RNS Number:6415J
Downing Healthcare Protectd.VCT PLC
11 March 2005

Downing Healthcare Protected VCT plc



Interim Statement

for the six months ended 31 December 2004





PERFORMANCE SUMMARY


                                                   31 Dec     30 June     31 Dec
                                                     2004        2004       2003

                                                    pence       pence      pence

Net asset value per share                           99.00       91.70      80.30

Cumulative dividends per ordinary share *           26.65       23.65      25.15

Total return                                       125.65      115.35     105.45



* - includes tax credit where reclaimable





CHAIRMAN'S STATEMENT



I am pleased to present the interim statement for the six-month period ended 31
December 2004 for Downing Healthcare Protected VCT plc.



Net Asset Value

At 31 December 2004, the net asset value per share was 99.0p.  This is an
increase of 8.8p or 9.6% since 30 June 2004, including the interim dividend
described below.  The total return (net asset value plus cumulative dividends)
to original investors since the Company's launch now stands at 125.65p per
share, compared to an original investment net of income tax relief of 80p per
share.



Venture capital investments

At the period end, the Company had a portfolio of investments in nine
asset-backed companies with a carrying value of #8.475 million.



The Board has reviewed the valuations of the investments at the period end and
made a number of adjustments.  The investment in Evedale Care Home Limited has
been increased by #325,000 to #1.475 million, primarily as a result of firm
indications regarding the market value of the company's care home.



The investment in Dovestone (The Gables) Limited has also been increased in
value by #250,000 to #850,000, also primarily as a result of a revaluation of
the company's care home.   Since the period end, the company has sold its care
home for at a price which underpins the valuation of the investment.



As mentioned in my statement with the year-end results, during October 2004
Downing (Acacia House) Limited also sold the care home it previously owned.
The sale of its care home allowed the company to pay some of the cumulative
preference dividends, which could not be paid previously to the VCT, thus
increasing the VCT's income for the period.



Both companies currently continue to provide services to care home businesses,
but are also reviewing long-term options, including the acquisition of other
care homes.



The Company made one new investment during the period, being a planned drawdown
of #500,000 by Heyford Homes VCT Limited for the housing development being built
in Milton Keynes.  The company also invested a further #50,000 in Downing
(Barwell) Limited in July 2004.



Overall the Venture Capital portfolio increased in value by #575,000 during the
period, which is equivalent to 6.4p per share.



In general, the trading performance of the Company's investments has continued
to improve during the period. Some investments are however still underperforming
and the Investment Manager is working to address those cases.



Discussions regarding restructuring and refinancing are still in progress in
respect of a number of holdings.  As the initial term of loan stock investments
made by the VCT has now expired, the management and equity partners of a number
of investee companies are seeking to refinance.  In some cases, this will result
in a lower yield on some of the VCT's investments resulting from the lower
prevailing borrowing rates and risk profiles of the investee companies compared
to when the original investments were made.



Results and Dividend

Net revenue return after taxation for the period was #225,000, representing 2.5p
per share.  An interim dividend of 1.5p per share (2004 - 1.0p per share) will
be paid on 29 April 2005 to shareholders on the register at 8 April 2005



Share repurchase

The Board continues to monitor the market in the Company's shares and takes a
pro-active role in ensuring that there is liquidity for shareholders wishing to
dispose of their shares by operating a policy of purchasing the Company's shares
for cancellation when appropriate.  During the period the Company repurchased
149,360 shares at an average price of 81.4p per share.



Directorate

In January 2005, Tony McGing decided to step down as a Director in order to
focus on an enhanced executive role within the investment management company,
Downing Healthcare Managers Limited.  I would personally like to thank Tony for
his contribution since the Company was launched in 1996 and look forward to
continuing to work with him in his capacity as an executive director of the
Investment Manager.



Outlook

The relatively strong market for care homes continues to provide the Company
with opportunities to realise some of its portfolio of investments and to
crystallise some of the gains seen over recent periods.  The Investment Manager
is currently working with the management and equity partners of two of the
investee companies with a view to potential disposals.



As a result of recent and possible future investment transactions, the Company
is expecting to have funds available to make a number of new investments over
the short and medium term.  The Investment Manger is now preparing a number of
potential new investments for consideration by the Board. As mentioned
previously, the Company has now broadened its investment criteria.  Although the
majority of the new investment opportunities are not in the care home sector,
they do provide similar characteristics in terms of "asset-backing" and yield.
I look forward to updating shareholders with developments in the next Annual
Report.





Chris Kay

Chairman



UNAUDITED SUMMARISED BALANCE SHEET

as at 31 December 2004


                                   31 December   31 December      30 June
                                          2004          2003         2004
                                          #000          #000         #000
Fixed assets
Venture capital investments              8,475         5,800        7,350

Net current assets                         478         1,866        1,082

Net assets                               8,953         7,666        8,432

Capital and reserves

Called up share capital                  4,522         4,773        4,596
Special reserve                          3,882         4,259        4,004
Capital redemption reserve                 384           133          310
Capital reserve                             18       (1,560)        (534)
Revenue reserve                            147            61           56

Total shareholders' funds                8,953         7,666        8,432

Net asset value per share                99.0p         80.3p        91.7p



UNAUDITED STATEMENT OF TOTAL RETURN

(incorporating the revenue account)

for the six months ended 31 December 2004






                                                         Six months ended

                                                         31 December 2004


                                                   Revenue    Capital      Total
                                                      #000       #000       #000

