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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Baronsmead 5 | LSE:BAV | London | Ordinary Share | GB00B0YZHK97 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 72.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMBAV
RNS Number : 6501H
Baronsmead VCT 5 PLC
19 August 2016
Baronsmead VCT 5 plc
Half-yearly report for the six months ended
30 June 2016
The Directors announce the unaudited half-yearly financial report for the six months to 30 June 2016 as follows:-
Copies of the half-yearly report can be obtained from the following website: www.baronsmeadvct5.co.uk.
Our Investment Objective
Baronsmead VCT 5 is a tax efficient listed company which aims to achieve long-term investment returns for private investors, including tax-free dividends.
Investment Policy
-- To invest primarily in a diverse portfolio of UK growth businesses, whether unquoted or traded on AIM.
-- Investments are made selectively across a range of sectors in companies that have the potential to grow and enhance their value.
Dividend Policy
The Board seeks to maintain a minimum level of annual dividends of 4.0p per share. The ability to meet this objective depends significantly on the level and timing of profitable realisations and it cannot be guaranteed.
Shareholder choice
The Board wishes to provide shareholders with a number of choices that enable them to utilise their investment in Baronsmead VCT 5 in ways that best suit their personal investment and tax planning and in a way that treats all shareholders equally.
-- Fund raising | From time to time the Company seeks to raise additional funds by issuing new shares at a premium to the latest published net asset value to account for issue costs.
-- Dividend Reinvestment Plan | The Company offers a Dividend Reinvestment Plan which enables shareholders to purchase additional shares through the market in lieu of cash dividends.
-- Buy back of shares | From time to time the Company buys its own shares through the market in accordance with its share price discount policy. Subject to certain conditions, the Company seeks to maintain a mid market share price discount of approximately 5.0 per cent. to net asset value. In the six months to 30 June 2016, 240,000 shares were bought back representing 0.4 per cent. of the shares in issue (excluding treasury shares) at 30 June 2016 at prices which represent an average of 5.1 per cent. discount to the latest published net asset values at the time the shares were bought back.
-- Secondary market | The Company's shares are listed on the London Stock Exchange and can be bought using a stockbroker or authorised share dealing service in the same way as shares of any other listed company. Approximately 355,000 existing shares were bought by investors in the six months to 30 June 2016.
Financial Headlines
-- 5.0p - Dividends totalled 5.0p for the six month period to 30 June 2016.
-- 148.2p - Net asset value ("NAV") total return to shareholders for every 100.0p invested at launch.
-- -3.8% - NAV per share decreased 3.8 per cent. to 83.09p in the six month period to 30 June 2016 before deduction of dividend.
Performance Summary
Cash Returned to Shareholders by date of investment
The table below shows the cash returned to shareholders, dependent on their subscription cost, including their income tax reclaimed on subscription.
Hot Features
Premium
Income tax Net cash Cumulative Return on
Cash invested reclaim invested dividends cash invested
Year subscribed (p) (p) (p) (p)* %
======================== ============= ========== ========= ========== ==============
2006 - Ordinary 100.00 40.00 60.00 45.20 85.2
======================== ============= ========== ========= ========== ==============
2007 - C share 100.00 30.00 70.00 38.96 69.0
======================== ============= ========== ========= ========== ==============
2011 - Ordinary 71.80 21.54 50.26 27.00 67.6
======================== ============= ========== ========= ========== ==============
2012 (December)
- Ordinary 63.70 19.11 44.59 21.00 63.0
======================== ============= ========== ========= ========== ==============
2013 (March) - Ordinary 64.70 19.41 45.29 19.00 59.4
======================== ============= ========== ========= ========== ==============
2015 (February)
- Ordinary 82.60 24.78 57.82 11.00 43.3
======================== ============= ========== ========= ========== ==============
2016 (March) - Ordinary 85.60 25.68 59.92 5.00 35.8
======================== ============= ========== ========= ========== ==============
* Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (0.938904).
Chairman's Statement
It is disappointing to have to report a fall in the underlying Net Asset Value per share of 3.8 per cent. (3.3p). This was not unexpected given the recent volatility on the quoted markets, particularly the fall following the Brexit decision.
