RNS Number:5754G
Ventus 3 VCT PLC
30 October 2007
Ventus 3 VCT plc
Half-yearly Financial Report
For the six month period ended 31 August 2007
Registered No: 5667211
Ventus 3 VCT plc (the "Company") presents its half yearly financial report for
the period ended 31st August 2007 as required by the UK Listing Authority's
Disclosure and Transparency Rule 4.2.
A full version of the report will be available on the Company's website at
www.ventusvct.com.
A copy of the above document is to be submitted to the UK Listing Authority, and
will shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Directors and advisers
Directors
D Pinckney (Chairman)
A Moore
P Thomas
C Wood
Secretary and registered office
Capita Company Secretarial Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Auditor
Baker Tilly UK Audit LLP
Chartered Accountants
2 Bloomsbury Street
London
WC1B 3ST
Bankers
HSBC Bank Plc
27-32 Poultry
London
EC2P 2BX
Investment Manager
Climate Change Capital Limited
3 More London Riverside
London
SE1 2AQ
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Broker
Brewin Dolphin Securities Limited
34 Lisbon Street
Leeds
LS1 4LX
VCT status advisers
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Solicitors
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London
EC4R 9HA
Chairman's statement
I am pleased to present the half-yearly financial report and accounts of Ventus
3 VCT plc (the "Company") for the six month period ended 31 August 2007.
Net asset value and results
At the period end, the net asset value per share of the company stood at 94.4
pence. Revenue attributable to shareholders for the period was #157,707 or 1.41
pence per share. The capital loss attributable to shareholders for the period
was #93,336 or 0.84 pence per share, resulting in a total return to shareholders
for the period of #64,371 or 0.57 pence per share. The main source of revenue
was interest earned on mezzanine loan stock, UK Government Treasury Bills and
cash deposits.
The Company declared and paid an annual dividend of 1.50 pence per share for the
period to 28 February 2007. This was paid as an interim dividend of 0.75 pence
per share on 15 February 2007 and a final dividend of 0.75 pence per share on 6
August 2007. Dividends to shareholders are accounted for in the period in which
the Company is liable to pay them, rather than in the period in respect of which
they are declared.
The Company has declared a further dividend for the half year to 31 August 2007
of 1.00 pence per share which will be paid to shareholders on 16 January 2008.
Principal risks
Under the UK Listing Authority's Disclosure and Transparency Rules, the
Directors are required to identify those material risks to which the Company is
exposed and take appropriate steps to mitigate those risks. Described below are
those risks which the Directors consider to be material and the steps that the
Directors have taken to identify and mitigate those risks:
* Failure to meet the investment requirements for compliance with HM
Revenue and Customs VCT regulations
The Board mitigates this risk by regularly reviewing investment management
activity and by obtaining pre-approval from HM Revenue and Customs for each
investment.
* Inadequate control environment at service providers
The Board mitigates this risk by only appointing service providers of a high
standing under agreements that set out their responsibilities and by obtaining
assurances from them that all exceptions have been reported to the Board.
* Non-compliance with UK Listing Authority Rules, Companies Act Legislation,
HM Revenue and Customs VCT regulations and other applicable regulations
The Board mitigates this risk by employing external advisers fully conversant
with applicable statutory and regulatory requirements who report regularly to
the Board on the Company's compliance.
VCT qualifying status
The Company retains PricewaterhouseCoopers LLP to review its compliance with HM
Revenue and Customs VCT regulations. The most recent review was undertaken prior
to the publication of the last Annual Report. The Directors are satisfied that
the Company has continued to fulfil the conditions for maintaining VCT status.
Responsibility statement
The Directors confirm that to the best of their knowledge:
(a) 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 give a true and fair view of the assets, liabilities,
financial position and profit of the Company as required by the Disclosure and
Transparency Rules ('DTR') 4.2.4R;
(b) the report includes a fair review of the information required by DTR
4.2.7R; and
(c) the report includes a fair review of the information required by DTR
4.2.8R.
