Downing Protected VCT III plc
Half Yearly Report for the six months ended 31 July 2009
The announcement released by the Company at 8:02 am today entitled
Half-Yearly Report as HUG 1344760 contained an error in respect of
the net asset value per Ordinary Share. The full corrected version
of the announcement is as follows:
Performance summary
31 Jul 31 Jan 31 Jul
2009 2009 2008
pence pence pence
Net asset value per Ordinary Share 9.3 36.3 93.3
Cumulative distributions per Ordinary Share 81.0 60.0 4.5
Total return per Ordinary Share 90.3 96.3 97.8
31 Jul 31 Jan 31 Jul
2009 2009 2008
pence pence pence
Net asset value per 'C' Share 94.2 n/a n/a
Net asset value per 'A' Share 0.1 n/a n/a
Total return per 'C' Share and 'A' Share 94.2 n/a n/a
CHAIRMAN'S STATEMENT
I am sure that Ordinary Shareholders will be pleased to have received
dividends totalling 89p per share (including 8p paid since the end of
the half-year under review), representing an absolute return of 29p
per share or 48.3% on the 60p per share net of income tax relief they
originally invested. This equates to an internal rate of return of
10.8% per annum. I doubt investors could have found many better
investment opportunities over the period.
To fund the above dividends, the Ordinary share pool exited from the
majority of its remaining investments during the period. The Company
has also successfully completed a new share fundraising issue and has
embarked on the process of investing these funds.
Ordinary Share pool
Ordinary Shareholders will be aware from my letter sent to them in
August that the investment exits achieved during the period funded
the payment of a further dividend of 8.0p per Ordinary Share on 28
August 2009. Ordinary Shareholders have now received total tax-free
dividends of 89.0p per share from the Company in addition to the 40p
per share in income tax relief that Shareholders received on their
original investment.
The Ordinary Share pool now holds a small number of remaining
investments, none of which have an imminent prospect of being
realised. The remaining net asset value per share of the Ordinary
Shares (following the payment of the dividend described above) is
1.3p per share. The Investment Manager believes that opportunities
might arise in the future to realise one or more of the remaining
investments at values well above the current carrying values.
Profitable outcomes are likely to depend on a significant improvement
in the market for development land and therefore may not arise for
some considerable time or ultimately may not arise at all.
Management Incentive
As I also described in my letter to Ordinary Shareholders in August,
the Company redeemed the loan notes held by the Board and Management
under the performance incentive arrangements at a price equivalent to
5.0p per Ordinary Share. A total consideration of 8.5p per Ordinary
Share was due under the performance incentive arrangements, which was
higher than we originally anticipated because funds have been
returned to Shareholders at a much quicker rate than originally
envisaged. The Board and Management Team agreed to accept the lower
sum (and to forgo any further amounts that that might have become
due) for the benefit of Shareholders. The Board and Management Team
feel that this provides a fair outcome for Shareholders.
The Board feels that the overall return to Ordinary Shareholders to
date of 89p per share is a satisfactory result in the current
conditions. There remains a possibility of a further distribution at
some point in the future.
'C' Share pool
Fundraising
The 'C' Share fundraising closed on 11 September 2009 having raised
gross proceeds (along with its sister company) of £14.3 million. This
provides your Company with net proceeds of £6.8 million and will
allow the Investment Manager to take advantage of good quality
investment opportunities that are expected to arise as economic
conditions start to improve.
Portfolio activity
The 'C' Share pool did not make any VCT-qualifying investments during
the period under review. However, since the period end good progress
has been made with four qualifying investment being completed.
The Investment Manager has also taken advantage of opportunities to
make a number of non-qualifying investments. All these investments
provide significantly higher yields than are available on cash
deposits or gilts with relatively low risk. In some cases,
investments have been acquired from the Ordinary Share pool, which
are obviously well-known to the Investment Manager and Board.
Net Asset Value
At 31 July 2009, the NAV per 'C' Share stood at 94.6p and the NAV per
'A' Share at 0.1p. This is a small increase of 0.2p on the initial
NAV net of fundraising costs.