Income                                                 340          -        340

Gains on investments (unrealised)                        -        575        575

Investment management fees                            (10)       (32)       (42)

Other expenses                                        (72)          -       (72)

Return on ordinary activities before taxation          258        543        801

Tax on ordinary activities                            (33)         10       (23)

Return attributable to equity shareholders             225        553        778

Dividends                                            (135)          -      (135)

Transfer (from)/to reserves                             90        553        643

Return per share                                      2.5p       6.0p       8.5p




                                                       Six months ended                      Year                       
                                                       31 December 2003                     ended
                                                                                          30 June
                                                                                             2004
                                                   Revenue   Capital     Total              Total
                                                     #'000     #'000     #'000              #'000

Income                                                 200         -       200                442

Gains on investments (unrealised)                        -         -         -              1,050

Investment management fees                             (5)      (18)                         (63)
                                                                          (23)

Other expenses                                        (69)         -      (69)              (143)

Return on ordinary activities before taxation          126      (18)       108              1,286

Tax on ordinary activities                            (31)         5      (26)               (45)

Return attributable to equity shareholders              95      (13)        82              1,241

Dividends                                             (95)         -      (95)              (233)

Transfer (from)/to reserves                              -      (13)      (13)              1,008

Return per share                                      1.0p    (0.1p)    (0.9p)              13.0p





The revenue column of this statement is the profit and loss account of the
Company.



All revenue and capital items in the above statement derive from continuing
operations.



The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.



The comparative figures were in respect of the six months ended 31 December 2003
and the year ended 30 June 2004 respectively.

UNAUDITED CASHFLOW STATEMENT

for the six months ended 31 December 2004


                                                                            Six            Six       Year
                                                                         months         months
                                                                          ended          ended      ended
                                                                             31             31         30
                                                                       December       December       June
                                                                           2004           2003       2004
                                                                          #'000          #'000      #'000

Cash inflow from operating activities                                       348            119        377

(see note 1 below)

Taxation

Corporation tax paid                                                       (21)           (43)       (66)



Capital expenditure

Purchase of venture capital investments                                   (550)              -      (500)
Proceeds on disposal of venture capital investments                           -             10         10
Net cash inflow from capital expenditure                                  (550)             10      (490)

Equity dividends paid                                                     (135)           (97)      (193)


Net cash (outflow)/inflow before financing                                (358)           (11)      (372)


Financing

Repurchase of ordinary shares                                             (122)          (134)      (390)
Net cash outflow from financing                                           (122)          (134)      (390)

Decrease in cash (see note 2 below)                                       (480)          (145)      (762)

Notes to the cashflow statement:
1    Cash inflow from operating activities
Net revenue before taxation                                                 258            126        288
Management fees charged to capital                                         (32)           (18)       (52)
(Increase)/decrease in prepayments and accrued income                      (26)           (27)         74
Increase in other creditors                                                 148             38         67
Net cash inflow from operating activities                                   348            119        377

2    Analysis of changes in cash during the period
Beginning of period                                                       1,300          2,062      2,062
Net cash (outflow)/inflow                                                 (480)          (145)      (762)
End of period                                                               820          1,917      1,300


INVESTMENT PORTFOLIO

as at 31 December 2004


                                                      Cost   Valuation   Valuation        % of
                                                                          movement   portfolio
                                                             at 31 Dec   in period
                                                                  2004
                                                     #'000       #'000       #'000    by value

Venture capital investments
Evedale Care Home Limited                            1,375       1,475         325       15.9%
Downing (Acacia House) Limited                       1,043       1,250           -       13.4%
Downing (Chertsey Road) Limited                      1,000       1,100           -       11.8%
Heyford Homes VCT Limited                            1,000       1,000           -       10.7%
Downing (Bon Accord) Limited                           970         975           -       10.5%
Dovestone (The Gables) Limited                         950         850         250        9.3%
Kimbolton Lodge Limited                                600         625           -        6.7%
Downing (Meadows) Limited                              575         625           -        6.7%
Downing (Barwell) Limited                              530         575           -        6.2%

Total investments                                    8,043       8,475         575       91.2%

Cash at bank and in hand                                           820                    8.8%

                                                                 9,295                  100.0%






NOTES



1.  The above financial information has been prepared on the basis of the
accounting policies set out in the Annual Report.   A new accounting policy in
relation to Investment Management fees has been adopted and states: "The Company
has adopted the policy of allocating investment management fees associated with
venture capital investments 75% to Capital Reserve and 25% to Revenue Reserve as
permitted by the SORP".



2.  The calculation of the revenue and capital return per share for the period
is based upon the net revenue and capital gain after tax of #225,000 and
#553,000 respectively, divided by the weighted average number of shares in issue
during the period of 9,143,389.



3.  The unaudited financial statements set out above do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985 and have
not been delivered to the Registrar of Companies.  The figures for the year
ended 30 June 2004 have been extracted from the financial statements for that
year, which have been delivered to the Registrar of Companies; the auditors'
report on those financial statements was unqualified.



Copies of the unaudited interim results are being sent to shareholders shortly.
Further copies can be obtained from the Company's Registered Office.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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