CHELVERTON SMALL COMPANIES ZDP PLC
Registered Number: 08142169
Half-Yearly Report
for the six months ended 31 October
2017
The Half-Yearly Report can be accessed via the Investment
Manager’s website at www.chelvertonam.com or by contacting the
Company Secretary on 01245 398950.
This interim report should be read in conjunction with the
Half-Yearly report of Chelverton Small Companies Dividend Trust PLC
(‘SCDT’).
COMPANY SUMMARY
Company Activities, Strategy &
Business Model
Chelverton Small Companies ZDP PLC (‘SCZ’ or the ‘Company’) was
incorporated on 13 July 2012 as a
wholly owned subsidiary of SCDT, together referred to as the
‘Group’. SCZ was formed especially for the issuing of Zero Dividend
Preference (‘ZDP’) shares. It raised £8,500,000 before expenses on
28 August 2012 by a placing of 8,500,000 ZDP shares, which are
listed on the UK Official List and admitted to trading on the
London Stock Exchange.
On the 24 March 2017 £1,146,150
was raised before expenses by placing an additional 849,000 ZDP
shares, which are listed on the UK Official List and admitted to
trading on the London Stock Exchange.
Pursuant to a loan agreement between SCZ and SCDT, SCZ has lent
the proceeds of the placing to SCDT. The loan is non-interest
bearing and is repayable three business days before the ZDP share
redemption date of 8 January 2018 or,
if required by SCZ, at any time prior to that date in order to
repay the ZDP share entitlement. The funds are to be managed in
accordance with the investment policy of SCDT.
SCZ investment objective &
policy
The objective of SCZ is to provide the final capital entitlement
of the ZDP shares to the holders of the ZDP shares at the
redemption date of 8 January 2018.
The proceeds of the placing of the ZDP shares have been lent to
SCDT under a loan agreement and the funds are managed in accordance
with the investment policy of SCDT.
SCZ has a capital structure comprising unlisted Ordinary shares
and ZDP shares listed on the Official List and traded on the London
Stock Exchange by way of a standard listing. SCZ is a wholly owned
subsidiary of SCDT which is a closed-ended investment company. On
28 August 2012, SCZ placed 8,500,000
ZDP shares at 100p per share and this raised a net total of £8.3
million. The expenses of the placing were borne by SCDT. On
24 March 2017, SCZ placed an
additional 849,000 ZDP shares at 135p per share and this raised a
net total of £1.1 million. The expenses of the placing were
borne by SCDT.
A contribution agreement between SCDT and SCZ has also been made
whereby SCDT will undertake to contribute such funds as would
ensure that SCZ will have in aggregate sufficient assets on
8 January 2018 to satisfy the final
capital entitlement of the ZDP shares of 136.70p per share, being
£12,780,083 in total. This assumes that the parent company and the
Company have sufficient assets as at 8 January 2018 to repay the ZDP shares. To this
extent the Company is reliant upon the investment performance of
the parent company and subject to the principal risks as set out in
the Annual Report of SCDT.
To protect the interests of ZDP shareholders, the loan agreement
contains a restriction on the Group incurring any other borrowings
(other than short-term indebtedness in the normal course of
business, such as when settling share transactions) except where
such borrowings are for the purpose of paying the final capital
entitlement due to holders of ZDP shares.
Based on the value of the Group’s assets as at 31 October 2017 they would have to fall at a rate
of 26.7% per annum for the Company to be unable to meet the full
capital repayment entitlements of the ZDP shares on the scheduled
repayment date of 8 January 2018.
The proceeds of the ZDP issue are being invested by SCDT in
accordance with the investment objective and policy of SCDT, which
is as follows (as extracted from the Annual Report of SCDT):
- The Company’s assets comprise investments in equities in order
to achieve its investment objectives. It is the aim of the Company
to provide both income and capital growth predominantly through
investment in mid and smaller capitalised UK companies admitted to
the Official List of the UK Listing Authority and traded on the
London Stock Exchange Main Market or traded on AIM.
- The Company will not invest in preference shares, loan stock or
notes, convertible securities or fixed interest securities or any
similar securities convertible into shares; nor will it invest in
the securities or other investment trusts or in unquoted
companies.
- There is no set limit on the Company’s gearing.
.
Registered in England No: 08142169
INTERIM MANAGEMENT REPORT
For details of the Group’s activities, development and
performance during the six months ended 31 October 2017
shareholders should refer to the Half-Yearly Report of SCDT, which
can be found on the Investment Manager’s website.
www.chelvertonam.com or is available for inspection at the NSM,
which is situated at www.morningstar.co.uk/uk/nsm
David
Horner
Chelverton Asset Management Limited
15 November 2017
PRINCIPAL RISKS
The principal risks facing the Company are substantially
unchanged since the date of the Annual Report for the year ended
30 April 2017 and continue to be as
set out on page 10 and 11 of that report.
