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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ventus Vct Plc | LSE:VEN | London | Ordinary Share | GB00B03KMY45 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 80.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMVEN
RNS Number : 9876D
Ventus VCT plc
30 October 2015
Ventus VCT plc
Half-yearly Financial Report
for the six month period ended 31 August 2015
Registered No: 5205442
Chairman's Statement
I am pleased to present the financial report of Ventus VCT plc (the "Company") for the six month period ended 31 August 2015.
The Investment Manager, Temporis Capital LLP, has continued its successful management of the portfolio with a focus on delivering predictable dividends to shareholders.
During the period, construction was completed of the wind farm owned by Benard Matthews Green Energy Halesworth Limited, a company in which all three share funds of the Company hold an equity investment. The wind farm operates five Senvion MM82 turbines and has a generating capacity of 10.25 megawatts.
The hydroelectric schemes on the Glenfalloch Estate owned by Darroch Power Limited and Upper Falloch Power Limited are in the late stages of construction. It is expected they will be operational by the end of the year. All three share funds hold equity investments in these companies and have provided mezzanine loans.
Investment policy
To achieve its objectives, the Company's strategy has been to focus on investing in companies developing or operating renewable energy projects with installed capacities of 2 to 20 megawatts. The opportunity for VCTs to make further investments in renewable energy projects is limited given new investments in companies benefiting from Renewable Obligation Certificates or Feed-in Tariffs will be excluded from the VCT scheme. The current investment are not affected. The Company is focused on optimising the value of the investments it holds.
In accordance with the strategic objectives set by the Board, the Investment Manager has continued to focus the Company's activities on wind and hydroelectric investments generating stable long-term income with the objective of providing predictable dividends to shareholders. In order to improve stability of cash returns from investee companies and enhance the predictability of dividends to shareholders of the Company, more recent investments are, on average, structured with lighter leverage than earlier investments. Further information can be found in the Investment Manager's Report below.
The Investment Manager's Report provides a detailed analysis of the portfolio held by each of the ordinary, "C" and "D" share funds including a schedule which sets out the stage of investment and the renewable energy technology type of the assets held by each investee company.
Dividend policy
As disclosed in the annual report and financial statements for the year ended 28 February 2015, the Directors anticipate a realistic target range in the medium term beyond 28 February 2015 of 6p to 8p per ordinary share per annum and 6p to 8p per "C" share per annum. The Company intends to pay a minimum of 5p per "D" share per annum starting in the year ending 29 February 2016 with a target dividend 6p to 8p per "D" share from the year ending 28 February 2019 onwards. It should be stressed that these are intentions only, and no forecasts are intended or should be inferred.
The charts below show historical annual dividends for ordinary and "C" shares, as well as target dividends for the next five years.
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Dividend targets are intentions only. Valuation models are based on assumptions that are subject to change. No forecasts are intended or inferred.
The interim dividends for the current financial year are set out in the sections below.
Net Asset Value, Results and Dividend - Ordinary Shares
At the period end, the net asset value ("NAV") of the ordinary share fund of the Company stood at GBP19,704,000 or 120.8p per ordinary share. The revenue profit attributable to ordinary shareholders for the period was GBP117,000 or 0.72p per ordinary share. The capital gain attributable to ordinary shareholders for the period was GBP346,000 or 2.13p per ordinary share, resulting in a net gain attributable to ordinary shareholders for the period of GBP463,000 or 2.85p per ordinary share.
The value of investments held at 31 August 2015 in the ordinary share fund was GBP16,647,000 compared to GBP15,532,000 at 28 February 2015. The Investment Manager's report gives details of investments made and proceeds received during the period, together with information about the valuation of all investee company holdings within the portfolio.
The Company has declared an interim dividend of 3.50p per ordinary share which will be paid on
13 January 2016 to all ordinary shareholders on the register as at the close of business on 11 December 2015.
Net Asset Value, Results and Dividend - "C" Shares
At the period end, the NAV of the "C" share fund of the Company stood at GBP13,537,000 or 120.0p per "C" share. The revenue profit attributable to "C" shareholders for the period was GBP354,000 or 3.14p per "C" share. The capital loss attributable to "C" shareholders for the period was GBP235,000 or 2.10p per "C" share, resulting in a net gain attributable to "C" shareholders for the period of GBP119,000 or 1.04p per "C" share.
The value of investments held at 31 August 2015 in the "C" share fund was GBP13,020,000 compared to GBP12,875,000 at 28 February 2015.
The Company has declared an interim dividend of 3.50p per "C" share which will be paid on
13 January 2016 to all "C" shareholders on the register as at the close of business on 11 December 2015.
Net Asset Value, Results and Dividend - "D" Shares
At the period end, the NAV of the "D" share fund of the Company stood at GBP2,123,000 or 106.6p per "D" share. The revenue profit attributable to "D" shareholders for the period was GBP65,000 or 3.26p per "D" share. The capital gain attributable to "D" shareholders for the period was GBP187,000 or 9.39p per "D" share, resulting in a net gain attributable to "D" shareholders for the period of GBP252,000 or 12.65p per "D" share.
The value of investments held at 31 August 2015 in the "D" share fund was GBP1,933,000 compared to GBP712,000 at 28 February 2015.
The Company has declared an interim dividend of 2.00p per "D" share which will be paid on
13 January 2016 to all "D" shareholders on the register as at the close of business on 11 December 2015.
VCT Qualifying Status
The Company retains Robertson Hare LLP to review its compliance with VCT regulations. The Directors are satisfied that the Company has continued to fulfil the conditions for maintaining VCT status.
Key Performance Indicators
The Directors consider the following key performance indicators, which are typical for VCTs, to best measure the Company's performance and to provide shareholders with a summary of how the business' objectives are pursued:
Hot Features
Premium
For the six month period
ended 31 August 2015 Ordinary
(unaudited) Shares "C" Shares "D" Shares Total
Pence Pence Pence
per per per
share share share
GBP000 (1) GBP000 (1) GBP000 (1) GBP000
Revenue profit attributable
to equity shareholders 117 0.72 354 3.14 65 3.26 536
Capital gain/(loss)
attributable to equity
shareholders 346 2.13 (235) (2.10) 187 9.39 298
------- ------- -------
Net profit attributable
to equity shareholders 463 2.85 119 1.04 252 12.65 834
Dividends paid during
the period (571) (3.50) (395) (3.50) - 0.00 (966)
---------- ------- ---------- ------- ----------- ------- ---------------------
Total movement in equity
shareholders' funds (108) (0.65) (276) (2.46) 252 12.65 (132)
========== ======= ========== ======= =========== ======= =====================
On-going charges ratio
(2) 3.45% 3.35% 3.16% 3.39%
====== ====== ====== ======
Ordinary
Shares "C" Shares "D" Shares Total
Pence Pence Pence
per per per
share share share
GBP000 (3) GBP000 (3) GBP000 (3) GBP000
As at 31 August 2015
(unaudited)
Net asset value 19,704 120.8 13,537 120.0 2,123 106.6 35,364
======== ============= ======== ============ ========= ============ ===================
Total shareholder
return
(4) 25,744 159.1 15,404 136.5 2,123 106.6 43,271
======== ============= ======== ============ ========= ============ ===================
(1) The "per share" value is determined in respect of the weighted average number of shares in issue during the period, except in respect of the dividends paid in the period, which is determined on the basis of the number of shares eligible to receive dividends at the time the dividends were paid.
