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DP3F Downing Three Vct Plc

13.50
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
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 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Downing Three VCT Downing Three Vct Plc - Half-Yearly Report

27/09/2018 4:13pm

UK Regulatory


 
TIDMDP3F 
 
 
   Downing THREE VCT plc 
 
   Half-Yearly Report 
 
   for the six months ended 30 June 2018 
 
   LEI: 2138008V2JDU2K6ZHF80 
 
   Performance summary 
 
 
 
 
                                           30 Jun  31 Dec  30 Jun 
'D' Share pool                              2018    2017    2017 
                                           Pence   Pence   Pence 
Net asset value per 'D' Share                   -       -    23.7 
Net asset value per 'E' Share                   -       -     0.1 
Cumulative distributions per 'D' Share     103.79  103.79    80.0 
                                           ------  ------  ------ 
Total return per 'D' Share and 'E' Share   103.79  103.79   103.8 
                                           ======  ======  ====== 
 
 
 
 
 
 
                                         30 Jun  31 Dec  30 Jun 
'F' Share pool                            2018    2017    2017 
                                         Pence   Pence   Pence 
Net asset value per 'F' Share              53.6    69.6    69.6 
Cumulative distributions per 'F' Share     49.0    30.0    27.5 
                                         ------  ------  ------ 
Total return per 'F' Share                102.6    99.6    97.1 
                                         ======  ======  ====== 
 
 
 
 
 
 
                                         30 Jun  31 Dec  30 Jun 
'H' Share pool                            2018    2017    2017 
                                         Pence   Pence   Pence 
Net asset value per 'H' Share              78.7    82.3    84.6 
Cumulative distributions per 'H' Share     22.5    20.0    17.5 
                                         ------  ------  ------ 
Total return per 'H' Share                101.2   102.3   102.1 
                                         ======  ======  ====== 
 
 
 
 
 
 
                                30 Jun 
'J' Share pool                   2018   31 Dec 2017  30 Jun 2017 
                                Pence      Pence        Pence 
Net asset value per 'J' Share     91.2         94.7         95.7 
                                ======  ===========  =========== 
 
 
   CHAIRMAN'S STATEMENT 
 
   Introduction 
 
   I am pleased to present the Half-Yearly Report for the six months ended 
30 June 2018. 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 for the share pools that have recently 
passed or are approaching their planned exit date. 
 
   Net asset values and overview 
 
   'F' Share pool 
 
   The 'F' Share pool launched in 2012 and began exiting from its 
investments earlier this year. In April the share class paid its first 
dividends in its realisation phase of 19.0p per share. 
 
   At 30 June 2018 the net asset value ("NAV") for a holding of one 'F' 
Share was 53.6p, an increase of 3.0p (4.3%) over the period. Total 
Return (NAV plus dividends paid to date) is now 102.6p for a combined 
holding, compared to the original cost, net of income tax relief, of 70p 
per share. 
 
   The pool still holds 12 investments, but plans are being progressed for 
exits from each of them. 
 
   Since the period end one further exit has been achieved. As a result, 
the Share pool will pay a further dividend of 18.0p per 'F' Share on 9 
November 2018. This will bring total distributions to 67.0p and leave a 
remaining NAV of 35.6p. 
 
   The task of exiting the remaining investments is likely to take some 
time to complete, although we expect significant progress to be made 
over the remainder of the year. The Manager does not, however, expect to 
be in a position to make the final distribution until 2019. 
 
   '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 2018, the net asset value ("NAV") for a holding of one 'H' 
Share was 78.7p which represents a net decrease of 1.1p (1.3%) over the 
period after adjusting for the dividends paid out. Total Return (NAV 
plus dividends paid to date) is now 101.2p, 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 2018, the net asset value ("NAV") and total return for a 
holding of one 'J' Share was 91.2p which represents a net decrease of 
3.5p (3.7%) over the period, compared to the initial NAV, before income 
tax relief, of 100.0p. This deficit has arisen partly due to a provision 
that has been required against one investment. 
 
   Due to the VCT regulations, the 'J' Share pool is effectively prohibited 
from paying dividends in its first three years. The Share pool will 
therefore commence returning funds to shareholders in 2019. 
 