Results
The return on ordinary activities for the period was as follows:
Revenue Capital Total
£'000 £'000 £'000
Ordinary Share pool (29) (579) (608)
'C' Share pool (12) - (12)
(41) (579) (620)
Share buybacks
In order to provide liquidity in the market for Shareholders that
need to sell all or part of their holdings, the Company operates a
share buyback policy in respect of its 'C' and 'A' Shares. The
current policy is to undertake share buybacks at a price equivalent
to 10% discount to the latest NAV. However, the Board will review
this discount level from time to time.
In view of the fact that the vast majority of the Ordinary Share Pool
funds fund have now been distributed to Ordinary Shareholders, the
Company will not buy in any further Ordinary Shares for cancellation.
No share buybacks in any share class were undertaken during the
period.
Risks and uncertainties
Under the Disclosure and Transparency Directive, the Board is
required in the Company's half-yearly results, to report on principal
risks and uncertainties facing the Company over the remainder of the
financial year.
The Board has reviewed the principal risks and uncertainties facing
the Company over the remainder of the financial period and concluded
that the key risks are:
(i) investment risk associated with investing in small and immature
businesses; and
(ii) failure to maintain approval as a VCT.
In both cases the Board is satisfied with the Company's approach to
these risks. The strategy of, where possible, taking charges over
assets to secure its investments helps to limit any potential losses
which could arise from the failure of an investee business.
The Company continually monitors its compliance with the VCT
regulations and retains PricewaterhouseCoopers to provide regular
reviews and advice in this area. The Board considers that this
approach reduces the risk of a breach of the VCT regulations to a
minimal level.
Outlook
The Board consider that the work of unwinding the Ordinary Share pool
and returning funds it investors is now virtually complete. The
Investment Manager will continue to work on the remaining Ordinary
Share pool investments with a view to ultimately extracting value
but, even if this is achievable, but it may be some considerable time
before any results are seen.
In respect of the 'C' Share pool, the Investment Manager is now
starting to see an increased flow of good quality potential
VCT-qualifying investment opportunities. The Board expects the
process of building the VCT-qualifying portfolio to make good headway
in the second half of the year.
Hugh Gillespie
Chairman
30 September 2009
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 July 2009
31 July2009 31 July 31 Jan
2008 2009
Ordinary 'C'
Shares Shares
Total Total Total
£'000 £'000 £'000 £'000 £'000
Fixed assets
Unquoted investments 62 3,386 3,448 6,237 3,801
Current assets
Debtors 13 319 332 61 20
Cash at bank and in hand * 989 2,739 3,728 3,330 21
1,002 3,058 4,060 3,391 41
Creditors: amounts falling
due within one year (129) (44) (173) (214) (165)
Net current 873 3,014 3,887 9,414 (124)
assets/(liabilities)
Creditors: amounts falling
due after one year - - - (20) (20)
Net assets 935 6,400 7,335 9,394 3,657
Capital and reserves
Called up share capital 101 21 122 101 101
Capital redemption reserve 1 - 1 1 1
Special reserve 1,288 - 1,288 9,440 3,882
Share premium account - 6,391 6,391 - -
Investment holding losses (492) - (492) (240) (393)
Capital reserve - realised - - - (81) -
Revenue reserve 37 (12) 25 173 66
Total equity shareholders' 935 6,400 7,335 9,394 3,657
funds
Ordinary Share * 9.3p - - 93.3p 36.3p
'C' Share - 94.2p - n/a n/a
'A' Share - 0.1p - n/a n/a
* On 28 August 2009, a dividend of 8.0p per Ordinary Share was paid
to Ordinary Shareholders, reducing the Ordinary Share pool's cash at
bank balance by £805,000 and the basic and diluted net asset value