(MORE TO FOLLOW) Dow Jones Newswires
October 30, 2015 04:44 ET (08:44 GMT)
(2) The on-going charges ratio represents the total operating expenditure during the period (excluding investment costs) as a percentage of the average NAV of the Company over the six month period.
The total annual running costs cap is set out in Note 3 to the financial statements.
(3) The "per share" value is determined in respect of the number of shares in issue at the period end, except in respect of the total shareholder return which includes dividends paid and is determined on the basis of the number of shares eligible to receive dividends at the time the dividends were paid.
(4) The total shareholder return represents the NAV of the Company at the period end plus the cumulative dividends paid by the Company since incorporation.
Key Information as at 31 August
2015
(unaudited)
------------------------------------- --------- --------- --------
Ordinary "C" "D"
Shares Shares Shares
Net asset value as at 31 August
2015 GBP19.7m GBP13.5m GBP2.1m
Net asset value per share as at
31 August 2015 120.8p 120.0p 106.6p
Mid-market share price as at market
close on 30 September 2015 98.5p 99.5p 100.0p
Cumulative dividends per share
paid to date 38.25p 16.5p -
Total Return per share (NAV plus
cumulative dividends paid) 159.1p 136.5p 106.6p
------------------------------------- --------- --------- --------
Target dividend per share for
year ending 29 February 2016:
Tax-free dividend * 8.0p 8.0p 5.0p
Equivalent pre-tax dividend to
Higher Rate taxpayer ** 11.9p 11.9p 7.4p
Equivalent pre-tax dividend to
Additional Rate taxpayer ** 12.9p 12.9p 8.1p
------------------------------------- --------- --------- --------
Target dividend yield for year
ending 29 February 2016 based
on
mid-market share price as at market
close on 30 September 2015:
After tax 8.1% 8.0% 5.0%
Equivalent pre-tax dividend to
Higher Rate taxpayer 12.0% 11.9% 7.4%
Equivalent pre-tax dividend to
Additional Rate taxpayer 13.1% 13.0% 8.1%
------------------------------------- --------- --------- --------
* Dividend targets are intentions only. No forecasts
are intended or should be inferred. For
eligible VCT investors (i.e., UK Residents aged
over 18 years), there is no liability to tax on
dividends and no Capital Gains Tax on realised
gains. An investment limit of GBP200,000 per
person per tax year applies.
** Equivalent pre-tax yields are computed
assuming a shareholder receives dividends
from
other sources in excess of the GBP5,000 per year
tax-free dividend allowance (which will become
effective from April 2016). From April 2016, Higher
rate taxpayers will pay tax on dividends in
excess of the GBP5,000 tax-free allowance at the
rate of 32.5% and Additional Rate taxpayers
(taxable income in excess of GBP150,000) will pay
tax on dividends in excess of the GBP5,000 tax-free
allowance at the rate of 38.1%.
The performance of the Company is reviewed in the Investment Manager's Report, including the Company's compliance with HM Revenue & Customs ("HMRC") VCT regulations.
David Pinckney
Chairman
29 October 2015
Principal risks and uncertainties
Under the Financial Conduct Authority's Disclosure and Transparency Rules, the Directors are required to identify those material risks to which the Company is exposed and take appropriate steps to mitigate those risks. Other than the inherent risks associated with investment activities, which are discussed in the Investment Manager's Report, the risks described below are those which the Directors consider to be material. The Directors do not expect that the risks and uncertainties presented will change significantly over the current financial year.
-- Failure to meet and maintain the investment requirements for compliance with HMRC VCT regulations may result in the Company losing its status as a VCT.
The Board mitigates this risk by regularly reviewing investment management activity and each new investment with appropriately qualified advisers and, typically, by obtaining pre-approval from HMRC for each qualifying investment.
-- Inadequate control environment at service providers may lead to inaccurate reporting or misappropriation of assets
This risk is mitigated by only appointing service providers of a high standing under agreements that set out their responsibilities and by obtaining assurances from them that all exceptions have been reported to the Board. In addition, the Board has appointed an independent external party, Roffe Swayne, to report directly to the Board in respect of the Company's internal controls undertaken by the Investment Manager on behalf of the Company.
-- Non-compliance with the Listing Rules of the Financial Conduct Authority, Companies Act Legislation and other applicable regulations may result in termination of the Company's Stock Exchange listing or other sanctions
This risk is mitigated by employing external advisers fully conversant with applicable statutory and regulatory requirements who report regularly to the Board on the Company's compliance.
-- Reliance on the UK Government's continued support for the renewable energy sector and the risk of adverse changes in the application of government policies particularly in respect of the renewable energy sector and tax legislation.
The future level of Government-mandated support for renewables has important implications for the industry and could impact the value of investments the Company has made in companies which own and operate renewable projects. However, the Directors believe that any future reductions in renewable energy tariffs should not impact any existing investments in companies operating renewable energy assets, as the UK Government has a consistent history of grandfathering financial support mechanisms for existing projects and has a long term commitment to the renewable energy sector.
Going Concern
The Directors have concluded that it is appropriate to continue to adopt the going concern basis in preparing the accounts. The Company's major cash flows are within the Company's control (namely investments and dividends) or are reasonably predictable (namely the operating expenses). The Company is able to forecast cash inflows comprising proceeds from investments to a reasonable degree. Having reviewed a cash flow forecast for the next 18 months, the Board has a reasonable expectation that the Company is able to continue in operational existence for a period of at least 12 months from the date of this report.
Under changes to the UK Corporate Governance code, the Board is required to include a 'longer term' viability statement in the next annual report. This will detail the Board's reasonable expectation as to the Company's viability based on a robust assessment of its current position in respect to its principal risks. This will also state whether the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, which is expected to be a period significantly longer than 12 months. This viability statement will be included in the annual report for the year ending
29 February 2016.
Responsibility Statement
The Directors acknowledge responsibility for the interim results and approve this half-yearly report. The Directors confirm that to the best of their knowledge:
a) the condensed financial statements have been prepared in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting and give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Company as required by Disclosure and Transparency Rule ("DTR") 4.2.4R;
b) the interim management report, included within the Chairman's Statement and Investment Manager's Report, includes a fair review of the information required by DTR 4.2.7R, being the important events of the first half of the year and the principal risks and uncertainties for the remaining six months of the year as set out above; and
c) the condensed financial statements include a fair review of related party transactions and changes thereto, as required by DTR 4.2.8R.
