TIDMVEN2
RNS Number : 1671E
Ventus 2 VCT PLC
02 November 2015
This announcement replaces the announcement 9878D made on 30
October 2015 at 08.45am. The corrections are to the ordinary share
fund table in the Investment Manager's Report and to notes 7 and 8.
The corrected information is included in the announcement
below.
Ventus 2 VCT plc
Half-yearly Financial Report
for the six month period ended 31 August 2015
Registered No: 05667210
Chairman's Statement
I am pleased to present the financial report of Ventus 2 VCT plc
(the "Company") for the six month period ended 31 August 2015.
The Investment Manager, Temporis Capital LLP, has continued its
successful management of the portfolio with a focus on delivering
predictable dividends to shareholders.
During the period, construction was completed of the wind farm
owned by Bernard Matthews Green Energy Halesworth Limited, a
company in which all three share funds of the Company hold an
equity investment. The wind farm operates five Senvion MM82
turbines and has a generating capacity of 10.25 megawatts.
The hydroelectric schemes on the Glenfalloch Estate owned by
Darroch Power Limited and Upper Falloch Power Limited are in the
late stages of construction. It is expected they will be
operational by the end of the year. All three share funds hold
equity investments in these companies and have provided mezzanine
loans.
Investment policy
To achieve its objectives, the Company's strategy has been to
focus on investing in companies developing or operating renewable
energy projects with installed capacities of 2 to 20 megawatts. The
opportunity for VCTs to make further investments in renewable
energy projects is limited given new investments in companies
benefiting from Renewable Obligation Certificates or Feed-in
Tariffs will be excluded from the VCT scheme. The Company is
focused on optimising the value of the investments it holds.
In accordance with the strategic objectives set by the Board,
the Investment Manager has continued to focus the Company's
activities on wind and hydroelectric investments generating stable
long-term income with the objective of providing predictable
dividends to shareholders. In order to improve stability of cash
returns from investee companies and enhance the predictability of
dividends to shareholders of the Company, more recent investments
are, on average, structured with lighter leverage than earlier
investments. Further information can be found in the Investment
Manager's Report below.
The Investment Manager's Report provides a detailed analysis of
the portfolio held by each of the ordinary, "C" and "D" share funds
including a schedule which sets out the stage of investment and the
renewable energy technology type of the assets held by each
investee company.
Dividend policy
As disclosed in the annual report and financial statements for
the year ended 28 February 2015, the Directors anticipate a
realistic target range in the medium term beyond 28 February 2015
of 4p to 6p per ordinary share per annum and 6p to 8p per "C" share
per annum. The Company intends to pay a minimum of 5p per "D" share
per annum starting in the year ending 29 February 2016 with a
target dividend 6p to 8p per "D" share from the year ending 28
February 2019 onwards. It should be stressed that these are
intentions only, and no forecasts are intended or should be
inferred.
The charts below show historical annual dividends for ordinary
and "C" shares, as well as target dividends for the next five
years.
[bar chart]
[bar chart]
Dividend targets are intentions only. Valuation models are based
on assumptions that are subject to change. No forecasts are
intended or inferred.
The interim dividends for the current financial year are set out
in the section below.
Net Asset Value, Results and Dividend - Ordinary Shares
At 31 August 2015, the net asset value ("NAV") of the ordinary
share fund of the Company attributable to equity shareholders stood
at GBP19,302,000 or 79.1p per ordinary share.
The revenue profit attributable to ordinary shareholders for the
six month period ended 31 August 2015 was GBP583,000 or 2.40p per
ordinary share. The capital gain attributable to ordinary
shareholders for the period was GBP751,000 or 3.07p per ordinary
share, resulting in a net gain to ordinary shareholders for the
period of GBP1,334,000 or 5.47p per ordinary share.
The value of investments held by the Company's ordinary share
fund at 31 August 2015 was GBP17,763,000 compared to GBP16,975,000
at 28 February 2015. The Investment Manager's Report gives details
of investments made and proceeds received during the period
together with information about the valuation of all investee
company holdings within the portfolio.
The Company has declared an interim dividend of 2.50p per
ordinary share which will be paid on 13 January 2016 to all
ordinary shareholders on the register as at the close of business
on 11 December 2015.
Net Asset Value, Results and Dividend - "C" Shares
At the period end, the NAV per "C" share of the Company stood at
GBP13,639,000 or 120.9p per "C" share.
The revenue profit attributable to "C" shareholders for the
period was GBP361,000 or 3.20p per "C" share. The capital loss
attributable to "C" shareholders for the period was GBP235,000 or
2.09p per "C" share, resulting in a net profit attributable to "C"
shareholders for the six month period ended 31 August 2015 of
GBP126,000 or 1.11p per "C" share.
The value of investments held at 31 August 2015 by the "C" share
fund was GBP13,020,000 compared to GBP12,875,000 at 28 February
2015.
The Company has declared an interim dividend of 3.50p per "C"
share which will be paid on 13 January 2016 to all "C" shareholders
on the register as at the close of business on
11 December 2015.
Net Asset Value, Results and Dividend - "D" Shares
At the period end, the NAV per "D" share of the Company stood at
GBP2,129,000 or 106.9p per "D" share.
The revenue profit attributable to "D" shareholders for the
period was GBP66,000 or 3.34p per "D" share. The capital gain
attributable to "D" shareholders for the period was GBP188,000 or
9.41p per "D" share, resulting in a net gain attributable to "D"
shareholders for the six month period ended 31 August 2015 of
GBP254,000 or 12.75p per "D" share.
The value of investments held at 31 August 2015 in the "D" share
fund was GBP1,933,000 compared to GBP712,000 at 28 February
2015.
The Company has declared an interim dividend of 2.00p per "D"
share which will be paid on
13 January 2016 to all "D" shareholders on the register as at
the close of business on 11 December 2015.
VCT Qualifying Status
The Company retains Robertson Hare LLP to review its compliance
with VCT regulations. The Directors are satisfied that the Company
has continued to fulfil the conditions for maintaining VCT
status.
Key Performance Indicators
The Directors consider the following key performance indicators,
which are typical for VCTs, to best measure the Company's
performance and to provide shareholders with a summary of how the
business' objectives are pursued:
For the six
months ended
31 August
2015 Ordinary
(unaudited) Shares "C" Shares "D" Shares Total
Pence Pence Pence
per per per
share share share
GBP000 (1) GBP000 (1) GBP000 (1) GBP000
Revenue profit
attributable
to equity
shareholders 583 2.40 361 3.20 66 3.34 1,010
Capital gain/
(loss)
attributable
to equity
shareholders 751 3.07 (235) (2.09) 188 9.41 704
--------------------- ----------------------------- --------------------- ---------------------------- ----------------------- -------------------------------- -----------------------------------
Net gain
attributable
to equity
shareholders 1,334 5.47 126 1.11 254 12.75 1,714
Dividends
paid during
the year (512) (2.10) (395) (3.50) - - (907)
--------------------- ----------------------------- --------------------- ---------------------------- ----------------------- -------------------------------- -----------------------------------
Total movement
in equity
shareholders'
funds 822 3.37 (269) (2.39) 254 12.75 807
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
===================== ============================= ===================== ============================ ======================= ================================ ===================================
On-going ratio
(2) 3.37% 3.22% 2.96% 3.29%
===================== ============================= ===================== ============================ ======================= ================================ ===================================
Ordinary
Shares "C" Shares "D" Shares Total
Pence Pence Pence
per per per
GBP000 share GBP000 share GBP000 share GBP000
As at 31 August
2015
(unaudited)
Net asset
value (3) 19,302 79.1 13,639 120.9 2,129 106.9 35,070
===================== ============================= ===================== ============================ ======================= ================================ ===================================
Total
shareholder
return (4) 24,122 103.4 15,505 137.4 2,129 106.9 41,756
===================== ============================= ===================== ============================ ======================= ================================ ===================================
(1) The "per share" value is determined in respect of the
weighted average number of shares in issue during the period,
except in respect of the dividends paid in the period, which is
determined on the basis of the number of shares eligible to receive
dividends at the time the dividends were paid.
