LEI: 21380035MV1VRYEXPR95
Half-Yearly Report for the six months ended 30
Unaudited | Audited | Unaudited | |
30 September 2021 | 31 March 2021 | 30 September 2020 | |
pence | pence | pence | |
Ventures Share pool | |||
Net Asset Value per Ventures Share | 68.50 | 67.2 | 61.2 |
Cumulative distributions | 5.25 | 2.5 | 2.5 |
Total Return per Ventures Share | 73.75 | 69.7 | 63.7 |
Healthcare Share pool | |||
Net Asset Value per Healthcare Share | 88.70 | 68.5 | 65.2 |
Cumulative distributions | 5.25 | 2.5 | 2.5 |
Total Return per Healthcare Share | 93.95 | 71.0 | 67.7 |
DSO D Share pool | |||
Net Asset Value per DSO D Share | 10.2 | 10.2 | 10.7 |
Cumulative distributions | 94.5 | 94.5 | 94.5 |
Adjusted for Performance Incentive estimate1 | (0.3) | (0.5) | (1.2) |
Total Return per DSO D Share | 104.4 | 104.2 | 104.0 |
DP67 Share pool | |||
Net Asset Value per DP67 Share | 19.5 | 18.4 | 18.4 |
Cumulative distributions (since original launch) | 67.8 | 67.8 | 67.8 |
Total Return per DP67 Share | 87.3 | 86.2 | 86.2 |
- Based on Total Return to Shareholders at
30 September 2021 , a Performance Incentive is expected to become due to management. The Performance Incentive has been estimated at 0.3p per DSO D Share. No provision has been included in the accounts as the conditions of the Performance Incentive fee have not yet been met.
Chairman’s Statement
Introduction
I am pleased to present the Company’s Half-Yearly Report for the six months ended
This has been a busy period for your Company, with a new evergreen share class created, another share class renamed and a new offer for subscription launched. We were also pleased to welcome three new board members and saw good progress made by some of the evergreen portfolio companies.
Fundraising
In August, the Company published a shareholder circular seeking approval for various resolutions in connection with the launch of a new fundraising. A new evergreen share class, focussing on AIM-quoted investments, was proposed, as well as a change of name for the Generalist Share class to become the Ventures Share Class to better describe the focus of its activities. A general meeting took place on
The new offer for subscription was launched at the same time, seeking to raise up to £10M in each of the Ventures, Healthcare and AIM share classes, with an overallotment facility of up to £15M for each share class.
The Board believes that the Company offers an attractive proposition for VCT investors, as there are signs that some of the earlier investments in the Ventures and Healthcare portfolio are starting to mature and the AIM market is also providing good opportunities for investment.
Full details of the offer can be found on the Downing website:
downing.co.uk/investor/products/vct
No shares have yet been allotted under this offer and therefore the AIM Share class does not feature in this Half-Yearly Report. We expect the Annual Report for the year ended
Evergreen Share pool review
Ventures Share pool (formerly Generalist)
During the period, the Ventures Share pool made one follow-on investment of £125,000, and there was an IPO which involved the conversion of loan notes into equity.
The Ventures Share pool Total Return stood at 73.75p as at
The NAV increase for the period predominantly results from several valuation uplifts within the Venture Capital Portfolio, including the IPO of Arecor Therapeutics plc (“Arecor”), which is discussed in more detail in the Investment Manager’s Reports for the Ventures and Healthcare Share pools.
Within the Ventures Liquidity Portfolio, there was a further redemption from
A more detailed review of the Ventures Share pool is included in the Ventures Investment Manager’s Report. A review of the Liquidity Investments is included below.
Healthcare Share pool
During the period, the Healthcare Share pool invested £1.2 million in four VCT Qualifying companies, three of which were existing companies in the Healthcare Share pool’s Venture Capital Portfolio. There were also two IPOs during the period, which are discussed in more detail in the Investment Manager’s Report.
As at
The NAV increase for the period is largely attributable to the AIM IPOs of two portfolio companies: Arecor and GENinCode. Based on their quoted share prices as at
As with the Ventures Share pool, the Healthcare Share pool received a further redemption from
A more detailed review of the Healthcare Share pool is included in the Investment Manager’s Report. A review of the Liquidity Investments is included below.
Planned Exit Share pools
DSO D Share pool
The DSO D Share pool holds four remaining investments. At the period end, the net asset value per share (“NAV”), net of the estimated performance incentive fee, stood at 9.9p. Total Return at
After the half-year date, the Manager achieved exits from the DSO D Share pool’s two renewable energy investments at proceeds slightly exceeding their valuations as at
The Manager is also progressing plans to exit from the two businesses with exposure to the hospitality sector,
A more detailed review of the DSO D Share pool is included in the Investment Manager’s Report.
DP67 Share pool
The DP67 Share pool also holds four remaining investments. At the period end, the net asset value (“NAV”) per Share stood at 19.5p. Total Return at
The DP67 Share pool has significant exposure to the hospitality sector and it has not been possible to significantly progress exits from these businesses yet, as they are only just starting to re-establish trading records following the disruption of the pandemic. However, with the
A more detailed review of the DP67 Share pool is included in the Investment Manager’s Report.
Dividends
On
Following the exits from
For both the DSO D and DP67 Share pools, the next dividends will be declared once further realisations have taken place.
Board reorganisation
With much of the Company’s activity now focussed on the evergreen share pools which invest in young growth businesses, a review of the board composition was undertaken, to ensure it was well aligned with the Company’s needs going forward.
A formal process took place with an external recruitment consultant to identify suitable candidates with experience relevant to areas in which the Company now actively invests. Full consideration was given to board diversity as part of this process; however, the primary criteria was to identify the candidates best placed to make a meaningful contribution to the Company in its investing activities.
Ultimately two candidates from this process were invited to join the board and were appointed as non-executive directors on
Dr
Andrew has a longstanding interest in enhancing the commercialisation and wider economic impact of
In addition to the above, in order to enhance the operational relationship between the Board and the Manager,
Chris has 35 years of venture capital and private equity experience, previously as head of private equity at Octopus Investments. Prior to this, he was a director at Beringea and Bridgepoint with previous experience at 3i and Charterhouse. Chris has transacted over 50 investments and has sat on the boards of a number of unquoted and quoted portfolio companies across a variety of commercial sectors.
