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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 | 59.50 | 59.50 | 59.50 | 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 2017
Financial Summary
31 August 2017 31 August 2016 28 February 2017
Net asset value per share 101.8p 100.8p 106.3p
("NAV")
Dividends paid per share 29.0p 24.0p 26.5p
since conversion/
consolidation*
Total return (NAV plus 130.8p 124.8p 132.8p
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 the half year report for ProVen VCT plc
(the "Company") for the six months ended 31 August 2017.
Net asset value
During the six-month period, the net asset value ("NAV") per share
decreased from 106.3p to 101.8p at 31 August 2017. Of the total decline
of 4.5p, 2.5p reflected the dividend paid during the period.
Portfolio activity and valuation
During the six months to 31 August 2017, a total of GBP3.3 million was
invested. This included GBP1.5 million into two new investments,
Deepcrawl and Smart Assistant, and GBP1.8 million into existing
portfolio companies to support their continued growth and development.
In addition, shares in Netcall plc, with a value of GBP0.3 million, were
received as part of the disposal of MatsSoft.
The period has seen a number of significant disposals with Third Bridge,
MatsSoft and APM Healthcare all being fully realised in the six months
to 31 August 2017. Aggregate proceeds of GBP9.3 million, including the
value of Netcall plc shares received as part of the MatsSoft disposal,
were generated on these three disposals. This represented a multiple of
over 3.7x the combined cost of GBP2.5 million. In addition, the
Company's loan balance with Celoxica was repaid in full in July 2017 and
there were further loan repayments from Skills Matter and Conversity.
The venture capital investment portfolio showed a net unrealised loss
for the six-month period of GBP3.1 million, predominantly as a result of
valuation decreases for Blis Media and Maplin. These more than offset
uplifts for, amongst others, Chess, Chargemaster and Watchfinder.
Further detail on investment activity is provided in the Investment
Manager's Report.
Results and dividends
The total loss on ordinary activities after taxation for the six-month
period to 31 August 2017 was GBP1.9 million.
During the six-month period, a final dividend of 2.5p per share in
respect of the year ended 28 February 2017 was paid on 14 July 2017
following shareholder approval at the Company's AGM.
On 11 October 2017, the Board declared a special interim dividend of
7.0p per share which will be paid on 17 November 2017 to shareholders on
the register at 20 October 2017. This dividend arises from the
successful realisations of Third Bridge, MatsSoft and APM Healthcare and
represents a cash return of 6.7% on the opening NAV per share at 1 March
2017, adjusted for the dividend paid in July 2017, of 103.8p.
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. 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 20 October 2017 to be eligible to receive the
forthcoming dividend as new shares.
Fund raising and share issues
During the period, the Company allotted 323,319 shares at 105.4p per
share under the Company's DRIS in respect of the dividend paid on 14
July 2017.
In response to the continuing strong investor demand for VCT share
issues, the Board announced on 11 October 2017 the intention to launch
an offer for subscription for the Sterling equivalent of EUR5 million
(approximately GBP4.4 million), the maximum amount allowed without the
issue of a full prospectus.
Full details will be released in due course but the offer will be
available exclusively to existing shareholders in ProVen VCT plc, ProVen
Growth and Income VCT plc and ProVen Planned Exit VCT plc for an initial
period after launch.
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 1,040,410 shares
at an average price of 100.3p per share and for aggregate consideration
(net of costs) of GBP1,043,567. This represented 1.1% of the shares in
issue at the start of the period. The shares were subsequently
cancelled.
Board appointment
I am pleased to announce the appointment of Neal Ransome to the Board
effective from 1 October 2017.
Neal is a chartered accountant and was formerly a partner at PwC. He was
Chief Operating Officer of PwC's Advisory business and led its
Pharmaceutical and Healthcare Corporate Finance practice. Neal is also a
director of Octopus AIM VCT plc. He was formerly a director of Parity
Group plc, an AIM-listed professional services company, and Quercus
Healthcare, a property unit trust fund. He is also a Trustee and Council
Member of the RSPB, the UK's largest nature conservation charity.
Patient Capital Review
In late 2016, HM Treasury announced its intention to conduct a review of
the availability and effectiveness of 'patient capital' investment in
the UK. A consultation paper "Financing growth in innovative firms" was
published in August 2017 and the consultation period closed on 22
September 2017.
