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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Proven Health | LSE:PHV | London | Ordinary Share | GB0030199391 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 28.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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ProVen Health VCT plc
Half-Yearly Report for the Six Months Ended 31 July 2012
Financial Summary
31 July 31 July 31 Jan
2012 2011 2012
Net asset value per share ("NAV") 39.9p 45.3p 44.2p
Dividends paid since launch 18.5p 17.5p 17.5p
Total return (NAV plus dividends paid since launch) 58.4p 62.8p 61.7p
Mid market share price 38.3p 41.3p 37.5p
=--------------------------------------------------------------------------
Chairman's Statement
Introduction
The half year report for the Company for the period to 31 July 2012 is set out
below. I would like to welcome those new shareholders who now hold shares in
the Company as a result of the merger with Longbow Growth and Income VCT plc
("LGIV"). As well as completing the merger with LGIV, the Company also concluded
an enhanced share buyback in April with gross proceeds of GBP1.2 million being re-
invested in the Company. The shareholders also approved a change to the
investment mandate with the result that the Company can now invest in a broad
range of areas in addition to the health sector.
Net asset value and portfolio activity
As at 31 July 2012, the Company's net asset value per share ("NAV") stood at
39.9p. After adjusting for the dividend of 1p per share paid on 9 March 2012,
this represents a decrease of 7.5% over the NAV at 31 January 2012. The FTSE
All Share Index was broadly unchanged over the same period whilst the FTSE All
Share Total Return Index, which includes dividends reinvested, increased by
1.9%.
The total return (NAV plus cumulative dividends paid) to ordinary shareholders
who invested at the outset of the Company was 58.4p per share at 31 July 2012
(31 January 2012: 61.7p per share).
During the half year, the Company made a further investment in APM Healthcare
and by virtue of this holding received founder shares in Long Eaton Healthcare.
The merger with LGIV resulted in an additional investment in Polytherics being
transferred to the Company. Further sales proceeds were received in March 2012
from the sale of Biovex. The Investment Manager expects to complete the
Company's first non-health investment shortly. Further detail on all investment
activity is provided in the Investment Manager's Report on the following pages.
Results and dividend
The Income Statement shows a loss on ordinary activities after taxation for the
Company for the period of GBP768,000 (comprising a revenue loss of GBP57,000 and a
capital loss of GBP711,000). The Company paid an interim dividend for the year to
31 January 2012 of 1p per share on 9 March 2012. The Board is not, at this
time, proposing an interim dividend for the year ending 31 January 2013.
Changes in share capital
During the period, the Company completed a merger with LGIV under which LGIV
transferred its net assets of GBP931,000 to the Company in consideration for which
the Company issued new ordinary shares to the shareholders of LGIV. The Company
also concluded an enhanced share buyback and an offer for subscription. Further
details are provided in the notes to the accounts.
Under the Company's dividend re-investment scheme, 71,621 shares were issued on
15 March 2012, following the dividend payment on 9 March 2012. In addition to
the enhanced share buyback, the Company also purchased 369,000 shares at an
average price of approximately 39p per share (approximately equal to a 10%
discount to the net asset value at the time of purchase). These shares were
subsequently cancelled.
Investor presentation
The Investment Manager will be holding its annual VCT shareholder presentation
on Monday 22 October 2012 at the Royal College of Surgeons, 35-43 Lincoln's Inn
Fields, London WC2A 3PE. This event provides shareholders with the opportunity
to meet the Investment Manager, Board directors and other shareholders, and to
hear directly from some of the portfolio companies. Shareholders should have
received an invitation with the Company's annual report but if you have not and
would like to attend, then please contact the Investment Manager at 39 Earlham
Street, London WC2H 9LT or by telephone on 020 7845 7820.
The Board also welcomes shareholder feedback and comments outside formal events
and meetings and can be contacted initially through the Investment Manager.
Charles Pinney
Chairman
Investment Manager's Report
Introduction
The broad economic backdrop has remained little changed for some time with
funding for businesses remaining challenging. The change in investment mandate
from a health focus to a wider remit was approved by shareholders in March 2012
and we expect the first non-health investment to complete shortly.
Portfolio performance and activity
At 31 July 2012, the Company's investment portfolio comprised holdings in 11
companies, of which 9 were unquoted and 2 were quoted, at a valuation of GBP4.8
million and original acquisition cost of GBP8.1 million. In addition, the Company
held GBP3.5 million in cash and liquidity funds.
