17th Aug 2012 14:06
Baronsmead VCT 3 plc
Half-Yearly Financial Report
For the six months ended 30 June 2012
The Directors announce the unaudited Half-Yearly Financial Report for the six months to 30 June 2012 as follows:-
Investment Objective
Baronsmead VCT 3 plc 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 3 aims to sustain a minimum annual dividend levelat an average of 4.5p per Ordinary Share, mindful of the need to maintain netasset value. The ability to meet these twin objectives depends significantly onthe level and timing of profitable realisations and it cannot be guaranteed.There will be variations in the amount of dividends paid year on year.Since launch the average annual tax free dividend paid to ordinary shareholdersincluding the 3.0p interim dividend, has been 5.8p per share (equivalent to apre-tax return of 7.7p per share for a higher rate taxpayer). For shareholderswho claimed tax reliefs on initial subscription of 20 per cent, 30 per cent or40 per cent, their returns would have been higher.
Share price discount policy
The Company buys back its shares if, in the opinion of the Board, a repurchasewould be in the best interests of the Company's shareholders as a whole. Sharesare bought back through the market rather than directly from shareholders. Thisminimises the number of shares bought back by the Company while maximising theopportunity for investors to invest in the Company's existing shares.
Through the operation of the Company's share buy back policy the mid share price was at an average discount to net asset value of approximately 10 per cent in the two years to 30 June 2012. The difference between the buy and sell price for the Company's shares averaged 1.1p over the same two year period.
Shareholder choice
The Board provides shareholders with a number of choices that enable them to utilise their investment in Baronsmead VCT 3 in ways that best suit their personal investment and tax planning, 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. On 12 January 2012 the Company launched
an offer for subscription to raise £4.135 million (£3.939 million after
costs). On 7 February 2012 the Company announced that this offer was fully
subscribed.
* 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. Approximately 1,106,000 shares were bought in this way between April and December 2011. * Buy back of shares - from time to time the Company buys its own shares through the market in order to maintain a mid share price discount of approximately 10 per cent to net asset value. In the six months to 30 June 2012, 656,897 shares were bought back representing 0.9 per cent of the shares in issue at 30 June 2012 at prices which represented an
average discount of 10 per cent to the latest published net asset values.
* 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. In addition
to the shares bought by participants of the Dividend Reinvestment Plan,
approximately 114,000 shares were bought by investors in the Company's
existing shares in the six months to 30 June 2012.
FINANCIAL HEADLINES
* +7.8%- Net asset value ("NAV") per share increased 7.8 per cent to 108.0p
before deduction of the interim dividend.
* 3.0p - Interim dividend of 3.0p payable on 21 September 2012 for the six
month period to 30 June 2012.
* 64.0p - Cumulative tax free dividends total 64.0p paid to shareholders in
the last 10 years, including the declared 3.0p interim dividend
* £3.9m - Net proceeds raised in January/February 2012.
Performance Summary to 30 June 2012
Total return* 6 months 1 year 3 years 5 years 10 years % % % % % Net Asset Value†+7.8 +4.2 +31.1 +16.9 +96.8 FTSE All-Share +3.3 (3.1) +47.4 +2.0 +80.9
* Source: ISIS EP LLP and AIC.
†This return for Baronsmead VCT 3 ignores up front tax reliefs and the impact of receiving dividends tax free.
Cash Returned to Shareholders
The table below shows the cash returned to shareholders dependent on their subscription cost, including their income tax reclaimed on subscription.
Year subscribed Subscription Income tax Net Cumulative Net Gross price reclaim cash dividends annual yield†p p invested paid* yield± % p p % 2001 (January) 100.0 20.0 80.0 66.3 7.3 9.7 2005 (March) - C 100.0 40.0 60.0 35.3 8.0 10.7Shares** 2010 (March) 103.1 30.9 72.2 18.0 11.0 14.6
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.
± Net annual yield represents the cumulative dividends paid expressed as an annualised percentage of the net cash invested.
