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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Chrysalis Vct Plc | LSE:CYS | London | Ordinary Share | GB0030348683 | 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% | 32.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Chrysalis VCT plc
Half Yearly Report for the six months ended 30 April 2017
Recent performance summary
30 April 30 April 31 October
2017 2016 2016
pence pence pence
Net asset value per share 84.30 83.50 80.80
Cumulative dividends paid per share 70.70 63.70 67.45
Total return (net asset value per share
plus cumulative dividends) 155.00 147.20 148.25
Introduction
I am pleased to present my statement for the six months ended 30 April
2017 and to report a further period of strong performance by your
company, fuelled by some disposals and developments in the existing
portfolio.
Net asset value and results
At 30 April 2017, the net asset value per share ("NAV") stood at 84.3p,
an increase of 6.8p (8.4%) since the previous year end of 31 October
2016 (after adding back the 3.25p dividend paid on 23 February 2017).
The Total Return to Shareholders who invested at the launch of the
Company in 2000 (NAV plus cumulative dividends) is now 155.0p compared
to the original cost (net of income tax relief) of 80.0p per share.
The return on activities after taxation for the Company for the period
was GBP2.0 million, comprising a revenue return of GBP96,000 and a
capital return of GBP1.9 million.
Dividends
In line with previous years, the Board has declared an interim dividend
of 1.75p per share. In addition, as a result the realisations in the
period as highlighted below, I am delighted that the Board has approved
a further special dividend of 3.0p per share will also be paid. The
total dividend of 4.75p will be paid on 4 August 2017 to Shareholders on
the register at 14 July 2017.
Following the payment of the dividend on 4 August 2017, Shareholders who
invested at launch will have received distributions totalling 75.45p per
share.
Venture capital portfolio
One major realisation was achieved in the period, being Internet Fusion
Limited. Our investment in the ecommerce retailer was sold for GBP2.1
million when the business was acquired by a third party in an all cash
transaction. We first invested in the company in 2012. With a
subsequent follow on investment the total cost was GBP800,000, although
we had increased the carrying value over time. In this period, the sale
produced a realised gain of GBP314,000. In addition to the proceeds
already received, there is the possibility of further consideration
under earn out arrangements in March 2018. The Board congratulates the
Manager on delivering an excellent result for Shareholders over a
relatively short investment period.
During the six months, Wessex Advanced Switching Products Limited
("WASP"), a successful realisation from 2015, paid further deferred
consideration of GBP525,000 to the Company. As with Internet Fusion,
this investment has proved to be an excellent outcome for Shareholders.
There were also three full or partial redemptions of loan stock from
various investee companies totalling GBP564,000 and two liquidation
receipts totalling GBP17,000. Total proceeds received in the period were
GBP3.2 million, giving rise to a total realised gain of GBP1.1 million.
The Company made one follow on investment in the period.
Venture capital portfolio (continued)
An additional GBP300,000 was invested in Zappar (Holding) Limited, the
augmented reality developer, as part of a fundraising undertaken by the
company to fund its continuing growth.
At the end of the period, the Company held a venture capital portfolio
comprising 25 investments with a total value of GBP17.0 million.
As usual, the Board has reviewed the valuations of all the unquoted
portfolio and made some a number of adjustments both upwards and
downwards. The most significant movement was a GBP1.2 million increase
in valuation increase in Zappar (Holding) Limited. The investment was
revalued to reflect the price at which the latest funding round was
carried out.
Overall, there was a net unrealised gain of GBP1.1 million across the
portfolio.
Non-qualifying portfolio
The Company continues to hold a portfolio of fixed income bonds, which
was valued at GBP2.2 million at the period end. The unrealised capital
gain on the portfolio over the period was GBP24,000, along with income
of GBP73,000.
The Company made one new non-qualifying investment of GBP750,000 in
Impact Healthcare REIT plc, a newly launched investment trust which
holds a portfolio of care homes. Impact Healthcare should deliver a
steady yield with reasonably limited risk and good liquidity on funds
that the Company might otherwise hold as cash generating very little
yield. This investment showed an unrealised gain of GBP30,000 for the
period.
