TIDMDP3C
Downing Planned Exit VCT 3 plc
Half-Yearly Report for the six months ended 31 July 2012
PERFORMANCE SUMMARY
'C' Share pool 31 Jul 31 Jan 31 Jul
2012 2012 2011
pence pence pence
Net asset value per 'C' Share 90.8 91.5 88.6
Net asset value per 'A' Share 0.1 0.1 0.1
Cumulative distributions per 'C' Share 15.0 12.5 10.0
---------- ---------- ---------
Total return per 'C' Share and 'A' Share 105.9 104.1 98.7
---------- ---------- ---------
'D' Share pool 31 Jul 31 Jan 31 Jul
2012 2012 2011
pence pence pence
Net asset value per 'D' Share 80.3 83.3 91.6
Net asset value per 'E' Share 0.1 0.1 0.1
Cumulative distributions per 'D' Share 10.0 7.5 5.0
---------- ---------- ---------
Total return per 'D' Share and 'E' Share 90.4 90.9 96.7
---------- ---------- ---------
'F' Share pool 31 Jul 31 Jan 31 Jul
2012 2012 2011
Pence pence pence
Net asset value per 'F' Share 94.4 n/a n/a
---------- ---------- ---------
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present my report for the six months ended 31 July 2012. The
Company's 'C' Share and 'D' Share pools have now completed their investment
phase and so have seen little investment activity in the period. This is in
contrast to the new 'F' Share pool which has continued to raise new funds and
has been a very active investor during the period.
Fundraising
As at 31 July 2012, the 'F' Share offer for subscription with its sister
company, Downing Planned Exit VCT 2 plc, had raised gross proceeds of
approximately GBP18 million or GBP8.9 million per company. The offer has been
extended from the original closing date and will now close on 28 September 2012.
Net asset values
'C' Share pool
At 31 July 2012, the net asset value ("NAV") for a combined holding of one 'C'
Share and one 'A' Share was 90.9p, an increase of 1.8p (1.9%) over the period.
Total Return (NAV plus dividends paid to date) is now 105.9p for a combined
holding.
'D' Share pool
At 31 July 2012, the net asset value ("NAV") for a combined holding of one 'D'
Share and one 'E' Share was 80.4p, a decrease of 0.5p (0.6%) over the period.
Total Return (NAV plus dividends paid to date) is now 90.4p for a combined
holding.
'F' Share pool
At 31 July 2012, the net asset value ("NAV") per 'F' Share was 94.4p, a decrease
of 0.1p from the initial NAV after issue costs.
Dividends
In line with the Company's stated policies, interim dividends will be paid as
follows:
'C' Shares 2.5p per share
'D' Shares 2.5p per share
'F' Shares 5.0p per share
Each of these dividends will be paid on 30 November 2012 to Shareholders on the
register at 2 November 2012.
Ordinary Share pool
The Company's original share pool, the Ordinary Share pool, completed returning
funds to Shareholders in 2010. Proposals to wind up the Ordinary Shares were
approved by Shareholders at a meeting on 25 July 2012 and they have now been
cancelled.
Share buybacks
The Company has a general policy of buying in for cancellation its own shares
that become available in the market. No shares were purchased in the period for
cancellation.
The current policy is that the Company will buy in any 'C' Shares, 'A' Shares,
'D' Shares or 'E' Shares at approximately a 10% discount to the latest published
NAV of those share classes. In respect of the 'F' Shares, any such purchases
will be undertaken at a price equal to the latest published NAV (i.e. at nil
discount) until 1 October 2016. Buybacks are subject to regulatory restrictions
and other factors such as availability of liquid funds.
Outlook
With approximately two years to go until the 'C' Share pool seeks to start
realising investments and returning funds to shareholders, and three years in
the case of the 'D' Share pool, any new investment activity by these pools is
now expected to be very limited.
The 'C' Share portfolio has reasonable prospects for continuing to make further
progress as it moves towards the exit date. The 'D' Share portfolio has suffered
from specific issues with two investments. These have now stabilised although
some value has been lost. The Board is satisfied with the remainder of the 'D'
Share portfolio and believes there are reasonable prospects for NAV growth from
here.
