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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Downing Absol 1 | LSE:DA1O | London | Ordinary Share | GB0002790714 | ORD 50P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 67.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMDA1O Downing Absolute Income VCT 1 plc Half-Yearly Report for the six months ended 31 December 2012 PERFORMANCE SUMMARY 31 Dec 30 Jun 2012 31 Dec 2011 2012 Unaudited Audited Unaudited Ordinary Share pool pence pence pence Net asset value per share 89.1 89.6 83.3 Cumulative distributions per share (paid) 65.4 63.4 62.4 --------- ----------- ---------- Total return per share 154.5 153.0 145.7 --------- ----------- ---------- 'C' Share pool Net asset value per share 78.3 79.7 86.1 Cumulative distributions per share (paid) 7.5 5.0 2.5 --------- ----------- ---------- Total return per share 85.8 84.7 88.6 --------- ----------- ---------- CHAIRMAN'S STATEMENT Introduction I am pleased to present the Company's Half-Yearly Report for the six months ended 31 December 2012. The period has been a reasonably stable one for the Company's investments, with both share classes making small improvements in net asset value. Net asset values Ordinary Share pool At 31 December 2012, the Company's Ordinary Share net asset value ("NAV") stood at 89.1p, an increase of 1.5p per share or 1.7% compared to 30 June 2012 (after adjusting for the 2.0p dividend paid in December 2012). The Total Return to original Shareholders now stands at 154.5p per share. A detailed review of the Ordinary Share pool is included in the Investment Manager's Report below. 'C' Share pool At 31 December 2012, the Company's 'C' Share NAV stood at 78.3p, an increase of 1.1p per share or 1.3% compared to 30 June 2012 (after adjusting for the 2.5p dividend paid in December 2012). The Total Return to Shareholders who invested in the 'C' Share offer now stands at 85.8p per share. A detailed review of the 'C' Share pool is included in the Investment Manager's Report below. Dividends Interim dividends will be paid as follows: Ordinary Shares 1.0p per share 'C' Shares 2.5p per share Both dividends will be paid on 19 April 2013 to Shareholders on the register at 22 March 2013. Share Realisation and Reinvestment Programme The Company undertook a Share Realisation and Reinvestment Programme ("SRRP") during the period in respect of the Ordinary Shares. Under the programme, the Company acquired 1,653,340 Ordinary Shares at 89.6p for cancellation and the sellers of those shares reinvested the proceeds in 1,603,739 new Ordinary Shares, issued at a price of 92.4p. Participants received VCT income tax relief based on the issue price of the new shares. The Company also issued 150,874 new Ordinary Shares in respect of new cash subscriptions under the top-up offer that was launched in conjunction with the SRRP. Share buybacks The Company normally operates a policy of making market purchases of its own shares when they become available in order to provide liquidity for Shareholders wishing to dispose of their holding. The Company's current policy is to acquire Ordinary Shares at approximately a 10% discount to the latest published NAV and 'C' Shares at a nil discount. During the period, the Company purchased 40,500 Ordinary Shares at an average price of 80.5p per share and 27,500 'C' Shares at an average price of 80.0p per share. All these shares were subsequently cancelled. Outlook The 'C' Share pool is expected to make further new investments over the remainder of the year as it seeks to complete building its initial VCT qualifying portfolio. The Manager reports a reasonable level of dealflow which is likely to provide suitable opportunities. General trading conditions remain challenging for most businesses. Although the 'C' Share pool has experienced some early difficulties with two investments, we believe that these are now behind us and both the Ordinary and 'C' Share portfolios have reasonable potential for growth when the economy starts to improve. Martin Bradford Chairman INVESTMENT MANAGERS REPORT - ORDINARY SHARE POOL Investment activity and performance The Ordinary Share pool is fully invested; accordingly, no new investments were made during the period. The majority of the Ordinary Share portfolio has performed well during the first half of the year, with a net valuation uplift of GBP77,000 recognised at the interim stage. The five investments in companies that own and operate care homes continue to represent a major proportion of value of the Ordinary Share investment portfolio. Trading performance of most of the care homes has continued to be good, with high occupancy levels and costs being well controlled. The most recent addition, Downing (Alton) Limited, faced some initial problems