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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Downing Three C | LSE:DP3C | London | Ordinary Share | GB00B3D75146 | C SHARES 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% | 2.505 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMDP3C Downing THREE VCT plc Half-Yearly Report for the six months ended 30 June 2016 PERFORMANCE SUMMARY 30 Jun 31 Dec 30 Jun 'C' Share pool 2016 2015 2015 Pence Pence Pence Net asset value per 'C' Share - 53.2 49.3 Net asset value per 'A' Share - 0.1 0.1 Cumulative distributions per 'C' Share 120.36 75.0 75.0 Adjusted for estimated performance fee - (7.4) (7.0) Total return per 'C' Share and 'A' Share 120.36 120.9 117.4 30 Jun 31 Dec 30 Jun 'D' Share pool 2016 2015 2015 Pence Pence Pence Net asset value per 'D' Share 34.7 51.3 72.9 Net asset value per 'E' Share 0.1 0.1 0.1 Cumulative distributions per 'D' Share 66.5 49.5 22.5 Total return per 'D' Share and 'E' Share 101.3 100.9 95.5 30 Jun 31 Dec 30 Jun 'F' Share pool 2016 2015 2015 Pence Pence Pence Net asset value per 'F' Share 69.7 71.5 71.7 Cumulative distributions per 'F' Share 22.5 20.0 17.5 Total return per 'F' Share 92.2 91.5 89.2 30 Jun 31 Dec 30 Jun 'H' Share pool 2016 2015 2015 Pence Pence Pence Net asset value per 'H' Share 88.9 90.5 93.3 Cumulative distributions per 'H' Share 12.5 10.0 7.5 Total return per 'H' Share 101.4 100.5 100.8 30 Jun 'J' Share pool 2016 31 Dec 2015 30 Jun 2015 Pence Pence Pence Net asset value per 'J' Share 97.7 98.5 99.9 CHAIRMAN'S STATEMENT Introduction I am pleased to present the Half-Yearly Report for the six months ended 30 June 2016. The period has seen the Company complete the process of returning capital to 'C' Shareholders and make a start in returning funds to investors in the 'D' Share pool. Net asset values and overview 'C' Share pool The task of returning funds to investors in the 'C' Share pool was completed with final dividends paid on 24 March 2016. The Total Return to Shareholders was 120.36p for a holding of one 'C' Share and one 'A' Share, compared to the cost net of income tax relief in 2009 of 70p. The Company is now taking steps to cancel the 'C' Shares and 'A' Shares and will update relevant Shareholders on progress shortly. 'D' Share pool The 'D' Share pool has now commenced the process of exiting from its investments. During the period sufficient realisations were completed to allow the payment of a dividend of 17.0p per 'D' Share in March 2016. At 30 June 2016, the remaining net asset value ("NAV") for a combined holding of one 'D' Share and one 'E' Share was 34.8p, an increase of 0.4p (0.8%) over the period. Total Return (NAV plus dividends paid to date) is now 101.3p for a combined holding, compared to the original cost, net of income tax relief, of 70p per share. 'F' Share pool The 'F' Share pool launched in 2012 and is scheduled to start exiting from investments in early 2018. At 30 June 2016, the NAV for a holding of one 'F' Share was 69.7p, a net increase of 0.7p (1.0%) over the period (after adjusting for dividends paid during the period of 2.5p per 'F' Share). Total Return (NAV plus dividends paid to date) is now 92.2p, compared to the original cost, net of income tax relief, of 70p per share. 'H' Share pool The 'H' Share pool raised funds in 2014 and is in the process of building its VCT qualifying portfolio. The target date to start realising investments is 2019. At 30 June 2016, the NAV for a holding of one 'H' Share was 88.9p. This represents a net increase of 0.9p (1.0%) over the period (after adjusting for the dividends paid during the period of 2.5p per 'H' Share). Total Return (NAV plus dividends paid to date) is now 101.4p, compared to the initial NAV of 100p and the original cost to investors (net of income tax relief) of between 70.4p and 80.1p (depending on initial costs). 'J' Share pool The 'J' Share pool raised funds in 2015 and is in the process of building its VCT qualifying portfolio. The target date to start realising investments is 2020. At 30 June 2016, the NAV for a holding of one 'J' Share was 97.7p, compared to the initial NAV of 100p and the original cost to investors (net of income tax relief) of between 70.0p and 76.5p (depending on initial costs). A full review for each share pool is covered in the specific Investment Manager's Reports. Dividends In line with the Company's stated policies, interim dividends will be paid as follows: 'F' Shares 2.5p per share 'H' Shares 2.5p per share Each of the above dividends will be paid on 16 December 2016 to Shareholders on the register at 18 November 2016. No interim dividend is being declared in respect of the 'D' Shares as further return of capital dividends will be declared once further investment realisation have been completed. As a result of changes to the VCT regulations in 2014, the 'J' Share pool is effectively prohibited from paying dividends