During the half year, the Company completed a further investment of GBP475,000
into APM Healthcare. APM Healthcare has now opened eight pharmacies in tandem
with local GPs with further openings in the pipeline. The Company also received
founder shares in April in Long Eaton Healthcare, a standalone pharmacy, by
virtue of its investment in APM Healthcare. In addition, the Company now has a
further GBP135,000 investment in Polytherics, as a result of the merger with
Longbow Growth and Income VCT plc. The Company also received $134,000 ( GBP83,000)
in March from Biovex, being initial sales proceeds originally held in escrow
following its original disposal in March 2011. After the period end, a further
follow-on investment of GBP77,000 was made into Population Genetics Technologies.
The overall investment portfolio disappointingly showed a decrease in value of
GBP736,000. This was principally due to further provisions being made against the
valuations of Altacor, Population Genetics Technologies, Omni Dental Sciences
and Digital Healthcare, offset by unrealised gains from the two quoted company
holdings, Sinclair IS Pharma and Ventura Group. Whilst the focus of the fund has
now shifted to later stage businesses and also to include non-health
investments, we continue to work with these companies to maximise value for
shareholders.
Outlook
We welcome both the change in the Company's investment mandate to allow non-
health sector deals and the recent merger with Longbow Growth Income and VCT
which has brought new funds for investment. We hope that these positive
developments will enable us to deliver improved investment returns for
shareholders over the medium term.
Beringea LLP
Summary of Investment Movements
for the six months ended 31 July 2012
Additions (at cost)
GBP'000
=---------------------------------------------
Polytherics Limited* 135
=---------------------------------------------
APM Healthcare Limited 475
=---------------------------------------------
Long Eaton Healthcare Limited** -
=---------------------------------------------
610
=---------------------------------------------
*Investment from Longbow Growth and Income VCT plc
**Founder shares at nominal value
Disposals
Market Realised
value at gain/
1 February Disposal Gain/(loss) (loss) in
Cost 2012 proceeds against cost period
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Biovex Inc - - 83 83 83
=------------------------------------------------------------------------------
Omni Dental 13
Sciences
Limited 13 13 - -
-----------------------------------------------------------------
13 13 96 83 83
=------------------------------------------------------------------------------
Summary of Investment Portfolio
as at 31 July 2012
Unrealised % of
gain/(loss) in portfolio
Cost Valuation the period by value
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Top venture
capital
investments
=------------------------------------------------------------------------------
Population
Genetics 10.8%
Technologies
Limited 1,129 903 (225)
=------------------------------------------------------------------------------
Polytherics 885 885 - 10.6%
Limited
=------------------------------------------------------------------------------
APM Healthcare 850 850 - 10.2%
Limited ***
=------------------------------------------------------------------------------
Altacor Limited 1,020 815 (425) 9.8%
=------------------------------------------------------------------------------
Sinclair IS 585 413 92 5.0%
Pharma plc **
=------------------------------------------------------------------------------
Digital 1,010 384 (134) 4.6%
Healthcare
Limited
=------------------------------------------------------------------------------
Vectura Group plc 250 331 48 4.0%
*
=------------------------------------------------------------------------------
Omni Dental 737 230 (92) 2.8%
Sciences Limited
=------------------------------------------------------------------------------
Long Eaton - - - 0.0%
Healthcare
Limited ****
=------------------------------------------------------------------------------
6,466 4,811 (736) 57.8%
=------------------------------------------------------------------------------
Other venture 1,647 - - 0.0%
capital
investments
=------------------------------------------------------------------------------
8,113 4,811 (736) 57.8%
=------------------------------------------------------------------------------
Current asset 2,998 36.0%
investments -
liquidity funds
=--------------------------------------------------------------- --------------
Cash at bank and 6.2%
in hand 517
=------------------------------------------------------------------------------
=------------------------------------------------------------------------------
Total investments 8,326 100.0%
=------------------------------------------------------------------------------
All venture capital investments are unquoted unless otherwise stated.