per Ordinary Share to 1.3p.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Year ended 31 July 31
31 July 2009 2008 January
2009
Ordinary 'C'
Share Share
pool pool Total Total Total
£'000 £'000 £'000 £'000 £'000
Opening shareholders' 3,657 - 3,657 9,730
funds
Issue of shares - 6,785 6,785 -
Share issue costs - (373) (373)
Purchase of own shares - - - (16) (16)
Total recognised
(losses)/gains for the (608) (12) (620) (119) (270)
year
Distributions (2,114) - (2,114) (201) (5,787)
Closing shareholders' 935 6,400 7,335 9,394 3,657
funds
INCOME STATEMENT
for the six months ended 31 July 2009
Six months ended
Company Total 31 Jul 2009
Revenue Capital Total
£'000 £'000 £'000
Income 59 59
Gain/ (loss) on investments-realised - 48 48
-unrealised - (124) (124)
59 (76) (17)
Investment management fees (36) - (36)
Other expenses (73) (503) (576)
Return on ordinary activities before (50) (579) (629)
taxation
Taxation 9 - 9
Return attributable to equity shareholders (41) (579) (620)
Basic and diluted return
Ordinary share (0.2p) (5.8p) (6.0p)
'C' share (0.2p) - -
'A' share - - -
Six months ended Year ended
Company Total 31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
£'000 £'000 £'000 £'000
Income 274 - 274 412
Gain/ (loss) on investments - 8 8 (34)
-realised
-unrealised - (240) (240) (393)
274 (232) 42 (15)
Investment management fees (48) - (48) (81)
Other expenses (68) - (68) (120)
Return on ordinary activities 158 (232) (74) (216)
before taxation
Taxation (45) - (45) (54)
Return attributable to equity 113 (232) (119) (270)
shareholders
Basic and diluted return
Ordinary share 1.1p (2.3p) (1.2p) 2.7p
'C' share n/a n/a n/a n/a
'A' share n/a n/a n/a n/a
Six months ended
Ordinary Shares 31 Jul 2009
Revenue Capital Total
£'000 £'000 £'000
Income 21 - 21
Gain/ (loss) on investments-realised - 48 48
-unrealised - (124) (124)
21 (76) (55)
Investment management fees (9) - (9)
Other expenses (48) (503) (551)
Return on ordinary activities before (36) (579) (615)
taxation
Taxation 7 - 7
Return attributable to equity shareholders (29) (579) (608)
Six months ended Year ended
Ordinary Shares 31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
£'000 £'000 £'000 £'000
Income 274 - 274 412
Gain/ (loss) on investments - 8 8 (34)
-realised
-unrealised - (240) (240) (393)
274 (232) 42 (15)
Investment management fees (48) - (48) (81)
Other expenses (68) - (68) (120)
Return on ordinary activities 158 (232) (74) (216)
before taxation
Taxation (45) - (45) (54)
Return attributable to equity 113 (232) (119) (270)
shareholders
Six months ended
'C' Shares 31 Jul 2009
Revenue Capital Total
£'000 £'000 £'000
Income 38 - 38
Gain (loss) on investments-realised - - -
-unrealised - - -
38 - 38
Investment management fees (27) - (27)
Other expenses (25) - (25)
Return on ordinary activities before (14) - (14)
taxation
Taxation 2 - 2
Return attributable to equity shareholders (12) - (12)
Six months ended Year ended
'C' Shares 31 Jul 2008 31 Jan 2009
Revenue Capital Total Total
£'000 £'000 £'000 £'000
Income n/a n/a n/a n/a
Gain (loss) on investments n/a n/a n/a n/a
-realised
-unrealised n/a n/a n/a n/a
n/a n/a n/a n/a
Investment management fees n/a n/a n/a n/a
Other expenses n/a n/a n/a n/a
Return on ordinary activities n/a n/a n/a n/a
before taxation
Taxation n/a n/a n/a n/a
Return attributable to equity n/a n/a n/a n/a
shareholders
A Statement of Total Recognised Gains and Losses has not been
prepared as all gains/losses are recognised in the Income Statement
as noted above
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 July 2009
Notes Six Year
Six months ended months ended
31 July 2009 to 31 31
July January
2008 2009
Ordinary 'C'
Shares Shares Total Total Total
£'000 £'000 £'000 £'000 £'000
Net cash inflow from 1 (562) (287) (849) 344 379
operating activities
(562) (287) (849) 344 379
Taxation
Corporation tax paid - - - (100) (100)
Capital expenditure
Purchase of (200) (4,074) (4,274) - (3,066)
investments
