Proven VCT plc : Half-yearly report
ProVen VCT plc
Half-Yearly Report For the Six Months Ended 31 August 2011
Financial Summary
 31 Aug 28 Feb 31 Aug
2011 2011 2010
 Pence Pence Pence
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Ordinary Shares
Net asset value per share ("NAV") 55.9 61.0 47.8
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Dividends paid per share since launch 107.7 101.5 101.5
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Total return (NAV plus dividends paid since launch) 163.6 162.5 149.3
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'C' Shares
Net asset value per share ("NAV") 82.0 76.8 71.4
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Dividends paid per share since issue 4.8 4.8 4.8
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Total return (NAV plus dividends paid since issue) 86.8 81.6 76.2
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'D' Shares
Net asset value per share ("NAV") 88.8 90.0 92.3
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Dividends paid per share since issue - - -
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Total return (NAV plus dividends paid since issue) 88.8 90.0 92.3
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Chairman's Statement
Introduction
The six months ended 31 August 2011 saw a period of high stock market
volatility, which has renewed fears that economic recovery may be some way
away. The Board takes some reassurance from the performance of the Company's
investment portfolios over this period, where small gains have been experienced
by two of the share pools.
Net asset values
Ordinary Shares
As at 31Â August 2011, the net asset value ("NAV") per Ordinary Share stood at
55.9p, an increase of 1.1p per share or 1.8% since the year end (after adjusting
for the dividend of 6.25p paid in the period).
'C' Shares
As at 31Â August 2011, the NAV per 'C' Share stood at 82.0p, an increase of 5.2p
per share or 6.8% since the year end.
'D' Shares
As at 31Â August 2011, the NAV per 'D' Share stood at 88.8p, a decrease of 1.2p
per share or 1.3% since the year end.
Fundraising
During the period, the Company continued to raise funds under its Ordinary Share
offer for subscription which opened on 11 January 2011. The offer closed on 6
May 2011 when it was fully subscribed, having raised gross funds of £1.5
million.
Venture capital investments
Ordinary Share portfolio
During the period, the Ordinary Share pool made two follow-on investments at a
total cost of £150,000. No realisations were made.
The net effect of investment valuation movements over the period was an
unrealised gain of £640,000.
'C' Share portfolio
The 'C' Share pool made one new investment and three follow-on investments,
totalling £535,000. One realisation was achieved in the form of Steak Media
Limited which resulted in a gain of £154,000 in the period.
The net effect of investment valuation movements over the period was an
unrealised gain of £545,000.
'D' Share portfolio
The 'D' Share pool made one new and two follow-on investments during the period,
totalling £250,000.
The net effect of investment valuation movements over the period was an
unrealised loss of £18,000.
Further details of the developments within the investment portfolios are
included in the Investment Manager's Report.
Results and dividends
The Income Statement shows a profit on ordinary activities after taxation for
the Company during the period of £1,021,000 (£252,000 revenue profit and
£769,000 capital gain). Details of how this is analysed between the various
share pools is shown in the detailed Income Statement.
The Board has decided that the Company will pay a dividend of 6.25p per Ordinary
Share on 2Â February 2012 to Shareholders on the register on 6 January 2012.
This will be an interim dividend in respect of the Company's financial year
ending 28 February 2012 and represents the distribution of the balance of the
profits made on the disposal of Saffron Digital earlier this year, together with
profits realised on previous investment disposals. No interim dividend will be
paid in respect of the 'C' Â Shares or 'D' Shares.
Share buybacks
The Company continues to have a policy of purchasing its own shares that become
available in the market in order to help provide liquidity to those Shareholders
that need it. The Company has a current policy of purchasing Ordinary Shares
and 'C' Shares at a price equivalent to a 10% discount to the latest published
NAV and at a 5% discount in respect of 'D' Shares.
During the period, the Company purchased 278,612 Ordinary Shares at an average
price of 49.7p per share; 67,152'C' Shares at an average price of 68.7p per
share; and 13,010 'D' Shares at an average price of 85.5p per share. These
shares were subsequently cancelled.
Dividend policy
I would like to thank Shareholders for the good level of response that the
Company received to the dividend survey that was sent out with the last Annual
Report. You may recall that the questionnaire sought views as to whether
Shareholders had a preference for maximised, but potentially irregular,
dividends or regular dividends of a consistent level and also how the management
of the NAV per share should impact on dividend policy.
