Half-yearly report

 

 

Dividend History                   

 

 

Your Company has continued to make satisfactory progress throughout the six month period ended 31 July 2007.

 

One new qualifying investment was made during the period.  £1 million was invested in Hoole Hall Country Club and Spa Limited.  The company has acquired the Hoole Hall hotel near Chester and is undertaking an extensive renovation to add conferencing, banqueting and spa facilities to the site. 

 

The Company also made three non-VCT qualifying investments during the period.  Investments totalling £1.6 million were made in Green Mountain Contractors Limited, Vermont Developments Limited and Sanguine Hospitality Limited.  Each of these businesses has experienced management teams who are well-known to the Investment Manager and gives the Company opportunities to enhance the yield on its non-qualifying funds with negligible risk.

 

One further portfolio development is that Honeycombe Pubs VCT Limited is expected to repay part of its loan stock in the near future.  As a result, this element of the investment is now being treated as non-VCT qualifying.

 

At 31 July 2007, the Company had a portfolio which includes 8 VCT qualifying investments with a total cost of £5.9 million, producing a VCT qualifying percentage of 61%.  The Investment Manager has two further investments earmarked for the Company which will ensure that the 70% target is met before the deadline of 31 January 2008.

 

The underlying businesses of each of the investments have continued to perform to plan throughout the period and the Board has concluded that no adjustments to the valuations are required, with each investment being held at cost.

 

During the period the Company disposed of three corporate bonds raising approximately £1.5 million, which was used to make the non-VCT qualifying investments mentioned above.

 

At 31 July 2007, the Net Asset Value per Ordinary Share ("NAV") stood at 95.4p, an increase of 1.1p since the previous year end of 31 January 2007 (after adjusting for the 1.5p dividend paid during the period).  Total Return (NAV plus cumulative dividends since launch) now stands at 97.9p per share.

 

The profit on ordinary activities after taxation for the period was £105,000, comprising a revenue profit of £116,000 and a capital loss of £11,000.

 

The Company operates a policy, subject to certain restrictions, of buying any shares that become available in the market.  No shares were purchased in the period under review. 

 

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:

 

 

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.  By the end of the current financial year, the Company must comply with the 70% Test.  The Board is satisfied with the Investment Manager's plans for achieving this in a timely manner, with one potential investment progressing that is expected to complete shortly and  another potential investment which can be used as a contingency to ensure that the 70% Test is met before the deadline.

 

The Manager's focus is now starting to shift towards possible investment exits which may allow the Company to make a significant distribution to Shareholders in the summer of 2008 in line with the strategy outlined in the Company's prospectus.  I hope to be in a position to provide further details of the exit plans with the results for the year ended 31 January 2008.

 

 

 

 

Hugh Gillespie

Chairman

 

                                   

 

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.

 

 

 

 

 

 

 

 

 

 

* Part of investment is non-VCT qualifying

 

 

Additions

 

 

 

1. The unaudited interim results cover the six months to 31 July 2007 and have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 31 January 2007 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 December 2005 ("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 2006 and the 12 month period ended 31 January 2007 respectively.

 

5. Return per share for the period has been calculated on 10,143,848 shares, being the weighted average number of shares in issue during the period.

 

 

 

The Special Reserve, Capital Reserve - Realised and Revenue Reserve are all distributable reserves.

 

 

8. 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 2007 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.

 

 

9. 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.

 

 

10. Copies of the unaudited interim results will be sent to Shareholders shortly. Further copies can be obtained from the Company's Registered Office.