Alongside the above appointments,
I believe we now have a board of directors with a broad range of skills and experience that is well suited to oversee the Company during the next years of its life.
Share buybacks
The Company operates a general policy of buying in Shares from its Evergreen Share pools that become available in the market, subject to regulatory and liquidity factors. Any such purchases are undertaken at a price approximately equal to NAV (i.e. at a nil discount).
As the planned exit share classes are in the process of returning funds to Shareholders, the Company no longer operates a share buyback policy in respect of the DSO D and DP67 Share classes.
During the six-month period ended
If you wish to sell or buy Shares in the Company, Panmure Gordon can supply details of closed periods etc.
Outlook
The Board is very encouraged by the progress made by the Healthcare share pool in recent months where two of the portfolio companies have started to demonstrate their potential in successfully completing IPOs. There are also signs within the Ventures share pool of the stronger investments starting to make headway. Both share pools suffered some setbacks in their early years. This is not an unexpected feature of investing in a portfolio of young businesses where investments may take time to prove their worth. This performance was also compounded by the impact of the coronavirus pandemic. With many of the businesses in these portfolios now several years into their life and having dealt with challenging conditions, we believe there are good prospects for improved overall performance going forward.
The new offer for subscription should ensure that the Company has funds available to allow the evergreen share classes to take advantage of attractive new investment opportunities which the Investment Manager is seeing, including extending into the area of AIM-quoted companies with the new AIM Share class.
For the planned exit share pools, the ongoing delays in exiting the investments are disappointing but somewhat expected given the sectors in which these shares classes are invested and the impact of the pandemic. The Board is satisfied that the Manager’s strategy in working towards exits while seeking to achieve optimal values is sensible. We hope to see progress in completing the task of realising the investments over the next 12 months.
I look forward to updating all Shareholders in my statement with the Annual Report, which we expect to publish in
Sir Aubrey Brocklebank Bt.
Chairman
Investment Manager’s Report - Ventures Share Pool
i. Overview
Introduction
We present a review of the investment portfolio and activity for the Ventures Share pool over the six-month period to
This Investment Manager’s Report is split into two sections comprising this overview and a review of the Venture Capital Portfolio. Where the Ventures Share pool has invested alongside the Healthcare Share pool, further valuation commentary can be found within the Investment Manager’s Report for the Healthcare Share pool.
A separate report on the portfolio of Liquidity Investments is included below.
Net Asset Value and results
As at
The return on ordinary activities for the Ventures Share pool for the period was £1.97 million, comprising a revenue loss of £253,000 and a capital gain of £2.2 million.
Whilst there has been further recovery in the NAV since
Portfolio Overview
As at
Portfolio Performance
Overall, there were ten valuation increases in the Venture Capital Portfolio, totalling £4.4 million, which more than offset the eight valuation reductions, totalling £2.2 million. The net valuation increase across the Venture Capital Portfolio was therefore £2.2 million as at
The carrying values of the Liquidity Investments have been adjusted to reflect their quoted prices as at
ii. Venture Capital Portfolio
Investment activity
During the period, £125,000 was invested in one existing business in the Venture Capital Portfolio. There was also one conversion within the portfolio, of loan notes into equity.
enterprise clients and hospitals. The Ventures Share pool invested an additional £125,000 in the business, alongside a further £250,000 from the Healthcare Share pool.
On
Portfolio valuation
During the period, the Venture Capital portfolio of the Ventures Share pool was increased in value by a total of £2.2 million, following a number of positive developments.
The valuation of Arecor was uplifted by £634,000 as at
Ayar
The Ventures Share pool’s investment in
FundingXchange Limited, an SME funding platform and B2B technology provider which enables online lending, was subject to a valuation reduction of £264,000 as at
Destiny Pharma plc, which is listed on AIM, was reduced in value by £165,000 as at
Lineten Limited, the owner of an aggregator platform for on-demand and same day delivery, was subject to a valuation reduction of £157,000 as at
The small valuation movements in respect of Virtual Class Limited (trading as Third Space Learning),
Outlook
After some early setbacks in the
Our role over the remainder of the year will focus on continued support of the existing portfolio companies in the Venture Capital Portfolio, as well as looking to add new investments to this portfolio as the proceeds of the current fundraising become available.
