We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Thames Ventures Vct 2 Plc | LSE:D467 | London | Ordinary Share | GB00BWX53D91 | DP67 ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 14.00 | 9.00 | 19.00 | 14.00 | 14.00 | 14.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investment Advice | -6.02M | -7.66M | -0.0777 | -12.81 | 98.05M |
Hot Features
Premium
TIDMD467
Downing FOUR VCT plc
LEI: 21380035MV1VRYEXPR95
Final Results for the year ended ended 31 March 2020
31 July 2020
Financial Highlights
Unaudited Audited Audited
--------------------------------------------------- --------- ------- --- -------
31 31
30 June March March
2020 2020 2019
--------------------------------------------------- --------- ------- --- -------
pence pence pence
--------------------------------------------------- --------- ------- --- -------
Generalist Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value and Total Return per Generalist
Share 64.1 61.7 83.5
--------------------------------------------------- --------- ------- --- -------
Healthcare Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value and Total Return per Healthcare
Share 69.8 68.1 83.3
--------------------------------------------------- --------- ------- --- -------
DSO D Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DSO D Share 12.0 27.8
--------------------------------------------------- --------- ------- --- -------
Cumulative distributions 94.5 76.5
--------------------------------------------------- --------- ------- --- -------
Adjusted for Performance Incentive estimate (4.3) (3.9)
--------------------------------------------------- --------- ------- --- -------
Total Return per DSO D Share 102.2 (1) 100.4
--------------------------------------------------- --------- ------- --- -------
DP67 Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DP67 Share 18.8 48.5
--------------------------------------------------- --------- ------- --- -------
Cumulative distributions (since original launch) 67.8 49.8
--------------------------------------------------- --------- ------- --- -------
Total Return per DP67 Share 86.6 98.3
--------------------------------------------------- --------- ------- --- -------
DP2011 General Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DP2011 General Ordinary Share - -
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DP2011 General A Share - 13.3
--------------------------------------------------- --------- ------- --- -------
Cumulative distributions (since original launch) 105.6 92.0
--------------------------------------------------- --------- ------- --- -------
Total Return per DP2011 General Ordinary Share and
DP2011 General A Share 105.6 (2) 105.3
--------------------------------------------------- --------- ------- --- -------
DP2011 Structured Share pool
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DP2011 Structured Ordinary
Share - -
--------------------------------------------------- --------- ------- --- -------
Net Asset Value per DP2011 Structured A Share - 9.9
--------------------------------------------------- --------- ------- --- -------
Cumulative distributions (since original launch) 105.1 95.0
--------------------------------------------------- --------- ------- --- -------
Total Return per DP2011 Structured Ordinary Share
and DP2011 Structured A Share 105.1 (3) 104.9
--------------------------------------------------- --------- ------- --- -------
(1) Based on Total Return to Shareholders at 31 March 2020, a
Performance Incentive is expected to become due to management. The
Performance Incentive has been estimated at 4.3p per DSO D Share. No
provision has been included in the accounts as the conditions of the
Performance Incentive fee have not yet been met.
(2) The Total Return to Shareholders at 31 March 2020 is shown net
of the Performance Incentive paid to management. By virtue of the A
Share dividends paid, members of the management team have received
Performance Incentive payments equivalent to 5.1p per DP2011 General
Ordinary Share.
(3) The Total Return to Shareholders at 31 March 2020 is shown
net of the Performance Incentive paid to management. By virtue of the A
Share dividends paid, members of the management team have received
Performance Incentive payments equivalent to 5.0p per DP2011 Structured
Ordinary Share.
Chairman's Statement
Introduction
I present the Company's Annual Report for the year ended 31 March 2020.
The outbreak and spread of Covid-19 has affected the world in ways which
we could not have anticipated. The extent of the impact on both the UK
and wider global economy has not yet been fully determined, although it
is already significant and adverse.
Prior to the outbreak, we saw some progress in realising the remaining
investments in the DSO D and DP67 planned exit share pools. Plans for
the final realisations have however been severely disrupted by the
pandemic and timing of when these will complete is now uncertain. The
task of exiting from the final investments in the DP2011 General Share
pool and DP2011 Structured Share Pool was completed, with final
dividends paid in September 2019 to bring those pools to a close.
Good progress was made during the year in investing the proceeds of the
funds raised in 2016/17 and 2018/19 for the Generalist and Healthcare
share pools. As I am sure you are aware the VCT tax rules require us to
invest in much earlier stage companies than in the past. It is usual
that we see the failures before the winners (the lemons ripen before the
plums). We would normally expect to see a drop in NAV but the pandemic
has exacerbated this effect. However, we believe that there are some
very exciting companies in the portfolio as described below.
Share pool review
As at 31 March 2020 the Company had four active share pools, being two
planned exit pools and two evergreen pools. Brief reviews of the share
pools which were active during the year are given below.
Evergreen Share pools
Generalist Share pool
The task of investing funds continued in the year under review with
GBP10.5 million being deployed into a variety of young growth
businesses.
The Generalist Share NAV and Total Return stood at 61.7p at the year end,
representing a decrease of 21.8p per Share or 26.0% over the year.
There have been two main factors which have combined to produce the fall
in NAV over the year. It is not unusual in a portfolio of young growth
businesses that some of the weaker businesses become apparent before the
stronger ones have ultimately proved themselves.
We have fully written down Xupes Limited and Live Better With Limited as
both businesses do not appear to be able to achieve their business plans
and their futures are now not clear. It is important when investing in
early stage companies to cut ones' losses as early as possible and
resist the temptation to throw good money after bad. We have also made a
number of partial write downs against several portfolio companies where
the coronavirus pandemic has had an impact.
In line with the original plans, the share pool invested a proportion of
its funds awaiting qualifying investments in an investment trust and
OEICs managed by Downing which mainly focus on quoted small cap
companies, referred to as the "Liquidity Funds". The value of these
holdings fell sharply at the start of the coronavirus pandemic, although
they have recovered somewhat since the year end as displayed by the 30
June NAVs of 64.1p for the Generalist Shares (and 69.8p for the
Healthcare Shares).
Although it is disappointing to have lost so much ground relatively
early in the life of this share class, the Board believes there is a
good prospect of recovery in the Liquidity Funds as conditions improve.
The Liquidity Funds have specific exposure to small company "special
situations", where the Manager has been working with the underlying
businesses, making changes to boards and enhancing the prospects for all
shareholders. The Board has been monitoring the progress of these
initiatives, which had been positively reflected in the NAVs of the
Funds in the last quarter of 2019 and start of 2020. Just like private
equity, these investments tend to have a 'J' curve performance which we
had begun to witness before the pandemic.
We are reassured that all the strategic investments in the Funds either
have net cash on the balance sheets, or are asset backed. All are niche
with a 'look through' to a world after the pandemic where their services
and products will continue to be needed. There is little if no exposure
in the Funds to high street retail/leisure/travel within these
portfolios. The Manager has a high level of engagement with these
management teams, and believes that the underlying portfolio, after some
hard work, now has the correct management teams at the operational level
to continue the progress that had already begun to be demonstrated
before the outbreak.
A more detailed review of the Generalist Share pool is included in the
Investment Manager's Report.
Healthcare Share pool
The Manager deployed GBP2.1 million in five VCT-qualifying investments
during the year.
The Healthcare Share NAV and Total Return stood at 68.1p at the year end,
representing a decrease of 15.2p per Share or 18.2% over the year.
As with the Generalist Share Pool, the decrease in the NAV is
attributable mainly to write downs being required against some of the
VCT-qualifying investments and the performance of the Liquidity Funds.
Like the Generalist pool, the Healthcare pool has a holding in Live
Better With Limited against which a full write down has been included as
the business has not made sufficient headway. Also like the Generalist
pool, the Liquidity Funds focused on the quoted small cap sector
suffered significant falls in value just prior to the year end, although
there has been some recovery since.
A more detailed review of the Healthcare Share pool is included in the
Investment Manager's Report.
Planned Exit Share pools
DSO D Share pool
During the year the Manager made further progress in exiting from the
remaining investments held by the DSO D Share pool. The remaining value
is now mostly represented by a pub company and two renewable energy
investments. We are optimistic that a transaction to exit from the
renewable energy businesses can be completed once we start to see a
return to more normal conditions. The prospects of an exit from the pub
company are less clear with the pub recommencing trading mid July.
The DSO D Share NAV stood at 12.0p at the year end, an increase of 2.2p
per Share or 6.4% over the year after adjusting for the dividend of
18.0p per Share paid in the year. The NAV after deducting the estimated
performance incentive of 4.3p per share that may become payable is 7.7p
per share. Total Return (net of the estimated performance incentive) now
stands at 102.2p per share compared to the cost for Shareholders who
invested in the original DSO D Share offer of 100.0p, or 70.0p per share
net of income tax relief.
A more detailed review of the DSO D Share pool is included in the
Investment Manager's Report.
DP67 Share pool
One exit was achieved in the year being that of Snow Hill Developments
LLP. The remaining value in the share pool is now held in three
companies which hold stakes in the conferencing and hotel sector. With
these venues only reopening this month, it is difficult to estimate when
transactions that will provide an exit might take place.
The DP67 Share NAV stood at 18.8p at the year end, a decrease of 11.7p
per Share or 24.1% over the year after adjusting for the dividend in the
year of 18.0p. Total Return now stands at 86.6p per Share, compared to
the original cost for Shareholders who invested in 2007 of 100.0p, or
70.0p net of income tax relief.
A more detailed review of the DP67 Share pool is included in the
Investment Manager's report.
DP2011 General and DP2011 Structured Share pools
The final distributions to DP2011 General Shareholders and DP2011
Structured Shareholders were made in September 2019. DP2011 General
Shareholders received a total of 105.595p for a combined holding of one
DP2011 General Ordinary Share and one DP2011 General A Share. DP2011
Structured General Shareholders received a total of 105.059p for a
combined holding of one DP2011 Structured General Ordinary Share and one
DP2011 Structured A Share. When compared against the original investment
of 70.0p, the Board believes both pools produced a satisfactory outcome.
Fundraising
The Company undertook a share offer for both the Generalist and
Healthcare Share pools which closed in October 2019 having raised gross
proceeds of GBP12.0 million for the Generalist Share Pool and GBP5.4
million for the Healthcare Share Pool.
The Company also launched a small top-up offer for subscription in April
2020 to facilitate allotments for monthly subscription investors that
arose from earlier offers.
There are no immediate plans for fundraising until the pandemic abates
and the economic future becomes clearer.
Share buybacks
The Company operates a general policy of buying in its own shares that
become available in the market, subject to regulatory and liquidity
factors. Any such purchases are undertaken at a price approximately
equal to NAV (i.e. at a nil discount).
However, as the remaining planned exit share pools have initiated the
process of returning funds to Shareholders, the Company will not
undertake any further buybacks in respect of those share classes.
During the year ended 31 March 2020, 73,944 Generalist Shares and 19,704
Healthcare Shares were purchased and cancelled.
Since the year end, on 20 May 2020, the Company appointed Panmure Gordon
as its corporate broker to assist in operating the share buyback process
and ensuring that the quoted spread on the Company's shares remains at a
reasonable level. If you wish to sell or buy shares in the Company,
Panmure Gordon can supply details of closed periods etc.
Annual General Meeting ("AGM")
With the social distancing restrictions still in place as a result of
the pandemic, it is difficult to make plans to hold an AGM as we would
normally do. The government has recognised this problem and has made
legislative changes to allow companies more flexibility in the way AGMs
are held.
