Final Results

 
TIDMCR5 
 
Core VCT V PLC 
 
 From:      Core VCT V PLC 
 
 Date:      6 April 2011 at 9.45am 
 
 
 
Yearly Financial Report for the year ended 31 December 2010 
 
Performance Summary 
Ordinary Shares                                31 December 2010 31 December 2009 
 
Net asset value per share                           89.31 pence      82.51 pence 
 
Total return to date per share[1]                   96.81 pence      89.51 pence 
 
Share price (mid market)                            50.25 pence      60.00 pence 
 
Cumulative dividends per share since inception       7.50 pence       7.50 pence 
 
Total expense ratio[2]                                    1.30%            0.91% 
 
 
[1]  Total return  per share  comprises closing  net asset  value per share plus 
cumulative dividends per share paid to date. 
[2]  Total expense ratio  has been calculated  using total operating expenses of 
the  Company, excluding trail commission and  third party transaction costs as a 
percentage of closing net assets. 
 
 
Chairman's Statement 
Results 
The  Net Asset Value (NAV) Total Return per Ordinary Shares was 96.81p as at 31 
December  2010, comprising  a  NAV  per  Ordinary Share of 89.31p and cumulative 
dividends  paid of 7.5p per  Ordinary Share.  This  is an increase  from the NAV 
Total  Return to 31 December  2009 of 8.2%.  A net  return of  GBP804,815 (7.3p per 
share)  was recorded through the Income Statement for the year ended 31 December 
2010 (2009: net return of  GBP391,288). 
 
The increase of 7.3p per share is accounted for by: 
  * 7.9p per share due to movement in the unquoted portfolio; and 
  * Less 0.6p per share for operating costs. 
 
 
Your Board is not in a position to recommend a final dividend to shareholders. 
 
Investments 
One  new portfolio  investment totalling   GBP1.0 million  was completed during the 
year,  into Ark Home  Healthcare Limited, Core  VCT plc invested   GBP2 million and 
Core  VCT  IV  plc  invested   GBP1.0  million.  Further investments totalling  GBP1.0 
million   were   completed   into   two  existing  portfolio  companies,  Allied 
International Limited, and Georgina Goodman Limited. 
 
The  Manager's Review in the Annual Report and Accounts refers in more detail to 
the  prospects  of  the  investment  portfolio,  which  now comprises 9 unquoted 
companies  with  an  investment  cost  of   GBP7.8  million and a valuation of  GBP8.9 
million. 
 
Share Price 
The  Ordinary  Shares  (CR5)  are  fully  listed  shares.  Prices  are available 
onwww.londonstockexchange.com  and  the  Ordinary  Shares  are  published in the 
Financial Times.  Shareholders are reminded that they must hold their shares for 
at least five years in order to retain the tax reliefs obtained. 
 
We  would remind  shareholders that  we view  the NAV  Total Return, rather than 
share  price, as  the preferred  measure of  performance, as  it encompasses the 
value   of  the  current  portfolio  and  the  amount  of  cash  distributed  to 
shareholders over the life of their investment. 
 
Core  VCT V plc  does have the  ability to buy  back shares, although we are not 
anticipating  making any share buy  backs for the foreseeable  future so that we 
are best placed as a company to maximise distributions made to all shareholders. 
 
Cash Assets 
We  have reported regularly on the performance of the Cash Asset portfolio under 
the  management of Credit Suisse. Their  contract was terminated on 19 May 2010 
and  since  then  we  have  realised  the  remaining instruments for cash. Since 
inception, the total losses generated by Credit Suisse amounted to  GBP1.0 million, 
equivalent  to  8.9p per  share.  This  clearly  has reduced our ability to make 
distributions  to shareholders on the scale initially targeted. We have examined 
all  routes available to  us to recover  this loss, but  have concluded that the 
costs  of pursuing any further action would be prohibitive.  The Company has net 
current assets of  GBP1.0 million, equivalent to 8.9p per share. 
 
