TIDMBNS
RNS Number : 4112W
Baronsmead VCT 4 PLC
18 August 2015
Baronsmead VCT 4 plc
Half-yearly Financial Report
30 June 2015
The Directors announce the unaudited half-yearly financial
report for the six months to 30 June 2015 as follows:-
Copies of the half yearly report can be obtained from the
following website: www.baronsmeadvct4.co.uk.
Our Investment Objective
Baronsmead VCT 4 is a tax efficient listed company which aims to
achieve long-term investment returns for private investors.
Investment Policy
-- To invest primarily in a diverse portfolio of UK growth
businesses, whether unquoted or traded on AIM.
-- Investments are made selectively across a range of sectors in
companies that have the potential to grow and enhance their
value.
Dividend Policy
The Board of Baronsmead VCT 4 has the objective to sustain a
progressive dividend policy for shareholders but this depends
primarily on the level of profitable realisations and it cannot be
guaranteed. There may be variations in the amount of dividends paid
year on year.
Shareholder choice
The Board wishes to provide shareholders with a number of
choices that enable them to utilise their investment in Baronsmead
VCT 4 in ways that best suit their personal investment and tax
planning and in a way that treats all shareholders equally.
-- Fund raising | From time to time the Company seeks to raise
additional funds by issuing new shares at a premium to the latest
published net asset value to account for issue costs.
-- Dividend Reinvestment Plan | The Company offers a Dividend
Reinvestment Plan which enables shareholders to purchase additional
shares through the market in lieu of cash dividends.
-- Buy back of shares | From time to time the Company buys its
own shares through the market in accordance with its share price
discount policy. Subject to certain conditions, the Company seeks
to maintain a mid market share price discount of approximately 5
per cent. to net asset value. In the six months to 30 June 2015,
1,200,000 shares were bought back representing 1.6 per cent. of the
shares in issue (excluding treasury shares) at 30 June 2015 at
prices which represent an average of 5.2 per cent. discount to the
latest published net asset values at the time the shares were
bought back.
-- Secondary market | The Company's shares are listed on the
London Stock Exchange and can be bought using a stockbroker or
authorised share dealing service in the same way as shares of any
other listed company. Approximately 99,000 existing shares were
bought by investors in the six months to 30 June 2015.
Financial Headlines
-- + 4.8% - Net asset value ("NAV") per share increased 4.8 per
cent to 100.03p in the six months ended 30 June 2015, before
deduction of dividends.
-- 219.7p - NAV total return to shareholders for every 100.0p invested at launch.
-- 3.0p - Interim dividend of 3.0p per share for the six month
period to 30 June 2015 to be paid on 18 September 2015.
-- GBP4.7m - Proceeds of GBP2.2m in unquoted and GBP2.5m in
quoted divestments in six months to 30 June 2015.
Cash Returned to Shareholders by date of investment
The table below shows the cash returned to shareholders,
dependent on their subscription cost, including their income tax
reclaimed on subscription.
Return
Cash Income Cumulative on cash
invested tax reclaim dividends invested
Year subscribed (p) (p) (p)* (%)
------------------ --------- ------------ ---------- ---------
2001/2002 100.00 20.00 78.00 98.0
------------------ --------- ------------ ---------- ---------
2006 (C shares)** 100.00 40.00 57.25 97.3
------------------ --------- ------------ ---------- ---------
2010 (March) 95.90 28.80 40.00 71.7
------------------ --------- ------------ ---------- ---------
2012 (December) 107.50 32.30 23.00 51.4
------------------ --------- ------------ ---------- ---------
2013 (March) 102.70 30.80 19.00 48.5
------------------ --------- ------------ ---------- ---------
2014 (March) 98.80 29.60 6.00 36.0
------------------ --------- ------------ ---------- ---------
Note -The total return could be higher for those shareholders
who were able to defer a capital gain on subscription and the net
sum invested may be less.
* Includes 3p interim dividend payable on 18 September 2015.
** Dividends paid to C shareholders post conversion have been
adjusted by the conversion ratio (1.0372828).
Chairman's Statement
I am pleased to report an increase of 4.6p (4.8 per cent) in the
underlying NAV per share for the six months to 30 June 2015. This
was attributable to increases in valuation of both the unquoted and
quoted portfolios. The interim dividend of 3.0p per share will be
paid on 18 September 2015 to shareholders on the register as at 4
September 2015.