(2) The on-going charges ratio represents the Company's total
operating expenditure during the period (excluding investment
costs) as a percentage of the average NAV of the Company during the
six month period.
The total annual running costs cap is set out in Note 3 to the
financial statements.
(3) The "per share" value is determined in respect of the number
of shares in issue at the period end, except in respect of the
total shareholder return which includes dividends paid and is
determined on the basis of the number of shares eligible to receive
dividends at the time the dividends were paid.
(4) The total shareholder return represents the NAV at period
end plus the cumulative dividends paid since incorporation.
Key Information as at 31 August
2015
(unaudited)
------------------------------------- --------- --------- --------
Ordinary C D
Shares Shares Shares
Net asset value as at 31 August
2015 GBP19.3m GBP13.6m GBP2.1m
Net asset value per share as at
31 August 2015 79.1p 120.9p 106.9p
Mid-market share price as at market
close on 30 September 2015 66.0p 99.5p 100.0p
Cumulative dividends per share
paid to date 24.30p 16.50p -
Total Return per share (NAV plus
cumulative dividends paid) 103.4p 137.4p 106.9p
------------------------------------- --------- --------- --------
Target dividend per share for
year ending 29 February 2016:
Tax-free dividend * 5.25p 8.0p 5.0p
Equivalent pre-tax dividend to
Higher Rate taxpayer ** 7.8p 11.9p 7.4p
Equivalent pre-tax dividend to
Additional Rate taxpayer ** 8.5p 12.9p 8.1p
------------------------------------- --------- --------- --------
Target dividend yield for year
ending 29 February 2016 based
on
mid-market share price as at market
close on 30 September 2015:
After tax 8.0% 8.0% 5.0%
Equivalent pre-tax dividend to
Higher Rate taxpayer 11.8% 11.9% 7.4%
Equivalent pre-tax dividend to
Additional Rate taxpayer 12.9% 13.0% 8.1%
------------------------------------- --------- --------- --------
* Dividend targets are intentions only. No forecasts
are intended or should be inferred. For
eligible VCT investors (i.e., UK Residents aged
over 18 years), there is no liability to tax on
dividends and no Capital Gains Tax on realised
gains. An investment limit of GBP200,000 per
person per tax year applies.
** Equivalent pre-tax yields are computed
assuming a shareholder receives dividends
from
other sources in excess of the GBP5,000 per year
tax-free dividend allowance (which will become
effective from April 2016). From April 2016, Higher
rate taxpayers will pay tax on dividends in
excess of the GBP5,000 tax-free allowance at the
rate of 32.5% and Additional Rate taxpayers
(taxable income in excess of GBP150,000) will pay
tax on dividends in excess of the GBP5,000 tax-free
allowance at the rate of 38.1%.
The performance of the Company is reviewed in the Investment
Manager's Report, including the Company's compliance with HM
Revenue & Customs ("HMRC") VCT regulations.
Alan Moore
Chairman
29 October 2015
Principal Risks and Uncertainties
Under the Financial Conduct Authority's Disclosure and
Transparency Rules, the Directors are required to identify those
material risks to which the Company is exposed and take appropriate
steps to mitigate those risks. Other than the inherent risks
associated with investment activities, which are discussed in the
Investment Manager's Report, the risks described below are those
which the Directors consider to be material. The Directors do not
expect that the risks and uncertainties presented will change
significantly over the current financial year.
-- Failure to meet and maintain the investment requirements for
compliance with HMRC VCT regulations may result in the Company
losing its status as a VCT.
The Board mitigates this risk by regularly reviewing investment
management activity and each new investment with appropriately
qualified advisers and, typically, by obtaining pre-approval from
HMRC for each qualifying investment.
-- Inadequate control environment at service providers may lead
to inaccurate reporting or misappropriation of assets
This risk is mitigated by only appointing service providers of a
high standing under agreements that set out their responsibilities
and by obtaining assurances from them that all exceptions have been
reported to the Board. In addition, the Board has appointed an
independent external party, Roffe Swayne, to report directly to the
Board in respect of the Company's internal controls undertaken by
the Investment Manager on behalf of the Company.
-- Non-compliance with the Listing Rules of the Financial
Conduct Authority, Companies Act Legislation and other applicable
regulations may result in termination of the Company's Stock
Exchange listing or other sanctions
This risk is mitigated by employing external advisers fully
conversant with applicable statutory and regulatory requirements
who report regularly to the Board on the Company's compliance.
-- Reliance on the UK Government's continued support for the
renewable energy sector and the risk of adverse changes in the
application of government policies particularly in respect of the
renewable energy sector and tax legislation.
The future level of Government-mandated support for renewables
has important implications for the industry and could impact the
value of investments the Company has made in companies which own
and operate renewable projects. However, the Directors believe that
any future reductions in renewable energy tariffs should not impact
any existing investments in companies operating renewable energy
assets, as the UK Government has a consistent history of
grandfathering financial support mechanisms for existing projects
and has a long term commitment to the renewable energy sector.
Going Concern
The Directors have concluded that it is appropriate to continue
to adopt the going concern basis in preparing the accounts. The
Company's major cash flows are within the Company's control (namely
investments and dividends) or are reasonably predictable (namely
the operating expenses). The Company is able to forecast cash
inflows comprising proceeds from investments to a reasonable
degree. Having reviewed a cash flow forecast for the next 18
months, the Board has a reasonable expectation that the Company is
able to continue in operational existence for a period of at least
12 months from the date of this report.
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
Under changes to the UK Corporate Governance code, the Board is
required to include a 'longer term' viability statement in the next
annual report. This will detail the Board's reasonable expectation
as to the Company's viability based on a robust assessment of its
current position in respect to its principal risks. This will also
state whether the Board has a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
which is expected to be a period significantly longer than 12
months. This viability statement will be included in the annual
report for the year ending 29 February 2016.
Responsibility Statement
The Directors acknowledge responsibility for the interim results
and approve this half-yearly report. The Directors confirm that to
the best of their knowledge:
(a) the condensed financial statements have been prepared in
accordance with International Accounting Standard 34 ("IAS 34")
Interim Financial Reporting and give a true and fair view of the
assets, liabilities, financial position and the profit or loss of
the Company as required by Disclosure and Transparency Rule ("DTR")
4.2.4R;
(b) the interim management report, included within the
Chairman's Statement and Investment Manager's Report, includes a
fair review of the information required by DTR 4.2.7R, being the
important events of the first half of the year and the principal
risks and uncertainties for the remaining six months of the year as
set out above; and
(c) the condensed financial statements include a fair review of
related party transactions and changes thereto, as required by DTR
4.2.8R.
The Responsibility Statement has been approved by the Board.
Paul Thomas
Director
29 October 2015
Investment Manager's Report
In line with the strategic objectives set by the Board, the
Investment Manager has continued to focus the Company's activities
on renewable energy investments generating stable long-term income
with the objective of providing predictable dividends to
shareholders.
The three share funds of the Company are now fully invested in
companies that own wind, hydro and landfill gas projects. All
development investments have either been developed out, sold or
written off. During the period, the Company's investments in
Blawearie Wind Limited, BEL Holdco Limited and BEL Acquisition
Limited, which in the aggregate were immaterial, were written down
to nil or nominal values.
Under the current VCT regulations, new investments in renewable
energy companies that benefit from Renewable Obligation
Certificates ("ROCs") or Feed-in Tariffs are excluded as qualifying
investments for VCTs. As such, the Company is limited in its
ability to make further investments in accordance with the
Investment Policy and has no plans to make further investments. The
VCT restrictions do not affect any of the Company's existing
investments.
