Half-yearly report

 
TIDMPNEA 
 
Pennine AIM VCT 6 plc 
Half-Yearly Report for the six months ended 31 March 2009 
 
CHAIRMAN'S STATEMENT 
 
In order to continue to comply with the VCT regulations, the Company 
must have at least 70% of its funds invested in qualifying 
investments at all times.  As a result, the Company remains heavily 
exposed to the AIM market which has experienced another difficult six 
months.  The economy has moved into recession and investor confidence 
has continued to wane, with the impact on smaller company valuations 
tending to be even greater than that on larger companies. 
 
Net Asset Value 
At the 31 March 2009, the Net Asset Value per Share ("NAV") of the 
Company stood at 65.9p, a decrease of 9.5p (12.6%) since 30 September 
2008 after adjusting for the dividend of 1p paid during the period. 
 
While the FTSE AIM All-Share index is not a perfect benchmark for the 
Company's performance, the fact that the index fell by 36.6% over the 
six-months ended 31 March 2009 gives some indication of the 
environment in which the Company has had to operate. 
 
Venture capital investments 
The Company had very little investment activity during the period as 
it is effectively fully invested.  Clerkenwell Ventures returned most 
of its capital to its shareholders, producing proceeds of GBP514,000. 
 The only other significant transaction was the reorganisation of 
Hoole Hall Country Club Limited where a new holding company was put 
in place. 
 
There were sizable falls in value across almost all AIM-quoted 
investments held by the Company.  Total unrealised losses were GBP2.6 
million for the period. 
 
Results 
The return on activities after taxation for the period was a loss of 
GBP2.5 million, comprising a revenue return of GBP44,000 and a capital 
loss of GBP2.6 million. 
 
"30p Return" 
The Company's original prospectus stated an intention to return 30p 
per share to Shareholders by 31 July 2009 by way of dividends and/or 
a tender offer.  The Board is pleased to confirm that, despite the 
difficult economic conditions, the Company will achieve this goal. 
 
To ensure that all Shareholders benefit from the "30p Return" without 
having to complete and return a tender form and to save costs, the 
Board has decided to pay a dividend of 26.85p per share on 31 July 
2009.  With the dividends paid previously of 3.15p per share, this 
will bring total dividend paid to shareholder since launch to 30p per 
share. 
 
This dividend will be paid to Shareholders on 31 July 2009 to 
Shareholders on the register at 3 July 2009. 
 
"IHT option" / Distribution in Specie 
Shareholders may be aware of the intention at the Company's launch to 
offer an "IHT option" whereby Shareholders who hold more than 30,000 
shares could elect to receive a distribution in specie of the 
relevant proportion of the Company's investment portfolio. 
 
With the sharp falls in the values of the Company's AIM-quoted 
investments, these now represent a smaller proportion of the 
investment portfolio than was originally anticipated. In light of 
this, the Board has reviewed the "IHT option" and notes the 
following: 
*              a distribution in specie for most Shareholders would 
  create a portfolio which would include some very small holdings in 
  AIM companies; 
*              a significant proportion of the Company's portfolio is 
  in illiquid unquoted investments; 
*              most of the unquoted investments include a large 
  proportion of loan sock, which is not eligible for business 
  property relief for IHT purposes; and 
*              the mechanism for achieving a distribution in specie 
  is complex and involves a substantial amount of costs in 
  professional and other fees. 
 
In view of these factors, the Directors have decided that it is not 
in the best interests of Shareholders as a whole to offer the "IHT 
Option" to Shareholders at the current time. 
 
Share buybacks 
Much of the Company's cash will be used up in paying the dividend 
described above.  The Board is therefore conscious of the need to 
carefully manage liquid funds.  For this reason the Board does not 
expect to make any market purchases of it own shares over the next 
six-months. 
 
The Directors are aware that, in practice, this may make it difficult 
for Shareholders to sell their holdings or may mean that Shareholders 
are offered prices at a substantial discount to NAV.  The Board will 
keep the share buyback policy under review. 
 
Future 
Following the completion of the "30p return", the Company will be 
significantly smaller.  The Board is conscious that this will have an 
impact on the Company's running costs and other factors, and 
therefore intends to undertake a review of options available to the 
Company for the future. 
 
Naturally, the Board will update Shareholders with the conclusion of 
this review when complete. 
 
