TIDMBNS
Baronsmead VCT 4 plc
Half Yearly Financial Report
17 August 2012
The Directors announce the unaudited half-yearly financial report for the six
months to 30 June 2012 as follows:-
Investment Objective
Baronsmead VCT 4 is a tax efficient listed company which aims to achieve
long-term investment returns for private investors.
Investment policy
? To invest primarily in a diverse portfolio of UK growth businesses, whether
unquoted companies or traded on AIM.
? Investments are made selectively across a range of sectors in companies that
have the potential to grow and enhance their value.
Dividend policy
The Board of Baronsmead VCT 4 has the objective to sustain a progressive
dividend policy for shareholders but this depends primarily on the level of
profitable realisations and it cannot be guaranteed. There may be variations in
the amount of dividends paid year on year.
Share price discount policy
The Company buys back its shares if, in the opinion of the Board, a repurchase
would be in the best interests of the Company's shareholders as a whole. Shares
are bought back through the market rather than directly from shareholders. This
minimises the number of shares bought back by the Company while maximising the
opportunity for investors to invest in the Company's existing shares.
Through the operation of the Company's share buy back policy the mid share
price was at an average discount to net asset value of approximately 10 per
cent in the two years to 30 June 2012. The difference between the buy and sell
price for the Company's shares averaged 0.9p over the same two year period.
Shareholder choice
The Board wishes to provide shareholders with a number of choices that enable
them to utilise their investment in Baronsmead VCT 4 in ways that best suit
their personal investment and tax planning and in a way that treats all
shareholders equally.
* Fund raising | From time to time the Company seeks to raise additional
funds by issuing new shares at a premium to the latest published net asset
value to account for issue costs. On 12 January 2012 the Company launched
an offer for subscription to raise GBP4.135 million (GBP3.938 million after
costs). On 7 February 2012 the Company announced that this offer was fully
subscribed.
* Dividend Reinvestment Plan | The Company offers a Dividend Reinvestment
Plan which enables shareholders to purchase additional shares through the
market in lieu of cash dividends. Approximately 800,000 shares were bought
in this way between April and December 2011. The Company also issued
20,000 shares out of Treasury on 12 December 2011 for the first time.
* Buy back of shares | From time to time the Company buys its own shares
through the market in order to maintain a mid share price discount of
approximately 10 per cent to net asset value. In the six months to 30 June
2012, 532,537 shares were bought back representing 0.9 per cent of the
shares in issue at 30 June 2012 at prices which represented an average
discount of 10.1 per cent to the latest published net asset values.
* Secondary market | The Company's shares are listed on the London Stock
Exchange and can be bought using a stockbroker or authorised share dealing
service in the same way as shares of any other listed company. In addition
to the shares bought by participants of the Dividend Reinvestment Plan,
approximately 36,000 shares were bought by investors in the Company's
existing shares in the six months to 30 June 2012.
FINANCIAL HEADLINES
? 7.1% - Net asset value ("NAV") per share increased 7.1 per cent to 100.7p
before deduction of the interim dividend.
? 3.0p - Interim dividend of 3.0p payable on 21 September 2012 for the six
month period to 30 June 2012.
? 55.0p - Cumulative tax free dividends total 55.0p per share paid to
shareholders in the last 10 years, including the declared 3.0p interim
dividend.
? GBP3.9m - Net proceeds raised in January/February 2012.
Performance Summary to 30 June 2012
Total return * 6 months % 1 year % 3 years % 5 years % 10 years %
Net Asset Value| 7.1 4.5 33.5 11.2 76.2
FTSE All-Share 3.3 (3.1) 47.4 2.0 80.9
* Source: ISIS EP LLP and AIC.
| This return for Baronsmead VCT 4 ignores up front tax relief and the impact
of receiving dividends tax free.
Cash Returned to Shareholders
The Board is aware that shareholders are concerned that the original capital
subscribed into Baronsmead VCT 4 has been maintained. The table below shows the
cash returned to shareholders dependent on their subscription cost, including
their income tax reclaimed on subscription.
Subscription Income Net Cumulative Net annual Gross
price tax cash dividends yield± yield|
p reclaim invested paid* % %
p p p
Year subscribed
2002 100.0 20.0 80.0 55.0 6.5 8.8
2006 (C 100.0 40.0 60.0 33.4 8.8 11.8
shareholders)**
2010 (March) 95.9 28.8 67.1 17.0 10.8 14.6
* Includes interim dividend of 3.0p to be paid on 21 September 2012.