In line with what many companies are currently doing, we are therefore
planning to hold a "closed AGM" which Shareholders will not be allowed
to attend. The meeting will still comply with the minimum legal
requirements for an AGM.
The closed AGM will take place on 9 September 2020 at 12:30pm.
Shareholders are encouraged to vote by proxy and are invited to submit
any questions for the Board or the Manager with their proxy form. The
Board will seek to address topics raised in any submitted questions by
publishing a statement with the AGM results. Full details included in
the notice of AGM at the back of this Report.
Three items of special business are proposed at the AGM:
- one in respect of the authority to buy back shares as noted above; and
- two in respect of the authority to allot shares.
The authority to allot shares ensures the Company will be able to allot
shares to monthly investors and also give the Board the opportunity to
consider further fundraising options without having to necessarily incur
the expense of seeking separate approval via a shareholder circular.
Any decision on future fundraising will, of course, give consideration
to the level of uninvested funds already held by the Company and the
rate of investment.
Shareholders are encouraged to submit their votes by proxy, as they will
not be able to do so in person. We always welcome questions from our
Shareholders at the AGM but this year, given the restrictions in place,
please send any questions via email to d4agm@downing.co.uk by 5:00 pm on
2 September 2020. Answers to any questions received will be addressed
on the website at www.downing.co.uk.
Outlook
As the disruption that the coronavirus pandemic has brought to everyday
life starts to reduce, this should re-open the path for the Manager to
secure exits from the remaining investments in the planned exit pools
and conclude the task of returning funds to investors. At this point it
is impossible to predict the timescale over which this can be achieved.
In respect of the Generalist and Healthcare pools, the next year, will
no doubt, be a challenging one for many of our portfolio companies.
However, I believe that there are some companies with very exciting
potential which will be able to produce high returns for the Company.
The Investment Manager will continue to provide as much support as it
can to guide the portfolio companies through these difficult times.
Inevitably, some may not be able to fully recover. However, some
companies are benefiting from the current conditions by being forced to
adapt their business models earlier than they might otherwise have done.
Since the year end the quoted Liquidity Funds have seen their share
prices increase somewhat. At 30 June 2020, the unaudited Generalist
share NAV stood at 64.1p and the Healthcare Share NAV 69.8p.
Looking forward, with the last of the planned exit share pools expected
to wind up in the foreseeable future, the Board is starting to consider
the optimal structure for the Company in the long term. With a portfolio
of young businesses which typically need several rounds of funding
before they are successful, it is important that the Company is able to
regularly raise new funds for investment. The Board is looking at how
this might be best achieved.
I will report on developments in the Half-Yearly Report to 30 September
2020.
Sir Aubrey Brocklebank Bt.
Chairman
Generalist Share Pool
Share Pool Summary
31 March 31 March
2020 2019
Financial highlights pence pence
Net Asset Value and Total Return per Generalist Share 61.7 83.5
------------------------------------------------------ -------- --------
Investment Manager's Report - Generalist Share Pool
Introduction
As at 31 March 2020, the Generalist Share Pool held a portfolio of 33
Venture Capital investments and three Liquidity investments, with a
combined value of GBP24.6 million.
Net Asset Value and results
As at 31 March 2020, the NAV of a Generalist share stood at 61.7p, a
decrease of 21.8p over the year. A number of factors have contributed to
this disappointing performance, including the impact of the Covid-19
pandemic, which has resulted in a number of negative valuation
adjustments being made at the year end.
13.3p of the fall arises from net losses in the Venture Capital
portfolio, where two investments in particular have had significant
write downs included against them, and several others across the
portfolio have been negatively impacted. 6.4p of the decrease is
attributable to the Liquidity investments, which encountered difficult
market conditions. Reduced investor confidence arising from the
high-profile mismanagement issues with the Woodford funds and the falls
in global markets as a result of the pandemic both contributed to
reduced fund valuations. The remaining 2.1p of the decrease has arisen
from the surplus of running costs over income. Further details of these
write downs are provided below.
The loss on ordinary activities for the Generalist Share pool for the
year was GBP9.8 million (2019: GBP3.9 million), comprising a revenue
loss of GBP582,000 (2019: GBP283,000) and a capital loss of GBP9.2
million (2019: GBP3.6 million).
This is the first year that the VCT regulations allow this relatively
young share pool to make a dividend payment. Accordingly, an interim
dividend of 2.5p will be paid on 25 September 2020, to investors on the
register at 4 September 2020. This is in line with stated policy of the
pool of paying between 4% and 5% dividends per annum.
The above results are the consequences of a number of factors. There
has been a further reduction in the value of the liquidity funds, which
although frustrating, is broadly in line with the sector. There are
some significant write downs across the unquoted portfolio, largely as
result of the common phenomenon of the weaker investments showing at
this earlier stage in the investment cycle. Given time, the superior
investments should become apparent. Finally, the cash drag of the
initial investment phase and the effect of expenses not covered by
income has also negatively impacted the performance of the fund, as seen
by the fall in NAV and Total Return.
Compared to the starting NAV of 100p, the current total return of 61.7p
is considered to be an underperformance against our expectations.
Investment activity
During the year we continued to make good progress in building the VCT
Qualifying portfolio of the Generalist Share pool, having invested a
total of GBP10.5 million in 19 companies.
New Venture Capital investments
A description of each of the new VCT Qualifying investments made during
the year is shown below.
StreetHub Limited (GBP1.3 million) trading as Trouva, is an online
marketplace for a curated range of homeware and lifestyle products.
Ecstase Limited (GBP1.0 million) trading as ADAY, is a direct to
consumer women's clothing brand founded in 2014 that creates versatile
and season-less garments with a low environmental footprint.
FundingXchange Limited (GBP525,000) is an SME funding platform and B2B
technology provider which enables online lending.
JRNI Limited (GBP525,000) is a business to business (B2B) software
platform that enables companies to offer online appointments and event
bookings for their customers and staff.
Hummingbird Technologies Limited (GBP500,000) is an advanced crop
analytics platform that is powered by machine learning and aerial
imagery to assess and predict crop health.
Cambridge Touch Technologies Limited (GBP459,000) is developing pressure
sensitive multi touch technology that is cheaper and simpler to
integrate in touch screen panels of mobile devices.
Lineten Limited (GBP400,000) is a software platform that connects
retailers to a range of on-demand and same-day delivery fleets to
coordinate customer deliveries.
Congenica Limited (GBP300,000) has developed a genomics-based diagnostic
decision support platform which helps doctors identify rare diseases in
patients.
FVRVS Limited (GBP250,000) trading as Fundamental VR, provides surgery
simulation software for enterprise clients and hospitals.
Snow Hill Developments (GBP1.2 million) is the developer of a hotel in
Birmingham. The Generalist Share Pool acquired the DP2011 General Share
Pool's interest in the business for GBP1.2 million. This transaction
allowed the Generalist Share Pool to add a yielding asset to its growing
portfolio, whilst also enabling theDP2011 General Share Pool to make its
final distribution to its investors. Snow Hill Developments LLP was
subsequently refinanced during the period, and the Generalist Share Pool
received proceeds of GBP1.4 million from its total investment of GBP1.3
million.
Follow-on Venture Capital investments
A description of each of the existing VCT Qualifying businesses to which
the Generalist Share pool provided further funding, totalling GBP1.4
million during the year is shown below.
A further GBP667,000 was invested in Lignia Wood Company Limited, which
makes a sustainably sourced softwood LIGNIA(R) impregnated with resin in
order to produce similar appearance and properties as high value
hardwoods such as oak and teak.
Limitless Technology Limited is the developer of an innovative crowd
service platform allowing loyal customers to be rewarded for providing
customer service and support as brand ambassadors. An additional
GBP583,000 was invested during the year.
GBP510,000 was invested in Upp Technologies Group (previously Volo
Commerce), a leading provider of multichannel e-commerce technology.
A further GBP500,000 was invested in Empiribox Holdings Limited,
bringing the total invested to GBP1.5 million. The company provides
equipment, lesson plans and CPD--accredited support for teachers to
deliver engaging and practical science lessons to UK primary school
children.
Masters of Pie Limited is an early stage technology firm specialising in
virtual and augmented reality software for manufacturing and wider
enterprise solutions. An additional GBP500,000 was invested during the
year.
GBP425,000 was invested in E Fundamentals (Group) Limited, bringing the
total invested to GBP1,342,000. The company provides a data analytics
service which provides online merchandising insights for brand owners,
to enable them to improve their online revenues.
GBP403,000 was invested in ADC Biotechnology Limited, a company creating
innovative new technology which aims to speed up, simplify and lower the
costs of the processes involved in the production of new Antibody Drug
Conjugates (ADCs).
A further GBP300,000 was invested in Channel Mum Limited, the developer
of a community based platform for parents.
Xupes Limited is an online retailer of pre-owned luxury goods including
designer watches, handbags, jewellery and antiques. A further
GBP115,000 was invested in the year.
Liquidity Investments
As Shareholders will be aware, where the Generalist Share pool invests
in other Downing-managed funds, Downing provides fee rebates to the
Generalist Share pool such that its investors are not "double-charged".
A small follow on investment of GBP169,000 was made into Downing
Strategic Micro-Cap Investment Trust plc.
Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Generalist Share
pool was reduced in value by a total of GBP6.0 million, following a
number of disappointing developments.
Live Better With Limited, which operates a healthcare website aiming to
help people with long-term medical conditions, has been reduced in value
to nil as a result of significant underperformance and the current
economic environment.
Empiribox Holdings Limited, the provider of equipment and training to
primary schools across the UK was reduced in value by GBP1.1 million as
a result of a number of factors, including operational issues
experienced in the company and cash restrictions within primary schools
which intensified as a result of the effective closure of UK schools
from March to mid-June.
Xupes Limited, the online retailer of pre-owned luxury goods, has been
written down to nil following uncertainty over its future as a result of
operational issues and likelihood of existing investors refusing to
further support the business. As the company has some borrowings, it is
difficult to recover any value and consequently the investment has been
fully provided against
Lignia Wood Company Limited, was written down by GBP617,000 as a result
of expected reductions in demand (due to the UK lockdown) and
restrictions on the movement of goods in its supply chain.
Maverick Pubs Limited has been written down by GBP400,000, reflecting
the temporary closure of both pub sites in as a result of the
coronavirus pandemic and the likely impact this may have upon the value
of public houses.
BridgeU Corporation provides a system to help students and teachers
manage the process of preparing for and completing global university
applications. The value has been written down by GBP397,000 following
the sale of the underlying business. The remaining value reflects the
deferred consideration which is expected to be paid to the VCT.
The Share pool's investment in Glownet Limited was also written off in
full during the year, a charge of GBP185,000. The company ceased
trading in March 2020 with no distributions anticipated.
The investment in ADC Biotechnology Limited was reduced in value by
GBP191,000 during the year, in line with a new funding round, which was
undertaken at a lower price to the earlier rounds under which the Share
pool invested.
Destiny Pharma plc ("Destiny Pharma"), which is listed on London's
Alternative Investment Market (AIM), was also revalued downwards as at
31 March 2020, by GBP157,000 in line with the prevailing quoted price at
that date. AIM prices typically fluctuate considerably in a given year
and the reduction in the share price of the Destiny Pharma is
symptomatic of this, as the business is progressing well.
Upp Technologies (formerly Volo) the e-commerce software provider, has
been going through a significant transformation including widespread
changes to the management team. Unfortunately, the company is yet to
generate significant revenues from its latest customer proposition and
our expectation is that target client numbers for this financial year
will be below our investment case, the valuation has therefore been
reduced in value by GBP269,000.
