Final Results
28 Ottobre 2004 - 6:08PM
UK Regulatory
RNS Number:5988E
Downing Healthcare Protectd.VCT PLC
28 October 2004
DOWNING HEALTHCARE PROTECTED VCT PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 30 JUNE 2004
NAV/
Total Return
to date 2004 2003
pence pence pence
Net asset value per share 91.7 91.7 80.2
Total dividends per ordinary share
(including tax credits where reclaimable) 25.1 2.5 2.5
116.8
Revenue return per ordinary share 2.4 2.6
Net assets #8.4 million #7.8 million
The statement to Shareholders by the Chairman, Chris Kay, includes the following
comments:
I am pleased to present the Annual Report for Downing Healthcare Protected VCT
plc ("Downing Healthcare") for the year ended 30 June 2004, a period which has
been an active one for the Company.
Net Asset Value
At 30 June 2004 the Company's Net Asset Value per share ("NAV") stood at 91.7p
per share, a rise of 11.5p per share or 14.3% over the year. The increase is
primarily attributable to the fact that valuations of care homes have increased
strongly over the period under review.
Investment Management
During the year, and following approval by Shareholders at the Annual General
Meeting, the Company appointed Downing Healthcare Managers Limited as its
Investment Manager ("Manager"). The Board is satisfied with the work undertaken
by the Manager since its appointment and believes that having a team that is
able to devote significant resources to the management of the investment
portfolio is beneficial to the performance of the Company.
Since the appointment of the Manager, there has been an improvement in the
availability and flow of information from a number of the investee companies.
With the Manager monitoring companies more closely than had been possible
previously, there is better control over the trading of the investees which
should, in time, lead to improved trading results.
Investments
During the year the Company made one new investment. The buoyant care home
market has made opportunities to invest in care homes significantly less
attractive than previously. With valuations still rising, the Board believes
that better investment opportunities currently exist in other "asset-backed"
sectors.
The new investment of #500,000 was made in May 2004 in Heyford Homes VCT
Limited, which is a joint venture in a housing development being undertaken in
Milton Keynes.
At the year-end, the Board has undertaken a review of the valuations of the
investments. The valuations have, in most cases, been based on indications from
sales agents, information from independent valuers and Directors' judgement
based on the current care home market. At 30 June 2004, the portfolio was
valued at #7.35 million, compared to #6.3 million at 30 June 2003 after
adjusting for the new investment.
Results and Dividend
Gross revenue for the year was #442,000 (2003: #474,000) and net revenue after
taxation was #228,000 (2003: #254,000). Several investments are in arrears with
loan stock interest payments, which is primarily as a result of historic poor
performance. The Directors have considered it prudent to make provisions for the
loan stock interest which is in arrears.
Your Board is proposing to pay a final dividend of 1.5p per share, which,
subject to shareholder approval, will be paid on 3 December 2004 to shareholders
on the register at 12 November 2004. The total dividend for the year will
therefore be 2.5p per share (2003: 2.5p). This brings the total dividends paid
to shareholders since launch (including tax credits where reclaimable) to 25.1p
per share.
The total return to shareholders (NAV plus cumulative dividends since launch) is
116.8p per share at 30 June 2004, compared to the original investment of #1 per
share or 80p net of income tax relief. The Board feels that, considering that
the sector in which the Company originally invested its funds went through a
long period of falling prices, this overall performance is satisfactory and note
that it compares favourably to most other VCTs.
Share repurchase
Your Board is conscious that the Company's share price is affected by the
illiquidity of its shares in the market, which is typical of many VCTs. The
Company, therefore, has a policy of purchasing its own shares. A special
resolution to continue with this policy is proposed for the forthcoming AGM.
During the year the Board used this power to repurchase 522,984 shares for an
average consideration of 71.0p per share.
Shareholders are now able to dispose of their holding without losing the income
tax relief they received at the time of investment. Those Shareholders who
deferred a gain by investing in this VCT will crystallise the gain when they
sell their shares. Any Shareholders considering selling their holding are
recommended to take advice from their financial adviser prior to making any
investment decision.
Publication of share price
The Company's share price continues to be quoted in the Financial Times on a
daily basis in the "Investment Companies" sector under the abbreviation "Downing
Hlth". The share price can also be found in various financial websites with the
TIDM/EPIC code "DHP".
Annual General Meeting
The eighth AGM of the Company will be held at 69 Eccleston Square, London SW1V
1PJ at 11.00 a.m. on 1 December 2004.
