TIDMCR3
CORE VCT PLC
From: Core VCT PLC
Date: 15 March 2013
Yearly Financial Report for the Year ended 31 December 2012
Performance Summary
Ordinary Shares 31 December 2012 31 December 2011
Net asset value per share 57.90 pence 66.30 pence
Total return to date per share(1) 89.05 pence 93.45 pence
Share price (mid market) 25.75 pence 37.50 pence
Cumulative dividends per share since 31.15 pence 27.15 pence
inception(2)
Ongoing charges ratio(3) 1.24% 1.04%
B Shares 31 December 2012 31 December 2011
Net asset value per share 0.01 pence 0.01 pence
Share price (mid market) 10.00 pence 14.00 pence
1. Total return per share comprises closing net asset value per share plus
cumulative dividends per share paid to date.
2. Based on a weighted average of dividends paid by Core VCT I plc, Core VCT
II plc and Core VCT III plc.
3. Ongoing charges ratio is calculated by taking operating costs of the Group
(excluding trail commission, third party transaction costs and costs
associated with corporate transactions) divided by the average NAV for the
year.
Chairman's Statement
Results
The Net Asset Value ("NAV") Total Return of the Ordinary Shares was 89.05p as at
31 December 2012, comprising a NAV of 57.90p and weighted average cumulative
dividend paid of 31.15p per Ordinary Share. This is a decrease from the NAV
Total Return to 31 December 2011 of 4.7%. A net loss of GBP1,905,295 (decrease of
4.40p per share) was recorded in the statement of Comprehensive Income for the
year ended 31 December 2012 (2011: net loss of GBP6,238,726).
The decrease of 4.40p per share is accounted for by:
* 4.08p per share due to movement in the unquoted portfolio;
* Add gain generated from sale of investment 0.40p; and
* Less 0.72p per share for operating costs.
Merger Costs
Following the merger of Core VCT I plc, Core VCT II plc and Core VCT III plc
("the Group") on 16 July 2009, I reported that the costs of undertaking the
merger were expected to be GBP453,000 (including VAT) and these should be
recovered within 3 years. I can report that as at 31 December 2012 cost savings
of GBP464,000 were achieved, slightly ahead of this target.
Investments
One of the main contributors to the fall in NAV was Allied International
Holdings Limited ("Allied"), an investment directly held by Core VCT plc, which
required further funding to progress with its turnaround plan. Both Core VCT IV
plc and Core VCT V plc did not participate in the further funding due to their
cash constraints and GBP950,000 was provided by Core VCT plc, by way of a loan
with capital priority and an appropriate exit premium. During the year, the
valuation reduced by GBP1.1 million (2.63p per Ordinary Share). This valuation
decrease was driven by a trading deterioration of almost 20% in revenues year-
on-year during 2012, exclusively within the European office destinations. This
was particularly disappointing to see, especially following the positive
recovery made in the business during 2011. However, confirmed booking levels for
FY2013 are very encouraging so far with over 45% of this year's budget already
confirmed.
During the year, the senior management team of Allied has been strengthened and
there has been a re-organisation within the global sales team to drive the
business forward. The order book for 2013 is well ahead of last year (up 40%)
with several offices in Europe and the USA already set to outperform their
budget which was set at over 15% year-on-year sales increase. Whilst progress
has been slower than anticipated originally, we believe the company is now in a
position to grow, organically and potentially by further acquisitions, into a
major global destination management operation over the medium term.
During the year, the value of Momentous Moving Excellence Ltd, an investment
directly held by Core VCT plc, was reduced by GBP0.88 million (2.03p per Ordinary
Share). This reduction reflected downward trends in asset values.
Core Capital I LP ("CCILP")
We reported in the Circular dated 9 June 2011, that GBP27.3 million of growth
capital would be provided to Abriand Limited, Ark Home Healthcare Limited,
Colway Limited, Kelway Limited and SPL Services Limited. Whilst this capital is
being deployed we expect that the valuations of these investments will remain
fairly flat. We do not expect major changes to the valuations until we are much
closer to achieving exits, which we target within a 2-3 year timescale.
Accordingly, during the year, the valuation of CCILP increased slightly by
GBP249,000 (0.58p per share).