Risks and uncertainties 
Under the Disclosure and Transparency Directive, the Board is now 
required in the Company's half-year 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; and 
*              failure to maintain approval as a VCT. 
 
In both cases, the Board is satisfied with the Company's approach to 
these risks.  Although the Company has significant exposure to the 
relatively immature businesses quoted on AIM, by holding a 
well-diversified portfolio, the impact of poor performance of 
individual businesses or certain sectors can, to the extend that it 
is possible, be reduced. 
 
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 
PricewaterhouseCoopers 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. 
 
Outlook 
In delivering the "30p Return" to Shareholders, there will be a 
significant change to the profile of the Company in that it will 
become significantly smaller and will become close to fully invested, 
mostly in investments which are reasonably illiquid. 
 
Accordingly, future performance is likely to be influenced by general 
AIM market conditions and the performance of existing portfolio 
investments. The last two months has seen steady increases in the 
FTSE AIM All-Share Index. At the 30 April 2009, the Company's NAV had 
risen by 1.3p to 67.2.p per share.  Although this is welcome, we 
remain cautious as to whether this is the start of a sustained 
recovery. 
 
 
 
Christopher Powell 
Chairman 
 
INCOME STATEMENT 
for the six months ended 31 March 2009 
 
 
 
                                                 Six months ended 
                                                   31 March 2009 
 
                                              Revenue Capital   Total 
                                                GBP'000   GBP'000   GBP'000 
 
Income                                            226       -     226 
 
Losses on investments                               - (2,450) (2,450) 
                                                  226 (2,450) (2,224) 
 
Investment management fees                       (46)   (137)   (183) 
Other expenses                                  (126)       -   (126) 
 
Return on ordinary activities before taxation      54 (2,587) (2,533) 
 
Taxation                                         (10)      10       - 
 
Return attributable to equity shareholders         44 (2,577) (2,533) 
 
Basic and diluted return per share               0.2p  (9.7p)  (9.5p) 
 
 
 
 
 
                                    Six months ended       Year ended 
                                      31 March 2008      30 September 
                                                                 2008 
 
                                 Revenue Capital   Total        Total 
                                   GBP'000   GBP'000   GBP'000        GBP'000 
 
Income                               484       -     484          722 
 
Losses on investments                  - (2,409) (2,409)      (3,845) 
                                     484 (2,409) (1,925)      (3,123) 
 
Investment management fees          (55)   (165)   (220)        (417) 
Other expenses                     (129)     (1)   (130)        (259) 
 
Return on ordinary activities        300 (2,575) (2,275)      (3,799) 
before taxation 
 
Taxation                                                         (13) 
                                    (83)      54    (29) 
Return attributable to equity        217 (2,521) (2,304)      (3,812) 
shareholders 
 
Basic and diluted return per        0.8p  (9.5p)  (8.7p)      (14.3p) 
share 
 
 
 
 
 
All Revenue and Capital items in the above statement derive from 
continuing operations. The total column within the Income Statement 
represents the profit and loss account of the Company. 
 
 
A Statement of Total Recognised Gains and Losses has not been 
prepared as all gains and losses are recognised in the Income 
Statement as noted above. 
 
UNAUDITED SUMMARISED BALANCE SHEET 
as at 31 March 2009 
 
 
                                        31 Mar    31 Mar   30 Sept 
                                          2009      2008      2008 
                                         GBP'000     GBP'000     GBP'000 
 
Fixed assets 
Investments                             10,017    17,914    19,420 
 
Current assets 
Debtors                                    153        96       145 
Cash at bank and in hand                 7,432     3,965       870 
                                         7,585     4,061     1,015 
 
 Creditors: amounts falling due within 
one year                                  (68)     (134)     (102) 
 
Net current assets                       7,517     3,927       913 
 
Net assets                              17,534    21,841    20,333 
 
 
Capital and reserves 
Called up share capital                    266       266       266 
Capital redemption reserve                   1         1         1 
Special reserve                         24,094    24,374    24,247 
Capital reserve - realised                 325       191       191 
Investment holding losses              (7,259)   (3,265)   (4,701) 
Revenue reserve                            107       274       329 
 
Equity shareholders' funds              17,534    21,841    20,333 
 
Basic and diluted net asset              65.9p     82.1p     76.4p 
value per share 
 