Investments
The Company's Investment Manager, Climate Change Capital Limited, continues to
identify and negotiate potential investment opportunities. The investments made
and the dividends paid constitute the important events of the period.
As at the date of this report, the Company has made investments in two companies
totalling #408,822. The Company has also contractually committed to invest and/
or holds exclusivity agreements with three companies representing potential
further investments of #1.16 million.
The Investment Manager's report on page 4 provides details of the investments
made as at 31 August 2007 and the amounts committed or under exclusivity
agreements as at the date of this report. All investments will be structured so
as to be treated as qualifying holdings for the purposes of VCT regulations
unless stated otherwise.
David Pinckney
Chairman
30 October 2007
Investment Manager's Report
Summary of investments
As at the date of this report, the Company has made investments in two companies
totalling #408,822. The Company also holds exclusivity agreements with two
companies representing potential further investments of #1.16 million.
The following table shows the investments made as at 31 August 2007, the
investments made since the end of the period and the total amount committed or
under exclusivity agreements as at the date of this report. All investments to
date have been structured so as to be treated as qualifying holdings for the
purposes of VCT regulations unless stated otherwise.
Invested,
Committed and/or
Under
Investment Investment Exclusivity
as at as at as at
31 August 2007 30 October 2007 30 October 2007
Company Name Details # # #
Craig Wind 10 megawatt 348,822 348,822 348,822
Farm Limited wind farm
A7 Lochhead Limited 6 megawatt - - 600,000
wind farm
Achairn Energy 6 megawatt 60,000 60,000 600,000
Limited wind farm
Olgrinmore Limited 4 megawatt wind farm - - 24,000*
(pre-consent)
______________ ______________ ______________
Total 408,822 408,822 1,572,822
-------------- -------------- --------------
* see commentary below
Craig Wind Farm Limited
The Company has completed its investment in Craig Wind Farm Limited, a company
operating a 10 megawatt wind farm in the Scottish Borders. The Company has
invested a total of #348,822 in Craig Wind Farm Limited by way of a #169,000
mezzanine loan facility and #179,822 invested in ordinary shares. The Company
owns 6.25% of the issued ordinary shares in Craig Wind Farm Limited.
The wind farm became operational in October 2007 after a period of delay caused
by the grid operating company. The first payment of mezzanine loan interest by
Craig Wind Farm Limited is expected in March 2008, subject to satisfactory
operational performance. Craig Wind Farm Limited is expected to commence paying
dividends to shareholders in September 2009.
Achairn Energy Limited
The Company is finalising contract negotiations to invest up to #600,000 in
Achairn Energy Limited, a company developing a 6 megawatt wind farm in
Caithness, Scotland. This site has full planning consent and has been provided
with an offer for a grid connection. The Company has already invested #60,000 in
ordinary shares to facilitate the payment of preliminary site development costs.
We are continuing to work with the developer and its consultants to secure the
contracts necessary to commence construction. The wind farm is expected to
become operational in the second half of 2008.
A7 Energy Lochhead
The Company has entered into a long term exclusivity agreement with A7 Energy
Limited in respect of the 6 megawatt Lochhead wind farm development in
Lanarkshire, Scotland. A7 Energy Limited has secured planning consent for this
wind farm, as well as an offer for connection to the grid. We are continuing to
work with the developer and its consultants to secure the contracts necessary to
commence construction. The wind farm is expected to start generating early in
2009. This project is expected to require an investment of approximately
#600,000 from the Company.
Olgrinmore Limited
The Company has committed to make an initial investment of #24,000 in Olgrinmore
Limited, a company developing a 4 megawatt wind farm in Caithness, Scotland.
Olgrinmore Limited is in the process of seeking planning permission for a two
turbine scheme from the local authority and expects to lodge an application
early in 2008. The investment will be used to contribute towards the planning
application costs. Olgrinmore Limited has accepted an offer for connection to
the grid and has secured the land for the development under an option. If
planning approval is granted the Company holds an option to make a further
investment to contribute towards the construction costs on pre-agreed terms with
the other shareholders. Initially, the investment would not be a qualifying
holding in accordance with HM Revenue & Customs VCT regulations. If the Company
contributes further capital upon grant of planning it will be possible to make
the existing investment and any future investments qualifying.
