 2008 (i) | 36.38 | 37.91 | 32.98 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Net asset value as at 31 December 2008 | 25.83 | 30.88 | 36.29 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Total shareholder value as at 31 December 2008 | 62.21 | 68.79 | 69.27 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Current annual dividend objective*: | | | |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Pence per share | 1.78 | 2.13 | 2.50 |
+-------------------------------------------------------------------+----------------+----------------+----------------+
| Percentage yield on net asset value | 6.9% | 6.9% | 6.9% |
+-------------------------------------------------------------------+----------------+----------------+----------------+
* Subject to investment performance
(i) The proforma shareholder returns presented above are based on the dividends
paid to shareholders before the merger and the pro-rata net asset value per
share and pro-rata dividends per share paid to 31 December 2008 since the
merger. This pro-forma is based upon the proportion of shares received by Murray
VCT PLC (now renamed CP1 VCT PLC) and Murray VCT 2 PLC (now renamed CP2 VCT PLC)
shareholders at the time of the merger with Crown Place VCT PLC on 13 January
2006.
(ii) Prior to 6 April 1999, venture capital trusts were able to add 20% to
dividends, and figures for the period up until 6 April 1999 are included at the
gross equivalent rate actually paid to shareholders.
* Formerly Murray VCT 3 PLC
In addition to the dividends paid above, the Board has declared a second
dividend for the year ending 30 June 2009, of 1.25 pence per Crown Place VCT PLC
share (0.25 pence to be paid out of revenue profits and 1.00 pence out of
realised capital gains), subject to approval from HM Revenue & Customs. The
record date and payment date for this dividend will be announced on the London
Stock Exchange RNS Service.
Interim Management Report
Results
In the six months to 31 December 2008, the Company's net asset value per share
declined by 12% from 41.1 pence to 36.3 pence. In the same period, the FTSE All
Share Index fell by 22%. The reduction in net asset value was largely due to a
downward revaluation of the investment portfolio, as well as a reduction in
investment income and deposit interest as a result of the sharp fall in interest
rates. During the period, the Company made a revenue profit after tax of
GBP390,000 and a capital loss after tax of GBP3,028,000 resulting in a total
loss after tax of GBP2,638,000 or 3.6 pence per share.
Dividends
The Company's policy is to pay regular and predictable dividends to investors
out of revenue income and realised capital gains. The first dividend in the
current financial year of 1.25 pence per share was paid to shareholders on 8
August 2008. Subject to the performance of the investment portfolio, the Board
aims to maintain the current annualised dividend distribution of 2.5 pence per
share going forward.
The Directors have declared a second dividend of 1.25 pence per Crown Place
VCT PLC share (of which 0.25 pence is to be paid from revenue and 1.00 pence out
of realised capital gains), subject to approval from HM Revenue & Customs. The
record date and payment date for this dividend will be announced on the London
Stock Exchange RNS Service.
Portfolio review
During the half year, the Company made new and follow-on investments totalling
GBP1.3 million. In September 2008, the Company invested GBP250,000 in Prime Care
Holdings Limited, a provider of domiciliary care based in East Sussex. The
domiciliary care sector is a GBP2.4bn industry showing attractive growth rates,
and is very fragmented. Prime Care Holdings has won a number of awards in
recognition of the quality of service it provides. The Company also invested
GBP76,000 in Ivivo Limited, a developer of medical imaging software and
GBP260,000 in Bravo Inns II Limited, an owner and operator of freehold pubs.
Following the period end, an investment of GBP210,000 was made in Forth
Photonics Limited, a medical device company that designs, develops, manufactures
and markets imaging systems for the non-invasive, in-vivo detection of cancerous
and pre-cancerous lesions. No investments were sold during the period.
Overall, the existing investment portfolio, which is well diversified, is
holding up reasonably well against the background of worsening global economic
conditions. An important element of this is that, apart from the investments
made prior to the change in Manager in 2005, which total GBP2 million on current
valuations, the majority of investee companies have no bank gearing. In
addition, many of them are in areas of the economy that still have residual
growth prospects. The slowdown in consumer spending has had some impact on the
hotel and health and fitness investments in the portfolio, which has been
reflected in their valuations, while the cinemas continue to trade well. Several
of the technology investments, such as Blackbay Limited and Rostima Limited,
have made significant progress during the period and are on course to deliver
shareholder value in the longer term.
The following is the sector split of the portfolio by valuation as at 31
December 2008:
http://www.rns-pdf.londonstockexchange.com/rns/9745N_-2009-2-26.pdf
As at 31 December 2008, the Group held cash balances and other liquid
investments of GBP9,963,000.
Change of Manager
On 23 January 2009, the business of Close Ventures Limited ("Close Ventures"),
the Manager of Crown Place VCT PLC was acquired by Albion Ventures LLP ("Albion
Ventures") from Close Brothers Group plc ("Close Brothers Group"). Albion
Ventures has been formed by the executive directors of Close Ventures Limited;
Close Brothers Group will continue to have an interest in the business of Albion
Ventures.
Your Board agreed that the Company's management contract should be novated from
Close Ventures to Albion Ventures on the same terms as the current agreement.
The investment approach of Albion Ventures and the investment policy of the
Company remain unchanged, with a continued emphasis on building up a broad
portfolio of investee companies with no bank borrowings and the maintenance of a
strong dividend yield. The Boards of the other VCTs managed by Close Ventures
have similarly agreed that the management contracts of these companies be
novated to Albion Ventures. Albion Ventures currently has funds under management
of approximately GBP220 million.
As a result of this change, the Company Secretary has changed to Albion Ventures
LLP. The Company name will remain unchanged.
Recovery of historic VAT
As a result of intensive lobbying by the Association of Investment Companies,
the welcome review by HM Revenue & Customs in July 2008 of the position
regarding the exemption of management fees from VAT has meant that the Manager
has been able to reclaim VAT that it had previously charged to the VCT.
Following discussions between the Board and the Manager regarding the reclaim of
historic VAT, GBP369,000 has been recognised in the accounts in respect of the
repayment. Further details regarding this claim, and its disclosure, are shown
in note 4 to the Half-yearly Financial Report. With effect from 1 October 2008,
all management and administration fees charged to the VCT are considered exempt
from VAT.
