Downing Plan VCT 6 Downing Planned Exit Vct 6 Plc : Half-yearly Report
28 September 2013 - 2:42AM
UK Regulatory
TIDMDPV6
DOWNING PLANNED EXIT VCT 6 PLC
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 JULY 2013
Performance summary
31 Jul 31 Jan 31 Jul
2013 2013 2012
pence pence pence
Net asset value per Ordinary Share 64.80 68.20 70.20
Net asset value per 'A' Share n/a n/a 0.10
Cumulative distributions per Ordinary Share 13.75 9.75 9.75
Total return per Ordinary Share and 'A' Share 78.55 77.95 80.05
CHAIRMAN'S STATEMENT
I present the Company's Half-Yearly Report for the six month period
ended 31 July 2013. There has been a relatively low level of investment
activity during the six months, although, towards the end of the period,
some progress has been made in realising investments as the Company
works towards returning funds to those Shareholders that did not
participate in the Share Realisation and Reinvestment Programme
("SRRP").
Venture capital investments
At the period end, the Company held a portfolio comprising 11
investments with a total value of GBP3.9 million.
There were four disposals in the period which produced total proceeds of
GBP1.5 million and gains of GBP94,000. The most significant disposal was
Crossco (1135) Limited, which owns and operates a number of children's
nurseries as part of the larger Complete Childcare group, along with a
related company, Brunswick Associates Limited. A total gain against
original cost of GBP127,000 was recognised. Consideration was mostly
received in cash although a small portion was deferred in the form of
loan notes in Mobius Two Limited, which has been treated as a new
investment.
There was also a partial exit from Gatewales Limited producing proceeds
of GBP508,000. The partial exit relates to a previous investment, West
Tower Holdings Limited, which underwent a reorganisation and was
absorbed into Gatewales.
There was one valuation movement in the period, which was a full
provision of GBP126,000 against the remaining value of Coast
Constructors Limited. The company has built an apartment and hotel
complex in Devon. Sales of the units are progressing slowly and prior
ranking debt may now result in there being no or, at best, little return
on our investment.
Net asset value and results
At 31 July 2013, the net asset value ("NAV") per Ordinary Share stood at
64.8p. This is an increase of 0.6p per share (0.9%) since the year end
of 31 January 2013 (after adjusting for the 4.0p dividend paid during
the period).
Total Return per Ordinary Share (NAV plus dividends paid to date) is
78.55p at 31 July 2013 compared to the original cost, net of income tax
relief, of approximately 70p per share.
The profit on ordinary activities after taxation for the period, as set
out in the Income Statement, was GBP51,000, comprising a revenue profit
of GBP83,000 and a capital loss of GBP32,000. In line with the Company's
policy, no interim dividend will be paid.
Return of capital
The Company now effectively has two different groups of Shareholders;
those wishing to exit at the earliest stage ("Exiting Shareholders") and
those who are planning to stay invested until 2018 by virtue of
participating in the SRRP ("Continuing Shareholders").
The mechanism for returning funds to Exiting Shareholders will be by way
of tender offers. There are currently good prospects for two further
realisations or part realisations. Once the outcome of these becomes
clear, the Company will start planning the first tender offer. We expect
this to take place early in 2014. It is not expected to be a complete
exit for the Exiting Shareholders but it should represent a significant
portion of the value of their shares. The tender offer will be
undertaken at a price equal to net asset value i.e. at no discount.
Full details of the proposed tender offer will, of course, be sent to
all Shareholders at the appropriate time.
Share buybacks
As the Company is now seeking to return funds to Exiting Shareholders in
an orderly manner, it is unlikely that the Company will make any market
purchases of its own shares at the current time.
The Board wishes to set aside all available cash from investment
realisations to be used to return funds to Exiting Shareholders by way
of tender offers.
Outlook
Over the remainder of the year, the Manager will continue to seek
further realisation opportunities to enable more funds to be returned to
Exiting Shareholders. Although there are some reasonable prospects, it
is clear that the whole task will take some time to complete.
Performance now appears to be more stable than it has been for some
time. Although it is not without risk, there is potential for capital
growth from which the Continuing Shareholders are expected to benefit
most.
Following the first tender offer, the size of the Company is likely to
reduce significantly and, as a result, running costs, of which there is
a sizeable fixed element, could become disproportionately high. In order
to address this, the Board is considering possible plans for merging the
Company with one or more other VCTs. The Company will, of course, let
Shareholders have full details as soon as there is any firm news of this
or with the plans for the first tender offer.
