TIDMPGO
ProVen Growth and Income VCT plc
Final Results for the year ended 28 February 2009
Financial Summary
Ordinary Shares 'C' Shares
As at 28 February 2009 2008 2009 2008
pence pence pence pence
Net asset value per share 57.10 121.60 76.70 94.90
Dividends paid since launch 132.90 81.90 8.25 3.00
Total return (net asset value plus 190.00 203.50 84.95 97.90
dividends paid since launch)
Year on year change in:
VCT total return -6.6% -13.2%
FTSE All Share Index total return -33.0% -33.0%
Dividends paid/payable in respect of 45.00 26.00 3.35 4.25
year*
*includes second interim dividend payable for the year ended 28
February 2009 of 14.00p per ordinary share and
1.35p per 'C' share declared after the year end
Chairman's Statement
Introduction
I am pleased to present the Annual Report for ProVen Growth and
Income VCT plc for the year ended 28 February 2009. I would like to
welcome any new shareholders who may have subscribed under the
Company's "Linked D Share offer".
The dramatic deterioration in economic conditions over the year has
naturally had some impact on your Company. Portfolio companies now
face greater challenges and the valuation of those businesses has
fallen partly as a result of falls in stock market comparables which,
in many cases are used as the bases for your Company's investment
valuations.
Net Asset Value
Ordinary Shares
At 28 February 2009, the Company's Ordinary Share Net Asset Value
("NAV") stood at 57.1p per share, a decrease of 13.5p or 11.1% since
29 February 2008 after adjusting for the dividends of 51p per share
which were paid during the year. By way of comparison, the FTSE
All¬Share Index fell by 36.0% over the same period. The Total Return
(NAV plus dividends paid to date) to Ordinary Shareholders that
invested at the Company's launch now stands at 190.0p.
'C' Shares
The NAV of the Company's 'C' Shares stood at 76.7p at 28 February
2009, a decrease of 12.15p or 13.6% since 29 February 2008 after
adjusting for the dividends of 5.25p per share which were paid during
the year.
The Total Return (NAV plus dividends paid to date) to 'C'
Shareholders that invested in the 'C' Share fundraising now stands at
84.95p compared to an original investment, net of income tax relief,
of 60p per share.
Portfolio Activity and Valuation
Ordinary Share pool
The Ordinary Share pool achieved one major investment exit during the
year, being the sale of ILG Digital Limited. This was sold as part of
a private equity transaction and produced proceeds of GBP2.2 million
against an original cost of GBP600,000 in November 2005. The Investment
Manager worked closely with the company throughout the period that
the investment was held and is to be congratulated for this excellent
outcome.
The Ordinary share pool made one new investment in the year. An
investment of GBP350,000 was made into Overtis Group Limited, a company
specialising in technology security.
The Board has reviewed the unquoted investment valuations at the year
end. The Ordinary share pool has a large proportion of its value
within one investment, Espresso Group. This company has continued to
make good progress and is starting to develop its business into other
areas. At the year end the Board has valued the investment at GBP1.6
million, a reduction of GBP0.5 million over the year, but still valued
substantially above original cost.
In reviewing the unquoted portfolio at the year end, the Board
consider P/E ratios and similar indicators of listed businesses in
similar sectors. In some cases, this alone has been the reason for
the reduction in the valuation of investments.
The Ordinary share pool's small portfolio of AIM investments all lost
value in the year.
Total unrealised losses on the portfolio for the year stood at GBP1.2
million.
'C' Share pool
The 'C' Share pool continued to be a very active investor during the
year. The pool invested GBP6.8 million into eight new investments and
GBP0.9 million in five follow-on investments. At the year end the pool
held a portfolio comprising 20 investments with a cost of GBP16.1
million.
As with the Ordinary share pool, the 'C' Share pool also benefited
from the exit from ILG Digital with a profit against original cost of
GBP217,000.
A number of businesses within the 'C' Share portfolio have been
unable to perform to original plan, primarily due to the challenging
climate. As a result, there have been some significant reductions in
valuations over the year, with unrealised losses totalling GBP3.9
million.
Full details of the investment activities of both the Ordinary and
'C' Share pools can be found in the Investment Manager's Review.
VAT on Management Fees
Following a European Court judgement, the Government made changes in
the Finance Bill 2008 such that VCTs became exempt from paying VAT on
management fees from 1 October 2008. This has the effect of slightly
reducing running costs for the Company. In addition, I am pleased to
report that Beringea successfully made a claim to recover VAT that
had previously been charged on their management fees. In view of the
fact that in some years management fees were restricted by the
running costs cap and that performance fees are calculated inclusive
of VAT, the Board agreed a basis on which the VAT recovered
(including interest) should be apportioned between the Company and
Beringea. This has resulted in a recovery to the Company of GBP206,000,
which has been recognised in the Income Statement in the year under
review.
