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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Chrysalis Vct Plc | LSE:CYS | London | Ordinary Share | GB0030348683 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 32.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCYS Chrysalis VCT plc HALF-YEARLY REPORT FOR THE SIX MONTHSED 30 APRIL 2016 Recent performance summary 30 April 30 April 31 October 2016 2015 2015 pence pence pence Net asset value per share 83.50 85.10 81.30 Cumulative dividends paid per share 63.70 56.50 60.45 Total return (net asset value per share plus cumulative dividends) 147.20 141.60 141.75 CHAIRMAN'S STATEMENT Introduction I am pleased to present my report for the six months ended 30 April 2016. The period has seen a steady performance from the investment portfolio and a relatively low level of investment activity, partly attributable to the uncertainty created by the new VCT rules. Net asset value and results At 30 April 2016, the net asset value per share ("NAV") stood at 83.5p, an increase of 5.45p (6.7%) since the previous year end of 31 October 2015 (after adding back the 3.25p dividend paid on 26 February 2016). The Total Return to Shareholders who invested at the launch of the Company in 2000 (NAV plus cumulative dividends) is now 147.2p 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 GBP1.6 million, comprising a revenue return of GBP141,000 and a capital return of GBP1.5 million. Dividends The Board is proposing to pay an interim dividend at the same level as last year of 1.75p per share. In addition, as a result of the deferred consideration received, as highlighted below, we will also pay a further special dividend of 2.0p per share. The total dividend of 3.75p will be paid on 29 July 2016 to Shareholders on the register at 1 July 2016. Following the payment of the dividend on 29 July 2016, Shareholders who invested at launch will have received distributions totalling 67.45p per share. Venture capital portfolio The Company invested GBP605,000 in the period in one new and two follow on investments. At the end of the period, the Company held a portfolio comprising 25 investments with a total value of GBP17.6 million. The largest addition was a further investment of GBP500,000 in Coolabi plc, the children's and family entertainment brand management group. The company owns brands such as The Clangers and Bagpuss and the new funds will support the production of new TV series. In March 2016 the Company invested GBP75,000 in a new venture, Fusion Catering Solutions Limited, a wedding and event caterer. The management team are known to the Company from an existing portfolio company, Life's Kitchen Limited. Finally, an additional GBP30,000 was also invested in Cambridge Mechatronics as part of a rights issue undertaken by the company to fund its continuing growth. In terms of realisations, a further GBP440,000 of deferred consideration was received in the period in respect of the sale of Wessex Advanced Switching Products Limited ("WASP"), which took place in 2015. GBP125,000 of deferred consideration was also received in respect of Autocue Group Limited which was also sold in 2015. There were also five full or partial redemptions of loan stock from various investee companies totalling GBP983,000 and one liquidation receipt of GBP14,000. Total proceeds received in the period were GBP1.6 million giving rise to a gain of GBP579,000. The Board has reviewed the valuations of all the unquoted portfolio and there have a number of relatively minor adjustments both up and down. The two most significant movements were both valuation increases. We have now been invested in Driver Require for over a year and so are no longer valuing it at cost and, due to its strong trading performance, there has been an upward valuation of GBP413,000. Cambridge Mechatronics raised a significant amount of money at a higher price than we originally paid and valuing our investment at that price resulted in an increase of GBP343,000. Overall, there was a net unrealised gain of GBP1.1 million across the portfolio. Fixed income securities The Company continues to hold a portfolio of fixed income bonds, which was valued at GBP2.1 million at the period end. The unrealised losses on the portfolio over the period was GBP50,000. Shares The Board continues to monitor the market in the Company's shares and remains of the view that the Company's liquid resources are best reserved to ensure that the Company is able to maintain a strong dividend stream. The Board believes that this make the shares attractive to potential buyers in the secondary market. As a result of this strategy, the Company will not usually buy in its own shares for cancellation. The Company retains Nplus1 Singer Capital Markets to act as its corporate broker. Nplus1 is usually aware of parties who are looking to trade and should be able to assist investors looking to buy or sell Chrysalis VCT shares. VCT rules As Shareholders will be aware from previous reports, there have been some major changes to the VCT rules over the last year. In