   The Investment Manager's Report 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 18.0p per share 
 
   'H' Shares 2.5p per share 
 
   The 'F' Share dividend will be paid on 9 November 2018 to Shareholders 
on the register at 19 October 2018. The 'H' Share dividend will be paid 
on 14 December 2018 to Shareholders on the register at 23 November 2018 
 
   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 2018, the Company repurchased and 
subsequently cancelled 19,400 'H' Shares and 19,725 'J' Shares for an 
aggregate consideration of GBP15,940 and GBP18,677 respectively, being 
an average price of 82.0p per 'H' Share and 94.5p per 'J' Share. 
 
   No share buybacks in respect of any other share classes were undertaken 
during the period. 
 
   Outlook 
 
   Over the remainder of the year we expect to see significant headway made 
in realising most of the remaining investments in the 'F' Share pool. As 
the process of realising investments usually includes transactions with 
third parties, timings can be unpredictable, and Shareholders should 
note that the exit process will take time to complete. While the Manager 
is focussing on delivering exits in a timely manner, the Board is keen 
to see that full value is achieved for all investments even if this may 
sometimes take longer to deliver. 
 
   In respect of the 'H' Share pool and 'J' Share pool, we expect this to 
be a stable period with the Manager focussing on nurturing the 
investments such that they will be well positioned to deliver successful 
exits when the time comes. 
 
   I look forward to updating Shareholders on progress in my statement with 
the year end report to 31 December 2018 but will also communicate 
additionally with 'F' Shareholders as and when there is any news of 
further distributions. 
 
   Michael Robinson 
 
   Chairman 
 
   INVESTMENT MANAGER'S REPORT 
 
   'F' SHARE POOL 
 
   As at 30 June 2018, the 'F' Share pool holds 12 investments and focus 
has now shifted to the process of realising its investments in order to 
return funds to 'F' Shareholders. 
 
   Investment activity 
 
   During the period, the full exit of Goonhilly Earth Station Limited 
completed and resulted in a good outcome for 'F' Shareholders generating 
proceeds of GBP1.2 million and an uplift over cost of GBP216,000. 
 
   Partial disposals also completed in two of the smaller portfolio 
companies. There was a partial loan note redemption in the Scottish 
licensed leisure company, Fubar Stirling Limited which generated a total 
gain over carrying value of GBP4,000. 
 
   There was also a partial loan note redemption in Fresh Green Power 
Limited, the domestic rooftop solar company, which was redeemed at par. 
 
   The majority of the portfolio investments remain valued at or above cost 
with there being several valuation movements in the period which 
generated an uplift over opening value of GBP104,000. 
 
   The most significant increase in valuation was in Merlin Renewables 
Limited, the anaerobic digestion plant in Norfolk. In August 2018, the 
plant was exited and the carrying value was uplifted to reflect the sale 
price at the period end. 
 
   An uplift of GBP20,000 was recognised in Atlantic Dogstar Limited, which 
owns a group of London pubs, following a revaluation of the sites. 
 
   Downing Pub EIS One Limited, which acquired the holdings of Pabulum Pubs 
Limited and Augusta Pub Company Limited in the prior year, was uplifted 
by GBP18,000 supported by independent sales valuations from industry 
specialists. 
 
   Other smaller movements in the portfolio included an uplift of GBP10,000 
in Lambridge Solar Limited and GBP3,000 in Fresh Green Power Limited. 
 
   One valuation write down took place in the period. Green Energy 
Production UK Limited, the operator of rooftop solar assets in 
Lincolnshire, had a reduction in value of GBP24,000 following a period 
of recurring operational issues. 
 
   Realisation plans 
 
   The pool's second most significant investment holding is Merlin 
Renewables Limited, the anaerobic digestion plant in Norfolk. Following 
the period end, an exit was achieved which delivered a significant 
return to the pool. 
 
   Plans are in place for the successful exit of the remaining portfolio 
companies however we anticipate that the exercise will take some time to 
complete in full. 
 
   Net asset value, results and dividend 
 
   At 30 June 2018, the net asset value ("NAV") for a holding of one 'F' 
Share was 53.6p, an increase of 3.0p (4.3%) over the period. Total 
Return (NAV plus dividends paid to date) is now 102.6p for a combined 
holding. 
 
   The gain on ordinary activities for the 'F' Shares, after taxation was 
GBP333,000 for the period, comprising a revenue profit of GBP9,000 and a 
capital gain of GBP324,000. 
 
   The Company will pay an interim dividend of 18.0p per 'F' Share on 9 
November 2018 to 'F' Shareholders on the register at 19 October 2018. 
 
   Outlook 
 
   The focus for the 'F' Share portfolio remains on exiting from its 
remaining investments. Progress continues to be made however exact 
timing on the final exit is dependent on transactions involving third 
parties. 
 
