Half-year report
THAMES VENTURES VCT 1 PLC LEI: 213800R88MRC4Y3OIW86
HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2023
Financial Summary
|
|
30 Sep |
31 Mar |
30 Sep |
Nov |
|
|
2023 |
2023 |
2022 |
2013 |
|
|
pence |
pence |
pence |
pence |
|
|
Unaudited |
Audited |
Unaudited |
Unaudited |
Net Asset Value per share (“NAV”) |
|
48.5 |
51.8 |
58.8 |
100.4 |
Cumulative dividends paid since Nov 2013 |
|
45.5 |
44.5 |
43.0 |
- |
Total Return
(NAV plus cumulative dividends paid per share) |
|
94.0 |
96.3 |
101.8 |
100.4 |
|
|
|
|
|
|
Chairman’s Statement
I present the Company’s unaudited Half-Yearly
Financial Report for the six months ended 30 September 2023.
Following an eventful year ended 31 March 2023
for the Company, with the main Investment Adviser changing from
Downing LLP to Foresight Group LLP, the six-month period ended 30
September 2023 has been more settled from a management perspective.
However, performance has been disappointing, with the UK investment
environment continuing to remain challenging.
Net asset value and results
As at 30 September 2023, the Company’s NAV stood
at 48.5p, a decrease of 2.3p (or 4.4%) compared to the 31 March
2023 year-end position, after adding back the 1.0p dividend paid
during the period.
The loss attributable to equity shareholders for
the period was £4.4 million, comprising a revenue gain of £0.2
million and a capital loss of £4.6 million.
Investment activity and performance
Over the last six months the Company has made
new and follow-on investments totalling £2.4 million, as well as
receiving proceeds of £3.3 million from exit events across the
portfolio.
At the period end, the Company held a portfolio
of 63 active investments, with 54% in unquoted growth (by value),
26% held in quoted growth and 20% in unquoted yield focused
investments. A total of 31 investments are held in the quoted
growth category which are either quoted on AIM, the Main Market or
the AQSE Growth Market and have a value of £16.9 million. This
includes one investment in new company, DXS International Plc. The
32 unquoted investments have a value of £48.9 million.
The reduction in value of the Company’s
investments over the period was driven by a large reduction (£4.1
million) in the valuation of Cornelis Networks Inc., with the
Company’s position being heavily diluted as a result of being
unable to participate in the most recent funding round, as the
portfolio company no longer meets the gross assets test in order to
be VCT qualifying. Limitless Limited also experienced a decrease in
valuation of £625,000, due to a co-investor remaining on the UK
sanctions list. Furthermore, the valuation of the quoted portfolio
fell by £1.9 million during the period, following the trend of the
FTSE AIM All Share market.
Offsetting the valuation decreases above, there
were some positive valuation movements seen from Carbice Limited,
Cambridge Touch Technologies and FundingXchange Limited. Further
details can be found in the Investment Adviser’s Report on pages 4
to 6.
Dividends
The Company has a stated policy of seeking to
pay dividends equivalent to at least 4% of NAV each year. The Board
has declared an interim dividend of 1.0p (equivalent to 2.1% of NAV
at 30 September 2023) which will be paid on 2 February 2024 to
Shareholders on the register as at 29 December 2023.
The above interim dividend will take the total
dividends paid since the merger in November 2013 to 46.5p per
share.
Running costs
Shareholders are reminded that the Company
benefits from a running cost cap provided by the Investment
Adviser, whereby any costs above 2.6% of net assets per annum are
met by the Adviser by way of a reduction in their fees.
Special Administration of the Company’s Custodian of
Quoted Assets
Since September 2020, the Company has used IBP
Markets Limited ("IBP") as custodian for its quoted investments.
Appointing a custodian is a requirement of the FCA, and IBP is an
FCA authorised and regulated wholesale broker, providing custody
services and access to equity and fixed income securities for
non-retail clients (which includes the Company). On 13 October
2023, the FCA published a supervisory notice under section
55L(3)(a) of the Financial Services and Markets Act 2000, imposing
certain restrictions on IBP. On the same date, IBP applied to the
High Court and special administrators were appointed. The special
administrators have yet to publish an estimated outcome statement
and therefore the full impact is currently unknown. The Investment
Adviser is actively collaborating with the special administrators
to reach a resolution and will communicate with Shareholders when
further information becomes available. Whilst this is being
resolved, the Company is unable to trade any of its AIM and fully
listed portfolio on the quoted market.
The Investment Adviser is in regular dialogue
with the special administrators. The outcome remains subject to
change particularly as additional claims may be made on custody
assets and client money and there remains a risk to the positions.
However, considering the information made available to the Company
at the date of this report, there is currently little indication
that there will be a materially adverse impact to Shareholders with
respect to the custody assets. The position with respect to client
money remains to be determined, but total cash at IBP represented
less than 1.5% of NAV as at 30 September.
Fundraising
With the uncertainty brought about by the
special administration of the custodian of the Company’s quoted
stocks, we have not been in a position to launch a fundraise so far
this year. Once clarity is achieved on the IBP situation, the Board
will be able to consider options for fundraising and will
communicate this with Shareholders.
Share buybacks
The Company usually operates a policy of buying
back its own shares that become available in the market, subject to
regulatory and liquidity factors. The Board review these on a
regular basis and will make appropriate adjustments as it sees
fit.
