Half Yearly Report

16th Oct 2009 10:39



TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months to 31 August 2009

 

  TP70 VCT plc

General Information

Directors

Michael Gabriel Sherry

James Chadwick Murrin

Ian David Parsons

Secretary and Registered Office

Peter William Hargreaves

4-5 Grosvenor Place

London, SW1X 7HJ

Company Registered Number

6010401

Solicitors

Howard Kennedy

19 Cavendish Square

London, W1A 2AW

Bankers

HSBC Bank plc

PO Box 648

27-32 Poultry

London, EC2P 2BX

Investment Manager and Administrator

Triple Point Investment Management LLP

4-5 Grosvenor Place

London, SW1X 7HJ

VCT Tax Advisor 

PricewaterhouseCoopers

1 Embankment Place

London, WC2N 6RH 

Independent Auditor

Grant Thornton UK LLP

1 Westminster Way

Oxford, OX2 0PZ

Registrars

Neville Registrars Limited

Neville House

18 Laurel Lane

Halesowen

West Midlands, B63 3DA

  TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months ended 31 August 2009

Index Page

Financial summary 1

Chairman's statement 1

Investment managers' report 3

Investment portfolio review 5

Director's Responsibility statement 6

Summary consolidated statement of comprehensive income 7

Summary consolidated balance sheet 8

Summary consolidated statement of changes in equity 9

Summary consolidated cash flow statement 10

Notes to the summarised set of financial statements   11-14

TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months ended 31 August 2009

Financial summary

	£'000
Net assets	25,466
Net loss before tax	(38)
Loss per share	(0.12p)
Net asset value per share	79.52p

Chairman's statement

I am pleased to be writing to you to present the unaudited interim results for TP70 VCT plc ("the Company") for the six months to 31 August 2009. 

Investment Strategy

TP70's strategy offers combined exposure to GAM's flagship Diversity fund and to Triple Point's particular brand of VCT qualifying investments. This strategy, intended to provide substantial exposure to a market-leading fund of hedge funds within a Venture Capital Trust, has been to gain exposure to GAM Diversity in the Company's first year and then to reduce that exposure during the third year in order to make VCT-qualifying investments. A significant exposure was to be retained in GAM Diversity for the remainder of the Company's life.

Following the replacement of the Barclays derivative transaction with a Bank Julius Baer leveraged note, the level of exposure to GAM Diversity was reduced to a current level of approximately 39%. The Board intends to maintain this exposure to GAM Diversity for the foreseeable future. This is below the exposure level which had been planned for the Company's third year, but higher than that for subsequent years, providing a consistent exposure to GAM Diversity.

 

In conjunction with the reduction of exposure to GAM Diversity, funds that have yet to be exposed to VCT qualifying investments have been invested in money market funds. These investments comprise, on an unaudited basis, some 38% of TP70's Net Asset Value. 

Progress has also been made in building up the portfolio of qualifying holdings which at 31 August 2009 comprised, on an unaudited basis, some 31% of Net Asset Value. The Board is pleased that the Company is on course to achieve the threshold of VCT qualifying investments in order to continue to enjoy VCT tax status. The Investment Manager's Review details this progress.

Results 

Over the period the Company made a loss of 0.12p per share and as at 31 August 2009 the Net Asset Value per share stood at 79.52p. 

Risks and Uncertainties 

The Board believes that the principal risks facing the Company are:

• Investment risk associated with exposure to GAM Diversity;

• Investment risk associated with VCT qualifying investments;

• Failure to continue to satisfy the requirements to qualify as a VCT;

• Counterparty risk relating to the derivative transaction with Julius Baer.

  TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months ended 31 August 2009

Chairman's statement (continued)

The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks, within the scope of the Company's established investment strategy.

If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on 020 7201 8989 or email me at [email protected].

Michael Sherry

Chairman

1 October 2009

  TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months ended 31 August 2009

Investment manager's report

TP70 VCT plc ("the Company") continues to make progress in its investment strategy continuing its exposure to GAM Diversity and deploying funds into VCT-qualifying investments.

