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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Downing Three Vct Plc | LSE:DP3F | London | Ordinary Share | GB00B6ZS1P26 | F SHS 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% | 13.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Downing THREE VCT plc
Half-Yearly Report
for the six months ended 30 June 2017
Performance summary
30 Jun 31 Dec 30 Jun
'D' Share pool 2017 2016 2016
Pence Pence Pence
Net asset value per 'D' Share 23.7 36.4 34.7
Net asset value per 'E' Share 0.1 0.1 0.1
Cumulative distributions per 'D' Share 80.0 66.5 66.5
Total return per 'D' Share and 'E' Share 103.8 103.0 101.3
30 Jun 31 Dec 30 Jun
'F' Share pool 2017 2016 2016
Pence Pence Pence
Net asset value per 'F' Share 69.6 69.4 69.7
Cumulative distributions per 'F' Share 27.5 25.0 22.5
Total return per 'F' Share 97.1 94.4 92.2
30 Jun 31 Dec 30 Jun
'H' Share pool 2017 2016 2016
Pence Pence Pence
Net asset value per 'H' Share 84.6 86.2 88.9
Cumulative distributions per 'H' Share 17.5 15.0 12.5
Total return per 'H' Share 102.1 101.2 101.4
30 Jun 31 Dec 30 Jun
'J' Share pool 2017 2016 2016
Pence Pence Pence
Net asset value per 'J' Share 95.7 95.8 97.7
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Half-Yearly Report for the six months ended
30 June 2017. The Company has a number of share pools, each of which is
in a different stage in its planned exit life. Generally progress has
been satisfactory over the period, with all the mature share pools
seeing an increase in their total return.
Net asset values and overview
'D' Share pool
The 'D' Share pool is now in the process of exiting from its
investments.
At 30 June 2017, the net asset value ("NAV") for a combined holding of
one 'D' Share and one 'E' Share was 23.8p. Total Return (NAV plus
dividends paid to date) is now 103.8p for a combined holding, compared
to the original cost, net of income tax relief, of 70p per share.
Total dividends of 80p per combined share have been paid to date. The
Manager is optimistic that one final dividend can be paid before the end
of the year to bring the share pool to a close.
'F' Share pool
The 'F' Share pool launched in 2012 and is scheduled to start exiting
from investments in early 2018.
At 30 June 2017, the net asset value ("NAV") for a holding of one 'F'
Share was 69.6p, an increase of 2.7p (3.9%) over the period. Total
Return (NAV plus dividends paid to date) is now 97.1p for a combined
holding, compared to the original cost, net of income tax relief, of 70p
per share.
The Manager anticipates that the first major distribution will be paid
in the first quarter of 2018.
'H' Share pool
The 'H' Share pool raised funds in 2014 and has now completed its
initial investment phase. The target date to start realising investments
is 2019.
At 30 June 2017, the net asset value ("NAV") for a holding of one 'H'
Share was 84.6p which represents a net increase of 0.9p (1.0%) over the
period after adjusting for the dividends paid out. Total Return (NAV
plus dividends paid to date) is now 102.1p, compared to the initial NAV,
before income tax relief, of 100.0p.
'J' Share pool
The 'J' Share pool raised funds in 2015 and is continuing to build its
initial investment portfolio. The target date to start realising
investments is 2020.
At 30 June 2017, the net asset value ("NAV") and total return for a
holding of one 'J' Share was 95.7p which represents a net decrease of
0.1p (0.1%) over the period, compared to the initial NAV, before income
tax relief, of 100.0p.
The Investment Manager's Report below will provide more detail on each
of the share pools.
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 15 December 2017 to
Shareholders on the register at 24 November 2017.
No interim dividend is being declared in respect of the 'D' Shares as
additional dividends will be declared once further investment
realisations have been completed. No dividend is being declared in
respect of the 'J' Share pool as the VCT regulations effectively
prohibit dividends at this early stage in the pool's life.