Related Party Transactions
Details of material related party transactions for the reporting period can be
found in note 13 to this Half-yearly Financial Report.
Risks and Uncertainties
The negative outlook for the UK economy continues to be the key risk affecting
your Company and, as mentioned above, we are beginning to see the effects of
this in certain sectors of the portfolio. Nevertheless, the portfolio as a whole
remains cash generative, while only a few investments have external bank
borrowings. This leads the Board to anticipate that, although valuations may
continue to come under further pressure in the short term, over the longer term,
the current reductions in value represent value deferred rather than
value permanently lost. Other key risks and uncertainties remain unchanged and
are as detailed on page 20 of the Annual Report and Financial Statements for the
year ended 30 June 2008. These include investment risk, venture capital trust
approval risk, compliance risk, internal control risk, reliance upon third party
risk and financial risk.
Dividend Reinvestment Scheme
I draw shareholders' attention to the introduction of a Dividend
Reinvestment Scheme whereby shareholders may elect to reinvest future dividends
by subscribing for New Ordinary Shares. Benefits to individual shareholders
arising on participation in the Dividend Reinvestment Scheme include:
? income tax relief on the reinvestment at the rate of 30 per cent. (VCT
investments cannot exceed GBP200,000 in one tax year to be able to obtain this
relief and new shares need to be held for at least five years);
? any gains arising on disposal of shares in a VCT will be exempt from tax (any
loss will not be an allowable capital loss); and
? any future dividends on the new shares are not subject to income tax.
The Circular dated 26 February 2009 which is being sent to shareholders with a
copy of this Half-Yearly Financial Report, 'Introduction of a Dividend
Reinvestment Scheme', details the mechanics of this Scheme.
Discount management and share buy-backs
It is the Board's policy to buy back shares in the market, subject to the
overall constraint that such purchases are in the Company's interest, including
the maintenance of sufficient resources for investment in existing and new
investee companies. The Company bought back 663,650 shares for cancellation
during the period at an average price of 32.8 pence per share. The weighted
average share price discount to net asset value was 13.2%. However, given the
high level of volatility and the adverse movements apparent in all markets, the
discount to net asset value per share at which shares are bought back will widen
from that applied historically.
Outlook
The UK economy is now officially in recession, but the length and severity is
difficult to predict. In the short term, the decline in interest rates to
historically unprecedented low levels will reduce the income generated by the
Company's cash resources. Nevertheless, we believe that your Company's policy
of ensuring that it has a first charge wherever possible over investee
companies' assets, will help to mitigate the adverse effects of the severe
economic downturn. In addition, your Company's substantial cash resources will
enable it to take advantage of attractive investment opportunities driven by the
lower valuations now becoming apparent. The Board views VCTs as a long term
savings product and in this context, despite the near-term pressure caused by
the deterioration in the economy, the Directors consider that the Company
remains well positioned to deliver long term shareholder value.
Patrick Crosthwaite
Chairman
26 February 2009
Responsibility Statement
The Directors have chosen to prepare this Half-yearly Financial Report for the
Group in accordance with International Financial Reporting Standards ("IFRS").
The Directors of the Company as at 26 February 2009 are shown in the Directors
section at the front of this Half-yearly Financial Statement.
In preparing the summarised financial statements for the period to 31 December
2008, we the Directors, confirm that to the best of our knowledge:
(a) the summarised financial statements has been prepared in accordance with
International Accounting Standard (IAS) 34 "Interim Financial Reporting" issued
by the International Accounting Standards Board;
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year);
(c) the summarised financial statements give a true an fair view in accordance
with IFRS of the assets, liabilities, financial position and of the profit and
loss of the Group for the period and comply with IFRS and Companies Act 1985 and
2006 and;
(d) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and changes
therein).
This Half-yearly Financial Report has not been audited or reviewed by the
auditors.
By order of the Board
Patrick Crosthwaite
Chairman
26 February 2009
Summary Consolidated Income Statement
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | Unaudited | Unaudited | Audited |
+------------------+-------+-----------------------------+-----------------------------+-----------------------------+
| | | six months to | six months to | year to |
| | | 31 December 2008 | 31 December 2007 | 30 June 2008 |
+------------------+-------+-----------------------------+-----------------------------+-----------------------------+
| | | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Losses on | 2 | - | (3,232) | (3,232) | - | (476) | (476) | - | (1,818) | (1,818) |
| investments | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Investment | 3 | 622 | - | 622 | 986 | - | 986 | 1,714 | - | 1,714 |
| income and | | | | | | | | | | |
| deposit interest | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Investment | | (63) | (187) | (250) | (87) | (260) | (347) | (167) | (502) | (669) |
| management fees | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Recovery of VAT | 4 | 92 | 277 | 369 | - | - | - | - | - | - |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Other expenses | | (147) | - | (147) | (160) | - | (160) | (307) | - | (307) |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) | | 504 | (3,142) | (2,638) | 739 | (736) | 3 | 1,240 | (2,320) | (1,080) |
| before taxation | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Taxation | | (114) | 114 | - | (176) | 85 | (91) | (283) | 304 | 21 |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) | | 390 | (3,028) | (2,638) | 563 | (651) | (88) | 957 | (2,016) | (1,059) |
| for the period | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Basic and | 6 | 0.53 | (4.14) | (3.61) | 0.74 | (0.86) | (0.12) | 1.27 | (2.67) | (1.40) |
| diluted | | | | | | | | | | |
| return/(loss) | | | | | | | | | | |
| per Ordinary | | | | | | | | | | |
| share | | | | | | | | | | |
| (pence)* | | | | | | | | | | |
+------------------+-------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
* (excluding Treasury shares)
This consolidated income statement has been reclassified to show losses on
investments at the top of the income statement.
The total column of this statement represents the Group's income statement,
prepared in accordance with International Financial Reporting Standards
('IFRS'). The supplementary revenue and capital reserve columns are prepared
under guidance published by the Association of Investment Trust Companies.
