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EDV Endeavour Mining Plc

1,609.00
28.00 (1.77%)
28 Mar 2024 - Closed
Delayed by 15 minutes
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
  28.00 1.77% 1,609.00 1,609.00 1,612.00 1,611.00 1,570.00 1,583.00 686,693 16:35:16
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Gold Ores 2.51B -57.3M -0.2324 -118.42 6.79B

Elderstreet VCT Plc Elderstreet Vct Plc : Final Results (correction)

28/04/2017 10:27am

UK Regulatory


 
TIDMEDV 
 
   Elderstreet VCT plc 
 
   Final Results (correction) 
 
   28 April 2017 
 
   The announcement released by Elderstreet VCT plc entitled "Final 
Results" on 27 April at 5:17pm incorrectly stated the record date for 
the dividend as 20 May 2017. 
 
   The announcement should have shown the correct record date of 19 May 
2017. 
 
   The remainder of the announcement is unchanged. 
 
   The full corrected text of the announcement is as follows: - 
 
   FINANCIAL SUMMARY 
 
 
 
 
                                                            2016    2015 
                                                            pence   pence 
 
Net asset value per share ("NAV")                            62.8    70.6 
Cumulative dividends paid since launch                       96.0    91.0 
Total return (NAV plus cumulative dividends paid per 
 share)                                                     158.8   161.6 
 
Dividends in respect of financial year ended 31 December 
 2016 
Interim dividend paid per share                               2.5     2.5 
Special dividend paid per share                                 -     5.0 
Final dividend per share (payable on 30 June 2017)            1.5     2.5 
                                                              4.0    10.0 
 
   CHAIRMAN'S STATEMENT 
 
   I am pleased to present the Company's Annual Report for the year ended 
31 December 2016. 
 
   It has been a year with significant developments for your Company. In 
November we announced that the Company's manager, Elderstreet 
Investments, had negotiated a significant co-investment agreement with 
Draper Esprit, a leading venture capital provider in the high-growth 
technology sector, which will lead to sharing deal flow, management 
experience and investment opportunities going forward. Draper Esprit 
also acquired a 30% stake in Elderstreet Investments, with an option to 
purchase the remainder of the company in the future.  The Board is fully 
supportive of this arrangement which subsequently allowed the Company to 
successfully launch a major new fundraising.  The Company now has a 
significant level of new funds available to take advantage of the flow 
of new opportunities and, over the coming years, we expect to see the 
portfolio become refocussed on sectors that can deliver high growth. 
 
   Net asset value and results 
 
   At 31 December 2016, the Company's Net Asset Value per share ("NAV") 
stood at 62.8p, which represents a fall of 2.8p (3.9%) over the year 
after adding back dividends of 5.0p per share which were paid during the 
year. 
 
   The total return to Shareholders who invested at the launch of the 
Company in 1998 (NAV plus cumulative dividends) now stands at 158.8p 
compared to the original cost (net of income tax relief) of 80.0p per 
share. 
 
   The loss on ordinary activities after taxation for the year was GBP1.0 
million (2015: GBP3.4 million profit), comprising a revenue return of 
GBP222,000 (2015: GBP262,000) and a capital loss of GBP1.3 million 
(2015: GBP3.1 million return). 
 
   Venture capital investments 
 
   In terms of new investment activity, the Company invested a total of 
GBP1.4 million in two existing portfolio companies; Concorde and 
AngloINFO. 
 
   One new Company was added to the portfolio during the year. An 
investment of GBP499,000 was made into Ridee Limited, which trades as 
Jinn, a fast growing 24/7 last mile urban logistics and delivery 
platform that allows users to order anything they want from local stores 
and restaurants. 
 
   During the year, the Company also benefitted from further deferred 
proceeds of GBP440,000 from Wessex Advanced Switching Products Limited, 
the investment was sold in 2014. There were a small number of other 
disposals which brought total net realised gains for the year to 
GBP432,000. 
 
   At the year end, the Company held a portfolio of 23 venture capital 
investments valued at GBP19.2 million, with the vast majority of value 
held in the top ten investments. 
 
   In reviewing the investment valuations at the year end, the Board made a 
number of valuation adjustments to the unquoted investments. The main 
movements are summarised as follows; Lyalvale Express Limited was 
increased by GBP571,000 as the investment continues to exceed 
expectations and Fords Packaging Topco Limited was uplifted by 
GBP556,000, following strong results in the past period.  These 
increases were offset by a GBP1.3 million write down in the value of 
Baldwin & Francis Limited, a manufacturer of equipment for the mining, 
rail, oil and gas industries. The company generally works on large 
contracts, and delays to a number of new orders has significantly 
impacted the business. 
 
   The management of Lyalvale Property Limited had been optimistic that 
planning permission would be obtained in respect of some development 
land that it owns. Unfortunately, ultimately planning permission was not 
granted and this has resulted in a write down of GBP786,000. The 
valuation of Ridee Limited has also been reduced by GBP149,000. 
 
   A number of the Company's investments are quoted on AIM and experienced 
significant movements over the year. The investment in Fulcrum Utility 
Services Limited increased in value by GBP1 million, Access Intelligence 
plc fell by GBP299,000, Interquest Group plc by GBP188,000 and Proxama 
plc by GBP276,000. 
 