although these have now been addressed and the focus is on building the occupancy level. Each of the care home investments has been held at its former carrying value. The valuation of the investment in Gatewales Limited was uplifted by GBP105,000. Gatewales holds an investment in a hotel development and is entitled to a share of the profits from the hotel over the next three years. We now have greater visibility on the profits that Gatewales will receive from this investment and have valued it accordingly. City Falkirk Limited owns a large nightclub in Falkirk, Scotland, which was purchased out of administration in April 2012. Performance of the nightclub is behind forecast as it has become apparent that the damage to the trade caused by the administration (e.g. poor customer service, lack of maintenance, etc.) was worse than expected and it has taken longer than anticipated to rebuild the reputation and regain lost custom. Accordingly, a cautionary reduction in value of GBP28,000 was recognised during the period. Details of the Ordinary Share pool portfolio and investment activity during the period are shown on the following below. Net asset value At 31 December 2012, the Company's Ordinary Share net asset value per share ("NAV") stood at 89.1p, an increase of 1.5p per share or 1.7% compared to 30 June 2012 (after adjusting for the 2.0p dividend paid in December 2012). The Total Return (net asset value plus dividends paid to date) to original Ordinary Share investors now stands at 154.5p per share. Results and dividend The profit on ordinary activities after taxation for the period for the Ordinary Share pool was GBP73,000 (2011: GBP42,000), comprising a revenue return of GBP23,000 (2011: GBP72,000) and a capital gain of GBP50,000 (2011 loss: GBP30,000). The Company will pay an interim dividend of 1.0p per share on 19 April 2013 to Shareholders on the register at 22 March 2013. Following the payment of this dividend, original investors will have received tax-free dividends totalling 66.4p per share since the Company's launch. Outlook We are satisfied with the progress made by the Ordinary Share portfolio to date and believe that there is potential for further growth before we consider seeking realisations of some investments. Trading conditions do, however, remain challenging for most businesses and therefore close monitoring of all portfolio companies will remain a priority. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO - ORDINARY SHARE POOL as at 31 December 2012 Unrealised gain/(loss) % of Cost Valuation in period portfolio GBP'000 GBP'000 GBP'000 by value Venture capital investments Bowman Care Homes Limited 800 1,700 - 23.4 % Downing (Pirbright Road) Limited 780 1,305 - 18.0% Blue Cedars Holdings Limited 970 1,268 - 17.4% Kimbolton Lodge Limited * 645 610 - 8.4% Downing (Alton) Limited 575 575 - 7.9% Future Biogas (SF) Limited 406 454 - 6.2% Gatewales Limited 367 267 105 3.7% Leytonstone Pub Limited 200 200 - 2.8% Chapel Street Food and Beverage Limited 125 125 - 1.7% Chapel Street Services Limited 125 125 - 1.7% City Falkirk Limited* 141 113 (28) 1.6% Heyford Homes (VCT) Limited 300 100 - 1.4% Progressive Energies Limited 100 100 - 1.4% Fubar Stirling Limited 89 89 - 1.2% Angel Solar Limited 75 75 - 1.0% Fenkle Street LLP ** 69 69 - 0.9% Cheers Dumbarton Limited 16 16 - 0.2% Chapel Street Hotel Limited ** 5 5 - 0.1% Lochrise Limited 4 4 - 0.1% Kings Gap Group Limited 1,000 - - 0.0% ------- --------- ----------- --------- 6,792 7,200 77 99.1% ------- ----------- Cash at bank and in hand 69 0.9% --------- --------- Total investments 7,269 100.0% --------- --------- SUMMARY OF INVESTMENT MOVEMENTS - ORDINARY SHARE POOL For the six months ending 31 December 2012 Market Total value at Loss realised Disposals Cost 1 July 2012 Proceeds vs cost gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Helcim Group Limited * 329 34 34 (295) - Kimbolton Lodge Limited ** 40 40 40 - - -------------------------------------------- 369 74 74 (295) - -------------------------------------------- * Partly non-qualifying ** Non-qualifying INVESTMENT MANAGERS REPORT - 'C' SHARE POOL Investment activity The 'C' Share pool continued to build its VCT qualifying portfolio during the period as it seeks to have at least 70% of its funds in qualifying investments by 30 June 2013. During the period, the pool made three new qualifying investments, one follow-on qualifying investment and two non-qualifying investments at a total cost of GBP2,261,000, details of which are set out below. A qualifying investment of GBP682,000 was completed in Mosaic Spa and Health Clubs Limited, a spa and health club management company which trades under the name of Fitness Express. The company currently has approximately 30 management contracts to provide