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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Thames Ventures Vct 2 Plc | LSE:D467 | London | Ordinary Share | GB00BWX53D91 | DP67 ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 14.00 | 9.00 | 19.00 | 14.00 | 13.50 | 14.00 | 0.00 | 08:00:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investment Advice | -6.02M | -7.66M | -0.0777 | -12.81 | 98.05M |
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TIDMD467
Downing FOUR VCT plc
LEI: 21380035MV1VRYEXPR95
Half-Yearly Report for the six months ended 30 September 2017
FINANCIAL HIGHLIGHTS
30 Sept 31 March 30 Sept
2017 2017 2016
pence pence pence
DSO B Share pool
Net asset value per DSO B Share 4.444 20.7 20.0
Net asset value per DSO C Share 10.939 0.1 0.1
Cumulative dividends per DSO B Share 91.500 91.5 91.5
Estimated performance incentive * (1) - (5.5) (5.3)
Total return per DSO B Share and DSO C Share 106.883 106.8 106.3
DSO D Share pool
Net asset value per DSO D Share 78.5 76.1 75.5
Cumulative dividends per DSO D Share 27.5 25.0 22.5
Estimated performance incentive * (4.2) - -
Total return per DSO D Share 101.8 101.1 98.0
DP67 Share pool
Net asset value per DP67 Share 68.7 66.1 63.9
Cumulative dividends per DP67 Share 29.8 27.8 25.8
Total return per DP67 Share 98.5 93.9 89.7
DP2011 General Share pool
Net asset value per DP2011 Gen Ord Share 15.0 15.0 25.0
Net asset value per DP2011 Gen A Share 34.4 31.2 30.3
Cumulative dividends per DP2011 Gen Ord Share 55.0 55.0 45.0
Total return per DP2011 Gen Ord Share and Gen A
Share 104.4* 101.2 100.3
Estimated Performance incentive (already included
above) * 5.2
DP2011 Structured Share pool
Net asset value per DP2011 Struc Ord Share 5.0 4.8 14.9
Net asset value per DP2011 Struc A Share 34.5 31.9 31.8
Cumulative dividends per DP2011 Struc Share 65.0 65.0 55.0
Total return per DP2011 Struc Ord Share and Struc
A Share 104.5* 101.7 101.7
Estimated Performance incentive (already included
above) * 5.2
DP2011 Low Carbon Share pool
Net asset value per DP2011 Low Carbon Share 39.1 43.0 41.7
Cumulative dividends per DP2011 Low Carbon Share 73.9 73.9 73.9
Estimated performance incentive * (5.5) (2.5) (6.8)
Total return per DP2011 Low Carbon Share 107.5 114.4 108.8
Generalist Share pool
Net asset value and Total return per Generalist
Share 98.7 99.9 N/A
Healthcare Share pool
Net asset value and Total return per Healthcare
Share 98.6 99.7 N/A
*A full explanation of the performance incentive arrangements for each
share pool will be shown in the half-yearly report.
(1)As at 30 September 2017, the performance incentive has been provided
for by virtue of the allocation of proceeds to the DSO C Share class.
The estimated performance incentive is equivalent to 5.5p per DSO B
Share.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's Half Yearly Report for the six
months ended 30 September 2017. It has been a productive start to the
year for your Company with good progress made on share pools working
towards exits and the completion of a successful fundraising for the
Generalist and Healthcare Share pools.
Share pools
The Company now has eight active share pools, each with a different
profile. This report includes sections covering the individual share
pools and I will give a brief overview of each.
DSO B Share Pool
The combined NAV of one DSO B Share and one DSO C Share stood at 15.383p
at 30 September 2017, an increase of 0.1p from 31 March 2017. Total
Return now stands at 106.883p per share, compared to the cost for
Shareholders who invested in the B Share offer, net of income tax relief,
of 70.0p. A performance fee equivalent to 5.5p per B Share will be paid
to members of the management team when the task of returning funds to
Shareholders is complete. This performance incentive fee has already
been deducted in arriving at the Total Return of 106.883p.
Since the period end, I am pleased to report that the final investments
have been realised at values equal to the carrying value at 30 September
2017. This has allowed the Board to declare final dividends as follows:
DSO B Shares 4.444p per share
DSO C Shares 10.939p per share
Both dividends will be paid on 26 January 2018 to Shareholders on the
register as at 5 January 2018.
The payment of these final distributions will bring this Share Pool to a
close and in due course, the share classes will be cancelled. These
distributions will bring Total Return to Shareholders who invested at
the launch of the share pools in 2010 to 106.883p for a combined holding
of one DSO B Share and one DSO C Share compared to the original cost of
70p net of tax relief. The Board considers this to be a satisfactory
outcome for investors.
DSO D Share Pool
The DSO D Share NAV stood at 78.5p at 30 September 2017, an increase of
4.9p per share or 6.4% over the period, after adjusting for the
dividends paid in the period of 2.5p. Total Return now stands at 101.8p
per share, compared to the cost for Shareholders who invested in the D
Share offer, net of income tax relief, of 70.0p. Based on the current
performance it is estimated that a performance fee equivalent to 4.2p
per D Share may become payable to the Manager. This has been reflected
in the Total Return figure shown above.
Following a number of disposals from the D Share Pool, the first major
distribution of 25.0p per DSO D Share was paid on 2 November 2017. Plans
are progressing in respect of realising the remaining investments,
although Shareholders should note that it is expected that it will take
some time to complete this process in full.
DP67 Share Pool
As at 30 September 2017, the NAV of the DP67 Shares stood at 68.7p per
share. This represents an increase of 4.6p (7.0%), after adjusting for
dividends paid in the period of 2.0p. Total Return for DP67 shareholders
now stands at 98.5p per share.
The fifth anniversary of the last allotment of DP67 Shares occurs early
next year and so the process of preparing to return funds to
Shareholders is now underway. We anticipate that the first significant
distribution will be paid early in 2018.
DP2011 General Share Pool
The DP2011 General Share Pool is now in the process of returning funds
to Shareholders. After providing for an estimated performance incentive
of 5.2p per DP2011 General Ordinary Share, as at 30 September 2017, the
NAV of a combined holding of one DP2011 General Ordinary Share and one
DP2011 General A Share stood at 49.4p per share. This represents an
increase of 3.2p or 6.9% after adjusting for dividends paid during the
period, as well as the performance incentive estimate.
Total Return for DP2011 General Shareholders now stands at 104.4p
compared to the cost for Shareholders who invested in the original offer,
net of income tax relief, of 70.0p.
On 2 November 2017 dividends of 15.0p per DP2011 General Ordinary Share
and 15.0p per DP2011 General A Share were paid, bringing total dividends
paid to Shareholders to 85.0p for a combined holding. Further
distributions will be made to Shareholders as the remaining investments
are realised.
DP2011 Structured Share Pool
The DP2011 General pool is at a similar stage to the DP2011 General
Shares. After providing for an estimated performance incentive of 5.2p
per DP2011 Structured Ordinary Share, as at 30 September 2017, the NAV
of a combined holding of one DP2011 Structured Ordinary Share and one
DP2011 Structured A Share stood at 39.5p per share. This represents an
increase of 2.8p or 7.6% after adjusting for dividends paid during the
period, as well as the performance incentive estimate.
Total Return for DP2011 Structured Shareholders now stands at 104.5p
compared to the cost for Shareholders who invested in the original offer,
net of income tax relief, of 70.0p.
On 2 November 2017 dividends of 5.0p per DP2011 Structured Ordinary
Share and 20.0p per DP2011 Structured A Share were paid, bringing total
dividends paid to Shareholders to 90.0p for a combined holding. Further
distributions will be made to Shareholders as the remaining investments
are realised.
DP2011 Low Carbon Share Pool
The NAV of the DP2011 Low Carbon Shares as at 30 September 2017 was
39.1p per share, a decrease of 3.9p (9.0%) for the period as a result of
reductions in investment values. Total Return for DP2011 Low Carbon
Shareholders now stands at 107.5p compared to the equivalent cost for
Shareholders who invested in the original offer, net of income tax
relief, of 70.0p. The Total Return figure reflects the estimated
performance incentive fee of 5.5p, which is expected to become payable
to the manager, Downing LLP, and the adviser, Low Carbon Investors.
