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TP70 2008(ii) VCT (TPV2)

  Print   

Monday 14 November, 2011

TP70 2008(ii) VCT

Half Yearly Report

RNS Number : 0324S
TP70 2008 (ii) VCT PLC
14 November 2011
 



 

 

 

 

TP70 2088 (II) VCT plc

 

Interim Results

 

The directors of TP70 2008 (II) VCT plc are pleased to announce its Interim results for the six months to 30 September 2011.

 

For further information please contact Triple Point Investment Management LLP on 020 7201 8989. The Interim report will be available in full at www.triplepoint.co.uk

 

Financial Summary

For the 6 months ended 30 September 2011

 


Unaudited


Audited


Unaudited

6 months ended


Year ended

6 months ended


30 September 2011


31 March 2011


30 September 2010


£'000


£'000


£'000

Net assets

18,362


19,193


18,936

Net asset value per share

80.33p


83.96p


82.69

Net loss before tax

(464)


(287)


(586)

Loss per share

(2.09p)


(1.32p)


(2.58p)







 

 

TP70 2008 (II) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM"). The Company was launched in November 2007 and raised £23 million through an offer for subscription. Initially 70% of the Company's net assets were to be invested in cash and liquid assets prior to investment in VCT qualifying holdings. The remaining 30% of net assets were to be exposed directly or indirectly to a leveraged version of GAM Diversity, a fund of hedge funds. The Company's policy is to hold qualifying investments in businesses with predictable revenue streams from financially sound customers and aim to generate an attractive income stream and modest growth for shareholders.

 

Chairman's Statement

For the 6 months ended 30 September 2011

 

I am writing to present the Unaudited Interim Financial Report for TP70 2008 (II) VCT plc ("the Company") for the. 6 months ended 30 September 2011.

 

 

The Company's strategy offers combined exposure to a leveraged version of GAM Diversity and to VCT qualifying venture capital investments with contractual revenues from financially secure counterparties.

 

Results

 

At 30 September 2011 the Company has in place a diversified portfolio of VCT qualifying investments, representing 78% of the value of its investments. Further details of the portfolio are given in the Investment Manager's Review on page 3.

 

The Company's exposure to GAM Diversity 2.5XL now stands at 21% of net assets, which with leverage

represents 53% of net assets.

 

During the period GAM Diversity 2.5XL contributed a loss of £535,000 to the Company which overall made a loss before taxation of £464,000. The performance of GAM is detailed further in the Investment Manager's Review on page 3. At the year end the Company's Net Asset Value per share stood at 80.33p and the loss per share for the six month period was 2.09p.

 

Dividend

 

A third dividend of £352,000 was paid to shareholders on 29 July 2011 equal to 1.54 p per share.

 

Board Composition

 

The Board regularly reviews the independence of its members and as a result a decision was taken that Peter Hargreaves, who has an interest in TPIM, should be replaced by a Director who is independent of TPIM. Therefore Peter resigned as a Director and Baroness Valentine was appointed on 2 June 2011.

 

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 maintain approval as a VCT

•   counterparty risk relating to the Bank Julius Baer note

 

The first and fourth risks are a consequence of the Company's investment strategy to which the Company committed in its Prospectus. 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

 

With the VCT qualifying investment portfolio in place the Company's principal focus will be on monitoring and managing the performance of these investments, as well as maintaining the required level of qualifying investments taking realisations and loan repayments into account.

 

If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on 020 7201 8989.

 

 

Chad Murrin

Chairman

10 November 2011

 

Investment Manager's Review

For the 6 months ended 30 September 2011

 

TP70 2008 (II) VCT plc'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 fund of hedge funds, Diversity, via GAM Diversity GBP 2.5XL. 

 

VCT Qualifying Investment Portfolio

 

As at 30 September 2011, the Company had £14.6 million deployed in VCT qualifying investments. Under the VCT qualification rules the Company is continuing to exceed the 70% target. These investments are spread across a range of companies and sectors, with a focus on businesses that derive predictable revenue streams from a financially sound customer base. All of these investments are HMRC approved for VCT qualifying purposes.

 

The Company has investments in five companies active in the renewable energy sector. Three of these companies, including a new investment, Trinity Hall Biogas Limited, are developing opportunities in anaerobic digestion. Their customers will be either electricity utility companies via a National Grid connection, or a business located close to the generators. Energy generation from biomass is also underpinned by the Feed-in Tariff or Renewables Obligation Certificate regime. 