gym and spa management to hotels, universities and corporate clients. In December 2011, the Company invested GBP280,000 in Mosaic Spa and Health Club (Shrewsbury) Limited to back the Mosaic management team to purchase a freehold operating health club known as Welti near Shrewsbury. In October 2012, a share- for-share exchange took place and Mosaic Spa and Health Club (Shrewsbury) Limited became a subsidiary of Mosaic Spa and Health Clubs Limited. At the same time, a second freehold club in Hereford, Holmer Park, was purchased by the company. The investment is making satisfactory progress. The share pool made an investment of GBP472,000 in Oak Grove Renewables Limited, which is developing a 2MW biogas plant in Norfolk. The plant will produce biogas through an anaerobic digestion process which is then used to generate electricity. The company will benefit from the receipt of Feed-in Tariffs for electricity generation and for electricity exported to the National Grid. A GBP700,000 non-qualifying investment was made in Baron House LLP. The partnership is developing a "Hampton by Hilton" hotel in central Newcastle. The investment will pay an on-going yield and will also entitle the Company to a share of the final development profit. GBP300,000 was also invested in another non-qualifying opportunity, Southampton Hotel Developments Limited. The company is developing a hotel at the Aegas Bowl, the home of Hampshire Cricket Club. Again, the investment pays an on-going yield and provides the company with a share in part of the completed development. The share pool realised two non-qualifying investments in the period, generating proceeds of GBP1.68 million. These were used to fund the new investments above. Despite working very closely with the business for an extensive period to try to find a viable business model, we were forced to conclude that Helcim Group had very limited prospects. We finally decided to accept an offer, in deferred consideration, which valued the 'C' Share pool's investment at GBP124,000, equal to the level at which it was valued at the previous year end. Investment performance Over the period, the majority of the 'C' Share pool investments have performed in line with expectations and continue to be valued at original cost. There have, however, been three valuation movements; two positive and one negative. The share price of Tracsis plc, one of the company's AIM-quoted holdings, performed very strongly over the period, producing an increase of GBP87,000 in the investment value. Part of the holding was also sold, generating a gain against cost of GBP27,000. Universe Group plc, the other AIM-quoted holding, also saw an increase in value of GBP34,000. Investment performance (continued) The negative movement arose in respect of City Falkirk Limited. The company owns a large nightclub in Falkirk, Scotland, which was purchased out of administration in April 2012. Performance at the nightclub is behind forecast as it has become apparent that the damage to the trade caused by the period in administration (e.g. poor customer service, lack of maintenance, etc.) was worse than expected and it has taken longer than anticipated to rebuild the reputation and regain lost custom. Accordingly, a cautionary reduction in value of GBP82,000 was recognised during the period. We are working closely with the company to ensure that all appropriate steps are taken to get the business back on track. In total, the portfolio produced a net unrealised capital gain of GBP39,000 for the six months. Details of the 'C' Share pool portfolio and investment activity during the period are shown below. Net asset value At 31 December 2012, the Company's 'C' Share net asset value per share ("NAV") stood at 78.3p, an increase of 1.1p per share or 1.3% compared to 30 June 2012 (after adjusting for the 2.5p dividend paid in December 2012). The Total Return to Shareholders who invested in the 'C' Share offer now stands at 85.8p per share. Although performance has been stable over the period, the Total Return is behind where we would have expected it to be at this stage as a result of a small number of problem investments on which we have reported previously. These difficulties have now been mostly resolved although value has been lost. In view of the disappointing performance to date, Downing has again offered to waive its management fees in respect of the 'C' Share pool for this period. Results and dividend The profit on ordinary activities after taxation for the period was GBP94,000 (2011 loss: GBP894,000) comprising a revenue return of GBP57,000 (2011: GBP103,000) and a capital gain of GBP37,000 (2011 loss: GBP997,000). In line with the 'C' Share prospectus, the Company will pay an interim dividend of 2.5p per share on 19 April 2013 to Shareholders