TIDMPAV
Pennine AIM VCT plc
Half Yearly Report for the six months ended 31 July 2009
Recent performance summary
2009 2009 2008
31 Jul 31 Jan 31 Jul
pence Pence pence
Net asset value per Ordinary Share 34.8 33.6 44.1
Cumulative distributions per Ordinary Share 88.1 88.1 88.1
Total return per Ordinary Share 122.9 121.7 132.2
Net asset value per 'D' Share 84.8 86.4 86.7
Cumulative dividends per 'D' Share 1.0 1.0 1.0
Total return per 'D' Share 85.8 87.4 87.7
CHAIRMAN'S STATEMENT
The six months ended 31 July 2009 have seen a change in market
conditions with less volatility than we have seen for some time and
steady increases in market indices over the latter half of the
period. However, the general economic conditions continue to have a
negative impact on many company valuations which has resulted in
there being little movement in your Company's net asset values over
the period.
Net Asset Value
At 31 July 2009, the Net Asset Value ("NAV") per Ordinary Share stood
at 34.8p, an increase of 1.2p or 3.6% since 31 January 2009.
The NAV per 'D' Share stood at 84.8p at 31 July 2009, a decrease of
1.6p or 1.9% since 31 January 2009.
Venture capital investments
Ordinary Share pool
During the period, the Ordinary Share pool invested GBP55,000 in two
new investments and three small follow-on investments. GBP40,000 was
invested into Financial News Publishing Limited, a financial
publisher which has arisen from Sanastro plc, a previous investment
which had failed during the period. GBP13,000 was also invested into
Tristel plc, a manufacturer of infection control products.
There have been a small number of realisations in the period.
Clerkenwell Ventures plc was unable to find suitable restaurant
businesses to acquire in line with its plans and returned most of its
surplus funds to shareholders. The Ordinary Share portfolio received
GBP150,000, realising a gain of GBP24,000.
Sanastro (as mentioned above) and Forward Media Limited both went
into liquidation in the period, producing total realised losses of
GBP53,000.
Over the period the majority of the Ordinary Share pool's AIM-quoted
and main market investments showed small increases in value and there
were no changes to the valuation of any of the Company's unquoted
investments. Unrealised gains for the six-months were GBP190,000.
'D' Share pool
During the period, the 'D' Share pool invested a further GBP50,000 in
Tristel plc.
The 'D' Share pool had one realisation, with cash being returned by
Clerkenwell Ventures plc as described above. The pool received
proceeds of GBP73,000, realising a gain of GBP12,000.
As with the Ordinary Share pool, the quoted investments within the
portfolio mostly increased in value. However, a provision of GBP50,000
was made against the unquoted investment in the Thames Club Limited.
The Company has been refurbishing the health club it owns in Staines,
which has unsurprisingly reduced trading performance temporarily.
Additionally, FSG Security plc was placed into administration in
August and has therefore been devalued to GBPnil. Overall the 'D'
Share portfolio showed unrealised losses of GBP8,000.
Details of both portfolios and movements thereon are shown below.
Fixed income and other investments
Ordinary Share pool
The Ordinary Share pool holds a small proportion of its funds in
listed fixed income investments and hedge funds. The portfolio showed
a small unrealised gain over the period of GBP18,000 and a realised
loss of GBP1,000.
'D' Share pool
The 'D' Share pool holds a portfolio of non-VCT qualifying
investments which comprise of a gilt and a FTSE index tracker. The
portfolio showed a small unrealised loss over the period of GBP29,000
and a realised loss of GBP2,000. The unrealised loss primarily arises
from the expectation of future rises in interest rates.
Revenue and dividend
The return for the period was GBP104,000 (2008 loss: GBP1,178,000),
comprising a revenue loss of GBP20,000 and a capital gain of GBP124,000.
In line with the Company's normal practice, no interim dividend will
be paid for either class of share.
Shares buybacks
The Company has currently suspended its share buyback policy while it
is in the process of cancelling its Share Premium account to create
more distributable reserves. Once this is complete, the Board will
give consideration to the Company's future share buyback policy.
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is now
required in the Company's half year 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 period are as follows:
(i) investment risk associated with investing in small and immature
businesses; and
(ii) failure to maintain approval as a VCT.
In both cases the Board continues to be satisfied with the Company's
approach to these risks. Although the Company has significant
exposure to the relatively immature businesses quoted on AIM, the
Company seeks to mitigate risk associated with this as far it can by
holding a well-diversified portfolio.
