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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Downing Three C | LSE:DP3C | London | Ordinary Share | GB00B3D75146 | C SHARES 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 |
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Downing THREE VCT plc
Half-Yearly Report for the six months ended 30 June 2016
PERFORMANCE SUMMARY
30 Jun 31 Dec 30 Jun
'C' Share pool 2016 2015 2015
Pence Pence Pence
Net asset value per 'C' Share - 53.2 49.3
Net asset value per 'A' Share - 0.1 0.1
Cumulative distributions per 'C' Share 120.36 75.0 75.0
Adjusted for estimated performance fee - (7.4) (7.0)
Total return per 'C' Share and 'A' Share 120.36 120.9 117.4
30 Jun 31 Dec 30 Jun
'D' Share pool 2016 2015 2015
Pence Pence Pence
Net asset value per 'D' Share 34.7 51.3 72.9
Net asset value per 'E' Share 0.1 0.1 0.1
Cumulative distributions per 'D' Share 66.5 49.5 22.5
Total return per 'D' Share and 'E' Share 101.3 100.9 95.5
30 Jun 31 Dec 30 Jun
'F' Share pool 2016 2015 2015
Pence Pence Pence
Net asset value per 'F' Share 69.7 71.5 71.7
Cumulative distributions per 'F' Share 22.5 20.0 17.5
Total return per 'F' Share 92.2 91.5 89.2
30 Jun 31 Dec 30 Jun
'H' Share pool 2016 2015 2015
Pence Pence Pence
Net asset value per 'H' Share 88.9 90.5 93.3
Cumulative distributions per 'H' Share 12.5 10.0 7.5
Total return per 'H' Share 101.4 100.5 100.8
30 Jun
'J' Share pool 2016 31 Dec 2015 30 Jun 2015
Pence Pence Pence
Net asset value per 'J' Share 97.7 98.5 99.9
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Half-Yearly Report for the six months ended
30 June 2016. The period has seen the Company complete the process of
returning capital to 'C' Shareholders and make a start in returning
funds to investors in the 'D' Share pool.
Net asset values and overview
'C' Share pool
The task of returning funds to investors in the 'C' Share pool was
completed with final dividends paid on 24 March 2016. The Total Return
to Shareholders was 120.36p for a holding of one 'C' Share and one 'A'
Share, compared to the cost net of income tax relief in 2009 of 70p.
The Company is now taking steps to cancel the 'C' Shares and 'A' Shares
and will update relevant Shareholders on progress shortly.
'D' Share pool
The 'D' Share pool has now commenced the process of exiting from its
investments. During the period sufficient realisations were completed to
allow the payment of a dividend of 17.0p per 'D' Share in March 2016.
At 30 June 2016, the remaining net asset value ("NAV") for a combined
holding of one 'D' Share and one 'E' Share was 34.8p, an increase of
0.4p (0.8%) over the period. Total Return (NAV plus dividends paid to
date) is now 101.3p for a combined holding, compared to the original
cost, net of income tax relief, of 70p per share.
'F' Share pool
The 'F' Share pool launched in 2012 and is scheduled to start exiting
from investments in early 2018.
At 30 June 2016, the NAV for a holding of one 'F' Share was 69.7p, a net
increase of 0.7p (1.0%) over the period (after adjusting for dividends
paid during the period of 2.5p per 'F' Share). Total Return (NAV plus
dividends paid to date) is now 92.2p, compared to the original cost, net
of income tax relief, of 70p per share.
'H' Share pool
The 'H' Share pool raised funds in 2014 and is in the process of
building its VCT qualifying portfolio. The target date to start
realising investments is 2019.
At 30 June 2016, the NAV for a holding of one 'H' Share was 88.9p. This
represents a net increase of 0.9p (1.0%) over the period (after
adjusting for the dividends paid during the period of 2.5p per 'H'
Share). Total Return (NAV plus dividends paid to date) is now 101.4p,
compared to the initial NAV of 100p and the original cost to investors
(net of income tax relief) of between 70.4p and 80.1p (depending on
initial costs).
'J' Share pool
The 'J' Share pool raised funds in 2015 and is in the process of
building its VCT qualifying portfolio. The target date to start
realising investments is 2020.
At 30 June 2016, the NAV for a holding of one 'J' Share was 97.7p,
compared to the initial NAV of 100p and the original cost to investors
(net of income tax relief) of between 70.0p and 76.5p (depending on
initial costs).
A full review for each share pool is covered in the specific Investment
Manager's Reports.
Dividends
In line with the Company's stated policies, interim dividends will be
paid as follows:
'F' Shares 2.5p per share
'H' Shares 2.5p per share
Each of the above dividends will be paid on 16 December 2016 to
Shareholders on the register at 18 November 2016.
No interim dividend is being declared in respect of the 'D' Shares as
further return of capital dividends will be declared once further
investment realisation have been completed.
As a result of changes to the VCT regulations in 2014, the 'J' Share
pool is effectively prohibited from paying dividends in its first three
years.
