We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Downing Two C | LSE:DP2C | London | Ordinary Share | GB00B3D74S43 | C' SHS 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 |
Hot Features
Premium
TIDMDP2C
DOWNING TWO VCT plc
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015
FINANCIAL HIGHLIGHTS
31 Dec 31 Dec
2015 2014
Pence Pence
'C' Share pool
Net asset value per 'C' Share 53.9 98.6
Net asset value per 'A' Share 0.1 0.1
Cumulative distributions per 'C' Share 75.0 25.0
Adjusted for performance fee estimate (7.6) -
Total return per 'C' Share and 'A' Share 121.4 123.7
'D' Share pool
Net asset value per 'D' Share 51.8 71.5
Net asset value per 'E' Share 0.1 0.1
Cumulative distributions per 'D' Share 49.5 22.5
Total return per 'D' Share and 'E' Share 101.4 94.1
'F' Share pool
Net asset value per 'F' Share 71.9 75.8
Cumulative distributions per 'F' Share 20.0 15.0
Total return per 'F' Share 91.9 90.8
'G' Share pool
Net asset value per 'G' Share 86.3 90.2
Cumulative distributions per 'G' Share 15.0 10.0
Total return per 'G' Share 101.3 100.2
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Annual Report for the year ended 31 December
2015. The Company currently has four share pools each of which are in
different phases of their expected life.
Since the year end, the oldest remaining share pool, the 'C' Share pool,
has completed the task of returning funds to Shareholders and has
delivered an excellent final outcome. The 'D' Share pool has also
recently commenced the process of returning funds to Shareholders
although there is some way to go to complete the task. The other share
pools are effectively fully invested and are not scheduled to start
realising their investment portfolios for some time yet.
I would also like to welcome new 'K' Shareholders to Company. The 'K'
Share fundraising was launched in December 2015, but the first 'K'
Shares were not allotted until after the year end and therefore have
limited coverage in this Annual Report.
A brief summary of each share pool is provided below. More detailed
reviews are provided in the Investment Manager's Report and Review of
Investments.
'C' Share pool
The Company's 'C' Shares were originally issued in 2008 and 2009. In
line with the Company's planned exit strategy, the 'C' Share pool exited
from most of its remaining investments in the year, which realised
GBP5.7 million. As at the 31 December 2015, the 'C' Share pool held a
portfolio of 2 investments with a total value of GBP748,000.
At 31 December 2015, the Net Asset Value ("NAV") of a combined holding
of one 'C' Share and one 'A' Share stood at 54.0p, which represents an
increase of 5.1% over the year after adjusting for the dividends of
50.0p per share paid in the year. Dividends paid to date total 75.0p.
Since the year end, realisations from the final two investments in
Quadrate Spa Limited and Quadrate Catering Limited have been achieved,
generating proceeds of GBP748,000. This resulted in the Company
declaring final dividends of 30.6p per 'C' Share and 15.2p per 'A' Share
which were paid on 24 March 2016, triggering a performance fee payable
to the management team equivalent to 7.6p per 'C' Share.
After providing for the performance fee, Total Return (cumulative
dividends to date) will be 120.8p, compared to the initial cost, net of
income tax relief of 70.0p. The Board believes that, considering the
economic climate in which the Investment Manager had to realise much of
the portfolio, this is an excellent return.
Following the final dividend, the task of returning funds to these
Shareholders is considered to be complete and no further dividends are
expected to be paid to 'C' Shareholders. Steps will be taken to wind up
this share class in due course.
'D' Share pool
The 'D' Shares were originally issued in 2010 and at the year end held a
portfolio of 13 investments with a total value of GBP4.4 million.
At 31 December 2015, the Net Asset Value ("NAV") of a combined holding
of one 'D' Share and one 'E' Share stood at 51.9p, which represents an
increase of 10.2% over the year after adjusting for the dividends of
27.0p per share paid in the year. Total Return (NAV plus cumulative
dividends to date) is now 101.4p, compared to the initial NAV of 94.5p.
During the year, the Manager commenced the task of realising the pool's
investment portfolio with a number of investments sold producing
proceeds of GBP3.6 million.
These proceeds were distributed to 'D' Shareholders by way of dividend
paid on 18 December 2015 (27.0p per 'D' share) and on 24 March 2016
(17.0p per 'D' Share). These returns bring total dividends paid since
the launch of the share class to 66.5p per 'D' Share. Since the period
end further investments have been realised generating an additional
GBP1.5 million.
The 'D' Share pool now has five main investments remaining and work is
ongoing to achieve good returns from each of them. The Manager is
optimistic that the majority will be realised before the end of the year,
although is cautious in respect of Aminghurst Limited where it appears
possible that a full exit might take longer. The Board intends to pay
further dividends as soon as a significant level of funds has been
generated by further realisations.
'F' Share pool
The 'F' Share pool was launched in 2012 and now holds a portfolio of 23
investments with a total value of GBP7.4 million.
At 31 December 2015, the 'F' Share NAV stood at 71.9p, which represents
an increase of 1.5% over the year after adjusting for the dividends of
5.0p per share paid in the year. Dividends paid to date total 20.0p such
that Total Return (NAV plus cumulative dividends to date) is now 91.9p,
compared to the initial NAV of 94.5p.
In line with the dividend policy, the Board is proposing to pay a final
dividend of 2.5p per 'F' Share on 24 June 2016 to Shareholders on the
register at the close of business on 20 May 2016.
'G' Share pool
The 'G' Share pool was launched in 2013 and completed its initial
investment phase this year. At 31 December 2015, the pool held 19
investments with a total value of GBP18.9 million.
At 31 December 2015, the 'G' Share NAV stood at 86.3p, which represents
a small increase over the initial year of 1.2% after adjusting for the
dividends of 5.0p per share paid in the year. Total Return (NAV plus
cumulative dividends to date) is now 101.3p, compared to the initial NAV
of 100.0p.
In line with the dividend policy, the Board is proposing to pay a final
dividend of 2.5p per 'G' Share on 24 June 2016 to Shareholders on the
register at the close of business on 20 May 2016.
Share buybacks
For share classes within the initial five year period, the Company
operates a general policy of buying in its own shares for cancellation
when any become available in the market. This policy is currently in
place for the 'F' Shares and 'G' Shares. During this period, any such
purchases will be undertaken at a price equal to the latest published
NAV (i.e. at nil discount). Any buybacks are subject to regulatory
restrictions and other factors such as the availability of liquid funds.
The Company is now unlikely to make any further purchases of 'D' Shares
and 'E' Shares as the process of returning funds to those Shareholders
is now underway. No purchases of 'C' Shares and 'A' Shares will be
undertaken as the Shares now have negligible value and steps will be
taken in due course to cancel these share classes.
Two purchases of 'G' Share were undertaken in the year. A total of
50,450 'G' Shares were purchased at an average price of 88.8p per share
and were subsequently cancelled.
A resolution to renew the authority for the Company to purchase its own
shares will be proposed at the forthcoming Annual General Meeting.
Board change
As I reported on in my statement with the Half Yearly Report.
Christopher McCann joined the Board as a non-executive Director on 28
August 2015.
