TIDMPPE
PROVEN PLANNED EXIT VCT PLC
Half-yearly report
For the six months ended 31 July 2015
Financial Summary
Ordinary Shares 31 July 2015 31 July 2014 31 January 2015
Net asset value per share ("NAV") 73.2p 76.6p 76.6p
Dividends paid since launch 27.0p 18.0p 24.0p
Total return (NAV plus dividends 100.2p 94.6p 100.6p
paid since launch)
Mid market share price 73.5p 75.5p 69.5p
'A' Shares 31 July 2015 31 July 2014 31 January 2015
Net asset value per share 0.1p 0.1p 0.1p
("NAV")
Dividends paid since launch - - -
Total return (NAV plus 0.1p 0.1p 0.1p
dividends paid since launch)
Mid market share price 0.1p 0.1p 0.1p
Dividend history for Ordinary Shares (since launch)
Ordinary Share dividends paid since inception Pence per share
For the period ended 31 January 2012 6.0
For the year ended 31 January 2013 6.0
For the year ended 31 January 2014 6.0
For the year ended 31 January 2015 9.0
Cumulative dividends paid to date 27.0
For the year ending 31 January 2016
Declared interim dividend payable on 23 October 2015 30.0
Chairman's Statement
Introduction
I have pleasure in presenting the half year report for ProVen Planned
Exit VCT plc (the "Company") for the six months ended 31 July 2015.
Portfolio activity and valuation
At 31 July 2015, your Company's venture capital investment portfolio
comprised four venture capital investments at a cost of GBP1.7 million
and a valuation of GBP1.8 million. In addition, the Company had net
current assets of GBP1.7 million, predominantly in cash.
The six month period was notable for three realisations, two of which,
Eagle-i Music and SPC International, returned the original investment
cost and interest income during the holding period and the third, Long
Eaton Healthcare, which in addition to interest income, also delivered
an attractive capital gain. These realisations reflect the effort made
by your Investment Manager in realising the investments in line with the
Company's stated intention of being a limited life VCT with an intended
life of between five and six years.
The investment portfolio continues to be valued in line with 31 January
2015 valuations with the exception of Cross Solar PV Limited, which has
been reduced slightly. The decline was partially offset by a further
dividend received by the Company.
Further detail on the portfolio activity is provided in the Investment
Manager's Review.
Results
The loss on activities after taxation for the six month period to 31
July 2015 was GBP15,000, comprising a revenue profit of GBP77,000 and a
capital loss of GBP92,000. The net asset value total return, comprising
net asset value and dividends paid since launch, was 100.2p per Ordinary
Share and 0.1p per 'A' Share. The Ordinary Share return represents a
slight decrease of 0.5% on the opening net asset value at the beginning
of the year, after adjusting for dividends paid during the period.
Dividends
The Company paid a final dividend of 3.0p per Ordinary Share for the
year ended 31 January 2015 on 26 June 2015, which took the total
dividends paid to Ordinary Shareholders to 27.0p.
Following the successful realisations during the period, I am pleased to
announce the payment of an enhanced interim dividend of 30.0p per
Ordinary Share to be paid on 23 October 2015 to Shareholders on the
register as at 9 October 2015. No dividend will be payable on the 'A'
Shares. This takes the overall Ordinary Share dividends paid to 57.0p,
or over 80% of a Shareholder's investment cost (net of 30% initial
income tax relief). The enhanced dividend, which is consistent with the
limited life of the Company, would not be possible without the
Investment Manager's judgement and efforts in investment selection,
monitoring and achieving realisations in a timely manner.
Share buybacks
The Directors intend that, in the five years following the first
allotment of shares, the Company will operate a policy of buying back
its own shares for cancellation at a zero discount to net asset value.
It should be noted, however, that a disposal of Venture Capital Trust
("VCT") shares within five years from allotment may result in the loss
of the initial income tax relief. Given the intended life of the Company,
it is not intended that any shares will be bought back after the fifth
anniversary of the first allotment of shares.
