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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 2015
Performance summary
30 Jun 31 Dec 30 Jun
'C' Share pool 2015 2014 2014
Pence Pence Pence
Net asset value per 'C' Share 49.3 98.2 91.3
Net asset value per 'A' Share 0.1 0.1 0.1
Cumulative distributions per 'C' Share 75.0 25.0 25.0
Adjusted for estimated performance fee (7.0) - -
Total return per 'C' Share and 'A' Share 117.4 * 123.3 116.4
30 Jun 31 Dec 30 Jun
'D' Share pool 2015 2014 2014
Pence Pence Pence
Net asset value per 'D' Share 72.9 71.3 75.9
Net asset value per 'E' Share 0.1 0.1 0.1
Cumulative distributions per 'D' Share 22.5 22.5 20.0
Total return per 'D' Share and 'E' Share 95.5 93.9 96.0
30 Jun 31 Dec 30 Jun
'F' Share pool 2015 2014 2014
Pence Pence Pence
Net asset value per 'F' Share 71.7 75.5 77.5
Cumulative distributions per 'F' Share 17.5 15.0 12.5
Total return per 'F' Share 89.2 90.5 90.0
30 Jun 31 Dec 30 Jun
'H' Share pool 2015 2014 2014
Pence Pence Pence
Net asset value per 'H' Share 93.3 94.7 99.6
Cumulative distributions per 'H' Share 7.5 5.0 -
Total return per 'H' Share 100.8 99.7 99.6
30 Jun
'J' Share pool 2015 Initial
Pence Pence
Net asset value per 'J' Share 99.9 100.0
*Based on Total Return levels at 30 June 2015, performance fees are
expected to become due to management, estimated to be 7p per 'C'/'A'
Share.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Half-Yearly Report for the six months ended
30 June 2015. Investment performance across the various share pools has
mostly been satisfactory and progress is being made in exiting from
investments in the share pools that have now reached their planned exit
date. The Company has also continued to raise new funds in the 'J' Share
pool.
Net asset values and overview
'C' Share pool
The 'C' Share pool is now exiting from its investments. During the
period sufficient realisations were completed to allow the payment of a
dividend of 50p per 'C' Share.
At 30 June 2015, the remaining net asset value ("NAV") for a combined
holding of one 'C' Share and one 'A' Share was 49.4p. This represents a
net increase of 1.1p (1.1%) over the period (after adjusting for
dividends paid during the period).
Assuming that certain performance hurdles are met, it is expected that a
performance fee will be payable to management and it is estimated that
this might be equivalent to 7p per Ordinary Share. After providing for
the performance fee the Total Return (NAV plus dividends paid to date)
stands at 117.4p for a combined holding one 'C' Share and one 'A' Share.
This compares to the original cost, net of income tax relief, of 70p per
share.
Plans are being advanced for exit from all of the remaining investments.
The Manager is hopeful that these can be completed soon and a final
payment made to 'C' Shareholders before the end of the year.
'D' Share pool
The 'D' Share pool has now passed its five year anniversary of the close
of the original fundraising offer and work is ongoing to unwind the 'D'
Share investment portfolio. Unfortunately a proposed transaction to
dispose of a number of solar investments earlier in the year fell
through, although a new process has now commenced with a different
purchaser. Another proposed sale has encountered delays, but the
Manager now expects it to complete soon.
Although it is unlikely that all investments will be realised over the
next few months, the Manager believes the Company will be in a position
to make a substantial initial payment to 'D' Shareholders before the end
of the year.
At 30 June 2015, the net asset value ("NAV") for a combined holding of
one 'D' Share and one 'E' Share was 73.0p, an increase of 1.6p (2.2%)
over the period. Total Return (NAV plus dividends paid to date) is now
95.5p 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 2017.
At 30 June 2015, the net asset value ("NAV") for a holding of one 'F'
Share was 71.7p, a net decrease of 1.3p (1.7%) 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 89.2p, 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 2015, the net asset value ("NAV") for a holding of one 'H'
Share was 93.3p. This represents a net increase of 1.1p (1.2%) 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
100.8p, compared to the initial NAV of 100.0p.
'J' Share pool
The 'J' Share pool was launched in December 2014 and completed its first
two investments in the period under review.
At 30 June 2015, the net asset value ("NAV") for a holding of one 'J'
Share was 99.9p, compared to the initial NAV of 100.0p.
A full review for each share pool is covered in the specific Investment
Manager's Reports below.
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 18 December 2015 to
Shareholders on the register at 20 November 2015.
No usual interim dividends are being declared in respect of the 'C'
Shares or 'D' Shares as it is expected that larger dividends will be
paid as soon as investment realisations complete.
