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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Endeavour Mining Plc | LSE:EDV | London | Ordinary Share | GB00BL6K5J42 | ORD USD0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,728.00 | 1,727.00 | 1,729.00 | 1,743.00 | 1,712.00 | 1,726.00 | 404,199 | 16:35:14 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 2.51B | -57.3M | -0.2324 | -126.85 | 7.27B |
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Draper Esprit VCT plc
LEI: 2138003I9Q1QPDSQ9Z97
Half-Yearly Report for the six months ended 30 September 2020
Recent performance summary
30 Sept 30 Sept 31 Mar
2020 2019 2020
Pence Pence Pence
Net Asset Value ("NAV") per
Share 49.9 57.1 46.0
Cumulative distributions paid
per Share 105.0 102.0 105.0
Total Return per Share 154.9 159.1 151.0
CHAIRMAN'S STATEMENT
Since my statement with the last annual report, published in July, we
have seen some progress in the battle against the coronavirus with the
end of the first lockdown but then a setback with the second wave and,
more recently, positive news in respect of vaccines which now suggests
there is some light at the end of the tunnel. The pandemic has been
disruptive for all businesses, but I believe the Company's portfolio has
generally weathered the storm well and many businesses have been able to
adapt to the new conditions.
Unsurprisingly new investment activity fell to a reduced level in the
early stages of the pandemic however, this has now recovered, and the
Manager made good progress in continuing to deploy the Company's funds
later in the period.
Net Asset Value, results and dividends
At 30 September 2020, the Company's Net Asset Value ("NAV") per share
stood at 49.9p, an increase of 3.9p or 8.5% since 31 March 2020.
The profit on ordinary activities after taxation for the period was
GBP5.7 million (2019: GBP228,000), comprising a revenue loss of
GBP222,000 (2019: revenue return of GBP134,000) and a capital profit of
GBP5.9 million (2019: GBP94,000).
An interim dividend of 1.0p per Share will be paid on 26 March 2021, to
Shareholders on the register as at 5 March 2021.
Venture capital investments
Investment activity and valuation
During the period, the Company made two new and three follow-on
investments, totalling GBP5.4 million.
The Company invested GBP2.4 million in Thought Machine Group Limited, a
fintech company which has developed cloud native banking technology with
its core banking system, Vault.
GBP1.1 million was also invested in Ravelin Technology Limited, a
cloud-based fraud detection and prevention platform that helps companies
stop online payment fraud.
Further investments were made into three existing portfolio businesses:
Back Office Technology (GBP720,000), Evonetix (GBP692,000) and Roomex
(GBP465,000).
At the period end, the Company held a portfolio of 39 venture capital
investments, valued at GBP37.7 million.
The Board has reviewed the valuations of the unquoted investments as at
30 September 2020 and made a number of adjustments to the carrying
values. This has resulted in a net valuation uplift of GBP6.2 million
for the period across the portfolio.
Fundraising
The Company launched an offer for subscription in October 2019 which
closed on 31 August 2020, having raised GBP13.5 million.
The Board is giving consideration to further fundraising plans.
Share buybacks
The Company continues to operate a policy of buying in its shares that
become available in the market, at approximately a 5% discount to the
latest published NAV, subject to regulatory and liquidity constraints.
In line with this policy, during the period the Company purchased
388,328 shares for cancellation an average price of 42.9p per share.
Any Shareholders considering selling their shares will need to use a
stockbroker and may wish to contact Panmure Gordon (UK) Limited, who
acts as the Company's corporate broker and can provide details on closed
periods when the Company is unable to buy shares.
Board Composition
As previously announced, Barry Dean retired from the Board and did not
stand for re-election as a non-executive director at the AGM, which took
place in September. We thank Barry for his significant contribution
during the period that he served on the Board.
The Board now comprises four non-executive directors. The Directors are
reviewing the Board structure and may make further adjustments in due
course.
Outlook
A substantial part of the Company's portfolio is now invested in
businesses introduced under the co-investment arrangements with Draper
Esprit plc. It is still too early to expect major successful exits from
these investments, but progress is generally satisfactory to date.