Historically, we have been able to rely on the
fact that we could liquidate part of our quoted portfolio if there
was ever a shortage of cash. Unfortunately, given the IBP situation
noted above, we would not currently be able to do this if required
in the short term. Although our cash position remains reasonably
healthy at the moment, the Board have reviewed the investment
pipeline and cash flow forecast for the next 12 months and deem it
prudent to be cautious with regard to the Company’s uninvested
funds and not undertake any buybacks. The Board will review this
decision at the end of February 2024 when the IBP situation is
clearer.
Sunset clause
A “sunset clause” applies to the current
approved scheme for EIS and VCT tax reliefs. This clause provides
that income tax relief will expire on subscriptions made for VCT
shares on or after 6 April 2025, unless the legislation is amended
to make the scheme permanent, or the “sunset clause” is
extended.
The UK Chancellor confirmed in the autumn
statement that the government remains committed to ensuring
early-stage, innovative companies have access to the investment
they need to grow and develop. As a result it was announced on 22
November 2023 that the government will legislate to extend the
Enterprise Investment Scheme (‘EIS’) and Venture Capital Trusts
(‘VCT’) to 2035.
Directorate
It was earlier communicated that within this
period, Stuart Goldsmith, the last remaining founding Director of
the Company, would be stepping down from the Board. My fellow
Directors and I express our gratitude for his dedicated work
throughout the years. On December 12, 2022, as part of a planned
succession, Atul Devani officially joined the Board, contributing
his VCT experience and expertise in the technology sector,
enriching the Board's capabilities going forward.
Change of Company Secretary and Registered
Office
I am pleased to announce that Foresight Group
LLP was appointed as Company Secretary effective from 1 September
2023, succeeding Grant Whitehouse. I would like to take this
opportunity to thank Grant for his many years of dedication and
service to the Company.
Outlook Businesses continue to
face multiple challenges in the UK and internationally. The
investment team will continue to monitor the existing portfolio
companies closely to ensure management address the macroeconomic
challenges appropriately and have the support that they need to do
so. The Board hopes to see the ventures investment team
continue to leverage the full benefits of the regional office
network and other resources of Foresight Group.
Chris KayChairman21 December
2023
Investment Adviser’s Report
We present our Investment Adviser’s Report for
the six-month period to 30 September 2023.
Unquoted
PortfolioInvestment focusIn line with the
current VCT regulations, the Company focus has for some years now
been on young unquoted growth businesses. This focus will continue
and other areas of Thames Ventures VCT 1’s portfolio are expected
to continue to reduce in size as suitable exit opportunities arise
and proceeds are reinvested in the core area.
Investment activityDuring the
period, the Company invested a total of £1.9 million as further
funding into two existing unquoted portfolio companies.
There were no investments made into new unquoted
companies during the period, however, shortly after the period-end,
£1.4 million was invested in a new company, Inoviv Limited. Inoviv
has a long-term data play in drug discovery and trials, having
developed novel precision biomarker technology which helps
pharmaceutical customers run drug trials more efficiently. This
investment will enable Inoviv to further accelerate their
commercial plans, including facilitating the development of tests
across more diseases.
The above excludes activity in the quoted
portfolio, which is detailed in isolation on page 5 of this
report.
The two follow-on investments are summarised as
follows:
A further £1.75 million was invested into
existing portfolio company, Cambridge Touch Technologies
Limited, a company developing pressure sensitive multi
touch technology.
A total of £150,000 was invested into
Cambridge Respiratory Innovations Limited (now
trading as Tidal Sense) who have developed a patent‐protected
ultrahigh sensitivity handheld capnometer to provide actionable
insights at the point of care for the diagnosis, monitoring and
management of cardiorespiratory conditions.
There were 11 full exits of unquoted investments
in the period, as summarised below:
Imagen Limited, a Software as a
Service (“SaaS”) video management platform which holds both current
and archive footage for major sporting organisations and news
outlets. The company was sold for initial cash consideration of
£1.7 million at a gain over cost of £0.7 million. There is also
£0.2 million deferred consideration, taking total proceeds to £1.9
million and a total gain over cost of £0.9 million. DiA
Imaging Analysis, a leading provider of advanced
Artificial Intelligence based solutions for ultrasound analysis,
was also sold in the period for initial proceeds of £0.2m versus
cost invested of £0.2m. There is also a deferred element of
consideration meaning a gain over cost will be realised on this
exit.
There were further proceeds of £0.3 million
received in relation to the winding up of two investments in the
unquoted yield-focused portfolio, Downing Pub EIS
ONE Limited and Pearce &
Saunders Limited. No further proceeds are anticipated on
these investments.
Portfolio valuationExcluding
the portfolio of quoted investments, there were net valuation
losses of £2.5 million over the period, which included £0.1 million
of unrealised foreign exchange gains.
Eleven companies in the portfolio recorded a
combined valuation gain of £3.7 million in the period. However,
this was offset by a number of companies reporting combined
valuation losses totalling £6.2 million. This is driven by the
ongoing challenges for businesses operating in the UK and
associated restriction on access to capital. The £3.7 million of
uplift in valuation over the period is driven by the following
investments.
Carbice Limited (£1.6 million),
the developer of a suite of products based on its carbon material
called Carbice Carbon which is primarily used as thermal management
solutions to enable greater thermal conductivity, has continued to
progress well during the period, with recurring revenues continuing
to grow and continued progress on fundraising. This movement
includes the impact of FX as this is a USD-denoted investment.