   Overall the portfolio had net unrealised losses for the year of 1.3 
million. 
 
   Fixed interest investments 
 
   The Company held a small portfolio of fixed interest investments which 
is managed by Smith & Williamson Investment Management Limited. The 
portfolio, valued at GBP1.6 million at the year end, generated 
investment income of GBP17,000 during the year and unrealised capital 
gains of GBP9,000 were recognised. 
 
   The remaining investments in the fixed interest portfolio was sold after 
year end for GBP1.6 million. 
 
   Management 
 
   As mentioned above, in November it was announced that Draper Esprit plc, 
a leading AIM quoted venture capital firm, had acquired a stake in 
Elderstreet Investments Limited, the Company's investment manager. At 
the same time, Elderstreet Investments put in place a co-investment 
agreement with Draper Esprit plc, which will provide the VCT with the 
benefit of deal flow and the considerable management experience of 
Draper Esprit. 
 
   The Draper Esprit team has been involved in investing over GBP800 
million into more than 200 technology businesses and also in creating 
businesses with a total aggregate value of over GBP6.4 billion of which 
over GBP5 billion has been exited. Draper Esprit currently manages 
institutional and EIS funds so is already familiar with many of the 
restrictions that apply to VCT investments. 
 
   The Board believes that Draper Esprit will bring considerable benefits 
to the VCT and looks forwards to working with them as the VCT moves into 
a new phase. 
 
   Fundraising activities 
 
   As discussed above, in December 2016, the Company launched a new offer 
for subscription seeking to raise up to a total of GBP10 million, with 
an option to increase the maximum level to GBP20 million. The offer has 
been well received by investors and, to date, has raised GBP15 million 
and allotted 21.7 million shares at an average share price of 64.99p. 
 
   Dividends 
 
   In recent years the Board has targeted annual dividends of between 4 and 
5 pence per share. In view of the significant level of new funds raised 
in the fundraising and the expected steady shift of the portfolio 
towards less mature investments, the Board expects that annual dividends 
will be slightly reduced over the coming years and has set a revised 
target of between 3 and 4 pence per share. The Board believes that the 
upsides of having a larger asset base and greater exposure to the 
potentially high growth investments that Draper Esprit can introduce 
outweighs any short term potential reduction compared to the historic 
yields. 
 
   With this in mind, the Board is proposing a final dividend of 1.5p per 
share to be paid on 30 June 2017 to Shareholders on the register at 19 
May 2017. This will bring total dividends paid in respect of the year to 
4.0p (2015: 10.0p), equivalent to a yield for a 40% tax payer of 10.9% 
p.a. based on the share price at the date of this report. 
 
   Share buybacks 
 
   The Company operates a policy of buying in shares that become available 
in the market at a discount of approximately 7.5% to the latest 
published NAV. 
 
   During the year the Company purchased a total of 217,500 shares at an 
average price of 63.6p per share. 
 
   Any Shareholders who are considering selling their shares will need to 
use a stockbroker. Such Shareholders should ask their stockbroker to 
register their interest in selling their shares with Shore Capital. 
 
   Auditors 
 
   In accordance with new regulations, the Company is obliged to review its 
auditors and undertake a competitive tender process at least every 10 
years. 
 
   As BDO (and its predecessor firm) has been the Company's auditor for the 
last 10 years, the Audit Committee has undertaken such a review this 
year. 
 
   The Audit Committee approached four audit firms seeking proposals to be 
considered for appointment as the Company's auditors. Two formal 
proposals were considered and ultimately the Committee decided to 
re-appoint BDO, the existing auditors. The Committee is satisfied that 
BDO has suitable experience and resources to provide a good quality 
audit service and have indicated that future audit fees will be 
maintained at a reasonable level. A proposal for their re-appointment 
will be put to Shareholders at the forthcoming AGM. 
 
   Year end and Company name 
 
   In view of the changes to the management, the Board is considering 
changing the Company's year end from 31 December to 31 March to align it 
better with other Draper Esprit funds. We will update Shareholders as 
and when any final decision is made. The Board is also giving 
consideration to whether it might be appropriate to change the Company's 
name in due course. In order to give the Board some flexibility to this 
end, a resolution will be proposed at the forthcoming AGM to amend the 
Articles of Association to give the Board the power to change the 
Company name without the requirement for a Shareholder Circular. 
Naturally we will ensure that any decision to change the Company's name 
is communicated to all Shareholders at that time. 
 
   Annual General Meeting ("AGM") 
 
   The next AGM of the Company will be held on 23 June 2017 at 20 Garrick 
Street, London, WC2E 9BT at 11:00 a.m. 
 
   Notice of the meeting is at the end of this document. Four items of 
Special Business are proposed; one ordinary resolution and two special 
resolutions in relation to the allotment of shares and share buybacks 
and one special resolution in respect of the amendments to the Articles 
of Association described above. 
 
   Outlook 
 
   A small number of setbacks in the portfolio have held back performance 
over the last year. However, the majority of the portfolio has performed 
reasonably well and the portfolio continues to include a number of 
investments that have prospects to deliver good outcomes for 
Shareholders. 
 