Although many of these businesses are reasonably immature, many operate
in sectors that have not been heavily impacted by the pandemic and
should be well positioned to flourish as the world starts slowly to
return to more normal conditions.
Over the remainder of the financial year, with dealflow reported to be
strengthening, we expect to see a reasonable level of further funds
deployed.
I look forward to updating Shareholders in the next Annual Report, which
will be issued in July 2021.
David Brock
Chairman
INVESTMENT MANAGER'S REPORT
The co-investment arrangements with Draper Esprit plc, to share deal
flow, management experience and investment opportunities, continues to
be positive from both an investment and a fundraising perspective. We
now define the Company as having two portfolios; a new technology
portfolio invested alongside other Draper Esprit funds and a legacy
portfolio assembled before the Draper Esprit arrangement.
At the period end, the Draper technology portfolio as a percentage of
total net assets accounted for 41%, the legacy portfolio 27%, and cash
32%.
Since the March year end, two new investments have been completed in the
fin-tech sector totalling GBP3.5 million.
One is Thought Machine Group Ltd. Founded in 2014 by a former Google
engineer. The company has built, Vault, a modern cloud native core
system for banks constrained by legacy systems. Over the last months,
the company has scaled up international hiring, adding 100 employees in
the first two quarters of 2020. This Draper Esprit led round was joined
by Lloyds Banking Group, IQ Capital, Backed and Playfair Capital.
Together with a further subsequent round led by Eurazeo Growth this
brings the total funds raised to $125 million.
The other is Ravelin Technology Ltd, a vendor of fraud detection
software. Founded in 2018 Ravelin has pioneered the use of machine
learning and graph network technologies to help online businesses accept
more payments with confidence. It has marquee clients in each sector
globally and has helped businesses to accept over 1.2 billion
transactions; secure over 230 million active user accounts; and use
machine learning to block 4 million fraudulent accounts which attempted
to place 14.7 million orders worth $53 billion.
Since the September period end we have signed commitments to an
additional two new investments totalling GBP1.2 million and are awaiting
HMRC advance assurance to complete.
Four further follow-ons have been made into the Draper Esprit portfolio
totalling GBP3.4 million, one post the September period end. Two
follow-ons were investments led by third party investors into Evonetix
and Back Office Technology.
Back Office Technology (trading as Form 3) is a cloud native fintech
payments processor. This GBP29 million strategic investment round
included new investors Lloyds Banking Group, Nationwide Building Society,
and venture capital firm, 83 North.
Evonetix which is developing DNA gene synthesis technology, raised a
further round led by US venture investors, Foresite Capital. The new
funding will be used to accelerate internal technology development,
including the integration of Evonetix's technology to enable the
synthesis of DNA on a chip.
Details of these additions can be found below.
Within the legacy portfolio, four companies make up 94% of the carrying
value at 30 September 2020. Two of these, Access Intelligence plc and
Fulcrum Utilities Group, are quoted on AIM and have risen in value by
56% since 30 March and now total GBP6.6m (12% of NAV). The valuation of
the two private companies, Fords and Lyalvale, remain unchanged. No
further investment was made into the legacy portfolio.
As Managers of the VCT, we were confident of the upward trend in the
portfolio valuations until the advent of the Covid crisis which resulted
in a marked decrease in portfolio valuations at the year end. We are
pleased to report an overall recovery in these valuations despite some
mixed results in trading across our portfolio companies.
As a result, the Company recorded a 3.9p increase in the Total Return
(net asset value including cumulative dividends), from 31 March 2020
from 151.0p to 154.9p, an increase of 8.5%.
The Draper Esprit investments continue to offer some exciting prospects
for the future. The pace at which new technologies are disrupting,
shaping and improving the world around us shows no signs of relenting
with developments around machine learning, artificial intelligence,
mobility, and blockchain opening up exciting new possibilities across
our areas of focus in enterprise, digital health, hardware and deeptech,
and consumer technology.
In summary the Manager continues to believe that despite the setbacks of
the Covid pandemic and the uncertainty of Brexit, investing into
technology retains the attributes of good potential for future value
growth.