Cambridge Touch Technologies
Limited (£862,000), a company developing pressure
sensitive multi touch technology. The value of this investment was
uplifted to reflect the valuation of the round which completed
during the period.
FundingXchange Limited
(£718,000), an SME funding platform and B2B technology provider
which enables online lending. After a challenging twelve months,
this company has negotiated additional funding to deliver its
growth plan. The valuation of this investment has therefore been
uplifted to reflect this.
Offsetting these valuation uplifts, are a number
of valuation decreases across the unquoted portfolio.
Cornelis Networks, Inc. (£4.1
million) is a technology provider delivering purpose-built
high-performance fabrics for High Performance Computing, Analytics
and Artificial Intelligence to leading commercial, scientific,
academic, and government organizations. The valuation was
amended to reflect a funding round which closed in the period in
which Thames Ventures VCT 1 Plc was unable to participate due to
the company not meeting the gross assets test to be VCT-qualifying.
Not participating led to a significant dilution of the Company’s
stake which has been reflected in the movement in valuation. This
movement includes the impact of FX as this is a USD-denoted
investment.
Limitless Limited (£625,000),
the developer of a crowdsourced customer service platform, was
subject to a valuation reduction as a result of one of the
co-investors being on the UK Sanctions List giving rise to a
funding risk.
CommerceIQ Inc. (£394,000), the
pioneer in helping brands win on retail ecommerce channels. Their
unified platform applies machine learning and automation across
marketing, supply chain, and sales operations to help brands gain
market share profitably. This valuation movement is simply a
reflection of current market conditions. The company continues to
perform well growing revenues during the period and supported by a
very strong balance sheet. This movement includes the impact of FX
as this is a USD-denoted investment.
Data Centre Response Limited
(£344,000), a provider of uninterruptable power supply systems. A
discount has been applied to the EBITDA multiple approach to
reflect the challenging market conditions which has led to an
unrealised fair value loss on this investment.
There are a number of smaller valuation
movements which partially offset one another for the half-year
period, ultimately resulting in an additional net decrease in value
of £238,000.
Quoted
PortfolioInvestment focusThe Company
continues to hold a portfolio of quoted investments, most of which
are quoted on the AIM market. The team at Downing LLP continue to
provide management services in respect of these investments under a
subcontract agreement with Foresight.
Investment activityAt 30
September 2023, the quoted portfolio comprised 31 investments with
a value of £16.9 million. There was only one material transaction
in the period – the part sale of Tracsis plc
realising a gain £548,000. The decision to take profits in
this holding was to reduce the large exposure to the Company after
the share price had performed well. Tracsis remains one of the
larger positions in the portfolio, reflecting our confidence in
this niche transport software business.
There were two investments made into quoted
assets during the period: new investment DXS International
Plc (£300,000) and existing investment Deepmatter
Group Plc (£159,000).
Portfolio valuationThe quoted
portfolio continued to be volatile in the period, following the
trend of the FTSE AIM All Share market which was down 11.6%, which
drove a £1.9 million fall in net valuation in the period.
Ten companies in the portfolio recorded a
combined valuation gain of £0.8 million, however this was offset by
a number of companies reporting combined valuation losses totalling
£2.7 million. Driving the gains in the period were uplifts in
Anpario Plc (£402,000) and Craneware
Plc (£243,000) however material unrealised losses include
Tracsis Plc (£547,000), Genincode
Plc (£292,000), Libertine Holdings Plc
(£254,000), Inland Homes Plc (£210,000) and
Impact Healthcare REIT Plc (£210,000). The
remaining portfolio recorded a total unrealised loss of £1.0
million. Whilst the companies continued to trade resiliently, this
was not necessarily reflected in share prices. Since the period
end, share prices have begun to recover into the December
pre-Christmas trading period.
Although our view continues to be that the
coming months are likely to remain challenging from a macroeconomic
perspective, there is certainly renewed interest in UK smaller
companies with the FTSE AIM All Share up over 9% since the
beginning of November. The Investment Adviser is pleased to note
that at the date of this report, the quoted portfolio had recovered
by £0.7 million since the period end, representing a 4.4% uplift.
We reiterate that the quoted portfolio contains good quality
companies, with plenty of scope for self-help, strong balance
sheets, and significant prospects for growth over the long-term
which we hope will translate into an improved longer term share
price performance.
Outlook The six months to 30
September 2023 has continued to see increasingly challenging market
conditions, with inflation and global interest rates still high,
which has had an inevitable impact on the portfolio.
Further to this, there have been a number of
events impacting the valuation of unquoted investments which have
been unavoidable, as detailed above, and the volatility of the
quoted portfolio remains in line with FTSE AIM All Share market
trends.
Despite this, we continue to see improved
performance from certain portfolio companies and anticipate this
will continue. Further to this, the economic situation has recently
seen its first glimpse of hope with the UK’s annual inflation rate
falling sharply in October, its lowest level for two years. This
being said, we are cognisant that the market has been, and will
continue to be, tough for many of these companies. The portfolio
companies that survive this economic turbulence may be better
placed than beforehand, due to tighter cost and cash
management.
We continue to expand our team to enable us to
take full advantage of the opportunities we are seeing, whilst
continuing to support the existing portfolio companies.