Share buybacks
The Company has a general policy in the first five years after the
launch of a share class of buying in its own shares that become
available in the market for cancellation. As a result, the Company will
buy 'F' Shares, 'H' Shares and 'J' Shares that become available in the
market and will, subject to liquidity and regulatory constraints, buy at
prices approximately equal to net asset value i.e. with no discount.
No shares were purchased in the six month period to 30 June 2016.
Outlook
The Board is pleased to have delivered a good final outcome for 'C'
Shareholders and the Manager's focus has now shifted to the exit process
for the 'D' Share pool. Over the remainder of the year we expect to see
significant progress in exiting from the remaining 'D' Share pool
investments and hope to be in a position to declare a further dividend
later in 2016 or early 2017. 'D' Shareholders should note that the exit
process may well present some challenges which could result in the exit
process taking some time to complete.
We expect investment activity in the 'F' Share pool to be reasonably low
during the remainder of the year as we look to the portfolio companies
to develop further ahead of the planned exit date.
The 'H' Share and 'J' Share pools have invested in a number of companies
that are preparing to commence trading and so these will require close
monitoring as they start to establish businesses.
In terms of the general outlook for small businesses, the result of the
EU Referendum appears to have created a period of uncertainty for the UK
economy and some volatility in stock markets. With a large proportion of
the Company's funds already invested, the Board believes that any
possible negative impact on the Company's performance will be limited.
A weaker longer term economy could result in greater difficulty in
exiting from investments at the appropriate time, however the Directors
feel that this is not a major risk. The Board will, of course, continue
to monitor developments closely.
I look forward to updating Shareholders in my statement with the Annual
Report to 31 December 2016.
Michael Robinson
Chairman
INVESTMENT MANAGER'S REPORT
'C' SHARE POOL
The 'C' Share pool completed the task of realising its investments in
January 2016, and on 24 March 2016, paid final dividends.
Net asset value and results
Over the life of their investment, investors in the 'C' Share pool
received total dividends of 105.51p per 'C' Share and 14.85p per 'A'
Share making a total return of 120.36p for an original investment of
100p (70p net of income tax relief). We believe that this represents a
very good return to Shareholders and brings the investment by 'C'
Shareholders to a close.
Investment activity in the period
The 'C' Share pool had two investments at the start of the period. Both
Quadrate Spa Limited and Quadrate Catering Limited were sold generating
gains over original cost of GBP160,000.
Outlook
We are very satisfied with the final performance of the 'C' Share pool.
Following the payment of the final dividends on 24 March 2016, the 'C'
Share pool had negligible value at the period end and, in line with the
Articles of the Company, the Company is taking steps to cancel the share
class. We will notify Shareholders of progress in due course.
Downing LLP
SUMMARY OF INVESTMENT MOVEMENTS
'C' SHARE POOL
for the six months ended 30 June 2016
Market Gain Total
value at Disposal against Realised
Disposals Cost 01/01/16 proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying and partially qualifying
investments
Quadrate Spa Limited 258 381 381 123 -
Quadrate Catering Limited 330 367 367 37 -
588 748 748 160 -
INVESTMENT MANAGER'S REPORT
'D' SHARE POOL
The 'D' Share pool is in the process of seeking to realise its
investments in order to return funds to 'D' Shareholders.
Investment activity
During the period under review, there were three full disposals and four
partial disposals which produced proceeds of GBP1.5 million and showed a
gain against previous carrying value of GBP109,000.
At 30 June 2016, the pool held 11 investments with a valuation of GBP3.0
million. One minor valuation change was made at the period end resulting
in a total valuation reduction of GBP58,000 in Mosaic Spa and Health
Clubs Limited. The carrying values adopted at the end of the period are
consistent with the values at which we believe the investments can be
exited.
The majority of investments have performed to plan although a small
number which have underperformed historically are yet to fully recover.
Realisation plans
There are exit plans in place for the remaining 11 investments. The
significant holdings in Kidspace Adventures Holdings Limited,
Westcountry Solar Solutions Limited and Avon Solar Energy Limited are
expected to exit in the next few months.
Although Gara Rock Resort Limited, formerly Aminghurst Limited, was sold
in March 2016, the timing of the loan repayments depends on when the
underlying apartments are sold. We are exploring some options to draw
the investment to a conclusion earlier than might otherwise be the case.
Net asset value and results
At 30 June 2016, the net asset value ("NAV") for a combined holding of
one 'D' Share and one 'E' Share was 34.8p, an increase of 0.4p (0.8%)
over the period. Total Return (NAV plus dividends paid to date) is now
101.3p for a combined holding.
The profit on ordinary activities for the 'D' Shares, after taxation,
for the period was GBP38,000, comprising a revenue loss of GBP13,000 and
a capital profit of GBP51,000.