Other valuation movements in the Venture Capital portfolio amounted to a
net valuation write down of GBP678,000.
Liquidity investments
The carrying values of the liquidity investments have been adjusted to
reflect their quoted prices as at 31 March 2020. This resulted in a
valuation reduction of GBP3.0 million for the year.
The year under review was another challenging period for equity
investors, largely characterised by negative sentiment, a volatile
economic backdrop, and slowing global growth. There was some recovery at
the end of 2019 and into 2020 as the general election offered some
certainty around Brexit. However, this recovery was short lived as fears
over the potential social and economic impact of the coronavirus spread
around the world, and markets sold off sharply in February.
The Covid-19 pandemic had a significant negative effect on share prices
towards the end the reporting period. The 'Covid discount' on the
Downing Strategic Micro-Cap Investment Trust has had a considerable
impact, resulting in the average discount on the Trust widening from
circa 3% since inception, to over 25% in March. The discount narrowed to
nearer 19% post reporting period end, which is in line with other
investment trusts and we would expect it to narrow as a more normalised
trading environment returns. The Downing Micro-Cap Growth Fund
underperformed the index in the period and the Managers have addressed
this by modifying the mandate to provide the fund with more liquidity
options. These changes include increasing the number of holdings from
25-30 to up to 40 and increasing the market capitalisation band up to
GBP350 million. This has resulted in improved performance in recent
months.
Given the difficult trading environment, the Managers of the Downing
Monthly Income Fund are focusing on improving the quality of the
portfolio as much as possible, looking at the more resilient earners and
strength in their capital positions. This should result in a robust
portfolio that is positioned for the more protracted economic headwinds
that the Managers expect to take a grip over the coming weeks and
months.
The Managers are concentrating on those businesses that have strong
balance sheets to ensure that any storm can be weathered, avoiding the
most vulnerable sectors such as leisure and travel where there was
little exposure pre-crisis anyway, and targeting businesses that have
high quality revenue streams that are unlikely to be affected by the
pandemic. The portfolios retain cash which allows the Managers the
flexibility to top up positions on bad days or invest in new situations
where they believe prices are wrong.
Outlook
The falls experienced across the portfolio are frustrating to report.
Although early unrealised losses within young growth companies are to be
expected, these unprecedented times and the current economic situation
have impaired valuations further than could have been predicted.
Across the portfolio investee companies have generally reacted promptly
to the coronavirus pandemic, taking steps to secure their immediate
survival and working to align themselves to the new normal. It is worth
noting that a number of businesses are well positioned to potentially
gain from the current economic climate, being pre aligned with emerging
demands.
We are dedicating substantial resources to the portfolio companies, in
order to provide additional support in these difficult times. We are
ensuring that all investee companies benefit from the Government aid
that is available and helping to make strong decisions as they deal with
these unprecedented conditions, hoping to recover as much value as
possible for investors.
Downing LLP
Review of Investments -- Generalist Share Pool
The following investments were held at 31 March 2020:
Valuation
movement % of
Cost Valuation in period portfolio
Portfolio of investments GBP'000 GBP'000 GBP'000
Venture Capital investments
--------------------------- -------- ----------- ---------- -----------
E-Fundamentals (Group)
Limited 1,342 1,342 - 4.8%
---------------------------- -------- ----------- ---------- -----------
Rated People Limited 1,282 1,282 - 4.6%
---------------------------- -------- ----------- ---------- -----------
Lignia Wood Company
Limited 1,778 1,250 (617) 4.5%
---------------------------- -------- ----------- ---------- -----------
Firefly Learning Limited 1,047 1,047 - 3.7%
---------------------------- -------- ----------- ---------- -----------
Trouva Limited 1,050 1,101 51 3.9%
---------------------------- -------- ----------- ---------- -----------
Ecstase Limited 1,000 1,000 - 3.6%
---------------------------- -------- ----------- ---------- -----------
Imagen Limited 1,000 1000 - 3.6%
---------------------------- -------- ----------- ---------- -----------
Upp Technologies Group
Limited (prev. Volo
Commerce) 1,077 808 (269) 3.0%
---------------------------- -------- ----------- ---------- -----------
Limitless Technology
Limited 756 802 - 2.9%
---------------------------- -------- ----------- ---------- -----------
Hackajob Limited 784 784 - 2.8%
---------------------------- -------- ----------- ---------- -----------
Masters of Pie Limited 667 667 - 2.4%
---------------------------- -------- ----------- ---------- -----------
Virtual Class Limited 803 546 2 2.0%
---------------------------- -------- ----------- ---------- -----------
Funding Exchange Limited 525 525 - 1.9%
---------------------------- -------- ----------- ---------- -----------
JRNI Limited 525 525 - 1.9%
---------------------------- -------- ----------- ---------- -----------
Exonar Limited 500 500 - 1.8%
---------------------------- -------- ----------- ---------- -----------
Maverick Pubs Limited 1,000 500 (400) 1.8%
---------------------------- -------- ----------- ---------- -----------
ADC Biotechnology Limited 815 478 (191) 1.7%
---------------------------- -------- ----------- ---------- -----------
Hummingbird Limited 500 418 (82) 1.5%
---------------------------- -------- ----------- ---------- -----------
BridgeU Limited 811 414 (397) 1.5%
---------------------------- -------- ----------- ---------- -----------
Lineten Limited 400 400 - 1.4%
---------------------------- -------- ----------- ---------- -----------
Fenkle Street LLP 301 400 28 1.4%
---------------------------- -------- ----------- ---------- -----------
Cambridge Touch
Technologies Limited 459 361 (98) 1.3%
---------------------------- -------- ----------- ---------- -----------
Empiribox Holdings Limited 1,528 325 (1,072) 1.2%
---------------------------- -------- ----------- ---------- -----------
Arecor Limited 300 300 - 1.1%
---------------------------- -------- ----------- ---------- -----------
Channel Mum Limited 500 300 (200) 1.1%
---------------------------- -------- ----------- ---------- -----------
Congenica Limited 300 300 - 1.1%
---------------------------- -------- ----------- ---------- -----------
FVRVS Limited 250 250 - 0.9%
---------------------------- -------- ----------- ---------- -----------
Destiny Pharma plc^ 500 104 (157) 0.4%
---------------------------- -------- ----------- ---------- -----------
Glownet Limited 741 - (185) 0.0%
---------------------------- -------- ----------- ---------- -----------
Live Better With Limited 1,211 - (1,284) 0.0%
---------------------------- -------- ----------- ---------- -----------
Ormsborough Limited 900 - (194) 0.0%
---------------------------- -------- ----------- ---------- -----------
Xupes Limited 933 - (933) 0.0%
---------------------------- -------- ----------- ---------- -----------
25,585 17,729 (5,998) 63.7%
--------------------------- -------- ----------- ---------- -----------
Liquidity investments
--------------------------- -------- ----------- ---------- -----------
MI Downing Monthly Income
Fund* 3,950 2,712 (791) 9.7%
---------------------------- -------- ----------- ---------- -----------
MI Downing UK Micro-Cap
Growth Fund* 4,025 2,270 (1,057) 8.1%
---------------------------- -------- ----------- ---------- -----------
Downing Strategic
Micro-Cap Investment
Trust plc*^ 4,269 1,873 (1,207) 6.7%
---------------------------- -------- ----------- ---------- -----------
12,244 6,855 (3,055) 24.5%
--------------------------- -------- ----------- ---------- -----------
37,859 24,584 (10,076) 88.2%
--------------------------- -------- ----------- ---------- -----------
Cash at bank and in hand 3,350 11.8%
---------------------------- -------- ----------- ---------- -----------
Total investments 27,934 100.0%
---------------------------- -------- ----------- ---------- -----------
All Venture Capital investments are incorporated in England and Wales.
*non-qualifying investment
^listed and traded on the London Stock Exchange
Investment movements for the year ended 31 March 2020
Cost
Additions GBP'000
Venture Capital investments
----------------------------------------------------- --------
Streethub Limited (t/a Trouva) 1,300
----------------------------------------------------- --------
Snow Hill Developments LLP* 1,225
----------------------------------------------------- --------
Ecstase Limited (t/a ADAY) 1000
----------------------------------------------------- --------
Lignia Wood Company Limited 667
----------------------------------------------------- --------
Limitless Technology Limited 583
----------------------------------------------------- --------
Funding Exchange Limited 525
----------------------------------------------------- --------
JRNI Limited 525
----------------------------------------------------- --------
Upp Technologies Group Limited (prev. Volo Commerce) 510
----------------------------------------------------- --------
Hummingbird Limited 500
----------------------------------------------------- --------
Empiribox Holdings Limited 500
----------------------------------------------------- --------
Masters of Pie Limited 500
----------------------------------------------------- --------
Cambridge Touch Technologies Limited 459
----------------------------------------------------- --------
E-Fundamentals (Group) Limited 425
----------------------------------------------------- --------
ADC Biotechnology Limited 403
----------------------------------------------------- --------
Lineten Limited 400
----------------------------------------------------- --------
Congenica Limited 300
----------------------------------------------------- --------
Channel Mum Limited 300
----------------------------------------------------- --------
FVRVS Limited (t/a Fundamental VR) 250
----------------------------------------------------- --------
Xupes Limited 115
----------------------------------------------------- --------
Liquidity Investments
----------------------------------------------------- --------
Downing Strategic Micro-Cap Investment Trust plc*^ 169
----------------------------------------------------- --------
10,656
----------------------------------------------------- --------
Valuation at Profit/(loss) Realised
Cost 01/04/19 Proceeds vs. cost gain
DISPOSALS GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture Capital investments
-------------------------------------------------------------------- --------
Snow Hill
Developments
LLP* 1,289 1,317 1,417 128 100
---------------- ------- --------------- --------- ------------- --------
Mosaic Spa and
Health Clubs
Limited* 32 17 18 (14) 1
---------------- ------- --------------- --------- ------------- --------
Conversion of
Loan Notes
---------------- ------- --------------- --------- ------------- --------
Trouva Limited 250 250 250 - -
---------------- ------- --------------- --------- ------------- --------
1,571 1,584 1,685 114 101
---------------- ------- --------------- --------- ------------- --------
*non-qualifying investment
^listed and traded on the London Stock Exchange
Healthcare Share Pool
Share Pool Summary
31 March 31 March
2020 2019
Financial highlights pence pence
------------------------------------------------------ -------- --------
Net Asset Value and Total Return per Healthcare Share 68.1 83.3
------------------------------------------------------ -------- --------
Investment Manager's Report- Healthcare Share Pool
Introduction
As at 31 March 2020, the Healthcare Share pool held a portfolio of 10
Venture Capital investments and three Liquidity investments, with a
combined value of GBP7.2 million.
Net Asset Value and results
As at 31 March 2020, the NAV of a Healthcare share stood at 68.1p, a
decrease of 15.1p over the year. A number of factors have combined to
produce this disappointing performance for the year.
8.9p of the decrease relates to investment revaluations in the Venture
Capital portfolio, principally in relation to write down against the
value of Live Better With Limited, although others across the portfolio
have been negatively impacted. 3.9p relates to a reduction in value of
the Liquidity Investments which continue to be negatively impacted by
the falls in global markets at the beginning of 2020, a consequence of
the pandemic. The remaining 2.3p of the NAV decrease is attributable to
the surplus of running costs over income.