 

The other two companies are pursuing opportunities in electricity generation from solar photo voltaic panels ("PV") for private and social housing. The panels will be placed on suitable roofs and used to generate electricity for the residents or occupiers, with any surplus electricity exported to the National Grid. The generation of electricity from solar PV falls within the Government's Feed-in Tariff regime and the companies will benefit from this framework. Feed-in Tariffs are linked to inflation and rates for solar PV arrays installed before 2012 have been set for 25 periods, which will provide the companies with a long term, predictable cash flow. The recently announced proposed changes to the Feed-in Tariff regime are not expected to have an adverse effect on the Company's qualifying investments.

 

The Company has invested in five companies which specialise in the deployment of digital projection technology and they continue to expand their operations in the UK and Continental Europe.

 

The Company's other investments are companies active in satellite trading (providing for two-way broadband communications and digital channels access to remote, rural regions across the UK and Europe), supplying medical gas services for the NHS, crematorium management for a local authority, providing telecommunications services to a public sector body, and delivering telecoms services to the corporate sector. Receipt of cash from the contracts for the supply of medical gas, crematorium management and telecoms services have meant that the investee companies involved in those businesses have made partial loan repayments to the Company.

 

The following commentary is based on information provided by GAM.

 

GAM Review

 

Over the six months to 30 September 2011, GAM Diversity 2.5 XL lost 12.33%. Over the same period the FTSE All Share lost 11.85% and the MSCI World Index lost 13.52%.

 

GAM report that the second quarter of 2011 proved to be another eventful period for equities. Although equity markets were relatively unchanged for the quarter, there was significant volatility throughout the period.

 

The third quarter was characterised as a stressed extension of the uncertain environment of the first half of 2011. The appetite for risk, which began to deteriorate at the end of July, continued through August and September. Risk aversion occurred against an almost unchanged economic backdrop: the latest data has demonstrated continuing low nominal GDP growth in both the US and Europe, with inflationary pressures in emerging markets and yet unresolved debt issues in Europe. What did change, however, was the markets' expectations, which turned more bearish after July. The continued lack of a coordinated policy response towards the euro zone debt crisis meant that the issues began to impact on core markets, such as Italy. This, and the recognition that China would accept a lower rate of growth in return for greater control of inflation, triggered a move by investors towards perceived safe havens. In broad market terms, this translated into an S&P 500 index decline of 13.9% and a MSCI World index fall of 16.5% for the quarter. The underlying managers in GAM's allocation to trading strategies posted positive absolute returns via exposure to government bonds and select emerging market assets. GAM's relative value managers also protected capital over the period, but GAM report that they were disappointed by the level of correlation that their equity hedge managers demonstrated to the general equity market sell-off.

 

GAM Outlook

 

It is GAM's view that the current political backdrop is unlikely to disappear anytime soon, with markets over the medium term moving consistently with fundamentals, but with sizeable interim reversals. Ultimately, GAM expect greater resolution on the issues in Europe and the US, which will provide opportunities for managers to generate more significant returns in multiple markets, whether they be bullish or bearish on any particular asset class and market. While there is the possibility that the environment may normalise, GAM believe it is prudent for managers to find ways to enhance their positioning rather than simply wait for resolution, which could take quarters or years, rather than weeks.

 

GAM expect the focus to shift incrementally towards these approaches. However, it is clear that volatility and correlation will remain elevated and this will continue to present challenges for all hedge fund managers, requiring them to manage this increased risk appropriately.

 

Should the current uncertainty eventually stabilise and translate into more sustained market movements, GAM expect the opportunity set to increase.

 

 

 

Outlook

 

Some additional investment in VCT qualifying companies may be necessary to replace realisations and loan repayments, but with the VCT qualifying investment portfolio in place our intention for the remainder of the Company's life is to focus primarily on monitoring and managing the performance of these investments and monitoring the Company's exposure to GAM Diversity.

 

 

 

 

 

Claire Ainsworth

Managing Partner

for Triple Point Investment Management LLP

10 November 2011

 



 

 Directors' Responsibility Statement

For the 6 months ended 30 September 2011

 

The Directors have prepared the Interim Financial Report for the Company in accordance with International Financial Reporting Standards ("IFRS").

 

In preparing the Interim Financial Report for the 6 month period to 30 September 2011, the Directors confirm that to the best of their knowledge:

a)  the Interim Financial Report has been prepared in accordance with International Accounting Standard IAS34, "Interim Financial Reporting" issued by the International Accounting Standards Board;

b)  the Interim Financial Report includes a fair review of important events during the period and their effect on the Financial Statements and a description of principal risks and uncertainties for the remainder of the accounting period;

c)  the Interim Financial Report gives a true and fair view in accordance with IFRS of the assets, liabilities, financial position and of the results of the Company for the period and complies with IFRS and the Companies Act 2006; 

d)  the Interim Financial Report includes a fair review of related party transactions and changes therein. Other than detailed in note 14 there are no related party transactions; and

e)  The Directors believe that the Company has sufficient financial resources to manage its business risks in the current uncertain economic outlook.

The Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

 

This Interim Financial Report has not been audited or reviewed by the auditors.

 

 

 

 

Chad Murrin

Chairman

10 November 2011

 


 

Unaudited Statement of Comprehensive Income

For the 6 months ended 30 September 2011

 



Unaudited


Audited


Unaudited



6 months ended


Year ended


6 months ended



30 September 2011


31 March 2011


30 September 2010


Note

Rev.

Cap.

Total


Rev.

Cap.

Total


Rev.

Cap.

Total



£'000

£'000

£'000


£'000

£'000

£'000


£'000

£'000

£'000














Investment income

5

286

-  

286


553

-  

553


251

-  

251

Realised loss on investments


-  

-  

-  


-  

(5)

(5)


-  

-  

-  

Unrealised loss on investments


-  

(270)

(270)


-  

(198)

(198)


-  

(308)

(308)

Unrealised loss on derivative transaction


-  

(265)

(265)


-  

(186)

(186)


-  

(303)

(303)

Investment return


286

(535)

(249)


553

(389)

164


251

(611)

(360)














Investment management fees


42

125

167


84

252

336


42

127

169

Financial and regulatory costs


13

-  

13


23

-  

23


12

-  

12

General administration

 


-  

-  

-  


17

-  

17


7

-  

7

Legal and professional fees


15

-  

15


34

-  

34


18

-  

18

Directors' remuneration

7

20

-  

20


41

-  

41


20

-  

20

Operating expenses


90

125

215


199

252

451


99

127

226

Profit / (loss) before taxation


196

(660)

(464)


354

(641)

(287)


152

(738)

(586)

Taxation

8

(41)

26

(15)


(68)

53

(15)


(32)

27

(5)

Profit/(loss) after taxation


155

(634)

(479)


286

(588)

(302)


120

(711)

(591)

Total comprehensive  income/(loss)


155

(634)

(479)


286

(588)

(302)


120

(711)

(591)

Basic and diluted earnings/(loss) per share

9

0.68p

(2.77p)

(2.09p)


1.25p

(2.57p)

(1.32p)


0.53p

(3.11p)

(2.58p)














 

 

The Total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS).  The supplementary Revenue Return and Capital columns have been prepared under guidance published by the Association of Investment Companies.

 

All revenue and capital items in the above statement derive from continuing operations.

 

This Statement of Comprehensive Income includes all recognised gains and losses.

 

The accompanying notes are an integral part of this statement.

 

 

 



 

 

Unaudited Balance Sheet

 

 




Unaudited


Audited


Unaudited


Note


30 September 2011


31 March 2011


30 September 2010




£'000


£'000


£'000









Non current assets








Financial assets at fair value through the income statement



18,360


19,096


18,871

















Current assets








Receivables



266


46


43

Cash and cash equivalents

10


195


125


118




461


171


161









Total assets



18,821


19,267


19,032

















Current liabilities








Payables and accrued expenses



423


53


63

Current taxation payable



36


21


33




459


74


96









Net assets



18,362


19,193


18,936









Equity attributable to equity holders








Share capital

11


229


229


229

Capital redemption reserve



2


2


2

Special distributable reserve


21,576


21,576


21,608

Capital reserve



(3,535)


(2,901)


(3,024)

Revenue reserve



90


287


121

Total equity



18,362


19,193


18,936









Net asset value per share (pence)

12


80.33p


83.96p


82.69p

 

 

 

 

 

The accompanying notes are an integral part of this statement.

 

  

Uanaudited Statement of Changes in Shareholders' Equity

For the 6 months ended 30 September 2011

 


Issued Capital

Share Redemption Reserve

Special Distributable Reserve

Capital Reserve

Revenue Reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

6 months ended 30 September 2011





Opening balance

229

2

21,576

(2,901)

287

19,193

Dividend paid

-  

-  

-  

-  

(352)

(352)

Transactions with owners

-  

-  

-  

-  

(352)

(352)

(Loss) / profit for the period

-  

-  

-  

(634)

155

(479)

Total comprehensive (loss) / income for the period

-  

-  

-  

(634)

155

(479)

229

2

21,576

(3,535)

90

18,362

Capital reserve consists of:







Unrealised losses on investments




(2,802)



Other realised losses




(733)







(3,535)










Year ended 31 March 2011







Opening balance

229

2

21,608

(2,313)

283

19,809

-  

-  

(32)

-  

-  

(32)

Dividend paid

-  

-  

-  

-  

(282)

(282)

-  

-  

(32)

-  

(282)

(314)

(Loss) / profit for the period

-  

-  

-  

(588)

286

(302)

Total comprehensive (loss)/ income for the period

-  

-  

-  

(588)

286

(302)

229

2

21,576

(2,901)

287

19,193

Capital reserve consists of:







Unrealised losses on investments




(2,267)



Other realised losses




(634)






(2,901)










6 months ended 30 September 2010




Opening balance

229

2

21,608

(2,313)

283

19,809

Dividend paid

-  

-  

-  

-  

(282)

(282)

-  


-  

-  

(282)

(282)

(Loss)/ profit for the period

-  

-  

-  

(711)

120

(591)

Total comprehensive (loss) / income for the period

-  

-  

-  

(711)

120

(591)

Balance at 30 September 2010

229

2

21,608

(3,024)

121

18,936

Capital reserve consists of:







Unrealised losses on investments




(2,494)



Other realised losses




(530)






(3,024)



 

The accompanying notes are an integral part of this statement.

 

Unaudited Statement of Cash Flows

For the 6 months ended 30 September 2011

 



Unaudited


Audited


Unaudited


6 months ended

Year ended

6 months ended



30 September 2011


31 March 2011


30 September 2010



£'000


£'000


£'000

Cash flows from operating activities







Loss before taxation


(464)


(287)


(586)

Realised loss on investments


-  


5


-  

Unrealised loss on investments


535


384


611

Cashflow generated by operations


71


102


25

(Increase)/ decrease in receivables


(220)


25


28

Increase/ (decrease) in payables


370


(286)


(276)

Taxation paid


-


(22)


-  

Net cash flows from operating activities


221


(181)


(223)








Cash flow from investing activities







Purchase of financial assets at fair value through profit or loss


(508)


(6,563)


(2,670)

Proceeds of sale of financial assets at fair value through profit or loss account


709


5,690


1,800

Net cash flows from investing activities


201


(873)


(870)








Cash flows from financing activities







Purchase of own shares


-  


(32)


-  

Dividends paid


(352)


(282)


(282)

Net cash flows from financing activities


(352)


(314)


(282)

Net Increase/ (decrease) in cash and cash equivalents


70


(1,368)


(1,375)






















Reconciliation of net cash flow to movements in cash and cash equivalents







Opening cash and cash equivalents


125


1,493


1,493

Net Increase/ (decrease) in cash and cash equivalents


70


(1,368)


(1,375)

Closing cash and cash equivalents


195


125


118

 

 

 

The accompanying notes are an integral part of this statement.

 

 

 

 

 

Notes to the Unaudited Interim Financial Report

For the 6 months ended 30 September 2011

 

 

1       Corporate Information             

                                                                                                                 

The Interim Financial Report of the Company for the 6 months ended 30 September 2011 was authorised for issue in accordance with a resolution of the Directors on 10 November 2011.

 

The Company applied for listing on the London Stock Exchange on 6 February 2008.

 

TP70 2008 (II) VCT plc is incorporated and domiciled in Great Britain. The address of TP70 2008 (II) VCT plc's registered office, which is also its principal place of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.

 

TP70 2008 (II) VCT plc's Interim Financial Report is presented in Pounds Sterling (£) which is also the functional currency of the Company, rounded to the nearest thousand.

 

The financial information set out in this Interim Financial Report does not constitute statutory accounts as defined in S434 of the Companies Act 2006.

 

The principal activity of the Company is investment. The Company's investment strategy is to offer combined exposure to a leveraged version of GAM Diversity and venture capital investments focused on companies with contractual revenues from financially secure counterparties.

                                                                                                 

                                                                                                                                   

2       Basis of preparation and accounting policies                                      

                                                                                                                                    

Basis of preparation

 

The Interim Financial Report of the Company for the 6 months ended 30 September 2011 has been prepared in accordance with IAS 34: Interim Financial Reporting.  It does not include all of the information required for full Financial Statements and should be read in conjunction with the Financial Statements for the year ended 31 March 2011.

 

Estimates

 

The preparation of the Interim Financial Report requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenditure. Actual results may differ from these estimates.

 

 

3.       Seasonality of operations

The Company's operations are not seasonal.

