Interim Results
March 28 2003 - 11:23AM
UK Regulatory
RNS Number:3710J
Downing Healthcare Protectd.VCT PLC
28 March 2003
Downing Healthcare Protected VCT plc
Interim Results
Chairman's Statement
I present the interim statement for the six-month period ended 31 December 2002
for Downing Healthcare Protected VCT plc.
At the Annual General Meeting in December 2002, the resolution proposing that
the Company continue as a VCT was overwhelmingly carried. Your Board was
encouraged by the show of support. The Company is therefore now starting to
implement the plan that I outlined in my statement in the Annual Report.
Board Composition
As anticipated in my year end statement, Michael Newman and Mahesh Patel
resigned as Directors at the Annual General Meeting on 10 December 2002. Martin
Bradford has subsequently joined the Board, contributing his valuable industry
experience.
Trading results
Net revenue after taxation for the period was #109,000 representing 1.1p per
share. Income for the period is lower than previously, the Directors have
considered it prudent to make provision against some loan stock interest due to
the Company from two investee companies, which are in arrears.
At 31 December 2002, after provision for the interim dividend, the net asset
value per share was 79.2p, a fall of 0.3p since 30 June 2002. The total return
to original investors since the Company's launch (net asset value per share plus
cumulative dividends) is 100.8p.
Venture capital investments
At the period end the Company had a portfolio of investments in nine nursing
home companies with a carrying value of #6.4 million.
As I reported previously, the equity investment in Downing (Green Gables)
Limited was sold for #237,000, giving rise to a small gain against the previous
carrying value. Since the period end, Green Gables has also redeemed loan stock
early, earning the Company an additional #25,000 in penalty interest.
Downing (Barwell) Limited has now completed the development of a new nursing
home in Leicestershire. The home recently obtained registration and has now
admitted its first residents. Part of the development comprises 27 close care
flats. Sales of the flats are progressing well with contracts having been
exchanged on six flats to date.
Generally, conditions in the care home sector have remained difficult. In
February, the Government announced that some aspects of the National Care
Standards, which were being phased in, would not now apply to existing care
homes. While this can be seen as positive news for private care home operators,
many of our investee companies have been forced to take steps to ensure that
they would comply with all the proposed standards. Typically this has involved
conversion work at the nursing homes to ensure room sizes are compliant and the
number of double rooms is reduced. This work has now proved to be unnecessary
and is an example of the sort of difficulties faced by private care home
operators who have to deal with conflicting and contradictory pressures from the
Government and Local Authorities.
In general, performance of the investee companies has now stabilised. Staffing
costs and fee rates however continue to be the strongest challenge faced by our
investees in trying to achieve a satisfactory performance.
Dividend
An interim dividend of 1.5p per share (2001 - 1.5p per share) will be paid on 6
May 2003 to shareholders on the register at 22 April 2003.
Publication of share price
The Company's share price continues to be quoted in the Financial Times on a
daily basis in the "Investment Companies" sector.
Share repurchase
The Board continues to monitor the market in the Company's shares and takes a
pro-active role in ensuring that there is liquidity for shareholders wishing to
dispose of their shares by operating a policy of purchasing the Company's shares
for cancellation when appropriate.
Outlook
With the proceeds arising on the disposal of the Green Gables investment, the
Company now has funds to make new investments when suitable opportunities arise.
Over the coming months, the Board will seek out new build proposals in line
with the future strategy outlined in my last statement.
The Board is also reviewing the structure of the existing investments with the
view to rebalancing the portfolio. I will update Shareholders in my year end
statement with details of progress in implementing the Company's strategy.
