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RNS

Half-year Report

Released 13:37 16-May-2017

RNS Number : 3071F
Income & Growth VCT (The) PLC
16 May 2017
 

The Income & Growth VCT plc ("the Company", "the VCT" or "I&G VCT") is a Venture Capital Trust ("VCT") listed on the London Stock Exchange. Its investment portfolio is advised by Mobeus Equity Partners LLP ("Mobeus").

 

Company Objective

The objective of the Company is to provide investors with an attractive return, by maximising the stream of tax-free dividend distributions from the income and capital gains generated by a diverse and carefully selected portfolio of investments, while continuing at all times to qualify as a VCT.

 

Financial Highlights

Results for the six months ended 31 March 2017

 

-

 

Net asset value total return per share was 2.0% for the six months.

 

-

Share price total return per share was 1.9% for the six months.

-

The Board has declared an interim dividend for the current year of 3.00 pence per share to be paid to shareholders on 20 June 2017,  which will bring cumulative dividends paid since the inception of the current share class* to 87.50  pence per share.

-

The Company made new investments totalling £3.14 million into four companies, BookingTek, Biosite, Tapas Revolution and Buster & Punch. In addition, £0.93 million was invested in Preservica, an existing portfolio company.

Performance Summary

 

The table below shows the recent past performance of the Company's current class* of shares for each of the last five years, and the current year to date.

 

 

 

Net assets

 

 

 

NAV per

share

 

 

 

Share price1

 

 

 

Cumulative dividends paid per

share

Cumulative total return per share to shareholders2

Dividends paid and proposed in respect of each year

 

 

 

(NAV

basis)

(Share price basis)

As at

 

(£m)

(p)

(p)

(p)

(p)

(p)

(p)

31 March 2017

 

69.88

96.43

86.50

84.50

180.93

171.00

3.004

30 September 2016

70.84

98.51

88.80

80.50

179.01

169.30

10.00

30 September 2015

75.20

106.38

93.50

68.50

174.88

162.00

12.00

30 September 2014

69.31

114.60

103.503

50.50

165.10

154.00

18.00

30 September 2013

60.47

113.90

99.50

40.50

154.40

140.00

10.00

30 September 2012

50.55

109.62

97.00

28.50

138.12

125.50

26.00

 

 

 

 

 

 

 

 

 

 

Source: Panmure Gordon & Co (mid-price).

2 Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (share price basis) plus cumulative dividends paid since launch of the current share class*.

3 The share price at 30 September 2014 has been adjusted to add back the dividend of 8.00 pence per share paid on 30 October 2014, which was excluded from the listed share price at that year end.

An interim dividend of 3.00 pence, referred to in the Financial Highlights above, is payable to shareholders on 20 June 2017.

 

* The first allotment of the former 'S' share class, now the current share class, took place on 6 February 2008.

 

Detailed performance data, including a table of dividends paid to date, for all share classes and fundraising rounds is shown in the Performance Data appendix in the Half-Year Report. The tables, which give information by allotment date on NAVs and dividends paid per share, are also available on the Company's website at www.incomeandgrowthvct.co.uk where they can be accessed by clicking on "table" under "Reviewing the performance of your investment" on the home page.

 

 

 

Chairman's Statement

 

I am pleased to present the Company's Half-Year Report for the six months ended 31 March 2017.

 

The half-year has again seen steady progress with a further positive return for the period, which is detailed in the Performance section below, and an increase in the rate of growth capital investments made, in accordance with the amended Investment Policy approved by shareholders in February 2016.

 

Seven investments have now been completed in accordance with the amended Investment Policy, in response to the new VCT legislation introduced by the Finance (No 2) Act 2015 (the "new VCT Rules"). The main features of this legislation are disclosed in the Summary of VCT Regulations in the Half-Year Report. Five of these seven investments were made in the period under review. Levels of new investment across the VCT industry have been lower than the comparable periods, so the Company has made a relatively strong start to investing under the new VCT rules.

 

The existing MBO focused portfolio constructed under the previous VCT rules has continued to perform steadily.

 

Performance

The Company's NAV total return per share was 2.0% for the six months to 31 March 2017 (2016 3.8%) while the total share price return was 1.9% (2016: 7.0%).

 

Cumulative NAV total return per share (being the closing net asset value plus total dividends paid to date) has risen to180.93 pence compared to 179.01 pence at the year-end. This represents a further increase of 1.1% over the period.

 

Investment portfolio

The portfolio has performed steadily during the period, increasing in value by 1.5% (2016: 6.5%) on a like-for-like basis. The aggregate portfolio saw a net increase of £0.07 million in realised gains and £0.73 million in unrealised gains over the six month period. The portfolio was valued at £51.90 million at the period-end (30 September 2016: £54.36 million).

 

During the six months under review, the Company invested a total of £ 4.07 million (including £0.72 million via a company preparing to trade), (2016: £4.47 million, including £4.18 million via companies preparing to trade) into five (2016: three) investments. These were BookingTek, a company that has developed a real-time booking platform for hotel meeting rooms and restaurant reservations; Biosite, a fast growing provider of biometric access control and software-based workforce management solutions for the construction sector; Preservica, an existing portfolio company which has developed software to preserve past and current data for future retrieval; Tapas Revolution, a leading Spanish themed restaurant chain; and most recently, Buster & Punch, a contemporary interiors brand.

 

The Company received cash proceeds of £6.61 million during the six month period, mostly being partial loan stock repayments.

 

Details of all these transactions and the performance of the portfolio are contained in the Investment Review.

 

Revenue account

The results for the period are set out in the Unaudited Condensed Income Statement in the Half-Year Report and show a revenue return (after tax) of 1.42 pence per share (2016: 1.69 pence). The revenue return for the period of £1.02 million has fallen from last year's comparable figure of £1.19 million. This fall is mainly due to a large interest receipt arising from the exit of Original Additions, which was included in the 2016 figure. Ignoring the effect of this non-recurring income, the underlying loan stock interest fell only slightly, which highlights the resilience of the income from the current portfolio.