± Net annual yield represents the cumulative dividends paid expressed as an
annualised percentage of the net cash invested.
| The gross equivalent yield if the dividends had been subject to higher rate
tax (currently 32.5 per cent on dividend income). The additional rate of tax on
dividend income of 42.5 per cent came into force from the 2010/11 tax year for
those who earned more than GBP150,000. For those Shareholders who would otherwise
pay this higher rate of tax on dividends, the future gross equivalent yield
will be higher than the figures shown.
**Dividends paid to C shareholders post conversion have been adjusted by the
conversion ration (1.0372828).
CHAIRMAN'S STATEMENT
I am delighted to report growth of 7.1 per cent in the Net Asset Value per
share to 100.68p a share. During the six months to 30 June 2012, the Company
raised GBP3.9 million net of expenses and invested GBP5.4 million in five new and
five follow-on investments.
An interim dividend of 3.0p per share will be funded from the profits realised
from the sale of investments.
RESULTS
The Net Asset Value ("NAV") increased by 7.1 per cent to 100.68p a share from
94.01p before taking account of the interim dividend which compares to a gain
in the FTSE All-Share Index of 3.3 per cent.
The proposed tax free interim dividend of 3.0p, together with the second
interim dividend of 4.0p paid in December 2011, equates to an annual tax free
dividend yield of 7.9 per cent on the mid share price of 88.75p as at 30 June
2012. For higher rate tax payers this is equivalent to 10.5 per cent.
Pence per
ordinary
share
NAV as at 1 January 2012 94.01
Valuation uplift 7.1 per cent 6.67
NAV as at 30 June 2012 100.68
Less Interim dividend payable on 21 (3.00)
September 2012
Total 97.68
LONG TERM PERFORMANCE
Over the last ten years the cumulative tax free dividends paid to shareholders
amount to 55.0p per share and the NAV total return has been 176.2p for each
100p invested.
This interim report now includes the ten year record of the fund in line with
other investment company reports. The Company's track record since launch can
be found in the Half-Yearly Report as well as on www.baronsmeadvct4.co.uk.
PORTFOLIO REVIEW
The net assets of GBP62.3 million comprise the following:
* unquoted companies 57 per cent.
* AIM-traded and other listed companies 27 per cent.
* Cash or near cash assets (government securities) 16 per cent.
The portfolio has progressed well during the last six months with a steady
increase in unquoted valuations of 5 per cent and a 20 per cent uplift in the
AIM quoted portfolio. The AIM investments enjoyed a re-rating of the small cap
sector during 2012 following a large reduction in the last quarter of 2011.
The most significant gains were GBP1.4 million from the unquoted domiciliary care
company Independent Living Services, and GBP1.3 million from the AIM traded
software company, IDOX. The largest unquoted investment, Nexus Vehicle Holdings
and the largest AIM investment, IDOX, represented 7.6 and 5.4 per cent of NAV
respectively.
The Board undertakes a quarterly review of the investment portfolio monitoring
trading performance and the overall health and trajectory of the investee
companies. At 30 June 2012, 86 per cent of companies in the portfolio were
progressing steadily or better.
NEW INVESTMENTS
During the six months to 30 June 2012 a total of GBP5.4 million was invested in
five new companies and a number of follow on investments which included:
* GBP833k in the unquoted Happy Days Consultancy, a childcare day nursery based
in Cornwall and a GBP360k follow on investment in Crew Clothing.
* GBP316k in the AIM-traded Zattikka and follow on investments in Accumuli GBP5k,
Dods Group GBP678k, Driver Group GBP61k and Inspired Energy GBP100k.
GBP3.0 million has also been invested into three unquoted acquisition vehicles
chaired by experienced operating partners with whom ISIS has successfully
worked in the recent past. These companies have been formed to enable
investment into established trading entities over the next two years. The
combination of their market knowledge and expertise with that of ISIS will
create investment opportunities in their chosen market sectors.
After the period end, GBP1.0 million was invested in Pho, an unquoted restaurant
group that specialises in Vietnamese street food.
INVESTMENT REALISATIONS
Three AIM investments were realised during the period. Clarity Commerce
Solutions, Real Good Food Company and Prologic were valued below cost and have
been divested to improve the quality of the portfolio.
TVC, the unquoted marketing communications agency, was sold to the Economist
Group for a profit representing a fivefold gain in value from the low point in
March 2010 following intensive intervention by the ISIS management team.