Results and Dividends
The total return on ordinary activities for the year was as follows:
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Ordinary Shares 49 (951) (902)
'C' Shares 539 (3,789) (3,250)
588 (4,740) (4,152)
On 31 October 2008, the Company paid interim dividends of 31.0p per
Ordinary Share (2008: 6.0p per share) and 2.0p per 'C' Share (2008:
1.0p)
In view of the forthcoming 'C' Share conversion described below, the
Board believes it is appropriate that all historic undistributed
gains are distributed to Shareholders prior to conversion. The Board
also believes that it is helpful for dividends to be paid prior to
the Tender Offer described below. Therefore the Company will pay the
following as second interim dividends in respect of the year ended 28
February 2009:
Revenue Capital Total
Pence Pence Pence
per per per
share share share
Ordinary Shares 1.00 13.50 14.00
'C' Shares 0.85 0.50 1.35
These dividends will be paid on 3 July 2009 to Shareholders on the
register at 19 June 2009.
Linked 'D' Share issue
In November 2008, the Company launched a Linked 'D' Share offer, in
conjunction with ProVen VCT plc. No shares were issued before 28
February 2009 and therefore 'D' Shares are not included in the
balance sheet and income statement in this report.
Up to the date of this report, the offer had raised a total of GBP9.3
million of which GBP4.7 million was allocated to 'D' Shares issued and
to be issued by ProVen Growth and Income VCT plc.
The offer is scheduled to close on 30 October 2009 (or earlier if
fully subscribed) and should provide the Company with a reasonable
level of additional funds for further investment.
'C' Share Tender Offer
The prospectus issued by the Company in November 2005 in connection
with the 'C' Share fundraising stated the Company's intention to
return at least 25p per 'C' share to 'C' Shareholders by 30 June
2009. Some outline details of a Tender Offer planned to take place by
that date were set out in the prospectus.
The Board is pleased to confirm that the Company will fulfil its
intention and has released details of the proposed Tender Offer. Full
details are set out in the circular that is being sent to 'C'
Shareholders. The Tender Offer will be subject to Shareholder
approval at the forthcoming Annual General Meeting ("AGM").
'C' Shareholders who wish to use their Tender Offer proceeds to
subscribe for 'D' Shares pursuant to the Linked D Share offer at a
3.5% discount to the normal subscription price should refer to the
Tender Offer circular.
Chairman's Statement continued
C Share Conversion and Share Consolidation
Following the 'C' Share Tender Offer described above and as set out
in the Company's 'C' Share prospectus, the Company intends to convert
the 'C' Shares into Ordinary Shares. The Directors are proposing that
the conversion timetable is adjusted slightly to fit into the
Company's reporting deadlines. It is proposed that conversion is
based on the relative NAVs of the Ordinary Shares and 'C' Shares as
at 31 August 2009 and that conversion take places within 45 days of
31 August 2009. Resolution 11 proposing this amendment will be put to
Shareholders at the AGM.
Following the conversion, it is further proposed that the Ordinary
Shares are consolidated into New Ordinary Shares at such a ratio such
that the NAV of the New Ordinary Shares will be equal to that of the
'C' Shares before conversion. As the 'C' Share class has
significantly more members than the existing Ordinary Share class,
the Board feels that this consolidation makes it more straightforward
for the majority of Shareholders to follow the value of the
investment.
After the conversion and consolidation, the Company will have two
share classes, New Ordinary Shares and 'D' Shares, which will
simplify the investment management and administration of the Company.
All Shareholders (except 'D' Shareholders) will receive new share
certificates for the New Ordinary Shares following the conversion and
consolidation.
Share Buybacks
In order to ensure liquidity in the market in the Company's shares,
the Company has operated a policy of buying in its own shares that
become available in the market.
During the year, the Company repurchased 52,889 Ordinary Shares at an
average price of 87.5p per share and 100,535 'C' Shares at an average
price of 76.2p for cancellation.
In view of the forthcoming Tender Offer and 'C' Share conversion, the
Board does not intend to make any further purchases of 'C' Shares.
The Board intends to continue to make purchases of Ordinary Shares
(and following conversion, New Ordinary Shares) as and when they
become available in the market. It expects to make such purchases at
approximately a 10% discount to the latest published NAV, although
the Board regularly reviews the discount level and number of shares
to be repurchased and may amend this policy if in the interests of
the Company.
A special resolution to allow the Board to continue to purchase
shares for cancellation will be proposed at the forthcoming AGM.
Annual General Meeting
The AGM of the Company will be held at 39 Earlham Street, London WC2H
9LT at 10:15 am on 7 July 2009.
Five items of special business will be proposed at the AGM in respect
of share buybacks as mentioned above, two resolutions in connection
with authority for the directors to allot shares, a resolution in
respect of the 'C' Share conversion and a resolution in respect of
the Tender Offer.
Outlook
Although the Company's NAVs have fallen over the year, the Board
remains broadly satisfied with the portfolio companies performance
given the difficult conditions. The Board does not expect to see
significant increase in value over the coming year, but over the
longer term, good quality companies that can adapt to the conditions
should be well positioned to deliver rewards to Shareholders when
conditions improve.