I am pleased that profits realised during the period enabled the Directors to pay an interim dividend of 5.0p per share in June 2016.
Results and Dividends
During the six months to 30 June 2016, the Company's NAV per share decreased 3.8 per cent. from 86.41p to 83.09p before dividends.
Pence per
ordinary
share
------------------------------- ----------
NAV as at 1 January 2016 86.41
------------------------------- ----------
Valuation decrease (3.8 per
cent.) (3.32)
------------------------------- ----------
NAV as at 30 June 2016 before
dividends 83.09
------------------------------- ----------
Less:
Interim dividend paid on 3
June 2016 (5.00)
------------------------------- ----------
NAV as at 30 June 2016 after
dividends 78.09
------------------------------- ----------
The interim dividend of 5.0p paid in June 2016 was largely as a result of recent realisations of investments. It was paid in lieu of the dividend that would normally be declared on the publication of the Company's results for the six months to 30 June 2016 and, by itself, is in excess of the 4.0p target annual dividend level set by the Directors. In the ordinary course of events a further dividend would be expected to be declared for the year 2016, subject to the level and timing of profitable realisations of investments.
Portfolio Review
As shown in the table below, as at 30 June 2016, the Company's net assets of GBP44m comprised investments in 59 unquoted and AIM-traded companies. In addition, the Company's investment in Wood Street Microcap provides investment exposure to a further 40 AIM-traded and fully listed companies.
% return
NAV % of No. of over the
Asset class (GBPm) net assets* investees period
========================= ======== ============= =========== =========
Unquoted and AIM-traded
companies 32.0 72 59 (1.7)
========================= ======== ============= =========== =========
Wood Street Microcap
Investment Fund 6.1 14 40 (10.1)
========================= ======== ============= =========== =========
Liquid assets 6.3 14 N/A -
========================= ======== ============= =========== =========
Totals 44.4 100 99
========================= ======== ============= =========== =========
* By value as at 30 June 2016
Includes capitalised interest and redemption premium income received.
Steady progress was made in some of our more mature unquoted investments including Kingsbridge Risk Solutions ("Kingsbridge"), Armstrong Craven and Kirona and the unquoted portfolio as a whole provided a return of 8.3 per cent. during the period. These gains, however, were more than offset by reductions in value of the Company's investments in AIM-traded companies and Wood Street Microcap reflecting the volatility of the quoted markets which was particularly pronounced toward the end of June following the Brexit decision. By 31 July 2016 the NAV per share had increased to 79.10p.
Investments and Divestments
Full details about the investments and divestments during the period are set out in the tables below.
In the six months to 30 June 2016, the Company invested GBP0.2m in Eden Research. However, following the period end, the Company invested a total of a further GBP0.1m in one follow-on investment.
The reduced level of investment activity has been due to rules introduced in November 2015 which restricted investment by VCTs to the provision of development capital to younger companies for organic growth rather than acquisitions. These rules are complex and it has taken time for the market to reach an understanding as to how they will be interpreted and enforced by HMRC. They have required the Manager to adapt its investment strategy and as a result, in keeping with the entire VCT industry, its rate of investment has been low during the first half of 2016.
The Company has now completed an investment under the new rules and the Manager reports a steadily increasing flow of investment opportunities. The Manager is experienced at adapting its investment strategy in response to changes in the VCT rules and the Board believes that it will continue to be able to identify an adequate supply of new and attractive investment opportunities that will comply with the new VCT rules and still generate good returns for the Company. The new rules dictate that these companies will be younger and smaller than those in which the Company has previously invested and, as a result, they may need to be held for longer periods. This may lead to some increased volatility of returns within the portfolio but the Manager remains confident that the overall portfolio will continue to generate appropriate returns.
A total of GBP4.0m was realised from the sale of investments during the period. This includes the partial sale of the Company's holding in Crawshaw Group which generated a return to date of 5.0 times cost and the sale of Kingsbridge which generated a return of 3.2 times its original cost. Against these successes, losses were realised on Independent Community Care Management and Tangent Communications.