Christopher is an experienced VCT director who is familiar with a number
of the Company's investments. He also has extensive banking, corporate
finance and unquoted investment management experience, including fifteen
years at Bridgepoint Capital and is proving to be a valuable addition to
the Board.
The Board now comprises three non-executive Directors which we believe
is an appropriate number for a Company of this size.
Fundraising
The 'K' Share Offer for Subscription was launched on 15 December 2015.
As at the date of this report, the Offer had raised gross proceeds
GBP12.3 million which makes the 'K' Share pool of a sufficient size to
build a suitable portfolio.
VCT Rules
As Shareholders may be aware, a number of potentially significant
changes to the VCT rules were made in November 2015 and some further
changes announced in the Budget in March 2016. The new rules have
introduced a limit on the age for most new investee companies of seven
years, a lifetime cap of GBP15 million on the total amount of VCT and
similar funding a company can receive and a ban on VCT funds being
used by an investee company to acquire another trade or business. They
have been brought in to bring the VCT scheme into line with the European
Union's Risk Capital Guidelines. In addition, new restrictions on
non-qualifying investments have been introduced and all investments into
power generation businesses are now effectively banned.
The impact of the new rules on most of the share pools is expected to be
minimal as they are not expecting to make any new investments. The new
'K' Share funds will however have to be invested under the new
regulations. The Manager believes that, although these new restrictions
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
will be significant and are unwelcome, it will still be possible to
build a balanced portfolio of good quality investments and has already
started to make progress to that end.
Annual General Meeting ("AGM")
The Company's ninth AGM will be held at Ergon House, Horseferry Road,
London, SW1P 2AL at 10:30 a.m. on 15 June 2016.
One item of special business will be proposed at the AGM in connection
with the authority for the Company to buy back shares as described
above.
Outlook
Following the successful completion of the return of funds to 'C' Share
pool investors, over the coming year, a significant proportion of the
Investment Manager's activity will be on seeking to exit the remaining
'D' Share investments in a timely manner and at optimal value.
Investment activity is expected to be limited over the coming year in
the 'F' Share pool and 'G' Share pool, which are now both fully invested
and will not start seeking to unwind their portfolios until 2018. The
Manager will continue to monitor those investments closely during the
remaining period to maximize prospects for growth before the exit dates.
The task of investing the new 'K' Share funds is now underway and we
expect to see a significant level of new investment activity over the
year as a portfolio is built from scratch within the constraints of the
new VCT rules.
Although there will be challenges faced by each share pool, generally we
believe that the Company is well positioned to deliver satisfactory
results to each group of Shareholders over the full life of their
investment. I look forward to updating Shareholders of all share pools
in my statement in the Half Yearly Report.
Hugh Gillespie
Chairman
25 April 2016
INVESTMENT MANAGER'S REPORT- 'C' SHARE POOL
Introduction
Soon after the year end, the 'C' Share pool completed the task of
realising its investments and, on 24 March 2016, paid final dividends.
Final outcome
Over the life of their investment, investors in the 'C' Share pool
received total dividends of 105.61p per 'C' Share and 15.22p per 'A'
Share making a total return of 120.83p for an original investment of
100p (70p net of income tax relief.) This equates to a return of 9.8%
per annum over the life of the investment, which we believe represents a
very good return to Shareholders.
'C' Share pool - investment activity
Investment activity throughout the year was almost exclusively focussed
on realisations. Total disposal proceeds of GBP5,671,000 were received
in the year.
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.
Domestic Solar Limited, the installer of domestic solar panels across
the UK, was sold and generated an uplift over original cost of
GBP165,000 on proceeds of GBP665,000.
Redmed Limited, the Lincoln bar operator, generated proceeds of
GBP610,000 which represented an uplift over original cost of GBP102,000.
Vermont Developments Limited sold a property development site in Salford,
which was its only remaining asset, and generated proceeds for the 'C'
Share pool of GBP156,000 and a gain against cost of GBP131,000.
The Thames Club Limited generated proceeds equivalent to its original
cost of GBP500,000.
The GBP210,000 non-qualifying loan in Hoole Hall Country Club Holdings
Limited was repaid at par.
Unfortunately, not all exit proceeds exceeded original cost and two were
sold at discounts in order to provide liquidity within an acceptable
timeframe. These included Future Biogas (SF) Limited which cost
GBP697,000 and had proceeds of GBP442,000; and Mosaic Spa and Health
Clubs Limited which cost GBP125,000 and had proceeds of GBP46,000.
The 3D Pub Co Limited which cost GBP267,000 and had proceeds of
GBP233,000 and Ecossol Limited which cost GBP250,000 and had proceeds of
GBP238,000 were both realised in the period at values marginally below
cost due to underperformance of the investments.
Several smaller exits also completed including Honeycombe Pubs VCT
Limited for GBP66,000, Chapel Street Services Limited, Chapel Street
Food and Beverage Limited and Chapel Street Hotel Limited for a combined
total of GBP105,000.
Quadrate Spa Limited and Quadrate Catering Limited were the last
remaining investments and were sold in January 2016 at a value of
GBP55,000 above original costs.
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 now has negligible valued and no further dividends are
expected. In due course, steps will be taken to cancel the 'C' Share and
'A' Share classes.
Downing LLP
25 April 2016
REVIEW OF INVESTMENTS - 'C' SHARE POOL
Portfolio of investments
The following investments, all of which are incorporated in England and
Wales, were held at 31 December 2015:
'C' Share pool
Valuation
movement % of
Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying investments and partially qualifying
investments
Quadrate Spa Limited* 364 381 17 10.2%
Quadrate Catering Limited 330 367 8 9.8%
694 748 25 20.0%
694 748 25 20.0%
Cash at bank and in hand 2,995 25 80.0%
Total investments 3,743 100%
*Part-qualifying investment
Summary of investment movements
Additions
Cost
VCT qualifying and partially qualifying investments GBP'000
Redmed Limited 158
Total 'C' Share pool 158
Disposals
Gain
Disposal against Total realised
Cost MV at 01/01/15 proceeds cost gain during the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying and partially qualifying
investments
Domestic Solar
Limited 500 560 665 165 105 **
Chapel Street
Food and
Beverage
Limited 50 13 45 (5) 32
Chapel Street
Services
Limited 50 13 42 (8) 29
Ecossol Limited 250 213 238 (12) 25
The 3D Pub Co
Limited 267 227 233 (34) 6
Redmed Limited 508 609 610 102 1
Atlantic Dogstar
Limited 663 1,260 1,260 597 -
Future Biogas
(SF) Limited 697 476 442 (255) (34)
Mosaic Spa and
Health Clubs
Limited 125 96 46 (79) (50)
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
Chapel Street
Hotel Limited 2 1 18 16 17
The Thames Club
Limited 500 500 500 - -
Hoole Hall
Country Club
Holdings
Limited 210 210 210 - -
Honeycombe Pubs
VCT Limited 188 66 66 (122) -
AEW Pubs No1
Limited - 261 261 261 -
Westow House Pub
No1 Limited - 15 - - (15) **
East Dulwich
Tavern Pub No1
Limited - 30 - - (30) **
5,108 6,010 5,671 563 (339)
* Adjusted for additions in the year
** Disposal proceeds were supplemented by dividends totalling GBP517,000
INVESTMENT MANAGER'S REPORT- 'D' SHARE POOL
Introduction
The 'D' Share pool holds investments in 13 companies and is fully
invested. The focus this year has been on realisations and ten full
exits have completed in the period. We are in the process of developing
realisation plans for the remainder of the portfolio.
