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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Down. 4 Dso Ord | LSE:DO1O | London | Ordinary Share | GB00B3L2G079 | DSO 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% | 2.505 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMDO1O Downing Structured Opportunities VCT 1 plc Half-Yearly Report for the six months ended 30 September 2014 Performance summary 30 Sept 31 Mar 30 Sept 2014 2014 2013 pence pence pence Ordinary Share pool Net asset value per Ordinary Share 93.5 92.2 91.3 Net asset value per 'A' Share 0.1 0.1 0.1 Cumulative dividends per Ordinary Share 40.0 37.5 35.0 Total return per Ordinary Share and 'A' Share 133.6 129.8 126.4 'B' Share pool Net asset value per 'B' Share 74.6 82.3 84.0 Net asset value per 'C' Share 0.1 0.1 0.1 Cumulative dividends per 'B' Share 30.0 20.0 17.5 Total return per 'B' Share and 'C' Share 104.7 102.4 101.6 'D' Share pool Net asset value per 'D' Share 81.2 83.0 85.3 Cumulative dividends per 'D' Share 12.5 10.0 7.5 Total return per 'D' Share 93.7 93.0 92.8 CHAIRMAN'S STATEMENT Introduction I am pleased to present the Company's half-yearly report for the six months ended 30 September 2014. The Company continues to operate three share pools each at differing stages in their life. Generally the Board has remained satisfied with progress, particularly in the Ordinary Share pool, which is now in the exit phase. Ordinary Share pool At 30 September 2014, the combined net asset value ("NAV") of one Ordinary Share and one 'A' Share stood at 93.6p; an increase of 3.8p (4.1%) since 31 March 2014 (after the dividend paid during the period of 2.5p per Ordinary Share). The NAV plus cumulative dividends paid to date for a combined holding of one Ordinary Share and one 'A' Share now totals 133.6p. Exit processes are already underway for many of the Ordinary Share pool's 18 investments. Realisations will be achieved by a variety of means including trade sales and refinancing. As a result, the exact timing of when disposal proceeds will be received is difficult to forecast precisely, however we anticipate that the Company will be in a position to declare a substantial dividend, which we expect to be in excess of 25p per Ordinary Share, early in the New Year. We believe that a further significant distribution may then be made in the second quarter of 2015, after which we are hopeful that the majority of the remaining value will have been returned. Ordinary Shareholders should note that, assuming exits are achieved in a timely manner and at current book value, it is likely that the hurdles for the payment of dividends on the 'A' Shares will be met. It is estimated that the value of such dividends payable to the Management 'A' Shares will be equivalent to 7p per Ordinary Share i.e. Total Return to shareholders who subscribed for one Ordinary Share and one 'A' Share at the Company's outset would be 126.6p. 'B' Share pool At 30 September 2014, the combined NAV of one 'B' Share and one 'C' Share stood at 74.7p; an increase of 2.3p per share (2.8%) since 31 March 2014 (after the 10.0p dividend paid during the period). The NAV plus cumulative dividends paid to date for a combined holding of one 'B' Share and one 'C' Share now totals 104.7p. Plans are also progressing to exit from the 'B' Share pool investments. The Manager anticipates that the first of these will occur in the first quarter in 2015. 'B' Shareholders can expect their first return of capital distribution in the second quarter of 2015. 'D' Share pool At 30 September 2014, the NAV per 'D' Share stood at 81.2p per share; an increase of 0.7p per share (0.8%) since 31 March 2014 (after the 2.5p dividend paid during the period). The NAV plus cumulative dividends paid to date for one 'D' Share now totals 93.7p. The process of building the initial 'D' Share Venture Capital portfolio is now approaching completion. This allows some time for the investments to grow and develop ahead of the scheduled commencement of the exit process in 2017. Dividends In line with the Company's policies, interim dividends will be paid as follows: 'B' Shares 2.5p per share 'D' Shares 2.5p per share Each of the dividends will be paid on 30 January 2015 to Shareholders on the register at 5 January 2015. No interim dividend is being declared in respect of the Ordinary Shares at this time as the Board expects to make an announcement about a significant distribution returning