Review of Investments – Ventures Share Pool
The following investments were held at
Cost as at 30 September 2021 | Valuation as at 30 September 2021 | Valuation movement in period | % of portfolio | |
Portfolio of investments | £’000 | £’000 | £’000 | |
Venture Capital investments | ||||
1,342 | 3,668 | 1,260 | 11.0% | |
1,000 | 2,352 | 524 | 7.0% | |
Virtual Class Limited (t/a Third Space Learning) | 1,053 | 1,816 | (60) | 5.4% |
1,282 | 1,584 | - | 4.8% | |
784 | 1,481 | 697 | 4.4% | |
1,402 | 1,337 | 30 | 4.0% | |
219 | 1,240 | 283 | 3.7% | |
764 | 1,191 | 465 | 3.6% | |
Arecor Therapeutics plc^ | 418 | 1,052 | 634 | 3.2% |
1,047 | 1,047 | - | 3.1% | |
1,000 | 1,000 | - | 3.0% | |
757 | 920 | - | 2.8% | |
1,050 | 786 | (264) | 2.4% | |
1,208 | 770 | (503) | 2.3% | |
734 | 746 | - | 2.2% | |
766 | 694 | 16 | 2.1% | |
933 | 675 | 384 | 2.0% | |
Masters of | 667 | 667 | - | 2.0% |
656 | 623 | 14 | 1.9% | |
525 | 525 | - | 1.6% | |
1,000 | 450 | - | 1.3% | |
375 | 439 | 64 | 1.3% | |
Fenkle Street LLP* | 301 | 388 | - | 1.2% |
Destiny Pharma plc^ | 500 | 364 | (165) | 1.1% |
459 | 361 | - | 1.1% | |
675 | 278 | - | 0.8% | |
750 | 271 | (482) | 0.8% | |
1,077 | 242 | - | 0.7% | |
550 | 202 | (177) | 0.6% | |
200 | 200 | - | 0.6% | |
400 | 52 | (157) | 0.2% | |
1,563 | - | (405) | 0.0% | |
1,778 | - | - | 0.0% | |
Live Better With Limited | 1,211 | - | - | 0.0% |
900 | - | - | 0.0% | |
29,346 | 27,421 | 2,158 | 82.2% | |
Liquidity investments | ||||
Downing Strategic Micro-Cap Investment Trust plc*^ | 4,269 | 3,333 | 196 | 10.0% |
MI Downing | 123 | 76 | (16) | 0.2% |
4,392 | 3,409 | 180 | 10.2% | |
33,738 | 30,830 | 2,338 | 92.4% | |
Cash at bank and in hand | 2,517 | 7.6% | ||
Total investments | 33,347 | 100.0% |
All Venture Capital investments are incorporated in
*non-qualifying investment
^listed and traded on the
Investment movements for the period ended 30 September 2021
Cost | |
Additions | £’000 |
Venture Capital investments | |
Arecor Therapeutics plc** | 422 |
125 | |
547 |
Cost | Valuation at 01/04/21* | Proceeds | Loss vs. cost | Realised gain | |
Disposals | £’000 | £’000 | £’000 | £’000 | £’000 |
Venture Capital investments | |||||
741 | - | - | (741) | - | |
Arecor Limited** | 418 | 418 | 418 | - | - |
Liquidity investments | |||||
MI Downing | 369 | 270 | 301 | (68) | 31 |
1,528 | 688 | 719 | (809) | 31 |
*non-qualifying investment
**includes Loan Note conversion and share for share exchange
Investment Manager’s
i. Overview
Introduction
We present a review of the investment portfolio and activity for the Healthcare Share pool over the six-month period to
This Investment Manager’s Report is split into two sections comprising this overview and a review of Venture Capital Portfolio.
A separate report on the portfolio of Liquidity Investments is included below.
Net Asset Value and results
As at
The return on ordinary activities for the Healthcare Share pool for the period was £4.5 million, comprising a revenue loss of £132,000 and a capital gain of £4.6 million.
The Total Return to Healthcare Shareholders, as at
Portfolio Overview
As at
The valuation movements during the period are discussed in more detail in the following sections of this Investment Manager’s Report.
Portfolio Performance
There were a number of valuation movements in the Venture Capital Portfolio during the period, resulting in a net valuation increase of £4.7 million.
The carrying values of the Liquidity Investments have been adjusted to reflect their quoted prices as at
ii. Venture Capital Portfolio
Investment activity
During the period, a total of £1.2 million was invested in four VCT Qualifying companies, three of which were existing businesses within the Venture Capital Portfolio. There were also two IPOs on AIM, one of which involved the conversion of loan notes into equity.
DiA Imaging Analysis Limited (“DiA”) (£415,000) is a leading provider of advanced AI-based solutions for ultrasound analysis. The additional capital will enable DiA to expand its portfolio of FDA-cleared and CE-marked AI-based ultrasound solutions that enable clinicians to identify clinical abnormalities with speed and accuracy.
GENinCode plc (“GENinCode”) develops products and technology that helps patients and healthcare practitioners to assess and predict the onset of cardiovascular disease, thrombosis, and the diagnosis of Familial Hypercholesterolemia. As part of the Company’s IPO on
On
Portfolio valuation
As at
Since its IPO, Arecor has made several positive updates on the progress of its products, which have bolstered its share price. As at 30 September, the market capitalisation of Arecor was £116 million. With the valuation now being based on the quoted bid price, the valuation of the Healthcare Share pool’s investment in the group was uplifted by £2.3 million as at
GENinCode successfully admitted its shares to trading on AIM on
The valuation of
The carrying value of the Healthcare Share pool’s investment in
Destiny Pharma plc, which is listed on AIM, was reduced in value by £248,000 as at
DiA Imaging Analysis Limited (“DiA”) was reduced in value by £4,000 as at
It is disappointing to report that we continue to anticipate no recovery of value from Live Better With Limited, a developer of a healthcare website aiming to help people with long term medical conditions.
Outlook
The two IPOs that took place in the period are reassuring signs of the quality of the companies in the Venture Capital Portfolio. These companies are now starting to drive the overall performance of the Healthcare Share pool in the right direction.
Over the remainder of the year, we will continue to focus on supporting the existing companies in the Venture Capital Portfolio, whilst also looking to further add to this portfolio in deploying existing and new fundraising proceeds. The healthcare sector is generating a good level of attractive dealflow and there is strong market sentiment towards these businesses, as we have observed with Arecor and GENinCode.