The ordinary share fund of the Company has investments in
companies operating eight UK wind farms with an aggregate installed
capacity of 69.35 megawatts. Five of these investee companies are
also owned in part by the "C" share fund and one such company is
also owned in part by the "D" share fund. The ordinary share fund
also has investments in three companies with hydroelectric projects
with combined capacity of 4.79 megawatts. Two of those companies
(Darroch Power Limited and Upper Falloch Power Limited), whose
projects are still under construction, are also owned in part by
the "C" share and "D" share funds. Finally, the ordinary share fund
has an investment in a company operating a landfill gas project
with a capacity of 2.3 megawatts.
The "C" share fund has investments in companies operating seven
UK wind farms with an aggregate installed capacity of 75.15
megawatts. Five of these seven companies are also owned in part by
the ordinary share fund and one is also owned in part by the "D"
share fund. The "C" share fund has also invested jointly with the
ordinary and "D" shares in Darroch Power Limited and Upper Falloch
Power Limited (2.8 megawatts combined).
The "D" share fund currently has one operational investment,
Bernard Matthews Green Energy Halesworth Limited, which operates a
10.25 megawatt wind farm and which is also owed in part by the
ordinary and "C" share funds. The "D" share fund has also invested
jointly with the ordinary and "C" shares in Darroch Power Limited
and Upper Falloch Power Limited (2.8 megawatts combined).
The following table shows key information about the renewable
energy projects owned by the Company's investee companies:
Output as Investment held
% of by
Capacity Operational budget Ordinary "C" "D"
Share Share Share
MW since Location six months Fund Fund Fund
ended 31
Aug 15
Operational
Wind
Achairn Energy Caithness,
Limited 6.00 May 2009 Scotland 72% ü
A7 Lochhead Lanarkshire,
Limited 6.00 Jun 2009 Scotland 117% ü
Greenfield
Wind Farm Lanarkshire,
Limited 12.30 Mar 2011 Scotland 99% ü ü
Biggleswade
Wind Farm
Limited 20.00 Dec 2013 Bedfordshire 105% ü ü
Eye Wind Power
Limited 6.80 Apr 2014 Suffolk 89% ü
Bernard Matthews
Green Energy
Pickenham
Limited/
North Pickenham
Energy Limited 4.00 Apr 2014 Norfolk 98% ü ü
Bernard Matthews
Green Energy
Weston Limited/
Weston Airfield
Investments
Ltd 4.00 Apr 2014 Norfolk 95% ü ü
AD Wind Farmers
Limited (Allt
Dearg Windfarmers Argyll and
LLP) 10.20 Dec 2012 Bute, Scotland 109% ü
White Mill
Windfarm Limited 14.40 Aug 2012 Cambridgeshire 108% ü
Bernard Matthews 10.25 Aug 2015 Suffolk N/A ü ü ü
Green Energy
Halesworth
Limited
Operational
Hydro
Near Loch
Osspower Limited Lomond,
(Allt Fionn) 1.99 Jul 2012 Scotland 154% ü
Operational
Landfill Gas
Renewable 2.30 Aug 2009 Belfast, * ü
Power Systems Northern
(Dargan Road) Ireland
Limited
Hydro under
Construction
Darroch Power 1.90 N/A Near Loch N/A ü ü ü
Limited (Derrydarroch) Lomond,
Scotland
Upper Falloch 0.90 N/A Near Loch N/A ü ü ü
Power Limited Lomond,
Scotland
* The revenues earned by Renewable Power Systems (Dargan Road)
Limited consist primarily of generator availability payments and
are not dependent on electricity output.
Performance of investee companies during the period was
generally satisfactory. One of the three turbines at the Achairn
wind farm was out of operation for most of the period because of a
damaged blade, however revenues were fully protected under warranty
claims. In the six months ended 31 August 2015, the Bernard
Matthews Green Energy Halesworth wind farm became operational. The
Derrydarroch and Upper Falloch hydro projects were under
construction during the period and are scheduled to be completed in
November 2015.
The investment manager is working actively to increase the value
of the Company's portfolio through improvements in the operations
of underlying assets and, when possible, the optimisation of the
financial structure of investee companies.
Ordinary share portfolio
A summary of the ordinary share fund's unaudited investment
valuations as at 31 August 2015 and gains and losses during the six
month period ended 31 August 2015 is given below.
Voting Investment Investment Investment Investment
rights value cost value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 28 28
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Achairn
Energy
Limited * Q 40.40% 2,840 1,363 4,203 1,226 1,289 2,515 168 4,035 2,515
A7 Lochhead
Limited * Q 20.00% 653 - 653 568 - 568 (83) 736 568
Greenfield
Wind Farm
Limited * PQ 16.65% 1,459 1,344 2,803 665 1,222 1,887 49 2,784 1,917
Biggleswade
Wind Farm
Limited * Q 3.50% 263 291 554 86 264 350 (40) 594 350
Eye Wind
Power
Limited ** Q 35.38% 2,131 - 2,131 1,480 - 1,480 246 1,885 1,480
Bernard
Matthews
Green
Energy
Weston
Limited * Q 50.00% 844 - 844 500 - 500 (127) 971 500
Bernard
Matthews
Green
Energy
Pickenham
Limited * Q 50.00% 730 - 730 500 - 500 36 694 500
Bernard
Matthews
Green
Energy
Halesworth
Limited ** Q 10.09% 689 - 689 351 - 351 153 536 351
Operational
companies
in the
wind sector
Firefly
Energy
Limited * Q 50.00% - 43 43 200 64 264 - 83 304
Operational
landfill
gas
Renewable
Power
Systems
(Dargan
Road)
Limited Q 50.00% 634 1,115 1,749 780 1,008 1,788 (15) 1,820 1,844
Operational
small
hydro
Osspower
Limited 50.00% 3,074 - 3,074 300 - 300 439 2,635 300
-------------------------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Small
hydro
under
construction
Darroch
Power
Limited * Q 11.46% 143 46 189 20 46 66 - 125 2
Upper
Falloch
Power
Limited * Q 10.97% 69 31 100 8 31 39 - 63 2
Development
and
pre-planning
BEL Holdco
Limited * 1.91% - - - 200 - 200 (2) 2 200
BEL
Acquisition
Limited * 1.91% 1 - 1 10 - 10 (9) 10 10
Realised
investments
Ben Glas
Power
Limited * 00.00% - - - - - - 2 2
Sandsfield
Heat &
Power
Limited 44.90% - - - 1,796 1,000 2,796 - - 2,796
The Small
Hydro
Company
Limited 22.50% - - - 115 - 115 - - 115
Redeven
Energy
Limited * 50.00% - - - - 130 130 - - 130
Total 13,530 4,233 17,763 8,805 5,054 13,859 815 16,975 13,886
-------------------------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
BEL Holdco Limited was written down to a nil value in the prior
year. However, liquidation proceeds of GBP3,000 were received
during the six month period ended 31 August 2015 which have been
treated as a realised gain.
Ben Glas Power Limited was sold during the six month period
ended 31 August 2015 or a consideration of GBP87,000. This has been
recognised as a realised gain in the income statement.
"C" share portfolio
A summary of the "C" share fund's unaudited investment
valuations as at 31 August 2015 and gains and losses during the six
month period ended 31 August 2015 is given below.