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.
Fundraising
The 'J' Share fundraising offer opened in December 2014 and has to date
raised GBP9 million, which is of a sufficient size to ensure a
reasonably spread portfolio for investors. The closing date for the
offer has now been extended to 30 September 2015.
Shareholders may be aware of the proposed VCT rule changes that have
been announced in the Summer Budget. The new rules have yet to be
finalised but they will place a greater restriction on the range of
investments that the Company can make in future.
For the pools that are already fully invested, there is not likely to be
any significant impact. In respect of the pools that have not yet
invested all their funds, this may result in the Company having to
invest in younger businesses, potentially exposing the Company to a
slightly higher risk profile. The proposed penalty for breaching some of
the new rules is loss of VCT status, so the Company and its investors
may face a higher risk of the loss of tax benefits than has previously
been the case. While acknowledging the additional risks that the new
rules may introduce, the Investment Manager, believes that the Company
will be able to satisfactorily adapt to the new rules and that the
original performance target for the J Share pool remains achievable.
The Company has recently published a brief supplementary prospectus in
respect of the rule changes.
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 2015.
Outlook
The Board is generally satisfied with progress and expects to see
significant headway made in realising investments from the 'C' Share and
'D' Share pools over the remainder of the year. We expect to see all
remaining funds returned to 'C' Share investors before the end of the
year and a significant proportion of the 'D' Share fund paid out to
those Shareholders over the same time period.
In terms of the less mature share pools, the Manager will continue to
work closely with all portfolio companies. In the 'F' Share pool we
believe there are prospects to recover ground lost on some of the weaker
investments. In respect of the 'H' and 'J' Share pools, we expect a
number of new VCT qualifying investments to be made over the remainder
of the year.
As soon as there is news of the next dividends for 'C' and 'D'
Shareholders, the Company will write to those Shareholders.
Michael Robinson
Chairman
INVESTMENT MANAGER'S REPORT
'C' SHARE POOL
The task of exiting all of the 'C' Share pool investments continued
during the period and we are hopeful this will now complete in the next
few months. A dividend of 50p per 'C' Share was paid on 20 March 2015,
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 11:16 ET (15:16 GMT)
bringing total dividends paid to date to 75.0p per 'C' Share.
Investment activity in the period
A number of investments were exited during the period under review:
The sale of Atlantic Dogstar Limited, AEW Pubs No 1 Limited, East
Dulwich Tavern Limited and Westow House Limited completed in January
2015, generating capital proceeds to the 'C' share pool of GBP2,400,000
as well as a dividend of GBP509,000. In total, this equates to a gain
against original cost of GBP1.2 million.
The GBP210,000 non-qualifying loan in Hoole Hall Country Club Holdings
Limited was repaid at par.
Vermont Developments Limited, a property development site in Salford,
was exited in the period and generated proceeds of GBP156,000 and a gain
against cost of GBP131,000.
Proceeds of GBP87,000 were received on the exit of Chapel Street
Services Limited, Chapel Street Food and Beverage Limited and Chapel
Street Hotel Limited.
Honeycombe Pubs Limited was sold in the period and proceeds of GBP66,000
were received.
Details of the 'C' Share pool portfolio and investment activity during
the period are shown below.
There have been some minor adjustments to valuations of the remaining
investments resulting in a net reduction of GBP53,000.
Further realisation plans
The 3D Pub Co Limited was disposed of in July at a price equal to the 30
June valuation. Each of the other remaining investments is in advanced
stages of transactions which should secure exits at full value. As there
are a significant number of parties involved it is difficult to
accurately estimate when all of the transactions will be completed,
however we are optimistic that the 'C' Share pool will be in a position
to make a final distribution to 'C' Shareholders before the end of the
year.
Net asset value and results
At 30 June 2015, the net asset value ("NAV") for a combined holding of
one 'C' Share and one 'A' Share was 49.4p.
Based on the performance to date, it is expected that performance
hurdles will be met and a performance fee will be paid to members of the
management team. It is estimated that this fee might be equivalent to 7p
per 'C' Share. After adjusting for that, Total Return (NAV plus
dividends paid to date) now stands at 117.4p for a combined holding of
one 'C' Share and one 'A' Share. Shareholders should note that although
the 'A' Shares currently have a nominal value, meeting the performance
hurdles will trigger a transfer of value from the 'C' Shares to the 'A'
Shares.
The profit on ordinary activities after taxation for the 'C' Shares for
the period was GBP89,000, comprising a revenue profit of GBP554,000 and
a capital loss of GBP465,000.