 

Dividends

The Board continues to be committed to providing an attractive dividend stream to shareholders and is pleased to declare an interim dividend of 3.00 pence per share for the year ending 30 September 2017, comprising 1.50 pence of income and 1.50 pence of capital. This dividend will be paid on 20 June 2017 to shareholders on the Register on 26 May 2017 and will bring cumulative dividends per share paid to date to 87.50 pence.

 

In respect of the past five financial years, and this half-year, the Company has now paid or declared dividends totalling 79.00 pence per share.

 

Shareholders are encouraged to ensure that Capita, the Company's Registrar, has up-to-date details for them and to check whether they have received all dividends payable to them. This is particularly important if they have recently moved house or changed their bank account. We are aware that a number of dividends remain unclaimed by shareholders and whilst we will continue to endeavour to contact you if this is the case, we cannot guarantee that we will be able to do so if the Registrars do not have an up-to-date address and/or email address for you.

 

Dividend Investment Scheme

The Company's Dividend Investment Scheme ("the Scheme") is a convenient, easy and cost effective way for shareholders to build up their shareholding in the Company. Instead of receiving cash dividends, shareholders can elect to receive new shares in the Company. By opting to receive a dividend in this manner, there are three benefits to shareholders:

 

-          The dividend remains tax free;

 

-          Shareholders are allotted new shares in the Company which will, subject to their particular circumstances, attract VCT tax reliefs applicable for the tax year in which the shares are allotted. The tax relief currently available to investors in new VCT shares is 30% for the 2017/18 tax year for investments up to £200,000 in any one tax year; and

 

-          The Scheme also has one particular advantage. Under its terms, a member is able to re-invest at an advantageous price, being the average market price of the shares for the five business days prior to the dividend being paid. This price is likely to be at a discount of 10% to the underlying net asset value (provided that this is greater than 70% of the latest published net asset value per share).

 

Shareholders wishing to join the Scheme should submit a mandate form to Capita Asset Services, the Scheme Administrator, by no later than Monday, 5 June 2017, to ensure that they receive the above dividend as shares. Details of where to obtain an application form can be found in Shareholder Information in the Half-Year Report.

 

Industry developments

An announcement in the recent Budget has brought VCTs within the remit of the current Patient Capital Review. The review, led by HM Treasury, is considering the current availability of long-term finance for innovative and growing companies looking to expand their businesses and changes in government policy that may support the expansion of long-term capital for growing innovative firms. We are closely monitoring developments and are continuing to support industry bodies such as the Association of Investment Companies, BVCA and EISA who are contributing their views to the Government on the Company's behalf.

 

A summary of current VCT regulation is included below.

 

Liquidity

Annual fundraisings by the Company have provided it with a satisfactory level of liquidity sufficient to pursue its Objective and to meet the Company's running costs. The Board will consider additional fundraising in the future in line with its liquidity and new investment requirements, together with an assessment of the effects of possible future legislative changes.

 

Cash available for investment

The Board continues to monitor credit risk in respect of its cash balances and to prioritise the security and protection of the Company's capital. Cash and liquidity fund balances as at 31 March 2017 amounted to £17.70 million. This figure included £6.74 million held in money market funds with AAA credit ratings and

£10.96 million held in deposit accounts with a number of well-known financial institutions across a range of maturities. In addition, the investment portfolio contained £4.53 million in companies preparing to trade that also hold cash in money market funds.

 

Share buy-backs

During the six months ended 31 March 2017, the Company bought back 32,790 of its own shares, representing 0.1% (2016: 0.3%) of the shares in issue at the beginning of the period, at a total cost of £0.03 million (2016: £0.21 million) inclusive of expenses.

 

It is the Company's policy to cancel all shares bought back by the Company. The Board regularly reviews its buyback policy and currently seeks to maintain the discount to NAV at which the Company's shares trade at around 10% below the latest published NAV.

 

Shareholder communications

May I remind you that the Company has its own website which is available at www.incomeandgrowthvct.co.uk.

 

The Investment Adviser held its seventh annual Shareholder Event in January 2017 which, from the feedback submitted, was well received by shareholders. The event included presentations on the investment activity and performance of the Mobeus VCTs. I would like to thank those shareholders who attended for helping to make it such a success. The next Event will take place in January 2018. Shareholders will be sent further details and an invitation nearer to the time.

 

Outlook

The outlook for the UK economy over the next year and the medium-term remains somewhat unclear, although current forecasts still predict economic growth over the next few years for the UK economy. The UK Government will presumably commence formal negotiations for the UK to leave the EU, after the General Election in June. The outcome of these negotiations with the EU will in due course provide more clarity to the UK economic environment.

 

In the meantime, the Board and Investment Adviser consider that the portfolio is well positioned to withstand this uncertainty. We will continue our measured and cautious approach to investment appraisal and our active engagement with existing portfolio companies. The portfolio has a solid foundation of investments made under the previous MBO strategy, the majority of which are mature and profitable companies providing consistent income returns. Over the coming years, this portfolio mix is expected to change towards younger growth capital companies. These sorts of companies typically exhibit more volatility in returns and generate less income as they tend to re-invest profits during their growth phase. Your Board remains confident that, within the current regulatory environment, and with the Investment Adviser's expanded investment team, attractive opportunities will continue to be identified.

 

Once again, I would like to take this opportunity to thank all shareholders for their continued support.

 

Colin Hook

Chairman

16 May 2017

 

Investment Policy         

 

The Company's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are generally structured as part loan and part equity in order to receive regular income and to generate capital gain upon sale.

 

Investments are made selectively across a number of sectors, principally in established companies.

 

The Company's cash and liquid resources are held in a range of instruments of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.

 

VCT regulation

The Investment Policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC.

 

Amongst other conditions, the Company may not invest more than 15% of its investments (by VCT value at the time of investment) in a single company or group and must have at least 70% by VCT value of its investments throughout the period in shares or securities comprised in VCT qualifying holdings of which a minimum overall of 30% by VCT value (70% for funds raised after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although the VCT can invest less than 30% (70% for funds raised after 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% by VCT value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).

 

The companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.

 

Asset Mix

The Company initially holds its funds in a portfolio of interest bearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 70% of net funds raised in qualifying investments.

 

Risk diversification and maximum exposures

Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured to achieve the optimum balance between loan stock and equity to provide protection against downside risk alongside the best potential overall returns.