 
 
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 
 
 
                                        31 Mar    31 Mar   30 Sept 
                                          2009      2008      2008 
                                         GBP'000     GBP'000     GBP'000 
 
Opening shareholders' funds             20,333    24,527    24,527 
Repurchase of own shares                     -      (49)      (49) 
Total recognised losses for the period (2,533)   (2,304)   (3,812) 
Dividends paid in period                 (266)     (333)     (333) 
 
Closing shareholders' funds             17,534    21,841    20,333 
 
 
UNAUDITED CASH FLOW STATEMENT 
for the six months ended 31 March 2009 
 
 
 
                                               31 Mar  31 Mar 30 Sept 
                                                 2009    2008    2008 
                                         Note   GBP'000   GBP'000   GBP'000 
Cash (outflow)/inflow from operating 
activities and returns on investments     1     (125)      94    (11) 
 
Taxation                                            -       -    (49) 
 
Capital expenditure 
Purchase of investments                       (1,001) (4,535) (7,477) 
Proceeds from sale of investments               7,954   7,142   7,143 
Net cash inflow/(outflow) from                  6,953   2,607   (334) 
capital expenditure 
 
Equity dividends paid                           (266)   (333)   (333) 
 
Net cash inflow/ (outflow) before               6,562   2,368   (727) 
financing 
 
Financing 
Repurchase of own shares                            -    (49)    (49) 
Net cash outflow from financing                     -    (49)    (49) 
 
Increase/ (decrease) in cash              2     6,562   2,319   (776) 
 
Notes to the cash flow statement: 
 
1    Cash (outflow)/ inflow from 
 operating activities and returns on 
investments 
Loss on ordinary activities before            (2,533) (2,275) (3,799) 
taxation 
Losses on investments                           2,450   2,409   3,845 
Increase in other debtors                         (8)     (3)    (52) 
Decrease in other creditors                      (34)    (37)     (5) 
  Net cash (outflow)/inflow from                (125)      94    (11) 
operating activities 
 
2    Analysis of net funds 
Beginning of period                               870   1,646   1,646 
Net cash inflow/(outflow)                       6,562   2,319   (776) 
End of period                                   7,432   3,965     870 
 
 
SUMMARY OF INVESTMENT PORTFOLIO 
as at 31 March 2009 
 
 
                                                 Unrealised 
                                                gain/(loss)      % of 
                                 Cost Valuation   in period portfolio 
                                GBP'000     GBP'000       GBP'000  by value 
Top twenty venture capital 
investments 
Cadbury House Limited *         1,000     1,000           -      5.7% 
Hoole Hall Country Club         1,000     1,000           -      5.7% 
Holdings Limited * 
Hoole Hall Spa and Leisure        750       750           -      4.3% 
Limited * 
Animal Care Group plc             500       619         136      3.6% 
Double Take Portraits Limited     895       613           -      3.5% 
* 
IS Pharma plc                     689       563        (18)      3.2% 
Craneware plc                     302       514        (28)      3.0% 
West Tower Holdings Limited *     500       500           -      2.9% 
Concateno plc                     378       416       (139)      2.4% 
First Care Limited *              375       375           -      2.1% 
Boomerang Plus plc                676       372       (363)      2.1% 
The Thames Club Limited *         350       350           -      2.0% 
Keycom plc **                     946       349       (116)      2.0% 
Tristel plc                       309       278        (38)      1.6% 
Blanc Brasseries Holdings plc     275       275           -      1.6% 
* 
Plastics Capital plc              695       257       (160)      1.5% 
FSG Security plc **               650       199       (204)      1.1% 
Hasgrove plc                      352       190        (88)      1.1% 
Zamano plc                        376       180        (94)      1.0% 
Servoca plc                       751       175       (400)      1.0% 
                               11,769     8,975     (1,512)     51.4% 
 
Other venture capital           5,507     1,042     (1,050)      6.0% 
investments 
 
                               17,276    10,017     (2,562)     57.4% 
 
Cash at bank and in hand                  7,432                 42.6% 
 
Total investments                        17,449                100.0% 
 
 
All venture capital investments are quoted on AIM unless otherwise 
stated. 
*   Unquoted 
** Quoted on the PLUS Market 
 