Outlook
The year to 30 June 2004 has been satisfactory in that the Company has
experienced a reasonable increase in its NAV. The Board feels that it may now
be an appropriate time for some of the investee companies to consider taking
advantage of the favourable care home market conditions. The Manager is,
therefore, discussing plans with a number of the equity partners and investee
company management and investigating possible disposal options. Valuations of
care homes may not be so robust in the future, so it is important that the
disposal opportunities are properly assessed.
Many of the original investments made by the Company are now over five years old
and, in most cases, the initial term of loan stock investment has expired. As a
result, the Manager is reviewing various proposals for refinancing and
restructuring investments. These may ultimately lead to reduced yields from
some investments as the risk profile of the debt has reduced and prevailing
interest rates are lower now than when the original investments were made.
I am pleased to report that, since the year-end, Downing (Acacia House) Limited
has completed the sale of its care home for #1.75 million, a sum significantly
above the original cost. The sale is particularly pleasing in that it
demonstrates that actual sales can be achieved at the current valuation levels.
The Investment Manager and the management of Downing (Acacia House) Limited are
now considering the options available, however, it is likely that a significant
amount of funds will be returned to Downing Healthcare in due course.
With the possibility that this and other investee companies may be returning
funds to Downing Healthcare, it is likely that the Company will make one or more
new investments in order to continue to comply with the VCT regulations. The
Manager is therefore actively seeking suitable new investment opportunities,
however as stated above these are likely to be in "asset-backed" situations not
in the care home sector.
Chris Kay
Chairman
STATEMENT OF TOTAL RETURN
(incorporating the revenue account)
for the year ended 30 June 2004
Year ended Year ended
30 June 2004 30 June 2003
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Gains on investments - realised - - - - 7 7
-unrealised - 1,050 1,050 - 50 50
- 1,050 1,050 - 57 57
Income 442 - 442 474 - 474
442 1,050 1,492 474 57 531
Investment management fees (16) (47) (63) - - -
Other expenses (138) (5) (143) (133) - (133)
Return on ordinary activities before tax 288 998 1,286 341 57 398
Tax on ordinary activities (60) 15 (45) (87) - (87)
Return on ordinary activities after tax 228 1,013 1,241 254 57 311
Dividends (233) - (233) (243) - (243)
Transfer (from)/to reserves (5) 1,013 1,008 11 57 68
Return per ordinary share 2.4p 10.6p 13.0p 2.6p 0.6p 3.2p
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.
BALANCE SHEET
as at 30 June 2004
2004 2003
#'000 #'000 #'000 #'000
Fixed Assets
Investments 7,350 5,800
Current assets
Debtors 53 137
Cash at bank and in hand 1,300 2,062
1,353 2,199
Creditors: amounts falling due within one year (271) (202)
Net current assets 1,082 1,997
Net assets 8,432 7,797
Capital and reserves
Called up share capital 4,596 4,858
Special reserve 4,004 4,377
Capital redemption reserve 310 48
Capital reserve (534) (1,547)
Revenue reserve 56 61
Total equity shareholders' funds 8,432 7,797
Net asset value per ordinary share 91.7p 80.2p
CASHFLOW STATEMENT
for the year ended 30 June 2004
Year ended Year ended
30 June 30 June
2004 2003
#'000 #'000
Net cash inflow from operating activities and returns on investment 377 513
Taxation
Corporation tax paid (66) (122)
Capital expenditure
Purchase of venture capital investments (500) (30)
Sale of venture capital investments 10 877
Net cash (outflow)/inflow from capital expenditure (490) 847
Equity dividends paid (193) (311)
Net cash (outflow)/inflow before financing (372) 927
Financing
Repurchase of ordinary shares (390) (13)
Net cash outflow from financing (390) (13)
(Decrease)/increase in cash (762) 914
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash during the year (762) 914
Net funds at 1 July 2003 2,062 1,148
Net funds at 30 June 2004 1,300 2,062
Announcement based on draft accounts (unqualified audit report)
The financial information has been prepared on the basis of the accounting
policies set out in the Company's financial statements for the year ended 30
June 2003.
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 30 June 2004. The statutory
accounts for the year ended 30 June 2004 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
The financial information for the year ended 30 June 2003 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; this report was unqualified
and did not contain a statement under section 237(2) or (3) of the Companies Act
1985.
A copy of the full annual report and financial statements for the period ended
30 June 2004 will be printed and posted to shareholders. Copies will also be
available to the public at the registered office of the Company at 69 Eccleston
Square, London SW1V 1PJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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