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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Proven Vct Plc | LSE:PVN | London | Ordinary Share | GB00B8GH9P84 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 59.50 | 58.00 | 61.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -9.88M | -13.83M | -0.0533 | -11.16 | 154.26M |
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PROVEN VCT PLC
Half-yearly report
For the six months ended 31 August 2018
Financial Summary
31 August 31 August 28 February
2018 2017 2018
Net asset value per share 108.9p 101.8p 99.7p
("NAV")
Dividends paid per share 38.5p 29.0p 36.0p
since conversion/ consolidation*
Total return (NAV plus 147.4p 130.8p 135.7p
dividends paid*)
*Dividends paid represent dividends paid since the consolidation of 5p
Ordinary Share into 10p Ordinary Shares on 30 October 2012. Prior to
this date, the Company paid dividends totalling 113.95p on the 5p
Ordinary Shares.
Chairman's Statement
Introduction
I have pleasure in presenting my first half year report for ProVen VCT
plc (the "Company") for the six months ended 31 August 2018.
Net asset value
During the six-month period, the net asset value ("NAV") per share
increased from 99.7p to 108.9p at 31 August 2018. The increase of 9.2p
comprised 11.7p of uplift arising largely from positive valuation
movements, offset by the dividend of 2.5p paid in July 2018.
Portfolio activity and valuation
During the six months to 31 August 2018, a total of GBP8.6 million was
invested. This included GBP4.8 million into two new investments, Mycs
and Aistemos, and GBP3.8 million into existing portfolio companies to
support their continued growth and development.
It was an exceptional period for realisations from the portfolio. The
sale of Watchfinder to Richemont Holdings UK Limited, a subsidiary of
the Swiss luxury group Compagnie Financière Richemont SA, was the
most successful exit in the Company's history in terms of realised
profit against original cost. The Company also realised its stake in
Chargemaster as part of a sale of the business to BP. Together, these
two disposals generated aggregate proceeds of GBP31.0 million and a gain
against cost of GBP25.9 million, representing a multiple of over 6x the
combined investment cost.
The Company's investments in Charterhouse Leisure and Conversity were
sold above the previously reported year end carrying value but at a loss
against cost, and an interim distribution in respect of Maplin's
administration was received in July 2018.
The venture capital investment portfolio showed net unrealised gains for
the six-month period of GBP3.4 million, predominantly as a result of
valuation increases for Blis Media, Incontext and Think, offset by
valuation decreases for Chess and Cogora.
Results and dividends
The total profit on ordinary activities after taxation for the six-month
period to 31 August 2018 was GBP12.0 million.
During the six-month period, a final dividend of 2.5p per share in
respect of the year ended 28 February 2018 was paid on 20 July 2018
following shareholder approval at the Company's AGM.
The Board has today declared a special interim dividend of 25.25p per
share which will be paid on 30 November 2018 to shareholders on the
register at 2 November 2018. This significant dividend reflects the
substantial profits crystallised on the realisations of Watchfinder and
Chargemaster. The dividend represents a cash return of 25.3% per share
on the opening NAV per share at 1 March 2018. The declaration of this
special interim dividend will result in an equivalent reduction in the
Company's NAV per share.
Shareholders are reminded that the Company operates a Dividend
Reinvestment Scheme ("DRIS") for shareholders that wish to have their
dividends reinvested in new shares and obtain further income tax relief
on those shares, subject to the usual restrictions. If you are not
currently registered for the DRIS and wish to have your dividends paid
in the form of new shares, DRIS forms are available from the
www.provenvcts.co.uk website or by contacting Beringea on 020 7845 7820.
Shareholders will need to be registered for the DRIS prior to 2 November
2018 to be eligible to receive the forthcoming dividend as new shares.