   With a significant level of new funds now available to invest, we expect 
to see a higher level of investment activity over the coming year and a 
number of new companies being introduced into the portfolio by Draper 
Esprit. The ongoing impact of the new VCT regulations and the expected 
dealflow from Draper Esprit is likely to result in a gradual increase in 
the risk profile of the portfolio over time. However, we believe that 
the enhanced management team and resources provide an excellent 
foundation for this new phase of the Company and have the potential to 
continue delivering the levels of performance that Shareholders have 
benefitted from in recent years. 
 
   David Brock 
 
   Chairman 
 
   26 April  2017 
 
   INVESTMENT MANAGER'S REPORT 
 
   Over the year the Company recorded a decrease in the total return of 
2.8p (net asset value including cumulative dividends), from 161.6p to 
158.8p including paying dividends of 5.0p per share. NAV per share 
decreased from 70.6p to 62.8p. 
 
   During the year, we invested GBP1.9 million as we continued to support 
the existing portfolio companies, and completed one new investment. Two 
follow-ons were made into Concorde Solutions Limited, and AngloINFO 
Limited, and one new investment was completed into Ridee Limited. The 
core portfolio has had a mixed performance. 
 
   Since the period end, the planning permission for Lyalvale Property 
Limited, which was sent to central government level for a decision, was 
declined post the year-end. This has resulted in a reduction of 
valuation of GBP786,000. Baldwin & Francis Limited ("BFH") has also 
suffered a decline in trading as orders that were expected to be 
received have been delayed. BFH operates in the rail, oil and gas, and 
mining markets, the latter two of which are still suffering from the 
decline in commodity prices. Your Manager has taken action to turn 
around the decline and made a provision of GBP1.3 million against the 
valuation. 
 
   On a positive note trading has performed better than expected in Fords 
Packaging Topco Limited ("Fords") and Lyalvale Express Limited which 
have been valued up by GBP556,000 and GBP571,000 respectively. 
 
   We flagged in last years' report that Fords innovation and investment in 
R&D could lead to better future trading performance. We have seen this 
come through in record orders for new machines as they enter their 
2017/18 trading year. Post the year end Fords repaid the Elderstreet VCT 
loan and is now debt free. 
 
   A new investment of GBP499,000 was made into Ridee Limited (trading as 
Jinn (www.jinnapp.com), a digital platform operating in the fast growing 
but competitive space of last mile delivery from restaurants and local 
stores. 
 
   A further investment of GBP750,000 was made in Concorde in April 2016 to 
support the further development of the business, which made progress 
following that funding round and since the year end has been sold 
generating proceeds slightly in excess of the year end carrying value. 
 
   Further follow-on investments totalling GBP643,000 were made into 
AngloINFO Limited during the year. The launch of the new website has 
taken longer than expected but a new mobile compliant digital platform 
is now live and the short to medium term target is to get the company to 
breakeven. We continue to believe that the business has reasonable 
growth prospects. 
 
   The highlight of the AIM portfolio was our investment in Fulcrum Utility 
Services Limited which rose by GBP1 million year on year as the company 
reported six monthly pre-tax profits of GBP3.1 million versus GBP1.6 
million in the previous year. 
 
   Access Intelligence plc continues to successfully integrate the business 
acquired in 2015. 
 
   Generally, it is worth noting that in nine out of the top ten companies 
by value at 31 December 2016 the Manager has at least one board seat or 
observer rights and is very actively involved with these businesses. 
 
   Escrow payments from two exits were received in the year totalling 
GBP1.9 million, of which GBP1.5 million was recognised in 2015 in 
relation to Smart Education Limited. 
 
   On the corporate front, your Manager, with the support of the VCT Board, 
sold a minority stake to Draper Esprit plc, who also have an option to 
acquire 100% in the future. 
 
   Draper Esprit is one of the leading venture capital investors involved 
in the creation, funding and development of high-growth technology 
businesses with an emphasis on digital technologies in the UK, the 
Republic of Ireland and Europe. Draper Esprit floated on the AIM market 
in June 2016 and at the time of writing has a market capitalisation of 
GBP144.7 million. The Manager has agreed a significant co-investment 
agreement with Draper Esprit to share deal flow, management experience, 
and investment opportunities going forward. 
 
   We are delighted to report that the new fundraising round of GBP10 
million for this season is performing well and a further over allotment 
of GBP10 million has been released. At the time of writing this new 
fundraising had raised GBP15 million. 
 
   In summary, although there have been mixed results in the core portfolio 
over the year, we remain cautiously optimistic, and confident, given the 
co-investment agreement with Draper Esprit, that we can find suitable 
new opportunities to invest in and refresh the portfolio. 
 
   Elderstreet Investments Limited 
 
   26 April 2017 
 
   REVIEW OF INVESTMENTS 
 
   Portfolio of investments 
 
   The following investments were held at 31 December 2016. All companies 
are registered in England and Wales, with the exception of Fulcrum 
Utility Services Limited which is registered in the Cayman Islands. 
 
