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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Down. Plan 8 | LSE:DPV8 | London | Ordinary Share | GB00B28C4Y36 | 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% | 34.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMDPV8 Downing Planned Exit VCT 8 plc Half-Yearly Report for the six months ended 30 June 2013 PERFORMANCE SUMMARY 30 Jun 31 Dec 30 Jun 2013 2012 2012 Pence Pence Pence Net asset value per Ordinary Share 77.4 80.1 80.8 Net asset value per 'A' Share 0.1 0.1 0.1 Cumulative distributions per Ordinary Share 12.5 10.0 10.0 Total return per Ordinary Share and 'A' Share 90.0 90.2 90.9 CHAIRMAN'S STATEMENT I am pleased to present the Company's Half-Yearly Report for the period ended 30 June 2013. Although the investment portfolio suffered from some minor write downs in the period, these were offset by income generated from the portfolio which, after running costs, has resulted in a small decrease in net asset value over the period after adding back dividends paid. More positively, shortly after the period end, the Manager has been able to complete the first investment realisations and will now start the process of returning funds to Shareholders. Net asset value and results At 30 June 2013, the net asset value ("NAV") per Ordinary Share and per 'A' Share stood at 77.4p and 0.1p respectively, producing a combined total of 77.5p. This is a decrease of 0.2p per share (0.2%) since 31 December 2012 (after adjusting for the 2.5p dividend paid during the period). Total Return (NAV plus cumulative dividends paid to date) is now 90.0p for a combined holding of one Ordinary Share and one 'A' Share. This compares to the original cost, net of income tax relief, of 70p. The loss on ordinary activities after taxation for the period was GBP20,000, which comprised a revenue surplus of GBP135,000 and a capital loss of GBP155,000. Investment review With the Company effectively fully invested, investment activity was at a low level during the period. However, one small new non-qualifying investment of GBP89,000 was made in Dominions House Limited. The company has acquired two development sites which have the potential to deliver an attractive capital uplift in a short period. In terms of investment disposals, there was one small redemption of loan stock of GBP15,000 from Fenkle Street LLP. The only other investment activity was a reorganisation whereby Gatewales Limited took over the interests of West Tower Holdings Limited, which had no impact on the investment valuation. As usual, the Board has undertaken a review of the investment valuations at the period end and some adjustments were made. The most significant adjustment has been a provision against the investment in Horsham Bowl Limited. The company owns a ten pin bowling alley and nightclub in Horsham, West Sussex. Attempts by management to improve the trading performance of the site do not appear to be making headway. Following the withdrawal of a potential purchaser and indications that the market for such sites has weakened, we have reassessed the value of the business and concluded that it is appropriate to make a provision of GBP210,000 against the investment. The Company holds three small investments in Chapel Street Food and Beverage Limited, Chapel Street Services Limited and Chapel Street Hotel Limited, each of which operates from the new Hotel Indigo in Liverpool. The hotel market in Liverpool has become very competitive, which has resulted in occupancy of the hotel building more slowly than expected. With bank debt ranking ahead of the VCT's investments, the Board have concluded that a provision of GBP49,000 across the three investments is appropriate. The portfolio has also provided some positive news from Crossco (1135) Limited and its related company, Brunswick International Associates Limited. The companies operate children's nurseries which form part of the Complete Childcare group. Trading at the nurseries has been steady and has justified a total uplift in valuation of GBP104,000 over the period. All other investments are performing more or less in line with expectations and have been held at previous carrying value. Overall the portfolio produced unrealised losses of GBP155,000 over the period. Investment realisation update The Company has now passed the fifth anniversary of the close of its offer for subscription and is at the stage where it is seeking to realise its investments in order to be able to return funds to Shareholders. As I mentioned in my statement in the last Annual Report, the ongoing lack of bank funding is a significant hindrance to this process and, as a result, we expect that the process will take some considerable time to complete. Having said that, I am pleased to report that, in July, the Manager managed to complete the disposal of Crossco (1135) Limited and Brunswick International Associates Limited, with a significant proportion of the consideration paid in cash (GBP1.0 million) and the remainder in the form of loan notes which are expected to be redeemed in 12 months' time. The valuation of the consideration is equal to our carrying value at the period end and represents a gain against original cost of GBP236,000. If the loan stock is redeemed in full at par, this will result in a further small gain. Additionally, I can report a partial redemption of loan notes in Gatewales Limited in July, producing proceeds of GBP526,000. I can also report that the Manager is in discussions with a potential funder that could allow a partial exit from Cadbury House