Proposed merger with Baronsmead Second Venture Trust
On 11 August 2016 the Board and the Board of Baronsmead Second Venture Trust plc announced that they have entered into discussions regarding a possible merger. It is intended that the merger would be effected on a NAV for NAV basis by way of a scheme of reconstruction under the Insolvency Act 1986. The boards believe that a merger would be in the best interests of the shareholders of both companies as it is expected that it would result in estimated annual costs savings of around GBP0.3m per annum, remove the duplication of communication with the many shareholders that are common to both companies and create a larger merged company with net assets of approximately GBP200m. The Board and the Board of Baronsmead Second Venture Trust plc expect to write to their respective shareholders with further details on the terms of the proposed Merger in October 2016. It is currently intended that, subject to shareholder approval, the Merger would become effective in November 2016.
Outlook
It will take time for the impact of the Brexit referendum on the UK economy to become apparent and in turn what the impact on the Company and its investments will be. In particular, it is too early to determine what the implications will be with regard to the VCT rules that are heavily influenced by the EU State Aid rules and whether in time there will be any relaxation to these restrictions. We are therefore proceeding on the basis that this will not be the case as it is likely to be a number of years before there will be clarity on that matter. Reassuringly, the current portfolio mix is diverse, gearing levels are low and so far trading activity has remained steady.
There are a number of investments that may be disposed of over the coming years that should assist in generating good returns for investors and enable the Company to continue to pay attractive dividends. The market is slowly adapting to the new VCT rules and the number of investment opportunities being considered is growing. The Manager is one of the most experienced in the sector with a track record of investing for the long term and we are therefore confident it can adapt to the challenges of the new VCT rules and any disruption that Brexit may bring.
John Davies
Chairman
18 August 2016
Investments in the period
Book
cost
Company Location Sector Activity GBP'000
=================== ================= =========== ================================= ========
AIM-traded investments
New
================================================================================================
Business Developer of biological
Eden Research plc Gloucestershire Services fungicides and bio equivalents 200
=================== ================= =========== ================================= ========
Total investments in the period 200
====================================================================================== ========
Realisations in the period
First Overall
investment Book cost Proceeds++ multiple
Company date GBP'000 GBP'000 return*
---------------------------- ------------- ------------ --------- ---------- ---------
Unquoted realisations
-------------------------------------------------------------------------------------------
Kingsbridge Risk Solutions Full trade
Ltd sale Jan 14 378 1,155 3.2
---------------------------- ------------- ------------ --------- ---------- ---------
Independent Community Full trade
Care Management Ltd sale Oct 11 604 244 0.5
---------------------------- ------------- ------------ --------- ---------- ---------
Total unquoted realisations 982 1,399
--------------------------------------------------------- --------- ---------- ---------
AIM-traded realisations
-------------------------------------------------------------------------------------------
Crawshaw Group plc Market sale Jun 09 459 2,315 5.0
---------------------------- ------------- ------------ --------- ---------- ---------
Tangent Communications Full market
plc sale Mar 07 632 251 0.4
---------------------------- ------------- ------------ --------- ---------- ---------
Total AIM-traded realisations 1,091 2,566
--------------------------------------------------------- --------- ---------- ---------
Total realisations in the period 2,073 3,965
--------------------------------------------------------- --------- ---------- ---------
++ Proceeds at time of realisation including redemption premium and interest.
* Includes interest/dividends received, loan note redemptions and partial realisations accounted for in prior periods.