on the register at 22 March 2013. Following the payment of this dividend, Shareholders will have received tax-free dividends totalling 10.0p per share since the Company's launch. Outlook The 'C' Share pool is on target to meet the 70% VCT qualifying test by the end of the financial year. A number of investment opportunities have been identified for the pool which we expect to complete over the coming months. Although the 'C' Share pool suffered significant losses from a couple of investments in its early life, we believe that these issues have now been fully resolved and, although the general economic climate remains difficult, we are optimistic that the portfolio has reasonable potential for growth going forward. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO - 'C' SHARE POOL as at 31 December 2012 Unrealised (loss)/gain % of Cost Valuation in period portfolio GBP'000 GBP'000 GBP'000 by value Qualifying venture capital investments Mosaic Spa and Health Clubs Limited * 682 682 - 9.8% Residential PV Trading Limited * 500 500 - 7.2% Future Biogas (Reepham Road) Limited 499 499 - 7.2% Oak Grove Renewables Limited 472 472 - 6.8% City Falkirk Limited * 422 340 (82) 4.9% Kidspace Adventures Holdings Limited * 300 300 - 4.3% Tracsis plc 81 284 87 4.1% Fubar Stirling Limited 268 268 - 3.9% Progressive Energies Limited 220 220 - 3.2% Alpha Schools (Holdings) Limited 200 207 - 3.0% Angel Solar Limited 175 175 - 2.5% Universe Group plc * 106 140 34 2.0% Cheers Dumbarton Limited 48 48 - 0.7% Lochrise Limited 13 13 - 0.2% Non-qualifying investments Baron House Developments LLP 700 700 - 10.1% Southampton Hotel Developments Limited 300 300 - 4.3% Liverpool Nurseries (Holdings) Limited 218 218 - 3.1% Kidspace Adventures Limited 200 200 - 2.9% ------- --------- ------------ ---------- 5,404 5,506 39 80.3%% ------- ------------ Cash at bank and in hand 1,368 19.7% --------- ---------- Total investments 6,934 100.0% --------- ---------- * Partly non-qualifying SUMMARY OF INVESTMENT MOVEMENTS - 'C' SHARE POOL for the six months ended 31 December 2012 Additions GBP'000 Qualifying venture capital investments Mosaic Spa and Health Clubs Limited * 682 Oak Grove Renewables Limited 472 Universe Group plc * 106 Tracsis plc 1 Non-qualifying investments Baron House Developments LLP 700 Southampton Hotel Developments Limited 300 -------- 2,261 -------- Market (Loss)/ Total value at profit realised Disposals Cost 1 July 2012 Proceeds vs cost loss GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Qualifying venture capital investments Helcim Limited* 1,186 124 124 (1,062) - Mosaic Spa and Health Club (Shrewsbury) Limited 280 280 280 - - Residential PV Trading Limited * 32 32 32 - - Tracsis plc 20 49 47 27 (2) Non-qualifying investments West Tower Holdings Limited 880 880 880 - - Hoole Hall Hotel Limited 800 800 800 - - -------------------------------------------- 3,198 2,165 2,163 (1,035) (2) -------------------------------------------- * Partly non-qualifying UNAUDITED INCOME STATEMENT for the six months ended 31 December 2012 Company Total Six months ended Six months ended Year ended 30 31 Dec 2012 31 Dec 2011 Jun 2012 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 285 - 285 285 - 285 631 Gains/(losses) on investments - realised - (2) (2) - 24 24 (61) - unrealised - 116 116 - (519) (519) (395) ----------------------- ------------------------ -------------- 285 114 399 285 (495) (210) 175 Investment management fees (9) (27) (36) (28) (83) (111) (70) Other expenses (165) - (165) (160) - (160) (289) ----------------------- ------------------------ -------------- Return on ordinary activities before taxation 111 87 198 97 (578) (481) (184) Taxation (31) - (31) (20) - (20) (94) ----------------------- ------------------------ -------------- Return attributable to equity shareholders 80 87 167 77 (578) (501) (278) ----------------------- ------------------------ -------------- Return per 0.3p 0.6p 0.9p 0.9p (0.4p) 0.5p 7.5p Ordinary Share Return per 'C' 0.6p 0.4p 1.0p 0.0p (6.2p) (6.2p) (10.0p) Share A Statement of Total Recognised Gains and Losses has not been prepared as all gains/losses are recognised in the Income Statement as noted above. UNAUDITED INCOME STATEMENT for the six months ended 31 December 2012 Year ended Six months ended Six months ended 30 Jun 31 Dec 2012 31 Dec 2011 2012 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Ordinary Share pool Income 140 - 140 143 - 143 282 Gains/(losses) on investments - realised - - - - 24 24 24 - unrealised - 77 77 - (27) (27) 517 ----------------------- ----------------------- ------ 140 77 217 143 (3) 140 823 Investment management fees (9) (27) (36) (9) (27) (36) (70) Other expenses (106) - (106) (45) - (45) (105) ----------------------- ----------------------- ------ Return