however this is not yet finalised. Exit prospects are less clear for some of the other remaining investments. In the case of both Horsham Bowl and The Thames Club, the businesses need to stabilise and establish an improving trading record in order to support possible trade sales at reasonable prices. The Manager is continuing to work to this end. Dividend As a result of the exits discussed above, the Company is now in a position to make its first major return of funds to Shareholders. A dividend of 21.5p per Ordinary Share will be paid to Shareholders on 4 October 2013 to Shareholders on the register at 13 September 2013. Following the payment of the dividend, Shareholders will have received total dividends since launch of 34.0p per Ordinary Share. Share buybacks In view of the fact the Company is now in the process of returning fund to Shareholders, the Company is unlikely to buy in any more shares for cancellation. The Board intends to retain any surplus liquid funds in the Company and distribute to Shareholders by way of dividends as and when sufficient levels have accumulated. Outlook There are still significant challenges ahead in exiting from the remaining investments, however the Board is pleased with progress made in the difficult conditions over the last two months and is encouraging the Manager to vigorously pursue further realisations. As I mentioned in my previous statement, the Board is considering whether it might be in the best interests of Shareholders for the Company to enter a formal VCT winding up period in the near future. In such a period, a liquidator is appointed and various VCT regulations are relaxed, which allows the Company to delist its shares from the London Stock Exchange and make significant running costs savings. I will, of course, communicate with Shareholders as soon as there is any further news on the above plans. Additionally, if there are any further major investment realisations prior to the next scheduled report, I will write to Shareholders at that time and expect to provide details of the next dividend. Hugh Gillespie Chairman UNAUDITED BALANCE SHEET as at 30 June 2013 30 Jun 30 Jun 31 Dec 2013 2012 2012 GBP'000 GBP'000 GBP'000 Fixed assets Investments 6,461 6,347 6,542 Current assets Debtors 268 145 209 Cash at bank and in hand 110 632 274 378 777 483 Creditors: amounts falling due within one year (163) (153) (114) Net current assets 215 624 369 Net assets 6,676 6,971 6,911 Capital and reserves Called up Ordinary Share capital 9 9 9 Called up 'A' Share capital 13 13 13 Deferred share capital 3 3 3 Special reserve 7,262 7,753 7,752 Revaluation reserve (797) (912) (1,042) Capital reserve - realised 44 44 44 Revenue reserve 142 61 132 Equity shareholders' funds 6,676 6,971 6,911 Net asset value per Ordinary Share 77.4p 80.8p 80.1p Net asset value per 'A' Share 0.1p 0.1p 0.1p 77.5p 80.9p 80.2p UNAUDITED INCOME STATEMENT for the six months ended 30 June 2013 Year ended Six months ended30 Jun Six months ended30 Jun 31 Dec 2013 2012 2012 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 280 - 280 177 - 177 365 Gains/(losses) on investments - (155) (155) - 24 24 (106) 280 (155) 125 177 24 201 259 Investment management fees (37) - (37) (35) - (35) (70) Other expenses (63) - (63) (67) - (67) (134) Return on ordinary activities before taxation 180 (155) 25 75 24 99 55 Taxation (45) - (45) (16) - (16) (33) Return attributable to equity shareholders 135 (155) (20) 59 24 83 22 Return per Ordinary Share 1.6p (1.8p) (0.2p) 0.7p 0.3p 1.0p 0.3p Return per 'A' - - - - - - - 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. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 30 June 2013 30 Jun 30 Jun 31 Dec 2013 2012 2012 GBP'000 GBP'000 GBP'000 Opening Shareholders' funds 6,911 7,119 7,119 Total recognised (loss)/profit for the period (20) 83 22 Dividends paid (215) (216) (215) Purchase of own shares - (15) (15) Closing Shareholders' funds 6,676 6,971 6,911 UNAUDITED CASH FLOW STATEMENT for the six months ended 30 June 2013 30 Jun 30 Jun 31 Dec 2013 2012 2012 Note GBP'000 GBP'000 GBP'000 Cash inflow from operating activities and returns on investments 1 125 108 143 Taxation Corporation tax paid - - (69) Capital expenditure Purchase of investments (89) (25) (350) Sale of investments 15 456 456 Net cash (outflow)/inflow from capital expenditure (74) 431 106 Equity dividends paid (215) (216) (215) Net cash (outflow)/inflow before financing (164) 323 (35) Financing Purchase of own shares - (15) (15) Net cash outflow from financing - (15) (15) (Decrease)/increase in cash 2 (164) 308 (50) Notes to the cash flow statement: 1 Cash inflow from operating activities and returns on investments Return on ordinary activities before taxation 25 99 55 Losses/(gains) on investments 155 (24) 106 (Increase)/decrease in other debtors (59) 51 (13) (Decrease) in other creditors (16) (15) - Increase/(decrease) in amounts due to subsidiary undertaking 20 (3) (5) Net cash inflow from operating activities 125 108 143 2 Analysis of net funds Beginning of period 274 324 324 Net cash (outflow)/inflow (164) 308 (50) End of period 110 632 274 SUMMARY OF INVESTMENT PORTFOLIO as at 30 June 2013 % of Unrealised portfolio Cost Valuation gain/(loss) by value GBP'000 GBP'000 GBP'000 VCT qualifying Crossco (1135) Limited t/a Kingsclere Nurseries 998 1,189 59 18.1% Hoole Hall Country Club Holdings Limited * 1,094 1,161 - 17.7% Cadbury House Holdings Limited 700 763 - 11.6% Gatewales Limited 750 750 - 11.4% Hoole Hall Spa and Leisure Club Limited 562 613 - 9.3% Horsham Bowl Limited * 861 471 (210) 7.2% The Thames