UNAUDITED INTERIM FINANCIAL REPORT TP70 VCT PLC FOR THE SIX MONTHS ENDED 31 AUGUST TP VCT PLC 1

Transcription

1 UNAUDITED INTERIM FINANCIAL REPORT TP70 VCT PLC FOR THE SIX MONTHS ENDED 31 AUGUST 2012 TP VCT PLC 1

2 Unaudited Interim Financial Report / General Information Directors Michael Sherry Chad Murrin David Parsons Richard Rose Secretary and Registered Office Peter Hargreaves 4-5 Grosvenor Place London SW1X 7HJ Registered Number Investment Manager and Administrator Triple Point Investment Management LLP 4-5 Grosvenor Place London SW1X 7HJ Tel: Independent Auditor Grant Thornton UK LLP 3140 Rowan Place John Smith Drive Oxford Business Park South Oxford, OX4 2WB Solicitors Howard Kennedy 19a Cavendish Square London W1A 2AW Registrars Neville Registars Limited Neville House 18 Laurel Lane Halesowen West Midlands B63 3DA VCT Taxation Advisers PriceWaterhouseCoopers 1 Embankment Place London WC2N 6RN Bankers HSBC Bank plc PO Box Poultry London EC2P 2BX TP70 VCT PLC

3 Unaudited Interim Financial Report / Contents Financial Summary 1 Chairman s Statement 2 Investment Manager s Review 3 Investment Portfolio 5 Directors Responsibility Statement 6 Unaudited Statement of Comprehensive Income 7 Unaudited Balance Sheet 8 Unaudited Statement of Changes in Shareholders Equity 9 Unaudited Statement of Cash Flows 10 Notes to the Unaudited Interim Financial Report 11 TP70 VCT PLC

4 Unaudited Interim Financial Report / Financial Summary Unaudited Audited Unaudited 6 months ended Year ended 6 months ended 31 August February August Net assets 6,232 22,704 23,388 Net profit/(loss) before tax 292 (917) (233) Profit/(loss) per share 0.91p (2.87p) (0.73p) Dividend Paid (52.4p) - - Net asset value per share 19.48p 70.97p 73.11p TP70 VCT plc ( the Company ) is a Venture Capital Trust ( VCT ). The investment manager is Triple Point Investment Management LLP ( TPIM ). The Company was launched in January 2007 and raised 30.6 million (net of expenses) through an offer for subscription. 4 TP70 VCT PLC

5 Unaudited Interim Financial Report / Chairman s Statement I am writing to you to present the unaudited Interim Financial Report for TP70 VCT plc ( the Company ) for the 6 months ended 31 August April 2012 marked the end of the Company s five year VCT holding period. In line with its investment strategy for a rapid exit after five years, the Company commenced realisation of investments and the return of funds to shareholders. As part of this plan, the Company halved its exposure to GAM Diversity with effect from 30 September 2011 and terminated the remaining exposure on 30 March Since the year end, 12.3 million of unquoted investments have been realised. Of this, 10.8 million came from the realisation of the Company s investments in companies providing digital projection services to the Odeon Cinema chain. There have also been realisations of 0.4 million from a solar company and 1.1 million from the satellite capacity trading companies. These transactions, combined with the termination of the GAM Diversity exposure, enabled the Company to pay dividends of 52.4p per share on 25 May 2012 and 3.59p per share on 21 September The Company s remaining investments in unquoted companies are estimated to have a realisable value of some 5.3million. Exit routes for these investments have been identified and negotiations to conclude those realisations are progressing. After the realisation of the remaining investments and further distributions, the Board s intention is to bring forward resolutions to place the Company into members voluntary liquidation, which will require shareholders approval. Thereafter it is expected that any remaining funds would be returned to shareholders by way of capital distribution by the Liquidators. Further details of the ongoing portfolio realisation process are in the Investment Manager s Review. Results It is the Directors present intention that the Company should go into members voluntary liquidation as part of the realisation process. Therefore the Financial Statements have not been prepared on a going concern basis, but instead have been drawn up on a break-up basis, estimating the values likely to be realised, net of the anticipated costs of realisation and likely costs of liquidation. Note the comparative figures at 29 February 2012 were also presented on a break-up basis. The comparative figures at 31 August 2011, which were presented on the going concern basis, have not been restated to break-up basis. As at 29 February 2012 the net asset value per share stood at 70.97p. During the six months under review the Company made a profit of 0.91p per share and paid a dividend of 52.4p on 25 May The resulting net asset value therefore stood at 19.48p at 31 August Risks The Board believes that the principal risks facing the Company are: investment risk associated with the VCT s portfolio of unquoted investments; failure to maintain approval as a qualifying VCT; failure to realise the remaining unquoted investments; failure to return remaining funds to shareholders. The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks, within the scope of the Company s established investment and realisation strategy. Outlook As noted above, the Company expects to make further distributions as the realisation programme continues and we will keep shareholders informed about the Company s progress. If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on MICHAEL SHERRY Chairman 18 October 2012 TP70 VCT PLC 5