BEST REPORT & ACCOUNTS - VCTs
Baronsmead VCT 4 received the award for Best Information to Shareholders Awards
in May 2012 from the Association of Investment Companies. The independent
judging panel commented "The awards demonstrate the industry's commitment to
promoting best practice in shareholder communication and recognising those
companies which have gone the extra mile to convey important information to
investors."
The judges praised the report and accounts for Baronsmead VCT 4 for being
detailed, colourful and balanced. Information was thoughtfully presented for
retail investors. The Board was delighted that its painstaking attention to
clarity was recognised by its trade body.
VCT LEGISLATION
The Finance Bill in March 2012 announced very significant changes to the
Venture Capital Trust ("VCT") legislation to broaden the role of VCT's in
financing growing companies and to comply with EU State Aid requirements for
the VCT scheme. In summary these changes are as follows:
* An increase in the size of companies which can receive VCT funds from GBP7
million to GBP15 million asset value and a headcount from 50 to 250.
* An increase in the amount of finance a company can receive from GBP2 million
to GBP5 million per year.
* The restriction of the use of VCT and EIS funds for the acquisition of
shares in another company. This change will apply only to VCT funds raised
after 5 April 2012.
The legislative changes received Royal Assent in mid July 2012.
In addition the annual limit of GBP1 million that a VCT can invest in a
qualifying investment in any tax year has been removed.
SHAREHOLDER CHOICE
The Board has always tried to offer shareholders a wide choice of options
regarding their investment in Baronsmead VCT 4. The options available are set
out on the inside front cover of this interim report together with the Board's
share price discount policy and the approach to share buy backs.
The Board believes that the buy back policy, which is operated primarily by our
brokers using the secondary market, is in the best interests of the Company's
shareholders as a whole. It facilitates realisation without limiting the
ability of the Board to offer "top-up" fund raisings to existing shareholders.
There is no intention to introduce an "enhanced buy back" scheme since such a
scheme would not generate additional funds and limit the raising of additional
funds through more cost effective non-prospectus offers.
WEBSITE
The Company's website has recently been redesigned and is continually updated
to provide easier access to information about the Company. Please do visit the
website at the following location and your feedback will be most appreciated:
www.baronsmeadvct4.co.uk
OUTLOOK
The outlook for the UK economy remains uncertain with low growth due to the
Euro zone debt crisis and the continuing lack of bank finance. The Board
believes the fund is well placed to steer through the current economic
conditions. The Board and Management focus on high growth niches within the
chosen market sectors, limit the amount of leverage in the portfolio and take a
"hands on" approach to supporting and guiding the investee companies
Robert Owen
Chairman
17 August 2012
Table of Investments and Realisations
Investments in the six months to 30 June 2012
Company Location Sector Activity Book cost
GBP'000
Unquoted
investments
New
Ingleby (1885) London Business Company seeking to acquire 1,000
Limited Services businesses in the business
services sector
Ingleby (1886) London Business Company seeking to acquire 1,000
Limited Services businesses in the business
services sector
Ingleby (1887) London Consumer Company seeking to acquire 1,000
Limited Markets businesses in the consumer
markets sector
Happy Days Newquay Healthcare & Provider of nursery based 833
Consultancy Education childcare in Cornwall &
Limited Plymouth across 16 settings
Follow on
Crew Clothing London Consumer Multi-channel clothing 360
Holdings Markets retailer
Limited
Total unquoted investments 4,193
AIM-traded & listed investments
New
Zattikka plc London TMT* Online games development 316
Follow on
Dods Group plc London TMT* Political information and 678
communication
Inspired Energy Kirkham Business Energy procurement 100
plc Services consultancy services
Driver Group Rossendale Business Dispute resolution 61
plc Services
Accumuli plc Salford TMT* Managed IT security 5
Total AIM-traded & listed 1,160
investments
Total investments in the 5,353
period
* Technology, Media and Telecommunications ("TMT").