Both the Ordinary share pool and the 'C' Share pool have some funds
available for investment. In addition, the 'D' Share pool will start
to invest its newly raised funds shortly. Although it remains a risky
time for investing, it may now be the time in the economic cycle when
opportunities start to arise that can produce excellent returns in
due course.
Andrew Davison
Chairman
Investment Manager's Review
Introduction
Beringea LLP is a specialist venture capital management company which
has been established for over 20 years. It currently manages
approximately GBP70 million of venture capital funds and has been the
investment manager of Proven Growth and Income VCT plc since
inception in 2001.
The Company currently has three share classes: ordinary shares, 'C'
shares and 'D' shares. The ordinary share pool was established in
2000 with a further fundraising in 2008. The 'C' share pool was
established in 2006. Further details of the performance of these
pools is provided below. In the current year, the Company announced a
linked 'D' Share fundraising with ProVen VCT plc. The offer remains
open but has currently raised over GBP9.3 million, of which the Company
has taken GBP4.7 million which will be primarily used for future
investment. At 28 February 2009, no 'D' shares had been issued.
Ordinary Share Pool ¬Share Performance & Portfolio
We were pleased to be able to generate further capital profits which
has enabled the Company to maintain the strong dividend returns to
Ordinary shareholders with dividends paid during the year of 31p. The
total dividends paid to original shareholders stood at 132.90p at 28
February 2009. A further dividend for the year to 28 February 2009 of
14.00p was declared on 9 June 2009, bringing total dividends paid to
146.9p and an annual tax free average dividend of 18.4p.
The portfolio benefited from the successful sale of ILG Digital to
the Private Equity firm ECI for GBP45.5 million. We were pleased to
execute a sale of a quality asset at a point which with hindsight was
close to the top of market values. The exit delivered a return on
capital of 3.3x in under two and a half years.
The Ordinary Share portfolio made one new investment, Overtis
(rebranded from OpticVision after our investment), during the year.
Overtis provides computer security and access control systems and has
performed strongly on the back of increasing concerns over both
internal and external threats to data security and intellectual
property.
At 28 February 2009, the Company's unquoted and quoted Ordinary Share
portfolio comprised nine investments with a cost of GBP2.8 million and
a valuation of GBP2.4 million. In addition, the Ordinary Share pool
held cash and liquidity funds of GBP1.5 million. Espresso Group Limited
accounts for over 40% of the Ordinary Share NAV, a reflection of the
maturity of the portfolio and the disposal of earlier investments.
Espresso continues to perform strongly and has established itself as
the dominant provider of online educational video content to the UK
primary school sector with a market share of over 60% and high
contract renewal rates. Following the acquisition in 2007 of 4
Learning, the educational business of Channel 4, Espresso has entered
the UK secondary schools market with its Clipbank product and has
already established a strong and growing presence.
'C' Share Pool ¬Share Performance & Portfolio
The 'C' Share funds were raised in 2006 and approximately 68% of the
net funds raised of over GBP23.5 million have now been invested
including GBP7.7 million in the current financial year:
Acquisitions Cost Description
GBP'000
Overtis Group 500 Technology security provider
Isango! 650 Travel provider
SPC International 625 Repair/refurbishment of electronic
equipment
Chess Technology 900 Producer of electro-optical devices
Fjord 1,000 Digital design/research agency
Lazurite 1,000 Intellectual property acquisition
vehicle
Prelude Media 1,000 Digital media acquisition vehicle
Espresso Group 1,101 Develops and delivers multimedia
education content for schools
Donatantonio 16 Import and distribution of vending
machines
Optima Data Intelligence 299 Marketing and data intelligence
Services services
Heritage Partners 100 Image rights ownership, management and
distribution
Charterhouse Leisure 471 Restaurants
Coolabi 25 Character rights management
7,687
The 'C' share pool is relatively young and therefore significant
realisations are not to be expected. That said, the pool had a small
investment in ILG Digital which it realised during the year for a
profit of GBP217,000. This has helped to contribute to a total dividend
return to 'C' shareholders of 8.25p per share as at 28 February 2009.
A further dividend of 1.35p per share was declared on 9 June 2009.
At 28 February 2009, the 'C' share investment portfolio was valued at
GBP11.5 million against an original investment cost of GBP16.1 million.
In addition, the 'C' share pool held cash and liquidity funds of GBP7.0
million.
The general economic outlook has affected all companies and we have
made provisions against a number of investments including
Charterhouse Leisure, Donatantonio, Optima Data Intelligence Services
and Isango. It is, however, still early in the investments' lifecycle
and we are hopeful that we can increase the value of some of these
over time.