Review of Investments –
The following investments were held at
Cost as at 30 September 2021 | Valuation as at 30 September 2021 | Valuation Movement in period | % of portfolio | |
Portfolio of investments | £’000 | £’000 | £’000 | |
Venture Capital investments | ||||
Arecor Therapeutics plc^ | 1,533 | 3,859 | 2,326 | 22.1% |
GENinCode plc^ | 1,202 | 2,419 | 1,217 | 13.8% |
1,056 | 1,843 | 758 | 10.5% | |
1,000 | 1,378 | 378 | 7.9% | |
1,184 | 1,215 | - | 6.9% | |
750 | 879 | 129 | 5.1% | |
528 | 556 | - | 3.2% | |
Destiny Pharma plc^ | 750 | 545 | (248) | 3.1% |
478 | 544 | 124 | 3.1% | |
500 | 500 | - | 2.9% | |
415 | 419 | 4 | 2.4% | |
400 | 400 | - | 2.3% | |
200 | 200 | - | 1.1% | |
Live Better With Limited | 1,106 | - | - | 0.0% |
11,102 | 14,757 | 4,688 | 84.4% | |
Liquidity Investments | ||||
Downing Strategic Micro-Cap Investment Trust plc*^ | 729 | 569 | 34 | 3.3% |
MI Downing | 40 | 24 | (5) | 0.1% |
769 | 593 | 29 | 3.4% | |
11,871 | 15,350 | 4,717 | 87.8% | |
Cash at bank and in hand | 2,137 | 12.2% | ||
Total investments | 17,487 | 100.0% |
*non-qualifying investment
^listed and traded on the
Investment movements for the period ended 30 September 2021
Cost | |
Additions | £’000 |
Venture Capital investments | |
Arecor Therapeutics plc** | 1,547 |
GENinCode plc | 1,202 |
415 | |
250 | |
200 | |
3,614 |
Cost | Valuation at 01/04/21* | Proceeds | Loss vs. cost | Realised gain | |
Disposals | £’000 | £’000 | £’000 | £’000 | £’000 |
Venture Capital investments | |||||
Arecor Limited** | 1,533 | 1,533 | 1,533 | - | - |
GENinCode plc | 900 | 900 | 900 | - | - |
Liquidity investments | |||||
MI Downing | 116 | 86 | 96 | (20) | 10 |
2,549 | 2,519 | 2,529 | (20) | 10 |
*non-qualifying investment
**includes Loan Note conversion and share for share exchange
Investment Manager’s Report- Liquidity Investments
i. Introduction
We present a review of the portfolios of Liquidity Investments, held by the Ventures and Healthcare Share pools, over the six-month period to
The carrying values of the Liquidity Investments have been adjusted to reflect their quoted prices as at
ii. Downing Strategic Micro-Cap Investment Trust plc
The values of the Ventures and Healthcare Share pool holdings in Downing Strategic Micro-Cap Investment Trust plc (“DSM”) increased in value by £196,000 and £34,000 during the period. As at
are healthy and capable of delivering earnings and cash flows which should ultimately be better than the pre-Covid period.
DSM holdings are now typically more efficient, better managed, and should be able to achieve better returns on invested capital than at initial investment. The Managers believe that the portfolio is as well positioned as it can be.
iii.
Ventures and Healthcare Shareholders will be aware of the small residual investments in
As at
Investment Manager’s
Introduction
The process of realising the investments and returning funds to Shareholders remains the focus of the DSO D Share pool, although this has been subject to significant delays as a result of the coronavirus pandemic.
Net Asset Value and results
The Net Asset Value (“NAV”) per DSO D Share at
Total Return, net of the estimated performance fee, stands at 104.2p per share compared to initial cost to Shareholders, net of income tax relief, of 70.0p per Share. We consider this to be satisfactory performance when compared to the initial NAV of 100p.
The loss on ordinary activities after taxation for the period was £1,000, comprising a revenue loss of £8,000 and a capital gain of £7,000.
Whilst it is unfortunate to report further delays in the realisation process, the NAV of the DSO Share pool has, to date, not been adversely impacted by the effects of the coronavirus pandemic. However, we continue to experience delays in exiting from the DSO D Share pool’s investments in Pearce and Saunders and
Venture Capital investments
As at
Portfolio activity
We are pleased to report that, after the half-year date, the DSO D Share pool exited from its two renewable energy investments.
Portfolio valuation
During the year, the carrying value of the portfolio of Venture Capital investments held by the DSO D Share pool was increased by £10,000.
As DSO D Shareholders will be aware
Finally,
Dividends
As
Outlook
The focus for the DSO D Share pool continues to be on realising the remaining investments. A
further distribution will be paid once the final realisations have taken place.
Review of investments -
The following investments were held at
Cost as at 30 September 2021 | Valuation as at 30 September 2021 | Valuation Movement in period | % of portfolio | |
Portfolio of investments | £’000 | £’000 | £’000 | |
Venture Capital investments | ||||
189 | 279 | (3) | 37.0% | |
275 | 94 | 17 | 12.5% | |
100 | 66 | (1) | 8.7% | |
Pearce and Saunders DevCo Limited* | 19 | 16 | (3) | 2.1% |
583 | 455 | 10 | 60.3% | |
Cash at bank and in hand | 300 | 39.7% | ||
Total investments | 755 | 100.0% |
* non-qualifying investment
All Venture Capital investments are incorporated in
There were no investment disposals during the period.
Investment Manager’s Report -
Introduction
The process of realising the investments and returning funds to DP67 Shareholders remains the focus for this Share pool, although this has been subject to substantial delays as a result of the coronavirus pandemic.
Net Asset Value and results
The Net Asset Value (“NAV”) per DP67 Share at
The return on ordinary activities after taxation for the period was £114,000, comprising a revenue loss of £17,000 and a capital gain of £131,000.
As Shareholders are aware, the DP67 portfolio has a high level of exposure to the leisure and hospitality sector, which has been heavily impacted by the coronavirus pandemic. It has not been possible to seek to achieve good exit values for these businesses during a period in which they have been unable to operate at a level close to full capacity. We are encouraged by the trading that has been possible following the gradual lifting of restrictions throughout the
Venture Capital investments
As at
Portfolio activity
It is disappointing to report that there were no realisations during the period.
Portfolio valuation
The DP67 portfolio was increased in value by a total of £138,000 during the period. This uplift was wholly attributable to
The valuations of the remaining Venture Capital investments are unchanged from those stated in the Annual Report to
Outlook
The focus for the DP67 Share pool continues to be on realising the remaining investments. The delays in the exit processes are frustrating, however we are hopeful that these might now complete by Q4 2022. In the interim, we will continue to work with management teams in order to maximise the proceeds for the DP67 Share pool. Further dividends will be paid once the final realisations have taken place.
Review of Investments –
The following investments were held at
Cost | Valuation | Valuation movement in period | % of portfolio | |
Portfolio of investments | £’000 | £’000 | £’000 | |
Venture Capital investments | ||||
1,409 | 791 | - | 38.2% | |
Fenkle Street LLP* | 405 | 727 | - | 34.9% |
Gatewales Limited** | 343 | 747 | 138 | 25.5% |
400 | - | - | 0.0% | |
99 | - | - | 0.0% | |
2,656 | 2,265 | 138 | 98.6% | |
Cash at bank and in hand | 10 | 1.4% | ||
Total investments | 2,275 | 100.0% |
*non-qualifying investment
**partially qualifying investment
All Venture Capital investments are incorporated in
There were no investment disposals during the period.