Results
During the six months to 30 June 2015, the Company's NAV per
share increased 4.8 per cent from 95.41p to 100.03p before taking
dividends into account.
Pence per
ordinary
share
--------------------------------- ---------
NAV as at 1 January 2015 95.41
--------------------------------- ---------
Valuation uplift (4.8 per cent) 4.62
--------------------------------- ---------
NAV as at 30 June 2015 before
dividends 100.03
--------------------------------- ---------
Less: Interim dividend payable
on 18 September 2015 (3.00)
--------------------------------- ---------
NAV as at 30 June 2015 after
accounting for interim dividend 97.03
--------------------------------- ---------
Portfolio Review
As shown in the table below, as at 30 June 2015 the Company's
net assets of GBP73.4m were invested in 68 companies. This table
also shows that the main driver of the growth in the value of the
NAV over the period was the 12.6 per cent increase in the value of
the unquoted with positive contributions from the Company's quoted
investments.
Per cent
Per cent return
of net No. of over the
Asset class NAV (GBPm) assets* investees period**
----------------------------- ---------- -------- ---------- ---------
Unquoted companies 29.2 40 23 12.6**
----------------------------- ---------- -------- ---------- ---------
AIM-traded companies 24.0 33 45 2.8
----------------------------- ---------- -------- ---------- ---------
Other net assets, primarily
cash and fixed interest 20.2 27 N/A -
----------------------------- ---------- -------- ---------- ---------
Totals 73.4 100 68
----------------------------- ---------- -------- ---------- ---------
* By value as at 30 June 2015.
**Includes capitalised interest and redemption premium income
received.
Investment and Divestment Activity
The Company invested GBP4.7m in four new unquoted and four new
quoted companies. Smaller follow-on investments in four quoted
companies totalled GBP0.8m. Three of the new unquoted investments
were in "acquisition" companies formed to enable investments into
established trading entities over the next two years. The other new
unquoted investment was in Centre4 Testing which is a specialist
provider of software testing services that helps its clients to
manage software implementations, upgrades and integration.
A total of GBP4.7m was realised from the five full and several
partial sales of investments and loan note redemptions. From the
unquoted portfolio, the sale of the Company's investment in Luxury
For Less generated a return 2.0 times its original cost within a
relatively short investment period of 20 months. From the quoted
portfolio, a longer term investment in Accumuli generated a return
4.4 times its original cost over 4.5 years.
Against these successes, losses were realised on other
investments; notably, Impetus Holdings and Surgi C. While it is
disappointing to have poor realisations, it is in the nature of
private equity investment that some investments will fail to
achieve their full potential. However, these realisations had no
impact on the NAV at 30 June 2015 as the Board had made full
provisions against the value of these investments in earlier
periods. More positively, the Investment Manager has continued to
consolidate the gains achieved in the quoted portfolio with the
Accumuli realisation referred to above being the most notable.
The tables below provide further information concerning the
Company's investments and divestments during the period.
Long Term Performance
The Company's objective continues to be focused on generating
consistent returns over the long-term through investing in a
portfolio of small unquoted and AIM traded companies with strong
growth prospects.
Baronsmead VCT 4 has been investing funds for shareholders since
2001 and, despite the inherent risk of investing in small
companies, the trust has delivered consistently good returns for
investors. While VCT tax reliefs do not change the underlying risks
associated with investing in smaller companies, the upfront tax
relief and the payment of tax free dividends helps to lessen the
amount of shareholders original investment cost which remains "at
risk".
(MORE TO FOLLOW) Dow Jones Newswires
August 18, 2015 11:45 ET (15:45 GMT)
As shown in the table below those shareholders who subscribed
for shares in either the Company's initial fundraising in 2001/2002
or the C share fundraising of March 2006 have had almost their
entire investment returned in dividends and reliefs. For instance,
since investing 100p in 2001/2002, founder shareholders have
received cash payments totalling 98.0p (being 20p VCT income tax
relief and 78.0p in dividends) and they still have an investment in
the trust with a NAV of 97.03p per share (after accounting for the
interim dividend).
While this analysis does not take account of the on-going value
of the tax free nature of VCT dividends, it serves as a useful
indicator of investment performance over the long term and the
cumulative cash that has been returned to shareholders.
The ten year record of performance is set out on our website
www.baronsmeadvct4.co.uk .