Outlook
The remainder of the year will be a busy period in terms of investment
realisations and we expect the next major distribution to Shareholders
to be made before the end of the year or early 2017.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'D' SHARE POOL
as at 30 June 2016
Unrealised loss in % of Portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Kidspace Adventure
Holdings Limited 375 465 - 13.0%
Mosaic Spa and
Health Clubs
Limited * 521 288 (58) 8.1%
Westcountry Solar
Solutions
Limited 250 250 - 7.0%
Avon Solar Energy
Limited 210 218 - 6.1%
Future Biogas
(Reepham Road)
Limited 451 98 - 2.7%
Camandale Limited* 422 2 - 0.1%
Quadrate Spa
Limited 144 - - 0.0%
Non-qualifying
investments
Gara Rock Resort
Limited 1,322 1,322 - 37.1%
Fenkle Street LLP 122 220 - 6.2%
Future Biogas (SF)
Limited 84 84 - 2.4%
Redmed Limited 21 19 - 0.5%
3,922 2,966 (58) 83.2%
Cash at bank and
in hand 597 16.8%
Total 3,563 100%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'D' SHARE POOL
for the six months ended 30 June 2016
Gain/
Market Disposal (loss) Total
value at Proceeds against Realised
Disposals Cost 01/01/16 * cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying and partially qualifying
investments
Quadrate Catering Limited 441 539 581 140 42
Future Biogas (Reepham Road) Limited 130 97 130 - 33
Liverpool Nurseries (Holdings) Limited - - 11 11 11
Quadrate Spa Limited 352 520 520 168 -
Non-qualifying investments
Future Biogas (SF) Limited 85 85 102 17 17
Kilmarnock Monkey Bar Limited - - 6 6 6
Commercial Street Hotel Limited 100 100 100 - -
Redmed Limited 6 5 5 (1) -
1,114 1,346 1,455 341 109
* Adjusted for additions in the year
INVESTMENT MANAGER'S REPORT
'F' SHARE POOL
The 'F' Share pool is fully invested in a portfolio focussed on asset
backed businesses and those with predictable revenue streams. The 'F'
Share pool is scheduled to start realising investments in 2017 in order
to return funds to shareholders in 2018.
Investment activity
Four new investments were made in the period totalling GBP700,000.
GBP300,000 was invested into Vectis Power Generation Limited which is
seeking to build and develop renewable energy plants; GBP150,000 was
invested into Brownfields Energy Limited which is seeking to develop
small-scale waste disposal projects; GBP125,000 was invested into both
Rhodes Renewables Limited and Morava Renewables Limited which are both
exploring opportunities in the wood refinery sector.
One full exit was completed in the period for Grasshoppper 2007 Limited,
the company that owns The Grasshopper Inn, a public house near Westerham,
Kent which was sold and generated proceeds equivalent to the original
cost of GBP378,000.
One notable partial divestment took place in the period being the part
repayment of a non-qualifying loan to Gara Rock Resort Limited, formerly
Aminghurst Limited, which generated proceeds of GBP494,000.
The majority of investments remain valued at or above cost and there was
one small valuation movement in the period on Atlantic Dogstar Limited.
The company owns a group of London pubs which are performing to plan and
as such the valuation has been increased by GBP18,000.
Net asset value, results and dividend
At 30 June 2016, the net asset value ("NAV") for a holding of one 'F'
Share was 69.7p, an increase of 0.7p (1.0%) over the period. Total
Return (NAV plus dividends paid to date) is now 92.2p for a combined
holding.
The gain on ordinary activities for the 'F' Shares, after taxation, for
the period was GBP71,000, comprising a revenue profit of GBP53,000 and a
capital gain of GBP18,000.
The Company will pay an interim dividend of 2.5p per 'F' Share, on 16
December 2016 to 'F' Shareholders on the register at 18 November 2016.