Voting Investment Investment Investment Investment
rights value cost value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months
at at at at at at at to as at as at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Greenfield
Wind
Farm
Limited * PQ 12.50% 1,096 1,009 2,105 500 917 1,417 39 2,089 1,440
White
Mill
Windfarm
Limited * PQ 25.00% 2,022 349 2,371 1,000 318 1,318 (492) 2,863 1,318
AD Wind
Farmers
Limited * Q 50.00% 1,147 - 1,147 1,000 - 1,000 (68) 1,215 1,000
Biggleswade
Wind
Farm
Limited * Q 21.50% 1,617 1,786 3,403 527 1,623 2,150 (250) 3,653 2,150
Weston
Airfield
Investments
Limited * Q 50.00% 1,910 - 1,910 1,000 - 1,000 366 1,544 1,000
North
Pickenham
Energy
Limited * Q 50.00% 1,405 - 1,405 1,000 - 1,000 226 1,179 1,000
Bernard
Matthews
Green
Energy
Halesworth
Limited ** Q 5.64% 386 - 386 300 - 300 86 300 300
Hydroelectric
scheme
under construction
Darroch
Power
Limited * Q 4.22% 53 133 186 53 133 186 - - -
Upper
Falloch
Power
Limited * Q 2.79% 17 90 107 17 90 107 - - -
-------------- ---- ---- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Development
and
pre-planning
Blawearie
Wind
Limited * 50.00% - - - 32 - 32 (32) 32 32
-------------- ---------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Realised
investments
Iceni
Renewables
Limited * 50.00% - - - 400 17 417 - - 417
-------------- ---------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Total 9,653 3,367 13,020 5,829 3,098 8,927 (125) 12,875 8,657
-------------------------- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
"D" share portfolio
A summary of the "D" share fund's unaudited investment
valuations as at 31 August 2015 and gains during the six month
period ended 31 August 2015 is given below.
Voting Investment Investment
rights Investment Investment value cost
value cost
Gain/
Shares Loans Total Shares Loans Total (loss) Total Total
six
as as as as as as as months as as
at at at at at at at to at at
31 31 31 31 31 31 31 31 28 28
August August August August August August August August February February
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015
% GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operational
wind
Bernard
Matthews
Green
Energy
Halesworth
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
Limited ** Q 13.38% 915 - 915 712 - 712 203 712 712
------------- ---- --- ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Hydroelectric
scheme under
construction
Darroch
Power
Limited * Q 25.50% 319 325 644 319 325 644 - - -
Upper
Falloch
Power
Limited * Q 29.58% 185 189 374 185 189 374 - - -
Total 1,419 514 1,933 1,216 514 1,730 203 712 712
------------------------ ------- ------- ------- -------- ------- ------- -------- ------- ----------- -----------
Q Investment complies with VCT regulations on qualifying holdings.
PQ Part of the investment complies with VCT regulations on qualifying holdings.
* A company in which Ventus VCT plc has also invested (or in
which Ventus VCT plc had invested prior to the investment being
realised).
** A company in which Temporis Capital Renewable Infrastructure
EIS Fund and Ventus VCT plc have also invested
The Company, Ventus VCT plc and Temporis Capital Renewable
Infrastructure EIS Fund are managed by
Temporis Capital LLP.
Valuation of Investments
It is the accounting policy of the Company to hold its
investments at fair value. The Company's investments in investee
companies which operate renewable energy assets are valued using a
discounted cash flow methodology. The Company has changed its
approach to the valuation methodology. Previously, the valuation
analysis was performed using a discount factor applied to the
leveraged cash flows of the investee companies. However, to
determine the valuations as at 31 August 2015, the Company has
applied a discount rate to the unleveraged cash flows to determine
the enterprise value of the investee company and then has
subtracted the market value of any senior debt (including any
prepayment fees and swap break costs) to calculate the value of the
equity and/or mezzanine debt in the investee company. In recent
years an active market for the purchase of operational renewable
energy assets has emerged; the revised valuation approach conforms
with the methodology that has become prevalent in the market. It
is, therefore, deemed a more appropriate method to value the
Company's investments. The discount rates used to value the
unleveraged cash flows of investee companies range from 7.5% to
10%, with discount rates applied to the cash flows of operating
wind farms generally being in the range of 8.25% to 9%.
The key assumptions that have a significant impact on discounted
cash flow valuations for these assets are the discount rate, the
price at which the power and associated benefits can be sold, the
amount of electricity the investee companies' generating assets are
expected to produce and operating costs.
The fair value of the Company's investments in project companies
which have not passed an initial satisfactory operational period
are determined to be the price of investment subject to a periodic
impairment review.
Sensitivity of Net Asset Value to Changes in Key Assumptions
The charts below illustrate the sensitivity of the NAV of the
Company's share funds to changes of certain key input assumptions
applied to the unleveraged cash flows in the valuation models.
The price at which the output from the generating assets is sold
is a factor of both wholesale electricity prices and Government
subsidies. The selling price is often fixed in the medium term
under power purchase agreements. For periods outside the terms of
these agreements the assumed future prices are estimated using
external third party forecasts which take the form of specialist
consultancy reports.
Specifically commissioned external consultant reports are used
to estimate the expected generating output of the investee
company's generating assets taking into account their type and
location. The analysis set out below describes the sensitivity of
each share fund's NAV to a higher (P75) or lower (P25) probability
of exceedance of the forecast long term average output versus the
base case (P50).
The discount factor and inflation rate applied to the cash flows
are regularly reviewed by the Investment Committee of the
Investment Manager to ensure they are set at the appropriate
levels. The Investment Committee and the Board will also give
consideration to the specific performance characteristics of the
particular type of generating technology being used. The range of
discount factors which form the base case in the sensitivity
analysis is set out in the section above. The base case inflation
rate used in the sensitivity analysis is 2.5%.
[bar chart]
[bar chart]
[bar chart]
Investment Policy
The Company has focused on investing in companies developing
renewable energy projects with installed capacities of up to 20
megawatts. Investments are generally in companies which own and
operate projects initiated by specialist small-scale developers and
smaller projects which are not attractive to large development
companies and utilities.
Asset Allocation
The Investment Manager seeks to allocate the Company's
investments in equity securities and loan stock of companies owning
renewable energy projects, primarily wind energy and hydroelectric.
Up to 10% of net proceeds raised from share offers may be allocated
to companies developing early stage renewable energy projects prior
to planning permissions being obtained.
The Company together with Ventus VCT plc has an allocation
agreement in place with the Investment Manager. The allocation
agreement prescribes the allocation of investments between the two
companies and their share funds in accordance with the ratio of
available funds in each share fund, subject to adjustment in
consideration of maintaining the VCT status of both companies,
concentration risk, expected timing of realisations and projected
dividend profiles.
When there is a conflict or potential conflict of interest
between the investment strategy of the Company and that of another
fund managed by Temporis Capital LLP, the matter is referred to the
Investment Manager's compliance officer who ensures any conflicts
are dealt with fairly. Any investment made in a company in which
another fund managed by the Investment Manager has invested or
intends to invest will be approved by the Directors who are
independent of the Investment Manager, unless the investment is
made at the same time and on the same terms or in accordance with a
specific pre-existing agreement between the Company and the
Investment Manager.
The Company's policy is to maintain cash reserves of at least 5%
of net proceeds raised from share offers for the purpose of meeting
operating expenses and purchasing its shares in the market.
Circumstances may arise which would require the Company to hold
less than 5% of net proceeds in cash for a limited period of
time.
In order to comply with VCT requirements, at least 70% by value
of the Company's investments are required to be comprised of
qualifying investments.
The Company typically owns 25% to 50% of the equity share
capital of each investee company and a portion of its investment in
each investee company may be in the form of loan stock.
The Company's uninvested funds are placed on deposit or invested
in short-term fixed income securities until suitable investment
opportunities are found.
Risk Diversification
The geographical focus of the Company's portfolio is the UK and
the majority of investments made to date are in the wind sector.
Funds are invested in a range of companies with small-scale
projects so project risk is not concentrated in only a few schemes.
The portfolio contains projects at different stages of the asset
lifecycle, ranging from pre-planning to construction and then into
operation. However, the portfolio is now mostly comprised of
companies which own operating assets. Investments are made via
subscriptions for new share capital, acquiring existing share
capital or via loan stock instruments in order to secure a
negotiated level of return from the project. The majority of
investments are made in special purpose companies set up
specifically to develop each project.