May, HMRC published the long awaited guidance on the new rules, however the full impact of the changes is probably still unknown. What is clear is that your Company is now not ordinarily able to support all existing portfolio companies with a further investment should they need it, despite the fact these businesses were within the VCT rules at the time of the original investment. This is understandably frustrating for the Board, the Manager and the relevant investee companies. We are however hopeful that we will be able to continue to provide support in one way or another to all portfolio companies to help further drive their growth and deliver rewards for our Shareholders. Outlook Your Board remains satisfied with the progress made by your Company. As with any investment activity of this nature, there will always be challenges, however I believe that your Company is as well placed as it can be to address issues that arise and we continue to hold a portfolio that can deliver further good results to Shareholders in future. I look forward to updating Shareholders in my Statement in the Annual Report to 31 October 2016. Peter Harkness Chairman 3 June 2016 SUMMARY OF INVESTMENT PORTFOLIO as at 30 April 2016 Valuation % of movement portfolio Cost Valuation in the period by value GBP'000 GBP'000 GBP'000 Top ten venture capital investments Coolabi Group Limited 3,456 3,830 (154) 15.4% Locale Enterprises Limited 2,513 2,663 286 10.7% Internet Fusion Limited 800 1,485 167 6.0% Precision Dental Laboratories Limited 1,110 1,482 192 5.9% K10 (London) Limited 950 1,117 36 4.5% Driver Require Limited 520 933 413 3.7% MyTime Media Holdings Limited 351 926 32 3.7% Electrobase RP Holdings Limited 1,001 900 (100) 3.6% Cambridge Mechatronics Limited 366 843 343 3.4% Zappar Limited 25 775 - 3.1% 11,092 14,954 1,215 60.0% Other venture capital investments 4,516 2,619 (80) 10.5% Fixed income securities 2,210 2,137 (50) 8.6% 17,818 19,710 1,085 79.1% Cash at bank and in hand 5,214 20.9% Total investments 24,924 100.0% All venture capital investments are unquoted unless otherwise stated SUMMARY OF INVESTMENT MOVEMENTS for the six months ended 30 April 2016 Additions GBP'000 New investments Fusion Catering Solutions Limited 75 Follow-on investments Coolabi Group Limited 500 Cambridge Mechatronics Limited 30 605 Disposals Gain Value at Disposal against Total Cost 1 Nov 2015* proceeds cost realised gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Venture capital investments Loan stock redemptions My Time Media Holdings Limited 400 400 400 - - Internet Fusion Limited 200 244 244 44 Precision Dental Laboratories Limited 200 200 200 - - Livvakt Limited 129 129 129 - - Locale Enterprises Limited 10 10 10 - - Dissolution, liquidation and retention Autocue Group Limited 125 125 125 Newquay Helicopter Limited - 14 14 14 Wessex Advanced Switching Products Limited - - 440 440 440
939 983 1,562 623 579 *Adjusted for purchases in the period where applicable UNAUDITED INCOME STATEMENT for the six months ended 30 April 2016 Year ended Six months ended Six months ended 31 Oct 30 Apr 2016 30 Apr 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 365 - 365 350 - 350 733 Net gains/(losses) on investments 1,971 - realised - 579 579 - 431 431 - unrealised - 1,085 1,085 - 1,512 1,512 365 1,664 2,029 350 1,943 2,293 2,704 Investment management fees (50) (151) (201) (50) (152) (202) (412) Performance incentive fees - (46) (46) - (24) (24) (35) Other expenses (139) - (139) (132) - (132) (263) Return on ordinary activities before taxation 176 1,467 1,643 168 1,767 1,935 1,994 Taxation (35) 35 - (32) 32 - - Return attributable to equity shareholders 141 1,502 1,643 136 1,799 1,935 1,994 Return per 0.5p 5.0p 5.5p 0.5p 6.0p 6.5p 6.7p share 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 2016 As at As at As at 30 Apr 2016 30 Apr 2015 31 Oct 2015 Note GBP'000 GBP'000 GBP'000 Fixed assets Investments 19,710 19,051 19,003 Current assets Debtors 161 3,597 153 Cash at bank and in hand 5,214 3,053 5,223 5,375 6,650 5,376 Creditors: amounts falling due within one year (102) (251) (67) Net current assets 5,273 6,399 5,309 Net assets 24,983 25,450 24,312 Capital and reserves Called up share capital 9 299 299 299 Capital redemption reserve 89 89 89 Share premium 1,478 1,478 1,478 Merger reserve 10 1,357 1,357 1,357 Special reserve 10 2,383 3,252 1,926 Capital reserve - realised 10 14,367 15,243 15,022 Capital reserve - unrealised 10 4,391 3,189 3,439 Revenue reserve 10 619 543 702 Equity shareholders' funds 8 24,983 25,450 24,312 Net asset value per share 8 83.5p 85.1p 81.3p STATEMENT OF CHANGE IN EQUITY for the six months ended 30 April 2016 Capital Share Redemption Share Merger Special Capital reserve Capital 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 2015 299 89 1,478 1,357 1,926 15,022 3,439 702 24,312 Expenses capitalised - - - - - (197) - - (197) Tax on capital expenses - - - - - 35 - - 35 Gains on investments - - - - - 579 1,085 - 1,664 Realisation of revaluations from previous years - - - - - 44 (44) - - Realisation of impaired valuations - - - - - 89 (89) - - Transfer between reserves - - - - 457 (457) - - - Retained net revenue for the period - - - - - - - 141 141 Dividends paid - - - - - (748) - (224) (972) At 30 April 2016 299 89 1,478 1,357 2,383 14,367 4,391 619 24,983 UNAUDITED CASH FLOW STATEMENT for the six months ended 30 April 2016 Six months Six months Year ended ended ended 30 Apr 2016 30 Apr 2015 31 Oct 2015 Note GBP'000 GBP'000 GBP'000 Cash inflow/(outflow) from operating activities and returns on investments 11 6 62 (146) Capital expenditure Purchase of investments (605) (1,907) (2,483) Proceeds on disposal of investments 1,562 932 5,083 Net cash inflow/(outflow) from capital expenditure 957 (975) 2,600 Equity dividends paid (972) (972) (2,169) Net cash (outflow)/inflow before financing (9) (1,885) 285 (Decrease)/increase in cash 12 (9) (1,885) 285 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 2016 and have been prepared in accordance with the accounting policies set out in the annual accounts for the year ended 30 September 2015 and in accordance with the Financial Reporting Standard 102 ("FRS102") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised November 2014 ("SORP"). This is the first period in which the financial statements have been prepared under FRS102, however, it has not been necessary to restate comparatives as the treatment previously applied aligns with the requirements of FRS102. As a result, there are no reconciling differences between the previous financial reporting framework and the current financial reporting framework and the comparative figures represent the position under both current and previous financial reporting frameworks. The Company implements new Financial Reporting Standards issued by the Financial Reporting Council when required. Presentation of Income Statement 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 alongside the Income Statement. The net revenue is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Part 6 of the Income Tax Act 2007. Fixed asset investments Investments are designated as "fair value through profit or loss" assets, upon acquisition, due to investments being managed and performance evaluated on a fair value basis. A financial asset is designated within this category if it is both acquired and managed, with a view to selling after a period of time, in accordance with the Company's documented investment policy. Key sources of estimation uncertainty Of the Company's assets measured at fair value, it is possible to determine their fair values within a reasonable range of estimates. The fair value of an investment upon acquisition is deemed to be cost. Thereafter, investments are measured at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines ("IPEV") together with FRS102 sections 11 and 12. Listed fixed income investments and investments quoted on AIM and the Main Market are measured using bid prices in accordance with the IPEV. For unquoted instruments, fair value is established using the IPEV. The valuation methodologies for unquoted entities used by the IPEV to ascertain the fair value of an investment are as follows: -Price of recent investment; -Multiples; -Net assets;
-Discounted cash flows or earnings (of underlying business); -Discounted cash flows (from the investment); and -Industry valuation benchmarks. The methodology applied takes account of the nature, facts and circumstances of the individual investment and uses reasonable data, market inputs, assumptions and estimates in order to ascertain fair value. Where an investee company has gone into receivership, liquidation, or administration (where there is little likelihood of recovery), the loss on the investment, although not physically disposed of, is treated as being realised. Permanent impairments in the value of investments are deemed to be realised losses and held within the Capital Reserve - Realised. Gains and losses arising from changes in fair value are included in the Income Statement for the year as a capital item and transaction costs on acquisition or disposal of the investment expensed. It is not the Company's policy to exercise significant influence over investee companies. Therefore the results of these companies are not incorporated into the Income Statement except to the extent of any income accrued. This is in accordance with the SORP and FRS102 sections 14 and 15 that do not require portfolio investments to be accounted for using the equity method of accounting. Income Dividend income from investments is recognised when the Shareholders' rights to receive payment have been established, normally the ex-dividend date. Interest income is accrued on a timely basis, by reference to the principal outstanding and at the effective interest rate applicable and only where there is reasonable certainty of collection. Expenses All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Income Statement, all expenses have been presented as revenue items except as follows: -Expenses which are incidental to the acquisition of an investment are deducted as a capital