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
currently buy '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.
During the period to 30 June 2017, the Company repurchased and
subsequently cancelled 14,562 'J' Shares for an aggregate consideration
of GBP13,907, being an average price of 95.5p per 'J' Share.
No share buybacks in respect of any other share classes were undertaken
during the period.
Outlook
The Manager will be engaged in a number of different activities for each
of the share pools over the remainder of the year. We hope to see the
'D' Share come to the end of its life with a final dividend and expect
preparations for investment realisations in the 'F' Share pool to
advance significantly. The 'H' Share pool is expected to have limited
investment activity over the remainder of the year while the Manager
focuses on the existing portfolio, but we expect to see a small number
of new additions to the 'J' Share portfolio as the funds raised continue
to be employed.
Shareholders may be aware of the "Patient Capital Review" currently
being undertaken by the Government which is seeking to strengthen the UK
as a place for growing innovative businesses. It is possible that this
review could result in some changes to the VCT regulations and the
associated tax reliefs. We expect that any planned changes will be
announced in the Budget in November. The Board and Manager are closely
monitoring developments and we will communicate with Shareholders if we
believe there are any changes which could have a significant impact on
Shareholders' investments.
In addition to any communications in connection with the above, I will
update all Shareholders in my statement in the next Annual Report, and I
also expect to write separately to 'D' Shareholders as and when there is
news of a final distribution.
Michael Robinson
Chairman
INVESTMENT MANAGER'S REPORT
'D' SHARE POOL
The 'D' Share pool is in the process of realising its investments in
order to return funds to 'D' Shareholders. The process has continued to
progress through the period and we are optimistic it will be completed
in the near future.
Investment activity
During the period under review, there was one partial disposal of
GBP245,000 in Mosaic Spa and Health Clubs Limited. This represented a
gain of GBP68,000 against the previous carrying value. Further proceeds
for this investment are expected in due course at which point the
company will be fully exited from the pool.
At 30 June 2017, the pool held seven investments with a valuation of
GBP2.2 million. Three small valuation changes were made at the period
end resulting in a total valuation reduction of GBP4,000. The carrying
values adopted at the end of the period are consistent with the values
at which we believe the investments can be exited.
Realisation plans
The pools most significant holding is in Gara Rock Resort Limited,
formerly Aminghurst Limited. We are pleased to report that we have
recently exchanged contracts for the sale of the investment and expect
this transaction to complete shortly.
Of the remaining six investments Avon Solar Energy Limited and
Westcountry Solar Solutions Limited are expected to exit in the next two
months. Mosaic Spa and Health Clubs Limited has partially exited in the
period and we are exploring options to facilitate a complete exit for
the share pool. No further proceeds are expected from Quadrate Spa
Limited or Future Biogas (Reepham Road) Limited.
Net asset value and results
At 30 June 2017, the net asset value ("NAV") for a combined holding of
one 'D' Share and one 'E' Share was 23.8p, an increase of 0.8p (2.2%)
over the period. Total Return (NAV plus dividends paid to date) is now
103.8p for a combined holding.
The profit on ordinary activities for the 'D' Shares, after taxation,
for the period was GBP76,000, comprising a revenue loss of GBP22,000 and
a capital profit of GBP98,000.
