TIDMCR5
Core VCT V PLC
From: Core VCT V PLC
Date: 25 August 2010
Half-Yearly Financial Report for the six months ended 30 June 2010
Performance Summary
Ordinary Shares 30 June 30 June 31 December
2010 2009 2009
Net asset value per share() 81.90 pence 80.30 pence 82.51 pence
Total return to date per share(1) 89.40 pence 87.30 pence 89.51 pence
Share price (mid market) 60.00 pence 60.00 pence 60.00 pence
Earnings per share (0.11) pence 1.38 pence 3.55 pence
Cumulative dividends per share since
inception 7.50 pence 7.00 pence 7.50 pence
Total expense ratio(2) 1.43% 0.67% 1.83%
1. Total return per share comprises closing net asset value per share plus
cumulative dividends per share paid to date.
2. Total expense ratio has been calculated using total operating costs divided
by closing net assets.
Chairman's Statement
Results
The Net Asset Value (NAV) Total Return per Ordinary Share was 89.40p as at 30
June 2010, comprising a NAV per Ordinary Share of 81.90p and cumulative
dividends paid of 7.50p per Ordinary Share. This is a slight decrease from the
NAV Total Return to 31 December 2009 of 0.1%, compared to a 6.2% decrease in the
value of the FTSE All Share Total Return Index over the same period.
Investments
The investment portfolio now comprises 9 unquoted investments with a cost of
GBP7.2 million and a value of GBP7.4 million.
One new investment totalling GBP1.0 million was completed during the period, into
Ark Healthcare Limited with a further GBP0.5 million being invested into an
existing portfolio company, Allied International. Further details of this new
investment and the rest of the portfolio are contained in the Manager's Review.
The Company is 84% invested in unquoted companies, exceeding the required
minimum to be over 70% invested for VCT qualifying purposes.
Dividends
Core VCT V intends to provide Shareholders with an attractive level of income by
distributing available profits generated through income and capital gains.
During the six months to 30 June 2010, the Company generated a loss of GBP11,566
and is therefore not in a position to pay an interim dividend to shareholders.
However, your Board is committed to distributing a substantial proportion of any
profits generated over the remainder of the financial year.
Share Price and Share Buy Backs
The Ordinary Shares (CR5) are fully listed shares. Prices are available on
www.londonstockexchange.com and the Ordinary Share price is published daily in
the Financial Times. Shareholders are reminded that they must hold their shares
for at least five years in order to retain the tax reliefs obtained.
We would remind shareholders that we view the NAV Total Return, rather than the
share price, as the preferred measure of performance, as it encompasses the
value of the current portfolio and the amount of cash distributed to
shareholders over the life of their investment.
We are conscious that the mid price of the shares continues to be at a discount
to the Net Asset Value, as it is for many other VCTs, reflecting the lack of
liquidity in the secondary market. During the period, we have appointed Matrix
as broker to the Company. Core VCT V does have the ability to buy back shares,
although we are not anticipating making any share buy backs for the foreseeable
future so that we are best placed as a Company to maximise distributions made to
all shareholders.
Board Changes
In order to comply with Chapter 15 of the UKLA Listing Rules and in particular
the independence of the Board, the following changes to the Board will take
place following the publication of this half-yearly report. I will resign as
non-executive Chairman of the Company but remain non executive Chairman of Core
VCT IV plc. I am pleased to report that Greg Aldridge has accepted the Board's
invitation to take on the Chairman's role. We are also delighted to welcome
David Harris to the Board. David is chief executive of InvaTrust Consultancy
Ltd, a specialist investment and marketing consultancy group that undertakes a
variety of projects within the investment fund management industry.
I would also like to take this opportunity to notify shareholders that following
Greg's appointment as Chairman he will retire as a non executive director of
Core VCT IV plc.
These changes will ensure that Core VCT V plc is fully compliant with Chapter
15 of the UKLA Listing Rules.
Information for Shareholders
The Board supports open communication with investors and welcomes any comments
or questions you may have, and full contact details are provided at the back of
this Report.