in its first three years. Share buybacks The Company has a general policy in the first five years after the launch of a share class of buying in its own shares that become available in the market for cancellation. As a result, the Company will buy 'F' Shares, 'H' Shares and 'J' Shares that become available in the market and will, subject to liquidity and regulatory constraints, buy at prices approximately equal to net asset value i.e. with no discount. No shares were purchased in the six month period to 30 June 2016. Outlook The Board is pleased to have delivered a good final outcome for 'C' Shareholders and the Manager's focus has now shifted to the exit process for the 'D' Share pool. Over the remainder of the year we expect to see significant progress in exiting from the remaining 'D' Share pool investments and hope to be in a position to declare a further dividend later in 2016 or early 2017. 'D' Shareholders should note that the exit process may well present some challenges which could result in the exit process taking some time to complete. We expect investment activity in the 'F' Share pool to be reasonably low during the remainder of the year as we look to the portfolio companies to develop further ahead of the planned exit date. The 'H' Share and 'J' Share pools have invested in a number of companies that are preparing to commence trading and so these will require close monitoring as they start to establish businesses. In terms of the general outlook for small businesses, the result of the EU Referendum appears to have created a period of uncertainty for the UK economy and some volatility in stock markets. With a large proportion of the Company's funds already invested, the Board believes that any possible negative impact on the Company's performance will be limited. A weaker longer term economy could result in greater difficulty in exiting from investments at the appropriate time, however the Directors feel that this is not a major risk. The Board will, of course, continue to monitor developments closely. I look forward to updating Shareholders in my statement with the Annual Report to 31 December 2016. Michael Robinson Chairman INVESTMENT MANAGER'S REPORT 'C' SHARE POOL The 'C' Share pool completed the task of realising its investments in January 2016, and on 24 March 2016, paid final dividends. Net asset value and results Over the life of their investment, investors in the 'C' Share pool received total dividends of 105.51p per 'C' Share and 14.85p per 'A' Share making a total return of 120.36p for an original investment of 100p (70p net of income tax relief). We believe that this represents a very good return to Shareholders and brings the investment by 'C' Shareholders to a close. Investment activity in the period The 'C' Share pool had two investments at the start of the period. Both Quadrate Spa Limited and Quadrate Catering Limited were sold generating gains over original cost of GBP160,000. Outlook We are very satisfied with the final performance of the 'C' Share pool. Following the payment of the final dividends on 24 March 2016, the 'C' Share pool had negligible value at the period end and, in line with the Articles of the Company, the Company is taking steps to cancel the share class. We will notify Shareholders of progress in due course. Downing LLP SUMMARY OF INVESTMENT MOVEMENTS 'C' SHARE POOL for the six months ended 30 June 2016 Market Gain Total value at Disposal against Realised Disposals Cost 01/01/16 proceeds cost gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Quadrate Spa Limited 258 381 381 123 - Quadrate Catering Limited 330 367 367 37 - 588 748 748 160 - INVESTMENT MANAGER'S REPORT 'D' SHARE POOL
The 'D' Share pool is in the process of seeking to realise its investments in order to return funds to 'D' Shareholders. Investment activity During the period under review, there were three full disposals and four partial disposals which produced proceeds of GBP1.5 million and showed a gain against previous carrying value of GBP109,000. At 30 June 2016, the pool held 11 investments with a valuation of GBP3.0 million. One minor valuation change was made at the period end resulting in a total valuation reduction of GBP58,000 in Mosaic Spa and Health Clubs Limited. The carrying values adopted at the end of the period are consistent with the values at which we believe the investments can be exited. The majority of investments have performed to plan although a small number which have underperformed historically are yet to fully recover. Realisation plans There are exit plans in place for the remaining 11 investments. The significant holdings in Kidspace Adventures Holdings Limited, Westcountry Solar Solutions Limited and Avon Solar Energy Limited are expected to exit in the next few months. Although Gara Rock Resort Limited, formerly Aminghurst Limited, was sold in March 2016, the timing of the loan