RNS Number : 1089P
TP70 VCT Plc
19 October 2012
TP70 VCT plc
Interim Results
The directors of TP70 VCT plc are pleased to announce its Interim results for the six months to 31 August 2012.
For further information please contact Triple Point Investment Management LLP on 020 7201 8989. The Interim report will be available in full at www.triplepoint.co.uk
Financial Summary
Unaudited
Audited
Unaudited
6 months ended
Year ended
6 months ended
31 August 2012
29 February 2012
31 August 2011
£'000
£'000
£'000
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.
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 2012.
30 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 2012.
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 2012.
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 2012. The resulting net asset value therefore stood at 19.48p at 31 August 2012.
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 020 7201 8989.
Michael Sherry
Chairman
18 October 2012
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
Industry Sector
Cinema Digitisation
Solar PV
Anaerobic Digestion
Satellite
Total Unquoted Investments
£'000
£'000
£'000
£'000
£'000
Investments at 29 February 2012
10,938
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 2012
176
3,317
1,334
431
5,258
Investments %
3.35%
63.08%
25.37%
8.20%
100.00%
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 constructing 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.
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.
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 2012.
Claire Ainsworth
Managing Partner
for Triple Point Investment Management LLP
18 October 2012
Investment Portfolio
Unaudited
Audited
31 August 2012
29 February 2012
Adjusted Cost
Valuation
Cost
Valuation
£'000
%
£'000
%
£'000
%
£'000
%
Unquoted qualifying holdings
5,077
70.88
4,827
74.35
18,275
76.76
17,636
77.31
Unquoted non-qualifying holdings
853
11.91
431
6.64
-
-
-
-
5,930
82.79
5,258
80.99
18,275
76.76
17,636
77.31
Derivative
-
-
-
-
3,651
15.34
3,289
14.42
Money market funds
500
6.98
500
7.70
-
-
-
-
Financial assets at fair value through the income statement
6,430
89.77
5,758
88.69
21,926
92.10
20,925
91.73
Cash and cash equivalents
734
10.23
734
11.31
1,880
7.90
1,880
8.27
7,164
100.00
6,492
100.00
23,806
100.00
22,805
100.00
Unquoted Qualifying Holdings
£'000
%
£'000
%
£'000
%
£'000
%
Provision of Satellite Capacity
Broadsword Satellite Communications Ltd
-
-
-
-
1,000
4.20
814
3.57
Satellite Broadband Access Solutions Ltd
-
-
-
-
1,000
4.20
797
3.49
Cinema Digitisation
21st Century Cinema Ltd
40
0.56
15
0.23
2,000
8.40
1,975
8.66
Big Screen Digital Services Ltd
58
0.81
-
-
2,000
8.40
1,942
8.52
Cinematic Services Ltd
40
0.56
9
0.14
2,000
8.40
1,969
8.63
Digima Ltd
40
0.56
7
0.11
2,000
8.40
1,967
8.63
Digital Screen Solutions Ltd
40
0.56
36
0.55
2,000
8.40
1,996
8.75
DLN Digital Ltd
20
0.28
108
1.66
1,000
4.20
1,088
4.77
Electricity Generation
Solar
Beam Carrier Trading Ltd
1,000
13.96
890
13.71
1,000
4.20
890
3.90
Convertibox Services Ltd
564
7.87
475
7.32
1,000
4.20
911
3.99
Campus Link Ltd
1,000
13.96
984
15.16
1,000
4.20
984
4.31
Green Energy for Education Ltd
1,000
13.96
968
14.91
1,000
4.20
968
4.24
Anaerobic Digestion
-
Biomass Future Generations Ltd
1,000
13.96
1,050
16.17
1,000
4.20
1,050
4.60
Katharos Organic Ltd
275
3.84
285
4.39
275
1.16
285
1.25
5,077
70.88
4,827
74.35
18,275
76.76
17,636
77.31
Cost
Valuation
Cost
Valuation
£'000
%
£'000
%
£'000
%
£'000
%
Unquoted Non-qualifying Holdings (ceased trading)
Provision of satellite capacity
Broadsword Satellite Communications Ltd
391
5.46
191
2.94
-
-
-
-
Satellite Broadband Access Solutions Ltd
462
6.45
240
3.70
-
-
-
-
853
11.91
431
6.64
-
-
-
-
Money market funds
BlackRock
500
6.98
500
7.70
-
-
-
-
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 2012. 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
Statement of Comprehensive Income
Unaudited
Audited
Unaudited
6 months ended
Year ended
6 months ended
Note
31 August 2012
29 February 2012
31 August 2011
Revenue
Capital
Total
Revenue
Capital
Total
Revenue
Capital
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Income
Investment income
4
441
-
441
727
-
727
353
-
353
(Loss)/gain arising on the disposal of investments
-
(358)
(358)
-
185
185
-
-
-
(Loss) arising on the revaluation of investments
-
(33)
(33)
-
(639)
(639)
-
-
-
Profit/(loss) arising on the revaluation on derivative transactions
-
362
362
-
(379)
(379)
-
(326)
(326)
Investment return
441
(29)
412
727
(833)
(106)
353
(326)
27
Investment management and administration fees
5
11
34
45
160
480
640
52
156
208
Financial and regulatory costs
31
-
31
29
-
29
14
-
14
General administration
6
-
6
13
-
13
5
-
5
Legal and professional fees
10
-
10
83
-
83
13
-
13
Directors' remuneration
6
28
-
28
46
-
46
20
-
20
Operating expenses
86
34
120
331
480
811
104
156
260
Operating profit/(loss) before taxation
355
(63)
292
396
(1,313)
(917)
249
(482)
(233)
Taxation
7
(91)
91
-
-
-
-
-
-
-
Operating profit/(loss) after taxation
264
28
292
396
(1,313)
(917)
249
(482)
(233)
Profit and total comprehensive income/(loss) for the period
264
28
292
396
(1,313)
(917)
249
(482)
(233)
Basic & diluted profit/(loss) per share
8
0.83p
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.