The consolidated income statements include the results of the subsidiaries CP1
VCT PLC and CP2 VCT PLC.
Comparative figures have been extracted from the interim accounts for the six
month period ended 31 December 2007 and the statutory accounts for the year
ended 30 June 2008.
Summary Consolidated Balance Sheet
+---------------------------------------+-------+--------------+-------------+
| | | Unaudited | Audited |
+---------------------------------------+-------+--------------+-------------+
| | | 31 December | 30 June |
| | | 2008 | 2008 |
+---------------------------------------+-------+--------------+-------------+
| | Notes | GBP'000 | GBP'000 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Non-current assets | | | |
+---------------------------------------+-------+--------------+-------------+
| Investments | 7 | 16,057 | 18,211 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Current assets | | | |
+---------------------------------------+-------+--------------+-------------+
| Trade and other receivables | | 713 | 308 |
+---------------------------------------+-------+--------------+-------------+
| Current asset investments | | 6,608 | 2,686 |
+---------------------------------------+-------+--------------+-------------+
| Current tax asset | | - | 53 |
+---------------------------------------+-------+--------------+-------------+
| Cash and cash equivalents | | 3,354 | 9,237 |
+---------------------------------------+-------+--------------+-------------+
| | | 10,675 | 12,284 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Total assets | | 26,732 | 30,495 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Current liabilities | | | |
+---------------------------------------+-------+--------------+-------------+
| Trade and other payables | | (333) | (321) |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Net assets | | 26,399 | 30,174 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Equity attributable to equityholders | | | |
+---------------------------------------+-------+--------------+-------------+
| Ordinary share capital | 8 | 8,000 | 8,066 |
+---------------------------------------+-------+--------------+-------------+
| Share premium | | 14,422 | 14,422 |
+---------------------------------------+-------+--------------+-------------+
| Capital redemption reserve | | 860 | 793 |
+---------------------------------------+-------+--------------+-------------+
| Own shares held | | (2,849) | (2,849) |
+---------------------------------------+-------+--------------+-------------+
| Realised capital reserve | | (17,252) | (17,206) |
+---------------------------------------+-------+--------------+-------------+
| Unrealised capital reserve | | (9,885) | (6,645) |
+---------------------------------------+-------+--------------+-------------+
| Special reserve | | 32,202 | 32,421 |
+---------------------------------------+-------+--------------+-------------+
| Revenue reserve | | 901 | 1,172 |
+---------------------------------------+-------+--------------+-------------+
| Total equity shareholders' funds | | 26,399 | 30,174 |
+---------------------------------------+-------+--------------+-------------+
| Net asset value per share (pence)* | | 36.3 | 41.1 |
+---------------------------------------+-------+--------------+-------------+
*(excluding Treasury shares)
The consolidated balance sheets include the balance sheets of the subsidiaries
CP1 VCT PLC and CP2 VCT PLC.
Comparative figures have been extracted from the statutory accounts for the year
ended 30 June 2008.
These financial statements were agreed by the Board of Directors, and authorised
for issue on 26 February 2009 and were signed on its behalf by
Patrick Crosthwaite
Chairman
Summary Company Balance Sheet
+---------------------------------------+-------+--------------+-------------+
| | | Unaudited | Audited |
+---------------------------------------+-------+--------------+-------------+
| | | 31 December | 30 June |
| | | 2008 | 2008 |
+---------------------------------------+-------+--------------+-------------+
| | Notes | GBP'000 | GBP'000 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Fixed assets | | | |
+---------------------------------------+-------+--------------+-------------+
| Fixed asset investments | 7 | 16,057 | 18,211 |
+---------------------------------------+-------+--------------+-------------+
| Investment in subsidiary undertakings | | 15,089 | 15,059 |
+---------------------------------------+-------+--------------+-------------+
| | | 31,146 | 33,270 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Current assets | | | |
+---------------------------------------+-------+--------------+-------------+
| Trade and other debtors | | 712 | 302 |
+---------------------------------------+-------+--------------+-------------+
| Current asset investments | | 6,608 | 2,686 |
+---------------------------------------+-------+--------------+-------------+
| Current tax asset | | - | 53 |
+---------------------------------------+-------+--------------+-------------+
| Cash at bank and in hand | | 3,236 | 6,548 |
+---------------------------------------+-------+--------------+-------------+
| | | 10,566 | 9,589 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Total assets | | 41,702 | 42,859 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Current liabilities | | | |
+---------------------------------------+-------+--------------+-------------+
| Trade and other creditors | | (15,303) | (12,685) |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Net assets | | 26,399 | 30,174 |
+---------------------------------------+-------+--------------+-------------+
| | | | |
+---------------------------------------+-------+--------------+-------------+
| Equity attributable to equityholders | | | |
+---------------------------------------+-------+--------------+-------------+
| Ordinary share capital | 8 | 8,000 | 8,066 |
+---------------------------------------+-------+--------------+-------------+
| Share premium | | 14,422 | 14,422 |
+---------------------------------------+-------+--------------+-------------+
| Capital redemption reserve | | 860 | 793 |
+---------------------------------------+-------+--------------+-------------+
| Own shares held | | (2,849) | (2,849) |
+---------------------------------------+-------+--------------+-------------+
| Realised capital reserve | | (17,252) | (17,206) |
+---------------------------------------+-------+--------------+-------------+
| Unrealised capital reserve | | (9,885) | (6,645) |
+---------------------------------------+-------+--------------+-------------+
| Special reserve | | 32,202 | 32,421 |
+---------------------------------------+-------+--------------+-------------+
| Revenue reserve | | 901 | 1,172 |
+---------------------------------------+-------+--------------+-------------+
| Total equity shareholders' funds | | 26,399 | 30,174 |
+---------------------------------------+-------+--------------+-------------+
| Net asset value per share (pence)* | | 36.3 | 41.1 |
+---------------------------------------+-------+--------------+-------------+
*(excluding Treasury shares)
The Company balance sheet has been prepared in accordance with UK GAAP.
Comparative figures have been extracted from the statutory accounts for the year
ended 30 June 2008.