Investment pipeline & market overview
We are actively assessing investment opportunities in over 30 individual
companies developing in excess of 400 megawatts of generating capacity. Whilst
the main investment strategy to date has been to seek investments in planning
approved onshore wind developments, the Company's investment strategy also
includes pursuing opportunities with companies developing non-wind technologies
such as landfill gas and small scale hydro-electric schemes, companies owning
existing operational assets and companies seeking planning permission for new
schemes.
As at the date of this report the British Wind Energy Association (''BWEA'')
database showed the following information about all UK onshore wind projects
which are under construction, have planning consent or have been submitted for
planning consent and are awaiting a decision:
Consented but not Awaiting planning
yet under decisions
Under construction construction Total
Number of projects 30 103 221 354
Total megawatts 822 1,942 7,873 10,637
In September 2007 the BWEA published their report 'Countdown to meeting the 10%
UK renewable electricity target by 2010' which showed that renewable energy
currently generates just over 4.5% of the UK's total electricity supply
requirement. The report states that the rate of installation of new renewable
generation capacity is behind target and needs to more than double by 2010 to
meet the 10% target. The BWEA also predicts that onshore wind needs to account
for almost half of this 10% target given limiting factors associated with other
technologies. For onshore wind this equates to a target of approximately 6,000
megawatts of total installed capacity. The UK currently has just over 2,000
megawatts of onshore wind capacity installed and operational.
Even if all projects under construction in the UK and those that are consented
but not yet under construction are completed and added to the total existing
operational capacity, there would be a shortfall, in relation to the 2010
target, of almost 1,300 megawatts which would need to be met by new projects.
The main barrier to the target being achieved is the increasing time taken to
acquire planning consents, both locally and through central government planning
authorities.
The following table summarises information published by the BWEA about the
number of onshore wind projects in the planning system across the UK:
Northern
Ireland
England Scotland Wales Total
Number of projects 64 98 19 40 221
Total megawatts 1,183 5,300 347 1,043 7,873
The rate of new approvals coming out of the planning system over the last two
years has restricted the number of new investment opportunities for the Company
in the consented onshore wind sector.
As a key element of the Company's investment strategy, and alongside continuing
to progress investment opportunities in onshore wind, we are working to identify
and negotiate investments in developments using other renewable energy
technologies such as landfill gas, small scale hydro and biomass. We are also
assessing a number of opportunities in the pre-planning sector, where there is
the potential to make earlier stage investments in companies developing projects
in return for an exclusive option to invest construction funding upon grant of
planning consent at a later stage.
On the basis of an assessment of the potential investments in the pipeline we
have advised the Directors that we are satisfied that sufficient projects are
available to fully invest the funds in accordance with the investment strategy
and the time period required to satisfy HM Revenue and Customs requirements in
respect of maintaining the Company's VCT status.
Climate Change Capital Limited
Investment Manager
30 October 2007
Income statement
for the six month period ended 31 August 2007 (unaudited)
Six months Period
ended ended Period ended
31 August 31 August 28 February
2007 2006 2007
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes #000 #000 #000 #000 #000 #000 #000 #000 #000
Income 290 - 290 187 - 187 453 - 453
------ ------ ------ ------ ------ ------ ------ ------ ------
290 - 290 187 - 187 453 - 453
------ ------ ------ ------ ------ ------ ------ ------ ------
Expenditure
Management fees 2 39 117 156 32 96 128 71 214 285
Other expenses 54 - 54 53 - 53 106 - 106
------ ------ ------ ------ ------ ------ ------ ------ ------
93 117 210 85 96 181 177 214 391
------ ------ ------ ------ ------ ------ ------ ------ ------
Return on ordinary
activities
before taxation 197 (117) 80 102 (96) 6 276 (214) 62
Tax on ordinary
activities 3 (40) 24 (16) (3) - (3) (54) 41 (13)
------ ------ ------ ------ ------ ------ ------ ------ ------
Return attributable
to equity
shareholders 157 (93) 64 99 (96) 3 222 (173) 49
------ ------ ------ ------ ------ ------ ------ ------ ------
Basic and diluted
return per
ordinary share (p) 4 1.41 (0.84) 0.57 1.03 (1.00) 0.03 2.13 (1.65) 0.47
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made.