repayments depends on when the underlying apartments are sold. We are exploring some options to draw the investment to a conclusion earlier than might otherwise be the case. Net asset value and results At 30 June 2016, the net asset value ("NAV") for a combined holding of one 'D' Share and one 'E' Share was 34.8p, an increase of 0.4p (0.8%) over the period. Total Return (NAV plus dividends paid to date) is now 101.3p for a combined holding. The profit on ordinary activities for the 'D' Shares, after taxation, for the period was GBP38,000, comprising a revenue loss of GBP13,000 and a capital profit of GBP51,000. Outlook The remainder of the year will be a busy period in terms of investment realisations and we expect the next major distribution to Shareholders to be made before the end of the year or early 2017. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'D' SHARE POOL as at 30 June 2016 Unrealised loss in % of Portfolio by Cost Valuation period value GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Kidspace Adventure Holdings Limited 375 465 - 13.0% Mosaic Spa and Health Clubs Limited * 521 288 (58) 8.1% Westcountry Solar Solutions Limited 250 250 - 7.0% Avon Solar Energy Limited 210 218 - 6.1% Future Biogas (Reepham Road) Limited 451 98 - 2.7% Camandale Limited* 422 2 - 0.1% Quadrate Spa Limited 144 - - 0.0% Non-qualifying investments Gara Rock Resort Limited 1,322 1,322 - 37.1% Fenkle Street LLP 122 220 - 6.2% Future Biogas (SF) Limited 84 84 - 2.4% Redmed Limited 21 19 - 0.5% 3,922 2,966 (58) 83.2% Cash at bank and in hand 597 16.8% Total 3,563 100% * Partially qualifying investment SUMMARY OF INVESTMENT MOVEMENTS 'D' SHARE POOL for the six months ended 30 June 2016 Gain/ Market Disposal (loss) Total value at Proceeds against Realised Disposals Cost 01/01/16 * cost gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Quadrate Catering Limited 441 539 581 140 42 Future Biogas (Reepham Road) Limited 130 97 130 - 33 Liverpool Nurseries (Holdings) Limited - - 11 11 11 Quadrate Spa Limited 352 520 520 168 - Non-qualifying investments Future Biogas (SF) Limited 85 85 102 17 17 Kilmarnock Monkey Bar Limited - - 6 6 6 Commercial Street Hotel Limited 100 100 100 - - Redmed Limited 6 5 5 (1) - 1,114 1,346 1,455 341 109 * Adjusted for additions in the year INVESTMENT MANAGER'S REPORT 'F' SHARE POOL The 'F' Share pool is fully invested in a portfolio focussed on asset backed businesses and those with predictable revenue streams. The 'F' Share pool is scheduled to start realising investments in 2017 in order to return funds to shareholders in 2018. Investment activity Four new investments were made in the period totalling GBP700,000. GBP300,000 was invested into Vectis Power Generation Limited which is seeking to build and develop renewable energy plants; GBP150,000 was invested into Brownfields Energy Limited which is seeking to develop small-scale waste disposal projects; GBP125,000 was invested into both Rhodes Renewables Limited and Morava Renewables Limited which are both exploring opportunities in the wood refinery sector. One full exit was completed in the period for Grasshoppper 2007 Limited, the company that owns The Grasshopper Inn, a public house near Westerham, Kent which was sold and generated proceeds equivalent to the original cost of GBP378,000. One notable partial divestment took place in the period being the part repayment of a non-qualifying loan to Gara Rock Resort Limited, formerly Aminghurst Limited, which generated proceeds of GBP494,000. The majority of investments remain valued at or above cost and there was one small valuation movement in the period on Atlantic Dogstar Limited. The company owns a group of London pubs which are performing to plan and as such the valuation has been increased by GBP18,000. Net asset value, results and dividend At 30 June 2016, the net asset value ("NAV") for a holding of one 'F' Share was 69.7p, an increase of 0.7p (1.0%) over the period. Total Return (NAV plus dividends paid to date) is now 92.2p for a combined holding. The gain on ordinary activities for the 'F' Shares, after taxation, for the period was GBP71,000, comprising a revenue profit of GBP53,000 and a capital gain of GBP18,000. The Company will pay an interim dividend of 2.5p per 'F' Share, on 16 December 2016 to 'F' Shareholders on the register at 18 November 2016. Outlook The focus now for the 'F' Share portfolio is on close monitoring and support of the portfolio companies to ensure that prospects for growth are optimised in the period until the realisation process commences in 2017. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'F' SHARE POOL as at 30 June 2016 Unrealised gain % of Portfolio by Cost Valuation in period value GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Apex Energy Limited 1,000 1,000 - 13.3% Vulcan Renewables Limited 653 778 - 10.4% Goonhilly Earth Station Limited 760 760 - 10.1% Lambridge Solar Limited 500 543 - 7.2% Merlin Renewables Limited 500 500 - 6.7% Augusta Pub Company Limited 290 324 - 4.3% Kidspace Adventures Holdings Limited 250 310 - 4.1% Vectis Power Generation Limited 300 300 - 4.0% Pearce and Saunders Limited 497 248 - 3.3% Pabulum Pubs Limited 200 229 - 3.1% Atlantic Dogstar Limited 200 218 18 2.9% Fresh Green Power Limited 200 200 - 2.7% City Falkirk Limited 422 177 - 2.4% Fubar Stirling Limited 268 169 - 2.3% Brownfields Energy Limited 150 150 - 2.0% Rhodes Renewables Limited 125 125 - 1.7% Morava Renewables Limited 125 125 - 1.7% Green Energy Production UK Limited 100 100 - 1.4% Cheers Dumbarton Limited 48 17 - 0.2% Redmed Limited * 13 11 - 0.1%