* Quoted on the Main Market
** Quoted on AIM
*** APM Healthcare Limited is also held by ProVen VCT plc and ProVen Growth
and Income VCT plc, both of which are managed by Beringea LLP
**** Long Eaton Healthcare Limited is also held by ProVen VCT plc, ProVen
Growth and Income VCT plc and ProVen Planned Exit VCT plc
Unaudited Balance Sheet
as at 31 July 2012
31 July 31 July 31 Jan
2012 2011 2012
GBP'000 GBP'000 GBP'000
=--------------------------------------------------------------------------
Fixed assets
Investments 4,811 5,110 4,951
=--------------------------------------------------------------------------
Current assets
Debtors 84 15 83
=--------------------------------------------------------------------------
Current investments 2,998 1,806 1,812
=--------------------------------------------------------------------------
Cash at bank and in hand 517 1,931 1,772
=--------------------------------------------------------------------------
3,599 3,752 3,667
=--------------------------------------------------------------------------
Creditors: amounts falling due within one year (45) (82) (133)
=--------------------------------------------------------------------------
Net current assets 3,554 3,670 3,534
=--------------------------------------------------------------------------
Net assets 8,365 8,780 8,485
=--------------------------------------------------------------------------
Capital and reserves
Called up share capital 210 194 192
=--------------------------------------------------------------------------
Capital redemption reserve 436 401 404
=--------------------------------------------------------------------------
Share premium account 9,593 7,428 7,427
=--------------------------------------------------------------------------
Special distributable reserve 5,600 7,445 7,168
=--------------------------------------------------------------------------
Capital reserve - realised (4,350) (3,581) (4,375)
=--------------------------------------------------------------------------
Capital reserve - unrealised (2,178) (2,312) (1,442)
=--------------------------------------------------------------------------
Revenue reserve (946) (795) (889)
=--------------------------------------------------------------------------
Total equity shareholders' funds 8,365 8,780 8,485
=--------------------------------------------------------------------------
Basic and diluted net asset value per share 39.9p 45.3p 44.2p
=--------------------------------------------------------------------------
Unaudited Income Statement
for the six months ended 31 July 2012
Six months ended Six months ended Year ended
31 Jan 2012
31 July 2012 31 July 2011
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Income 77 - 77 32 - 32 48
=------------------------------------------------------------------------------
Losses on - (653) (653) - (220) (220) (286)
investments
=------------------------------------------------------------------------------
77 (653) (576) 32 (220) (188) (238)
=------------------------------------------------------------------------------
Investment (19) (58) (77) (21) (63) (84) (156)
management
fee
=------------------------------------------------------------------------------
Other (115) - (115) (73) - (73) (165)
expenses
=------------------------------------------------------------------------------
Loss on (57) (711) (768) (62) (283) (345) (559)
ordinary
activities
before
taxation
=------------------------------------------------------------------------------
Tax on - - - - - - -
ordinary
activities
=------------------------------------------------------------------------------
Loss (57) (711) (768) (62) (283) (345) (559)
attributable
to equity
shareholders
=------------------------------------------------------------------------------
Basic and (0.3p) (3.4p) (3.7p) (0.3p) (1.5p) (1.8p) (2.9p)
diluted loss
per share
=------------------------------------------------------------------------------
Reconciliation of Movements in Shareholders' Funds
31 July 31 July 31 Jan
2012 2011 2012
GBP'000 GBP'000 GBP'000
=-----------------------------------------------------------------
Opening shareholders' funds 8,485 9,199 9,199
=-----------------------------------------------------------------
Proceeds from share issues 2,218 271 272
=-----------------------------------------------------------------
Share issue costs (2) (8) (9)
=-----------------------------------------------------------------
Purchase of own shares (1,376) (141) (222)
=-----------------------------------------------------------------
Total recognised loss for the period (768) (345) (559)
=-----------------------------------------------------------------
Dividends paid (192) (196) (196)
=-----------------------------------------------------------------
Closing shareholders' funds 8,365 8,780 8,485
=-----------------------------------------------------------------
Unaudited Cash Flow Statement
for the six months ended 31 July 2012
Six months Six months Year
ended ended ended
31 July 2012 31 July 2011 31 Jan 2012
Note GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Net cash outflow from A
operating activities (204) (167) (304)
=------------------------------------------------------------------------------
Capital expenditure
=------------------------------------------------------------------------------
Purchase of investments (475) - (1,175)
=------------------------------------------------------------------------------
Disposal of investments 96 692 1,960
=------------------------------------------------------------------------------
Net cash (outflow)/inflow (379) 692 785
from capital expenditure
=------------------------------------------------------------------------------
Equity dividends paid (161) (163) (163)
=------------------------------------------------------------------------------
Net cash (outflow)/inflow (744) 362 318
before financing
=------------------------------------------------------------------------------
Financing
=------------------------------------------------------------------------------
Proceeds from share issues 2,053 238 239
=------------------------------------------------------------------------------
Share issue costs (2) (8) (9)