It is early days for the 'F' Share pool and the process of building the
investment portfolio has some way to go. The Manager reports that it is
continuing to see a steady flow of promising investment opportunities so we
should expect a significant level of activity over the remainder of the year.
Hugh Gillespie
Chairman
26 September 2012
INVESTMENT MANAGER'S REPORT
'C' SHARE POOL
Investment activity
The 'C' Share pool is now fully qualifying; accordingly, no new qualifying
investments were made during the period.
The majority of the 'C' Share portfolio has performed well during the first half
of the year with a net valuation uplift of GBP76,000 recognised at the interim
stage.
At the interim stage, the 'C' Share pool commissioned independent valuations for
Atlantic Dogstar Limited, East Dulwich Tavern Limited and Westow House Limited
which all operate pubs in South London. The valuations resulted in uplifts in
value of GBP50,000, GBP41,000 and GBP64,000 respectively. All three pubs are
performing well and are significantly surpassing their original business plans.
A GBP79,000 write down in value was made to Honeycombe Pubs VCT Limited which owns
a bar in Burnley, Lancashire. An independent valuation was commissioned which
indicated that the value of the property had fallen below the loan stock cost
and a reduction in value was recognised.
Net asset value
At 31 July 2012, the NAV per 'C' Share stood at 90.8p and per 'A' Share at
0.1p, producing a combined total of 90.9p. This is an increase of 1.8p (1.9%)
since the previous year end of 31 January 2012 (after adjusting for dividends of
2.5p per 'C' Share paid during the period). Total return (NAV plus cumulative
dividends paid) was 105.9p per 'C' Share and 'A' Share at 31 July 2012.
Results and dividend
The profit on ordinary activities for the 'C' Shares, after taxation, for the
period was GBP126,000, comprising a revenue profit of GBP50,000 and a capital profit
of GBP76,000.
The Company will pay an interim dividend of 2.5p per 'C' Share, on 30 November
2012, to 'C' Shareholders on the register at 2 November 2012.
Outlook
We are pleased with the progress made by the 'C' Share portfolio to date and
believe that the there is potential for further growth before we start to seek
realisations and commence returning funds to Shareholders in 2014. Trading
conditions do, however, remain challenging for most businesses and therefore
close monitoring of all portfolio companies will remain a priority.
Downing LLP
26 September 2012
SUMMARY OF INVESTMENT PORTFOLIO
'C' SHARE POOL
as at 31 July 2012
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP'000 GBP'000 GBP'000
Qualifying investments
Bijou Wedding Venues Limited 815 884 - 13.6%
Future Biogas (SF) Limited 627 703 - 10.7%
Atlantic Dogstar Limited 429 654 50 10.0%
Domestic Solar Limited* 500 500 - 7.7%
Redmed Limited* 438 437 - 6.7%
Westow House Limited 304 395 64 6.1%
East Dulwich Tavern Limited 344 385 41 5.9%
Quadrate Catering Limited 330 330 - 5.1%
Quadrate Spa Limited* 323 323 - 5.0%
Ecossol Limited 250 250 - 3.8%
The 3D Pub Co Limited 267 187 - 2.9%
Mosaic Spa and Health Club Limited* 125 125 - 1.9%
Chapel Street Services Limited 50 50 - 0.8%
Chapel Street Food and Beverage 50 50 - 0.8%
Limited
Non-qualifying investments
Hoole Hall Country Club Holdings 581 581 - 8.9%
Limited
The Thames Club Limited 500 500 - 7.7%
Honeycombe Pubs VCT Limited 175 96 (79) 1.5%
Vermont Developments Limited 25 25 - 0.4%
Commercial Street Hotel Limited 2 2 - 0.0%
------- --------- ----------- ----------
6,135 6,477 76 99.5%
------- -----------
Cash at bank and in hand 44 0.5%
--------- ----------
Total 6,521 100%
--------- ----------
SUMMARY OF INVESTMENT MOVEMENTS
'C' SHARE POOL
for the six months ended 31 July 2012
Additions GBP'000
Quadrate Spa Limited* 13
--------
* Partially qualifying investment
INVESTMENT MANAGER'S REPORT
'D' SHARE POOL
Investment activity
The 'D' Share pool made two new qualifying investments (including partially
qualifying investments or investments that will become qualifying in due course)
and two non-qualifying investments during the period at a total cost of
GBP1,167,000, details of which are set out below.