Investment Diversification at 30 June 2016
Sector by value Percentage
---------------------------------------- -----------
Business Services 31%
---------------------------------------- -----------
Consumer Markets 26%
---------------------------------------- -----------
Healthcare & Education 12%
---------------------------------------- -----------
Technology, Media & Telecommunications
("TMT") 31%
---------------------------------------- -----------
Total assets by value Percentage
------------------------------------ -----------
Unquoted - loan note 15%
------------------------------------ -----------
Unquoted - equity 5%
------------------------------------ -----------
AIM & collective investment
vehicle 66%
------------------------------------ -----------
Listed interest bearing securities 6%
------------------------------------ -----------
Net current assets (principally
cash) 8%
------------------------------------ -----------
Time investments held by value Percentage
-------------------------------- -----------
Less than 1 year 3%
-------------------------------- -----------
Between 1 and 3 years 20%
-------------------------------- -----------
Between 3 and 5 years 26%
-------------------------------- -----------
Greater than 5 years 51%
-------------------------------- -----------
Independent Review Report to Baronsmead VCT 5 plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 June 2016 which comprises the Income Statement, Statement of Changes in Equity, Balance Sheet and Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the company are prepared in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with FRS 104 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Emphasis of Matter - Going concern
In forming our conclusion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in the notes to the financial statements concerning the Company's ability to continue as a going concern. On 11 August 2016 the board of directors of Baronsmead VCT 5 (BVCT 5) and Baronsmead Second Venture Trust (BSVT) announced that they have entered into discussions regarding a possible merger of the Companies. It is intended that BSVT will acquire all the assets in BVCT 5 in exchange for the issue of new shares to the BVCT 5 shareholders, followed by the voluntary wind up of BVCT 5. The Directors of BVCT 5 have considered the impact of the proposed transaction on BVCT 5 and have concluded that it constitutes a material uncertainty that may cast significant doubt upon the ability of BVCT 5 to continue as a going concern, as BVCT 5 would be voluntarily wound up. The Directors still consider it appropriate to prepare the accounts on a going concern basis, given that the transaction has not yet been formally approved by the shareholders of BVCT 5 and in the event that the merger does not proceed, the Directors consider that BVCT 5 would continue as a going concern. The financial statements do not include the adjustments that would result if BVCT 5 was no longer a going concern.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with FRS 104 Interim Financial Reporting and the DTR of the UK FCA.
John Waterson, Statutory Auditor
for and on behalf of KPMG LLP
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
18 August 2016
Responsibility statement of the Directors in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with the FRS104 'Interim Financial Reporting';
-- the Chairman's Statement (constituting the interim management report) includes a fair review of the information required by DTR 4.2.7R of the Disclosure Guidance 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;
-- the Statement of Principal Risks and Uncertainties below is a fair review of the information required by DTR 4.2.7R; and
-- the financial statements include a fair review of the information required by DTR 4.2.8R of the Disclosure Guidance 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.
On behalf of the Board
John Davies
Chairman
18 August 2016
Unaudited Income Statement
For the six months to 30 June 2016
Six months to Six months to Year to
Notes 30 June 2016 30 June 2015 31 December 2015
--------------- ----- ------------------------------- ------------------------------- ----------------------------
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
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Unrealised
(losses)/gains
on movement in
fair
value of
investments 7 - (1,723) (1,723) - 1,815 1,815 - 6,610 6,610
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Realised
gains/(losses)
on
disposal of
investments 7 - 477 477 - 493 493 - 514 514
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Income 250 - 250 289 - 289 630 - 630
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Investment
management
fee (137) (410) (547) (116) (348) (464) (249) (748) (997)
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Other expenses (210) - (210) (204) - (204) (395) - (395)
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
(Loss)/profit
on
ordinary
activities
before
taxation (97) (1,656) (1,753) (31) 1,960 1,929 (14) 6,376 6,362
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Taxation on
ordinary
activities - - - - - - - - -
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
(Loss)/profit
for
the period,
being
total
comprehensive
income for the
period (97) (1,656) (1,753) (31) 1,960 1,929 (14) 6,376 6,362
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Return per
ordinary
share:
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
Basic 2 (0.17p) (3.00p) (3.17p) (0.06p) 3.76p 3.70p (0.03p) 12.14p 12.11p
--------------- ----- --------- --------- --------- --------- --------- --------- -------- -------- --------
All items in the above statement derive from continuing operations.
The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the realised and unrealised profit or loss on investments and the proportion of the management fee charged to capital.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 by the Association of Investment Companies ("AIC SORP").