Thames Ventures TeamForesight Group
LLP21 December 2023
Unaudited Income Statement For the six months
ended 30 September 2023
|
|
Six months ended30 September
2023(Unaudited) |
Six months ended30 September
2022(Unaudited) |
Year ended31 March
2023(Audited) |
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Total |
Note |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
|
|
Income |
|
1,065 |
- |
1,065 |
2,710 |
- |
2,710 |
3,031 |
|
|
|
|
|
|
|
|
|
Losses on investments |
10 |
- |
(4,175) |
(4,175) |
- |
(3,728) |
(3,728) |
(12,351) |
|
|
1,065 |
(4,175) |
(3,110) |
2,710 |
(3,728) |
(1,018) |
(9,320) |
|
|
|
|
|
|
|
|
|
Investment management fees |
|
(449) |
(449) |
(898) |
(275) |
(275) |
(550) |
(1,598) |
Other expenses |
|
(376) |
- |
(376) |
(388) |
- |
(388) |
(812) |
|
|
|
|
|
|
|
|
|
Return/(loss) on ordinary activities before
tax |
|
240 |
(4,624) |
(4,384) |
2,047 |
(4,003) |
(1,956) |
(11,730) |
|
|
|
|
|
|
|
|
|
Tax on total comprehensive income and ordinary activities |
|
(24) |
24 |
- |
(78) |
78 |
- |
- |
|
|
|
|
|
|
|
|
|
Return/(loss) attributable to equity
shareholders |
5 |
216 |
(4,600) |
(4,384) |
1,969 |
(3,925) |
(1,956) |
(11,730) |
|
|
|
|
|
|
|
|
|
Basic and diluted return per share |
|
0.1p |
(2.5)p |
(2.4)p |
1.1p |
(2.2)p |
(1.1)p |
(6.5)p |
The total column within the Income Statement
represents the Statement of Total Comprehensive Income of the
Company prepared in accordance with Financial Reporting Standards
(“FRS102”). There are no other items of comprehensive income. The
supplementary revenue and capital return columns are prepared in
accordance with the Statement of Recommended Practice issued in
November 2014 and updated in July 2022 by the Association of
Investment Companies (“AIC SORP”).
Unaudited Balance Sheet as at 30 September
2023
Company number: 03150868
|
|
30 Sep 2023 |
|
30 Sep 2022 |
|
31 Mar2023 |
|
|
£’000 |
|
£’000 |
|
£’000 |
|
Note |
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
|
Fixed assets |
|
|
|
|
|
|
Investments |
10 |
65,871 |
|
81,130 |
|
71,227 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Debtors |
|
7,393 |
|
5,896 |
|
6,828 |
Cash at bank and in hand |
|
13,580 |
|
20,051 |
|
15,282 |
|
|
20,973 |
|
25,947 |
|
22,110 |
|
|
|
|
|
|
|
Creditors: amounts falling due within one
year |
(1,077) |
|
(1,298) |
|
(1,354) |
|
|
|
|
|
|
|
Net current assets |
|
19,896 |
|
24,649 |
|
20,756 |
|
|
|
|
|
|
|
Net assets |
|
85,767 |
|
105,779 |
|
91,983 |
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Called up share capital |
8 |
1,770 |
|
1,799 |
|
1,774 |
Capital redemption reserve |
9 |
71 |
|
1,711 |
|
32 |
Share premium account |
9 |
2,252 |
|
81,236 |
|
428 |
Funds held in respect of shares not yet allotted |
9 |
- |
|
16 |
|
- |
Special reserve |
9 |
85,122 |
|
15,873 |
|
88,813 |
Capital reserve realised |
9 |
(5,627) |
|
- |
|
- |
Revaluation reserve |
9 |
3,619 |
|
6,024 |
|
2,592 |
Revenue reserve |
9 |
(1,440) |
|
(880) |
|
(1,656) |
|
|
|
|
|
|
|
Equity shareholders’ funds |
|
85,767 |
|
105,779 |
|
91,983 |
|
|
|
|
|
|
|
Basic and diluted net asset value per share |
7 |
48.5p |
|
58.8p |
|
51.8p |
Statement of Changes in Equity For the six
months ended 30 September 2023
|
Called up share capital |
Capital redemption reserve |
Share premium account |
Special reserve |
Capital reserve realised |
Revaluation reserve |
Revenue reserve |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
|
|
For the six months ended 30 September 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 Apr 2023 |
1,774 |
32 |
428 |
88,813 |
- |
2,592 |
(1,656) |
91,983 |
Total comprehensive income |
- |
- |
- |
- |
(5,627) |
1,027 |
216 |
(4,384) |
Transactions with owners |
|
|
|
|
|
|
Dividend paid |
- |
- |
- |
(1,779) |
- |
- |
- |
(1,779) |
Issue of new shares |
29 |
- |
1,556 |
- |
- |
- |
- |
1,585 |
Share issue costs |
- |
- |
(7) |
- |
- |
- |
- |
(7) |
Shares issued under the dividend reinvestment scheme |
6 |
- |
275 |
- |
- |
- |
- |
281 |
Purchase of own shares |
(39) |
39 |
- |
(1,912) |
- |
- |
- |
(1,912) |
|
|
|
|
|
|
|
|
|
At 30 Sept 2023 |
1,770 |
71 |
2,252 |
85,122 |
(5,627) |
3,619 |