Elderstreet Investments Limited
SUMMARY OF INVESTMENT PORTFOLIO
Valuation % of
Investment Portfolio as movement portfolio
at 30 September 2020 Cost Valuation in period by value
GBP'000 GBP'000 GBP'000
Top ten venture capital
investments
Access Intelligence plc* 2,586 5,980 2,238 10.9%
Fords Packaging Topco Limited 2,433 5,626 - 10.1%
Endomagnetics Limited 912 2,862 397 5.2%
Back Office Technology Limited 1,420 2,409 - 4.3%
Thought Machine Group Limited 2,400 2,400 - 4.3%
IESO Digital Health Limited 1,900 2,061 161 3.7%
StreetTeam Software Limited 2,504 1,917 1,776 3.4%
Evonetix Limited 1,485 1,882 7 3.4%
Freetrade Limited 600 1,500 240 2.7%
Lyalvale Express Limited 1,915 1,428 - 2.6%
18,155 28,063 4,819 50.6%
Other venture capital investments 20,775 9,611 1,352 17.3%
38,930 37,676 6,171 67.9%
Cash at bank and in hand 17,806 32.1%
Total investments 55,482 100.0%
SUMMARY OF INVESTMENT MOVEMENTS
Investment additions
Venture capital investments GBP'000
Thought Machine Group Limited 2,400
Ravelin Technology Limited 1,133
Back Office Technology Limited 720
Evonetix Limited 693
Roomex UK Limited 465
5,411
Value at
1 April Profit Realised (loss)/
Investment disposals Cost 2020 Proceeds vs cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Venture capital
investments
Retention proceeds
Pod Point Holdings
Limited - - 22 22 22
- - 22 22 22
*Quoted on AIM
All venture capital investments are unquoted unless otherwise stated.
UNAUDITED BALANCE SHEET
as at 30 September 2020
30 Sept 30 Sept 31 Mar
2020 2019 2020
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 37,676 31,913 26,095
Current assets
Debtors 51 75 2,416
Cash at bank and in
hand 17,806 14,036 8,422
17,857 14,111 10,838
Creditors: amounts falling
due within one year (219) (205) (190)
Net current assets 17,638 13,906 10,648
Net assets 55,314 45,819 36,743
Capital and reserves
Called up Share capital 5,544 4,015 3,997
Capital redemption reserve 652 615 633
Share premium account 18,321 6,387 6,388
Merger reserve 1,828 1,828 1,828
Special reserve 17,814 21,729 18,713
Capital reserve - unrealised 10,588 8,952 4,417
Capital reserve - realised 798 2,175 776
Revenue reserve (231) 118 (9)
Equity Shareholders'
funds 55,314 45,819 36,743
Basic and diluted Net 49.9p 57.1p 46.0p
Asset Value per Share
UNAUDITED INCOME STATEMENT
for the six months ended 30 September 2020
Six months ended Six months ended Year ended
30 Sept 2020 30 Sept 2019 31 Mar 2020
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 48 - 48 411 - 411 585
Gains on
investments
Realised - 22 22 - - - 120
Unrealised - 6,171 6,171 - 386 386 (5,746)
48 6,193 6,241 411 386 797 (5,041)
Investment
management fees (91) (276) (367) (98) (292) (390) (848)
Other expenses (179) - (179) (179) - (179) (366)
Return on ordinary
activities before
taxation (222) 5,917 5.695 134 94 228 (6,255)
Tax on total
comprehensive
income and
ordinary
activities - - - - - - -
Return attributable
to equity
Shareholders (222) 5,917 5,695 134 94 228 (6,255)
Basic and diluted
return per Share (0.2p) 5.5p 5.3p 0.2p 0.1p 0.3p (7.8p)
All Revenue and Capital items in the above statement are derived from
continuing operations. The total column within the Income Statement
represents the profit and loss account of the Company.