A further investment of GBP125,000 was made in Kidspace Adventure Holdings
Limited, to redevelop an indoor and outdoor children's play centre known as
Hobbledown Farm, which opened in July 2012.
In February 2012, a GBP467,000 non-qualifying investment was made in Liverpool
Nurseries Holdings Limited to purchase the assets of one of the Company's
existing investments, Gingerbread Pre-Schools (UK) Limited, after the original
investment encountered some difficulties and went into administration. As part
of the reorganisation, the existing manager and investment partner has been
dismissed. A new manager has been appointed and the nurseries are now starting
to make progress. A loss against cost of GBP181,000 arose on the reorganisation.
A GBP150,000 non-qualifying loan was made to Aminghurst Limited to fund the
continued build of the hotel and apartment development near Salcombe, Devon.
The majority of the 'D' Share pool investments have performed in line with
expectations over the period and continued to be valued at original cost. There
have, however, been two adjustments.
An uplift in value of GBP13,750 was recognised on the Alpha Schools Holdings
Limited, an independent primary school operator, to reflect that the business is
performing well and in line with expectations.
A further reduction in value was made to Camandale Limited which owns two pubs,
The Riverbank and The Monkey Bar, located in Kilmarnock, Scotland. The Monkey
Bar was closed in January 2012 and no buyer has yet been found for the property.
The Riverbank, which remains open, is still not performing to expectations and,
accordingly, a cautionary GBP46,000 write down in value was made at the interim.
In total, the portfolio produced net unrealised capital losses of GBP31,500 for
the six months.
Net asset value
At 31 July 2012, the NAV per 'D' Share stood at 80.3p and per 'E' Share at
0.1p, producing a combined total of 80.4p. This is a small decrease of 0.5p
(0.6%) since the previous year end of 31 January 2012 (after adjusting for
dividends of 2.5p per 'D' Share paid during the period). Total return (NAV plus
cumulative dividends paid) was 90.4p per 'D' Share and 'E' Share at 31 July
2012.
Results and dividend
The loss on ordinary activities for the 'D' Shares, after taxation, for the
period was GBP51,000, comprising a revenue loss of GBP19,000 and a capital loss of
GBP32,000.
The Company will pay an interim dividend of 2.5p per 'D' Share, on 30 November
2012, to 'D' Shareholders on the register at 2 November 2012.
Outlook
The problems with Camandale and Gingerbread Pre-Schools have been a setback for
the pool. After a period of intensive management of both investments, these
businesses have now been brought under control and we do not expect to see any
further loss of value. The remainder of the 'D' Share portfolio is still at a
relatively early stage, but we are satisfied with progress to date and believe
there is good potential for growth ahead of 2015, when the pool will seek to
start realising its investments.