6 Unaudited Interim Financial Report / Investment Manager s Review At the period end the Company held 81% of its net assets in qualifying and non-qualifying unquoted investments. These investments are in 13 companies across four sectors; cinema digitisation, satellite capacity trading and electricity generation from solar PV and anaerobic digestion. As the Company s five year anniversary was passed on the 30 April 2012, the priority has been to arrange an orderly disposal of these investments in order to enable the Company to distribute the proceeds to shareholders. Investment Realisation Programme At the time of writing, 12.3 million has been divested from the qualifying investment portfolio. TPIM on behalf of the Company is currently in advanced negotiations to conclude the realisation of the remaining investments. It should be noted that whilst negotiations are well advanced and the values shown in the accounts reflect the expected amount to be received from the completion of the realisation programme, the actual amounts received could be lower. Realisations to Date During the period, the Company realised part of its holdings in six companies that deploy, maintain and operate digital equipment in cinemas in the UK and Continental Europe. These divestments have raised a total of 10.8 million to date with further proceeds still to be realised. Further realisations of 0.4 million have been received from companies that own solar PV panels installed on residential properties and 1.1 million from companies which trade in and supply broadband transmission capacity. Sector Analysis The make up of the portfolio of unquoted investments can be analysed as follows: Electricity Generation Total Cinema Anaerobic Unquoted Industry Sector Digitisation Solar PV Digestion Satellite Investments Investments at 29 February ,938 3,753 1,334 1,611 17,636 Investments disposed of during the 6 months ended 31 August 2012 (10,762) (436) - (1,147) (12,345) Provisions made against the cost of investments (33) (33) Investments at 31 August ,317 1, ,258 Investments % 3.35% 63.08% 25.37% 8.20% % 6 TP70 VCT PLC

7 Unaudited Interim Financial Report / Investment Manager s Review continued VCT PORTFOLIO REVIEW Solar PV The investments in companies that own roof-mounted residential solar PV panels continue to provide steady, yet strong, cash flows. Over the past six months, the Government has announced further changes to the Feed-in Tariff regime for solar. However, as the Feed-in Tariff is a grandfathered scheme, all existing solar installations, including those in which your Company has invested, remain unaffected. Anaerobic Digestion Anaerobic Digestion (AD) is an established technology used to generate electricity from the production of biogas through the biological treatment of organic materials using naturally occurring organisms. Within the portfolio are two investments in small enterprises contructs plants to generate electricity from farm-based AD. The first of the two projects has been energised, connected to the grid and is building up to full electricity output. The equipment used by these AD businesses is supplied by one of Europe s leading suppliers, EnviTec Biogas. Cinema Digitisation The businesses in the portfolio that deploy, maintain and operate digital equipment in cinemas in the UK and Continental Europe continue to perform in line with their objectives. Digital cinema projection conversion is paid for under the globally recognised Virtual Print Fee model, through which Film Studios pay for the cost of the deployment over a number of years. The majority of the revenues come from the six major investment grade Hollywood Studios. Film booking rates are significantly ahead of the base line projections which has built further headroom into the project. Looking ahead, seven of the top ten films of 2012 are expected in the second half of the year including Skyfall, the new Bond film, and Hobbit. Outlook As detailed above, progress has been made in the realisation of the investment portfolio, in order to fulfil the undertaking of returning funds to shareholders as soon as practicable following the end of the five year VCT holding period on 30 April Satellite Capacity The companies traded in broadband transmission capacity on HYLAS 1, a satellite that uses the latest technology to deliver high-speed, two-way data services across Europe. These companies performed less well than expected, partly due to delays in the launch of the satellite (which had the effect of reducing and delaying their ability to sell capacity) and partly due to weaker overall demand for such capacity.during the period the companies disposed of their remaining capacity and as a result ceased to trade and are no longer VCT qualifying investments. CLAIRE AINSWORTH Managing Partner for Triple Point Investment Management LLP 18 October 2012 TP70 VCT PLC 7