Gearing
The Company does not intend to borrow funds for investment
purposes. However the Company is exposed to gearing through its
investee companies which typically fund the construction costs of
each project through senior debt which is non-recourse to the
Company. The Investment Manager is involved in assisting investee
companies in negotiating the terms of this finance to ensure
competitive terms are achieved. The interest rate is typically
fixed for the duration of the loan so that investee companies are
not exposed to changes in market interest rates.
To the extent that borrowing should be required by the Company
for any purpose, the Directors will restrict the borrowings of the
Company. The aggregate principal amount at any time outstanding in
respect of money borrowed by the Company will not, without the
previous sanction of an ordinary resolution of the Company, exceed
a sum equal to 10% of the adjusted share capital and reserves of
the Company in accordance with its Articles.
Maximum Exposures
In order to gauge the maximum exposure of the Company to various
risks, the following can be used as a guide:
i) Investments in qualifying holdings
Under VCT regulations, at least 70% of the Company's funds
should be invested in qualifying holdings. When there is an issue
of new shares, the 70% requirement does not apply to the new funds
raised for any accounting periods which end earlier than three
years from the date of allotment of the new shares.
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
For the purposes of the 70% qualifying holdings requirement,
disposals of qualifying investments for cash may be disregarded for
a period of six months. Where a VCT breaches any requirement due to
factors outside of its control, it may apply to HMRC for a
determination that the breach will be disregarded for a period of
90 days while the breach is remedied.
ii) Concentration limits
Under VCT regulations, no more than 15% of the Company's total
assets should be in a single investee company at the time the
investment is made in that investee company.
iii) Investments in pre-planning projects
In accordance with the Company's investment policy, a maximum of
10% of the net funds raised from share offers may be invested in
companies developing pre-planning projects.
Temporis Capital LLP
Investment Manager
29 October 2015
Directors and Advisers
Directors
Alan Moore (Chairman)
Paul Thomas
Colin Wood
Company Secretary
The City Partnership (UK) Limited
Thistle House
21 Thistle Street
Edinburgh
EH2 1DF
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Principal Banker
Barclays Bank Plc
1 Churchill Place
London
E14 1DF
Investment Manager & Registered Office
Temporis Capital LLP
Berger House
36/38 Berkeley Square
London
W1J 5AE
Registrar
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Broker
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
VCT Taxation Adviser
Robertson Hare LLP
Suite C, First Floor
4 - 6 Staple Inn
London
WC1V 7QH
Solicitors
Howard Kennedy LLP
No.1 London Bridge
London
SE1 9BG
Independent Review Report to Ventus 2 VCT plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six month period ended 31 August 2015 which comprises the Condensed
Statement of Comprehensive Income, the Condensed Statement of
Financial Position, the Condensed Statement of Changes in Equity,
the Condensed Statement of Cash Flows and the related explanatory
notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting", as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority and for no other purpose. No person is entitled
to rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of our terms
of engagement or has been expressly authorised to do so by our
prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six month period ended
31 August 2015 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, as adopted by
the European Union, and the Disclosure and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
BDO LLP
Chartered Accountants
London, United Kingdom
29 October 2015
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Condensed Statement of Comprehensive Income
For the six month period ended 31 August 2015 (unaudited)
Ordinary Shares "C" Shares "D" Shares Total
Revenue Capital Total Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Realised
loss on
investments 6 - 85 85 - - - - - - - 85 85
Net unrealised
gain/ (loss)
on
investments 6 - 820 820 - (125) (125) - 203 203 - 898 898
Income 780 - 780 471 - 471 83 - 83 1,334 - 1,334
Investment
management
fees 3 (58) (172) (230) (44) (133) (177) (6) (18) (24) (108) (323) (431)
Other expenses (121) - (121) (43) - (43) (8) - (8) (172) - (172)
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Profit/
(loss) before
taxation 601 733 1,334 384 (258) 126 69 185 254 1,054 660 1,714
Taxation 4 (18) 18 - (23) 23 - (3) 3 - (44) 44 -
Profit/
(loss) and
total
comprehensive
income
attributable
to equity
shareholders 583 751 1,334 361 (235) 126 66 188 254 1,010 704 1,714
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Return per
share
Basic and
diluted
return per
share (p) 5 2.40 3.07 5.47 3.20 (2.09) 1.11 3.34 9.41 12.75
The Company has only one class of business and derives its
income from investments made in the UK.
The total column of this statement represents the Company's
Condensed Statement of Comprehensive Income, prepared in accordance
with the recognition and measurement principles of International
Financial Reporting Standards as adopted by the European Union. The
revenue and capital columns shown above constitute supplementary
information prepared under the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" 2009 ("SORP") published by the Association of
Investment Companies.
The accompanying notes set out below form an integral part of
these Financial Statements.
Condensed Statement of Comprehensive Income
For the six month period ended 31 August 2014 (unaudited)
Ordinary Shares "C" Shares "D" Shares Total
Revenue Capital Total Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Realised
gains
on
investments 6 - 95 95 - - - - - - - 95 95
Net unrealised
gains
on
investments 6 - 671 671 - 519 519 - - - - 1,190 1,190
Income 596 - 596 417 - 417 - - - 1,013 - 1,013
Investment
management
fees 3 (55) (166) (221) (41) (123) (164) (5) (14) (19) (101) (303) (404)
Other
expenses (104) (8) (112) (50) - (50) (7) - (7) (161) (8) (169)
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Profit/
(loss)
before
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
taxation 437 592 1,029 326 396 722 (12) (14) (26) 751 974 1,725
Taxation 4 (13) 13 - (26) 26 - 3 (3) - (36) 36 -
Profit/
(loss)
and total
comprehensive
income
attributable
to equity
shareholders 424 605 1,029 300 422 722 (9) (17) (26) 715 1,010 1,725
-------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- -------
Return
per share
Basic
and diluted
return
per share
(p) 5 1.74 2.48 4.22 2.65 3.73 6.38 (0.60) (1.14) (1.74)
The Company has only one class of business and derives its
income from investments made in the UK.
The total column of this statement represents the Company's
Condensed Statement of Comprehensive Income, prepared in accordance
with the recognition and measurement principles of International
Financial Reporting Standards as adopted by the European Union. The
revenue and capital columns shown above constitute supplementary
information prepared under the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" 2009 ("SORP") published by the Association of
Investment Companies.
The accompanying notes set out below form an integral part of
these Financial Statements.
Condensed Statement of Financial Position
as at 31 August 2015 (unaudited)
As at 31 August As at 28 February
2015 2015
(unaudited) (audited)
Ordinary "C" "D" Ordinary "C" "D"
Shares Shares Shares Total Shares Shares Shares Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Non-current
assets
Investments 6 17,763 13,020 1,933 32,716 16,975 12,875 712 30,562
Trade and other
receivables - - - - 801 - - 801
17,763 13,020 1,933 32,716 17,776 12,875 712 31,363
--------- -------- -------- --------- --------- -------- -------- ---------
Current assets
Trade and other
receivables 7 1,287 224 83 1,594 348 263 1 612
Cash and cash
equivalents 417 421 120 958 458 833 1,173 2,464
1,704 645 203 2,552 806 1,096 1,174 3,076
--------- -------- -------- --------- --------- -------- -------- ---------
Total assets 19,467 13,665 2,136 35,268 18,582 13,971 1,886 34,439
--------- -------- -------- --------- --------- -------- -------- ---------
Current liabilities
Trade and other
payables (165) (26) (7) (198) (102) (63) (11) (176)
Net current
assets 1,539 619 196 2,354 704 1,033 1,163 2,900
--------- -------- -------- --------- --------- -------- -------- ---------
Net assets 19,302 13,639 2,129 35,070 18,480 13,908 1,875 34,263
--------- -------- -------- --------- --------- -------- -------- ---------
Equity attributable
to equity holders
Share capital 6,097 2,832 498 9,427 6,097 2,832 498 9,427
Capital redemption
reserve 2,105 - - 2,105 2,105 - - 2,105
Share premium - - 1,433 1,433 - - 1,433 1,433
Special reserve 13,472 7,725 - 21,197 13,472 7,725 - 21,197
Capital reserve
- realised (10,298) (1,608) (53) (11,959) (10,914) (1,498) (38) (12,450)
Capital reserve
- unrealised 7,796 4,574 203 12,573 7,661 4,699 - 12,360
Revenue reserve 130 116 48 294 59 150 (18) 191
Total equity 19,302 13,639 2,129 35,070 18,480 13,908 1,875 34,263
--------- -------- -------- --------- --------- -------- -------- ---------
Basic and diluted
net asset value
per share (p) 8 79.1 120.9 106.9 75.8 123.3 94.2
Approved by the Board and authorised for issue on 29 October
2015.