funds to Ordinary Shareholders early in the New Year. Share buybacks As both the Ordinary Share pool and B Share pool are now in or approaching their exit phase, the Board does not intend to undertake any further share buybacks in respect of the Ordinary Shares, 'A' Shares, 'B' Shares and 'C' Shares. The Board intends to preserve cash so that it can be distributed to all relevant Shareholders in due course. In respect of the 'D' Shares, The Company operates a share buyback policy whereby, subject to any liquidity and regulatory restrictions, it will buy in 'D' Shares that become available in the market for cancellation at a price equivalent to net asset value i.e. at nil discount. Outlook During the remainder of the financial year, the Board expects the Company to make a good start in returning funds to Ordinary Shareholders and for realisation plans for the 'B' Share pool to be significantly progressed. The exit for the 'D' Share pool is not scheduled to commence until 2017. As a result, the Manager's main focus over the remainder of the year will be on close monitoring of the investments and ensuring that they are well positioned to take advantage of the improving economic conditions. The Board is continuing to explore the possibility of a merger with one or more other VCTs, which may provide some attractive benefits to Shareholders. Naturally the Board will be in communication as and when there is any news to report. Lord Flight Chairman INVESTMENT MANAGER'S REPORT ORDINARY SHARE POOL The Ordinary Share pool holds a portfolio of 18 Venture Capital investments with a value of GBP8.5 million. The majority of the Ordinary Share pool's investments have continued to perform at least in line with expectations and plans for the realisations are progressing well. Portfolio activity Unquoted portfolio The significant valuation movements in the period are summarised as follows: Atlantic Dogstar Limited, East Dulwich Tavern Limited and Westow House Limited are three companies that have been valued on the basis of the sales proceeds expected to be generated from the pubs they operate, adjusted for an appropriate discount. Westow House Limited owns the Westow House, a pub in Crystal Palace, South London. Atlantic Dogstar Limited owns two pubs in London: The Dogstar in Brixton and The Clapton Hart in Clapton. East Dulwich Tavern Limited owns a London pub of the same name. Based on estimated market value, an uplift of GBP225,000 for the three companies over the period has been recognised. Structured product portfolio The Ordinary Share pool no longer holds any structured products. Net asset value At 30 September 2014, the Ordinary Share NAV stood at 93.5p and the 'A' Share NAV at 0.1p, giving a combined NAV of 93.6p. Total return (NAV plus cumulative dividends to date) was 133.6p for a combined holding of one Ordinary and one 'A' Share. This represents a net increase of 3.8p over the period (after adjusting for dividends paid during the period of 2.5p per Ordinary Share), equivalent to an increase of 4.1%. Results and dividend The profit on ordinary activities after taxation for the period was GBP391,000, comprising a revenue profit of GBP188,000 and a capital profit of GBP203,000. No interim dividend will be paid this year as any available cash will be added to the planned return of capital payment early in the New Year. Outlook Our focus with the Ordinary Share portfolio has now turned to exits and a significant number of realisations plans are being progressed. We are optimistic that investment exits can be achieved in a timely manner and at values equal to or in excess of current carrying value. Current plans should result in a number of exits by the end of the year such that the Company will be in a position to pay a significant distribution early in 2015. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO ORDINARY SHARE POOL as at 30 September 2014 Unrealised % of gain/(loss) portfolio Cost Valuation in period by value GBP'000 GBP'000 GBP'000 Qualifying investments Atlantic Dogstar Limited 585 1,244 229 12.8% Redmed Limited* 914 1,159 - 11.9% Future Biogas (SF) Limited* 1,009 1,137 - 11.7% Domestic Solar Limited 1,000 1,120 - 11.5% Quadrate Spa Limited* 636 636 - 6.5% Quadrate Catering Limited 577 629 - 6.5% East Dulwich Tavern Limited 459 597 51 6.1% Westow House Limited 405 581 (55) 6.0% The 3D Pub Co Limited* 627 549 - 5.6% Ecossol Limited 500 425 - 4.4% Mosaic Spa and Health Clubs Limited* 250 211 - 2.2% Slopingtactic Limited 102 117 15 1.2% Camandale Limited* 269 24 - 0.2% Chapel Street Food and Beverage Limited 75 19 - 0.2% Chapel Street Services Limited 75 19 - 0.2% 7,483 8,467 240 87.0% Non-qualifying investments Fenkle Street LLP 58 58 - 0.6% Kilmarnock Monkey Bar Limited 22 22 - 0.2% Chapel Street Hotel Limited 3 1 - 0.0% 83 81 - 0.8% Total 7,566 8,548 240 87.8% Cash at bank and in hand 1,185 12.2% Total investments 9,733 100.0% *partially non-qualifying There were no additions or disposals during the period. INVESTMENT MANAGER'S REPORT 'B' SHARE POOL The 'B' Share pool holds 21 venture capital investments and two Structured Product investments and is fully invested. Plans for exits from investments are developing well such that we are targeting a first significant return of capital to 'B' Shareholders in the second quarter of 2015. Portfolio activity Unquoted portfolio The significant valuation movements in the period are summarised as follows: Alpha Schools Holdings Limited, the independent primary school operator, has performed to plan and an increase of GBP71,000 has been made to the valuation. The valuation of Slopingtactic Limited was increased by GBP43,000. The company is the owner and operator of the Lamb and Lion freehold public house in York. Generally, the solar arrays owned by a number of investments within the portfolio are producing good yields. Progressive Energies Limited, which owns a portfolio of PV panels on residential roofs, has supported an increase in valuation of GBP41,000. Structured product portfolio The Structured Product portfolio was valued at GBP2.4 million as at 30 September 2014. During the period, sales and redemptions realised GBP268,000. Net asset value At 30 September 2014, the NAV per 'B' Share stood at 74.6p and the NAV per 'C' Share stood at 0.1p, producing a combined total of 74.7p. This is an increase of 2.3p per share (2.8%) since 31 March 2014 (after taking into account the 10.0p dividend paid during the period). The NAV plus cumulative dividends paid to date for one 'B' Share and one 'C' Share amounts to 104.7p. Results and dividend The profit on ordinary activities after taxation for the period was GBP456,000, comprising a revenue profit of GBP311,000 and a capital profit of GBP145,000. A 2.5p dividend per 'B' Share will be paid on 23 January 2015 to Shareholders on the register at 2 January 2015. Outlook We remain reasonably satisfied with the 'B' Share portfolio and believe that there are some prospects for further growth before we start to seek realisations commencing in 2015 in order to return funds to Shareholders. A number of investment exit plans are developing well and we are confident that the Company will be in a position to make the first capital distribution to 'B' Shareholders soon after the fifth anniversary of the close of the 'B' Share offer. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'B' SHARE POOL as at 30 September 2014 Unrealised % of gain/(loss) portfolio Cost Valuation in period by value GBP'000 GBP'000 GBP'000 Qualifying investments Future Biogas (Reepham Road) Limited 1,662 1,662 - 11.1% Quadrate Spa Limited* 954 985 31 6.5% Quadrate Catering Limited 850 926 - 6.1% Kidspace Adventures Holdings Limited 750 896 - 5.9% Domestic Solar Limited 800 896 - 5.9% Antelope Pub Limited 750 885 16 5.8% Alpha Schools Holdings Limited 733 876 71 5.8% Liverpool Nurseries (Holdings) Limited 870 772 - 5.1% Green Electricity Generation Limited 500 605 - 4.0% Westcountry Solar Solutions Limited 500 500 - 3.3% West Tower Property Limited 500 500 - 3.3% Mosaic Spa and Health Clubs Limited* 600 493 - 3.3% Ecossol Limited 500 425 - 2.8% Avon Solar Energy Limited 420 420 - 2.8% Progressive Energies Limited 340 381 41 2.5% Slopingtactic Limited 277 320 43 2.1% Ridgeway Pub Company Limited 137 126 - 0.8% Camandale Limited* 732 33 (32) 0.2% 11,875 11,701 170 77.3% Non-qualifying investments Commercial Street Hotel Limited 185 185 - 1.2% Fenkle Street LLP 154 154 - 1.0% Kilmarnock Monkey Bar Limited 60 60 - 0.4% 399 399 - 2.6% Structured product investments Barclays 5Y Synthetic Zero 1,003 1,382 17 9.1% HSBC 5.67% Defensive Worst of Auto Call 953 978 16 6.5% 1,956 2,360 33 15.6% Total 14,230 14,460 203 95.5% Cash at bank and in hand 674 4.5% Total investments 15,134 100.0% * partially non-qualifying SUMMARY OF INVESTMENT MOVEMENTS 'B' SHARE POOL as at 30 September 2014 Realised Valuation at Disposal Total