The Investment Manager, supported by the Board, has been actively
involved in the recent consultation. It has made a response to the
consultation highlighting the considerable benefits of the VCT scheme to
the UK economy and making suggestions about how the scheme could be
improved. It has also contributed to the responses made by the VCT
Association, which comprises a number of leading VCT Managers, of which
it is a member, as well as contributing to responses made by industry
bodies such as the AIC and the BVCA. The conclusions of the review are
expected to be announced as part of the Budget, scheduled for 22
November 2017.
The recommendations from the consultation may result in material changes
to the VCT scheme. We hope, however, that the significant contribution
that VCTs make to the UK economy by providing patient capital to support
the growth of innovative UK companies will be recognised in any of the
Government's decisions arising from the consultation.
Outlook
It is encouraging to see the level of disposals achieved during the
period, especially at valuations that result in significant gains for
the Company. The current portfolio has a number of growing and vibrant
companies, most of whom I believe should be able to succeed despite
operating in rapidly changing conditions. However, it would be rash to
expect them all to be unaffected should the global and UK economy
falter. I therefore look forward to the second half of the year with
cautious optimism.
Andrew Davison
Chairman
19 October 2017
Investment Manager's Report
Introduction
We have pleasure in presenting our half year report for ProVen VCT plc
(the "Company") for the six-month period to 31 August 2017.
Investment activity and portfolio valuation
At 31 August 2017, the Company's investment portfolio comprised 43
investments, of which 41 were unquoted, at a cost of GBP57.7 million and
a valuation of GBP66.3 million. This represents an overall unrealised
uplift on cost of GBP8.6 million or 14.8%.
During the period, the Company invested a further GBP3.3 million,
comprising GBP1.5 million into two new companies and GBP1.8 million into
four existing portfolio companies. In addition, shares in Netcall plc,
with a value of GBP0.3 million, were received as part of the disposal of
MatsSoft.
The new investments in Smart Assistant (GBP1.0 million), a provider of
interactive guided selling software that assists the online buying
process, and Deepcrawl (GBP0.5 million), a leading web crawler and
search marketing analytics company, were both completed in July 2017.
The follow-on investments were made into Poq Studio (GBP1,125,000),
Honeycomb.TV (GBP405,000), Perfect Channel (GBP150,000) and
ContactEngine (GBP112,000) to support the continued growth and
development of these companies.
The Company generated capital proceeds of GBP9.6 million, predominantly
from the disposals of Third Bridge (GBP5.4 million), MatsSoft (GBP2.5
million) and APM Healthcare (GBP1.4 million). These disposals resulted
in an aggregate gain of over GBP6.8 million on the original investment
cost.
Third Bridge has been one of the Company's strongest performing
portfolio companies over recent years, with revenues growing by over 6x
during the Company's four and half year holding period. IK Investment
Partners, a pan-European private equity company, acquired a minority
stake in Third Bridge, allowing the Company to realise its investment in
full at a multiple of over 5.7x cost and an annual rate of return of
over 46%.
MatsSoft was acquired by AIM-listed Netcall plc. As part of the
transaction, the Company received cash proceeds of GBP2.2m and shares in
Netcall valued at GBP0.3 million, equivalent to a multiple of 2.4x cost.
There is the potential for a further earn-out based on the performance
of Netcall's share price over the next two years.
Overall, the venture capital investment portfolio showed an unrealised
loss of GBP3.1 million, equivalent to 3.1p per share over the period.
The unrealised loss was driven predominantly by valuation decreases for
Blis Media, which was adversely impacted by declining advertising spend,
Maplin, which faces challenging market conditions on the high street and
from online competition, and Donatantonio, which has been affected by
the depreciation in Sterling against the Euro.
There was strong performance and valuation increases from a number of
companies, notably Chess, Chargemaster and Watchfinder, which continue
to show strong revenue growth, but these were insufficient to offset the
valuation decreases.
A summary of the top 20 venture capital investments, by value, is
provided in the Summary of Investment Portfolio.
Post period end portfolio activity
Since 31 August 2017, the Company has invested GBP0.5 million in Been
There Done That Global Limited, a provider of a tech-enabled platform
that develops brand media strategies.
Outlook
We continue to see a healthy flow of new investment opportunities and
expect to complete several of these before the end of the Company's
financial year, as well as a number of follow-on investments into
existing portfolio companies. However, we continue to remain highly
selective about the opportunities we pursue and to subject these to
thorough due diligence.