The total columns of this statement are the profit and loss accounts of the
Company for the respective periods. The supplementary revenue and capital
columns have been prepared under guidance published by the Association of
Investment Companies.
There were no recognised gains and losses for the period other than those shown
above.
Balance Sheet
as at 31 August 2007 (unaudited)
31 August 2007 31 August 2006 28 February 2007
(unaudited) (unaudited) (audited)
Note #000 #000 #000
Fixed assets
Investments 409 169 169
--------- --------- ---------
409 169 169
--------- --------- ---------
Current assets
Debtors 32 10 15
Short term investments in UK treasury bills 10,042 10,321 10,149
Cash at bank 114 127 267
--------- --------- ---------
10,188 10,458 10,431
Creditors: amounts falling due within one year (56) (28) (39)
--------- --------- ---------
Net current assets 10,132 10,430 10,392
--------- --------- ---------
Net assets 10,541 10,599 10,561
--------- --------- ---------
Share Capital & Reserves
Ordinary share capital 2,793 2,793 2,793
Special reserve 7,803 7,803 7,803
Capital reserve - realised (290) (96) (173)
Revenue reserve 235 99 138
--------- --------- ---------
Shareholders' funds 10,541 10,599 10,561
--------- --------- ---------
Basic and diluted net asset value per ordinary
share (p) 5 94.4 94.9 94.5
Cash flow statement
for the six month period ended 31 August 2007 (unaudited)
Six months ended Period ended Period ended
31 August 2007 31 August 2006 28 February 2007
(unaudited) (unaudited) (audited)
#000 #000 #000
Net cash (outflow)/inflow
from operating activities
and returns on investments (206) 21 39
Capital expenditure
Purchase of venture capital
investments (240) (169) (169)
Equity dividends paid (84) - (84)
Management of liquid resources
Proceeds from maturity of
UK treasury bills 15,349 - -
Purchase of UK treasury bills (14,972) (10,321) (10,115)
----------- ----------- -----------
Net cash outflow before
financing (153) (10,469) (10,329)
----------- ----------- -----------
Financing
Shares issued - 11,173 11,173
Issue costs - (577) (577)
----------- ----------- -----------
Net cash inflow from financing - 10,596 10,596
----------- ----------- -----------
(Decrease)/increase in cash (153) 127 267
----------- ----------- -----------
Net cash (outflow)/inflow
from operating activities and
returns on investments
Return on ordinary
activities before taxation 80 6 62
Increase in debtors (17) (10) (15)
Increase in creditors 1 25 26
Net unrealised gains on
short term investments (270) - (34)
----------- ----------- -----------
Net cash (outflow)/inflow
from operating activities
and returns on investments (206) 21 39
----------- ----------- -----------
Analysis of net funds
At beginning of period 267 - -
Net cash flows for the period (153) 127 267
----------- ----------- -----------
At end of period 114 127 267
----------- ----------- -----------
Reconciliation of movements in shareholders' funds
for the six month period ended 31 August 2007 (unaudited)
Six months ended Period ended Period ended
31 August 2007 31 August 2006 28 February 2007
(unaudited) (unaudited) (audited)
#000 #000 #000
Equity shareholders' funds
at beginning of period 10,561 - -
Return on ordinary
activities after tax 64 3 49
Dividends paid in the period (84) - (84)
Net proceeds of share issues - 10,596 10,596
------------ --------- ---------
Equity shareholders' funds
at end of period 10,541 10,599 10,561
------------ --------- ---------
Notes to the financial statements
for the six month period ended 31 August 2007 (unaudited)
1. The unaudited half-yearly financial statements for the six months ended
31 August 2007 do not constitute statutory accounts within the meaning of
Section 240 of the Companies Act and such statements have not been delivered to
the Registrar of Companies. The half-yearly financial statements, which have not
been audited, have been prepared in accordance with UK Generally Accepted
Accounting Practice (UKGAAP) and under the same accounting policies as the
financial statements for the period ended 28 February 2007. The half-yearly
financial statements have been prepared using the guidance set out in the
Statement of Recommended Practice (SORP) "Financial Statements of Investment
Trust Companies" (revised in December 2005), to the extent that the guidance is
consistent with UKGAAP. The financial statements for the period ended 28
February 2007 have been filed with the Registrar of Companies and received an
unqualified audit report.