Outlook
The end of the task of realising all the share pool's investments is now
in sight. The exact timing is dependent on transactions involving third
parties so is somewhat uncertain, however we anticipate that the pool
should be able to make one final payment before the end of the year.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'D' SHARE POOL
as at 30 June 2017
Unrealised gain/ % of portfolio by
Cost Valuation (loss) in period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Avon Solar Energy
Limited 210 252 12 10.3%
Westcountry Solar
Solutions
Limited 250 216 (34) 8.9%
Mosaic Spa and
Health Clubs
Limited* 325 123 - 5.0%
Quadrate Spa
Limited 144 - - 0.0%
Non-qualifying
investments
Gara Rock Resort
Limited 1,322 1,322 - 54.2%
Fenkle Street LLP 122 287 18 11.8%
Future Biogas
(Reepham Road)
Limited 320 - - 0.0%
2,693 2,200 (4) 90.2%
Cash at bank and
in hand 240 9.8%
Total 2,440 100%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'D' SHARE POOL
for the six months ended 30 June 2017
Market Gain Total
value at Disposal against realised
Disposals Cost 01/01/17 proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying and partially qualifying
investments
Mosaic Spa and Health Clubs
Limited 196 177 245 49 68
196 177 245 49 68
* 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. Planning
has begun in respect of the process to realise investments and start
returning funds to Shareholders which can commence early in 2018.
Investment activity
With the pool being fully invested, no new investments were made in the
period although one follow-on investment of GBP194,000 was made in
Goonhilly Earth Station Limited, where further funding was required.
Funds had previously been invested in two companies, Morava Limited and
Brownfields Trading Limited to explore business opportunities in
specific sectors. In the event both companies were unable to find
suitable opportunities, the GBP275,000 of funds invested were returned
to the Share pool.
One 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 GBP95,000.
The majority of investments remain valued at or above cost and there
were several valuation movements in the period.
Merlin Renewables Limited, the anaerobic digestion plant in Norfolk
continues to perform well and the valuation was increased by GBP67,000.
Vulcan Renewables Limited has been sold after the period and the
increase in value of GBP66,000 reflected expected sales proceeds minus a
discount for execution risk. The sale subsequently completed at a higher
value than shown overleaf.
An uplift of GBP39,000 was recognised in the period on Fresh Green Power
Limited. The domestic rooftop solar company is generating profits in
line with our expectations and we are now exploring options to sell the
investment.
The valuation of Lambridge Solar Limited, the owner of commercial solar
arrays in Lincolnshire, has been increased by GBP26,000 as it continues
to perform well.
Atlantic Dogstar Limited continues to perform to plan and a small
valuation uplift of GBP7,000 has been recognised in the period.
Net asset value, results and dividend
At 30 June 2017, the net asset value ("NAV") for a holding of one 'F'
Share was 69.6p, an increase of 2.7p (3.9%) over the period. Total
Return (NAV plus dividends paid to date) is now 97.1p for a combined
holding.
The gain on ordinary activities for the 'F' Shares, after taxation, for
the period was GBP291,000, comprising a revenue profit of GBP86,000 and
a capital gain of GBP205,000.
The Company will pay an interim dividend of 2.5p per 'F' Share, on 15
December 2017 to 'F' Shareholders on the register at 24 November 2017.
Outlook
The focus now for the 'F' Share portfolio is shifting towards planning
for exits. Good progress is being made and we anticipate that the first
major distribution will be paid in the first quarter of 2018.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'F' SHARE POOL
as at 30 June 2017
Unrealised gain in % of portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying and
partially
qualifying
investments
Apex Energy
Limited 1,000 1,000 - 13.4%
Goonhilly Earth
Station Limited 954 954 - 12.8%
Vulcan Renewables
Limited 653 844 66 11.3%
Merlin Renewables
Limited 500 642 67 8.6%
Lambridge Solar
Limited 500 595 26 8.0%
Pearce and
Saunders Limited 497 497 - 6.6%
Augusta Pub
Company Limited 290 349 - 4.7%
Vectis Alpha
Limited 300 300 - 4.0%
Fresh Green Power
Limited 200 239 39 3.2%
Pabulum Pubs
Limited 200 237 - 3.2%
Atlantic Dogstar
Limited 200 234 7 3.1%
City Falkirk
Limited 422 177 - 2.4%
Fubar Stirling
Limited 268 169 - 2.3%
Rhodes Solutions
Limited 125 125 - 1.7%
Green Energy
Production UK
Limited 100 100 - 1.3%
Cheers Dumbarton
Limited 48 17 - 0.2%
Lochrise Limited 13 - - 0.0%
Non-qualifying
investments
Baron House
Developments
Limited 481 481 - 6.4%
Gara Rock Resort
Limited 163 163 - 2.2%
London City
Shopping Centre
Limited 66 66 - 0.9%
Pearce and
Saunders DevCo
Limited 46 46 - 0.6%
7,026 7,235 205 96.9%
Cash at bank and
in hand 232 3.1%
Total 7,467 100.0%
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'F' SHARE POOL
as at 30 June 2017
Additions GBP'000
Qualifying investments
Goonhilly Earth Station Limited 194
Total 194
Market Total
value at Disposal Gain against realised
Disposals Cost 01/01/17 proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT qualifying
and partially
qualifying
investments
Brownfields
Trading
Limited 150 150 150 - -
Morava Limited 125 125 125 - -
Non-qualifying
investments
Gara Rock
Resort
Limited 95 95 95 - -
370 370 370 - -
* 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 now fully
qualifying.