Board Changes 
There  were several Board changes implemented during the year in order to comply 
with  the new  independence conditions  of Chapter  15 of the UKLA Listing Rules 
which took effect during September 2010.  I resigned as a non executive Director 
of  Core VCT  IV plc  to take  up the  Chairmanship of the Company.  Ray Maxwell 
resigned  as Chairman of the Company to take  up the Chairmanship of Core VCT IV 
plc.  David Harris was also appointed a non executive Director of the Company. 
 
Annual General Meeting 
The  Company's  Annual  General  Meeting  will  be  held at 10.15 am (or as soon 
thereafter  as the Annual General  Meeting of Core VCT  IV plc has concluded) on 
20 June   2011 at   19 Cavendish  Square,  London,  W1A  2AW.  This  is  a  good 
opportunity  for  shareholders  to  meet  the  Directors and Manager and I would 
encourage you to attend. 
 
The  Notice of the Annual General Meeting  is contained on pages 36 to 37 of the 
Annual  Report and Accounts and  a Form of  Proxy is enclosed.  Shareholders who 
are  unable to attend the Meeting are encouraged to complete and return the Form 
of  Proxy  to  the  Company's  registrars  so  as to ensure that their votes are 
represented at the Meeting. 
 
Outlook 
The  investment programme for making new  investments has now been completed and 
given that we are now fully invested we are constrained in the amount of capital 
we  have available to  invest further into  the portfolio. However,  some of our 
largest  investments have  reached a  stage where  they are  looking to build on 
their success and raise further capital for expansion and to maximise the growth 
in  value  that  this  is  expected  to create. The Directors, together with the 
Manager and the other Core VCTs are considering options to raise further funding 
for  the underlying portfolio companies.  Should these discussions be successful 
we will inform shareholders immediately. 
 
 
Greg Aldridge 
Chairman 
5 April 2011 
 
 
 
Principal Risks and Uncertainties 
 
The  Company's assets consist mainly  of unquoted investments. These investments 
are not publicly traded and there is not a liquid market for them, and therefore 
these  investments may be  difficult to realise.   More detailed explanations of 
these risks and the way which they are managed are contained in note 2. 
 
Other risks faced by the Company include the following: 
 
  * Economic risk - events such as economic recession and movements in interest 
    rates could affect small companies' valuations. 
  * Loss of approval as a Venture Capital Trust - the Company must comply with 
    Section 274 of the Income Tax Act 2007 which allows it to be exempted from 
    capital gains tax on investment gains. Any breach of these rules may lead to 
    the Company losing its approval as a VCT. 
  * Investment and Strategic - incorrect strategy, asset allocation, and stock 
    selection could all lead to poor returns for shareholders.  The underlying 
    investments may also need significant funding which is not in accordance 
    with VCT legislation. 
  * Regulatory - breach of regulatory rules could lead to the suspension of the 
    Company Stock Exchange Listing, financial penalties or a qualified audit 
    report. 
  * Operational - Failure of the Manager's business could lead to an inability 
    to provide accurate reporting and monitoring, leading to a loss of 
    shareholders' confidence. 
  * Financial - inadequate controls by the Manager could lead to 
    misappropriation of assets. Inappropriate accounting policies may lead to 
    misreporting or breaches of regulations. 
 
 
The  Board seeks  to mitigate  and manage  these risks  though continual review, 
policy   setting,  shareholder  communication  and  enforcement  of  contractual 
obligations and monitoring progress and compliance. 
 
 
Statement  of  Directors'  Responsibilities  in  Respect of the Annual Financial 
Report 
 
In  accordance  with  Chapter  4 of  the  Disclosure  and Transparency Rules, we 
confirm  that to the best of our knowledge,  in respect of the Annual Report for 
the  year  ended  31 December  2010, of  which  this  statement of results is an 
extract: 
 
  * The financial statements have been prepared in accordance with applicable UK 
    Accounting Standards, on a going concern basis, and give a true and fair 
    view of the assets, liabilities, financial position and return of the 
    Company; 
  * This Annual Financial Report includes a fair review of the important events 
    that have occurred during the financial year and their impact on the 
    financial statements; 
  * This Annual Financial Report includes a description of the Company's 
    principal risks and uncertainties; and 
  * This Annual Financial Report includes details of related party transactions 
    that have taken place during the financial year. 
 