The Responsibility Statement has been approved by the Board.
David Pinckney
Chairman
29 October 2015
Investment Manager's Report
In line with the strategic objectives set by the Board, the Investment Manager has continued to focus the Company's activities on renewable energy investments generating stable long-term income with the objective of providing predictable dividends to shareholders.
The three share funds of the Company are now fully invested in companies that own wind and hydro projects. All development investments have either been developed out, sold or written off. During the period, the Company's investments in Blawearie Wind Limited, BEL Holdco Limited and BEL Acquisition Limited, which in the aggregate were immaterial, were written down to nil or nominal values.
Under the current VCT regulations, new investments in renewable energy companies that benefit from Renewable Obligation Certificates ("ROCs") or Feed-in Tariffs are excluded as qualifying investments for VCTs. As such, the Company is limited in its ability to make further investments in accordance with the Investment Policy and has no plans to make further investments. The VCT restrictions do not affect any of the Company's existing investments.
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October 30, 2015 04:44 ET (08:44 GMT)
The ordinary share fund of the Company has investments in companies operating ten UK wind farms with an aggregate installed capacity of 83.35 megawatts. Five of these investee companies are also owned in part by the "C" share fund and one such company is also owned in part by the "D" share fund.
The "C" share fund has investments in companies operating seven UK wind farms with an aggregate installed capacity of 75.15 megawatts. Five of these seven companies are also owned in part by the ordinary share fund and one is also owned in part by the "D" share fund
The "D" share fund currently has one operational investment, Bernard Matthews Green Energy Halesworth Limited, which operates a 10.25 megawatt wind farm and which is also owed in part by the ordinary and "C" share funds.
The three share funds have a joint investment in two companies with hydroelectricity projects under construction near Loch Lomond in Scotland (Darroch Power Limited and Upper Falloch Power Limited). These projects will have aggregate installed capacity of 2.8 megawatts.
The following table shows key information about the renewable energy projects owned by the Company's investee companies:
Capacity Operational Output Ordinary "C" "D"
as a % Share Share Share
of budget
MW since Location six months Fund Fund Fund
ended
31 Aug
15
Operational Wind
Fenpower Limited 10.00 May 2007 Cambridgeshire 99% ü
A7 Greendykeside Lanarkshire,
Limited 4.00 Nov 2007 Scotland 114% ü
Achairn Energy Caithness,
Limited 6.00 May 2009 Scotland 72% ü
Lanarkshire,
A7 Lochhead Limited 6.00 Jun 2009 Scotland 117% ü
Greenfield Wind Lanarkshire,
Farm Limited 12.30 Mar 2011 Scotland 99% ü ü
Biggleswade Wind
Farm Limited 20.00 Dec 2013 Bedfordshire 105% ü ü
Eye Wind Power
Limited 6.80 Apr 2014 Suffolk 89% ü
Bernard Matthews
Green Energy
Pickenham Limited/
North Pickenham
Energy Limited 4.00 Apr 2014 Norfolk 98% ü ü
Bernard Matthews
Green Energy
Weston Limited/
Weston Airfield
Investments Limited 4.00 Apr 2014 Norfolk 95% ü ü
AD Wind Farmers
Limited (Allt
Dearg Windfarmers Argyll and
LLP) 10.20 Dec 2012 Bute, Scotland 109% ü
White Mill Windfarm
Limited 14.40 Aug 2012 Cambridgeshire 108% ü
Bernard Matthews 10.25 Aug 2015 Suffolk N/A ü ü ü
Green Energy
Halesworth Limited
Hydro under Construction
Darroch Power 1.90 N/A Near Loch N/A ü ü ü
Limited (Derrydarroch) Lomond,
Scotland
Upper Falloch 0.90 N/A Near Loch N/A ü ü ü
Power Limited Lomond,
Scotland
Performance of investee companies during the period was generally satisfactory. One of the three turbines at the Achairn wind farm was out of operation for most of the period because of a damaged blade, however revenues were fully protected under warranty claims. In the six months ended 31 August 2015, the Bernard Matthews Green Energy Halesworth wind farm became operational. The Derrydarroch and Upper Falloch hydro projects were under construction during the period and are scheduled to be completed in November 2015.
The Investment Manager is working actively to increase the value of the Company's portfolio through improvements in the operations of underlying assets and, when possible, the optimisation of the financial structure of investee companies.
Ordinary share portfolio
A summary of the ordinary share fund's unaudited investment valuations as at 31 August 2015 and gains and losses during the six month period ended 31 August 2015 is given below.
Voting Investment Investment Investment Investment
rights value cost value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Fenpower
Limited Q 33.33% 3,097 1,676 4,773 309 1,588 1,897 290 4,483 1,897
A7 Greendykeside
Limited Q 50.00% 1,988 682 2,670 916 620 1,536 165 2,505 1,536
Achairn
Energy
Limited * Q 8.50% 598 287 885 203 261 464 36 849 464
A7 Lochhead
Limited * Q 30.00% 980 - 980 820 - 820 (123) 1,103 820
Greenfield
Wind Farm
Limited * PQ 8.35% 732 673 1,405 333 613 946 24 1,396 961
Biggleswade
Wind Farm
Limited * Q 3.50% 263 291 554 86 264 350 (40) 594 350
Eye Wind
Power Limited ** Q 35.38% 2,131 - 2,131 1,597 - 1,597 246 1,885 1,597
Bernard
Matthews
Green Energy
Weston
Limited * Q 50.00% 844 - 844 500 - 500 (127) 971 500
Bernard
Matthews
Green Energy
Pickenham
Limited * Q 50.00% 730 - 730 500 - 500 36 694 500
Bernard
Matthews
Green Energy
Halesworth
Limited ** Q 4.45% 305 - 305 50 - 50 68 237 50
Operational companies
in the wind sector
Firefly
Energy
Limited * Q 50.00% - 385 385 200 578 778 - 745 1,138
--------------- ---- ---- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Hydroelectric scheme
under construction
Darroch
Power Limited * Q 14.09% 176 444 620 176 444 620 - - -
Upper Falloch
Power Limited * Q 9.30% 58 301 359 58 301 359 - - -
--------------- ---- ---- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Development
and
pre-planning
BEL Holdco
Limited * 11.40% - - - 750 - 750 (12) 12 750
BEL
Acquisition
Limited * 11.40% 6 - 6 58 - 58 (52) 58 58
--------------- ---------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Realised
investments
Redeven
Energy
Limited * 50.00% - - - - 113 113 - - 113
Total 11,908 4,739 16,647 6,556 4,782 11,338 511 15,532 10,734
--------------------------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
BEL Holdco Limited was written down to a nil value in the prior year. However, liquidation proceeds of GBP20,000 were received during the six month period ended 31 August 2015 which have been treated as realised gains.