No shares were purchased by the Company during the period. Shareholders
who are considering selling their shareholding may wish to contact the
Company's brokers, Panmure Gordon, prior to any sale.
VCT legislation
The Finance Bill published on 15 July 2015, following the second 2015 UK
Budget, includes a number of proposed changes to the VCT rules. These
are mainly designed to bring the legislation in line with the EU State
Aid Risk Finance Guidelines which were revised last year and are
expected to come into effect from Royal Assent of the Finance Bill which
is anticipated to be later this year.
The changes predominately focus around the type of investments VCTs will
be permitted to make going forward and as the Company is no longer
pursuing investment opportunities, your Board believes that these
changes will not have an adverse impact on the Company.
Outlook
The Company has made good progress in the six months to 31 July 2015,
realising three out of the Company's seven investments at cost or above.
This has allowed the enhanced interim dividend of 30.0p to be declared,
which, as previously mentioned, will take the total dividends paid to
over 80% of a Shareholder's initial net investment. The Investment
Manager is focussed on achieving realisations for the remaining
investments so that the Company can proceed to an orderly wind up and
liquidation. The timing of these realisations is uncertain, given that
the investments are unquoted, but your Board is optimistic that they
will be achieved within the five to six year timeframe set out in the
original prospectus.
Peter L R Hewitt
Chairman
28 September 2015
Investment Manager's Review
Introduction
We have pleasure in presenting our half year review for ProVen Planned
Exit VCT plc (the "Company") for the six month period to 31 July 2015.
Beringea LLP is a specialist venture capital management company which
traces its origins back 30 years. It currently manages over GBP140
million of VCT funds through three VCTs and has managed VCTs since their
inception in 1996.
Investment activity and portfolio valuation
As at 31 July 2015, the Company's venture capital investment portfolio
comprised four VCT qualifying investments at a cost of GBP1.7 million
and valuation of GBP1.8 million. In addition, the Company had cash of
GBP1.7 million.
We are currently working towards realising the Company's venture capital
investment portfolio in line with the Company's stated objective of
being a limited life VCT. We were therefore pleased to realise three
investments, all of which delivered a positive return for the Company's
shareholders. There were no new investments.
In May 2015, Long Eaton Healthcare Limited was sold to a third party,
realising a GBP150,000 gain on cost and delivering an overall return of
18.7% per annum. In the same month, Eagle-i Music Limited was realised
at its carrying value at 31 January 2015, as part of the sale process
involving its parent company Eagle Rock Entertainment Group Limited. In
June 2015, SPC International Limited repaid the Company's loan and
equity investments at cost.
The remaining investments continue to be valued in line with their 31
January 2015 valuations, with the exception of Cross Solar PV Limited.
While the latest valuation represents a reduction from 31 January 2015,
the investment is still valued above cost. Additionally the Company has
received both interest and dividend income in the six months to 31 July
2015.
Outlook
The realisations we have achieved in the six months to 31 July 2015 will
benefit Ordinary Shareholders as a result of the enhanced interim
dividend that has been declared by your Board. We are working towards
realisations for the remaining investments in the portfolio and remain
optimistic that these will be achieved in line with the targeted life of
the Company.
Beringea LLP
28 September 2015
Summary of Investment Portfolio
as at 31 July 2015
The following investments were held at 31 July 2015:
Valuation
movement in % of portfolio
Cost Valuation period by value
GBP'000 GBP'000 GBP'000
Venture capital
investments
Cross Solar PV
Limited 600 764 (69) 21.6%
Donatantonio
Group Limited 550 550 - 15.5%
Cogora Group
Limited 500 500 - 14.1%
Blis Media
Limited 28 33 - 0.9%
1,678 1,847 (69) 52.1%
Cash at bank and
in hand 1,693 47.9%
Total
investments 3,540 100.0%
All venture capital investments are unquoted and are also held by ProVen
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VCT plc and ProVen Growth and Income VCT plc, both of which are also
managed by Beringea LLP.