item. -Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment. -Expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated. The Company has adopted the policy of allocating investment manager's fees, 75% to capital and 25% to revenue as permitted by the SORP. The allocation is in line with the Board's expectation of long term returns from the Company's investments in the form of capital gains and income respectively. -Performance incentive fees arising are treated as a capital item. Taxation The tax effects on different items in the Income Statement are allocated between capital and revenue on the same basis as the particular item to which they relate using the Company's effective rate of tax for the accounting period. Due to the Company's status as a Venture Capital Trust and the continued intention to meet the conditions required to comply with Part 6 of the Income Tax Act 2007, no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments which arise. Deferred taxation is not discounted and is provided in full on timing differences 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. 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 accounts. Other debtors and other creditors Other debtors (including accrued income) and other creditors are included within the accounts at amortised cost. Issue costs Issue costs in relation to the shares issued are deducted from the share premium account. 3. The financial statements are presented in Sterling (GBP). 4. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. 5. The comparative figures were in respect of the six months ended 30 April 2015 and the year ended 31 October 2015 respectively. 6. Basic and diluted return per share Six months Six months Year ended ended ended 30 Apr 2016 30 Apr 2015 31 Oct 2015 Return per share based on: Net revenue return for the period (GBP'000) 141 136 296 Capital return per share based on: Net capital gain for the period (GBP'000) 1,502 1,799 1,698 Weighted average number of shares 29,917,025 29,917,025 29,917,025 7. Dividends paid Year Six months ended ended 30 Apr 2016 31 Oct 2015 Pence Revenue Capital Total Total per share GBP'000 GBP'000 GBP'000 GBP'000 Paid in period 2015 Final 3.25p 224 748 972 - 2015 Interim 1.75p - - - 524 2015 Special 2.25p - - - 673 2014 Final 3.25p - - - 972 224 748 972 2,169 8. Basic and diluted net asset value per share Six months Six months Year ended ended ended 30 Apr 2016 30 Apr 2015 30 Oct 2015 Net asset value per share based on: Net assets (GBP'000) 24,983 25,450 24,312 Number of shares in issue at the period end 29,917,025 29,917,025 29,917,025 Net asset value per share 83.5p 85.1p 81.3p 9. Called up share capital Shares in issue GBP'000 Period ended 30 April 2016 29,917,025 299 Period ended 30 April 2015 29,917,025 299 Year ended 31 October 2015 29,917,025 299 10. 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 2016 30 Apr 2015 31 Oct 2015 GBP'000 GBP'000 GBP'000 Special reserve 2,383 3,252 1,926 Capital reserve - realised 14,367 15,243 15,022 Revenue reserve 619 543 702 Merger reserve - distributable element 275 275 275 Unrealised losses - excluding unrealised unquoted gains (306) (850) (283) 17,338 18,463 17,642 11. Reconciliation of return on ordinary activities before taxation to net cash flow from operating activities Six months Six months Year ended ended ended 30 Apr 2016 30 Apr 2015 31 Oct 2015 GBP'000 GBP'000 GBP'000 Return on ordinary activities before taxation 1,643 1,935 1,994 Gains on investments (1,664) (1,943) (1,971) (Increase)/decrease in other debtors (7) 88 33 Increase/(decrease) in other creditors 34 (18) (202) Net cash inflow/(outflow) from operating activities 6 62 (146) 12. Reconciliation of net cash flow to movement in net funds Net funds at Net funds at 1 Nov 2015 Cash flows 30 Apr 2016 GBP'000 GBP'000 GBP'000 Cash at bank and in hand 5,223 (9) 5,214 13. 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: i. investment risk associated with investing in small and immature businesses; and ii. 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. 14. 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. 15. The Directors confirm that, to the best of their knowledge, the half yearly financial statements have been prepared in accordance with the "Statement: Half Yearly Financial Reports" issued by the UK Accounting Standards Board and the half yearly financial report includes a fair review of the information required by: a. 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 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 entity during that period, and any changes in the related party transactions described in the last annual report that could do so. 16. 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 2015 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. 17. 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.downing.co.uk. This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX 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 HUG#2017692
(END) Dow Jones Newswires
June 03, 2016 07:02 ET (11:02 GMT)
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