As with the other DP2011 share pools, the process of returning funds to
investors commenced in 2016. In respect of the Low Carbon pool, the
Manager is working on transactions to realise the remaining investments
and we believe that a final distribution should be made to Shareholders
in early 2018.
Generalist Share pool
The Generalist Share was launched in late 2016. As at 30 September 2017,
NAV and Total Return stood at 98.7p, a decrease of 1.2p per share or
1.2% over the period. This fall has arisen as the majority of
fundraising proceeds are yet to be invested, meaning that the portfolio
is generating little income to offset against running costs.
As detailed in the Investment Manager's Report, the process of building
the Generalist portfolio is underway, with GBP2.0m having been invested
in VCT Qualifying investments during the six months to 30 September
2017. The Manager has a good pipeline of investment opportunities from
which the portfolio will be built over the next 18 months.
Healthcare Share pool
The Healthcare Share pool was also launched in late 2016. As at 30
September 2017, the Healthcare Share NAV and Total Return stood at 98.6p
at 30 September 2017. Similarly, the fall is as a result of the pool
being in an early stage, having no income to offset against running
costs.
There is strong competition for deals in the healthcare sector, which
tends to inflate the valuations of investee companies. However, the
manager has been working to develop a pipeline of opportunities, in
order to grow the portfolio.
Dividends
In line with the dividend policy on the DSO D and DP67 Share Pools,
interim dividends were paid as follows:
DSO D Shares 2.5p
DP67 Shares 2.5p
The interim dividends were paid on 29 September 2017 to Shareholders on
the register at 1 September 2017.
As mentioned above, a number of other dividends in respect of other
Share classes were paid on 2 November and some have been declared for
payment on 26 January 2018.
No dividends have been declared in the Generalist and Healthcare Share
pools as they are still in the early stage of building their initial
portfolios.
Share buybacks
The Company has a policy of buying in any Generalist and Healthcare
Shares that become available in the market and will usually expect to do
so at a price approximately equal to the latest NAV of the shares,
subject to regulatory restrictions and other factors such as
availability of liquid funds.
In respect of the other share pools that are in the process of returning,
or preparing to commence returning, funds to Shareholders, the Board
does not intend to buy in any of those shares as it is envisaged that
the exit for these Shareholders will be facilitated by way of
distributions
No shares were purchased during the period ended 30 September 2017.
Fundraising
The Generalist Share offer launched in December 2016 and closed having
reached full subscription of GBP30 million in August 2017. The
Healthcare offer closed on 30 November 2017, having raised a total of
GBP12.32m.
A small top-up offer for the Generalist Share class was subsequently
launched under which regular monthly subscriptions have been allotted.
The Boards congratulates Downing, the promoter, on the successful
fundraising, which provides the Company with a substantial asset base in
"evergreen" share classes for the future.
VCT regulations
The Government's recent Budget outlined further changes to the VCT
regulations resulting from the "Patient Capital Review", which has
sought to strengthen the availability of capital for innovative growth
businesses in the UK. The Board welcomes the Government's ongoing
support of Venture Capital Trusts and believe that the new regulations
will ensure that VCTs continue provide well targeted capital in the
future.
The most significant amendment to the regulations impacting the Company
is the requirement for VCTs to hold at least 80% of their investments in
qualifying companies, an increase on the 70% previously in place. For
the Company, this increase will be effective from 1 April 2020.
Although final details of all the changes are not yet available the
Board and Manager consider that the new regulations will not have a
major impact on the Company's investment strategy or risk profile,
although the we will continue to monitor developments as further
guidance is published.
Outlook
A significant proportion of the Manager's resources over the remainder
of the year will be focused on realising investments from the share
pools that are now in the process of returning, or starting to return,
funds to Shareholders. We also expect the remainder of the year to be
busy in terms of new investment activity in both the Generalist and
Healthcare Share Pools as their initial portfolios are built.
Generally, the Board is satisfied with the performance of the portfolio
companies, which the Manager will continue to closely monitor.
I look forward to reporting developments in my statement with the Annual
Report to 31 March 2018 as the Company steadily transitions from being a
planned exit vehicle to an evergreen VCT.
Lord Flight
Chairman
INVESTMENT MANAGER'S REPORT
DSO B SHARE POOL
Portfolio Activity
The DSO B Share pool continued to make good progress during the six
month period, with one partial and two full realisations having taken
place, generating total proceeds of GBP1.4m.
Portfolio valuation
The remaining investments have been revalued as at 30 September 2017,
resulting in an overall uplift of GBP76,000. This increase predominantly
relates to deferred consideration due from Snow Hill Developments LLP
and London City Shopping Centre Limited, as a result of the DSO B Share
pool having an historic interest in these companies.
Net asset value and results
The NAV at 30 September was 4.444p per DSO B Share and 10.939p per DSO C
Share, for a combined holding of one DSO B Share and one DSO C Share.
Total Return (combined NAV plus cumulative dividends) stood at 106.883p
for a combined holding, after taking into account the estimated
performance incentive fee of 5.5p.
The profit on ordinary activities after taxation for the period was
GBP9,000, comprising a revenue loss of GBP86,000 and a capital return of
GBP95,000.
Outlook
Following 30 September 2017, the remaining investments in the DSO B
Share pool were transferred to the Generalist Share pool at a price
equal to their carrying value as at 30 September 2017. This transfer has
allowed the manager to progress with returning funds to shareholders,
whilst also allowing the Generalist Share pool to add further
investments to its growing portfolio.
The final distributions to Shareholders, of 4.444p per B share and
10.939p per C share, will be paid on 26 January 2017, to Shareholders on
the register as at 5 January 2018.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DSO B SHARE POOL
as at 30 September 2017
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
Fenkle Street LLP* 154 361 (1) 8.5%
Snow Hill Developments LLP* - 86 86 2.0%
Mosaic Spa & Health Clubs
Limited 282 37 (39) 0.9%
London City Shopping Centre
Limited* - 30 30 0.7%
Future Biogas (Reepham Road)
Limited* 632 - - 0.0%
Quadrate Spa Limited 276 - - 0.0%
1,344 514 76 12.1%
Cash at bank and in hand 3,717 87.9%
Total investments 4,231 100.0%
*non-qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
DSO B SHARE POOL
for the period ended 30 September 2017
Valuation at Disposal Total gain/(loss) against
Disposals Cost 31/03/2017 proceeds cost Realised gain in period
GBP000 GBP000 GBP000 GBP000 GBP000
Avon Solar
Energy
Limited 420 515 528 108 13
Westcountry
Solar
Solutions
Limited 500 434 445 (55) 11
Mosaic Spa &
Health
Clubs
Limited 480 411 385 (95) (26)
Total 1,400 1,360 1,358 (42) (2)
INVESTMENT MANAGER'S REPORT
DSO D SHARE POOL
Venture Capital portfolio
One partial and four full realisations took place during the period,
generating proceeds of GBP1.5m. As at 30 September 2017, the D Share
Pool had a portfolio of ten investments with a value of GBP3.6m.
Structured Product portfolio
The one remaining Structured Product investment was sold during April,
generating proceeds of GBP608,000, resulting in a gain over cost of
GBP106,000.
Portfolio valuation
Two small uplifts in value were recognised in the period, for Merlin
Renewables Limited and Fresh Green Power Limited, totalling GBP106,000.
Results and net asset value
The net asset value ("NAV") per DSO D Share at 30 September 2017 stood
at 78.5p, an increase of 4.9p or 6.4% over the period, after adjusting
for dividends paid. Total Return stands at 101.8p per share compared to
initial cost to Shareholders, net of income tax relief, of 70.0p per
share.
The profit on ordinary activities after taxation for the period was
GBP384,000, comprising a revenue gain of GBP45,000 and a capital gain of
GBP339,000.
Dividends
In light of the recent realisations from the D Share Pool, the first
return of capital, being 25.0p per DSO D Share, was paid on 2 November
2017 to shareholders on the register as at 13 October 2017.
This is in addition to the interim dividend of 2.5p, which was paid in
line with the annual dividend policy, on 29 September 2017 to
shareholders on the register at 1 September 2017.