Lochrise Limited 13 - - 0.0% Non-qualifying investments Baron House Developments LLP 481 481 - 6.4% Gara Rock Resort Limited 345 345 - 4.6% London City Shopping Centre Limited 66 66 - 0.9% Pearce and Saunders DevCo Limited 46 46 - 0.6% Southampton Hotel Development Limited 298 - - 0.0% 7,850 7,222 18 96.4% Cash at bank and in hand 269 3.6% Total 7,491 100.0% * Partially qualifying investment SUMMARY OF INVESTMENT MOVEMENTS 'F' SHARE POOL as at 30 June 2016 Additions GBP'000 Qualifying investments Vectis Power Generation Limited 300 Brownfields Energy Limited 150 Rhodes Renewables Limited 125 Morava Renewables Limited 125 Total 700 Market value at Loss Total 01/01/16 Disposal against Realised Disposals Cost * proceeds cost gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Grasshopper 2007 Limited 378 378 378 - - Redmed Limited 5 3 3 (2) - Non-qualifying investments Gara Rock Resort Limited 494 494 494 - - 877 875 875 (2) - * adjusted for purchases made in the period INVESTMENT MANAGER'S REPORT 'H' SHARE POOL The 'H' Share pool raised funds in 2014 and has made good progress in building the initial VCT qualifying portfolio. The fund is expected to be fully qualifying by 31 December 2016. Investment activity During the last six months, six qualifying investments were made totalling GBP4.4 million and one non-qualifying investment for GBP850,000 as we continue to build the qualifying portfolio of the 'H' Share pool. The qualifying investments include GBP1.5 million in Hermes Renewables Limited, which is seeking to build and operate a wood pelleting plant. GBP850,000 was invested in Quadrate Catering Limited which operates a restaurant in the iconic Cube Complex in Birmingham. GBP613,000 was invested in both Ironhide Generation Limited and GBP614,000 into Indigo Generation Limited. GBP492,000 was invested in Rockhopper Renewables Limited and GBP281,000 in SF Renewables (Solar) Limited. All of the above investments are in the process of acquiring land in India to build and operate 15MW ground mounted solar arrays. One non-qualifying investment was made in Quadrate Spa Limited for GBP850,000 which owns and operates a health club business in The Cube complex in Birmingham. Two non-qualifying loans were repaid in full in the period being Pub People Limited, the public house operator in the East Midlands, repaid GBP984,000 and Ludlow Taverns Limited which repaid GBP388,000. The majority of investments remain valued at cost and there was one small valuation movement in the period on Atlantic Dogstar. The company owns a group of London pubs which are performing to plan and as such the valuation has been increased by GBP88,000. Net asset value and results At 30 June 2016, the net asset value per 'H' Share was 88.9p, a net increase of 0.9p (1.0%) over the period. Total Return (NAV plus dividends paid to date) is now 101.4p. Results and dividend The gain on ordinary activities for the 'H' Shares, after taxation, for the period was GBP128,000, comprising a revenue profit of GBP40,000 and a capital gain of GBP88,000. The Company will pay an interim dividend of 2.5p per 'H' Share, on 16 December 2016 to 'H' Shareholders on the register at 18 November 2016. Outlook The 'H' Share pool will become fully qualifying at the year end and as a result our focus will shift to the close monitoring and support of the portfolio companies in order to nurture growth before the planned exit date. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'H' SHARE POOL as at 30 June 2016 Unrealised gain % of Portfolio by Cost Valuation in period value GBP'000 GBP'000 GBP'000 VCT qualifying investments Hermes Renewables Limited 1,500 1,500 - 12.5% Apex Energy Limited 1,300 1,300 - 10.8% Hedderwick Limited 1,250 1,250 - 10.4% Atlantic Dogstar Limited 1,000 1,088 88 9.1% Kidspace Adventures Holdings Limited 1,085 1,085 - 9.1% Quadrate Catering Limited 850 850 - 7.1% Ironhide Generation Limited 613 613 - 5.1% Indigo Generation Limited 613 613 - 5.1% Antelope Pub Limited 500 500 - 4.2% Rockhopper Renewables Limited 492 492 - 4.1% Oak Grove Renewables Limited 420 315 - 2.6% SF Renewables (Solar) Limited 281 281 - 2.3% Non-qualifying investments Quadrate Spa Limited 850 850 - 7.1% Hobblers