(1,440) |
85,767 |
|
|
|
|
|
|
|
|
|
Statement of Changes in Equity For the year
ended 31 March 2023
|
Called up share capital |
Capital redemption reserve |
Share premium account |
Funds held in respect of shares not yet
allotted |
Special reserve |
Capital reserve realised |
Revaluation reserve |
Revenue reserve |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
|
|
|
For the year ended 31 March 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2022 |
1,776 |
1,697 |
79,035 |
78 |
16,328 |
- |
11,303 |
(744) |
109,473 |
Total comprehensive income |
- |
- |
- |
- |
- |
(1,204) |
(11,718) |
1,192 |
(11,730) |
Realisation of revaluations from previous years* |
- |
- |
- |
- |
- |
2,438 |
(2,438) |
- |
- |
Realisation of impaired valuations |
- |
- |
- |
- |
- |
(5,445) |
5,445 |
- |
- |
Transfer between reserves* |
- |
(1,710) |
(81,236) |
- |
74,984 |
7,962 |
- |
- |
- |
Transactions with owners |
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
(3,751) |
- |
(2,104) |
(5,855) |
Utilised in share issue |
- |
- |
- |
(78) |
- |
- |
- |
|
(78) |
Issue of new shares |
43 |
- |
2,680 |
- |
- |
- |
- |
- |
2,723 |
Share issue costs |
- |
- |
(51) |
- |
- |
- |
- |
- |
(51) |
Purchase of own shares |
(45) |
45 |
- |
- |
(2,499) |
- |
- |
- |
(2,499) |
At 31 March 2023 |
1,774 |
32 |
428 |
- |
88,813 |
- |
2,592 |
(1,656) |
91,983 |
|
|
|
|
|
|
|
|
|
|
* A transfer of £nil
representing previously recognised unrealised gains on disposal of
investments during the period ended 30 September 2023 (year ended
31 March 2023: £2.4m) has been made from the revaluation reserve to
the capital reserve -realised.
A transfer of £nil representing realised gains
on disposal of investments, less the excess of capital expenses
over capital income and capital dividends in the period (year ended
31 March 2023: losses £8.0m) has been made from the capital reserve
- realised to the special reserve.
Unaudited Cash Flow Statement For the six
months ended 30 September 2023
|
|
Six months ended 30 Sep 2023 |
|
Six months ended 30 Sep 2022 |
|
Year ended 31 Mar 2023 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|
|
£’000 |
|
£’000 |
|
£’000 |
Cash flow from operating activities |
|
|
|
|
|
|
Loss on ordinary activities before taxation |
(4,384) |
|
(1,956) |
|
(11,730) |
Loss on investments |
|
4,175 |
|
3,728 |
|
12,351 |
Increase/(decrease) in creditors |
|
82 |
|
635 |
|
(60) |
Increase in debtors |
|
(891) |
|
(2,596) |
|
(3,529) |
|
|
|
|
|
|
|
Cash from operations |
|
|
|
|
|
|
Corporation tax paid |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
Net cash outflow from operating activities |
(1,018) |
|
(189) |
|
(2,968) |
|
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
|
|
|
Purchase of investments |
|
(2,209) |
|
(5,673) |
|
(11,758) |
Proceeds from disposal of investments |
|
3,295 |
|
6,769 |
|
14,134 |
Proceeds from deferred consideration |
|
419 |
|
- |
|
- |
|
|
|
|
|
|
|
Net cash inflow from investing activities |
1,505 |
|
1,096 |
|
2,376 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds from share issue |
|
1,586 |
|
2,289 |
|
1,781 |
Funds held in respect of shares not yet allotted |
- |
0 |
(63) |
|
(78) |
Share issue costs |
|
(7) |
|
(51) |
|
(51) |
Purchase of own shares |
|
(2,270) |
|
(729) |
|
(1,723) |
Equity dividends paid |
|
(1,498) |
|
(3,158) |
|
(4,911) |
|
|
|
|
|
|
|
Net cash outflow from financing activities |
(2,189) |
|
(1,712) |
|
(4,982) |
|
|
|
|
|
|
|
Decrease in cash |
|
(1,702) |
|
(805) |
|
(5,574) |
|
|
|
|
|
|
|
Net movement in cash |
|
|
|
|
|
|
Beginning of period |
|
15,282 |
|
20,856 |
|
20,856 |
Net cash outflow |
|
(1,702) |
|
(805) |
|
(5,574) |
End of period |
|
13,580 |
|
20,051 |
|
15,282 |
Summary of Investment Portfolio as at 30
September 2023
|
Cost |
Valuation |
Additions / (disposals) |
Valuation movement in period† |
% of portfolio by value |
|
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
Top twenty venture capital investments (by
value) |
|
|
|
|
|
Tracsis Plc* |
1,297 |
5,541 |
(694) |
(547) |
7.0% |
Doneloans Limited |
3,631 |
4,146 |
- |
(10) |
5.2% |
Cambridge Touch Technologies Limited |
2,709 |