   Downing LLP 
 
   SUMMARY OF INVESTMENT PORTFOLIO 
 
   'F' SHARE POOL 
 
   as at 30 June 2018 
 
 
 
 
 
 
                                                  Unrealised      % of 
                                                  gain/(loss)   portfolio 
                              Cost    Valuation    in period    by value 
                             GBP'000   GBP'000     GBP'000 
 
VCT qualifying and 
 partially qualifying 
 investments 
Apex Energy Limited            1,000      1,000             -       17.2% 
Merlin Renewables 
 Limited                         500        718            77       12.3% 
Downing Pub EIS One 
 Limited                         490        607            18       10.4% 
Lambridge Solar Limited          500        605            10       10.4% 
Pearce and Saunders 
 Limited                         497        497             -        8.5% 
Atlantic Dogstar 
 Limited                         200        255            20        4.4% 
Fresh Green Power 
 Limited                         189        231             3        4.0% 
Green Energy Production 
 UK Limited                      100         76          (24)        1.3% 
Fubar Stirling Limited            95          5             -        0.1% 
 
Non-qualifying investments 
Baron House Developments 
 LLP                             481        481             -        8.3% 
London City Shopping 
 Centre Limited                   66         66             -        1.1% 
Pearce and Saunders 
 DevCo Limited                    46         46             -        0.8% 
 
                               4,164      4,587           104       78.8% 
 
Cash at bank and 
 in hand                                  1,234                     21.2% 
 
Total                                     5,821                    100.0% 
 
   SUMMARY OF INVESTMENT MOVEMENTS 
 
   'F' SHARE POOL 
 
   as at 30 June 2018 
 
 
 
 
 
 
                                      Market                  Gain       Total 
                                       value     Disposal    against    realised 
Disposals                  Cost     at 01/01/18   proceeds    cost        gain 
                          GBP'000    GBP'000      GBP'000   GBP'000    GBP'000 
 
VCT qualifying 
 and partially 
 qualifying investments 
Goonhilly Earth 
 Station Limited              955           955      1,171       216         216 
Fubar Stirling 
 Limited                        6             2          6         -           4 
Fresh Green Power 
 Limited                       11            11         11         -           - 
 
                              972           968      1,188       216         220 
                          =======                =========            ========== 
 
   INVESTMENT MANAGER'S REPORT 
 
   'H' SHARE POOL 
 
   The 'H' Share pool raised funds in 2014 and has made good progress in 
building its VCT qualifying portfolio and is now fully qualifying. 
 
   Investment activity 
 
   With the pool being fully invested, no new investments were made in the 
period. 
 
   Valuations movements during the period totalled an unrealised loss of 
GBP318,000, mainly due to the significant write down in value in 
Quadrate Spa Limited. The non qualifying investment owns and operates a 
health club business in The Cube complex in Birmingham and has been 
written down by GBP458,000 at the period end as a result of poor 
performance. 
 
   This movement has been partially offset by the valuation uplifts in the 
period that totalled GBP140,000. 
 
   Atlantic Dogstar Limited, which owns a group of London Pubs, was 
uplifted by GBP102,000 following a revaluation of the sites. 
 
   Oak Grove Renewables Limited, which operates an anaerobic digestion 
plant in Norwich, was exited during the period, however is awaiting the 
receipt of deferred consideration from the sale. As the likelihood of 
receiving this payment has now increased, the carrying value was 
uplifted by GBP21,000. 
 
   Net asset value and results 
 
   At 30 June 2018, the net asset value per 'H' Share was 78.7p, a net 
decrease of 1.1p (1.3%) over the period. Total Return (NAV plus 
dividends paid to date) is now 101.2p. 
 
   Results and dividend 
 
   The loss on ordinary activities for the 'H' Shares, after taxation, for 
the period was GBP146,000, comprising a revenue profit of GBP172,000 and 
a capital loss of GBP318,000. 
 
   The Company will pay an interim dividend of 2.5p per 'H' Share, on 14 
December 2018 to Shareholders on the register at 23 November 2018. 
 
   Outlook 
 
   The 'H' Share pool is now fully invested and our focus is now on close 
monitoring and support of the portfolio companies in order to nurture 
growth before reaching its five year anniversary at the end of 2019. 
 