 
For and behalf of the Board: 
 
Greg Aldridge 
Chairman 
5 April 2011 
 
 
 
Audited Income Statement 
For the Year ended 31 December 2010 
 
                                              Notes   Revenue  Capital     Total 
 
                                                             GBP         GBP          GBP 
 
 
 
Movement in investment holdings                             -  874,297   874,297 
Losses on disposal of investments                           -  (3,157)   (3,157) 
 
Exchange differences                                        -       84        84 
 
Income                                                201,814        -   201,814 
 
Transaction costs and investment 
  management expenses                                   (305) (44,860)  (45,165) 
 
Other expenses                                      (223,518)        - (223,518) 
                                                   ----------------------------- 
 
Return on ordinary activities before taxation        (22,009)  826,364   804,355 
 
 
 
Tax on ordinary activities                                460        -       460 
 
 
                                                   ----------------------------- 
Return attributable to equity shareholders      3    (21,549)  826,364   804,815 
                                                   ----------------------------- 
 
 
 
 
Return per Ordinary Share                       3     (0.20)p    7.50p     7.30p 
 
 
 
 
The  total  column  of  this  statement  is  the  profit and loss account of the 
Company. 
There were no other gains or losses in the year ended 31 December 2010. 
All  revenue and  capital items  in the  above statement  derive from continuing 
operations. 
No operations were acquired or discontinued in the year. 
 
 
Audited Reconciliation of Movements in Shareholders' Funds 
for the year ended 31 December 2010 
 
                                        GBP 
 
 Opening Shareholders' funds   9,096,471 
 
 Net return for the year         804,815 
 
 Dividends paid - revenue       (55,124) 
                             ------------- 
 
 
 Closing Shareholders' funds   9,846,162 
                             ------------- 
 
 
 
 
 
Audited Income Statement 
For the Year ended 31 December 2009 
 
                                              Notes   Revenue  Capital     Total 
                                                             GBP         GBP          GBP 
 
 
Movement in investment holdings                                208,224   208,224 
 
Gains on sale of investments                                   138,480   138,480 
 
Income                                                223,771        -   223,771 
 
Transaction costs and investment 
 
  management fees                                     (2,122) (16,845)  (18,967) 
 
Other expenses                                      (147,288)        - (147,288) 
 
 
                                                   ----------------------------- 
Return on ordinary activities before 
taxation                                               74,361  329,859   404,220 
 
 
 
Tax on ordinary activities                           (16,070)    3,138  (12,932) 
                                                   ----------------------------- 
 
Return attributable to equity shareholders     3       58,291  332,997   391,288 
 
 
                                                   ----------------------------- 
 
 
Return per share                               3        0.53p    3.02p     3.55p 
 
 
 
 
 
 
Audited Reconciliation of Movements in Shareholders' Funds 
for the year ended 31 December 2009 
 
                                        GBP 
 
 Opening Shareholders' funds   9,421,806 
 
 Net return for the year         391,288 
 
 Dividends paid - revenue      (165,375) 
 
 Dividends paid - capital      (551,248) 
                             ------------- 
 
 
 Closing Shareholders' funds   9,096,471 
                             ------------- 
 
 
 
 
 
Audited Balance Sheet                                     As At            As At 
                                               31 December 2010 31 December 2009 
                                         Notes 
 
                                                               GBP                 GBP 
 
Non-current assets 
 
Investments at fair value                             8,867,758        7,253,947 
                                              ---------------------------------- 
 
 
Current assets 
 
Debtors and prepayments                                  63,778        1,237,326 
 
Cash at bank                                          1,129,187          735,249 
 
 
                                              ---------------------------------- 
                                                      1,192,965        1,972,575 
 
 
 
Creditors:  amounts  falling  due within 
one year                                              (214,561)        (130,051) 
 
 
                                              ---------------------------------- 
Net current assets                                      978,404        1,842,524 
 
 
                                              ---------------------------------- 
Net assets 
                                                      9,846,162        9,096,471 
                                              ---------------------------------- 
 
 
Capital and reserves 
 
Called-up Ordinary share capital                          1,102            1,102 
 
Capital reserve                                        (44,617)        (870,981) 
 