Realisations in the six months to 30 June 2012
Company First 31 December Realised Overall
investment 2011 profit/ multiple
date valuation (loss) return *
GBP'000 this period
GBP'000
Unquoted
realisations
TVC Group Limited Full trade Jul 08 1,298 26 ^
sale
MLS Limited Loan Jul 06 121 - 1.0
repayment
Total unquoted 1,419 26
realisations
AIM-traded & listed realisations
Clarity Commerce Full trade Oct 99 29 3 0.6
Solutions plc sale
Prologic plc Full trade Jun 04 78 36 0.5
sale
Real Good Food Full market Dec 03 101 41 0.4
Company (The) plc sale
Total AIM-traded & listed 208 80
realisations
Total realisations in the period 1,627 106|
^ Not disclosed.
| Proceeds of GBP7,000 were also received in respect of Getting Personal Limited,
which had been sold in the year ended 31 December 2011.
Summary Investment Portfolio
Investment Classification at 30 June 2012
By Sector* Percentage
Business Services 31%
Consumer Markets 19%
Financial Services 2%
Healthcare & Education 15%
IT & Media 33%
Total Assets* Percentage
Unquoted - loan stock 42%
Unquoted - ordinary & preference 15%
shares
AIM & listed 27%
Interest bearing securities 11%
Net current assets 5%
Time Investments Held* Percentage
Less than 1 year 21%
Between 1 and 3 years 14%
Between 3 and 5 years 16%
Greater than 5 years 49%
* at 30 June 2012 valuation
Summary Investment Portfolio
Company Sector Book 31 30 June % of % of % of
cost December 2012 net Equity Equity
GBP'000 2011 valuation assets held by held
valuation GBP'000 Baronsmead by
GBP'000| VCT 4 plc all
funds*
Unquoted
Nexus Vehicle Business 2,367 5,658 4,713 7.6 12.6 57.4
Holdings Limited Services
CableCom TMT 1,381 3,707 3,881 6.2 10.6 48.0
Networking
Holdings Limited
Crew Clothing Consumer 1,344 2,676 3,047 4.9 6.1 25.5
Company Limited Markets
Fisher Outdoor Consumer 1,423 1,777 2,771 4.5 10.5 44.0
Leisure Holdings Markets
Limited
Independent Healthcare & 1,599 1,293 2,667 4.3 16.2 65.7
Living Services Education
Limited
CSC (World) TMT 1,607 1,940 2,282 3.7 8.8 40.0
Limited
Kafévend Consumer 1,252 1,991 2,204 3.5 15.8 66.5
Holdings Limited Markets
Valldata Group Business 1,617 1,694 1,749 2.8 8.9 40.6
Limited Services
Inspired Business 796 1,368 1,382 2.2 5.0 22.5
Thinking Group Services
Limited
Independent Healthcare & 1,346 1,346 1,346 2.2 10.9 55.0
Community Care Education
Management
Limited
MLS Limited TMT 389 1,043 1,122 1.8 5.3 22.5
Ingleby (1885) Business 1,000 - 1,000 1.6 9.6 48.6
Limited Services
Ingleby (1886) Business 1,000 - 1,000 1.6 9.6 48.6
Limited Services
Ingleby (1887) Consumer 1,000 - 1,000 1.6 9.6 48.6
Limited Markets
Arcas Business 1,000 1,000 1,000 1.6 9.6 48.6
Investments Services
Limited
HealthTech Healthcare & 1,000 1,000 1,000 1.6 9.6 48.6
Innovation Education
Partners Limited
Quest Venture Business 1,000 1,000 1,000 1.6 9.6 48.6
Partners Limited Services
Happy Days Healthcare & 833 - 833 1.3 8.4 42.5
Consultancy Education
Limited
Playforce Business 1,033 512 512 0.8 9.7 44.0
Holdings Limited Services
Music Festivals Consumer 400 400 400 0.7 N/A N/A
plc Loan note Markets
Other investments 3,340 970 326 0.5
Total unquoted 26,727 29,375 35,235 56.6
AIM
IDOX plc TMT 738 2,021 3,358 5.4 2.4 9.6
Netcall plc TMT 868 842 1,337 2.2 4.1 20.4
Escher Group TMT 614 564 759 1.2 1.9 9.7
Holdings plc
Tasty plc Consumer 470 547 741 1.2 2.5 17.1
Markets
Jelf Group plc Financial 727 849 737 1.2 1.4 6.3
Services
TLA Worldwide Business 620 620 651 1.0 4.9 24.3
plc Services
Dods Group plc TMT 991 61 609 1.0 5.9 29.9
FFastFill plc TMT 313 448 601 1.0 0.9 6.1
Driver Group plc Business 563 259 568 0.9 4.1 19.4
Services
Accumuli plc TMT 337 473 556 0.9 3.5 19.9
Vianet Group plc Business 646 388 518 0.8 1.8 9.6
Services
Sinclair IS Healthcare & 524 398 479 0.8 0.4 2.4
Pharma plc Education
Paragon Consumer 200 425 400 0.6 3.1 17.3
Entertainment Markets
Limited
Anpario plc Healthcare & 275 315 339 0.5 2.0 14.8
Education
Zattikka plc TMT 316 - 325 0.5 1.4 7.1
Electric Word TMT 633 318 318 0.5 5.3 28.8
plc
Plastics Capital Business 473 321 317 0.5 1.7 9.8
plc Services
Inspired Energy Business 300 217 309 0.5 2.4 11.8
plc Services