The half-yearly results are for the six month period from 1 March 2007 to 31
August 2007 and the comparative results are for the period from 5 January 2006
(incorporation date) to 31 August 2006 and 28 February 2007 respectively.
All investments are designated as "fair value through profit or loss" assets and
are initially measured at cost. Thereafter the investments are measured at
subsequent reporting dates at fair value.
Investments in unquoted companies are valued in accordance with
International Private Equity and Venture Capital Valuation Guidelines. Under
these guidelines, the investments are valued at fair value at the reporting
date, except in situations where fair value cannot be measured reliably. In such
situations, the investments are reported at the carrying value at the previous
reporting date, unless there is evidence that an investment has since then been
impaired.
When an investee company has gone into receivership or liquidation, the
investment, although physically not disposed of, is treated as being realised.
It is not the Company's policy to exercise either significant or controlling
influence over investee companies. Therefore the results of these companies are
not incorporated into the revenue account, except to the extent of any income
accrued.
The majority of monies held pending investment are invested in financial
instruments with same day or two-day access and as such are treated as current
investments. These are valued at middle market prices as at 31 August 2007.
Under FRS 26 investments should be valued at bid market prices. There is no
material difference between the valuation at bid prices and the valuation at
middle market prices.
2. The Company pays the Investment Manager an annual management fee equal
to 2.5% of the Company's net assets. The fee is exclusive of VAT and is payable
quarterly in advance. The annual management fee is allocated 75% to capital and
25% to revenue.
3. The half-yearly tax charge of #16,461 is based on the likely effective
tax rate for the year. This has been estimated at 20% and applied to the return
on ordinary activities for the half-year.
4. The basic and diluted return per share of 0.57 pence (period ended 31
August 2006: 0.03 pence; period ended 28 February 2007: 0.47 pence) is based on
the profit for the period to 31 August 2007 of #64,371 (period ended 31 August
2006: #3,040; period ended 28 February 2007: #49,448) and the weighted average
number of shares in issue during the period of 11,172,954 (period ended 31
August 2006: 9,686,224; period ended 28 February 2007: 10,444,247).
5. The basic and diluted net asset value per share of 94.4 pence (period
ended 31 August 2006: 94.9 pence; period ended 28 February 2007: 94.5 pence) is
based on net assets of #10,542,194 (period ended 31 August 2006: #10,599,009;
period ended 28 February 2007: #10,561,620) and the number of shares in issue as
at 31 August 2007 of 11,172,954 (31 August 2006: 11,172,954; 28 February 2007:
11,172,954).
6. The half-yearly financial statements were approved by the Directors on
30 October 2007.
7. An interim dividend of 1.00 pence per share has been declared for the
period ending 31 August 2007 which will be paid to shareholders on 16 January
2008. A final dividend for the period ended 28 February 2007 of 0.75 pence per
share was paid in the period ended 31 August 2007.
8. Copies of this half-yearly report have been sent to shareholders and
are available from the Company Secretary, c/o Capita Company Secretarial
Services Limited, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
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