"C" share portfolio
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A summary of the "C" share fund's unaudited investment valuations as at 31 August 2015 and gains and losses during the six month period ended 31 August 2015 is given below.
Voting Investment Investment Investment Investment
rights value cost value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Greenfield
Wind Farm
Limited * PQ 12.50% 1,096 1,009 2,105 500 917 1,417 39 2,089 1,440
White Mill
Windfarm
Limited * PQ 25.00% 2,022 349 2,371 1,000 318 1,318 (492) 2,863 1,318
AD Wind
Farmers
Limited * Q 50.00% 1,147 - 1,147 1,000 - 1,000 (68) 1,215 1,000
Biggleswade
Wind Farm
Limited * Q 21.50% 1,617 1,786 3,403 527 1,623 2,150 (250) 3,653 2,150
Weston
Airfield
Investments
Limited * Q 50.00% 1,910 - 1,910 1,000 - 1,000 366 1,544 1,000
North
Pickenham
Energy
Limited * Q 50.00% 1,405 - 1,405 1,000 - 1,000 226 1,179 1,000
Bernard
Matthews
Green Energy
Halesworth
Limited ** Q 5.64% 386 - 386 300 - 300 86 300 300
Hydroelectric
scheme under
construction
Darroch
Power
Limited * Q 4.22% 53 133 186 53 133 186 - - -
Upper Falloch
Power
Limited * Q 2.79% 17 90 107 17 90 107 - - -
-------------- ---- ---- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Development
and
pre-planning
Blawearie
Wind Limited * 50.00% - - - 32 - 32 (32) 32 32
-------------- ---------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Realised
investments
Iceni
Renewables
Limited * 50.00% - - - 400 17 417 - - 417
Total 9,653 3,367 13,020 5,829 3,098 8,927 (125) 12,875 8,657
-------------------------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
"D" share portfolio
A summary of the "D" share fund's unaudited investment valuations as at 31 August 2015 and gains during the six month period ended 31 August 2015 is given below.
Voting Investment Investment Investment Investment
rights value cost value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Bernard
Matthews
Green
Energy
Halesworth
Limited ** Q 13.38% 915 - 915 712 - 712 203 712 712
------------- ---- --- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Hydroelectric
scheme under
construction
Darroch
Power
Limited * Q 25.50% 319 325 644 319 325 644 - - -
Upper
Falloch
Power
Limited * Q 29.58% 185 189 374 185 189 374 - - -
Total 1,419 514 1,933 1,216 514 1,730 203 712 712
------------------------ ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Q Investment complies with VCT regulations on qualifying holdings.
PQ Part of the investment complies with VCT regulations on qualifying holdings.
* A company in which Ventus 2 VCT plc has also invested (or in which Ventus 2 VCT plc had invested prior to the investment being realised).
** A company in which Temporis Capital Renewable Infrastructure EIS Fund and Ventus 2 VCT plc have also invested.
The Company, Ventus 2 VCT plc and Temporis Capital Renewable Infrastructure EIS Fund are managed by
Temporis Capital LLP.
Valuation of Investments
It is the accounting policy of the Company to hold its investments at fair value. The Company's investments in investee companies which operate renewable energy assets are valued using a discounted cash flow methodology. The Company has changed its approach to the valuation methodology. Previously, the valuation analysis was performed using a discount factor applied to the leveraged cash flows of the investee companies. However, to determine the valuations as at 31 August 2015, the Company has applied a discount rate to the unleveraged cash flows to determine the enterprise value of the investee company and then has subtracted the market value of any senior debt (including any prepayment fees and swap break costs) to calculate the value of the equity and/or mezzanine debt in the investee company. In recent years an active market for the purchase of operational renewable energy assets has emerged; the revised valuation approach conforms with the methodology that has become prevalent in the market. It is, therefore, deemed a more appropriate method to value the Company's investments. The discount rates used to value the unleveraged cash flows of investee companies range from 7.5% to 9%, with discount rates applied to the cash flows of operating wind farms generally being in the range of 8.25% to 9%.
The key assumptions that have a significant impact on discounted cash flow valuations for these assets are the discount rate, the price at which the power and associated benefits can be sold, the amount of electricity the investee companies' generating assets are expected to produce and operating costs.
The fair value of the Company's investments in project companies which have not passed an initial satisfactory operational period are determined to be the price of investment subject to a periodic impairment review.
Sensitivity of Net Asset Value to Changes in Key Assumptions
The charts below illustrate the sensitivity of the NAV of the Company's share funds to changes of certain key input assumptions applied to the unleveraged cash flows in the valuation models.
The price at which the output from the generating assets is sold is a factor of both wholesale electricity prices and Government subsidies. The selling price is often fixed in the medium term under power purchase agreements. For periods outside the terms of these agreements the assumed future prices are estimated using external third party forecasts which take the form of specialist consultancy reports.
Specifically commissioned external consultant reports are used to estimate the expected generating output of the investee company's generating assets taking into account their type and location. The analysis set out below describes the sensitivity of each share fund's NAV to a higher (P75) or lower (P25) probability of exceedance of the forecast long term average output versus the base case (P50).
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The discount factor and inflation rate applied to the cash flows are regularly reviewed by the Investment Committee of the Investment Manager to ensure they are set at the appropriate levels. The Investment Committee and the Board will also give consideration to the specific performance characteristics of the particular type of generating technology being used. The range of discount factors which form the base case in the sensitivity analysis is set out in the section above. The base case inflation rate used in the sensitivity analysis is 2.5%.
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Investment Policy
The Company has focused on investing in companies developing renewable energy projects with installed capacities of up to 20 megawatts. Investments are generally in companies which own and operate projects initiated by specialist small-scale developers and smaller projects which are not attractive to large development companies and utilities.
Asset Allocation
The Investment Manager seeks to allocate the Company's investments in equity securities and loan stock of companies owning renewable energy projects, primarily wind energy and hydroelectric. Up to 10% of net proceeds raised from share offers may be allocated to companies developing early stage renewable energy projects prior to planning permissions being obtained.
The Company together with Ventus 2 VCT plc has an allocation agreement in place with the Investment Manager. The allocation agreement prescribes the allocation of investments between the two companies and their share funds in accordance with the ratio of available funds in each share fund, subject to adjustment in consideration of maintaining the VCT status of both companies, concentration risk, expected timing of realisations and projected dividend profiles.