   Downing LLP 
 
   SUMMARY OF INVESTMENT PORTFOLIO 
 
   'H' SHARE POOL 
 
   as at 30 June 2018 
 
 
 
 
                                                  Unrealised      % of 
                                                  gain/(loss)   portfolio 
                              Cost    Valuation    in period    by value 
                             GBP'000   GBP'000     GBP'000 
VCT qualifying investments 
Hermes Wood Pellets 
 Limited                       1,500      1,500             -       14.2% 
Apex Energy Limited            1,300      1,300             -       12.3% 
Atlantic Dogstar 
 Limited                       1,000      1,279           102       12.1% 
Zora Energy Renewables 
 Limited                       1,000      1,000             -        9.4% 
Quadrate Catering 
 Limited                         850        850             -        8.0% 
Ironhide Generation 
 Limited                         613        613             -        5.8% 
Indigo Generation 
 Limited                         613        613             -        5.8% 
Antelope Pub Limited             500        500             -        4.7% 
Rockhopper Renewables 
 Limited                         492        492             -        4.6% 
SF Renewables (Solar) 
 Limited                         281        281             -        2.6% 
Oak Grove Renewables 
 Limited                         420        252            21        2.4% 
Pearce and Saunders 
 Limited                         193        193             -        1.8% 
 
Non-qualifying investments 
Hedderwick Limited             1,250      1,320            17       12.5% 
Quadrate Spa Limited             850        392         (458)        3.7% 
 
                              10,862     10,585         (318)       99.9% 
 
Cash at bank and 
 in hand                                     11                      0.1% 
 
Total                                    10,596                      100% 
 
 
 
   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 and the focus for this share pool is on the 
close monitoring of the investee companies. 
 
   Investment activity 
 
   During the period, three adjustments were made to the valuations, 
leading an unrealised loss totalling GBP288,000. 
 
   Oak Grove Renewables Limited, which operates an anaerobic digestion 
plant in Norwich, was fully exited after the period end. As a result, 
the carrying value was uplifted by GBP22,000 to reflect the pending exit 
proceeds. 
 
   Ormsborough Limited, who own several pubs and restaurants across 
Yorkshire, had a reduction in value of GBP312,000 due to overspend on 
recent developments. 
 
   Net asset value and results 
 
   At 30 June 2018, the net asset value per 'J' Share was 91.2p, a net 
decrease of 3.5p (3.7%) over the period. 
 
   The loss on ordinary activities for the 'J' Shares, after taxation, was 
GBP369,000 for the period, comprising a revenue loss of GBP81,000 and a 
capital loss of GBP288,000. 
 
   Outlook 
 
   The emphasis for the 'J' share pool now gradually shifts to the close 
monitoring of the Share pool's investments as we seek to optimise growth 
over the planned exit life, however we also expect there to be a small 
number of further additions to utilise the remaining cash of the pool. 
 
   Downing LLP 
 
   SUMMARY OF INVESTMENT PORTFOLIO 
 
   'J' SHARE POOL 
 
   as at 30 June 2018 
 
 
 
 
                                                 Unrealised 
                                                    gain/       % of 
                                                   (loss)     portfolio 
                              Cost    Valuation   in period   by value 
                             GBP'000   GBP'000    GBP'000 
VCT qualifying investments 
Pilgrim Trading Limited        1,297      1,297           -       13.9% 
Jito Trading Limited           1,000      1,000           -       10.7% 
Yamuna Renewables 
 Limited                         800        800           -        8.5% 
Ormsborough Limited            1,000        735       (312)        7.8% 
Indigo Generation 
 Limited                         613        613           -        6.5% 
Ironhide Generation 
 Limited                         613        613           -        6.5% 
Exclusive Events 
 Venues Limited                  500        500           -        5.3% 
Rockhopper Renewables 
 Limited                         492        492           -        5.3% 
Garthcliff Shipping 
 Limited                         400        400           -        4.3% 
Managed Storage Services 
 (1) Limited                     400        400           -        4.3% 
Zora Energy Renewables 
 Limited                         300        300           -        3.2% 
SF Renewables (Solar) 
 Limited                         281        281           -        3.0% 
Oak Grove Renewables 
 Limited                         420        252          22        2.7% 
Mosaic Spa and Healthclubs 
 Limited                          27         29           2        0.3% 
 
Non-qualifying investments 
Fenkle Street LLP                287        287           -        3.1% 
Snow Hill Developments 
 LLP                              43         43           -        0.5% 
London City Shopping 
 Centre Limited                   15         15           -        0.2% 
 