Net asset value and results
At 31 December 2015, the 'D' Share NAV stood at 51.8p and the 'E' Share
NAV at 0.1p, giving a combined NAV of 51.9p. Total Return (NAV plus
cumulative dividends to date) was 101.4p for a combined holding of one
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
'D' and one 'E' Share. This represents a net increase of 7.3p over the
period (after adjusting for dividends paid during the period of 27.0p
per 'D' Share), equivalent to an increase of 10.2%.
The return on ordinary activities for the 'D' Shares for the period was
a gain of GBP723,000 (2014: loss GBP50,000) being a revenue profit of
GBP339,000 (2014: GBP242,000) and a capital gain of GBP384,000 (2014:
loss GBP292,000).
'D' Share pool - investment activity
Two small new investments completed in the period, Redmed Limited, the
owner and operator of a bar in Lincoln for GBP194,000; and Future Biogas
(SF) Limited, the operator of a biogas plant in Norfolk for GBP169,000.
Ten full exits occurred in the period generating proceeds of
GBP2,900,000 and a realised gain over the opening 2015 valuation of
GBP294,000.
Domestic Solar Limited, the installer of domestic solar panels across
the UK, was sold and generated an uplift over original cost of
GBP132,000 on proceeds of GBP532,000.
The investment in Alpha Schools Holdings Limited was realised in the
period for GBP513,000, an uplift of GBP146,000 over original cost
Liverpool Nurseries (Holdings) Limited generated proceeds of GBP427,000
and an uplift over the brought forward market value of GBP40,000,
although marginally below original investment cost of GBP435,000.
Green Electricity Generation Limited was sold at an uplift over cost of
GBP65,000 and generated proceeds of GBP315,000.
Other full exits in the period that generated proceeds above cost
include: Slopingtactic Limited which cost GBP196,000 and had proceeds of
GBP248,000; Progressive Energies Limited which cost GBP170,000 and had
proceeds of GBP203,000; and Ridgeway Pub Company Limited which cost
GBP137,000 and had proceeds GBP150,000.
The exit of West Tower Property Limited returned the original cost of
GBP250,000 to the Share pool.
Unfortunately not all exits exceeded original cost and some were sold at
discounts due to performance issues. These included Ecossol Limited
which cost GBP250,000 and had proceeds of GBP237,000 and Kilmarnock
Monkey Bar Limited which had cost GBP42,000 and had proceeds of
GBP25,000.
Partial exits totalling GBP650,000 also took place during the period.
The most significant of these were Future Biogas (Reepham Road) Limited
with proceeds equivalent to cost of GBP261,000 and Redmed Limited which
cost GBP166,000 and received proceeds of GBP176,000.
'D' Share pool - portfolio valuation
The majority of the 'D' Share portfolio performed in line with
expectations during the year. There were a small number of valuation
movements which resulted in a net unrealised profit of GBP87,000.
Fenkle Street LLP, is a property development company based in Newcastle.
The hotel is trading well and an uplift in the value of GBP98,000 has
been recognised.
Quadrate Catering Limited and Quadrate Spa Limited were in an exit
process at the period end date and have subsequently completed. The
investments have been valued at the full amount of exit proceeds
received which represented a total uplift of GBP81,000 across both
companies.
Kidspace Adventures Holdings Limited, the owner of three well
established children's play areas in Croydon, Romford and Epsom
continues to perform well and an increase in the valuation of GBP17,000
has been recognised in the period.
Future Biogas (Reepham Road) Limited, the owner and operator of a biogas
plant in Norfolk, has not performed in line with initial expectations
and while the issues have now been resolved, performance to date is
notably below plan. This has resulted in a decrease in the valuation of
GBP65,000.
Small movements in value were also made on two investments: GBP47,000
decrease to Mosaic Spa and Health Clubs Limited; and a GBP7,000 uplift
on Avon Solar Limited.
Outlook
The realisation of the 'D' share pool investments has continued well and
exit plans for the remaining investments are progressing. We believe
that there are good prospects for the majority of the remaining
investment portfolio to be realised by the end of 2016, although we are
cautious in respect of Aminghurst, where it make take more time to
finally exit.
Downing LLP
25 April 2016
REVIEW OF INVESTMENTS - 'D' SHARE POOL
Portfolio of investments
The following investments, all of which are incorporated in England and
Wales, were held at 31 December 2015:
'D' Share pool
Valuation
movement % of
Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying and partially
qualifying investments
Quadrate Catering Limited 441 538 57 10.7%
Quadrate Spa Limited* 496 520 24 10.3%
Kidspace Adventures Holdings
Limited 375 465 17 9.2%
Mosaic Spa and Health Clubs
Limited* 521 346 (47) 6.9%
Westcountry Solar Solutions
Limited 250 250 - 5.0%
Avon Solar Limited 210 218 7 4.3%
Future Biogas (Reepham Road)
Limited 581 196 (65) 3.9%
Camandale Limited* 422 2 (1) 0.0%
3,296 2,535 (8) 50.3%
Non-qualifying investments
Aminghurst Limited 1,321 1,321 - 26.2%
Fenkle Street LLP 122 220 98 4.3%
Future Biogas (SF) Limited 169 169 - 3.4%
Commercial Street Hotel Limited 100 100 - 2.0%
Redmed Limited 27 24 (3) 0.5%
1,739 1,834 95 36.4%
5,035 4,369 87 86.7%
Cash at bank and in hand 667 13.3%
Total investments 5,036 100%
*Part-qualifying investment
Summary of investment movements
Additions
Cost
GBP'000
VCT qualifying and partially qualifying investments
Mosaic Spa and Health Clubs Limited 46
Camandale Limited 8
Non-qualifying investments
Redmed Limited 194
Future Biogas (SF) Limited 169
Total 'D' Share pool 417
Disposals
Gain Total realised
Disposal against gain
Cost MV at 01/01/15 proceeds cost during the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Domestic Solar
Limited 400 448 532 132 84 **
Alpha Schools
Holdings
Limited 367 438 513 146 75
Liverpool
Nurseries
(Holdings)
Limited 435 387 427 (8) 40
Ecossol Limited 250 213 237 (13) 24
Ridgeway Pub
Company
Limited 137 126 150 13 24
Slopingtactic
Limited 196 226 248 52 22
Progressive
Energies
Limited 170 190 203 33 13
Green
Electricity
Generation
Limited 250 303 315 65 12
Future Biogas
(Reepham Road)
Limited 261 261 261 - -
West Tower
Property
Limited 250 250 250 - -
Camandale
Limited 102 35 28 (74) (7)
Non-qualifying
investments
Redmed Limited 166 166 176 10 10
Aminghurst
Limited 185 185 185 - -
Kilmarnock
Monkey Bar
Limited 42 25 25 (17) -
Total 'D' Share
pool 3,211 3,253 3,550 339 297
* Adjusted for additions in the year
** Disposal proceeds were supplemented by dividends totalling GBP7,000
INVESTMENT MANAGER'S REPORT- 'F' SHARE POOL
Introduction
The 'F' Share pool is fully invested in a portfolio focussed on asset
backed businesses and those with predictable revenue streams. In the
period, two new qualifying investments were made at a total cost of
GBP1.2m. Three qualifying follow on investments totalling GBP456,000
were also made.