 

Co-investment

The Company is entitled to invest alongside other VCTs advised by Mobeus Equity Partners LLP that have a similar investment policy, normally on a pro rata to net assets basis.

 

Borrowing

The Company's articles of association permit borrowing of up to 10% of the adjusted capital and reserves (as defined therein). However, it has never borrowed and the Board has currently no plans to undertake any borrowing.

 

Summary of VCT Regulation

 

To assist shareholders, the following table contains a summary of the most important rules that determine VCT approval.

 

To maintain its status as a VCT, the Company must meet a number of conditions, the most important of which are that:

-        The Company must hold at least 70%, by VCT tax value*, of its total investments (shares, securities and liquidity) in VCT qualifying holdings, within approximately three years of a fundraising;

-        Of these qualifying holdings, an overall minimum of 70% by VCT tax value* (30% for funds raised on or before 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules);

-        No investment in a single company or group of companies may represent more than 15% (by VCT tax value*) of the Company's total investments at the date of investment;

The Company must pay sufficient levels of income dividend from its revenue available for distribution so as not to retain more than 15% of its income from shares and securities in a year;

-        The Company's shares must be listed on a regulated European stock market; and

-        Non-qualifying investments can no longer be made, except for certain exemptions in managing the Company's short-term liquidity;

-        To be a VCT qualifying holding, new investments must be in companies:-

-        which carry on a qualifying trade;

-        which have no more than £15 million of gross assets at the time of investment and £16 million immediately following investment from VCTs;

-        whose maximum age is generally seven years (ten years for knowledge intensive businesses);

-        that receive no more than an annual limit of £5 million and a lifetime limit of £12 million (£20 million for knowledge intensive companies), from VCTs and similar sources of State Aid funding;

-        that use the funds received from VCTs for growth and development purposes.

*VCT tax value means as valued in accordance with prevailing VCT legislation, which may not be the same as the investment cost or the carrying value of the investment shown in the Investment Portfolio Summary in Half-Year Report.

 

 

 

 

 

 

 

 

Investment Review

 

New investment in the half-year

A total of £4.07 million was invested into five companies during the six months under review. This comprised new investments into BookingTek, Biosite, Tapas Revolution, Buster & Punch and a further investment into an existing portfolio company, Preservica.

 

Company

 

Business

Date of investment

Amount of new

Investment (£m)

BookingTek

Direct booking software for hotels

October

2016

0.78

Based in London, BookingTek has developed software that enables hotels to reduce their reliance on third-party booking systems by means of a real-time booking platform for meeting rooms and restaurant reservations. The investment is to support further growth. The company's latest accounts for the year ended 31 July 2016 show turnover of £2.03 million and loss before interest, tax and amortisation of goodwill of £0.29 million.

Biosite

Workforce management

November

2016

0.86

Based in the Midlands, Pattern Analytics (Biosite) is a fast-growing provider of biometric access control and software-based workforce management solutions for the construction sector. The investment will support the expansion of the team to facilitate the development of new site-management tools to enable managers to oversee all aspects of a construction project. The company's latest accounts for the year ended 31 July 2016 show turnover of £4.69 million and profit before interest, tax and amortisation of goodwill of £0.49 million.

Preservica

Seller of proprietary digital archiving software

December

2016

0.93

Preservica has developed the world's leading software for the long-term preservation of digital records ensuring that digital content remains accessible, irrespective of future changes in technology. Previously a subsidiary of Tessella, it was demerged prior to the sale of Tessella in December 2015. The new investment provided additional growth capital to finance the development of the business. The company's latest accounts for the year ended 31 March 2016 show turnover of £1.78 million and profit before interest, tax and amortisation of goodwill of £0.16 million.

Tapas Revolution

Restaurant chain

January 2017

0.78

Based in London, Ibericos Etc. (which trades as Tapas Revolution) is a leading Spanish restaurant chain in the casual dining sector focusing on shopping centre sites with high footfall. Having opened its first restaurant in Shepherd's Bush: Westfield, the business has since opened six restaurants. The investment provided growth capital to a high-calibre team with significant restaurant rollout experience who have spent the past five years building and refining their offer and are now well placed to capitalise on a strong pipeline of new sites. The company's latest accounts for the year ended 25 October 2015 show turnover of £2.37 million and loss before interest, tax and amortisation of goodwill of £0.16 million.

Buster & Punch

Retailer

March 2017

0.72

Chatfield Services Limited (trading as Buster & Punch) is a London-based interiors brand founded in 2012 by architect and industrial designer Massimo Buster Minale. Buster + Punch (www.busterandpunch.com) started in a small garage in East London, where it built the "world's first designer LED light bulb" (Buster Bulb) and made its name with its industrial-inspired lighting. Its products are now sold in over 50 countries, both directly to end-consumers, designers and architects, and through well-known retailers including John Lewis, Harvey Nichols and Harrods. The investment will support the business's international expansion plans and the broadening of its product range. The company's latest accounts for the year ended 31 March 2016 show turnover of £1.98 million and profit before interest, tax and amortisation of goodwill of £0.47 million.

 

Realisations in the half-year

There have been no full realisations during the six month period under review although the Company received total cash proceeds of £6.61 million (2016: £10.65 million). This was in the form of loan stock repayments of £6.45 million (2016: £1.75 million) detailed below, deferred consideration of £0.06 million from Focus Pharma and MachineWorks, realised in a previous period, and other receipts of £0.10 million.