VCT Legislation
In the successive March and Summer Budgets 2015, the Chancellor
announced legislative changes that are designed to ensure that VCTs
continue to be approved by the European Union ("EU") and remain
effective in giving small and growing businesses access to finance.
In order to meet EU requirements the UK Government has proposed
introducing new criteria regarding the age of companies that will
be eligible as investments, a lifetime cap on the total amount of
state aided investment that an investee company can receive and
rules that require that the investment be used for the "organic"
growth of the investee company. The legislation is subject to EU
State aid approval and is expected to take effect from the date of
Royal Assent later this year.
The objective of these changes is to direct VCT investments into
younger companies that will use the investment to grow their
businesses "organically" rather than by acquiring another business
or trade. The Manager believes that if the proposed legislation is
enacted by the UK as drafted it will present a number of challenges
for the VCT industry. However, the Manager, with its long track
record of successful investing and experienced team, should be well
placed to adapt to these new rules. As the draft legislation is
complex it is not yet entirely clear how the rules will affect the
VCT industry but we expect to be able to provide an update in the
next quarter.
Outlook
The improvement in the UK economy now appears to be more firmly
established. However, the UK economy does not operate in isolation
and the external environment remains uncertain with concerns over
the on-going issues related to Greece and the Euro, growth and
stock market valuations in China and continued political
instability in various regions.
The unquoted portfolio contains a higher proportion of newer
investments following recent sales. As a result, growth in the
value of the unquoted portfolio is likely to be more modest until
these investments mature, although some increase in value has begun
to take place. The progress made by our newer investments and the
Company's portfolio diversity and asset mix should help to continue
to deliver consistent returns for shareholders.
Robert Owen
Chairman
18 August 2015
Table of Investments and Realisations
Investments in the period
Book cost
Company Location Sector Activity GBP'000
---------------------- --------------- -------------- ------------------------------------ ---------
Unquoted investments
New
--------------------------------------------------------------------------------------------------------
Company seeking to acquire
Business businesses in the Business
Ingleby (1973) Ltd London Services Services sector 956
---------------------- --------------- -------------- ------------------------------------ ---------
Company seeking to acquire
Business businesses in the Business
Ingleby (1974) Ltd London Services Services sector 956
---------------------- --------------- -------------- ------------------------------------ ---------
Company seeking to acquire
Consumer businesses in the Consumer
Ingleby (1975) Ltd London Markets Markets sector 956
---------------------- --------------- -------------- ------------------------------------ ---------
Provider of software testing
Business services, primarily through
Centre4 Testing Ltd Sussex Services use of contractors 953
---------------------- --------------- -------------- ------------------------------------ ---------
Total unquoted investments 3,821
--------------------------------------------------------------------------------------------- ---------
AIM traded investments
New
--------------------------------------------------------------------------------------------------------
Provider of domain name &
CentralNic Group plc London TMT* registry services 396
---------------------- --------------- -------------- ------------------------------------ ---------
Venn Life Sciences Clinical Research organisation
Holdings Healthcare providing consulting and clinical
plc London & Education trial services 225
---------------------- --------------- -------------- ------------------------------------ ---------
Business
Plant Impact plc Hertfordshire Services Crop enhancing products 189
---------------------- --------------- -------------- ------------------------------------ ---------
Business Tech focused investor & advisory
MXC Capital Ltd Guernsey Services business 113
---------------------- --------------- -------------- ------------------------------------ ---------
Follow on
---------------------- --------------- -------------- ------------------------------------ ---------
Ideagen plc Derbyshire TMT* Compliance software solutions 450
---------------------- --------------- -------------- ------------------------------------ ---------
EG Solutions plc# Staffordshire TMT* Back office optimisation software 228
---------------------- --------------- -------------- ------------------------------------ ---------
Pinnacle Technology
Group plc Stirlingshire TMT* B2B telecoms and IT reseller 51
---------------------- --------------- -------------- ------------------------------------ ---------
Castleton Technology Public sector IT managed services
plc Cambridge TMT* and software 33
---------------------- --------------- -------------- ------------------------------------ ---------
Total AIM traded investments 1,685
--------------------------------------------------------------------------------------------- ---------
Total investments in the period 5,506
--------------------------------------------------------------------------------------------- ---------
* Technology, Media & Telecommunications ("TMT").
# During the period, the EG Solutions plc Loan note and capitalised
interest was converted into Ordinary shares.