When there is a conflict or potential conflict of interest between the investment strategy of the Company and that of another fund managed by Temporis Capital LLP, the matter is referred to the Investment Manager's compliance officer who ensures any conflicts are dealt with fairly. Any investment made in a company in which another fund managed by the Investment Manager has invested or intends to invest will be approved by the Directors who are independent of the Investment Manager, unless the investment is made at the same time and on the same terms or in accordance with a specific pre-existing agreement between the Company and the Investment Manager.
The Company's policy is to maintain cash reserves of at least 5% of net proceeds raised from share offers for the purpose of meeting operating expenses and purchasing its shares in the market. Circumstances may arise which would require the Company to hold less than 5% of net proceeds in cash for a limited period of time.
In order to comply with VCT requirements, at least 70% by value of the Company's investments are required to be comprised of qualifying investments.
The Company typically owns 25% to 50% of the equity share capital of each investee company and a portion of its investment in each investee company may be in the form of loan stock.
The Company's uninvested funds are placed on deposit or invested in short-term fixed income securities until suitable investment opportunities are found.
Risk Diversification
The geographical focus of the Company's portfolio is the UK and the majority of investments made to date are in the wind sector. Funds are invested in a range of companies with small-scale projects so that project risk is not concentrated in only a few schemes. The portfolio contains projects at different stages of the asset lifecycle, ranging from pre-planning to construction and then into operation. However, the portfolio is now mostly comprised of companies which own operating assets. Investments are made via subscriptions for new share capital, acquiring existing share capital or via loan stock instruments in order to secure a negotiated level of return from the project. The majority of investments are made in special purpose companies set up specifically to develop each project.
Gearing
The Company does not intend to borrow funds for investment purposes. However the Company is exposed to gearing through its investee companies which typically fund the construction costs of each project through senior debt which is non-recourse to the Company. The Investment Manager is involved in assisting investee companies in negotiating the terms of this finance to ensure competitive terms are achieved. The interest rate is typically fixed for the duration of the loan so that investee companies are not exposed to changes in market interest rates.
To the extent that borrowing should be required by the Company for any purpose, the Directors will restrict the borrowings of the Company. The aggregate principal amount at any time outstanding in respect of money borrowed by the Company will not, without the previous sanction of an ordinary resolution of the Company, exceed a sum equal to 10% of the adjusted share capital and reserves of the Company in accordance with its Articles.
Maximum Exposures
In order to gauge the maximum exposure of the Company to various risks, the following can be used as a guide:
i) Investments in qualifying holdings
Under VCT regulations, at least 70% of the Company's funds should be invested in qualifying holdings. When there is an issue of new shares, the 70% requirement does not apply to the new funds raised for any accounting periods which end earlier than three years from the date of allotment of the new shares.
For the purposes of the 70% qualifying holdings requirement, disposals of qualifying investments for cash may be disregarded for a period of six months. Where a VCT breaches any requirement due to factors outside of its control, it may apply to HMRC for a determination that the breach will be disregarded for a period of 90 days while the breach is remedied.
ii) Concentration limits
Under VCT regulations, no more than 15% of the Company's total assets should be in a single investee company at the time the investment is made in that investee company.
iii) Investments in pre-planning projects
In accordance with the Company's investment policy, a maximum of 10% of the net funds raised from share offers may be invested in companies developing pre-planning projects.
Temporis Capital LLP
Investment Manager
29 October 2015
Directors and Advisers
Directors
David Pinckney (Chairman)
David Williams
Richard Abbott
Company Secretary
The City Partnership (UK) Limited
Thistle House
21 Thistle Street
Edinburgh
EH2 1DF
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Principal Banker
Barclays Bank plc
1 Churchill Place
London
E14 5HP
Investment Manager & Registered Office
Temporis Capital LLP
Berger House
36 - 38 Berkeley Square
London
W1J 5AE
Registrar
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Broker
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
VCT Taxation Adviser
Robertson Hare LLP
Suite C, First Floor
4 - 6 Staple Inn
London
WC1V 7QH
Solicitors
Howard Kennedy LLP
No.1 London Bridge
London
SE1 9BG
Independent Review Report to Ventus VCT plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six month period ended 31 August 2015 which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Equity, the Condensed Statement of Cash Flows and the related explanatory notes.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of half-yearly financial reporting in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
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We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six month period ended 31 August 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
BDO LLP,
Chartered Accountants
London,
United Kingdom
29 October 2015
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Condensed Statement of Comprehensive Income
for the six month period ended 31 August 2015 (unaudited)
Ordinary Shares "C" Shares "D" Shares Total
Revenue Capital Total Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Realised
gains on
investments 6 - 20 20 - - - - - - - 20 20
Net unrealised
gain/ (loss)
on
investments 6 - 511 511 - (125) (125) - 203 203 - 589 589
Income 347 - 347 471 - 471 83 - 83 901 - 901
Investment
management
fees 3 (63) (188) (251) (44) (132) (176) (6) (18) (24) (113) (338) (451)
Other expenses (164) - (164) (51) - (51) (10) - (10) (225) - (225)
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Profit/
(loss)
before
taxation 120 343 463 376 (257) 119 67 185 252 563 271 834
Taxation 4 (3) 3 - (22) 22 - (2) 2 - (27) 27 -
Profit/
(loss)
and total
comprehensive
income
for the
period
attributable
to
shareholders 117 346 463 354 (235) 119 65 187 252 536 298 834
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Return
per share:
Basic and
diluted
return
per share
(p) 5 0.72 2.13 2.85 3.14 (2.10) 1.04 3.26 9.39 12.65
The Company has only one class of business and derives its income from investments made in the UK.
The total column of this statement represents the Company's Condensed Statement of Comprehensive Income, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union. The revenue and capital columns shown above constitute supplementary information prepared under the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" 2009 ("SORP") published by the Association of Investment Companies.
The accompanying notes on set out below form an integral part of these Financial Statements.
Condensed Statement of Comprehensive Income
for the six month period ended 31 August 2014 (unaudited)
Ordinary Shares "C" Shares "D" Shares Total
Revenue Capital Total Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Realised
gain on
investments 6 - 150 150 - - - - - - - 150 150
Net unrealised
gains
on
investments 6 - 239 239 - 519 519 - - - - 758 758
Income 632 - 632 417 - 417 - - - 1,049 - 1,049
Investment
management
fees 3 (62) (186) (248) (41) (123) (164) (5) (14) (19) (108) (323) (431)
Other
expenses (87) (2) (89) (60) - (60) (9) - (9) (156) (2) (158)
-------- -------- ------- -------- -------- ------- ------- -------- -------- -------
Profit/
(loss)
before
taxation 483 201 684 316 396 712 (14) (14) (28) 785 583 1,368
Taxation 4 (15) 15 - (24) 24 - 3 (3) - (36) 36 -
Profit/(loss)
and total
comprehensive
income
for the
period
attributable
to
shareholders 468 216 684 292 420 712 (11) (17) (28) 749 619 1,368
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Return per
share:
Basic
and diluted
return
per share
(p) 5 2.87 1.32 4.19 2.58 3.71 6.29 (0.74) (1.14) (1.88)
The Company has only one class of business and derives its income from investments made in the UK.