These financial statements were approved by the Board of Directors, and
authorised for issue on 26 February 2009 and were signed on its behalf by
Patrick Crosthwaite
Chairman
Summary Consolidated Statement of Changes in Equity (unaudited)
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| | Ordinary | | Capital | Own | Realised | Unrealised | Special | Revenue | Total |
| | share | Share | redemption | shares | capital | capital | reserve | reserve | GBP'000 |
| | capital | premium | reserve | held* | reserve | reserve | * | * | |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | * | GBP'000 | GBP'000 | GBP'000 | |
| | | | | | GBP'000 | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| As at 30 June 2008 | 8,066 | 14,422 | 793 | (2,849) | (17,206) | (6,645) | 32,421 | 1,172 | 30,174 |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Purchase of own | (66) | - | 66 | - | - | - | (219) | - | (219) |
| shares for | | | | | | | | | |
| cancellation | | | | | | | | | |
| (including costs) | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Capitalised | - | - | - | - | (73) | - | - | - | (73) |
| management and | | | | | | | | | |
| performance fees | | | | | | | | | |
| (net of tax) | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Capitalised VAT | - | - | - | - | 277 | - | - | - | 277 |
| recoverable on | - | - | - | - | 8 | - | - | - | 8 |
| management and | | | | | | | | | |
| performance fees | | | | | | | | | |
| Net realised gains | | | | | | | | | |
| on investments | | | | | | | | | |
| during the period | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Movement in | - | - | - | - | - | (3,240) | - | - | (3,240) |
| unrealised | | | | | | | | | |
| depreciation during | | | | | | | | | |
| the period | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Revenue profit for | - | - | - | - | - | - | - | 390 | 390 |
| the period | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Dividends paid in | - | - | - | - | (257) | - | - | (661) | (918) |
| the period | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| As at 31 December | 8,000 | 14,422 | 860 | (2,849) | (17,252) | (9,885) | 32,202 | 901 | 26,399 |
| 2008 | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| As at 1 July 2007 | 8,392 | 14,422 | 468 | (2,849) | (11,193) | (9,558) | 33,686 | 1,006 | 34,374 |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Purchase of own | (326) | - | 326 | - | - | - | (1,265) | - | (1,265) |
| shares for | | | | | | | | | |
| cancellation | | | | | | | | | |
| (including costs) | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Capitalised | - | - | - | - | (197) | - | - | - | (197) |
| management and | | | | | | | | | |
| performance fees | | | | | | | | | |
| (net of tax) | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Net realised losses | - | - | - | - | (4,731) | - | - | - | (4,731) |
| on investments | | | | | | | | | |
| during the year | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Movement in | - | - | - | - | - | 2,913 | - | - | 2,913 |
| unrealised | | | | | | | | | |
| appreciation during | | | | | | | | | |
| the year | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Revenue profit for | - | - | - | - | - | - | - | 957 | 957 |
| the year | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| Dividends paid in | - | - | - | - | (1,085) | - | - | (791) | (1,876) |
| the year | | | | | | | | | |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
| As at 30 June 2008 | 8,066 | 14,422 | 793 | (2,849) | (17,206) | (6,645) | 32,421 | 1,172 | 30,174 |
+----------------------+----------+---------+------------+---------+----------+------------+---------+---------+---------+
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| As at 1 July 2007 | 8,392 | 14,422 | 468 | (2,849) | (11,193) | (9,558) | 33,686 | 1,006 | 34,374 |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Purchase of own | (146) | - | 146 | - | - | - | (581) | - | (581) |
| shares for | | | | | | | | | |
| cancellation | | | | | | | | | |
| (including costs) | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Capitalised | - | - | - | - | (175) | - | - | - | (175) |
| management and | | | | | | | | | |
| performance fees | | | | | | | | | |
| (net of tax) | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Net realised gains | - | - | - | - | 258 | - | - | - | 258 |
| on investments | | | | | | | | | |
| during the period | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Movement in | - | - | - | - | - | (734) | - | - | (734) |
| unrealised | | | | | | | | | |
| depreciation during | | | | | | | | | |
| the period | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Revenue profit for | - | - | - | - | - | - | - | 563 | 563 |
| the period | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| Dividends paid in | - | - | - | - | (340) | - | - | (604) | (944) |
| the period | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
| As at | 8,246 | 14,422 | 614 | (2,849) | (11,450) | (10,292) | 33,105 | 965 | 32,761 |
| 31 December 2007 | | | | | | | | | |
+----------------------+-------+--------+---------+---------+----------+----------+--------+-------+--------+
* Included within these reserves is an amount of GBP12,093,000 (June 2008:
GBP12,620,000; December 2007: GBP18,839,000) which is considered distributable.
The special reserve has been treated as distributable in determining the
reserves available for distribution.
The consolidated statement of changes in equity for the Group also represents
the Company's reconciliation of movements
in shareholders' funds.