Chris Kay
Chairman
28 March 2003
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 December 2002
31 31 30
Dec Dec June
2002 2001 2002
#000 #000 #000
Fixed assets
Venture capital investments 6,370 6,600 6,600
Net current assets 1,345 1,145 1,145
Net assets 7,715 7,745 7,745
Capital and reserves
Called up share capital 4,871 4,871 4,871
Special reserve 4,393 4,393 4,393
Capital redemption reserve 35 35 35
Capital reserve (1,597) (1,602) (1,604)
Revenue reserve 13 48 50
Total shareholders' funds 7,715 7,745 7,745
Net asset value per share 79.2p 79.5p 79.5p
UNAUDITED STATEMENT OF TOTAL RETURN
(incorporating the revenue account)
for the six months ended 31 December 2002
Six months ended
31 December 2002
Revenue Capital Total
#000 #000 #000
Income 212 - 212
Gains on investments - 7 7
Investment management fees - - -
Other expenses (62) - (62)
Return on ordinary activities before taxation 150 7 157
Tax on ordinary activities (41) - (41)
Return attributable to equity shareholders 109 7 116
Net dividends (146) - (146)
Transfer (from)/ to reserves (37) 7 (30)
Return per share 1.1p 0.1p 1.2p
Six months ended Year
31 Dec 2001 ended
30 June
2002
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Income 288 - 288 574
Gains on investments - 1 1 1
Investment management fees (4) (4) (17)
(8)
Other expenses (59) - (59) (100)
Return on ordinary activities before taxation 225 (3) 222 458
Tax on ordinary activities (79) 1 (78) (148)
Return attributable to equity shareholders 146 (2) 144 310
Net dividends (146) - (146) (312)
Transfer (from)/ to reserves - (2) (2) (2)
Return per share 1.5p - 1.5p 3.2p
The revenue column of this statement is the profit and loss account of the
Company.
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 in shares, securities and bank deposits.
The comparative figures were in respect of the six months ended 31 December 2001
and the year ended 30 June 2002 respectively.
UNAUDITED CASHFLOW STATEMENT
for the six months ended 31 December 2002
Six Six Year
months months
ended ended ended
31 Dec 31 Dec 30
2002 2001 June
2002
#'000 #'000 #'000
Cash inflow from operating activities
(see note 1 below) 101 245 434
Taxation
Corporation tax (received)/paid (61) 2 (121)
Capital expenditure
Purchase of venture capital investments - (250) (250)
Proceeds on disposal of venture capital investments 207 830 821
Net cash inflow from capital expenditure 207 580 571
Equity dividends paid (165) (156) (302)
Net cash inflow before financing 82 671 582
Financing
Repurchase of ordinary shares - (22) (22)
Net cash outflow from financing - (22) (22)
Increase in cash (see note 2 below) 82 649 560
Notes to the cashflow statement:
1 Cash inflow from operating activities
Net revenue before taxation 150 225 465
Management fees charged to capital - (4) (8)
(Increase)/decrease in prepayments and accrued income (39) 25 (25)
(Decrease)/increase in other creditors (10) (1) 2
Net cash inflow from operating activities 101 245 434
2 Analysis of changes in cash during the period
Beginning of period 1,148 588 588
Net cash inflow 82 649 560
End of period 1,230 1,237 1,148
INVESTMENT PORTFOLIO
as at 31 December 2002
Cost Valuation % of
portfolio
#'000 #'000 by value
Venture capital investments
Downing (Chertsey Road) Limited 1,000 1,200 15.8%
Downing (Bon Accord) Limited 970 920 12.1%
Evedale Care Home Limited 1,375 900 11.8%
Downing (Acacia House) Limited 1,043 850 11.2%
Downing (Green Gables) Limited 650 650 8.6%
Downing (Barwell) Limited 500 500 6.6%
Kimbolton Lodge Limited 600 500 6.6%
Downing (Meadows) Limited 575 450 5.9%
Dovestone (The Gables) Limited 950 400 5.2%
Total investments 7,663 6,370 83.8%
Cash 1,230 16.2%
7,600 100.0%
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The above financial information has been prepared on the basis of the
accounting policies set out in the Annual Report.
2. The calculation of the revenue and capital return per share for the period
is based upon the net revenue and capital after tax of #109,000 and #7,000
respectively, divided by the weighted average number of shares in issue during
the period of 9,741,961.
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. The figures for the year
ended 30 June 2002 have been extracted from the financial statements for that
year, which have been delivered to the Registrar of Companies; the auditors'
report on those financial statements was unqualified.
Copies of the unaudited interim results are being sent to shareholders shortly.
Further copies can be obtained from the Company's Registered Office.
This information is provided by RNS
The company news service from the London Stock Exchange
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