4,078 |
1,750 |
862 |
5.1% |
Downing Strategic Micro-cap Investment Trust Plc** |
5,699 |
3,559 |
- |
(181) |
4.5% |
Carbice Corporation Inc |
3,020 |
3,532 |
- |
1,649 |
4.4% |
Ayar Labs Inc |
1,280 |
3,173 |
- |
46 |
4.0% |
Baron House Developments LLP |
2,695 |
2,961 |
- |
(57) |
3.7% |
Hackajob Limited |
2,284 |
2,568 |
- |
(18) |
3.2% |
Virtual Class Limited |
1,164 |
2,183 |
- |
(112) |
2.8% |
Cadbury House Holdings Ltd |
3,082 |
2,162 |
- |
- |
2.7% |
Data Centre Response Limited |
557 |
2,022 |
- |
(344) |
2.5% |
Maestro Media Limited |
1,320 |
1,868 |
- |
- |
2.4% |
Trinny London Limited |
443 |
1,813 |
- |
(76) |
2.3% |
Rated People Limited |
1,582 |
1,743 |
- |
(78) |
2.2% |
Anpario Plc* |
1,448 |
1,608 |
- |
402 |
2.1% |
Parsable Inc |
1,532 |
1,529 |
- |
23 |
1.9% |
Vivacity Labs Limited |
1,289 |
1,443 |
- |
- |
1.8% |
Bulbshare Limited |
749 |
1,349 |
- |
67 |
1.7% |
CommerceIQ Inc |
1,749 |
1,337 |
- |
(394) |
1.7% |
FundingXchange Limited |
1,335 |
1,279 |
- |
718 |
1.6% |
|
38,865 |
49,894 |
1,056 |
1,950 |
62.8% |
|
|
|
|
|
|
Other venture capital investments |
38,772 |
15,977 |
(1,992) |
(6,370) |
20.1% |
Total investments |
77,637 |
65,871 |
(936) |
(4,420) |
82.9% |
Cash at bank and in hand |
|
13,580 |
|
|
17.1% |
Total investments and cash |
|
79,451 |
|
|
100.0% |
|
|
|
|
|
|
|
All venture capital investments are unquoted unless otherwise
stated.
* Quoted on AIM
**
Listed and traded on the Main Market of the London Stock
Exchange† The valuation movement in the period
includes unrealised foreign exchange gains of £110,000.
Summary of Investment Movements For the six
months ended 30 September 2023
Additions
|
£’000 |
Quoted investments |
|
DXS International Plc |
300 |
Deepmatter Group Plc |
159 |
|
459 |
Unquoted investments |
|
Cambridge Touch Technologies Limited |
1,750 |
Tidalsense Limited |
150 |
|
1,900 |
Total additions |
2,359 |
Disposals
|
Cost |
Value at 31/03/23 |
Proceeds |
Valuation movement in period |
Realised gain/(loss) |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
Quoted growth investments |
|
|
|
|
|
Tracsis Plc |
146 |
686 |
694 |
8 |
548 |
Let's Explore Group Plc |
325 |
276 |
375 |
99 |
50 |
Genincode Plc |
26 |
23 |
18 |
(5) |
(8) |
|
497 |
985 |
1,087 |
102 |
590 |
|
|
|
|
|
|
Unquoted yield focused investments |
Pearce & Saunders Ltd |
1,122 |
- |
172 |
172 |
(950) |
Downing Pub EIS ONE Limited |
68 |
94 |
87 |
(7) |
19 |
Pearce & Saunders Devco Ltd |
84 |
70 |
- |
(70) |
(84) |
Quadrate Spa Ltd |
372 |
- |
- |
- |
(372) |
Top Ten Holdings Plc |
399 |
- |
- |
- |
(399) |
Quadrate Catering Ltd |
1,500 |
- |
- |
- |
(1,500) |
Yamuna Renewables Limited |
2,500 |
- |
- |
- |
(2,500) |
|
6,045 |
164 |
259 |
95 |
(5,786) |
|
|
|
|
|
|
Unquoted growth investments |
Imagen Limited |
1,000 |
1,703 |
1,746 |
43 |
746 |
DIA Imaging Analysis Limited |
207 |
282 |
196 |
(86) |
(11) |
Ludorum Plc |
177 |
- |
7 |
7 |
(170) |
Live Better With Limited |
990 |
- |
- |
- |
(990) |
|
2,374 |
1,985 |
1,949 |
(36) |
(425) |
|
|
|
|
|
|
|
8,916 |
3,134 |
3,295 |
161 |
(5,621) |
Notes to the Unaudited Financial Statements For
the six months ended 30 September 2023
- General information
Thames Ventures VCT 1 plc (“the Company”) is a
Venture Capital Trust established under the legislation introduced
in the Finance Act 1995 and is domiciled in the United Kingdom and
incorporated in England and Wales.
- Basis of accounting
The unaudited half-yearly financial results
cover the six months to 30 September 2023 and have been prepared in
accordance with the accounting policies set out in the statutory
accounts for the year ended 31 March 2023, which were prepared in
accordance with the Financial Reporting Standard 102 (“FRS102”) and
in accordance with the Statement of Recommended Practice “Financial
Statements of Investment Trust Companies” issued in November 2014
and updated in July 2022 (“SORP”).
- The Company has only one class of business and
derives its income from investments made in shares, securities and
bank deposits.
- The comparative figures were in respect of the six months ended
30 September 2022 and the year ended 31 March 2023
respectively.