Outlook
VCTs were created to provide a source of capital for SMEs (small and
medium sized enterprises), a sector of the economy which has
historically struggled to access capital for growth. The current
economic environment created in part by the collapse of the credit
markets has not only exacerbated this condition but at a time when
SMEs are suffering from reduced consumer/business spending and the
management of effective deflation. We would expect SMEs to experience
difficult trading conditions for at least the next 18 months and as
such, benefiting from the experience of previous periods of
recession, we continue to focus our efforts on the existing companies
within the portfolio ensuring their investment plans and cost
structures reflect the macro environment.
However, historic investment returns have shown us that difficult
economic conditions have provided a great opportunity to invest in
companies at attractive valuations. We see the opportunity for new
investments in areas of economic robustness such as our recent
investment in the defence contractor 'Chess Technologies' and areas
of established innovation such as the design of mobile media
platforms, 'Fjord'. At all times we will invest in market leading
companies with exceptional management teams.
Beringea LLP
Investment Portfolio - Ordinary Share Pool
as at 28 February 2009
+---------------------------------------------------------------------------------------------+
| | 28 February 2009 | | 29 February 2008 |
|-----------------------------+-----------------------------------+-+-------------------------|
| | | |Valuation| | | | | % of|
| | | | movement| % of| | | |portfolio|
| | Cost|Valuation| in year|portfolio| | Cost|Valuation| by value|
| |GBP'000| GBP'000| GBP'000| by value| |GBP'000| GBP'000| |
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Venture capital investments | | | | | | | | |
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Espresso Group Limited | 628| 1,595| (541)| 40.9%| | 784| 2,292| 30.3%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Overtis Group Limited | 350| 350| -| 9.0%| | n/a| n/a| n/a|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Campden Media Limited | 488| 207| (279)| 5.3%| | 488| 486| 6.4%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Ashford Colour Press Limited | 413| 157| (230)| 4.0%| | 481| 456| 6.0%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|UBC Media plc* | 400| 63| (55)| 1.6%| | 400| 119| 1.6%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Pilat Media Global plc* | 50| 25| (67)| 0.7%| | 50| 92| 1.2%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Immedia plc* | 170| 9| (7)| 0.2%| | 171| 15| 0.2%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Baby Innovations S.A. t/a | | | | | | | | |
|Steribottle | 209| -| -| 0.0%| | 209| -| 0.0%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Sports Holdings Limited | 48| -| -| 0.0%| | 48| -| 0.0%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|ILG Digital Limited | -| -| -| -| | 600| 1,345| 17.8%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
| |2,756| 2,406| (1,179)| 61.7%| |2,631| 3,460| 45.7%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Total venture capital | | | | | |3,231| 4,805| 63.5%|
|investments | | | | | | | | |
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Liquidity funds | | 1,470| | 37.7%| | | 2,270| 30.1%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Cash at bank and in hand | | 25| | 0.6%| | | 486| 6.4%|
|-----------------------------+-----+---------+---------+---------+-+-----+---------+---------|
|Total Ordinary Share | | 3,901| | 100.0%| | | 7,561| 100.0%|
|investments | | | | | | | | |
+---------------------------------------------------------------------------------------------+
All venture capital investments above are unquoted unless otherwise
stated.
*Quoted on AIM
All venture capital investments above are registered in England and
Wales with the exception of Baby Innovations S.A., which is
registered in Madeira.
Investment Portfolio - C Share Pool
as at 28 February 2009
+------------------------------------------------------------------------------------------------+
| | 28 February 2009 | | 29 February 2008 |
|-------------------------------+------------------------------------+-+-------------------------|
| | | |Valuation| % of| | | | % of|
| | | | movement|portfolio| | | |portfolio|
| | Cost|Valuation| in year| by value| | Cost|Valuation| by value|
| | GBP'000| GBP'000| GBP'000| | |GBP'000| GBP'000| |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Top ten venture capital | | | | | | | | |
|investments | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Espresso Group Limited | 1,101| 1,100| (1)| 5.9%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Path Group Limited | 1,000| 1,000| -| 5.4%| |1,000| 1,000| 4.2%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Fjord Limited | 1,000| 1,000| -| 5.4%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Lazurite Limited | 1,000| 1,000| -| 5.4%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Prelude Media Limited | 1,000| 1,000| -| 5.4%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Chess Technology Limited | 900| 900| -| 4.9%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Eagle Rock Entertainment Group | 680| 877| (38)| 4.7%| | 680| 915| 3.9%|
|Limited | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Charterhouse Leisure Limited | 1,000| 801| (199)| 4.3%| | 529| 529| 2.2%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Saffron Media Group Limited | 670| 670| -| 3.6%| | 670| 670| 2.8%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Donatantonio Limited | 1,366| 651| (715)| 3.5%| |1,350| 1,350| 5.7%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | 9,717| 8,999| (953)| 48.5%| |4,229| 4,464| 18.8%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Other venture capital | | | | | | | | |