The return on ordinary activities for the Healthcare Share pool for the
year was a loss of GBP2.7 million (2019: loss of GBP1.4 million), being
a revenue loss of GBP240,000 (2019: loss of GBP198,000) and a capital
loss of GBP2.5 million (2019: loss of GBP1.2 million).
This is the first year that the VCT regulations allow this relatively
young share pool to make a dividend payment. Accordingly, an interim
dividend of 2.5p will be paid on 25 September 2020, to investors on the
register at 4 September 2020. This is in line with stated policy of the
pool of paying between 4% and 5% dividends per annum.
The above results are the consequences of a number of factors. There
has been a further reduction in the value of the liquidity funds, which
although frustrating, is broadly in line with the sector. There are
some significant write downs across the unquoted portfolio, largely as
result of the common phenomenon of the weaker investments showing at
this earlier stage in the investment cycle. Given time, the superior
investments should become apparent. Finally, the cash drag of the
initial investment phase and the effect of expenses not covered by
income has also negatively impacted the performance of the fund, as seen
by the fall in NAV and Total Return.
Compared to the starting NAV of 100p, the current total return of 68.1pp
is considered to be an underperformance against our expectations.
Investment activity
During the year a total of GBP2.1 million was invested in five venture
capital investments, three new and two follow on.
New Venture Capital investments
A description of each of the new VCT Qualifying investments made during
the year is shown below.
Congenica Limited (GBP750,000) has developed a genomics-based diagnostic
decision support platform which helps doctors identify rare diseases in
patients.
FVRVS Limited (GBP500,000) trading as Fundamental VR, provides surgery
simulation software for enterprise clients and hospitals.
The Electrospinning Company Limited (GBP278,000) is a supplier and
manufacturer of clinical-grade biomaterials, which can be used to act as
a synthetic scaffold for implantation within body tissue to promote
repair post trauma or surgery.
Follow-on Venture Capital investments
Future Health Works Limited, is a developer of MyRecovery, a mobile app
that informs and empowers patients throughout their orthopaedic
treatment, customised to their procedure and hospital. A further
GBP250,000 was invested in the year.
GBP338,000 was invested in ADC Biotechnology limited, a company creating
innovative new technology which aims to speed up, simplify and lower the
costs of the processes involved in the production of new Antibody Drug
Conjugates (ADCs).
Liquidity Investments
As Shareholders will be aware, where the Healthcare Share pool invests
in other Downing-managed funds, Downing provides fee rebates to the
Healthcare Share pool such that its investors are not "double-charged".
A small follow on investment of GBP29,000 was made into Downing
Strategic Micro-Cap Investment Trust plc.
Portfolio valuation
Venture Capital portfolio
During the year the Venture Capital portfolio of the Healthcare Share
pool was reduced in value by GBP1.6 million.
Live Better With Limited, a developer of a healthcare website aiming to
help people with long-term medical conditions, has been reduced in value
to nil as a result of significant underperformance and the current
economic environment.
ADC Biotechnology Limited, was further reduced in value by GBP317,000
during the year. This was to bring the valuation in line with a new
funding round, which was undertaken at a lower price to the first round
under which the Share pool invested. The company is running behind plan
as a result of delayed approvals on its production site. However,
production is expected to commence shortly, and we continue to work
closely with the management team.
Destiny Pharma plc ("Destiny Pharma"), which is listed on London's
Alternative Investment Market (AIM), was also revalued downwards as at
31 March 2020, by GBP237,000 in line with the prevailing quoted price at
that date. AIM prices typically fluctuate considerably in a given year
and the reduction in the share price of the Destiny Pharma is
symptomatic of this, even though the business is progressing well.
Other movements in the Venture Capital portfolio amounted to a net
uplift of GBP91,000.
Liquidity investments
The carrying values of the liquidity investments have been adjusted to
reflect their quoted prices as at 31 March 2020. This resulted in a
valuation reduction of GBP721,000 for the year. This decrease is largely
due to adverse conditions in global markets, which have reduced quoted
prices.
Given the difficult trading environment, the Managers of the Downing
Monthly Income Fund are focusing on improving the quality of the
portfolio as much as possible, looking at the more resilient earners and
strength in their capital positions. This should result in a robust
portfolio that is positioned for the more protracted economic headwinds
that the Managers expect to take a grip over the coming weeks and
months.
The Managers are concentrating on those businesses that have strong
balance sheets and targeting businesses that have high quality revenue
streams that are unlikely to be affected by the pandemic. The Liquidity
Funds retain cash which allows the Managers the flexibility to top up
positions on bad days or invest in new situations where they believe
prices are wrong.
Outlook
The building of the Venture Capital portfolio of the Healthcare Share
pool progressed well during the year and we expect to see a similar
level of investment activity over the coming year, as we work to
continue to deploy the remaining proceeds from the 2018 Offer.
Whilst the performance of Live Better With is disappointing, early
unrealised losses within young companies such as this are to be expected,
as weaker investments tend to be highlighted before the stronger
businesses prove themselves.
The remainder of the unquoted portfolio has been largely unaffected by
the coronavirus pandemic, and we will continue to support and advise
these companies in order to ensure the maximum return to investors on
the remainder of their investment.
Downing LLP
Review of Investments -- Healthcare Share Pool
The following investments were held at 31 March 2020:
Valuation
movement % of
Cost Valuation in period portfolio
Portfolio of investments GBP'000 GBP'000 GBP'000
--------------------------- -------- ----------- ---------- -----------
Venture Capital investments
--------------------------- -------- ----------- ---------- -----------
Arecor Limited 1,100 1,100 - 8.4%
---------------------------- -------- ----------- ---------- -----------
Open Bionics Limited 1,000 1,000 - 7.7%
---------------------------- -------- ----------- ---------- -----------
Congenica Limited 750 750 - 5.8%
---------------------------- -------- ----------- ---------- -----------
Adaptix Limited 556 555 64 4.2%
---------------------------- -------- ----------- ---------- -----------
Future Health Works
Limited 528 555 27 4.2%
---------------------------- -------- ----------- ---------- -----------
ADC Biotechnology 1,392 555 (317) 4.2%
---------------------------- -------- ----------- ---------- -----------
FVRVS Limited 500 500 - 3.8%
---------------------------- -------- ----------- ---------- -----------
The Electrospinning
Company Limited 278 278 - 2.1%
---------------------------- -------- ----------- ---------- -----------
Destiny Pharma plc^ 750 155 (237) 1.2%
---------------------------- -------- ----------- ---------- -----------
Live Better With Limited 1,106 - (1,179) 0.0%
---------------------------- -------- ----------- ---------- -----------
7,960 5,448 (1,642) 41.6%
--------------------------- -------- ----------- ---------- -----------
Liquidity Investments
--------------------------- -------- ----------- ---------- -----------
MI Downing Monthly Income
Fund* 1,125 632 (294) 4.8%
---------------------------- -------- ----------- ---------- -----------
MI Downing UK Micro-Cap
Growth Fund* 1,100 757 (221) 5.8%
---------------------------- -------- ----------- ---------- -----------
Downing Strategic
Micro-Cap Investment
Trust plc*^ 729 320 (206) 2.5%
---------------------------- -------- ----------- ---------- -----------
2,954 1,709 (721) 13.1%
--------------------------- -------- ----------- ---------- -----------
10,914 7,157 (2,363) 54.7%
--------------------------- -------- ----------- ---------- -----------
Cash at bank and in hand 5,930 45.3%
---------------------------- -------- ----------- ---------- -----------
Total investments 13,087 100.0%
---------------------------- -------- ----------- ---------- -----------
*non-qualifying investment
^listed and traded on the London Stock Exchange
Investment movements for the year ended 31 March 2020
Cost
Additions GBP'000
--------------------------------------------------- --------
Venture Capital investments
--------------------------------------------------- --------
Congenica Limited 750
--------------------------------------------------- --------
FVRVS Limited 500
--------------------------------------------------- --------
ADC Biotechnology 338
--------------------------------------------------- --------
The Electrospinning Company Limited 278
--------------------------------------------------- --------
Future Health Works Limited 250
--------------------------------------------------- --------
Liquidity Investments
--------------------------------------------------- --------
Downing Strategic Micro-Cap Investment Trust plc*^ 29
--------------------------------------------------- --------
2,145
--------------------------------------------------- --------
DSO D Share Pool
Share Pool Summary
31 March 31 March
2020 2019
-------------------------------------------- -------- --------
Financial highlights pence pence
-------------------------------------------- -------- --------
Net Asset Value per DSO D Share 12.0 27.8
-------------------------------------------- -------- --------
Cumulative distributions 94.5 76.5
-------------------------------------------- -------- --------
Adjusted for Performance Incentive estimate (4.3) (3.9)
-------------------------------------------- -------- --------
Total Return per DSO D Share 102.2 100.4
-------------------------------------------- -------- --------
Investment Manager's Report DSO D Share Pool
Introduction
The process of realising the investments and returning funds to
Shareholders remains the focus of the DSO D Share pool, although this
has been subject to delays as a result of the global pandemic.
Net Asset Value and results
The Net Asset Value ("NAV") per DSO D Share at 31 March 2020 stood at
12.0p, an increase of 2.2p or 6.4% over the year after adjusting for
dividends paid. Total Return stands at 102.2p per share compared to
initial cost to Shareholders, net of income tax relief, of 70.0p per
Share.
The gain on ordinary activities after taxation for the year was
GBP175,000 (2019: loss of GBP207,000), comprising a revenue gain of
GBP121,000 (2019: loss of GBP49,000) and a capital gain of GBP54,000
(2018: loss of GBP158,000).
Dividends paid during the year totalled 18.0p as the pool continues to
return funds to investors.
Despite the delays in the realisation process, the NAV of the pool has
not been significantly impacted by the ongoing pandemic, with income and
realised gains compensating for the minor write downs. The Board is
satisfied with the overall performance, as indicated by the NAV and
Total Return, which remains in excess of GBP1. Whist delays in the exit
process are unfortunate, we believe there will be opportunities to exit
from the remaining investments at acceptable values once the disruption
of the pandemic starts to subside.
Total Return of 102.2p is considered to be satisfactory performance when
compared to the initial NAV of 100p.
Venture Capital investments
As at 31 March 2020, the DSO D Share Pool held five Venture Capital
investments with a total value of GBP655,000.
Portfolio activity
Lambridge Solar, the owner of commercial solar arrays in Lincolnshire,
was fully exited during the year, generating total proceeds of
GBP716,000 and a gain over opening value of GBP111,000.
Plans were in place for the exit of the remaining portfolio companies.
However, Shareholders should be aware that due to the impact of the
global pandemic on the current market conditions, this may now take
longer than originally anticipated.
Portfolio valuation
During the year, the carrying value of the DSO D portfolio was reduced
by GBP42,000.
There were two small increases in value the period, the larger being an
uplift of GBP21,000 on Fresh Green Power, the owner of solar panels on
the rooftops of domestic properties in the UK, which has been revalued
as part of a potential sale.
Apex Energy, the developer of a standby electricity generation plant in
the East Midlands, was further reduced in value by GBP33,000 to reflect
preliminary exit proceeds.
Pearce and Saunders Limited, the owner of freehold pubs in south east
London was decreased by GBP33,000 in line with expected exit proceeds.
Other portfolio valuation movements amounted to a net uplift of
GBP3,000.
Outlook
The focus for the DSO D Share pool continues to be on realising the
remaining investments. Although the exit processes have been delayed
due to the coronavirus pandemic, we anticipate that the majority of the
remaining realisations will take place before the end of the year, and
we will continue to provide the investee companies with as much support
as possible during this time. Further dividends will be declared once
this process has been completed.