 

Loan stock repayments

Partial loan stock repayments received from seven companies totalled £6.45 million for the six months as summarised below:

 

Company

Business

Month(s)

Amount (£000's)

 

 

Backhouse Management

Company preparing to trade

January

1,203

 

 

Barham Consulting

Company preparing to trade

December, March

1,203

 

 

Creasy Marketing

Company preparing to trade

March

1,203

 

 

McGrigor  Management

Company preparing to trade

January, February

1,203

 

 

Hollydale Management

Company preparing to trade

March

932

 

 

Chatfield Services

Company preparing to trade

March

687

 

 

BG Training

Technical training

January

18

 

 

 

 

Total

6,449

 

 

Investment Portfolio Summary

as at 31 March 2017

Total cost at 31 March 2017 (unaudited)

£

Valuation at 30 September 2016

(audited)

£

Additional investments in the period

£

Valuation at 31 March 2017 (unaudited)

£

 

 

 

 

Tovey Management Limited (trading as Access IS)

Provider of data capture and scanning hardware

3,313,932

3,532,917

-

3,969,609

Virgin Wines Holding Company Limited

Online wine retailer

2,745,503

3,706,526

-

3,766,225

Entanet Holdings Limited

Wholesale communications provider

3,175,171

3,351,685

-

3,408,538

Media Business Insight Holdings Limited

A publishing and events business focused on the creative production industries

3,666,556

2,980,641

-

3,349,588

ASL Technology Holdings Limited

Printer and photocopier services

2,722,106

2,870,789

-

2,938,549

I-Dox plc

Developer and supplier of knowledge management products

453,881

2,833,470

-

2,916,807

Manufacturing Services Investment Limited

Company seeking to carry on a business in the manufacturing sector

2,708,100

2,708,100

-

2,708,100

Gro-Group Holdings Limited

Baby sleep products

2,398,928

1,651,824

-

2,080,321

Tharstern Group Limited

Software based management Information systems for the printing industry

1,454,278

1,777,923

-

1,734,745

CGI Creative Graphics International Limited

Vinyl graphics to global automotive, recreation vehicle and aerospace markets

1,943,948

1,768,414

-

1,727,786

EOTH Limited (trading as Equip Outdoor Technologies) Distributor of branded outdoor equipment and clothing including the Rab and Lowe Alpine brands

1,383,313

1,495,307

-

1,695,321

Veritek Global Holdings Limited

Maintenance of imaging equipment

2,289,859

2,297,607

-

1,693,780

Vian Marketing Limited (trading as Tushingham Sails) Design, manufacture and sale of stand-up paddleboards and windsurfing sails

1,207,437

1,593,103

-

1,663,277

Fullfield Limited (trading as Motorclean)

Vehicle cleaning and valet services

1,517,734

2,020,433

-

1,559,379

RDL Corporation Limited

Recruitment consultants within the pharmaceutical, business intelligence and IT sectors

1,441,667

1,409,809

-

1,486,503

Redline Worldwide Limited

Provider of security services to the aviation industry

1,129,121

1,129,121

-

1,385,757

Turner Topco Limited (trading as ATG Media)

Publisher and online auction platform operator

1,529,075

1,114,321

-

1,332,895

Bourn Bioscience Limited

Management of In-vitro fertilisation clinics

1,610,379

1,206,547

-

1,073,275

Master Removers Group Limited (formerly Leap New Co Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie  Man & Van)) A specialist logistics, storage and removals business

682,183

878,989

-

971,039

Preservica Limited1

Seller of proprietary digital archiving software

935,000

-

935,000

935,000

TPSFF Holdings Limited (formerly The Plastic Surgeon Holdings)

Supplier of snagging and finishing services to the property sector

406,169

836,215

-

912,459

Pattern Analytics Limited (trading as Biosite)

Workforce management and security services for the construction industry

857,014

-

857,014

857,014

BookingTek Limited

Direct booking software for hotels

779,095

-

779,095

779,095

 

Ibericos Etc. Limited (trading as Tapas Revolution)

Spanish restaurant chain

776,386

-

776,386

776,386

 

Chatfield Services Limited (trading as Buster and Punch)2

Industrial inspired lighting and interiors retailer

725,226

1,504,000

-

725,226

 

Jablite Holdings Limited

Manufacturer of expanded polystyrene products

498,790

1,271,052

-

712,321

 

Aquasium Technology Limited

Manufacturing and marketing of bespoke electron beam welding and vacuum furnace equipment

250,000

681,377

-

693,301

 

MPB Group Limited

Online marketplace for used photographic and video equipment

650,075

650,075

 

650,075

 

Hollydale Management Limited

Company seeking to carry on a business in the food sector

994,560

1,554,000

-

621,600

 

Omega Diagnostics Group plc

In-vitro diagnostics for food intolerance, autoimmune diseases and infectious diseases

280,026

367,511

-

536,682

 

Blaze Signs Holdings Limited

Manufacturer and installer of signs

418,281

608,241

-

491,102

 

Vectair Holdings Limited

Designer and distributor of washroom products

53,400

302,340

-

357,543

 

Backhouse Management Limited

Company seeking to carry on a business in the motor sector

782,080

1,504,000

-

300,800

 

Barham Consulting Limited

Company seeking to carry on a business in the catering sector

782,080

1,504,000

-

300,800

 

Creasy Marketing Services Limited

Company seeking to carry on a business in the textile sector

782,080

1,504,000

-

300,800

 

McGrigor Management Limited

Company seeking to carry on a business in the pharmaceutical sector

782,080

1,504,000

-

300,800

 

LightWorks Software Limited

Provider of software for CAD and CAM vendors

20,471

61,212

-

73,793

 

BG Training Limited

Technical training business

53,125

70,833

-

53,125

 

Racoon International Holdings Limited

Supplier of hair extensions, hair care products and training

655,851

104,999

-

52,500

 

Corero Network Security plc

Provider of e-business technologies

600,000

9,577

-

4,670

 

Oxonica Limited

International  nanomaterials group

2,524,527

-

-

-

 

NexxtDrive Limited

Developer and exploiter of mechanical transmission technologies

487,014

-

-

-

 

CB Imports Group Limited (trading as Country Baskets) Importer and distributor of artificial flowers, floral sundries and home décor products

175,000

-

-

-

 

Biomer Technology Limited

Developer of biomaterials for medical devices

137,170

-

-

-

 

Newquay Helicopters (2013) Limited (in creditors' voluntary liquidation) Helicopter  service operator

15,234

-

-

.

 

Watchgate Limited

Holding company

1,000

-

-

-

 

   Total

52,794,905

54,364,958

3,347,495

51,896,586

                 

 

1 - A further £935,000 was invested into Preservica Limited, adding to the Company's existing shareholding that was received as part of the disposal of Tessella Holdings Limited in December 2015.