Hugh Gillespie
Chairman
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 July 2013
Unrealised % of
loss portfolio
Cost Valuation in period by value
GBP'000 GBP'000 GBP'000
Qualifying investments
Cadbury House Holdings Limited 1,300 1,417 - 25.6%
Hoole Hall Country Club Holdings
Limited 750 817 - 14.8%
Hoole Hall Spa and Leisure Club
Limited 563 613 - 11.1%
The Thames Club Limited 1,075 350 - 6.3%
Gatewales Limited 242 242 - 4.4%
Coast Constructors Limited 933 - (126) 0.0%
4,933 3,439 (126) 62.2%
Non-qualifying investments
Snow Hill Developments LLP 250 250 - 4.5%
Moebius Two Limited 158 158 - 2.9%
Fenkle Street LLP 38 38 - 0.7%
Vermont Developments Limited 451 25 - 0.4%
Aminghurst Limited 207 - - 0.0%
The Thames Club Limited 50 - - 0.0%
1,154 471 - 8.5%
Total 6,157 3,910 (126) 70.7%
Cash at bank and in hand 1,618 29.3%
Total investments 5,528 100.0%
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 31 July 2013
Additions
Non-qualifying investments GBP'000
Moebius Two Limited 158
158
Disposals
Total
Market realised
value at Gain gain in
Cost 01/02/13* Proceeds vs. cost period
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Qualifying investments
Crossco (1135) Limited -
Kingsclere Nurseries 665 752 792 127 40
Gatewales Limited 438 508 508 70 -
1,103 1,260 1,300 197 40
Non-qualifying
investments
Brunswick Associates
Limited - - 30 30 30
The Meredith Pub Group
Limited 120 120 144 24 24
120 120 174 54 54
1,223 1,380 1,474 251 94
* Adjusted for purchases in the year
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 July 2013
31 Jul 31 Jul 31 Jan
2013 2012 2013
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 3,910 5,418 5,260
Current assets
Debtors 197 326 196
Cash at bank and in hand 1,618 529 633
1,815 855 829
Creditors: amounts falling due within one year (87) (104) (154)
Net current assets 1,728 751 675
Net assets 5,638 6,169 5,935
Capital and reserves
Called up Ordinary Share Capital 9 22 9
Deferred shares 16 3 16
Capital redemption reserve 5 1 5
Share premium 2,704 - 2,704
Special reserve 5,081 8,063 5,247
Revenue reserve 179 220 96
Revaluation reserve (2,506) (2,290) (2,292)
Capital reserve - realised 150 150 150
Equity shareholders' funds 5,638 6,169 5,935
Net asset value per Ordinary Share 64.8p 70.2p 68.2p
UNAUDITED INCOME STATEMENT
for the six months ended 31 July 2013
Year
ended
Six months ended31 Jul Six months ended31 Jul 31 Jan
2013 2012 2013
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 231 - 231 289 - 289 265
Gains/(losses)
on
investments
- realised - 94 94 - - - -
- unrealised - (126) (126) - (506) (506) (631)
231 (32) 199 289 (506) (217) (366)
Investment
management
fees (13) - (13) (26) - (26) (64)
Other expenses (108) - (108) (72) - (72) (164)
Return/(loss)
on ordinary
activities
before
taxation 110 (32) 78 191 (506) (315) (594)
Taxation (27) - (27) (46) - (46) (16)
Return/(loss)
attributable
to equity
shareholders 83 (32) 51 145 (506) (361) (610)
Return per
Ordinary
Share 1.0p (0.4p) 0.6p 1.6p (5.7p) (4.1p) (6.9p)
A Statement of Total Recognised Gains and Losses has not been prepared
as all gains and losses are recognised in the Income Statement as noted
above.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 31 July 2013
31 Jul 31 Jul 31 Jan
2013 2012 2013
GBP'000 GBP'000 GBP'000
Opening Shareholders' funds 5,935 6,775 6,775
Purchase of own shares - (67) (2,763)
Proceeds from share issue - - 2,708
Dividends paid (348) (178) (175)
Total recognised gains/(losses) for the period 51 (361) (610)
Closing Shareholders' funds 5,638 6,169 5,935
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 July 2013
Six Six
months months Year
ended ended ended
31 Jul 31 Jul 31 Jan
2013 2012 2013
Note GBP'000 GBP'000 GBP'000
Cash inflow from operating activities and returns
on investments 1 17 68 106
Taxation
Corporation tax paid - - (5)
Capital expenditure
Purchase of investments (158) (25) (50)
Proceeds from sale of investments 1,474 486 544
Net cash inflow from capital expenditure 1,316 461 494
Equity dividends paid (348) (178) (175)
Net cash inflow before financing 985 351 420
Financing
Repurchase of own shares - (66) (2,763)
Proceeds from share issue - - 2,732
Net cash outflow from financing - (66) (31)
Increase in cash 2 985 285 389
Notes to the cash flow statement:
1Cash inflow from operating activities and returns
on investments
Net revenue before taxation 78 (315) (594)
Losses on investments 32 506 631
(Increase)/decrease in other debtors (1) (100) 31
(Decrease)/increase in other creditors (73) (16) 31
(Decrease)/increase in amounts due to subsidiary
undertaking (19) (7) 7
Net cash inflow from operating activities 17 68 106
2Analysis of net funds
Beginning of period 633 244 244
Net cash inflow 985 285 389
End of period 1,618 529 633
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half-yearly results cover the six months to 31
July 2013 and have been prepared in accordance with the accounting
policies set out in the statutory accounts for the year ended 31 January
2013 which were prepared under UK Generally Accepted Accounting Practice
("UK GAAP") and in accordance with the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies" revised January
2009 ("SORP").