|investments | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|SPC International Limited | 625| 582| (43)| 3.1%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Optima Data Intelligence | 1,299| 507| (792)| 2.7%| |1,000| 1,000| 4.2%|
|Services Limited | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Overtis Group Limited | 500| 500| -| 2.7%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Dianomi Limited | 324| 403| 79| 2.2%| | 324| 324| 1.4%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Heritage Partner Limited | 900| 248| (653)| 1.3%| | 800| 800| 3.4%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Steak Media Limited | 375| 182| (344)| 1.0%| | 375| 526| 2.2%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Coolabi plc* | 450| 115| (362)| 0.6%| | 424| 452| 1.9%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Isango! Limited | 650| -| (650)| 0.0%| | n/a| n/a| n/a|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Breeze Tech Limited | 225| -| (225)| 0.0%| | 225| 225| 0.9%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|The Vending Corporation Limited| 1,012| -| 5| 0.0%| |1,016| -| 0.0%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | 6,360| 2,537| (2,985)| 13.6%| |4,164| 3,327| 14.0%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Investments no longer held | -| -| -| -| | 203| 253| 1.1%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Total venture capital |16,077| 11,536| (3,938)| 62.1%| |8,596| 8,044| 33.9%|
|investments | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Liquidity funds | | 6,080| | 32.8%| | | 14,280| 60.1%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Cash at bank and in hand | | 948| | 5.1%| | | 1,423| 6.0%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
|Total 'C' Share investments | | 18,564| | 100.0%| | | 23,747| 100.0%|
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
|-------------------------------+------+---------+---------+---------+-+-----+---------+---------|
| | | | | | | | | |
+------------------------------------------------------------------------------------------------+
All venture capital investments above are unquoted and are registered
in England and Wales.
* Quoted on AIM
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and
regulations. United Kingdom company law requires the Directors to
prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the financial statements in
accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law). The
financial statements are required by law to give a true and fair view
of the state of affairs of the Company and of the profit or loss of
the Company for that period.
In preparing those financial statements, the Directors are required
to:
* select suitable accounting policies and then apply them
consistently;
* make judgements and estimates that are reasonable and prudent; and
* state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements.
The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the
financial statements comply with the requirements of the Companies
Act 1985. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Report of the
Directors and other information included in the Annual Report is
prepared in accordance with company law in the United Kingdom. They
are also responsible for ensuring that the Annual Report includes
information required by the Listing Rules of the Financial Services
Authority.
The Directors are responsible for the maintenance and integrity of
the company website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements differs from
legislation in other jurisdictions.
Statement as to disclosure of information to Auditors
The Directors in office at the date of the report have confirmed, as
far as they are aware, that there is no relevant audit information of
which the Auditors are unaware. Each of the Directors have confirmed
that they have taken all the steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit
information and to establish that it has been communicated to the
Auditors. This confirmation is given and should be interpreted in
accordance with the provisions of S234ZA of the Companies Act 1985.
Income Statement
for the year ended 28 February 2009
Company Position
Year ended 28 February 2009 Year ended 29 February
2008
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 1,188 - 1,188 1,374 - 1,374
(Losses)/Gains - (4,055) (4,055) - 306 306
on investments
1,188 (4,055) (2,867) 1,374 306 1,680
Investment (136) (407) (543) (191) (570) (761)
management
fees
Performance (27) (634) (661) (12) (138) (150)
incentive fees
Recoverable 51 155 206 - - -
VAT
Other expenses (271) (16) (287) (274) (16) (290)
Return on
ordinary 805 (4,957) (4,152) 897 (418) 479
activities
before tax
Tax on (217) 217 - (276) 276 -
ordinary
activities
Return
attributable 588 (4,740) (4,152) 621 (142) 479
to equity
shareholders
Return per 0.7p (14.0p) (13.3p) 0.6p 4.3p 4.9p
Ordinary Share
Return per 'C' 2.2p (15.2p) (13.0p) 2.4p (1.7p) 0.7p
Share
Split as:
Ordinary Shares
Year ended Year
28 Feb ended 29
2009 Feb 2008
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 188 - 188 201 - 201
(Losses)/Gains on - (284) (284) - 551 551
investments
188 (284) (96) 201 551 752
Investment (31) (92) (123) (52) (155) (207)
management fees
Performance (27) (634) (661) (12) (138) (150)
incentive fees
Recoverable VAT 14 42 56 - - -