 

2 - £1,504,000 invested in Chatfield Services Limited, a company preparing to trade, was used for the investment into Buster & Punch. This resulted in a net repayment to the Company of £778,774

 

Statement of the Directors' Responsibilities

 

Responsibility statement

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Colin Hook (Chairman), Jonathan Cartwright (Chairman of the Audit and Nomination & Remuneration Committees) and Helen Sinclair (Chairman of the Investment Committee), being the Directors of the Company, confirm that to the best of their knowledge:

 

(a)        The condensed set of financial statements, which has been prepared in accordance with Financial Reporting Standard 104 "Interim Financial Reporting" gives a true and fair view of the assets, liabilities, financial position and profit of the Company as required by DTR 4.2.10;

 

(b)        the Half-Year Management Report which comprises the Chairman's Statement, Investment Policy, Investment Review and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;

 

(c)         a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and

 

(d)        there were no related party transactions in the first six months of the current financial year that are required to be disclosed, in accordance with DTR 4.2.8.

 

Principal risks and uncertainties

In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Accounts for the year ended 30 September 2016 ("the Annual Report").

 

The principal risks faced by the Company are:

 

•           Investment and strategic

•           Loss of approval as a Venture Capital Trust;

•           Regulatory;

•           Counterparty;

•           Economic;

•           Financial and operating;

•           Market;

•           Asset liquidity; and

•           Market liquidity;

 

A detailed explanation of the principal risks facing the Company can be found in the Annual Report on page 25 and in Note 16 on Financial Instruments on pages 59- 66. Copies can be viewed or downloaded from the Company's website: www.incomeandgrowthvct.co.uk

 

Going concern

The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Half-Year Management Report. The Directors have satisfied themselves that the Company continues to maintain a significant cash position. The majority of companies in the portfolio continue to trade profitably and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, share buybacks and dividends) are within the Company's control.

 

The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks are shown in Notes 16 and 17 on page 59 to 66 of the Annual Report. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the half-year report and financial statements.

 

Cautionary statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

 

For and on behalf of the Board:

 

Colin Hook

Chairman

16 May 2017

 

Unaudited Condensed Income Statement

for the six months ended 31 March 2017

 

 

 

Six months ended 31 March 2017

Six months ended 31 March 2016

Year ended 30 September 2016

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total

 

 

£

£

£

£

£

£

£

£

£

Unrealised gains on investments

9

-

725,815

725,815

-

726,630

726,630

-

549,889

549,889

Realised gains on investments

9

-

69,100

69,100

-

2,471,203

2,471,203

-

2,506,146

2,506,146

Income

4

1,640,297

-

1,640,297

1,894,754

-

1,894,754

3,201,629

-

3,201,629

Investment Adviser's fees

5

(197,406)

(592,219)

(789,625)

(213,564)

(640,692)

(854,256)

(419,260)

(1,257,781)

(1,677,041)

Investment  Advisers' performance fees

5

-

-

-

-

(1,134,982)

(1,134,982)

-

(1,140,221)

(1,140,221)

Other expenses

 

 

(206,829)

 

-

 

(206,829)

(197,949)

-

(197,949)

(392,228)

-

(392,228)

 

Profit on ordinary activities before taxation

 

 

 

 

1,236,062

 

 

 

202,696

 

 

 

1,438,758

 

1,483,241

 

1,422,159

 

2,905,400

 

2,390,141

 

658,033

 

3,048,174

Taxation on profit on ordinary activities

6

(211,109)

211,109

-

(288,818)

288,818

-

(479,600)

479,600

-

Profit for the period and total comprehensive income

 

 

1,024,953

 

413,805

 

1,438,758

 

1,194,423

 

1,710,977

 

2,905,400

 

1,910,541

 

1,137,633

 

3,048,174

 

Basic and diluted earnings per share

 

7

 

1.42p

 

0.57p

 

1.99p

 

1.69p

 

2.41p

 

4.10p

 

2.68p

 

1.60p

 

4.28p

 

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the unrealised gains and realised gains on investments and the proportion of the Investment Adviser's fee and performance fee charged to capital.

 

The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with UK GAAP, including Financial Reporting Standard 102. In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice ("SORP") updated in January 2017 by the Association of Investment Companies ("AIC"), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.

 

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the period.

 

Unaudited Condensed Balance Sheet

as at 31 March 2017

 

 

 

31 March 2017

(unaudited)

31 March 2016

(unaudited)

30 September 2016

(audited)

 

Notes

£

£

£

Fixed assets

 

 

 

 

Investments at fair value

9

51,896,586

53,954,429

54,364,958

Current assets

 

 

 

 

Debtors and prepayments

 

455,875

532,667

304,935

Current  asset investments

10

9,891,458

18,395,656

15,338,067

Cash at bank

10

7,805,131

2,805,684

2,189,856

 

 

 

18,152,464

21,734,007

17,832,858

Creditors: amounts falling due within one year

(167,622)

(1,377,009)

(1,357,178)

Net current assets

17,984,842

20,356,998

16,475,680

Net assets

69,881,428

74,311,427

70,840,638

 

Capital and reserves

 

 

 

 

Called up share capital

 

724,688

711,648

719,140

Capital redemption reserve

 

12,313

11,564

11,985

Share premium reserve

 

18,809,469

17,628,344

18,308,887

Revaluation reserve

 

5,645,322

4,921,137

4,744,396

Special  distributable reserve

 

24,404,104

25,448,930

24,980,045

Realised capital reserve

 

18,129,188

23,393,471

20,225,980

Revenue reserve

 

2,156,344

2,196,333

1,850,205

Equity shareholders' funds

69,881,428

74,311,427

70,840,638

 

Basic and diluted net asset value:

 

 

 

96.43p

 

 

Basic and diluted net asset value per share

11

104.42p

98.51p

 

 

Unaudited Condensed Statement of Changes in Equity

for the six months ended 31 March 2017

 

Non-distributable reserves

 

Distributable reserves

 

 

Called up

Capital

Share

Revaluation

Special

Realised

Revenue

Total

 

share

redemption

premium

reserve

distributable

capital

reserve

 

 

capital

reserve

reserve

 

reserve

reserve

 

 

 

 

 

 

 

(Note a)

 

 

 

 

