Downing Plan 2011 Downing Planned Exit Vct 2011 Plc : Final Results

 
TIDMD1GO 
 
   Downing Planned Exit VCT 2011 plc 
 
   Final results for the year ended 30 November 2013 
 
 
 
 
                                                           30 Nov  30 Nov 
Performance summary                                         2013    2012   Initial 
General pool                                               Pence   Pence    Pence 
Net asset value per General Ordinary Share                   78.0    80.3     88.4 
Net asset value per General 'A' Share                         6.2     6.3      6.1 
Cumulative dividends paid per General Ordinary Share         12.5     7.5        - 
Total return per General Ordinary Share and 'A' Share        96.7    94.1     94.5 
 
Structured pool 
Net asset value per Structured Ordinary Share                80.1    81.9     88.4 
Net asset value per Structured 'A' Share                      6.3     6.5      6.1 
Cumulative dividends paid per Structured Ordinary 
 Share                                                       12.5     7.5        - 
Total return per Structured Ordinary Share and 'A' 
 Share                                                       98.9    95.9     94.5 
 
Low Carbon pool (per GBP1 invested) * 
Net asset value per 1.0695 Low Carbon Ordinary Shares        89.7    86.0     94.5 
Cumulative dividends paid per 1.0695 Low Carbon Ordinary 
 Shares                                                      13.4     8.0        - 
                                                            103.1    94.0     94.5 
 
 
 
   * Low Carbon Ordinary Shares were originally issued at 93.5p per share. 
The above figures have been expressed in terms of an original investment 
of GBP1 which equates to a holding of 1.0695 shares. 
 
   CHAIRMAN'S STATEMENT 
 
   Introduction 
 
   I am pleased to present the Annual Report of Downing Planned Exit VCT 
2011 plc for the year ended 30 November 2013. The General and Structured 
pools were reasonably active investors during the year as they completed 
building their VCT qualifying portfolios. In terms of performance, a 
number of the venture capital investments have started to mature and, in 
the Structured Share Pool, the Structured Products continue to produce 
steady results. The solar investments in the Low Carbon Pool have 
similarly made reasonable progress. On the negative side, there have 
been a small number of investments that have underperformed in the 
General and Structured pools which has held back overall performance a 
little. 
 
   General Share pool 
 
   At 30 November 2013, the net asset value ("NAV") per General Ordinary 
Share was 78.0p and per General 'A' Share was 6.2p. This represents an 
increase of 2.6p (3.2%) over the year after adjusting for dividends 
paid. Uplifts in the valuation of several investments were partly 
cancelled out by provisions which were required against two 
underperforming businesses, Mosaic Spa and Health Clubs Limited and City 
Falkirk Limited. 
 
   Dividends totalling 12.5p per General Ordinary Share have been paid to 
date so Total Return for a combined holding of one General Ordinary 
Share and one General 'A' Share is 96.7p. This compares to the initial 
NAV of 94.5p (net of issue costs) and the cost to Shareholders (net of 
income tax relief) of 70.0p. 
 
   The General Share pool made four new VCT qualifying investments in the 
year at a total cost of GBP2.7 million. Much of the funding for the new 
investments arose from redemption of non-qualifying short-term secured 
loans. Since the year end, there has been one further new investment 
such that the task of building the General Share portfolio is now 
considered to be complete. Any further new investment activity is only 
likely to arise if there is an unexpected exit from an existing 
investment earlier than planned. 
 
   Structured Share pool 
 
   At 30 November 2013, the net asset value ("NAV") per Structured Ordinary 
Share was 80.1p and per Structured 'A' Share was 6.3p. This represents 
an increase of 3.0p (3.1%) over the year after adjusting for dividends 
paid. As with the General Share pool, gains on a number of venture 
capital investments and the Structured Product investments were partly 
offset by provisions required against Mosaic Spa & Health Clubs Limited 
and City Falkirk limited. 
 
   Dividends totalling 12.5p per Structured Ordinary Share have been paid 
to date so Total Return for a combined holding of one Structured 
Ordinary Share and one Structured 'A' Share is 98.9p. This compares to 
the initial NAV of 94.5p (net of issue costs) and the cost to 
Shareholders (net of income tax relief) of 70.0p. 
 
   The Structured Share pool completed five new VCT qualifying investments 
in the year at a total cost of GBP2.2 million, the majority of these 
funds being provided from Structured Products which matured. At the year 
end, the Structured Share pool held approximately 22% of its funds in 
Structured Products and the majority of the reminder in VCT qualifying 
investments. As with the General Share pool, there has been one further 
qualifying investment made since the year end and further new investment 
activity is now expected to be limited. 
 