Downing LLP
26 September 2012
SUMMARY OF INVESTMENT PORTFOLIO
'D' SHARE POOL
as at 31 July 2012
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP'000 GBP'000 GBP'000
Qualifying investments
Future Biogas (Reepham Road) 748 748 - 9.2%
Limited*
Quadrate Catering Limited 441 441 - 5.4%
Quadrate Spa Limited* 436 436 - 5.4%
Domestic Solar Limited* 400 400 - 4.9%
Alpha Schools (Holdings) Limited 367 381 14 4.7%
Kidspace Adventures Holdings 375 375 - 4.6%
Limited*
Mosaic Spa and Health Club (Shrewsbury) 350 350 - 4.3%
Limited
Avon Solar Energy Limited 250 250 - 3.1%
Ecossol Limited 250 250 - 3.1%
Green Electricity Generation 250 250 - 3.1%
Limited
West Country Solar Solutions 250 250 - 3.1%
Limited
Slopingtactic Limited 195 195 - 2.4%
Progressive Energies Limited 170 170 - 2.1%
Ridgeway Pub Company Limited 136 136 - 1.7%
Mosaic Spa and Health Club 125 125 - 1.5%
Limited*
Camandale Limited* 561 113 (46) 1.4%
Non-qualifying investments
Aminghurst Limited 2,150 2,150 - 26.4%
Liverpool Nurseries (Holdings) 467 467 - 5.7%
Limited
Retallack Surfpods Limited 250 250 - 3.1%
Fenkle Street LLP 147 147 - 1.8%
Kidspace Adventures Limited 135 135 - 1.7%
Commercial Street Hotel Limited 100 100 - 1.2%
------------- --------- ----------- ----------
8,553 8,119 (32) 99.9%
------------- -----------
Cash at bank and in hand 8 0.1%
--------- ----------
Total 8,127 100.0%
--------- ----------
* Partially qualifying investment
SUMMARY OF INVESTMENT MOVEMENTS
'D' SHARE POOL
for the six months ended 31 July 2012
Additions GBP'000
Qualifying investments
Kidspace Adventures Holdings Limited* 125
Quadrate Spa Limited* 17
Non-qualifying investments
Liverpool Nurseries (Holdings) Limited 467
Liverpool Nurseries (House) Limited 203
Aminghurst Limited 150
Liverpool Nurseries (Greenbank) Limited 138
Liverpool Nurseries(Cottage) Limited 67
--------
Total 1,167
--------
Total
Market Loss realised
value at Disposal against gain/
Disposals Cost 01/02/12** proceeds cost (loss)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Qualifying investments
Gingerbread Pre-Schools (UK) Limited 576 395 395 (181) -
Non-qualifying investments
Liverpool Nurseries (House) Limited 203 203 203 - -
Liverpool Nurseries (Greenbank)
Limited 138 138 138 - -
Liverpool Nurseries(Cottage) Limited 67 67 67 - -
Hoi Polloi Pub Co Limited 60 60 60 - -
-------------------------------------------
Total 1,044 863 863 (181) -
-------------------------------------------
* Partially qualifying investment
**Adjusted for purchases in the year
INVESTMENT MANAGER'S REPORT
'F' SHARE POOL
During the period, 8.9 million 'F' Shares were issued under the offer for
subscription, generating net proceeds of GBP8.4 million after share issue costs.
The task of investing these new funds is now underway.
Investment activity
During the 'F' Share pool's initial period, 13 new investments were made at a
total cost of GBP4.4 million. Of these investments, five were VCT qualifying.
Brief details of the largest of these qualifying investments (or investments
that will become qualifying in due course) are as follows:
GBP816,000 was invested in Tor Solar PV Limited which owns a portfolio of solar
panels on farms in the south west of the UK.
Three investments were made in City Falkirk Limited, Fubar Stirling Limited and
Cheers Dumbarton Limited totalling GBP737,000. Each of these companies owns and
operates a Scottish nightclub. The clubs are managed by Lochrise Limited which
is associated with the Castle Leisure Group, an experienced operator in the
region.
A GBP560,000 investment was made in Vulcan Renewables Limited which is developing
a 2MW gas injection biogas plant near Doncaster. Through an anaerobic digestion
process, biogas is produced which is used to generate electricity. The company
benefits from the receipt of Feed-in Tariffs and payments for electricity
exported to the National Gas Grid.
GBP200,000 was invested in Fresh Green Power Limited and GBP100,000 was invested in
Green Energy Production Limited. Both companies install, own and manage solar
panels on domestic rooftops. Both businesses benefit from the receipt of Feed-in
Tariffs from solar energy generation.
In addition to the above, a number of non-qualifying investments were made in
the form of secured loans. These helped to generate investment income on funds
ahead of them being employed in VCT qualifying investments.