 

 

4.      Segmental reporting

                                                                                                                                             

The Company's segments are defined by the financial information provided to the Board.  The Company only has one class of business, being investment activity. 

 

 

5.           Investment Income


Unaudited


Audited


Unaudited


6 months ended


Year ended


6 months ended


30 September 2011


31 March 2010


30 September 2010


Rev.

Cap.

Total


Rev.

Cap.

Total


Rev.

Cap.

Total


£'000

£'000

£'000


£'000

£'000

£'000


£'000

£'000

£'000

Loan stock interest

285

-  

285


537

-  

537


239

-  

239

Income receivable on money market funds

1

-  

1


16

-  

16


12

-  

12

Interest receivable on bank balances

-  

-  

-  


-  

-  

-  


-  

-  

-  

Total

286

-  

286


553

-  

553


251

-  

251

 

 

6.      Investment management fees

                                                                                                                                             

TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 6 February 2008. The agreement runs until 6 February 2013 and may be terminated at any time thereafter by not less than twelve months' notice given by either party and which provides for an administration and investment management fee of 1.75% per annum of net assets payable quarterly in arrears. Should such notice be given the Investment Manager would continue to perform its duties under the Investment Management Agreement and to receive its management fee during the notice period.

 

7.      Directors' Remuneration

 

Directors' remuneration

Unaudited


Audited


Unaudited


6 months ended


Year ended


6 months ended


30 September 2011


31 March 2011


30 September 2010


Rev.

Cap.

Total


Rev.

Cap.

Total


Rev.

Cap.

Total


£'000

£'000

£'000


£'000

£'000

£'000


£'000

£'000

£'000

Chad Murrin (Chairman)

8

-  

8


15

-  

15


15

-  

15

Michael Stanes

6

-  

6


6

-  

6


-  

-  

-  

Baroness Valentine

4

-  

4


-  

-  

-  


-  

-  

-  

Peter Hargreaves

2

-  

2


6

-  

6


-  

-  

-  

Sir John Lucas-Tooth

-  

-  

-  


8

-  

8


13

-  

13

Robert Reid

-  

-  

-  


6

-  

6


12

-  

12

Total

20

-  

20


41

-  

41


40

-  

40













 

 

8.      Taxation


Unaudited


Audited


Unaudited


6 months ended


Year ended


6 months ended


30 September 2011


31 March 2011


30 September 2010


Rev.

Cap.

Total


Rev.

Cap.

Total


Rev.

Cap.

Total


£'000

£'000

£'000


£'000

£'000

£'000


£'000

£'000

£'000

Profit / (loss) on ordinary activities before tax

196

(660)

(464)


354

(641)

(287)


152

(738)

(586)

Capital losses  not taxable

-  

535

535


-  

389

389


-  

611

611


196

(125)

71


354

(252)

102


152

(127)

25

UK corporation tax at an effective rate of 21% (21%)

41

(26)

15


74

(53)

21


32

(27)

5

Adjustment re prior year

-  

-  

-  


(6)

-  

(6)


-  

-  

-  

Total charged in statement of comprehensive income

41

(26)

15


68

(53)

15


32

(27)

5

 

Capital gains and losses are exempt from corporation tax due to the Company's status as a Venture Capital Trust.

 

 

9.      Loss per share

 

The loss per share is based on a loss from ordinary activities after tax of £479,000 and on the weighted average number of shares in issue during the period of 22,858,626.

 

 

10.    Cash and cash equivalents

 

Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc.

 

 

11.    Share Capital

 



Unaudited


Audited


Unaudited


30 September 2011

31 March 2011

30 September 2010

Ordinary Shares of 1p







Authorised







no. of shares

50,000,000

50,000,000

50,000,000

Par Value £'000


500


500


500

Issued & Fully Paid







no. of shares

22,858,626

22,858,626

22,898,626

Par Value £'000


229


229


229








 

 

12.    Net asset value per share

 

The calculation of net asset value per share is based on net assets of £18,362,000 divided by the 22,858,626 shares in issue.

 

 

13.    Commitments and contingencies                                                                                     

                                                                                                                                     

The Company has no commitments or contingent liabilities.

 

14.    Related party transactions 

                  

Peter Hargreaves, who was a Director of the Company. has an equity interest in Triple Point LLP (TPLLP), which in turn has a controlling interest in TPIM. During the period TPIM provided investment management and administration services to the Company for a fee amounting to £167,000.

 

 

15.    Post balance sheet events

 

There were no post balance sheet events.

 

 

15.    Dividends

 

During the period a dividend of £352, 000 was paid equal to 1.54p per share on 22,858,626 shares.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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