                               8,488      8,057       (288)       86.1% 
 
Cash at bank and 
 in hand                                  1,299                   13.9% 
 
Total                                     9,356                    100% 
 
 
 
   UNAUDITED SUMMARISED BALANCE SHEET 
 
   as at 30 June 2018 
 
 
 
 
                                                                                                                  30 Jun        31 Dec 
                                                                     30 Jun 2018                                   2017           2017 
 
                                          '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                      -          4,587           10,585          8,057         23,229        29,026      24,699 
 
Current assets 
Debtors                                   -             39               35            445            519           324         322 
Cash at bank and in hand                  7          1,234               11          1,299          2,551         2,486       3,933 
                                          7          1,273               46          1,744          3,070         2,810       4,255 
 
Creditors: amounts falling due 
 within one year                         (7    )       (56     )        (89    )       (63    )      (215   )      (312   )    (262) 
 
Net current assets                        -          1,217              (43)         1,681          2,855         2,498       3,993 
 
Net assets                                -          5,804           10,542          9,738         26,084        31,524      28,692 
 
Capital and reserves 
Called up share capital                  25             11               13             11             60            60          60 
Capital redemption reserve              124              -                -              -            124           124         124 
Special reserve                           -          5,995           (3,024)             -          2,971         8,017       5,146 
Share premium account                     -              -           13,608         11,031         24,639        24,639      24,639 
Revaluation reserve                    (249)           463             (279)          (432)          (497)         (481)          1 
Capital reserve -- realised               -         (1,033)               -             (6)        (1,039)       (1,039)     (1,039) 
Revenue reserve                         100            368              224           (866)          (174)          204        (239) 
 
  Total equity shareholders' funds        -          5,804           10,542          9,738         26,084        31,524      28,692 
 
Basic and diluted net asset value per: 
'D' Share                                 -                                                                           23.7p       - 
'E' Share                                 -                                                                            0.1p       - 
'F' Share                                                  53.6p                                                      69.6p      69.6p 
'H' Share                                                                  78.7p                                      84.6p      82.3p 
'J' Share                                                                                 91.2p                       95.7p      94.7p 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   for the period ended 30 June 2018 
 
 
 
 
 
 
                      Called 
                       up           Capital               Share                   Capital 
                       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 
 2017                       78            106     9,888    24,639        (790)      (1,033)       132    33,020 
Total 
 comprehensive 
 income                      -              -         -         -          268          301       108       677 
Transactions 
 with owners 
Issue 
 of new 
 shares                      -              -         -         -            -            -         -         - 
Share 
 issue 
 costs                       -              -         -         -            -            -         -         - 
Purchase 
 of 
 own shares                  -              -         -         -            -            -      (66)      (66) 
Transfer 
 between 
 reserves                    -              -   (4,742)         -          523        4,632     (413)         - 
Cancellation 
 of 
 shares                   (18)             18         -         -            -            -         -         - 
Dividend 
 paid                        -              -         -         -            -      (4,939)         -   (4,939) 
                      --------  -------------            --------  -----------  -----------  -------- 
At 31 December 
 2017                       60            124     5,146    24,639            1      (1,039)     (239)    28,692 
Total comprehensive 
 income                      -              -         -         -        (502)          220       100     (182) 
Transactions 
 with 
 owners 
Purchase 
 of own 
 shares                      -              -         -         -            -            -      (35)      (35) 
Transfer 
 between 
 reserves                    -              -   (2,175)         -            4        2,171         -         - 
Dividend 
 paid                        -              -         -         -            -      (2,391)         -   (2,391) 
Cancellation 
 of shares                   -              -         -         -            -            -         -         - 
                      --------  -------------            --------  -----------  -----------  -------- 
At 30 June 
 2018                       60            124     2,971    24,639        (497)      (1,039)     (174)    26,084 
                      ========  =============            ========  ===========  ===========  ========  ======== 
 
 
 
 
   INCOME STATEMENT 
 
   for the six months ended 30 June 2018 
 
   Company Total 
 
 
 
 
                                                                                  Year 
                                                                                 ended 
                          Six months ended              Six months ended        31 Dec 
                             30 Jun 2018                   30 Jun 2017            2017 
                    Revenue   Capital    Total    Revenue  Capital    Total      Total 
                    GBP'000   GBP'000   GBP'000   GBP'000  GBP'000   GBP'000   GBP'000 
 
  Income             514           -     514         556        34    590        1,027 
 