Investment activity
During the last six months, there were no investment additions or
realisations.
The majority of investments remain valued at cost and there were two
valuation movements recognised in the period generating a total gain of
GBP61,000.
Atlantic Dogstar Limited continues to perform to plan and a small
valuation uplift of GBP38,000 has been recognised in the period.
The Antelope Pub Limited owns a pub of the same name in Tooting which
continues to trade well and ahead of budget resulting in an increase in
value of GBP23,000 being recognised in the period.
Net asset value and results
At 30 June 2017, the net asset value per 'H' Share was 84.6p, a net
increase of 0.9p (1.0%) over the period. Total Return (NAV plus
dividends paid to date) is now 102.1p.
Results and dividend
The gain on ordinary activities for the 'H' Shares, after taxation, for
the period was GBP115,000, comprising a revenue profit of GBP54,000 and
a capital gain of GBP61,000.
The Company will pay an interim dividend of 2.5p per 'H' Share, on 15
December 2017 to 'H' Shareholders on the register at 24 November 2017.
Outlook
The 'H' Share pool is now fully qualifying and therefore our focus is
now on close monitoring and support of the portfolio companies in order
to nurture growth before the ultimate exit date.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'H' SHARE POOL
as at 30 June 2017
Unrealised gain in % of portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying
investments
Hermes Renewables
Limited 1,500 1,500 - 13.1%
Apex Energy
Limited 1,300 1,300 - 11.4%
Atlantic Dogstar
Limited 1,000 1,175 38 10.3%
Zora Energy
Renewables
Limited 1,000 1,000 - 8.8%
Quadrate Catering
Limited 850 850 - 7.4%
Ironhide
Generation
Limited 613 613 - 5.4%
Indigo Generation
Limited 613 613 - 5.4%
Antelope Pub
Limited 500 523 23 4.6%
Rockhopper
Renewables
Limited 492 492 - 4.3%
SF Renewables
(Solar) Limited 281 281 - 2.5%
Oak Grove
Renewables
Limited 420 231 - 2.0%
Non-qualifying
investments
Hedderwick Limited 1,250 1,250 - 11.0%
Quadrate Spa
Limited 850 850 - 7.4%
Pearce and
Saunders Limited 193 193 - 1.7%
Augusta Pub
Company Limited 155 155 - 1.4%
11,017 11,026 61 96.7%
Cash at bank and
in hand 372 3.3%
Total 11,398 100%
No investment movements in the period to 30 June 2017.
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 the Share pool is
due to become qualifying by the end of 2017.
Investment activity
During the last six months, three new qualifying investments have been
made totalling GBP1.3 million as we continue to build the qualifying
portfolio.
The qualifying investments include a GBP1 million investment in
Ormsborough Limited. The company owns several pubs and restaurants
across Yorkshire and this investment supported their continued
expansion.
GBP297,000 was invested into Pilgrim Trading Limited. The company
acquired two sites to be converted in to children's nurseries, one of
which has recently been opened in Twickenham and the other is in the
planning stage.