Downing LLP
Review of investments - DSO D Share Pool
The following investments were held at 31 March 2020:
Valuation
movement % of
Cost Valuation in year portfolio
Portfolio of investments GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- --------- -----------
Venture Capital investments
------------------------------- -------- ----------- --------- -----------
Pearce and Saunders Limited 300 343 (33) 37.0%
------------------------------- -------- ----------- --------- -----------
Fresh Green Power Limited 189 231 21 24.9%
------------------------------- -------- ----------- --------- -----------
Green Energy Production UK
Limited 100 54 3 5.8%
------------------------------- -------- ----------- --------- -----------
Pearce and Saunders DevCo
Limited* 20 20 - 2.2%
------------------------------- -------- ----------- --------- -----------
Apex Energy Limited 400 7 (33) 0.8%
------------------------------- -------- ----------- --------- -----------
1,009 655 (42) 70.7%
------------------------------- -------- ----------- --------- -----------
Cash at bank and in hand 272 29.3%
------------------------------- -------- ----------- --------- -----------
Total investments 927 100.0%
------------------------------- -------- ----------- --------- -----------
* non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2020
Valuation at Profit Realised
Cost 01/04/19 Proceeds vs. cost gain
Disposals GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- ------------ ---------- --------- --------
Venture Capital
investments
------------------ ------- ------------ ---------- --------- --------
Lambridge Solar
Limited 500 605 716 216 111
------------------ ------- ------------ ---------- --------- --------
500 605 716 216 111
------------------ ------- ------------ ---------- --------- --------
DP67 Share Pool
Share Pool Summary
31 March 31 March
2020 2019
Financial highlights pence pence
------------------------------- -------- --------
Net Asset Value per DP67 Share 18.8 48.5
------------------------------- -------- --------
Cumulative distributions 67.8 49.8
------------------------------- -------- --------
Total Return per DP67 Share 86.6 98.3
------------------------------- -------- --------
Investment Manager's Report - DP67 Share Pool
Introduction
The DP67 Share pool continues to focus on the process of realising the
investment portfolio and returning funds to investors. As may be
expected, this process has been delayed as a result of the global
pandemic.
Net Asset Value and results
The Net Asset Value ("NAV") per DP67 Share at 31 March 2020 stood at
18.8p, a decrease of 11.7p or 24.8% over the year. Total Return stands
at 86.6p per share compared to initial cost to Shareholders, net of
income tax relief, of 70.0p per Share.
The loss on ordinary activities after taxation for the year was GBP1.3
million (2019: loss of GBP166,000), comprising a revenue loss of
GBP559,000 (2019: profit of GBP127,000) and a capital loss of
GBP758,000 (2019: loss of GBP293,000).
Dividends totalling 18.0p were paid out during the year as the pool
continues to return funds to investors.
The adverse performance of the pool is mainly attributable to the large
exposure of the portfolio to the leisure and hospitality industry, which
has been particularly badly affected by the ongoing pandemic. The delays
to the exit process are also frustrating, but we believe that it will
not be possible to realise the full value of these investments until
more normal conditions have started to return.
When compared to the initial NAV of 100p the Total Return of 86.6p is
considered to be an underperformance of the share pool against
expectations.
Venture Capital investments
As at 31 March 2020, the DP67 Share pool held a portfolio of five
Venture Capital investments, with a total value of GBP2.1 million.
Portfolio activity
One divestment from Snow Hill Developments took place during the year,
generating proceeds of GBP788,000 and a total gain over opening value of
GBP47,000.
The DP67 Share pool had a membership interest in the business under
which a fixed return accrued. The disposal marks the return of the
remainder of this fixed value to the Share pool.
Plans were progressing for the exit of the remaining portfolio
companies. However, Shareholders should be aware that due to the impact
of the global pandemic on the current market conditions, this may now
take longer than originally anticipated.
Portfolio valuation
The DP67 portfolio decreased in value by a total of GBP769,000 during
the year. This was principally due to a write down of GBP822,000 on
Cadbury Holdings Limited. Although Cadbury House (Hotel and Spa) has now
reopened (following the closure due to COVID-19), the value of the hotel
has been written down to reflect the uncertainty surrounding the
recovery of the hospitality sector. A weighted average of the closed
valuation (80%) and mature trade valuation (20%) has been adopted, which
has had a consequential impact upon the value of the DP67 share pool's
investment.
This is partially offset by an increase of GBP53,000 attributable to
Fenkle Street LLP which was adjusted to reflect the anticipated proceeds
which may be recoverable in 2021.
The other remaining investments are held at the same value as last year.
Outlook
The focus for the DP67 Share pool continues to be on realising the
remaining investments. Although the exit processes have been delayed due
to the coronavirus pandemic, we are hopeful that the remaining
realisations will take place over the next 12 months and further
dividends will be declared once this process has been completed.
Downing LLP
Review of Investments -- DP67 Share PoolDP67
The following investments were held at 31 March 2020:
Valuation
movement % of
Cost Valuation in year portfolio
Portfolio of investments GBP'000 GBP'000 GBP'000
---------------------------- -------- ----------- --------- -----------
Venture Capital investments
---------------------------- -------- ----------- --------- -----------
Cadbury House Holdings
Limited 1,409 791 (822) 37.1%
----------------------------- -------- ----------- --------- -----------
Fenkle Street LLP** 405 750 53 35.2%
----------------------------- -------- ----------- --------- -----------
Gatewales Limited* 343 527 - 24.7%
----------------------------- -------- ----------- --------- -----------
Yamuna Renewables Limited 400 - - 0.0%
----------------------------- -------- ----------- --------- -----------
London City Shopping Centre
Limited** 99 - - 0.0%
----------------------------- -------- ----------- --------- -----------
2,656 2,068 (769) 97.1%
---------------------------- -------- ----------- --------- -----------
Cash at bank and in hand 62 2.9%
----------------------------- -------- ----------- --------- -----------
Total investments 2,130 100.0%
----------------------------- -------- ----------- --------- -----------
* partially qualifying investment
** non-qualifying investment
All Venture Capital investments are incorporated in England and Wales.
Investment movements for the year ended 31 March 2020
(Loss)/
Valuation profit Realised
Cost at 01/04/19 Proceeds vs. cost gain
Disposals GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------- ------------ ---------- --------- --------
Venture Capital
investments
---------------------- ------- ------------ ---------- --------- --------
Snow Hill Developments
LLP** 474 741 788 314 47
---------------------- ------- ------------ ---------- --------- --------
474 741 788 314 47
---------------------- ------- ------------ ---------- --------- --------
** non-qualifying investment
DP2011 General Share Pool
Share Pool Summary
31 March 31 March
2020 2019
Financial highlights pence pence
--------------------------------------------------- -------- --------
Net Asset Value per DP2011 General Ordinary Share - -
--------------------------------------------------- -------- --------
Net Asset Value per DP2011 General A Share - 13.3
--------------------------------------------------- -------- --------
Cumulative distributions 105.6 92.0
--------------------------------------------------- -------- --------
Total Return per DP2011 General Ordinary Share and
DP2011 General A Share 105.6 105.3
--------------------------------------------------- -------- --------
Investment Manager's Report - DP2011 General Share Pool
Introduction
The process of realising the remaining investments held by the DP2011
General Share pool was completed during August 2019, and the final
distribution of 13.595p per DP2011 General Ordinary Share was paid on 27
September.
Realisations
During the year, the remaining three investments were sold from the
DP2011 General Share pool, generating total proceeds of GBP2.0 million
at a gain over opening value of GBP75,000.
Final Results
Over the life of the DP2011 General Share pool, Shareholders who
invested under the original offer achieved a Total Return of 105.6p.
The Board is satisfied with performance of this fund as evidenced by a
Total Return of over GBP1 compared to a net investment after tax relief
of 70p.
Following the final distributions, in accordance with the Articles of
the Company, the DP2011 General Shares were converted into worthless
deferred Shares and were duly cancelled on 15 November 2019.
Downing LLP
Review of Investments -- DP2011 General Share Pool
Investment movements for the year ended 31 March 2020
Valuation Profit/(loss) Realised
Cost at 01/04/19 Proceeds vs. cost gain
Disposals GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- ------------ ---------- ------------- --------
Venture Capital
investments
------------------ ------- ------------ ---------- ------------- --------
Snow Hill
Developments
LLP** 680 1,206 1,225 545 19
------------------ ------- ------------ ---------- ------------- --------
Wickham Solar
Limited 550 660 716 166 56
------------------ ------- ------------ ---------- ------------- --------
Mosaic Spa and
Health Clubs
Limited* 86 29 29 (57) -
------------------ ------- ------------ ---------- ------------- --------
1,316 1,895 1,970 654 75
------------------ ------- ------------ ---------- ------------- --------
* partially qualifying investment ** non qualifying investment
DP2011 Structured Share Pool
Share Pool Summary
31 March 31 March
2020 2019
Financial highlights pence pence
----------------------------------------------------- -------- --------
Net Asset Value per DP2011 Structured Ordinary Share - -
----------------------------------------------------- -------- --------
Net Asset Value per DP2011 Structured A Share - 9.9
----------------------------------------------------- -------- --------
Cumulative distributions 105.1 95.0
----------------------------------------------------- -------- --------
Total Return per DP2011 Structured Ordinary Share
and DP2011 Structured A Share 105.1 104.9
----------------------------------------------------- -------- --------
Investment Manager's Report- DP2011 Structured Share Pool
Introduction
The process of realising the remaining investments held by the DP2011
Structured Share pool was completed during August 2019 and the final
distribution of 10.095p per DP2011 Structured Ordinary Share was paid on
27 September.
Realisations
During the year, the remaining two investments were sold from the DP2011
Structured Share pool, generating total proceeds of GBP735,000 at a
profit over opening value of GBP56,000.
Final Results
Over the life of the DP2011 Structured Share pool, Shareholders who
invested under the original offer achieved a Total Return of 105.1p.
The Board is satisfied with performance of this fund as evidenced by a
Total Return of over GBP1 compared to a net investment after tax relief
of 70p.
Following the final distributions, in accordance with the Articles of
the Company, the DP2011 Structured Shares were converted into worthless
deferred Shares and were duly cancelled on 15 November 2019.
Downing LLP
31 July 2020
Review of Investments -- DP2011 Structured Share Pool
Investment movements for the year ended 31 March 2020
Valuation Profit/(loss) Realised
Cost at 01/04/19 Proceeds vs. cost gain
Disposals GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------- ------------ --------- ------------- --------
Venture Capital
investments
------------------- ------- ------------ --------- ------------- --------
Wickham Solar
Limited 550 660 716 166 56
------------------- ------- ------------ --------- ------------- --------
Mosaic Spa and
Health Clubs
Limited* 58 19 19 (39) -
------------------- ------- ------------ --------- ------------- --------
608 679 735 127 56
------------------- ------- ------------ --------- ------------- --------
* partially qualifying investment
Directors' responsibilities
The Directors are responsible for preparing the Report of the Directors,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations. They are also
responsible for ensuring that the Annual Report includes information
required by the Listing Rules of the Financial Conduct Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law, the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom accounting
standards and applicable law) including Financial Reporting Standard
102, the financial reporting standard applicable in the UK and Republic
of Ireland (FRS 102). Under company law, the Directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period.
In preparing these financial statements the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and
prudent;
- state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business;
and
- carry out a robust assessment of the principal risks facing the
Company, as set out in the Strategic Report.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions, to
disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In addition, each of the Directors considers that the Annual Report,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company's position,
performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included
in the Annual Reports may differ from legislation in other
jurisdictions.