Outlook
We are pleased with the overall performance of the 'C' Share portfolio
and believe that the task of completing the liquidation of the remaining
portfolio can be completed in a timely manner. As soon as this process
is complete, we expect the Company to make a final payment to 'C'
Shareholders to bring a successful investment to a close.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'C' SHARE POOL
as at 30 June 2015
Unrealised gain % of portfolio by
Cost Valuation in period value
GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Domestic Solar
Limited 500 560 - 15.8%
Future Biogas
(SF) Limited* 697 476 - 13.5%
Redmed Limited 350 430 (22) 12.2%
Quadrate Spa
Limited* 363 363 - 10.3%
Quadrate Catering
Limited 330 359 - 10.1%
The 3D Pub Co
Limited 267 233 6 6.6%
Ecossol Limited 250 175 (37) 4.9%
Mosaic Spa and
Health Clubs
Limited* 125 97 - 2.7%
Non-qualifying
investments
The Thames Club
Limited 500 500 - 14.1%
3,382 3,193 (53) 90.2%
Cash at bank and
in hand 348 9.8%
Total 3,541 100%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'C' SHARE POOL
for the six months ended 30 June 2015
Market Gain Total
value at Disposal against realised
Disposals Cost 01/01/15* proceeds cost gain/(loss)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Chapel Street
Food and
Beverage
Limited 50 13 45 (5) 32
Chapel Street
Services
Limited 50 13 42 (8) 29
Atlantic
Dogstar
Limited 663 1,260 1,260 597 -
East Dulwich
Tavern
Limited 644 734 541 (103) (193) **
Westow House
Limited 429 606 338 (91) (268) **
Non-qualifying
investments
Vermont
Developments
Limited 25 120 156 131 36
Hoole Hall
Country Club
Holdings
Limited 210 210 210 - -
Honeycombe Pubs
VCT Limited 188 66 66 (122) -
AEW Pubs No 1
Limited - 261 261 261 -
Chapel Street
Hotel Limited 2 1 - (2) (1)
Westow House
Pub No 1
Limited - 16 - - (16) **
East Dulwich
Tavern Pub No
1 Limited - 31 - - (31) **
2,261 3,331 2,919 658 (412)
* Adjusted for additions in the year
**Disposal proceeds were supplemented by dividends totalling GBP509,000
INVESTMENT MANAGER'S REPORT
'D' SHARE POOL
The 'D' Share pool recently passed the five year anniversary of the
close of the original fundraising and has therefore now started the
process of seeking to realise its investments in order to return funds
to 'D' shareholders.
Exits have been achieved from some small investments so far. Other
transactions are being progressed which should result in exits from a
significant proportion of the portfolio within the next few months.
Investment activity
During the period under review, there were four full disposals and two
part disposals which produced proceeds of GBP1.3 million and showed a
small gain against previous carrying value of GBP50,000.
At 30 June 2015, the pool held 18 investments with a valuation of GBP5.9
million. Some minor valuation changes were made at the period end
resulting in a total valuation reduction of GBP11,000. 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 have not been able to make
up lost ground as yet.
Realisation plans
Plans are well advanced for exits from all of the share pool's VCT
qualifying investments. A proposed transaction to dispose of all of the
solar assets fell through earlier in the year when the purchaser was not
able to complete. However, a new purchaser is now in place and we
believe the transaction should complete soon.
Separate transactions are also being progressed for Future Biogas
(Reepham Road), the Quadrate and Commercial Street Hotel companies,
Kidspace, Alpha Schools and Mosaic which, assuming they each go ahead as
planned will, with the above transaction, result in approximately 75% of
the fund being liquidated over the next few months. As soon as a
significant proportion of the portfolio has been realised, we expect the
Board to declare a major distribution to Shareholders.
Aminghurst is the one major investment where the exit plans are
currently a little less clear. The company developed an apartment and
hotel complex at Gara Rock in Devon. Sales of the apartments have been
slow to date and it is therefore currently difficult to estimate when
Aminghurst may be in position to repay funds to the Company. Some
options are being explored that might help to draw the investment to a
conclusion earlier than might otherwise be the case.
Net asset value and results
At 30 June 2015, the net asset value ("NAV") for a combined holding of
one 'D' Share and one 'E' Share was 73.0p, an increase of 1.6p (2.2%)
over the period. Total Return (NAV plus dividends paid to date) is now
95.5p for a combined holding.
The profit on ordinary activities for the 'D' Shares, after taxation,
for the period was GBP154,000, comprising a revenue profit of GBP115,000
and a capital profit of GBP39,000.