SUMMARY OF INVESTMENT MOVEMENTS 
for the six months ended 31 March 2009 
 
Additions 
 
                                         GBP'000 
 
Hoole Hall Country Club Holdings Limited 1,000 
Sundry additions                             1 
                                         1,001 
 
 
Disposals 
 
 
                                Market            Gain/      Realised 
                              value at           (loss)         gain/ 
                             1 October Disposal against (loss) in the 
                        Cost    2008 * Proceeds    cost        period 
                       GBP'000     GBP'000    GBP'000   GBP'000         GBP'000 
Venture Capital 
disposals 
Clerkenwell Ventures 
plc                      540       390      514    (26)           124 
Hoole Hall Country 
Club Limited           1,000     1,000    1,000       -             - 
 
Fixed interest 
securities 
Treasury 4% 07/03/2009 6,305     6,452    6,440     135          (12) 
 
                       7,845     7,842    7,954     109           112 
 
 
* Adjusted for purchases in the period 
 
 
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 
 
 
1.   The unaudited half yearly financial results cover the six months 
to 31 March 2009 and have been prepared in accordance with the 
accounting policies set out in the statutory accounts for the year 
ended 30 September 2008 which were prepared under UK Generally 
Accepted Accounting Practice ("UK GAAP") and in accordance with the 
Statement of Recommended Practice "Financial Statements of Investment 
Trust Companies and Venture Capital Trusts" issued in January 2009 
("SORP"). 
 
2.   All revenue and capital items in the Income Statement derive 
from continuing operations. 
 
3.   The Company has only one class of business and derives its 
income from investments made in shares, securities and bank deposits. 
 
4.   The comparative figures were in respect of the six months ended 
31 March 2008 and the year ended 30 September 2008 respectively. 
 
5.   Return per share for the period has been calculated on 
26,606,102 shares, being the weighted average number of shares in 
issue during the period. 
 
NAV per share for the period has been calculated on 26,606,102 
shares, being the number of shares in issue at the period end. 
 
6.   Dividends 
 
                           31 March 2009   30 Sept 2008 
 
                   Revenue Capital Total          Total 
                     GBP'000   GBP'000 GBP'000          GBP'000 
Paid in year 
2008 Final - 1.00p     266       -   266            333 
 
 
 
7.   Reserves 
 
                                Capital    Capital Investment 
                     Special redemption    reserve    holding Revenue 
                     reserve    reserve - realised     losses reserve 
                       GBP'000      GBP'000      GBP'000      GBP'000   GBP'000 
 
At 1 October 2008     24,247          1        191    (4,701)     329 
Expenses capitalised       -          -      (137)          -       - 
Tax on capital             -          -         10          -       - 
expenses 
Gains/(losses) on          -          -        112    (2,562)       - 
investments 
Transfer between       (153)          -        149          4       - 
reserves 
Retained net revenue       -          -          -          -      44 
for the year 
Dividends paid in          -          -          -          -   (266) 
year 
At 31 March 2009      24,094          1        325    (7,259)     107 
 
 
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/capital distributions. On 21 October 2008 
the Company revoked investment company status under section 833 of 
Companies Act 2006.  The Special Reserve, Capital Reserve - Realised 
and Revenue Reserve are all distributable reserves. 
 
8.   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 year ended 30 September 2008 have 
been extracted from the financial statements for that year, which 
have been delivered to the Registrar of Companies; the Independent 
Auditors' Report on those financial statements was unqualified. 
 
9.   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 and the half-yearly financial report 
includes a fair review of the information required by: 
 
a.   DTR 4.2.7R of the Disclosure and Transparency Rules, being an 
indication of important events that have occurred during the first 
six months of the financial year and their impact on the condensed 
set of financial statements, and a description of the principal risks 
and uncertainties for the remaining six months of the year; and 
 
b.   DTR 4.2.8R of the Disclosure and Transparency Rules, being 
related party transactions that have taken place in the first six 
months of the current financial year and that have materially 
affected the financial position or performance of the entity during 
that period, and any changes in the related party transactions 
described in the last annual report that could do so. 
 
10. Copies of the unaudited half yearly financial reports will be 
sent to Shareholders shortly. Further copies can be obtained from the 
Company's Registered Office and will be available from download from 
www.downing.co.uk. 
 
=--END OF MESSAGE--- 
 
 
 
 
This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.