Sanderson Group TMT 387 201 302 0.5 1.8 6.9
plc
PROACTIS TMT 619 341 290 0.5 5.4 26.4
Holdings plc
Other 4,654 2,732 2, 691 4.3
investments
Total AIM 15,268 12,340 16,205 26.0
Listed
Vectura Group Healthcare & 245 286 389 0.6 0.2 1.3
plc Education
Chime TMT 369 293 269 0.4 0.2 1.3
Communications
plc
Marwyn Financial 525 81 68 0.1 0.3 1.8
Management Services
Partners plc
Marwyn Value Financial 64 44 37 0.1 1.3 6.0
Investors plc Services
Total listed 1,203 704 763 1.2
Interest bearing
securities
UK T-Bill 23/07/12 3,999 - 3,999 6.5
UK T-Bill 17/09/12 3,198 - 3,198 5.1
Total interest 7,197 - 7,197 11.6
bearing securities
Total investments 50,395 42,419 59,400 95.4
Net current as 2,882 4.6
sets
Net assets 62,282 100.0
| The total investment valuation at 31 December 2011 per the table above does
not agree to the audited accounts due to the purchases and sales since that
date.
* All funds managed by the same investment manager, ISIS EP LLP, including
Baronsmead VCT 4.
The full investment portfolio can be found in the Half-Yearly Report.
AIM & Listed Portfolio Concentration Analysis at 30 June 2012
Investment ranking Book cost Valuation % of
by valuation GBP'000 GBP'000 portfolio
Top Ten 6,241 9,917 58.4
11-20 3,999 3,696 21.8
21-30 3,550 2,464 14.5
30+ 2,681 891 5.3
Total 16,471 16,968 100.0
Independent Review Report to Baronsmead VCT 4 plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2012 which comprises the Income Statement, Reconciliation of Movement in
Shareholders' Funds, Balance Sheet and Statement of Cash Flows and the related
explanatory notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Services Authority
("the UK FSA"). Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with UK Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice). The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with the
Statement Half-Yearly Financial Reports as issued by the UK Accounting
Standards Board.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International
Standards on Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2012 is not prepared, in all material respects,
in accordance with the Statement Half-Yearly Financial Reports as issued by the UK Accounting
Standards Board and the DTR of the UK FSA.
Catherine Burnet
for and on behalf of KPMG Audit Plc
Chartered Accountants, Edinburgh
17 August 2012
Responsibility statement of the Directors in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
?the condensed set of financial statements has been prepared in accordance with
the Statement Half-yearly Financial Reports issued by the UK Accounting
Standards Board;
? the Chairman's Statement (constituting the interim management report)
includes a fair review of the information required by 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;
? the Statement of Principal Risks and Uncertainties is a fair review of the
information required by DTR 4.2.7R being a description of the principal risks
and uncertainties for the remaining six months of the year; and
? the financial statements include a fair review of the information required by
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.
By Order of the Board,
R Owen
Chairman
17 August 2012
Unaudited Income Statement
For the six months to 30 June 2012
Six months to 30 June Six months to 30 June Year to 31 December
2012 2011 2011*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000*
Unrealised gains on - 4,551 4,551 - 4,768 4,768 - 1,508 1,508
investments
Realised gains on - 113 113 - 204 204 - 1,817 1,817
investments
Income 319 - 319 842 - 842 1,885 - 1,885
Investment (191) (572) (763) (186) (558) (744) (362) (1,086) (1,448)
management fee
Other expenses (193) - (193) (185) - (185) (369) - (369)
(Loss)/profit on (65) 4,092 4,027 471 4,414 4,885 1,154 2,239 3,393
ordinary activities
before taxation
Taxation on - - - (88) 88 - (243) 243 -
ordinary activities
(Loss)/profit on (65) 4,092 4,027 383 4,502 4,885 911 2,482 3,393
ordinary activities
after taxation
Return per ordinary (0.10)p 6.70p 6.60p 0.65p 7.63p 8.28p 1.55p 4.23p 5.78p
share: Basic
* Figures as at 31 December 2011 are audited.