At this early stage, the investment portfolio has a disproportionately high
exposure to a small number of business sectors. This has resulted from
investment opportunities that have presented themselves and we expect the
portfolio to become more diversified and better balanced as the task of
investing funds continues.
Results and dividend
At 31 July 2012, the net asset value ("NAV") per 'F' Share stood at 94.4p,
compared to an initial NAV of 94.5p, a fall of 0.1p (0.1%).
The loss on ordinary activities for the 'F' Shares, after taxation, for the
period was GBP8,000, relating wholly to a revenue loss.
In accordance with the policy set out in the 'F' Share prospectus, the Company
will pay an interim dividend of 5.0p per 'F' Share on 30 November 2012 to 'F'
Shareholders on the register at 2 November 2012.
Outlook
The task of building the 'F' Share investment portfolio is at an early stage but
we are satisfied with the progress made to date in investing the funds. The
general economic climate remains challenging, but we continue to see good
quality deal flow which we believe will allow us to build a portfolio which can
deliver the targeted returns to Shareholders over the life of the pool.
Downing LLP
26 September 2012
SUMMARY OF INVESTMENT PORTFOLIO
'F' SHARE POOL
as at 31 July 2012
Unrealised % of
gain/(loss) portfolio
Cost Valuation in period by value
GBP'000 GBP'000 GBP'000
Qualifying investments
Tor Solar PV Limited* 816 816 - 10.1%
Vulcan Renewables Limited 560 560 - 7.0%
City Falkirk Limited* 421 421 - 5.2%
Fresh Green Power Limited 200 200 - 2.5%
Green Energy Production UK Limited 100 100 - 1.2%
Non-qualifying investments
Baron House Developments LLP 625 625 - 7.8%
Clareville Street LLP 500 500 - 6.2%
Holdland House Developments Ltd 300 300 - 3.7%
West Tower Holdings Limited 290 290 - 3.6%
Fubar Stirling Limited 268 268 - 3.3%
Kidspace Adventures Holdings Limited 250 250 - 3.1%
Cheers Dumbarton Limited 48 48 - 0.6%
Lochrise Limited 13 13 - 0.2%
------- --------- ----------- ----------
4,391 4,391 - 54.5%
------- -----------
Cash at bank and in hand 3,630 45.5%
--------- ----------
Total 8,021 100.0%
--------- ----------
* Partially qualifying investment
All of the above investments were additions in the period.
Market Gain Total
value at Disposal against realised
Disposals Cost 01/02/12** proceeds cost gain
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-qualifying investments
Baron House Developments LLP 75 75 75 - -
-------------------------------------------
** Adjusted for purchases in the year
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 July 2012
31 Jul 31 Jan
31 Jul 2012 2011 2012
Total Total Total
'C' 'D' 'F' (inc (inc (inc
Shares Shares Shares Ords) Ords) Ords)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted investments 6,477 8,119 4,391 18,987 13,774 14,240
Current assets
Debtors 108 26 399 533 1,164 1,391
Cash at bank and in hand 44 8 3,630 3,682 949 672
--------------------------------- -------- -------
152 34 4,029 4,215 2,113 2,063
Creditors: amounts falling
due within one year
(109) (120) (53) (282) (353) (213)
--------------------------------- -------- -------
Net current assets 43 (86) 3,976 3,933 1,760 1,850
--------------------------------- -------- -------
Net assets 6,520 8,033 8,367 22,920 15,534 16,090
--------------------------------- -------- -------
Capital and reserves
Called up share capital 18 25 9 153 144 144
Share capital to be issued - - - - - 1,178
Capital redemption reserve 4 - - 5 5 5
Special reserve 5,993 8,726 - 14,719 15,480 15,148
Share premium account - - 8,366 8,366 - -
Revaluation reserve 343 (616) - (273) (133) (317)
Capital reserve - realised 53 - - 48 - 53
Revenue reserve 109 (102) (8) (98) 38 (121)
--------------------------------- -------- -------
Total equity shareholders'
funds
6,520 8,033 8,367 22,920 15,534 16,090
--------------------------------- -------- -------