Four non-qualifying investments were realised in the period, generating
total proceeds of GBP326,000.
Net asset value and results
At 31 December 2015, the 'F' Share NAV stood at 71.9p. Total Return (NAV
plus cumulative dividends to date) for Shareholders who invested in the
original share offer is now 91.9p. This represents a net increase of
1.1p per share over the period (after adjusting for dividends paid
during the period of 5.0p per Share), equivalent to an increase of 1.5%.
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
The return on ordinary activities for the 'F' Share pool for the period
was a gain of GBP118,000 (2014: GBP87,000) being a revenue profit of
GBP175,000 (2014: GBP98,000) and a capital loss of GBP57,000 (2014:
GBP11,000).
'F' Share pool - investment activity
A new investment of GBP1,000,000 was made in Apex Energy Limited. The
company is seeking to undertake the build and operation of electricity
generation power plants.
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, Pearce and Saunders DevCo Limited 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.
A further qualifying investment of GBP65,000 was also made in Vulcan
Renewables Limited.
Two further partially qualifying and non-qualifying investments were
made in the period: Redmed Limited for GBP87,000 and London City
Shopping Centre Limited for GBP23,000.
One full exit of a qualifying company occurred in the period: Tor Solar
Limited, the operator of a solar farm in the south west of England,
generated proceeds of GBP753,000 and a GBP73,000 profit over the
original investment cost.
The partial exit of Redmed Limited generated proceeds of GBP329,000 in
the period. This represented a small uplift of GBP10,000 over cost.
During the year, several realisations of non-qualifying loans were made:
Hoole Hall Hotel Limited for GBP84,000; Dominions House Limited for
GBP59,000; and The 3D Pub Co Limited for GBP55,000.
'F' Share pool - portfolio valuation
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. There have however been several adjustments made which have
resulted in a net unrealised loss of GBP136,000 in the year.
Following a further round of financing the valuation of Vulcan
Renewables Limited was increased by GBP126,000.
Lambridge Solar Limited, the owner of a solar farm in Lincolnshire is
performing well and the valuation has been increased by GBP43,000.
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 GBP34,000 respectively.
Kidspace Adventures Holdings Limited, which owns three well established
children's play areas in Croydon, Romford and Epsom continues to perform
well. As a result the valuation has been increased by GBP11,000.
Unfortunately, these increases were offset by three value reductions.
The pubs owned and operated by Pearce and Saunders Limited have
experienced underperformance in the year and the valuation has been
reduced by GBP248,000.
Performance at two of the Share pool's Scottish nightclubs, Fubar
Stirling Limited and City Falkirk Limited has continued to operate below
expectations and value reductions of GBP99,000 and GBP30,000
respectively have been made. Whilst we continue to work closely with the
management of both clubs to bring trading back on track, it is clear
that the depressed economic conditions in the region are a major
contributing factor to the weak performance.
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
2018.
Downing LLP
25 April 2016
REVIEW OF INVESTMENTS - 'F' SHARE POOL
Portfolio of investments
The following investments, all of which are incorporated in England and
Wales, were held at 31 December 2015:
Valuation
movement % of
'F' Share pool Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying and partially
qualifying investments
Apex Energy Limited 1,000 1,000 - 12.9%
Vulcan Renewables Limited 653 779 126 10.0%
Goonhilly Earth Station Limited 760 760 - 9.8%
Lambridge Solar Limited 500 543 43 7.0%
Merlin Renewables Limited 500 500 - 6.4%
Grasshopper 2007 Limited 378 378 - 4.9%
Augusta Pub Company Limited 290 324 34 4.2%
Kidspace Adventures Holdings
Limited 250 310 11 4.0%
Pearce and Saunders Limited* 497 248 (248) 3.2%
Pabulum Pubs Limited 200 229 29 2.9%
Atlantic Dogstar Limited 200 200 - 2.6%
Fresh Green Power Limited 200 200 - 2.6%
City Falkirk Limited 422 177 (30) 2.3%
Fubar Stirling Limited 268 169 (99) 2.2%
Green Energy Production UK
Limited 100 100 - 1.3%
Cheers Dumbarton Limited 48 17 - 0.2%
Redmed Limited* 18 13 (2) 0.0%
Lochrise Limited 13 - - 0.0%
6,297 5,947 (136) 76.5%
Non-qualifying investments
Aminghurst Limited 839 839 - 10.8%
Baron House Developments LLP 481 481 - 6.2%
London City Shopping Centre
Limited 66 66 - 0.9%
Pearce and Saunders DevCo
Limited 46 46 - 0.6%
Southampton Hotel Developments
Limited 298 - 0.0%
1,730 1,432 - 18.5%
8,027 7,379 (136) 95.0%
Cash at bank and in hand 392 5.0%
Total investments 7,771 100%
* Part-qualifying investment
Summary of investment movements
Additions
Cost
GBP'000
VCT qualifying and partially qualifying investments
Apex Energy Limited 1,000
Pearce and Saunders Limited 304
Atlantic Dogstar Limited 200
Redmed Limited 87
Vulcan Renewables Limited 65
Non-qualifying investments
Pearce and Saunders DevCo Limited 46
London City Shopping Centre Limited 23
Total 'F' Share pool 1,725
Disposals
Total realised
Gain gain
MV at Disposal against during
Cost 01/01/15 proceeds cost the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Tor Solar PV
Limited 680 680 753 73 73
Redmed Limited 319 323 329 10 6
Pearce and
Saunders
Limited 257 257 257 - - **
Non-qualifying
investments
Aminghurst
Limited 128 128 128 - -
Hoole Hall Hotel
Limited 84 84 84 - -
Dominions House
Limited 59 59 59 - -
The 3D Pub Co
Limited 55 55 55 - -
Total 'F' Share
pool 1,582 1,586 1,665 83 79
* Adjusted for additions in the year
** Disposal proceeds were supplemented by dividends totalling GBP46,000
INVESTMENT MANAGER'S REPORT- 'G' SHARE POOL
Introduction
Over the course of the year, the 'G' Share pool has continued to build
its qualifying portfolio and is fully qualifying as at 31 December 2015.
Net asset value and results
At 31 December 2015, the 'G' Share NAV stood at 86.3p. Total Return (NAV
plus cumulative dividends to date) for Shareholders who invested in the
original share offer is now 101.3p. This represents a net increase of
1.1p per Share over the period (after adjusting for dividends paid
during the period of 5.0p per Share), equivalent to an increase of 1.2%.