The Company's investment strategy for the first two years was up to 100% exposure to GAM's flagship Diversity Fund, and then to invest at least 70% of funds into Triple Point style VCT-qualifying investments to meet the VCT-qualification threshold. As I outlined in the last review, part of the exposure to GAM Diversity was made via a derivative transaction with Barclays Capital which in this period has been replaced by a smaller position held through a leveraged note with Bank Julius Baer. The Company's effective exposure to GAM Diversity now stands at some 39%. 

In the six months under review, GAM Diversity has risen 2.08%. Although this rise is significantly smaller than some of the rises seen in equity markets (the MSCI World Index has risen 28.75% and the FTSE All Share has gained 33.81%), it is a welcome positive contribution. It is worth noting that all the major strategies within Diversity (Equity Hedge, Trading and Arbitrage) posted positive returns with Trading, in particular, profiting in current market conditions.

Over the six months to 31 August 2009 the Company has succeeded in committing exposing 31% of its funds (by value of investments) to VCT qualifying investments. These investments cover services to the cinema industry and the provision of broadband satellite capacity. All of these investments are HMRC-approved for VCT-qualifying purposes. The Company is aiming to invest a further 38% of its funds into VCT-qualifying companies over the next six months, thereby securing its VCT tax status.

Results

Following the drop in the Company's Net Asset Value (NAV) over the last period reviewed, we are pleased to report that the Company's NAV for this period has stabilised and is comparable to that as at 28 February 2009.

Outlook

The Manager's primary focus for the next six months is to deploy further funds into VCT-qualifying investments to meet the 70% qualifying investment threshold. There are a number of target investee companies in the pipeline including companies providing educational media services, Wi-Fi internet and telephony to universities and conversion to digital television. With this promising pipeline, and the fact that the Company has already deployed 31% of funds over the first two quarters of this financial year in qualifying investments, we are confident that the Company will meet this target. 

David Dick

Managing Partner

Triple Point Investment Management LLP

1 October 2009

  TP70 VCT plc

Condensed Consolidated Interim Financial Report

for the 6 months ended 31 August 2009

Investment manager's report (continued)

ABOUT TRIPLE POINT INVESTMENT MANAGEMENT LLP

TPIM LLP is a specialist in tax-efficient investments. As well as managing several market-leading VCTs, TPIMLLP offers investors a range of investment products that qualify for government sponsored tax reliefs including the Enterprise Investment Scheme (EIS) and Business Property Relief (BPR).

The Triple Point investment model - focused on capital security, liquidity and tax-enhanced returns - has been built around the group's capabilities in taxation, structured finance and investment to the benefit of every Triple Point product.

For more information on Triple Point Investment Management LLP please call 020 7201 8990.