Outlook
Plans are progressing in respect of realising the remaining investments,
however due to the number of investments held this process may take some
time to complete.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DSO D SHARE POOL
as at 30 September 2017
Unrealised % of
gain portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
Goonhilly Earth Station Limited 715 715 - 11.7%
Merlin Renewables Limited 500 642 67 10.5%
Nightjar Sustainable Power Limited 485 600 - 9.8%
Lambridge Solar Limited 500 595 - 9.7%
Apex Energy Limited 400 400 - 6.5%
Pearce and Saunders Limited* 300 300 - 4.9%
Fresh Green Power Limited 200 239 39 3.9%
Green Energy Production UK Limited 100 100 - 1.6%
Fubar Stirling Limited 135 25 - 0.4%
Pearce and Saunders DevCo Limited** 20 20 - 0.3%
3,355 3,636 106 59.3%
Cash at bank and in hand 2,479 40.7%
Total investments 6,115 100.0%
*partially qualifying
**non-qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
DSO D SHARE POOL
for the period ended 30 September 2017
Valuation at Disposal Total gain/(loss) against Realised
Disposals Cost 31/03/2017 proceeds cost gain in period
GBP000 GBP000 GBP000 GBP000 GBP000
Venture
Capital
investments
Vulcan
Renewables
Limited 653 779 903 250 124
City Falkirk
Limited 562 236 324 (238) 88
Fubar
Stirling
Limited 223 201 209 (14) 8
Cheers
Dumbarton 64 22 37 (27) 15
Lochrise
Limited 17 - 10 (7) 10
1,519 1,238 1,483 (36) 245
Structured
Product
investments
HSBC 5.4%
Dual Index
Synthetic
Zero 501 598 608 107 10
2,020 1,836 2,091 71 255
INVESTMENT MANAGER'S REPORT
DP67 SHARE POOL
Portfolio activity
One partial and one full realisation occurred during the period. As at
30 September 2017, the DP67 Share Pool had a portfolio of 7 investments
with a value of GBP4.9m.
Results and net asset value
The net asset value ("NAV") per DSO DP67 Share at 30 September 2017
stood at 68.7p, an increase of 4.6p (7.0%) over the period, after
adjusting for dividends paid. Total Return stands at 98.5p per share
compared to initial cost to Shareholders, net of income tax relief, of
70.0p per share.
The profit on ordinary activities after taxation for the period was
GBP514,000, comprising a revenue gain of GBP57,000 and a capital gain of
GBP457,000.
Portfolio valuation
The DP67 portfolio continues to perform well, with two uplifts during
the period, totalling GBP244,000, and all other investment valuations
remaining unchanged from the year end.
Dividends
The fifth anniversary of the close of the offer will fall during January
2018 and the first return of capital is expected to be announced shortly
thereafter.
Outlook
The focus for the Share pool is on realisations and monitoring
performance in order to maximise growth opportunities. Several companies
are currently in exit processes and we hope to see further progress in
this regard over the next six months.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DP67 SHARE POOL
as at 30 September 2017
Unrealised % of
gain portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
Cadbury House Holdings Limited 1,409 1,613 - 22.5%
Snow Hill Developments LLP* 809 1,203 143 16.8%
Fenkle Street LLP* 405 678 - 9.5%
Oak Grove Renewables Limited 820 451 - 6.3%
Gatewales Limited* 344 446 101 6.2%
Yamuna Energy Limited 400 400 - 5.6%
London City Shopping Centre
Limited* 99 99 - 1.4%
4,286 4,890 244 68.3%
Cash at bank and in hand 2,264 31.7%
Total investments 7,154 100.0%
*non-qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
DP67 SHARE POOL
for the period ended 30 September 2017
Valuation at Disposal Total gain against Realised
Disposals Cost 31/03/2017 proceeds cost gain in period
GBP000 GBP000 GBP000 GBP000 GBP000
Brownfields
Trading
Limited 300 300 300 - -
Gatewales
Limited 65 102 340 275 238
365 402 640 275 238
INVESTMENT MANAGER'S REPORT
DP2011 GENERAL SHARE POOL
Portfolio activity
During the period, six full exits and two partial disposals completed,
generating proceeds of GBP5.1m. The largest of these, Vulcan Renewables
Limited, generated proceeds of GBP2.5m and a profit over cost of
GBP333,000. As at 30 September 2017, the DP2011 General Share Pool had a
portfolio of ten investments with a value of GBP2.9m.
Net asset value and results
The combined net asset value ("NAV") of one DP2011 General Ordinary
Share and one DP2011 General A Share at 30 September 2017 stood at 49.4p,
a decrease of 3.2p or 6.9% over the period. Total Return stands at
104.4p per share compared to an initial cost to Shareholders, net of
income tax relief, of 70.0p per share.
The profit on ordinary activities after taxation for the period was
GBP593,000, comprising a revenue profit of GBP56,000 and a capital gain
of GBP537,000.
Portfolio valuation
One small uplift and one small reduction in value were recognised in the
period, generating a net uplift of GBP88,000. The valuations of the
remaining investments are unchanged from the year end.
Dividends
The Share pool started the task of realising its investments earlier
this year. As a result, a further return of capital, being 15.0p per
DP2011 General Ordinary Share and 15.0p per DP2011 General A Share was
paid on 2 November 2017 to shareholders on the register as at 13 October
2017. Further distributions will be made to shareholders as the
remaining investments are realised.
Outlook
The focus for the pool is now on realising investments, in order to
return funds to Shareholders. Shareholders will be provided with a
further update in the annual report to 31 March 2018, which will be
published in June 2018.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DP2011 GENERAL SHARE POOL
as at 30 September 2017
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
Snow Hill Developments LLP* 750 1,095 113 12.8%
Wickham Solar Limited 550 600 - 7.0%
Odysian Holdings Limited 873 591 - 6.9%
Oak Grove Renewables Limited 400 233 - 2.7%
Mosaic Spa and Health Clubs
Limited 212 101 (25) 1.2%
London City Shopping Centre
Limited* 88 88 - 1.0%
Clean Electricity Limited* 70 70 - 0.8%
UK Renewable Power Limited* 55 55 - 0.6%
Fubar Stirling Limited 142 29 - 0.3%
21(st) Century Energy Limited* 22 22 - 0.3%
3,162 2,884 88 33.6%
Cash at bank and in hand 5,675 66.4%
Total investments 8,559 100.0%
*non-qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
DP2011 GENERAL SHARE POOL
for the period ended 30 September 2017
Realised
gain
Valuation at Disposal Total gain/(loss) against in
Disposals Cost 31/03/2017 proceeds cost period
GBP000 GBP000 GBP000 GBP000 GBP000
Vulcan
Renewables
Limited 2,199 2,199 2,532 333 333
Avon Solar
Energy
Limited 505 618 633 128 15
Mosaic Spa &
Health
Clubs
Limited 935 699 699 (236) -
Westcountry
Solar
Solutions
Limited 600 521 535 (65) 14
City Falkirk
Limited 330 283 389 59 106
Fubar
Stirling
Limited 268 241 251 (17) 10
Cheers
Dumbarton
Limited 27 27 22 (5) (5)
Lochrise
Limited - - 12 12 12
4,864 4,588 5,073 209 485
INVESTMENT MANAGER'S REPORT
DP2011 STRUCTURED SHARE POOL
Portfolio activity
Six full and two partial realisations occurred during the period,
generating proceeds of GBP3.1m. The largest of these, Vulcan Renewables
Limited, generated proceeds of GBP1.5m and a profit over cost of
GBP225,000 As at 30 September 2017, the DP2011 Structure Share Pool had
a portfolio of five investments with a value of GBP1.4m.
Net asset value and results
The combined net asset value ("NAV") of one DP2011 Structured Ordinary
Share and one DP2011 Structured A Share at 30 September 2017 stood at
39.5p, a decrease of 2.8p or 7.6% over the period. Total Return stands
at 104.5p per share compared to an initial cost to Shareholders, net of
income tax relief, of 70.0p per share.
The profit on ordinary activities after taxation for the period was
GBP332,000 comprising a revenue profit of GBP43,000 and a capital gain
of GBP289,000.
Portfolio valuation
One small reduction in value of GBP16,000 was recognised in the period.
The valuations of the remaining investments are unchanged from the year
end.