During the year, a further GBP6.3 million was drawn down from the Institutional
investors in CCILP. The main recipient of these funds was Abriand Limited, in
which a further GBP3.5 million was invested and which completes the total GBP15.0
million growth capital commitment from CCILP for this investment. This has been
utilised to fund capital expenditure on new sites, and the acquisition and
conversion of the Chez Gerard sites from the administrator of Paramount
Restaurants. During the course of the year, all of the acquired sites have been
fully converted, mostly into the Brasserie Blanc format, with one unit trading
as a re-launched Chez Gerard site. The total commitment to Abriand Limited from
CCILP was GBP20.2 million with GBP5.2 million being provided, predominantly during
2011, to acquire additional shares in the company.
During the year, GBP1.2 million was invested in SPL Services Limited to fund
working capital requirements. Ark Home Healthcare Limited received GBP0.8
million of funding to design, trial and implement a new business operating
model. The remaining GBP0.75 million drawn down relates to the General Partner
Fee for the year to June 2013.
The remaining GBP7.8 million to be called (net of General Partner Fee) is intended
to be deployed in Ark Home Healthcare Limited, Colway Limited and SPL Services
Limited.
Realisations
I mentioned in my Chairman's Statement last year that Adapt Limited was sold to
funds managed by Lyceum Capital for approximately GBP30 million. Some of the
proceeds were held in an escrow account to fund litigation costs. These funds
were released during the year and Core VCT plc received a further GBP172,000. The
total return, since inception, on this investment is summarised below:
Cost GBP1.5 million
Total Return GBP3.0 million
Money Multiple 2.0x
IRR 20% pa
In addition, shortly before the year end, we received the part repayment of a
short term loan to Momentous Moving Excellence Ltd, totalling GBP250,000.
Dividends
Following the successful sale of Adapt Limited to funds managed by Lyceum
Capital during September 2011, a 4p interim capital dividend was paid to
Ordinary Shareholders on 28 February 2012.
The retained cash balances at the year-end are GBP1.1 million, which the Board
believes will provide a sufficient level of headroom for the operations of the
Company, and accordingly is not recommending a further distribution as a final
dividend to shareholders at this stage. Future dividends will only be paid to
shareholders following the successful exit of investments within the portfolio,
when we plan to distribute all of the realised proceeds available, subject to
working capital and VCT requirements.
B Shares
Shareholders will be aware that the Company has an innovative charging
structure. No annual management fees are paid to Core Capital LLP, which is only
rewarded once shareholders have been returned all of their effective initial
capital of 60 pence and subject to a hurdle rate of 5 per cent per annum. This
is achieved through the issue of B Shares, which collectively receive 40% of
distribution above the effective initial capital plus hurdle. Of these shares,
73% are held by Core Capital LLP, such that Core Capital will receive 29% of
distributions above the effective initial cost plus hurdle.
Currently, total cumulative distributions, including the hurdle, are
approximately 50.27p per Ordinary Share short of the required threshold
following the achievement of which the B Shares would participate in
distributions. However, I would like to remind shareholders that once this
threshold is achieved, distributions to Ordinary Shares will be reduced to 60%
of the total, and that your holding in B Shares forms an integral part of your
investment along with your holding in Ordinary Shares.
Share Price and Share Buy Backs
We would remind shareholders that we view the NAV Total Return, rather than the
share price, as the preferred measure of performance, as it encompasses the
value of the current portfolio and the amount of cash distributed to
shareholders over the life of their investment. It is disappointing to report
that the NAV Total Return has fallen by 4.7% over the year. However, we
believe that the underlying portfolio performance will improve as we start to
see the benefits from deploying the substantial capital raised last year from
Core Capital I LP, and as our directly held investment, Allied, makes the
progress we expect.
We are conscious that the mid price of the shares continues to be at a
significant discount to the NAV (56% at 31 December 2012). Whilst the Group has
the ability to buy back its own shares, the Boards' view is that any cash
realised from disposal of investments should be returned to all shareholders by
way of a distribution. Both the Ordinary Shares (CR3) and B Shares (CR3B) are
fully listed shares. Prices are available on www.londonstockexchange.com.
I am pleased to welcome my co Director, John Brimacombe, as a fellow shareholder
following his purchase of 250,000 B Shares during the year.