Outlook
We hope to deploy the remaining cash resources in the coming months. With the
investment programme now almost complete, our focus is managing the existing
portfolio and planning to realise capital in order to maximise the potential
gains from the portfolio. The average age of the portfolio is still relatively
young, and in general our approach is to continue to hold our investments as
they increase in scale and market conditions for exits improve.
Ray Maxwell
Chairman
24 August 2010
Principal Risks and Uncertaintiesff
The Company's assets consist of unquoted investments, securities, cash and
liquid resources. Its principal risks are therefore market risk, credit risk
and liquidity risk. Other risks faced by the Company include economic risks, the
loss of approval as a Venture Capital Trust, failure to comply with other
regulatory requirements, and broader risks such as reputational, operational and
financial risks. These risks and the way in which they are managed, are
described in more detail in the Annual Report for the year ended 31 December
2009, in note 18 to the accounts. The Company's principal risks and
uncertainties have not changed materially since the date of that report and it
is not envisaged that there will be any changes to the risks and uncertainties
in the remaining six months of the financial year.
Related Party Transactions
Details of related party transactions in accordance with the Disclosure and
Transparency rule 4.2.8 can be found in Note 9 to the Accounts on page 16.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements have been prepared in compliance
with the Companies Act 2006, applicable accounting standards, ASB Statement of
Half-yearly Financial Reporting and the 2009 Statement of Recommended Practice
"Financial Statements of Investment Trust Companies" and give a true and fair
view of the assets, liabilities, financial position and profit and loss of the
Company, as required by Disclosure & Transparency Rule 4.2.4; and
(b) the interim management report includes a fair review of the information
required by Disclosure & Transparency Rules 4.2.7 - 8 in accordance with
Disclosure & Transparency Rule 4.2.10
For and behalf of the Board:
Ray Maxwell
Chairman
24 August 2010
Manager's Review
Investment Highlights
* One new investment was completed, totalling GBP1 million and GBP0.5 million was
invested in one existing portfolio company;
* Investment Portfolio now comprises 9 investments with a cost of GBP7.2 million
and a value of GBP7.4 million;
* The Company was 84% invested in qualifying companies as at 30 June 2010,
exceeding the required minimum to be over 70% invested for VCT purposes.
New Investment
In June, we invested GBP1 million into Ark Healthcare Limited (utilising Core Mezz
I Limited), alongside Core VCT who invested GBP2 million and Core VCT IV which
invested GBP1 million. Ark is a "buy and build" strategy in the
domiciliary/homecare sector, focused on the southern half of the UK.
Existing Investment
We invested a further GBP0.5 million alongside Core VCT IV and Core VCT which
invested GBP1 million into Allied International to provide additional working
capital funding.
A more detailed description of the status of each investment follows.
Colway Limited Investment Cost: GBP1,563,000
Valuation: GBP1,618,000
Colway is a long established office and graphic supplies business, with three
principal divisions - Business, Systems and Retail.
Following the completion of the balance sheet restructuring after the company's
senior lender, Kaupthing Singer & Friedlander, was placed into administration,
each of the three Core VCTs invested a further GBP0.5 million ( GBP1.5 million in
aggregate) in December 2009 in order to provide funds for the continuation of
Colway's acquisition led growth strategy. One further small acquisition has been
completed during the period ended 30 June 2010, and further acquisitions are
under negotiation and assessment.
Allied International Investment Cost: GBP1,502,000
Valuation: GBP1,500,000
Allied is a leading Destination Management Company (DMC) with 26 locations
throughout the USA, Europe and the Middle East.
We acquired the business in November 2009 by acquiring all of the senior debt at
a substantial discount and providing working capital funding. 2009 represented
a low point in the business cycle, and we believe Allied has the potential to
grow organically and by acquisition into a major global operation.
We have introduced new management at a senior level, eliminated senior debt and
provided further funding during 2010 to be used for growth and acquisitions.
This further investment was GBP0.5 million from each of Core VCT IV and Core VCT
V, alongside GBP1 million from Core VCT. We continue to hold several discussions
over potential merger and acquisition targets.
Camwatch Limited Investment Cost: GBP995,000
Valuation: GBP1,174,000
Camwatch is a designer, supplier, and installer of detector activated remote
CCTV monitoring systems and provides a 24/7 remote monitoring service for over
20,000 cameras across the UK and abroad.