Outlook
The focus now for the 'F' Share portfolio is on close monitoring and
support of the portfolio companies to ensure that prospects for growth
are optimised in the period until the realisation process commences in
2017.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'F' SHARE POOL
as at 30 June 2016
Unrealised gain % of Portfolio by
Cost Valuation in period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Apex Energy
Limited 1,000 1,000 - 13.3%
Vulcan Renewables
Limited 653 778 - 10.4%
Goonhilly Earth
Station Limited 760 760 - 10.1%
Lambridge Solar
Limited 500 543 - 7.2%
Merlin Renewables
Limited 500 500 - 6.7%
Augusta Pub
Company Limited 290 324 - 4.3%
Kidspace
Adventures
Holdings Limited 250 310 - 4.1%
Vectis Power
Generation
Limited 300 300 - 4.0%
Pearce and
Saunders Limited 497 248 - 3.3%
Pabulum Pubs
Limited 200 229 - 3.1%
Atlantic Dogstar
Limited 200 218 18 2.9%
Fresh Green Power
Limited 200 200 - 2.7%
City Falkirk
Limited 422 177 - 2.4%
Fubar Stirling
Limited 268 169 - 2.3%
Brownfields Energy
Limited 150 150 - 2.0%
Rhodes Renewables
Limited 125 125 - 1.7%
Morava Renewables
Limited 125 125 - 1.7%
Green Energy
Production UK
Limited 100 100 - 1.4%
Cheers Dumbarton
Limited 48 17 - 0.2%
Redmed Limited * 13 11 - 0.1%
Lochrise Limited 13 - - 0.0%
Non-qualifying
investments
Baron House
Developments LLP 481 481 - 6.4%
Gara Rock Resort
Limited 345 345 - 4.6%
London City
Shopping Centre
Limited 66 66 - 0.9%
Pearce and
Saunders DevCo
Limited 46 46 - 0.6%
Southampton Hotel
Development
Limited 298 - - 0.0%
7,850 7,222 18 96.4%
Cash at bank and
in hand 269 3.6%
Total 7,491 100.0%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'F' SHARE POOL
as at 30 June 2016
Additions GBP'000
Qualifying investments
Vectis Power Generation Limited 300
Brownfields Energy Limited 150
Rhodes Renewables Limited 125
Morava Renewables Limited 125
Total 700
Market
value at Loss Total
01/01/16 Disposal against Realised
Disposals Cost * proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying and
partially qualifying
investments
Grasshopper
2007 Limited 378 378 378 - -
Redmed Limited 5 3 3 (2) -
Non-qualifying
investments
Gara Rock
Resort
Limited 494 494 494 - -
877 875 875 (2) -
* adjusted for purchases made in the period
INVESTMENT MANAGER'S REPORT
'H' SHARE POOL
The 'H' Share pool raised funds in 2014 and has made good progress in
building the initial VCT qualifying portfolio. The fund is expected to
be fully qualifying by 31 December 2016.
Investment activity
During the last six months, six qualifying investments were made
totalling GBP4.4 million and one non-qualifying investment for
GBP850,000 as we continue to build the qualifying portfolio of the 'H'
Share pool.
The qualifying investments include GBP1.5 million in Hermes Renewables
Limited, which is seeking to build and operate a wood pelleting plant.
GBP850,000 was invested in Quadrate Catering Limited which operates a
restaurant in the iconic Cube Complex in Birmingham.
GBP613,000 was invested in both Ironhide Generation Limited and
GBP614,000 into Indigo Generation Limited. GBP492,000 was invested in
Rockhopper Renewables Limited and GBP281,000 in SF Renewables (Solar)
Limited. All of the above investments are in the process of acquiring
land in India to build and operate 15MW ground mounted solar arrays.
One non-qualifying investment was made in Quadrate Spa Limited for
GBP850,000 which owns and operates a health club business in The Cube
complex in Birmingham.
Two non-qualifying loans were repaid in full in the period being Pub
People Limited, the public house operator in the East Midlands, repaid
GBP984,000 and Ludlow Taverns Limited which repaid GBP388,000.
The majority of investments remain valued at cost and there was one
small valuation movement in the period on Atlantic Dogstar. The company
owns a group of London pubs which are performing to plan and as such the
valuation has been increased by GBP88,000.
Net asset value and results
At 30 June 2016, the net asset value per 'H' Share was 88.9p, a net
increase of 0.9p (1.0%) over the period. Total Return (NAV plus
dividends paid to date) is now 101.4p.
Results and dividend
The gain on ordinary activities for the 'H' Shares, after taxation, for
the period was GBP128,000, comprising a revenue profit of GBP40,000 and
a capital gain of GBP88,000.
The Company will pay an interim dividend of 2.5p per 'H' Share, on 16
December 2016 to 'H' Shareholders on the register at 18 November 2016.
Outlook
The 'H' Share pool will become fully qualifying at the year end and as a
result our focus will shift to the close monitoring and support of the
portfolio companies in order to nurture growth before the planned exit
date.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'H' SHARE POOL
as at 30 June 2016
Unrealised gain % of Portfolio by
Cost Valuation in period value
GBP'000 GBP'000 GBP'000
VCT qualifying
investments
Hermes Renewables
Limited 1,500 1,500 - 12.5%
Apex Energy
Limited 1,300 1,300 - 10.8%
Hedderwick Limited 1,250 1,250 - 10.4%
Atlantic Dogstar
Limited 1,000 1,088 88 9.1%
Kidspace
Adventures
Holdings Limited 1,085 1,085 - 9.1%
Quadrate Catering
Limited 850 850 - 7.1%
Ironhide
Generation
Limited 613 613 - 5.1%
Indigo Generation
Limited 613 613 - 5.1%
Antelope Pub
Limited 500 500 - 4.2%
Rockhopper
Renewables
Limited 492 492 - 4.1%
Oak Grove
Renewables
Limited 420 315 - 2.6%
SF Renewables
(Solar) Limited 281 281 - 2.3%
Non-qualifying
investments
Quadrate Spa
Limited 850 850 - 7.1%
Hobblers Heath
Limited 727 727 - 6.1%
Pearce and
Saunders Limited 193 193 - 1.6%
Augusta Pub
Company Limited 155 155 - 1.3%
11,829 11,812 88 98.5%
Cash at bank and
in hand 183 1.5%
Total 11,995 100%
SUMMARY OF INVESTMENT MOVEMENTS
'H' SHARE POOL
as at 30 June 2016
Additions GBP'000
Qualifying investments
Hermes Renewables Limited 1,500
Quadrate Catering Limited 850
Ironhide Generation Limited 614
Indigo Generation Limited 613
Rockhopper Renewables Limited 492
SF Renewables (Solar) Limited 281
Non-qualifying investments
Quadrate Spa Limited 850
Total 5,200
Market Total
value at Disposal Gain against Realised
Disposals Cost 01/01/16 * proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-qualifying
investments
Pub People
Limited 984 984 984 - -
Ludlow Taverns
Springhill
Limited 388 388 388 - -
1,372 1,372 1,372 - -
* adjusted for purchases made in the period
INVESTMENT MANAGER'S REPORT
'J' SHARE POOL
The fundraising for the 'J' Share pool was launched in December 2014 and
raised GBP11 million prior to closing in 2015. The majority of these
funds have now been invested as at the period end and is due to become
qualifying by the end of 2017.