Sale of investments 3,864 688 4,552 2,742 7,989
Net cash inflow/
(outflow) from 3,664 (3,386) 278 2,742 4,983
capital expenditure
Equity dividends (2,114) - (2,114) (201) (5,787)
paid
Net cash inflow/ 988 (3,673) (2,685) 2,785 (525)
(outflow) before
financing
Financing
Proceeds from share - 6,785 6,785 - -
issue
Share issue costs - (373) (373) - -
Purchase of own (20) - (20) (16) (16)
shares/ loan notes
Net cash inflow from (20) 6,412 6,392 (16) (16)
financing
Increase/ (decrease) 2 968 2,739 3,707 2,769 (541)
in cash
Notes to the cash Six
flow statement: Six months ended months Year
31 July 2009 ended ended
31 31
July January
2008 2009
Ordinary 'C' Total Total Total
Shares Shares
£'000 £'000 £'000 £'000 £'000
1 Cash inflow from operating activities and
returns on investments
Return on ordinary (615) (14) (629) (74) (270)
activities before
taxation
Losses on 76 - 76 232 427
investments
Decrease/(increase) (20) (317) (337) 100 141
in other debtors
Increase/(decrease) (3) 44 41 86 81
in other creditors
Net cash inflow from (562) (287) (849) 344 379
operating activities
2 Analysis of net
funds
Beginning of period 21 - 21 562 562
Net cash 968 2,739 3,707 2,769 (541)
inflow/(outflow)
End of period 989 2,739 3,728 3,331 21
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 July 2009
Ordinary Share pool
Unrealised % of
gain/ (loss) in portfolio by
Cost Valuation period value
Venture capital £'000
investments £'000 £'000 £'000
Chapel Street Hotel 31 31 - 3.0%
(2008) LLP
Vermont Development 452 25 (75) 2.5%
Limited
Sanguine Hospitality 6 6 - 0.5%
Limited
Honeycombe Pubs VCT 65 - (49) 0.0%
Limited
554 62 (124) 6.0%
Cash at bank and in 94.0%
hand 989
Ordinary Share pool 1,051 100.0%
- Total
'C' Share pool
Unrealised % of
gain/ (loss) portfolio
Cost Valuation in period by value
Venture capital investments £'000 £'000 £'000 £'000
Hoole Hall Country Club 1,206 1,206 - 19.7%
Holdings Limited
Liongold Contracting 1,000 1,000 - 16.3%
Limited
The Thames Club Limited 500 500 - 8.2%
Coastal Partnerships 330 330 - 5.4%
Limited
Honeycombe Pubs VCT Limited 175 175 - 2.9%
Close Imperial Pub Company 175 175 - 2.9%
plc
3,386 3,386 - 55.4%
Cash at bank and in hand 2,739 44.6%
'C' Share pool - Total 6,125 100.0%
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 31 July 2009
Additions
Ordinary Share pool 'C' Share pool
£'000 £000
Non Qualifying VCT investments
Liongold Contracting Limited - 1,000
Hoole Hall Country Club Holdings Limited - 1,894
The Thames Club Limited - 500
Coastal Partnerships Limited - 330
Honeycombe Pubs VCT Limited 200 175
Close Imperial Pub Company Plc - 175
200 4,074
Disposals
Gain/ Total
Market (loss) Realized
value at Disposal against gain/
Cost 01/02/09 Proceeds cost (loss)
Ordinary Share pool £'000 £'000 £'000
VCT Qualifying investments
Liongold Contracting 1,000 -
Limited 1,000 1,000 -
Honeycombe Pubs VCT 200 48
Limited 151 199 48
Honeycombe Pubs VCT 200 (25)
Limited 200 175 (25)
1,351 1,400 1,374 23 23
Non VCT Qualifying
investments
Downing Acquisitions 1 750 -
Limited 750 750 -
Hoole Hall Country Club 1,375 -
Holdings Limited 1,375 1,375 -
Coastal Partnerships 330 -
Limited 330 330 -
Heyford Homes (Thornton 9 -
Hall) Limited 9 9 -
Universe Contracting - -
Limited 25 25 25
2,489 2,464 2,489 - 25
3,480 3,864 3,863 - -
'C' Share pool
Non VCT Qualifying
investments
Hoole Hall Country Club 688 -
Holdings Limited 688 688 -
688 688 688 - -
Total Ordinary and 'C' 4,552 23
Share pools 4,528 4,551 48
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half-yearly results cover the six months to 31 July
2009 and have been prepared in accordance with the accounting
policies set out in the statutory accounts for the year ended 31
January 2009 which were prepared under UK Generally Accepted
Accounting Practice ("UK GAAP") and in accordance with the Statement
of Recommended Practice "Financial Statements of Investment Trust
Companies" revised January 2009 ("SORP").