Directors' statement pursuant to the Disclosure Guidance and
Transparency Rules
Each of the Directors, confirms that, to the best of each person's
knowledge:
- the financial statements, which have been prepared in accordance with
the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the
Company; and
- the management report included within the Report of the Directors,
Strategic report, Chairman's Statement, Investment Manager's Report, and
Review of Investments includes a fair review of the development and
performance of the business and the position of the company, together
with a robust assessment of the principal risks and uncertainties that
it faces.
Statement as to disclosure of information to Auditors
The Directors in office at the date of the report have confirmed, as far
as they are aware, that there is no relevant audit information of which
the Auditor is unaware. Each of the Directors has confirmed that they
have taken all the steps that they ought to have taken as Directors in
order to make themselves aware of any relevant audit information and to
establish that it has been communicated to the Auditor.
By order of the Board
Grant Whitehouse
Secretary of Downing FOUR VCT plc
Audited Income Statement
for the year ended 31 March 2020
Year ended 31 March 2020 Year ended 31 March 2019
------------------------------------------------------- --------------------------------- -----------------------------
Revenue Capital Total Revenue Capital Total
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Income 272 69 341 378 230 608
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Loss on investments - (11,837) (11,837) - (5,091) (5,091)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
272 (11,768) (11,496) 378 (4,861) (4,483)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Investment management fees (561) (562) (1,123) (386) (386) (772)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Other expenses (711) - (711) (468) - (468)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Loss on ordinary activities before tax (1,000) (12,330) (13,330) (476) (5,247) (5,723)
-------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Tax on total comprehensive
income and ordinary activities (300) - (300) 7 - 7
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Loss attributable to equity Shareholders, being total
comprehensive income for the year (1,300) (12,330) (13,630) (469) (5,247) (5,716)
-------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Basic and diluted return per share:
-------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DSO D Share 1.5p 0.7p 2.2p 0.6p 2.0p 2.6p
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DP67 Share (5.0p) (6.8p) (11.8p) 1.1p (2.6p) (1.5p)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DP2011 General Share - - - - - -
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DP2011 General A Share (0.1p) 0.4p 0.3p (0.3p) 0.3p -
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DP2011 Structured Share - - - - - -
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
DP2011 Structured A Share (0.2p) 0.4p 0.2p (0.2p) (0.1p) (0.3p)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Generalist Share (1.4p) (22.6p) (24.0p) (0.9p) (11.1p) (12.0p)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
Healthcare Share (1.3p) (13.7p) (15.0p) (1.6p) (9.7p) (11.3p)
------------------------------------------------------- --------- ---------- ---------- ------- --------- ---------
The total column within the Income Statement represents the Statement of
Total Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standard 102 ("FRS 102"). The supplementary revenue
return and capital return columns are prepared in accordance with the
Statement of Recommenced Practice issued in February 2018 by the
Association of Investment Companies ("AIC SORP").
Income Statement
Analysed by Share pool -- unaudited and non-statutory
for the year ended 31 March 2020
Split as:
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
DSO D Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- -------- ------- ------- -------- ------- -------
Income 142 - 142 14 - 14
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Net gain/(loss) on investments - 69 69 - (141) (141)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
142 69 211 14 (141) (127)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Investment management fees (15) (15) (30) (17) (17) (34)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Other expenses (16) - (16) (46) - (46)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Return/(loss) on ordinary activities before tax 111 54 165 (49) (158) (207)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities 10 - 10 - - -
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Return/(loss) attributable to equity Shareholders,
being total comprehensive income for the year 121 54 175 (49) (158) (207)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
DP67 Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- -------- ------- ------- ------- ------- -------
Income 20 - 20 214 112 326
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Net loss on investments - (722) (722) - (372) (372)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
20 (722) (702) 214 (260) (46)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Investment management fees (36) (36) (72) (33) (33) (66)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Other expenses (229) - (229) (26) - (26)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (245) (758) (1,003) 155 (293) (138)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities (314) - (314) (28) - (28)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (559) (758) (1,317) 127 (293) (166)
---------------------------------------------------- ------- ------- ------- ------- ------- -------
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
DP2011 General Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Income 3 - 3 4 - 4
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Net gain on investments - 75 75 - 71 71
--------------------------------------------------- ------- ------- ------- ------- ------- -------
3 75 78 4 71 75
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Investment management fees (9) (10) (19) (20) (20) (40)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Other expenses (14) - (14) (31) - (31)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (20) 65 45 (47) 51 4
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities - - - - - -
--------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (20) 65 45 (47) 51 4
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
DP2011 Structured Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Income - - - 3 - 3
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Net gain on investments - 56 56 - - -
--------------------------------------------------- ------- ------- ------- ------- ------- -------
- 56 56 3 - 3
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Investment management fees (4) (4) (8) (7) (7) (14)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Other expenses (16) - (16) (15) - (15)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return on ordinary activities before tax (20) 52 32 (19) (7) (26)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities - - - - - -
--------------------------------------------------- ------- ------- ------- ------- ------- -------
(Loss)/return attributable to equity Shareholders,
being total comprehensive income for the year (20) 52 32 (19) (7) (26)
--------------------------------------------------- ------- ------- ------- ------- ------- -------
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
Generalist Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Income 64 69 133 114 118 232
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net loss on investments - (8,952) (8,952) - (3,572) (3,572)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
64 (8,883) (8,819) 114 (3,454) (3,340)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Investment management fees (334) (334) (668) (180) (180) (360)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Other expenses (316) - (316) (252) - (252)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Loss on ordinary activities before tax (586) (9,217) (9,803) (318) (3,634) (3,952)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities 4 - 4 35 - 35
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Loss attributable to equity Shareholders, being total
comprehensive income for the year (582) (9,217) (9,799) (283) (3,634) (3,917)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Year ended 31 March 2020 Year ended 31 March 2019
Revenue Capital Total Revenue Capital Total
Healthcare Share pool GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Income 43 - 43 29 - 29
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Net loss on investments - (2,363) (2,363) - (1,077) (1,077)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
43 (2,363) (2,320) 29 (1,077) (1,048)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Investment management fees (163) (163) (326) (129) (129) (258)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Other expenses (120) - (120) (98) - (98)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Loss on ordinary activities before tax (240) (2,526) (2,766) (198) (1,206) (1,404)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Tax on total comprehensive income and ordinary
activities - - - - - -
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Loss attributable to equity Shareholders, being total
comprehensive income for the year (240) (2,526) (2,766) (198) (1,206) (1,404)
-------------------------------------------------------- ------- ------- ------- ------- ------- -------
Audited Balance Sheet
as at 31 March 2020
2020 2019
GBP'000 GBP'000
-------------------------------------------------- -------- -------
Fixed assets
------------------------------------------------- -------- -------
Investments 34,464 39,394
-------------------------------------------------- -------- -------
Current assets
------------------------------------------------- -------- -------
Debtors 548 800
-------------------------------------------------- -------- -------
Cash at bank and in hand 9,614 18,443
-------------------------------------------------- -------- -------
10,162 19,243
------------------------------------------------- -------- -------
Creditors: amounts falling due within one year (801) (485)
-------------------------------------------------- -------- -------
Net current assets 9,361 18,758
-------------------------------------------------- -------- -------
Net assets 43,825 58,152
-------------------------------------------------- -------- -------
8BCapital and reserves
------------------------------------------------- -------- -------
Called up Share capital 98 138
-------------------------------------------------- -------- -------
Capital redemption reserve 58 -
-------------------------------------------------- -------- -------
Special reserve 39,433 47,040
-------------------------------------------------- -------- -------
Share premium account 17,971 7,172
-------------------------------------------------- -------- -------
Funds held in respect of Shares not yet allotted 535 4,772
-------------------------------------------------- -------- -------
Revaluation reserve (13,302) (4,158)
-------------------------------------------------- -------- -------
Capital reserve -- realised 2,483 4,940
-------------------------------------------------- -------- -------
Revenue reserve (3,451) (1,752)
-------------------------------------------------- -------- -------
Total equity Shareholders' funds 43,825 58,152
-------------------------------------------------- -------- -------
Basic and diluted Net Asset Value per Share:
-------------------------------------------------- -------- -------
DSO D Share 12.p 27.8p
-------------------------------------------------- -------- -------
DP67 Share 18.7p 48.5p
-------------------------------------------------- -------- -------
DP2011 General Ordinary Share N/A -
-------------------------------------------------- -------- -------
DP2011 General A Share N/A 13.3p
-------------------------------------------------- -------- -------
DP2011 Structured Ordinary Share N/A -
-------------------------------------------------- -------- -------
DP2011 Structured A Share N/A 9.9p
-------------------------------------------------- -------- -------
Generalist Share 61.7p 83.5p
-------------------------------------------------- -------- -------
Healthcare Share 68.1p 83.3p
-------------------------------------------------- -------- -------
The financial statements were approved and authorised for issue by the
Board of Directors on 31 July 2020 and were signed on its behalf by:
Sir Aubrey Brocklebank Bt.