£

£

£

£

£

£

£

£

At 1 October 2016

719,140

11,985

18,308,887

4,744,396

24,980,045

20,225,980

1,850,205

70,840,638

Comprehensive income

for the period

 

 

 

 

 

 

 

 

Profit/(loss) for the period

-

-

-

725,815

-

(312,010)

1,024,953

1,438,758

Total comprehensive income for the period

 

-

 

-

 

-

 

725,815

 

-

 

(312,010)

 

1,024,953

 

1,438,758

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Dividends  re-invested

into new shares

 

5,876

 

-

 

500,582

 

-

 

-

 

-

 

-

 

506,458

Shares bought back

(328)

328

-

-

(29,170)

-

-

(29,170)

Dividends paid

-

-

-

-

-

(2,156,442)

(718,814)

(2,875,256)

Total contributions

by and distributions to owners

 

 

5,548

 

 

328

 

 

500,582

 

 

-

 

 

(29,170)

 

 

(2,156,442)

 

 

(718,814)

 

 

(2,397,968)

 

Other movements

 

 

 

 

 

 

 

 

Realised losses transferred

to special reserve (note a)

 

-

 

-

 

-

 

-

 

(546,771)

 

546,771

 

-

 

-

Realisation of previously unrealised  depreciation

 

-

 

-

 

-

 

175,111

 

-

 

(175,111)

 

-

 

-

Total other movements

-

-

-

175,111

(546,771)

371,660

-

-

At 31 March 2017

724,688

12,313

18,809,469

5,645,322

24,404,104

18,129,188

2,156,344

69,881,428

 

Notes

a) The Special distributable reserve provides the Company with a reserve to fund market purchases of the Company's own shares, to absorb any existing and future losses and for any other corporate purpose.

 

Unaudited Condensed Statement of Changes in Equity

for the six months ended 31 March 2016

 

Non-distributable reserves

 

Distributable reserves

 

 

Called up

Capital

Share

Revaluation

Special

Realised

Revenue

 

 

share

redemption

premium

reserve

distributable

capital

reserve

 

 

capital

reserve

reserve

 

reserve

reserve

 

Total

At 1 October 2015

706,930

9,288

16,977,902

8,997,633

27,147,965

19,653,747

1,708,831

75,202,296

Comprehensive income

for the period

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

726,630

-

984,347

1,194,423

2,905,400

Total comprehensive income for the period

 

-

 

-

 

-

 

726,630

 

-

 

984,347

 

1,194,423

 

2,905,400

 

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

Dividends  re-invested

into new shares

 

6,994

 

-

 

650,442

 

-

 

-

 

-

 

-

 

657,436

Shares bought back

(2,276)

2,276

-

-

(212,179)

-

-

(212,179)

Dividends paid

-

-

-

-

-

(3,534,605)

(706,921)

(4,241,526)

Total contributions

by and distributions to owners

 

 

4,718

 

 

2,276

 

 

650,442

 

 

-

 

 

(212,179)

 

 

(3,534,605)

 

 

(706,921)

 

 

(3,796,269)

 

Other movements

 

 

 

 

 

 

 

 

Realised losses transferred

to special reserve

 

-

 

-

 

-

 

-

 

(1,486,856)

 

1,486,856

 

-

 

-

Realisation of previously unrealised  appreciation

 

-

 

-

 

-

 

(4,803,126)

 

-

 

4,803,126

 

-

 

-

Total other movements

-

-

-

(4,803,126)

(1,486,856)

6,289,982

-

-

At 31 March 2016

711,648

11,564

17,628,344

4,921,137

25,448,930

23,393,471

2,196,333

74,311,427

 

Unaudited Condensed Statement of Cash Flows

for the six months ended 31 March 2017

 

 

 

Six months ended

31 March 2017 (unaudited)

Six months ended

31 March 2016 (unaudited)

Year ended

30 September 2016

(audited)

 

Notes

£

£

£

Cash flows from operating activities

 

 

 

 

Profit for the financial period

 

1,438,758

2,905,400

3,048,174

Adjustments for:

 

 

 

 

Unrealised gains on investments

 

(725,815)

(726,630)

(549,889)

Realised gains on investments

 

(69,100)

(2,471,203)

(2,506,146)

(Increase)/decrease  in debtors

 

(150,940)

(150,101)

77,630

(Decrease)/increase in creditors

 

(1,152,217)

220,474

190,471

Net cash (outflow)/inflow from operating activities

(659,314)

(222,060)

260,240

Cash flows from investing activities

 

 

 

 

Purchase of investments

9

(3,347,495)

(285,932)

(936,007)

Disposal of investments

9

6,610,782

10,645,086

10,742,834

Decrease in bank deposits with a maturity over three months

 

 

2,028,243

 

1,960,755

 

1,960,755

Net cash inflow from investing activities

 

5,291,530

12,319,909

11,767,582

Cash flows from financing activities

 

 

 

 

Equity dividends paid

8

(2,368,798)

(3,584,090)

(7,160,312)

Purchase of own shares

 

(66,509)

(185,476)

(212,644)

Net cash outflow from financing activities

(2,435,307)

(3,769,566)

(7,372,956)

Net increase in cash and cash equivalents

 

2,196,909

8,328,283

4,654,866

Cash and cash equivalents at start of period

 

12,347,911

7,693,045

7,693,045

Cash and cash equivalents at end of period

14,544,820

16,021,328

12,347,911

 

Cash and cash equivalents comprise:

 

 

 

 

Cash at bank and in hand

 

7,805,131

2,805,684

2,189,856

Cash equivalents

 

6,739,689

13,215,644

10,158,055

 

The notes below form part of these Half-Year Financial Statements.

 

Notes to the Unaudited Condensed Financial Statements

for the six months ended 31 March 2017

1.   Company information

The Income and Growth VCT plc is a public limited company incorporated in England, registration number 4069483. The registered office is 30 Haymarket, London, SW1Y 4EX.

 

2.   Basis of preparation of the Financial Statements

These Financial Statements prepared in accordance with accounting policies consistent with Financial Reporting Standard 102 ("FRS102"), Financial Reporting Standard 104 ("FRS104") - Interim Financial Reporting, with the Companies Act 2006 and the 2014 Statement of Recommended practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') (updated in January 2017) issued by the Association of Investment Companies. The Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as 

specified in note  9.

