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NTN Northern 3 Vct Plc

84.50
0.00 (0.00%)
25 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Northern 3 Vct Plc LSE:NTN London Ordinary Share GB0031152027 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 84.50 83.00 86.00 84.50 84.50 84.50 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Investors, Nec -1.47M -1.97M -0.0152 -55.59 109.53M

Northern 3 VCT plc Half-year Report

01/12/2020 4:20pm

UK Regulatory


 
TIDMNTN 
 
 
   1 DECEMBER 2020 
 
   NORTHERN 3 VCT PLC 
 
   UNAUDITED HALF-YEARLY FINANCIAL REPORT 
 
   FOR THE SIX MONTHSED 30 SEPTEMBER 2020 
 
   Northern 3 VCT PLC is a Venture Capital Trust (VCT) managed by Mercia 
Fund Management.  It invests mainly in unquoted venture capital holdings 
and aims to provide high long-term tax-free returns to shareholders 
through a combination of dividend yield and capital growth. 
 
   Financial highlights (comparative figures as at 30 September 2019 and 31 
March 2020) 
 
 
 
 
 
                                                        Six months ended  Six months ended    Year ended 
                                                          30 September      30 September       31 March 
                                                              2020              2019             2020 
                                                        ----------------  ----------------  ------------ 
Net assets                                                 GBP103.3m          GBP86.6m        GBP72.5m 
Net asset value per share                                    93.6p             92.1p           78.1p 
Return per share: 
 Revenue                                                      0.6p              0.3p            0.3p 
 Capital                                                      17.9p            (0.1)p          (12.1)p 
 Total                                                        18.5p             0.2p           (11.8)p 
Dividend declared 
 in respect of the period                                     2.0p              2.0p            4.0p 
Cumulative return to shareholders 
 since launch: 
 Net asset value per share                                    93.6p             92.1p           78.1p 
 Dividends paid per share*                                    97.4p             93.4p           95.4p 
 Net asset value plus dividends paid per share               191.0p            185.5p          173.5p 
Mid-market share price at end of period                      75.5p             86.5p           70.0p 
Share price discount to net asset value                            19.3%              6.1%         10.4% 
Tax-free dividend yield (based on the net asset value 
 per share)                                                         4.3%              4.2%          4.2% 
 
   *Excluding interim dividend not yet paid 
 
   **The annualised dividend yield is calculated by dividing the dividends 
in respect of the 12 month period ended on each reference date by the 
net asset value per share at the start of the period. 
 
   For further information, please contact: 
 
   Enquiries: 
 
   Simon John/James Bryce, NVM Private Equity -- 0191 244 6000 
 
   Website:  www.nvm.co.uk 
 
   Martin Glanfield, Chief Financial Officer, Mercia Asset Management PLC 
-- 0330 223 1430 
 
   HALF-YEARLY MANAGEMENT REPORT TO SHAREHOLDERS 
 
   The period under review has been dominated by the coronavirus (COVID-19) 
pandemic. The management teams of the companies in our portfolio have 
demonstrated resilience in their response to the evolving situation and 
our investment manager continues to work closely with them to provide 
support. A successful public share offer raising gross proceeds of GBP13 
million was allotted during the period and means that we are well placed 
to continue to provide additional financing if we consider that it is 
sensible. 
 
   Results and dividend 
 
   The unaudited net asset value (NAV) per share at 30 September 2020 was 
93.6 pence (31 March 2020 (audited) 78.1 pence).  The September figure 
is stated after deducting the final dividend totalling 2.0 pence per 
share in respect of the year ended 31 March 2020, which was paid on 4 
September 2020 and therefore recognised in the current half-yearly 
accounts. 
 
   The return per share for the half year as shown in the income statement, 
before deducting the dividend, was 18.5 pence, compared with a return of 
0.2 pence in the six month period ended 30 September 2019.  The total 
return for the period was primarily caused by an increase in the 
directors' valuations of unquoted investments, reflecting significant 
progress in the performance of some portfolio companies. 
 