Performance fee
The Company has continued to deliver strong performance, driven by
strong investment returns. At 31 August 2018, largely as a result of the
exceptional realisations achieved during the period, the performance
hurdles have been achieved for certain fundraisings and a performance
incentive fee of GBP5.8 million has been accrued in respect of the year
ending 28 February 2019. The actual performance incentive fee payable to
the investment manager, if any, will only be payable once the 28
February 2019 results have been finalised.
Fund raising and share issues
During the period, the Company allotted 324,715 shares at 107.5p per
share under the Company's DRIS in respect of the dividend paid on 20
July 2018.
In response to the strong investor demand for VCT share issues, the
Board announced on 22 October 2018 the intention to launch a combined
offer for subscription with ProVen Growth and Income VCT plc. Full
details will be released in due course.
Share buybacks
The Company continues to operate a policy of purchasing its own shares
as they become available in the market at a discount of approximately 5%
to the latest published NAV.
During the period, the Company completed purchases of 942,201 shares at
an average price of 104.9p per share and for aggregate consideration
(net of costs) of GBP988,153. This represented 0.9% of the shares in
issue at the start of the period. The shares were subsequently
cancelled.
Outlook
The market for disposals has remained strong in the six months to 31
August 2018 and the exits from Watchfinder and Chargemaster have
resulted in significant realised gains for the Company, allowing a
special interim dividend to be declared. The current portfolio continues
to perform well and is well diversified across a range of sectors.
However, the ongoing uncertainty over a Brexit deal for the United
Kingdom remains a largely unquantifiable risk to individual portfolio
companies and the Company's overall performance.
Despite this potential headwind, I remain optimistic about the prospects
of the Company as we enter the second half of the financial year.
Neal Ransome
Chairman
24 October 2018
Investment Manager's Report
Introduction
We have pleasure in presenting our half year report for ProVen VCT plc
(the "Company") for the six months ended 31 August 2018.
Investment activity and portfolio valuation
At 31 August 2018, the Company's investment portfolio comprised 42
investments, of which 40 were unquoted, at a cost of GBP62.2 million and
a valuation of GBP70.0 million. This represents an overall unrealised
uplift on cost of GBP7.8 million or 12.5%.
During the period, the Company invested a further GBP8.6 million,
comprising GBP4.8 million into two new companies and GBP3.8 million into
three existing portfolio companies.
The new investment in Mycs (GBP3.6 million), a Berlin based online
retailer for customisable furniture, was completed in May 2018 and was
discussed in the Company's most recent annual report. The Company also
invested GBP1.2 million in Aistemos, a software company specialising in
intellectual property analytics, in August 2018. The investment is being
used to expand the company's sales and marketing function.
The follow-on investments were made into My 1st Years (GBP2.6 million),
Poq Studio (GBP902,000) and Perfect Channel (GBP368,000).
The Company generated capital proceeds of GBP31.4 million, predominantly
from the disposals of Watchfinder (GBP23.4 million) and Chargemaster
(GBP7.6 million). These two disposals resulted in an aggregate gain of
over GBP25.9 million on the original investment cost. In addition, the
Company's investments in Charterhouse Leisure and Conversity were fully
realised at a loss against cost but a slight uplift against the carrying
value at the previous year end.
An interim distribution in respect of the administration of Maplin of
GBP335,000 was also received in the period. There is the potential for a
further distribution as the administration progresses, however, it is
unlikely that the Company's total investment in Maplin will be
recovered.
Watchfinder has grown significantly since the Company first invested in
2014, with revenues growing from GBP25.1 million in 2014 to GBP86.7
million in 2017. On 1 June 2018, Richemont Holdings UK Limited, a
subsidiary of the Swiss luxury group Compagnie Financière Richemont
SA, agreed to acquire 100% of the share capital of Watchfinder, allowing
the Company to realise its investment in full at a multiple of 8.9x cost
and an annual rate of return of over 75%.
Chargemaster has also performed well over recent years, driven by the
growth in sales of electric vehicles. In July 2018, the Company realised
its investment in full as part of an acquisition of Chargemaster by BP
plc. Total proceeds of GBP7.6 million were generated from the disposal,
half of which are receivable in January 2019, representing a gain
against cost of GBP5.2 million.