Special distributable reserve                         9,854,246        9,854,246 
 
Revenue reserve                                          35,431          112,104 
 
 
                                              ---------------------------------- 
Total equity shareholders' funds           4          9,846,162        9,096,471 
                                              ---------------------------------- 
 
 
Net asset value per 0.01p Ordinary Share   4             89.31p           82.51p 
 
 
 
Audited Cash Flow Statement 
 
                                                 Year ended       Year ended 
 
                                           31 December 2010 31 December 2009 
 
                                                           GBP                 GBP 
 
Operating activities 
 
Investment income received                          180,615          291,220 
 
Investment management fees paid                     (3,471)         (10,706) 
 
Other cash payments                               (251,974)        (441,774) 
                                          ---------------------------------- 
 
 
Net cash outflow from operating activities         (74,830)        (161,260) 
 
 
 
Taxation 
 
UK Corporation paid                                (11,596)         (25,554) 
 
 
Investing activities 
 
Acquisition of investments                      (2,035,159)      (9,390,205) 
 
Disposal of investments                           1,370,563        8,182,330 
 
Exchange differences                                     84                - 
                                          ---------------------------------- 
Net cash outflow from financial investment        (664,512)      (1,207,875) 
 
 
 
Equity dividends paid                              (55,124)        (716,623) 
 
Called up share capital received                  1,200,000        1,700,000 
                                          ---------------------------------- 
Net cash inflow/(outflow) before financing          393,938        (411,312) 
 
 
 
Increase/(decrease) in cash                         393,938        (411,312) 
                                          ---------------------------------- 
 
 
Notes: 
 
1. The accounts have been prepared under the fair value rules of the Companies 
Act 2006, and in accordance with applicable accounting standards (United Kingdom 
Generally Accepted Accounting Practice) and the Statement of Recommended 
Practice, "Financial Statements of Investment Trust Companies and Venture 
Capital Trusts" issued in January 2009. 
 
The Directors have considered the future cash flows of the Company and are 
satisfied that it is appropriate to prepare the financial statements on a going 
concern basis.  In forming this opinion, the cashflow projections of the Company 
were reviewed and confirmed that the Company had sufficient funds to meets its 
contracted expenditure. 
 
The Directors are considering the options available to raise further funding for 
the underlying portfolio companies and this may involve restructuring the VCT. 
 This may, or may not, result in a proposal being put to shareholders in the 
future to restructure the Company. 
 
2. Financial Instruments 
The Company's financial instruments in the year comprised equity and fixed and 
floating rate interest securities that are held in accordance with the Company's 
investment objective and cash, liquid resources and short term debtors and 
creditors that arise directly from the Company's operations. 
 
The Company's investment portfolio consists of unquoted investments representing 
90% (2009: 76%) of net assets. This portfolio has a 100% (2009: 100%) 
concentration or risk towards small UK based, sterling denominated companies. 
 The Credit Suisse portfolio was fully realised during the year. 
 
The main risks arising from the Company's financial instruments are due to 
fluctuations in market prices (market price risk), credit risk and interest rate 
risk, although liquidity risk and currency risk are also discussed below.  The 
Board regularly reviews and agrees policies for managing each of these risks and 
these are summarised below.  These have been in place through the current year 
and preceding periods. 
 
Market Price Risk 
Market price risk arises from uncertainty about the future prices of financial 
instruments held in accordance with the Company's investment objective.  It 
represents the potential gain or loss that a Company might benefit or suffer 
from through holding market positions in the face of market movements. 
 
The investments in equity and fixed interest stocks of unquoted companies that 
the Company holds are not traded and as such the prices are more uncertain than 
those of more widely traded securities.  As in a number of cases the unquoted 
investments are valued by reference to price earnings ratios prevailing in 
quoted comparable sectors, their valuations are exposed to changes in the price 
earnings ratios that exist in quoted markets. 
 
The Board's strategy in managing the market price risk inherent in the Company's 
portfolio of equities and loan stock investments is determined by the 
requirement to meet the Company's investment objective.  As part of the 
investment process, the Board seeks to maintain an appropriate spread of market 
risk, and has full and timely access to relevant information from the Investment 
Manager.  No single investment is permitted to exceed 15% of total VCT value of 
investment assets at the point of investment.  The Board meets regularly and 
reviews the investment performance and financial results, as well as compliance 
with the Company's objectives. 
 