The Company's compliance with the VCT regulations is continually
monitored by the Administration Manager, who regularly reports 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.
Outlook
Market indices have generally continued to rise since the period end,
leading to small increases in the NAV of both the Ordinary Share and
D Shares. However, despite improved market performance in recent
months, the FTSE AIM All-Share Index remains substantially below its
levels of two years ago. Accordingly the Board believes it is
unrealistic to expect the Company's Ordinary Share pool to recover
the ground it has lost in the short or medium-term.
The 'D' Share pool raised its funds approximately two and half year
ago and has not been so badly affected by the declining markets.
This pool may be in a better position to benefit from improving
markets.
The Board is conscious that, with net assets of less than GBP7 million,
the Company is small for a VCT. As a result, running costs are now at
their maximum level of 3.5% of net asset per annum, with any surplus
costs being borne by the Investment and Administration Managers. The
Board is considering options for the future of the Company that can
reduce the burden of annual running costs on Shareholders and meet
other Shareholder requirements such as strong dividend and share
buyback policies. Naturally, I shall be in touch with Shareholders
if and when there are any significant developments.
Hugh Gillespie
Chairman
28 September 2009
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 July 2009
As at As at
31 Jul 2008 31 Jan
As at 31 Jul 2009 2009
Ordinary 'D'
Shares Shares Total Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investments 3,795 1,773 5,568 8,083 6,576
Current assets
Debtors 41 27 68 78 116
Cash at bank and in 732 619 1,351 217 211
hand
773 646 1,419 295 327
Creditors: amounts
falling (18) (13) (31) (83) (51)
due within one year
Net current assets 755 633 1,388 212 276
Net assets 4,550 2,406 6,956 8,295 6,852
Capital and reserves
Called up share 1,308 284 1,592 1,607 1,592
capital
Capital redemption 299 - 299 284 299
reserve
Special reserve - 2,396 2,396 - 2,396
Share premium account 4,984 - 4,984 7,380 4,984
Capital reserve - 959 (71) 888 2,171 1,724
realised
Investment holding (3,696) (205) (3,901) (3,896) (4,861)
losses
Revenue reserve (492) 2 (490) (490) (470)
Merger reserve 1,188 - 1,188 1,239 1,188
Equity shareholders' 4,550 2,406 6,956 8,295 6,852
funds
Net asset value per:
Ordinary Share 34.8p 44.1p 33.6p
'D' Share 84.8p 86.7p 86.4p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
31 Jul 2009 31 Jul 31 Jan
2008 2009
Ordinary 'D'
Shares Shares Total Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Shareholders' funds 4,403 2,449 6,852 10,063 10,063
Repurchase of own shares - - - (162) (213)
Total recognised 147 (43) 104 (1,178) (2,570)
gains/(losses) for the
period
Dividends paid in period - - - (428) (428)
Closing Shareholders' funds 4,550 2,406 6,956 8,295 6,852
UNAUDITED INCOME STATEMENT
for the six months ended 31 July 2009
Six months ended
31 Jul 2009
Revenue Capital Total
Company position GBP'000 GBP'000 GBP'000
Income 77 - 77
Gains/(losses) on investments - 153 153
77 153 230
Investment management fees (10) (29) (39)
Other expenses (87) - (87)
Return/(loss) on ordinary activities (20) 124 104
Taxation - - -
Return/(loss) attributable to Equity (20) 124 104
Shareholders
Return per Ordinary Share (0.1p) 1.2p 1.1p
Return per 'D' Share (0.2p) (1.3p) (1.5p)
Six months ended Year ended
31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
Company position GBP'000 GBP'000 GBP'000 GBP'000
Income 112 - 112 234
Gains/(losses) on - (1,084) (1,084) (2,495)
investments
112 (1,084) (972) (2,261)
Investment management fees (22) (66) (88) (90)
Other expenses (115) (3) (118) (219)
Return/(loss) on ordinary (25) (1,153) (1,178) (2,570)
activities
Taxation - - - -
Return/(loss) attributable (25) (1,153) (1,178) (2,570)
to Equity Shareholders
Return per Ordinary Share (0.1p) (7.5p) (7.6p) (18.0p)
Return per 'D' Share (0.4p) (5.0p) (5.4p) (5.8p)