   The directors have declared an unchanged interim dividend of 2.0 pence 
per share for the year ending 31 March 2021, which will be paid on 29 
January 2021 to shareholders on the register at the close of business on 
8 January 2021. 
 
   Venture capital investment activity 
 
   The primary focus over the last six months has been to support existing 
investments and preserve value for shareholders, however, further 
progress was made on the development of the portfolio with one new 
investment completed: GBP0.7m was invested in Enate, a human and digital 
workforce management software solution.  Following a significant volume 
of fund-raising activity across the sector in recent years, there is 
currently a significant level of funding available for venture capital 
and private equity investing. This inevitably increases competition for 
attractive investment opportunities; however, our manager continues to 
apply high standards in its appraisal of potential investment 
opportunities. 
 
   We continue to allocate a significant proportion of our investment 
activity to providing additional growth capital to our existing 
portfolio companies. A total of GBP1.8 million was invested in six 
existing portfolio businesses during the period to support their 
continued development. 
 
   It was a relatively quiet period for investment realisations, however 
the investment in AIM listed Cello Health plc was sold in full following 
an agreed takeover bid.  The proceeds generated for the company of 
GBP0.9m represent a multiple of over 2.5x the original cost of the 
investment.  Positive underlying trading trends were observed in a 
number of portfolio companies including Agilitas IT Holdings which was 
sold subsequent to the balance sheet date generating a return of eight 
times the original cost of the investment over its lifetime. The 
valuation as at 30 September 2020 reflects the sale proceeds received. 
 
   Venture capital portfolio update 
 
   Following the first reports of COVID-19 in the prior financial year, the 
initial effects in the UK principally impacted businesses with complex 
supply chains or overseas customers in certain territories.  As the 
spread of the virus led to a global pandemic, the effect on the economy 
has become much more pronounced and measures taken to tackle COVID-19 
have had a material impact on almost every business in the UK. 
 
   The short-term impact on individual portfolio companies varies 
significantly depending on the sector in which they operate and the 
ability of their employees to work effectively from home. Your company 
benefits from holding a diversified portfolio of investments and the 
areas of the economy which continue to be the most affected, namely 
travel, leisure and hospitality, represent less than 10% by cost of the 
venture capital portfolio.  Technology and software sub-sectors have 
been more resilient during 2020 and investments in these areas represent 
around 40% by cost of the venture capital portfolio.   We are also 
invested in a number of businesses which employ a purely e-commerce 
business model.  Trading in several of these holdings has been extremely 
strong both during the initial lockdown and subsequently, leading to the 
relevant valuations being marked up accordingly as at 30 September 2020. 
 
   Share offers and liquidity 
 
   As a result of the share offer launched in January 2020, gross proceeds 
of GBP13 million were received and new shares were allotted during the 
period. Having considered the current level of liquid resources 
available to the company, including those received after the period end 
from the sale of Agilitas IT Holdings, the board does not intend to 
raise further funds in the current tax year.  The company's dividend 
investment scheme remains open, enabling shareholders to invest some or 
all of their dividends in new shares attracting income tax relief. 
 
   Share buy-backs 
 
   We have maintained our policy of buying back our shares in the market, 
where necessary to maintain market liquidity, at a discount of 5% to 
NAV.  During the period 487,973 shares, were purchased for cancellation 
at a total cost of GBP367,000. 
 
   VCT qualifying status and legislation 
 
   Amendments to the VCT scheme rules announced in 2017 are still being 
implemented on a phased basis and as previously reported, from 1 April 
2020 your company has been required to hold at least 80% of its relevant 
investments in VCT qualifying assets (previously 70%). The company has 
continued to comply with the conditions laid down by HM Revenue & 
Customs for the maintenance of approved venture capital trust status. 
Our manager monitors the position closely and the board also receives 
regular reports from our specialist taxation advisers. 
 
   Independent auditor 
 
   The audit committee regularly reviews the requirements and deadlines for 
mandatory audit tendering and rotation; under current regulations the 
last period for which KPMG LLP would be permitted to act as auditor of 
the company would be the year ending 31 March 2023. In the interest of 
good governance, the audit committee conducted a tender process in 
November 2020. Having considered the results of the tender, the board 
approved the audit committee's recommendation that Mazars LLP, an 
international firm of chartered accountants, be appointed as independent 
auditor of the company for the year ending 31 March 2021. 
 