  Gains/(losses) 
  on investments 
  - realised           -         220     220           -        62     62          267 
  - unrealised         -        (502)   (502)          -       290    290          268 
                     514        (282)    232         556       386    942        1,562 
 
  Investment 
   management 
   fees             (239)          -    (239)       (303)        -   (303)       (594) 
  Other expenses    (137)          -    (137)       (146)        -   (146)       (264) 
 
  Return/(loss) 
   on ordinary 
   activities 
   before 
   taxation          138        (282)   (144)        107       386    493          704 
 
Tax on total 
 comprehensive 
 income and 
 ordinary 
 activities          (38)          -     (38)        (21)        -    (21)        (27) 
 
  Return/(loss) 
   attributable 
   to equity 
   shareholders      100        (282)   (182)         86       386    472          677 
                                                           ======= 
 
  Return per 'D' 
  Share                -           -       -       (0.2p)     1.0p       0.8p     0.9p 
  Return per 'E' 
  Share                -           -       -           -         -      -            - 
  Return per 'F' 
  Share                 0.1p     3.0p       3.1p     0.8p     1.9p       2.7p     5.2p 
  Return per 'H' 
   Share                1.3p   (2.4p)     (1.1p)     0.4p     0.5p       0.9p     1.1p 
  Return per 'J' 
   Share              (0.8p)   (2.7p)     (3.5p)   (0.3p)     0.2p     (0.1p)   (1.1p) 
 
   INCOME STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                 Year 
                                                                                ended 
                        Six months ended              Six months ended         31 Dec 
  'D' Shares               30 Jun 2018                  30 Jun 2017              2017 
                   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           46 
 
  Gains/(losses) 
  on investments 
  - realised             -        -        -      -           68      68           59 
  - unrealised           -        -        -      -           (4)     (4)           - 
                         -        -        -      9           98     107          105 
 
  Investment 
   management 
   fees                  -        -        -    (19)           -     (19)        (32) 
  Other expenses         -        -        -    (17)           -     (17)        (17) 
 
  (Loss)/return 
   on ordinary 
   activities 
   before 
   taxation              -        -        -    (27)          98      71           56 
 
  Tax on total 
   comprehensive 
   income and 
   ordinary 
   activities            -        -        -      5            -       5           31 
 
  (Loss)/return 
   attributable 
   to equity 
   shareholders          -        -        -    (22)          98      76           87 
                   =======  =======  ======= 
 
   INCOME STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                     Year 
                                                                                    ended 
                          Six months ended                Six months ended         31 Dec 
  'F' Shares                30 Jun 2018                     30 Jun 2017              2017 
                   Revenue   Capital     Total     Revenue   Capital     Total      Total 
                   GBP'000   GBP'000    GBP'000    GBP'000   GBP'000    GBP'000   GBP'000 
 
  Income            113             -    113        222             -    222          449 
 
  Gains on 
  investments 
  - realised          -           220    220          -             -      -          215 
  - unrealised        -           104    104          -           205    205          131 
                    113           324    437        222           205    427          795 
 
  Investment 
   management 
   fees             (58)            -    (58)       (68)            -    (68)       (136) 
  Other expenses    (46)            -    (46)       (47)            -    (47)        (91) 
 
  Return on 
   ordinary 
   activities 
   before 
   taxation           9           324    333        107           205    312          568 
 
  Tax on total 
   comprehensive 
   income and 
   ordinary 
   activities         -             -      -        (21)            -    (21)         (7) 
 
  Return 
   attributable 
   to equity 
   shareholders       9           324    333         86           205    291          561 
                             ========                        ======== 
 
   INCOME STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                                                       Year 
                                                                                                                      ended 
                                                               Six months ended              Six months ended        31 Dec 
  'H' Shares                                                      30 Jun 2018                   30 Jun 2017            2017 
                                                         Revenue   Capital    Total    Revenue  Capital    Total      Total 
                                                         GBP'000   GBP'000   GBP'000   GBP'000  GBP'000   GBP'000   GBP'000 
 
  Income                                                  332           -     332         226         -    226          364 
 
  Gains/(losses) on investments 
  - realised                                                -           -       -           -         -      -            - 
  - unrealised                                              -        (318)   (318)          -        61     61           90 
                                                          332        (318)     14         226        61    287          454 
 
  Investment management fees                             (102)          -    (102)       (116)        -   (116)       (229) 
  Other expenses                                          (49)          -     (49)        (43)        -    (43)        (82) 
 