As well as submitting our own response to HM Treasury's consultation on
patient capital and providing evidence to support the submissions from
key industry bodies such as the AIC and BVCA, we also joined with a
number of leading VCT managers to form the VCT Association to collate
and submit evidence to demonstrate the effectiveness of the VCT scheme.
The VCT Association will continue its lobbying and engagement to promote
the advantages of VCTs and its work with the Treasury to improve the
effectiveness of the scheme. We will remain a leading contributor to
these initiatives, as well as engaging in our own efforts.
Beringea LLP
19 October 2017
Summary of Investment portfolio
as at 31 August 2017
Cost Valuation Valuation movement in period % of portfolio
GBP'000 GBP'000 GBP'000 by value
Top twenty venture capital investments
(by value)
Watchfinder.co.uk Limited 2,629 8,824 449 8.7%
Perfect Channel Limited 3,159 4,912 102 4.8%
Chargemaster plc 2,421 4,203 1,058 4.1%
Think Limited 2,757 3,999 260 4.0%
Chess Technologies Limited 1,045 3,890 1,851 3.9%
Monmouth Holdings Limited 4,000 3,736 (73) 3.7%
Monica Vinader Limited 534 3,679 - 3.7%
Rapid Charge Grid Limited 4,200 3,630 (217) 3.6%
Litchfield Media Limited 3,580 3,331 (58) 3.3%
Disposable Cubicle
Curtains Limited 2,032 2,642 17 2.6%
Cogora Group Limited 2,643 2,387 (585) 2.4%
Poq Studio Limited 2,250 2,250 - 2.2%
Infinity Reliance Limited
(t/a My 1st Years) 2,155 2,155 - 2.2%
Whistle Sports, Inc. 2,090 2,090 - 2.1%
Thread, Inc. 1,477 1,477 - 1.5%
Donatantonio Group Limited 1,078 1,265 (662) 1.3%
InContext Solutions, Inc. 1,976 1,202 (337) 1.2%
MEL Topco Limited (t/a
Maplin Electronics) 2,217 1,073 (1,179) 1.1%
Response Tap Limited 1,060 1,071 11 1.1%
Smart Information Systems
GmbH (t/a Smart
Assistant) 986 986 - 1.0%
Other venture capital
investments 13,458 7,481 (3,698) 7.4%
Total venture capital
investments 57,747 66,283 (3,061) 65.9%
Cash at bank and in hand 34,252 34.1%
Total investments 100,535 100.0%
Other venture capital investments at 31 August 2017 comprise: 7Digital
Group plc, Blis Media Limited, Buckingham Gate Financial Services
Limited, Charterhouse Leisure Limited, ContactEngine Limited, Conversity
Limited, D30 Holdings Ltd, Dianomi Limited, Firefly Learning Limited,
Honeycomb.TV Limited, Inskin Media Limited, Macklin Holdings Limited,
Network Locum Limited, Sealskinz Holdings Limited, Senselogix Limited,
Simplestream Limited, Skills Matter Limited, SPC International Limited,
Steribottle Global 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.
Blis Media Limited is also held by ProVen Planned Exit VCT plc, of which
Beringea LLP was the investment manager until 31 March 2016 when ProVen
Planned Exit VCT plc was placed into Members Voluntary Liquidation. The
liquidator has agreed that Beringea LLP will continue to manage the
investment in Blis Media Limited on behalf of ProVen Planned Exit VCT
plc until it is sold.
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 and Smart Information Systems GmbH, which is registered in
Austria.
Summary of investment movements
for the six months ended 31 August 2017
Investment activity during the six months ended 31 August 2017 is
summarised as follows:
Additions Cost
GBP'000
Poq Studio Limited 1,125
Smart Information Systems GmbH (t/a Smart Assistant) 986
Written Byte Limited (t/a Deepcrawl) 488
Honeycomb.TV Limited 405
Netcall plc* 287
Perfect Channel Limited 150
ContactEngine Limited 112
Total 3,553
Market Realised
value at 1 Disposal Gain against gain in
Disposals Cost March 2017 proceeds cost period
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Third Bridge
Group
Limited 949 3,767 5,432 4,483 1,665
MatsSoft
Limited * 1,010 1,474 2,454 1,444 980
APM
Healthcare
Limited 500 986 1,382 882 396
Celoxica
Limited 118 118 118 - -
Conversity
Limited 86 - 94 8 94
Skills
Matter
Limited 79 79 79 - -
Total 2,742 6,424 9,559 6,817 3,135
* MatsSoft Limited was disposed of during the period. As part of the
disposal, the Company received shares in Netcall plc valued at
GBP287,000 on the disposal date. The Netcall plc shares are shown as an
addition and disposal, as part of the MatsSoft Limited proceeds, in the
tables above.