Basic and diluted net asset value
per:
'C' Share 90.8p 88.6p 91.5p
'A' Share 0.1p 0.1p 0.1p
'D' Share 80.3p 91.6p 83.3p
'E' Share 0.1p 0.1p 0.1p
'F' Share 94.4p n/a n/a
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
31 Jul 31 Jan
31 July 2012 2011 2012
Total Total Total
'C' 'D' 'F' (inc (inc (inc
Shares Shares Shares Ords) Ords) Ords)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Shareholders' funds 6,574 8,333 1,178 16,090 16,033 16,033
Issue of shares - - 8,862 8,862 - -
Share issue costs - - (487) (487) - -
Total recognised gains/
(losses) for the year
126 (51) (8) 62 110 (83)
Share capital to be issued - - (1,178) (1,178) - 1,178
Dividends (179) (250) - (429) (609) (1,038)
---------------------------------- -------- --------
Closing Shareholders' funds 6,521 8,032 8,367 22,920 15,534 16,090
------------------------------ -------- --------
INCOME STATEMENT
for the six months ended 31 July 2012
Company Total (including Ordinary Share pool)
Year
ended
Six months ended Six months ended 31 Jan
2012
31 Jul 2012 31 Jul 2011
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 295 - 295 573 - 573 676
Gains/(losses) on
investments
- realised - (5) (5) - - - 53
- unrealised - 44 44 - (133) (133) (317)
-------------------------- ----------------------- -------
295 39 334 573 (133) 440 412
Investment management (108) -
fees (145) - (145) (108) (211)
Other expenses (110) - (110) (109) - (109) (199)
-------------------------- ----------------------- -------
Return on ordinary
activities
(133)
before taxation 40 39 79 356 223 2
Taxation (17) - (17) (113) - (113) (85)
-------------------------- ----------------------- -------
Return attributable to
equity
shareholders 23 39 62 243 (133) 110 (83)
-------------------------- ----------------------- -------
Return per 'C' Share 0.7p 1.1p 1.8p 0.8p - 0.8p 6.2p
Return per 'A' Share - - - - - - -
Return per 'D' Share (0.2p) (0.3p) (0.5p) 1.9p (1.3p) 0.6p (5.3p)
Return per 'E' Share - - - - - - -
Return per 'F' Share (0.1p) - (0.1p) n/a n/a n/a n/a
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains/losses are recognised in the Income Statement as noted above.
'C' Shares
Year
ended
Six months ended Six months ended 31 Jan
2012
31 Jul 2012 31 Jul 2011
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 151 - 151 160 - 160 337
Gains on investments
- realised - - - - - - 53
- unrealised - 76 76 - - - 267
----------------------- ----------------------- ------
151 76 227 160 - 160 657
Investment management fees (44) - (44) (45) - (45) (88)
Other expenses (40) - (40) (37) - (37) (74)
----------------------- ----------------------- ------
Return on ordinary
activities
before taxation 67 76 143 78 - 78 495
Taxation (17) - (17) (25) - (25) (51)
----------------------- ----------------------- ------
Return attributable to
equity
shareholders 50 76 126 53 - 53 444
----------------------- ----------------------- ------
'D' Shares
Year
ended
Six months ended Six months ended 31 Jan
2012
31 Jul 2012 31 Jul 2011
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 85 - 85 413 - 413 339
Losses on investments
- realised - - - - - - -
- unrealised - (32) (32) - (133) (133) (584)
----------------------- ----------------------- ------
85 (32) 53 413 (133) 280 (245)
Investment management fees (56) - (56) (63) - (63) (123)
Other expenses (48) - (48) (72) - (72) (125)
----------------------- ----------------------- ------
Return on ordinary
activities
before taxation (19) (32) (51) 278 (133) 145 (493)
Taxation - - - (88) - (88) (34)
----------------------- ----------------------- ------
Return attributable to
equity
shareholders (19) (32) (51) 190 (133) 57 (527)
----------------------- ----------------------- ------
'F' Shares
Year
ended
Six months ended Six months ended 31 Jan
2012
31 Jul 2012 31 Jul 2011
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 59 - 59 - - - -