Paul Thomas
Director
Ventus 2 VCT plc. Registered No: 05667210
The accompanying notes set out below form an integral part of
these Financial Statements.
Condensed Statement of Changes in Equity
for the six month period ended 31 August 2015 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 6,097 2,105 - 13,472 (10,914) 7,661 59 18,480
Transfers
of unrealised
gains on
investments
to realised
gains on
investments - - - - 685 (685) - -
Profit/
(loss) and
total
comprehensive
income for
the period - - - - (69) 820 583 1,334
Dividends
paid in
the period - - - - - - (512) (512)
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
At 31 August
2015 6,097 2,105 - 13,472 (10,298) 7,796 130 19,302
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 2,832 - - 7,725 (1,498) 4,699 150 13,908
Profit/
(loss) and
total
comprehensive
income for
the period - - - - (110) (125) 361 126
Dividends
paid in
the period - - - - - - (395) (395)
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
At 31 August
2015 2,832 - - 7,725 (1,608) 4,574 116 13,639
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
"D" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
2015 498 - 1,433 - (38) - (18) 1,875
Profit/
(loss) and
total
comprehensive
income for
the period - - - - (15) 203 66 254
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
At 31 August
2015 498 - 1,433 - (53) 203 48 2,129
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2015 9,427 2,105 1,433 21,197 (12,450) 12,360 191 34,263
Transfers
of unrealised
gains on
investments
to realised
gains on
investments - - - - 685 (685) - -
Profit and
total
comprehensive
income for
the period - - - - (194) 898 1,010 1,714
Dividends
paid in
the period - - - - - - (907) (907)
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
At 31 August
2015 9,427 2,105 1,433 21,197 (11,959) 12,573 294 35,070
------------------- ----------------------- ------------------- ------------------- ------------------------------ ------------------------------ ------------------- -------------------
The revenue reserve and realised capital reserve are
distributable reserves. The special reserves may be used to fund
buy-backs and pay dividends if they are considered by the Board to
be in the interests of the shareholders.
The accompanying notes set out below form an integral part of
these Financial Statements.
Condensed Statement of Changes in Equity
for the six month period ended 31 August 2014 (unaudited)
Capital Capital Capital
Share redemption Share Special reserve reserve Revenue
capital reserve premium reserve realised unrealised reserve Total
Ordinary
Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 6,097 2,105 - 13,575 (10,860) 6,553 227 17,697
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - - 210 (210) - -
Profit/ (loss)
and total
comprehensive
income for
the period - - - - (66) 671 424 1,029
Dividends
paid in the
period - - - - - - (427) (427)
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2014 6,097 2,105 - 13,575 (10,716) 7,014 224 18,299
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
"C" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 2,832 - - 7,770 (1,242) 4,225 248 13,833
Shares
repurchased
in the year - - - (45) - - - (45)
Profit/ (loss)
and total
comprehensive
income for
the period - - - - (97) 519 300 722
Dividends
paid in the
period - - - - - - (283) (283)
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- --------------
At 31 August
2014 2,832 - - 7,725 (1,339) 4,744 265 14,227
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
"D" Shares GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 - - - - - - - -
Shares issued
in the period 498 - 1,489 - - - - 1,987
Issue costs - - (51) - - - - (51)
Loss and
total
comprehensive
income for
the period - - - - (17) - (9) (26)
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- --------------
At 31 August
2014 498 - 1,438 - (17) - (9) 1,910
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 March
2014 8,929 2,105 - 21,345 (12,102) 10,778 475 31,530
Shares issued
in the period 498 - 1,489 - - - - 1,987
Issue costs - - (51) - - - - (51)
Shares
repurchased
in the year - - - (45) - - - (45)
Transfers
of unrealised
losses on
investments
to realised
losses on
investments - - - - 210 (210) - -
Profit/ (loss)
and total
comprehensive
income for
the period - - - - (180) 1,190 715 1,725
Dividends
paid in the
period - - - - - - (710) (710)
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
At 31 August
2014 9,427 2,105 1,438 21,300 (12,072) 11,758 480 34,436
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
-------------- ----------------- -------------- -------------- ---------------------- ---------------------- -------------- --------------
The accompanying notes set out below form an integral part of
these Financial Statements.
Condensed Statement of Cash Flows
for the six month period ended 31 August 2015 (unaudited)
Six months ended 31 August Six months ended
2015 31 August 2014
(unaudited) (unaudited)
Ordinary "C" "D"
Shares Shares Shares Total Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cash flows
from
operating
activities
Investment
income
received 652 510 - 1,162 1,020
Investment
management
fees paid (231) (177) (24) (432) (404)
Other cash
payments (65) (79) (11) (155) (450)
--------------- --------------- --------------- ------------------------------ ---------------------------------------
Net cash
from/
(used in)
operations 356 254 (35) 575 166
Taxes paid - - - - -
Net cash
inflow/
(outflow)
from
operating
activities 356 254 (35) 575 166
--------------- --------------- --------------- ------------------------------ ---------------------------------------
Cash flows
from
investing
activities
Purchases of
investments (102) (294) (1,018) (1,414) (722)
Disposals of
investments 87 - - 87 1
Proceeds
from
investments 130 23 - 153 1,230
Net cash
(outflow)/
inflow from
investing
activities 115 (271) (1,018) (1,174) 509
--------------- --------------- --------------- ------------------------------ ---------------------------------------
Cash flows
from
financing
activities
"D" shares
issued - - - - 1,987
"D" share
issue
costs - - - - (51)
Dividends
paid (512) (395) - (907) (710)
"C" share
repurchase - - - - (45)
Net cash
(outflow)/
inflow from
financing
activities (512) (395) - (907) 1,181
--------------- --------------- --------------- ------------------------------ ---------------------------------------
Net
(decrease)/
increase in
cash
and cash
equivalents (41) (412) (1,053) (1,506) 1,855
Cash and
cash
equivalents
at
the
beginning
of the
period 458 833 1,173 2,464 1,081
Cash and
cash
equivalents
at
the end of
the
period 417 421 120 958 2,936
--------------- --------------- --------------- ------------------------------ ---------------------------------------
The accompanying notes set out below form an integral part of
these Financial Statements.
Explanatory Notes to the Condensed Financial Statements
for the six month period ended 31 August 2015 (unaudited)
1. Accounting convention and policies
The unaudited half-yearly results which cover the six month
period ended 31 August 2015 have been prepared on the basis of
accounting policies set out in the statutory accounts of the
Company for the year ended 28 February 2015. The half-yearly
financial statements have been prepared under IAS 34 Interim
Financial Reporting.
The accounting policies are consistent with those of the
previous financial year. The Directors do not expect the accounting
policies to change over the current financial year.
2. Publication of non-statutory accounts
The financial information for the year ended 28 February 2015
does not constitute the Company's statutory accounts for that
period but has been derived from them. The financial information
for the six month periods ended 31 August 2015 and 31 August 2014
has not been audited but have been reviewed by the auditor.