--------------------------------------------------------------------------------------------------------
Realisations in the period
First Overall
investment Book cost Proceeds++ multiple
Company date GBP'000 GBP'000 return*
---------------------- --------------------- ------------ --------- ---------- ---------
Unquoted realisations
---------------------------------------------------------------------------------------------
Full trade
Luxury For Less Ltd sale Jul 13 955 1,787 2.0
---------------------- --------------------- ------------ --------- ---------- ---------
Create Health Ltd Loan note repayment Mar 13 112 213 1.9
---------------------- --------------------- ------------ --------- ---------- ---------
Eque2 Ltd Loan note repayment Apr 13 111 123 1.1
---------------------- --------------------- ------------ --------- ---------- ---------
Kingsbridge Ltd Loan note repayment Jan 14 48 76 1.6
---------------------- --------------------- ------------ --------- ---------- ---------
Full trade
Impetus Holdings Ltd sale Apr 12 1,304 0 0.0
---------------------- --------------------- ------------ --------- ---------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
August 18, 2015 11:45 ET (15:45 GMT)
Full trade
Surgi C Ltd sale Apr 10 854 0 0.3
---------------------- --------------------- ------------ --------- ---------- ---------
Total unquoted realisations 3,384 2,199
----------------------------------------------------------- --------- ---------- ---------
AIM traded realisations
---------------------------------------------------------------------------------------------
Recommended
Accumuli plc offer Nov 10 505 2,140 4.4
---------------------- --------------------- ------------ --------- ---------- ---------
Anpario plc Market sale Nov 06 54 235 4.3
---------------------- --------------------- ------------ --------- ---------- ---------
Full market
Cohort plc sale Oct 07 48 76 1.7
---------------------- --------------------- ------------ --------- ---------- ---------
Total AIM traded realisations 607 2,451
----------------------------------------------------------- --------- ---------- ---------
Total realisations in the period 3,991 4,650
----------------------------------------------------------- --------- ---------- ---------
++ Proceeds at time of realisation including redemption premium and
interest.
* Includes interest/dividends received, loan note redemptions and partial
realisations accounted for in prior periods.
Proceeds of GBP39,000 were also received in respect of MLS Ltd and
GBP5,000 in respect of Playforce Holdings Ltd, both of which had been
sold in prior periods.
Deferred consideration of GBP88,000 was also received in respect of
CSC (World) Ltd.
Investment Diversification at 30 June 2015
Sector by value Percentage
---------------------------------------- -----------
Business Services 41%
---------------------------------------- -----------
Consumer Markets 18%
---------------------------------------- -----------
Healthcare & Education 10%
---------------------------------------- -----------
Technology, Media & Telecommunications
("TMT") 31%
---------------------------------------- -----------
Total Assets by value Percentage
--------------------------------------- -----------
Unquoted - loan note 27%
--------------------------------------- -----------
Unquoted - equity 13%
--------------------------------------- -----------
AIM 33%
--------------------------------------- -----------
Listed interest bearing securities 13%
--------------------------------------- -----------
Net current assets (principally cash) 14%
--------------------------------------- -----------
Time Investments held by value Percentage
-------------------------------- -----------
Less than 1 year 17%
-------------------------------- -----------
Between 1 and 3 years 27%
-------------------------------- -----------
Between 3 and 5 years 20%
-------------------------------- -----------
Greater than 5 years 36%
-------------------------------- -----------
Independent Review
Report to Baronsmead VCT 4 plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2015 which comprises the Income Statement,
Statement of Changes in Equity, Balance Sheet and Statement of Cash
Flows and the related explanatory notes. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA"). Our review
has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
Company will be prepared in accordance with UK Accounting Standards
and applicable law (UK Generally Accepted Accounting Practice),
including FRS 102 The Financial Reporting Standard applicable in
the UK and Republic of Ireland. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with FRS 104 Interim Financial
Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2015 is not prepared, in all material respects, in accordance
with FRS 104 Interim Financial Reporting and the DTR of the UK
FCA.
John Waterson
for and on behalf of KPMG LLP
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
18 August 2015
Responsibility statement of the Directors in respect of the
half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with the FRS 104 'Interim Financial Reporting;
-- the Chairman's Statement (constituting the interim management
report) includes a fair review of the information required by 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;
-- the Statement of Principal Risks and Uncertainties below is a
fair review of the information required by DTR 4.2.7R being a
description of the principal risks and uncertainties for the
remaining six months of the year; and
-- the financial statements include a fair review of the
information required by 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.
