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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Downing Pro | LSE:DPV | London | Ordinary Share | GB00B0697094 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 89.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:5218C Downing Protected VCT II PLC 05 May 2006 DOWNING PROTECTED VCT II PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE PERIOD ENDED 31 JANUARY 2006 The statement to shareholders by the Chairman, Hugh Gillespie, includes the following comments: Introduction I am pleased to present the Company's first Report and Accounts and welcome the opportunity to update Shareholders on the progress made to date. Fundraising Downing Protected VCT II plc ("DPII") and Downing Protected VCT III plc ("DPIII ") were launched as sister venture capital trusts in January 2005 and between February and June 2005 raised a combined total of #20.4 million. Net proceeds of each VCT after issue costs were #9.6 million, equivalent to 94.5p per share. DPII and DPIII have identical Management Teams and Board members. It is intended that the investments made by the Companies will mirror each other and, therefore, performance is expected to be materially the same. Net Asset Value At 31 January 2006, the Company's Net Asset Value per share ("NAV") stood at 95.7p, a rise of 1.3p (1.3%) from the initial NAV of 94.5p. The Company's investment strategy is to minimise risk and, consequently, the structure of investments means that the potential upside is limited. The NAV performance over this initial period is, therefore, considered satisfactory and in line with the Board's expectations. Venture capital investments By 31 January 2006, the Company had made 6 investments at a total cost of #3.7 million. With over 38% of the Company's funds invested (over 35% in VCT qualifying investments), the Board is satisfied with progress made by the Investment Manager and that the Company is comfortably on target to have 70% of the Company's funds invested in VCT qualifying investments before the deadline of 31 January 2008. Fixed interest investments In line with the investment strategy, it is intended that the Company invests approximately 25% of its funds in a portfolio of fixed interest securities. Since the period end, yields have improved and the Company recently acquired a portfolio of 6 corporate bonds at a total cost of #3 million. Results and dividend As this is the Company's first accounting period the Board has given careful consideration to the accounting policies adopted. In view of the fact that the Investment Manager is focussed on seeking yielding investments with limited downside risk, the Board feels it is appropriate to charge 100% of the Investment Management Fees as a revenue cost. This differs from the policy of charging 25% of such fees as a revenue cost and 75% as a capital cost, which was proposed in the Company's prospectus. The Board feels that the treatment adopted more accurately reflects the investment management activities undertaken. Gross revenue for the period was #362,000 and the net revenue profit after taxation was #124,000. The Board is proposing to pay a dividend of 1p per share on 27 June 2006 to shareholders on the register at the close of business on 2 June 2006. Share repurchase Your Board is conscious that the Company's share price is affected by the illiquidity of its shares in the market, resulting principally from the fact that income tax relief is not available to purchasers of second-hand shares. The Board, therefore, monitors the market for any shares that become available and, subject to close periods and other regulatory restrictions, will purchase shares in the market for cancellation. It is the Board's current intention to buy in shares at between a 5% and 10% discount to the Company's most recently published Net Asset Value. No shares have been purchased by the Company during the period under review. Cancellation of share premium account The purchase of the Company's own shares for cancellation has a negative effect on the Company's ability to pay dividends. Therefore, in line with most VCTs, the Company intends to seek court approval to cancel its Share Premium account and create a distributable Special Reserve which can be utilised to buy back shares without affecting the Company's ability to pay dividends and gives the Company flexibilities in other areas. The Company is planning to undertake this process in the next few months. Annual General Meeting The Company's first Annual General Meeting will be held at 69 Eccleston Square, London, SW1V 1PJ at 2:00 pm on 22 June 2006. One item of Special Business is proposed, being a resolution to authorise the Directors to purchase up to 1,524,062 ordinary shares in the market, representing approximately 14.99% of the current issued shares. Outlook The Company's initial period has been satisfactory with a significant proportion of the Company's funds invested. The Investment Manager has reported strong deal flow and has a number of potential investments under review. The current year will see the Investment Manager concentrate on investing the remainder of the funds in suitable asset-backed or similar investments in order to take the Company above the 70% VCT qualification target. As this progresses, the task of monitoring existing portfolio companies will become increasingly important to ensure they remain on track and give the Company a good chance of a successful exit in due course. INCOME STATEMENT For the period ended 31 January 2006 Period ended 31 January 2006 Revenue Capital Total #'000 #'000 #'000 Income 362 - 362 Gains on "fair value through profit or loss" - - - assets 362 - 362 Investment management fees (80) - (80) Other expenses (115) (115) Return on ordinary activities before tax 167 - 167 Tax on ordinary activities (43) - (43) Return attributable to equity shareholders 124 - 124 Return per share 1.3p - 1.3p All Revenue and Capital items in the above statement derive from continuing operations. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Period ended 31 January 2006 Revenue Capital Total #'000 #'000 #'000 Return attributable to equity shareholders 124 - 124 Total recognised gains for the period 124 - 124 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the period ended 31 January 2006 Period ended 31 January 2006 #'000 Opening shareholders' funds - Issue of shares 10,167 Share issue costs (559) Total recognised gains for the period 124 Closing shareholders' funds 9,732 BALANCE SHEET as at 31 January 2006 2006 #'000 #'000 Investments "Fair value through profit or loss" assets 3,742 Current Assets Debtors 68 Cash at bank and in hand 6,064 6,132 Creditors: amounts falling due within one year (122) Net current assets 6,010 Net assets less current liabilities 9,752 Creditors: amounts falling due after more than one (20) year Net assets 9,732 Equity attributable to Equity Holders Called up share capital 102 Share premium 9,506 Revenue reserve 124 Total Equity 9,732 Net asset value per ordinary share 95.7p The accompanying notes are an integral part of these financial statements. CASH FLOW STATEMENT For the period ended 31 January 2006 Period ended 31 Jan 2006 #'000 Net cash inflow from operating activities 178 Capital expenditure Purchase of investments (3,742) Net cash outflow from capital expenditure (3,742) Net cash outflow before financing (3,564) Financing Proceeds from share issue 10,167 Share issue costs (559) Proceeds from Loan Notes issue 20 Net cash inflow from financing 9,628 Increase in cash 6,064 Reconciliation of net cash flow to movement in net funds Increase in cash during the period 6,064 Net funds at 17 January 2005 - Net funds at 31 January 2006 6,064 The accompanying notes are an integral part of these financial statements. NOTES: Accounting policies Basis of accounting The Company has prepared its financial statements under UK Generally Accepted Accounting Practice ("UK GAAP"). Where presentation guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised December 2005 ("SORP") is consistent with the requirements of UK GAAP, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. The financial statements are prepared under the historical cost convention except for the revaluation of certain financial instruments. Presentation of Income Statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the Association of Investment Trust Companies ("AITC"), supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. The net revenue is the measure the directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 842 Income and Corporation Taxes Act 1988. Investments Unquoted investments are designated as "fair value through profit or loss" assets. The Directors establish the fair value of each investment by using an adjusted net asset valuation model, as they believe this best reflects the nature of the underlying investments and it is calculated in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Where an investment has been held for less than one year, unless there are any indications to the contrary, fair value is assumed to be equal to the cost of the investment. The unrealised depreciation or appreciation arising on the valuation of investments and gains and losses arising on the disposal of investments are dealt with in the capital reserve. It is not the Company's policy to exercise significant influence over investee companies. Therefore the results of these companies are not incorporated into the income statement except to the extent of any income accrued. This is in accordance with the SORP that does not require portfolio investments to be accounted for using the equity method of accounting. Income Dividend income from investments is recognised when the shareholders' rights to receive payment has been established, normally the ex dividend date. Interest income is accrued on a timely basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount, and only where there is reasonable certainty of collection. Expenses All expenses are accounted for on accruals basis. In respect of the analysis between revenue and capital items presented within the income statement, all expenses have been presented as revenue items except as follows: * Expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment. * Expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated. The Company has adopted a policy of charging 100% of the Investment Management fees to the revenue account. Deferred taxation Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Announcement based on draft accounts (unqualified audit report) The financial information set out in the announcement does not constitute the Company's statutory accounts for the period ended 31 January 2006. The statutory accounts for the period ended 31 January 2006 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. A copy of the full annual report and financial statements for the period ended 31 January 2006 will be printed and posted to shareholders. Copies will also be available to the public at the registered office of the Company at 69 Eccleston Square, London SW1V 1PJ. This information is provided by RNS The company news service from the London Stock Exchange END FR AKPKNBBKDFPK
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