Annual General Meeting
The Company's Annual General Meeting will be held at 10 am on 1 May 2013 at 19
Cavendish Square, London, W1A 2AW. This is a good opportunity for shareholders
to meet the Directors and the Manager and I would encourage you to attend.
The Notice of the Annual General Meeting is contained on pages 40 to 41 of the
Annual Report and Accounts and a Form of Proxy is enclosed. Shareholders who are
unable to attend the Meeting are encouraged to complete and return the Form of
Proxy to the Company's registrars so as to ensure that their votes are
represented at the Meeting.
Outlook
The outlook for the UK economy remains subdued and uncertain. Against this
backdrop, it is encouraging that the level of debt in our underlying portfolio
is relatively low and management teams have been strengthened where required.
Together with the further capital that has either recently been invested or
remains available, our largest companies in particular are well placed to
deliver growth. Your Board and Manager are working towards creating value and
seeking realisations for our shareholders whenever opportunities occur over the
medium term.
Peter Smaill
Chairman
14 March 2013
Principal Risks and Uncertainties
The Company's assets consist mainly of unquoted investments. These investments
are not publicly traded and there is not a liquid market for them, and therefore
these investments maybe difficult to realise. More detailed explanations of
these risks and the way which they are managed are contained in note 2.
Other risks faced by the Company include the following:
* Economic risk - events such as economic recession, movements in interest
rates and the availability of debt finance could affect the valuation of
small companies.
* Loss of approval as a Venture Capital Trust - the Company must comply with
Section 274 of the Income Tax Act 2007 which allows it to be exempt from
capital gains tax on investment gains. Any breach of these rules may lead to
the Company losing its approval as a VCT.
* Investment and strategic - incorrect strategy, asset allocation, and stock
selection could all lead to poor returns for shareholders. The underlying
investments may also need significant funding which is not in accordance
with VCT legislation.
* Regulatory - breach of regulatory rules could lead to the suspension of the
Company Stock Exchange Listing, financial penalties or a qualified audit
report.
* Operational - Failure of the Manager's accounting systems or disruption to
the Manager's business could lead to an inability to provide accurate
reporting and monitoring, leading to a loss of shareholders' confidence.
* Financial - inadequate controls by the Manager could lead to
misappropriation of assets. Inappropriate accounting policies may lead to
misreporting or breaches of regulations.
The Board seeks to mitigate and manage these risks through continual review,
policy setting, shareholder communication and enforcement of contractual
obligations and monitoring progress and compliance.
Statement of Directors' Responsibilities in Respect of the Annual Financial
Report
The Directors are responsible for preparing the Annual Report and the Group and
Company financial statements in accordance with applicable United Kingdom law
and those International Financial Reporting Standards ("IFRS") as adopted by the
European Union.
Under company law the Directors must not approve the Group and Company financial
statements unless they are satisfied that they present fairly the financial
position, the financial performance and cash flows of the Group and Company for
that period. In preparing the Group and Company financial statements the
Directors are required to:
* select suitable accounting policies in accordance with IAS 8: Accounting
Policies, Changes in Accounting Estimates and Errors and then apply them
consistently;
* present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
* provide additional disclosure when compliance with the specific requirements
in IFRS is insufficient to enable users to understand the impact of
particular transactions, other events and conditions on the Group's and the
Company's financial position and financial performance;
* state that the Group and Company have complied with IFRS, subject to any
material departures disclosed and explained in the financial statements;
and
* make judgements and estimates that are reasonable and prudent.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the transactions of the Group and Company and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the Group and Company financial
statements comply with the Companies Act 2006 and Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Each of the Directors confirms that to the best of his knowledge:
* the financial statements, prepared in accordance with IFRS as adopted by the
European Union, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group and the Company; and
* the Report of the Directors includes a fair review of the development and
performance of the business and the position of the Group and Company
together with a description of the principal risks and uncertainties that
they face.