Unaudited Income Statement
for the six months ended
Six months ended | Six months ended | Year ended 31 Mar 2021 | ||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | ||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Income | 43 | 2 | 45 | 234 | 2 | 236 | 268 | |
Gains on investments | - | 7,244 | 7,244 | - | 762 | 762 | 4,816 | |
43 | 7,246 | 7,289 | 234 | 764 | 998 | 5,084 | ||
Investment management fees | (244) | (244) | (488) | (196) | (196) | (392) | (822) | |
Other expenses | (209) | - | (209) | 105 | - | 105 | (97) | |
(Loss)/profit on ordinary activities before tax | (410) | 7,002 | 6,592 | 143 | 568 | 711 | 4,165 | |
Tax on total comprehensive income and ordinary activities | - | - | - | - | - | - | (69) | |
(Loss)/profit attributable to equity Shareholders, being total comprehensive income for the period | (410) | 7,002 | 6,592 | 143 | 568 | 711 | 4,096 | |
Basic and diluted return per share: | ||||||||
Ventures Share | (0.5p) | 4.6p | 4.1p | 0.4p | 1.6p | 2.0p | (1.8p) | |
Healthcare Share | (0.7p) | 23.7p | 23.0p | (0.1p) | (0.3p) | (0.4p) | (0.4p) | |
DSO D Share | (0.1p) | 0.1p | 0.0p | - | (1.3p) | (1.3p) | 8.0p | |
DP67 Share | (0.2p) | 1.3p | 1.1p | (0.1p) | (0.3p) | (0.4p) | 2.9p |
A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement as noted above.
Analysed by Share pool
for the six months ended
Six months ended 30 | Six months ended | Year ended 31 Mar 2021 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
Ventures Share pool | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Income | 35 | 1 | 36 | 195 | 2 | 197 | 232 | ||
Net gain on investments | - | 2,369 | 2,369 | - | 878 | 878 | 4,067 | ||
35 | 2,370 | 2,405 | 195 | 880 | 1,075 | 4,299 | |||
Investment management fees | (152) | (152) | (304) | (113) | (113) | (226) | (514) | ||
Other expenses | (136) | - | (136) | 90 | - | 90 | (25) | ||
(Loss)/profit on ordinary activities before tax | (253) | 2,218 | 1,965 | 172 | 767 | 939 | 3,760 | ||
Tax on total comprehensive income and ordinary activities | - | - | - | - | - | - | (39) | ||
(Loss)/profit attributable to equity Shareholders, being total comprehensive income for the period | (253) | 2,218 | 1,965 | 172 | 767 | 939 | 3,721 |
` | Six months ended 30 | Six months ended | Year ended 31 Mar 2021 | ||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
Healthcare Share pool | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Income | 8 | 1 | 9 | 22 | - | 22 | 36 | ||
Net gain on investments | - | 4,727 | 4,727 | - | 8 | 8 | 796 | ||
8 | 4,728 | 4,736 | 22 | 8 | 30 | 832 | |||
Investment management fees | (82) | (82) | (164) | (72) | (72) | (144) | (268) | ||
Other expenses | (58) | - | (58) | 29 | - | 29 | (15) | ||
(Loss)/profit on ordinary activities before tax | (132) | 4,646 | 4,514 | (21) | (64) | (85) | 549 | ||
Tax on total comprehensive income and ordinary activities | - | - | - | - | - | - | - | ||
(Loss)/profit attributable to equity Shareholders, being total comprehensive income for the period | (132) | 4,646 | 4,514 | (21) | (64) | (85) | 549 |
Six months ended | Six months ended | Year ended 31 Mar 2021 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
DSO D Share pool | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Income | - | - | - | 7 | - | 7 | - | ||
Net gain/(loss) on investments | - | 10 | 10 | - | (97) | (97) | (106) | ||
- | 10 | 10 | 7 | (97) | (90) | (106) | |||
Investment management fees | (3) | (3) | (6) | (4) | (4) | (8) | (12) | ||
Other expenses | (5) | - | (5) | (6) | - | (6) | (25) | ||
(Loss)/profit on ordinary activities before tax | (8) | 7 | (1) | (3) | (101) | (104) | (143) | ||
Tax on total comprehensive income and ordinary activities | - | - | - | - | - | - | - | ||
(Loss)/profit attributable to equity Shareholders, being total comprehensive income for the period | (8) | 7 | (1) | (3) | (101) | (104) | (143) |
Six months ended | Six months ended | Year ended 31 Mar 2021 | |||||||
Revenue | Capital | Total | Revenue | Capital | Total | Total | |||
DP67 Share pool | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Income | - | - | - | 10 | - | 10 | - | ||
Net gain/(loss) on investments | - | 138 | 138 | - | (27) | (27) | 59 | ||
- | 138 | 138 | 10 | (27) | (17) | 59 | |||
Investment management fees | (7) | (7) | (14) | (7) | (7) | (14) | (28) | ||
Other expenses | (10) | - | (10) | (8) | - | (8) | (32) | ||
(Loss)/profit on ordinary activities before tax | (17) | 131 | 114 | (5) | (34) | (39) | (1) | ||
Tax on total comprehensive income and ordinary activities | - | - | - | - | - | - | (30) | ||
(Loss)/profit attributable to equity Shareholders, being total comprehensive income for the period | (17) | 131 | 114 | (5) | (34) | (39) | (31) |
Unaudited Balance Sheet
as at
As at 30 September 2021 | As at 30 September 2020 | As at 31 March 2021 | |||
£’000 | £’000 | £’000 | |||
Fixed assets | |||||
Investments | 48,900 | 42,281 | 40,743 | ||
Current assets | |||||
Debtors | 393 | 375 | 701 | ||
Cash at bank and in hand | 4,964 | 1,309 | 6,986 | ||
5,357 | 1,684 | 7,867 | |||
Creditors: amounts falling due within one year | (644) | (556) | (381) | ||
Net current assets | 4,713 | 1,128 | 7,306 | ||
Net assets | 53,613 | 43,409 | 48,049 | ||
Capital and reserves | |||||
Called up Share capital | 103 | 100 | 102 | ||
Capital redemption reserve | 58 | 58 | 58 | ||
Special reserve | 27,547 | 37,377 | 29,417 | ||
Share premium account | 20,919 | 18,930 | 20,010 | ||
Funds held in respect of Shares not yet allotted | 194 | 68 | 241 | ||