The return on ordinary activities for the 'G' Share pool for the period
was a gain of GBP286,000 (2014: GBP18,000) being a revenue profit of
GBP257,000 (2014: GBP17,000) and a capital gain of GBP29,000 (2014:
GBP1,000).
Investment activity
During the period the 'G' Share pool made seven new qualifying
investments and two follow on investments at a total cost of
GBP11,745,000. Of these investments, seven were VCT qualifying and two
were non-qualifying.
Brief details of the qualifying investments (or investments that will
become qualifying in due course) are as follows:
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
GBP3.5 million was invested in Atlantic Dogstar Limited in January 2015.
The company owns and operates five freehold pubs in London.
The 'G' Share pool invested GBP1,977,000 in Kidspace Adventures Holdings
Limited, which owns three well established children's play areas in
Croydon, Romford and Epsom.
Antelope Pub Limited owns and operates a pub of the same name in Tooting,
London. GBP1,760,000 has been invested in the company in the period.
A new investment of GBP1,300,000 was made in Apex Energy Limited. The
company is seeking to undertake the build and operation of electricity
generation power plants.
GBP1,250,000 has been invested in Hedderwick Limited. The company is
seeking a wedding venue site requiring investment.
Oak Grove Renewables Limited operates an anaerobic digestion plant in
Norfolk. GBP420,000 was invested in the company in the period.
In addition to the above, a number of non-qualifying investments were
made in the form of secured loans.
These help to generate investment income on funds ahead of them being
employed in VCT qualifying investments. The most significant of these
was Hobblers Heath Limited, which is building a children's adventure
playground in Hounslow, West London. GBP1,325,000 has been invested in
this company. GBP175,000 has also been invested in Redmed Limited, the
owner and operator of a bar in Lincoln.
11 non-qualifying loans were fully or partially repaid in the period and
generated total proceeds of GBP6,412,000. Of these 11, seven were repaid
in full and generated total proceeds of GBP5,663,000.
Full repayment was made on Harrogate Street LLP of GBP1.4m; Deeside
Solar Farms Limited of GBP1.2m; Woodbridge Solar Limited of GBP1.2m;
Vulcan Renewables Limited of GBP940,000, Future Biogas (SF) Limited of
GBP525,000; Antelope Pub Limited of GBP300,000; and Dominions House
Limited of GBP98,000.
The 'G' Share pool investments have performed in line with expectations
over the period and the majority continue to be valued at original cost.
Four companies had their valuation reviewed at the period end and
generated a small uplift of GBP16,000 overall.
The most significant of these was a value reduction on Oak Grove
Renewables Limited of GBP105,000 due to performance issues at the
anaerobic digestion plant.
This was more than offset by good performance at two pub companies:
Augusta Pub Company and Pabulum Pubs Limited. Both are performing ahead
of plan and were uplifted by GBP68,000 and GBP58,000 respectively.
Outlook
Following the exits of a number of non-qualifying investments and the
redeployment of this capital to qualifying investments, the 'G' Share
investment portfolio now holds more than 70% of its funds in qualifying
investments. Our focus has now shifted to close monitoring and support
of the portfolio companies in order to nurture growth before the
ultimate exit date.
Downing LLP
25 April 2016
REVIEW OF INVESTMENTS - 'G' SHARE POOL
Portfolio of investments
The following investments, all of which are incorporated in England and
Wales, were held at 31 December 2015:
Valuation
movement % of
'G' Share pool Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000
VCT qualifying and partially
qualifying investments
Atlantic Dogstar Limited 3,500 3,500 - 16.0%
Kidspace Adventures Holdings
Limited 1,977 1,977 - 9.1%
Antelope Pub Limited 1,760 1,760 - 8.1%
Goonhilly Earth Station Limited 1,710 1,710 - 7.8%
Apex Energy Limited 1,300 1,300 - 6.0%
Hedderwick Limited 1,250 1,250 - 5.7%
Grasshopper 2007 Limited 1,050 1,050 - 4.8%
Augusta Pub Company Limited 580 648 68 3.0%
Pabulum Pubs Limited 400 458 58 2.1%
Oak Grove Renewables Limited 420 315 (105) 1.4%
Redmed Limited 37 27 (5) 0.1%
13,984 13,995 16 64.1%
Non-qualifying investments
Hobblers Heath Limited 1,325 1,325 - 6.1%
Baron House Developments LLP 1,093 1,093 - 5.0%
Pub People Limited 873 873 - 4.0%
Aminghurst Limited 801 801 - 3.7%
Ludlow Taverns Limited 387 387 - 1.8%
Pearce and Saunders Limited 193 193 - 0.9%
London City Shopping Centre
Limited 110 110 - 0.5%
Craft Beer Pub Co Limited 92 92 - 0.4%
4,874 4,874 - 22.4%
18,858 18,869 16 86.5%
Cash at bank and in hand 2,967 13.5%
Total investments 21,836 100.0%
*Part-qualifying investment
Summary of investment movements
Additions
Cost
GBP'000
VCT qualifying and partially qualifying investments
Atlantic Dogstar Limited 3,500
Kidspace Adventures Holdings Limited 1,977
Antelope Pub Limited 1,760
Apex Energy Limited 1,300
Hedderwick Limited 1,250
Oak Grove Renewables Limited 420
Redmed Limited 175
Non-qualifying investments
Hobblers Heath Limited 1,325
London City Shopping Centre Limited 38
Total 'G' Share pool 11,745
Disposals
Gain
Disposal against Total realised
Cost MV at 01/01/15 proceeds cost gain during the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Redmed Limited 638 644 657 19 13
Antelope Pubs
Limited 300 300 300 - -
Non-qualifying
investments
Pub People
Limited 24 24 24 - -
Aminghurst
Limited 199 199 199 - -
Ludlow Taverns
Limited 33 33 33 - -
Pearce and
Saunders
Limited 493 493 493 - -
Dominions House
Limited 98 98 98 - -
Harrogate
Street LLP 1,400 1,400 1,400 - -
Future Biogas
(SF) Limited 525 525 525 - -
Woodbridge
Solar Limited 1,200 1,200 1,200 - -
Deeside Solar
Farm Limited 1,200 1,200 1,200 - -
Vulcan
Renewables
Limited 940 940 940 - -
7,050 7,056 7,069 19 13
* Adjusted for additions in the year
Directors' responsibilities statement
The Directors are responsible for preparing the Report of the Directors,
the Directors' Remuneration Report, the Strategic Report and the
financial statements in accordance with applicable law and regulations.
They are also responsible for ensuring that the Annual Report includes
information required by the Listing Rules of the Financial Conduct
Authority.
Company law requires the directors to prepare financial statements for
each financial year. Under that law the directors have elected to
prepare the financial statements 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). Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the company and of the profit
or loss of the company for that year.
In preparing these financial statements the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and
prudent;
-- state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements; and
-- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the company's transactions, to
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
disclose with reasonable accuracy at any time the financial position of
the company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In addition, each of the Directors considers that the Annual Report,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company's
performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included
in annual reports may differ from legislation in other jurisdictions.