For and on behalf of the Board:
Peter Smaill
Chairman
14 March 2013
Audited Group Statement of Comprehensive Income
for the year ended 31 December 2012
Revenue Capital
Return Return Total
Notes GBP GBP GBP
=-------------------------------------------------------------------------------
Capital losses on investments
Losses on investments held at fair value - (1,594,933) (1,594,933)
=-------------------------------------------------------------------------------
- (1,594,933) (1,594,933)
Revenue
Investment Income 10,000 - 10,000
Other Income 870 - 870
=-------------------------------------------------------------------------------
Total Income 10,870 (1,594,933) (1,584,063)
=-------------------------------------------------------------------------------
Expenditure
Other expenses (321,232) - (321,232)
=-------------------------------------------------------------------------------
Total expenditure (321,232) - (321,232)
=-------------------------------------------------------------------------------
Loss before taxation (310,362) (1,594,933) (1,905,295)
Taxation - - -
=-------------------------------------------------------------------------------
Loss for year/total comprehensive income 3 (310,362) (1,594,933) (1,905,295)
=-------------------------------------------------------------------------------
Return per Ordinary Share: 3 (0.72)p (3.68)p (4.40)p
Audited Group Statement of Comprehensive Income
for the year ended 31 December 2011
Revenue Capital
Return Return Total
Notes GBP GBP GBP
=-------------------------------------------------------------------------------
Capital losses on investments
Losses on investments held at fair value - (5,770,276) (5,770,276)
=-------------------------------------------------------------------------------
- (5,770,276) (5,770,276)
Revenue
Investment Income 393,883 - 393,883
Other Income 2,669 - 2,669
=-------------------------------------------------------------------------------
Total Income 396,552 (5,770,276) (5,373,724)
=-------------------------------------------------------------------------------
Expenditure
Other expenses (354,113) (510,889) (865,002)
=-------------------------------------------------------------------------------
Total expenditure (354,113) (510,889) (865,002)
=-------------------------------------------------------------------------------
Profit/(loss) before taxation 42,439 (6,281,165) (6,238,726)
Taxation - - -
=-------------------------------------------------------------------------------
Profit/(loss) for year/total
comprehensive income 3 42,439 (6,281,165) (6,238,726)
=-------------------------------------------------------------------------------
Return per Ordinary Share: 3 0.10p (14.51)p (14.41)p
Audited Group and Company Balance Sheets
as at 31 December 2012
Group Company Group Company
2012 2012 2011 2011
Notes GBP GBP GBP GBP
=-------------------------------------------------------------------------------
Non-current assets
Investments at fair value
through
profit or loss 24,120,643 24,120,643 25,187,092 25,187,092
Subsidiary undertaking - 1,000 - 1,000
=-------------------------------------------------------------------------------
24,120,643 24,121,643 25,187,092 25,188,092
Current assets
Other receivables 2,657 2,657 6,541 6,541
Cash 1,075,281 1,074,281 3,645,336 3,644,336
=-------------------------------------------------------------------------------
1,077,938 1,076,938 3,651,877 3,650,877
Current liabilities
Other payables (124,213) (124,213) (127,249) (127,249)
=-------------------------------------------------------------------------------
Net current assets 953,725 952,725 3,524,628 3,523,628
=-------------------------------------------------------------------------------
Net assets 25,074,368 25,074,368 28,711,720 28,711,720
=-------------------------------------------------------------------------------
Equity
Called-up Ordinary Share
capital 4,330 4,330 4,330 4,330
Called up B Share capital 2,887 2,887 2,887 2,887
Special distributable
reserve 30,635,667 30,635,667 32,367,724 32,367,724
Capital reserve (5,025,477) (5,025,477) (3,430,544) (3,430,544)
Revenue reserve (543,039) (543,039) (232,677) (232,677)
=-------------------------------------------------------------------------------
Shareholders' funds 25,074,368 25,074,368 28,711,720 28,711,720
=-------------------------------------------------------------------------------
Assets attributable to
Ordinary
Shareholders 4 25,071,482 25,071,482 28,708,834 28,708,834
Assets attributable to B
Shareholders 4 2,886 2,886 2,886 2,886
Net asset value per 0.01p
Ordinary Share 4 57.90p 57.90p 66.30p 66.30p
Net asset value per 0.01p