Balance Sheet
Unaudited
Audited
Unaudited
31 August 2012
29 February 2012
31 August 2011
Note
£'000
£'000
£'000
Non current assets
Financial assets at fair value through profit or loss
-
-
21,617
Current assets
Financial assets at fair value through profit or loss
5,758
20,925
-
Receivables
49
405
820
Cash and cash equivalents
9
734
1,880
1,525
6,541
23,210
2,345
Total assets
6,541
23,210
23,962
Current liabilities
Payables
309
506
574
309
506
574
Net assets
6,232
22,704
23,388
Equity attributable to equity holders of the parent
Share capital
10
320
320
320
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)
11
19.48p
70.97p
73.11p
The accompanying notes are an integral part of this statement.
Statement of Changes in Shareholders' Equity
Special
Share
Distributable
Capital
Revenue
Capital
Reserve
Reserve
Earnings
Total
£'000
£'000
£'000
£'000
£'000
6 months ended 31 August 2012
Opening balance
320
30,562
(7,550)
(628)
22,704
Dividends paid
-
(16,764)
-
-
(16,764)
Transactions with owners
-
(16,764)
-
-
(16,764)
Profit for the period
-
-
28
264
292
Total comprehensive income for the period
-
-
28
264
292
Balance at 31 August 2012
320
13,798
(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
320
30,562
(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 2012
320
30,562
(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
320
30,562
(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 2012
320
30,562
(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.
Statement of Cash Flows
Unaudited
Audited
Unaudited
31 August 2012
29 February 2012
31 August 2011
£'000
£'000
£'000
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
33
639
-
Loss arising on the derivative
(4)
379
326
Cash generated by operations
321
(84)
93
Decrease/(increase) in receivables
356
133
(282)
(Decrease)/increase in payables
(197)
392
460
Net cash flows from operating activities
480
441
271
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 2012
1,880
254
254
Net (decrease)/increase in cash and cash equivalents
(1,146)
1,626
1,271
Cash and cash equivalents at 31 August 2012
734
1,880
1,525
The accompanying notes are an integral part of this statement.
Notes to the Unaudited Interim 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 2012.
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 2006.
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 2012.
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 2012
29 February 2012
31 August 2011
Rev.
Cap.
Total
Rev.
Cap.
Total
Rev.
Cap.
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Interest receivable on bank balances
1
-
1
1
-
1
-
-
-
Loan stock interest
208
-
208
726
-
726
353
-
353
Income from bond portfolio
232
-
232
-
-
-
-
-
-
Total
441
-
441
727
-
727
353
-
353
5. Investment management and administration fees
TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 5 April 2007. 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 2012
29 February 2012
31 August 2011
Rev.
Cap.
Total
Rev.
Cap.
Total
Rev.
Cap.
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
M G Sherry (Chairman)
6
-
6
12
-
12
6
-
6
J C Murrin
8
-
8
15
-
15
8
-
8
I D Parsons
6
-
6
13
-
13
6
-
6
R Rose
8
-
8
6
-
6
-
-
-
Total
28
-
28
46
-
46
20
-
20
7. Taxation
Unaudited
Audited
Unaudited
6 months ended
Year ended
6 months ended
31 August 2012
29 February 2012
31 August 2011
Rev.
Cap.
Total
Rev.
Cap.
Total
Rev.
Cap.
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Profit/(loss) on ordinary activities before tax
355
(63)
292
396
(1,313)
(917)
249
(482)
(233)
Corporation tax @ 20%
71
(12)
59
79
(263)
(184)
50
(96)
(46)
Effect of:
Utilisation of tax losses brought forward
20
(84)
(64)
(79)
-
(79)
(60)
(380)
(440)
Non taxable items
-
5
5
-
167
167
-
65
65
Disallowed expenditure
-
-
-
-
-
-
-
-
-
Unrelieved tax losses arising in the year
-
-
-
96
96
10
411
421
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 31,992,471
9. Cash and cash equivalents
Cash and cash equivalents comprise deposits with HSBC Bank plc.
10. Share capital
Unaudited
Audited
Unaudited
31 August 2012
29 February 2012
31 August 2011
Ordinary Shares of 1p
Authorised
Number of shares
50,000,000
50,000,000
50,000,000
Par Value £'000
500
500
500
Issued & Fully Paid
Number of shares
31,992,471
31,992,471
31,992,471
Par Value £'000
320
320
320
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 2012.
14. Post balance sheet events
Other than those detailed in the Chairman's Statement there were no post balance sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange
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