- Return per share
Weighted average
number of shares in issue |
|
Revenue return |
|
Capital loss |
|
£’000 |
|
£’000 |
|
|
|
|
|
|
Six months ended 30 September 2023 |
179,310,912 |
|
216 |
|
(4,600) |
|
|
|
|
|
|
Six months ended 30 September 2022 |
180,153,252 |
|
1,969 |
|
(3,925) |
|
|
|
|
|
|
Year ended 31 March 2023 |
179,972,333 |
|
1,192 |
|
(12,922) |
- Dividends paid in the period
|
Six months ended30 September
2023 |
Year ended31 March 2023 |
|
Revenue |
Capital |
Total |
|
Total |
|
Date paid |
£’000 |
£’000 |
£’000 |
|
£’000 |
|
|
|
|
|
|
|
2023 Final |
Sep 2023: 1.0p |
- |
1,779 |
1,779 |
|
- |
2023 Interim |
Jan 2023: 1.5p |
- |
- |
- |
|
2,699 |
2022 Final |
Aug 2022: 1.75p |
- |
- |
- |
|
3,156 |
|
- |
1,779 |
1,779 |
|
5,855 |
- Basic and diluted net asset value per
share
|
Shares in issue |
|
Net assets |
|
NAV per share |
|
No. |
|
£’000 |
|
Pence |
|
|
|
|
|
|
30 September 2023 |
176,968,887 |
|
85,767 |
|
48.5 |
30 September 2022 |
179,899,225 |
|
105,779 |
|
58.8 |
31 March 2023 |
177,441,775 |
|
91,983 |
|
51.8 |
- Called up share capital
|
|
|
Shares in issue |
|
£’000 |
|
|
|
|
|
|
30 September 2023 |
|
|
176,968,887 |
|
1,770 |
30 September 2022 |
|
|
179,899,225 |
|
1,799 |
31 March 2023 |
|
|
177,441,775 |
|
1,774 |
- Reserves
The Special reserve is available to the Company to enable the
purchase of its own shares in the market without affecting its
ability to pay dividends/capital distributions.
|
30 Sep2023 |
|
30 Sep 2022 |
|
31 Mar2023 |
|
£’000 |
|
£’000 |
|
£’000 |
|
|
|
|
|
|
Capital redemption reserve |
71 |
|
1,711 |
|
32 |
Share premium account |
2,252 |
|
81,236 |
|
428 |
Funds held in respect of shares not yet allotted |
- |
|
16 |
|
- |
Special reserve |
85,122 |
|
15,873 |
|
88,813 |
Capital reserve realised |
(5,627) |
|
- |
|
- |
Revaluation reserve |
3,619 |
|
6,024 |
|
2,592 |
Revenue reserve |
(1,440) |
|
(880) |
|
(1,656) |
Total reserves |
83,997 |
|
103,980 |
|
90,209 |
Distributable reserves are calculated as
follows:
|
30 Sep2023 |
|
30 Sep 2022 |
|
31 Mar2023 |
|
£’000 |
|
£’000 |
|
£’000 |
|
|
|
|
|
|
Special reserve |
85,122 |
|
15,873 |
|
88,813 |
Capital reserve |
(5,627) |
|
- |
|
- |
Revenue reserve |
(1,440) |
|
(880) |
|
(1,656) |
Unrealised losses (excluding unrealised unquoted gains) |
(12,622) |
|
(11,434) |
|
(9,973) |
|
65,433 |
|
3,559 |
|
77,184 |
- Investments
|
Unquoted investments |
Quoted on Aquis Growth Market |
Quoted on Main Market |
Quoted on AIM |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Opening cost at 1 April 2023 |
60,855 |
48 |
7,216 |
16,074 |
84,193 |
Unrealised gains/(losses) at 1 April 2023 |
6,195 |
(47) |
(2,056) |
(1,500) |
2,592 |
Permanent impairment losses at 1 April 2023 |
(15,288) |
- |
- |
(270) |
(15,558) |
Opening fair value at 1 April 2023 |
51,762 |
1 |
5,160 |
14,304 |
71,227 |
|
|
|
|
|
|
Movements in the year: |
|
|
|
|
|
Purchased at cost |
1,900 |
300 |
- |
159 |
2,359 |
Disposals - proceeds |
(2,208) |
- |
- |
(1,087) |
(3,295) |
- realised (losses)/gains on disposals* |
(6,211) |
- |
- |
590 |
(5,621) |
Unrealised foreign exchange gains |
110 |
- |
- |
- |
110 |
Unrealised gains/(losses)* |
3,590 |
(94) |
(391) |
(2,014) |
1,091 |
Closing value at 30 Sept 2023 |
48,943 |
207 |
4,769 |
11,952 |
65,871 |
|
|
|
|
|
|
Closing cost at 30 Sept 2023 |
54,336 |
348 |
7,216 |
15,736 |
77,636 |
*Losses on investments in the Income Statement
include realised gains relating to the deferred consideration
receipts totalling £419,000 from ADC Biotechnology Limited
(£310,000), StorageOS Inc (£89,000) and Black & White
Hospitality Limited (£20,000).
* Losses on investments in the Income Statement
also include unrealised gains which are a result of the deferred
consideration debtor decrease of £174,000. The debtor movement
reflects the recognition of amounts receivable in respect of DIA
Imaging Analysis Limited (£47,000) and Imagen Limited (£156,000),
offset by receipts in respect of ADC Biotechnology Limited
(£310,000) and StorageOS Inc (£89,000) and FX uplifts made against
balances in respect of Efundamentals Group Limited (£5,000) and
StorageOS Inc (£17,000).