Heath Limited 727 727 - 6.1% Pearce and Saunders Limited 193 193 - 1.6% Augusta Pub Company Limited 155 155 - 1.3% 11,829 11,812 88 98.5% Cash at bank and in hand 183 1.5% Total 11,995 100% SUMMARY OF INVESTMENT MOVEMENTS 'H' SHARE POOL as at 30 June 2016 Additions GBP'000 Qualifying investments Hermes Renewables Limited 1,500 Quadrate Catering Limited 850 Ironhide Generation Limited 614 Indigo Generation Limited 613 Rockhopper Renewables Limited 492 SF Renewables (Solar) Limited 281 Non-qualifying investments Quadrate Spa Limited 850 Total 5,200 Market Total value at Disposal Gain against Realised Disposals Cost 01/01/16 * proceeds cost gain GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Non-qualifying investments Pub People Limited 984 984 984 - - Ludlow Taverns Springhill Limited 388 388 388 - - 1,372 1,372 1,372 - - * adjusted for purchases made in the period INVESTMENT MANAGER'S REPORT 'J' SHARE POOL The fundraising for the 'J' Share pool was launched in December 2014 and raised GBP11 million prior to closing in 2015. The majority of these funds have now been invested as at the period end and is due to become qualifying by the end of 2017. Investment activity During the last six months, ten qualifying investments have been made totalling GBP7.8m as we start to build the qualifying portfolio of the 'J' Share pool. The qualifying investments include GBP900,000 in Vectis Power Generation Limited which is seeking to build and develop renewable energy plants. GBP900,000 was also invested in Brownfields Energy Limited which is seeking to develop small-scale waste disposal projects. GBP800,000 was invested in Yamuna Renewables Limited who are seeking investment opportunities in the wood refinery sector. GBP613,000 was invested in Ironhide Generation Limited and GBP614,000 into Indigo Generation Limited. GBP492,000 was invested into Rockhopper Renewables Limited and GBP281,000 into SF Renewables (Solar) Limited. All of the above investments are in the process of acquiring land in India to build and operate 15MW ground mounted solar arrays. Jito Renewables Limited, Rhodes Renewables Limited and Morava Renewables Limited are all exploring opportunities in the wood refinery sector following investments of GBP1 million, GBP1 million and GBP1.2 million respectively. No valuation adjustments have been made in the period with all investments remaining at cost. Net asset value and results At 30 June 2016, the net asset value per 'J' Share was 97.7p, a net decrease of 0.8p (0.8%) over the period. The loss on ordinary activities for the 'J' Shares, after taxation, for the period was GBP90,000, being wholly related to revenue. Outlook The task of building the 'J' Share portfolio is progressing well. We have a good pipeline of potential investment opportunities from which we
expect to be able to build a solid qualifying portfolio with good potential for growth over the planned life of the Share pool. Accordingly, we expect to complete a number of new qualifying and non-qualifying investments for the share pool over the remainder of the year. Downing LLP SUMMARY OF INVESTMENT PORTFOLIO 'J' SHARE POOL as at 30 June 2016 Unrealised gain % of Portfolio by Cost Valuation in period value GBP'000 GBP'000 GBP'000 VCT qualifying and partially qualifying investments Morava Renewables Limited 1,150 1,150 - 10.9% Jito Renewables Limited 1,000 1,000 - 9.5% Rhodes Renewables Limited 1,000 1,000 - 9.5% Cedarville Limited 1,000 1,000 - 9.5% Pilgrim Pubs Limited 1,000 1,000 - 9.5% Brownfields Energy Limited 900 900 - 8.6% Vectis Power Generation Limited 900 900 - 8.6% Yamuna Power Generation Limited 800 800 - 7.6% Indigo Generation Limited 614 614 - 5.8% Ironhide Generation Limited 613 613 - 5.8% Rockhopper Renewables Limited 492 492 - 4.7% Oak Grove Renewables Limited 420 315 - 3.0% SF Renewables (Solar) Limited 281 281 - 2.7% 10,170 10,065 - 95.7% Cash at bank and in hand 457 4.3% Total 10,522 100% SUMMARY OF INVESTMENT MOVEMENTS 'J' SHARE POOL as at 30 June 2016 Additions GBP'000 Qualifying investments Morava Renewables Limited 1,150 Jito Renewables Limited 1,000 Rhodes Renewables Limited 1,000 Brownfields Energy Limited 900 Vectis Power Generations Limited 900 Yamuna Renewables Limited 800 Indigo Generation Limited 614 Ironhide Generation Limited 613 Rockhopper Renewables Limited 492 SF Renewables Limited 281 Total 7,750 UNAUDITED SUMMARISED BALANCE SHEET as at 30 June 2016 30 Jun 31 Dec 30 Jun 2016 2015 2015 'C' 'D' Shares Shares 'F' Shares 'H' Shares 'J' Shares Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Unquoted investments - 2,966 7,222 11,812 10,065 32,065 26,046 22,707 Current assets Debtors - (3) 153 103 3 256 655 632 Cash at bank and in hand 67 597 269 183 457 1,573 13,044 16,578 67 594 422 286 460 1,829 13,699 17,210 Creditors: amounts falling due within one year (64) (92) (102) (139) (40) (437) (1,019) (494) Net current assets 3 