The relationship between the VCTs managed by Beringea is covered by a
co-investment agreement.
All venture capital investments held at the period end are registered in
England and Wales.
Unaudited Condensed Income Statement
for the six months ended 31 July 2015
(unaudited) (unaudited)
Six months ended Six months ended (audited)
31 July 2015 31 July 2014 Year ended 31 January 2015
Revenue Capital Total Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 121 (75) 46 137 50 187 545
Investment management fee (6) (17) (23) (6) (17) (23) (49)
Other expenses (38) - (38) (46) - (46) (92)
Return / (loss) on ordinary activities
before taxation 77 (92) (15) 85 33 118 404
Tax on ordinary activities - - - - - - -
Return / (loss) attributable to equity
shareholders 77 (92) (15) 85 33 118 404
Basic and diluted return/ (loss) per share
Ordinary Share 1.6p (1.9p) (0.3p) 1.8p 0.7p 2.5p 8.4p
'A' Share - - - - - - -
All revenue and capital items in the above statement derive from
continuing operations. The total column within this statement represents
the Unaudited Condensed Income Statement of the Company.
The Company has no recognised gains or losses other than the results for
the six month period as set out above.
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Financial Position
as at 31 July 2015
(unaudited) (unaudited) (audited)
31 July 31 July 31 January
2015 2014 2015
GBP'000 GBP'000 GBP'000
Fixed assets
Investments 1,847 3,183 3,202
Current assets
Debtors 23 68 53
Cash at bank and in hand 1,693 496 487
1,716 564 540
Creditors: amounts falling due within one year (36) (49) (56)
Net current assets 1,680 515 484
Net assets 3,527 3,698 3,686
Capital and reserves
Called up Ordinary Share capital 5 5 5
Called up 'A' Share capital 7 7 7
Special distributable reserve 3,235 3,822 3,379
Capital reserve - realised (30) (144) (164)
Capital reserve - unrealised 168 127 394
Revenue reserve 142 (119) 65
Total equity shareholders' funds 3,527 3,698 3,686
Basic and diluted net asset value per share
Ordinary Share 73.2p 76.6p 76.6p
'A' Share 0.1p 0.1p 0.1p
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Changes in Equity
Called
For the six up Called
months ended Ordinary up 'A' Special
31 July 2015 Share Share distributable Capital Capital Revenue
(unaudited) Capital capital reserve reserve - realised reserve - unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February
2015 5 7 3,379 (164) 394 65 3,686
Return /
(loss)
attributable
to equity
shareholders - - - 134 (226) 77 (15)
Dividends
paid in the
period - - (144) - - - (144)
At 31 July
2015 5 7 3,235 (30) 168 142 3,527
Called
For the six up Called
months ended Ordinary up 'A' Special
31 July 2014 Share Share distributable Capital Capital Revenue
(unaudited) Capital capital reserve reserve - realised reserve - unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February
2014 5 7 3,822 (127) 77 (59) 3,725
Return /
(loss)
attributable
to equity
shareholders - - - (17) 50 85 118
Dividends
paid in the
period - - - - - (145) (145)
At 31 July
2014 5 7 3,822 (144) 127 (119) 3,698
The special reserve, capital reserve - realised and revenue reserve are
distributable reserves. Reserves available for distribution therefore
amount to GBP3,347,000 (2014: GBP3,559,000).
The accompanying notes form an integral part of this announcement.