Revaluation reserve | 5,804 | (12,610) | (1,143) | ||
Capital reserve – realised | 3,166 | 2,803 | 3,132 | ||
Revenue reserve | (4,178) | (3,317) | (3,768) | ||
Total equity Shareholders’ funds | 53,613 | 43,409 | 48,049 | ||
Basic and diluted Net Asset Value per Share: | |||||
Ventures Share | 68.5p | 61.2p | 10.2p | ||
Healthcare Share | 88.7p | 65.2p | 18.4p | ||
DSO D Share | 10.2p | 10.7p | 67.2p | ||
DP67 Share | 19.5p | 18.4p | 68.5p |
Analysed by Share pool
as at 30
As at 30 September 2021 | As at 30 September 2020 | As at 31 March 2021 | |||
Ventures Share pool | £’000 | £’000 | £’000 | ||
Fixed assets | |||||
Investments | 30,830 | 30,976 | 28,633 | ||
Current assets | |||||
Debtors | 198 | 240 | 464 | ||
Cash at bank and in hand | 2,517 | 79 | 3,141 | ||
2,715 | 319 | 3,605 | |||
Creditors: amounts falling due within one year | (404) | (3,070) | (238) | ||
Net current assets | 2,311 | (2,751) | 3,367 | ||
Net assets | 33,141 | 28,225 | 32,000 | ||
Capital and reserves | |||||
Called up share capital | 60 | 57 | 59 | ||
Capital redemption reserve | 58 | 58 | 58 | ||
Special reserve | 18,997 | 26,082 | 20,195 | ||
Share premium account | 14,551 | 13,180 | 14,009 | ||
Funds held in respect of shares not yet allotted | 189 | 61 | 222 | ||
Revaluation reserve | 1,237 | (9,322) | (814) | ||
Capital reserve – realised | 878 | 426 | 847 | ||
Revenue reserve | (2,829) | (2,317) | (2,576) | ||
Total equity Shareholders’ funds | 33,141 | 28,225 | 32,000 |
As at 30 September 2021 | As at 30 September 2020 | As at 31 March 2021 | |||
Healthcare Share pool | £’000 | £’000 | £’000 | ||
Fixed assets | |||||
Investments | 15,350 | 8,806 | 9,538 | ||
Current assets | |||||
Debtors | 194 | 2,882 | 254 | ||
Cash at bank and in hand | 2,137 | 890 | 3,491 | ||
2,331 | 3,772 | 3,745 | |||
Creditors: amounts falling due within one year | (187) | (291) | (99) | ||
Net current assets | 2,144 | 3,481 | 3,646 | ||
Net assets | 17,494 | 12,287 | 13,184 | ||
Capital and reserves | |||||
Called up share capital | 24 | 24 | 24 | ||
Special reserve | 7,987 | 10,323 | 8,656 | ||
Share premium account | 6,368 | 5,750 | 6,001 | ||
Funds held in respect of shares not yet allotted | 5 | 7 | 19 | ||
Revaluation reserve | (4,587) | (2,640) | (161) | ||
Capital reserve – realised | (474) | - | (84) | ||
Revenue reserve | (1,403) | (1,177) | (1,271) | ||
Total equity Shareholders’ funds | 17,494 | 12,287 | 13,184 |
As at 30 September 2021 | As at 30 September 2020 | As at 31 March 2021 | |||
DSO D Share pool | £’000 | £’000 | £’000 | ||
Fixed assets | |||||
Investments | 455 | 458 | 445 | ||
Current assets | |||||
Debtors | 65 | 82 | 29 | ||
Cash at bank and in hand | 300 | 312 | 344 | ||
365 | 394 | 373 | |||
Creditors: amounts falling due within one year | (20) | (12) | (17) | ||
Net current assets | 345 | 382 | 356 | ||
Net assets | 800 | 840 | 801 | ||
Capital and reserves | |||||
Called up share capital | 8 | 8 | 8 | ||
Special reserve | 963 | 972 | 966 | ||
Revaluation reserve | (128) | (132) | (138) | ||
Capital reserve – realised | (37) | (37) | (37) | ||
Revenue reserve | (6) | 29 | 2 | ||
Total equity Shareholders’ funds | 800 | 840 | 801 |
As at 30 September 2021 | As at 30 September 2020 | As at 31 March 2021 | |||
DP67 Share pool | £’000 | £’000 | £’000 | ||
Fixed assets | |||||
Investments | 2,265 | 2,041 | 2,127 | ||
Current assets | |||||
Debtors | 1 | 53 | 1 | ||
Cash at bank and in hand | 10 | 28 | 10 | ||
11 | 81 | 11 | |||
Creditors: amounts falling due within one year | (98) | (65) | (74) | ||
Net current assets | (87) | 16 | 63 | ||
Net assets | 2,178 | 2,057 | 2,064 | ||
Capital and reserves | |||||
Called up share capital | 11 | 11 | 11 | ||
Special reserve | (400) | - | (400) | ||
Revaluation reserve | 108 | (516) | (30) | ||
Capital reserve – realised | 2,399 | 2,414 | 2,406 | ||
Revenue reserve | 60 | 148 | 77 | ||
Total equity Shareholders’ funds | 2,178 | 2,057 | 2,064 |
Statement of Changes in Equity
for the six months ended
Share capital Called up | Capital Redemption reserve | Special reserve | Share premium account | Funds held in respect of Shares not yet allotted | Revaluation Reserve (Note 9) | Capital reserve - realised | Revenue reserve | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
At | 98 | 58 | 39,433 | 17,971 | 535 | (13,302) | 2,483 | (3,451) | 43,825 |
Total comprehensive income | - | - | - | - | - | 4,158 | 249 | (311) | 4,096 |
Transfer between reserves* | - | - | (10,016) | - | - | 8,001 | 2,021 | (6) | - |
Unallotted Shares | - | - | - | - | (294) | - | - | - | (294) |
Transactions with owners | |||||||||
Dividend paid | - | - | - | - | - | - | (1,621) | - | (1,621) |
Cancellation of shares | - | - | - | - | - | - | - | - | - |
Purchase of own shares | - | - | - | - | - | - | - | - | - |
Issue of shares | 4 | - | - | 2,097 | - | - | - | - | 2,101 |
Share issue costs | - | - | - | (58) | - | - | - | - | (58) |
At | 102 | 58 | 29,417 | 20,010 | 241 | (1,143) | 3,132 | (3,768) | 48,049 |
Total comprehensive income | - | - | - | - | - | 7,203 | (202) | (410) | 6,591 |
Transfer between reserves* | - | - | (1,845) | - | - | (256) | 2,101 | - | - |
Unallotted Shares | - | - | - | - | (47) | - | - | - | (47) |
Transactions with owners | |||||||||
Dividend paid | - | - | - | - | - | - | (1,865) | - | (1,865) |
Cancellation of Shares | - | - | - | - | - | - | - | - | - |
Purchase of own shares | - | - | (25) | - | - | - | - | - | (25) |
Issue of shares | 1 | - | - | 933 | - | - | - | - | 934 |