Chairman
Balance Sheet
Analysed by Share pool -- unaudited and non-statutory
as at 31 March 2020
Split as:
2020 2019
DSO D Share pool GBP'000 GBP'000
----------------------------------------------- ------- -------
Fixed assets
----------------------------------------------- ------- -------
Investments 655 1,302
------------------------------------------------ ------- -------
Current assets
----------------------------------------------- ------- -------
Debtors 50 1
------------------------------------------------ ------- -------
Cash at bank and in hand 272 910
------------------------------------------------ ------- -------
322 911
----------------------------------------------- ------- -------
Creditors: amounts falling due within one year (33) (28)
------------------------------------------------ ------- -------
Net current assets 289 883
------------------------------------------------ ------- -------
Net assets 944 2,185
------------------------------------------------ ------- -------
Capital and reserves
----------------------------------------------- ------- -------
Called up share capital 8 8
------------------------------------------------ ------- -------
Special reserve 900 2,259
------------------------------------------------ ------- -------
Revaluation reserve 39 153
------------------------------------------------ ------- -------
Capital reserve -- realised (37) (148)
------------------------------------------------ ------- -------
Revenue reserve 34 (87)
------------------------------------------------ ------- -------
Total equity Shareholders' funds 944 2,185
------------------------------------------------ ------- -------
2020 2019
DP67 Share pool GBP'000 GBP'000
----------------------------------------------- ------- -------
Fixed assets
----------------------------------------------- ------- -------
Investments 2,068 3,578
------------------------------------------------ ------- -------
Current assets
----------------------------------------------- ------- -------
Debtors 49 669
------------------------------------------------ ------- -------
Cash at bank and in hand 62 1,251
------------------------------------------------ ------- -------
111 1,920
----------------------------------------------- ------- -------
Creditors: amounts falling due within one year (83) (70)
------------------------------------------------ ------- -------
Net current assets 28 1,850
------------------------------------------------ ------- -------
Net assets 2,096 5,428
------------------------------------------------ ------- -------
Capital and reserves
----------------------------------------------- ------- -------
Called up share capital 11 11
------------------------------------------------ ------- -------
Special reserve - 534
------------------------------------------------ ------- -------
Revaluation reserve (489) 547
------------------------------------------------ ------- -------
Capital reserve -- realised 2,419 3,622
------------------------------------------------ ------- -------
Revenue reserve 155 714
------------------------------------------------ ------- -------
Total equity Shareholders' funds 2,096 5,428
------------------------------------------------ ------- -------
2020 2019
Generalist Share pool GBP'000 GBP'000
------------------------------------------------- -------- -------
Fixed assets
------------------------------------------------- -------- -------
Investments 24,584 24,565
-------------------------------------------------- -------- -------
Current assets
------------------------------------------------- -------- -------
Debtors 442 124
-------------------------------------------------- -------- -------
Cash at bank and in hand 3,350 8,661
-------------------------------------------------- -------- -------
3,792 8,785
------------------------------------------------- -------- -------
Creditors: amounts falling due within one year (266) (220)
-------------------------------------------------- -------- -------
Net current assets 3,526 8,565
-------------------------------------------------- -------- -------
Net assets 28,110 33,130
-------------------------------------------------- -------- -------
Capital and reserves
------------------------------------------------- -------- -------
Called up share capital 56 43
-------------------------------------------------- -------- -------
Capital redemption reserve 58 -
-------------------------------------------------- -------- -------
Special reserve 27,666 31,111
-------------------------------------------------- -------- -------
Share premium account 12,505 4,692
-------------------------------------------------- -------- -------
Funds held in respect of Shares not yet allotted 410 3,396
-------------------------------------------------- -------- -------
Revaluation reserve (10,201) (4,209)
-------------------------------------------------- -------- -------
Capital reserve -- realised 101 -
-------------------------------------------------- -------- -------
Revenue reserve (2,485) (1,903)
-------------------------------------------------- -------- -------
Total equity Shareholders' funds 28,110 33,130
-------------------------------------------------- -------- -------
2020 2019
------------------------------------------------- ------- -------
Healthcare Share pool GBP'000 GBP'000
------------------------------------------------- ------- -------
Fixed assets
------------------------------------------------- ------- -------
Investments 7,157 7,375
-------------------------------------------------- ------- -------
Current assets
------------------------------------------------- ------- -------
Debtors 7 2
-------------------------------------------------- ------- -------
Cash at bank and in hand 5,930 6,461
-------------------------------------------------- ------- -------
5,937 6,463
------------------------------------------------- ------- -------
Creditors: amounts falling due within one year (419) (121)
-------------------------------------------------- ------- -------
Net current assets 5,518 6,342
-------------------------------------------------- ------- -------
Net assets 12,675 13,717
-------------------------------------------------- ------- -------
Capital and reserves
------------------------------------------------- ------- -------
Called up share capital 23 18
-------------------------------------------------- ------- -------
Special reserve 10,867 12,152
-------------------------------------------------- ------- -------
Share premium account 5,466 2,480
-------------------------------------------------- ------- -------
Funds held in respect of Shares not yet allotted 125 1,376
-------------------------------------------------- ------- -------
Revaluation reserve (4,651) (1,394)
-------------------------------------------------- ------- -------
Capital reserve -- realised - -
------------------------------------------------- ------- -------
Revenue reserve (1,155) (915)
-------------------------------------------------- ------- -------
Total equity Shareholders' funds 12,675 13,717
-------------------------------------------------- ------- -------
Statement of Changes in Equity
for the year ended 31 March 2020
Funds held in
respect
Called Capital Share of Shares Capital
up Share Redemption Special premium not yet Revaluation reserve Revenue
capital reserve reserve account allotted Reserve - realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
At 31 March 2018 188 31 8,021 43,904 420 234 4,641 (1,104) 56,335
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Total comprehensive
income - - - - - (5,250) 3 (469) (5,716)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Transfer between reserves* - - (4,960) - - 858 4,102 - -
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Unallotted Shares - - - - 4,352 - - - 4,352
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Transactions with owners
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Dividend paid - - - - - - (3,806) - (3,806)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Cancellation of Share Premium/ Capital Redemption
Reserve - (89) 43,993 (43,904) - - - - -
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Cancellation of Shares (58) 58 - - - - - - -
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Purchase of own Shares - - (14) - - - - - (14)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Issue of Shares 8 - - 7,172 - - - - 7,180
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Share issue costs - - - - - - - (179) (179)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
At 31 March 2019 138 - 47,040 7,172 4,772 (4,158) 4,940 (1,752) 58,152
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Total comprehensive income - - - - - (12,227) (103) (1,300) (13,630)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Transfer between reserves* - - (7,530) - - 3,083 4,843 (399) -
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Unallotted Shares - - - - 535 - - - 535
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Transactions with owners
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Dividend paid - - - - - - (7,200) - (7,200)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Cancellation of Shares (58) 58 - - - - - - -
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Purchase of own Shares - - (77) - - - - - (77)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Issue of Shares 18 - - 11,178 (4,772) - - - 6,424
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
Share issue costs - - - (379) - - - - (379)
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
At 31 March 2020 98 58 39,433 17,971 535 (13,302) 2,483 (3,451) 43,825
-------------------------------------------------- -------- ----------- -------- -------- ------------- ----------- ----------- -------- ----------
*A transfer of GBP167,000 (2019: GBP858,000), representing previously
recognised unrealised gains and losses on disposal of investments during
the year ended 31 March 2020, has been made between the Revaluation
Reserve and the Special Reserve. A transfer of GBP7.5 million (2019:
GBP4.1 million) representing realised gains and losses on disposal of
investments, less capital expenses and capital dividends in the year and
less a transfer to the revenue reserve on wind up of the DP2011 Share
Classes was made between the Capital Reserve - realised and the Special
reserve.
Cash Flow Statement
for the year ended 31 March 2020
Unaudited non statutory analysis Audited
DSO D DP67 DP2011 General DP2011 Structured
Share Share Share Share Generalist Health-
pool pool pool pool Share pool care Share pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash flows from operating
activities
------------------------------- ------- -------------- ----------------- ----------- ---------------- --------
Return/(loss) on
ordinary activities
before taxation 165 (1,003) 45 32 (9,803) (2,766) (13,330)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Losses/(gains) on
investments (69) 722 (75) (56) 8,952 2,363 11,837
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
(Decrease)/increase in
creditors 15 13 (31) (15) 46 298 326
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
(Increase)/decrease in
debtors (49) (147) 1 3 (314) (5) (217)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net cash
inflow/(outflow) from
operating activities 62 (121) (60) (36) (1,119) (110) (1,384)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Corporation tax paid - 159 - - - - 159
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net cash generated
from operating
activities 62 38 (60) (36) (1,119) (108) (1,225)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash flow from
investing activities
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Purchase of
investments - - - - (10,565) (2,145) (12,801)
--------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Proceeds from
disposal of
investments 716 788 1,970 735 1,685 - 5,894
--------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net cash
inflow/(outflow) from
investing activities 716 788 1,970 735 (8,971) (2,145) (6,907)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net cash
inflow/(outflow)
before financing 778 826 1,910 699 (10,090) (2,255) (8,132)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash flows from
financing activities
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Repurchase of Shares - - - - (61) (16) (77)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Issue of share capital - - - - 4,707 1,715 6,424
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cost of issue of share
capital - - - - (277) (102) (379)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Funds held in respect
of Shares not yet
allotted - - - - 410 125 535
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Equity dividends paid (1,416) (2,015) (2,504) (1,265) - - (7,200)
--------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net cash
(outflow)/inflow from
financing activities (1,416) (2,015) (2,504) (1,265) 4,779 1,724 (697)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Net change in cash (638) (1,189) (594) (566) (5,311) (531) (8,829)
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash and cash
equivalents at start
of the year 910 1,251 594 566 8,661 6,461 18,443
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash and cash
equivalents at end of
the year 272 62 - - 3,350 5,930 9,614
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash and cash
equivalents comprise
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash at bank and in
hand 272 62 - - 3,350 5,930 9,614
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Total cash and cash
equivalents 272 62 - - 3,350 5,930 9,614
---------------------- ------- ------- -------------- ----------------- ----------- ---------------- --------
Cash Flow Statement
for the year ended 31 March 2019
Unaudited non statutory analysis Audited
DSO D DP67 DP2011 General DP2011 Structured Healthcare
Share Share Share Share Generalist Share
pool pool pool pool Share pool pool Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash flows from operating
activities
------------------------------- ------- -------------- ----------------- ----------- ---------- --------
(Loss)/return on
ordinary activities
before taxation (207) (138) 4 (26) (3,952) (1,404) (5,723)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Losses/(gains) on
investments 141 372 (71) - 3,572 1,077 5,091
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
(Decrease)/increase in
creditors (39) (74) (37) (22) 40 9 (123)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Decrease/(increase) in
debtors 65 (117) (1) - (50) (1) (104)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net cash
(outflow)/inflow from
operating activities (40) 43 (105) (48) (390) (319) (859)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Corporation tax paid - - - - - - -
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net cash generated
from operating
activities (40) 43 (105) (48) (390) (319) (859)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash flow from
investing activities
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Purchase of
investments - - - - (10,890) (4,874) (15,764)
--------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Proceeds from
disposal of
investments 2,256 689 419 366 1,806 935 6,471
--------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net cash
inflow/(outflow) from
investing activities 2,256 689 419 366 (9,084) (3,939) (9,293)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net cash
inflow/(outflow)
before financing 2,216 732 314 318 (9,474) (4,258) (10,152)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash flows from
financing activities
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Repurchase of Shares - - - - (14) - (14)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Issue of share capital - - - - 4,589 2,412 7,001
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Funds held in respect
of Shares not yet
allotted - - - - 2,997 1,354 4,351
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Equity dividends paid (1,888) - (1,289) (629) - - (3,806)
--------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net cash
(outflow)/inflow from
financing activities (1,888) - (1,289) (629) 7,572 3,766 7,532
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Net change in cash 328 732 (975) (311) (1,902) (492) (2,620)
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash and cash
equivalents at start
of the year 582 519 1,569 877 10,563 6,953 21,063
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash and cash
equivalents at end of
the year 910 1,251 594 566 8,661 6,461 18,443
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash and cash
equivalents comprise
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Cash at bank and in
hand 910 1,251 594 566 8,661 6,461 18,443
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Total cash and cash
equivalents 910 1,251 594 566 8,661 6,461 18,443
---------------------- ------- ------- -------------- ----------------- ----------- ---------- --------
Notes to the Accounts
for the year ended 31 March 2020
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements in accordance with the
Financial Reporting Standard 102 ("FRS 102") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" revised October 2019
("SORP").
The Company implements new Financial Reporting Standards ("FRS") issued
by the Financial Reporting Council when required.
The financial statements are presented in pounds sterling and rounded to
thousands. The Company's functional and presentational currency is
pounds sterling.
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. The revenue
return 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.
Judgements in applying accounting policies and key sources of estimation
uncertainty
Investments
All investments are designated as "fair value through profit or loss"
assets due to investments being managed and performance evaluated on a
fair value basis, in accordance with Section 9.9B(a) of FRS 102. A
financial asset is designated within this category if it is both
acquired and managed on a fair value basis, with a view to selling after
a period of time, in accordance with the Company's documented investment
policy.
It is possible to determine the 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").
Liquidity investments are measured using bid prices.
For unquoted investments, fair value is established by using the IPEV
guidelines. The valuation methodologies for unquoted entities used by
the IPEV to ascertain the fair value of an investment are as follows:
- Calibration to 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.
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. 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.
It is not the Company's policy to exercise significant influence or
joint control 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 FRS 102
sections 14 and 15 and the SORP, which do not require portfolio
investments to be accounted for using the equity method of accounting.
Calibration to price of recent investment requires a level of judgment
to be applied in assessing and reviewing any additional information
available since the last investment date. The manager considers a range
of factors in order to determine if there is any indication of decline
in value or evidence of increase in value since the recent investment
date. If no such indications are noted the price of the recent
investment will be used as the fair value for the investment.