The total column of this statement represents the Company's Condensed Statement of Comprehensive Income, prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union. The revenue and capital columns shown above constitute supplementary information prepared under the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" 2009 ("SORP") published by the Association of Investment Companies.
The accompanying notes on set out below form an integral part of these Financial Statements.
Condensed Statement of Financial Position
as at 31 August 2015 (unaudited)
As at 31 August As at 28 February
2015 2015
(unaudited) (audited)
Ordinary "C" "D" Ordinary "C" "D"
Shares Shares Shares Total Shares Shares Shares Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-current assets
Investments 6 16,647 13,020 1,933 31,600 15,532 12,875 712 29,119
Trade and other
receivables - - - - 2,404 - - 2,404
16,647 13,020 1,933 31,600 17,936 12,875 712 31,523
--------- -------- -------- -------- --------- -------- -------- ----------
Current assets
Trade and other
receivables 7 3,023 235 84 3,342 309 263 1 573
Cash and cash
equivalents 8 432 323 115 870 1,749 752 1,169 3,670
3,455 558 199 4,212 2,058 1,015 1,170 4,243
--------- -------- -------- -------- --------- -------- -------- ----------
Total assets 20,102 13,578 2,132 35,812 19,994 13,890 1,882 35,766
--------- -------- -------- -------- --------- -------- -------- ----------
Current liabilities
Trade and other
payables (398) (41) (9) (448) (182) (77) (11) (270)
Net current assets 3,057 517 190 3,764 1,876 938 1,159 3,973
--------- -------- -------- -------- --------- -------- -------- ----------
Net assets 19,704 13,537 2,123 35,364 19,812 13,813 1,871 35,496
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--------- -------- -------- -------- --------- -------- -------- ----------
Equity attributable
to equity holders
Share capital 4,076 2,832 498 7,406 4,076 2,832 498 7,406
Capital redemption
reserve 1,587 - - 1,587 1,587 - - 1,587
Share premium - - 1,433 1,433 - - 1,433 1,433
Special reserve 8,761 7,667 - 16,428 9,176 7,667 - 16,843
Capital reserve
- realised (1,061) (1,587) (55) (2,703) (2,957) (1,477) (39) (4,473)
Capital reserve
- unrealised 6,037 4,574 203 10,814 7,587 4,699 - 12,286
Revenue reserve 304 51 44 399 343 92 (21) 414
Total equity 19,704 13,537 2,123 35,364 19,812 13,813 1,871 35,496
--------- -------- -------- -------- --------- -------- -------- ----------
Basic and diluted
net asset value
per share (p) 9 120.8 120.0 106.6 121.5 122.4 94.0
Approved by the Board and authorised for issue on 29 October 2015.
David Pinckney
Chairman
Ventus VCT plc. Registered No: 05205442
The accompanying notes on set out below form an integral part of these Financial Statements.
Condensed Statement of Changes in Equity
for the six month period ended 31 August 2015 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 4,076 1,587 - 9,176 (2,957) 7,587 343 19,812
Transfer
from special
reserve
to revenue
reserve - - - (415) - - 415 -
Transfer
of unrealised
gains on
investment
to realised
gains on
investment - - - - 2,061 (2,061) - -
Profit/(loss)
and total
comprehensive
income
for the
period - - - - (165) 511 117 463
Dividends
paid in
the period - - - - - - (571) (571)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2015 4,076 1,587 - 8,761 (1,061) 6,037 304 19,704
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 2,832 - - 7,667 (1,477) 4,699 92 13,813
Profit/(loss)
and total
comprehensive
income
for the
period - - - - (110) (125) 354 119
Dividends
paid in
the period - - - - - - (395) (395)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2015 2,832 - - 7,667 (1,587) 4,574 51 13,537
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
"D" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 498 - 1,433 - (39) - (21) 1,871
Profit/(loss)
and total
comprehensive
income
for the
period - - - - (16) 203 65 252
Dividends
paid in
the period - - - - - - - -
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2015 498 - 1,433 - (55) 203 44 2,123
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 7,406 1,587 1,433 16,843 (4,473) 12,286 414 35,496
Transfer
from special
reserve
to revenue
reserve - - - (415) - - 415 -
Transfer
of unrealised
gains on
investment
to realised
gains on
investment - - - - 2,061 (2,061) - -
Profit/(loss)
and total
comprehensive
income
for the
period - - - - (291) 589 536 834
Dividends
paid in
the period - - - - - - (966) (966)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2015 7,406 1,587 1,433 16,428 (2,703) 10,814 399 35,364
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
All amounts presented in the statement of changes in equity are attributable to equity holders. The revenue reserve and realised capital reserve are distributable reserves. The special reserve may be used to fund buy-backs of ordinary shares and pay dividends if they are considered by the Board to be in the interests of the shareholders.
The accompanying notes on set out below form an integral part of these Financial Statements.
Condensed Statement of Changes in Equity
For the six month period ended 31 August 2014 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 4,076 1,587 - 9,479 (4,315) 8,654 165 19,646
Transfer
of unrealised
losses on
investment
to realised
losses on
investment - - - - 1,615 (1,615) - -
Profit/(loss)
and total
comprehensive
income for
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the period - - - - (23) 239 468 684
Dividends
paid in
the period - - - - - - (408) (408)
------------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2014 4,076 1,587 - 9,479 (2,723) 7,278 225 19,922
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 2,832 - - 7,712 (1,245) 4,225 247 13,771
Share buyback
for Treasury
in the period - - - (45) - - - (45)
Profit/(loss)
and total
comprehensive
income for
the period - - - - (99) 519 292 712
Dividends
paid in
the period - - - - - - (283) (283)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- --------------
At 31 August
2014 2,832 - - 7,667 (1,344) 4,744 256 14,155
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
"D" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 - - - - - - - -
Shares issued
in the period 498 - 1,488 - - - - 1,986
Issue costs - - (53) - - - - (53)
Profit/(loss)
and total
comprehensive
income for
the period - - - - (17) - (11) (28)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2014 498 - 1,435 - (17) - (11) 1,905
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 6,908 1,587 - 17,191 (5,560) 12,879 412 33,417
Shares issued
in the period 498 - 1,488 - - - - 1,986
Issue costs - - (53) - - - - (53)
Share buyback
for Treasury
in the period - - (45) - - - (45)
Transfer
of unrealised
losses on
investment
to realised
losses on
investment - - - - 1,615 (1,615) - -
Profit/(loss)
and total
comprehensive
income for
the period - - - - (139) 758 749 1,368
Dividends
paid in
the period - - - - - - (691) (691)
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2014 7,406 1,587 1,435 17,146 (4,084) 12,022 470 35,982
------------------- ----------------- --------------- -------------- ---------------------- ---------------------- -------------- --------------
The accompanying notes on set out below form an integral part of these Financial Statements.
