Interim Results
31 Agosto 2011 - 8:00AM
UK Regulatory
TIDMPMH
AChairman's Statement
Highlights
* One of the top performing VCTs of its peer group
* Net asset value per share at 30 June 2011 of 97.02p (after adding back 7p
dividend paid on 1(st) March 2011)
Introduction
During the six months to 30 June 2011, the Company maintained a cautious
approach in its investments whilst remaining well positioned to exploit the
opportunities which are arising as a result of tight credit markets.
Qualifying investments
During the period, the Company agreed terms to invest up to GBP860,000 into
Mirfield Contracting Limited ("MCL"). As a member of a limited liability
partnership with other contracting companies, MCL will provide project
management services to a GBP3.8 million development of town houses in Mirfield
(near Wakefield) West Yorkshire. The investment manager has continued to review
a number of other suitable qualifying investments and expects to make further
qualifying investments in the second half of the year to ensure the Company is
on course to meet its HMRC qualifying target.
Non-qualifying investments
The Company has invested approximately GBP10.8 million to date in a range of bond
funds, absolute return funds and a partly hedged equity income fund. The non-
qualifying portfolio continues to be positioned cautiously, remaining liquid
whilst looking to generate income in volatile market conditions. However, it
retains some exposure to securities markets as is required by VCT qualifying
rules. Since the end of June markets have been unusually volatile and this has
impacted the value of even cautiously constructed portfolios. As a consequence,
the volatility during July and August has cost the VCT some 1.7p per share in
NAV.
Net Asset Value ('NAV')
The net asset value remains strong in relation to the Company's peer group,
despite the difficult economic conditions which have continued since the
financial crisis and since the Company was launched. During the period, the
Company's net asset value increased slightly by 0.1% (adding back the dividend
of 7p paid on 1(st) March 2011) to 97.02p.
Dividends
As set-out in the accounts for the period ended 31 December 2010, a dividend of
7p per ordinary share was declared during the period and paid on 1st March
2011. Reflecting this recent payout, your Board is not proposing a further
dividend in relation to this interim period but reiterates the intention to pay
out an annual dividend of up to 7p per ordinary share per annum as envisaged in
the Company's prospectus.
VCT Qualifying Status
PricewaterhouseCoopers LLP ('PwC') provides the board and the investment manager
with advice on the ongoing compliance with Her Majesty's Revenue & Customs
('HMRC') rules and regulations concerning VCTs. PwC assists the Investment
Manager in establishing the status of investments as qualifying holdings and has
reported that the Company has met all HMRC's criteria to date.
Principal risks and uncertainties
Continuing uncertainty whilst the UK slowly comes out of recession has meant
that markets remain turbulent. Global concerns have impacted UK markets
negatively, most notably the increasing concerns over the US deficit and the
escalating sovereign wealth crisis in Europe. The consequences of this for the
Company's investment portfolio constitute the principal risk and uncertainty for
the Company in the second half of 2010.
Outlook
During the period, the Investment Manager has met a number of companies which
are potentially suitable for investment. There is a good flow of opportunities
which may lead to suitable investments. We will update you in due course as
investments are completed. The restrictions on availability of bank credit
continue to affect the terms on which target companies can raise finance. This
should both increase the demand for our offering and improve the terms we can
secure when we offer finance. There are many suitable companies which are well-
managed, in good market positions, can offer security and need our finance. We
therefore believe the Company is strongly positioned to assemble a portfolio to
deliver attractive returns to shareholders in the medium to long term.