Unaudited Condensed Statement of Cash Flows
for the six months ended 31 July 2015
(unaudited) (unaudited) (audited)
Six months Six months Year
ended ended ended
31 July 31 July 31 January
2015 2014 2015
Note GBP'000 GBP'000 GBP'000
Net cash generated from
operating activities A 70 19 60
Cash flows from investing
activities
Disposal of investments 1,280 - 248
Net cash from investing activities 1,280 - 248
Cash flows from financing
activities
Purchase of own shares - - (9)
Equity dividends paid (144) (145) (434)
Net cash from financing activities (144) (145) (443)
Increase/ (decrease) in
cash and cash equivalents B 1,206 (126) (135)
Notes to the cash flow
statement:
A Net cash generated from
operating activities
(Loss)/ return on ordinary
activities before taxation (15) 118 404
Loss/ (gain) on investments 75 (50) (317)
Decrease/ (increase) in debtors 30 (41) (26)
Decrease in creditors (20) (8) (1)
Net cash generated from operating
activities 70 19 60
B Analysis of net funds
Beginning of period /year 487 622 622
Net cash inflows/ (outflows) 1,206 (126) (135)
End of period / year 1,693 496 487
The accompanying notes form an integral part of this announcement.
Notes to the half-yearly report
1. Accounting policies
Basis of preparation
The Company has prepared its financial statements under Financial
Reporting Standard 102 ("FRS102") and in accordance with the Statement
of Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (the "SORP"), which was revised in
November 2014.
This is the first period in which the financial statements have been
prepared under FRS102, however, it has not been necessary to restate
comparatives as the treatment previously applied aligns with the
requirements of FRS102. As a result, there are no reconciling
differences between the previous financial reporting framework and the
current financial reporting framework and the comparative figures
represent the position under both current and previous financial
reporting frameworks.
The following accounting policies have been applied consistently
throughout the period. Further details of principal accounting policies
will be disclosed in the Annual Report and Accounts for the year ending
31 January 2016.
a) Presentation of Income Statement
In accordance with the SORP, supplementary information which analyses
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the Income Statement between items of a revenue and capital nature has
been presented alongside the Income Statement. The revenue return
attributable to equity shareholders is the measure the Directors believe
appropriate in assessing the Company's compliance with certain
requirements set out in S274 of the Income Tax Act 2007.
b) Investments
Investments, including equity and loan stock, are designated as "fair
value through profit or loss" assets due to investments being managed
and performance evaluated on a fair value basis. A financial asset is
designated within this category if it is both acquired and managed, with
a view to selling after a period of time, in accordance with the
Company's documented investment policy. The fair value of an investment
upon acquisition is deemed to be cost. Thereafter investments are
measured at fair value in accordance with International Private Equity
and Venture Capital Valuation Guidelines ("IPEVCVG") issued in December
2012 together with FRS102.
The valuation methodologies used by the Directors for assessing the fair
value of unquoted investments are as follows:
-- investments are usually retained at cost for twelve months following
investment, except where a company's performance against plan is
significantly below the expectations on which the investment was made in
which case a provision against cost is made as appropriate;
-- where a company is in the early stage of development it will normally
continue to be held at cost as the best estimate of fair value, reviewed
for impairment on the basis described above;
-- where a company is well established after an appropriate period, the
investment may be valued by applying a suitable earnings or revenue
multiple to that company's maintainable earnings or revenue. The
multiple used is based on comparable listed companies or a sector but
discounted to reflect factors such as the different sizes of the
comparable businesses, different growth rates and the lack of
marketability of unquoted shares;
-- where a value is indicated by a material arms-length transaction by a
third party in the shares of the company, the valuation will normally be
based on this, reviewed for impairment as appropriate;
-- where alternative methods of valuation, such as net assets of the
business or the discounted cash flows arising from the business are more
appropriate, then such methods may be used; and
-- where repayment of the equity is not probable, redemption premiums will
be recognised.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions and estimates in order to ascertain fair
value. Methodologies are applied consistently from year to year except
where a change results in a better estimate of fair value.
Where an investee company has gone into receivership or liquidation, or
the loss in value below cost is considered to be permanent, or there is
little likelihood of a recovery from a company in administration, the
loss on the investment, although not physically disposed of, is treated
as being realised.
Gains and losses arising from changes in fair value are included in the
Unaudited Condensed Income Statement for the period as a capital item.
2. All revenue and capital items in the Unaudited Condensed Income
Statement derive from continuing operations.