B Share 4 0.01p 0.01p 0.01p 0.01p
Audited Group and Company Statements of Changes in Equity
for the year ended 31 December 2012
Called
up
Ordinary Called Special
up
Share B Share Share Distributable Capital Revenue
capital Capital Premium Reserve Reserve Reserve Total
GBP GBP GBP GBP GBP GBP GBP
=-------------------------------------------------------------------------------------------
Group
For the year
ended 31 Dec
2012
Net assets at 4,330 2,887 - 32,367,724 (3,430,544) (232,677) 28,711,720
1 January 2012
Loss for the
year/total
- - - - (1,594,933) (310,362) (1,905,295)
comprehensive
income
Dividends paid - - - (1,732,057) - - (1,732,057)
=-------------------------------------------------------------------------------------------
Net assets at 4,330 2,887 - 30,635,667 (5,025,477) (543,039) 25,074,368
31 December
2012
=-------------------------------------------------------------------------------------------
Group
For the year
ended 31 Dec
2011
Net assets at 4,330 2,887 30,879,638 5,818,227 2,850,621 (275,116) 39,280,587
1 January 2011
(Loss)/profit
for the
year/total
- - - - (6,281,165) 42,439 (6,238,726)
comprehensive
income
Dividends paid - - - (4,330,141) - - (4,330,141)
Cancellation
of Share
Premium
account - - (30,879,638) 30,879,638 - - -
=-------------------------------------------------------------------------------------------
Net assets at 4,330 2,887 - 32,367,724 (3,430,544) (232,677) 28,711,720
31 December
2011
=-------------------------------------------------------------------------------------------
Company
For the year
ended 31 Dec
2012
Net assets at 4,330 2,887 - 32,367,724 (3,430,544) (232,677) 28,711,720
1 January 2012
Loss for the
year/total
- - - - (1,594,933) (310,362) (1,905,295)
comprehensive
income
Dividends paid - - - (1,732,057) - - (1,732,057)
=-------------------------------------------------------------------------------------------
Net assets at 4,330 2,887 - 30,635,667 (5,025,477) (543,039) 25,074,368
31 December
2012
=-------------------------------------------------------------------------------------------
Company
For the year
ended 31 Dec
2011
Net assets at 4,330 2,887 30,879,638 5,818,227 2,850,621 (275,116) 39,280,587
1 January 2011
Loss for the
year/total
- - - - (6,281,165) 42,439 (6,238,726)
comprehensive
income
Dividends paid - - - (4,330,141) - - (4,330,141)
Cancellation
of Share
Premium
account - - (30,879,638) 30,879,638 - - -
=-------------------------------------------------------------------------------------------
Net assets at 4,330 2,887 - 32,367,724 (3,430,544) (232,677) 28,711,720
31 December
2011
=-------------------------------------------------------------------------------------------
Audited Group and Company Cash Flow Statements
for the year ended 31 December 2012
Group Company Group Company
2012 2012 2011 2011
GBP GBP GBP GBP
=-------------------------------------------------------------------------------
Net cash (outflow)/inflow from
operating activities (837,998) (837,998) 6,504,520 6,503,520
Financing activities
Equity dividends paid (1,732,057) (1,732,057) (4,330,141) (4,330,141)
=-------------------------------------------------------------------------------
Net cash outflow from
financing activities (1,732,057) (1,732,057) (4,330,141) (4,330,141)
Net (decrease)/increase in
cash and cash equivalents (2,570,055) (2,570,055) 2,174,379 2,173,379
Cash and cash equivalents at
beginning of period 3,645,336 3,644,336 1,470,957 1,470,957
=-------------------------------------------------------------------------------
Cash and cash equivalents at
the end of period 1,075,281 1,074,281 3,645,336 3,644,336
=-------------------------------------------------------------------------------
Reconciliation of loss before
taxation to net cash
(outflow)/inflow from
operating activities
Loss before taxation (1,905,295) (1,905,295) (6,238,726) (6,238,726)
Losses on investments 1,594,933 1,594,933 5,770,276 5,770,276
Purchases of investments (950,000) (950,000) (16,751,214) (16,752,214)
Sales of investments 421,516 421,516 23,588,738 23,588,738
Decrease in accrued income and
prepayments 3,884 3,884 100,718 100,718
(Decrease)/increase in other
payables (3,036) (3,036) 34,728 34,728
=-------------------------------------------------------------------------------
Net cash (outflow)/inflow from
operating activities (837,998) (837,998) 6,504,520 6,503,520
=-------------------------------------------------------------------------------
Notes:
1. The financial statements of the Company and the Group have been prepared in
accordance with the Companies Act 2006 and International Financial Reporting
Standards ('IFRS') as adopted by the European Union.