gain against gain in Disposals Cost 31/03/2014 proceeds cost period GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Structured Product investments UBS 7.3% Defensive Worst of Auto Call 251 265 268 17 3 Total 251 265 268 17 3 INVESTMENT MANAGER'S REPORT 'D' SHARE POOL At 30 September 2014, the 'D' Share pool held 12 venture capital investments with a value of GBP3.8 million and five Structured Product investments with a value of GBP1.7 million. Portfolio activity Unquoted portfolio During the period two new venture capital investments were made totalling GBP794,000. There were no disposals. GBP294,000 has been invested in Grasshopper 2007 Limited. The company owns and operates a pub in Kent which also operates as a restaurant and wedding venue. In July 2014, GBP500,000 was invested in Lambridge Solar Limited. The company is building ground mounted solar panels in Lincolnshire. The systems will qualify for Renewable Obligations Certificates (ROCs). Portfolio valuation There were no changes to valuations of venture capital investments in the period. Structured product portfolio The Structured Product portfolio was valued at GBP1.7 million as at 30 September 2014. During the period sales and redemptions realised GBP699,000. Net asset value At 30 September 2014, the NAV per 'D' Share stood at 81.2p per share; an increase of 0.7p per share (0.8%) since 31 March 2014 (after taking into account the 2.5p dividend paid during the period). The NAV plus cumulative dividends paid to date for one 'D' Share now totals 93.7p. Results and dividend The profit on ordinary activities after taxation for the period was GBP53,000, comprising a revenue profit of GBP28,000 and a capital profit of GBP25,000. A 2.5p dividend per 'D' Share will be paid on 23 January 2015 to Shareholders on the register at 2 January 2015. Outlook Over the remainder of the year, we expect to see further uninvested cash employed in Venture Capital investments and, if suitable opportunities arise, consideration will be also given to further Structured Product investments. In the medium term, the Structured Product portfolio will reduce in size as funds are switched to develop the venture capital portfolio in order that the pool is at least 70% invested in VCT qualifying investments and is well placed for its target exit date commencing in 2017. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'D' SHARE POOL as at 30 September 2014 Unrealised % of gain portfolio Cost Valuation in period by value GBP'000 GBP'000 GBP'000 Qualifying investments Tor Solar PV Limited 640 640 - 9.9% Vulcan Renewables Limited 588 588 - 9.1% Goonhilly Earth Station Limited 570 570 - 8.8% Lambridge Solar Limited 500 500 - 7.8% Fubar Stirling Limited 358 358 - 5.6% Grasshopper 2007 Limited 294 294 - 4.6% Pearce and Saunders Limited* 280 280 - 4.3% City Falkirk Limited 562 275 - 4.3% Fresh Green Power Limited 200 200 - 3.1% Green Energy Production UK Limited 100 100 - 1.6% Cheers Dumbarton Limited 64 22 - 0.3% Lochrise Limited 17 - - - 4,173 3,827 - 59.4% Structured product investments HSBC 5.4% Dual Index Synthetic Zero 501 537 12 8.3% Goldman Sachs 8.5% Defensive Worst Of Auto Call 351 384 13 6.0% Credit Suisse 7% Defensive Worst Of Auto Call 251 268 7 4.2% HSBC 7.1% Defensive Worst Of Auto Call 251 262 3 4.1% HSBC 5.67% Defensive Worst Of Auto Call 251 257 4 4.0% 1,605 1,708 39 26.6% Total 5,778 5,535 39 86.0% Cash at bank and in hand 908 14.0% Total investments 6,443 100.0% * partially non-qualifying SUMMARY OF INVESTMENT MOVEMENTS 'D' SHARE POOL as at 30 September 2014 Additions GBP'000 Qualifying investments Lambridge Solar Limited 500 Grasshopper 2007 Limited 294 794 Realised Valuation at Disposal Total gain against gain in Disposals Cost 31/03/2014 proceeds cost period GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Structured products UBS 7.3% Defensive Worst Of Auto Call 251 265 268 17 3 Barclays 7.75% Defensive Worst Of Auto Call 401 424 431 30 7 652 689 699 47 10 UNAUDITED INCOME STATEMENT for the six months ended 30 September 2014 Year ended Six months ended Six months ended 31 Mar 30 Sept 2014 30 Sept 2013 2014 Revenue Capital Total Revenue Capital Total Total Company Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 1,167 - 1,167 843 - 843 1,705 Gains on investments - realised - 13 13 - 69 69 65 - unrealised - 482 482 - 128 128 318 1,167 495 1,662 843 197 1,040 2,088 Investment management fees (123) (121) (244) (129) (129) (258) (500) Other