A GBP10,000 investment was made into Exclusive Events Venues Limited to
pay a deposit to secure a site in Chester that will be used exclusively
as a wedding venue. Since the period end, following a successful
planning application, a further investment has been made to acquire and
develop the site.
Funds were invested in Morava Limited to explore opportunities in the
wood refinery sector, Brownfields Trading Limited to develop small scale
waste disposal projects and Cedarville Limited to identify a wedding
venue site. During the period, these funds have been returned to the
Share pool to provide GBP3.0 million for alternative investment
opportunities. There were no other disposals in the period.
One valuation adjustment was made in the period on Ormsborough Limited
following good overall performance of the group which resulted in an
uplift in valuation of GBP28,000.
Net asset value and results
At 30 June 2017, the net asset value per 'J' Share was 95.7p, a net
decrease of 0.1p (0.1%) over the period.
The loss on ordinary activities for the 'J' Shares, after taxation, for
the period was GBP10,000, comprising a revenue loss of GBP32,000 and a
capital gain of GBP22,000.
Outlook
The 'J' Share pool will become fully qualifying at the year end,
therefore we will continue to seek investment opportunities and develop
the current investment portfolio over the remainder of the period.
Downing LLP
SUMMARY OF INVESTMENT PORTFOLIO
'J' SHARE POOL
as at 30 June 2017
Unrealised gain in % of portfolio by
Cost Valuation period value
GBP'000 GBP'000 GBP'000
VCT qualifying
investments
Pilgrim Trading
Limited 1,297 1,297 - 12.7%
Ormsborough
Limited 1,000 1,028 28 10.1%
Rhodes Solutions
Limited 1,000 1,000 - 9.8%
Jito Trading
Limited 1,000 1,000 - 9.8%
Vectis Alpha
Limited 900 900 - 8.8%
Yamuna Renewables
Limited 800 800 - 7.8%
Indigo Generation
Limited 613 613 - 6.0%
Ironhide
Generation
Limited 613 613 - 6.0%
Rockhopper
Renewables
Limited 492 492 - 4.8%
Zora Energy
Renewables
Limited 300 300 - 2.9%
SF Renewables
(Solar) Limited 281 281 - 2.8%
Oak Grove
Renewables
Limited 420 231 - 2.3%
Exclusive Events
Venues Limited 10 10 - 0.1%
8,726 8,565 28 83.9%
Cash at bank and
in hand 1,642 16.1%
Total 10,207 100%
SUMMARY OF INVESTMENT MOVEMENTS
'J' SHARE POOL
as at 30 June 2017
Additions GBP'000
Qualifying investments
Ormsborough Limited 1,000
Pilgrim Trading Limited 297
Exclusive Events Venues Limited 10
Total 1,307
Total
Market value Disposal Loss against realised
Disposals Cost at 01/01/17 proceeds cost loss
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
VCT
qualifying
and partially
qualifying
investments
Morava
Limited 1,150 1,150 1,149 (1) (1)
Cedarville
Limited 1,000 1,000 995 (5) (5)
Brownfields
Trading
Limited 900 900 900 - -
3,050 3,050 3,044 (6) (6)
*Adjusted for additions made in the period
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 June 2017
*
*
30 Jun 31 Dec
30 Jun 2017 2016 2016
'D'
Shares 'F' Shares 'H' Shares 'J' Shares Total Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted
investments 2,200 7,235 11,026 8,565 29,026 32,065 30,836
Current assets
Debtors 3 185 77 59 324 256 133
Cash at bank and
in hand 240 232 372 1,642 2,486 1,573 2,337
243 417 449 1,701 2,810 1,829 2,470
Creditors:
amounts falling
due within one
year (76) (122) (104) (10) (312) (437) (286)
Net current
assets 167 295 345 1,691 2,498 1,392 2,184
Net assets 2,367 7,530 11,371 10,256 31,524 33,457 33,020
Capital and
reserves
Called up share
capital 25 11 13 11 60 78 78
Capital
redemption
reserve 124 - - - 124 106 106
Special reserve 2,319 8,051 (2,353) - 8,017 11,054 9,888
Share premium
account - - 13,608 11,031 24,639 24,639 24,639
Revaluation
reserve (597) 269 9 (162) (481) (1,810) (790)
Capital reserve -
realised - (1,033) - (6) (1,039) (1,033) (1,033)
Revenue reserve 496 232 94 (618) 204 423 132
Total equity 2,367 7,530 11,371 10,256 31,524 33,457 33,020
shareholders'
funds
Basic and diluted net asset value per:
'D' Share 23.7p 34.7p 36.4p
'E' Share 0.1p 0.1p 0.1p
'F' Share 69.6p 69.7p 69.4p
'H' Share 84.6p 88.9p 86.2p
'J' Share 95.7p 97.7p 95.8p
* The comparative Balance Sheet at 30 June 2016 and 31 December 2016
includes the 'C' Share pool which has subsequently been cancelled.