Summary Consolidated Cash Flow Statement
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| | Note | Unaudited | Unaudited | Audited |
| | | six months to | six | year to |
| | | | months to | 30 June |
| | | 31 December | 31 December | 2008 |
| | | 2008 | 2007 | GBP'000 |
| | | GBP'000 | GBP'000 | |
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Operating | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Investment | | 591 | 599 | 1,858 |
| income | | | | |
| received | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Deposit | | 183 | 213 | 396 |
| interest | | | | |
| received | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Administration | | (27) | (29) | (59) |
| fees paid | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Investment | | (288) | (565) | (900) |
| management | | | | |
| fees paid | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Other | | (123) | (89) | (212) |
| cash | | | | |
| payments | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Cash | | 336 | 129 | 1,083 |
| generated | | | | |
| from | | | | |
| operations | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Taxation | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Tax | | 52 | (52) | (52) |
| received/(paid) | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Net cash | 9 | 388 | 77 | 1,031 |
| flows | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| investing | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Purchase | | (1,282) | (4,949) | (3,434) |
| of | | | | |
| investments | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Disposal | | 25 | 6,690 | 9,122 |
| of | | | | |
| investments | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Net cash | | (1,257) | 1,741 | 5,688 |
| flows | | | | |
| from | | | | |
| investing | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Management | | | | |
| of liquid | | | | |
| resources | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Purchase | | (3,835) | - | (2,718) |
| of | | | | |
| current | | | | |
| investments | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| financing | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Equity | | (918) | (944) | (1,876) |
| dividends | | | | |
| paid | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Purchase | | (261) | (612) | (1,255) |
| of | | | | |
| Ordinary | | | | |
| shares | | | | |
| for | | | | |
| cancellation | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Net cash | | (1,179) | (1,556) | (3,131) |
| flows | | | | |
| used in | | | | |
| financing | | | | |
| activities | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| (Decrease)/increase | | (5,883) | 262 | 870 |
| in cash and cash | | | | |
| equivalents | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Cash and | | 9,237 | 8,367 | 8,367 |
| cash | | | | |
| equivalents | | | | |
| at the | | | | |
| start of | | | | |
| the period | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
| Cash and | 10 | 3,354 | 8,629 | 9,237 |
| cash | | | | |
| equivalents | | | | |
| at the end | | | | |
| of the | | | | |
| period | | | | |
+---------------------+----------+---------------+-------------+-----------------------+
Notes to the Summarised Set of Financial Statements
for the six months ended 31 December 2008 (unaudited)
1. Accounting policies
The following policies refer to the Group and the Company except where noted.
References to International Financial Reporting Standards ('IFRS') relate to the
Group financial statements and to Financial Reporting Standards ('FRS') relate
to the Company financial statements.
Basis of accounting
The Half-yearly Financial Report has been prepared in accordance with the
historical cost convention, modified to include the revaluation of investments
and in accordance with International Financial Reporting Standards ('IFRS')
adopted for use in the European Union (and therefore comply with Article 4 of
the EU IAS regulation), in the case of the Group, and in accordance with
Financial Reporting Standards ('FRS') in the case of the Company.
Both the Group and the Company financial statements also apply the Statement of
Recommended Practice: "Financial Statements of Investment Trust Companies"
('SORP') issued by the Association of Investment Trust Companies ("AITC") in
January 2003 and revised in December 2005, in so far as this does not conflict
with IFRS or FRS. The financial statements have been prepared in accordance with
those parts of the Companies Acts 1985 and 2006 applicable to the companies
reporting under IFRS and FRS. The information in this document does not include
all of the disclosures required by IFRS and SORP in full annual financial
statements, and it should be read in conjunction with the consolidated financial
statements of the Group for the year ended 30 June 2008. This Half-yearly
Financial Report has been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's published
consolidated financial statements for the year ended 30 June 2008.
These financial statements are presented in Sterling to the nearest thousand.
Accounting policies have been applied consistently in current and prior periods.
In order to better reflect the activities of a venture capital trust, and in
accordance with the SORP, supplementary information which analyses the Income
statement between items of a revenue and capital nature has been presented
within the Income statement.
The Directors also consider it more useful to shareholders to separate the
capital returns to shareholders and the Special reserve from within the revenue
reserve and have therefore reclassified the comparative reserves on a consistent
basis.
Gains or losses on investments have also been reclassified and presented at the
top of the Consolidated Income statement. The Directors believe this
presentation is more relevant to the Group's activities as a venture capital
trust.
Basis of consolidation
The Group consolidated financial statements incorporate the financial statements
of the Company for the period ended 31 December 2008 and the entities controlled
by the Company (its subsidiaries), for the same period. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on consolidation.
As permitted by Section 230 of the Companies Act 1985, the Company has not
presented its own profit and loss account. The amount of the Company's loss for
the period dealt with in the accounts of the Group is GBP2,669,000 (30 June
2008: loss GBP1,076,000; 31 December 2007: loss GBP107,000).
Segmental reporting
The Directors are of the opinion that the Group and the Company are engaged in a
single segment of business, being investment business. The Group invests in
smaller companies principally based in the UK.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method in
the Group financial statements. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the subsidiaries, plus any costs directly attributable
to the business combination. The subsidiary's identifiable assets, liabilities
and contingent liabilities that meet the conditions for recognition under IFRS 3
"Business Combinations" are recognised at their fair value at the acquisition
date.
Estimates
The preparation of the Group and Company's Half-yearly Financial Report requires
estimates, assumptions and judgments to be made, which affect the reported
results and balances. Actual outcomes may differ from these estimates, with a
consequent impact on the results of future periods. These estimates and
assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are
those used to determine the fair value of investments at fair value through
profit or loss.
The valuation of investments at fair value through the profit or loss is
determined by using valuation techniques. The Group and the Company use
judgments to select a variety of methods and makes assumptions that are mainly
based on market conditions at each balance sheet date.
Fixed and current asset investments
Quoted and unquoted equity investments
In accordance with IAS 39 'Financial Instruments: Recognition and Measurement',
and FRS 26 'Financial Instruments: Recognition and Measurement', quoted and
unquoted equity investments are designated as fair value through profit or loss
('FVTPL'). Investments listed on recognised exchanges are valued at the closing
bid prices at the end of the accounting period. Unquoted investments' fair value
is determined by the Directors in accordance with the International Private
Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).
Fair value movements on equity investments and gains and losses arising on the
disposal of investments are reflected in the capital column of the Income
statement in accordance with the AITC SORP. Realised gains or losses on the sale
of investments will be reflected in the Realised capital reserve, and unrealised
gains or losses arising from the revaluation of investments will be reflected in
the Unrealised capital reserve.
Warrants, convertibles and unquoted equity derived instruments
Warrants, convertibles and unquoted equity derived instruments are only valued
if their exercise or contractual conversion terms would allow them to be
exercised or converted as at the balance sheet date, and if there is additional
value to the Company in exercising or converting as at the balance sheet date.
Otherwise these instruments are held at nil value. The valuation techniques used
are those used for the underlying equity investment.