Condensed Statement of Cash Flows
For the six month period ended 31 August 2015 (unaudited)
Six months Six months
ended ended 31
31 August August
2015 2014
(unaudited) (unaudited)
Ordinary
Shares "C" Shares "D" Shares Total Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cash flows
from
operating
activities
Investment
income
received 155 511 - 666 1,019
Deposit
interest
received 2 - - 2 -
Investment
management
fees paid (250) (176) (24) (450) (429)
Other cash
payments (69) (98) (12) (179) (295)
------------------------ ------------------------- ------------------------- -------------------------
Cash
generated
from/ (used
in)
operations (162) 237 (36) 39 295
Taxes paid - - - - -
Net cash
inflow/
(outflow)
from
operating
activities (162) 237 (36) 39 295
------------------------ ------------------------- ------------------------- ------------------------- -------------------------
Cash flows
from
investing
activities
Purchases of
investments (979) (294) (1,018) (2,291) (770)
Disposals of
investments - - - - 1
Proceeds
from
investments 395 23 - 418 2,745
-------------------------
Net cash
(outflow)/
inflow from
investing
activities (584) (271) (1,018) (1,873) 1,976
------------------------ ------------------------- ------------------------- ------------------------- -------------------------
Cash flows
from
financing
activities
"D" shares
issued - - - - 1,986
"D" share
issue
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costs - - - - (53)
"C" share
buy
back - - - - (45)
Dividends
paid (571) (395) - (966) (691)
-------------------------
Net cash
(outflow)/
inflow from
financing
activities (571) (395) - (966) 1,197
------------------------ ------------------------- ------------------------- ------------------------- -------------------------
Net
(decrease)/
increase in
cash and
cash
equivalents (1,317) (429) (1,054) (2,800) 3,468
Cash and
cash
equivalents
at the
beginning
of the
period 1,749 752 1,169 3,670 703
Cash and
cash
equivalents
at the end
of
the period 432 323 115 870 4,171
------------------------ ------------------------- ------------------------- ------------------------- -------------------------
The accompanying notes on set out below form an integral part of these Financial Statements.
Explanatory Notes to the Condensed Financial Statements
For the six month period ended 31 August 2015 (unaudited)
1. Accounting convention and policies
The unaudited half-yearly results which cover the six month period ended 31 August 2015 have been prepared on the basis of accounting policies set out in the statutory accounts of the Company for the year ended 28 February 2015. The half-yearly financial statements have been prepared under IAS 34 Interim Financial Reporting.
The accounting policies are consistent with those of the previous financial year. The Directors do not expect the accounting policies to change over the current financial year.
2. Publication of non-statutory accounts
The financial information for the year ended 28 February 2015 contained in this Half-Yearly Financial Report does not constitute the Company's statutory accounts for that period but has been derived from them. The financial information for the six month periods ended 31 August 2015 and 31 August 2014 has not been audited but have been reviewed by the auditor.
Statutory accounts in respect of the year ended 28 February 2015 have been audited and reported on by the auditor and delivered to the Registrar of Companies and included the Report of the Auditor which was unqualified, did not draw attention to any matter by way of emphasis and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.
3. Investment management fees
The Company pays the Investment Manager an annual management fee equal to 2.5% of the Company's net assets. The fee is not subject to VAT and is payable quarterly in advance. The annual management fee is allocated 75% to capital and 25% to revenue. Total annual running costs are in aggregate capped at 3.6% of NAV (excluding the Investment Manager's performance fee, any irrecoverable VAT and investment costs), with any excess being borne by the Investment Manager.
The amount paid to the Investment Manager for the six month period ended 31 August 2015 in respect of the net assets attributable to the ordinary shareholders was GBP251,000 (six month period ended 31 August 2014: GBP248,000). The amount paid to the Investment Manager for the six month period ended 31 August 2015 in respect of the net assets attributable to the "C" shareholders was GBP176,000 (six month period ended 31 August 2014: GBP164,000). The amount paid to the Investment Manager for the six month period ended 31 August 2015 in respect of the net assets attributable to the "D" shareholders was GBP24,000 (six month period ended 31 August 2014: GBP19,000).
4. Taxation
The Company has accrued GBPnil tax charge in the ordinary share fund (six month period ended 31 August 2014: GBPnil tax charge); GBPnil tax charge in the "C" share fund (six month period ended 31 August 2014: GBPnil tax charge) and GBPnil tax charge in the "D" share fund (six month period ended 31 August 2014: GBPnil tax charge). The tax charges are accrued using an effective tax rate of 20% for the 2015/16 tax year and 21% for the 2014/15 tax year, however dividends and capital gains are not subject to tax resulting in a lower effective tax rate than the standard applicable rate in the UK.
No provision for deferred taxation has been made on potential capital gains due to the Company's current status as a VCT under section 274 of the ITA and the Directors' intention to maintain that status. The Company intends to continue to meet the conditions required to maintain its status as a VCT for the foreseeable future.
5. Basic and diluted return per share For the six months ended 31 Ordinary "D" August 2015 (unaudited) Shares "C" Shares Shares Revenue return for the period p per share 0.72 3.14 3.26 Based on: Revenue return for the period GBP000 117 354 65 Weighted average number number of shares in issue of shares 16,307,547 11,283,207 1,990,767 Capital gain/ (loss) for the period p per share 2.13 (2.10) 9.39 Based on: Capital gain/ (loss) for the period GBP000 346 (235) 187 Weighted average number number of shares in issue of shares 16,307,547 11,283,207 1,990,767 Net profit for the period p per share 2.85 1.04 12.65 Based on: Net gain for the period GBP000 463 119 252 Weighted average number number of shares in issue of shares 16,307,547 11,283,207 1,990,767 For the six months ended 31 Ordinary "D" August 2014 (unaudited) Shares "C" Shares Shares Revenue return for the period p per share 2.87 2.58 (0.74) Based on: Revenue return for the period GBP000 468 292 (11) Weighted average number number of shares in issue of shares 16,307,547 11,314,224 1,488,331 Capital gain/(loss) for the period p per share 1.32 3.71 (1.14) Based on: Capital gain/(loss) for the period GBP000 215 420 (17) Weighted average number number of shares in issue of shares 16,307,547 11,314,224 1,488,331 Net profit/(loss) for the period p per share 4.19 6.29 (1.88) Based on: Net gain/(loss) for the period GBP000 683 712 (28) Weighted average number number of shares in issue of shares 16,307,547 11,314,224 1,488,331
There were no differences between basic and diluted return per ordinary share, per "C" share or per "D" share because no dilutive instruments had been issued or granted.