Unaudited Reconciliation of Movement in Shareholders' Funds
For the six months to 30 June 2012
Six Six Year to
months to months to 31 December
30 June 30 June 2011
2012 2011 GBP'000*
GBP'000 GBP'000
Opening shareholders' funds 54,786 58,704 58,704
Profit for the period 4,027 4,885 3,393
Purchase of shares for treasury (468) (640) (850)
Gross proceeds of share issues 4,135 - -
Expenses of share issue & buy backs for (198) (3) (6)
treasury
Dividends paid - (2,370) (6,455)
Closing shareholders' funds 62,282 60,576 54,786
* Figures as at 31 December 2011 are audited.
Notes
1. The unaudited interim results which cover the six months to 30 June 2012
have been prepared in accordance with applicable accounting standards and
adopting the accounting policies set out in the statutory accounts of the
Company for the year to 31 December 2011.
2. Return per ordinary share is based on a weighted average of 61,039,183
ordinary shares in issue (30 June 2011 - 59,008,711; 31 December 2011 -
58,693,578).
3. Earnings for the six months to 30 June 2012 should not be taken as a guide
to the results of the full financial year to 31 December 2012.
4. During the six months to 30 June 2012 the Company purchased 532,537 ordinary
shares to be held in treasury at a cost of GBP468,000. At 30 June 2012, the
Company holds 6,661,130 ordinary shares in treasury. Excluding treasury shares,
there were 61,859,931 ordinary shares in issue at 30 June 2012 (30 June 2011 -
58,514,236; 31 December 2011 - 58,274,236).
5. The interim dividend of 3.0p per ordinary share (3.0p capital) will be paid
on 21 September 2012 to shareholders on the register on 7 September 2012. The
ex-dividend date is 5 September 2012.
6. The financial information contained in this half-yearly report does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The information for the year to 31 December 2011 has been extracted from
the latest published audited financial statements. The audited financial
statements for the year to 31 December 2011 have been filed with the Registrar
of Companies. The auditor's report thereon was (i) unqualified, (ii) did not
include reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006. No statutory accounts in
respect of any period after 31 December 2011 have been reported on by the
Company's auditors or delivered to the Registrar of Companies.
7. Copies of the half-yearly financial report will be distributed to
shareholders and available from the Registered Office of the Company at 100
Wood Street, London EC2V 7AN.
Unaudited Balance Sheet
As at 30 June 2012
As at As at As at
30 June 30 June 31 December
2012 2011 2011
GBP'000 GBP'000 GBP'000*
Fixed assets
Unquoted investments 35,235 31,001 30,673
Traded on AIM 16,205 12,432 12,548
Traded on NYSE - 174 -
Listed on LSE 763 929 704
Interest bearing securities 7,197 14,987 8,199
59,400 59,523 52,124
Current assets
Debtors 308 631 562
Cash at bank and on deposit 3,046 884 2,528
3,354 1,515 3,090
Creditors (amounts falling due within (472) (462) (428)
one year)
Net current assets 2,882 1,053 2,662
Net assets 62,282 60,576 54,786
Capital and reserves
Called-up share capital 6,852 6,440 6,440
Share premium account 24,717 21,192 21,190
Capital redemption reserve 8,622 8,622 8,622
Capital reserve 13,134 15,690 14,415
Revaluation reserve 9,006 8,240 4,103
Revenue reserve (49) 392 16
Equity shareholders' funds 62,282 60,576 54,786
* Figures as at 31 December 2011 are audited.
As at As at As at
30 June 30 June 31 December
2012 2011 2011*
Net asset value per share 100.68p 103.52p 94.01p
Number of ordinary shares in 61,859,931 58,514,236 58,274,236
circulation
Treasury net asset value per share 99.52p 102.17p 93.08p
Number of ordinary shares in 61,859,931 58,514,236 58,274,236
circulation
Number of ordinary shares held in 6,661,130 5,888,593 6,128,593
treasury
Number of listed ordinary shares in 68,521,061 64,402,829 64,402,829
issue
* Figures as at 31 December 2011 are audited.
