Final Results
June 07 2010 - 11:37AM
UK Regulatory
TIDMTPV2
RNS Number : 1969N
TP70 2008 (ii) VCT PLC
07 June 2010
TP70 2008 (II) VCT plc
Final Results
7 June 2010
TP70 2008 (II) VCT plc, managed by Triple Point Investment Management LLP today
announces the final results for the year ended 31 March 2010.
These results were approved by the Board of Directors on 3 June 2010.
You may view the Annual Report in on the Triple Point website
www.triplepoint.co.uk at Our Products/TP70 2008 (II)/ TP70 2008 (II)/ News. All
other statutory information will also be found there.
About TP70 2008 (II) VCT plc
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The
investment manager is Triple Point Investment Management LLP. The Company was
launched in November 2007 and raised GBP23 million (net of expenses) through an
offer for subscription.
Details of the Fund's progress are discussed in the Chairman's Statement and
Investment Manager's Review forming part of the extract from the Financial
Statements which follows.
Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means for private
individuals to invest in unlisted companies in the UK. Subsequent Finance Acts
have introduced changes to VCT legislation. The tax benefits currently available
to eligible new investors in VCTs include:
· upfront income tax relief of 30%
· exemption from income tax on dividends paid; and
· exemption from capital gains tax on disposals of shares in VCTs
The Company has been approved as a VCT by HM Revenue & Customs. In order to
maintain its approval, the Company must comply with certain requirements on a
continuing basis. Above all, the Company is required at all times to hold 70%
of its investments (as defined in the legislation) in VCT qualifying holdings,
of which at least 30% must comprise eligible ordinary shares.
For this purpose, a 'VCT qualifying holding' consists of up to GBP1 million
invested in any one year in new shares or securities of a UK unquoted company
(which may be quoted on AIM) which is carrying on a qualifying trade, and whose
gross assets at the time of investment do not exceed a prescribed limit. The
definition of 'qualifying trade' excludes certain activities such as property
investment and development, financial services and asset leasing. The Company
will continue to ensure its compliance with these qualification requirements.
Report of the Directors - Financial summary
For the year ended 31 March 2010
+------------------------------+---------+------+----------+
| | 2010 | | 2009 |
+------------------------------+---------+------+----------+
| | GBP'000 | | GBP'000 |
| | | | |
+------------------------------+---------+------+----------+
| Net assets | 19,809 | | 19,762 |
+------------------------------+---------+------+----------+
| Profit / (loss) before tax | 480 | | (2,029) |
+------------------------------+---------+------+----------+
| Earnings per share | 1.97p | | (10.20p) |
| | | | |
+------------------------------+---------+------+----------+
| Net asset value per share | 86.51p | | 86.30p |
| | | | |
+------------------------------+---------+------+----------+
For a GBP1 investment per share investors, with a sufficient income tax
liability in the relevant year, can expect to have received a 30p tax credit and
a first dividend of 1.76p which taken together with the current NAV of 86.51p
totals 118.27p.
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The
investment manager is Triple Point Investment Management LLP. The Company was
launched in November 2007 and raised GBP23.0 million through an offer for
subscription. Initially 70% of the Company's net assets were to be invested in
cash and liquid assets. Thereafter by the end of the third year, at least 70%
will be invested in VCT qualifying investments. The remaining 30% of net assets
are exposed to a leveraged version of GAM Diversity, a fund of hedge funds. The
Company invests in businesses with contractual revenues from financially sound
customers and aims to generate an attractive income stream and modest but
accessible capital growth to shareholders.
The Directors' Report on pages 11 to 15 and the Directors' Remuneration Report
on pages 16 to 17 have each been drawn up in accordance with the requirements of
English law and liability in respect thereof is also governed by English law. In
particular, the responsibility of the Directors for these reports is owed solely
to TP 70 2008 (II) VCT plc.
The directors submit to the members their Annual Report and financial statements
for the Company for the year ended 31 March 2010. The Report of the Directors,
includes the Group Financial Summary, Chairman's statement, Details of Advisers,
Shareholder Information, Investment Portfolio, Directors' Report, Directors'
Remuneration Report and the Corporate Governance Statement.