Share issue costs | - | - | - | (24) | - | - | - | - | (24) |
At | 103 | 58 | 27,547 | 20,919 | 194 | 5,804 | 3,166 | (4,178) | 53,613 |
* A transfer of (£256,000) (2021: £8,001,000) representing previously recognised realised gains and losses on disposal of investments during the period has been made between the Revaluation Reserve and the Capital reserve - realised. A transfer of £1,845,000 (2021: £10,022,000) representing the total of: realised losses on the disposal of investments, cumulative impairment losses, capital expenses and capital dividends in the period, has been made between the Capital Reserve - realised and the Special reserve. A transfer of £nil (2021: £6,000), representing the balance on the Revenue reserve relating to previously cancelled share classes, has been made from the revenue reserve to the Special reserve.
Unaudited Statement of Cash Flows
for the six months ended 30
DSO D Share pool | DP67 Share pool | Ventures Share pool | Healthcare Share pool | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | |
Cash flows from operating activities | |||||
(Loss)/return on ordinary activities before taxation | (1) | 114 | 1,965 | 4,514 | 6,592 |
Gains on investments | (10) | (138) | (2,369) | (4,728) | (7,245) |
Increase in creditors | 3 | 24 | 164 | 88 | 214 |
(Increase)/decrease in debtors | (36) | - | 269 | 59 | 357 |
Net cash (outflow)/inflow from operating activities | (44) | - | 29 | (67) | (82) |
Corporation tax paid | - | - | - | - | - |
Net cash generated from operating activities | (44) | - | 29 | (67) | (82) |
Cash flow from investing activities | |||||
Purchase of investments | - | - | (547) | (3,614) | (4,161) |
Proceeds from disposal of investments | - | - | 719 | 2,529 | 3,248 |
Net cash inflow/(outflow) from investing activities | - | - | 172 | (1,085) | (913) |
Net cash (outflow)/inflow before financing | (44) | - | 201 | (1,152) | (995) |
Cash flows from financing activities | |||||
Issue of share capital | - | - | (11) | (14) | (25) |
Issue of share capital | - | - | 556 | 378 | 934 |
Cost of issue of share capital | - | - | (14) | (10) | (24) |
Funds held in respect of shares not yet allotted | - | - | (33) | (14) | (47) |
Equity dividends paid | - | - | (1,323) | (542) | (1,865) |
Net cash outflow from financing activities | - | - | (825) | (202) | (1,027) |
Net change in cash | (44) | - | (624) | (1,354) | (2,022) |
Cash and cash equivalents at start of the year | 344 | 10 | 3,141 | 3,491 | 6,986 |
Cash and cash equivalents at end of the year | 300 | 10 | 2,517 | 2,137 | 4,964 |
Cash and cash equivalents comprise | |||||
Cash at bank and in hand | 300 | 10 | 2,517 | 2,137 | 4,964 |
Total cash and cash equivalents | 300 | 10 | 2,517 | 2,137 | 4,964 |
Unaudited Statement of Cash Flows
for the six months ended
DSO D Share pool | DP67 Share pool | Ventures Share pool | Healthcare Share pool | Total | |
£’000 | £’000 | £’000 | £’000 | £’000 | |
Cash flows from operating activities | |||||
(loss)/return on ordinary activities before taxation | (104) | (39) | 939 | (85) | 711 |
Losses/(gains) on investments | 97 | 27 | (878) | (8) | (762) |
(Decrease)/increase in creditors | (22) | (18) | 2,804 | (128) | 2,636 |
(Increase)/decrease in debtors | (32) | (4) | 202 | (2,875) | (2,709) |
Net cash (outflow)/inflow from operating activities | (61) | (34) | 3,067 | (3,096) | (124) |
Corporation tax paid | - | - | - | - | - |
Net cash generated from operating activities | (61) | (34) | 3,067 | (3,096) | (124) |
Cash flow from investing activities | |||||
Purchase of investments | - | - | (6,163) | (1,639) | (7,802) |
Proceeds from disposal of investments | 101 | - | 650 | - | 751 |
Net cash inflow/(outflow) from investing activities | 101 | - | (5,513) | (1,639) | (7,051) |
Net cash inflow/(outflow) before financing | 40 | (34) | (2,446) | (4,735) | (7,175) |
Cash flows from financing activities | |||||
Issue of share capital | - | - | 705 | 295 | 1,000 |
Cost of issue of share capital | - | - | (29) | (10) | (39) |
Funds held in respect of shares not yet allotted | - | - | (351) | (119) | (470) |
Equity dividends paid | - | - | (1,150) | (471) | (1,621) |
Net cash outflow from financing activities | - | - | (825) | (305) | (1,130) |
Net change in cash | 40 | (34) | (3,271) | (5,040) | (8,305) |
Cash and cash equivalents at start of the year | 272 | 62 | 3,350 | 5,930 | 9,614 |
Cash and cash equivalents at end of the year | 312 | 28 | 79 | 890 | 1,309 |
Cash and cash equivalents comprise | |||||
Cash at bank and in hand | 312 | 28 | 79 | 890 | 1,309 |
Total cash and cash equivalents | 312 | 28 | 79 | 890 | 1,309 |
Notes to the Unaudited Financial Statements
1. General Information
2. Basis of accounting
The unaudited half-yearly financial results cover the six months to
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 are in respect of the six months ended
5. Net Asset Value per share at the period end has been calculated on the number of shares in issue at the period end as follows:
Ventures Shares* | 48,107,209 |
Healthcare Shares* | 19,710,375 |
DSO D Shares | 7,867,247 |
DP67 Shares | 11,192,136 |
*Excludes Management Shares
6. Return per share for the period has been calculated on the average number of shares in issue in the period as follows:
Ventures Shares* | 47,737,573 |
Healthcare Shares* | 19,573,094 |
DSO D Shares | 7,867,247 |
DP67 Shares | 11,192,136 |
*Excludes Management Shares
7. 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.