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
4. The comparative figures are in respect of the six-month period
ended 31 July 2008 and the year ended 31 January 2009 respectively.
5. Dividends
Six months ended Year ended
31 July 2009 31 Jan 2009
Ordinary Shares
Per share Revenue Capital Total Total
pence £'000 £'000 £'000 £'000
Paid in year
2010 Interim 21.0p - 2,114 2,114
2009 Interim 55.5p - - - 5,586
2008 Final 2.0p - - - 201
- 2,114 2,114 5,787
No dividend have been paid or declared in respect of the 'C' Shares
or 'A' Shares
6. Basic and diluted return per share
Ordinary 'C' 'A'
Shares Shares Shares
Revenue return per share based
on:
Net revenue after taxation (29) (12) -
(£'000)
Weighted average number of 10,068,985 6,651,327 14,151,327
ordinary shares in issue
Capital return/(loss) per share
based on:
Net capital gain for the (579) - -
financial year (£'000)
Weighted average number of 10,068,985 6,651,327 14,151,327
ordinary shares in issue
7. Net asset value per Share
Ordinary
Shares 'C' Shares 'A' Shares
Net asset value per share based
on:
Net assets (£'000) 935 6,386 14
Number of shares in issue at 10,064,617 6,777,113 14,277,113
period end
8. Reserves
Capital Capital Investment
redemption Special Share Revenue reserve holding
reserve reserve premium reserve realised losses
£'000 £'000 £'000 £'000 £'000 £'000
At 1 February 1 3,882 - 66 - (393)
2009
Issue of - - 6,764 - - -
shares
Share issue - - (373) - - -
costs
Net
gains/(losses) - - - - 48 (124)
on investments
Expenses - - - - (503) -
capitalised
Distributions - (2,114) - - - -
paid
Transfer
between - (480) - - 455 25
reserves
Retained net
revenue for - - - (41) - -
the year
At 31 July 1 1,288 6,391 25 - (492)
2009
The Special reserve, Capital reserve-realised, Investment holding
losses reserve and Revenue reserve are all distributable reserves.
Reserves available for distribution at the period end amounted to
£821,000.
9. The unaudited condensed financial statements set out herein do not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985 and have not been delivered to the Registrar
of Companies. The figures for the year ended 31 January 2009 have
been extracted from the financial statements for that year, which
have been delivered to the Registrar of Companies; the auditors'
report on those financial statements was unqualified.
10.The Directors confirm that, to the best of their knowledge, the
half-yearly financial statements have been prepared in accordance
with the "Statement: Half-Yearly Financial Reports" issued by the UK
Accounting Standards Board and the half-yearly financial report
includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements, and a description of the principal risks
and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period, and any changes in the related party transactions
described in the last annual report that could do so.
11. Copies of the unaudited half-yearly report will be sent to
Shareholders shortly. Further copies can be obtained from the
Company's Registered Office or will be available for download from
www.downing.co.uk.
---END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
Die PresseMitteilung stellt eine Meinungsäußerung des Erfassers dar. Der Erfasser hat versichert, dass die eingestellte PresseMitteilung der Wahrheit entspricht, dass sie frei von Rechten Dritter ist und zur Veröffentlichung bereitsteht. firmenpresse.de macht sich die Inhalte der PresseMitteilungen nicht zu eigen. Die Haftung für eventuelle Folgen (z.B. Abmahnungen, Schadenersatzforderungen etc.) übernimmt der Eintrager und nicht firmenpresse.de
