TPV2 TP70 2008 (II)

 

TIDMTPV2 
 
RNS Number : 1969N 
TP70 2008 (ii) VCT PLC 
07 June 2010 
 

 
TP70 2008 (II) VCT plc 
Final Results 
 
7 June 2010 
 
TP70 2008 (II) VCT plc, managed by Triple Point Investment Management LLP today 
announces the final results for the year ended 31 March 2010. 
 
These results were approved by the Board of Directors on 3 June 2010. 
 
You may view the Annual Report in on the Triple Point website 
www.triplepoint.co.uk at Our Products/TP70 2008 (II)/ TP70 2008 (II)/ News. All 
other statutory information will also be found there. 
 
About TP70 2008 (II) VCT plc 
 
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The 
investment manager is Triple Point Investment Management LLP. The Company was 
launched in November 2007 and raised GBP23 million (net of expenses) through an 
offer for subscription. 
 
Details of the Fund's progress are discussed in the Chairman's Statement and 
Investment Manager's Review forming part of the extract from the Financial 
Statements which follows. 
 
Venture Capital Trusts (VCTs) 
 
VCTs were introduced in the Finance Act 1995 to provide a means for private 
individuals to invest in unlisted companies in the UK. Subsequent Finance Acts 
have introduced changes to VCT legislation. The tax benefits currently available 
to eligible new investors in VCTs include: 
 
·      upfront income tax relief of 30% 
·      exemption from income tax on dividends paid; and 
·      exemption from capital gains tax on disposals of shares in VCTs 
 
The Company has been approved as a VCT by HM Revenue & Customs. In order to 
maintain its approval, the Company must comply with certain requirements on a 
continuing basis. Above all, the Company is required at all times to hold  70% 
of its investments (as defined in the legislation) in VCT qualifying holdings, 
of which at least 30% must comprise eligible ordinary shares. 
 
For this purpose, a 'VCT qualifying holding' consists of up to GBP1 million 
invested in any one year in new shares or securities of a UK unquoted company 
(which may be quoted on AIM) which is carrying on a qualifying trade, and whose 
gross assets at the time of investment do not exceed a prescribed limit. The 
definition of 'qualifying trade' excludes certain activities such as property 
investment and development, financial services and asset leasing. The Company 
will continue to ensure its compliance with these qualification requirements. 
 
 
 
 
 
Report of the Directors - Financial summary 
For the year ended 31 March 2010 
+------------------------------+---------+------+----------+ 
|                              |   2010  |      |    2009  | 
+------------------------------+---------+------+----------+ 
|                              | GBP'000 |      |  GBP'000 | 
|                              |         |      |          | 
+------------------------------+---------+------+----------+ 
| Net assets                   | 19,809  |      |  19,762  | 
+------------------------------+---------+------+----------+ 
| Profit / (loss) before tax   |    480  |      |  (2,029) | 
+------------------------------+---------+------+----------+ 
| Earnings per share           |   1.97p |      | (10.20p) | 
|                              |         |      |          | 
+------------------------------+---------+------+----------+ 
| Net asset value per share    |  86.51p |      |   86.30p | 
|                              |         |      |          | 
+------------------------------+---------+------+----------+ 
 
For a GBP1 investment per share investors, with a sufficient income tax 
liability in the relevant year, can expect to have received a 30p tax credit and 
a first dividend of 1.76p which taken together with the current NAV of 86.51p 
totals 118.27p. 
 
 
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The 
investment manager is Triple Point Investment Management LLP. The Company was 
launched in November 2007 and raised GBP23.0 million through an offer for 
subscription. Initially 70% of the Company's net assets were to be invested in 
cash and liquid assets. Thereafter by the end of the third year, at least 70% 
will be invested in VCT qualifying investments.  The remaining 30% of net assets 
are exposed to a leveraged version of GAM Diversity, a fund of hedge funds. The 
Company invests in businesses with contractual revenues from financially sound 
customers and aims to generate an attractive income stream and modest but 
accessible capital growth to shareholders. 
 
The Directors' Report on pages 11 to 15 and the Directors' Remuneration Report 
on pages 16 to 17 have each been drawn up in accordance with the requirements of 
English law and liability in respect thereof is also governed by English law. In 
particular, the responsibility of the Directors for these reports is owed solely 
to TP 70 2008 (II) VCT plc. 
 
The directors submit to the members their Annual Report and financial statements 
for the Company for the year ended 31 March 2010. The Report of the Directors, 
includes the Group Financial Summary, Chairman's statement, Details of Advisers, 
Shareholder Information, Investment Portfolio, Directors' Report, Directors' 
Remuneration Report and the Corporate Governance Statement. 
 