502 320 147 420 1,392 12,680 16,716 Net assets 3 3,468 7,542 11,959 10,485 33,457 38,726 39,423 Capital and reserves Called up share capital 18 25 11 13 11 78 75 78 Capital redemption reserve 106 - - - - 106 106 106 Special reserve - 3,850 8,885 (1,681) - 11,054 17,348 15,749 Share premium account - - - 13,608 11,031 24,639 21,367 24,639 Revaluation reserve (105) (956) (627) (17) (105) (1,810) (1,504) (1,466) Capital reserve - realised - - (1,033) - - (1,033) 301 (1,033) Revenue reserve (16) 549 306 36 (452) 423 1,033 1,350 Total equity shareholders' funds 3 3,468 7,542 11,959 10,485 33,457 38,726 39,423 Basic and diluted net asset value per: 'C' Share - 49.3p 53.2p 'A' Share - 0.1p 0.1p 'D' Share 34.7p 72.9p 51.3p 'E' Share 0.1p 0.1p 0.1p 'F' Share 69.7p 71.7p 71.5p 'H' Share 88.9p 93.3p 90.5p 'J' Share 97.7p 99.9p 98.5p STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2016 Capital Share Capital Called up share redemption Special premium Revaluation reserve Revenue capital reserve reserve reserve reserve - realised reserve Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 1 January 2015 67 106 22,268 13,608 (289) (1,033) 342 35,069 (Loss)/gain on investments - - - - (234) 34 - (200) Retained revenue - - - - - - 1,317 1,317 Issue of new shares 11 - - 11,031 - - - 11,042 Share issue costs - - - - - - (309) (309) Transfer between reserves - - (6,519) - (943) 7,462 - - Dividend paid - - - - - (7,496) - (7,496) At 31 December 2015 78 106 15,749 24,639 (1,466) (1,033) 1,350 39,423 Gain on investments - - - - 47 110 - 157 Retained revenue - - - - - - (40) (40) Transfer between reserves - - (4,695) - (391) 5,973 (887) - Dividend paid - - - - - (6,083) - (6,083) At 30 June 2016 78 106 11,054 24,639 (1,810) (1,033) 423 33,457 INCOME STATEMENT for the six months ended 30 June 2016 Company Total Year Ended Six months ended Six months ended 31 Dec 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 435 - 435 1,411 - 1,411 2,449 Gains/(losses) on investments - realised - 110 110 - (362) (362) 34 - unrealised - 47 47 - (244) (244) (234) 435 157 592 1,411 (606) 805 2,249 Investment management fees (328) - (328) (332) - (332) (695) Other expenses (164) - (164) (148) - (148) (275) Return/(loss) on ordinary activities before taxation (57) 157 100 931 (606) 325 1,279 Tax on total comprehensive income and ordinary activities 17 - 17 (84) - (84) (162) Return/(loss) attributable to equity shareholders (40) 157 117 847 (606) 241 1,117 Return per 'C' Share (0.4p) - (0.4p) 7.7p (6.5p) 1.2p 5.1p Return per 'A' Share - - - - - - - Return per 'D' Share (0.1p) 0.5p 0.4p 1.2p 0.4p 1.6p 6.9p Return per 'E'
Share - - - - - - - Return per 'F' Share 0.5p 0.2p 0.7p 0.3p (1.7p) (1.4p) 1.0p Return per 'H' Share 0.3p 0.7p 1.0p 1.2p - 1.2p 0.8p Return per 'J' Share (0.8p) - (0.8p) (0.2p) - (0.2p) (2.4p) A Statement of Total Recognised Gains and Losses has not been prepared as all gains/losses are recognised in the Income Statement as noted above. INCOME STATEMENT for the six months ended 30 June 2016 Year ended Six months ended Six months ended 31 Dec 'C' Shares 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 6 - 6 621 - 621 815 Gains/(losses) on investments - realised - - - - (412) (412) (342) - unrealised - - - - (53) (53) 25 6 - 6 621 (465) 156 498 Investment management fees (8) - (8) (31) - (31) (56) Other expenses (35) - (35) (24) - (24) (41) Return/(loss) on ordinary activities before taxation (37) - (37) 566 (465) 101 401 Tax on total comprehensive income and ordinary activities 7 - 7 (12) - (12) (36) Return/(loss) attributable to equity shareholders (30) - (30) 554 (465) 89 365 INCOME STATEMENT for the six months ended 30 June 2016 Year Ended Six months ended Six months ended 31 Dec 'D' Shares 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 19 - 19 227 - 227 528 Gains/(losses) on investments - realised - 109 109 - 50 50 297 - unrealised - (58) (58) - (11) (11) 87 19 51 70 227 39 266 912 Investment management fees (27) - (27) (49) - (49) (97) Other expenses (16) - (16) (32) - (32) (54) Return/(loss) on ordinary activities before taxation (24) 51 27 146 39 185 761 Tax on total comprehensive income and ordinary activities 11 - 11 (31) - (31) (71) Return/(loss) attributable to equity shareholders (13) 51 38 115 39 154 690 INCOME STATEMENT for the six months ended 30 June 2016 Year Ended Six months ended Six months ended 31 Dec 'F' Shares 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 171 - 171 153 - 153 407 Losses on investments - realised - - - - - - 79 - unrealised - 18 18 - (180) (180) (136) 171 18 189 153 (180) (27) 350 Investment management fees (69) - (69) (73) - (73) (144) Other expenses (36) - (36) (46) - (46) (85) Return/(loss) on ordinary activities before taxation 66 18 84 34 (180) (146) 121 Tax on total comprehensive income and ordinary activities (13) - (13) (2) - (2) (13) Return/(loss) attributable to equity shareholders 53 