TIDMCYS
Chrysalis VCT plc
Half-Yearly Report for the six months ended 30 April 2018
Recent performance summary
30 April 30 April 31 October
2018 2017 2017
Pence Pence pence
Net asset value per share 78.00 84.30 80.00
Cumulative dividends paid per share 78.70 70.70 75.45
Total return 156.70 155.00 155.45
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present my statement for the six months ended 30 April
2018. The portfolio has continued to perform satisfactorily over the
period.
Net asset value and results
At 30 April 2018, the net asset value per share ("NAV") stood at 78.0p,
an increase of 1.25p (1.6%) since the previous year end of 31 October
2017, after adding back the 3.25p dividend paid on 2 March 2018.
The Total Return to Shareholders who invested at the launch of the
Company in 2000 (NAV plus cumulative dividends) is now 156.7p compared
to the original cost (net of income tax relief) of 80.0p per share.
The return on activities after taxation for the Company for the period
was GBP346,000, comprising a revenue return of GBP49,000 and a capital
return of GBP297,000.
Market developments and future strategy
As announced in my statement in last year's annual report the Board has
conducted a further review of market developments and has considered
carefully the options that may be available to the Company.
The recent and prospective changes in Venture Capital Trust regulations
substantially prohibit the style of structured investment that the
Investment Manager has historically deployed so successfully. At the
same time, the universe of eligible companies has been significantly
reduced and the pool of funds seeking to invest in qualifying companies
has expanded, not least due to changes in taxation in areas such as
pension contributions and inheritance tax. In the view of the Board,
this leaves the Investment Manager significantly less well placed to
source and execute transactions that are likely to yield good returns to
Shareholders. The Investment Manager also has limited ability to make
follow on investments in existing portfolio companies, due to a
combination of the new rule changes and the increasing concentration
within the portfolio. For these reasons, the Board expects further
investment activity to remain rather more muted.
The Board is however confident that the existing portfolio is likely to
deliver attractive realisations over time. Mindful of regulatory
requirements, in particular current and prospective restrictions on the
amount of capital than can be held outside qualifying investments, it is
proposed that further distributions of capital to Shareholders will be
made to assist in continuing to comply with the regulations. The Board
has therefore decided that, in addition to its established policy of
distributing regular interim and final dividends totalling 5p per share
per annum, it will pay additional special dividends as and when
realisations provide liquidity.
The Board also believes it is now appropriate to adopt a more active
approach to share buybacks and in future intends to conduct buybacks,
subject to market conditions and any liquidity or regulatory
restrictions, at a target discount of 15% to the latest published NAV.
The 15% discount level has been carefully considered by the Board and
selected to take account of the particular characteristics of the
Company's investment portfolio.
Any Shareholders wishing to buy or sell shares in the Company may wish
to consider contacting the Company's broker, Nplus1 Singer Capital
Markets, who will be able to provide details of share availability and
likely timings in respect of buybacks. There were no share buybacks in
the period under review.
The Board recognises that over time the consequences of the above
decisions will probably be to reduce the size of the Company to the
point where its cost base relative to its net assets becomes
inappropriate. The Board will address this issue in a timely manner.
Venture capital portfolio
Portfolio activity
During the six months to 30 April 2018, a restructuring resulted in a
partial exit from MyTime Media Holdings Limited. This produced a
realised loss of GBP137,000, but this has been offset by an unrealised
uplift GBP140,000 on the remaining holding. The related investment in
Hoop Holdings Limited was also exited in full at a small gain in the
period.
During the period, Internet Fusion Limited, an e-commerce business from
which the Company exited in 2017, generated deferred consideration of
GBP608,000. As the full cost of the investment was treated as disposed
when the exit took place in 2017, the cash generated represents a pure
profit for the Company. This investment has yielded an excellent
outcome for Shareholders.
No new or follow-on investments were made during the period.
Since the period end, I am pleased to announce that a further investment,
Inaspect, has been sold at a price that represents a significant gain
against cost and was approximately equal to carrying value at 30 April
2018.
Valuations
The Board has reviewed the valuations of the unquoted portfolio and a
number of adjustments have been made accordingly. As a whole, the fair
value movements in respect of unquoted investments amounted to a net
uplift of GBP23,000.
The most significant fair value adjustment was a GBP362,000 reduction in
respect of Precision Dental Laboratories, in order to bring the
valuation in line with likely market value.
Cambridge Mechatronics Limited, a high technology design and
engineering company, was uplifted by GBP330,000 during the period. The
investment was revalued to reflect the price of the company's latest
funding round.
Coolabi Group Limited, a media group and rights owner, and now the
Company's largest investment by value, was uplifted by GBP275,000 in
line with value which accrues on the preferred element of this
investment.
Locale Enterprises Limited, an Italian restaurant operator, has suffered
a decline in turnover and the valuation has been reduced by GBP218,000
accordingly.
Non-qualifying portfolio
The Company continues to hold a portfolio of two fixed income bonds,
valued at GBP1.5 million at the period end. The unrealised capital loss
on the portfolio during the period was GBP32,000, however the Company
also received interest of GBP45,000.