Outlook
The remainder of the year will be a busy period in terms of investment
disposals and we expect the first major distribution to Shareholders to
be made before the end of the year. The complete disposal process is
likely to take some time and, as a result of Aminghurst in particular,
it may be 12 months or more before the full task is completed.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'D' SHARE POOL
as at 30 June 2015
Unrealised
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 11:16 ET (15:16 GMT)
gain/(loss) in % of Portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Future Biogas
(Reepham Road)
Limited 842 522 - 7.2%
Quadrate Catering
Limited 441 481 - 6.6%
Quadrate Spa
Limited* 496 496 - 6.8%
Kidspace Adventure
Holdings Limited 375 454 6 6.2%
Domestic Solar
Limited 400 448 - 6.1%
Alpha Schools
(Holdings)
Limited 367 438 - 6.0%
Mosaic Spa and
Health Clubs
Limited 475 347 - 4.8%
Green Electricity
Generation
Limited 250 303 - 4.2%
Westcountry Solar
Solutions
Limited 250 250 - 3.4%
Avon Solar Energy
Limited 210 210 - 2.8%
Progressive
Energies Limited 170 190 - 2.6%
Ecossol Limited 250 175 (38) 2.4%
Liverpool
Nurseries
(Holdings)
Limited - 22 22 0.3%
Camandale Limited 421 2 (1) 0.0%
Non-qualifying
investments
Aminghurst Limited 1,322 1,322 - 18.1%
Fenkle Street LLP 122 122 - 1.7%
Commercial Street
Hotel Limited 100 100 - 1.4%
Kilmarnock Money
Bar Limited 42 25 - 0.3%
6,533 5,907 (11) 80.9%
Cash at bank and
in hand 1,391 19.1%
Total 7,298 100%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'D' SHARE POOL
for the six months ended 30 June 2015
Additions GBP'000
Non-qualifying investments
Camandale Limited 8
Total 8
Market Total
value at Disposal Gain against realised
Disposals Cost 01/01/15* proceeds cost gain/(loss)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Ridgeway Pub
Company
Limited 137 126 150 13 24
Slopingtactic
Limited 196 225 248 52 23
Liverpool
Nurseries
(Holdings)
Limited 435 386 397 (38) 11
West Tower
Property
Limited 250 250 250 - -
Camandale
Limited 102 36 28 (74) (8)
Non-qualifying
investments
Aminghurst
Limited 185 185 185 - -
1,305 1,208 1,258 (47) 50
* Adjusted for additions in the year
INVESTMENT MANAGER'S REPORT
'F' SHARE POOL
The 'F' Share pool is now fully invested and is scheduled to start
realising investments in 2017 in order to return funds to shareholders.
Investment activity
The 'F' Share pool made three further qualifying investments in the
period and has now met the target of having at least 70% of its funds in
VCT qualifying investments. Details of the new investments are set out
below:
GBP258,000 of non-qualifying loan was replaced with a qualifying
investment in Pearce and Saunders Limited, the freehold pub company that
operates three sites in south east London. A further GBP46,000 was also
invested in a new company that will be used to take advantage of a
related development opportunity.
GBP200,000 was invested in Atlantic Dogstar Limited, the owner and
operator of five London pubs.
GBP64,000 was invested in Vulcan Renewables Limited, the operator of a
biogas plant in Doncaster.
The majority of the 'F' Share pool investments have performed in line
with expectations over the period and continue to be valued at original
cost, however, there have been a number of adjustments to valuations
resulting in an unrealised value decrease of GBP180,000. Details are
below:
Following a further round of financing the valuation of Vulcan
Renewables Limited was increased by GBP126,000.
After third party valuations of the sites at two of our freehold London
pub companies, Pabulum Pubs Limited and Augusta Pub Company Limited, the
valuations were increased by GBP29,000 and GBP19,000 respectively.
Kidspace Adventures Holdings Limited is the holding company of Kidspace
Adventures Limited which owns three children's play centres. Continued
good performance at all three sites has resulted in an increase in value
of GBP4,000.
These gains were offset by valuation reductions on four investments,
most notably Pearce and Saunders Limited where underperformance at the
pub sites resulted in a valuation decrease of GBP249,000. Also Tor Solar
Limited, the solar panel installer, saw its valuation reduced by
GBP85,000 following underperformance of a number of the solar arrays.
In addition to the Pearce and Saunders reorganisation noted above there
was also a partial repayment of the non-qualifying loan in Aminghurst
Limited which generated GBP128,000. Furthermore, Hoole Hall Hotel
Limited exited for GBP84,000.
Details of the 'F' Share pool portfolio and investment activity during
the period are shown below.
Net asset value, results and dividend
At 30 June 2015, the net asset value ("NAV") for a holding of one 'F'
Share was 71.7p, a decrease of 1.3p (1.7%) over the period. Total Return
(NAV plus dividends paid to date) is now 89.2p for a combined holding.