 

The Half-Year Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting 

Council's (FRC) guidance on Review of Interim Financial Information.

 

The Company has elected to apply early the revised disclosure requirements as set out in Amendments to FRS 102 - Fair value hierarchy disclosures, issued in March 2016.

 

3.   Principal accounting policies

The accounting policies have been applied consistently throughout the period. Full details of principal accounting policies 

will be disclosed in the Annual Report, while the policy in respect of investments is included within an outlined box at the 

top of note 9 on investments.

 

4.   Income

 

 

 

Six months

ended 31 March 2017

Six months ended 31 March 2016

Year ended

30 September 2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

Dividends

Money market funds

Loan stock interest

Bank deposit interest

Other income

Total income

1,640,297

1,894,754

3,201,629

 

5.   Investment Adviser's fees and performance fees

 

 

Six months ended 31 March 2017

Six months ended 31 March 2016

Year ended

30 September 2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

Allocation to revenuereturn: Investment Adviser's fees

Allocation to capital return: Investment Adviser's fees

Investment Advisers' performance fees

Total

789,625

1,989,238

2,817,262

 

Investment Adviser's fees

Investment Advisers' performance fees

Total

789,625

1,989,238

2,817,262

 

 

The Directors have charged 75% of the fees payable under the Investment Adviser's agreement, and 100% of the amounts payable under the Incentive Agreements, to the capital reserve. The Directors believe it is appropriate to charge the incentive 

fees wholly against the capital return, as any fees payable depend on capital performance, as explained below.

 

On 30 September 2014, a new incentive fee agreement was signed between the Board and Mobeus, with effect from 1 October 2013, to amend and replace the previous agreement. The previous agreement remains in force, but  only 
with the  former adviser, Foresight. For the period ended 31 March 2017, no amount has been accrued under the  
previous 
agreement. Mobeus waived their right to their portion of the fee under the previous agreement.  
This agreement is due to 
expire on 
10 March 2019.

 

Any payment under the new incentive agreement is now 15% of net realised gains for each year, payable in cash.  It is 
payable only if Cumulative Net Asset Value (NAV) total return per share (being the closing NAV at a year end plus cumulative 
dividends paid to that year end, since 1 October 2013 equals or exceeds a "Target Return". The Target Return is the greater of
two targets, being either:

 

i.  compound growth of 6% per annum (but 5% per annum for the year ended 30 September 2014 only), before  deducting any incentive fee payable (for the year of calculation only) under both this amended agreement and the existing incentive agreement with Foresight in Cumulative NAV total return per share; or

 

ii. the cumulative percentage change in the Consumer Prices Index since 1 October 2013 to the relevant 

    financial year end, theresultant figure then being multiplied by (100+A)/100, where A is the number of full 

    12 month periods (or part thereof ) that have passed between 1 October 2013 and the relevant financial year end.

 

Both measures of Target Return are applied to the same opening base, being NAV per share as at 30 September 2013 of 
113.90 pence. The objective of this Target Return is to enable shareholders to benefit from a 
cumulative NAV return of at 

least 6% per annum (5% in the financial year ended 30 September 2014), before any incentive fee is payable. Once a 
payment has been made, cumulative NAV total return is calculated after deducting 
past years' incentive fees paid and 
payable.

 

Under this new incentive agreement, any fee payments to Mobeus are subject to an annual cap of an amount equal to 2% 
of the net assets of I&G VCT as at the immediately preceding year end. This cap will include any fee payable to 
Foresight 
under the old agreement, although any such payment to Foresight is not capped. Any excess over the 2% remains payable 
to Mobeus in the following year(s), subject to the 2% annual cap in such subsequent year(s) 
and after any
payment in respect of such subsequent year(s).

 

For the year ending 30 September 2017, the Target Return will be 142.44p per share (being a 6% uplift on the  Target Return 
at the previous year end of 134.38 pence per share). As at 31 March 2017, the  
Cumulative Total NAV return is 140.43p per 
share, so the Target Return for the 2017 financial year has currently not been met and so no fee has been accrued.

6.   Taxation

There is no tax charge for the period as the Company has tax losses brought forward from previous periods, which can be 

offset against taxable income.

 

7.   Basic and diluted earnings and return per share

Dividend

Type

For the year

ended

30 September

Pence

per

share

Date paid

Six months ended

31 March 2017

(unaudited)

Six months ended

31 March 2016

(unaudited)

Year ended

30 September 2016

(audited)

 

 

 

 

 

 

 

 

£

£

£

 

Final

 

Income

 

2015

 

1.00p

 

15 February 2016

 

-

 

706,921

 

706,921

Final

Capital

2015

5.00p

15 February 2016

-

3,534,605

3,534,606

Interim

Income

2016

1.00p

7 July 2016

-

-

1,067,478

Interim

Capital

2016

5.00p

7 July 2016

-

-

3,202,433

Final

Income

2016

1.00p

15 February 2017

718,814

-

-

Final

Capital

2016

3.00p

15 February 2017

2,156,442

-

-

Previous dividends not claimed within the statutory period

 

 

(5,232)

 

2,875,256

4,241,526

8,506,206

 

 

Six months ended 31 March 2017

Six months ended 31 March 2016

Year ended

30 September 2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

i)   Total earnings after taxation:

 

1,438,758

 

2,905,400

 

3,048,174

Basic and diluted earnings per share

1.99p

4.10p

4.28p

ii)  Net revenue from ordinary activities after taxation

1,024,953

1,194,423

1,910,541

Basic and diluted revenue return per share

1.42p

1.69p

2.68p

Net unrealised capital gains on investments

725,815

726,630

549,889

Net realised capital gains on investments

69,100

2,471,203

2,506,146

Capital Investment Adviser's fees less taxation

(381,110)

(351,874)

(778,181)

Investment  Advisers' performance fees

-

(1,134,982)

(1,140,221)

iii)  Total capital return

413,805

1,710,977

1,137,633

Basic and diluted capital return per share

0.57p

2.41p

1.60p

iv)  Weighted average number of shares in issue in the period

72,037,688

70,863,747

71,198,046

 

8.   Dividends paid

* - £2,875,256 (31 March 2016: £4,241,526; 30 September 2016: £8,506,206) disclosed above differs to that shown in the Statement 
of Cash Flows of £2,368,798 (31 March 2016: £3,584,090; 30 September 2016: £7,160,312) due to £506,458 (31 March 2016: 
£657,436; 30 September 2016: £1,345,894) of new shares issued as part of the Company's Dividend Investment Scheme.