Overall, the venture capital investment portfolio showed an unrealised
gain of GBP3.4 million, equivalent to 3.4p per share, over the period.
There were valuation uplifts for, amongst others, Blis, Incontext and
Think, which were partially offset by valuation decreases for Chess and
Cogora.
Post period end portfolio activity
Since 31 August 2018, the Company has invested a further GBP442,000 into
Incontext to support the company's continued growth.
Outlook
Following on from the significant disposals achieved in the previous
financial year, the further realisations achieved in the first half of
this financial year have generated significant realised profits for
Shareholders. There are also a number of other portfolio companies
nearing an exit that could generate further realised gains over the
coming months. As well as a strong exit environment, we are also seeing
a strong flow of attractive investment opportunities as companies
continue to seek capital for expansion, despite uncertainty over a
Brexit deal.
Overall, the current portfolio continues to perform well and it is
encouraging to see some of the more recent investments such as POQ and
My 1st Years making strong progress, supported by our follow-on funding.
We therefore look forward to the second half of the financial year with
optimism.
Beringea LLP
24 October 2018
Summary of Investment portfolio
as at 31 August 2018
Cost GBP'000
Valuation Valuation movement in period % of portfolio
GBP'000 GBP'000 by value
Top twenty venture
capital investments
(by value)
Infinity Reliance
Limited (t/a My 1st
Years) 4,731 6,658 108 5.9%
Think Limited 2,757 6,129 761 5.5%
Poq Studio Limited 3,152 5,402 - 4.8%
Monica Vinader Limited 534 4,766 77 4.3%
Litchfield Media
Limited 3,580 4,202 724 3.8%
Rapid Charge Grid
Limited 4,200 3,860 97 3.4%
Mycs GmbH 3,551 3,551 - 3.2%
Chess Technologies
Limited 1,045 3,400 (836) 3.0%
InContext Solutions,
Inc. 2,363 2,855 685 2.5%
Whistle Sports, Inc. 2,090 2,729 405 2.4%
Thread, Inc. 2,646 2,723 (81) 2.4%
Blis Media Limited 841 2,271 800 2.0%
Cogora Group Limited 2,643 1,977 (317) 1.9%
Smart Information
Systems GmbH (t/a
Smart Assistant) 1,309 1,894 585 1.7%
MPB Group Limited 1,842 1,843 - 1.6%
Response Tap Limited 1,060 1,789 212 1.6%
Disposable Cubicle
Curtains Limited 2,201 1,592 16 1.4%
Donatantonio Group
Limited 1,078 1,438 31 1.3%
ContactEngine Limited 562 1,371 197 1.2%
Monmouth Holdings
Limited 1,500 1,308 (1) 1.2%
Other venture capital
investments 18,503 8,282 (43) 7.4 %
---------------------- ------------- ----------- ---------------- ---------------- ---------- ---------
Total venture capital
investments 62,188 70,040 3,420 62.5 %
---------- ---------
Cash at bank and in
hand 41,953 37.5 %
---------- ---------
Total investments 111,993 100.0 %
---------- ---------
Other venture capital investments at 31 August 2018 comprise: 7Digital
Group plc, Aistemos Limited, Been There Done That Global Limited,
Buckingham Gate Financial Services Limited, D30 Holdings Ltd, Firefly
Learning Limited, Iridium Topco Limited (formerly Honeycomb.TV Limited),
Inskin Media Limited, Lantum Limited, Macklin Holdings Limited, MEL
Topco Limited (t/a Maplin), Netcall plc, Perfect Channel Limited,
Sealskinz Holdings Limited, Senselogix Limited, Simplestream Limited,
Skills Matter Limited, SPC International Limited, TVPlayer Limited,
Utility Exchange Online Limited, Vigilant Applications Limited and
Written Byte Limited (t/a Deepcrawl).