The loss on ordinary activities for the 'F' Shares, after taxation, for
the period was GBP148,000, comprising a revenue profit of GBP32,000 and
a capital loss of GBP180,000.
The Company will pay an interim dividend of 2.5p per 'F' Share, on 18
December 2015 to 'F' Shareholders on the register at 20 November 2015.
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 2015
Unrealised
gain/(loss) in % of Portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Vulcan Renewables
Limited 653 778 126 10.0%
Goonhilly Earth
Station Limited 760 760 - 9.8%
Tor Solar PV
Limited 680 595 (85) 7.7%
Merlin Renewables
Limited 500 500 - 6.4%
Lambridge Solar
Limited 500 500 - 6.4%
Grasshopper 2007
Limited 378 378 - 4.9%
Augusta Pub
Company Limited 290 309 19 4.0%
Kidspace
Adventures
Holdings Limited 250 302 4 3.9%
Fubar Stirling
Limited 268 256 (12) 3.3%
Pearce and
Saunders
Limited* 497 248 (249) 3.2%
Redmed Limited 250 239 (12) 3.1%
Pabulum Pubs
Limited 200 229 29 3.0%
City Falkirk
Limited 422 207 - 2.6%
Atlantic Dogstar
Limited 200 200 - 2.6%
Fresh Green Power
Limited 200 200 - 2.6%
Green Energy
Production UK
Limited 100 100 - 1.3%
Cheers Dumbarton
Limited 48 17 - 0.2%
Lochrise Limited 13 - - 0.0%
Non-qualifying
investments
Aminghurst Limited 839 839 - 10.8%
Baron House
Developments LLP 481 481 - 6.2%
Dominions House
Limited 59 59 - 0.8%
3D Pub Company
Limited 55 55 - 0.7%
Pearce and
Saunders DevCo
Limited 46 46 - 0.6%
London City
Shopping Centre
Limited 43 43 - 0.6%
Southampton Hotel
Development
Limited 298 - - 0.0%
8,030 7,341 (180) 94.7%
Cash at bank and
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 11:16 ET (15:16 GMT)
in hand 407 5.3%
Total 7,748 100.0%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'F' SHARE POOL
as at 30 June 2015
Additions GBP'000
Qualifying investments
Pearce and Saunders Limited 304
Atlantic Dogstar Limited 200
Vulcan Renewables Limited 64
Non-qualifying investments
Pearce and Saunders DevCo Limited 46
Total 614
Market Total
value at Disposal Gain against realised
Disposals Cost 01/01/15* proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Qualifying
investments
Pearce and
Saunders
Limited 258 258 258 - -
Non-qualifying
investments
Aminghurst
Limited 128 128 128 - -
Hoole Hall
Hotel Limited 84 84 84 - -
470 470 470 - -
* adjusted for purchases made in the period
INVESTMENT MANAGER'S REPORT
'H' SHARE POOL
The 'H' Share pool raised funds in 2014 and is still in the early stages
of building its VCT qualifying portfolio.
Investment activity
The pool made its first two new qualifying investments in the period, as
well as two further non-qualifying investments. Details are set out
below:
GBP1,000,000 was invested in Atlantic Dogstar Limited, in January 2015.
The company owns and operates five freehold pubs in London.
Oak Grove Renewables Limited operates an anaerobic digestion plant in
Norfolk. GBP420,000 has been invested in the company in the period.
A non-qualifying loan of GBP200,000 was made to UK Solar (Hartwell) LLP
to fund the construction of a solar plant in Northamptonshire.
GBP155,000 non-qualifying loan was made to Augusta Pub Company Limited,
an owner and operator of freehold London pubs.
All of the 'H' Share pool investments are performing as expected and are
valued at original cost.
There was one partial disposal in the period being a repayment of
non-qualifying loan of GBP23,000 made by Ludlow Taverns Springhill
Limited.
Net asset value and results
At 30 June 2015, the net asset value per 'H' Share was 93.3p, a net
increase of 1.1p (1.2%) over the period. Total Return (NAV plus
dividends paid to date) is now 100.8p.
Results and dividend
The gain on ordinary activities for the 'H' Shares, after taxation, for
the period was GBP154,000 being wholly related to Revenue.
The Company will pay an interim dividend of 2.5p per 'H' Share, on 18
December 2015 to 'H' Shareholders on the register at 20 November 2015.