The financial statements have been prepared on a going concern basis. Where
presentational guidance set out in the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture Capital Trusts"
('SORP') issued by the Association of Investment Companies ('AIC') in January
2009 is consistent with the requirements of IFRS, the Directors have sought to
prepare the financial statements on a basis compliant with the recommendations
of the SORP.
The financial information for the year ended 31 December 2012 included in this
report has been taken from the Company's full accounts.
The functional currency of the Group is UK pounds Sterling as this is the
currency of the primary economic environment in which the Group operates.
Accordingly, the financial statements have been prepared in UK pounds sterling.
There have been no significant changes to the accounting policies during the
year 31 December 2012.
2. Financial Instruments
The Group's financial instruments in the year comprised equity and fixed and
floating interest rate securities that are held in accordance with the Company's
investment objective and cash, liquid resources and short term debtors and
creditors that arise directly from the Company's operations.
The Group's investment portfolio consists of unquoted investments representing
96% (2011: 88%) of net assets. This portfolio has a 100% (2011: 100%)
concentration of risk towards small UK based, sterling denominated companies.
The main risks arising from the Group's financial instruments are due to
fluctuations in market prices (market price risk), credit risk and interest rate
risk, although liquidity risk and currency risk are also discussed below. The
Board regularly reviews and agrees policies for managing each of these risks and
these are summarised below. These have been in place throughout the current and
preceding periods.
Market Price Risk
Market price risk arises from uncertainty about the future prices of financial
instruments held in accordance with the Company's investment objectives. It
represents the potential gain or loss that the Company might benefit or suffer
from through holding market positions in the face of market movements.
The investments in equity and fixed interest stocks of unquoted companies that
the Group holds are not traded and as such the prices are more uncertain than
those of more widely traded securities. As, in a number of cases, the unquoted
investments are valued by reference to price earnings ratios prevailing in
quoted comparable sectors, their valuations are exposed to changes in the price
earnings ratios that exist in quoted markets.
The Board's strategy in managing the market price risk inherent in the Group's
portfolio of equities and loan stock investments is determined by the
requirement to meet the Company's investment objective. As part of the
investment process, the Board seeks to maintain an appropriate spread of market
risk, and has full and timely access to relevant information from the Investment
Manager. No single investment is permitted to exceed 15% of total VCT value of
investment assets at the point of investment. The Board meets regularly and
reviews the investment performance and financial results, as well as compliance
with the Company's objectives.
Credit Risk
Credit Risk is the risk that a counterparty will fail to discharge an obligation
or commitment that it has entered into with the Group. The carrying amounts of
financial assets best represents the maximum credit risk exposure at the balance
sheet date. The Group has an exposure to credit risk in respect of the loan
stock investments it has made in investee companies, most of which have no
security attached to them, and where they do, such security ranks beneath any
bank debt that an investee company may owe.
There could also be a failure by counterparties to deliver securities which the
Group has paid for, or not pay for securities which the Group has delivered.
This risk is considered to be small as most of the Group's investment
transactions are in unquoted investments, where investments are conducted
through solicitors, to ensure that payment matches delivery.
Interest Rate Risk
The Group's fixed and floating interest rate securities, its equity investments
and net revenue may be affected by interest rate movements. Investments are
often in relatively small businesses, which are relatively high risk investments
sensitive to interest rate fluctuations.
The Group's assets include fixed and floating rate interest instruments. The
rate of interest earned is regularly reviewed by the Board, as part of the risk
management processes applied to these instruments, already disclosed under
market price risk.
Liquidity Risk
The investment in equity and fixed interest stocks of unquoted companies that
the Group holds are not traded. They are not readily realisable. The ability of
the Group to realise the investments at their carrying value may at times not be
possible if there are no willing purchasers. The Group's ability to sell
investments may also be constrained by the requirements set down by the VCTs.
The maturity profile of the Group's loan stock investments disclosed within the
consideration of credit risk indicates that a majority of these assets will be
readily realisable within the next 1 to 4 years from the year end.
All creditors and accruals are due within one year and are comfortably covered
by cash held and short term debtors.
Currency Risk
All assets and liabilities are denominated in sterling and therefore there is no
currency risk.