Statement as to disclosure of information to Auditor
The Directors in office at the date of the report have confirmed, as far
as they are aware, that there is no relevant audit information of which
the Auditor is unaware. Each of the Directors has confirmed that they
have taken all the steps that they ought to have taken as Directors in
order to make themselves aware of any relevant audit information and to
establish that it has been communicated to the Auditor.
INCOME STATEMENT
for the year ended 31 December 2015
Year ended 31 December
2015 Year ended 31 December 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 2,663 - 2,663 1,959 - 1,959
Gain on investments - 41 41 - 227 227
2,663 41 2,704 1,959 227 2,186
Investment
management
fees (753) - (753) (941) - (941)
Other expenses (251) - (251) (287) - (287)
Return on ordinary
activities before
tax 1,659 41 1,700 731 227 958
Tax on total
comprehensive
income and
ordinary
activities (201) - (201) (179) - (179)
Return attributable
to equity
shareholders 1,458 41 1,499 552 227 779
Basic and diluted
return/(loss) per:
'C' Share 9.6p (4.4p) 5.2p 2.7p 7.4p 10.1p
'A' Share - - - - - -
'D' Share 3.4p 3.8p 7.2p 2.4p (2.9p) (0.5p)
'E' Share - - - - - -
'F' Share 1.6p (0.5p) 1.1p 0.9p (0.1p) 0.8p
'G' Share 1.0p 0.1p 1.1p 0.1p - 0.1p
All Revenue and Capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued
during the year. The total column within the Income Statement represents
the Statement of Total Comprehensive Income of the Company prepared in
accordance with Financial Reporting Standards ("FRS 102"). The
supplementary revenue and capital return columns are prepared in
accordance with the Statement of Recommended Practice issued in November
2014 by the Association of Investment Companies ("AIC SORP").
Other than revaluation movements arising on investments held at fair
value through the profit and loss, there were no differences between the
return/loss as stated above and at historical cost.
INCOME STATEMENT (ANALYSED BY SHARE POOL)
for the year ended 31 December 2015
'C' Share pool
Year ended 31 December 2015 Year ended 31 December 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 818 - 818 390 - 390
(Loss)/gain on
investments - (315) (315) - 529 529
818 (315) 503 390 529 919
Investment
management
fees (57) - (57) (89) - (89)
Other expenses (35) - (35) (48) (48)
Return/(loss)
on ordinary 726 (315) 411 253 529 782
activities
before tax
Tax on total
comprehensive (39) - (39) (58) - (58)
income and
ordinary
activities
Return/(loss)
attributable 687 (315) 372 195 529 724
to equity
shareholders
'D' Share pool
Year ended 31 December Year ended 31 December
2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 560 - 560 467 - 467
Gain/(loss) on investments - 384 384 - (292) (292)
560 384 944 467 (292) 175
Investment management fees (97) - (97) (104) - (104)
Other expenses (44) - (44) (49) - (49)
Return/(loss) on ordinary activities
before tax 419 384 803 314 (292) 22
Tax on total comprehensive income and
ordinary activities (80) - (80) (72) - (72)
Return/(loss) attributable to equity
shareholders 339 384 723 242 (292) (50)
'F' Share pool
Year ended 31 December Year ended 31 December
2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 409 - 409 424 - 424
Loss on investments - (57) (57) - (11) (11)
409 (57) 352 424 (11) 413
Investment management fees (144) - (144) (184) - (184)
Other expenses (74) - (74) (98) - (98)
(Loss)/return on ordinary activities
before tax 191 (57) 134 142 (11) 131
Tax on total comprehensive income and
ordinary activities (16) - (16) (44) - (44)
Return/(loss) attributable to equity
shareholders 175 (57) 118 98 (11) 87
'G' Share pool
Year ended 31 December Year ended 31 December
2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 876 - 876 678 - 678
Gain on investments - 29 29 - 1 1
876 29 905 678 1 679
Investment management fees (455) - (455) (564) - (564)
Other expenses (98) - (98) (92) - (92)
Return on ordinary activities
before tax 323 29 352 22 1 23
Tax on total comprehensive
income and ordinary (66) - (66) (5) - (5)
activities
Return attributable to equity
shareholders 257 29 286 17 1 18
BALANCE SHEET
as at 31 December 2015
2015 2014
GBP'000 GBP'000
Fixed assets
Investments 31,365 35,236
Current assets
Debtors 879 635
Cash at bank and in hand 7,021 10,047
7,900 10,682
Creditors: amounts falling due within one year (532) (568)
Net current assets 7,368 10,114
Net assets 38,733 45,350
Capital and reserves
Called up share capital 79 79
Capital redemption reserve 106 106
Special reserve 40,086 47,161
Share premium reserve - -
Revaluation reserve (1,248) (289)
Capital reserve - realised (2,252) (2,255)
Revenue reserve 1,962 548
Total equity shareholders' funds 38,733 45,350
Basic and diluted net asset value per Share:
'C' Share 53.9p 98.6p
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
'A' Share 0.1p 0.1p
'D' Share 51.8p 71.5p
'E' Share 0.1p 0.1p
'F' Share 71.9p 75.8p
'G' Share 86.3p 90.2p
BALANCE SHEET (ANALYSED BY SHARE POOL)
as at 31 December 2015
'C' Shares
2015 2014
GBP000 GBP000
Fixed assets
Investments 748 6,576
Current assets
Debtors 175 52
Cash at bank and in hand 2,995 514
3,170 566
Creditors: amounts falling due within one year (75) (108)
Net current assets 3,095 458
Net assets 3,843 7,034
Capital and reserves
Called up share capital 18 18
Capital redemption reserve 106 106
Special reserve 2,743 5,745
Share premium reserve - -
Revaluation reserve 55 932
Capital reserve - realised - -
Revenue reserve 921 233
Total equity shareholders' funds 3,843 7,034
'D' Shares
2015 2014
GBP000 GBP000
Fixed assets
Investments 4,369 7,119
Current assets
Debtors 283 136
Cash at bank and in hand 667 81
950 217
Creditors: amounts falling due within one year (133) (174)
Net current assets 817 43
Net assets 5,186 7,162
Capital and reserves
Called up share capital 25 25
Capital redemption reserve - -
Special reserve 5,205 7,566
Share premium reserve - -
Revaluation reserve (667) (712)
Capital reserve - realised - -
Revenue reserve 623 283
Total equity shareholders' funds 5,186 7,162
'F' Shares
2015 2014
GBP000 GBP000
Fixed assets
Investments 7,379 7,377
Current assets
Debtors 131 145
Cash at bank and in hand 392 822
523 967
Creditors: amounts falling due within one year (119) (138)
Net current assets 404 829
Net assets 7,783 8,206
Capital and reserves
Called up share capital 11 11
Capital redemption reserve - -
Special reserve 9,158 9,618
Share premium reserve - -
Revaluation reserve (647) (510)
Capital reserve - realised (1,032) (1,034)
Revenue reserve 293 121
Total equity shareholders' funds 7,783 8,206
'G' Shares
2015 2014
GBP000 GBP000
Fixed assets
Investments 18,869 14,164
Current assets
Debtors 290 302
Cash at bank and in hand 2,967 8,630
3,257 8,932
Creditors: amounts falling due within one year (205) (148)
Net current assets 3,052 8,784
Net assets 21,921 22,948
Capital and reserves
Called up share capital 25 25
Capital redemption reserve - -
Special reserve 22,980 24,232
Share premium reserve - -
Revaluation reserve 11 1
Capital reserve - realised (1,220) (1,221)
Revenue reserve 125 (89)
Total equity shareholders' funds 21,921 22,948
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
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
Year ended 31 December 2014
At 1
January
2014 79 106 13,988 35,664 (516) (2,255) (4) 47,062
Gain on
investments - - - - 227 - - 227
Retained
revenue - - - - - - 552 552
Transfer
between
reserves - - 33,173 (35,664) - 2,491 - -
Dividend
paid - - - - - (2,491) - (2,491)
At 31
December
2014 79 106 47,161 - (289) (2,255) 548 45,350