  Return/(loss) on ordinary activities before taxation    181        (318)   (137)         67        61    128          143 
 
  Taxation on total comprehensive income and ordinary 
   activities                                              (9)          -      (9)        (13)        -    (13)           5 
 
  Return/(loss) attributable to equity shareholders       172        (318)   (146)         54        61    115          148 
                                                                                                ======= 
 
   INCOME STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                         Year 
                                                                                        ended 
                           Six months ended                  Six months ended          31 Dec 
  'J' Shares                  30 Jun 2018                      30 Jun 2017               2017 
                    Revenue    Capital     Total     Revenue     Capital     Total      Total 
                    GBP'000    GBP'000    GBP'000    GBP'000     GBP'000    GBP'000   GBP'000 
 
  Income              69          -         69         99          -          99          168 
 
  (Losses)/gains 
  on investments 
  - realised           -          -          -          -         (6)         (6)         (6) 
  - unrealised         -       (288)      (288)         -         28          28           46 
                      69       (288)      (219)        99         22         121          208 
 
  Investment 
   management 
   fees              (79)         -        (79)      (100)         -        (100)       (197) 
  Other expenses     (42)         -        (42)       (39)         -         (39)        (74) 
 
  (Loss)/gain on 
   ordinary 
   activities 
   before 
   taxation          (52)      (288)      (340)       (40)        22         (18)        (63) 
 
  Tax on total 
   comprehensive 
   income and 
   ordinary 
   activities        (29)         -        (29)         8          -           8         (56) 
 
  (Loss)/gain 
   attributable 
   to equity 
   shareholders      (81)      (288)      (369)       (32)        22         (10)       (119) 
 
   UNAUDITED CASH FLOW STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                        30 Jun      31 Dec 
                                                     30 Jun 2018                         2017         2017 
 
                                  'D'        'F'        'H' 
                                 Shares     Shares     Shares     'J' 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   (13)            60     234         (425)          (144)     (41)     (71) 
 
Cash flows from investing 
activities 
Purchase of investments          -              -       -            -              -   (1,501)  (3,653) 
Sale of investments              -          1,188       -            -          1,188    3,659   10,325 
Net cash inflow from 
 investing activities            -          1,188       -            -          1,188    2,158    6,672 
 
Net cash inflow/(outflow) 
 before financing 
 activities                    (13)         1,248     234         (425)         1,044    2,117    6,601 
 
Cash flows from financing 
activities 
Purchase of own shares           -              -     (16)         (19)           (35)     (14)     (66) 
Equity dividends paid            -         (2,056)   (335)           -         (2,391)  (1,954)  (4,939) 
Net cash outflow from 
 financing                       -         (2,056)   (351)         (19)        (2,426)  (1,968)  (5,005) 
                              ----  ----  -------   -----       ------   ----  ------ 
Increase/(decrease) 
 in cash                   2   (13)          (808)   (117)        (444)        (1,382)     149    1,596 
                                                                                        ======   ====== 
 
   NOTES TO THE UNAUDITED CASH FLOW STATEMENT 
 
   for the six months ended 30 June 2018 
 
 
 
 
                                                                                                               30 Jun      31 Dec 
                                                                             30 Jun 2018                        2017         2017 
 
                                                                '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 (outflow)/inflow from operating activities 
   and returns on investments 
   (Loss)/return on ordinary activities before 
    taxation                                                -           333       (137)        (340)    (144)     493      704 
   Corporation tax paid                                     -             -          -          (38)     (38)       -      (18) 
   Losses/(gains) on investments                            -          (324)       318          288      282     (352)    (535) 
   Decrease/(increase) in other debtors                     -            85         54         (336)    (197)    (191)    (191) 
   (Decrease)/increase in other creditors                 (13)          (34)        (1)           1      (47)       9      (31) 
   Net cash (outflow)/inflow from operating 
    activities                                            (13)           60        234         (425)    (144)     (41)     (71) 
                                                        =====   ===  ======      =====  ===  ======   ======   ======   ====== 
 
2 Analysis of net funds 
   Beginning of period                                     20         2,042        128        1,743    3,933    2,337    2,337 
   Net cash (outflow)/inflow                              (13)         (808)      (117)        (444)  (1,382)     149    1,596 
                                                                                             ------ 
   End of period                                            7         1,234         11        1,299    2,551    2,486    3,933 
                                                        =====  ==== 
 
 
   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 2018 
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 2017, 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 2017 and the year ended 31 December 2017 respectively. 
 