Share buybacks
The Board regularly reviews the Company's share buyback policy to ensure
that it remains appropriate and the Directors remain of the opinion that
the Company's liquid resources are generally best utilised in paying tax
free dividends to all Shareholders. Accordingly, the Company does not
have a fixed policy to buy in its own shares, but may do so, on an ad
hoc basis, from time to time.
There were no share buybacks undertaken during the period.
We recommend that any Shareholders wishing to either acquire more shares,
or to sell existing holdings, contact the Company's broker, Nplus1
Singer Capital Markets, who are often aware of other parties looking to
buy or sell.
Outlook
The completion of another significant profitable realisation in the
period supports the Board's view that our self-managed structure can
deliver excellent results for Shareholders.
Finally, having joined this Board in 2005 - immediately after the
mergers which created the Company - and having served as your Chairman
since 2008, I have decided that it is time for me to retire and I will
leave the Board on 30 September 2017.
As this is my last statement to Shareholders, I would like to thank,
for one final time, my fellow Directors, Julie Baddeley and Martin
Knight for the support they have given me over these last nine years. My
thanks are also due to the executives - led by Chris Kay - who have
managed your investments and produced the excellent results which it has
been my privilege to report. I am also very grateful to Grant
Whitehouse and his team at Downing for the diligence they have always
shown when supporting the Company and the Board.
I am sure shareholders will be pleased to hear that the Board has
decided that Martin Knight will take over as chairman, when I retire.
Martin will make an excellent chairman for the Company and I wish him
every success. My colleagues also intend to make a new non-executive
director appointment in due course and select one of their number to
succeed Martin as Chairman of the Audit Committee
Due to our self-managed structure, the Chairman of Chrysalis is far
closer to the detail of our portfolio than is typical in the VCT world.
That is one of the chief reasons this has been such an interesting and
satisfying role and I hope Martin enjoys the interaction with both
investees and investors as much as I have done.
Peter Harkness
Chairman
4 July 2017
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 April 2017
% of
Valuation movement portfolio
Cost Valuation in the period by value
GBP'000 GBP'000 GBP'000
Top ten venture capital
investments
Coolabi Group Limited 3,456 4,044 - 16.0%
Locale Enterprises Limited 2,513 2,623 (147) 10.4%
Zappar (Holding) Limited 300 2,161 1,236 8.5%
Precision Dental
Laboratories Limited 1,110 1,756 26 6.9%
K10 (London) Limited 950 1,118 (4) 4.4%
MyTime Media Holdings
Limited 76 1,020 (197) 4.0%
Driver Require Limited 520 928 (21) 3.7%
Cambridge Mechatronics
Limited 366 843 - 3.3%
Green Star Media Limited 650 726 8 2.9%
IX Group Limited 250 385 (3) 1.5%
10,191 15,604 898 61.6%
Other venture capital
investments 4,278 1,413 120 5.6%
Non-qualifying investments
Fixed income securities 2,210 2,181 24 8.6%
Other
Impact Healthcare REIT Plc
(quoted) 750 780 30 3.1%
2,960 2,961 54 11.7%
17,429 19,978 1,072 78.9%
Cash at bank and in hand 5,327 21.1%
Total investments 25,305 100.0%
All venture capital investments are unquoted unless otherwise stated.