expenses (349) (1) (350) (201) - (201) (368) Return on ordinary activities before taxation 695 373 1,068 513 68 581 1,220 Taxation (168) - (168) (101) - (101) (223) Return attributable to equity shareholders 527 373 900 412 68 480 997 Return per 1.8p 2.0p 3.8p 2.0p (0.5p) 1.5p 4.8p Ordinary Share Return per - - - - - - - 'A' Share Return per 1.6p 0.7p 2.3p 1.0p 0.6p 1.6p 2.4p 'B' Share Return per - - - - - - - 'C' Share Return per 0.4p 0.3p 0.7p 0.0p 0.0p 0.0p 0.3p 'D' Share 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. Year ended Six months ended Six months ended 31 Mar 30 Sept 2014 30 Sept 2013 2014 Revenue Capital Total Revenue Capital Total Total Ordinary Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 389 - 389 365 - 365 644 Gains/(losses) on investments - realised - - - - 9 9 42 - unrealised - 240 240 - (19) (19) 183 389 240 629 365 (10) 355 869 Investment management fees (36) (36) (72) (41) (41) (82) (152) Other expenses (106) (1) (107) (70) - (70) (128) Return on ordinary activities before taxation 247 203 450 254 (51) 203 589 Taxation (59) - (59) (49) - (49) (90) Return attributable 188 203 391 205 (51) 154 499 to equity shareholders Year ended Six months ended Six months ended 31 Mar 30 Sept 2014 30 Sept 2013 2014 Revenue Capital Total Revenue Capital Total Total 'B' Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 640 - 640 412 - 412 904 Gains/(losses) on investments - realised - 3 3 - 45 45 (9) - unrealised - 203 203 - 137 137 126 640 206 846 412 182 594 1,021 Investment management fees (62) (61) (123) (63) (63) (126) (250) Other expenses (171) - (171) (93) - (93) (171) Return on ordinary activities before taxation 407 145 552 256 119 375 600 Taxation (96) - (96) (52) - (52) (128) Return attributable 311 145 456 204 119 323 472 to equity shareholders Year ended Six months ended Six months ended 31 Mar 30 Sept 2014 30 Sept 2013 2014 Revenue Capital Total Revenue Capital Total Total 'D' Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 138 - 138 66 - 66 157 Gains on investments - realised - 10 10 - 15 15 31 - unrealised - 39 39 - 10 10 10 138 49 187 66 25 91 198 Investment management fees (25) (24) (49) (25) (25) (50) (98) Other expenses (72) - (72) (38) - (38) (69) Return on ordinary activities before taxation 41 25 66 3 - 3 31 Taxation (13) - (13) - - - (5) Return attributable to equity shareholders 28 25 53 3 - 3 26 UNAUDITED SUMMARISED BALANCE SHEET as at 30 September 2014 30 Sept 31 Mar 30 Sept 2014 2013 2014 Ordinary 'B' 'D' Share Share Share pool pool pool Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Investments 8,548 14,459 5,535 28,542 28,644 28,220 Current assets Debtors 177 180 58 415 327 598 Cash at bank and in hand 1,185 674 908 2,767 4,472 4,220 1,362 854 966 3,182 4,799 4,818 Creditors: amounts falling due within one year (277) (434) (106) (817) (487) (584) Net current assets 1,085 420 860 2,365 4,312 4,234 Net assets 9,633 14,879 6,395 30,907 32,956 32,454 Capital and reserves Called up share capital 26 50 8 84 83 84 Capital redemption reserve 5 - - 5 5 5 Share premium 2,794 - - 2,794 10,240 2,794 Special reserve 3,819 13,488 7,437 24,744 20,044 27,090 Revaluation reserve 983 230 (241) 972 718 543 Capital reserve - realised 1,149 561 (796) 914 1,232 851 Revenue reserve 857 550 (13) 1,394 634 1,087 Equity shareholders' funds 9,633 14,879 6,395 30,907 32,956 32,454 Net asset value per: Ordinary Share 93.5p - - 91.3p 92.2p 'A' Share 0.1p - - 0.1p 0.1p 'B' Share - 74.6p - 84.0p 82.3p 'C' Share - 0.1p - 0.1p 0.1p 'D' Share - - 81.2p 85.3p 83.0p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 30 September 2014 30 Sept 31 Mar 30 Sept 2014 2013 2014 Ordinary 'B' 'D' Share Share Share pool pool pool Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Opening Shareholders' funds 9,499 16,415 6,540 32,454 34,756 34,756 Purchase of own shares - - - - (30) (97) Dividends (257) (1,992) (198) (2,447) (2,250) (3,202) Total recognised gains for the period 391 456 53 900 480 997 Closing Shareholders' funds 9,633 14,879 6,395 30,907 32,956 32,454 UNAUDITED CASH FLOW STATEMENT for the six months ended 30 September 2014 30 Sept 31 Mar 30 Sept 2014 2013 2014 'B' 'D' Ordinary Share Share Share pool pool pool Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash inflow from operating activities and returns on investments 1 197 314 14 525 206 771 Taxation Corporation tax paid - - - - - (112) Capital expenditure Purchase of investments - - (794) (794) (2,722) (4,624) Sale of investments - 268 699 967 4,296 6,807 Movements in deposit held for purchase of investments - - 294 294 - (294) Net cash inflow from capital expenditure - 268 199 467 1,574 1,889 Equity dividends paid (257) (1,991) (197) (2,445) (2,250) (3,202) Net cash (outflow) before financing (60) (1,409) 16 (1,453) (470) (654) Financing Purchase of own shares - - - - (30) (98) Net cash (outflow)/inflow from financing - - - - (30) (98) (Decrease)/increase in cash 2 (60) (1,409) 16 (1,453) (500) (752) Notes to the cash flow statement: 1 Cash inflow/(outflow) from operating activities and returns on investments Return on ordinary activities before taxation 450 552 66 1,068 581 1,220 (Gains) on investments (241) (206) (49) (496) (197) (383) (Increase) in other debtors (41) (57) (14) (112) (91) (69) (Decrease)/increase in other creditors 29 25 11 65 (87) 3 Net cash inflow from operating activities 197 314 14 525 206 771 2 Analysis of net funds Beginning of period 1,245 2,083 892 4,220 4,972 4,972 Net cash (outflow)/inflow (60) (1,409) 16 (1,453) (500) (752) End of period 1,185 674 908 2,767 4,472 4,220 NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. Basis of accounting The unaudited half-yearly results cover the six months to 30 September 2014 and have been prepared in accordance with the accounting policies set out in the annual accounts for the year ended 31 March 2014 which were prepared under UK Generally Accepted Accounting Practice ("UK GAAP") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised January 2009 ("SORP"). 2. All revenue and capital items in the Income Statement derive from continuing operations. 3. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. 4. Net asset value per share at the period end has been calculated on 10,288,157 Ordinary Shares, 15,506,488 'A' Shares, 19,911,070 'B' Shares, 29,926,070 'C' Shares, and 7,877,527 'D' Shares being the number of shares in issue at the period end. 5. Return per share for the period has been calculated on 10,288,157 Ordinary Shares, 15,506,488 'A' Shares, 19,911,070 'B' Shares, 29,926,070 'C' Shares, and 7,877,527 'D' Shares being the number of shares in issue at the period end. 6. Dividends Six months ended 30 September 2014 Ordinary Shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Paid in period Interim - 257 257 'B' Shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Paid in period 199 1,793 1,992 'D' Shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Paid in period 20 178 198 7. Reserves Share Capital Capital premium reserve redemption account Special reserve Revaluation reserve - realised Revenue reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 As at 31 March 2014 2,794 27,090 543 851 1,087 5 Purchase of own shares - - - - - - Gains on investments - - 482 13 - - Expenses capitalised - - - (123) - - Dividends - - - (2,226) (221) - Transfer between reserves - (2,346) (53) 2,399 - - Retained revenue - - - - 528 - At 30 September 2014 2,794 24,744 972 914 1,394 5 The Revenue reserve, Special reserve and Capital reserve - realised are distributable reserves and are reduced by revaluation losses of GBP1,854,000. Distributable reserves at 30 September 2014 were GBP25,198,000. 8. 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. 9. 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 structured products; 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 PricewaterhouseCoopers ("PwC") to provide regular reviews and advice in this area. PwC 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. In investing in structured products, the Company is exposed to market risk, liquidity risk and counterparty risk. The Company manages these risks as follows: - holding a portfolio of structured products; - limiting exposure to any one counterparty; and - monitoring credit ratings and other indicators relevant to counterparties. 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. 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 the business. The Board is satisfied that this approach reduces the investment risk described in (iii) above as far as is reasonably possible. 10. 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. 11. 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. 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: Downing Structured Opportunities VCT 1 PLC via Globenewswire HUG#1874963
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