The results indicated that Shareholders have relatively consistent views in this
matter, both by number and by volume of shares held. A clear majority of all
classes of shares favoured the payment of large dividends as soon as possible
whether the NAV was reduced or not. The majority was largest amongst those
Shareholders that had held their shares since the Company's initial fundraising,
while a small minority energetically expressed their preference that dividends
should not reduce NAV. The Board has therefore given consideration to what
approach might satisfy most Shareholders.
The Board's conclusion has been that the Company should seek to maximise
dividends paid to Shareholders, while maintaining NAV at an appropriate level.
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 has concluded that the key risks facing the Company over the remainder
of the financial year are as follows:
i. investment risk associated with a large proportion of the Ordinary Share
assets being invested in a single investment;
ii. investment risk associated with investing in small and immature businesses;
iii. investment risk arising from extremely volatile stock market conditions and
their potential effect on investment valuation; and
iv. failure to maintain approval as a VCT.
Although having a large proportion of the Ordinary Share assets invested in a
single investment involves additional risks, this situation is not unusual
within the venture capital industry and has arisen as a result of strong growth
in the value of one investment. The Board regularly reviews the position.
In the case of (ii), the Board is also satisfied with the Company's approach.
The Investment Manager follows a rigorous process in vetting and careful
structuring of new investments and, after an investment is made, close
monitoring of the business. In respect of (iii), the Company seeks to hold a
diversified portfolio. However, the Company's ability to manage this risk is
quite limited, primarily due to the restrictions arising from the VCT
regulations.
The Company's compliance with the VCT regulations is continually monitored by
the Administrator, who reports regularly to the Board on the current position.
The Company also retains PricewaterhouseCoopers to provide regular reviews and
advice in this area. The Board considers that this approach reduces the risk of
a breach of the VCT regulations to a minimal level.
Going concern
The Company has sufficient financial resources at the period end, and holds a
diversified portfolio of investments. As a consequence, the Directors believe
that the Company is well placed to manage its business risks successfully
despite the current uncertain economic outlook.
The Directors confirm that they are satisfied that the Company has adequate
resources to continue in business for the foreseeable future. For this reason,
they believe 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.
Outlook
The economic outlook for the UK remains uncertain, along with even greater
concerns within the Eurozone. Although these conditions are generally not
supportive to profitable realisations, there remains a market for quality
businesses as the recent disposals of Saffron Media Group and Steak Media
demonstrate. The Board is satisfied that the portfolios comprise a number of
good quality businesses across a range of sectors which have the potential to
thrive even in the current environment. Espresso now represents approximately
23% of the Ordinary Share pool and as such the Board has taken care to arrive at
a fair value. Clearly the future performance of the Ordinary Share pool will be
significantly influenced by this investment.
As well as working closely with the existing portfolio, over the reminder of the
financial year the Manager will continue to devote substantial resources to new
investing activities as the task of building the 'D' Share portfolio progresses.
Andrew Davison
Chairman
27 October 2011
Investment Manager's Report
Introduction
We have pleasure in presenting our half yearly report to 31 August 2011 for
ProVen VCT plc. Against a background of continuing stock market volatility and
challenging trading conditions, we continue to work with existing portfolio
companies to maximise shareholder value and to seek new investment opportunities
in areas where we believe that the broader economic risks will be mitigated by
strong market spend. A good example of the latter area in recent years has been
the investments made by the Company in new digital technologies and related
support services where there has been notable success.
Portfolio activity and valuation
Ordinary Share pool
At 31 August 2011, the Company's Ordinary Share portfolio comprised holdings in
16 companies, of which 13 were unquoted and 3 were quoted, at a valuation of
£11.8 million and original acquisition cost of £10.5 million. In addition, the
Ordinary Share pool held £3.5 million in cash and liquidity funds.
Further funding was provided to Tossed (£110,000) and Overtis Group (£40,000)
during the period. Within the existing portfolio, Espresso continues to dominate
in value terms, accounting for approximately 23% of the pool. The company
continued to perform strongly over the period. During the period, Think, the
digital media agency, announced that it had been selected as the lead digital
agency for "Pottermore", the online reading experience created by J.K. Rowling
and built around the Harry Potter books. This, together with new client wins
such as Formica and Warner Brothers, has contributed to the uplift in valuation.