The fair value of
investments is determined using the detailed accounting policy as
shown in the audited financial statements for the year ended 31
March 2023. The Company has categorised its financial instruments
using the fair value hierarchy as follows:
Level 1
Reflects financial instruments quoted in an active market (quoted
companies and fixed interest bonds);Level 2
Reflects financial instruments that have prices that are observable
either directly or indirectly; andLevel
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 Sep 2023 |
Level 1 |
Level 2 |
Level 3 |
31 Mar 2023 |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
Quoted on AIM |
11,952 |
- |
- |
11,952 |
14,304 |
- |
- |
14,304 |
Quoted on Aquis |
207 |
- |
- |
207 |
1 |
- |
- |
1 |
Quoted on main market |
4,769 |
- |
- |
4,769 |
5,160 |
- |
- |
5,160 |
Unquoted loan notes |
- |
- |
10,467 |
10,467 |
- |
- |
10,467 |
10,467 |
Unquoted equity |
- |
- |
38,476 |
38,476 |
- |
- |
41,295 |
41,295 |
|
16,928 |
- |
48,943 |
65,871 |
19,465 |
- |
51,762 |
71,227 |
The unaudited financial statements set out
herein do not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006 and have not been delivered
to the Registrar of Companies. The figures for the year ended 31
March 2023 have been extracted from the financial statements for
that year, which have been delivered to the Registrar of Companies;
the Auditor’s report on those financial statements was
unqualified.
11. Going
concernThe Directors have reviewed the Company’s financial
resources at the period end and concluded that the Company is well
placed to manage its business risks.
The Directors confirm that they are satisfied
that the Company has adequate resources to continue to operate for
the foreseeable future. For this reason, the Directors believe that
the Company continues to be a going concern and that it is
appropriate to apply the going concern basis in preparing the
financial statements.
12.
Risks and
uncertaintiesUnder the Disclosure and Transparency Rules,
the Board is required, in the Company’s half-year results, to
report on principal risks and uncertainties facing the Company over
the remainder of the financial year. The lingering impact of the
coronavirus pandemic and the consequential behavioural changes
still creates uncertainty for some businesses but has not changed
the nature of these risks.
The Board has concluded that the key risks
are:(i) compliance risk of failure to maintain approval
as a VCT; and(ii) investment risk associated with investing
in small and immature businesses.
The Company’s compliance with the VCT
regulations is continually monitored by the Investment Adviser, who
regularly reports to the Board on the current position. The Company
also retains Philip Hare & Associates LLP to provide regular
reviews and advice in this area.
In order to make VCT qualifying investments, the
Company has to invest in small businesses which are often immature.
The impact of the coronavirus pandemic has been significant on some
portfolio companies and, in many cases, the VCT regulations
restrict the Company from making further investment into these
businesses, so the Investment Adviser seeks to provide whatever
other support they can to these businesses, including encouraging
them to take advantage of Government support that may be available.
The Company also has a limited period in which it must invest the
majority of its funds into VCT qualifying investments. The
Investment Adviser follows a rigorous process in vetting and
careful structuring of new investments, including taking a charge
over the assets of the business wherever possible and, after an
investment is made, closely monitoring the business.
Increasing inflation, particularly on wages and
other costs has developed into an emerging risk during the period.
The Investment Adviser’s close relationship with the investee
companies allow it to ensure that the businesses properly assess
the potential impact of increasing costs and the extent to which
these may or may not be able to be passed on to the end
customer.
The Board is satisfied that these approaches
provide satisfactory management of the key risks.
13.
Contingent liabilityAs
outlined in the Chairman’s Statement on page 2, since September
2020, the Company has used IBP Markets Limited ("IBP") as custodian
for its quoted investments. IBP is an FCA authorised and regulated
wholesale broker, providing custody services and access to equity
and fixed income securities for non-retail clients (which includes
the Company). On 13 October 2023, the FCA published a
supervisory notice under section 55L(3)(a) of the Financial
Services and Markets Act 2000, imposing certain restrictions on
IBP. On the same date, IBP applied to the High Court and special
administrators were appointed. The special administrators have yet
to publish an estimated outcome statement and therefore the full
impact is currently unknown. The Investment Adviser is actively
collaborating with the special administrators to reach a resolution
and will communicate with Shareholders when further information
becomes available.
The Investment Adviser is in regular dialogue
with the special administrators. The outcome remains subject to
change particularly as additional claims may be made on custody
assets and client money and there remains a risk to the positions.
However, considering the information made available to the Company
at the date of this report, there is currently little indication
that there will be a materially adverse impact to Shareholders with
respect to the custody assets. The position with respect to client
money remains to be determined, but total cash at IBP represented
less than 1.5% of NAV as at 30 September.
14. The Directors confirm
that, to the best of their knowledge, the half yearly financial
report has been prepared in accordance with the “Statement:
Half-Yearly Financial Reports” issued by the UK Accounting
Standards Board as well as in accordance with FRS 104 Interim
Financial Reporting and the half-yearly financial report includes a
fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and
Transparency Rules, being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have
taken place during 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.
15. Copies of the
unaudited half-yearly financial results will be sent to
Shareholders shortly. Further copies can be obtained from the
Company’s Registered Office and will be available for download
fromwww.foresightgroup.eu/products/thames-ventures-vct-1-plc
End
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