With the exception of 7Digital Group plc and Netcall plc which are
quoted on AIM, all venture capital investments are unquoted.
All of the above investments, with the exception of Macklin Holdings
Limited, Monmouth Holdings Limited, SPC International Limited and Think
Limited, were also held by ProVen Growth and Income VCT plc, of which
Beringea LLP is the investment manager.
All venture capital investments are registered in England and Wales
except for InContext Solutions, Inc., Thread, Inc. and Whistle Sports,
Inc. which are Delaware registered corporations in the United States of
America, Smart Information Systems GmbH, which is registered in Austria
and Mycs GmbH, which is registered in Germany.
Summary of investment movements
for the six months ended 31 August 2018
Investment activity during the six months ended 31 August 2018 is
summarised as follows:
Additions Cost
GBP'000
Mycs GmbH 3,551
Infinity Reliance Limited (t/a
My 1st Years) 2,576
Aistemos Limited 1,223
Poq Studio Limited 902
Perfect Channel Limited 368
Total 8,620
Market
value at Realised
1 March Disposal Gain/ (loss) gain in
Disposals Cost 2018 proceeds against cost period
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Watchfinder.co.uk
Limited 2,629 10,228 23,353 20,724 13,125
Chargemaster
plc 2,421 5,604 7,613 5,192 2,009
Charterhouse
Leisure Limited 875 8 91 (784) 83
MEL Topco Limited
(t/a Maplin) - - 335 335 335
MatsSoft Limited - - 53 53 53
Conversity
Limited 28 - 4 (24) 4
Total 5,953 15,840 31,449 25,496 15,609
------- --------- --------- --------------- --------
Of the disposals above, MatsSoft Limited was realised in the prior
period but proceeds were recognised in the current period in excess of
the amounts previously accrued.
The proceeds received in respect of MEL Topco Limited (t/a Maplin)
reflected an interim distribution in respect of the company's
administration.
Unaudited Condensed Income Statement
for the six months ended 31 August 2018
(audited)
(unaudited) (unaudited) Year ended
Six months ended Six months ended 28 Feb
31 Aug 2018 31 Aug 2017 2018
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- --------- ------- --------- ------- -------
Income 183 - 183 524 - 524 528
--------------------------------------
Realised gains on investments - 15,609 15,609 - 3,135 3,135 3,359
--------------------------------------
Unrealised gains/ (losses) on
investments - 3,420 3,420 - (3,061) (3,061) 2,828
--------------------------------------
Investment management fee (296) (888) (1,184) (272) (815) (1,087) (2,013)
--------------------------------------
Performance incentive fee - (5,771) (5,771) - (1,118) (1,118) (1,124)
--------------------------------------
Other expenses (304) - (304) (319) (9) (328) (638)
--------------------------------------
(Loss)/ return on ordinary activities
before taxation (417) 12,370 11,953 (67) (1,868) (1,935) 2,940
--------------------------------------
Tax on ordinary activities - - - - - - -
--------------------------------------
(Loss)/ return attributable to equity
shareholders (417) 12,370 11,953 (67) (1,868) (1,935) 2,940
--------------------------------------
Basic and diluted (loss)/ return per
share (0.4p) 12.2p 11.8p (0.1p) (1.9p) (2.0p) 3.0p
-------------------------------------- --------- --------- ------- -------
All revenue and capital items in the above statement derive from
continuing operations. The total column within this statement represents
the Unaudited Condensed Income Statement of the Company.
The Company has no recognised gains or losses other than the results for
the six-month period as set out above.