The investment in Impact Healthcare REIT plc, an investment trust which
holds a portfolio of care homes, was uplifted by GBP4,000 in line with
the quoted bid price at the period end.
Dividends
In line with the policy discussed above, the Company will pay a standard
interim dividend of 1.75p per share. In view of the disposals that have
taken place in the period, the Company will also pay a special dividend
of 3p per share, bring the total to 4.75p per share. The total dividend
will be paid on 3 August 2018 to Shareholders on the register at 6 July
2018.
Following the payment of the dividend, Shareholders who invested at
launch will have received distributions totalling 83.45p per share.
I look forward to updating Shareholders on developments in my statement
in the Annual Report, which I expect to be published in December or
January.
Martin Knight
Chairman
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 April 2018
Valuation
movement % of
in the portfolio
Cost Valuation period by value
GBP'000 GBP'000 GBP'000
Top ten venture capital
investments
Coolabi Group Limited 3,456 4,869 275 20.9%
Locale Enterprises Limited 2,513 2,336 (218) 10.0%
Zappar Limited 300 2,161 - 9.3%
Precision Dental Laboratories
Limited 1,110 1,367 (364) 5.8%
Cambridge Mechatronics Limited 366 1,172 329 5.1%
K10 (London) Limited 950 1,110 (7) 4.8%
Driver Require Limited 520 902 (59) 3.9%
MyTime Media Holdings Limited 56 848 140 3.6%
Green Star Media Limited 650 667 (52) 2.8%
IX Group Limited 250 340 1 1.4%
10,171 15,772 45 67.6%
Other venture capital investments 3,764 867 (26) 3.7%
Fixed income securities
Lloyds Banking Group 7% perp 724 760 (19) 3.3%
Intermediate Capital Group plc 7%
21/12/18 746 700 (14) 3.0%
1,470 1,460 (33) 6.3%
Other investments
Impact Healthcare REIT Plc* 750 769 4 3.3%
750 769 4 3.3%
16,155 18,868 (10) 80.9%
Cash at bank and in hand 4,449 19.1%
Total investments 23,317 100.0%
All venture capital investments are unquoted unless otherwise stated.
*Listed and traded on the Main Market of the London Stock Exchange.
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 30 April 2018
Disposals
Value at Gain/(loss) Total
1 Nov Disposal against realised
Cost 2017 proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture capital
investments
Disposals
Hoop Holdings Limited 150 135 150 - 15
MyTime Media Holdings
Limited 20 257 120 100 (137)
Earn-out
Internet Fusion
Limited - - 608 608 608
170 392 878 708 486
UNAUDITED INCOME STATEMENT
for the six months ended 30 April 2018
Year
Six months ended Six months ended ended
30 Apr 30 Apr 31 Oct
2018 2017 2017
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 235 - 235 302 - 302 576
Net gains on investments
- realised - 486 486 - 1,110 1,110 1,301
- unrealised - (10) (10) - 1,072 1,072 1,110
235 476 711 302 2,182 2,484 2,987
Investment management fees (49) (148) (197) (50) (150) (200) (408)
Performance incentive fees - (37) (37) - (106) (106) (127)
Other expenses (130) (1) (131) (136) - (136) (274)
Return on ordinary activities
before taxation 56 290 346 116 1,926 2,042 2,178
Tax on total comprehensive
income and ordinary activities (7) 7 - (20) 20 - -
Return attributable to equity
shareholders 49 297 346 96 1,946 2,042 2,178
Return per share 0.2p 1.0p 1.2p 0.3p 6.5p 6.8p 7.3p
The total column within the Income Statement represents the profit and
loss account of the Company. No operations were acquired or discontinued
during the period.
A Statement of Total Recognised Gains and Losses has not been prepared
as all gains and losses are recognised in the Income Statement as noted
above.