Investment activity
During the last six months, ten qualifying investments have been made
totalling GBP7.8m as we start to build the qualifying portfolio of the
'J' Share pool.
The qualifying investments include GBP900,000 in Vectis Power Generation
Limited which is seeking to build and develop renewable energy plants.
GBP900,000 was also invested in Brownfields Energy Limited which is
seeking to develop small-scale waste disposal projects.
GBP800,000 was invested in Yamuna Renewables Limited who are seeking
investment opportunities in the wood refinery sector.
GBP613,000 was invested in Ironhide Generation Limited and GBP614,000
into Indigo Generation Limited. GBP492,000 was invested into Rockhopper
Renewables Limited and GBP281,000 into SF Renewables (Solar) Limited.
All of the above investments are in the process of acquiring land in
India to build and operate 15MW ground mounted solar arrays.
Jito Renewables Limited, Rhodes Renewables Limited and Morava Renewables
Limited are all exploring opportunities in the wood refinery sector
following investments of GBP1 million, GBP1 million and GBP1.2 million
respectively.
No valuation adjustments have been made in the period with all
investments remaining at cost.
Net asset value and results
At 30 June 2016, the net asset value per 'J' Share was 97.7p, a net
decrease of 0.8p (0.8%) over the period.
The loss on ordinary activities for the 'J' Shares, after taxation, for
the period was GBP90,000, being wholly related to revenue.
Outlook
The task of building the 'J' Share portfolio is progressing well. We
have a good pipeline of potential investment opportunities from which we
expect to be able to build a solid qualifying portfolio with good
potential for growth over the planned life of the Share pool.
Accordingly, we expect to complete a number of new qualifying and
non-qualifying investments for the share pool over the remainder of the
year.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'J' SHARE POOL
as at 30 June 2016
Unrealised gain % of Portfolio by
Cost Valuation in period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Morava Renewables
Limited 1,150 1,150 - 10.9%
Jito Renewables
Limited 1,000 1,000 - 9.5%
Rhodes Renewables
Limited 1,000 1,000 - 9.5%
Cedarville Limited 1,000 1,000 - 9.5%
Pilgrim Pubs
Limited 1,000 1,000 - 9.5%
Brownfields Energy
Limited 900 900 - 8.6%
Vectis Power
Generation
Limited 900 900 - 8.6%
Yamuna Power
Generation
Limited 800 800 - 7.6%
Indigo Generation
Limited 614 614 - 5.8%
Ironhide
Generation
Limited 613 613 - 5.8%
Rockhopper
Renewables
Limited 492 492 - 4.7%
Oak Grove
Renewables
Limited 420 315 - 3.0%
SF Renewables
(Solar) Limited 281 281 - 2.7%
10,170 10,065 - 95.7%
Cash at bank and
in hand 457 4.3%
Total 10,522 100%
SUMMARY OF INVESTMENT MOVEMENTS
'J' SHARE POOL
as at 30 June 2016
Additions GBP'000
Qualifying investments
Morava Renewables Limited 1,150
Jito Renewables Limited 1,000
Rhodes Renewables Limited 1,000
Brownfields Energy Limited 900
Vectis Power Generations Limited 900
Yamuna Renewables Limited 800
Indigo Generation Limited 614
Ironhide Generation Limited 613
Rockhopper Renewables Limited 492
SF Renewables Limited 281
Total 7,750
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 June 2016
30 Jun 31 Dec
30 Jun 2016 2015 2015
'C' 'D'