Unaudited Condensed Income Statement
for the six months ended 31 August 2017
(unaudited) (unaudited)
Six months ended Six months ended (audited)
31 Aug 2017 31 Aug 2016 Year ended 28 Feb 2017
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 524 - 524 600 - 600 949
Gains on investments - 74 74 - 5,422 5,422 14,134
Investment management fee (272) (815) (1,087) (252) (755) (1,007) (1,994)
Performance incentive fee - (1,118) (1,118) - (376) (376) (426)
Other expenses (319) (9) (328) (204) (8) (212) (436)
(Loss)/ return on ordinary activities
before taxation (67) (1,868) (1,935) 144 4,283 4,427 12,227
Tax on ordinary activities - - - - - - -
(Loss)/ return attributable to equity
shareholders (67) (1,868) (1,935) 144 4,283 4,427 12,227
Basic and diluted (loss)/ return per
share (0.1p) (1.9p) (2.0p) 0.2p 4.5p 4.7p 12.7p
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 2017
(unaudited) (unaudited) (audited)
31 Aug 31 Aug 28 Feb
2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 66,283 63,836 72,216
Current assets
Debtors 676 410 592
Cash at bank and in hand 34,252 36,329 33,210
34,928 36,739 33,802
Creditors: amounts falling due within one year (1,565) (1,118) (1,279)
Net current assets 33,363 35,621 32,523
Net assets 99,646 99,457 104,739
Capital and reserves
Called up share capital 9,784 9,863 9,856
Capital redemption reserve 3,757 3,611 3,653
Share premium account 48,560 47,943 48,252
Special reserve 13,168 19,528 16,666
Capital reserve - realised 15,281 6,775 10,406
Revaluation reserve 9,586 12,041 16,329
Revenue reserve (490) (304) (423)
Total equity shareholders' funds 99,646 99,457 104,739
Basic and diluted net asset value per share 101.8p 100.8p 106.3p
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Changes in Equity
Called Share
up Capital Share capital
Six months ended 31 Aug 2017 share redemption premium to be Special Capital Revaluation Revenue
(unaudited) capital reserve account issued reserve reserve - realised reserve reserve Total
GBP'000 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
Total comprehensive income - - - - - 4,875 (6,743) (67) (1,935)
Issue of new shares 32 - 308 - - - - - 340
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
Called Share
up Capital Share capital
Six months ended 31 Aug 2016 share redemption premium to be Special Capital Revaluation Revenue
(unaudited) capital reserve account issued reserve reserve - realised reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 March 2016 6,547 3,587 16,985 20,576 24,457 7,019 7,514 (153) 86,532
Total comprehensive income - - - - - (244) 4,527 144 4,427
Issue of new shares 3,340 - 30,958 (20,756) - - - - 13,722
Share issue costs - - - - (1,063) - - - (1,063)
Share buybacks and
cancellation (24) 24 - - (229) - - - (229)
Dividends paid - - - - (3,637) - - (295) (3,932)
At 31 August 2016 9,863 3,611 47,943 - 19,528 6,775 12,041 (304) 99,457
The special reserve, capital reserve - realised and revenue reserve are
distributable reserves. The distributable reserves are reduced by losses
of GBP1,042,000 (2016: GBP1,042,000) which are included in the
revaluation reserve. Reserves available for distribution therefore
amount to GBP26,917,000 (2016: GBP24,957,000).