2. All revenue and capital items in the Income Statement derive
from continuing operations.
3. The Company has only one class of business and derives its
income from investments made in shares, securities and bank deposits.
4. Net asset value per share has been calculated on 8,704,741
Ordinary Shares, being the shares in issue at the period end.
5. Return per share for the period has been calculated on
8,704,741 Ordinary Shares, being the weighted average number of shares
in issue during the period.
6. Dividends
31 Jul 2013 31 Jan 2013
Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000
Paid in year
2013 Final - 348 348 175
7. Reserves
Capital Capital
redemption Special Revenue Revaluation reserve
reserve reserve reserve reserve - realised
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February
2013 5 5,247 96 (2,292) 150
Purchase of own
shares - - - - -
Net
(loss)/gains
on
investments - - - (126) 94
Transfer
between
reserves - 182 - (88) (94)
Dividends paid - (348) - - -
Retained net
revenue - - 83 - -
At 31 July 2013 5 5,081 179 (2,506) 150
The Special reserve, Capital reserve - realised and Revenue reserve are
all distributable reserves. Revaluation reserve includes losses of
GBP2,341,000 which are included in the calculation of distributable
reserves. Total distributable reserves at 31 July 2013 were
GBP3,069,000.
8. The Directors confirm that, to the best of their knowledge,
the half-yearly financial statements have been prepared in accordance
with the "Statement: Half-Yearly Financial Reports" issued by the UK
Accounting Standards Board and the half-yearly financial report includes
a fair review of the information required by:
a) 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, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) 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.
9. Risks and uncertainties
The Board has reviewed the principal risks and uncertainties facing the
Company over the remainder of the financial period and concluded that
the key risks are:
* investment risk associated with investing in small and immature
businesses; and
* failure to maintain approval as a VCT.
In both cases the Board is satisfied with the Company's approach to
these risks. The strategy of, where possible, taking charges over assets
to secure its investments helps to limit any potential losses which
could arise from the failure of an investee business.
The Company continually monitors its compliance with the VCT regulations
and retains PricewaterhouseCoopers to provide regular reviews and advice
in this area. The Board considers that this approach reduces the risk of
a breach of the VCT regulations to a minimal level.
10. Going concern
The Directors have reviewed the Company's financial resources at the
period end and concluded that the Company is well placed to manage its
business risks.
11. The Board confirms that it is satisfied that the Company has
adequate resources to continue in business for the foreseeable future.
For this reason, the Board believes that the Company continues to be a
going concern and that it is appropriate to apply the going concern
basis in preparing the financial statements.
12. The unaudited condensed financial statements set out herein
do not constitute statutory accounts within the meaning of Section 434
of the Companies Act 2006 and have not been delivered to the Registrar
of Companies. The figures for the year ended 31 January 2013 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.
13. Copies of the unaudited half-yearly results will be sent to
Shareholders shortly. Further copies can be obtained from the Company's
registered office and will be available for download from
www.downing.co.uk.
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: Downing Planned Exit VCT 6 PLC via Thomson Reuters ONE
HUG#1732089
Downing P.E.6 (LSE:DPV6)
Historical Stock Chart
From May 2024 to Jun 2024
Downing P.E.6 (LSE:DPV6)
Historical Stock Chart
From Jun 2023 to Jun 2024