   Prospects 
 
   COVID-19 has caused a great deal of volatility in financial markets and 
whilst most quoted indices have staged a significant recovery since the 
lows experienced in March 2020, it is difficult to predict the future 
trajectory of the economic recovery. Many businesses are facing 
significant challenges, but we remain generally optimistic about the 
prospects for the companies in our portfolio. 
 
   On behalf of the Board 
 
   James Ferguson 
 
   Chairman 
 
   The unaudited half-yearly financial statements for the six months ended 
30 September 2020 are set out below. 
 
   INCOME STATEMENT 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                       Six months ended                     Six months ended 
                       30 September 2020                    30 September 2019 
               Revenue     Capital      Total      Revenue     Capital           Total 
                GBP000      GBP000      GBP000      GBP000      GBP000          GBP000 
Gain on 
 disposal of 
 investments           -         466         466           -          45            45 
Movements in 
 fair value 
 of 
 investments           -      19,903      19,903           -         448           448 
              ----------  ----------  ----------  ----------  ----------    ---------- 
                       -      20,369      20,369           -         493           493 
Income             1,014           -       1,014         680           -           680 
Investment 
 management 
 fee               (206)       (617)       (823)       (208)       (623)         (831) 
Other 
 expenses          (168)           -       (168)       (195)           -         (195) 
              ----------  ----------  ----------  ----------  ----------    ---------- 
Return on 
 ordinary 
 activities 
 before tax          640      19,752      20,392         277       (130)           147 
Tax on 
return on 
ordinary 
activities             -           -           -           -           -             - 
              ----------  ----------  ----------  ----------  ----------    ---------- 
Return on 
 ordinary 
 activities 
 after tax           640      19,752      20,392         277       (130)           147 
              ----------  ----------  ----------  ----------  ----------    ---------- 
Return per          0.6p       17.9p       18.5p        0.3p      (0.1)p        0.2p 
 share 
 
 
 
 
 
 
 
                                              Year ended 31 March 2020 
                                          Revenue     Capital      Total 
                                           GBP000      GBP000      GBP000 
Gain on disposal of investments                   -       (168)       (168) 
Movements in fair value of investments            -     (9,943)     (9,943) 
                                         ----------  ----------  ---------- 
                                                  -    (10,111)    (10,111) 
Income                                        1,126           -       1,126 
Investment management fee                     (435)     (1,304)     (1,739) 
Other expenses                                (363)           -       (363) 
                                         ----------  ----------  ---------- 
Return on ordinary activities before 
 tax                                            328    (11,415)    (11,087) 
Tax on return on ordinary 
activities                                        -           -           - 
                                         ----------  ----------  ---------- 
Return on ordinary activities after tax         328    (11,415)    (11,087) 
                                         ----------  ----------  ---------- 
Return per share                               0.3p     (12.1)p     (11.8)p 
 
 
   BALANCE SHEET 
 
   (unaudited) as at 30 September 2020 
 
 
 
 
                           30 September 2020  30 September 2019  31 March 2020 
                                 GBP000             GBP000           GBP000 
 
Fixed asset investments               85,689             70,730         63,776 
                                  ----------         ----------     ---------- 
Current assets: 
Debtors                                  583              1,067             28 
Cash and cash equivalents             17,158             15,177          8,876 
                                  ----------         ----------     ---------- 
                                      17,741             16,244          8,904 
Creditors (amounts 
falling due 
  within one year)                      (98)              (330)          (137) 
                                  ----------         ----------     ---------- 
Net current assets                    17,643             15,914          8,767 
                                  ----------         ----------     ---------- 
 