Unquoted loan stock and Euro commercial paper
Unquoted loan stock and Euro commercial paper are classified as loans and
receivables in accordance with IAS 39 and FRS 26 and carried at amortised cost
using the Effective Interest Rate method ('EIR') less impairment. Movements in
the amortised cost relating to interest income are reflected in the revenue
column of the Income statement, and hence are reflected in the Revenue reserve,
and movements in respect of capital provisions are reflected in the capital
column of the Income statement and are reflected in the Realised capital reserve
following sale, or in the Unrealised capital reserve on revaluation.
Loan stocks which are not impaired or past due are considered fully performing
in terms of contractual interest and capital repayments and the Board does not
consider that there is a current likelihood of a shortfall on security cover
for these assets. For unquoted loan stock, the amount of the impairment is the
difference between the asset's cost and the present value of estimated future
cash flows, discounted at the effective interest rate.
Unquoted loan stocks are classified as fixed asset investments in the balance
sheet.
Euro commercial paper is classified as a current asset
investment in the balance sheet.
Floating rate notes
In accordance with IAS 39 and FRS 26, floating rate notes are designated as fair
value through profit or loss ("FVTPL"). Floating rate notes are valued at market
bid price at the balance sheet date and are disclosed as current asset
investments in the balance sheet.
It is not the Group or the Company's policy to exercise control or significant
influence over investee companies. Therefore in accordance with the exemptions
under IAS 28 "Investments in associates" and FRS 9 "Associates and joint
ventures" those undertakings in which the Group or Company holds more than 20
per cent. of the equity are not regarded as associated undertakings.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of an
investment.
Investment income
Unquoted equity income
Dividend income is not recognised as part of the fair value movement of an
investment, but is recognised separately as investment income through the
Revenue reserve when a share becomes ex-dividend.
Unquoted loan stock and Euro commercial paper income
Fixed returns on debt securities are recognised on a time apportionment basis
using an effective interest rate over the life of the financial instrument. Loan
stock accrued interest is recognised in the Balance sheet as part of the
carrying value of the loans and receivables at the end of each reporting period.
Returns on cash balances are recognised on an accruals basis
using the rate agreed with the bank.
Taxation
Taxation is applied on a current basis in accordance with IAS 12 and FRS 16
"Income taxes". Taxation associated with capital expenses is applied in
accordance with the SORP. Deferred taxation is provided in full on temporary
differences in accordance with IAS 12 and timing differences in accordance with
FRS 16, that result in an obligation at the balance sheet date to pay more tax
or a right to pay less tax, at a future date, at rates expected to apply when
they crystallise based on current tax rates and law. Temporary and timing
differences arise from the inclusion of items of income and expenditure in
taxation computations in periods different from those in which they are included
in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which unused tax losses and credits can
be utilised.
Dividends
In accordance with IAS 10 and FRS 21 "Events after the balance sheet date",
dividends are accounted for in the period in which the dividend has been paid,
or approved by shareholders.
Issue costs
Issue costs associated with the allotment of share capital have
been deducted from the share premium account.
Investment management fees, performance incentive fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged
through the Revenue column of the Income statement, except for management fees
and performance incentive fees which are allocated in part to the capital column
of the Income statement, to the extent that these relate to an enhancement in
the value of the investments and in line with the Board's expectation that over
the long term 75 per cent. of the Group's investment returns will be in the form
of capital gains.
Receivables and payables/debtors and creditors
* Receivables are non-interest bearing, are short term in nature and are
accordingly stated at their nominal value, as reduced by appropriate allowances
for estimated irrecoverable amounts. The Directors consider that the carrying
amount of receivables/debtors is not materially different to their fair value.
* Payables are non-interest bearing and are stated at their nominal value. The
Directors consider that the carrying amount of payables/creditors is not
materially different to their fair value.
Realised capital reserves
The following are disclosed in this reserve:
- gains and losses compared to cost on the realisation
of investments;
- expenses, together with the related taxation effect, charged
in accordance with the above policies; and
- dividends paid to equity holders.
Unrealised capital reserves
Increases and decreases in the valuation of investments held at
the period end are disclosed in this reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own shares.
Own shares held reserve
This reserve accounts for the reduction in distributable reserves through the
repurchase of the Company's own shares for Treasury.
Special reserve
The cancellation of the share premium account has created a special reserve that
can be used to fund market purchases and subsequent cancellation of own shares,
to cover gross realised losses, and for other distributable purposes.
2. Losses on investments
+----------------+-----------+--------------+----------+
| | Unaudited | Unaudited | Audited |
| | six | six | year to |
| | months to | months | |
| | 31 | to | 30 June |
| | December | 31 December | 2008 |
| | 2008 | 2007 | GBP'000 |
| | GBP'000 | GBP'000 | |
+----------------+-----------+--------------+----------+
| Unrealised | (2,556) | (1,208) | (3,716) |
| losses on | | | |
| non-current | | | |
| asset | | | |
| investments | | | |
| held at | | | |
| fair value | | | |
| through | | | |
| profit and | | | |
| loss | | | |
| account | | | |
+----------------+-----------+--------------+----------+
| Net | - | 235 | 5,515 |
| unrealised | | | |
| losses | | | |
| transferred | | | |
| to realised | | | |
| losses in | | | |
| the period | | | |
+----------------+-----------+--------------+----------+
| Unrealised | (709) | 243 | 1,145 |
| (losses)/gains | | | |
| on non-current | | | |
| asset | | | |
| investments | | | |
| held at | | | |
| amortised cost | | | |
+----------------+-----------+--------------+----------+
| Unrealised | (3,265) | (730) | 2,944 |
| (losses)/gains | | | |
| on non-current | | | |
| asset | | | |
| investments | | | |
| sub-total | | | |
+----------------+-----------+--------------+----------+
| Unrealised | 25 | (4) | (31) |
| gains/(losses) | | | |
| on current | | | |
| asset | | | |
| investments | | | |
+----------------+-----------+--------------+----------+
| Unrealised | (3,240) | (734) | 2,913 |
| (losses)/gains | | | |
| sub-total | | | |
+----------------+-----------+--------------+----------+
| Realised | 8 | 493 | 784 |
| gains on | | | |
| investments | | | |
| held at | | | |
| fair value | | | |
| through | | | |
| profit and | | | |
| loss | | | |
| account | | | |
+----------------+-----------+--------------+----------+
| Net | - | (235) | (5,515) |
| realised | | | |
| losses | | | |
| transferred | | | |
| from | | | |
| unrealised | | | |
| losses in | | | |
| the year | | | |
+----------------+-----------+--------------+----------+
| Realised | 8 | 258 | (4,731) |
| gains/(losses) | | | |
| sub-total | | | |
+----------------+-----------+--------------+----------+
| Total | (3,232) | (476) | (1,818) |
+----------------+-----------+--------------+----------+
Investments valued on an amortised cost basis are unquoted loan stock
investments and Euro commercial paper.
