Downing Healthcare - Interim Results
April 09 1998 - 1:27PM
UK Regulatory
RNS No 8809r
DOWNING HEALTHCARE PROTECTED VCT PLC
9th April 1998
Downing Healthcare Protected VCT plc - Chairman's Statement
Introduction
Downing Healthcare Protected VCT plc (Downing Healthcare
VCT) was launched in spring 1997 and successfully raised #9.8
million. The investment strategy is to invest 75% of funds in
nursing home businesses and 25% of funds in fixed income
securities managed by Cazenove Fund Management Limited
(Cazenove). Approximately #2.5 million has been committed
to three nursing home businesses, into which follow-on
investments of #640,000 are anticipated. In addition #2
million has been invested by Cazenove in fixed income
securities.
Investments
- Nursing Home Investments
Although there are a large number of care homes on the market,
your directors are of the view that a number of the better
quality homes are only "unofficially" available for sale. The
dealflow has come from your directors' network of contacts
within the industry and from a mailshot to 4,500 care homes
which were not on the market (responses were received from
over 400). All this activity has resulted in over 100 visits
by your directors, with 10 offers being made and four being
accepted.
The Company has committed funds so far to three Care Homes
businesses. Kimbolton Lodge is situated very close to the
centre of Bedford and is registered for 44 beds. Evedale Care
Home is a new 60 bed purpose built home which opened in March
1997 and is located in a residential area of Coventry.
Harnham Croft is a care home registered for 49 beds and is
located near to the centre of Salisbury and overlooks the
River Nadder with views of the cathedral.
In addition, an investment of #1 million has been agreed for
the purchase of a care home business in Kent. On the basis
that full investment is made in all four of these care home
businesses, the Company will have invested over #4 million in
qualifying investments. This equates to over 60% of the
three year VCT qualifying target after one year. Only a
further two to three homes are required and your directors
will continue to be very careful about the quality of nursing
home businesses they are purchasing on your behalf.
- Fixed Income Securities
Cazenove have concentrated on short-dated (approximately three
years) fixed interest securities of high credit quality (ie
"safety first"). Their strategy is to invest sums of between
#200,000 and #600,000 in approximately six UK bonds. Current
investments are with Marks & Spencer, GEC and similar quality
covenants.
Trading Results
Although this interim statement is in respect of the period
from incorporation (on 27 January 1997) to 31 December 1997,
the offer for subscription closed on 12 May 1997, so the
company has only effectively been trading for approximately
eight months. During the period income was #445,000 and net
profit before tax was #387,000. The vast majority of this
income was derived from funds awaiting investment, which were
used to purchase treasury bills or held in bank deposits. The
remaining 30% of funds were invested by Cazenove.
Dividends
A first interim dividend of 0.8 pence per share (1.0 pence per
share gross) was paid on 29 September 1997.
A second interim dividend of 1.6 pence per share will be paid
on 21 May 1998 to shareholders on the register at 24 April
1998. The dividend will be paid gross at a rate of 2.0 pence
per share, as the tax credit will be reclaimed by the Company
on behalf of shareholders.
Balance Sheet
The net asset value at 31 December 1997 was 95.5 pence per
share compared to an initial net asset value of 95.0 pence per
share. All investments held at 31 December 1997 are valued in
accordance with BVCA Guidelines.
Outlook
We continue to generate a strong flow of investment
opportunities and expect steady investment progress during the
second half of the period. The economic background continues
to provide us with stable conditions in which to develop the
potential of Downing Healthcare VCT.
Christopher Norland
Chairman
Unaudited statement of total return (incorporating the revenue
account) from incorporation on 27 January 1997 to 31 December
1997
Revenue Capital Total
#'000 #'000 #'000
Gains on investments - 4 4
Income 445 - 445
Provision for management incentive (20) (20) (40)
fees
Other expenses (22) - (22)
Net profit before taxation 403 (16) 387
Taxation (111) 5 (106)
Net profit after taxation 292 (11) 281
Net dividend First interim - 0.8p (78) - (78)
per share net
Second interim - 1.6p per (157) - (157)
share net
Retained profit 57 (11) 46
Earnings per share 3.0p (0.1p) 2.9p
Unaudited summary balance sheet as at 31 December 1997
#'000
Fixed asset investments 2,607
Current assets
Debtors 187
Cash and short term investments 7547
Creditors: due within one year (974)
Net current assets 6,760
Net assets 9,367
Capital & reserves
Called up share capital 4,906
Share premium account 4,415
Capital reserve unrealised (11)
Revenue reserve 57
Total shareholders' funds 9,367
Net asset value per share 95.5p
Notes to the financial statements
1. The net asset value per share at 31 December 1997 has
been calculated on net assets of #9,367,000.
2. The calculation of earnings per share for the period is
based on the net revenue after tax divided by the
weighted average number of shares in issue during the
period.
3. The unaudited financial statements set out above do not
constitute statutory accounts, within the meaning of
section 240 of the Companies Act 1985, and have not been
delivered to the Registrar of Companies.
4. Copies of the interim results are being sent to
shareholders on 9 April 1998. Further copies can be
obtained from the Company's Registered Office at 69
Eccleston Square, London, SW1V 1PJ
Enquiries:
Nick Lewis 0171 416 7780
Tony McGing 0171 416 7780
END
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