Dividends
The Share pool started the task of realising its investments earlier
this year. As a result, a further return of capital, being 5.0p per
DP2011 Structured Ordinary Share and 20.0p per DP2011 Structured A Share
was paid on 2 November 2017 to shareholders on the register as at 13
October 2017. Further distributions will be made to shareholders as the
remaining investments are realised.
Outlook
The focus for the pool is now on realising investments, in order to
return funds to Shareholders. Shareholders will be provided with a
further update in the annual report to 31 March 2018, which will be
published in June 2018.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DP2011 STRUCTURED SHARE POOL
as at 30 September 2017
Unrealised % of
loss portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
Wickham Solar Limited 550 600 - 12.5%
Odysian (Holdings) Limited 582 394 - 8.2%
Oak Grove Renewables Limited 545 317 - 6.6%
Mosaic Spa and Health Clubs
Limited 142 67 (16) 1.4%
Fubar Stirling Limited 95 20 - 0.4%
1,914 1,398 (16) 29.1%
Cash at bank and in hand 3,390 70.9%
Total investments 4,788 100.0%
SUMMARY OF INVESTMENT MOVEMENTS
DP2011 STRUCTURED SHARE POOL
for the period ended 30 September 2017
Valuation at Disposal Total gain/(loss) against Realised
Disposals Cost 31/03/2017 proceeds cost gain/(loss) in period
GBP000 GBP000 GBP000 GBP000 GBP000
Vulcan
Renewables
Limited 1,305 1,305 1,530 225 225
Avon Solar
Energy
Limited 336 412 422 86 10
Westcountry
Solar
Solutions
Limited 400 347 356 (44) 9
Mosaic Spa &
Health
Clubs
Limited 543 386 386 (157) -
City Falkirk
Limited 220 189 259 39 70
Fubar
Stirling
Limited 178 161 167 (11) 6
Cheers
Dumbarton
Limited 18 18 15 (3) (3)
Lochrise
Limited - - 8 8 8
3,000 2,818 3,143 143 325
INVESTMENT MANAGER'S REPORT
DP2011 LOW CARBON SHARE POOL
Portfolio activity
As at 30 September 2017, the DP2011 Low Carbon Share Pool had a
portfolio of four investments with a value of GBP2.9m.
Net asset value and results
The net asset value ("NAV") per DP2011 Low Carbon Ordinary Share at 30
September 2017 stood at 39.1p, a decrease of 3.9p over the period. Total
Return stands at 107.5p per share compared to an initial cost to
Shareholders, net of income tax relief, of 70.0p per share. The Total
Return figure is stated net of the estimated performance fee.
We have reviewed and recalculated the estimated performance fee that we
expect to become payable to Low Carbon Investors Limited and Downing LLP
should the remaining investments be exited at their current valuations.
This now stands at 5.5p per share. (We identified a computation error in
the calculation at the previous year end when the estimate was stated as
2.5p per share.)
The loss on ordinary activities after taxation for the period was
GBP303,000 comprising a revenue profit of GBP82,000 and a capital loss
of GBP385,000.
Portfolio valuation
One uplift and three reductions in value were recognised in the period,
generating a net value reduction of GBP303,000. The valuation changes
have been processed in order to bring the portfolio valuations in line
with the proceeds the Manager expects to realise on exit.
Dividends
As with the other DP2011 share pools, the process of returning funds to
investors commenced in 2016. In respect of the Low Carbon pool, the
Manager is working on transactions to realise the remaining investments
and we believe that a final distribution should be made to Shareholders
in early 2018.
Outlook
The focus for the pool is now on realising investments, in order to
return funds to Shareholders. We anticipate that there will be an update
for Shareholders early in the new year, once the remaining investments
have been realised.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
DP2011 LOW CARBON SHARE POOL
as at 30 September 2017
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP000 GBP000 GBP000
Venture Capital investments
21(st) Century Energy Limited 708 762 54 27.8%
UK Renewable Power Limited 780 686 (94) 25.0%
Clean Electricity Limited 710 686 (23) 25.0%
Progressive Power Generation
Limited 800 560 (240) 20.4%
Total 2,998 2,694 (303) 98.2%
Cash at bank and in hand 45 1.8%
Total investments 2,739 100.0%
There were no disposals or additions during the period.
INVESTMENT MANAGER'S REPORT - GENERALIST SHARE POOL
Portfolio activity
Seven new and two follow on investments totalling GBP13.1m were made
during the year, as we start to build the portfolio of the Generalist
Share pool.
VCT Qualifying Investments
A further GBP250,000 was invested in Xupes Limited, an online retailer
of pre-owned luxury goods including designer watches, handbags,
jewellery and antiques. The management team has built a profitable
business with a strong brand selling high-quality products, centred on
exceptional customer service.
GBP250,000 was invested in Empiribox Limited, a company which provides
equipment, lesson plans and CPD-accredited support for teachers to
deliver engaging and practical science lessons to UK primary school
children. The company has seen strong growth and now supplies to more
than 20,000 pupils across 150 schools in the UK.
GBP394,000 was invested in BridgeU, a company founded in 2014 to provide
schools with a smart, modern university and careers guidance service.
The platform provides intelligent university and course matching
tailored to each student, helps teachers to support and manage the
creation of compelling applications and provides senior leaders in
schools with powerful analytics and reporting tools.
GBP500,000 was invested in Destiny Pharma PLC, an innovative biotech
company developing treatments for antibiotic-resistant bacteria (also
known as superbugs). The investment was made in collaboration with
BioScience Managers.
GBP567,000 was invested in Volo Commerce Limited, a leading provider of
multichannel e-commerce technology. The company enables brands and
retailers to efficiently and rapidly grow their e-commerce businesses by
automating the sales process and providing valuable analytics to improve
profitability and growth.
Non-Qualifying Investments
In order to utilise fundraising proceeds in the short term, GBP4.1m was
invested in Downing Strategic Micro-Cap Investment Trust PLC and a
follow on investment of GBP3m was made in the MI Downing UK Micro-cap
Growth Fund. Both companies hold concentrated portfolios of UK listed
companies, predominantly with market capitalisations of below GBP150m at
the time of investment.
Further to this, GBP1.5m was invested in the MI Downing Monthly Income
Fund, which targets a premium yield to the UK equity income sector.
GBP1.8m was also invested in the MI Downing Diversified Global Managers
Fund, which invests in a global portfolio of specialised funds to
provide access to a variety of asset classes and fund strategies.
Net asset value and results
At 30 September 2017, the NAV of a Generalist share stood at 98.7p, a
decrease of 1.2p for the period, resulting from the initial "cash drag"
of holding uninvested funds.
The loss on ordinary activities after taxation for the period was
GBP340,000 comprising a revenue loss of GBP181,000 and a capital loss of
GBP159,000.
Portfolio valuation
The carrying values of the liquidity investments have been adjusted to
reflect their quoted prices as at 30 September 2017. With the exception
of Destiny Pharma plc, which has been revalued to the prevailing bid
price as at 30 September 2017, the venture capital portfolio continues
to be held at cost, due to these investments being in an early stage.
Outlook
The task of building the Generalist Share portfolio is underway and we
will continue to seek investment opportunities as we develop the
investment portfolio.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
GENERALIST SHARE POOL
as at 30 September 2017
The following investments were held at 30 September 2017:
Unrealised
(loss)/gain % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital
investments
Volo Commerce Limited 567 567 - 1.9%
Destiny Pharma plc** 500 494 (6) 1.6%
Xupes Limited 450 450 - 1.5%
BridgeU Corporation 394 394 - 1.3%
Empiribox Limited 250 250 - 0.8%
2,161 2,155 (6) 7.1%
Liquidity investments
Downing Strategic
Micro-Cap Investment
Trust plc* 4,100 4,059 (41) 13.4%
MI Downing UK Micro-Cap
Growth Fund* 3,025 3,011 (14) 9.9%
MI Downing Diversified
Global Managers Fund* 1,800 1,779 (21) 5.9%
MI Downing Monthly Income
Fund* 1,500 1,558 58 5.1%
10,425 10,407 (18) 34.3%
Total 12,586 12,562 (24) 41.4%
Cash at bank and in hand 17,732 58.6%
Total investments 30,294 100.0%
*non-qualifying investment
**listed and traded on the Main Market of the London Stock Exchange
All VCT Qualifying Investments are incorporated in England and Wales.