'C' Share pool
At 31 August 2011, the Company's 'C' Share portfolio comprised 19 unquoted
holdings with a cost of £7.9 million and a valuation of £9.4 million. In
addition, the 'C' Share pool held £2.5 million in cash and liquidity funds.
Further funding totalling £535,000 was provided to Campden Media, Tossed,
Overtis and Senselogix. The Company's holding in Steak Media was sold in May
2011, which we reported in the 2011 Annual Report. In addition to the initial
profit on sale, there is also deferred consideration dependent on future
performance which would result in further proceeds. There was a strong
performance from Think, as described above, and it is now the largest holding in
the 'C' Share venture capital portfolio accounting for 13% by value of the pool.
Fjordnet and Donatantonio together account for a further 19% by value of the
pool.
'D' Share pool
At 31 August 2011, the Company's 'D' Share portfolio comprised 8 unquoted
holdings with a cost of £2.0 million and a valuation of £1.9 million. In
addition, the 'D' Share pool held £5.5 million in cash and liquidity funds.
The 'D' Share pool made a further new investment of £187,500, alongside ProVen
Growth and Income VCT plc and ProVen Health VCT plc, into APM Healthcare Limited
("APM") in August. APM is seeking to establish a new chain of pharmacies and
will particularly focus on GP centre-based pharmacies, a fast growing segment in
the industry. The team is led by a very experienced founder and manager of
pharmacy chains. Â Further funding by ProVen VCT plc has been committed to
implement the rollout plan and will be drawn down against agreed milestones.
Much of the investment in the 'D' Share pool has occurred relatively recently
and in accordance with established valuation guidelines is valued at cost. We
have, however, uplifted the valuation of Tossed and made provisions against the
valuations of two portfolio companies.
Outlook
The UK economy continues to face a number of challenges as it seeks to balance
economic growth against the need to reduce the deficit. Conditions are
undoubtedly challenging for many of the portfolio companies but we are
encouraged by the overall performance of many of them.
The majority of the returns to the Company's Shareholders will come from
portfolio company realisations and there will always be potential exit
opportunities for quality companies, not just from UK acquirers but also
internationally, as demonstrated by the recent disposals of Saffron Media to a
Tawianese company and Steak Media to a Japanese company. The key challenges for
us, as the Investment Manager, are identifying such businesses and then helping
nurture and develop them to the point where profitable realisations can be
achieved. We are confident in our ability to do this and therefore for the
overall prospects for all the share portfolios.
Beringea LLP
27 October 2011
Unaudited Balance Sheet
as at 31 August 2011
Company Total
 31 Aug 31 Aug 28 Feb
2011 2010 2011
 £'000 £'000 £'000
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Fixed assets
Investments 23,062 17,441 21,490
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Current assets
Debtors 193 146 288
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Current investments 9,200 10,200 9,200
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Cash at bank and in hand 2,310 2,486 3,814
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Creditors: amounts falling due within one year (251) (182) (826)
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Net current assets 11,452 12,650 12,476
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Net assets 34,514 30,091 33,966
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Capital and reserves
Called up share capital 5,066 4,984 4,972
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Capital redemption reserve 269 225 238
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Share premium account 10,139 8,763 8,811
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Special reserve 13,801 16,953 14,913
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Capital reserve - realised 2,890 1,633 3,518
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Revaluation reserve 2,640 (2,048) 1,548
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Revenue reserve (291) (419) (34)
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Equity Shareholders' funds 34,514 30,091 33,966
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Net asset value per Ordinary Share: 55.9p 47.8p 61.0p
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Net asset value per 'C' Share: 82.0p 71.4p 76.8p
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Net asset value per 'D' Share: 88.8p 92.3p 90.0p
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Unaudited Balance Sheet
as at 31 August 2011
Ordinary Shares
 31 Aug 31 Aug 28 Feb
2011 2010 2011
 £'000 £'000 £'000
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Fixed assets
Investments 11,806 10,387 11,016
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Current assets
Debtors 128 122 160
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Current investments 3,400 890 3,400
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Cash at bank and in hand 124 823 1,464
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Creditors: amounts falling due within one year (117) (86) (662)
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Net current assets 3,535 1,749 4,362
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Net assets 15,341 12,136 15,378
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Capital and reserves
Called up share capital 1,371 1,269 1,260
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Capital redemption reserve 225 202 211