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 30 April 2017
Additions
GBP'000
Follow-on investments (Venture capital investments)
Zappar (Holding) Limited 300
New investments (Non-qualifying)
Impact Healthcare REIT Plc 750
1,050
Disposals
Value at Gain
1 Nov Disposal against Total
Cost 2016* proceeds cost realised gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture capital
investments
Unquoted
Zappar (Holding)
Limited 25 150 150 125 -
Livvakt Limited 160 160 160 - -
Rhino Sport &
Leisure Limited 273 - 254 (19) 254
Rhino-Powa Holdings
Limited 31 - - (31) -
Internet Fusion
Limited 800 1,802 2,116 1,316 314
Dissolution,
liquidation and
retention
Autocue Group
Limited - - 3 3 3
Newquay Helicopters
(2013) Limited - - 14 14 14
Wessex Advanced
Switching Products
Limited - - 525 525 525
1,289 2,112 3,222 1,933 1,110
* Adjusted for purchases in the period where applicable
UNAUDITED INCOME STATEMENT
for the six months ended 30 April 2017
Year
ended
Six months ended Six months ended 31 Oct
30 Apr 2017 30 Apr 2016 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 302 - 302 365 - 365 603
Net gains on investments
- realised - 1,110 1,110 - 579 579 592
- unrealised - 1,072 1,072 - 1,085 1,085 1,508
302 2,182 2,484 365 1,664 2,029 2,703
Investment management fees (50) (150) (200) (50) (151) (201) (407)
Performance incentive fees - (106) (106) - (46) (46) (41)
Other expenses (136) - (136) (139) - (139) (310)
Return on ordinary activities
before taxation 116 1,926 2,042 176 1,467 1,643 1,945
Tax on total comprehensive
income and ordinary activities (20) 20 - (35) 35 - -
Return attributable to equity
shareholders 96 1,946 2,042 141 1,502 1,643 1,945
Return per share 0.3p 6.5p 6.8p 0.5p 5.0p 5.5p 6.5p
The total column within the Income Statement represents the profit and
loss account of the Company. No operations were acquired or discontinued
during the period.
A Statement of Total Recognised Gains and Losses has not been prepared
as all gains and losses are recognised in the Income Statement as noted
above.
UNAUDITED BALANCE SHEET
as at 30 April 2017
30 Apr 2017 30 Apr 2016 31 Oct 2016
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 19,978 19,710 19,968
Current assets
Debtors 66 161 88
Cash at bank and in hand 5,327 5,214 4,161
5,393 5,375 4,249
Creditors: amounts falling
due within one year (138) (102) (54)
Net current assets 5,255 5,273 4,195
Net assets 25,233 24,983 24,163
Capital and reserves
Called up share capital 299 299 299
Capital redemption reserve 89 89 89
Share premium 1,478 1,478 1,478
Merger reserve 1,357 1,357 1,357
Special reserve 924 2,383 802
Capital reserve - realised 14,800 14,367 13,896
Capital reserve -
unrealised 5,708 4,391 5,760
Revenue reserve 578 619 482
Equity shareholders' funds 25,233 24,983 24,163
Net asset value per share 84.3p 83.5p 80.8p
STATEMENT OF CHANGE IN EQUITY
for the six months ended 30 April 2017
Capital
Share Redemption Share Merger Special Capital reserve Capital reserve Revenue
Capital reserve premium reserve reserve -realised -unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 November 2016 299 89 1,478 1,357 802 13,896 5,760 482 24,163
Expenses
capitalised - - - - - (256) - - (256)
Tax on capital
expenses - - - - - 20 - - 20
Gains on
investments - - - - - 1,110 1,072 - 2,182
Realisation of
revaluations from
previous years - - - - - 823 (823) - -
Realisation of
impaired
valuations - - - - - 301 (301) - -
Transfer between
reserves - - - - 122 (122) - - -
Retained net
revenue for the
period - - - - - - - 96 96
Dividends paid - - - - - (972) - - (972)
At 30 April 2017 299 89 1,478 1,357 924 14,800 5,708 578 25,233
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 April 2017
Six Six
months months Year
ended ended ended
30 Apr 2017 30 Apr 2016 31 Oct 2016
GBP'000 GBP'000 GBP'000
Cash inflow/(outflow) from operating activities and
returns on investments (34) 6 (103)
Capital expenditure
Purchase of investments (1,050) (605) (755)
Proceeds on disposal of investments 3,222 1,562 1,890
Net cash inflow/(outflow) from capital expenditure 2,172 957 1,135
Equity dividends paid (972) (972) (2,094)
(Decrease)/increase in cash 1,166 (9) (1,062)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. General information
Chrysalis VCT plc ("the Company") is a Venture Capital Trust established
under the legislation introduced in the Finance Act 1995 and is
domiciled in the United Kingdom and incorporated in England and Wales.
2. Accounting policies
Basis of accounting
The unaudited half-yearly results cover the six months to 30 April 2017
and have been prepared in accordance with the accounting policies set
out in the annual accounts for the year ended 31 October 2016 and in
accordance with the Financial Reporting Standard 102 ("FRS102") and in
accordance with the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies" revised November 2014
("SORP").