INVESTMENT MANAGER'S REPORT - HEALTHCARE SHARE POOL
Portfolio activity
One follow on and four new investments totalling GBP2.7m were made
during the period, as we start to build the portfolio of the Healthcare
Share pool.
VCT Qualifying Investments
GBP750,000 was invested in Destiny Pharma PLC, an innovative biotech
company developing treatments for antibiotic-resistant bacteria (also
known as superbugs). The investment was made in collaboration with
BioScience Managers, a global leader in healthcare and life sciences and
investment partner to the Healthcare Share Class.
Non-Qualifying Investments
In order to utilise fundraising proceeds in the short term, GBP700,000
was invested in Downing Strategic Micro-Cap Investment Trust PLC and a
further GBP800,000 was invested in the MI Downing UK Micro-Cap Growth
Fund. Both companies hold concentrated portfolios of UK listed companies,
predominantly with market capitalisations of below GBP150m at the time
of investment.
Further to this, GBP600,000 was invested in the MI Downing Monthly
Income Fund, which targets a premium yield to the UK equity income
sector.
GBP500,000 was also invested in the MI Downing Diversified Global
Managers Fund, which invests in a global portfolio of specialised funds
to provide access to a variety of asset classes and fund strategies.
Net asset value and results
At 30 September 2017, the NAV of a Healthcare share stood at 98.6p, a
decrease of 1.1p for the period, resulting from the initial "cash drag"
of holding uninvested funds.
The loss on ordinary activities after taxation for the period was
GBP100,000, comprising a revenue loss of GBP49,000 and a capital loss of
GBP51,000.
Portfolio valuation
The carrying values of all investments have been adjusted to reflect
their quoted prices as at 30 September 2017.
Outlook
The task of building the Healthcare Share portfolio is underway and we
will continue to seek investment opportunities as we develop the
investment portfolio.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
HEALTHCARE SHARE POOL
as at 30 September 2017
The following investments were held at 30 September 2017:
Unrealised
(loss)/gain % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000
Venture Capital
investments
Destiny Pharma plc** 750 740 (10) 8.2%
750 740 (10) 8.2%
Liquidity investments
MI Downing UK Micro-Cap
Growth Fund* 825 816 (9) 9.1%
Downing Strategic
Micro-Cap Investment
Trust plc* 700 693 (7) 7.7%
MI Downing Diversified
Global Managers Fund* 600 593 19 6.6%
MI Downing Monthly Income
Fund* 500 519 (7) 5.8%
2,625 2,621 (4) 29.2%
Total 3,375 3,361 (14) 37.4%
Cash at bank and in hand 5,629 62.6%
Total investments 8,990 100.0%
* non-qualifying investment
**listed and traded on the Main Market of the London Stock Exchange
All VCT Qualifying Investments are incorporated in England and Wales.
UNAUDITED INCOME STATEMENT
for the six months ended 30 September 2017
Year
ended
Six months ended Six months ended 31 Mar
30 Sep 2017 30 Sep 2016 2017
Revenue Capital Total Revenue Capital Total Total
Company Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 545 - 545 978 - 978 1,999
Net gains on investments - 1,440 1,440 - 1,165 1,165 1,980
545 1,440 1,985 978 1,165 2,143 3,979
Investment management fees (317) (317) (634) (183) (184) (367) (656)
Other expenses (246) - (246) (252) - (252) (515)
Return on ordinary activities before tax (18) 1,123 1,105 543 981 1,524 2,808
Tax on total comprehensive income and ordinary
activities (14) - (14) 18 - 18 (151)
Return attributable to equity shareholders, being
total comprehensive income for the year (32) 1,123 1,091 561 981 1,542 2,657
Return per DSO B Share (0.4p) 0.5p 0.1p 0.3p 2.2p 2.5p 3.1p
Return per DSO C Share - - - - - - -
Return per DSO D Share 0.6p 4.3p 4.9p 0.4p 2.0p 2.4p 5.6p
Return per DP67 Share 0.5p 4.1p 4.6p 1.2p 4.2p 5.4p 9.7p
Return per DP2011 Gen Ordinary Share 0.4p 3.4p 3.8p 1.1p 0.1p 1.2p 2.2p
Return per DP2011 Gen A Share - - - - - - -
Return per DP2011 Struc Ordinary Share 0.4p 2.7p 3.1p 1.3p (0.7p) 0.6p 0.7p
Return per DP2011 Struc A Share - - - - - - -
Return per DP2011 Low Carbon Share 1.1p (5.0p) (3.9p) 0.4p (0.4p) 0.0p 1.4p
Return per Generalist Share (0.9p) (0.7p) (1.6p) - - - (2.0p)
Return per Healthcare Share (1.3p) (1.4p) (2.7p) - - - (2.5p)
UNAUDITED INCOME STATEMENT (ANALYSED BY SHARE POOL)
Year
ended
Six months ended Six months ended 31 Mar
30 Sep 2017 30 Sep 2016 2017
Revenue Capital Total Revenue Capital Total Total
B Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 15 - 15 98 - 98 270
Gains on
investments - 121 121 - 458 458 494
15 121 136 98 458 556 764
Investment
management
fees (26) (26) (52) (19) (19) (38) (54)
Other expenses (61) - (61) (21) - (21) (55)
Return on
ordinary
activities
before
taxation (72) 95 23 58 439 497 655
Taxation (14) - (14) (7) - (7) (36)
Return
attributable to
equity
shareholders (86) 95 9 51 439 490 619
Revenue Capital Total Revenue Capital Total Total
D Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 96 - 96 91 - 91 174
Gains on
investments - 361 361 - 177 177 431
96 361 457 91 177 268 605
Investment
management
fees (22) (22) (44) (20) (21) (41) (86)
Other expenses (29) - (29) (37) - (37) (80)
Return/(losses)
on ordinary
activities
before
taxation 45 339 384 34 156 190 439
Taxation - - - (3) - (3) (2)
Return/(losses)
attributable to
equity
shareholders 45 339 384 31 156 187 437
Year
ended
Six months ended Six months ended 31 Mar
30 Sep 2017 30 Sep 2016 2017
Revenue Capital Total Revenue Capital Total Total
DP67 Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 119 - 119 211 - 211 500
Gains on
investments - 482 482 - 503 503 883
119 482 601 211 503 714 1,383
Investment
management
fees (25) (25) (50) (23) (23) (46) (94)
Other expenses (37) - (37) (36) - (36) (70)
Return on
ordinary
activities
before
taxation 57 457 514 152 480 632 1,219
Taxation - - - (15) - (15) (129)
Return
attributable to
equity
shareholders 57 457 514 137 480 617 1,090
Revenue Capital Total Revenue Capital Total Total
DP2011 General
Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 132 - 132 283 - 283 521
Gains on
investments - 573 573 - 64 64 164
132 573 705 283 64 347 685
Investment
management
fees (36) (36) (72) (54) (54) (108) (194)
Other expenses (40) - (40) (68) - (68) (145)
Return/(losses)
on ordinary
activities
before
taxation 56 537 593 161 10 171 346
Taxation - - - 17 - 17 1
Return/(losses)
attributable to
equity
shareholders 56 537 593 178 10 188 347
Year
ended
Six months ended Six months ended 31 Mar
30 Sep 2017 30 Sep 2016 2017
Revenue Capital Total Revenue Capital Total Total
DP2011 Structured
Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 86 - 86 218 - 218 354
Gains/(losses) on
investments - 309 309 - (37) (37) (57)
86 309 395 218 (37) 181 297
Investment
management fees (20) (20) (40) (38) (38) (76) (126)
Other expenses (23) - (23) (53) - (53) (100)
Return/(losses)
on ordinary
activities
before taxation 43 289 332 127 (75) 52 71
Taxation - - - 9 - 9 1
Return/(losses)
attributable to
equity
shareholders 43 289 332 136 (75) 61 72
Revenue Capital Total Revenue Capital Total Total
DP2011 Low Carbon
Share pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 112 - 112 77 - 77 179
(Losses)/gains on
investments - (370) (370) 77 - 77 67
112 (370) (258) 77 - 77 246
Investment
management fees (15) (15) (30) (29) (29) (58) (86)
Other expenses (15) - (15) (31) - (31) (65)
Return/(losses)
on ordinary
activities
before taxation 82 (385) (303) 17 (29) (12) 95
Taxation - - - 17 - 17 12
Return/(losses)
attributable to
equity
shareholders 82 (385) (303) 34 (29) 5 107
Year
ended
Six months ended Six months ended 31 Mar
30 Sep 2017 30 Sep 2016 2017
Revenue Capital Total Revenue Capital Total Total
Generalist Share
pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 10 - 10 - - - -
Losses on
investments - (24) (24) - - - -
10 (24) (14) - - - -
Investment
management fees (135) (135) (270) - - - (10)
Other expenses (56) - (56) - - - (1)
Return/(losses)
on ordinary
activities
before taxation (181) (159) (340) - - - (11)
Taxation - - - - - - -
Return/(losses)
attributable to
equity
shareholders (181) (159) (340) - - - (11)
Revenue Capital Total Revenue Capital Total Total
Healthcare Share
pool GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Income 1 - 1 - - - -
Losses on
investments - (13) (13) - - - -
1 (13) (12) - - - -
Investment
management fees (38) (38) (76) - - - (6)
Other expenses (12) - (12) - - - -