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Share premium account 2,354 1,026 1,026
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Special reserve 7,238 7,356 8,247
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Capital reserve - realised 2,926 1,738 3,700
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Revaluation reserve 1,262 632 622
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Revenue reserve (35) (87) 312
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Equity Shareholders' funds 15,341 12,136 15,378
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Net asset value per Ordinary Share 55.9p 47.8p 61.0p
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Unaudited Balance Sheet
as at 31 August 2011
'C' Shares
 31 Aug 31 Aug 28 Feb
2011 2010 2011
 £'000 £'000 £'000
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Fixed assets
Investments 9,382 6,871 8,833
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Current assets
Debtors 45 20 109
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Current investments 1,350 2,810 1,350
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Cash at bank and in hand 1,144 728 950
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Creditors: amounts falling due within one year (81) (59) (100)
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Net current assets 2,458 3,499 2,309
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Net assets 11,840 10,370 11,142
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Capital and reserves
Called up share capital 3,612 3,633 3,629
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Capital redemption reserve 43 22 26
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Share premium account - - -
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Special reserve 6,563 9,597 6,666
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Capital reserve - realised 201 - -
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Revaluation reserve 1,485 (2,680) 1,016
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Revenue reserve (64) (202) (195)
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Equity shareholders' funds 11,840 10,370 11,142
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Net asset value per 'C' Share 82.0p 71.4p 76.8p
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Unaudited Balance Sheet
as at 31 August 2011
'D' Shares
 31 Aug 31 Aug 28 Feb
2011 2010 2011
 £'000 £'000 £'000
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Fixed assets
Investments 1,874 183 1,641
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Current assets
Debtors 20 4 19
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Current investments 4,450 6,500 4,450
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Cash at bank and in hand 1,042 935 1,400
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Creditors: amounts falling due within one year (53) (37) (64)
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Net current assets 5,459 7,402 5,805
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Net assets 7,333 7,585 7,446
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Capital and reserves
Called up share capital 83 82 83
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Capital redemption reserve 1 1 1
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Share premium account 7,785 7,737 7,785
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Special reserve - - -
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Capital reserve - realised (237) (105) (182)
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Revaluation reserve (107) - (90)
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Revenue reserve (192) (130) (151)
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Equity shareholders' funds 7,333 7,585 7,446
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Net asset value per 'D' Share 88.8p 92.3p 90.0p
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Unaudited Income Statement
for the six months ended 31 August 2011
Company Total
   Year ended
  28 Feb 2011
Six months ended Six months ended
31 Aug 2011 31 Aug 2010
----------------------------------------------------------
 Revenue Capital Total Revenue Capital Total Total
 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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Income 488 - 488 261 - 261 831
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Gains on investments - 1,321 1,321 - 121 121 3,961
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 488 1,321 1,809 261 121 382 4,792
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Investment management (86) (259) (345) (53) (157) (210) (640)
fee
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Performance incentive - (293) (293) - (360) (360) (360)
fees
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Other expenses (150) - (150) (175) - (175) (253)
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Return/(loss) on
ordinary activities
before taxation 252 769 1,021 33 (396) (363) 3,539
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Tax on ordinary - - - - - - -
activities
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Return/(loss)
attributable to equity 252 769 1,021 33 (396) (363) 3,539
shareholders
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Basic and diluted
return/(loss) per 0.6p 0.8p 1.4p 0.2p 0.9p 1.1p 14.2p
Ordinary Share
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Basic and diluted
return/(loss) per 'C' 0.9p 4.2p 5.1p - (2.9p) (2.9p) 1.3p
Share
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Basic and diluted (0.4p) (0.9p) (1.3p) (0.3p) (0.5p) (0.8p) (3.1p)