3. Investment income and deposit interest
+----------------------------------------+------------+-------------+-------------+
| | Unaudited | Unaudited | Audited |
| | six months | six | year to |
| | to | months to | 30 June |
| | 31 | 31 December | 2008 |
| | December | 2007 | GBP'000 |
| | 2008 | GBP'000 | |
| | GBP'000 | | |
+----------------------------------------+------------+-------------+-------------+
| Income recognised on investments held | | | |
| at fair value through profit and loss | | | |
+----------------------------------------+------------+-------------+-------------+
| UK dividend income | 37 | 60 | 69 |
+----------------------------------------+------------+-------------+-------------+
| Management fees received from equity | - | - | 3 |
| investments | | | |
+----------------------------------------+------------+-------------+-------------+
| Floating rate note interest | 85 | 63 | 144 |
+----------------------------------------+------------+-------------+-------------+
| Bank deposit interest | 123 | 210 | 441 |
| Other income | 9 | - | - |
+----------------------------------------+------------+-------------+-------------+
| | 254 | 333 | 657 |
+----------------------------------------+------------+-------------+-------------+
| Income recognised on investments held | | | |
| at amortised cost | | | |
+----------------------------------------+------------+-------------+-------------+
| Return on loan stock investments | 305 | 653 | 1,057 |
+----------------------------------------+------------+-------------+-------------+
| Euro Commercial Paper income | 63 | - | - |
+----------------------------------------+------------+-------------+-------------+
| | 622 | 986 | 1,714 |
+----------------------------------------+------------+-------------+-------------+
4. Recovery of VAT
HM Revenue & Customs issued a business briefing on 24 July 2008 which permitted
the recovery of historic VAT that had been charged on management, performance
and administration fees, and which made these fees exempt from VAT with effect
from 1 October 2008.
The amount of GBP369,000 recoverable from the Manager has been recognised as a
separate item in the Income statement, allocated between revenue and capital
return in the same proportion as that at which the original VAT had been
charged. At 31 December 2008, the amount due to Crown Place VCT PLC from Close
Ventures Limited in respect of this VAT claim was GBP369,000. This has been
received by the Company since the balance sheet date.
It is possible that further amounts may be recoverable in due course, however,
the Directors are at this stage unable to quantify the amounts involved.
5. Dividends
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Unaudited | Unaudited | Audited |
| | six months to | six months to | year to |
| | 31 December 2008 | 31 December 2007 | 30 June 2008 |
+----------------------+-----------------------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| First dividend paid | - | - | - | 604 | 340 | 944 | 604 | 340 | 944 |
| on 28 December 2007 | | | | | | | | | |
| (1.25 pence per | | | | | | | | | |
| share) | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Second dividend paid | - | - | - | - | - | - | 187 | 745 | 932 |
| on 25 April 2008 | | | | | | | | | |
| (1.25 pence per | | | | | | | | | |
| share) | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| First dividend paid | 661 | 257 | 918 | - | - | - | - | - | - |
| on 8 August 2008 | | | | | | | | | |
| (1.25 pence per | | | | | | | | | |
| share) | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | 661 | 257 | 918 | 604 | 340 | 944 | 791 | 1,085 | 1,876 |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
In addition, the Board has declared a second dividend of 1.25 pence per share
(0.25 pence to be paid out of revenue profits and 1.00 pence out of realised
capital gains). This will be paid subject to HM Revenue & Customs approval. The
record date and payment date of this dividend will be announced on the London
Stock Exchange RNS service.
6. Basic and diluted return per share
The return per share has been based on the following figures:
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
| | Unaudited six months to | Unaudited six months to | Audited year |
| | 31 December 2008 | 31 December 2007 | to |
| | | | 30 June 2008 |
+--------------------+-----------------------------------+--------------------------------+--------------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
| | | | | | | | | | |
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
| Return | 390 | (3,028) | (2,638) | 563 | (651) | (88) | 957 | (2,016) | (1,059) |
| attributable to | | | | | | | | | |
| equity shares | | | | | | | | | |
| (GBP'000) | | | | | | | | | |
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
| Weighted average | | | 73,181,241 | | | 76,215,222 | | | 75,364,144 |
| shares in issue | | | | | | | | | |
| (excluding | | | | | | | | | |
| Treasury shares) | | | | | | | | | |
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
| Return | 0.53 | (4.14) | (3.61) | 0.74 | (0.86) | (0.12) | 1.27 | (2.67) | (1.40) |
| attributable per | | | | | | | | | |
| equity share | | | | | | | | | |
| (pence) | | | | | | | | | |
+--------------------+-----------+----------+------------+---------+---------+------------+---------+---------+------------+
There are no convertible instruments, derivatives or contingent share agreements
in issue, and therefore no dilution affecting the return per share.