Return/(losses)
on ordinary
activities
before taxation (49) (51) (100) - - - (6)
Taxation - - - - - - -
Return/(losses)
attributable to
equity
shareholders (49) (51) (100) - - - (6)
UNAUDITED BALANCE SHEET
as at 30 September 2017
As at 31
As at 30 September As at 30 September March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 31,939 26,760 27,095
Current assets
Debtors 1,180 1,114 1,709
Cash at bank and in
hand 40,931 8,236 31,441
42,111 9,350 33,150
Creditors: amounts
falling due within
one year (338) (731) (833)
Net current assets 41,773 8,619 32,317
Net assets 73,712 35,379 59,412
8BCapital and
reserves
Called up Share
capital 180 135 144
Capital redemption
reserve 31 31 31
Special reserve 29,203 33,272 30,620
Share premium
account 39,846 - 10,074
Funds held in
respect of shares
not yet allotted 1,127 - 16,137
Revaluation reserve (1,198) (2,412) (1,980)
Capital reserve -
realised 4,668 2,621 3,331
Revenue reserve (145) 1,732 1,055
Total equity
shareholders'
funds 73,712 35,379 59,412
Basic and diluted
net asset value
per Share:
DSO B Share 4.4p 20.0p 20.7p
DSO C Share 16.5p 0.1p 0.1p
DSO D Share 78.5p 75.5p 76.1p
DP67 Share 68.7p 63.9p 66.1p
DP2011 General 15.0p 25.0p 15.0p
Ordinary Share
DP2011 General A 34.4p 30.3p 31.2p
Share
DP2011 Structured 5.0p 14.9p 4.8p
Ordinary Share
DP2011 Structured A 34.5p 31.8p 31.9p
Share
DP2011 Low Carbon 39.1p 41.7p 43.0p
Share
Generalist Share 98.7p N/A* 99.9p
Healthcare Share 98.6p N/A* 99.7p
*The comparative balance sheet as at 30 September 2016 includes only the
Share Pools in existence at that date.
UNAUDITED BALANCE SHEET (ANALYSED BY SHARE POOL)
as at 30 September 2017
DSO B Shares
As at
As at 30 As at 30 September 31 March
September 2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 514 1,743 1,752
Current assets
Debtors 1 18 74
Cash at bank and in
hand 3,717 2,379 2,475
3,718 2,397 2,549
Creditors: amounts
falling due within
one year (72) (126) (151)
Net current assets 3,646 2,271 2,398
Net assets 4,160 4,014 4,150
Capital and
reserves
Called up share
capital - B Shares 20 20 20
Called up share
capital - C Shares 30 30 30
Capital redemption
reserve 31 31 31
Special reserve 3,095 3,693 3,186
Share premium
reserve - - -
Revaluation reserve (945) (1,742) (1,108)
Capital reserve -
realised 1,729 1,711 1,705
Revenue reserve 200 271 286
Total equity
shareholders'
funds 4,160 4,014 4,150
DSO D Shares
As at
As at 30 As at 30 September 31 March
September 2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 3,636 4,966 5,365
Current assets
Debtors 113 185 254
Cash at bank and in
hand 2,479 860 435
2,592 1,045 689
Creditors: amounts
falling due within
one year (51) (75) (62)
Net current assets 2,541 970 627
Net assets 6,177 5,936 5,992
Capital and
reserves
Called up share
capital 8 8 8
Capital redemption
reserve - - -
Special reserve 6,205 6,659 6,598
Share premium
reserve - (263) -
Revaluation reserve 281 - (9)
Capital reserve -
realised (266) (510) (510)
Revenue reserve (51) 42 (95)
Total equity
shareholders'
funds 6.177 5,936 5,992
DP67 Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 4,890 5,515 5,047
Current assets
Debtors 621 3 392
Cash at bank and in
hand 2,264 1,775 2,396
2,885 1,778 2,788
Creditors: amounts
falling due within
one year (55) (112) (404)
Net current assets 2,830 1,666 2,384
Net assets 7,720 7,181 7,431
Capital and
reserves
Called up share
capital 11 11 11
Capital redemption
reserve - - -
Special reserve 5,623 5,592 5,836
Share premium
reserve - - -
Revaluation reserve 603 993 396
Capital reserve -
realised 1,308 355 1,070
Revenue reserve 175 230 118
Total equity
shareholders'
funds 7,720 7,181 7,431
DP2011 General Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 2,884 7,284 7,385
Current assets
Debtors 205 479 585
Cash at bank and in
hand 5,675 1,925 266
5,880 2,404 851
Creditors: amounts
falling due within
one year (76) (190) (143)
Net current assets 5,804 2,214 708
Net assets 8,688 9,498 8,093
Capital and
reserves
Called up share
capital 16 34 16
Capital redemption
reserve 18 - 18
Special reserve - 9,177 -
Share premium
reserve 7,489 - 7,805
Revaluation reserve (278) (740) (641)
Capital reserve -
realised 956 466 466
Revenue reserve 487 561 429
Total equity
shareholders'
funds 8,688 9,498 8,093
DP2011 Structured Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 1,398 4,254 4,233
Current assets
Debtors 120 321 365
Cash at bank and in
hand 3,390 1,155 28
3,510 1,476 393
Creditors: amounts
falling due within
one year (44) (139) (94)
Net current assets 3,466 1,337 299
Net assets 4,864 5,591 4,532
Capital and
reserves
Called up share
capital - Ordinary
Shares 11 11 11
Called up share
capital - A Shares 13 13 13
Capital redemption
reserve - - -
Special reserve 4,348 5,498 4,565
Share premium
reserve - -
Revaluation reserve (514) (660) (682)
Capital reserve -
realised 685 346 346
Revenue reserve 321 383 279
Total equity
shareholders'
funds 4,864 5,591 4,532
DP2011 Low Carbon Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 2,694 2,998 3,065
Current assets
Debtors 248 108 140
Cash at bank and in
hand 45 142 116
293 250 256
Creditors: amounts
falling due within
one year (28) (89) (59)
Net current assets 265 161 197
Net assets 2,959 3,159 3,262
Capital and
reserves
Called up share
capital 8 8 8
Capital redemption
reserve - - -
Special reserve 2,624 2,653 2,639
Share premium
reserve - - -
Revaluation reserve (303) - 67
Capital reserve -
realised 253 253 253
Revenue reserve 377 245 295
Total equity
shareholders'
funds 2,959 3,159 3,262
Generalist Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 12,562 - 225
Current assets
Debtors 77 - -
Cash at bank and in
hand 17,732 - 21,225
17,809 - 21,225
Creditors: amounts
falling due within
one year (164) - (10)
Net current assets 17,645 - 21,215
Net assets 30,207 - 21,440
Capital and
reserves
Called up share
capital 38 - 7
Special reserve (140) - (5)
Share premium
reserve 31,063 - 7,633
Revaluation reserve (24) - -
Funds held in
respect of shares
not yet allotted 566 - 14,012
Revenue reserve (1,296) - (207)
Total equity
shareholders'
funds 30,207 - 21,440
Healthcare Shares
As at
As at 30 September As at 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 3,361 - 25
Current assets
Debtors - - -
Cash at bank and in
hand 5,629 - 4,500
5,629 - 4,500
Creditors: amounts
falling due within
one year (46) - (7)
Net current assets 5,583 - 4,493
Net assets 8,944 - 4,518
Capital and
reserves
Called up share
capital 9 - 2
Special reserve (41) - (3)
Share premium
reserve 8,782 - 2,441
Revaluation reserve (13) - -
Funds held in
respect of shares
not yet allotted 561 - 2,125
Revenue reserve (354) - (47)
Total equity
shareholders'
funds 8,944 - 4,518
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2017
Called
up Capital Share Capital
Share Redempt-ion Special premium Funds held in respect Revaluat-ion reserve- Revenue
capital reserve reserve account of shares not yet allotted Reserve realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March
2016 161 5 44,441 - - (2,645) 1,949 1,171 45,082
Total
comprehensive
income - - - - - 599 1,321 737 2,657
Transfer
between
reserves* - - (13,772) - - 66 13,706 - -
Unallotted
shares - - - - 16,137 - - - 16,137
Transactions
with owners
Dividend paid - - - - - - (13,645) (608) (14,253)
Cancellation
of shares (26) 26 - - - - - - -
Purchase of
own shares - - (49) - - - - - (49)
Issue of
shares 9 - - 10,074 - - - - 10,083
Share issue
costs - - - - - - - (245) (245)
At 31 March
2017 144 31 30,620 10,074 16,137 (1,980) 3,331 1,055 59,412
Total
comprehensive
income - - - - - 137 986 (32) 1,091
Transfer
between
reserves* - - (1,417) - - 645 772 - -
Unallotted
shares - - - - 14,798 - - - 14,798
Transactions
with owners
Dividend paid - - - - - - (421) - (421)
Cancellation
of shares - - - - - - - - -
Purchase of
own shares - - - - - - - - -
Issue of
shares 36 - - 29,772 (29,808) - - - -
Share issue
costs - - - - - - - (1,168) (1,168)
At 30
September
2017 180 31 29,203 39,846 1,127 (1,198) 4,668 (145) 73,712
*A transfer of GBP645,000 (31 March 2017: GBP66,000) representing
previously recognised realised gains on disposal of investments during
the period has been made from the Revaluation Reserve to the Capital
reserve-realised. A transfer of GBP1.4 million (31 March 2017: GBP13.8
million) representing realised gains on disposal of investments, less
capital expenses and capital dividends in the period was made from
Capital Reserve - realised to Special reserve.