Unaudited Statement of Cash Flows
For the six months to 30 June 2012
Six months Six months Year
to to to
30 June 30 June 31 December
2012 2011 2011
GBP'000 GBP'000 GBP'000*
Net cash outflow from operating activities (368) (295) (105)
Capital expenditure and financial (2,584) 2,736 8,488
investment
Equity dividends paid - (2,370) (6,455)
Net cash (outflow)/inflow before financing (2,952) 71 1,928
Net cash inflow/(outflow) from financing 3,470 (643) (856)
Increase/(decrease) in cash 518 (572) 1,072
Reconciliation of net cash inflow/
(outflow) to movement in net cash
Increase/(decrease) in cash 518 (572) 1,072
Opening net cash 2,528 1,456 1,456
Net cash at end of period 3,046 884 2,528
Reconciliation of operating profit before taxation to net cash flow from
operating activities
Profit on ordinary activities before 4,027 4,885 3,393
taxation
Gains on investments (4,664) (4,972) (3,325)
Changes in working capital and other 269 (208) (173)
non-cash items
Net cash outflow from operating activities (368) (295) (105)
* Figures as at 31 December 2011 are audited.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed interest investments, cash and
liquid resources. Its principal risks are therefore market risk, credit risk
and liquidity risk. Other risks faced by the Company include economic, loss of
approval as a Venture Capital Trust, investment and strategic, regulatory,
reputational, operational and financial risks. These risks, and the way in
which they are managed, are described in more detail under the heading
Principal risks, risk management and regulatory environment within the Business
Review and Notes in the Company's Annual Report and Accounts for the year to 31
December 2011. The Company's principal risks and uncertainties have not changed
materially since the date of that report.
Related Parties
ISIS EP LLP ("the Manager") manages the investments of the Company. The Manager
also provides or procures the provision of secretarial, accounting,
administrative and custodian services to the Company. Under the management
agreement, the Manager receives a fee of 2.5 per cent per annum of the net
assets of the Company. This is described in more detail under the heading
Management within the Report of the Directors in the Company's Annual Report
and Accounts for the year to 31 December 2011. During the period, the Company
has incurred management fees of GBP763,000 and secretarial and accounting fees of
GBP63,000 payable to the Manager.
Going Concern
After making enquires, and bearing in mind the nature of the Company's business
and assets, the Directors consider that the Company has adequate resources to
continue in operational existence for the foreseeable future. In arriving at
this conclusion, the Directors have considered the liquidity of the Company and
its ability to meet obligations as they fall due for a period of at least
twelve months from the date that these financial statements were approved. As
at 30 June 2012, the Company held cash balances & investments in interest
bearing securities with a combined value of GBP10,243,000. Cash flow projections
have been reviewed and show that the Company has sufficient funds to meet both
its contracted expenditure and its discretionary cash outflows in the form of
the share buyback programme and dividend policy. The Company has no external
loan finance in place and therefore is not exposed to any gearing covenants.
Corporate Information
Directors Registrar and Transfer Office
Robert Owen (Chairman) Computershare Investor Services PLC
Ian Kirkpatrick|* PO Box 82
Alan Pedder CBE|^ The Pavilions
Robin Williams Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0870 889 3251
ISIS EP LLP
Brokers
Registered Office Matrix Corporate Capital LLP
100 Wood Street One Vine Street
London EC2V 7AN London W1J 0AM
Investment Manager Auditors
ISIS EP LLP KPMG Audit Plc
100 Wood Street Saltire Court
London EC2V 7AN 20 Castle Terrace
Edinburgh EH1 2EG
FPPE LLP
(Listed interest bearing securities
only) Solicitors
100 Wood Street Norton Rose LLP
London EC2V 7AN 3 More London Riverside
London SE1 2AQ
Investor Relations
Michael Probin VCT Status Adviser
020 7506 5796 PricewaterhouseCoopers LLP
1 Embankment Place
Registered Number London WC2N 6RH
04313537
Website
www.baronsmeadvct4.co.uk
| Chairman of the Nomination Committee
* Chairman of the Audit Committee
| Chairman of the Management Engagement and Remuneration Committee
^ Senior Independent Director
Copies of the half yearly report can be obtained from the following website:
www.baronsmeadvct4.co.uk.
National Storage Mechanism
A copy of the half-yearly report will be submitted shortly to the National
Storage Mechanism ("NSM") and will be available for inspection at the NSM,
which is situated at: www.hemscott.com/nsm.do
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
END
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