Outlook
The task of building the 'H' Share portfolio is now underway. 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 next five years. The portfolio currently comprises a
number of non-qualifying investments that provide additional yield in
the initial phase but will be realised in order to provide funds for
further qualifying investments in due course. As a result, we expect
there to be a significant level of investment activity over the
remainder of the year.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'H' SHARE POOL
as at 30 June 2015
Unrealised gain in % of Portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Atlantic Dogstar
Limited 1,000 1,000 - 8.1%
Oak Grove
Renewables
Limited 420 420 - 3.4%
Non-qualifying
investments
Woodbridge Solar
Limited 1,800 1,800 - 14.5%
Deeside Solar
Limited 1,800 1,800 - 14.5%
Vulcan Renewables
Limited 1,410 1,410 - 11.4%
Pub People Limited 984 984 - 8.0%
Future Biogas (SF)
Limited 525 525 - 4.2%
Ludlow Taverns
Springhill
Limited 398 398 - 3.2%
UK Solar
(Hartwell) LLP 200 200 - 1.6%
Pearce and
Saunders Limited 193 193 - 1.6%
Augusta Pub
Company Limited 155 155 - 1.3%
8,885 8,885 - 71.8%
Cash at bank and
in hand 3,485 28.2%
Total 12,370 100%
SUMMARY OF INVESTMENT MOVEMENTS
'H' SHARE POOL
as at 30 June 2015
Additions GBP'000
Qualifying investments
Atlantic Dogstar Limited 1,000
Oak Grove Renewables Limited 420
Non-qualifying investments
UK Solar (Hartwell) LLP 200
Augusta Pub Company Limited 155
Total 1,775
Market Total
value at Disposal Gain against Realised
Disposals Cost 01/01/15* proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-qualifying
investments
Ludlow Taverns
Springhill
Limited 23 23 23 - -
23 23 23 - -
* adjusted for purchases made in the period
INVESTMENT MANAGER'S REPORT
'J' SHARE POOL
Fundraising
The fundraising for the 'J' Share pool was launched in December 2014 and
has raised GBP8.9m to date. The closing date for the offer has now been
extended to 30 September 2015.
Investment activity
Two initial investments were made in the period being a qualifying
investment of GBP420,000 in Oak Grove Renewables Limited and a
non-qualifying secured loan investment of GBP410,000 in UK Solar (Lower
Newton) LLP.
Net asset value and results
At 30 June 2015, the net asset value per 'J' Share was 99.9p, a small
reduction of 0.1p from the initial value resulting from the excess of
running costs over investment income while most of the funds have been
held in cash.
The loss on ordinary activities for the 'J' Shares, after taxation, for
the period was GBP8,000, being wholly related to revenue.
Following changes to the VCT regulations in 2014, there are now tight
restrictions on dividends that can be paid on new VCT shares. As a
result it is expected that no dividend will be paid to 'J' Shareholders
in the initial years following investment.
Outlook
The task of building the 'J' Share portfolio has very recently begun. 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 2015
Unrealised gain in % of Portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Oak Grove
Renewables
Limited 420 420 - 5.2%
Non-qualifying
investments
UK Solar (Lower
Newton) LLP 300 300 - 3.7%
720 720 - 8.9%
Cash at bank and
in hand 7,413 91.1%
Total 8,133 100%
SUMMARY OF INVESTMENT MOVEMENTS
'J' SHARE POOL
as at 30 June 2015
Additions GBP'000
Qualifying investments
Oak Grove Renewables Limited
420
Non-qualifying investments
UK Solar (Solar Newton) LLP 410
Total 830
Market Total
value at Disposal Gain against realised
Disposals Cost 01/01/15* proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-qualifying
investments
UK Solar (Lower
Newton) LLP 110 110 110 - -
110 110 110 - -
* adjusted for purchases made in the period
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 June 2015
30 Jun 31 Dec
30 Jun 2015 2014 2014
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 11:16 ET (15:16 GMT)
'C' Shares 'D' 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 3,193 5,907 7,341 8,885 720 26,046 22,172 28,204
Current assets
Debtors 89 130 119 286 31 655 272 417
Cash at bank and in
hand 348 1,391 407 3,485 7,413 13,044 11,728 7,182