  TP70 VCT plc

Condensed consolidated interim financial report

for the 6 months ended 31 August 2009

Investment portfolio review

	31 August 2009
Security	Cost		Valuation
	£'000	%	£'000	%
Qualifying holdings	8,000	32.56	8,000	32.34
Non-qualifying holdings	14,981	60.97	15,118	61.16
Uninvested funds	1,593	6.47	1,593	6.50
	24,574	100.00	24,711	100.00
Qualifying Holdings (all Unquoted)
21 Century Cinema Ltd A Shares	100	0.41	100	0.40
21 Century Cinema Ltd C Shares	200	0.81	200	0.81
21 Century Cinema Ltd Loan	700	2.85	700	2.83
Beam Carrier A Shares	100	0.41	100	0.40
Beam Carrier C Shares	400	1.63	400	1.62
Beam Carrier Loan	500	2.03	500	2.02
Big Screen Dig Serv A Shares	100	0.41	100	0.40
Big Screen Dig Serv C Shares	200	0.81	200	0.81
Big Screen Dig Serv Loan	700	2.85	700	2.83
Broadsword A Shares	800	3.26	800	3.24
Broadsword C Shares	200	0.81	200	0.81
Cinematic Services Ltd A Shares	1,000	4.07	1,000	4.05
Digima Ltd A Shares	100	0.41	100	0.40
Digima Ltd C Shares	200	0.81	200	0.81
Digima Ltd Loan	700	2.85	700	2.83
Digital Screen Sol. A Shares	100	0.41	100	0.40
Digital Screen Sol. C Shares	200	0.81	200	0.81
Digital Screen Sol. Loan	700	2.85	700	2.83
Satellite Broadband A Shares	100	0.41	100	0.40
Satellite Broadband C Shares	200	0.81	200	0.81
Satellite Broadband Loan	700	2.85	700	2.83
	8,000	32.56	8,000	32.34
Non Qualifying Holdings
Quoted
MG Fund 4.625 18 Jan 2013 MTN	1,530	6.23	1,505	6.09
Money market investments
Blackrock	2,450	9.97	2,450	9.91
Henderson	2,450	9.97	2,450	9.91
Ignis	2,450	9.97	2,450	9.91
Insight	2,450	9.97	2,450	9.91
Julias Baer Deposit as security for derivative transaction	3,651	14.86	3,651	14.77
Unrealised gain on derivative transaction	-	-	162	0.66
	14,981	60.97	15,118	61.16

  TP70 VCT plc

Condensed consolidated interim financial report

for the 6 months ended 31 August 2009

Directors' Responsibility Statement

The Directors have chosen to prepare the interim financial report for the company in accordance with International Financial Reporting Standards ("IFRS").

In preparing the summarised financial statements for the 6 month period to 31 August 2009, the Directors confirm that to the best of their knowledge:

a) the summarised set of financial statements have been prepared in accordance with international accounting standard IAS34,"Interim Financial Reporting" issued by the International Accounting Standards board;

b) the interim report includes a fair review of important events during the period and their effect on the financial statements and a description of principal risks and uncertainties for the remainder of the accounting period;

c) the summarised set of financial statements give a true and fair view in accordance with IFRS of the assets, liabilities, financial position and of the results of the company for the period and comply with IFRS and the Companies Acts 1985 and 2006; and

d) the interim report includes a fair review of related party transactions and changes therein. Other than detailed in note 17 there are no related party transactions.

This Interim Financial Report has not been audited or reviewed by the auditor. 

Michael Sherry

Chairman

1 October 2009

   TP70 VCT plc

Summarised consolidated statement of comprehensive income

for the 6 months ended 31 August 2009

		6 months ended				6 months ended				11 months ended
	Note	31 August 2009				30 September 2008				28 February 2009
		Rev.	Cap.	Total		Rev.	Cap.	Total		Rev.	Cap.	Total
		£'000	£'000	£'000		£'000	£'000	£'000		£'000	£'000	£'000
Investment income		276	-	276		702	-	702		965	-	965
Realised gain / (loss) on investments	10	-	(8)	(8)		-	4	4		-	214	214
Unrealised loss on investments	10	-	-	-		-	(1,094)	(1,094)		-	(442)	(442)
Derivative transaction	15	-	162	162		(708)	(634)	(1,342)		(1,937)	(2,429)	(4,366)
Investment return		276	154	430		(6)	(1,724)	(1,730)		(972)	(2,657)	(3,629)
Investment management fees	6	56	169	225		62	185	247		108	325	433
Financial and regulatory costs		38	-	38		4	-	4		7	-	7
General administration		10	-	10		26	-	26		39	-	39
Legal and professional fees		116	18	134		13	-	13		60	-	60
Directors' remuneration	7	20	-	20		21	-	21		40	-	40
Operating expenses		240	187	427		126	185	311		254	325	579
Operating profit / (loss)		36	(33)	3		(132)	(1,909)	(2,041)		(1,226)	(2,982)	(4,208)
Loan interest paid		(41)	-	(41)		-	-	-		-	-	-
Loss before taxation		(5)	(33)	(38)		(132)	(1,909)	(2,041)		(1,226)	(2,982)	(4,208)
Taxation	8	-	-	-		-	-	-		-	-	-
Loss after taxation		(5)	(33)	(38)		(132)	(1,909)	(2,041)		(1,226)	(2,982)	(4,208)
Other comprehensive income		-	-	-		-	-	-		-	-	-
Total comprehensive income		(5)	(33)	(38)		(132)	(1,909)	(2,041)		(1,226)	(2,982)	(4,208)
Basic & diluted loss per share	9	(0.02p)	(0.10p)	(0.12p)		(0.41p)	(5.96p)	(6.37p)		(3.83p)	(9.31p)	(13.14p)