Camwatch has continued with its investment in its sales capability, and is
starting to see the benefits of its joint venture with JCB in placing more
camera towers in the field. The investment is held in a junior secured
structure, with the majority of our anticipated return being earned through an
attractive paid yield.
Brasserie Holdings plc Investment Cost: GBP1,000,000
Valuation: GBP1,000,000
Owns and operates branded restaurants in the premium casual dining segment of
the market.
Trading over the year has been resilient, with restaurant EBITDA increasing by
some 20% to GBP2.4 million in the year ended 27 June 2010. This business has a
complete, experienced and capable management team in place which can manage a
very substantial increase in the number of sites in the business and is
developing a Brasserie pub concept to take advantage of the availability of pub
sites on the market.
The investment is structured 90% in loan notes yielding 7% per annum, and 10% in
equity to provide capital gain potential.
Ark Home Healthcare Limited Investment Cost: GBP1,000,000
Valuation: GBP1,000,000
Ark is a "buy and build" strategy in the domiciliary/homecare sector, focused on
the southern half of the UK.
We co-led this investment alongside Ashridge Capital as part of a total GBP17.5
million equity commitment in June 2010. Core VCT IV and Core VCT V invested GBP1
million each and Core VCT invested GBP2 million. Ark acquired three providers at
completion to create an initial profitable platform. It intends acquiring a
further 15-25 businesses over a three year period to build a substantial
homecare group.
The investment is held primarily in loan notes with a 10.5% per annum accrued
yield.
Georgina Goodman Limited Investment Cost: GBP125,000
Valuation: GBP125,000
Georgina Goodman is the designer, wholesaler and retailer of luxury women's
shoes branded 'Georgina Goodman'.
The products are targeted at the top end of the luxury market. The management
team are seeking to develop 'Georgina Goodman' as an international luxury
brand. Wholesale clients include many of the world's leading department stores.
We invested GBP125,000 alongside Core VCT IV and a co-investor introduced by Core
Capital in the first GBP2 million tranche of a GBP4 million anticipated fundraising
by the Company. We anticipate make a small further investment of GBP78,000,
alongside a larger co-investment, in the second half of 2010. The investment is
structured 90% in a loan note with a preferred return and 10% in equity.
Unaudited Income Statement
For the Six Months ended 30 June 2010
Notes Revenue Capital Total
GBP GBP GBP
Movement in investment holdings 6 - 94,963 94,963
Net losses on sale of investments 6 - (72,094) (72,094)
Income 3 95,103 - 95,103
Transaction costs and investment
management expenses (153) (28,311) (28,464)
Other expenses (101,074) - (101,074)
-----------------------------
Return on ordinary activities before (6,124) (5,442) (11,566)
taxation
Tax on ordinary activities - - -
-----------------------------
Return attributable to equity (6,124) (5,442) (11,566)
shareholders
-----------------------------
Return per Ordinary Share (p) 5 (0.06) (0.05) (0.11)
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital columns are both prepared under
guidance published by the Association of Investment Companies.
There were no other gains or losses in the six months ended 30 June 2010 and
accordingly, no statement of Total Recognised Gains and Losses has been
prepared.
All revenue and capital items derive from continuing activities.