   6. Dividends 
 
 
 
 
                                                            Year ended 
                                      Six months ended        31 Dec 
                                        30 June 2018           2017 
                     Per share   Revenue  Capital   Total     Total 
    Paid in period       pence   GBP'000  GBP'000  GBP'000   GBP'000 
 
    'D' Shares 
    Special 'D' 
     2017                23.69p        -       -        -        2,361 
    Special 'E' 
     2017                  0.1p        -       -        -           15 
    Y/e Dec 2016 
     Final                13.5p        -       -        -        1,350 
                                       -       -        -        3,726 
                                 =======  ======   ======   ========== 
 
    'F' Shares 
    Y/E Dec 2017 
     Final                19.0p        -  (2,056)  (2,056)           - 
    Y/E Dec 2016 
     Final                 2.5p        -       -        -          271 
    Y/E Dec 2016 
     Interim               2.5p        -       -        -          270 
                                 -------                    ---------- 
                                       -  (2,056)  (2,056)         541 
                                 =======                    ========== 
 
    'H' Shares 
    Y/E Dec 2016 
     Final                 2.5p        -    (335)    (335)           - 
    Y/E Dec 2016 
     Final                 2.5p        -       -        -          336 
    Y/E Dec 2016 
     Interim               2.5p        -       -        -          336 
                                       -    (335)    (335)         672 
                                 =======  ======   ======   ========== 
 
 
   No dividends have been paid or declared in respect of the 'J' Shares. 
 
   7. Basic and diluted return per share 
 
 
 
 
             Weighted average 
             number of shares          Revenue               Capital 
                 in issue           (loss)/return            return 
                                                                   Per 
                                  GBP'000   Per share    GBP'000   share 
 
'D' Shares          9,979,109        -              -         -        - 
'E' Shares         14,994,862        -              -         -        - 
'F' Shares         10,821,660        9           0.1p       324     3.0p 
'H' Shares         13,379,978      172           1.3p      (318)  (2.4p) 
'J' Shares         10,674,386      (81)        (0.8p)      (288)  (2.7p) 
                                   100                     (282) 
 
 
   8. Net asset value per share 
 
 
 
 
             Shares in issue   Net asset value 
                              GBP'000  Per Share 
 
'D' Shares         9,979,109        -          - 
'E' Shares        14,994,862        -          - 
'F' Shares        10,821,660    5,804      53.6p 
'H' Shares        13,389,758   10,542      78.7p 
'J' Shares        10,675,533    9,738      91.2p 
                              ------- 
                               26,084 
                              ======= 
 
 
   9. Reserves 
 
 
 
 
                            Period ended 30 June 
                                            2018  Year ended 31 Dec 2017 
                                         GBP'000                 GBP'000 
 
Capital redemption reserve                   124                     124 
Special reserve                            2,971                   5,146 
Share premium reserve                     24,639                  24,639 
Revaluation reserve                        (497)                       1 
Capital reserve-realised                 (1,039)                 (1,039) 
Revenue reserve                            (174)                   (239) 
                                          26,024                  28,632 
                            ====================  ====================== 
 
 
   The Special reserve, Capital reserve - realised and Revenue reserve are 
all distributable reserves. The Revaluation reserve includes losses of 
GBP1,423,000 which are included in the calculation of distributable 
reserves. Total distributable reserves are GBP335,000 (31 Dec 2017: 
GBP3,148,000). 
 
   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 2017. 
 
   The Company has categorised its financial instruments using the fair 
value hierarchy as follows: 
 
   Level 1 Reflects financial instruments quoted in an active market; 
 
   Level 2 Reflects financial instruments that have prices that are 
observable either directly or indirectly; and 
 
   Level 3 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                         30 June    Level    Level    Level      31 Dec 
                    1      Level 2    Level 3    2018        1        2        3         2017 
                GBP'000   GBP'000    GBP'000   GBP'000   GBP'000  GBP'000  GBP'000     GBP'000 
 
     Loan 
      notes           -          -      2,985     2,985        -        -     3,283      3,283 
     Unquoted 
     equity           -          -     20,244    20,244        -        -    21,416     21,416 
                      -          -     23,229    23,229        -        -    24,699     24,699 
                =======  =========  =========  ========  =======  =======  ========  ========= 
 
 
   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 2017 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 carefully structuring 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. 
 
 
 
 
 
 

(END) Dow Jones Newswires

September 27, 2018 11:13 ET (15:13 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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