The loss per share shown above is both basic and diluted as there are no potentially dilutive financial instruments in issue.

The total column of this statement is the company's statement of comprehensive income prepared in accordance with International Financial Reporting Standards ("IFRS"). The supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies.

The accompanying notes on pages 11 to 14 form an integral part of this interim financial report.

.

  TP70 VCT plc

Summarised consolidated balance sheet at 31 August 2009

		31-Aug-09		30-Sep-08		28-Feb-09
	Note	£'000		£'000		£'000
Non Current Assets
Financial assets at fair value through profit and loss	10	23,118		29,038		5,164
Current assets:
Other receivables		1,128		796		20,677
Cash and cash equivalents	11	1,593		98		98
		2,721		894		20,775
TOTAL ASSETS		25,839		29,932		25,939
Current Liabilities
Trade and other payables		8		2,133		342
Current taxation payable	8	-		-		-
Accrued expenses		365		128		93
		373		2,261		435
NET ASSETS		25,466		27,671		25,504

T The accompanying notes on pages 11 to 14 form an integral part of this interim financial report.

  TP70 VCT plc

Summarised consolidated statement of changes in equity

for the 6 months ended 31 August 2009

			Special
	Issued	Share	Distributable	Capital	Revenue
	Capital	Premium	Reserve	Reserve	Reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
6 months ended 31 August 2009
Opening balance	320	-	30,583	(4,024)	(1,375)	25,504
Loss and total recognised income and expense for the period	-	-	-	(33)	(5)	(38)
Balance at 31 August 2009	320	-	30,583	(4,057)	(1,380)	25,466
6 Months ended 30 September 2008
Opening balance	320	30,596	-	(1,042)	(149)	29,725
Loss and total recognised income and expense for the period	-	-	-	(1,909)	(132)	(2,041)
Purchase of own shares	-	-	-	-	(13)	(13)
Balance at 30 September 2008	320	30,596	-	(2,951)	(294)	27,671
11 Months ended 28 February 2009
Opening balance	320	30,596	-	(1,042)	(149)	29,725
Loss and total recognised income and expense for the period	-	-	-	(2,982)	(1,226)	(4,208)
Cancellation of share premium	-	(30,596)	30,596	-	-	-
Purchase of own shares	-	-	(13)	-	-	(13)
Balance at 28 February 2009	320	-	30,583	(4,024)	(1,375)	25,504

The accompanying notes on pages 11 to 14 form an integral part of this interim financial report.

.