Split as:
Six months ended
31 Jul 2009
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Ordinary Shares
Income 49 - 49
Gains/(losses) on investments - 180 180
49 180 229
Investment management fees (6) (19) (25)
Other expenses (57) - (57)
Return/(loss) on ordinary activities (14) 161 147
Taxation - - -
Return/(loss) attributable to Equity (14) 161 147
Shareholders
Six months ended Year ended
31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
Ordinary Shares GBP'000 GBP'000 GBP'000 GBP'000
Income 83 - 83 162
Gains/(losses) on - (963) (963) (2,356)
investments
83 (963) (880) (2,194)
Investment management fees (16) (48) (64) (61)
Other expenses (79) (2) (81) (151)
Return/(loss) on ordinary (12) (1,013) (1,025) (2,406)
activities
Taxation - - - -
Return/(loss) attributable (12) (1,013) (1,025) (2,406)
to Equity Shareholders
Six months ended
31 Jul 2009
Revenue Capital Total
GBP'000 GBP'000 GBP'000
'D' Shares
Income 28 - 28
Losses on investments - (27) (27)
28 (27) 1
Investment management fees (4) (10) (14)
Other expenses (30) - (30)
Loss on ordinary activities (6) (37) (43)
Taxation - - -
Loss attributable to Equity Shareholders (6) (37) (43)
Six months ended Year ended
31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
'D' Shares GBP'000 GBP'000 GBP'000 GBP'000
Income 29 - 29 72
Losses on investments - (121) (121) (139)
29 (121) (92) (67)
Investment management fees (6) (18) (24) (29)
Other expenses (36) (1) (37) (68)
Loss on ordinary activities (13) (140) (153) (164)
Taxation - - - -
Loss attributable to Equity (13) (140) (153) (164)
Shareholders
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 July 2009
Six months ended Six months Year
31 Jul 2009 ended ended
Ordinary 'D' 31 Jul 2008 31 Jan 2009
Shares Share Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net cash outflow
from operating 1 (1) (13) (14) (19)
activities (71)
Capital
expenditure
Purchase of (55) (50) (105) (2,517) (2,779)
investments
Proceeds on 595 670 1,265 3,295 3,647
disposal of
investments
Net cash inflow 540 620 1,160 778 868
from capital
expenditure
Equity dividends - - - (430) (428)
paid
Net cash inflow before 539 607 1,146 329 369
financing
Financing
Purchase of own (6) - (6) (162) (208)
shares
Net cash outflow from (6) - (6) (162) (208)
financing
Increase in cash 2 533 607 1,140 167 161
Notes to the cash
flow statement:
1 Cash (outflow)/inflow from
operating activities
Return/(loss) on
ordinary activities 147 (43) 104 (1,178) (2,570)
before taxation
(Gains)/losses on (180) 27 (153) 1,084 2,495
investments
Decrease in other 35 13 48 79 46
debtors
Decrease in
accruals and (3) (10) (13) (42)
deferred income (4)
Net cash outflow
from operating (1) (13) (14) (19) (71)
activities
2 Analysis of
net funds
Beginning of 199 12 211 50 50
period
Net cash inflow 533 607 1,140 167 161
End of period 732 619 1,351 217 211
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 July 2009
Unrealised
gain/(loss) in % of
ORDINARY SHARE POOL Cost Valuation the period portfolio
GBP'000 GBP'000 GBP'000
Top ten venture capital
investments
Connaught plc ** 40 575 29 12.7%
Spice plc ** 249 323 (31) 7.1%
Cadbury House Limited * 289 289 - 6.4%
FDM Group plc 200 282 90 6.2%
Synergy Health plc ** 145 240 45 5.3%
Hoole Hall Country Club 200 200 - 4.4%
Holdings Limited *
Aero Inventory plc 230 167 (26) 3.7%
Ludorum plc 63 131 66 2.9%
Interserve plc ** 102 118 - 2.6%
Straight plc 179 107 51 2.4%
1,697 2,432 224 53.7%
Other venture capital 5,067 664 (34) 14.7%
investments
Other investments 727 699 18 15.4%
Total investments 7,491 3,795 208 83.8%
Cash at bank and in hand 732 16.2%
Total investments 4,527 100.0%
(including cash)
'D' SHARE POOL
Top ten venture capital
investments
Animalcare Group plc 101 147 9 6.1%
Tristel plc 113 112 8 4.7%
IS Pharma plc 100 103 19 4.3%
Cadbury House Limited * 100 100 - 4.2%
Ludorum plc 35 72 37 3.0%
Hoole Hall Country Club 50 50 - 2.1%
Holdings Limited *
Hoole Hall Spa and 50 50 - 2.1%
Leisure Limited *
The Thames Club Limited 100 50 (50) 2.1%
*
Plastics Capital plc 100 25 (5) 1.1%