6. Investments
Six months
ended
31 August
2015 Ordinary Shares "C" Shares "D" Shares Total
(unaudited) Loan Loan Loan Loan
Shares Stock Total Shares Stock Total Shares Stock Total Shares Stock Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 6,322 4,412 10,734 5,759 2,898 8,657 712 - 712 12,793 7,310 20,103
Opening
realised
losses (162) (417) (579) (464) (17) (481) - - - (626) (434) (1,060)
Opening
unrealised
gains 5,102 275 5,377 4,472 227 4,699 - - - 9,574 502 10,076
Opening
fair value 11,262 4,270 15,532 9,767 3,108 12,875 712 - 712 21,741 7,378 29,119
During
the period
Purchases
at cost 234 745 979 70 223 293 504 514 1,018 808 1,482 2,290
Investment
(MORE TO FOLLOW) Dow Jones Newswires
October 30, 2015 04:44 ET (08:44 GMT)
proceeds - (375) (375) - (23) (23) - - - - (398) (398)
Realised
losses - - - - - - - - - - - -
Unrealised
gains/
(losses) 412 99 511 (184) 59 (125) 203 - 203 431 158 589
Closing
fair value 11,908 4,739 16,647 9,653 3,367 13,020 1,419 514 1,933 22,980 8,620 31,600
------------ --------------- -------------- ---------------- --------------- -------------- ---------------- --------------- -------------- -------------- --------------- --------------
Closing
position
Closing
cost 6,556 4,782 11,338 5,829 3,098 8,927 1,216 514 1,730 13,601 8,394 21,995
Closing
realised
losses (162) (417) (579) (464) (17) (481) - - - (626) (434) (1,060)
Closing
unrealised
gains 5,514 374 5,888 4,288 286 4,574 203 - 203 10,005 660 10,665
Closing
fair value 11,908 4,739 16,647 9,653 3,367 13,020 1,419 514 1,933 22,980 8,620 31,600
------------ --------------- -------------- ---------------- --------------- -------------- ---------------- --------------- -------------- -------------- --------------- --------------
BEL Holdco Limited was written down to a nil value in the prior year. However, liquidation proceeds of GBP20,000 were received during the six month period ended 31 August 2015 which have been treated as realised gains.
Year ended
28 February
2015 Ordinary Shares "C" Shares "D" Shares Total
(audited) Loan Loan Loan Loan
Shares Stock Total Shares Stock Total Shares Stock Total Shares Stock Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 8,264 4,887 13,151 5,457 3,740 9,197 - - - 13,721 8,627 22,348
Opening
realised
losses (2,312) (417) (2,729) (464) (17) (481) - - - (2,776) (434) (3,210)
Opening
unrealised
gains 6,309 285 6,594 3,984 241 4,225 - - - 10,293 526 10,819
Opening
fair value 12,261 4,755 17,016 8,977 3,964 12,941 - - - 21,238 8,719 29,957
During
the year
Purchases
at cost 58 - 58 2 - 2 712 - 712 772 - 772
Disposal
proceeds - (475) (475) - (541) (541) - - - - (1,016) (1,016)
Conversion
of loan
stock to
shares - - - 300 (301) (1) - - - 300 (301) (1)
Investment
proceeds (1,765) - (1,765) - - - - - - (1,765) - (1,765)
Realised
losses 150 - 150 - - - - - - 150 - 150
Unrealised
gains/
(losses) 558 (10) 548 488 (14) 474 - - - 1,046 (24) 1,022
Closing
fair value 11,262 4,270 15,532 9,767 3,108 12,875 712 - 712 21,741 7,378 29,119
------------ --------------- -------------- ---------------- --------------- -------------- ---------------- --------------- -------------- -------------- --------------- --------------
Closing
position
Closing
cost 6,322 4,412 10,734 5,759 2,898 8,657 712 - 712 12,793 7,310 20,103
Closing
realised
losses (162) (417) (579) (464) (17) (481) - - - (626) (434) (1,060)
Closing
unrealised
gains 5,102 275 5,377 4,472 227 4,699 - - - 9,574 502 10,076
Closing
fair value 11,262 4,270 15,532 9,767 3,108 12,875 712 - 712 21,741 7,378 29,119
------------ --------------- -------------- ---------------- --------------- -------------- ---------------- --------------- -------------- -------------- --------------- --------------
The shares held by the Company represent equity holdings in unquoted UK companies. The Investment Manager's Report provides details in respect of the Company's shareholding in each investment. The investments acquired and disposed of during the period are detailed in the Investment Manager's Report.
Under IFRS 7 and IFRS 13, the Company is required to report the category of fair value measurements used in determining the value of its investments, to be disclosed by the source of inputs, using a three-level hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
-- Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
-- Those with inputs for the instrument that are not based on observable market data (unobservable inputs) (Level 3).
As at 31 August 2015, each of the Company's investments held was valued using inputs which are considered to be Level 3 inputs and a reconciliation of the movements is in the table above.
The Board has considered the key assumptions which may affect the results reported in the financial statements and the Company is further required to disclose the effect of changing one or more inputs with reasonable alternative assumptions where a significant change to the fair value measurement would result. The key assumptions that have a significant impact on the fair value in the discounted future cash flow valuations are the discount factors used (which range from 7.5% to 9.0%), the price at which power and associated benefits may be sold and the levels of electricity the investee' companies generating assets are likely to produce (which are taken from specialist consultant reports).
As at 31 August 2015, the value of the Company's investment in Bernard Matthews Green Energy Halesworth Limited was determined on a discounted cash flow basis as it is now operational, whereas previously the investment was valued on the basis of the price of recent investment.
The Board has determined that a reasonable alternative assumption may be made in respect of the discount factors applied; the sensitivity of the value of the portfolio to the application of an increase or decrease in discount factors is set out below.
The investment portfolio has been reviewed for the effect of alternative valuation inputs, namely the sensitivity of the total value of all investments to a 0.5% increase or decrease in the discount factors applied to the valuation models of investments which have been valued using the discounted future cash flows from the underlying business.
(MORE TO FOLLOW) Dow Jones Newswires
October 30, 2015 04:44 ET (08:44 GMT)
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