Year ended 31 December 2015
At 1
January
2015 79 106 47,161 - (289) (2,255) 548 45,350
(Loss)/gain
on
investments - - - - (8) 49 - 41
Purchase of
own shares - - - - - - (44) (44)
Retained
revenue - - - - - - 1,458 1,458
Transfer
between
reserves - - (7,075) - (951) 8,026 - -
Dividend
paid - - - - - (8,072) - (8,072)
At 31
December
2015 79 106 40,086 - (1,248) (2,252) 1,962 38,733
CASH FLOW STATEMENT
for the year ended 31 December 2015
Year ended 31 December 2015
'C' 'D' 'F' 'G'
Share Share Share Share
pool pool pool pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash inflow from
operating activities 530 153 170 325 1,178
Cash flows from investing
activities
Purchase of investments (158) (416) (1,724) (11,744) (14,042)
Sale of investments 5,671 3,550 1,665 7,068 17,954
Net cash inflow/(outflow) from
investing activities 5,513 3,134 (59) (4,676) 3,912
Net cash inflow/(outflow)
before financing activities 6,043 3,287 111 (4,351) (5,090)
Cash flows from financing
activities
Equity dividends paid (3,562) (2,700) (540) (1,270) (8,072)
Purchase of own shares - - - (44) (44)
Net cash outflow from
financing activities (3,562) (2,700) (540) (1,314) (8,116)
Increase/(decrease) in
cash 2,481 587 (429) (5,665) (3,026)
Year ended 31 December 2014
Net cash inflow/(outflow)
from operating activities 181 245 86 (108) 404
Cash flows from investing
activities
Purchase of investments (650) - (2,181) (8,272) (11,103)
Sale of investments 371 143 1,189 2,564 4,267
Net cash (outflow)/inflow from
investing activities (279) 143 (992) (5,708) (6,836)
Net cash (outflow)/inflow before
financing activities (98) 388 (906) (5,816) (6,432)
Cash flows from financing
activities
Equity dividends paid (178) (499) (541) (1,272) (2,490)
Net cash inflow from financing
activities (178) (499) (541) (1,272) (2,490)
Decrease in cash (276) (111) (1,447) (7,088) (8,922)
NOTES
1. General information
Downing TWO 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
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
Basis of accounting
The Company has prepared its financial statements under FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of
Ireland' and in accordance with the Statement of Recommended Practice
("SORP") for investment trust companies and venture capital trusts
issued by the Association of Investment Companies ("AIC") revised
November 2014.
The Company implements new Financial Reporting Standards ("FRS") issued
by the Financial Reporting Council when required.
This is the first year in which the Financial Statements have been
prepared under FRS 102, however it has not been necessary to restate
comparatives as the treatment previously applied aligns with the
requirements of FRS 102. As a result, there are no reconciling
differences between the previous financial reporting framework and the
current financial reporting framework and the comparative figures
represent the position under both current and previous financial
reporting frameworks.
The financial statements are presented in Sterling (GBP).
Presentation of Income Statement
In order to better reflect the activities of a venture capital trust and
in accordance with the SORP, supplementary information which analyses
the Income Statement between items of a revenue and capital nature has
been presented alongside the Income Statement. The return on ordinary
activities is the measure the Directors believe appropriate in assessing
the Company's compliance with certain requirements set out in Part 6 of
the Income Tax Act 2007.
Investments
Venture capital investments are designated as "fair value through profit
or loss" assets due to investments being managed and performance
evaluated on a fair value basis. A financial asset is designated within
this category if it is both acquired and managed on a fair value basis,
with a view to selling after a period of time, in accordance with the
Company's documented investment policy. The fair value of an investment
upon acquisition is deemed to be cost. Thereafter investments are
measured at fair value in accordance with the International Private
Equity and Venture Capital Valuation Guidelines ("IPEV") together with
FRS 102 sections 11 and 12.
For unquoted investments, fair value is established using the IPEV
guidelines. The valuation methodologies for unquoted entities used by
the IPEV to ascertain the fair value of an investment are as follows:
-- Price of recent investment;
-- Multiples;
-- Net assets;
-- Discounted cash flows or earnings (of underlying business);
-- Discounted cash flows (from the investment); and
-- Industry valuation benchmarks.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions and estimates in order to ascertain fair
value.
Gains and losses arising from changes in fair value are included in the
Income Statement for the year as a capital item and transaction costs on
acquisition or disposal of the investment are expensed. Where an
investee company has gone into receivership, liquidation or
administration (where there is little likelihood of recovery), the loss
on the investment, although not physically disposed of, is treated as
being realised.
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 and FRS 102 sections
14 and 15 that does not require portfolio investments, where the
interest held is greater than 20%, 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 time apportionment basis, by reference
to the principal sum outstanding and at the effective rate applicable
and only where there is reasonable certainty of collection in the
foreseeable future.
Expenses
All expenses are accounted for on an 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 the policy
of allocating Investment Manager's fees 100% as revenue.
-- Expenses and liabilities not specific to a share class are generally
allocated pro rata to the net assets.
-- Performance incentive fees arising from the disposal of investments
are deducted as a capital item.
Taxation
The tax effects on different items in the Income Statement are allocated
between capital and revenue on the same basis as the particular item to
which they relate using the Company's effective rate of tax for the
accounting year.
Due to the Company's status as a Venture Capital Trust and the continued
intention to meet the conditions required to comply with Part 6 of the
Income Tax Act 2007, no provision for taxation is required in respect of
any realised or unrealised appreciation of the Company's investments
which arise.
Deferred taxation which is not discounted 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 years different from those in
which they are included in the accounts. Deferred taxation is not
discounted.
Other debtors and other creditors
Other debtors (including accrued income) and other creditors are
included within the accounts at amortised cost.
Issue costs
Issue costs in relation to the shares issued for each share class have
been deducted from the share premium account for the relevant share
class.
3. Basic and diluted return per share
'C' Shares 'A' Shares 'D' Shares 'E' Shares 'F' Shares 'G' Shares
Revenue
return
(GBP'000) 687 - 339 - 175 257
Net
capital
loss for
the year
(GBP'000) (315) - 384 - (57) 29
Weighted
average 7,126,194 10,724,029 10,000,000 14,950,000 10,822,154 25,349,833
number of
shares in
issue
As the Company has not issued any convertible securities or share
options, there is no dilutive effect on return per share for any of the
share classes. The return per share disclosed therefore represents both
the basic and diluted return per share for all share classes.