Unaudited Statement of Changes in Equity
For the six months to 30 June 2016
Distributable
Non-distributable reserves reserves
--------------------- -------------------------------------- ------------------
Called-up Share Revaluation Capital Revenue
share capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- --------------- -------- ----------- -------- -------- --------
At 1 January 2016 5,720 7,200 16,524 16,983 (1,002) 45,425
--------------------- ------- --------------- -------- ----------- -------- -------- --------
(Loss)/profit on
ordinary activities
after taxation - - (3,132) 1,476 (97) (1,753)
--------------------- ------- --------------- -------- ----------- -------- -------- --------
Net proceeds of
share issue & cost
of buybacks 4/5 450 3,285 - (190) - 3,545
--------------------- ------- --------------- -------- ----------- -------- -------- --------
Dividends paid 6 - - - (2,841) - (2,841) --------------------- ------- --------------- -------- ----------- -------- -------- -------- At 30 June 2016 6,170 10,485 13,392 15,428 (1,099) 44,376
For the six months to 30 June 2015
Distributable
Non-distributable reserves reserves
------------------------- ------------------------------------------ ------------------
Called-up Revaluation Capital Revenue
share capital Share premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
At 1 January 2015 5,266 4,016 12,054 18,971 (988) 39,319
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
(Loss)/profit on
ordinary activities
after taxation - - (324) 2,284 (31) 1,929
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
Net proceeds of
share issue, costs
of buybacks & sale
of shares from treasury 454 3,184 - (379) - 3,259
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
Dividends paid 6 - - - (1,069) - (1,069)
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
At 30 June 2015 5,720 7,200 11,730 19,807 (1,019) 43,438
------------------------- ----- -------------- ------------- ----------- -------- -------- --------
For the year to 31 December 2015
Non-distributable reserves Distributable reserves
------------------------- ------------------------------------------ ------------------------
Called-up Revaluation Capital Revenue
share capital Share premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
At 1 January 2015 5,266 4,016 12,054 18,971 (988) 39,319
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
Profit/(loss) on
ordinary activities
after taxation - - 4,470 1,906 (14) 6,362
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
Net proceeds of
share issue, costs
of buybacks & sale
of shares from treasury 454 3,184 - (709) - 2,929
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
Dividends paid 6 - - - (3,185) - (3,185)
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
At 31 December 2015 5,720 7,200 16,524 16,983 (1,002) 45,425
------------------------- ------- -------------- ------------- ----------- ----------- ----------- --------
Unaudited Balance Sheet
As at 30 June 2016
As at As at As at 31
30 June 30 June December
2016 2015 2015
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ----- --------- -------- ---------
Fixed assets
----------------------------------- ----- --------- -------- ---------
Unquoted investments 7 8,822 8,419 9,938
----------------------------------- ----- --------- -------- ---------
Traded on AIM 7 23,116 22,285 26,316
----------------------------------- ----- --------- -------- ---------
Collective investment vehicle 7 6,131 6,342 6,820
----------------------------------- ----- --------- -------- ---------
Listed interest bearing securities 7 2,498 1,998 1,000
----------------------------------- ----- --------- -------- ---------
Investments 7 40,567 39,044 44,074
----------------------------------- ----- --------- -------- ---------
Current assets
----------------------------------- ----- --------- -------- ---------
Debtors 131 102 178
----------------------------------- ----- --------- -------- ---------
Cash at bank and on deposit 4,065 4,647 1,572
----------------------------------- ----- --------- -------- ---------
4,196 4,749 1,750
----------------------------------- ----- --------- -------- ---------
Creditors (amounts falling due
within one year) (387) (355) (399)
----------------------------------- ----- --------- -------- ---------
Net current assets 3,809 4,394 1,351
----------------------------------- ----- --------- -------- ---------
Net assets 44,376 43,438 45,425
----------------------------------- ----- --------- -------- ---------
Capital and reserves
----------------------------------- ----- --------- -------- ---------
Called-up share capital 6,170 5,720 5,720
----------------------------------- ----- --------- -------- ---------
Share premium 10,485 7,200 7,200
----------------------------------- ----- --------- -------- ---------
Capital reserve 15,428 19,807 16,983
----------------------------------- ----- --------- -------- ---------
Revaluation reserve 7 13,392 11,730 16,524
----------------------------------- ----- --------- -------- ---------