 
Report of the Directors - Chairman's Statement 
 
 
I am pleased to present the audited accounts for TP70 2008 (II) VCT plc ("the 
Company") for the year ended 31 March 2010. 
 
INVESTMENT STRATEGY 
 
The Company's strategy offers combined exposure to GAM Diversity 2.5XL and to 
VCT-qualifying venture capital investments with contractual revenues from 
financially secure counterparties. 30% of the Company's funds at cost are 
currently exposed to GAM Diversity 2.5XL.  The remaining 70% is in the process 
of being invested in suitable VCT-qualifying holdings. Funds not deployed are 
held in money market funds. 
 
By the end of the third accounting period, to meet the VCT-qualifying criteria, 
the Company's intention is that at least 70% of assets will be committed to 
VCT-qualifying holdings with the balance exposed to GAM Diversity 2.5XL. 
 
 
Report of the Directors - Chairman's Statement (continued) 
 
RESULTS 
 
At 31 March 2010 the portfolio of qualifying holdings comprised some 52.2% of 
TP70 2008 (II)'s net assets. The Investment Manager's report details the 
progress made in building up the portfolio of VCT qualifying holdings in order 
to secure the Company's VCT tax status. Progress slowed this year compared to 
last year but having reviewed the Investment Manager's pipeline of investment 
opportunities, the Board is confident that the 70% target can be secured by 31 
March 2011. 
 
The Company's exposure to GAM Diversity 2.5XL now stands at 23.8% of net assets. 
The past year has seen a recovery in the value of GAM Diversity of 8.63%, which 
after the leverage translated into a gain of GBP377,000 which has contributed to 
an overall profit for the year of GBP450,000. The performance of GAM Diversity 
is discussed further in the Investment Manager's Review. At the year end, the 
Net Asset Value per share stood at 86.51p (2009: 86.30p). 
 
DIVIDEND 
 
As an investment trust the Company is able to distribute its revenue profits but 
not its capital profits  whilst subject to solvency tests ignorring capital 
losses. . Hence its income statement  records separately its revenue return and 
capital return under guidance published by the Association of Investment 
Companies. 
The Board has resolved to pay a second dividend equal to its revenue profits of 
GBP282,000 for the year (1.23p per share) in accordance with its dividend 
policy, the dividend to be paid to shareholders on the register at 16 July 2010. 
 
 
RISKS 
 
The Board believes that the principal risks facing the Company are: 
·    investment risk associated with exposure to GAM Diversity 2.5XL 
·    investment risk associated with undertaking VCT qualifying investments 
·    failure to secure final approval as a VCT 
 
The first risk is a consequence of the Company's investment strategy. The Board 
and the Investment Manager continue to work to minimise either the likelihood or 
potential impact of the second and third risks which also follow from the 
Company's investment strategy. 
 
OUTLOOK 
 
The Company's focus over the next year will be to complete its investment into 
qualifying investments to secure VCT status and to work closely with the 
management of those businesses to ensure funds are deployed in a profitable 
manner. 
 
 
If you have any queries or comments, please do not hesitate to telephone Triple 
Point Investment Management LLP on 020 7201 8989 or email me at 
chad.murrin@triplepoint.co.uk. 
. 
 
 
 
Chad Murrin 
 Chairman 
 3 June 2010 
 
Investment Manager's review 
 
 
Overview 
 
TP70 2008 (II) VCT plc's (the "Company's") objective is to deploy at least 70% 
of its funds into VCT-qualifying investments and, with the remainder of its 
funds, to offer leveraged exposure to GAM's flagship fund of hedge funds; 
Diversity, via GAM Diversity GBP 2.5XL. Over the year under review, the Company 
has continued to make progress with its investment programme and at 31 March 
2010 the Company had deployed 52.2% of net assets in VCT qualifying investments. 
 
 
VCT Qualifying Investments Portfolio 
 
The Company's portfolio of VCT qualifying investments is currently spread across 
fourteen qualifying companies in five sectors. 
 
In March 2009, the Company invested GBP1m into each of five companies which 
specialise in the deployment of digital projection technology, and who will each 
work with one or more of the major UK cinema chains. The companies will need to 
purchase and deploy digital technology and equipment, and will carry out a 
number of services, including the installation and ongoing maintenance of the 
systems to specific industry wide specifications. Over the past two years there 
has been a global movement towards the digitisation of film distribution, due 
latterly to the significant commercial success of 3D movies, such as Avatar and 

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