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2017
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 2016 78 106 15,749 24,639 (1,466) (1,033) 1,350 39,423
Total
comprehensive
income - - - - 406 214 (333) 287
Transactions with
owners
Issue of new
shares - - - - - - - -
Share issue costs - - - - - - - -
Transfer between
reserves - - (5,861) - 270 6,476 (885) -
Dividend paid - - - - - (6,690) - (6,690)
At 31 December
2016 78 106 9,888 24,639 (790) (1,033) 132 33,020
Total
comprehensive
income - - - - 290 96 86 472
Transactions with
owners
Purchase of own
shares - - - - - - (14) (14)
Transfer between
reserves - - (1,871) - 19 1,852 - -
Dividend paid - - - - - (1,954) - (1,954)
Cancellation of
shares (18) 18 - - - - - -
At 30 June 2017 60 124 8,017 24,639 (481) (1,039) 204 31,524
INCOME STATEMENT
for the six months ended 30 June 2017
Company Total
Year
ended
Six months ended Six months ended 31 Dec
30 Jun 2017 30 Jun 2016* 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 556 34 590 435 - 435 625
Gains on
investments
- realised - 62 62 - 110 110 174
- unrealised - 290 290 - 47 47 406
556 386 942 435 157 592 1,205
Investment
management
fees (303) - (303) (328) - (328) (643)
Other expenses (146) - (146) (164) - (164) (296)
Return/(loss)
on ordinary
activities
before
taxation 107 386 493 (57) 157 100 266
Tax on total
comprehensive
income and
ordinary
activities (21) - (21) 17 - 17 21
Return/(loss)
attributable
to equity
shareholders 86 386 472 (40) 157 117 287
Return per 'C'
Share - - - (0.4p) - (0.4p) (0.4p)
Return per 'A'
Share - - - - - - -
Return per 'D'
Share (0.2p) 1.0p 0.8p (0.1p) 0.5p 0.4p 2.0p
Return per 'E'
Share - - - - - - -
Return per 'F'
Share 0.8p 1.9p 2.7p 0.5p 0.2p 0.7p 2.8p
Return per 'H'
Share 0.4p 0.5p 0.9p 0.3p 0.7p 1.0p 0.7p
Return per 'J'
Share (0.3p) 0.2p (0.1p) (0.8p) - (0.8p) (2.8p)
* The comparative Income Statement as at 30 June 2016 and 31 December
2016 includes the 'C' Share pool which has subsequently been cancelled.