18 71 32 (180) (148) 108 INCOME STATEMENT for the six months ended 30 June 2016 Year Ended Six months ended Six months ended 31 Dec 'H' Shares 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 202 - 202 359 - 359 594 Gains/(losses) on investments - realised - - - - - - - - unrealised - 88 88 - - - (105) 202 88 290 359 - 359 489 Investment management fees (120) - (120) (128) - (128) (253) Other expenses (32) - (32) (36) - (36) (69) Return on ordinary activities before taxation 50 88 138 195 - 195 167 Taxation on total comprehensive income and ordinary activates (10) - (10) (41) - (41) (55) Return attributable to equity shareholders 40 88 128 154 - 154 112 INCOME STATEMENT for the six months ended 30 June 2016 Year Ended Six months ended Six months ended 31 Dec 'J' Shares 30 Jun 2016 30 Jun 2015 2015 Revenue Capital Total Revenue Capital Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Income 37 - 37 51 - 51 104 Gains/(losses) on investments - realised - - - - - - - - unrealised - - - - - - (105) 37 - 37 51 - 51 (1) Investment management fees (104) - (104) (51) - (51) (144) Other expenses (45) - (45) (10) - (10) (26) Loss on ordinary activities before taxation (112) - (112) (10) - (10) (171) Tax on total comprehensive income and ordinary activities 22 - 22 2 - 2 13 Loss attributable to equity shareholders (90) - (90) (8) - (8) (158) UNAUDITED CASH FLOW STATEMENT for the six months ended 30 June 2016 30 Jun 31 Dec 30 Jun 2016 2015 2015 'C' 'D' 'F' 'H' Shares Shares Shares Shares 'J' Shares Total Total Total Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Net cash inflow/ (outflow) from operating activities 1 137 210 16 (13) (72) 278 893 862 Cash flows from investing activities Purchase of investments - - (700) (5,200) (7,750) (13,650) (3,227) (11,766) Sale of investments 748 1,455 875 1,372 - 4,450 4,780 17,063 Net cash inflow/(outflow) from investing activities 748 1,455 175 (3,828) (7,750) (9,200) 1,553 5,297 Net cash inflow/(outflow) before financing activities 885 1,665 191 (3,841) (7,822) (8,922) 2,446 6,159 Cash flows from financing activities Equity dividends paid (3,780) (1,696) (271) (336) - (6,083) (4,195) (7,496) Proceeds from share issue - - - - - - 7,767 11,042 Share issue costs - - - - - - (156) (309)
Net cash (outflow)/inflow from financing (3,780) (1,696) (271) (336) - (6,083) 3,416 3,237 (Decrease)/increase in cash 2 (2,895) (31) (80) (4,177) (7,822) (15,005) 5,862 9,396 NOTES TO THE UNAUDITED CASH FLOW STATEMENT for the six months ended 30 June 2016 30 Jun 31 Dec 30 Jun 2016 2015 2015 'C' 'D' 'F' 'H' 'J' Shares Shares Shares Shares Shares Total Total Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 1 Cash inflow from operating activities and returns on investments Return/(loss) on ordinary activities before taxation (37) 27 84 138 (112) 100 325 1,279 Corporation tax paid 5 7 - - - 12 - (132) Losses/(gains) on investments - (51) (18) (88) - (157) 606 200 Decrease/(increase) in other debtors 174 254 (24) (54) 25 375 (238) (216) (Decrease)/increase in other creditors (5) (27) (26) (9) 15 (52) 200 (269) Net cash inflow/(outflow) from operating activities 137 210 16 (13) (72) 278 893 862 2 Analysis of net funds Beginning of period 2,962 628 349 4,360 8,279 16,578 7,182 7,182 Net cash (outflow)/inflow (2,895) (31) (80) (4,177) (7,822) (15,005) 5,862 9,396 End of period 67 597 269 183 457 1,573 13,044 16,578 NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. General information Downing Three VCT plc ("The Company") is a venture capital trust established under the legislation introduced in the Finance Act 1995 and is domiciled in the United Kingdom and incorporated in England and Wales. 2. Accounting policies - Basis of accounting The unaudited half-yearly results cover the six months to 30 June 2016 and have been prepared in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" revised January 2009 and in accordance with the accounting policies set out in the statutory accounts for the year ended 31 December 2015, which were prepared 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). 3. All revenue and capital items in the Income Statement derive from continuing operations. 4. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. 5. The comparative figures are in respect of the six month period ended 30 June 2015 and the year ended 31 December 2015 respectively. 6. Dividends Year ended Six months ended 31 Dec 30 June 2016 2015 Per share Revenue Capital Total Total Paid in period pence GBP'000 GBP'000 GBP'000 GBP'000 'C' Shares Special 'C' 2016 30.5p - 2,184 2,184 - Special 'A' 2016 14.8p - 1,596 1,596 - Y/E Dec 2014 Final 50.0p - - - 3,588 - 3,780 3,780 3,588 'D' Shares Y/E Dec 2015 Final 17.0p - 1,696 1,696 - Y/E Dec 2014 Interim 27.0p - - - 2,695 - 1,696 1,696 2,695 'F' Shares Y/E Dec 2015 Final 2.5p - 271 271 - Y/E Dec 2015 Interim 2.5p - - - 270 Y/E Dec 2014 Final 2.5p - - - 270 - 271 271 540 'H' Shares Y/E Dec 2015 Final 2.5p - 336 336 - Y/E Dec 2015 Interim 2.5p - - - 337 Y/E Dec 2014 Final 2.5p - - - 336 - 336 336 673 No dividends have been paid or declared in respect of the 'E' Shares or 'J' Shares. 