 

9.   Summary of movement on investments during the period

 

 

The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at 'fair value through profit and loss' ("FVTPL"). All investments held by the Company are classified as FVTPL, and measured in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") guidelines, as updated in December 2015. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.

 

For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

 

Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEV guidelines:

 

All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, each investment is considered as a whole on a 'unit of account' basis alongside consideration of:

 

i)    Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a

      company, this value will be used.

 

ii)    In the absence of i), and depending upon both the subsequent trading performance and investment structure of an

       investee company, the valuation basis will usually move to either:-

 

a)  an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that

company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).

 

or:-

 

b) where a company's underperformance against plan indicates a diminution in the value of the

                     investment, provision against cost is made, as appropriate.

 

iii)  Premiums, to the extent that they are considered capital in nature, and that will be received upon

repayment of loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.

 

iv)  Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied.

 

Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement.

 

All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.

 

A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.

 

The methods of fair value measurement are classified in to hierarchy based on the reliability of the information used to determine the valuation.

 

- Level 1 - Fair value is measured based on quoted prices in an active market.

- Level 2 - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.

Level 3 - Fair value is measured using valuation techniques using inputs that are not based on observable market data.

 

 

 

 

 

 

Traded on AIM

 

Level 1

Unquoted ordinary shares

Level 3

Unquoted Preference

shares

Level 3

Unquoted Loan stock

 

Level 3

Total

 

£

£

£

£

£

 

 

 

 

 

 

 

Valuation at 1 October 2016

 

3,210,558

 

12,137,532

 

22,646

 

38,994,222

 

54,364,958

Purchases at cost

-

2,943,504

-

403,991

3,347,495

Sales - proceeds

-

(160,584)

-

(6,450,198)

(6,610,782)

- realised (losses)/gains

-

(2,228,980)

-

2,298,080

69,100

Reclassification  at valuation

-

(87)

87

-

-

Unrealised gains/(losses) on investments in the period

 

247,601

 

(581,951)

 

391,878

 

668,287

 

725,815

Valuation at 31 March 2017

3,458,159

12,109,434

414,611

35,914,382

51,896,586

Book cost at 31 March 2017

1,333,907

20,789,093

27,428

30,644,477

52,794,905

Unrealised gains/(losses) at 31 March 2017

2,124,252

(2,186,018)

387,183

5,269,905

5,595,322

Permanent impairment of valuation of investments

-

(6,493,641)

-

-

(6,493,641)

Valuation at 31 March 2017

3,458,159

12,109,434

414,611

35,914,382

51,896,586

 

Gains/(losses) on investments

 

 

 

 

 

Realised (losses)/gains based on historical cost

-

(2,404,091)

-

2,298,080

(106,011)

Less amounts recognised as unrealised losses in previous years

 

-

 

175,111

 

-

 

-

 

175,111

Realised (losses)/gains based on carrying value at 30 September 2016

 

-

 

(2,228,980)

 

-

 

2,298,080

 

69,100

Net movement in unrealised gains/ (losses) in the period

 

247,601

 

(581,951)

 

391,878

 

668,287

 

725,815

Gains/(losses) on investments for the period ended 31 March 2017

 

247,601

 

(2,810,931)

 

391,878

 

2,966,367

 

794,915

Unrealised gains/(losses) at 31 March 2017 above of £5,595,322 differ to that shown in the Revaluation reserve on the Statement of Changes in Equity of £5,645,322. The difference of £50,000 is the estimated fair value of contingent consideration held at the Balance Sheet date, and is included within Debtors.

 

There has been no significant change in the risk analysis as disclosed in Note 16 of the Financial Statements in the Company's Annual Report. The increase in unrealised valuations of the loan stock investments above reflect the changes in the entitlement to loan premiums, and/or in the underlying enterprise value of the investee company. The increase does not arise from assessments of credit or market risk upon these instruments.

 

Level 3 unquoted equity and loan investments are valued in accordance with IPEV guidelines as follows:

 

 

as at

31 March 2017

as at

31 March 2016

as at

30 September 2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

Valuation methodology

Estimated realisation proceeds

Recent investment price

Earnings multiple

Total

48,438,427

51,514,665

51,154,400

 

10.  Current asset investments

 

 

as at

31 March 2017

as at

31 March 2016

as at

30 September 2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

OEIC Money market funds

Bank deposits that mature within three months but are not immediately repayable

Cash equivalents per Statement of Cash Flows

Bank deposits that mature after three months

Current asset investments

9,891,458

18,395,656

15,338,067

Cash at bank

7,805,131

2,805,684

2,189,856

 

11.  Net asset value per share

 

 

 

as at

31 March 2017

as at

31 March 2016

as at

30 September 2016

 

(unaudited)

(unaudited)

(audited)

Net assets

Number of shares in issue

Net asset value per share - basic and diluted

96.43p

104.42p

98.51p

 

12.  Post balance sheet events

On 3 May 2017, TPSFF Holding Limited (formerly The Plastic Surgeon Holdings Limited) repaid loan stock of £36,852.

 

13.  Statutory Information

The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 has not been audited.

 

The financial information contained in this Half-Year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Financial Statements for the year ended 30 September 2016 have been filed with the Registrar of Companies. The auditor has reported on these Financial Statements and that report was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

 

14.  Half-Year Report

Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London, SW1Y 4EX, or can be downloaded via the Company's website at www.incomeandgrowthvct.co.uk.

 

 

Contact details for further enquiries:

Rob Brittain or Sarah Penfold at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail on vcts@mobeusequity.co.uk. 

 

Mobeus Equity Partners LLP (the Investment Adviser), on 020 7024 7600 or by e-mail on info@mobeusequity.co.uk.

 

DISCLAIMER

 

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Half-year Report - RNS