8. Dividends
Six months ended | |||||
Pence per Share | Revenue £’000 | Capital £’000 | Total £’000 | ||
Ventures Shares | |||||
Paid | |||||
Final (year ended | 2.75 | - | 1,323 | 1,323 | |
Healthcare Shares | |||||
Paid | |||||
Final (year ended | 2.75 | - | 542 | 542 |
9. Reserves
£’000 | £’000 | £’000 | |
Capital redemption reserve | 58 | 58 | 58 |
Special reserve | 27,547 | 37,377 | 29,417 |
Share premium account | 20,919 | 18,930 | 20,010 |
Revaluation reserve | 5,804 | (12,610) | (1,143) |
Capital reserve – realised | 3,166 | 2,803 | 3,132 |
Revenue reserve | (4,178) | (3,317) | (3,768) |
Funds held in respect of shares not yet allotted | 194 | 68 | 241 |
53,510 | 43,309 | 47,947 |
The Revenue reserve, Special reserve and Capital reserve - realised are distributable reserves and are reduced by revaluation losses of £11.8 million. Distributable reserves at
10. Fixed assets – investments
Liquidity investments | Quoted VC investments | Unquoted VC investments | Total | |
£’000 | £’000 | £’000 | £’000 | |
Opening cost at | 5,646 | 1,250 | 42,374 | 49,270 |
Unrealised (losses)/gains at | (1,497) | 72 | 548 | (877) |
Unrealised foreign exchange losses at | - | - | (266) | (266) |
Impairment losses at | - | - | (7,384) | (7,384) |
Opening fair value at | 4,149 | 1,322 | 35,272 | 40,743 |
Movements in the year: | ||||
Purchased at cost | - | 3,171 | 990 | 4,161 |
Disposals - proceeds | (397) | (2,851) | - | (3,248) |
- realised gains on disposals | 41 | - | - | 41 |
Unrealised foreign exchange gains | - | - | 79 | 79 |
Unrealised gains in the Income Statement | 209 | 3,764 | 3,151 | 7,124 |
Transfers between investment categories | - | 2,833 | (2,833) | - |
Closing value at | 4,002 | 8,239 | 36,659 | 48,900 |
Closing cost at | 5,161 | 4,403 | 39,790 | 49,354 |
Unrealised (losses)/gains at | (1,159) | 3,836 | 3,313 | 5,990 |
Unrealised foreign exchange losses at | - | - | (187) | (187) |
Impairment losses at | - | - | (6,257) | (6,257) |
Closing value at | 4,002 | 8,239 | 36,659 | 48,900 |
The fair value of investments is determined using the detailed accounting policy as shown in the audited financial statements for the year ended
Level 1 Reflects financial instruments quoted in an active market (quoted companies, investment funds and fixed interest bonds);
Level 2 Reflects financial instruments that have prices that are observable either directly or indirectly; and
Level 3 Reflects financial instruments that use valuation techniques that are not based on observable market data (investments in unquoted shares and loan note investments).
Level 1 | Level 2 | Level 3 | 30 | Level 1 | Level 2 | Level 3 | |||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Liquidity investments | 4,002 | - | - | 4,002 | 4,149 | - | - | 4,149 | |
Quoted equity | 8,239 | - | - | 8,239 | 1,322 | - | - | 1,322 | |
Unquoted loan notes | - | - | 3,667 | 3,667 | - | - | 3,667 | 3,667 | |
Unquoted equity | - | - | 32,992 | 32,992 | - | - | 31,605 | 31,605 | |
12,241 | - | 36,659 | 48,900 | 5,471 | - | 35,272 | 40,743 |
11. Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is required in the Company’s half-year results to report on the 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) compliance risk of failure to maintain approval as a VCT;
(ii) market, liquidity and counterparty risk associated with Public Equity investments; and
(iii) investment risk associated with investing in small and immature businesses.
The Company’s compliance with the VCT regulations is continually monitored by the Manager, who reports regularly to the Board on the current position. The Company also retains
With this approach, the Board believes that these risks are reduced.
In order to make VCT qualifying investments, the Company has to invest in small businesses which are often immature. It also has a limited period in which it must invest the majority of its funds into VCT qualifying investments. The Manager follows a rigorous process in vetting and carefully structuring new investments, including taking a charge over the assets of the business wherever possible and, after an investment is made, closely monitoring the business.
12. Going concern
The Directors have reviewed the Company’s financial resources at the period end and conclude that the Company is well placed to manage its business risks.
The Board confirms that it is satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, the Board believes 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.
13. The Directors confirm that, to the best of their knowledge, the Half-Yearly Report has been prepared in accordance with the “Statement: Half-Yearly Financial Reports” issued by the
- 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
- 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.
14. Copies of the Half-Yearly Report will be sent to Shareholders shortly. Further copies can be obtained from the Company’s registered office or downloaded from www.downing.co.uk
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