on ordinary activities before taxation 25 50 75 89 (30) 59 648 Taxation (2) - (2) (17) - (17) (32) ----------------------- ----------------------- ------ Return attributable to equity shareholders 23 50 73 72 (30) 42 616 ----------------------- ----------------------- ------ 'C' Share pool Income 145 - 145 142 - 142 349 Gains/(losses) on investments - realised - (2) (2) - - - (85) - unrealised - 39 39 - (492) (492) (912) ----------------------- ----------------------- ------ 145 37 182 142 (492) (350) (648) Investment management fees - - - (19) (56) (75) - Other expenses (59) - (59) (115) - (115) (184) ----------------------- ----------------------- ------ Return on ordinary activities before taxation 86 37 123 8 (548) (540) (832) Taxation (29) - (29) (3) - (3) (62) ----------------------- ----------------------- ------ Return attributable to equity shareholders 57 37 94 5 (548) (543) (894) ----------------------- ----------------------- ------ UNAUDITED SUMMARISED BALANCE SHEET as at 31 December 2012 31 Dec 31 Dec 30 Jun 2012 2011 2012 Ord Shares 'C' Shares Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Investments 7,200 5,566 12,924 12,064 12,628 Current assets Debtors 54 212 107 646 117 Cash at bank and in hand 69 1,368 1,437 2,051 1,877 ------------------------- --------- ------- 123 1,580 1,544 2,697 1,994 Creditors: amounts falling due within one year (134) (128) (262) (200) (241) ------------------------- --------- ------- Net current assets (11) 1,452 1,282 2,497 1,753 ------------------------- --------- ------- Net assets 7,189 7,018 14,206 14,561 14,381 ------------------------- --------- ------- Capital and reserves Called up share capital 4,036 9 4,045 4,100 4,034 Capital redemption reserve 2,131 - 2,131 1,198 1,264 Share premium 744 - 744 279 - Special reserve (637) 6,745 6,108 9,470 9,292 Revaluation reserve 409 162 571 (1,018) (873) Capital reserve - realised 460 27 487 411 582 Revenue reserve 46 75 121 121 82 ------------------------- --------- ------- Equity shareholders' funds 7,189 7,018 14,207 14,561 14,381 ------------------------- --------- ------- Net asset value per Ordinary Share 89.1p 83.3p 89.6p Net asset value per 'C' Share 78.3p 86.1p 79.7p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 31 December 2012 31 Dec 31 Dec 30 Jun 2012 2011 2012 Ord Shares 'C' Shares Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Opening Shareholders' funds 7,212 7,169 14,381 14,963 14,963 Proceeds from share issue 1,621 - 1,621 648 649 Share issue costs - - - (35) (36) Purchase of own shares (1,555) (21) (1,576) (123) (221) Total recognised gains/(losses) for the period 73 94 167 (501) (278) Distributions paid (162) (224) (386) (391) (696) ---------------------------- -------- ------- Closing Shareholders' funds 7,189 7,018 14,207 14,561 14,381 ---------------------------- -------- ------- UNAUDITED CASH FLOW STATEMENT for the six months ended 31 December 2012 31 Dec 31 Dec 30 Jun 2012 2011 2012 Ord Shares 'C' Shares Total Total Total Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Cash inflow/(outflow) from operating activities and returns on 1 (400) 355 investments 16 (91) (75) ---------------------------- --------- -------- Taxation Corporation tax paid - - - (17) (19) Capital expenditure Purchase of investments - (2,261) (2,261) (3,547) (6,767) Sale of investments 74 2,163 2,237 3,648 6,344 ---------------------------- --------- -------- Net cash inflow/(outflow) from capital expenditure 40 (98) (24) 101 (423) ---------------------------- --------- -------- Equity dividends paid (162) (224) (386) (391) (696) ---------------------------- --------- -------- Net cash outflow before financing (72) (413) (485) (707) (783) Financing Repurchase of shares (1,554) (22) (1,576) (123) (221) Share issue costs - - - (36) (36) Proceeds from share 1,621 - 1,621 649 649 issue ---------------------------- --------- -------- Net cash (outflow)/inflow from 67 (22) 45 490 392 financing ---------------------------- --------- -------- Decrease in cash 2 (5) (435) (440) (217) (391) ---------------------------- --------- -------- Notes to the cash flow statement: 1 Cash inflow/(outflow) from operating activities and returns on investments Return on ordinary activities before taxation 75 123 198 (481) (184) Losses/(gains) on investments (77) (37) (114) 495 456 Decrease/(increase) in other 5 (153) (148) (423) 107 debtors Increase/(decrease) in other 13 (24) (11) 9 (24) creditors ---------------------------- --------- -------- Net cash inflow/(outflow) from operating activities 16 (91) (75) (400) 355 ---------------------------- --------- -------- 2 Analysis of net funds Beginning of period 74 1,803 1,877 2,268 2,268 Net cash (5) (435) (440) (217) (391) inflow/(outflow) ---------------------------- --------- -------- End of period 69 1,368 1,437 2,051 1,877 ---------------------------- --------- -------- NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. The unaudited half-yearly financial results cover the six months to 31 December 2012 and have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 30 June 2012, which were prepared under UK Generally Accepted Accounting Practice ("UK GAAP") and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" revised January 2009 ("SORP"). 