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Financial Position
as at 31 August 2018
(unaudited)
(unaudited) 31 (audited)
31 Aug Aug 28 Feb
2018 2017 2018
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 70,040 66,283 73,840
Current assets
Debtors 4,734 676 574
Cash at bank and in hand 41,953 34,252 28,671
46,687 34,928 29,245
Creditors: amounts falling
due within one year (6,417) (1,565) (1,554)
Net current assets 40,270 33,363 27,691
Net assets 110,310 99,646 101,531
Capital and reserves
Called up share capital 10,125 9,784 10,187
Capital redemption reserve 24 3,757 3,837
Share premium account - 48,560 52,786
Special reserve 58,956 13,168 5,469
Capital reserve - realised 29,420 15,281 10,583
Revaluation reserve 13,210 9,586 19,677
Revenue reserve (1,425) (440) (1,008)
Total equity shareholders'
funds 110,310 99,646 101,531
Basic and diluted net asset 108.9p 101.8p 99.7p
value per share
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Changes in Equity
Six months Called
ended 31 up Capital Share Capital
Aug 2018 share redemption premium Special reserve Revaluation Revenue
(unaudited) capital reserve account reserve - realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 March
2018 10,187 3,837 52,786 5,469 10,583 19,677 (1,008) 101,531
Issue of
new shares 32 - 317 - - - - 349
Total comprehensive
income - - - - 8,950 3,420 (417) 11,953
Transfer
of previously
unrealised
gains now
realised - - - - 9,887 (9,887) - -
Share buybacks
and cancellation (94) 94 - (993) - - - (993)
Cancellation
of share
premium account - - (53,103) 53,103 - - - -
Cancellation
of capital
redemption
reserve - (3,907) - 3,907 - - - -
Dividends
paid - - - (2,530) - - - (2,530)
At 31 August
2018 10,125 24 - 58,956 29,420 13,210 (1,425) 110,310
Six months Called
ended 31 up Capital Share Capital
Aug 2017 share redemption premium Special reserve Revaluation Revenue
(unaudited) capital reserve account reserve - realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 March
2017 9,856 3,653 48,252 16,666 10,406 16,329 (423) 104,739
Issue of
new shares 32 - 308 - - - - 340
Total comprehensive
income - - - - 1,193 (3,061) (67) (1,935)
Transfer
of previously
unrealised
gains now
realised - - - - 3,682 (3,682) - -
Share buybacks
and cancellation (104) 104 - (1,049) - - - (1,049)
Dividends
paid - - - (2,449) - - - (2,449)
At 31 August
2017 9,784 3,757 48,560 13,168 15,281 9,586 (490) 99,646
The special reserve, capital reserve - realised and revenue reserve are
distributable reserves. Reserves available for distribution therefore
amount to GBP86,951,000 (2017: GBP27,959,000).
During the period, the Company cancelled its share premium account and
capital redemption reserve as confirmed by an Order of the High Court of
Justice Chancery Division. The Company registered the Court Order
approving the Cancellation with the Registrar of Companies on 15 August
2018 and the cancellation became effective on such registration.
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Cash Flows
for the six months ended 31 August 2018
(unaudited) (unaudited) (audited)
Six months Six months Year
ended ended ended
31 Aug 31 Aug 28 Feb
2018 2017 2018
Note GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----- ------------- -------------
Net cash used in operating activities A (6,373) (1,702) (2,944)
---------------------------------------------------- ------
Cashflows from investing activities
---------------------------------------------------- ----- ------------- -------------
Purchase of investments (8,620) (3,453) (7,710)
------------------------------------------------------------
Sale of investments 31,449 9,272 12,239
------------------------------------------------------------
Net cash from investing activities 22,829 5,819 4,529
------------------------------------------------------------
Cashflows from financing activities
---------------------------------------------------- ----- ------------- -------------
Proceeds from share issues - - 3,757
------------------------------------------------------------
Share issue costs - - (129)
------------------------------------------------------------
Purchase of own shares (993) (967) (1,724)
------------------------------------------------------------
Equity dividends paid (2,181) (2,108) (8,010)
------------------------------------------------------------
Net cash used in financing (3,174) (3,075) (6,124)
------------------------------------------------------------
Increase/ (decrease) in cash and cash equivalents B 13,282 1,042 (4,539)
---------------------------------------------------- ------
Notes to the cash flow statement:
A Cash used in operating activities
Return/ (loss) on ordinary activities before taxation 11,953 (1,935) 2,940
------------------------------------------------------------
Gain on investments (19,029) (74) (6,187)
------------------------------------------------------------
(Increase)/ decrease in prepayments, accrued income
and other debtors (4,160) (84) 53
------------------------------------------------------------
Increase in accruals and other creditors 4,863 391 250
------------------------------------------------------------
Net cash used in operating activities (6,373) (1,702) (2,944)
------------------------------------------------------------
B Analysis of net funds
Beginning of period /year 28,671 33,210 33,210
------------------------------------------------------------
Net cash inflows/ (outflows) 13,282 1,042 (4,539)
------------------------------------------------------------
End of period/ year 41,953 34,252 28,671
------------------------------------------------------------
The accompanying notes form an integral part of this announcement.