3. There are no other items of comprehensive income other than those
disclosed in the Unaudited Condensed Income Statement.
4. The Company has only one operating segment as reported to the Board
of Directors in their capacity as chief operating decision makers and
derives its income from investments made in shares, securities and bank
deposits.
5. The comparative figures are in respect of the year ended 31 January
2015 and the six month period ended 31 July 2014.
6. Basic and diluted return per Ordinary Share for the period has been
calculated on 4,804,658 shares, being the weighted average number of
shares in issue during the period.
7. Basic and diluted NAV per share for the period has been calculated on
4,804,658 Ordinary Shares and 7,227,352 'A' Shares, being the number of
shares in issue at the period end.
8. Dividends
Pence 31 July 31 July
per share 2015 2014 31 January 2015
GBP'000 GBP'000 GBP'000
Paid in the period / year:
2015 final dividend paid on 26
June 2015 3.0 144 - -
2015 interim dividend paid on
19 November 2014 6.0 - - 289
2014 final dividend paid on 18
June 2014 3.0 - 145 145
144 145 434
Dividend declared:
2016 interim dividend payable
on 23 October 2015 30.0 1,441 - -
9. Contingent liabilities, guarantees and financial commitments
The Company has no contingent liabilities, guarantees or financial
commitments at 31 July 2015.
10. Called up share capital
During the six months to 31 July 2015, the Company did not issue or
repurchase any Ordinary Shares or 'A' Shares.
11. Financial instruments
Investments are valued at fair value as determined using the measurement
policies described in note 1.
The Company has categorised its financial instruments that are measured
subsequent to initial recognition at fair value, using the fair value
hierarchy as follows:
Level a Reflects financial instruments quoted in an active market.
Level b Reflects financial instruments that have been valued based
on prices of recent transactions for identical instruments.
Level c (i) Reflects financial instruments that have been valued using
valuation techniques with observable inputs.
Level c (ii) Reflects financial instruments that have been valued using
valuation techniques with unobservable inputs.
31 July 2015 31 January 2015
Level a Level b Level c Level a Level b Level c
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan notes - - 1,155 - - 1,867
Unquoted equity - - 692 - - 1,335
Total - - 1,847 - - 3,202
All financial instruments included within the Level c column have been
categorised as Level c (ii) financial instruments and have been valuing
using valuation techniques with unobservable inputs.
12. Controlling part and related party transactions
In the opinion of the Directors, there is no immediate or ultimate
controlling party.
Malcolm Moss, a Director of the Company, is also a Partner of Beringea
LLP. Beringea LLP was the Company's investment manager during the
period. During the six months ended 31 July 2015, GBP23,000 was payable
to Beringea LLP in respect of these services. At the period end the
Company owed Beringea LLP GBP13,000.
During the six months to 31 July 2015, an amount of GBP11,250 was
payable to the Directors of the Company. No amount was outstanding at
the period end.
13. The unaudited financial statements set out herein have not been
subject to review by the auditor and do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006.
There have therefore not been delivered to the Registrar of Companies.
The figures for the year ended 31 January 2015 have been extracted from
the financial statements for that period, which have been delivered to
the Registrar of Companies; the Auditor's report on those financial
statements was unmodified.
14. The Directors confirm that, to the best of their knowledge, the
half-yearly financial statements have been prepared in accordance with
Financial Reporting Standard 104 ("FRS104") issued by the Financial
Reporting Council 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.
15. Risk and uncertainties
Under the Disclosure and Transparency Directive the Board is required,
in the Company's half-yearly results, to report on the principal risks
and uncertainties facing the Company over the remainder of the financial
year.
The Board has concluded that the key risks facing the Company over the
remainder of the financial year are as follows:
(i) investment risk associated with investing in small and immature
businesses;
(ii) investment risk arising from volatile stock market conditions
and their potential effect on the value of the Company's venture capital
investments and the exit opportunity for those investments; and
(iii) breach of VCT regulations.
In respect of (i) and (ii), the Board is satisfied with the Company's
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