Net assets                           103,332             86,644         72,543 
                                  ----------         ----------     ---------- 
Capital and reserves: 
Called-up equity share 
 capital                               5,522              4,705          4,647 
Share premium                         19,500              7,198          7,428 
Capital redemption 
 reserve                                 457                360            432 
Capital reserve                       58,106             64,931         60,786 
Revaluation reserve                   18,204              8,224        (1,653) 
Revenue reserve                        1,543              1,226            903 
                                  ----------         ----------     ---------- 
Total equity 
 shareholders' funds                 103,332             86,644         72,543 
                                  ----------         ----------     ---------- 
Net asset value per share              93.6p              92.1p          78.1p 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                           -----------------Non-distributable 
                                reserves-----------------                  Distributable reserves     Total 
                                              Capital 
               Called up share     Share     redemption     Revaluation      Capital      Revenue 
                   capital        premium     reserve         reserve*       reserve      reserve 
                   GBP000         GBP000      GBP000          GBP000         GBP000      GBP000      GBP000 
At 1 April 
 2020                    4,647       7,428          432           (1,653)      60,786          903     72,543 
Return on 
 ordinary 
 activities 
 after tax                   -           -            -            19,857       (105)          640     20,392 
Dividends 
 paid                        -           -            -                 -     (2,208)            -    (2,208) 
Net proceeds 
 of share 
 issues                    900      12,072            -                 -           -            -     12,972 
Shares 
purchased for 
cancellation              (25)           -           25                 -       (367)            -      (367) 
                    ----------  ----------   ----------        ----------  ----------   ----------  --------- 
At 30 
 September 
 2020                    5,522      19,500          457            18,204      58,106        1,543    103,332 
                    ----------  ----------   ----------        ----------  ----------   ----------  --------- 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   (unaudited) for the six months ended 30 September 2019 
 
 
 
 
                          -----------------Non-distributable 
                              reserves-----------------                 Distributable reserves     Total 
                                              Capital 
               Called up share     Share     redemption    Revaluation     Capital     Revenue 
                   capital        premium     reserve       reserve*       reserve     reserve 
                   GBP000         GBP000      GBP000        GBP000          GBP000    GBP000      GBP000 
At 1 April 
 2019                    4,393         840          299          9,166      65,665        2,368     82,731 
Return on 
 ordinary 
 activities 
 after tax                   -           -            -          (942)         812          277        147 
Dividends 
 paid                        -           -            -              -       (473)      (1,419)    (1,892) 
Net proceeds 
 of share 
 issues                    373       6,358            -              -           -            -      6,731 
Shares 
purchased for 
cancellation              (61)           -           61              -     (1,073)            -    (1,073) 
                    ----------  ----------   ----------     ----------  ----------   ----------  --------- 
At 30 
 September 
 2019                    4,705       7,198          360          8,224      64,931        1,226     86,644 
                    ----------  ----------   ----------     ----------  ----------   ----------  --------- 
 
 
   STATEMENT OF CHANGES IN EQUITY 
 
   for the year ended 31 March 2020 
 
 
 
 
                           -----------------Non-distributable 
                                reserves-----------------                  Distributable reserves     Total 
                                              Capital 
               Called up share     Share     redemption     Revaluation      Capital      Revenue 
                   capital        premium     reserve         reserve*       reserve      reserve 
                   GBP000         GBP000      GBP000          GBP000         GBP000      GBP000       GBP000 
At 1 April 
 2019                    4,393         840          299             9,166      65,665        2,368      82,731 
Return on 
ordinary 
activities 
after tax                    -           -            -          (10,819)       (596)          328    (11,087) 
Dividends 
 paid                        -           -            -                 -     (1,967)      (1,793)     (3,760) 
Net proceeds 
 of share 
 issues                    387       6,588            -                 -           -            -       6,975 
Shares 
purchased 
for 
 cancellation            (133)           -          133                 -     (2,316)            -     (2,316) 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
At 31 March 
 2020                    4,647       7,428          432           (1,653)      60,786          903      72,543 
                    ----------  ----------   ----------        ----------  ----------   ----------  ---------- 
 
 
   *The revaluation reserve is generally non-distributable other than that 
part of the reserve relating to gains/losses on readily realisable 
quoted investments, which is distributable. 
 