8 Unaudited Interim Financial Report / Investment Portfolio Unaudited Audited 31 August February 2012 Adjusted Cost Valuation Cost Valuation 000 % 000 % 000 % 000 % Unquoted qualifying holdings 5, , , , Unquoted non-qualifying holdings , , , , Derivative , , Money market funds Financial assets at fair value through the income statement 6, , , , Cash and cash equivalents , , , , , , Unquoted Qualifying Holdings Provision of Satellite Capacity Broadsword Satellite Communications Ltd , Satellite Broadband Access Solutions Ltd , Cinema Digitisation 21st Century Cinema Ltd , , Big Screen Digital Services Ltd , , Cinematic Services Ltd , , Digima Ltd , , Digital Screen Solutions Ltd , , DLN Digital Ltd , , Electricity Generation Solar Beam Carrier Trading Ltd 1, , Convertibox Services Ltd , Campus Link Ltd 1, , Green Energy for Education Ltd 1, , Anaerobic Digestion Biomass Future Generations Ltd 1, , , , Katharos Organic Ltd , , , , Unquoted Non-qualifying Holdings (ceased trading) Provision of satellite capacity Broadsword Satellite Communications Ltd Satellite Broadband Access Solutions Ltd Money market funds BlackRock TP70 VCT PLC

9 Unaudited Interim Financial Report / Directors Responsibility Statement The Directors have prepared the Interim Financial Report for the Company in accordance with International Financial Reporting Standards ( IFRS ). In preparing the Interim Financial Report for the 6 month period to 31 August 2012, the Directors confirm that to the best of their knowledge: a) the Interim Financial Report has been prepared in accordance with International Accounting Standard IAS34, Interim Financial Reporting issued by the International Accounting Standards board; b) the Interim Financial Report includes a fair review of important events during the period and their effect on the Financial Statements and a description of principal risks and uncertainties for the remainder of the accounting period; c) the Interim Financial Report gives a true and fair view in accordance with IFRS of the assets, liabilities, financial position and of the results of the company for the period and complies with IFRS and the Companies Act 2006; d) the Interim Financial Report includes a fair review of related party transactions and changes therein. There are no related party transactions other than those detailed in note 13; and e) The Directors believe that the Company has sufficient financial resources to complete the process of realisation. Following completion of shareholders five year holding period, steps have been taken to realise the Company s investments and initial distributions were made on 25 May 2012 and 21 September After the realisation of the remaining investments and further distributions have been made, the Board will propose resolutions to place the Company into members voluntary liquidation which will require shareholders approval. Thereafter all further funds will be returned to shareholders by way of capital distribution by the Liquidators. In the circumstances this Interim Financial Report has been prepared on a break-up basis taking into account the expected costs of the Company s liquidation. This Interim Financial Report has not been audited or reviewed by the auditors. MICHAEL SHERRY Chairman 18 October 2012 TP70 VCT PLC 9

10 Unaudited Statement of Comprehensive Income Income Unaudited Audited Unaudited 6 months ended Year ended 6 months ended 31 August February August 2011 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total Investment income (Loss)/gain arising on the disposal of investments - (358) (358) (Loss) arising on the revaluation of investments - (33) (33) - (639) (639) Profit/(loss) arising on the revaluation on derivative transactions (379) (379) - (326) (326) Investment return 441 (29) (833) (106) 353 (326) 27 Investment management and administration fees Financial and regulatory costs General administration Legal and professional fees Directors remuneration Operating expenses Operating profit/(loss) before taxation 355 (63) (1,313) (917) 249 (482) (233) Taxation 7 (91) Operating profit/(loss) after taxation (1,313) (917) 249 (482) (233) Profit and total comprehensive income/(loss) for the period (1,313) (917) 249 (482) (233) Basic & diluted profit/(loss) per share p 0.09p 0.91p 1.24p (4.11p) (2.87p) 0.78p (1.51p) (0.73p) The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS). The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP). All revenue and capital items in the above statement derive from continuing operations. This Statement of Comprehensive Income includes all recognised gains and losses. The accompanying notes are an integral part of this statement. 10 TP70 VCT PLC