UNAUDITED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2020
Called
up Capital
Share redemption Share Merger Special Capital Capital Revenue
capital reserve premium reserve reserve reserve-unrealised reserve-realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April
2019 3,436 599 - 1,828 22,545 8,403 2,174 (16) 38,969
Total comprehensive
income - - - - - (5,746) (516) 7 (6,255)
Transfer between
reserves - - - - (3,281) 1,760 1,521 - --
Transactions
with owners
Issue of new
Shares 595 - 6,388 - - - - - 6,983
Share issue
costs - - - - (185) - - - (185)
Purchase of
own Shares (34) 34 - - (366) - - - (366)
Dividends
paid - - - - - - (2,403) - (2,403)
--------- --------- --------
At 31 March
2020 3,997 633 6,388 1,828 18,713 4,417 776 (9) 36,743
--------- --------- --------
Total comprehensive
income - - - - - 6,171 (254) (222) 5,695
Transfer between
reserves - - - - (276) 276 - --
Transactions
with owners
Issue of new
Shares 1,566 - 11,933 - - - - - 13,499
Share issue
costs - - - - (455) - - - (455)
Purchase of
own Shares (19) 19 - - (168) - - - (168)
Dividends paid - - - - - - - -
--------- --------- --------
At 30 September
2020 5,544 652 18,321 1,828 17,814 10,588 798 (231) 55,314
======== ========= ========
A transfer of GBP276,000 was made from the Special reserve to the
Capital Reserve -- realised in respect of capital expenses in the
period.
UNAUDITED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2020
Six months ended Six months ended Period ended
30 Sept 2020 30 Sept 2019 31 Mar 2020
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Return on ordinary
activities before
taxation 5,695 228 (6,255)
Gains on investments (6,193) (386) 5,626
(Increase)/decrease in
debtors 2,408 (10) (2,403)
Increase/(decrease) in
creditors (11) 13 16
Net cash outflow
generated from
operating activities 1,899 (155) (3,016)
Cash flow from investing
activities
Purchase of investments (5,411) (2,850) (5,208)
Sale of investments 22 - 2,165
Net cash outflow from
investing activities (5,389) (2,850) (3,043)
Cash flows from
financing activities
Proceeds from Share
issue 13,500 6,982 6,983
Share issue costs (498) (203) (165)
Purchase of own Shares (128) (194) (389)
Equity dividends paid - 1 (2,403)
Net cash inflow from
financing activities 12,874 6,586 4,026
---------------- ---------------- ------------
Increase/(decrease) in
cash 9,384 3,581 (2,033)
Net movement in cash
Beginning of period 8,422 10,455 10,455
Net cash
inflow/(outflow) 9,384 3,581 (2,033)
End of period 17,806 14,036 8,422
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
for the six months ended 30 September 2020
1.The unaudited Half-Yearly Report covers the six months to 30 September
2020 and has been prepared in accordance with the accounting policies
set out in the statutory accounts for the period ended 31 March 2020,
which were prepared in accordance with the Financial Reporting Standard
102 ("FRS 102") and the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies" issued in October 2019
("SORP").
2.The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
3.The comparative figures are in respect of the six months ended 30
September 2019 and the year ended 31 March 2020, respectively.
4.Basic and diluted return per Share
30 Sept 2020 30 Sept 2019 31 Mar 2020
Return per Share based on:
Net revenue gain for the period
(GBP'000) (222) 134 7
Capital return per Share based
on:
Net capital gain for the period
(GBP'000) 5,917 94 (6,262)
Weighted average number of
Shares 106,544,017 80,116,839 80,113,600
5.Dividends
30 September 2020 31 March 2020
Per Share Revenue Capital Total Total
Pence GBP'000 GBP'000 GBP'000 GBP'000
Payable
2021 Interim 1.0p - 1,109 1,109 -
Paid in the
period
2020 Final 1.5p - 1,587 1,587
2020 Interim 1.5p - - - 1,199
2019 Final 1.5p - - - 1,204
- 1,587 1,587 2,403
=============
6.Basic and diluted Net Asset Value per Share
30 Sept 2020 30 Sept 2019 31 Mar 2020
Net asset value per Share based
on:
Net assets (GBP'000) 55,314 45,819 36,743
Number of Shares in issue at
the period end 110,874,413 80,293,973 79,934,164
Net Asset Value per Share 49.9p 57.1p 46.0p
7.Called up Share capital
30 Sept 2020 30 Sept 2019 31 Mar 2020
Ordinary Shares of 5p each
Number of Shares in issue at
the period end 110,874,413 80,293,973 79,934,164
Nominal value (GBP'000) 5,544 4,015 3,997
During the period the Company allotted 31,328,577 Ordinary Shares of 5p
each ("Ordinary Shares") under an Offer for Subscription that launched
in October 2019, at an average price of 43.1p per Share. Gross proceeds
received thereon were GBP13.5 million, with issue costs in respect of
the Offer amounting to GBP455,000.