Notes to the half-yearly report
for the six months ended 31 August 2018
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under Financial
Reporting Standard 102 ("FRS102") and in accordance with the Statement
of Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (the "SORP") issued by the
Association of Investment Companies ("AIC") which was revised in January
2017.
The following accounting policies have been applied consistently
throughout the period. Further details of principal accounting policies
were disclosed in the Annual Report and Accounts for the year ended 28
February 2018.
1. Presentation of Income Statement
In order to better reflect the activities of an investment company and,
in accordance with guidance issued by the AIC, supplementary information
which analyses the Income Statement between items of a revenue and
capital nature has been presented alongside the Income Statement. The
revenue return attributable to equity shareholders 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.
1. Investments
Investments, including equity and loan stock, are recognised at their
trade date and measured at "fair value through profit or loss" 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. The fair
value of an investment upon acquisition is deemed to be cost.
Thereafter investments are measured at fair value in accordance with
International Private Equity and Venture Capital Valuation Guidelines
("IPEV Guidelines") issued in December 2015, together with Sections 11
and 12 of FRS102.
Publicly traded investments are measured using bid prices in accordance
with the IPEV Guidelines.
Key judgements and estimates
The valuation methodologies used by the Directors for estimating the
fair value of unquoted investments are as follows:
-- investments are usually retained at cost for twelve months following
investment, except where a company's performance against plan is
significantly below the expectations on which the investment was made in
which case a provision against cost is made as appropriate;
-- where a company is in the early stage of development it will normally
continue to be held at cost as the best estimate of fair value, reviewed
for impairment on the basis described above;
-- where a company is well established after an appropriate period, the
investment may be valued by applying a suitable earnings or revenue
multiple to that company's maintainable earnings or revenue. The
multiple used is based on comparable listed companies or a sector but
discounted to reflect factors such as the different sizes of the
comparable businesses, different growth rates and the lack of
marketability of unquoted shares;
-- where a value is indicated by a material arms-length transaction by a
third party in the shares of the company, the valuation will normally be
based on this, reviewed for impairment as appropriate;
-- where alternative methods of valuation, such as net assets of the
business or the discounted cash flows arising from the business are more
appropriate, then such methods may be used; and
-- where repayment of the equity is not probable, redemption premiums will
be recognised.
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. Methodologies are applied consistently from year to year except
where a change results in a better estimate of fair value.
Where an investee company has gone into receivership or liquidation, or
the loss in value below cost is considered to be permanent, or there is
little likelihood of a recovery from a company in administration, the
loss on the investment, although not physically disposed of, is treated
as being realised.
All investee companies are held as part of an investment portfolio and
measured at fair value. Therefore, it is not the policy for investee
companies to be consolidated and any gains or losses arising from
changes in fair value are included in the Unaudited Condensed Income
Statement for the period as a capital item.
Gains and losses arising from changes in fair value are included in the
Unaudited Condensed Income Statement for the period as a capital item
and transaction costs on acquisition or disposal of the investment are
expensed.