The Company implements new Financial Reporting Standards issued by the
Financial Reporting Council when required.
The financial statements are presented in Sterling (GBP).
Presentation of Income Statement
In order to better reflect the activities of a Venture Capital Trust,
and in accordance with the SORP, supplementary information which
analyses the Income Statement between items of a revenue and capital
nature has been presented alongside the Income Statement. Net revenue is
the measure the Directors believe appropriate in assessing the Company's
compliance with certain requirements set out in Part 6 of the Income Tax
Act 2007.
Fixed asset investments
Investments are designated as "fair value through profit or loss" assets,
upon acquisition, due to investments being managed and performance
evaluated on a fair value basis. A financial asset is designated within
this category if it is both acquired and managed, with a view to selling
after a period of time, in accordance with the Company's documented
investment policy.
Judgements in applying accounting policies and key sources of estimation
uncertainty
Of the Company's assets measured at fair value, it is possible to
determine their fair values within a reasonable range of estimates. The
fair value of an investment upon acquisition is deemed to be cost.
Thereafter, investments are measured at fair value in accordance with
FRS 102 sections 11 and 12 together with the International Private
Equity and Venture Capital Valuation Guidelines ("IPEV").
Fixed income investments and investments quoted on AIM are measured
using bid prices in accordance with the IPEV.
For unquoted investments, fair value is established using the IPEV. The
valuation methodologies for unquoted entities used by the IPEV to
ascertain the fair value of an investment are as follows:
-Price of recent investment;
-Multiples;
-Net assets;
-Discounted cash flows or earnings (of underlying business);
-Discounted cash flows (from the investment); and
-Industry valuation benchmarks.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions and estimates in order to ascertain fair
value.
Where an investee company has gone into receivership, liquidation, or
administration (where there is little likelihood of recovery), the loss
on the investment, although not physically disposed of, is treated as
being realised. Permanent impairments in the value of investments are
deemed to be realised losses and held within the Capital Reserve -
Realised.
Gains and losses arising from changes in fair value are included in the
Income Statement for the year as a capital item, and transaction costs
on acquisition or disposal of the investment are expensed.
It is not the Company's policy to exercise controlling influence over
investee companies. Therefore, the results of these companies are not
incorporated into the Income Statement except to the extent of any
income accrued. This is in accordance with the SORP and FRS102 sections
14 and 15 that do not require portfolio investments to be accounted for
using the equity method of accounting.
Income
Dividend income from investments is recognised when the Shareholders'
rights to receive payment have been established, normally the
ex-dividend date.
Interest income is accrued on a timely basis by reference to the
principal outstanding and the applicable effective interest rate, and
only where there is reasonable certainty of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of the
analysis between revenue and capital items presented within the Income
Statement, all expenses have been presented as revenue items except as
follows:
-Expenses which are incidental to the acquisition of an investment are
deducted as a capital item.
-Expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment.
-Expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of the
investments held can be demonstrated. The Company has adopted the policy
of allocating investment manager's fees as 75% to capital and 25% to
revenue, as permitted by the SORP. The allocation is in line with the
Board's expectation of long term returns from the Company's investments
in the form of capital gains and income respectively.
-Performance incentive fees arising from the disposal of investments are
deducted as a capital item.
Taxation
The tax effects on different items in the Income Statement are allocated
between capital and revenue on the same basis as the particular item to
which they relate using the Company's effective rate of tax for the
accounting period.
Due to the Company's status as a Venture Capital Trust and the continued
intention to meet the conditions required to comply with Part 6 of the
Income Tax Act 2007, no provision for taxation is required in respect of
any realised or unrealised appreciation of the Company's investments
which arise.
Deferred taxation is not discounted and is provided in full on timing
differences that result in an obligation at the balance sheet date to
pay more tax, or a right to pay less tax, at a future date, at rates
expected to apply when they crystallise based on current tax rates and
law. Timing differences arise from the inclusion of items of income and
expenditure in taxation computations in years different from those in
which they are included in the accounts. Deferred taxation is not
discounted.
Other debtors and other creditors
Other debtors (including accrued income) and other creditors are
included within the accounts at amortised cost.