Revenue reserve (1,099) (1,019) (1,002)
----------------------------------- ----- --------- -------- ---------
Equity shareholders' funds 44,376 43,438 45,425
----------------------------------- ----- --------- -------- ---------
As at As at As at
30 June 30 June 31 December
2016 2015 2015
----------------------------------------- ---------- ----------- ------------
Net asset value per share 78.09p 81.98p 86.41p
----------------------------------------- ---------- ----------- ------------
Number of ordinary shares in circulation 56,826,606 52,984,080 52,569,080
----------------------------------------- ---------- ----------- ------------
Net asset value per share 78.01p 81.64p 85.97p
----------------------------------------- ---------- ----------- ------------
Number of ordinary shares held
in treasury 4,872,296 4,217,296 4,632,296
----------------------------------------- ---------- ----------- ------------
Number of listed ordinary shares
in issue 61,698,902 57,201,376 57,201,376
----------------------------------------- ---------- ----------- ------------
Unaudited Statement of Cash Flows
For the six months to 30 June 2016
Six
Six months to Year to
months to 30 June 31 December
30 June 2016 2015 2015
GBP'000 GBP'000 GBP'000
--------------------------------------------- ------------- ---------- ------------
Net cash outflow from operating activities (472) (603) (1,017)
--------------------------------------------- ------------- ---------- ------------
Net cash inflow from investing activities 2,261 672 458
--------------------------------------------- ------------- ---------- ------------
Equity dividends paid (2,841) (1,069) (3,185)
--------------------------------------------- ------------- ---------- ------------
Net cash outflow before financing activities (1,052) (1,000) (3,744)
--------------------------------------------- ------------- ---------- ------------
Net cash inflow from financing activities 3,545 3,260 2,929
--------------------------------------------- ------------- ---------- ------------ Increase/(decrease) in cash 2,493 2,260 (815) --------------------------------------------- ------------- ---------- ------------ Reconciliation of net cash flow to movement in net cash --------------------------------------------- ------------- ---------- ------------ Increase/(decrease) in cash 2,493 2,260 (815) --------------------------------------------- ------------- ---------- ------------ Opening cash position 1,572 2,387 2,387 --------------------------------------------- ------------- ---------- ------------ Closing cash at bank and on deposit 4,065 4,647 1,572 --------------------------------------------- ------------- ---------- ------------ Reconciliation of (loss)/profit on ordinary activities before taxation to net cash outflow from operating activities --------------------------------------------- ------------- ---------- ------------ (Loss)/profit on ordinary activities before taxation (1,753) 1,929 6,362 --------------------------------------------- ------------- ---------- ------------ Losses/(gains) on investments 1,246 (2,308) (7,124) --------------------------------------------- ------------- ---------- ------------ Changes in working capital and other non-cash items 35 (224) (255) --------------------------------------------- ------------- ---------- ------------ Net cash outflow from operating activities (472) (603) (1,017) --------------------------------------------- ------------- ---------- ------------
Notes
1. The condensed financial statements for the six months to 30 June 2016 comprise the statements set out above together with the related notes below. The Company applied FRS 102 and the AIC's Statement of Recommended Practice issued in November 2014 for its financial year ending 31 December 2015 in its financial statements. The condensed financial statements for the six months to 30 June 2016 have therefore been prepared in accordance with FRS 104 'Interim Financial Reporting'. The accounts have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements for the year ended 31 December 2015.
2. Return per share is based on a weighted average of 55,214,151 ordinary shares in issue (30 June 2015: 52,135,250 ordinary shares; 31 December 2015: 52,502,811 ordinary shares).
3. Earnings for the first six months to 30 June 2016 should not be taken as a guide to the results of the full financial year to 31 December 2016.
4. During the six months to 30 June 2016 the Company purchased 240,000 shares to be held in treasury at a cost of GBP190,000. At 30 June 2016, the Company holds 4,872,296 ordinary shares in treasury. These shares may be re-issued below Net Asset Value as long as the discount at issue is narrower than the average discount at which the shares were bought back.
5. On 11 March 2016 the Company issued 4,497,526 shares. Excluding treasury shares, there were 56,826,606 ordinary shares in circulation at 30 June 2016 (30 June 2015: 52,984,080 ordinary shares; 31 December 2015: 52,569,080 ordinary shares).