UNAUDITED BALANCE SHEET
as at 30 April 2018
30 Apr 2018 30 Apr 2017 31 Oct 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 18,868 19,978 19,269
Current assets
Debtors 88 66 180
Cash at bank and in hand 4,449 5,327 4,559
4,537 5,393 4,739
Creditors: amounts falling
due within one year (84) (138) (61)
Net current assets 4,453 5,255 4,678
Net assets 23,321 25,233 23,947
Capital and reserves
Called up share capital 299 299 299
Capital redemption reserve 89 89 89
Share premium 1,478 1,478 1,478
Merger reserve 1,357 1,357 1,357
Special reserve 562 924 602
Capital reserve - realised 13,443 14,800 13,715
Capital reserve -
unrealised 5,569 5,708 5,902
Revenue reserve 524 578 505
Equity shareholders' funds 23,321 25,233 23,947
Net asset value per share 78.0p 84.3p 80.0p
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 April 2018
Capital Capital Capital
Share Redemption Share Merger Special reserve reserve Revenue
Capital reserve premium reserve reserve -realised -unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 November
2017 299 89 1,478 1,357 602 13,715 5,902 505 23,947
Total
comprehensive
income - - - - - 307 (10) 49 346
Realisation of
impaired
valuations - - - - - 101 (101) - -
Transfers
between
reserves - - - - (40) 262 (222) - -
Transactions
with owners
Dividends paid - - - - - (942) - (30) (972)
At 30 April
2018 299 89 1,478 1,357 562 13,443 5,569 524 23,321
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 April 2018
Six months Six months Year
ended ended ended
30 Apr 2018 30 Apr 2017 31 Oct 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Return on ordinary activities
before taxation 346 2,042 2,178
Gains on investments (476) (2,182) (2,411)
Decrease/(increase) in other
debtors 92 22 (92)
Increase/(decrease) in other
creditors 22 84 8
Net cash outflow from
operating activities (16) (34) (317)
Cash flows from investing
activities
Proceeds from disposal of
investments 878 3,222 4,409
Purchase of investments - (1,050) (1,300)
Net cash inflow from investing
activities 878 2,172 3,109
Net cash inflow before
financing activities 862 2,138 2,792
Cash flows from financing
activities
Equity dividends paid (972) (972) (2,394)
Net cash outflow from
financing activities (972) (972) (2,394)
(Decrease)/increase in cash (110) 1,166 398
Net movement in cash
Beginning of the year 4,559 4,161 4,161
Net cash (outflow)/inflow (110) 1,166 398
End of the year 4,449 5,327 4,559
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. General information
Chrysalis VCT plc ("the Company") is a Venture Capital Trust established
under the legislation introduced in the Finance Act 1995 and is
domiciled in the United Kingdom and incorporated in England and Wales.
2. Accounting policies
Basis of accounting
The unaudited half-yearly results cover the six months to 30 April 2018
and have been prepared in accordance with the accounting policies set
out in the annual accounts for the year ended 31 October 2017 and in
accordance with the Financial Reporting Standard 102 ("FRS 102") and in
accordance with the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies" revised November 2014
("SORP").
3.The comparative figures were in respect of the six months ended 30
April 2017 and the year ended 31 October 2017 respectively.
4. Basic and diluted return per share
Six months Six months Year
ended ended ended
30 Apr 2018 30 Apr 2017 31 Oct 2017
Return per share based on:
Net revenue return for the
period (GBP'000) 49 96 173
Capital return per share based
on:
Net capital gain for the period
(GBP'000) 297 1,946 2,005
Weighted average number of
shares 29,917,025 29,917,025 29,917,025
5. Basic and diluted net asset value per share
Six months Six months Year
ended ended ended
30 Apr 2018 30 Apr 2017 31 Oct 2017
Net asset value per share based
on:
Net assets (GBP'000) 23,321 25,233 23,947
Number of shares in issue at the
period end 29,917,025 29,917,025 29,917,025
Net asset value per share 78.0p 84.3p 80.0p
6. Called up share capital
Shares in issue GBP'000
Period ended 30 April 2018 29,917,025 299
Period ended 30 April 2017 29,917,025 299
Year ended 31 October 2017 29,917,025 299
7. Reserves
The special reserve is available to the Company to enable the purchase
of its own shares in the market without affecting its ability to pay
dividends, and also allows the Company to make transfers between
reserves to offset realised capital losses arising on disposals and
impairments.
Distributable reserves are calculated as follows:
Six months Six months Year
ended ended ended
30 Apr 2018 30 Apr 2017 31 Oct 2017
GBP'000 GBP'000 GBP'000
Special reserve 562 924 602
Capital reserve - realised 13,443 14,800 13,715
Revenue reserve 524 578 505
Merger reserve - distributable element 276 276 276
Unrealised losses - excluding unrealised unquoted
gains (338) (161) (119)
14,467 16,417 14,979
8. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required
in the Company's half-year 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 period are as follows:
- investment risk associated with investing in small and immature
businesses;
- failure to maintain approval as a VCT.
In both cases, the Board is satisfied with the Company's approach to
these risks. As a VCT, the Company is forced to have significant
exposure to relatively immature businesses. This risk is mitigated to
some extent by holding a well-diversified portfolio.
The Company's compliance with the VCT regulations is continually
monitored by the Administration Manager, who regularly reports to the
Board on the current position. The Company also retains Philip Hare and
Associates LLP 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.
9. 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.
10. The Directors confirm that, to the best of their knowledge, the
half-yearly financial statements have been prepared in accordance with
FRS 104 Interim Financial Reporting and the Half-Yearly Report includes
a fair review of the information required by:
- 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
- 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.
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 31 October 2017 have been extracted from the
financial statements for that year, which have been delivered to the
Registrar of Companies; the Independent Auditor's Report on those
financial statements was unqualified.
12. Copies of the unaudited Half-Yearly Report will be sent to
Shareholders shortly. Further copies can be obtained from the Company's
registered office and will be available for download from
www.chrysalisvct.co.uk.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Chrysalis VCT PLC via Globenewswire
(END) Dow Jones Newswires
June 18, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Chrysalis Vct (LSE:CYS)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Chrysalis Vct (LSE:CYS)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