UNAUDITED STATEMENT OF CASH FLOWS
Six months ended 30 September 2017
DP2011
DSO B DSO D DP67 Gen DP2011 Struc
Share Share Share Share Share DP2011 Generalist
pool pool pool pool pool LC Share pool Share Pool Health-care Share Pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Return on ordinary
activities before
taxation 23 384 514 593 332 (303) (340) (100) 1,105
(Gains)/losses on
investments (121) (361) (482) (573) (309) 370 24 13 (1,440)
Decrease/(increase) in
debtors 35 141 (24) 380 244 (108) (77) - 591
Increase/(decrease) in
creditors 5 (24) (50) (48) (41) (24) 154 41 16
Net cash inflow from
operating
activities (58) 140 (42) 352 226 (65) (239) (46) 268
Corporation tax (58) 10 (505) (16) (7) (6) - - (582)
New cash generated
from operating
activities (116) 150 (547) 336 219 (71) (239) (46) (314)
Cash flow from investing
activities
Purchase of
investments - - - - - - (12,360) (3,350) (15,710)
Proceeds from
disposal of
investments 1,358 2,091 640 5,073 3,143 - - - 12,305
Net cash
inflow/(outflow) from
investing activities 1,358 2,091 640 5,073 3,143 - (12,360) (3,350) (3,405)
Net cash
inflow/(outflow)
before financing 1,242 2,241 93 5,409 3,362 (71) (12,599) (3,396) (3,719)
Cash flows from financing
activities
Repurchase of shares - - - - - - - - -
Issue of share
capital - - - - - - 22,552 6,089 28,641
Unallotted shares - - - - - - (13,446) (1,564) (15,010)
Equity dividends paid - (197) (225) - - - - - (422)
Net cash
(outflow)/inflow from
financing activities - (197) (225) - - - 9,106 4,525 13,209
Net movement in
cash 1,242 2,044 (132) 5,409 3,362 (71) (3,493) 1,129 9,490
Cash and cash
equivalents at start
of year 2,475 435 2,396 266 28 116 21,225 4,500 31,441
Cash and cash
equivalents at end
of year 3,717 2,479 2,264 5,675 3,390 45 17,732 5,629 40,931
Cash and cash equivalents comprise
Cash at bank and in
hand 3,717 2,479 2,264 5,675 3,390 45 17,732 5,629 40,931
Total cash and cash
equivalents 3,717 2,479 2,264 5,675 3,390 45 17,732 5,629 40,931
UNAUDITED STATEMENT OF CASH FLOWS
Six months ended 30 September 2016
DP2011 Year
DSO B DSO D DP67 Gen DP2011 Struc ended 31
Share Share Share Share Share DP2011 March
pool pool pool pool pool LC Share pool Total 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Return on ordinary
activities before
taxation 491 190 632 171 52 (12) 1,524 2,808
Losses/(gains) on
investments (458) (177) (503) (64) 37 - (1,165) (1,980)
Decrease/(increase) in
debtors 33 (22) 196 (87) (92) (63) (35) (325)
(Decrease)/increase in
creditors (66) 19 4 24 15 7 3 (92)
Net cash inflow from
operating
activities - 10 329 44 12 (68) 327 406
Corporation tax paid (80) (13) (7) (12) (8) (14) (134) (408)
New cash generated
from operating
activities (80) (3) 322 32 4 (82) 193 (2)
Cash flow from investing
activities
Purchase of
investments - - (700) - - - (700) (1,095)
Proceeds from
disposal of
investments 1,749 900 1,515 3,226 3,065 - 10,455 11,332
Net cash
inflow/(outflow) from
investing activities 1,749 900 815 3,226 3,065 - 9,755 10,237
Net cash
inflow/(outflow)
before financing 1,669 897 1,137 3,258 3,069 (82) 9,948 10,235
Cash flows from financing
activities
Repurchase of shares - - (49) - - - (49) (49)
Issue of share
capital - - - - - - - 9,838
Unallotted shares - - - - - - - 16,137
Equity dividends paid - (196) (224) (3,519) (3,470) (3,787) (11,196) (14,253)
Net cash
(outflow)/inflow from
financing activities 1,669 (196) (273) (3,519) (3,470) (3,787) (11,245) 11,673
Net
increase/(decrease)
in cash 1,669 701 864 (261) (401) (3,869) (1,297) 21,908
Cash and cash
equivalents at start
of year 710 159 911 2,186 1,556 4,011 9,533 9,533
Cash and cash
equivalents at end
of year 2,379 860 1,775 1,925 1,155 142 8,236 31,441
Cash and cash equivalents
comprise
Cash at bank and in
hand 2,379 860 1,775 1,925 1,155 142 8,236 31,441
Total cash and cash
equivalents 2,379 860 1,775 1,925 1,155 142 8,236 31,441
*Comparative cash flows include only the DSO Share Pools in existence at
those dates.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
General Information
Downing FOUR 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.
Basis of accounting
The unaudited half-yearly financial results cover the six months to 30
September 2017 and have been prepared in accordance with the accounting
policies set out in the statutory accounts for the year ended 31 March
2017, which were prepared in accordance with the Financial Reporting
Standard 102 ("FRS 102") and in accordance with the Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies" revised November 2014 ("SORP").
The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
The comparative figures are in respect of the six months ended 30
September 2016 and the year ended 31 March 2017 respectively.