†The gross equivalent yield if the dividends had been subject to higher ratetax (currently 32.5 per cent on dividend income). The additional rate of tax ondividend income of 42.5 per cent which came into force from the 2010/11 taxyear for those shareholders who earned more than £150,000 has not beenincluded. For those shareholders who would otherwise pay this additional rateof tax on dividends, the future gross equivalent yield will be higher than thefigures shown.
** Dividends paid to C shareholders post conversion have been adjusted by the conversion ratio (0.85642528).
CHAIRMAN'S STATEMENT
I am delighted to report growth of 7.8 per cent in Net Asset Value to 108.01pper share which was mainly attributable to increases in the valuations of theAIM portfolio. In the six months to 30 June 2012, the Company raised £3.9 millionnet of expenses and invested £6.4 million in five new and six follow-oninvestments.
In the absence of substantial realisations in the period the interim dividend of 3.0p per share will be funded by Capital reserves.
Results
The Net Asset Value increased to 108.01p per share from 100.16p before taking account of the interim dividend. This 7.8 per cent increase compares to the gain in the FTSE All-Share Index of 3.3 per cent.
Pence per share NAV as at 1 January 2012 100.16 Valuation uplift (7.8 per cent) 7.85 NAV as at 30 June 2012 108.01 Less Interim dividend payable on (3.00)21 September 2012 105.01Long Term Performance
Over the last ten years the cumulative tax free dividends paid to shareholders, including the interim dividend of 3.0p, amount to 64.0p per share. The NAV total return over ten years has been 196.8p for each 100p invested compared with 180.9p for the FTSE All-Share index.
In previous years we have provided the performance record since the launch ofthe Company in January 2001. However, recognising that most investmentcompanies typically report on ten year performance, we have set out the tenyear record in the financial summary to this half-yearly report. In view of ourpolicy of providing full disclosure and transparency we have also set out thefull record of performance on our website www.baronsmeadvct3.co.uk.
Portfolio Review
The net assets of £68.3 million were invested as follows:
• 52 per cent in unquoted companies
• 29 per cent in AIM-traded and other listed companies
• 5 per cent in Wood Street Microcap Investment Fund
• 14 per cent in liquid assets or UK government securities.
The portfolio has progressed well during the last six months with a steadyincrease in unquoted values of 5 per cent and a significant uplift in thequoted portfolio of 23 per cent. The latter gain reflected a re-rating of thesmall cap sector from January 2012 following a large reduction during the lastquarter of 2011.The most significant gain in the unquoted portfolio was an uplift of £1.37 millionin the value of Independent Living Services Limited, a domiciliary carebusiness based in Scotland and on the quoted side IDOX plc, an AIM tradedsoftware company, increased in value by £1.76 million. Each quarter thedirection of trading and profitability of these companies is recorded so thatthe Board can monitor the overall health and trajectory of the portfolio. At 30 June 2012, 86 per cent of companies in the portfolio were progressing steadilyor better.
The largest unquoted investment, Nexus Vehicle Holdings, and the largest AIM investment, IDOX plc, represented 6.9 and 6.5 per cent of net asset value respectively.
New Investments
During the six months to 30 June 2012 approximately £6.4 million was invested in five new companies as well as a number of follow on investments.
An unquoted investment of £833,000 was made into Happy Days Consultancy, anestablished childcare day nursery based in Newquay covering South-West England.A follow on investment of £360,000 was also made into Crew Clothing HoldingsLimited.
In addition, £3.0 million has been invested into three unquoted acquisition companies chaired by experienced operating partners with whom ISIS has successfully worked in the recent past. These companies have been formed to enable investment into established trading entities over the next two years.
After the period end £1.0 million was invested in Pho, an unquoted restaurant group that specialises in Vietnamese street food.
£1.2 million of new investments were made into four quoted companies as set out in the Table of Investments and Realisations below.
Finally, a further investment of £1.0 million was made into Wood Street Microcap Investment Fund.