   STATEMENT OF CASH FLOWS 
 
   (unaudited) for the six months ended 30 September 2020 
 
 
 
 
                        Six months 
                           ended       Six months ended      Year ended 
                       30 September      30 September 
                           2020              2019           31 March 2020 
                          GBP000            GBP000             GBP000 
Cash flows from 
operating 
activities: 
Return on ordinary 
 activities before 
 tax                           20,392               147             (11,087) 
Adjustments for: 
Gain on disposal of 
 investments                    (466)              (45)                  168 
Movement in fair 
 value of 
 investments                 (19,903)             (448)                9,943 
(Increase)/decrease 
 in debtors                     (556)             (856)                  183 
(Decrease)/increase 
 in creditors                    (38)               126                 (65) 
                           ----------        ----------           ---------- 
Net cash outflow 
 from operating 
 activities                     (571)           (1,076)                (858) 
                           ----------        ----------           ---------- 
Cash flows from 
investing 
activities: 
Purchase of 
 investments                  (3,431)           (6,789)             (12,772) 
Sale/repayment of 
 investments                    1,886             6,363                8,696 
                           ----------        ----------           ---------- 
Net cash outflow 
 from investing 
 activities                   (1,545)             (426)              (4,076) 
                           ----------        ----------           ---------- 
Cash flows from 
financing 
activities: 
Issue of ordinary 
 shares                        13,300             6,852                7,109 
Share issue expenses            (327)             (120)                (135) 
Share subscriptions 
 held pending 
 allotment                          -           (6,493)              (6,493) 
Purchase of ordinary 
 shares for 
 cancellation                   (367)           (1,073)              (2,316) 
Equity dividends 
 paid                         (2,208)           (1,892)              (3,760) 
                           ----------        ----------           ---------- 
Net cash 
 inflow/(outflow) 
 from financing 
 activities                    10,398           (2,726)                (5,595) 
                           ----------        ----------           ---------- 
Net 
 increase/(decrease) 
 in cash and cash 
 equivalents                    8,282           (4,228)             (10,529) 
Cash and cash 
 equivalents at 
 beginning of 
 period                         8,876            19,405               19,405 
                           ----------        ----------           ---------- 
Cash and cash 
 equivalents at end 
 of period                     17,158            15,177                8,876 
                           ----------        ----------           ---------- 
 
   INVESTMENT PORTFOLIO SUMMARY 
 
   as at 30 September 2020 
 
 
 
 
                                          Cost     Valuation   % of net assets 
                                         GBP000      GBP000        by value 
 
Agilitas IT Holdings                          822      10,507             10.2 
Entertainment Magpie Group                  1,360       8,795              8.5 
Lineup Systems                                974       5,095              4.9 
Currentbody.com                             1,843       4,191              4.1 
SHE Software Group                          2,168       2,829              2.7 
Sorted Holdings                             2,542       2,757              2.7 
It's All Good                               1,131       2,366              2.3 
Clarilis                                    1,772       2,305              2.2 
Ideagen*                                      406       2,162              2.1 
Intelling Group                             1,118       2,020              2.0 
Volumatic Holdings                            733       2,005              1.9 
Idox*                                         530       1,989              1.9 
Biological Preparations Group               1,915       1,787              1.7 
Knowledgemotion                             1,740       1,515              1.5 
GRIP-UK t.a. The Climbing Hangar            1,904       1,505              1.5 
                                       ----------  ----------          ------- 
Fifteen largest venture capital 
 investments                               20,958      51,828             50.2 
Other venture capital investments          36,227      23,807             23.0 
                                       ----------  ----------          ------- 
Total venture capital investments          57,185      75,635             73.2 
Listed equity investments                  10,301      10,054              9.7 
                                       ----------  ----------          ------- 
Total fixed asset investments              67,486      85,689             82.9 
                                       ---------- 
Net current assets                                     17,643             17.1 
                                                   ----------          ------- 
Net assets                                            103,332            100.0 
                                                   ----------          ------- 
*Quoted on AIM 
 
 
   BUSINESS RISKS 
 
   The board carries out a regular and robust assessment of the risk 
environment in which the company operates and seeks to identify new 
risks as they emerge.  The principal risks and uncertainties identified 
by the board which might affect the company's business model and future 
performance, and the steps taken with a view to their mitigation, are as 
follows: 
 