4. Basic and diluted net asset value per share
31 Dec 2015 31 Dec 2014
Shares in issue
Net asset value Net asset Value
31 Dec 31 Dec per per
2015 2014 share GBP'000 share GBP'000
'C'
Shares 7,126,194 7,126,194 53.9p 3,832 98.6p 7,023
'A'
Shares 10,724,029 10,724,029 0.1p 11 0.1p 11
'D'
Shares 10,000,000 10,000,000 51.8p 5,171 71.5p 7,147
'E'
Shares 14,950,000 14,950,000 0.1p 15 0.1p 15
'F'
Shares 10,822,154 10,822,154 71.9p 7,783 75.8p 8,206
'G'
Shares 25,386,546 25,436,996 86.3p 21,921 90.2p 22,948
38,733 45,350
The 'C' Share pool, 'D' Share pool, 'F' Share pool and 'G' Share pool
are treated as separate investment pools. Within the 'C' Share pool the
Directors allocate the assets and liabilities of the Company between the
'C' Shares and 'A' Shares such that each share class has sufficient net
assets to represent its dividend and return of capital rights. Within
the 'D' Share pool the Directors allocate the assets and liabilities of
the Company between the 'D' Shares and 'E' Shares such that each share
class has sufficient net assets to represent its dividend and return of
capital rights.
5. Principal risks
The Company's financial instruments comprise investments held at fair
value through profit and loss, being equity and loan stock investments
in unquoted companies, loans and receivables consisting of short term
debtors, cash deposits and financial liabilities, being creditors
arising from its operations. The main purpose of these financial
instruments is to generate cashflow and revenue and capital appreciation
for the Company's operations. The Company has no gearing or other
financial liabilities apart from short-term creditors and does not use
any derivatives.
The fair value of cash deposits and short term debtors and creditors
equates to their carrying value in the Balance Sheet.
Loans and receivables and other financial liabilities are stated at
amortised cost which the Directors consider is equivalent to fair value.
The Company's investment activities expose the Company to a number of
risks associated with financial instruments and the sectors in which the
Company invests. The principal financial risks arising from the
Company's operations are:
-- Investment risks
-- Credit risk
-- Liquidity risk
The Board regularly reviews these risks and the policies in place for
managing them. There have been no significant changes to the nature of
(MORE TO FOLLOW) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
the risks that the Company is exposed to over the year and there have also been no significant changes to the policies for managing those risks during the year. The risk management policies used by the Company in respect of the principal financial risks and a review of the financial instruments held at the year end are provided below: Investment risks As a VCT, the Company is exposed to investment risks in the form of potential losses and gains that may arise on the investments it holds in accordance with its investment policy. The management of these investment risks is a fundamental part of investment activities undertaken by the Investment Manager and overseen by the Board. The Manager monitors investments through regular contact with management of investee companies, regular review of management accounts and other financial information and attendance at investee company board meetings. This enables the Manager to manage the investment risk in respect of individual investments. Investment risk is also mitigated by holding a diversified portfolio spread across various business sectors and asset classes. The key investment risks to which the Company is exposed are: -- Investment price risk -- Interest rate risk Investment price risk Investment price risk arises from uncertainty about the valuation of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through changes in the fair value of unquoted investments that it holds. Interest rate risk The Company accepts exposure to interest rate risk on floating-rate financial assets through the effect of changes in prevailing interest rates. The Company receives interest on its cash deposits at a rate agreed with its bankers. Investments in loan stock attract interest predominately at fixed rates. A summary of the interest rate profile of the Company's investments is shown below. There are three categories in respect of interest which are attributable to the financial instruments held by the Company as follows: -- "Fixed rate" assets represent investments with predetermined yield targets and comprise certain loan note investments. -- "Floating rate" assets predominantly bear interest at rates linked to Bank of England base rate or LIBOR and comprise cash at bank and liquidity fund investments and certain loan note investments. -- "No interest rate" assets do not attract interest and comprise equity investments and debtors. The Company monitors the level of income received from fixed and floating rate assets and, if appropriate, may make adjustments to the allocation between the categories, in particular, should this be required to ensure compliance with the VCT regulations. Credit risk Credit risk is the risk that a counterparty to a financial instrument is unable to discharge a commitment to the Company made under that instrument. The Company is exposed to credit risk through its holdings of loan stock in investee companies, cash deposits and debtors. The Manager manages credit risk in respect of loan stock with a similar approach as described under "Investment risks" above. In addition the credit risk is partially mitigated by registering floating charges over the assets of certain investee companies. The strength of this security in each case is dependent on the nature of the investee company's business and its identifiable assets. Similarly the management of credit risk associated with interest, dividends and other receivables is covered within the investment management procedures. Cash is mainly held by Bank of Scotland plc and Royal Bank of Scotland plc, both of which are A-rated financial institutions and both also ultimately part-owned by the UK Government. Consequently, the Directors consider that the credit risk associated with cash deposits is low. There have been no changes in fair value during the year that are directly attributable to changes in credit risk. Liquidity risk Liquidity risk is the risk that the Company encounters difficulties in meeting obligations associated with its financial liabilities. Liquidity risk may also arise from either the inability to sell financial instruments when required at their fair values or from the inability to generate cash inflows as required. As the Company has a relatively low level of creditors, (GBP532,000, 2014: GBP568,000) and has no borrowings, the Board believes that the Company's exposure to liquidity risk is low. The Company always holds sufficient levels of funds as cash in order to meet expenses and other cash outflows as they arise. For these reasons, the Board believes that the Company's exposure to liquidity risk is minimal. The Company's liquidity risk is managed by the Investment Manager in line with guidance agreed with the Board and is reviewed by the Board at regular intervals. 6. Events after the end of the reporting period Following the end of the reporting period, the remaining funds attributable to the 'C' Shares and 'A' Shares were distributed by way of dividends of 30.6p per 'C' Share and 15.2p per 'A' Share on 24 March 2016. This equated to a payment of GBP2.2 million to 'C' Shareholders and GBP1.6 million to 'A' Shareholders (including GBP544,000 on the 'A' Shares held by members of the management team). Following this, the 'C' Share pool will have negligible remaining value and is expected to be delisted and wound up in due course. ANNOUNCEMENT BASED ON AUDITED ACCOUNTS The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 31 December 2015, but has been extracted from the statutory financial statements for the year ended 31 December 2015 which were approved by the Board of Directors on 25 April 2015 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006. The statutory accounts for the period ended 31 December 2014 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006. A copy of the full annual report and financial statements for the year ended 31 December 2015 will be printed and posted to shareholders shortly. Copies will also be available to the public at the registered office of the Company at Ergon House, London, SW1P 2AL and will be available for download from www.downing.co.uk. This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Downing TWO VCT plc via Globenewswire HUG#2006500
(END) Dow Jones Newswires
April 25, 2016 12:44 ET (16:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
1 Year Downing Two C Chart |
1 Month Downing Two C Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