Investment realisations
Six investments were realised during the period. On the unquoted portfolio TVCGroup, a marketing communications agency based in London, was sold for anundisclosed but profitable multiple. This investment was made in July 2008 butvery quickly encountered difficult trading conditions such that by March 2010operating profits had fallen significantly and the company was valued at 25 percent of cost. Since then its recovery has been significant with credit due tothe management for attracting a new senior team, winning new profitablecontracts and tightening its financial management, in which efforts it wassupported heavily by our Investment Manager ISIS. The final sale to theEconomist Group in March 2012 represented a fivefold gain in value from the lowpoint.Five AIM companies were divested, Clarity Commerce Solutions, Real Good FoodCompany (The), Prologic, Stagecoach Theatre Arts and Colliers International UKwere legacy AIM-traded companies that were valued below cost and were divestedlargely to reduce the tail of older and poorer performing investments. Theircombined value at 31 December 2011 was £449,000 but together realised £251,000in excess of this.VCT LegislationThe Finance Bill in March 2012 announced some changes designed to improveVenture Capital Trust ("VCT") legislation and to obtain continued EU State Aidapproval for the VCT scheme. These changes received Royal Assent on 17 July 2012and are summarised below:
* Increasing the size of companies which can receive VCT funds (from those
with assets of £7 million to £15 million)
* Allowing companies with a greater number of employees to receive funding
(up from a headcount of 50 to 250) * Enabling companies to receive more money from VCTs and other similar schemes (up from £2 million to £5 million per year)
* Restricting the use of VCT and EIS funds for the acquisition of shares in
another company. This change will apply only to VCT funds raised after
5 April 2012.
In addition, from 6 April 2012, the annual limit of £1 million that a VCT can invest in a qualifying investment in any tax year has been removed.
Shareholder Choice
The Board has always tried to offer shareholders a wide choice of optionsregarding their investment in Baronsmead VCT 3. To explain those options wehave set out on the inside front cover of this half-yearly report the Board'sshare price discount policy and our approach to buy backs. The Board believesthat the buy back policy, which is operated primarily by our brokers using thesecondary market, is in the best interests of the Company's shareholders as awhole. It facilitates realisation, if that is required, without limiting theability of the Board to offer "top-up" fund raisings to existing shareholders.There is no intention to introduce an `enhanced buy back' scheme since such ascheme does not generate additional funds for the Company and could also limitour ability to raise additional funds through more cost effectivenon-prospectus offers.
Website
The Company's website has recently been redesigned and is continually updatedto provide easier access to information about the Company. Please do visit theweb site at the following location and your feedback will be most appreciated:www.baronsmeadvct3.co.ukOutlookThe outlook for the UK economy is uncertain with the volatility caused by theEurozone debt crisis and the continued lack of bank finance manifesting inlimited growth. The Manager's focus on identifying high growth niches withinits specialist sectors, on limiting the amount of leverage in the portfolio andits hands on approach to supporting and guiding its investments has ensuredthat the portfolio has largely avoided distress to date. The Board believesthat this approach should ensure that Baronsmead VCT 3 is well placed to steerthrough these current economic conditions and continue to prosper.Anthony TownsendChairman17 August 2012
Table of Investments and Realisations
Investments in the six months to 30 June 2012