   Investment and liquidity risk:  investment in smaller and unquoted 
companies, such as those in which the company invests, involves a higher 
degree of risk than investment in larger listed companies because they 
generally have limited product lines, markets and financial resources 
and may be more dependent on key individuals. The securities of smaller 
companies in which the company invests are typically unlisted, making 
them illiquid, and this may cause difficulties in valuing and disposing 
of the securities. The company may invest in businesses whose shares are 
quoted on AIM - the fact that a share is quoted on AIM does not mean 
that it can be readily traded and the spread between the buying and 
selling prices of such shares may be wide.  Mitigation:  the directors 
aim to limit the risk attaching to the portfolio as a whole by careful 
selection, close monitoring and timely realisation of investments, by 
carrying out rigorous due diligence procedures and maintaining a wide 
spread of holdings in terms of financing stage and industry sector 
within the rules of the VCT scheme.  The board reviews the investment 
portfolio with the investment manager on a regular basis. 
 
   Financial risk:  most of the company's investments involve a medium to 
long term commitment and many are relatively illiquid. Mitigation:  the 
directors consider that it is inappropriate to finance the company's 
activities through borrowing except on an occasional short-term basis. 
Accordingly they seek to maintain a proportion of the company's assets 
in cash or cash equivalents in order to be in a position to pursue new 
unquoted investment opportunities and to make follow-on investments in 
existing portfolio companies.  The company has very little direct 
exposure to foreign currency risk and does not enter into derivative 
transactions. 
 
   Economic risk: events such as economic recession or general fluctuation 
in stock markets, exchange rates and interest rates may affect the 
valuation of investee companies and their ability to access adequate 
financial resources, as well as affecting the company's own share price 
and discount to net asset value. The level of economic risk has been 
elevated by the COVID-19 pandemic which has caused a global recession 
during 2020.  Mitigation: the company invests in a diversified portfolio 
of investments spanning various industry sectors, and maintains 
sufficient cash reserves to be able to provide additional funding to 
investee companies where it is appropriate and in the interests of the 
company to do so.  The manager typically provides an investment 
executive to actively support the board of each unquoted investee 
company.  At all times, and particularly during periods of heightened 
economic uncertainty, the investment executives share best practice from 
across the portfolio with investee management teams in order to mitigate 
economic risk. 
 
   Brexit risk: the implementation of the decision for the UK to withdraw 
from the European Union (EU) is a process which involves significant 
uncertainty.  The impact on the future business environment in the UK is 
therefore difficult to predict.  Mitigation: whilst we do not expect 
that Brexit will have a significant impact on the operations of Northern 
3 VCT itself, the board and the manager follow Brexit developments 
closely with a view to identifying changes which might affect the 
company's investment portfolio.  The manager works closely with investee 
companies in order to plan for a range of possible outcomes. 
 
   Stock market risk:  some of the company's investments are quoted on the 
London Stock Exchange or AIM and will be subject to market fluctuations 
upwards and downwards.  External factors such as terrorist activity or 
global health crises, such as the COVID-19 pandemic, can negatively 
impact stock markets worldwide.  In times of adverse sentiment there may 
be very little, if any, market demand for shares in smaller companies 
quoted on AIM.  Mitigation:  the company's quoted investments are 
actively managed by specialist managers, including Mercia in the case of 
the AIM-quoted investments, and the board keeps the portfolio and the 
actions taken under ongoing review. 
 
   Credit risk:  the company holds a number of financial instruments and 
cash deposits and is dependent on the counterparties discharging their 
commitment.  Mitigation:  the directors review the creditworthiness of 
the counterparties to these instruments and cash deposits and seek to 
ensure there is no undue concentration of credit risk with any one 
party. 
 