3. The comparative figures were in respect of the six months ended 30
April 2016 and the year ended 31 October 2016 respectively.
4. Basic and diluted return per share
Six months Year
Six months ended ended ended
30 Apr 2017 30 Apr 2016 31 Oct 2016
Return per share based on:
Net revenue return for the
period (GBP'000) 96 141 154
Capital return per share
based on:
Net capital gain for the
period (GBP'000) 1,946 1,502 1,791
Weighted average number of
shares 29,917,025 29,917,025 29,917,025
5. Dividends paid
Year
Six months ended ended
30 Apr 2017 31 Oct 2016
Pence Revenue Capital Total Total
per share GBP'000 GBP'000 GBP'000 GBP'000
Paid in period
2016 Final 3.25p - 972 972 -
2016 Interim 1.75p - - - 524
2016 Special 2.00p - - - 598
2015 Final 3.25p - - - 972
- 972 972 2,094
6. Basic and diluted net asset value per share
Six months Year
Six months ended ended ended
30 Apr 2017 30 Apr 2016 31 Oct 2016
Net asset value per share
based on:
Net assets (GBP'000) 25,233 24,983 24,163
Number of shares in issue at
the period end 29,917,025 29,917,025 29,917,025
Net asset value per share 84.3p 83.5p 80.8p
7. Called up share capital
Shares in issue GBP'000
Period ended 30 April 2017 29,917,025 299
Period ended 30 April 2016 29,917,025 299
Year ended 31 October 2016 29,917,025 299
8. Reserves
The special reserve is available to the Company to enable the purchase
of its own shares in the market without affecting its ability to pay
dividends, and also allows the Company to make transfers between
reserves to offset realised capital losses arising on disposals and
impairments.
Distributable reserves are calculated as follows:
Six months Year
Six months ended ended ended
30 Apr 2017 30 Apr 2016 31 Oct 2016
GBP'000 GBP'000 GBP'000
Special reserve 924 2,383 802
Capital reserve - realised 14,800 14,367 13,896
Revenue reserve 578 619 482
Merger reserve - distributable element 276 275 275
Unrealised losses - excluding unrealised unquoted
gains (161) (306) (312)
16,417 17,338 15,143
9. Reconciliation of return on ordinary activities before taxation to
net cash flow from operating activities
Six months Year
Six months ended ended ended
30 Apr 2017 30 Apr 2016 31 Oct 2016
GBP'000 GBP'000 GBP'000
Return on ordinary
activities before taxation 2,042 1,643 1,945
Gains on investments (2,182) (1,664) (2,100)
(Increase)/decrease in other
debtors 22 (7) 65
Increase/(decrease) in other
creditors 84 34 (13)
Net cash inflow/(outflow)
from operating activities (34) 6 (103)
10. Reconciliation of net cash flow to movement in net funds
Net funds at Net funds at
1 Nov 2016 Cash flows 30 Apr 2017
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 4,161 1,166 5,327
11. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required
in the Company's half year results to report on 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 period are as follows: i) investment risk associated with investing in small and immature businesses; and ii) failure to maintain approval as a VCT. In both cases, the Board is satisfied with the Company's approach to these risks. As a VCT, the Company is forced to have significant exposure to relatively immature businesses. This risk is mitigated to some extent by holding a well-diversified portfolio. The Company's compliance with the VCT regulations is continually monitored by the Administration Manager, who regularly reports to the Board on the current position. The Company also retains Philip Hare and Associates LLP 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 a minimal level. 12. Going concern The Company has sufficient financial resources at the period end, and holds a diversified portfolio of investments. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they believe 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. 13. The Directors confirm that, to the best of their knowledge, the half yearly financial statements have been prepared in accordance with FRS 104 Interim Financial Reporting 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. 14. 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 October 2016 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Independent Auditor's Report on those financial statements was unqualified. 15. Copies of the unaudited half yearly report will be sent to Shareholders shortly. Further copies can be obtained from the Company's registered office and will be available for download from www.downing.co.uk. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Chrysalis VCT PLC via Globenewswire
(END) Dow Jones Newswires
July 04, 2017 13:04 ET (17:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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