Examples of signals which could indicate a movement in value are: -
- Changes in results against budget or in expectations of achievement of
technical milestones (patents/testing/ regulatory approvals)
- Significant changes in the market of the products or in the economic
environment in which it operates
- Significant changes in the performance of comparable companies
- Internal matters such as fraud, litigation or management structure.
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 time apportioned basis, by reference to
the principal sum outstanding and at the effective rate applicable, and
only where there is reasonable certainty of collection in the
foreseeable future.
Distributions from investments in limited liability partnerships
("LLPs") are recognised as they are paid to the Company. Where such
items are considered capital in nature they are recognised as capital
income.
Arrangement fee rebates received from Downing LLP are treated as capital
income following the date of investment.
Where previously accrued income is considered unrecoverable a
corresponding bad debt expense is recognised.
Expenses
All expenses are accounted for on an accruals basis, and are stated
inclusive of any VAT charged. 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 disposal of an investment are
deducted from the disposal proceeds of the investment; or
- 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 a policy
of charging 50% of the investment management fees to the revenue account
and 50% to the capital account, to reflect the Board's estimated split
of investment returns which will be achieved by the company over the
long term.
Expenses and liabilities not specific to a share class are generally
allocated pro rata to the Net Asset Values of each share class.
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 arises.
Deferred taxation, which is not discounted, 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 periods different from those
in which they are included in the accounts.
Other debtors and other creditors
Other debtors (including accrued income) and other creditors are
included within the accounts at amortised cost.
Issue costs
Issue costs in relation to the Shares issued for each share class have
been deducted from the share premium account, special reserve or revenue
reserve, as applicable, for the relevant share class.
Performance Incentive
Amounts payable in respect of Performance Incentive arrangements are
recorded at such time that an obligation has been established. In
respect of the DSO D Share pool, the Performance Incentive is expected
to be recorded as an expense item through the Income Statement.
Performance Incentives in respect of all other Share classes are paid by
way of dividends, and will therefore be recognised in accordance with
the dividend accounting policy.
Dividends
Dividends payable are recognised as distributions in the financial
statements when the company's liability to make payment has been
established, typically once declared by the Board or approved by
Shareholders at the AGM.
Funds held in respect of Shares not yet allotted
Cash received in respect of applications for new Shares that have not
yet been allotted is shown as "Funds held in respect of Shares not yet
allotted" and recorded on the Balance Sheet.
Reportable segments
The Company has one reportable segment as the sole activity of the
Company is to operate as a VCT and all of the Company's resources are
allocated to this activity.
2. Basic and diluted return per share
Basic
Weighted and
Average diluted
number Capital Total return
of Shares in Revenue return/ gain/ Comprehensive per
issue* (loss) (loss) income share
GBP'000 GBP'000 GBP'000 pence
------------ ------------- --------------- ------- -------------- -------
Return per share is
calculated on the
following:
--------------------------- --------------- ------- -------------- -------
Year ended 31 March 2020
--------------------------- --------------- ------- -------------- -------
DSO D Shares 7,867,247 121 54 175 2.2p
------------ ------------- --------------- ------- -------------- -------
DP67 Shares 11,192,136 (559) (758) (1,317) (11.7p)
------------ ------------- --------------- ------- -------------- -------
DP2011
General
Ordinary
Shares 15,644,066 - - - -
------------ ------------- --------------- ------- -------------- -------
DP2011
General A
Shares 18,418,614 (20) 65 45 0.3p
------------ ------------- --------------- ------- -------------- -------
DP2011
Structured
Ordinary
Shares 10,678,725 - - - -
------------ ------------- --------------- ------- -------------- -------
DP2011
Structured
A Shares 12,572,817 (20) 52 32 0.2p
------------ ------------- --------------- ------- -------------- -------
Generalist
Shares 40,797,371 (582) (9,217) (9,799) (24.0p)
------------ ------------- --------------- ------- -------------- -------
Healthcare
Shares 18,483,433 (240) (2,526) (2,766) (15.0p)
------------ ------------- --------------- ------- -------------- -------
Year ended
31 March
2019
------------ ------------- --------------- ------- -------------- -------
DSO D Shares 7,867,247 (49) (158) (207) 2.6p
------------ ------------- --------------- ------- -------------- -------
DP67 Shares 11,192,136 127 (293) 166 (1.5p)
------------ ------------- --------------- ------- -------------- -------
DP2011
General
Ordinary
Shares 15,644,066 - - -
------------ ------------- --------------- ------- -------------- -------
DP2011
General A
Shares 18,418,614 (47) 51 4 -
------------ ------------- --------------- ------- -------------- -------
DP2011
Structured
Ordinary
Shares 10,678,725 - - - -
------------ ------------- --------------- ------- -------------- -------
DP2011
Structured
A Shares 12,572,817 (19) (7) (26) (0.3p)
------------ ------------- --------------- ------- -------------- -------
Generalist
Shares 31,412,013 (283) (3,634) (3,917) (12.0p)
------------ ------------- --------------- ------- -------------- -------
Healthcare
Shares 12,378,737 (198) (1,206) (1,404) (11.3p)
----------- ------------- --------------- ------- -------------- -------
*Excluding Management Shares
As the Company has not issued any convertible securities or share
options, there is no dilutive effect on the return per DSO D Share, DP67
Share, Generalist Share or Healthcare Share. The return per share
disclosed therefore represents both the basic and diluted return per
Share for all classes of Share.
3. Basic and diluted Net Asset Value per share
Shares in issue 2020 Net Asset Value 2019 Net Asset Value
-----------
Pence per Pence per
2020 2019 share GBP'000 share GBP'000
----------- ---------- ---------- --------- --------- --------- ---------
DSO D
Shares 7,867,247 7,867,247 12.0 944 27.8 2,185
----------- ---------- ---------- --------- --------- --------- ---------
DP67 Shares 11,192,136 11,192,136 18.8 2,096 48.5 5,428
----------- ---------- ---------- --------- --------- --------- ---------
DP2011
General
Ordinary
Shares - 15,644,066 N/A N/A - -
----------- ---------- ---------- --------- --------- --------- ---------
DP2011
General A
Shares - 18,418,614 N/A N/A 13.3 2,459
----------- ---------- ---------- --------- --------- --------- ---------
DP2011
Structured
Ordinary
Shares - 10,678,725 N/A N/A - -
----------- ---------- ---------- --------- --------- --------- ---------
DP2011
Structured
A Shares - 12,572,817 N/A N/A 9.9 1,233
----------- ---------- ---------- --------- --------- --------- ---------
Generalist
Shares 44,865,567 35,621,598 61.7 27,700 83.5 29,734
----------- ---------- ---------- --------- --------- --------- ---------
Generalist
Management
Shares 11,216,392 7,487,874 - - - -
----------- ---------- ---------- --------- --------- --------- ---------
Healthcare
Shares 18,421,889 14,821,564 68.1 12,550 83.3 12,341
----------- ---------- ---------- --------- --------- --------- ---------
Healthcare
Management
Shares 4,605,472 2,993,571 - - - -
----------- ---------- ---------- --------- --------- --------- ---------
Funds held in respect of shares not
yet allotted 535 4,772
----------------------------------- --------- --------- --------- ---------
Net assets
per
Balance
Sheet 43,825 58,152
----------- ---------- ---------- --------- --------- --------- ---------
The Directors allocate the assets and liabilities of the Company between
the DSO D Shares, DP67 Shares, Generalist Shares and Healthcare Shares
such that each Share class has sufficient net assets to represent its
dividend and return of capital rights.
As the Company has not issued any convertible shares or share options,
there is no dilutive effect on the Net Asset Value per DSO D Share, per
DP67 Share, per Generalist Share or per Healthcare Share. The Net Asset
Value per share disclosed therefore represents both the basic and
diluted Net Asset Value per DSO D Share, per DP67 Share, per Generalist
Share and per Healthcare Share.
4. Principal Risks
The Company's investment activities expose the Company to a number of
risks associated with financial instruments and the sectors in which the
Company invests. The principal financial risks arising from the
Company's operations are:
Market risks;
- Credit risk; and
- Liquidity risk.
The Board regularly reviews these risks and the policies in place for
managing them. There have been no significant changes to the nature of
the risks that the Company is exposed to over the year and there have
also been no significant changes to the policies for managing those
risks during the year.
The risk management policies used by the Company in respect of the
principal financial risks and a review of the financial instruments held
at the year end are provided below:
Market risks
As a VCT, the Company is exposed to investment risks in the form of
potential losses and gains that may arise on the investments it holds,
in accordance with its investment policy. The management of these market
risks is a fundamental part of investment activities undertaken by the
Investment Manager and is overseen by the Board. The Manager monitors
investments through regular contact with management of investee
companies, regular review of management accounts and other financial
information and attendance at investee company board meetings. This
enables the Manager to manage the investment risk in respect of
individual investments. Investment risk is also mitigated by holding a
diversified portfolio spread across various business sectors and asset
classes.
The key market risks to which the Company is exposed are:
- Investment price risk; and
- Interest rate risk.
The Company has undertaken sensitivity analysis on its financial
instruments, split into the relevant component parts, taking into
consideration the economic climate at the time of review in order to
ascertain the appropriate risk allocation.
Investment price risk
Investment price risk arises from uncertainty about the future prices
and valuations of financial instruments held in accordance with the
Company's investment objectives. It represents the potential loss that
the Company might suffer through market price movements in respect of
quoted investments, and also changes in the fair value of unquoted
investments that it holds.
Interest rate risk
The Company accepts exposure to interest rate risk on floating-rate
financial assets through the effect of changes in prevailing interest
rates. The Company receives interest on its cash deposits at a rate
agreed with its bankers. Investments in loan stock attract interest
predominately at fixed rates
Credit risk
Credit risk is the risk that a counterparty to a financial instrument is
unable to discharge a commitment to the Company made under that
instrument. The Company is exposed to credit risk through its holdings
of loan stock in investee companies, cash deposits and debtors. Credit
risk relating to holdings of loan stock in investee companies is
considered to be part of market risk.
Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties in
meeting obligations associated with its financial liabilities. Liquidity
risk may also arise from either the inability to sell financial
instruments at their fair values when required, or from the inability to
generate cash inflows as required.
5. Events after the reporting period
In the period between 31 March 2020 and the date of this report, the
Company issued the following Shares:
- 668,377 Generalist Shares, at an average price of 62.61p per Share;
and
- 191,150 Healthcare Shares, at an average price of 69.08p per Share.
At the date of this report, there were 56,750,335 Generalist Shares and
44,507,994 Healthcare Shares in issue, including Management Shares.
ANNOUNCEMENT BASED ON AUDITED ACCOUNTS
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in accordance
with section 434 Companies Act 2006 for the year ended 31 March 2020 but
has been extracted from the statutory financial statements for the year
ended 31 March 2020 which were approved by the Board of Directors on 31
July 2020 and will be delivered to the Registrar of Companies. The
Independent Auditor's Report on those financial statements was
unqualified and did not contain any emphasis of matter nor statements
under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2019 have been
delivered to the Registrar of Companies and received an Independent
Auditors report which was unqualified and did not contain any emphasis
of matter nor statements under s 498(2) and (3) of the Companies Act
2006.
(END) Dow Jones Newswires
July 31, 2020 12:53 ET (16:53 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
1 Year Thames Ventures Vct 2 Chart |
1 Month Thames Ventures Vct 2 Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