 
 
 
                                                   Valuation 
                                                    movement  % of portfolio 
                               Cost     Valuation   in year      by value 
                             GBP'000      GBP'000   GBP'000 
Ten largest venture capital 
investments (by value) 
Lyalvale Express Limited       1,915        3,903        571           16.9% 
Fords Packaging Topco 
 Limited                       2,883        3,795        556           16.4% 
Access Intelligence plc *      2,333        2,989      (128)           13.0% 
Fulcrum Utility Services 
 Limited *                       500        2,146      1,000            9.3% 
AngloINFO Limited              2,277        1,569      (299)            6.8% 
Concorde Solutions Limited     1,650        1,525      (142)            6.6% 
Baldwin & Francis Limited      1,534          912    (1,340)            4.0% 
Macranet Limited                 863          863          -            3.7% 
Ridee Limited                    499          350      (149)            1.5% 
Cashfac plc                      260          328          -            1.4% 
                              14,714       18,380         69           79.6% 
Other venture capital 
investments 
Servoca plc *                    333          228       (96)            1.0% 
Interquest Group plc *           226          156      (188)            0.7% 
Lyalvale Property Limited        300          128      (786)            0.6% 
Proxama plc*                     860          123      (276)            0.5% 
Uvenco UK plc *                1,326           72       (18)            0.3% 
Sift Digital Limited             125           48        (8)            0.2% 
Sift Limited                     125           42       (14)            0.2% 
SparesFinder Limited             103           34          -            0.1% 
The Kellan Group plc *           657            7        (4)            0.0% 
Infoserve Group plc              127            -          -               - 
The National Solicitors 
 Network Limited                 501            -          -               - 
The QSS Group Limited            268            -          -               - 
RB Sport & Leisure Holdings 
 plc                             188            -          -               - 
                               5,139          838    (1,390)            3.6% 
Fixed income securities 
United Kingdom 1.25% Gilt 
 22/07/2018                      892          925          8            4.0% 
United Kingdom 1.00% Gilt 
 07/09/2017                      614          616          1            2.7% 
S&W Investment Funds Cash 
 Fund                             10           10          -            0.0% 
                               1,516        1,551          9            6.7% 
 
                              21,369       20,769    (1,312)           89.9% 
 
Cash at bank and in hand                    2,302                      10.1% 
 
Total investments                          23,071                     100.0% 
 
   All venture capital investments are unquoted unless otherwise stated 
 
   *    Quoted on AIM 
 
   Investment movements for the year ended 31 December 2016 
 
   ADDITIONS 
 
 
 
 
                              GBP'000 
Venture capital investments 
Concorde Solutions Limited        750 
AngloINFO Limited                 643 
Ridee Limited                     499 
                                1,892 
 
 
   DISPOSALS 
 
 
 
 
 
                            Value at                Profit 
                   Cost     01/01/16    Proceeds    vs cost    Realised profit 
                 GBP'000   GBP'000     GBP'000     GBP'000        GBP'000 
Retention 
proceeds 
Wessex Advanced 
 Switching 
 Products 
 Limited               -           -         440        440                440 
Smart Education 
 Limited               -           -           5          5                  5 
 
                       -           -         445        445                445 
 
 
 
 
   Directors' responsibilities statement 
 
   The Directors are responsible for preparing the Report of the Directors, 
the Strategic Report, the Directors' Remuneration Report and the 
financial statements in accordance with applicable law and regulations. 
They are also responsible for ensuring that the annual report includes 
information required by the Listing Rules of the Financial Conduct 
Authority. 
 
   Company law requires the Directors to prepare financial statements for 
each financial year. Under that law, the Directors have elected to 
prepare the financial statements in accordance with United Kingdom 
Generally Accepted Accounting Practice (United Kingdom Accounting 
Standards and applicable law), including Financial Reporting Standard 
102, the financial reporting standard applicable in the UK and Republic 
of Ireland (FRS102). Under company law the Directors must not approve 
the financial statements unless they are satisfied that they give a true 
and fair view of the state of affairs of the Company and of the profit 
or loss of the Company for that period. 
 
   In preparing the financial statements, the Directors are required to: 
 
   -- select suitable accounting policies and then apply them consistently; 
 
   -- make judgments and accounting estimates that are reasonable and 
prudent; 
 
   -- state whether applicable UK Accounting Standards have been followed, 
subject to any material departures disclosed and explained in the 
financial statements; and 
 
   -- prepare the financial statements on the going concern basis unless it 
is inappropriate to presume that the Company will continue in business; 
and 
 
   -- prepare a director's report, a strategic report and director's 
remuneration report which comply with the requirements of the Companies 
Act 2006. 
 
   The Directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the Company's transactions, to 
disclose with reasonable accuracy at any time the financial position of 
the Company and to enable them to ensure that the financial statements 
comply with the Companies Act 2006. They are also responsible for 
safeguarding the assets of the Company and hence for taking reasonable 
steps for the prevention and detection of fraud and other 
irregularities. 
 
   In addition, each of the Directors considers that the Annual report, 
taken as a whole, is fair, balanced and understandable and provides the 
information necessary for Shareholders to assess the Company's 
performance, business model and strategy. 
 
   The Directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the Company's website. 
Legislation in the United Kingdom governing the preparation and 
dissemination of the financial statements and other information included 
in annual reports may differ from legislation in other jurisdictions. 
 
   The maintenance and integrity of the Company's website is the 
responsibility of the Directors.  The Directors' responsibility also 
extends to the ongoing integrity of the financial statements contained 
therein. 
 