  TP70 VCT plc

Summarised consolidated cash flow statement

for the 6 months ended 31 August 2009

	6 months		6 months		11 months
	ended		ended		ended
	31-Aug-09		30-Sep-08		28-Feb-09
	£'000		£'000		£'000
Cash flows from operating activities
Loss before taxation	(38)		(2,041)		(4,208)
Realised (gain) / loss on investments	8		(4)		(214)
Unrealised loss on investments	-		1,094		442
(Gain) / loss on derivative transaction	(162)		1,342		4,366
Cash absorbed by operations	(192)		391		386
(decrease) / increase in other receivables	(311)		(218)		561
(Increase) / decrease in current liabilities	(62)		906		(920)
Net cash outflow from operating activities	(565)		1,079		27
Cash flow from investing activities
Purchase of financial assets at fair value through profit and loss account	(21,451)		-		-
Sales of financial assets at fair value through profit and loss account	3,651		300		25,036
Loss on derivative transaction	-		(1,342)		(4,366)
Decrease / (increase) in receivables from investment disposals	19,860		-		(20,660)
Net cash flows from investing activities	2,060		(1,042)		10
Cash flows from financing activities
Purchase of own shares	-		(13)		(13)
Net cash flows from financing activities	-		(13)		(13)
Net increase in cash and cash equivalents	1,495		24		24
Reconciliation of net cash flow to movements in cash and cash equivalents
Cash and cash equivalents at 1 March 2009	98		74		74
Net increase in cash and cash equivalents	1,495		24		24
Cash and cash equivalents at 31 August 2009	1,593		98		98

The accompanying notes on pages 11 to 14 form an integral part of this interim financial report.

  TP70 VCT plc

Notes to the summarised set of financial statements

for the 6 months ended 31 August 2009

1  Corporate Information

The interim condensed financial statements of the company for the 6 months ended 31 August 2009 were authorised for issue in accordance with a resolution of the directors on 1 October 2009.

The company was admitted for listing on the London Stock Exchange on 21 March 2007.

TP70 VCT Plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of TP70 VCT plc's registered office, which is also its principal place of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.

TP70 VCT plc's consolidated interim financial statements are presented in Pounds Sterling (£) which is also the functional currency of the parent company.

The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985.

The principal activity of the company is investment. The company's investment strategy is to offer combined exposure to GAM Diversity Inc (GAM's fund of hedge funds) and venture capital investments focused on companies with contractual revenues from financially secure counterparties.

2 Basis of preparation and accounting policies

Basis of preparation

The interim condensed consolidated financial statements of the Group for the 6 months ended 31 August 2009 have been prepared in accordance with IAS 34: Interim Financial Reporting. They do not include all of the information required for full financial statements and should be read in conjunction with the consolidated financial statements of the Group for the period from 1 April 2008 to 28 February 2009.

The accounting policies applied by the Group in the condensed consolidated financial statements are the same as those applied by the Group in its financial statements for the period from 1 April 2008 to 28 February 2009.

3  Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation and uncertainty were the same as those that applied to the consolidated financial statements as at and for the period ended 28 February 2009.

4  Seasonality of operations

The company's operations are not seasonal.

   TP70 VCT plc 

Notes to the summarised set of financial statements

for the 6 months ended 31 August 2009

5  Segmental reporting

The Company currently has only one class of business, investment activity, and its only geographical segment is Europe.

6  Investment management fees

Triple Point Investment Management LLP provides investment management and administration services to the Company under an Investment Management Agreement effective 5 April 2007 which runs for a period of 5 years and may be terminated at any time thereafter by not less than twelve months' notice given by either party and which provides for an administration and investment management fee of 1.75% per annum of net assets calculated and payable quarterly in arrears.

7  Directors' remuneration

	6 months ended				6 months ended				11 months ended
	31 August 2009				30 September 2008				28 February 2009
	Rev.	Cap.	Total		Rev.	Cap.	Total		Rev.	Cap.	Total
	£'000	£'000	£'000		£'000	£'000	£'000		£'000	£'000	£'000
M G Sherry (Chairman)	6	-	6		6	-	6		12	-	12
J C Murrin	8	-	8		8	-	8		15	-	15
I D Parsons	6	-	6		7	-	7		13	-	13
Total	20	-	20		21	-	21		40	-	40