Net asset value per share at the period end has been calculated on the
number of shares in issue at the period end as follows:
DSO B Shares 19,911,070 DP2011 Structured Shares 10,678,725
DSO C Shares 29,926,070 DP2011 Structured A Shares 12,572,817
DSO D Shares 7,867,247 DP2011 Low Carbon Shares 7,575,419
DP67 Shares 11,239,785 Generalist Shares 37,504,899
DP2011 General Shares 15,644,066 Healthcare Shares 8,506,813
DP2011 General A Shares 18,418,614
Return per share for the period has been calculated on the average
number of shares in issue in the period as follows:
DSO B Shares 19,911,070 DP2011 Structured Shares 10,678,725
DSO C Shares 29,926,070 DP2011 Structured A Shares 12,572,817
DSO D Shares 7,867,247 DP2011 Low Carbon Shares 7,575,419
DP67 Shares 11,239,785 Generalist Shares 21,210,366
DP2011 General Shares 15,644,066 Healthcare Shares 3,637,092
DP2011 General A Shares 18,418,614
Dividends
Six months ended 30 September 2017
Revenue Capital Total
GBP000 GBP000 GBP000
Paid in period
DSO D Shares - 197 197
DP67 Shares - 225 225
Reserves
30 Sep 30 Sep 31 Mar
2017 2016 2017
GBP'000 GBP'000 GBP'000
Capital redemption reserve 31 31 31
Special reserve 29,203 33,272 30,620
Share premium account 39,846 - 10,074
Funds held in respect of shares not yet
allotted 1,127 - 16,137
Capital reserve - realised (1,198) (2,412) (1,980)
Revaluation reserve 4,668 2,621 3,331
Revenue reserve (145) 1,732 1,055
Total reserves 73,532 35,244 59,268
The Revenue reserve, Special reserve and Capital reserve - realised are
distributable reserves and are reduced by revaluation losses of GBP3.3
million. Distributable reserves at 30 September 2017 were GBP32.5
million.
Investments
The fair value of investments is determined using the detailed
accounting policy as shown in the audited financial statements for the
year ended 31 March 2016. The Company has categorised its financial
instruments using the fair value hierarchy as follows:
Level a Reflects financial instruments quoted in an active market
(quoted companies, investment funds and fixed interest bonds);
Level b Reflects financial instruments that have prices that are
observable either directly or indirectly; and
Level c i)Reflects financial instruments that use valuation techniques
that are based on observable market data.
ii)Reflects financial instruments that use valuation techniques that are
not based on observable market data (investments in unquoted shares and
loan note investments).
Level Level
Level Level c 30 Sep Level Level c 31 Mar
a b (ii) 2017 a b (ii) 2017
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Structured
Products - - - - 598 - - 598
Quoted
equity 1,234 - - 1,234 - - - -
Liquidity
Investments 13,029 - - 13,029 - - - -
Unquoted
loan notes - - 7,432 7,432 - - 12,781 12,781
Unquoted
equity - - 10,244 10,244 - - 13,716 13,716
14,263 - 17,676 31,939 598 - 26,497 27,095
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is required
in the Company's half-year results to report on the 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:
- compliance risk of failure to maintain approval as a VCT;
- market, liquidity and counterparty risk associated with Liquidity
Investments; and
- investment risk associated with investing in small and immature
businesses.
The Company's compliance with the VCT regulations is continually
monitored by the Manager, who reports regularly to the Board on the
current position. The Company also retains Phillip Hare & Associates LLP
("Phillip Hare") to provide regular reviews and advice in this area.
Philip Hare have confirmed that all relevant tests have been complied
with for the period under review. The Board considers that this approach
reduces the risk of a breach of the VCT regulations.
With this approach, the Board believes that these risks are reduced.
In order to make VCT qualifying investments, the Company has to invest
in small businesses which are often immature. In addition, funds
invested under the new VCT regulations in force from November 2015
provide greater restriction on, amongst other things, the age of the
investments. It also has a limited period in which it must invest the
majority of its funds. The Manager follows a rigorous process in vetting
and careful structuring of new investments, including taking a charge
over the assets of the business wherever possible and, after an
investment is made, closely monitoring thebusiness. The Board is
satisfied that this approach reduces the investment risk described in
(iii) above as far as is reasonably possible.
Going concern
The Directors have reviewed the Company's financial resources at the
period end and conclude that the Company is well placed to manage its
business risks.
The Board confirms that it is satisfied that the Company has adequate
resources to continue in business for the foreseeable future. For this
reason, the Board believes 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.
Statutory accounts
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 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:
- DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
- DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period, and any
changes in the related party transactions described in the last annual
report that could do so.
Copies of the Half-Yearly Report will be sent to Shareholders shortly.
Further copies can be obtained from the Company's registered office or
can be downloaded from www.downing.co.uk.
PERFORMANCE INCENTIVE ARRANGEMENTS
Performance incentive arrangements are in place for the each share pool
except the DP67 pool. The various schemes are summarised as follows:
DSO B Shares
The performance incentive in respect of the DSO B Shares is facilitated
by holdings of DSO C Shares that are held by members of the management
team (who subscribed for A Shares at 0.1p per share). An incentive is
due to management when the hurdle is met as follows:
- Shareholders receive total proceeds of at least 100p per DSO B
Share/DSO C Share (excluding income tax relief); and
- Shareholders achieve a tax-free compound return of at least 7% per
annum (after allowing for income tax relief on investment).
After the above hurdle is met, management receive 3% of the proceeds on
the first 100p of distributions and 20% thereafter. This is paid by
dividends by virtue of the shareholdings of C Shares held by the
management team.
The maximum performance incentive is limited to an amount equivalent to
1.25% of Net Assets attributable to DSO B Shares per annum. With a lower
than usual ongoing management fee of 1.5%, the maximum management fees
(including performance incentive) borne by investors is 2.75% of net
assets per annum.
As at 30 September 2017, the estimated performance fee is 5.5p per DSO B
Share.
DSO D Shares
The Performance Incentive in respect of the DSO D Shares is structured
as a simple fee when the hurdle is met. A fee is payable when:
- Shareholders receive total proceeds of at least 100p per DSO D Share
(excluding income tax relief); and
- Shareholders achieve a tax-free compound return of at least 7% per
annum (after allowing for income tax relief on investment).
If the hurdle is met, the fee will be 3p per DSO D Share plus 20% of
shareholder proceeds above 100p per D Share. The maximum performance fee
is limited to 7p per D Share.
As at 30 September 2017, the estimated performance fee is 4.2p per DSO B
Share.
DP2011 General Shares/ DP2011 Structured Shares
The performance incentive arrangements in respect of the DP2011 General
and DP2011 Structured pools enable payments, by way of distributions of
income, to members of the management team who subscribed for 15% of the
DP2011 General A Shares and DP2011 Structured A Shares at 6.5p per
share.
Once proceeds to Shareholders exceeds 70p per DP2011 General Ordinary
Share/DP2011 Structured Ordinary Share a performance incentive of 15%
becomes due to members of the management team. No further incentive is
paid to management once Shareholder proceeds exceed 120p per DP2011
General Ordinary Share/DP2011 Structured Ordinary Share.
As at 30 September 2017, it been estimated that a performance incentive
due to management in respect of the DP2011 General and Structured Share
pools will be approximately 5.2p per DP2011 General Ordinary Share and
5.2p per DP2011 Structured Ordinary Share.
DP2011 Low Carbon Shares
As no A Shares were issued in connection with the DP2011 Low Carbon
Share pool, the performance incentive takes the form of an incentive fee
payable to Downing LLP.
A fee will become payable equal to 15% of shareholder proceeds in excess
of 70p per share. No further fees accrue after shareholder proceeds
exceed 120p per share.
As at 30 September 2017, it been estimated that a performance incentive
fee due in respect of the DP2011 Low Carbon Pool will be approximately
equivalent to 5.5p per DP2011 Low Carbon Shares.
Generalist and Healthcare Share pools
A performance incentive scheme is in place in respect of the Generalist
and Healthcare Management Shares, which will represent 20% of the total
number of Generalist and Healthcare Shares in issue. As part of the
arrangement, in order to prevent dilution to the shareholders of the
Generalist and Healthcare Shares, the management team will waive their voting rights granted by these Management Shares at any general meeting of the Company and income or capital distributions otherwise payable on these Management Shares will be waived unless the share class has achieved a Total Return (based on audited year end results) in excess of GBP1 per share for the years ended 31 March 2018, 31 March 2019 and 31 March 2020. For subsequent years, the Total Return hurdle increases by 3p per annum such that for the year ended 31 March 2021 the hurdle is GBP1.03, and for the year ended 31 March 2022 the hurdle is GBP1.06. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Downing FOUR VCT plc via Globenewswire
(END) Dow Jones Newswires
December 22, 2017 10:10 ET (15:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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