(loss) per 'D' Share
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Analysed by share class:
Ordinary Shares pool
   Year
 ended
  28 Feb
 2011
Six months ended Six months ended
31 Aug 2011 31 Aug 2010
---------------------------------------------------
 Revenue Capital Total Revenue Capital Total Total
 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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Income 254 - 254 170 - 170 626
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Gains on investments - 640 640 - 662 662 3,709
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 254 640 894 170 662 832 4,335
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Investment management fee (40) (120) (160) (23) (69) (92) (278)
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Performance incentive fees - (293) (293) - (360) (360) (360)
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Other expenses (62) - (62) (85) - (85) (96)
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Return on ordinary activities
before taxation 152 227 379 62 233 295 3,601
--------------------------------------------------------------------------------
Tax on ordinary activities - - - - - - -
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Return attributable to equity
shareholders 152 227 379 62 233 295 3,601
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'C' Shares
 Six months ended Six months ended Year ended
28 Feb 2011
31 Aug 2011 31 Aug 2010
--------------------------------------------------------
 Revenue Capital Total Revenue Capital Total Total
 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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Income 210 - 210 71 - 71 153
--------------------------------------------------------------------------------
Gains/(losses) on - 698 698 - (541) (541) 342
investments
--------------------------------------------------------------------------------
 210 698 908 71 (541) (470) 495
--------------------------------------------------------------------------------
Investment management (28) (84) (112) (18) (52) (70) (212)
fee
--------------------------------------------------------------------------------
Performance incentive - - - - - - -
fees
--------------------------------------------------------------------------------
Other expenses (52) - (52) (59) - (59) (99)
--------------------------------------------------------------------------------
Return/(loss) on
ordinary activities
before taxation 130 614 744 (6) (593) (599) 184
--------------------------------------------------------------------------------
Tax on ordinary - - - - - - -
activities
--------------------------------------------------------------------------------
Return/(loss)
attributable to equity
shareholders 130 614 744 (6) (593) (599) 184
--------------------------------------------------------------------------------
Analysed by share class:
'D' Shares
 Six months ended Six months ended Year ended
28 Feb 2011
31 Aug 2011 31 Aug 2010
--------------------------------------------------------
 Revenue Capital Total Revenue Capital Total Total
 £'000 £'000 £'000 £'000 £'000 £'000 £'000
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Income 24 - 24 20 - 20 52
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(Loss) on investments - (17) (17) - - - (90)
--------------------------------------------------------------------------------
 24 (17) 7 20 - 20 (38)
--------------------------------------------------------------------------------
Investment management (18) (55) (73) (12) (36) (48) (150)
fee
--------------------------------------------------------------------------------
Performance incentive - - - - - - -
fees
--------------------------------------------------------------------------------
Other expenses (36) - (36) (31) - (31) (58)
--------------------------------------------------------------------------------
(Loss) on ordinary
activities before
taxation (30) (72) (102) (23) (36) (59) (246)
--------------------------------------------------------------------------------
Tax on ordinary - - - - - - -
activities
--------------------------------------------------------------------------------
(Loss) attributable to
equity shareholders (30) (72) (102) (23) (36) (59) (246)
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Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 August 2011
  31 Aug 28 Feb
31 Aug 2011 2010 2011
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 Ordinary   'C'   'D'
Shares Shares Shares Total Total Total
 £'000  £'000  £'000  £'000 £'000 £'000
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Opening
shareholders'
funds 15,378 Â 11,142 Â 7,446 Â 33,966 29,022 29,022
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Proceeds from 1,537 Â - Â - Â 1,537 3,947 3,999
share issues
--------------------------------------------------------------------------------
Share issue (84) Â - Â - Â (84) (217) (220)
costs
--------------------------------------------------------------------------------
Purchase of own (139) Â (46) Â (11) Â (196) (243) (338)
shares
--------------------------------------------------------------------------------
Total recognised
gain/(loss) for
the year 379 Â 744 Â (102) Â 1,021 (363) 3,539
--------------------------------------------------------------------------------
Distributions (1,730) Â - Â - Â (1,730) (2,055) (2,036)
--------------------------------------------------------------------------------
Closing 15,341 Â 11,840 Â 7,333 Â 34,514 30,091 33,966
shareholders'
funds
--------------------------------------------------------------------------------
Unaudited Cash Flow Statement
for the six months ended 31 August 2011
  Six months Six months Year
ended ended ended