Investments are derecognised when the contractual rights to the cash
flows from the asset expire or the Company transfers the asset and
substantially all the risks and rewards of ownership of the asset to
another entity.
1. All revenue and capital items in the Unaudited Condensed Income Statement
derive from continuing operations.
2. There are no other items of comprehensive income other than those
disclosed in the Unaudited Condensed Income Statement.
3. The Company has only one operating segment as reported to the Board of
Directors in their capacity as chief operating decision makers and
derives its income from investments made in shares, securities and bank
deposits.
4. The comparative figures are in respect of the year ended 28 February 2018
and the six-month period ended 31 August 2017.
5. Basic and diluted return per share for the period has been calculated on
101,682,918 shares, being the weighted average number of shares in issue
during the period.
6. Basic and diluted NAV per share for the period has been calculated on
101,257,111 shares, being the number of shares in issue at the period
end.
7. Dividends
(unaudited) (unaudited) (audited)
Year
Six months ended Six months ended ended
28 Feb
31 Aug 2018 31 Aug 2017 2018
Revenue Capital Total Revenue Capital Total Total
Pence GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2017 Final 2.5 - - - - 2,453 2,453 2,453
2018 Special
Interim 7.0 - - - - - - 6,848
2018 Final 2.5 - 2,530 2,530 - - - -
Total dividends
paid - 2,530 2,530 - 2,453 2,453 9,301
1. Contingent liabilities, guarantees and financial commitments
Based on the NAV per share at 31 August 2018, before any performance fee
accrual, and cumulative dividends paid and payable ahead of 28 February
2019, a maximum performance fee of GBP5.9 million would become payable
in relation to certain fundraisings for which the performance hurdles
have been achieved. However, the performance fee structure contains
certain restrictions to ensure that the hurdles continue to be met after
the payment of a performance fee and to encourage the payment of
tax-free dividends. After applying these restrictions, an accrual for a
performance fee of GBP5.8 million has been made at 31 August 2018 and
has been reflected in the NAV per share. The actual performance
incentive fee, if any, will only be payable once the full year results
have been finalised. As a result, no performance incentive fee is
payable at 31 August 2018.
A contingent liability of GBP0.1 million, being the difference between
the maximum performance fee and the amount accrued at 31 August 2018,
therefore exists at the period end.
The Company has no other contingent liabilities, guarantees or financial
commitments at 31 August 2018.
1. Called up share capital
Under the terms of the Company's Dividend Reinvestment Scheme, the
Company allotted 324,715 shares to subscribing shareholders on 20 July
2018. The aggregate consideration for the shares was GBP349,070.
During the six months to 31 August 2018, the Company repurchased 942,201
shares for an aggregate consideration (net of costs) of GBP988,153 being
an average price of 104.9p per share and which represented 0.9% of the
Company's issued share capital at the start of the year. These shares
were subsequently cancelled. Costs relating to the share repurchases
amounted to GBP4,945.
11. Financial instruments
Investments are valued at fair value as determined using the measurement
policies described in note 1.
The Company has categorised its financial instruments that are measured
subsequent to initial recognition at
fair value, using the fair value hierarchy as follows:
Level 1 Reflects instruments quoted in an active market.
Level 2 Reflects financial instruments that have been valued using
inputs, other than quoted prices, that are observable.
Level 3 Reflects financial instruments that have been valued using
valuation techniques with unobservable inputs.