Shares Shares 'F' Shares 'H' Shares 'J' Shares Total Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted
investments - 2,966 7,222 11,812 10,065 32,065 26,046 22,707
Current assets
Debtors - (3) 153 103 3 256 655 632
Cash at bank
and in hand 67 597 269 183 457 1,573 13,044 16,578
67 594 422 286 460 1,829 13,699 17,210
Creditors:
amounts
falling due
within one
year (64) (92) (102) (139) (40) (437) (1,019) (494)
Net current
assets 3 502 320 147 420 1,392 12,680 16,716
Net assets 3 3,468 7,542 11,959 10,485 33,457 38,726 39,423
Capital and
reserves
Called up
share
capital 18 25 11 13 11 78 75 78
Capital
redemption
reserve 106 - - - - 106 106 106
Special
reserve - 3,850 8,885 (1,681) - 11,054 17,348 15,749
Share premium
account - - - 13,608 11,031 24,639 21,367 24,639
Revaluation
reserve (105) (956) (627) (17) (105) (1,810) (1,504) (1,466)
Capital
reserve -
realised - - (1,033) - - (1,033) 301 (1,033)
Revenue
reserve (16) 549 306 36 (452) 423 1,033 1,350
Total equity
shareholders'
funds 3 3,468 7,542 11,959 10,485 33,457 38,726 39,423
Basic and diluted net asset value per:
'C' Share - 49.3p 53.2p
'A' Share - 0.1p 0.1p
'D' Share 34.7p 72.9p 51.3p
'E' Share 0.1p 0.1p 0.1p
'F' Share 69.7p 71.7p 71.5p
'H' Share 88.9p 93.3p 90.5p
'J' Share 97.7p 99.9p 98.5p
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2016
Capital Share Capital
Called up share redemption Special premium Revaluation reserve Revenue
capital reserve reserve reserve reserve - realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2015 67 106 22,268 13,608 (289) (1,033) 342 35,069
(Loss)/gain on
investments - - - - (234) 34 - (200)
Retained revenue - - - - - - 1,317 1,317
Issue of new
shares 11 - - 11,031 - - - 11,042
Share issue costs - - - - - - (309) (309)
Transfer between
reserves - - (6,519) - (943) 7,462 - -
Dividend paid - - - - - (7,496) - (7,496)
At 31 December
2015 78 106 15,749 24,639 (1,466) (1,033) 1,350 39,423
Gain on
investments - - - - 47 110 - 157
Retained revenue - - - - - - (40) (40)
Transfer between
reserves - - (4,695) - (391) 5,973 (887) -
Dividend paid - - - - - (6,083) - (6,083)
At 30 June 2016 78 106 11,054 24,639 (1,810) (1,033) 423 33,457
INCOME STATEMENT
for the six months ended 30 June 2016
Company Total
Year Ended
Six months ended Six months ended 31 Dec
30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 435 - 435 1,411 - 1,411 2,449
Gains/(losses)
on investments
- realised - 110 110 - (362) (362) 34
- unrealised - 47 47 - (244) (244) (234)
435 157 592 1,411 (606) 805 2,249
Investment
management
fees (328) - (328) (332) - (332) (695)
Other expenses (164) - (164) (148) - (148) (275)
Return/(loss)
on ordinary
activities
before
taxation (57) 157 100 931 (606) 325 1,279
Tax on total
comprehensive
income and
ordinary
activities 17 - 17 (84) - (84) (162)
Return/(loss)
attributable
to equity
shareholders (40) 157 117 847 (606) 241 1,117
Return per 'C'
Share (0.4p) - (0.4p) 7.7p (6.5p) 1.2p 5.1p
Return per 'A'
Share - - - - - - -
Return per 'D'
Share (0.1p) 0.5p 0.4p 1.2p 0.4p 1.6p 6.9p
Return per 'E'
Share - - - - - - -
Return per 'F'
Share 0.5p 0.2p 0.7p 0.3p (1.7p) (1.4p) 1.0p
Return per 'H'
Share 0.3p 0.7p 1.0p 1.2p - 1.2p 0.8p
Return per 'J'
Share (0.8p) - (0.8p) (0.2p) - (0.2p) (2.4p)
A Statement of Total Recognised Gains and Losses has not been prepared
as all gains/losses are recognised in the Income Statement as noted
above.