=------------------------------------------------------------------------------
Purchase of own shares (1,376) (107) (222)
=------------------------------------------------------------------------------
Net cash inflow from 675 123 8
financing
=------------------------------------------------------------------------------
(Decrease)/increase in cash B (69) 485 326
=------------------------------------------------------------------------------
Notes to the cash flow
statement:
A Net cash flow from
operating activities
Loss on ordinary activities (768) (345) (559)
before taxation
=------------------------------------------------------------------------------
Losses on investments 653 220 286
=------------------------------------------------------------------------------
Re-invested liquidity funds - (6) (12)
=------------------------------------------------------------------------------
(Increase)/decrease in (1) 6 (62)
debtors
=------------------------------------------------------------------------------
(Decrease)/increase in (88) (42) 43
creditors
=------------------------------------------------------------------------------
Net cash outflow from (204) (167) (304)
operating activities
=------------------------------------------------------------------------------
B Analysis of net funds
Beginning of period 3,584 3,246 3,246
=------------------------------------------------------------------------------
Net cash (outflow)/inflow (69) 485 326
=------------------------------------------------------------------------------
Other non cash changes - 6 12
=------------------------------------------------------------------------------
End of period 3,515 3,737 3,584
=------------------------------------------------------------------------------
Net funds split as:
Beginning of period:
Cash at bank and in hand 1,772 1,446 1,446
=------------------------------------------------------------------------------
Liquidity funds 1,812 1,800 1,800
=------------------------------------------------------------------------------
Total funds at beginning of 3,584 3,246 3,246
period
=------------------------------------------------------------------------------
End of period:
Cash at bank and in hand 517 1,931 1,772
=------------------------------------------------------------------------------
Liquidity funds 2,998 1,806 1,812
=------------------------------------------------------------------------------
Total funds at end of period 3,515 3,737 3,584
=------------------------------------------------------------------------------
Notes to the Unaudited Financial Statements
1. The unaudited half yearly results cover the six months to 31 July 2012
and have been prepared in accordance with 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 January 2012, which were prepared
under UK Generally Accepted Accounting Practice.
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. There are no recognised gains or losses other than those disclosed in the
Income Statement.
4. The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
5. The comparative figures were in respect of the period ended 31 July 2011
and the year ended 31 January 2012.
6. Basic and diluted return per share for the period has been calculated on
20,691,343 shares, being the weighted average number of shares in issue during
the period.
7. Basic and diluted NAV per share for the period has been calculated on
20,975,364 shares, being the number of shares in issue at the period end.
8. Dividends
Pence per 31 July 2012 31 Jan 2012
share GBP'000 GBP'000
=------------------------------------------------------------------------------
Paid in the period
2012 final dividend paid on 9 March 1.0 192 -
2012
=------------------------------------------------------------------------------
2011 final dividend paid on 17 June 1.0 - 196
2011
=------------------------------------------------------------------------------
=------------------------------------------------------------------------------
192 196
=------------------------------------------------------------------------------
Split as:
Paid directly to 161 163
shareholders
=------------------------------------------------------------------------------
Shares issued under dividend re-investment 31 33
scheme
=------------------------------------------------------------------------------
192 196
=------------------------------------------------------------------------------
9. Reserves
Capital redemption Share Capital Capital
reserve premium Special reserve - reserve - Revenue
account reserve realised unrealised reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
At 1 February
2012
404 7,427 7,168 (4,375) (1,442) (889)
=------------------------------------------------------------------------------
Issue of new - 2,168 - - - -
shares
=------------------------------------------------------------------------------
Share issue costs - (2) - - - -
=------------------------------------------------------------------------------
Purchase of own 32 - (1,376) - - -
shares
=------------------------------------------------------------------------------
Expenses - - - (58) - -
capitalised
=------------------------------------------------------------------------------
Gains/(losses) on
investments - - - 83 (736) -
=------------------------------------------------------------------------------
Retained net loss - - - - - (57)
=------------------------------------------------------------------------------
Dividends paid in - - (192) - - -
the period
=------------------------------------------------------------------------------
At 31 July 2012 436 9,593 5,600 (4,350) (2,178) (946)
=------------------------------------------------------------------------------
At the period end there were GBPnil (31 Jan 2012: GBP462,000) of reserves available
for distribution after taking into account net unrealised losses.
10. The unaudited financial statements set out herein do not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
and have not been delivered to the Registrar of Companies. The figures for the
year ended 31 January 2012 have been extracted from the financial statements for
that year, which have been delivered to the Registrar of Companies; the
Auditor's report on those financial statements was unqualified.