3. Return per Ordinary Share
Year ended Year ended
31 Dec 2012 31 Dec 2011
GBP GBP
i. Basic return from ordinary activities after (1,905,295) (6,238,726)
taxation
Basic return per share (4.40)p (14.41)p
ii. Net revenue return from ordinary activities after (310,362) 42,439
taxation
Revenue return per share (0.72)p 0.10p
iii. Net capital return from ordinary activities after (1,594,933) (6,281,165)
taxation
Capital return per share (3.68)p (14.51)p
iv. Weighted average number of ordinary shares in 43,301,414 43,301,414
issue in the year
4. Net asset value
The net asset values per share, as disclosed in the balance sheet, are based on
attributable assets at the date of the balance sheet ("attributed basis"). The
Board considers that the Articles basis reflects the attribution of assets
between the two classes of shares that would occur in the event that a
liquidation of the Company took place. On liquidation, B shareholders could be
entitled to up to 40% of the assets remaining after the Ordinary Shareholders
first recover their effective initial cost of 60 pence per share plus the annual
hurdle rates to both share classes, achieved up to the date of liquidation.
By attributing to the B shares purely the capital contribution of 0.01 pence per
share reflects the Board's best estimate at 31 December 2012 of the B shares'
entitlement to assets at 31 December, given the inherent uncertainties in
projecting the investment performance of the Manager (which will ultimately
determine the B shares' entitlement to the Company's assets).
The net asset value per share have been calculated by reference to the number of
shares in issue at 31 December 2012 (2011: same) being 43,301,414 Ordinary
Shares and 28,867,227 B shares.
31 December 2012 Net asset value
GBP
=----------------------------------------------------------------------------
Ordinary Shares of 0.01p each in accordance with the Articles 21,766,242
Additional entitlement to assets on the attributed basis 3,305,240
Attributed basis 25,071,482
Net asset value pence per share 57.90p
B Shares of 0.01p each in accordance with the Articles 3,308,126
Reduced entitlement to assets on the attributed basis (3,305,240)
Attributed basis 2,886
Net asset value pence per share 0.01p
31 December 2011 Net asset value
GBP
=----------------------------------------------------------------------------
Ordinary Shares of 0.01p each in accordance with the Articles 23,071,487
Additional entitlement to assets on the attributed basis 5,637,347
Attributed basis 28,708,834
Net asset value pence per share 66.30p
B Shares of 0.01p each in accordance with the Articles 5,640,233
Reduced entitlement to assets on the attributed basis (5,637,347)
Attributed basis 2,886
Net asset value pence per share 0.01p
5. David Dancaster is a partner of Core Capital LLP, the Company's Manager, and
the group finance director of Caparo plc which is a member of Core Capital LLP.
Caparo hold 1,177,254 Ordinary Shares and 34,807 B Shares in Core VCT plc. No
amounts have been paid or are payable to Caparo plc except dividends paid to all
ordinary shareholders of the Company totalling a cumulative weighted average of
31.15p per share as at 31 December 2012. Nothing (2011: nil) was due to the
Manager at 31 December 2012. Details of the carried interest arrangements
between the Company and the Manager are set out in Note 3 of the Annual Report
and Accounts which also discloses amounts paid and payable to the Manager.
Following the successful launch of Core Capital I LP, the general partner of the
LP, receives GBP750,000 per annum until the fourth anniversary, payable out of the
assets of Core Capital I LP.
Core Secretarial Services LLP provided both accounting and company secretarial
services to the Company for the period to 11 February 2012 and received GBP15,958
(2011: GBP149,679) from the Company. Rhonda Nicoll is a member of Core Capital
LLP and is also a partner of Core Secretarial Services LLP.
6. This announcement is not the Company's statutory accounts. The statutory
accounts for the year ended 31 December 2011 have been delivered to the
Registrar of Companies and have received an audit report which was unqualified
and did not contain any emphasis of matter and did not contain any statements
under section 498(2) and 498(3) of the Companies Act 2006.
The preliminary announcement is prepared on the same basis as set out in the
prior year statutory accounts and was approved by the Board on 14 March 2013.
The Annual Report for the year ended 31 December 2012 will be posted to
shareholders and is available for inspection at 9 South Street, London W1K 2XA,
the registered office of the Company, and on the Company's website, www.core-
cap.com.
Enquiries
Stephen Edwards 020 3179 0919
Rhonda Nicoll 020 3179 0930
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Core VCT plc via Thomson Reuters ONE
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