INCOME STATEMENT
for the six months ended 30 June 2016
Year
ended
Six months ended Six months ended 31 Dec
'C' Shares 30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 6 - 6 621 - 621 815
Gains/(losses)
on investments
- realised - - - - (412) (412) (342)
- unrealised - - - - (53) (53) 25
6 - 6 621 (465) 156 498
Investment
management
fees (8) - (8) (31) - (31) (56)
Other expenses (35) - (35) (24) - (24) (41)
Return/(loss)
on ordinary
activities
before
taxation (37) - (37) 566 (465) 101 401
Tax on total
comprehensive
income and
ordinary
activities 7 - 7 (12) - (12) (36)
Return/(loss)
attributable
to equity
shareholders (30) - (30) 554 (465) 89 365
INCOME STATEMENT
for the six months ended 30 June 2016
Year
Ended
Six months ended Six months ended 31 Dec
'D' Shares 30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 19 - 19 227 - 227 528
Gains/(losses)
on investments
- realised - 109 109 - 50 50 297
- unrealised - (58) (58) - (11) (11) 87
19 51 70 227 39 266 912
Investment
management
fees (27) - (27) (49) - (49) (97)
Other expenses (16) - (16) (32) - (32) (54)
Return/(loss)
on ordinary
activities
before
taxation (24) 51 27 146 39 185 761
Tax on total
comprehensive
income and
ordinary
activities 11 - 11 (31) - (31) (71)
Return/(loss)
attributable
to equity
shareholders (13) 51 38 115 39 154 690
INCOME STATEMENT
for the six months ended 30 June 2016
Year
Ended
Six months ended Six months ended 31 Dec
'F' Shares 30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 171 - 171 153 - 153 407
Losses on
investments
- realised - - - - - - 79
- unrealised - 18 18 - (180) (180) (136)
171 18 189 153 (180) (27) 350
Investment
management
fees (69) - (69) (73) - (73) (144)
Other expenses (36) - (36) (46) - (46) (85)
Return/(loss)
on ordinary
activities
before
taxation 66 18 84 34 (180) (146) 121
Tax on total
comprehensive
income and
ordinary
activities (13) - (13) (2) - (2) (13)
Return/(loss)
attributable
to equity
shareholders 53 18 71 32 (180) (148) 108
INCOME STATEMENT
for the six months ended 30 June 2016
Year
Ended
Six months ended Six months ended 31 Dec
'H' Shares 30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 202 - 202 359 - 359 594
Gains/(losses) on investments
- realised - - - - - - -
- unrealised - 88 88 - - - (105)
202 88 290 359 - 359 489
Investment management fees (120) - (120) (128) - (128) (253)
Other expenses (32) - (32) (36) - (36) (69)
Return on ordinary activities before taxation 50 88 138 195 - 195 167
Taxation on total comprehensive income and ordinary
activates (10) - (10) (41) - (41) (55)
Return attributable to equity shareholders 40 88 128 154 - 154 112
INCOME STATEMENT
for the six months ended 30 June 2016
Year
Ended
Six months ended Six months ended 31 Dec
'J' Shares 30 Jun 2016 30 Jun 2015 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 37 - 37 51 - 51 104
Gains/(losses)
on investments
- realised - - - - - - -
- unrealised - - - - - - (105)
37 - 37 51 - 51 (1)
Investment
management
fees (104) - (104) (51) - (51) (144)
Other expenses (45) - (45) (10) - (10) (26)
Loss on
ordinary
activities
before
taxation (112) - (112) (10) - (10) (171)
Tax on total
comprehensive
income and
ordinary
activities 22 - 22 2 - 2 13
Loss
attributable
to equity
shareholders (90) - (90) (8) - (8) (158)
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2016
30 Jun 31 Dec
30 Jun 2016 2015 2015
'C' 'D' 'F' 'H'
Shares Shares Shares Shares 'J' Shares Total Total Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash inflow/
(outflow) from operating activities 1 137 210 16 (13) (72) 278 893 862
Cash flows from investing activities
Purchase of investments - - (700) (5,200) (7,750) (13,650) (3,227) (11,766)
Sale of investments 748 1,455 875 1,372 - 4,450 4,780 17,063
Net cash inflow/(outflow)
from investing activities 748 1,455 175 (3,828) (7,750) (9,200) 1,553 5,297
Net cash inflow/(outflow) before
financing activities 885 1,665 191 (3,841) (7,822) (8,922) 2,446 6,159
Cash flows from
financing activities
Equity dividends paid (3,780) (1,696) (271) (336) - (6,083) (4,195) (7,496)
Proceeds from share issue - - - - - - 7,767 11,042
Share issue costs - - - - - - (156) (309)
Net cash (outflow)/inflow from
financing (3,780) (1,696) (271) (336) - (6,083) 3,416 3,237
(Decrease)/increase
in cash 2 (2,895) (31) (80) (4,177) (7,822) (15,005) 5,862 9,396
NOTES TO THE UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2016
30 Jun 31 Dec
30 Jun 2016 2015 2015
'C' 'D' 'F' 'H' 'J'
Shares Shares Shares Shares Shares Total Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
1 Cash inflow from operating activities and returns
on investments
Return/(loss) on ordinary activities before taxation (37) 27 84 138 (112) 100 325 1,279
Corporation tax paid 5 7 - - - 12 - (132)
Losses/(gains) on investments - (51) (18) (88) - (157) 606 200
Decrease/(increase) in other debtors 174 254 (24) (54) 25 375 (238) (216)
(Decrease)/increase in other creditors (5) (27) (26) (9) 15 (52) 200 (269)
Net cash inflow/(outflow) from operating activities 137 210 16 (13) (72) 278 893 862
2 Analysis of net funds
Beginning of period 2,962 628 349 4,360 8,279 16,578 7,182 7,182
Net cash (outflow)/inflow (2,895) (31) (80) (4,177) (7,822) (15,005) 5,862 9,396
End of period 67 597 269 183 457 1,573 13,044 16,578
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. General information
Downing Three VCT plc ("The Company") is a venture capital trust
established under the legislation introduced in the Finance Act 1995 and
is domiciled in the United Kingdom and incorporated in England and
Wales.