Unaudited Income Statement
For the Six Months ended 30 June 2009
Revenue Capital Total
GBP GBP GBP
Movement in investment holdings - 66,093 66,093
Net losses on sale of investment - -
Income 154,795 - 154,795
Transaction costs and investment
management expenses (611) (367) (978)
Other expenses (57,993) - (57,993)
---------------------------
Return on ordinary activities before 96,191 65,726 161,917
taxation
Tax on ordinary activities (9,778) 38 (9,740)
---------------------------
Return attributable to equity shareholders 86,413 65,764 152,177
---------------------------
Return per Ordinary Share (p) 0.78 0.60 1.38
Audited Income Statement
For the Year ended 31 December 2009
Revenue Capital Total
GBP GBP GBP
Movement in investment holdings - 208,224 208,224
Net gains on sale of investments - 138,480 138,480
Income 223,771 - 223,771
Transaction costs and investment
management fees (2,122) (16,845) (18,967)
Other expenses (147,288) - (147,288)
-----------------------------------
Return on ordinary activities before 74,361 329,859 404,220
taxation
Tax on ordinary activities (16,070) 3,138 (12,932)
-----------------------------------
Return attributable to equity 58,291 332,997 391,288
shareholders
-----------------------------------
Return per share (p) 0.53 3.02 3.55
Unaudited Balance Sheet
As At As At As At
30 June 30 June 31 December
2010 2009 2009
Notes (unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Investments at fair value 6 7,625,817 5,559,257 7,253,947
------------------------------------
Current assets
Debtors and prepayments 60,604 2,657,654 1,237,326
Cash at bank 1,488,713 761,928 735,249
------------------------------------
1,549,317 3,419,582 1,972,575
Creditors: amounts falling due within
one
year
Corporation tax (12,055) - -
Other creditors (68,626) (34,418) (71,056)
Accruals (64,672) (87,061) (58,995)
------------------------------------
Net current assets 1,403,964 3,298,103 1,842,524
------------------------------------
Net assets 9,029,781 8,857,360 9,096,471
------------------------------------
Capital and reserves
Called-up Ordinary share capital 7 1,102 1,102 1,102
Share premium account 7 - (881,580) -
Capital reserve 7 (876,423) (256,634) (870,981)
Special distributable reserve 7 9,854,246 9,854,246 9,854,246
Revenue reserve 7 50,856 140,226 112,104
------------------------------------
Equity shareholders' funds 9,029,781 8,857,360 9,096,471
------------------------------------
Net asset value per 0.01p ordinary 8 81.90 80.30 82.51
share (p)
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2010
Six months Six months Year ended
ended ended 31 December
30 June 2010 30 June 2009 2009
(unaudited) (unaudited) (audited)
GBP GBP GBP
Opening Shareholders' funds 9,096,471 9,421,806 9,421,806
Return for the period (11,566) 152,177 391,288
Dividends paid - revenue (55,124) (165,375) (165,375)
Dividends paid - capital - (551,248) (551,248)
--------------------------------------------
Closing Shareholders' funds 9,029,781 8,857,360 9,096,471
--------------------------------------------
Unaudited Cash Flow Statement
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating activities
Investment income received 79,211 190,366 291,220
Investment management fees paid (2,864) (2,804) (10,706)
Other cash payments (128,383) (74,094) (441,774)
------------------------------------
Net cash (outflow)/inflow from operating (52,036) 113,468 (161,260)
activities
Taxation
Taxation paid - - (25,554)
Capital expenditure and financial
investments
Purchase of investments (1,506,827) (3,391,478) (9,390,205)
Disposals of investments 1,167,451 3,610,000 8,182,330
------------------------------------
Net cash outflow from capital expenditure
and (339,376) (218,522) (1,207,875)
financial investment
Equity dividends paid (55,124) (716,623) (716,623)
Called up share capital received 1,200,000 - 1,700,000
------------------------------------
Increase/(decrease) in cash 753,464 (384,633) (411,312)
------------------------------------
Reconciliation of net cash flow to movement
in
net cash
Increase/(decrease) in cash 753,464 (384,633) (411,312)
Opening cash 735,249 1,146,561 1,146,561
------------------------------------
Net cash for the period 1,488,713 761,928 735,249
------------------------------------
Reconciliation of net return on ordinary
activities
before taxation to net cash flow from
operating
activities
Return on ordinary activities before (11,566) 161,917 404,220
taxation
Loss/(profit) on realisation of investments 72,094 - (138,480)
Movement in investment holdings (94,963) (66,093) (208,224)
(Increase)/decrease in debtors (23,278) 34,883 (232,471)
Increase/(decrease) in creditors 5,677 (17,239) 13,695
------------------------------------
Net cash flow from operating activities (52,036) 113,468 (161,260)
------------------------------------
Notes:
1. The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Company for the
year ended 31 December 2009. Unquoted investments have been valued in
accordance with IPEVC guidelines. Quoted investments are stated at bid
prices in accordance with IPEVC guidelines and UK Generally Accepted
Accounting Practice. These statements have been prepared on a going concern
basis and nothing has happened that would change the Directors' going
concern assessment from the last audited financial statements to 31 December
2009.