By Order of the Board,
Robert Owen
Chairman
18 August 2015
Unaudited Income Statement
For the six months to 30 June 2015
Six months to Six months to Year to
30 June 2015 30 June 2014 31 December 2014
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Unrealised gains on
movement in fair
value
of investments 6 - 3,314 3,314 - 2,695 2,695 - 1,784 1,784
Realised gains on
disposal
of investments 6 - 473 473 - 228 228 - 913 913
Income 708 - 708 774 - 774 2,567 - 2,567
Investment management
fee (228) (683) (911) (218) (654) (872) (442) (1,327) (1,769)
Other expenses (244) - (244) (239) - (239) (445) - (445)
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit on ordinary
activities
before taxation 236 3,104 3,340 317 2,269 2,586 1,680 1,370 3,050
Taxation on ordinary
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activities - - - (14) 14 - (257) 257 -
Profit for the
period,
being
total comprehensive
income for the
period 236 3,104 3,340 303 2,283 2,586 1,423 1,627 3,050
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
Return per ordinary
share:
Basic 2 0.32p 4.18p 4.50p 0.43p 3.20p 3.63p 1.95p 2.22p 4.17p
--------------------- ----- -------- -------- -------- -------- -------- -------- -------- -------- --------
All items in the above statement derive from continuing
operations.
The revenue column of the Income Statement includes all income
and expenses. The capital column accounts for the realised and
unrealised profit or loss on investments and the proportion of the
management fee charged to capital.
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standards ("FRS"). The supplementary revenue
return and capital return columns are prepared in accordance with
the Statement of Recommended Practice issued in November 2014 by
the Association of Investment Companies ("AIC SORP").
Unaudited Statement of Changes in Equity
For the six months to 30 June 2015
Distributable
Non-distributable reserves reserves
--------------------------- ======= =========================================== ================== --------
Called-up
share Share Other Revaluation Capital Revenue
capital premium reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------- --------- -------- --------- ----------- -------- -------- --------
At 1 January 2015 8,334 8,688 37,608(#) 9,302 6,835 377 71,144
Movement between reserves - - (37,608) - 37,608 - -
Profit/(loss) on ordinary
activities after taxation - - - 3,286 (182) 236 3,340
Buyback of shares to
be held
in treasury 4 - - - - (1,100) - (1,100)
--------------------------- ------- --------- -------- --------- ----------- -------- -------- --------
At 30 June 2015 8,334 8,688 - 12,588 43,161 613 73,384
--------------------------- ------- --------- -------- --------- ----------- -------- -------- --------
# On 18 December 2013 the court granted orders allowing the
Company to cancel its share premium account and capital redemption
reserve. The amounts of GBP28,998,000 (share premium) and
GBP8,622,000 (capital redemption reserve) less costs paid became
distributable during 2015.
For the six months to 30 June 2014
Non-distributable reserves Distributable
reserves
-------------------------- ----- ----------------------------------------------- ------------------ --------
Called-up Share Other Revaluation Capital Revenue
share capital premium reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ----- -------------- -------- -------- ----------- -------- -------- --------
At 1 January 2014 7,322 - 37,610 8,247 11,787 371 65,337
Profit/(loss) on ordinary
activities
after taxation - - - 2,504 (221) 303 2,586
Net proceeds of share
issue
& buybacks 1,012 8,688 - - (442) - 9,258
Other costs charged to
capital - (1) - - - - (1)
Dividends paid 5 - - - - (3,618) (301) (3,919)
-------------------------- ----- -------------- -------- -------- ----------- -------- -------- --------
At 30 June 2014 8,334 8,687 37,610 10,751 7,506 373 73,261
-------------------------- ----- -------------- -------- -------- ----------- -------- -------- --------
For the year to 31 December 2014
Non-distributable reserves Distributable reserves
------------------------------ ----- ------------------------------------------ ------------------------ --------
Called-up
share Share Other Revaluation Capital Revenue
capital premium reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----- --------- -------- -------- ----------- ----------- ----------- --------
At 1 January 2014 7,322 - 37,610 8,247 11,787 371 65,337
Profit on ordinary activities
after taxation - - - 1,055 572 1,423 3,050
Net proceeds of share
issue,
buybacks & sale of shares