Credit Risk 
Credit Risk is the risk that a counterparty will fail to discharge their 
obligation or commitment that it has entered into with the Company.  The Company 
has exposure to credit risk in respect of the loan stock investments it has made 
in investee companies, most of which have no security attached to them, and 
where they do, such security ranks beneath any bank debt that an investee 
company may owe.   GBP51,619 of the accrued income is due within 3 months of the 
year end. 
 
There could be a failure by counterparties to deliver securities which the 
Company has paid for, or pay for securities which the Company has delivered. 
 This risk is considered to be small as most of the Company's investment 
transactions are in unquoted investments, where investments are conducted 
through solicitors, to ensure that payment matches delivery. 
 
Interest Rate Risk 
The Company's fixed and floating rate interest securities, its equity 
investments and net revenue may be affected by interest rate movements. 
 Investments are often in relatively small businesses, which are relatively high 
risk investments sensitive to interest rate fluctuations. 
 
The Company's assets include fixed and floating rate instruments.  The rate of 
interest earned is regularly reviewed by the Board, as part of the risk 
management process, already disclosed under market price risk. 
 
Liquidity Risk 
The investment in equity and fixed interest stocks of unquoted companies that 
the Company holds are not traded.  They are not readily realisable.  The ability 
of the Company to realise the investments at their carrying value may at times 
not be possible if there are no willing purchasers.  The Company's ability to 
sell investments may also be constrained by the requirements set down by the 
VCTs.  The maturity profile of the Company's loan stock investments disclosed 
within the consideration of credit risk indicates that a majority of these 
assets are also not readily realisable until dates up to 5 years or more from 
the year end. 
 
To counter these risks to the Company's liquidity all creditors and accruals are 
due within one year and are comfortably covered by cash held and short term 
debtors. 
 
Currency Risk 
All assets and liabilities are denominated in sterling and therefore there is no 
currency risk. 
 
3. Earnings and return per share 
                                            Year ended         Year ended 
                                      31 December 2010   31 December 2009 
                                                      GBP                   GBP 
 
 (i)Total return from ordinary 
 activities after taxation                     804,815            391,288 
 Basic return per share                          7.30p              3.55p 
 
 (ii) Revenue return from ordinary 
 activities after taxation                    (21,549)             58,291 
 Revenue return per share                      (0.20)p              0.53p 
 
 (iii) Capital return from ordinary 
 activities after taxation                     826,364            332,997 
 Capital return per share                        7.50p              3.02p 
 
 (iv)Weighted average number of 
   ordinary shares in issue in the 
   year                                     11,024,969         11,024,969 
 
 
4. Net asset value 
Net asset value per Ordinary Share is based on the net assets at the end of the 
year of  GBP9,846,162 (2009:  GBP9,096,471) and on 11,024,969 Ordinary Shares (2009: 
same), being the number of Ordinary Shares in issue on that date. 
 
5. The operations of the Company are wholly in one business segment, investment 
holding, and one geographical segment, the United Kingdom. 
 
6. Paul Richards is a partner of Core Capital LLP, the Manager.  Details of the 
carried interest arrangements between the Company and the Manager are set out in 
Note 3 to the Annual Report and Accounts. 
 
7. This announcement is not the Company's statutory accounts.  The statutory 
accounts for the year ended 31 December 2009 have been delivered to the 
Registrar of Companies and have received an audit report which was unqualified 
and did not contain any emphasis of matter and did not contain any statements 
under sections 498(2) and 498(3) of the Companies Act 2006. 
 
The preliminary announcement is prepared on the same basis as set out in the 
prior year statutory accounts. 
 
The Annual Report for the year ended 31 December 2010 will be posted to 
shareholders and is available for inspection at 103 Baker Street, London, W1U 
6LN, the registered office of the Company, and on the Company's website, 
www.core-cap.com. 
 
 
 Enquiries 
 
 Stephen Edwards   020 3179 0919 
 
 Rhonda Nicoll     020 3179 0930 
 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
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(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Core VCT V plc via Thomson Reuters ONE 
 
[HUG#1503089]