   Legislative and regulatory risk:  in order to maintain its approval as a 
VCT, the company is required to comply with current VCT legislation in 
the UK, which reflects the European Commission's State-aid rules. 
Changes to the UK legislation or the State-aid rules in the future could 
have an adverse effect on the company's ability to achieve satisfactory 
investment returns whilst retaining its VCT approval.  Mitigation:  the 
board and the investment manager monitor political developments and 
where appropriate seek to make representations either directly or 
through relevant trade bodies. 
 
   Internal control risk:  the company's assets could be at risk in the 
absence of an appropriate internal control regime which is able to 
operate effectively even during times of disruption, such as that caused 
by COVID-19.  Mitigation:  the board regularly reviews the system of 
internal controls, both financial and non-financial, operated by the 
company and the investment manager.  These include controls designed to 
ensure that the company's assets are safeguarded and that proper 
accounting records are maintained. 
 
   VCT qualifying status risk:  while it is the intention of the directors 
that the company will be managed so as to continue to qualify as a VCT, 
there can be no guarantee that this status will be maintained. A failure 
to continue meeting the qualifying requirements could result in the loss 
of VCT tax relief, the company losing its exemption from corporation tax 
on capital gains, to shareholders being liable to pay income tax on 
dividends received from the company and, in certain circumstances, to 
shareholders being required to repay the initial income tax relief on 
their investment. Mitigation:  the investment manager keeps the 
company's VCT qualifying status under continual review and its reports 
are reviewed by the board on a quarterly basis.  The board has also 
retained Philip Hare & Associates LLP to undertake an independent VCT 
status monitoring role. 
 
   OTHER MATTERS 
 
   The unaudited half-yearly financial statements for the six months ended 
30 September 2020 do not constitute statutory financial statements 
within the meaning of Section 434 of the Companies Act 2006, have not 
been reviewed or audited by the company's independent auditor and have 
not been delivered to the Registrar of Companies.  The comparative 
figures for the year ended 31 March 2020 have been extracted from the 
audited financial statements for that year, which have been delivered to 
the Registrar of Companies.  The auditor's report on those financial 
statements (i) was unqualified, (ii) did not include any reference to 
matters to which the auditor drew attention by way of emphasis without 
qualifying the report and (iii) did not contain a statement under 
Section 498 (2) or (3) of the Companies Act 2006.  The half-yearly 
financial statements have been prepared on the basis of the accounting 
policies set out in the annual financial statements for the year ended 
31 March 2020. 
 
   Each of the directors confirms that to the best of his knowledge the 
half-yearly financial statements have been prepared in accordance with 
the Statement "Half-yearly financial reports" issued by the UK 
Accounting Standards Board and the half-yearly financial report includes 
a fair review of the information required by (a) DTR 4.2.7R of the 
Disclosure Rules 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 Rules 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. 
 
   The directors of the company at the date of this statement were Mr J G D 
Ferguson (Chairman), Mrs A B Brown, Mr C J Fleetwood, Mr T R Levett and 
Mr J M O Waddell. 
 
   The calculation of return per share is based on the return on ordinary 
activities after tax for the six months ended 30 September 2020 and on 
110,279,045 (2019: 94,579,721) ordinary shares, being the weighted 
average number of shares in issue during the period. 
 
   The calculation of the net asset value per share is based on the net 
assets at 30 September 2020 divided by the 110,445,090 (2019: 
94,101,352) ordinary shares in issue at that date. 
 
   The interim dividend of 2.0 pence per share for the year ending 31 March 
2021 will be paid on 29 January 2021 to shareholders on the register at 
the close of business on 8 January 2021. 
 
   A copy of the half-yearly financial report for the six months ended 30 
September 2020 is expected to be posted to shareholders by 22 December 
2020 and will be available to the public at the registered office of the 
company at Time Central, 32 Gallowgate, Newcastle upon Tyne NE1 4SN and 
on the company's website. 
 
   Neither the contents of the NVM Private Equity LLP or the Mercia Asset 
Management PLC website, nor the contents of any website accessible from 
hyperlinks on the NVM Private Equity LLP or Mercia Asset Management PLC 
website (or any other website) is incorporated into, or forms part of, 
this announcement. 
 
 
 
 

(END) Dow Jones Newswires

December 01, 2020 11:20 ET (16:20 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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