2. All revenue and capital items in the Income Statement derive from continuing operations. 3. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. 4. The comparative figures were in respect of the six months ended 31 December 2011 and the year ended 30 June 2012 respectively. 5. Dividends Six months to Year ended 31 December 2012 30 June 2012 Revenue Capital Total Revenue Capital Total Ordinary Shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Paid in period 2012 Final - 2p 41 121 162 - - - 2012 Interim - 1p - - - 82 - 82 2011 Final - 2p - - - 41 124 165 ----------------------- ---------------------- 41 121 162 123 124 247 ----------------------- ---------------------- 'C' Shares Paid in period Final 2012 - 2.5p - 224 224 - - - 2012 1st Interim - 2.5p - - - 112 112 224 2012 2nd Interim - 2.5p - - - - 225 225 ----------------------- ---------------------- - 224 224 112 337 449 ----------------------- ---------------------- 6. Reserves Capital Capital Share redemption Special reserve Revaluation Revenue premium reserve reserve realised reserve reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 30 June 2012 1,264 9,292 582 (873) 82 - Repurchase of shares 867 (1,576) - - - - Issue of new shares - - - - - 744 Share issue costs - - - - - - Expenses capitalised - - (27) - - - Gain/(loss) on investments - - (2) 116 - - Transfer between reserves - (1,608) 280 (1,328) - - Retained net revenue for the period - - - - 80 - Dividend paid - - (346) - (41) - ---------------------------------------------------- At 31 December 2012 2,131 6,108 487 (571) 121 744 ---------------------------------------------------- The Special reserve, Capital reserve - realised and Revenue reserve are all distributable reserves. Revaluation reserve includes losses of GBP1,444,000 which are included in the calculation of distributable reserves. Total distributable reserves are GBP5,272,000. 7. Net asset value per share has been calculated on 8,071,443 Ordinary Shares and 8,966,557 'C' Shares, being the shares in issue at the period end. 8. Return per share for the period has been calculated on 8,087,430 Ordinary Shares and 8,984,940 'C' Shares, being the weighted average number of shares in issue during the period. 9. 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 30 June 2012 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified. 10. 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; (ii) market risk in respect of the various assets held by the investee companies; and (iii) failure to maintain approval as a VCT. In order to make VCT qualifying investments, the Company has to invest in small businesses which are often immature. The Investment Manager follows a rigorous process in vetting and careful structuring of new investments and, after an investment is made, close monitoring of the business. The Manager also seeks to diversify the portfolio to some extent by holding investments which operate in various sectors. The Board is satisfied with this approach. The Company's compliance with the VCT regulations is continually monitored by the Administration Manager, who reports regularly to the Board on the current position. The Company also retains PricewaterhouseCoopers to provide regular reviews and advice in this area. The Board considers that this approach, along with the fact that the Company currently operates at comfortably above the "70% test", reduces the risk of a breach of the VCT regulations to a minimal level. 11. Going concern The Directors have reviewed the Company's financial resources at the period end and conclude that the Company is well placed to manage its business risks. The Board confirms that it is satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, the Board believes that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements. 12. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with the "Statement: Half- Yearly Financial Reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by: a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so. 13. Copies of the unaudited half-yearly financial reports 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 Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Downing Absolute Income VCT 1 PLC via Thomson Reuters ONE [HUG#1681833]
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