from treasury 1,012 8,688 - - (775) - 8,925
Other costs charged to
capital - - (2) - - - (2)
Dividends paid 5 - - - - (4,749) (1,417) (6,166)
------------------------------ ----- --------- -------- -------- ----------- ----------- ----------- --------
At 31 December 2014 8,334 8,688 37,608 9,302 6,835 377 71,144
------------------------------ ----- --------- -------- -------- ----------- ----------- ----------- --------
Unaudited Balance Sheet
As at 30 June 2015
As at As at As at
30 June 30 June 31 December
2015 2014 2014
Notes GBP'000 GBP'000 GBP'000
Fixed assets
Unquoted investments 6 29,210 27,067 24,302
Traded on AIM 6 23,948 24,830 24,055
Listed interest bearing securities 6 9,490 9,996 10,993
Listed on LSE - 1,318 -
Traded on ISDX - 502 -
Investments 6 62,648 63,713 59,350
Current assets
Debtors 269 251 485
Cash at bank and on deposit 11,039 9,874 11,869
-------------------------------------- ------- -------- -------- ------------
11,308 10,125 12,354
Creditors (amounts falling due within
one year) (572) (577) (560)
Net current assets 10,736 9,548 11,794
Net assets 73,384 73,261 71,144
Capital and reserves
Called-up share capital 8,334 8,334 8,334
Share premium account 8,688 8,687 8,688
Other reserve - 37,610 37,608
Capital reserve 43,161 7,506 6,835
Revaluation reserve 6 12,588 10,751 9,302
Revenue reserve 613 373 377
Equity shareholders' funds 73,384 73,261 71,144
-------------------------------------- ------- -------- -------- ------------
As at As at As at
30 June 30 June 31 December
2015 2014 2014
Net asset value per share 100.03p 97.76p 95.41p
Number of ordinary shares in circulation 73,363,013 74,938,013 74,563,013
Treasury net asset value per share 99.08p 97.26p 94.74p
Number of ordinary shares in circulation 73,363,013 74,938,013 74,563,013
Number of ordinary shares held in treasury 9,975,130 8,400,130 8,775,130
Number of listed ordinary shares in issue 83,338,143 83,338,143 83,338,143
------------------------------------------- ----------- ---------- ------------
Unaudited Statement of Cash Flows
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For the six months to 30 June 2015
Six Six
months months
to 30 June to Year to
2015 30 June 31 December
GBP'000 2014 2014
GBP'000 GBP'000
Net cash (outflow)/inflow from operating activities (381) (352) 245
Net cash inflow/(outflow) from investing activities 648 (3,294) 687
Equity dividends paid - (3,918) (6,166)
Net cash inflow/(outflow) before financing activities 267 (7,564) (5,234)
Net cash (outflow)/inflow from financing activities (1,097) 9,251 8,916
(Decrease)/increase in cash (830) 1,687 3,682
Reconciliation of net cash flow to movement in
net cash
(Decrease)/increase in cash (830) 1,687 3,682
Opening cash position 11,869 8,187 8,187
Closing cash at bank and on deposit 11,039 9,874 11,869
Reconciliation of profit on ordinary activities
before taxation to net cash (outflow)/inflow
from operating activities
Profit on ordinary activities before taxation 3,340 2,586 3,050
Gains on investments (3,787) (2,923) (2,697)
Changes in working capital and other non-cash
items 66 (15) (108)
Net cash (outflow)/inflow from operating activities (381) (352) 245
Notes
1. The condensed financial statements for the six months to 30
June 2015 comprise the statements set out below together with the
related notes below. The Company applies UK Generally Accepted
Accounting Principles in its annual financial statements, and is
intending to adopt FRS 102 and the AIC's Statement of Recommended
Practice issued in November 2014 for its financial year ending 31
December 2015. The condensed financial statements for the six
months to 30 June 2015 have therefore been prepared in accordance
with FRS 104 'Interim Financial Reporting'. The directors do not
expect any significant changes to the Company's accounting policies
as a result of the adoption of FRS 102. The accounts have therefore
been prepared on the basis of the same accounting policies as set
out in the Company's Annual Report and Financial Statements for the
year ended 31 December 2014.
The comparative figures for the financial year ended 31 December
2014 are not the Company's statutory accounts for that financial
year, but are based on those accounts, represented as necessary to
comply with FRS 102. Those accounts have been reported on by the
Company's auditor and delivered to the registrar of companies. The
report of the auditor was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
2. Return per share is based on a weighted average of 74,206,991
ordinary shares in issue (30 June 2014 - 71,219,291 ordinary
shares; 31 December 2014 - 73,099,277 ordinary shares).