Gains on investments
- realised - - - - - - -
- unrealised - - - - - - -
----------------------- ----------------------- ------
59 - 59 - - - -
Investment management fees (45) - (45) - - - -
Other expenses (22) - (22) - - - -
----------------------- ----------------------- ------
Loss on ordinary
activities
before taxation (8) - (8) - - - -
Taxation - - - - - - -
----------------------- ----------------------- ------
Loss attributable to
equity
shareholders (8) - (8) - - - -
----------------------- ----------------------- ------
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 July 2012
31 Jul 31 Jan
2012
31 Jul 2012 2011
Total Total Total
'C' 'D' 'F' (inc (inc (inc
Shares Shares Shares Ords) Ords) Ords)
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash
inflow/(outflow) 57 69 19 145 (350) 519
1
from operating
activities
-------------------------------- --------- --------
Taxation
Corporation tax paid - - - - - (120)
Capital expenditure
Purchase of investments (13) (1,167) (4,466) (5,646) (5,321) (8,469)
Sale of investments - 863 75 938 4,636 7,187
-------------------------------- --------- --------
Net cash outflow from
capital expenditure (13) (304) (4,391) (4,708) (685) (1,282)
-------------------------------- --------- --------
Equity dividends paid (179) (250) - (429) (609) (1,038)
-------------------------------- --------- --------
Net cash outflow before (135) (485) (4,372) (4,992) (1,644) (1,921)
financing
Financing
Proceeds from share - - 8,489 8,489 - -
issue
Share issue costs - - (487) (487) - - -
-------------------------------- --------- --------
Net cash inflow from - - 8,002 8,002 - -
financing
-------------------------------- --------- --------
(Decrease)/increase 2 (135) (485) 3,630 3,010 (1,644) (1,921)
in cash
-------------------------------- --------- --------
Notes to the cash flow statement:
1 Cash inflow from operating activities and returns on
investments
Return on ordinary
activities before 143 (51) (8) 79 223 2
taxation
(Gains)/losses on (76) 32 - (39) 133 264
investments
Decrease/(increase) in 6 72 (26) 52 (714) 238
other debtors
(Decrease)/increase in (16) 16 53 53 8 15
other creditors
-------------------------------- --------- --------
Net cash
inflow/(outflow) from 57 69 19 145 (350) 519
operating activities
-------------------------------- --------- --------
2 Analysis of net funds
Beginning of period 179 493 - 672 2,593 2,593
Net cash (135) (485) 3,630 3,010 (1,644) (1,921)
(outflow)/inflow
-------------------------------- --------- --------
End of period 44 8 3,630 3,682 949 672
-------------------------------- --------- --------
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half-yearly results cover the six months to 31 July 2012
and have been prepared in accordance with the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture Capital Trusts"
revised January 2009 and in accordance with the accounting policies set out in
the statutory accounts for the year ended 31 January 2012, which were prepared
under UK Generally Accepted Accounting Practice.
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
4. The comparative figures are in respect of the six month period ended 31
July 2011 and the year ended 31 January 2012 respectively.
5. Dividends
Six months ended Year ended
31 July 2012 31 Jan 2012
Per share Revenue Capital Total Total
Paid in year pence GBP'000 GBP'000 GBP'000 GBP'000
'C' Shares
2011 Final 5.0p - - - 359
2012 Interim 2.5p - - - 179
2012 Final 2.5p - 179 179 -
----------- ----------- --------- ----------
- 179 179 538
----------- ----------- --------- ----------
'D' Shares
2011 Final 2.5p - - - 250
2012 Interim 2.5p - - - 250
2012 Final 2.5p - 250 250 -
----------- ----------- --------- ----------
- 250 250 500
----------- ----------- --------- ----------
No dividends have been paid or declared in respect of the 'A' Shares, 'E' Shares
or 'F' Shares.