2. Earnings for the six months should not be taken as a guide to the results of
the financial year to 31 December 2010.
3. Income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP GBP GBP
Fixed and variable
interest securities 145 62,596 74,213
Loan stocks 93,668 91,257 147,660
Bank interest 1,290 942 1,898
------------------------------------------
Total income 95,103 154,795 223,771
------------------------------------------
4. Taxation
There will be no tax charge due by the Company since total expenses
(including fees allocated to capital) are expected to be more than income.
5. Earnings and return per share
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP GBP GBP
(i) Total return after taxation (11,566) 152,177 391,288
Basic return per share (0.11)p 1.38p 3.55p
(ii) Revenue return from ordinary
shares after taxation (6,124) 86,413 58,291
Revenue return per share (0.06)p 0.78p 0.53p
(iii) Capital return from ordinary
shares after taxation (5,442) 65,764 332,997
Capital return per share (0.05)p 0.60p 3.02p
(iv) Weighted average number of
ordinary shares in issue in the
period 11,024,969 11,024,969 11,024,969
6. Investments
Listed Unlisted Total
(Level 1) (Level 3) GBP
GBP GBP
Valuation at 31 December 2009 355,746 6,898,201 7,253,947
Purchases at cost - 1,516,452 1,516,452
Sale proceeds (149,477) (1,017,974) (1,167,451)
Net losses)/gains on sale of (74,707) 2,613 (72,094)
investments
Investment holding gains 62,255 32,708 94,963
-------------------------------------------
Valuation as at 30 June 2010 193,817 7,432,000 7,625,817
-------------------------------------------
Book cost at 30 June 2010 444,942 7,200,415 7,645,357
(Losses)/gains on investment (251,125) 231,585 (19,540)
holdings
-------------------------------------------
Valuation as at 30 June 2010 193,817 7,432,000 7,625,817
-------------------------------------------
7. Share capital and reserves
Called up
Ordinary Special
Share Capital Distributable Revenue
Capital Reserve Reserve Reserve Total
GBP GBP GBP GBP GBP
As at 31 December 2009 1,102 (870,981) 9,854,246 112,104 9,096,471
Net realised losses on - (72,094) - - (72,094)
investments
Movement in investment - 94,963 - - 94,963
holdings
Capitalised management - (28,311) - - (28,311)
fees
Dividends - - - (55,124) (55,124)
Net return for the - - - (6,124) (6,124)
period
-----------------------------------------------------
As at 30 June 2010 1,102 (876,423) 9,854,246 50,856 9,029,781
-----------------------------------------------------
8.
Net asset value
Six months Six months
ended ended Year ended
30 June 30 June 31 December 2009
2010 2009 (audited)
(unaudited) (unaudited) GBP
GBP GBP
Net assets 9,029,781 8,857,360 9,096,471
Number of shares in issue 11,024,969 11,024,969 11,024,969
Net asset value per share 81.90p 80.30p 82.51p
9.
Related Party Transaction
Paul Richards is a member of the Manager, Core Capital LLP. Details of the
carried interest arrangements between the Company and the Manager are set
out in the Annual Report for the year ended 31 December 2009.
10. The financial information for the six months ended 30 June 2010 and 30 June
2009 has not been audited.
11.
These are not statutory accounts in terms of Section 434 of the Companies
Act 2006. Statutory accounts for the year to 31 December 2009, which
received an unqualified audit report, have been lodged with the Registrar of
Companies. No statutory accounts in respect of any period after 31 December
2009 have been reported on by the Company's auditors or delivered to the
Registrar of Companies.
12.
Copies of this statement are being sent to all shareholders. Further copies
are available free of charge from the Company's registered office, 103 Baker
Street, London, W1U 6LN. A copy can also be obtained from the Company's
website atwww.core-cap.com.
[HUG#1440180]
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Source: Core VCT V plc via Thomson Reuters ONE
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