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Cash Flows
for the six months ended 31 August 2017
(unaudited) (unaudited) (audited)
Six months Six months Year
ended ended ended
31 Aug 31 Aug 28 Feb
2017 2016 2017
Note GBP'000 GBP'000 GBP'000
Net cash used in operating activities A (1,702) (2,937) (4,140)
Cashflows from investing activities
Purchase of investments (3,453) (3,290) (10,181)
Sale of investments 9,272 6,269 13,874
Net cash from investing activities 5,819 2,979 3,693
Cashflows from financing activities
Proceeds from share issues - 13,191 33,767
Share issue costs - (1,063) (1,063)
Purchase of own shares (967) (196) (710)
Share capital to be issued - - (20,576)
Equity dividends paid (2,108) (3,400) (5,516)
Net cash (used in)/ from financing (3,075) 8,532 5,902
Increase in cash and cash equivalents B 1,042 8,574 5,455
Notes to the cash flow statement:
A Cash used in operating activities
(Loss)/ return on ordinary activities before taxation (1,935) 4,427 12,227
Gain on investments (74) (5,314) (14,134)
(Increase)/ decrease in prepayments, accrued income
and other debtors (84) 30 (241)
Increase/ (decrease) in accruals and other creditors 391 (2,080) (1,992)
Net cash used in operating activities (1,702) (2,937) (4,140)
B Analysis of net funds
Beginning of period /year 33,210 27,755 27,755
Net cash inflows 1,042 8,574 5,455
End of period/ year 34,252 36,329 33,210
The accompanying notes form an integral part of this announcement.
Notes to the half-yearly report
for the six months ended 31 August 2017
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 2017.
a) 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.
b) 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.
2. All revenue and capital items in the Unaudited Condensed Income
Statement derive from continuing operations.
3. There are no other items of comprehensive income other than
those disclosed in the Unaudited Condensed Income Statement.
4. 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.
5. The comparative figures are in respect of the year ended 28
February 2017 and the six-month period ended 31 August 2016.
6. Basic and diluted return per share for the period has been
calculated on 98,357,659 shares, being the weighted average number of
shares in issue during the period.
7. Basic and diluted NAV per share for the period has been
calculated on 97,845,882 shares, being the number of shares in issue at
the period end.
8. Dividends
(unaudited) (unaudited) (audited)
Year
Six months ended Six months ended ended
28 Feb
31 Aug 2017 31 Aug 2016 2017
Revenue Capital Total Revenue Capital Total Total
Pence GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016 Final 4.0 - - - 295 3,637 3,932 3,932
2017
Interim 2.5 - - - - - - 2,460
2017 Final 2.5 - 2,449 2,449 - - - -
Total
dividends
paid - 2,449 2,449 295 3,637 3,932 6,392
9. Contingent liabilities, guarantees and financial commitments
The Company has no contingent liabilities, guarantees or financial
commitments at 31 August 2017.
10. Called up share capital
Under the terms of the Company's Dividend Reinvestment Scheme, the
Company allotted 323,319 shares to subscribing shareholders on 14 July
2017. The aggregate consideration for the shares was GBP340,778.
During the six months to 31 August 2017, the Company repurchased
1,040,410 shares for an aggregate consideration (net of costs) of
GBP1,043,567 being an average price of 100.3p per share and which
represented 1.1% 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 GBP5,240.
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 2017 28 Feb 2017
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AIM quoted 311 - - 311 33 - - 33
Loan notes - - 19,354 19,354 - - 21,815 21,815
Unquoted
equity - - 38,047 38,047 - - 45,884 45,884
Preference
shares - - 8,571 8,571 - - 4,484 4,484
Total 311 - 65,972 66,283 33 - 72,183 72,216
12. 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 2017, GBP1,087,000 was
payable to Beringea LLP in respect of these services. At the period end
the Company owed Beringea LLP GBP178,000.
From 13 January 2015 Beringea LLP was appointed Administration Manager
of the Company. Fees paid to Beringea in its capacity as Administration
Manager for the six months ended 31 August 2017 amounted to GBP29,000 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.
For the year ending 28 February 2018, a performance incentive fee of
GBP1,118,000 has been accrued. 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 2017.
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
2017, GBP157,000 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 2017 amounted to GBP318,000.
During the six months to 31 August 2017, an amount of GBP61,000 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. They have therefore not been delivered to the Registrar of Companies. The figures for the year ended 28 February 2017 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 a minimal level. 16. 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 www.provenvcts.co.uk. 17. Post balance sheet events Since 31 August 2017, the Company has invested GBP0.5 million in Been There Done That Global Limited, a provider of a tech-enabled platform that develops brand media strategies. Effective from 1 October 2017, Neal Ransome was appointed as Director of the Company. On 11 October 2017, the Board declared an interim dividend of 7.0p per share which will be paid on 17 November 2017 to shareholders on the register at 20 October 2017. Also on 11 October 2017, the Board announced the intention to launch an offer for subscription for the Sterling equivalent of EUR5 million (approximately GBP4.4 million). Full details will be released in due course. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Proven VCT plc via Globenewswire
(END) Dow Jones Newswires
October 19, 2017 12:03 ET (16:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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