437 1,521 526 3,771 7,444 13,699 12,000 7,599
Creditors: amounts
falling due within
one year (93) (144) (111) (110) (561) (1,019) (568) (734)
Net current
assets/(liabilities) 344 1,377 415 3,661 6,883 12,680 11,432 6,865
Net assets 3,537 7,284 7,756 12,546 7,603 38,726 33,604 35,069
Capital and reserves
Called up share
capital 18 25 11 13 8 75 64 67
Share capital to be
issued - - - - - - 431 -
Capital redemption
reserve 106 - - - - 106 106 106
Special reserve 1,495 7,515 9,346 (1,008) - 17,348 23,462 22,268
Share premium account - - - 13,607 7,760 21,367 10,685 13,608
Revaluation reserve (190) (626) (688) - - (1,504) (320) (289)
Capital reserve -
realised 1,334 - (1,033) - - 301 (1,033) (1,033)
Revenue reserve 774 370 120 (66) (165) 1,033 209 342
Total equity
shareholders' funds 3,537 7,284 7,756 12,546 7,603 38,726 33,604 35,069
Basic and diluted net asset value per:
'C' Share 49.3p 91.3p 98.2p
'A' Share 0.1p 0.1p 0.1p
'D' Share 72.9p 75.9p 71.3p
'E' Share 0.1p 0.1p 0.1p
'F' Share 71.7p 77.5p 75.5p
'H' Share 93.3p 99.6p 94.7p
'J' Share 99.9p n/a n/a
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
30 Jun 31 Dec
30 June 2015 2014 2014
'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
Opening
Shareholders'
funds 7,037 7,130 8,174 12,728 - 35,069 22,837 22,837
Issue of shares - - - - 7,767 7,767 11,117 14,009
Share issue
costs - - - - (156) (156) (422) (563)
Purchase of own
shares - - - - - - - -
Total
recognised
gains/(losses)
for the
period 89 154 (148) 154 (8) 241 340 677
Share capital
to be issued - - - - - - 431 -
Dividends (3,589) - (270) (336) - (4,195) (699) (1,891)
Closing
Shareholders'
funds 3,537 7,284 7,756 12,546 7,603 38,726 33,604 35,069
INCOME STATEMENT
for the six months ended 30 June 2015
Company Total
Six months ended Six months ended Year ended 31
30 Jun 2015 30 Jun 2014 Dec 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 1,411 - 1,411 657 - 657 1,466
Gains/(losses)
on investments
- realised - (362) (362) - - - -
- unrealised - (244) (244) - 197 197 226
1,411 (606) 805 657 197 854 1,692
Investment
management
fees (332) - (332) (270) - (270) (564)
Other expenses (148) - (148) (173) - (173) (296)
Return/(loss)
on ordinary
activities
before
taxation 931 (606) 325 214 197 411 832
Taxation (84) - (84) (71) - (71) (155)
Return/(loss)
attributable
to equity
shareholders 847 (606) 241 143 197 340 677
Return per 'C'
Share 7.7p (6.5p) 1.2p 0.9p 2.2p 3.1p 9.9p
Return per 'A'
Share - - - - - - -
Return per 'D'
Share 1.2p 0.4p 1.6p 1.0p 0.5p 1.5p (0.6p)
Return per 'E'
Share - - - - - - -
Return per 'F'
Share 0.3p (1.7p) (1.4p) 0.2p (0.1p) 0.1p 0.7p
Return per 'H'
Share 1.2p - 1.2p (0.8p) - (0.8p) (0.5p)
Return per 'J'
Share (0.2p) - (0.2p) n/a n/a n/a n/a
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 2015
Year
ended
Six months ended Six months ended 31 Dec
'C' Shares 30 Jun 2015 30 Jun 2014 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 621 - 621 168 - 168 391
Gains/(losses) on
investments
- realised - (412) (412) - - - -
- unrealised - (53) (53) - 154 154 529
621 (465) 156 168 154 322 920
Investment
management
fees (31) - (31) (44) - (44) (89)
Other expenses (24) - (24) (38) - (38) (64)
Return/(loss)
on ordinary
activities
before
taxation 566 (465) 101 86 154 240 767
Taxation (12) - (12) (20) - (20) (56)
Return/(loss)
attributable
to equity
shareholders 554 (465) 89 66 154 220 711
Year
ended
Six months ended Six months ended 31 Dec
'D' Shares 30 Jun 2015 30 Jun 2014 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 227 - 227 221 - 221 473
Gains/(losses)
on investments
- realised - 50 50 - - - -
- unrealised - (11) (11) - 55 55 (292)
227 39 266 221 55 276 181
Investment
management
fees (49) - (49) (53) - (53) (103)
Other expenses (32) - (32) (41) - (41) (67)
Return on
ordinary
activities
before
taxation 146 39 185 127 55 182 11
Taxation (31) - (31) (32) - (32) (70)
Return/(loss)
attributable
to equity
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 11:16 ET (15:16 GMT)
shareholders 115 39 154 95 55 150 (59)
INCOME STATEMENT
for the six months ended 30 June 2015
Year
ended
Six months ended Six months ended 31 Dec