6. Basic and diluted return per share
'C' 'A' 'D' 'E' 'F'
Shares Shares Shares Shares Shares
Revenue return per share based on:
Net revenue after taxation
( GBP'000) 50 - (19) - (8)
----------------------------------------------------
Capital return/(loss) per share based on:
Net capital gain for the
76 - (32) - -
financial year ( GBP'000)
----------------------------------------------------
Weighted average number of
7,173,376 10,760,064 9,994,109 14,994,862 6,498,803
shares in issue
----------------------------------------------------
7. Net asset value per share
Shares in issue Net asset value
per share GBP'000
'C' Shares 7,173,376 90.8p 6,509
'A' Shares 10,760,064 0.1p 11
'D' Shares 9,994,109 80.3p 8,018
'E' Shares 14,994,862 0.1p 15
'F' Shares 8,862,142 94.4p 8,367
Ordinary Shares * 10,064,617 - -
---------
22,920
---------
* The Ordinary Shares have been cancelled since the period end.
8. Reserves
Capital Share Capital
redemption premium Special Revenue reserve Revaluation
reserve reserve reserve reserve - realised reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February 2012 5 - 15,148 (121) 53 (317)
Issue of shares - 8,853 - - - -
Share issue costs - (487) - - - -
Net (loss)/gain on - - - - (5) 44
investments
Expenses capitalised - - - - - -
Dividends paid - - - - (429) -
Transfer between - - (429) - 429 -
reserves
Retained revenue - - - 23 - -
--------------------------------------------------------
At 31 July 2012 5 8,366 14,719 (98) 48 (273)
--------------------------------------------------------
The Special reserve, Capital reserve - realised and Revenue reserve are all
distributable reserves. The Revaluation reserve includes losses of GBP607,000
which are included in the calculation of distributable reserves. Total
distributable reserves are GBP14,062,000 ( GBP14,416,000 at 31 January 2012).
9. The unaudited condensed financial statements set out herein do not
constitute statutory accounts within the meaning of Section 434 of the Companies
Act 2006 and have not been delivered to the Registrar of Companies. The figures
for the year ended 31 January 2012 have been extracted from the financial
statements for that year, which have been delivered to the Registrar of
Companies; the Auditor's report on those financial statements was unqualified.
10. The Directors confirm that, to the best of their knowledge, the half-yearly
financial statements have been prepared in accordance with the "Statement: Half-
Yearly Financial Reports" issued by the UK Accounting Standards Board and the
half-yearly financial report includes a fair review of the information required
by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, 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,
and a description of the principal risks and uncertainties for the remaining six
months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period, and any changes in the related
party transactions described in the last annual report that could do so.
11. Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is required, in the
Company's half-yearly results, to report on principal risks and uncertainties
facing the Company over the remainder of the financial year.
The Board concluded that the key risks facing the Company over the remainder of
the financial period are as follows:
(i) Compliance risk of failure to maintain approval as a VCT; and
(ii) Investment risk associated with investing in small and immature
businesses.
The Company's compliance with the VCT regulations is continually monitored by
the Manager, who reports regularly to the Board on the current position. The
Company has also appointed PricewaterhouseCoopers to provide regular reviews and
advice in this area.
In order to make VCT qualifying investments, the Company has to invest in small
businesses which are often immature. It also has a limited period in which it
must invest the majority of its funds. The Manager follows a rigorous process in
vetting and careful structuring of new investments, including taking a charge
over the assets of the business wherever possible and, after an investment is
made, closely monitoring the business.
The Board is satisfied that these approaches provide satisfactory management of
the key risks.
12. Going concern
The Directors have reviewed the Company's financial resources at the period end
and conclude that the Company is well placed to manage its business risks.
The Board confirms that it is satisfied that the Company has adequate resources
to continue in business for the foreseeable future. For this reason, the Board
believes that the Company continues to be a going concern and that it is
appropriate to apply the going concern basis in preparing the financial
statements.
13. Copies of the unaudited half-yearly report will be sent to Shareholders
shortly. Further copies can be obtained from the Company's registered office or
will be available for download from www.downing.co.uk.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Downing Planned Exit VCT 3 PLC via Thomson Reuters ONE
[HUG#1643893]
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