Statutory accounts in respect of the year ended 28 February 2015
have been audited and reported on by the auditor and delivered to
the Registrar of Companies and included the Report of the Auditor
which was unqualified, did not draw attention to any matter by way
of emphasis and did not contain a statement under S498(2) or
S498(3) of the Companies Act 2006.
3. Investment management fees
The Company pays the Investment Manager an annual management fee
equal to 2.5% of the Company's net assets. The fee is not subject
to VAT and is payable quarterly in advance. The annual management
fee is allocated 75% to capital and 25% to revenue. Total annual
running costs are in aggregate capped at 3.6% of NAV (excluding the
Investment Manager's performance fee, any irrecoverable VAT and
investment costs), with any excess being borne by the Investment
Manager.
The amount paid to the Investment Manager for the six month
period ended 31 August 2015 in respect of net asset value
attributable to ordinary shareholders was GBP230,000 (six month
period ended 31 August 2014: GBP221,000). The amount paid to the
Investment Manager for the six month period ended 31 August 2015 in
respect of the net assets attributable to the "C" shareholders was
GBP177,000 (six month period ended 31 August 2014: GBP164,000). The
amount paid to the Investment Manager for the six month period
ended 31 August 2015 in respect of the net assets attributable to
the "D" shareholders was GBP24,000 (six month period ended 31
August 2014: GBP19,000).
4. Taxation
The Company has accrued GBPnil tax charge for the six month
period ended 31 August 2015 in the ordinary share fund (six month
period ended 31 August 2014: GBPnil tax charge), GBPnil tax charge
in the "C" share fund (six month period ended 31 August 2014:
GBPnil tax charge) and GBPnil tax charge in the "D" share fund (six
month period ended 31 August 2014: GBPnil tax charge). The tax
charges are accrued using an effective tax rate of 20% for the
2015/16 tax year and 21% for the 2014/15 tax year, however
dividends and capital gains are not subject to tax resulting in a
lower effective tax rate than the standard applicable rate in the
UK.
No provision for deferred taxation has been made on potential
capital gains due to the Company's current status as a VCT under
section 274 of the ITA and the Directors' intention to maintain
that status. The Company intends to continue to meet the conditions
required to maintain its status as a VCT for the foreseeable
future.
5. Basic and diluted return per share
For the six months ended Ordinary "D"
31 August 2015 (unaudited) Shares "C" Shares Shares
Revenue return for the
period p per share 2.40 3.20 3.34
Based on:
Revenue return for the
period GBP000 583 361 66
Weighted average number number
of shares in issue of shares 24,392,655 11,283,207 1,990,767
Capital gain/ (loss) for
the period p per share 3.07 (2.09) 9.41
Based on:
Capital gain/ (loss) for
the period GBP000 751 (235) 188
Weighted average number number
of shares in issue of shares 24,392,655 11,283,207 1,990,767
Net profit for the period p per share 5.47 1.11 12.75
Based on:
Net gain for the period GBP000 1,334 126 254
Weighted average number number
of shares in issue of shares 24,392,655 11,283,207 1,990,767
For the six months ended Ordinary "D"
31 August 2014 (unaudited) Shares "C" Shares Shares
Revenue return for the
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
period p per share 1.74 2.65 (0.60)
Based on:
Revenue return for the
period GBP000 424 300 (9)
Weighted average number number
of shares in issue of shares 24,392,655 11,314,224 1,488,332
Capital gain/(loss) for
the period p per share 2.48 3.73 (1.14)
Based on:
Capital gain/(loss) for
the period GBP000 605 422 (17)
Weighted average number number
of shares in issue of shares 24,392,655 11,314,224 1,488,332
Net profit/(loss) for the
period p per share 4.22 6.38 (1.74)
Based on:
Net gain/(loss) for the
period GBP000 1,029 722 (26)
Weighted average number number
of shares in issue of shares 24,392,655 11,314,224 1,488,332
There were no differences between basic and diluted return per
ordinary share, per "C" share or per "D" share because no dilutive
instruments had been issued or granted.
6. Investments
Ordinary
Shares "C" Shares "D" Shares Total
Six months
ended
31 August Loan Loan Loan Loan
2015 Shares stock Total Shares stock Total Shares stock Total Shares stock Total
(unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 8,783 5,103 13,886 5,759 2,898 8,657 712 - 712 15,254 8,001 23,255
Opening
realised
losses (2,564) (1,228) (3,792) (464) (17) (481) - - - (3,028) (1,245) (4,273)
Opening
unrealised
gains 6,469 412 6,881 4,472 227 4,699 - - - 10,941 639 11,580
Opening
fair value 12,688 4,287 16,975 9,767 3,108 12,875 712 - 712 23,167 7,395 30,562
During the
period
Purchases
at cost 24 77 101 70 223 293 504 514 1,018 598 814 1,412
Investment
proceeds (2) (126) (128) - (23) (23) - - - (2) (149) (151)
Realised
losses (5) - (5) - - - - - - (5) - (5)
Unrealised
gains/
(losses) 825 (5) 820 (184) 59 (125) 203 - 203 844 54 898
Closing
fair value 13,530 4,233 17,763 9,653 3,367 13,020 1,419 514 1,933 24,602 8,114 32,716
---------------- --------------- -------------- ---------------- --------------- --------------- ---------------- --------------- -------------- -------------- --------------- --------------
Closing
position
Closing
cost 8,807 5,054 13,861 5,829 3,099 8,928 1,216 514 1,730 15,852 8,666 24,518
Closing
realised
losses (2,569) (1,228) (3,797) (464) (17) (481) - - - (3,033) (1,245) (4,278)
Closing
unrealised
gains 7,292 407 7,699 4,288 286 4,574 203 - 203 11,783 693 12,476
Closing
fair value 13,530 4,233 17,763 9,653 3,367 13,020 1,419 514 1,933 24,602 8,114 32,716
================ =============== ============== ================ =============== =============== ================ =============== ============== ============== =============== ==============
BEL Holdco Limited was written down to a nil value in the prior
year. However, liquidation proceeds of GBP3,000 were received
during the six month period ended 31 August 2015 which have been
treated as a realised gain.
Ben Glas Power Limited was sold during the six month period
ended for a consideration of GBP87,000. This has been recognised as
a realised gain in the income statement.
Ordinary Shares "C" Shares "D" Shares Total
Year ended
28 February Loan Loan Loan Loan
2015 Shares stock Total Shares stock Total Shares stock Total Shares stock Total
(audited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Opening
position
Opening
cost 10,042 5,893 15,935 5,457 3,740 9,197 - - - 15,499 9,633 25,132
Opening
realised
losses (4,234) (1,228) (5,462) (464) (17) (481) - - - (4,698) (1,245) (5,943)
Opening
unrealised
gains 5,397 469 5,866 3,984 241 4,225 - - - 9,381 710 10,091
Opening
fair value 11,205 5,134 16,339 8,977 3,964 12,941 - - - 20,182 9,098 29,280
During
the year
Purchases
at cost 15 - 15 2 - 2 712 - 712 729 - 729
Investment
proceeds (303) (490) (793) - (541) (541) - - - (303) (1,031) (1,334)
Conversion
of loan
stock to
shares 300 (300) - - - - - - - 300 (300) -
Realised
gains/
(losses) 96 - 96 300 (301) (1) - - - 396 (301) 95
Unrealised
gains/
(losses) 1,375 (57) 1,318 488 (14) 474 - - - 1,863 (71) 1,792
Closing
fair value 12,688 4,287 16,975 9,767 3,108 12,875 712 - 712 23,167 7,395 30,562
-------------- --------------- -------------- ---------------- --------------- ---------------- ---------------- --------------- -------------- ------------ --------------- --------------
Closing
position
Closing
cost 8,783 5,103 13,886 5,759 2,898 8,657 712 - 712 15,254 8,001 23,255
Closing
realised
losses (2,564) (1,228) (3,792) (464) (17) (481) - - - (3,028) (1,245) (4,273)
Closing
unrealised
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
gains 6,469 412 6,881 4,472 227 4,699 - - - 10,941 639 11,580
Closing
fair value 12,688 4,287 16,975 9,767 3,108 12,875 712 - 712 23,167 7,395 30,562
============== =============== ============== ================ =============== ================ ================ =============== ============== ============ =============== ==============
The shares held by the Company represent equity holdings in
unquoted UK companies. The Investment Manager's Report above
provides details in respect of the Company's shareholding in each
investment. The investments acquired and disposed of during the
period are detailed in the Investment Manager's Report.