INCOME STATEMENT
for the six months ended 30 June 2017
Year
ended
Six months ended Six months ended 31 Dec
'D' Shares 30 Jun 2017 30 Jun 2016 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 9 34 43 19 - 19 123
Gains/(losses)
on investments
- realised - 68 68 - 109 109 168
- unrealised - (4) (4) - (58) (58) 28
9 98 107 19 51 70 319
Investment
management
fees (19) - (19) (27) - (27) (52)
Other expenses (17) - (17) (16) - (16) (31)
Return/(loss)
on ordinary
activities
before
taxation (27) 98 71 (24) 51 27 236
Tax on total
comprehensive
income and
ordinary
activities 5 - 5 11 - 11 (30)
Return/(loss)
attributable
to equity
shareholders (22) 98 76 (13) 51 38 206
INCOME STATEMENT
for the six months ended 30 June 2017
Year
ended
Six months ended Six months ended 31 Dec
'F' Shares 30 Jun 2017 30 Jun 2016 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 222 - 222 171 - 171 99
Losses on
investments
- realised - - - - - - 5
- unrealised - 205 205 - 18 18 410
222 205 427 171 18 189 514
Investment
management
fees (68) - (68) (69) - (69) (136)
Other expenses (47) - (47) (36) - (36) (73)
Return on
ordinary
activities
before
taxation 107 205 312 66 18 84 305
Tax on total
comprehensive
income and
ordinary
activities (21) - (21) (13) - (13) 3
Return
attributable
to equity
shareholders 86 205 291 53 18 71 308
INCOME STATEMENT
for the six months ended 30 June 2017
Year
ended
Six months ended Six months ended 31 Dec
'H' Shares 30 Jun 2017 30 Jun 2016 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 226 - 226 202 - 202 355
Gains/(losses) on investments
- realised - - - - - - -
- unrealised - 61 61 - 88 88 53
226 61 287 202 88 290 408
Investment management fees (116) - (116) (120) - (120) (239)
Other expenses (43) - (43) (32) - (32) (61)
Return on ordinary activities before taxation 67 61 128 50 88 138 108
Taxation on total comprehensive income and ordinary
activities (13) - (13) (10) - (10) (11)
Return attributable to equity shareholders 54 61 115 40 88 128 97
INCOME STATEMENT
for the six months ended 30 June 2017
Year
ended
Six months ended Six months ended 31 Dec
'J' Shares 30 Jun 2017 30 Jun 2016 2016
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 99 - 99 37 - 37 42
Losses on
investments
- realised - (6) (6) - - - -
- unrealised - 28 28 - - - (84)
99 22 121 37 - 37 (42)
Investment
management
fees (100) - (100) (104) - (104) (208)
Other expenses (39) - (39) (45) - (45) (96)
Loss on
ordinary
activities
before
taxation (40) 22 (18) (112) - (112) (346)
Tax on total
comprehensive
income and
ordinary
activities 8 - 8 22 - 22 52
Loss
attributable
to equity
shareholders (32) 22 (10) (90) - (90) (294)
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2017
30 Jun 31 Dec
30 Jun 2017 2016 2016
'D' 'F' 'H' 'J'
Shares Shares Shares Shares Total Total Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash
(outflow)/inflow
from operating
activities 1 3 (30) 99 (113) (41) 278 (3)
Cash flows from
investing
activities
Purchase of
investments - (194) - (1,307) (1,501) (13,650) (14,950)
Sale of investments 245 370 - 3,044 3,659 4,450 7,401
Net cash
inflow/(outflow)
from investing
activities 245 176 - 1,737 2,158 (9,200) (7,549)
Net cash
inflow/(outflow)
before financing
activities 248 146 99 1,624 2,117 (8,922) (7,552)
Cash flows from
financing
activities
Purchase of own
shares - - - (14) (14) - -
Equity dividends
paid (1,347) (271) (336) - (1,954) (6,083) (6,690)
Net cash
(outflow)/inflow
from financing (1,347) (271) (336) (14) (1,968) (6,083) (6,690)
Increase/(decrease)
in cash 2 (1,099) (125) (237) 1,610 149 (15,005) (14,242)
NOTES TO THE UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 June 2017
30 Jun 31 Dec
30 Jun 2017 2016 2016
'D' 'F' 'H' 'J'
Shares Shares Shares Shares Total Total Total
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 71 312 128 (18) 493 100 266
Corporation tax paid - - - - - 12 (171)
Losses/(gains) on investments (64) (205) (61) (22) (352) (157) (580)
Decrease/(increase) in other debtors - (160) 28 (59) (191) 375 498
(Decrease)/increase in other creditors (4) 23 4 (14) 9 (52) (16)
Net cash inflow/(outflow) from operating activities 3 (30) 99 (113) (41) 278 (3)
2 Analysis of net funds
Beginning of period 1,339 357 609 32 2,337 16,578 16,579
Net cash (outflow)/inflow (1,099) (125) (237) 1,610 149 (15,005) (14,242)
End of period 240 232 372 1,642 2,486 1,573 2,337
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 2017
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 2016, 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 2016 and the year ended 31 December 2016 respectively.