7. Basic and diluted return per share Weighted average number of shares in Revenue Capital issue return/(loss) return Per GBP'000 Per share GBP'000 share 'C' Shares 7,158,326 (30) (0.4p) - - 'A' Shares 10,750,064 - - - - 'D' Shares 9,979,109 (13) (0.1p) 51 0.5p 'E' Shares 14,994,862 - - - - 'F' Shares 10,821,660 53 0.5p 18 0.2p 'H' Shares 13,446,972 40 0.3p 88 0.7p 'J' Shares 10,733,377 (90) (0.8p) - - (40) 157 8. Net asset value per share Shares in issue Net asset value Per GBP'000 Share 'C' Shares 7,158,326 3 - 'A' Shares 10,750,064 - - 'D' Shares 9,979,109 3,453 34.7p 'E' Shares 14,994,862 15 0.1p 'F' Shares 10,821,660 7,542 69.7p 'H' Shares 13,446,972 11,959 88.9p 'J' Shares 10,733,377 10,485 97.7p 33,457 9. Reserves Period ended Year ended 30 June 31 Dec 2016 2015 GBP'000 GBP'000 Capital redemption reserve 106 106 Special reserve 11,054 15,749 Share premium reserve 24,639 24,639 Revaluation reserve (1,810) (1,466) Capital reserve-realised (1,033) (1,033) Revenue reserve 423 1,350 33,379 39,345 The Special reserve, Capital reserve - realised and Revenue reserve are all distributable reserves. The Revaluation reserve includes losses of GBP2,414,000 which are included in the calculation of distributable reserves. Total distributable reserves are GBP8,030,000 (31 Dec 2015: GBP13,911,000). 1. The fair value of investments is determined using the detail accounting policy set out in the statutory accounts for the year ended 31 December 2015. The Company has categorised its financial instruments using the fair value hierarchy as follows: Level a: Reflects financial instruments quoted in an active market; Level b: Reflects financial instruments that have prices that are observable either directly or indirectly; and Level c: i) Reflects financial instruments that use valuation techniques that are based on observable market date. ii) Reflects financial instruments that use valuation techniques that are not based on observable market data (unquoted equity investments and loan note investments). Period Year ended ended Level Level Level 30 June Level Level Level 31 Dec a b c (ii) 2016 a b c (ii) 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Loan notes - - 7,928 7,928 - - 11,318 11,318 Unquoted equity - - 24,137 24,137 - - 11,389 11,389 - - 32,065 32,065 - - 22,707 22,707 11. The unaudited condensed financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended 31 December 2015 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified. 12. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with the "Statement: Half-Yearly Financial Reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so. 13. Risks and uncertainties Under the Disclosure and Transparency Directive, the Board is required, in the Company's half-yearly results, to report on principal risks and uncertainties facing the Company over the remainder of the financial year. The Board concluded that the key risks facing the Company over the remainder of the financial period are as follows: (i) Compliance risk of failure to maintain approval as a VCT; and (ii) Investment risk associated with investing in small and immature businesses. The Company's compliance with the VCT regulations is continually monitored by the Manager, who reports regularly to the Board on the current position. The Company has also reappointed Philip Hare & Associates LLP to provide regular reviews and advice in this area. In order to make VCT qualifying investments, the Company has to invest in small businesses which are often immature. It also has a limited period in which it must invest the majority of its funds. The Manager follows a rigorous process in vetting and careful structuring of new investments, including taking a charge over the assets of the business wherever possible and, after an investment is made, closely monitoring the business. The Board is satisfied that these approaches provide satisfactory management of the key risks. 14. Going concern The Directors have reviewed the Company's financial resources at the period end and conclude that the Company is well placed to manage its business risks. The Board confirms that it is satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, the Board believes that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements. 1. Copies of the unaudited half-yearly report will be sent to Shareholders shortly. Further copies can be obtained from the Company's registered office or will be available for download from www.downing.co.uk. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Downing THREE VCT plc via Globenewswire
(END) Dow Jones Newswires
September 28, 2016 12:39 ET (16:39 GMT)
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