   By order of the Board 
 
   Grant Whitehouse 
 
   Secretary of Elderstreet VCT plc 
 
   26 April 2017 
 
   INCOME STATEMENT 
 
   for the year ended 31 December 2016 
 
 
 
 
                                                                  2016                                     2015 
 
                                                      Revenue   Capital     Total     Revenue  Capital   Total 
                                                      GBP'000   GBP'000    GBP'000    GBP'000  GBP'000  GBP'000 
 
Income                                                    603          -        603       688        -      688 
Gains on investments                                        -      (867)      (867)         -    3,906    3,906 
 
                                                          603      (867)      (264)       688    3,906    4,594 
 
Investment management fees                              (125)      (375)      (500)     (118)    (354)    (472) 
Performance incentive fees                                  -          -          -         -    (454)    (454) 
Other expenses                                          (256)       (13)      (269)     (308)      (6)    (314) 
 
Return/(Loss) on ordinary activities before tax           222    (1,255)    (1,033)       262    3,092    3,354 
Tax on total comprehensive income and ordinary 
activities                                                  -          -          -  -      -        -        - 
 
Return/(Loss) attributable to equity shareholders, 
 being total comprehensive income for the year            222    (1,255)    (1,033)       262    3,092    3,354 
 
Basic and diluted return/(loss) per share                0.6p     (3.6p)     (3.0p)      0.8p     9.0p     9.8p 
 
 
   All Revenue and Capital items in the above statement derive from 
continuing operations. No operations were acquired or discontinued 
during the year. The total column within the Income Statement represents 
the Statement of Total Comprehensive Income of the Company prepared in 
accordance with Financial Reporting Standards ("FRS102"). The 
supplementary revenue and capital return columns are prepared in 
accordance with the Statement of Recommended Practice issued in November 
2014 by the Association of Investment Companies ("AIC SORP"). 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   for the year ended 31 December 2016 
 
 
 
 
                Called 
                  up       Capital                                     Capital       Capital 
                 share    Redemption   Share     Merger   Special      reserve       reserve    Revenue 
                capital    reserve     premium   reserve   reserve   - unrealised   - realised   reserve   Total 
                GBP'000    GBP'000    GBP'000   GBP'000   GBP'000      GBP'000       GBP'000    GBP'000   GBP'000 
 
For the year ended 31 December 2016 
 
At 1 January 
 2016             1,733          474     3,743     1,828     2,629          4,433        9,132       486   24,458 
Total 
 comprehensive 
 income               -            -         -         -         -        (1,312)           57       222  (1,033) 
Transfer 
 between 
 reserves             -            -         -         -     (423)             40          383         -        - 
Transactions 
with owners 
Issue of new 
 shares             130            -     1,709         -         -              -            -         -    1,839 
Share issue 
 costs                -            -         -         -       (9)              -            -         -      (9) 
Purchase of 
 own shares        (11)           11         -         -     (139)              -            -         -    (139) 
Dividends paid        -            -         -         -         -              -      (1,484)     (372)  (1,856) 
 
At 31 December 
 2016             1,852          485     5,452     1,828     2,058          3,161        8,088       336   23,260 
 
For the year ended 31 December 2015 
 
At 1 January 
 2015             1,678          465     2,908     1,882     2,991          4,908        8,713       224   23,769 
Total 
 comprehensive 
 income               -            -         -         -         -          3,152         (60)       262    3,354 
Realisation of 
 revaluations 
 from prior 
 years                -            -         -         -         -        (3,627)        3,627         -        - 
Transfer 
 between 
 reserves             -            -         -      (54)     (239)              -          293         -        - 
Transactions 
with owners 
Issue of new 
 shares              45            -       596         -         -              -            -         -      641 
Issue of new 
 shares under 
 DRIS*               19            -       239         -         -              -            -         -      258 
Share issue 
 costs                -            -         -         -       (9)              -            -         -      (9) 
Purchase of 
 own shares         (9)            9         -         -     (114)              -            -         -    (114) 
Dividends paid        -            -         -         -         -              -      (3,441)         -  (3,441) 
 
At 31 December 
 2015             1,733          474     3,743     1,828     2,629          4,433        9,132       486   24,458 
 
 
   *Dividend Reinvestment Scheme 
 
   BALANCE SHEET 
 
   at 31 December 2016 
 
 
 
 
                                                2016              2015 
                                      GBP'000  GBP'000  GBP'000  GBP'000 
Fixed assets 
Investments                                     20,769            20,189 
 
Current assets 
Debtors                                   342             1,757 
Cash at bank and in hand                2,302             3,113 
                                        2,644             4,870 
 
Creditors: amounts falling due 
 within one year                        (153)             (601) 
 
Net current assets                               2,491             4,269 
 
Net assets                                      23,260            24,458 
 
Capital and reserves 
Called up share capital                          1,852             1,733 
Capital redemption reserve                         485               474 
Share premium                                    5,452             3,743 
Merger reserve                                   1,828             1,828 
Special reserve                                  2,058             2,629 
Capital reserve - unrealised                     3,161             4,433 
Capital reserve - realised                       8,088             9,132 
Revenue reserve                                    336               486 
 
Total equity shareholders' funds                23,260            24,458 
 
Basic and diluted net asset value                62.8p             70.6p 
 per share 
 