Other expenses (78) - (78) (84) (4) (88)
Return on ordinary
activities before 66 (968) (902) 53 254 307
tax
Tax on ordinary (17) 17 - (18) 18 -
activities
Return attributable
to equity 49 (951) (902) 35 272 307
shareholders
'C' Shares
Year Year
ended ended
28 Feb 29 Feb
2009 2008
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 1,000 - 1,000 1,173 - 1,173
(Losses)/Gains on - (3,771) (3771) - (245) (245)
investments
1,000 (3,771) (2,771) 1,173 (245) 928
Investment management (105) (315) (420) (139) (415) (554)
fees
Performance incentive - - - - - -
fees
Recoverable VAT 37 113 150 - - -
Other expenses (193) (16) (209) (190) (12) (202)
Return on ordinary
activities before tax 739 (3,989) (3,250) 844 (672) 172
Tax on ordinary (200) 200 - (258) 258 -
activities
Return attributable
to equity 539 (3,789) (3,250) 586 (414) 172
shareholders
Reconciliation of Movements in Shareholders' Funds
for the year ended 28 February 2009
Year ended Year ended
28 February 2009 29 February 2008
Ordinary 'C' Ordinary 'C'
Shares Shares Total Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening
shareholders'
funds 7,594 23,691 31,285 8,134 24,288 32,422
Issue of
shares 656 - 656 - - -
Share issue (36) - (36) - - -
costs
Purchase of (47) (77) (124) (32) (20) (52)
own shares
Total (902) (3,250) (4,152) 307 172 479
recognised
(losses)/gains
for the year
Distributions (3,375) (1,309) (4,684) (815) (749) (1,564)
Closing 3,890 19,055 22,945
shareholders'
funds 7,594 23,691 31,285
Balance Sheet
at 28 February 2009
Year Year
ended ended
28 Feb 28 Feb
2009 2008
Ordinary 'C' Ordinary 'C'
Shares Shares Total Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Investments 2,406 11,537 13,943 4,805 8,044 12,849
Current assets
Debtors 945 569 1,514 241 170 411
Current investments 1,470 6,080 7,550 2,270 14,280 16,550
Cash at bank and in 25 948 973 486 1,423 1,909
hand
2,440 7,597 10,037 2,997 15,873 18,870
Creditors: amounts
falling due within
one year (956) (79) (1,035) (208) (226) (434)
Net current assets 1,484 7,518 9,002 2,789 15,647 18,436
Net assets 3,890 19,055 22,945 7,594 23,691 31,285
Capital and
reserves
Called up share 68 1,243 1,311 62 1,248 1,310
capital
Capital redemption 9 6 15 9 1 10
reserve
Share premium 641 22,357 22,998 27 22,357 22,384
Special reserve 2,517 - 2,517 3,639 - 3,639
Capital reserve 971 (224) 747 2,161 288 2,449
-realised
Capital reserve - (350) (4,541) (4,891) 1,575 (553) 1,022
unrealised
Revenue reserve 34 214 248 121 350 471
Equity 3,890 19,055 22,945 7,594 23,691 31,285
shareholders' funds
Net asset value per 57.1p 76.7p 121.6p 94.9p
share
Cash Flow Statement
for year ended 28 February 2009
+------------------------------------------------------------------------------------+
| | | Year| | | | Year| |
| | | ended| | | | ended| |
| | | 28 Feb| | | | 29 Feb| |
| | | 2009| | | | 2008| |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| |Ordinary| 'C'| | |Ordinary| 'C'| |
| | Shares| Shares| Total| | Shares| Shares| Total|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | GBP'000| GBP'000| GBP'000| | GBP'000| GBP'000| GBP'000|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Net cash (outflow)/inflow from | | | | | | | |
|operating activities | (752)| (24)| (776)| | (776)| 330| (446)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Capital expenditure | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Purchase of investments | (350)|(7,687)|(8,037)| | (48)|(8,394)|(8,442)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Sale of investments | 2,662| 422| 3,084| | 2,484| 1,313| 3,797|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Net cash inflow /(outflow) from | | | | | | | |
|capital expenditure | 2,312|(7,265)|(4,953)| | 2,436|(7,081)|(4,645)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Equity dividends paid | (3,375)|(1,309)|(4,684)| | (815)| (749)|(1,564)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Management of liquid resources | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Purchase of current investments | | | | | | | |
|held as liquidity funds | (1,000)| (300)|(1,300)| | (2,220)|(1,500)|(3,720)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Withdrawal from liquidity funds | 1,800| 8,500| 10,300| | 1,350| 7,820| 9,170|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Net cash inflow /(outflow) from | 800| 8,200| 9,000| | (870)| 6,320| 5,450|
|liquid resources | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Net cash (outflow) /inflow | | | | | | | |
|before financing | (1,015)| (398)|(1,413)| | (25)|(1,180)|(1,205)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Financing | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Proceeds from share issue | 637| -| 637| | 16| -| 16|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Share issue costs | (36)| -| (36)| | -| -| -|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Purchase of own shares | (47)| (77)| (124)| | (5)| (20)| (25)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|Net cash inflow/(outflow) from | | | | | | | |
|financing | 554| (77)| 477| | 11| (20)| (9)|
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
| | | | | | | | |
|--------------------------------+--------+-------+-------+-+--------+-------+-------|
|(Decrease)/ increase in cash | (461)| (475)| (936)| | (14)|(1,200)|(1,214)|
+------------------------------------------------------------------------------------+
Notes
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies" revised December 2005 ("SORP").
The financial statements are prepared under the historical cost
convention except for the revaluation of certain financial
instruments.