Ray Pierce
Chairman
31 August 2011
Income Statement (unaudited)
For the six months ended 30 June 2011
Six months ended | Six months ended | 7 October 2009 to
30 June 2011 | 30 June 2010 | 31 December 2010
| |
| |
Revenue Capital Total|Revenue Capital Total |Revenue Capital Total
Note GBP'000 GBP'000 GBP'000| GBP'000 GBP'000 GBP'000 | GBP'000 GBP'000 GBP'000
| |
| |
(Loss)/gains | |
on | |
investments - 69 69| - (150) (150)| - 54 54
| |
Income 149 - 149| 45 - 45| 131 - 131
| |
| |
| |
149 69 218| 45 (150) (105)| 131 54 185
| |
| |
| |
| |
| |
Investment | |
management | |
fees 4 29 88 117| 20 59 79| 49 148 197
| |
Other 84| |
expenses 84 - | 64 - 64| 140 - 140
| |
| |
| |
113 88 201| 84 59 143| 189 148 337
| |
| |
| |
Return/(loss) | |
on ordinary | |
activities | |
before | |
taxation 36 (19) 17| (39) (209) (248)| (58) (94) (152)
| |
Tax on return | |
on ordinary | |
activities (5) 5 -| - - - | - - -
| |
| |
| |
Return/(loss) | |
on ordinary | |
activities | |
after tax | |
attributable | |
to | |
equity | |
shareholders 31 (14) 17| (39) (209) (248)| (58) (94) (152)
| |
| |
| |
Basic and | |
diluted | |
| |
Return/(loss) | |
per Ordinary | |
Share (pence) 2 0.23 (0.11) 0.12|(0.43)p (2.28)p (2.71)p|(0.50)p (0.80)p (1.30)p
| |
| |
| |
The revenue column of this statement is the profit and loss of the Company. All
revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
Balance Sheet (unaudited)
As at 30 June 2011
As at As at As at
30 June 2011 30 June 2010 31 December 2010
Note GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 10,807 3,067 10,923
Current Assets
Debtors 62 68 87
Cash at bank and in hand 1,552 10,319 2,374
1,614 10,387 2,461
Creditors - amounts
falling due within one
year (112) (300) (133)
Net Current Assets 1,502 10,087 2,328
Total Assets less Current
Liabilities 12,309 13,154 13,251
Creditors - amounts
falling due after more
than one year
(including convertible
debt) (1) (1) (1)
Net Assets 12,308 13,153 13,250
Capital and Reserves
Called up share capital 137 137 137
Share premium account - 13,264 13,264
Capital reserve - realised (207) (61) (110)
Capital reserve - 17
unrealised 101 (148)
Other reserve - - -
Revenue reserve 12,277 (39) (58)
Equity Shareholders' Funds 12,308 13,153 13,250
Net Asset Value per
Ordinary Share 3 90.02p 96.20p 96.91p
Diluted Net Asset Value
per Ordinary Share 3 90.02p 96.20p 96.91p
Cash Flow Statement (unaudited)
For the six months ended 30 June 2011
Six months Period ended
ended Six months ended 30 31 December
30 June 2011 June 2010 2010
GBP'000 GBP'000 GBP'000
Operating activities
Interest income received 146 8 96
Investment management fees - (134)
paid (128)
Directors fees paid (24) - (39)
Other expenses paid (59) (4) (35)
Net cash inflow/(outflow)
from operating activities (65) 4 (112)
Capital expenditure and
financial investment
Purchase of investments (1,920) (3,216) (11,615)
Proceeds from sale of - 741
investments 2,143
Net realized gain on forward (2) (13)
foreign exchange contracts (21)
Acquisition costs (3) (2) (13)
Net cash inflow/(outflow)
from capital expenditure and
financial investment 199 (3,218) (10,887)
Equity dividend paid (957) - -
Financing
Proceeds received from issue - 13,519 13,521
of ordinary share capital
Expenses paid for issue of - - (149)
share capital
Proceeds received from issue - -
of redeemable preference
shares 50
Redemption of redeemable - -
preference shares (50)
Proceeds received from - 1
convertible loan notes 1
Net cash inflow from - 13,520 13,373
financing
Inflow/(Outflow) in the (823) 10,306 2,374
period
Reconciliation of net cash
flow to movement in net
funds
Decrease in cash for the 10,306 2,374
period (823)
Net cash at start of the 13 -
period 2,375
Net funds at the period end 1,552 10,319 2,374
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the six months ended 30 June 2011
Called
up Share Capital Capital
share premium reserve- reserve- Other Revenue
capital account realised unrealised reserve reserve Total
GBP'000 GBP'00 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 30 June 2011
Balance at 1
January 2011 137 13,264 (110) 17 - (58) 13,250
Total
recognised
(losses)/gains
for the period - (13,264) (98) 84 - 13,293 15
Dividends paid - - - - - (957) (957)
-----------------------------------------------------------------
Balance at 30
June 2011 137 - (208) 101 - 12,278 12,308
Six months ended 30 June 2010
Balance at 1
January 2010 - 13 - - - - 13,672
Share issues in
the period 137 13,522 - - - - (271)
Expenses of
share issues - (271) - - - - (271)
Total
recognised
losses for the
period - - (61) (148) - (39) (248)
-----------------------------------------------------------------
Balance at 30
June 2010 137 13,264 (61) (148) - (39) 13,153
For the period ended 31 December 2010
Share issues in
the period 137 13,535 - - - - 13,672
Expenses of
share issues - (271) - - - - (271)
Return after
taxation
attributable to
equity
shareholders - - (110) 17 - (58) (151)
-----------------------------------------------------------------
Balance at 31
December 2010 137 13,264 (110) 17 - (58) 13,250
Notes to the Interim Report
For the six months ended 30 June 2011
1. Accounting Policies
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of fixed asset investments, and
in accordance with applicable Accounting Standards and with the Statement of
Recommended Practice, "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" ("SORP").