   STATEMENT OF CASH FLOWS 
 
   for the year ended 31 December 2016 
 
 
 
 
                                                        2016     2015 
                                                       GBP'000  GBP'000 
Cash flow from operating activities 
(Loss)/profit on ordinary activities before taxation   (1,033)    3,354 
Losses/gains on investments                                867  (3,906) 
Decrease/(increase) in debtors                           1,415     (20) 
Decrease in creditors                                    (448)    (185) 
 
Net cash inflow/(outflow) from operating activities        801    (757) 
 
Cash flow from investing activities 
Purchase of investments                                (1,892)    (2,677) 
Proceeds from disposal of investments                      445      7,509 
 
Net cash (outflow)/inflow from investing activities    (1,447)      4,832 
 
Cash flow for financing activities 
Equity dividends paid                                  (1,856)    (3,183) 
Proceeds from share issue                                1,830        773 
Purchase of own shares                                   (139)      (114) 
 
Net cash outflow from financing activities               (165)    (2,524) 
 
Net (Decrease)/increase in cash                          (811)      1,551 
Cash and cash equivalents at start of year               3,113      1,562 
 
Cash and cash equivalents at end of year                 2,302      3,113 
 
 
Cash and cash equivalents comprise 
Cash at bank and in hand                                 2,302      3,113 
 
Total cash and cash equivalents                          2,302      3,113 
 
   NOTES TO THE ACCOUNTS 
 
   for the year ended 31 December 2016 
 
   1. Accounting policies 
 
   General information 
 
   Elderstreet 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.  The Company is a premium listed entity on the London Stock 
Exchange. 
 
   Basis of accounting 
 
   The Company has prepared its financial statements in accordance with the 
Financial Reporting Standard 102 ("FRS102") and in accordance with the 
Statement of Recommended Practice "Financial Statements of Investment 
Trust Companies and Venture Capital Trusts" issued November 2014 
("SORP").  The Company implements new Financial Reporting Standards 
issued by the Financial Reporting Council when required.  There were no 
new Standards issued during the year. 
 
   Presentation of Income Statement 
 
   In order to better reflect the activities of a venture capital trust, 
and in accordance with the SORP, supplementary information which 
analyses the Income Statement between items of a revenue and capital 
nature has been presented alongside the Income Statement. The net 
revenue is the measure the Directors believe appropriate in assessing 
the Company's compliance with certain requirements set out in Part 6 of 
the Income Tax Act 2007. 
 
   Investments 
 
   Investments are designated as "fair value through profit or loss" assets, 
upon acquisition, due to investments being managed and performance 
evaluated on a fair value basis. A financial asset is designated within 
this category if it is both acquired and managed, with a view to selling 
after a period of time, in accordance with the Company's documented 
investment policy. 
 
   Judgement in applying accounting policies and key sources of estimation 
uncertainty 
 
   Of the Company's assets measured at fair value, it is possible to 
determine their fair values within a reasonable range of estimates. The 
fair value of an investment upon acquisition is deemed to be cost. 
Thereafter, investments are measured at fair value in accordance with 
the International Private Equity and Venture Capital Valuation 
Guidelines ("IPEV") together with FRS102 sections 11 and 12. 
 
   Listed fixed income investments and investments quoted on AIM and the 
Main Market are measured using bid prices in accordance with the IPEV. 
 
   For unquoted instruments, fair value is established using the IPEV. The 
valuation methodologies for unquoted entities used by the IPEV to 
ascertain the fair value of an investment are as follows: 
 
   -- Price of recent investment; 
 
   -- Multiples; 
 
   -- Net assets; 
 
   -- Discounted cash flows or earnings (of underlying business); 
 
   -- Discounted cash flows (from the investment); and 
 
   -- Industry valuation benchmarks. 
 
   The methodology applied takes account of the nature, facts and 
circumstances of the individual investment and uses reasonable data, 
market inputs, assumptions and estimates in order to ascertain fair 
value. 
 
   Where an investee company has gone into receivership, liquidation, or 
administration (where there is little likelihood of recovery), the loss 
on the investment, although not physically disposed of, is treated as 
being realised. Permanent impairments in the value of investments are 
deemed to be realised losses and held within the Capital Reserve - 
Realised. 
 
   Gains and losses arising from changes in fair value are included in the 
Income Statement for the year as a capital item and transaction costs on 
acquisition or disposal of the investment expensed. 
 
   It is not the Company's policy to exercise significant influence over 
investee companies. Therefore the results of these companies are not 
incorporated into the Income Statement except to the extent of any 
income accrued. This is in accordance with the SORP and FRS102 sections 
14 and 15 that do not require portfolio investments to be accounted for 
using the equity method of accounting. 
 
   Income 
 
   Dividend income from investments is recognised when the Shareholders' 
rights to receive payment have been established, normally the 
ex-dividend date. 
 
   Interest income is accrued on a timely basis, by reference to the 
principal outstanding and at the effective interest rate applicable and 
only where there is reasonable certainty of collection. 
 
   Expenses 
 
   All expenses are accounted for on an accruals basis. In respect of the 
analysis between revenue and capital items presented within the Income 
Statement, all expenses have been presented as revenue items except as 
follows: 
 
   -- Expenses which are incidental to the acquisition of an investment are 
deducted as a capital item. 
 