11 Unaudited Balance Sheet At 31 August 2012 Unaudited Audited Unaudited 31 August February August 2011 Note Non current assets Financial assets at fair value through profit or loss ,617 Current assets Financial assets at fair value through profit or loss 5,758 20,925 - Receivables Cash and cash equivalents ,880 1,525 6,541 23,210 2,345 Total assets 6,541 23,210 23,962 Current liabilities Payables Net assets 6,232 22,704 23,388 Equity attributable to equity holders of the parent Share capital Special distributable reserve 13,798 30,562 30,562 Capital reserve (7,522) (7,550) (6,719) Revenue reserve (364) (628) (775) Total equity 6,232 22,704 23,388 Net asset value per share (pence) p 70.97p 73.11p The accompanying notes are an integral part of this statement. TP70 VCT PLC 11

12 Unaudited Statement of Changes in Shareholders Equity Special Share Distributable Capital Revenue Premium Reserve Reserve Reserve Total months ended 31 August 2012 Opening balance ,562 (7,550) (628) 22,704 Dividends paid - (16,764) - - (16,764) Transactions with owners - (16,764) - - (16,764) Profit for the period Total comprehensive income for the period Balance at 31 August ,798 (7,522) (364) 6,232 Capital reserve consists of: Investment holding losses (672) Other realised losses (6,850) (7,522) Year ended 29 February 2012 Opening balance ,562 (6,237) (1,024) 23,621 (Loss)/profit for the year - - (1,313) 396 (917) Total comprehensive (loss)/income for the year - - (1,313) 396 (917) Balance at 29 February ,562 (7,550) (628) 22,704 Capital reserve consists of: Investment holding losses (1,001) Other realised losses (6,549) (7,550) 6 months ended 31 August 2011 Opening balance ,562 (6,237) (1,024) 23,621 (Loss)/profit for the period - - (482) 249 (233) Total comprehensive (loss)/income for the period - - (482) 249 (233) Balance at 29 February ,562 (6,719) (775) 23,388 Capital reserve consists of: Investment holding losses (309) Other realised losses (6,410) (6,719) The capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue and special distributable reserve are distributable by way of dividend. The accompanying notes are an integral part of this statement. 12 TP70 VCT PLC

13 Unaudited Statement of Cash Flows Unaudited Audited Unaudited 31 August February August Cash flows from operating activities Operating profit/(loss) before taxation 292 (917) (233) Gain arising on the disposal of investments - (185) - Loss arising on the revaluation of investments Loss arising on the derivative (4) Cash generated by operations 321 (84) 93 Decrease/(increase) in receivables (282) (Decrease)/increase in payables (197) Net cash flows from operating activities Cash flows from investing activities Purchase of financial assets at fair value through profit or loss (500) - - Sales of financial assets at fair value through profit or loss 15,638 1,185 1,000 Net cash flows from investing activities 15,138 1,185 1,000 Cash flows from financing activities Dividends paid (16,764) - - Net cash flows from financing activities (16,764) - - Net (decrease)/increase in cash and cash equivalents (1,146) 1,626 1,271 Reconciliation of net cash flow to movements in cash and cash equivalents Cash and cash equivalents at 1 March , Net (decrease)/increase in cash and cash equivalents (1,146) 1,626 1,271 Cash and cash equivalents at 31 August ,880 1,525 The accompanying notes are an integral part of this statement. TP70 VCT PLC 13