7. Non-current asset investments
+------------------------------------------------------+-------------+-----------+
| | Unaudited | Audited |
| | 31 December | 30 June |
| | 2008 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------------------+-------------+-----------+
| Investments held at fair value through profit or | 5,399 | 7,307 |
| loss | | |
+------------------------------------------------------+-------------+-----------+
| Investments held at amortised cost | 10,658 | 10,904 |
+------------------------------------------------------+-------------+-----------+
| | 16,057 | 18,211 |
+------------------------------------------------------+-------------+-----------+
8. Ordinary share capital
+------------------------------------------------------+-------------+-----------+
| | Unaudited | Audited |
| | 31 December | 30 June |
| | 2008 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------------------+-------------+-----------+
| Authorised | | |
+------------------------------------------------------+-------------+-----------+
| 140,000,000 Ordinary shares of 10p each | 14,000 | 14,000 |
+------------------------------------------------------+-------------+-----------+
| | | |
+------------------------------------------------------+-------------+-----------+
| Allotted, called up and fully paid | | |
+------------------------------------------------------+-------------+-----------+
| 80,000,740 Ordinary shares of 10p each (30 June | 8,000 | 8,066 |
| 2008: 80,664,390) | | |
+------------------------------------------------------+-------------+-----------+
| | | |
+------------------------------------------------------+-------------+-----------+
| Allotted, called up and fully paid excluding | 7,318 | 7,340 |
| Treasury shares | | |
| 73,181,241 Ordinary shares of 10p each (30 June | | |
| 2008: 73,403,980) | | |
+------------------------------------------------------+-------------+-----------+
The Company repurchased for cancellation 663,650 Ordinary shares during the
period (year to June 2008: 3,256,044; six months to 31 December 2007: 1,456,436)
at a cost of GBP219,000 (year to June 2008: GBP1,265,000; six months to 31
December 2007: GBP581,000). This represented approximately 0.9% of the share
capital (excluding Treasury shares) as at 1 July 2008. The shares purchased for
cancellation were funded from the special reserve. The total number of shares
held in Treasury as at 31 December 2008 was 7,260,410 (30 June 2008: 7,260,410;
31 December 2007: 7,260,410).
9. Reconciliation of revenue return on ordinary activities before taxation to
net cash inflow from operating activities
+----------------------------------+--------------+--------------+-------------+
| | Unaudited | Unaudited | Audited |
| | six months | six months | year to |
| | to | to | 30 June |
| | 31 December | 31 December | 2008 |
| | 2008 | 2007 | GBP'000 |
| | GBP'000 | GBP'000 | |
+----------------------------------+--------------+--------------+-------------+
| | | | |
+----------------------------------+--------------+--------------+-------------+
| Revenue return before tax | 504 | 739 | 1,240 |
+----------------------------------+--------------+--------------+-------------+
| Capitalised expenses and VAT | 90 | (260) | (502) |
| recovery | | | |
+----------------------------------+--------------+--------------+-------------+
| Decrease in accrued amortised | 138 | 232 | 648 |
| loan stock interest | | | |
+----------------------------------+--------------+--------------+-------------+
| Increase in receivables | (372) | (501) | (114) |
+----------------------------------+--------------+--------------+-------------+
| Increase/(decrease) in payables | 28 | (133) | (241) |
+----------------------------------+--------------+--------------+-------------+
| Net cash inflow from operating | 388 | 77 | 1,031 |
| activities | | | |
+----------------------------------+--------------+--------------+-------------+
10. Analysis of changes in cash during the period
+------------------------------------------+-------------------------+--------------------+----------------+
| | Unaudited | Unaudited | Audited |
| | six months to | six months to | year to |
| | 31 December | 31 December 2007 | 30 June |
| | 2008 | GBP'000 | 2008 |
| | GBP'000 | | GBP'000 |
+------------------------------------------+-------------------------+--------------------+----------------+
| Opening cash balances | 9,237 | 8,367 | 8,367 |
+------------------------------------------+-------------------------+--------------------+----------------+
| Net cash (outflow)/inflow | (5,883) | 262 | 870 |
+------------------------------------------+-------------------------+--------------------+----------------+
| | 3,354 | 8,629 | 9,237 |
+------------------------------------------+-------------------------+--------------------+----------------+
11.Contingencies, guarantees and financial commitments
The Company did not have any contingencies or guarantees as at 31 December
2008 (30 June 2008: nil; 31 December 2007: nil).
12.Post Balance Sheet Events
Since 31 December 2008 the Company has completed the following
investments:
- January 2009: Investment in GB Pub Company VCT Limited of GBP4,000
- January 2009: Investment in Forth Photonics Limited of GBP210,000
- February 2009: Investment in Xceleron Limited of GBP15,000
- February 2009: Investment in Vibrant Energy Surveys Limited of
GBP27,000
- February 2009: Investment in the Dunedin Pub Company VCT
Limited of GBP8,000
On 23 January 2009, the business of Close Ventures Limited, the Manager of the
VCT was acquired by Albion Ventures LLP from Close Brothers Group plc. Further
details regarding the change are shown in the Interim Management Report.
13. Related Party Transactions
The Manager, Albion Ventures LLP and its predecessor Close Ventures Limited, are
considered to be related parties by virtue of the fact that they are/were party
to a management agreement from the Company. During the period, investment
management and administration services of a total value of GBP275,000 (June
2008: GBP728,000; December 2007: GBP376,000) were purchased by the Company from
Close Ventures Limited (which was recently acquired by Albion Ventures LLP as
described in the Interim Management Report). At the financial period end, the
amount due to Close Ventures Limited, disclosed as accruals, was GBP236,000
(June 2008: GBP169,000). The amount due to Crown Place VCT PLC from Close
Ventures Limited in respect of historic VAT claims, can be found in note 4.
Buy-backs of Ordinary shares during the period were transacted through
Winterflood Securities Limited, a subsidiary of Close Brothers Group plc, which,
at the time of the transactions, was the ultimate parent company of the Manager.
A total of 663,650 shares were purchased at an average price of 32.8 pence per
share.
14. Other information
The information set out in the Half-yearly Financial Report does not constitute
the Group's statutory accounts for the period ended 31 December 2008 or 31
December 2007 and is unaudited. The financial information for the year ended
30 June 2008 does not constitute statutory accounts as defined in section 240 of
the Companies Act 1985. A copy of the statutory accounts for that period has
been delivered to the Registrar of Companies. The auditors' report on those
accounts was not qualified and did not contain statements under s237 (2) or (3)
of the Companies Act 1985.
15.Publication
This Half-yearly Financial Report is being sent to shareholders and copies will
be made available to the public at the registered office of the Company and at
Companies House. The interim report will also be made available to the public
via the FSA viewing facility and also electronically at
www.albion-ventures.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGGZZNVVGLZM
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