Under IFRS 7 and IFRS 13, the Company is required to report the
category of fair value measurements used in determining the value
of its investments, to be disclosed by the source of inputs, using
a three-level hierarchy:
-- Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1);
-- Those involving inputs other than quoted prices included in
Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2);
and
-- Those with inputs for the instrument that are not based on
observable market data (unobservable inputs) (Level 3).
As at 31 August 2015, each of the Company's investments held was
valued using inputs which are considered to be Level 3 inputs and a
reconciliation of the movements is in the table above.
The Board has considered the key assumptions which may affect
the results reported in the Financial Statements and the Company is
further required to disclose the effect of changing one or more
inputs with reasonable alternative assumptions where a significant
change to the fair value measurement would result.
The key assumptions that have a significant impact on fair value
in the discounted future cash flow valuations are the discount
factors used (which range from 7.5% to 10.0%), the price at which
power and associated benefits may be sold and the levels of
electricity the investee companies' generating assets are likely to
produce (which are taken from specialist consultant reports).
As at 31 August 2015, the value of the Company's investment in
Bernard Matthews Green Energy Halesworth Limited was determined on
a discounted cash flow basis as it is now operational, whereas
previously the investment was valued on the basis of the price of
recent investment.
The Board has determined that a reasonable alternative
assumption may be made in respect of the discount factors applied;
the sensitivity of the value of the portfolio to the application of
an increase or decrease in discount factors is set out below.
The investment portfolio has been reviewed for the effect of
alternative valuation inputs, namely the sensitivity of the total
value of all investments to a 0.5% increase or decrease in the
discount factors applied to the valuation models which have been
valued using the discounted future cash flows from the underlying
business.
The following table demonstrates the impact the application of
the upside and downside alternative discount factor to the net
asset value of each share fund:
Net Asset Discount
Discount Value Factor
Factor +0.5% -0.5%
GBP000 GBP000 GBP000
Ordinary
shares 18,357 19,302 20,298
"C" shares 12,912 13,639 14,405
"D" shares 2,049 2,129 2,213
Further sensitivity analysis is provided in the Investment
Manager's Report.
7. Trade and other receivables (current)
At 31 August 2015, the ordinary share fund held current trade
receivables totalling GBP1,287,000 which includes GBP797,000
representing the amortised cost value of the outstanding balance of
the consideration arising from the Company's sale of Craig Wind
Farm Limited plus the accrued interest on the outstanding balance.
As at 31 August 2015, this amount has been treated as a current
asset as the Directors' have a reasonable expectation it will
received within a period of one year. As at 28 February 2015 the
outstanding balance of GBP801,000 was treated as a non-current
asset. The deferred consideration receivable of GBP685,000 has been
transferred from the unrealised capital reserve to the realised
capital reserve during the six month period ended 31 August 2015.
The accrued interest outstanding in respect of the deferred
consideration amounted to GBP112,000 as at 31 August 2015 and has
been treated as realised income in the revenue reserve.
8. Basic and diluted net asset value per share
As at 31 August 2015 Ordinary "C" "D"
(unaudited) Shares Shares Shares
Net asset value per
share p per share 79.1 120.9 106.9
Based on:
Net asset value GBP000 19,302 13,639 2,129
number
Number of shares of shares 24,392,655 11,283,207 1,990,768
As at 28 February 2015 Ordinary "C" "D"
(audited) Shares Shares Shares
Net asset value per
share p per share 75.8 123.3 94.2
Based on:
Net asset value GBP000 18,480 13,908 1,875
number
Number of shares of shares 24,392,655 11,283,207 1,990,768
9. Dividends
A final dividend for the year ended 28 February 2015 of 2.10p
per ordinary share was paid to ordinary shareholders on 5 August
2015.
An interim dividend of 2.50p per ordinary share has been
declared for the six month period ended 31 August 2015 which will
be paid on 13 January 2016 to all ordinary shareholders on the
register as at close of business on 11 December 2015.
A final dividend for the year ended 28 February 2015 of 3.50p
per "C" share was paid to "C" shareholders on 5 August 2015.
An interim dividend of 3.50p per "C" share has been declared for
the six months period ended 31 August 2015 which will be paid on 13
January 2016 to all "C" shareholders on the register as at close of
business on 11 December 2015.
No dividend was paid to "D" shareholders for the year ended 28
February 2015.
An interim dividend of 2.00p per "D" share has been declared for
the six months period ended 31 August 2015 which will be paid on 13
January 2016 to all "C" shareholders on the register as at close of
business on 11 December 2015.
10. Contingencies, guarantees and financial commitments
The contingencies, guarantees and financial commitments of the
Company were disclosed in the annual report and financial
statements for the year ended 28 February 2015. All the guarantees
disclosed therein remain in force, along with those described
below.
On 20 March 2015, the Company registered a share charge over its
shares in Darroch Power Limited to GCP Hydro 1 Limited as security
for a senior loan facility of GBP6,525,000 raised by Darroch Power
Limited to finance the construction costs of its hydroelectric
scheme. The liability of the Company under this charge of shares is
limited to the value of the Company's investment in shares of
Darroch Power Limited.
On 20 March 2015, the Company registered a share charge over its
shares in Upper Falloch Power Limited to GCP Hydro 1 Limited as
security for a senior loan facility of GBP3,360,000 raised by Upper
Falloch Power Limited to finance the construction costs of its
hydroelectric scheme. The liability of the Company under this
charge of shares is limited to the value of the Company's
investment in shares of Upper Falloch Power Limited.
In its Annual Report and Financial Statements for the year ended
28 February 2015, the Company disclosed that a claim had been filed
against the Company under a warranty in the Share Purchase
Agreement pertaining to the sale of an investee company previously
owned by the Company. The disclosure stated that the Company was
vigorously defending the claim, that no provision had been made in
the accounts and that the Directors did not expect the outcome to
have a material impact on the Company's accounts. The claim in
question has now been settled with an immaterial impact on the
Company's net asset value. The settlement specifies that the
deferred consideration due to the Company pursuant to the sale in
question will now be due by 31 December 2016 at the latest. The
deferred consideration continues to accrue interest.
11. Related party transactions
The investee companies in which the Company has a shareholding
of 20% or more are considered to be related parties. The
significant changes to the balances and transactions with these
companies are presented in the Investment Manager's Report. The
aggregate balances at the period end and transactions with these
companies during the six month period ended 31 August 2015 are
summarised below.
Ordinary Shares "C" shares "D" shares Total
GBP000 GBP000 GBP000 GBP000
Balances as at
31 August 2015 (unaudited)
Investments - shares 13,529 9,653 1,419 24,601
Investments - loan stock 4,233 3,367 514 8,114
Accrued interest income 376 193 27 596
Transactions in the six months ended
31 August 2015 (unaudited)
Loan stock interest income 166 201 27 394
Dividend income 485 270 56 811
(MORE TO FOLLOW) Dow Jones Newswires
November 02, 2015 04:09 ET (09:09 GMT)
Ventus 2 Vct (LSE:VEN2)
Historical Stock Chart
From Apr 2024 to May 2024
Ventus 2 Vct (LSE:VEN2)
Historical Stock Chart
From May 2023 to May 2024