2. Return per Ordinary Share
The total gain per share of 0.11p (30 June 2010 - loss per share of 2.71p) is
based on the gain for the period of GBP17,000 (30 June 2010 - loss of GBP248,000)
and the weighted average number of shares in issue as at 30 June 2011 of
13,671,870 (30 June 2010 - 13,671,870).
3. Net asset value per share
+------------------+-------------+-----------------+---------------------------+
| | | | Net Asset Value per share |
| +-------------+-----------------+--------+------------------+
| Period | Net assets | Shares in issue | Basic | Diluted |
+------------------+-------------+-----------------+--------+------------------+
| 30 June 2011 | GBP12,308,000 | 13,671,870 | 90.02p | 90.02p |
+------------------+-------------+-----------------+--------+------------------+
| 31 December 2010 | GBP13,250,000 | 13,671,870 | 96.91p | 96.91p |
+------------------+-------------+-----------------+--------+------------------+
| 30 June 2010 | GBP13,153,000 | 13,671,870 | 96.20p | 96.20p |
+------------------+-------------+-----------------+--------+------------------+
4. Management fees
The Company pays the Investment Manager an annual management fee of 2% of the
Company's net assets. The fee is payable quarterly in arrears. The annual
management fee is allocated 75% to capital and 25% to revenue.
5. Related Party Transactions
Related party transactions are described in the 2010 Annual Report and Accounts
on page 31. There were no other related party transactions during the six months
ended 30 June 2011.
6. The financial information for the six months ended 30 June 2011
and 30 June 2010 has not been audited and does not comprise full financial
statements within the meaning of Section 423 of the Companies Act 2006. The
financial information for the Year ended 31 December 2010 has been extracted
from the company's full financial statements for the period then ended that have
been delivered to the Registrar of Companies, and on which the report of the
Auditors was unqualified. The interim financial statements have been prepared on
the same basis as the annual financial statements.
Notes to the Interim Report continued
For the six months ended 30 June 2011
7. Investment portfolio summary
As at 30 June Valuation Cost Gain/ Valuation as a
2011 GBP'000 GBP'000 (loss) % of Net Assets
Non-qualifying
investments
Blackrock UK
Emerging GBP 627 591 36 5%
BlueBay Macro A
GBP 345 315 30 3%
BlueBay Macro GBP
295 250 45 2%
Exane Archimedes
602 568 34 5%
Gartmore UK
Absolute Return 608 583 25 5%
GLG European
Alpha
Alternatives GBP 440 430 10 4%
Investec SPEC
SITS I ACC 649 658 (9) 5%
Jupiter
Strategic Bonds 785 868 (83) 6%
Legal & General
UT DYN Bond Trust
Inc 728 749 (21) 6%
Old Mutual FD
MGRS Corp Bond
Inc 793 813 (20) 6%
Pimco Gbl Invrs
Unconstraind Bond
Hgd Instl 355 355 - 3%
Pimco Global
Investors Hedged
Income 779 791 (12) 6%
Puma Absolute
Return B 1,913 1,900 13 15%
Schroders Unit
Trust Income
Maximiser 523 557 (34) 4%
Threadneedle Inv
High Yield Bond
Inc 753 873 (120) 6%
Trafalgar Azri R1 612 600 12 5%
--------------------------------------------------------------
Total
investments 10,807 10,901 (94) 88%
Balance of
portfolio 1,501 1,501 12%
--------------------------------------------------------------
Net Assets 12,308 12,402 (94) 100%
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originality of the information contained therein.
Source: Puma High Income VCT PLC via Thomson Reuters ONE
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