Club Limited * 1,125 350 - 5.3% Chapel Street Food and Beverage Limited 50 26 (24) 0.4% Chapel Street Services Limited 50 26 (24) 0.4% 6,190 5,349 (199) 81.4% Non-qualifying Future Biogas (SF) Limited 350 350 - 5.3% Southampton Hotel Developments Limited 300 300 - 4.6% Snow Hill Developments LLP 250 250 - 3.8% Dominions House Limited 89 89 - 1.4% Fenkle Street LLP 77 77 - 1.2% Brunswick International Associates Limited - 45 45 0.7% Chapel Street Hotel Limited 2 1 (1) 0.0% The New Swan Holding Company Limited - - - 0.0% Hoole Hall Hotel Limited - - - 0.0% London City Shopping Centre Limited - - - 0.0% Southampton Spa Limited - - - 0.0% 1,068 1,112 44 17.0% Total investments 7,258 6,461 (155) 98.4% Cash at bank and in hand 110 1.6% Total 6,571 100% * partly non-qualifying SUMMARY OF INVESTMENT MOVEMENTS as at 30 June 2013 Additions GBP'000 Qualifying investment Gatewales Limited ** 750 Non-qualifying investment Dominions House Limited 89 839 Disposals Realised Valuation at Loss vs. gain in Cost 01/01/13 Proceeds cost period GBP'000 GBP'000 * GBP'000 GBP'000 GBP'000 Qualifying investment West Tower Holdings Limited ** 1,150 750 750 (400) - Non-qualifying investments Fenkle Street LLP 15 15 15 - - 1,165 765 765 (400) - * adjusted for purchases in the period ** reorganisation whereby Gatewales Limited took over the interests of West Tower Holdings Limited NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. The unaudited half-yearly financial results cover the six months to 30 June 2013 and have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 31 December 2012 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 and Venture Capital Trusts" 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. The comparative figures were in respect of the six months ended 30 June 2012 and the year ended 31 December 2013 respectively. 5. Net asset value per share at the period end has been calculated on 8,615,627 Ordinary Shares and 12,951,610 'A' Shares, being the number of shares in issue at the period end. 6. Return per share for the period has been calculated on 8,615,627 Ordinary Shares and 12,951,610 'A' Shares, being the weighted average number of shares in issue during the period. 7. Dividends Six months ended Year ended 30 June 2013 31 Dec 2012 Per share Revenue Capital Total Total pence GBP'000 GBP'000 GBP'000 GBP'000 Paid in year 2012 Final 2.5p 125 90 215 - 2011 Final 2.5p - - - 215 171 44 215 215 8. Reserves Capital Special Revaluation reserve Revenue reserve reserve - realised reserve Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 31 December 2012 7,752 (1,042) 44 132 6,886 (Losses) on investments - (155) - - (155) Distributions paid - - (90) (125) (215) Purchase of own shares - - - - - Retained net revenue - - - 135 135 Realisation of revaluations from previous years - 400 (400) - - Transfer between reserves (490) 490 - - At 30 June 2013 7,262 (797) 44 142 6,651 The Special reserve, Capital reserve - realised and Revenue reserve are all distributable reserves. Revaluation reserve includes losses of GBP1,214,000, which are included in the calculation of distributable reserves. Total distributable reserves are GBP6,234,000 (31 Dec 2013: GBP6,753,000). 9. The unaudited financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended 31 December 2012 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified. 10. Risk and uncertainties Under the Disclosure and Transparency Directive, the Board is required, in the Company's half-year results, to report on principal risks and uncertainties facing the Company over the remainder of the financial year. The Board has concluded that the key risks facing the Company over the remainder of the financial period are as follows: (i) investment risk associated with investing in small and immature businesses; and (ii) failure to maintain approval as a VCT. In order to make VCT qualifying investments, the Company has to invest in small businesses which are often immature. The Investment Manager has followed a rigorous process in vetting and carefully structuring new investments, including taking a charge over the assets of the business wherever possible and, after an investment is made, closely monitors the business. The Board is satisfied that this approach reduces the investment risks described in (i) as far as reasonably possible. The Company's compliance with the VCT regulations is continually monitored by the Administration Manager, who reports regularly to the Board on the current position. The Company also retains PricewaterhouseCoopers to provide regular reviews and advice in this area. The Board considers that this approach reduces the risk of a breach of the VCT regulations to an acceptable level. 11. Going concern The Company has sufficient financial resources at the period end, and holds a diversified portfolio of investments. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully. The Directors have concluded that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they believe that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements. 12. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with the "Statement: Half-Yearly Financial Reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by: a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the current financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so. 13. 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 Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Downing Planned Exit VCT 8 plc via Thomson Reuters ONE HUG#1725368
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