   Low Carbon pool 
 
   The net asset value ("NAV") per Low Carbon Ordinary Share at 30 November 
2013 was 83.8p. This represents an increase of 5.9p (7.0%) over the year 
after adjusting for dividends paid. Dividends totalling 10.0p per Low 
Carbon Ordinary Share have been paid to date so Total Return per share 
is 93.8p. The Low Carbon Ordinary Shares were originally issued at a 
price of 93.5p rather than the more usual price of GBP1. Total Return 
based on an investment of GBP1 is therefore 100.4p. This compares to the 
initial net asset value of an investment of GBP1 (net of issue costs) of 
94.5p and the cost to Shareholders (net of income tax relief) of 70.0p. 
 
   The Low Carbon Share pool investments have now established solid records 
of electricity generation in line with, or exceeding, original plan and 
valuation uplifts have been recognised in a number of the holdings. 
 
   Dividends 
 
   It is the Company's intention to pay dividends of 5.0p per annum in 
respect of each of the classes of Ordinary Shares. 
 
   Interim dividends of 2.5p were paid on 30 November 2013 in respect of 
each class of Ordinary Shares and so a final dividend of 2.5p for each 
class of Ordinary Shares is being proposed. 
 
   Subject to Shareholder approval at the AGM, the dividends will be paid 
on 16 May 2014 to Shareholders on the register at 22 April 2014. 
 
   Share buybacks 
 
   The Company operates a share buyback policy whereby, subject to certain 
restrictions, it will buy in any of its own shares that become available 
in the market for cancellation. In its initial years, the Company has a 
policy of, subject to any regulatory and liquidity contracts, 
undertaking any buybacks at a price approximately equal to the latest 
published NAV (i.e. at a nil discount). 
 
   Share buybacks undertaken in the year are summarised as follows: 
 
 
 
 
                                Average 
                                purchase 
                                 price       % of 
                               (pence per    shares 
Share class           Number     share)     in issue 
General Ordinary       5,650         80.0      0.04% 
General A              7,700          6.0      0.04% 
Structured Ordinary    5,650         82.0      0.05% 
Structured A           7,700          6.0      0.07% 
Low Carbon Ordinary    7,141         86.0      0.09% 
 
 
 
   A special resolution seeking authority for the Company to continue to 
make further purchases of its own shares is proposed for the forthcoming 
Annual General Meeting ("AGM"). 
 
   Annual General Meeting 
 
   The Company will hold its third AGM on 13 May 2014 at 11:30 a.m. at 10 
Lower Grosvenor Place, London SW1W 0EN. 
 
   One item of special business is proposed in respect of share buybacks as 
mentioned above. 
 
   Outlook 
 
   The Board remains generally satisfied with progress made by the Company 
to date. Although there are a small number of investments that have 
faced difficulties, we believe that appropriate action has, or is, being 
taken by the Investment Manager and are optimistic that any further 
potential loss of value from these investments will be limited. The 
majority of investments are making satisfactory progress and have the 
potential to deliver further uplifts in value as they continue to 
mature. 
 
   The exit process for all share classes is due to start in 2016. The 
Investment Manager's objective between now and then is to ensure that 
the majority of investment continue to make progress, while developing 
plans for how exits will ultimately be secured. 
 
   Sir Aubrey Brocklebank Bt. 
 
   Chairman 
 
   INVESTMENT MANAGER'S REPORT - GENERAL SHARE POOL 
 
   Introduction 
 
   The General Share pool holds investments in 24 companies the initial 
investment phase is now complete. The majority of the General Share 
pool's investments are performing to plan, although three investments 
faced difficulties against which provisions have been made resulting in 
a combined unrealised loss of GBP414,000 being recorded. Overall, there 
was an unrealised capital loss of GBP45,000 for the year. 
 
   Net asset value and results 
 
   The net asset value ("NAV") per General Ordinary Share at 30 November 
2013 stood at 78.0p and the NAV per General 'A' Share at 6.2p. Total 
Return (combined NAV plus dividends paid to date) now stands at 96.7p 
compared to the original cost, net of income tax relief, of 70.0p. 
 
   The profit on ordinary activities after taxation for the period was 
GBP393,000, comprising a revenue profit of GBP515,000 and a capital loss 
of GBP122,000. 
 
   Investment activity 
 
   The General Share pool began the year with GBP12.1 million of 
investments and ended with GBP13.3 million spread across a portfolio of 
24 companies. Fifteen of these investments, with a value of GBP10.0 
million, were VCT qualifying (or part qualifying). 
 
   Three new qualifying or partially qualifying and one reinvestment of