31 Aug 2011 31 Aug 2010 28 Feb 2011
 Note £'000 £'000 £'000
--------------------------------------------------------------------------------
Net cash outflow from A
operating activities (781) (623) (2,043)
--------------------------------------------------------------------------------
Capital expenditure
Purchase of investments  (935) (1,434) (4,600)
--------------------------------------------------------------------------------
Disposal of investments  685 771 3,728
--------------------------------------------------------------------------------
Net cash outflow from  (250) (663) (872)
capital expenditure
--------------------------------------------------------------------------------
Equity distributions paid  (1,730) (2,055) (2,036)
--------------------------------------------------------------------------------
Management of liquid
resources
Purchase of current investments held as - - (1,110)
liquidity funds
--------------------------------------------------------------------------------
Withdrawal from liquidity  - - 2,110
funds
--------------------------------------------------------------------------------
Net cash inflow from liquid  - - 1,000
resources
--------------------------------------------------------------------------------
Net cash outflow before  (2,761) (3,341) (3,951)
financing
--------------------------------------------------------------------------------
Financing
Proceeds from share issue  1,537 1,963 3,999
--------------------------------------------------------------------------------
Share issue costs  (84) (217) (220)
--------------------------------------------------------------------------------
Purchase of own shares  (196) (243) (338)
--------------------------------------------------------------------------------
Net cash inflow from  1,257 1,503 3,441
financing
--------------------------------------------------------------------------------
Decrease in cash B (1,504) (1,838) (510)
--------------------------------------------------------------------------------
Notes to the cash flow
statement:
A Net cash flow from
operating activities
Return/(loss) on ordinary activities 1,021 (363) 3,539
before taxation
--------------------------------------------------------------------------------
(Gains) on investments  (1,321) (121) (3,961)
--------------------------------------------------------------------------------
Decrease/(increase) in  94 (105) (247)
debtors
--------------------------------------------------------------------------------
Decrease in creditors  (575) (34) (1,374)
--------------------------------------------------------------------------------
Net cash (outflow) from operating (781) (623) (2,043)
activities
--------------------------------------------------------------------------------
B Analysis of net funds
Beginning of period  3,814 4,324 4,324
--------------------------------------------------------------------------------
Net cash outflow  (1,504) (1,838) (510)
--------------------------------------------------------------------------------
End of period  2,310 2,486 3,814
--------------------------------------------------------------------------------
Summary of Investment Portfolio
as at 31 August 2011
Valuation
 movement % of
 in the portfolio
Ordinary Share pool Cost Valuation period  by value
 £'000 £'000 £'000
--------------------------------------------------------------------------------
Top ten venture capital investments (by
value)
Espresso Group Limited 1,317 3,492 161 22.8%
--------------------------------------------------------------------------------
SPC International Limited 1,618 1,673 13 10.9%
--------------------------------------------------------------------------------
Think Limited 403 1,591 850 10.4%
--------------------------------------------------------------------------------
Eagle Rock Entertainment Group Limited 1,010 1,176 (133) 7.7%
--------------------------------------------------------------------------------
Campden Media Limited 1,289 1,170 - 7.6%
--------------------------------------------------------------------------------
Donatantonio Limited 582 719 (9) 4.7%
--------------------------------------------------------------------------------
Tossed Limited 578 697 118 4.5%
--------------------------------------------------------------------------------
Ashford Colour Press Limited 500 430 (3) 2.8%
--------------------------------------------------------------------------------
Fjordnet Limited 200 278 (67) 1.8%
--------------------------------------------------------------------------------
Pilat Media Global plc 172 276 (160) 1.8%
--------------------------------------------------------------------------------
 7,669 11,502 770 75.0%
--------------------------------------------------------------------------------
Other venture capital investments 2,875 304 (130) 2.0%
--------------------------------------------------------------------------------
 10,544 11,806 640 77.0%
--------------------------------------------------------------------------------
Liquidity fund investments  3,400  22.2%
--------------------------------------------------------------------------------
Cash at bank and in hand  124  0.8%
--------------------------------------------------------------------------------
Ordinary Share pool total  15,330  100.0%
--------------------------------------------------------------------------------
Other venture capital investments at 31 August 2011 comprise: UBC Media Group
plc, Coolabi plc, Overtis Group Limited, Isango! Limited, Baby Innovations t/a
Steribottle and Sports Holdings Limited.
With the exclusion of Pilat Media Global plc, UBC Media Group plc and Coolabi
plc which are quoted on AIM, all venture capital investments are unquoted.