6. Dividends
Year ended
Six months ended 31 Dec
30 June 2017 2016
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
Special 'A' 2016 14.8p - - - 1,596
- - - 3,780
'D' Shares
Y/E Dec 2016 Final 13.5p - 1,347 1,347 -
Y/E Dec 2015 Final 17.0p - - - 1,697
- 1,347 1,347 1,697
'F' Shares
Y/E Dec 2016 Final 2.5p - 271 271 -
Y/E Dec 2015 Final 2.5p - - - 271
Y/E Dec 2015 Interim 2.5p - - - 270
- 271 271 541
'H' Shares
Y/E Dec 2016 Final 2.5p - 336 336 -
Y/E Dec 2015 Final 2.5p - - - 336
Y/E Dec 2015 Interim 2.5p - - - 336
- 336 336 672
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
'D' Shares 9,979,109 (22) (0.2p) 98 1.0p
'E' Shares 14,994,862 - - - -
'F' Shares 10,821,660 86 0.8p 205 1.9p
'H' Shares 13,446,972 54 0.4p 61 0.5p
'J' Shares 10,718,653 (32) (0.3p) 22 0.2p
86 386
8. Net asset value per share
Shares in issue Net asset value
GBP'000 Per Share
'D' Shares 9,979,109 2,352 23.7p
'E' Shares 14,994,862 15 0.1p
'F' Shares 10,821,660 7,530 69.6p
'H' Shares 13,446,972 11,371 84.6p
'J' Shares 10,718,815 10,256 95.7p
31,524
9. Reserves
Period ended
30 June Year ended 31 Dec
2017 2016
GBP'000 GBP'000
Capital redemption reserve 124 106
Special reserve 8,017 9,888
Share premium reserve 24,639 24,639
Revaluation reserve (481) (790)
Capital reserve-realised (1,039) (1,033)
Revenue reserve 204 132
31,464 32,942
The Special reserve, Capital reserve - realised and Revenue reserve are
all distributable reserves. The Revaluation reserve includes losses of
GBP1,570,000 which are included in the calculation of distributable
reserves. Total distributable reserves are GBP5,612,000 (31 Dec 2016:
GBP7,407,000).
10. The fair value of investments is determined using the detailed
accounting policy set out in the statutory accounts for the year ended
31 December 2016.
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 data.
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 30 June Level Level Level 31 Dec
a Level b c (ii) 2017 a b c (ii) 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan
notes - - 5,794 5,794 - - 6,201 6,201
Unquoted
equity - - 23,232 23,232 - - 24,635 24,635
- - 29,026 29,026 - - 30,836 30,836
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 2016 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 as well as in accordance with FRS 104 Interim
Financial Reporting and the half-yearly financial report includes a fair
review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period, and any
changes in the related party transactions described in the last annual
report that could do so.
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.
15. Copies of the unaudited half-yearly report will be sent to
Shareholders shortly. Further copies can be obtained from the Company's
registered office 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, 2017 11:20 ET (15:20 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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