In addition, and due to the Company’s dependence on SCDT to
repay the loan and provide a contribution to meet the capital
entitlement of the ZDP shareholders, the other risks faced by the
Company are considered to be the same as for SCDT. These are
defined in note 24 of SCDT’s Annual Report for the year ended
30 April 2017 and include the
following; market risk, market price risk, foreign currency risk,
interest rate risk, credit risk and liquidity risk.
RESPONSIBILITY STATEMENT OF THE
DIRECTORS IN RESPECT OF
THE HALF-YEARLY REPORT
We confirm that to the best of our knowledge:
-
the condensed set of financial statements has been prepared in
compliance with the IAS34 ‘Interim Financial Reporting’ and gives a
true and fair view of the assets, liabilities and financial
position of the Company; and
-
the interim management report and notes to the Half-Yearly
Report include a fair view of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of the 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 Company
during that period; and any changes in the related party
transactions described in the last Annual Report that could do
so.
This Half-Yearly Report was approved by the Board of Directors
on 15 November 2017 and the above
responsibility statement was signed on its behalf by Lord Lamont,
Chairman.
STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
for the six months ended 31 October
2017
|
Six months ended 31 October 2017 |
|
Year to 30 April 2017 (audited) |
|
Revenue |
Capital |
Total |
|
Revenue |
Capital |
Total |
|
£'000 |
£'000 |
£'000 |
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Income |
- |
- |
- |
|
- |
- |
- |
Provision for contribution from SCDT regarding the capital
entitlement of the ZDP shares |
-
|
341 |
341 |
|
-
|
633 |
633 |
Return before
finance costs and taxation |
- |
341 |
341 |
|
- |
633 |
633 |
|
|
|
|
|
|
|
|
Appropriations in
respect of ZDP shares |
- |
(341) |
(341) |
|
- |
(633) |
(633) |
Net return after
finance costs and before taxation |
- |
- |
- |
|
- |
- |
- |
|
|
|
|
|
|
|
|
Taxation |
- |
- |
- |
|
- |
- |
- |
|
|
|
|
|
|
|
|
Net return after
taxation |
- |
- |
- |
|
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return per ZDP
share (see note 3) |
- |
3.65p |
3.65p |
|
- |
7.37p |
7.37p |
Six months ended 31 October 2016 |
|
Revenue |
Capital |
Total |
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
- |
- |
- |
Income |
-
|
313 |
313 |
Provision for contribution from SCDT regarding the capital
entitlement of the ZDP shares |
- |
313 |
313 |
Return before finance costs and taxation |
|
|
|
|
- |
(313) |
(313) |
Appropriations in respect of ZDP shares |
- |
- |
- |
Net
return after finance costs and before taxation |
|
|
|
|
- |
- |
- |
Taxation |
|
|
|
|
- |
- |
- |
Net
return after taxation |
|
|
|
|
|
|
|
|
- |
3.68p |
3.68p |
Return
per ZDP share (see note 3) |
The total column of this statement is the Statement of
Comprehensive Income of the Company, prepared in accordance with
International Financial Reporting Standards (‘IFRS’), as adopted by
the EU. The supplementary revenue and capital return columns are
presented for information purposes as recommended by the Statement
of Recommended Practice issued by the Association of Investment
Companies (‘AIC’).
All items in the above statement derive from continuing
operations.
BALANCE SHEET (unaudited)
as at 31 October 2017
|
31
October 2017 |
|
30 April
2017 |
|
31
October 2016 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
(audited) |
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Loans and
receivables |
12,649 |
|
12,308 |
|
10,842 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Trade and other
receivables |
13 |
|
13 |
|
13 |
|
|
|
|
|
|
Total
assets |
12,662 |
|
12,321 |
|
10,855 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
ZDP shares |
(12,649) |
|
(12,308) |
|
(10,842) |
|
|
|
|
|
|
Net assets |
13 |
|
13 |
|
13 |
|
|
|
|
|
|
Represented
by: |
|
|
|
|
|
Share capital |
13 |
|
13 |
|
13 |
|
|
|
|
|
|
Equity
shareholders’ funds |
13 |
|
13 |
|
13 |
|
|
|
|
|
|
Net asset value per
ZDP share (see note 4) |
135.30p |
|
131.65p |
|
127.56p |
|
|
|
|
|
|
NOTES TO THE HALF-YEARLY REPORT
For the six months ended 31 October
2017
1. General information
The financial information contained in this Half-Yearly Report
does not constitute statutory financial statements as defined in
Section 434 of the Companies Act 2006. The statutory financial
statements for the year ended 30 April
2017, which contained an unqualified auditors’ report, have
been lodged with the Registrar of Companies and did not contain a
statement required under the Companies Act 2006. These statutory
financial statements were prepared under IFRS and in accordance
with the Statement of Recommended Practice: Financial Statements of
Investment Trust Companies and Venture Capital Trusts (‘SORP)
issued by the AIC in November 2014,
except to any extent where it conflicts with IFRS.