11. Offer for subscription, enhanced share buyback and merger
Between 5 April 2012 and 13 April 2012, the Company issued 69,246 shares for
consideration at approximately 45.9p per share, under an offer for subscription
dated 10 February 2012. The aggregate consideration for the shares was GBP31,000
and share issue costs thereon amounted to GBP1,000
Under the terms of an enhanced share buyback, outlined in a circular issued by
the Company on 10 February 2012, the Company bought back and subsequently issued
a number of shares on 5 April 2012 in the tax year 2011/12 and 13 April 2012 in
the tax year 2012/13. On 5 April 2012, the Company purchased 1,804,994 shares
for cancellation at a price of 43.3p per share and issued 1,721,418 shares at a
price of 45.4p per share. On 13 April 2012, the Company purchased 1,025,322
shares for cancellation at a price of 43.3p per share and issued 977,859 shares
at a price of 45.4p per share. Total funds of GBP1.2 million were re-invested in
the Company with transaction costs of approximately GBP57,000 being incurred.
Beringea LLP was entitled to a fee of GBP12,000 in respect of services provided in
connection with the enhanced share buyback.
On 16 March 2012, following approval by the shareholders of both companies, the
Company completed a scheme of reconstruction with Longbow Growth and Income VCT
plc ("LGIV") (the "Scheme" or "Merger"). The terms of the Scheme were set out in
a circular issued by the Company on 10 February 2012. The Scheme was effected by
LGIV transferring its net assets to the Company, in consideration for which the
Company issued 2,150,872 new ordinary shares to the shareholders of LGIV. Under
the Scheme, LGIV was placed into members' voluntary liquidation. The number of
new shares issued by the Company to the shareholders of LGIV was determined on
the basis of the relevant net assets of LGIV and the Company at the close of
business on 13 March 2012, in accordance with the terms of the Scheme. The new
ordinary shares rank pari passu in all respects and form a single class with the
existing ordinary shares.
The Merger resulted in the addition of net funds (including investments) of
GBP931,000, an increase of 11% over the net assets of the Company at 31 January
2012. At the date of the Merger, LGIV held one venture capital investment,
Polytherics Limited, in which the Company already had an investment. The
Company's costs of the Merger were GBP75,000 and are recoverable from the
Investment Manager over two years. GBP14,000 was repaid by the Investment Manager
to the Company during the period.
12. Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is required in the
Company's half-yearly results, to report on the principal risks and
uncertainties facing the Company over the remainder of the financial year.
The Board has concluded that the key risks facing the Company over the remainder
of the financial year are as follows:
(i) investment risk associated with investing in small and immature
businesses;
(ii) market risk arising from volatile stock market conditions and their
potential effect on investment valuation particularly in the areas of investment
permitted by VCT rules; and
(iii) compliance risk in failing to maintain approval as a VCT.
In the case of (i), the Board is satisfied with the Company's approach. The
Investment Manager follows a rigorous process in vetting and structuring new
investments and, after an investment is made, close monitoring of the business.
In respect of (ii), the Company seeks to hold a diversified investment
portfolio, albeit currently concentrated in the health sector. The Board is
confident that the Investment Manager's investment policy should help to limit
this risk whilst remaining within the constraints of the VCT regulations.
As far as (iii) is concerned, the Company's compliance with the VCT regulations
is continually monitored by the Investment Manager, who reports regularly to the
Board on the current and forecast position. The Company also retains
PricewaterhouseCoopers to provide regular reviews and advice in this area. The
Board considers that this approach reduces the risk of a breach of the VCT
regulations to an acceptable level.
13. Going concern
The Directors have reviewed the Company's financial resources at the period end
and conclude that the Company is well placed to manage its business risks.
The Board confirms that it is satisfied that the Company has adequate resources
to continue in business for the foreseeable future. For this reason, the Board
believes that the Company continues to be a going concern and that it is
appropriate to apply the going concern basis in preparing the financial
statements.
14. The Directors confirm that, to the best of their knowledge, the half-
yearly financial statements have been prepared in accordance with the
"Statement: Half-Yearly Financial Reports" issued by the UK Accounting Standards
Board and the half-yearly financial report includes a fair review of the
information required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for
the remaining six months of the year; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period, and any changes in the related
party transactions described in the last annual report that could do so.
15. Copies of the unaudited half yearly results will be sent to shareholders.
Further copies can be obtained from the Company's registered office and will be
available for download from www.provenvcts.co.uk.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Proven Health VCT Plc via Thomson Reuters ONE
[HUG#1644542]
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