During the period, the Company purchased 388,328 Shares for cancellation
for an aggregate consideration of GBP168,000, at an average price of
42.9p per Share (approximately equal to a 5.8% discount to the most
recently published NAV at the time of purchase) and representing 0.5% of
the Share capital in issue as at 1 April 2020.
8.Reserves
The special reserve is available to the Company to enable the purchase
of its own Shares in the market without affecting its ability to pay
dividends and allows the Company to write back realised capital losses
arising on disposals and impairments.
Distributable reserves are calculated as follows:
30 Sept 2020 30 Sept 2019 31 Mar 2020
GBP'000 GBP'000 GBP'000
Special reserve 17,814 21,729 18,713
Capital reserve - realised 798 2,175 776
Revenue reserve (231) 118 (9)
Merger reserve - distributable
element 423 423 423
Unrealised losses - net of
unquoted gains 805 (524) (3,545)
19,609 23,921 16,358
In October 2018, the balances on the Share Premium account and the
capital redemption reserve were cancelled and added to the special
reserve, contributing an additional GBP26.2 million to distributable
reserves. The VCT regulations place some restrictions on the use of
these reserves during the first three to four years after the funds on
which they arose were raised.
9.Investments
The fair value of investments is determined using the detailed
accounting policy as set out in Note 1 of the Annual Report.
The Company has categorised its financial instruments using the fair
value hierarchy as follows:
Level 1 -Reflects financial instruments quoted in an active market
(fixed interest investments, and investments in shares quoted on either
the Main or AIM Markets);
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).
Six months ended Period ended 31
30 Sept 2020 Mar 2020
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AIM
quoted
shares 6,605 565 - 7,170 4,006 250 - 4,256
Loan
notes - - 508 508 - - 508 508
Unquoted
shares - - 29,998 29,998 - - 21,331 21,331
6,605 565 30,506 37,676 4,006 250 21,839 26,095
10.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 has concluded that the key risks facing the Company over the
remainder of the financial period are as follows:
-investment risk associated with investing in small and immature
businesses;
-liquidity risk arising from investing mainly in unquoted businesses;
and
-failure to maintain approval as a VCT.
In all cases the Board is satisfied with the Company's approach to these
risks. As a VCT, the Company is forced to have significant exposure to
relatively immature businesses. This risk is mitigated to some extent by
holding a well-diversified portfolio.
With a reasonably illiquid venture capital investment portfolio, the
Board ensures that it maintains an appropriate proportion of its assets
in cash and liquid instruments.
The Company's compliance with the VCT regulations is continually
monitored by the Administration Manager, who regularly reports to the
Board on the current position. The Company also retains Philip Hare and
Associates LLP to provide regular reviews and advice in this area. The
Board considers that this approach reduces the risk of a breach of the
VCT regulations to a minimal level.
The Company has considerable financial resources at the period end and
holds a diversified portfolio of investments. As a result, the Directors
believe that the Company is well placed to manage its business risks
successfully despite the current uncertain economic outlook.
The Directors have concluded that the Company has adequate resources to
continue in operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in preparing the
financial statements.
11.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 current 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. 12.The unaudited financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the period ended 31 March 2020 have been extracted from the financial statements for that period, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified. 13.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 downloaded from www.draperespritvct.com and www.downing.co.uk.
(END) Dow Jones Newswires
December 22, 2020 12:16 ET (17:16 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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