6. The interim dividend of 5.0p per share (5.0p capital) was paid on 3 June 2016 to shareholders on the register on 20 May 2016. The ex-dividend date was 19 May 2016.
For the year ended 31 December 2015, the Company paid an interim dividend on 18 September 2015 of 2.0p per share (2.0p capital) and a second interim dividend on 18 December 2015 of 2.0p per share (2.0p capital).
7. All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
The methods of fair value measurement are classified into a hierarchy based on reliability of the information used to determine the valuation.
-- Level a - Fair value is measured based on quoted prices in an active market.
-- Level b - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.
-- Level c -
i) Fair value is measured using a valuation technique that is based on data from an observable market or;
ii) Fair value is measured using a valuation technique that is not based on data from an observable market.
Level c
Level a Level b (ii)
----------------------------------- --------------------- ----------- -------- --------
Listed
interest Collective
bearing Traded investment
securities on AIM vehicle Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ----------- -------- ----------- -------- --------
Opening book cost 1,000 16,001 2,664 7,885 27,550
----------------------------------- ----------- -------- ----------- -------- --------
Opening unrealised appreciation - 10,315 4,156 2,053 16,524
----------------------------------- ----------- -------- ----------- -------- --------
Opening valuation 1,000 26,316 6,820 9,938 44,074
----------------------------------- ----------- -------- ----------- -------- --------
Movements in the period:
----------------------------------- ----------- -------- ----------- -------- --------
Transfer between levels - 400 - (400) -
----------------------------------- ----------- -------- ----------- -------- --------
Purchases at cost 4,497 200 - - 4,697
----------------------------------- ----------- -------- ----------- -------- --------
Sales - proceeds (2,999) (2,566) - (1,393) (6,958)
----------------------------------- ----------- -------- ----------- -------- --------
- realised gains on sales - 273 - 204 477
----------------------------------- ----------- -------- ----------- -------- --------
Unrealised gains realised during
the period - 1,202 - 207 1,409
----------------------------------- ----------- -------- ----------- -------- --------
(Decrease)/increase in unrealised
appreciation - (2,709) (689) 266 (3,132)
----------------------------------- ----------- -------- ----------- -------- --------
Closing valuation 2,498 23,116 6,131 8,822 40,567
----------------------------------- ----------- -------- ----------- -------- --------
Closing book cost 2,498 15,510 2,664 6,503 27,175
----------------------------------- ----------- -------- ----------- -------- --------
Closing unrealised appreciation - 7,606 3,467 2,319 13,392
----------------------------------- ----------- -------- ----------- -------- --------
Closing valuation 2,498 23,116 6,131 8,822 40,567
----------------------------------- ----------- -------- ----------- -------- --------
Equity shares - 23,116 6,131 2,352 31,599
----------------------------------- ----------- -------- ----------- -------- --------
Loan notes - - - 6,470 6,470
----------------------------------- ----------- -------- ----------- -------- --------
Fixed income securities 2,498 - - - 2,498
----------------------------------- ----------- -------- ----------- -------- --------
Closing valuation 2,498 23,116 6,131 8,822 40,567
----------------------------------- ----------- -------- ----------- -------- --------
There has been no significant change in the risk analysis as disclosed in the Company's annual accounts.
8. The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The information for the year to 31 December 2015 has been extracted from the latest published audited financial statements. The audited financial statements for the year to 31 December 2015, which were unqualified, have been filed with the Registrar of Companies. No statutory accounts in respect of any period after 31 December 2015 have been reported on by the Company's auditors or delivered to the Registrar of Companies.
9. The Company has one reportable segment being investing in primarily a portfolio of UK growth businesses, whether unquoted or traded on AIM.
10. Copies of the half-yearly financial report have been made available to shareholders and are available from the Registered Office of the Company at 100 Wood Street, London EC2V 7AN.
Principal Risks and Uncertainties
The Company's assets consist of equity, fixed interest investments, shares in collective investment schemes, cash and liquid resources. Its principal risks are therefore market risk, credit risk, liquidity risk and competitive risk. Other risks faced by the Company include loss of approval as a Venture Capital Trust, investment performance, regulatory and compliance, legislative, economic, political and external factors and operational risks. These risks, and the ways in which they are managed, are described in more detail in the Principal Risks & Uncertainties table within the Strategic Report in the Company's Annual Report and Accounts for the year to 31 December 2015. The Company's principal risks and uncertainties have not changed materially since the date of that report, with the exception of the impact of Brexit as described in the Chairman's Statement above.