3. Earnings for the first six months to 30 June 2015 should not
be taken as a guide to the results of the full financial year to 31
December 2015.
4. During the six months to 30 June 2015 the Company purchased
1,200,000 shares to be held in treasury at a cost of GBP1,100,000.
At 30 June 2015, the Company holds 9,975,130 ordinary shares in
treasury. Excluding treasury shares, there were 73,363,013 ordinary
shares in issue at 30 June 2015 (30 June 2014 - 74,938,013 ordinary
shares; 31 December 2014 - 74,563,013 ordinary shares)
5. The interim dividend of 3.0p per share (2.7p capital, 0.3p
revenue) will be paid on 18 September 2015 to shareholders on the
register on 4 September 2015. The ex-dividend date is 3 September
2015.
During the year to 31 December 2014, the Company paid a first
interim dividend on 7 March 2014 of 6.0p per share (5.54p capital,
0.46p revenue) and a second interim dividend on 19 September 2014
of 3.0p per share (1.51p capital, 1.49p revenue).
6. All investments are initially recognised and subsequently
measured at fair value. Changes in fair value are recognised in the
Income Statement.
The methods of fair value measurement are classified into a
hierarchy based on reliability of the information used to determine
the valuation.
-- Level a - Fair value is measured based on quoted prices in an active market.
-- Level b - Fair value is measured based on directly observable
current market prices or indirectly being derived from market
prices.
-- Level c -
i) Fair value is measured using a valuation technique that is
based on data from an observable market or;
ii) Fair value is measured using a valuation technique that is
not based on data from an observable market.
Level c
Level a (ii)
Listed
interest
bearing Traded
securities on AIM Unquoted Total
GBP'000 GBP'000 GBP'000 GBP'000
Opening book cost 10,993 16,774 22,281 50,048
Opening unrealised appreciation - 7,281 2,021 9,302
Opening valuation 10,993 24,055 24,302 59,350
Movements in the period:
Purchases at cost 27,982 2,054 3,821 33,857
Sales - proceeds (29,485) (2,820) (2,041) (34,346)
- realised gains on sales - 324 149 473
Unrealised gains/(losses) realised during
the period - 1,520 (1,492) 28
(Decrease)/increase in unrealised appreciation - (1,185) 4,471 3,286
Closing valuation 9,490 23,948 29,210 62,648
Closing book cost 9,490 17,852 22,718 50,060
Closing unrealised appreciation - 6,096 6,492 12,588
Closing valuation 9,490 23,948 29,210 62,648
----------------------------------------------- ----------- -------- -------- --------
Equity shares - 23,948 9,246 33,194
Loan notes - - 19,964 19,964
Fixed income securities 9,490 - - 9,490
Closing valuation 9,490 23,948 29,210 62,648
----------------------------------------------- ----------- -------- -------- --------
There has been no significant change in the risk analysis as
disclosed in the Company's annual accounts.
7. The financial information contained in this half-yearly
financial report does not constitute statutory accounts as defined
in Section 434 of the Companies Act 2006. The information for the
year to 31 December 2014 has been extracted from the latest
published audited financial statements. The audited financial
statements for the year to 31 December 2014, which were
unqualified, have been filed with the Registrar of Companies. No
statutory accounts in respect of any period after 31 December 2014
have been reported on by the Company's auditors or delivered to the
Registrar of Companies.
8. The Company has one reportable segment being investing in
primarily a portfolio of UK growth businesses, whether unquoted or
traded on AIM.
9. Copies of the half-yearly financial report will shortly be
made available to shareholders and will also be available from the
Registered Office of the Company at 100 Wood Street, London EC2V
7AN.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed interest
investments, cash and liquid resources. Its principal risks are
therefore market risk, credit risk, liquidity risk and competitive
risk. Other risks faced by the Company include loss of approval as
a Venture Capital Trust, investment performance, regulatory and
compliance, legislative, economic, political and external factors
and operational risks. These risks, and the way in which they are
managed, are described in more detail in the Risk Matrix within the
Strategic Report, in the Company's Annual Report and Accounts for
the year to 31 December 2014. The Company's principal risks and
uncertainties have not changed materially since the date of that
report.
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