Summary of Investment Portfolio
as at 31 August 2011
Valuation
 movement % of
 in the portfolio
'C' Share pool Cost Valuation period by value
 £'000 £'000 £'000
--------------------------------------------------------------------------------
Top ten venture capital investments (by
value)
Think Limited 403 1,591 850 13.4%
--------------------------------------------------------------------------------
Fjordnet Limited 800 1,114 (271) 9.4%
--------------------------------------------------------------------------------
Donatantonio Limited 885 1,095 (13) 9.2%
--------------------------------------------------------------------------------
Lazurite Limited 1,000 957 (11) 8.1%
--------------------------------------------------------------------------------
Charterhouse Leisure Limited 700 652 (27) 5.5%
--------------------------------------------------------------------------------
SPC International Limited 403 610 5 5.1%
--------------------------------------------------------------------------------
Chess Technologies Limited 600 561 107 4.7%
--------------------------------------------------------------------------------
Tossed Limited 425 511 86 4.3%
--------------------------------------------------------------------------------
Celebrus Technologies Limited 470 470 - 4.0%
--------------------------------------------------------------------------------
Overtis Group Limited 605 324 (103) 2.7%
--------------------------------------------------------------------------------
 6,291 7,885 623 66.4%
--------------------------------------------------------------------------------
Other venture capital investments 1,605 1,497 (78) 12.6%
--------------------------------------------------------------------------------
 7,896 9,382 545 79.0%
--------------------------------------------------------------------------------
Liquidity fund investments  1,350  11.4%
--------------------------------------------------------------------------------
Cash at bank and in hand  1,144  9.6%
--------------------------------------------------------------------------------
'C' Share pool total  11,876  100.0%
--------------------------------------------------------------------------------
Other ventures capital investments at 31 August 2011 comprise: Dianomi Limited,
Blismobile Limited, Isango! Limited, Monica Vinader Limited, Senselogix Limited,
Matssoft Limited, Cinergy International Limited, Campden Media Limited and Eagle
Rock Entertainment Group Limited.
All venture capital investments are unquoted.
Summary of Investment Portfolio
as at 31 August 2011
Valuation
 movement % of
 in the portfolio
'D' Share pool Cost Valuation  period by value
 £'000 £'000 £'000
---------------------------------------------------------------------------
Venture capital investments
Matssoft Limited 650 650 - 8.8%
---------------------------------------------------------------------------
Celebrus Technologies Limited 300 300 - 4.1%
---------------------------------------------------------------------------
Tossed Limited 223 268 45 3.6%
---------------------------------------------------------------------------
APM Healthcare Limited 188 188 - 2.6%
---------------------------------------------------------------------------
Monica Vinader Limited 138 138 - 1.9%
---------------------------------------------------------------------------
Fjordnet Limited 276 134 (51) 1.8%
---------------------------------------------------------------------------
Cinergy International Limited 115 104 (12) 1.4%
---------------------------------------------------------------------------
Senselogix Limited 92 92 - 1.2%
---------------------------------------------------------------------------
 1,982 1,874 (18) 25.4%
---------------------------------------------------------------------------
Liquidity fund investments  4,450  60.4%
---------------------------------------------------------------------------
Cash at bank and in hand  1,042  14.2%
---------------------------------------------------------------------------
'D' Share pool total  7,366  100.0%
---------------------------------------------------------------------------
All venture capital investments are unquoted.
Summary of Investment Movements
for the six months ended 31 August 2011
Additions Cost
 £'000
--------------------------------
Ordinary Share pool
Fjordnet Limited 110
--------------------------------
Overtis Group Limited 40
--------------------------------
 150
--------------------------------
'C' Share pool
Campden Media Limited 227
--------------------------------
Overtis Group Limited 191
--------------------------------
Tossed Limited 80
--------------------------------
Senselogix Limited 37
--------------------------------
 535
--------------------------------
'D' Share pool
APM Healthcare Limited 187
--------------------------------
Tossed Limited 40
--------------------------------
Senselogix Limited 23
--------------------------------
 250
--------------------------------
Disposals
  Market
  value at  Gain Realised
1 March Disposal against gain in
 Cost 2011*  Proceeds  cost  period
 £'000 £'000  £'000  £'000  £'000
-------------------------------------------------------------------------
'C' Share pool
Steak Media Limited 456 531 685 229 154
-------------------------------------------------------------------------
No disposals were made by the Ordinary Share or 'D' Share pools in the period.
*Market value at 1 March 2011 is adjusted for investments made since 1 March
2011.