Clerkenwell Ventures plc 9 5 (2) 0.2%
758 714 16 29.9%
Other venture capital 100 - (24) -
investments
Other investments
Treasury 8% Stock 2009 531 575 (19) 24.0%
Barclays Bank FTSE 155% (10) 20.2%
16/03/2012 589 484
Total investments 1,978 1,773 (37) 74.1%
Cash at bank and in hand 619 25.9%
Total investments 2,392 100.0%
(including cash)
All venture capital investments are listed on AIM unless otherwise
stated
* Unquoted
** Listed on London Stock Exchange Main Market
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 31 July 2009
Additions
'D'
Ordinary Share pool Share pool
GBP'000 GBP'000
Venture Capital investments
Financial News Publishing Limited 40 -
Tristel plc 13 50
Sundry investments 2 -
Total 55 50
Disposals
Market
value at Total
1 February Disposal Profit/(loss) realised
Cost 2009 * proceeds vs cost gain/(loss)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
ORDINARY POOL
Partial disposal
Ludorum plc 2 2 4 2 2
Restructuring
Clerkenwell
Ventures plc 158 126 150 (8) 24
Liquidations 788 53 - (788) (53)
Redemptions
Barclays Bank plc
GAM Diversity
Tracker 108 93 93 (15) -
Treasury 4%
Stock 07/03/09 346 349 348 2 (1)
1,402 623 595 (807) (28)
'D' SHARE POOL
Restructuring
Clerkenwell
Ventures plc 77 61 73 (4) 12
Redemptions
Treasury 4%
Stock 07/03/09 593 599 597 4 (2)
670 660 670 - 10
* After adjusting for purchases in the period.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half yearly results cover the six months to 31 July
2009 and have been prepared in accordance with Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" revised January 2009 ("SORP")
and in accordance with the accounting policies set out in the
statutory accounts for the year ended 31 January 2009, which were
prepared under UK Generally Accepted Accounting Practice ("UK GAAP").
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the period ended 31
July 2008 and the year ended 31 January 2009 respectively.
5. Net Asset Value per share calculations are based on the following:
Ordinary Shares 'D' Shares
Net Asset Value per share based on:
Net Assets (GBP'000) 4,550 2,406
Number of shares in issue at period end 13,086,372 2,836,269
6. Return per share calculations are based on the following:
Ordinary Shares 'D' Shares
Revenue loss per share based on:
Net revenue loss after taxation (GBP'000) (14) (6)
Capital return per share based on:
Net capital gain/(loss) for the period 161 (37)
(GBP'000)
Weighted average number of shares in 13,086,372 2,836,269
issue
7. Dividends
Paid in the period 31 Jul 2009 31 Jan 2009
Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000
Ordinary Shares:
2008 Final - 1.0p - - - 400
'D' Shares:
2008 Final - 1.0p - - - 28
8. Reserves
Capital Special Share Capital Investment Revenue Merger
redemption reserve premium reserve holding reserve reserve
reserve account - losses
realised
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Company
position
At 1 February 299 2,396 4,984 1,724 (4,861) (470) 1,188
2009
Capital - - - (29) - - -
expenses
Gains/(losses) - - - (18) 171 - -
on investments
Transfer - - - (789) 789 - -
between
reserves
Retained net - - - - - (20) -
loss
At 31 July 299 2,396 4,984 888 (3,901) (490) 1,188
2009
The Special Reserve, Capital Reserve - Realised, the Merger Reserve
and the Revenue Reserve are all distributable. Investment Holding
Losses Reserve included losses of GBP3,901,000 which are distributable.
Reserves available for distribution at the period end amounted to
GBP81,000.
9. The unaudited financial statements set out herein 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 31 January 2009 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.
10.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.
11.Copies of the unaudited half yearly financial reports will be sent
to Shareholders shortly. Further copies can be obtained from the
Company's Registered Office and will be available for download from
www.downing.co.uk.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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