   -- Expenses which are incidental to the disposal of an investment are 
deducted from the disposal proceeds of the investment. 
 
   -- Expenses are split and presented partly as capital items where a 
connection with the maintenance or enhancement of the value of the 
investments held can be demonstrated. The Company has adopted the policy 
of allocating investment manager's fees, 75% to capital and 25% to 
revenue as permitted by the SORP. The allocation is in line with the 
Board's expectation of long term returns from the Company's investments 
in the form of capital gains and income respectively. 
 
   -- Performance incentive fees arising are treated as a capital item. 
 
   Taxation 
 
   The tax effects on different items in the Income Statement are allocated 
between capital and revenue on the same basis as the particular item to 
which they relate using the Company's effective rate of tax for the 
accounting period. 
 
   Due to the Company's status as a Venture Capital Trust and the continued 
intention to meet the conditions required to comply with Part 6 of the 
Income Tax Act 2007, no provision for taxation is required in respect of 
any realised or unrealised appreciation of the Company's investments 
which arise. 
 
   Deferred taxation is not discounted and is provided in full on timing 
differences that result in an obligation at the balance sheet date to 
pay more tax, or a right to pay less tax, at a future date, at rates 
expected to apply when they crystallise based on current tax rates and 
law. Timing differences arise from the inclusion of items of income and 
expenditure in taxation computations in periods different from those in 
which they are included in the accounts. 
 
   Other debtors and other creditors 
 
   Other debtors (including accrued income) and other creditors are 
included within the accounts at amortised cost. 
 
   Issue costs 
 
   Issue costs in relation to the shares issued are deducted from the 
special reserve account. 
 
   2. Basic and diluted return per share 
 
 
 
 
                                                         2016        2015 
 
Return per share based on: 
Net revenue return for the financial year (GBP'000)          222         262 
Net capital (losses)/gains for the financial year 
 (GBP'000)                                               (1,255)       3,092 
Total return for the financial year (GBP'000)            (1,033)       3,354 
 
Weighted average number of shares in issue            35,214,342  34,356,056 
 
 
   As the Company has not issued any convertible securities or share 
options, there is no dilutive effect on return per share. The return per 
share disclosed, therefore, represents both basic and diluted return per 
share. 
 
   3. Basic and diluted return per share 
 
 
 
 
                                                    2016                   2015 
                  Shares in issue        Net asset value        Net asset value 
 
                                     Pence                  Pence 
  2016                     2015     per share    GBP'000   per share    GBP'000 
 
Ordinary 
 Shares    37,034,366  34,660,694        62.8     23,260        70.6     24,458 
 
 
   As the Company has not issued any convertible securities or share 
options, there is no dilutive effect on net asset value per share. The 
net asset value per share disclosed therefore represents both basic and 
diluted net asset value per share. 
 
   4. Principal risks 
 
   The Company's investment activities expose the Company to a number of 
risks associated with financial instruments and the sectors in which the 
Company invests. The principal financial risks arising from the 
Company's operations are: 
 
   -- Market risks; 
 
   -- Credit risk; and 
 
   -- Liquidity risk. 
 
   The Board regularly reviews these risks and the policies in place for 
managing them. There have been no significant changes to the nature of 
the risks that the Company is exposed to over the year and there have 
also been no significant changes to the policies for managing those 
risks during the year. 
 
   The risk management policies used by the Company in respect of the 
principal financial risks and a review of the financial instruments held 
at the year end are provided below. 
 
   Investment risks 
 
   As a VCT, the Company is exposed to investment risks in the form of 
potential losses that may arise on the investments it holds in 
accordance with its investment policy. The management of these 
investment risks is a fundamental part of investment activities 
undertaken by the Investment Manager and overseen by the Board. The 
Manager monitors investments through regular contact with management of 
investee companies, regular review of management accounts and other 
financial information and attendance at investee company board meetings. 
This enables the Manager to manage the investment risk in respect of 
individual investments. Investment risk is also mitigated by holding a 
diversified portfolio spread across various business sectors and asset 
classes. 
 
   The key investment risks to which the Company is exposed are: 
 
   -- Investment price risk; and 
 
   -- Interest rate risk. 
 
   The Company has undertaken sensitivity analysis on its financial 
instruments, split into the relevant component parts, taking into 
consideration the economic climate at the time of review in order to 
ascertain the appropriate risk allocation. 
 
   Investment price risk 
 
   Investment price risk arises from uncertainty about the future prices 
and valuations of financial instruments held in accordance with the 
Company's investment objectives. It represents the potential loss that 
the Company might suffer through investment price movements in respect 
of quoted investments and also changes in the fair value of unquoted 
investments that it holds. 
 
   Interest rate risk 
 
   The Company accepts exposure to interest rate risk on floating-rate 
financial assets through the effect of changes in prevailing interest 
rates. The Company receives interest on its cash deposits at a rate 
agreed with its bankers and on liquidity funds at rates based on the 
underlying investments. Investments in loan notes and fixed interest 
investments attract interest predominately at fixed rates. A summary of 
the interest rate profile of the Company's investments is shown below. 
 