Related Parties
Livingbridge VC LLP ('the Manager') manages the investments of the Company. The Manager also provides or procures the provision of secretarial, accounting, administrative and custodian services to the Company. Under the management agreement, the Manager receives a fee of 2.5 per cent. per annum of the net assets of the Company. This is described in more detail under the heading 'The Investment Management Agreement' within the Strategic Report in the Company's Annual Report and Accounts for the year to 31 December 2015. During the period, the Company has incurred management fees of GBP547,000 (30 June 2015: GBP464,000; 31 December 2015: GBP997,000) and secretarial and accounting fees of GBP51,000 (30 June 2015: GBP49,000; 31 December 2015: GBP100,000) payable to the Manager.
Going Concern
After making enquiries, and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future. In arriving at this conclusion, the Directors have considered the liquidity of the Company and its ability to meet obligations as they fall due for a period of at least twelve months from the date that these financial statements were approved. As at 30 June 2016, the Company held cash balances and readily realisable securities totalling GBP6,563,000. Cash flow projections have been reviewed and show that the Company has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of the share buyback programme and dividend policy. The Company has no external loan finance in place and therefore is not exposed to any gearing covenants.
On 11 August 2016 the board of directors of Baronsmead VCT 5 (BVCT 5) and Baronsmead Second Venture Trust (BSVT) announced that they have entered into discussions regarding a possible merger of the Companies. It is intended that BSVT will acquire all the assets in BVCT 5 in exchange for the issue of new shares to the BVCT 5 shareholders, followed by the voluntary wind up of BVCT 5. The Directors of BVCT 5 have considered the impact of the proposed transaction on BVCT 5 and have concluded that it constitutes a material uncertainty that may cast significant doubt upon the ability of BVCT 5 to continue as a going concern, as BVCT 5 would be voluntarily wound up. The Directors still consider it appropriate to prepare the accounts on a going concern basis, given that the transaction has not yet been formally approved by the shareholders of BVCT 5 and in the event that the merger does not proceed, the Directors consider that BVCT 5 would continue as a going concern. The financial statements do not include the adjustments that would result if BVCT 5 was no longer a going concern. However, had the accounts not been prepared on a going concern basis, this would not have a material impact on the financial statements or disclosure notes of the company on the basis that the assets and liabilities on the balance sheet are valued at fair value and costs relating to the disposal of assets and settlement of liabilities are deemed to be not material.
Corporate Information
Directors Registrars and Transfer Office
John Davies(++) Computershare Investor Services PLC
David Hunter* The Pavilions
Gillian Nott OBE^ Bridgwater Road
Charles Pinney(#) Bristol BS99 6ZZ
Tel: 0800 923 1531
Secretary
Livingbridge VC LLP Brokers
Panmure Gordon & Co
Registered Office One New Change
100 Wood Street London EC4M 9AF
London EC2V 7AN Tel: 020 7886 2500
Investment Manager Auditors
Livingbridge VC LLP KPMG LLP
100 Wood Street Saltire Court
London EC2V 7AN 20 Castle Terrace
020 7506 5717 Edinburgh EH1 2EG
Registered Number Solicitors
05689280 Dickson Minto W.S.
Broadgate Tower
20 Primrose Street
London EC2A 2EW
VCT Status Adviser
Philip Hare & Associates LLP
4-6 Staple Inn
Holborn
London WC1 7QN
Website
www.baronsmeadvct5.co.uk
++ Chairman
* Chairman of the Audit Committee
^ Chairman of the Nomination Committee
# Senior Independent Director and
Chairman of the Management Engagement
and Remuneration Committee
National Storage Mechanism
A copy of the Half-yearly Report will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.hemscott.com/nsm.do.
END
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VKLBFQVFFBBQ
(END) Dow Jones Newswires
August 19, 2016 04:17 ET (08:17 GMT)
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