Report of the Directors - Chairman's Statement
I am pleased to present the audited accounts for TP70 2008 (II) VCT plc ("the
Company") for the year ended 31 March 2010.
INVESTMENT STRATEGY
The Company's strategy offers combined exposure to GAM Diversity 2.5XL and to
VCT-qualifying venture capital investments with contractual revenues from
financially secure counterparties. 30% of the Company's funds at cost are
currently exposed to GAM Diversity 2.5XL. The remaining 70% is in the process
of being invested in suitable VCT-qualifying holdings. Funds not deployed are
held in money market funds.
By the end of the third accounting period, to meet the VCT-qualifying criteria,
the Company's intention is that at least 70% of assets will be committed to
VCT-qualifying holdings with the balance exposed to GAM Diversity 2.5XL.
Report of the Directors - Chairman's Statement (continued)
RESULTS
At 31 March 2010 the portfolio of qualifying holdings comprised some 52.2% of
TP70 2008 (II)'s net assets. The Investment Manager's report details the
progress made in building up the portfolio of VCT qualifying holdings in order
to secure the Company's VCT tax status. Progress slowed this year compared to
last year but having reviewed the Investment Manager's pipeline of investment
opportunities, the Board is confident that the 70% target can be secured by 31
March 2011.
The Company's exposure to GAM Diversity 2.5XL now stands at 23.8% of net assets.
The past year has seen a recovery in the value of GAM Diversity of 8.63%, which
after the leverage translated into a gain of GBP377,000 which has contributed to
an overall profit for the year of GBP450,000. The performance of GAM Diversity
is discussed further in the Investment Manager's Review. At the year end, the
Net Asset Value per share stood at 86.51p (2009: 86.30p).
DIVIDEND
As an investment trust the Company is able to distribute its revenue profits but
not its capital profits whilst subject to solvency tests ignorring capital
losses. . Hence its income statement records separately its revenue return and
capital return under guidance published by the Association of Investment
Companies.
The Board has resolved to pay a second dividend equal to its revenue profits of
GBP282,000 for the year (1.23p per share) in accordance with its dividend
policy, the dividend to be paid to shareholders on the register at 16 July 2010.
RISKS
The Board believes that the principal risks facing the Company are:
· investment risk associated with exposure to GAM Diversity 2.5XL
· investment risk associated with undertaking VCT qualifying investments
· failure to secure final approval as a VCT
The first risk is a consequence of the Company's investment strategy. The Board
and the Investment Manager continue to work to minimise either the likelihood or
potential impact of the second and third risks which also follow from the
Company's investment strategy.
OUTLOOK
The Company's focus over the next year will be to complete its investment into
qualifying investments to secure VCT status and to work closely with the
management of those businesses to ensure funds are deployed in a profitable
manner.
If you have any queries or comments, please do not hesitate to telephone Triple
Point Investment Management LLP on 020 7201 8989 or email me at
chad.murrin@triplepoint.co.uk.
.
Chad Murrin
Chairman
3 June 2010
Investment Manager's review
Overview
TP70 2008 (II) VCT plc's (the "Company's") objective is to deploy at least 70%
of its funds into VCT-qualifying investments and, with the remainder of its
funds, to offer leveraged exposure to GAM's flagship fund of hedge funds;
Diversity, via GAM Diversity GBP 2.5XL. Over the year under review, the Company
has continued to make progress with its investment programme and at 31 March
2010 the Company had deployed 52.2% of net assets in VCT qualifying investments.
VCT Qualifying Investments Portfolio
The Company's portfolio of VCT qualifying investments is currently spread across
fourteen qualifying companies in five sectors.
In March 2009, the Company invested GBP1m into each of five companies which
specialise in the deployment of digital projection technology, and who will each
work with one or more of the major UK cinema chains. The companies will need to
purchase and deploy digital technology and equipment, and will carry out a
number of services, including the installation and ongoing maintenance of the
systems to specific industry wide specifications. Over the past two years there
has been a global movement towards the digitisation of film distribution, due
latterly to the significant commercial success of 3D movies, such as Avatar and
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