Going concern
The accounts have been prepared under a going concern basis in
accordance with the assessment made by the Directors as set out in
the Statement of Corporate Governance.
Presentation of income statement
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the Association of
Investment Companies ("AIC"), supplementary information which
analyses the income statement between items of a revenue and capital
nature has been presented alongside the income statement. The net
revenue is the measure the directors believe appropriate in assessing
the Company's compliance with certain requirements set out in Part 6
of the Income Tax Act 2007.
Fixed assets investments
All investments are designated as "fair value through profit or loss"
assets and are initially measured at cost. Thereafter the investments
are measured at subsequent reporting dates at fair value.
Listed fixed income investments and investments quoted on AIM are
measured using bid prices.
In respect of unquoted instruments, fair value is established by
using International Private Equity and Venture Capital Valuation
Guidelines. Where no reliable fair value can be estimated for such
unquoted equity investments they are carried at cost, subject to any
provision for impairment.
Gains and losses arising from changes in fair value are included in
the income statement for the year as a capital item and transaction
costs on acquisition or disposal of the investment expensed.
It is not the Company's policy to exercise either significant or
controlling influence over investee companies. Therefore, the results
of these companies are not incorporated into the revenue account
except to the extent of any income accrued.
Current assets investments
Current assets investments comprise investments in liquidity funds
with AAA rating and are redeemable on call. These investments are
marked¬to¬market.
Income
Dividend income from investments is recognised when the shareholders'
rights to receive payment has been established, normally the ex
dividend date.
Interest income is accrued on a receivable basis, by reference to the
principal outstanding, and at the effective interest rate applicable
and only where there is reasonable certainty of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of
the analysis between revenue and capital items presented within the
income statement, all expenses have been presented as revenue items
except as follows:
* expenses which are incidental to the acquisition of an investment
are deducted from the Capital Account;
* expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment; and
* expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of the
investments held can be demonstrated and accordingly the investment
management fee and finance costs have been allocated 25% to revenue
and 75% to capital, in order to reflect the directors expected
long¬term view of the nature of the investment returns of the
Company.
Taxation
The tax effects of different items in the Income Statement are
allocated between capital and revenue on the same basis as the
particular item to which they relate using the Company's effective
rate of tax for the accounting period.
Due to the Company's status as a venture capital trust and the
continued intention to meet the conditions required to comply with
Part 6 of the Income Tax Act 2007, no provision for taxation is
required in respect of any realised or unrealised appreciation of the
Company's investments which arises.
Deferred taxation is provided in full on timing differences that
result in an obligation at the balance sheet date to pay more tax, or
a right to pay less tax, at a future date, at rates expected to apply
when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and
expenditure in taxation computations in periods different from those
in which they are included in the financial statements.
2. Return per share
Ordinary Shares
'C' Shares
Revenue return per share based on:
Net revenue after taxation (GBP'000) 49 539
Weighted average number of ordinary 6,778,943 24,925,885
shares in issue
Capital return per share based on:
Net capital (loss) for the financial (951) (3,789)
year (GBP'000)
Weighted average number of shares in 6,778,943 24,925,885
issue
3. Net asset value per share
2009 2008 2009 2008
Shares in pence net pence net
Issue per asset per asset
share v alue share v alue
GBP'000 GBP'000
Ordinary shares 6,816,160 6,244,631 57.1 3,890 121.6 7,594
'C' shares 24,855,707 24,956,242 76.7 19,055 94.9 23,691
22,945 31,285
4. Principal financial risks
As a VCT, the majority of the Company's assets are represented by
financial instruments which are held as part of the investment
portfolio. In order to ensure continued compliance with relevant VCT
regulation and to be in a position to deliver the long term capital
growth which is part of the Company's investment objective, the Board
is very much aware of the need to manage and mitigate the risks
associated with the financial instruments held within the investment
portfolio.
The management of these risks starts the application of a clear
investment policy which has been developed by the Directors who are
experienced investment professionals. Furthermore, the Board has
appointed an experienced investment manager to whom they have
communicated the company's investment objective and whose
remuneration is linked to the achievement of that objective. The
Investment Manager reports regularly to the Board on performance, and
to facilitate the direct Board involvement with key decisions, on
whether or not to invest, disinvest and the nature, terms and the
security of investments being made.
In assessing the risk profile of its investment portfolio, the Board
has identified three principal classes of financial instrument. All
financial instruments are "fair value through the profit and loss
account" and are recognised as such on initial recognition.
In addition to its investment portfolio, the VCT maintains a
portfolio of liquidity funds and a cash position. The liquidity fund
portfolio comprises investments in liquidity funds operated by major
institutions and are A-rated. Cash is mainly held by Bank of Scotland
plc which is an A rated financial institution. Consequently, the
Directors consider that the risk profile associated with cash
deposits and liquidity funds is low and thus the carrying value in
the financial statements is a close approximation of its fair value.
A review of the specific financial risks faced by the Company is
presented below.