(unaudited) (audited)
31 Aug 2018 28 Feb 2018
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AIM quoted 316 - - 316 234 - - 234
Loan notes - - 15,739 15,739 - - 14,741 14,741 Unquoted equity - - 40,246 40,246 - - 49,918 49,918 Preference shares - - 13,739 13,739 - - 8,947 8,947 Total 316 - 69,724 70,040 234 - 73,606 73,840 1. Controlling party and related party transactions In the opinion of the Directors there is no immediate or ultimate controlling party. Malcolm Moss, a Director of the Company, is also a Partner of Beringea LLP. Beringea LLP was the Company's Investment Manager during the period. During the six months ended 31 August 2018, GBP1,184,000 was payable to Beringea LLP in respect of these services. At the period end the Company owed Beringea LLP GBP215,000. Beringea LLP was also the Company's Administration Manager during the period. Fees paid to Beringea in its capacity as Administration Manager for the six months ended 31 August 2018 amounted to GBP31,000 of which GBP15,000 remained outstanding at the period end. As the Company's investment manager, Beringea LLP is also entitled to receive a performance incentive fee based on the Company's performance for each financial year to 28 February. The performance incentive fee arrangements are set out, in detail, in the Annual Report and Accounts. In respect of the year ending 28 February 2019, a performance incentive fee of GBP5,771,000 has been accrued. The actual performance incentive fee, if any, will only be payable once the 28 February 2019 results have been finalised. As a result, no performance incentive fee is payable at 31 August 2018. Beringea LLP may charge arrangement fees, in line with industry practice, to companies in which it invests. It may also receive directors fees or monitoring fees from investee companies. These costs are borne by the investee company not the Company. In the six-month period to 31 August 2018, GBP93,000 was payable to Beringea LLP for arrangement fees under such arrangements. Directors and monitoring fees payable to Beringea LLP in the six-month period to 31 August 2018 amounted to GBP274,000. During the six months to 31 August 2018, an amount of GBP72,000 was payable to the Directors of the Company as remuneration for services provided to the Company. No amount was outstanding at the period-end. 13. The unaudited financial statements set out herein have not been subject to review by the auditor and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The figures for the year ended 28 February 2018 have been extracted from the financial statements for that period, which have been delivered to the Registrar of Companies; the Auditor's report on those financial statements was unqualified. 14. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with Financial Reporting Standard 104 issued by the Financial Reporting Council 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. 15. Risk and uncertainties Under the Disclosure and Transparency Directive, the Board is required in the Company's half-yearly results, to report on the 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 year are as follows: (i) investment risk associated with investing in small and immature businesses; (ii) investment risk arising from volatile stock market conditions and their potential effect on the value of the Company's venture capital investments and the exit opportunity for those investments; and (iii) breach of VCT regulations. In the case of (i), the Board is satisfied with the Company's approach. The Investment Manager follows a rigorous process in vetting and careful structuring of new investments and, after an investment is made, close monitoring of the business. In respect of (ii), the Company seeks to hold a diversified portfolio. However, the Company's ability to manage this risk is quite limited, primarily due to the restrictions arising from the VCT regulations. The Company's compliance with the VCT regulations is continually monitored by the Administration Manager, who reports regularly to the Board on the current position. The Company also retains Philip Hare & Associates LLP to provide regular reviews and advice in this area. The Board considers that this approach reduces the risk of a breach of the VCT regulations (iii) to an appropriate level. 1. Going concern The Directors have reviewed the Company's financial resources at the period end and concluded that the Company is well placed to manage its business risks. The Board confirms that it is satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, the Board believes that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements. Copies of the unaudited half yearly results will be sent to shareholders. Further copies can be obtained from the Company's registered office and will be available for download from https://www.globenewswire.com/Tracker?data=JvpY_YV1cARcg3bO_lRiZX-7GQ57YCEUvtC2Jk9lYoTySXxwO4kVB_wvS6eGXOkD4qS8lyDP-AZfTtoWcUZgm3kclx2L2a3THfefQYy-iis= www.provenvcts.co.uk. 1. Post balance sheet events Since 31 August 2018, the Company has invested a further GBP442,000 in Incontext. On 22 October 2018, the Company announced its intention to launch a combined offer for subscription with ProVen Growth and Income VCT plc. Full details will be released in due course.
(END) Dow Jones Newswires
October 24, 2018 07:27 ET (11:27 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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