2. Accounting policies - Basis of accounting
The unaudited half-yearly results cover the six months to 30 June 2016
and have been prepared in accordance with the Statement of Recommended
Practice "Financial Statements of Investment Trust Companies and Venture
Capital Trusts" revised January 2009 and in accordance with the
accounting policies set out in the statutory accounts for the year ended
31 December 2015, which were prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom accounting
standards and applicable law), including Financial Reporting Standard
102, the financial reporting standard applicable in the UK and Republic
of Ireland (FRS 102).
3. All revenue and capital items in the Income Statement derive from
continuing operations.
4. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
5. The comparative figures are in respect of the six month period
ended 30 June 2015 and the year ended 31 December 2015 respectively.
6. Dividends
Year ended
Six months ended 31 Dec
30 June 2016 2015
Per share Revenue Capital Total Total
Paid in period pence GBP'000 GBP'000 GBP'000 GBP'000
'C' Shares
Special 'C' 2016 30.5p - 2,184 2,184 -
Special 'A' 2016 14.8p - 1,596 1,596 -
Y/E Dec 2014 Final 50.0p - - - 3,588
- 3,780 3,780 3,588
'D' Shares
Y/E Dec 2015 Final 17.0p - 1,696 1,696 -
Y/E Dec 2014 Interim 27.0p - - - 2,695
- 1,696 1,696 2,695
'F' Shares
Y/E Dec 2015 Final 2.5p - 271 271 -
Y/E Dec 2015 Interim 2.5p - - - 270
Y/E Dec 2014 Final 2.5p - - - 270
- 271 271 540
'H' Shares
Y/E Dec 2015 Final 2.5p - 336 336 -
Y/E Dec 2015 Interim 2.5p - - - 337
Y/E Dec 2014 Final 2.5p - - - 336
- 336 336 673
No dividends have been paid or declared in respect of the 'E' Shares or
'J' Shares.
7. Basic and diluted return per share
Weighted average
number of shares in Revenue Capital
issue return/(loss) return
Per
GBP'000 Per share GBP'000 share
'C' Shares 7,158,326 (30) (0.4p) - -
'A' Shares 10,750,064 - - - -
'D' Shares 9,979,109 (13) (0.1p) 51 0.5p
'E' Shares 14,994,862 - - - -
'F' Shares 10,821,660 53 0.5p 18 0.2p
'H' Shares 13,446,972 40 0.3p 88 0.7p
'J' Shares 10,733,377 (90) (0.8p) - -
(40) 157
8. Net asset value per share
Shares in issue Net asset value
Per
GBP'000 Share
'C' Shares 7,158,326 3 -
'A' Shares 10,750,064 - -
'D' Shares 9,979,109 3,453 34.7p
'E' Shares 14,994,862 15 0.1p
'F' Shares 10,821,660 7,542 69.7p
'H' Shares 13,446,972 11,959 88.9p
'J' Shares 10,733,377 10,485 97.7p
33,457
9. Reserves
Period ended Year ended
30 June 31 Dec
2016 2015
GBP'000 GBP'000
Capital redemption reserve 106 106
Special reserve 11,054 15,749
Share premium reserve 24,639 24,639
Revaluation reserve (1,810) (1,466)
Capital reserve-realised (1,033) (1,033)
Revenue reserve 423 1,350
33,379 39,345
The Special reserve, Capital reserve - realised and Revenue reserve are
all distributable reserves. The Revaluation reserve includes losses of
GBP2,414,000 which are included in the calculation of distributable
reserves. Total distributable reserves are GBP8,030,000 (31 Dec 2015:
GBP13,911,000).
1. The fair value of investments is determined using the detail accounting
policy set out in the statutory accounts for the year ended 31 December
2015.
The Company has categorised its financial instruments using the fair
value hierarchy as follows:
Level a: Reflects financial instruments quoted in an active market;
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 date.
ii) Reflects financial instruments that use valuation techniques that
are not based on observable market data (unquoted equity investments and
loan note investments).
Period Year
ended ended
Level Level Level 30 June Level Level Level 31 Dec
a b c (ii) 2016 a b c (ii) 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan
notes - - 7,928 7,928 - - 11,318 11,318
Unquoted
equity - - 24,137 24,137 - - 11,389 11,389
- - 32,065 32,065 - - 22,707 22,707
11. The unaudited condensed 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 2015 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.
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 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. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required,
in the Company's half-yearly results, to report on principal risks and
uncertainties facing the Company over the remainder of the financial
year.
The Board concluded that the key risks facing the Company over the
remainder of the financial period are as follows:
(i) Compliance risk of failure to maintain approval as a VCT; and
(ii) 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 has also reappointed Philip Hare &
Associates LLP to provide regular reviews and advice in this area. 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 these approaches provide
satisfactory management of the key risks.
14. 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.
1. Copies of the unaudited half-yearly report will be sent to Shareholders
shortly. Further copies can be obtained from the Company's registered
office or will be available for download from www.downing.co.uk.
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 THREE VCT plc via Globenewswire
(END) Dow Jones Newswires
September 28, 2016 12:39 ET (16:39 GMT)
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