'F' Shares 30 Jun 2015 30 Jun 2014 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 153 - 153 232 - 232 424
Losses on
investments
- realised - - - - - - -
- unrealised - (180) (180) - (12) (12) (11)
153 (180) (27) 232 (12) 220 413
Investment
management
fees (73) - (73) (107) - (107) (184)
Other expenses (46) - (46) (78) - (78) (117)
Return/(loss)
on ordinary
activities
before
taxation 34 (180) (146) 47 (12) 35 112
Taxation (2) - (2) (21) - (21) (41)
Return/(loss)
attributable
to equity
shareholders 32 (180) (148) 26 (12) 14 71
Year
ended
Six months ended Six months ended 31 Dec
'H' Shares 30 Jun 2015 30 Jun 2014 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 359 - 359 36 - 36 178
Gains/(losses)
on investments
- realised - - - - - - -
- unrealised - - - - - - -
359 - 359 36 - 36 178
Investment
management
fees (128) - (128) (66) - (66) (188)
Other expenses (36) - (36) (16) - (16) (48)
Return/(loss)
on ordinary
activities
before
taxation 195 - 195 (46) - (46) (58)
Taxation (41) - (41) 2 - 2 12
Return/(loss)
attributable
to equity
shareholders 154 - 154 (44) - (44) (46)
INCOME STATEMENT
for the six months ended 30 June 2015
Year
ended
Six months ended Six months ended 31 Dec
'J' Shares 30 Jun 2015 30 Jun 2014 2014
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 51 - 51 - - - -
Gains/(losses)
on investments
- realised - - - - - - -
- unrealised - - - - - - -
51 - 51 - - - -
Investment
management
fees (51) - (51) - - - -
Other expenses (10) - (10) - - - -
(Loss) on
ordinary
activities
before
taxation (10) - (10) - - - -
Taxation 2 - 2 - - - -
(Loss)
attributable
to equity
shareholders (8) - (8) - - - -
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2015
30 Jun 31 Dec
30 Jun 2015 2014 2014
'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 1
activities 515 110 29 (283) 522 893 306 762
Taxation
Corporation tax paid - - - - - - - (129)
Capital expenditure
Purchase of
investments - (8) (614) (1,775) (830) (3,227) (2,356) (10,413)
Sale of investments 2,919 1,258 470 23 110 4,780 98 2,153
Net cash
inflow/(outflow)
from capital
expenditure 2,919 1,250 (144) (1,752) (720) 1,553 (2,258) (8,260)
Equity dividends
paid (3,589) - (270) (336) - (4,195) (700) (1,891)
Net cash
(outflow)/inflow
before financing (155) 1,360 (385) (2,371) (198) (1,749) (2,652) (9,518)
Financing
Proceeds from share
issue - - - - 7,767 7,767 11,117 13,621
Share issue costs - - - - (156) (156) - (422) (175)
Purchase of own
shares - - - - - - - -
Share capital to be
issued - - - - - - 431 -
Net cash inflow from
financing - - - - 7,611 7,611 11,126 13,446
Increase/(decrease)
in cash 2 (155) 1,360 (385) (2,371) 7,413 5,862 8,474 3,928
NOTES TO THE UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2015
30 Jun 31 Dec
30 Jun 2015 2014 2014
'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 101 185 (146) 195 (10) 325 411 833
Losses/(gains) on investments 465 (39) 180 - - 606 (197) (226)
Decrease/(increase) in other debtors (23) 22 21 (227) (31) (238) (101) (248)
Increase/(decrease) in other creditors (16) (28) (24) (249) 524 207 16 278
(Decrease)/increase in amount due to subsidiary
undertaking (12) (30) (2) (2) 39 (7) 177 125
Net cash inflow/(outflow) from operating activities 515 110 29 (283) 522 893 306 762
2 Analysis of net funds
Beginning of period 503 31 792 5,856 - 7,182 3,254 3,254
Net cash inflow/(outflow) (155) 1,360 (385) (2,371) 7,413 5,862 8,474 3,928
End of period 348 1,391 407 3,485 7,413 13,044 11,728 7,182
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half-yearly results cover the six months to 30 June
2015 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 2014, which were prepared under UK Generally Accepted
Accounting Practice.
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 are in respect of the six month period
ended 30 June 2014 and the year ended 31 December 2014 respectively.
5. Dividends
Year ended
Six months ended 31 Dec
30 June 2015 2014
Per share Revenue Capital Total Total
Paid in period pence GBP'000 GBP'000 GBP'000 GBP'000
'C' Shares
Y/E Dec 2014 Final 50.0p - 3,589 3,589 -
P/E Dec 2013 Final 2.5p - - - 179
- 3,589 3,589 179
'D' Shares
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