Notes to the Unaudited Financial Statements
1. The unaudited half yearly results cover the six months to 31 August 2011 and
have been prepared in accordance with UK Generally Accepted Accounting Practice
("UK GAAP"). Where presentational guidance set out in the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies"
revised January 2009 ("SORP") is consistent with the requirements of UK GAAP,
the directors have sought to prepare the financial statements on a consistent
basis compliant with the recommendations of the SORP.
2. All revenue and capital items in the Income Statement derive from continuing
operations.
3. There are no recognised gains or losses other than those disclosed in the
Income Statement.
4. The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
5. The comparative figures were in respect of the period ended 31 August 2010
and the year ended 28 February 2011.
6. Return per share for the period has been calculated on the following:
Ordinary
  Shares 'C' Shares 'D' Shares
---------------------------------
Revenue return per share based on:
Net revenue profit after taxation (£'000) 152 130 (30)
---------------------------------------------------------------------------
Weighted average number of shares in issue 27,079,420 14,486,672 8,266,517
---------------------------------------------------------------------------
Capital return per share based on:
Net revenue profit after taxation (£'000) 227 462 (176)
---------------------------------------------------------------------------
Weighted average number of shares in issue 27,079,420 14,486,672 8,266,517
---------------------------------------------------------------------------
7. Net Asset Value per share for the period has been calculated on the
following:
 Ordinary Shares 'C' Shares 'D' Shares
--------------------------------------
Net Assets (£'000) 15,341 11,687 7,230
-----------------------------------------------------------------------------
Number of shares in issue at period end 27,431,590 14,447,790 8,256,901
-----------------------------------------------------------------------------
8. Dividends
 Year
ended
6 months to 6 months to 28 Feb
31 Aug 2011 31 Aug 2010 Â 2011
----------------------------------------------------
 Revenue Capital Total Revenue Capital Total Total
Pence £'000 £'000 £'000 £'000 £'000 £'000 £'000
---------------------------------------------------------------------
Ordinary Share dividends paid in
period
2011 Interim 6.25 498 1,232 1,730 - - - -
---------------------------------------------------------------------
2010 Final 8.0 - - - - 2,055 2,055 2,036
---------------------------------------------------------------------
  498 1,232 1,730 - 2,055 2,055 2,036
---------------------------------------------------------------------
No dividends were paid on the 'C' Share pool or 'D' Share pool during the
period.
9. Reserves
 Capital redemption reserve Share  Capital
premium Special reserve Revaluation Revenue
account  reserve  - realised  reserve  reserve
 £'000 £'000 £'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
At 1 March 2011 238 8,811 14,913 3,518 1,548 (34)
--------------------------------------------------------------------------------
Expenses capitalised - - - (552) - -
--------------------------------------------------------------------------------
Tax relief on expenses - - - - - -
capitalised
--------------------------------------------------------------------------------
Share issue - 1,328 - - - -
--------------------------------------------------------------------------------
Purchase of own shares 31 - (186) - - (11)
--------------------------------------------------------------------------------
Gains on investments - - - 154 1,168 -
--------------------------------------------------------------------------------
Retained revenue - - - - - 252
--------------------------------------------------------------------------------
Distributions paid - - - (1,232) - (498)
--------------------------------------------------------------------------------
Transfer between - - (926) 1,002 (76) -
reserves
--------------------------------------------------------------------------------
At 31 August 2011 269 10,139 13,801 2,890 2,640 (291)
--------------------------------------------------------------------------------
The Special reserve, Capital reserve-realised and Revenue reserve are all
distributable reserves. The Revaluation reserve includes losses of £3,433,000
which are included in the calculation of distributable reserves. Total
distributable reserves are £12,967,000.
10. Contingent liabilities, guarantees and financial commitments
The Company has guaranteed bank borrowings of one of its investments,
Donatantonio Limited, amounting to £225,000. A third party has provided a
guarantee to the Company amounting to £112,500 in respect of the above guarantee
such that the Company's net exposure is £112,500.
Apart from the above, the Company has no contingent liabilities, guarantees and
financial commitments.
11. The unaudited 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 28 February 2011 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.
12. 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.
13. Copies of the unaudited half-yearly results will be sent to shareholders.
Further copies can be obtained from the Company's Registered Office and will be
available for download from www.provenvcts.com and 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: Proven VCT plc via Thomson Reuters ONE
[HUG#1558891]