Market price risk
Market price risk arises from uncertainty about the future prices of
financial instruments held in accordance with the Company's
investment objectives. It represents the potential loss that the
Company might suffer through holding market positions in the face of
market movements. At 28 February 2009, the unrealised loss on AIM
quoted portfolios was GBP858,000 (2008: GBP367,000).
The investments that the Company holds are, in the main, thinly
traded and as such the prices are more volatile than those of more
widely traded securities. In addition, the ability of the Company to
realise the investments at their carrying value may at times not be
possible if there are no willing purchasers. The ability of the
Company to purchase or sell investments is also constrained by the
requirements set down for Venture Capital Trusts.
The Board considers each investment purchase to ensure that an
acquisition will enable the Company to continue to have an
appropriate spread of market risk and that an appropriate risk reward
profile is maintained.
It is not the Company's policy to use derivative instruments to
mitigate market risk, as the Board believes that the effectiveness of
such instruments does not justify the cost involved.
As many of the Company's unquoted investments are valued using
Price/Earnings ratios of small publicly quoted companies, a fall in
share prices generally would impact on the valuation of the unquoted
portfolio. A 10% fall in the valuations of all of the unquoted
investments held by the Company would have an effect as follows:
Interest rate risk
The Company receives interest on its cash deposits at a rate agreed
with its banker, while investments in loan stock and fixed interest
investments attract interest predominately at fixed rates. As the
Company must comply with the VCT regulations, increases in interest
rates could lead to a potential breach of these regulations. The
Company therefore monitors the level of income received from fixed,
floating and non interest rate assets to ensure that the regulations
are not breached. The Company has reviewed the potential financial
impact of the interest rate risk and concluded that a 1.0% change in
base rate would cause an 8.2% change in overall income receivable by
the Company.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument
is unable to discharge a commitment to the Company made under that
instrument. The Company's financial assets that are exposed to
credit risk are summarised as follows:
2008 2007
GBP'000 GBP'000
Investments in liquidity funds 7,550 16,550
Investments in loan stocks 7,821 4,743
Cash and cash equivalents 973 1,909
Interest, dividends and other receivables 373 419
16,717 23,621
Credit risk in respect of investments in liquidity funds is minimised
by, where possible, investing in AAA-rated funds.
Investments in loan stocks comprise a fundamental part of the
Company's venture capital investments and are managed within the main
investment management procedures.
Cash is mainly held by Bank of Scotland plc, which is an A-rated
financial institution and, consequently the Directors consider that
the risk profile associated with cash deposits is low.
Interest, dividends and other receivables are predominantly covered
within the investment management procedures.
Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties
in meeting obligations associated with its financial liabilities. As
the Company only ever has a very low level of creditors and has no
borrowings, the Board believes that the Company's exposure to
liquidity risk is minimal.
5. Related party transactions
Beringea Limited, of which Malcolm Moss is a director, acted as
promoter for the Offers for Subscription dated 11 February 2008 and
agreed to underwrite the costs of the Offer in return for a fee of
5.5% of the monies raised, which amounted to GBP36,000 (2008:
GBP35,000). Beringea Limited was also the investment manager during
the year. The total fees relating to this service, together with
performance incentive fees due in the year under the agreement,
amounted to GBP1,204,000 (2008: GBP761,000) (all inclusive of VAT), of
which GBPNil (2008: GBP194,000) was outstanding at the year end. Beringea
Limited (and subsequently, Beringea LLP, of which Malcolm Moss is a
partner) also acted as promoter to the "Linked D Share Offer"
launched in November 2008. Beringea LLP/Beringea Limited receives
5.5% of the gross proceeds of the offer, out of which it must pay the
costs of the Offer including initial commissions.
Nicholas Lewis is a director of Downing Management Services Limited,
which provides administration services to the Company. During the
year GBP40,000 (2008: GBP39,000) (inclusive of VAT) was due to Downing
Management Services Limited in respect of these services of which
GBP10,000 (2008: GBP10,000) remained outstanding at the year end.
Announcement based on audited accounts
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in accordance
with section 434 Companies Act 2006 for the year ended 28 February
2009, but has been extracted from the statutory financial statements
for the year ended 28 February 2009, which were approved by the Board
of Directors on 9 June 2009 and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The
Independent Auditor's Report on those financial statements was
unqualified and did not contain any emphasis of matter nor statements
under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 29 February 2008 have been
delivered to the Registrar of Companies and received an Independent
Auditors report which was unqualified and did not contain any
emphasis of matter nor statements under S237(2) or (3) of the
Companies Act 1985.
A copy of the full annual report and financial statements for the
year ended 28 February 2009 will be printed and posted to
shareholders shortly. Copies will also be available to the public at
the registered office of the Company at 39 Earlham Street, London
WC2H 9LT and will be available for download from www.provenvcts.com
and 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.
Proven Growth & Income Vct (LSE:PGO)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Proven Growth & Income Vct (LSE:PGO)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