8  Taxation on ordinary activities

	6 months ended				6 months ended				11 months ended
	31 August 2009				30 September 2008				28 February 2009
	Rev.	Cap.	Total		Rev.	Cap.	Total		Rev.	Cap.	Total
	£'000	£'000	£'000		£'000	£'000	£'000		£'000	£'000	£'000
Loss on ordinary activities before tax	(5)	(33)	(38)		(132)	(1,909)	(2,041)		(1,226)	(2,982)	(4,208)
Capital (gains) / losses not taxable	-	(154)	(154)		-	1,724	1,724		-	2,657	2,657
	(5)	(187)	(192)		(132)	(185)	(317)		(1,226)	(325)	(1,551)
UK Corporation tax at 28%	(1)	(52)	(53)		(37)	(52)	(89)		(343)	(91)	(434)
Tax value of unused tax losses	1	52	53		37	52	89		343	91	434
Add tax value of unused tax losses brought forward from previous years	388	404	792		45	313	358		45	313	358
Unused tax losses carried forward	389	456	845		82	365	447		388	404	792
Total current tax charge	-	-	-		-	-	-		-	-	-

Capital gains and losses are exempt from corporation tax due to the company's status as a Venture Capital Trust.

No provision has been made for a deferred tax asset in the balance sheet.

  TP70 VCT plc

Notes to the summarised set of financial statements

for the 6 months ended 31 August 2009

9 Loss per share

The loss per share is based on a loss from ordinary activities after tax of £38,000, and on the weighted average number of shares in issue during the period of 32,022,471.

10 Financial assets at fair value through profit or loss

	31-Aug-09				30-Sep-08		28-Feb-09
	Quoted	Unquoted	Total		Quoted		Quoted
	£'000	£'000	£'000		£'000		£'000
Balance at 1 March 2009	5,164	-	5,164		30,428		30,428
Purchases at cost	9,800	11,651	21,451		-		-
Disposal Proceeds	(3,651)	-	(3,651)		(300)		(25,036)
Realised gain / (loss) on disposal	(8)	-	(8)		4		214
Unrealised gain / (loss) in period	-	162	162		(1,094)		(442)
Valuation at 31 August 2009	11,305	11,813	23,118		29,038		5,164
Cost at 31 August 2009	11,330	11,651	22,981		29,758		5,695
Unrealised gain / (loss) at 31 August 2009	(25)	162	137		(720)		(531)

Further details of these investments are provided in the Investment portfolio review.

11 Cash and cash equivalents

Cash and cash equivalents comprise deposits with HSBC Bank plc.

12 Share Capital

	31-Aug-09		30-Sep-08		28-Feb-09
Ordinary Shares of 1p
Authorised
Number of shares	50,000,000		50,000,000	50,000,000
Par Value £'000	500		500		500
Issued & Fully Paid
Number of shares	32,022,471		32,022,471		32,022,471
Par Value £'000	320		320		320

  TP70 VCT plc

Notes to the summarised set of financial statements

for the 6 months ended 31 August 2009

13 Subsidiary

At 31 August 2009 the Company had the following subsidiary company:

	Class of share capital	Country of Incorporation	Valuation of Investment	Proportion of shares held by the parent company
			£'000	%
Starshell Limited	Ordinary	Cyprus	-	100

14 Net asset value per share

The calculation of net asset value per share is based on net assets of £25,466,000 divided by the 32,022,471 shares in issue.

15 Derivative transaction

The Company has made a payment of £3,651,000 to Julius Baer and in return will receive back an equivalent sum plus or minus the leveraged performance of GAM Diversity. As a result the Company has an exposure of approximately 39% to GAM Diversity. The gain on the transaction is deemed to be a capital item and is therefore included in the capital column of the income statement

16  Commitments and contingencies

The company has no outstanding commitments or contingent liabilities.

17 Related party transactions

Michael Sherry, Chairman of the Company, is an equity Member of Triple Point LLP (TPLLP). TPLLP in turn has a controlling interest in Triple Point Investment Management LLP (TPIMLLP). During the period, TPIMLLP received £225,000 for providing management and administrative services to the Company.

18  Post balance sheet events

There have been no significant post balance sheet events.

ENDIR MFBLTMMJBMJL

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