The financial information of the Company for the period ended
31 October 2017 has also been
consolidated into the results of SCDT for the six months ended
31 October 2017.
This Half-Yearly Report has not been reviewed by the Company’s
Auditors.
This Half-Yearly Report has been prepared using accounting
policies set out in note 2 of the Company’s audited financial
statements for the year ended 30 April
2017.
2. Taxation
There is no charge to United
Kingdom income taxation as the Company does not have any
income. There are no deferred tax assets in respect of unrelieved
excess expenses as all expenses are borne by SCDT.
3. Return per ZDP share
The capital return per ZDP share is based on appropriations,
(the accrued entitlement to date) of £341,000 (30 April 2017: £633,000; 31 October 2016: £313,000) and on 9,349,000
(30 April 2017: 8,586,063;
31 October 2016: 8,500,000) being the
weighted average number of ZDP shares in issue during the
period.
4. Net asset value per ZDP share
The net asset value per ZDP share is based on the net assets
attributable of £12,649,000 (30 April
2017: £12,308,000; 31 October
2016: £10,842,000) and on 9,349,000 (30 April 2017: 9,349,000; 31 October 2016:
8,500,000) being the number of ZDP shares in issue during the
period.
5. Going concern
The Company will fulfil its investment objective through the
contribution agreement it has with SCDT. The contribution from SCDT
will provide the capital entitlement of the ZDP shareholders. The
principal risk the Company faces, is therefore, that SCDT would not
have sufficient assets to repay the loan and to make a contribution
to fulfil the amount of the capital entitlement due to the ZDP
shareholders. Covenants are in place between SCDT and the Company
that ensure that SCDT will not undertake certain actions in
relation to both itself and the Company.
Due to the Company’s dependence on SCDT to repay the loan and
provide a contribution to meet the capital entitlement of the ZDP
shareholders, other risks faced by the Company are considered to be
the same as for SCDT and these are defined in note 24 of SCDT’s
Annual Report.
SCDT has considerable financial resources and therefore the
Directors believe that the Company is well placed to manage its
business risks and also believe that SCDT will have sufficient
resources to continue in operational existence for the foreseeable
future. Accordingly, they have prepared this Half-Yearly Report on
the going concern basis.
6. Related party transactions
The funds lent to SCDT are managed by Chelverton Asset
Management Limited, a company in which Mr van Heesewijk, a Director of the Company, has an
interest. The Investment Manager is remunerated by SCDT and the
amounts in respect of its services as Investment Manager of the
Company are not separately identifiable.
DIRECTORS AND ADVISERS
Directors
Lord Lamont of Lerwick
(Chairman) |
|
David Harris |
|
William van
Heesewijk |
|
Howard Myles |
|
|
|
Principal Group Advisers
Investment
Manager |
Secretary and
Registered Office |
Chelverton Asset
Management Limited |
Maitland
Administration Services Limited |
11 Lara Place |
Springfield Lodge |
Bath BA2 4BL |
Colchester Road,
Chelmsford |
Tel: 01225 483030 |
Essex CM2 5PW |
|
Tel: 01245 398950 |
|
|
Registrar and
Transfer Office for the ZDP shares |
Auditor |
Share Registrars
Limited |
Hazlewoods LLP |
The
Courtyard
17 West Street |
Windsor
House
Bayshill Road |
Farnham |
Cheltenham GL50
3AT |
Surrey GU9 7DR |
|
Tel: 01252 821390 |
|
www.shareregistrars.uk.com |
|
SHAREHOLDER INFORMATION
Financial calendar
Company year
end
April
Annual results
announced
June
Annual General
Meeting
September
Half-year results
announced
December
Sources of further information
The Company’s ZDP shares are listed on the London Stock
Exchange.
The Company’s ZDP NAV is released to the London Stock Exchange
on a weekly basis and published monthly via the AIC.
Information about the Company and SCDT can be obtained on the
Manager’s website: www.chelvertonam.com. Any enquiries can also be
emailed to cam@chelvertonam.com
Share registrar enquiries
The register for the ZDP shares is maintained by Share
Registrars Limited. In the event of queries regarding your holding,
please contact the Registrar on 01252 821390. Changes of name
and/or address must be notified in writing to the Registrar.
END