14 Notes to the Unaudited Financial Report 1. CORPORATE INFORMATION The Interim Financial Report of the Company for the 6 months ended 31 August 2012 was authorised for issue in accordance with a resolution of the Directors on 18 October TP70 VCT plc is incorporated and domiciled in Great Britain. The address of TP70 VCT plc s registered office, which is also its principal place of business, is 4-5 Grosvenor Place, London, SW1X 7HJ. TP70 VCT plc s Interim Financial Report is presented in Pounds Sterling ( ) which is also the functional currency of the Company, rounded to the nearest thousand. The financial information set out in this report does not constitute statutory accounts as defined in S434 of the Companies Act The principal activity of the Company is investment. The Company s investment strategy was to offer combined exposure to GAM Diversity (fund of hedge funds) and venture capital investments focused on companies with contractual revenues from financially secure counterparties. 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES Basis of preparation The Interim Financial Report of the Company for the 6 months ended 31 August 2012 has been prepared in accordance with IAS 34: Interim Financial Reporting. It does not include all of the information required for full Financial Statements and should be read in conjunction with the Financial Statements for the year ended 29 February Estimates The preparation of the Interim Financial Report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenditure. Actual results may differ from these estimates. 3. SEGMENTAL REPORTING The Company s segments are defined by the financial information provided to the Board. The Company only has one class of business, being investment activity. All revenues and assets are generated and held in the UK. 4. INVESTMENT INCOME Unaudited Audited Unaudited 6 months ended Year ended 6 months ended 31 August February August 2011 Rev. Cap. Total Rev. Cap. Total Rev. Cap. Total Interest receivable on bank balances Loan stock interest Income from bond portfolio Total TP70 VCT PLC

15 Notes to the Unaudited Interim Financial Report 5. INVESTMENT MANAGEMENT AND ADMINISTRATION FEES TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 5 April The agreement runs for a period of 5 years and may be terminated at any time thereafter by not less than twelve months notice given by either party. The agreement provides for an administration and investment management fee of 1.75% per annum of net assets calculated and payable quarterly in arrears. With effect from 1 April 2012 only the administration element of the combined fee is payable, whilst TPIM is due 1% of distributions to shareholders. Should such notice be given, the Investment Manager would perform its duties under the Investment Management Agreement and receive its fee during the notice period. 6. DIRECTORS REMUNERATION Unaudited Audited Unaudited 6 months ended Year ended 6 months ended 31 August February August 2011 Rev. Cap. Total Rev. Cap. Total Rev. Cap. Total M G Sherry (Chairman) J C Murrin I D Parsons R Rose Total TP70 VCT PLC 15

16 Notes to the Unaudited Interim Financial Report 7. TAXATION Unaudited Audited Unaudited 6 months ended Year ended 6 months ended 31 August February August 2011 Rev. Cap. Total Rev. Cap. Total Rev. Cap. Total Profit/(loss) on ordinary activities before tax 355 (63) (1,313) (917) 249 (482) (233) Corporation 20% 71 (12) (263) (184) 50 (96) (46) Effect of: Utilisation of tax losses brought forward 20 (84) (64) (79) - (79) (60) (380) (440) Non taxable items Disallowed expenditure Unrelieved tax losses arising in the year Tax charge/credit for the period 91 (91) Capital gains and losses are exempt from corporation tax due to the Company s status as a Venture Capital Trust. 8. PROFIT PER SHARE The profit per share is based on a profit from ordinary activities after tax of 292,000 and on the number of shares in issue during the period of 31,992, CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise deposits with HSBC Bank plc. 10. SHARE CAPITAL Unaudited Audited Unaudited 31 August February August 2011 Ordinary Shares of 1p Authorised Number of shares 50,000,000 50,000,000 50,000,000 Par Value Issued & Fully Paid Number of shares 31,992,471 31,992,471 31,992,471 Par Value TP70 VCT PLC

17 Notes to the Unaudited Interim Financial Report 11. NET ASSET VALUE PER SHARE The calculation of net asset value per share is based on net assets of 6,232,000 divided by the 31,992,471 shares in issue. 12. COMMITMENTS AND CONTINGENCIES The Company has no commitments or contingent liabilities. 13. RELATED PARTY TRANSACTIONS Michael Sherry, Chairman of the Company, was an equity Member of Triple Point LLP (TPLLP). TPLLP in turn has a controlling interest in Triple Point Investment Management LLP (TPIM). TPIM received 45,527 for the 6 month period for providing management and administrative services to the Company. At 31 August 2012 the Company owed TPIM 3,874 for these management and administration services. In addition a provision has been made for a 1% fee payable to TPIM equal to 229,000 on distributions made or expected to be made to shareholders after 1 April POST BALANCE SHEET EVENTS Other than those detailed in the Chairman s Statement there were no post balance sheet events. TP70 VCT PLC 17

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20 TP70 VCT plc 4-5 Grosvenor Place London SW1X 7HJ United Kingdom (Registered Office) Company number: (0)