   Interest rate risk profile of financial assets and financial liabilities 
 
   There are three levels of interest which are attributable to the 
financial instruments as follows: 
 
   -- "Fixed rate" assets represent investments with predetermined yield 
targets and comprise fixed interest and loan note investments. 
 
   -- "Floating rate" assets predominantly bear interest at rates linked to 
Bank of England base rate and comprise cash at bank and Cash Trust 
investments. 
 
   -- "No interest rate" assets do not attract interest and comprise equity 
investments, loans and receivables (excluding cash at bank) and other 
financial liabilities. 
 
   The Company monitors the level of income received from fixed, floating 
and non-interest rate assets and, if appropriate, may make adjustments 
to the allocation between the categories, in particular, should this be 
required to ensure compliance with the VCT regulations. 
 
   The Bank of England base rate decreased from 0.5% per annum to 0.25% per 
annum on 4 August 2016. Any potential change in the base rate, at the 
current level, would have an immaterial impact on the net assets and 
total return of the Company. 
 
   Credit risk 
 
   Credit risk is the risk that a counterparty to a financial instrument is 
unable to discharge a commitment to the Company made under that 
instrument. The Company is exposed to credit risk through its holdings 
of loan notes in investee companies, investments in fixed income 
securities, cash deposits and debtors. 
 
   The Manager manages credit risk in respect of loan notes with a similar 
approach as described under market risks above. In addition, the credit 
risk is partially mitigated by registering floating charges over the 
assets of certain investee companies. The strength of this security in 
each case is dependent on the nature of the investee company's business 
and its identifiable assets. The level of security is a key means of 
managing credit risk. Similarly, the management of credit risk 
associated interest, dividends and other receivables is covered within 
the investment management procedures. 
 
   Cash is mainly held at Royal Bank of Scotland plc, with a balance also 
maintained at Bank of Scotland plc, both of which are A-rated financial 
institutions and ultimately part-owned by the UK Government. 
Consequently, the Directors consider that the risk profile associated 
with cash deposits is low. 
 
   There have been no changes in fair value during the year that can be 
directly attributable to changes in credit risk. 
 
   Liquidity risk 
 
   Liquidity risk is the risk that the Company encounters difficulties in 
meeting obligations associated with its financial liabilities. Liquidity 
risk may also arise from either the inability to sell financial 
instruments when required at their fair values or from the inability to 
generate cash inflows as required. The Company normally has a relatively 
low level of creditors (2016: GBP153,000, 2015: GBP428,000) and has no 
borrowings. The Company always holds sufficient levels of funds as cash 
and readily realisable investments in order to meet expenses and other 
cash outflows as they arise. For these reasons, the Board believes that 
the Company's exposure to liquidity risk is minimal. 
 
   The Company's liquidity risk is managed by the Investment Manager in 
line with guidance agreed with the Board and is reviewed by the Board at 
regular intervals. 
 
   5. Related party transactions 
 
   Michael Jackson is a Director of Elderstreet Investments Limited which 
provides investment management services to the Company. During the year, 
GBP500,000 (2015: GBP472,000) was due in respect of these services. No 
performance incentive fees were due to Elderstreet Investments Limited 
in respect of the year under review (2015: GBP454,000). GBP454,000 was 
outstanding at 31 December 2015. 
 
   Nicholas Lewis is a partner of Downing LLP which provides administration 
services to the Company. During the year, GBP50,000 (2015: GBP50,000) 
was due to Downing LLP in respect of these services. 
 
   During 2015, as a result of changes to the VCT rules, the Company was 
unable to convert its existing loans in Uvenco UK plc (formerly 
SnackTime plc).  Following advice from specialist VCT advisors, the 
Company sold the loans to the Investment Manager, who converted the 
loans into equity.  Under the terms of the transaction, the Company is 
due sums equal to 75% of any disposal proceeds that the Investment 
manager may receive on the shares arising from the conversion.  The 
market value of those shares decreased by GBP17,000 and accordingly the 
debtor due from the Investment Manager was reduced in 2016 by GBP12,697, 
being 75% of the value adjustment. 
 
   ANNOUNCEMENT BASED ON AUDITED ACCOUNTS 
 
   The financial information set out in this announcement does not 
constitute the Company's statutory financial statements in accordance 
with section 434 Companies Act 2006 for the year ended 31 December 2016, 
but has been extracted from the statutory financial statements for the 
year ended 31 December 2016, which were approved by the Board of 
Directors on 27 April 2017 and will be delivered to the Registrar of 
Companies following the Company's Annual General Meeting. The 
Independent Auditor's Report on those financial statements was 
unqualified and did not contain any emphasis of matter nor statements 
under s498(2) and (3) of the Companies Act 2006. 
 
   The statutory accounts for the year ended 31 December 2015 have been 
delivered to the Registrar of Companies and received an Independent 
Auditors report which was unqualified and did not contain any emphasis 
of matter nor statements under s 498(2) and (3) of the Companies Act 
2006. 
 
   A copy of the full annual report and financial statements for the year 
ended 31 December 2016 will be printed and posted to shareholders 
shortly. Copies will also be available to the public at the registered 
office of the Company at Ergon House, Horseferry Road, London, SW1P 2AL 
and 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: Elderstreet VCT plc via Globenewswire 
 
 
 
 

(END) Dow Jones Newswires

April 28, 2017 05:27 ET (09:27 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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