Company Location Sector Activity Book cost £'000 Unquoted investments New Ingleby (1885) Limited London Business Company seeking to 1,000 Services acquire businesses in the business services sector Ingleby (1886) Limited London Business Company seeking to 1,000 Services acquire businesses in the business services sector Ingleby (1887) Limited London Consumer Company seeking to 1,000 Markets acquire businesses in the consumer markets sector Happy Days Consultancy Newquay Healthcare Provider of nursery based 833Limited & Education childcare in Cornwall & Plymouth across 16 settings Follow on Crew Clothing Holdings London Consumer Multi-channel clothing 360Limited Markets retailer Total unquoted investments 4,193 AIM-traded & listed investments
New Zattikka plc London TMT* Online games development 316 Follow on Dods Group plc London TMT* Political information and 678 communication Inspired Energy plc Kirkham Business Energy procurement 100 Services consultancy services Driver Group plc Rossendale Business Dispute resolution 60 Services Accumuli plc Salford TMT* Managed IT security 5 Total AIM-traded and listed 1,159investments
Collective investment vehicle
Follow on Wood Street Microcap 1,000Investment Fund Total collective investment vehicle
1,000
Total investments in the period
6,352
* Technology, Media and Telecommunications ("TMT")
Realisations in the six months to 30 June 2012
Company First 31 Realised Overall investment December profit/ multiple date 2011 (loss) return valuation this £'000 period £'000 Unquoted realisations TVC Group Limited Full trade sale Jul 08 1,298 26 ^ MLS Limited Loan repayment Jul 06 121 - 1.0 Total unquoted 1,419 26 realisations AIM-traded & listed realisations Stagecoach Theatre Full trade sale Dec 01 153 140 0.7Arts plc
Real Good Food Company Full market sale Dec 03 160 65
0.4(The) plc Prologic plc Full trade sale Jun 04 103 48 0.5 Clarity Commerce Full trade sale Oct 09 29 2 0.6Solutions plc
Colliers International Written off Jul 01 4 (4)
0.0UK plc
Total AIM-traded & listed realisations 449 251 Total realisations in the period 1,868 227â€
^ Not disclosed
†Proceeds of £8,000 were also received in respect of Getting Personal Limited, which had been sold in the year ended 31 December 2011.
Investment Classification at 30 June 2012
By Sector* % Business Services 31 Consumer Markets 18 Financial Services 2 Healthcare & Education 16 Technology, Media & Telecommunications 33("TMT") Total Assets* % Unquoted - loan stock 38 Unquoted - ordinary & preference shares 13 AIM, listed & collective investment vehicle 35 Listed interest bearing securities 11 Net current assets 3Time Investment Held* % Less than 1 year 20 Between 1 and 3 years 14 Between 3 and 5 years 15 Greater than 5 years 51
* at 30 June 2012 valuation
Summary Investment Portfolio
Company Sector Book 31 30 June % of % of % of cost December 2012 net equity equity £'000 2011 valuation assets held by held valuation £'000 Baronsmead by £'000 †VCT 3 plc all funds* Unquoted Nexus Vehicle Business 2,368 5,658 4,713 6.9 12.6 57.4Holdings Limited Services CableCom TMT 1,381 3,707 3,881 5.7 10.6 48.0Networking Holdings Limited Crew Clothing Consumer 1,344 2,676 3,047 4.5 6.1 25.5Holdings Limited Markets Fisher Outdoor Consumer 1,423 1,777 2,771 4.0 10.5 44.0Leisure Holdings Markets Limited Independent Healthcare & 1,599 1,293 2,667 3.9 16.2
65.7
Living Services Education
Limited CSC (World) TMT 1,606 1,940 2,282 3.3 8.8 40.0Limited Kafevend Consumer 1,252 1,991 2,204 3.2 15.8 66.5
Holdings Limited Markets
Valldata Group Business 1,616 1,694 1,749 2.5 8.9 40.6Limited Services Inspired Business 796 1,368 1,382 2.0 5.0 22.5Thinking Group Services Limited Independent Healthcare & 1,346 1,346 1,346 2.0 10.9 55.0Community Care Education Management Limited MLS Limited TMT 389 1,043 1,122 1.6 5.3 22.5 Arcas Business 1,000 1,000 1,000 1.5 9.6 48.6Investments Services Limited HealthTech Healthcare & 1,000 1,000 1,000 1.5 9.6 48.6Innovation Education Partners Limited Quest Venture Business 1,000 1,000 1,000 1.5 9.6 48.6
Partners Limited Services
Ingleby (1885) Business 1,000 - 1,000 1.5 9.6 48.6Limited Services Ingleby (1886) Business 1,000 - 1,000 1.5 9.6 48.6Limited Services Ingleby (1887) Consumer 1,000 - 1,000 1.5 9.6 48.6Limited Markets Happy Days Healthcare & 833 - 833 1.2 8.4 42.5Consultancy Education Limited Playforce Business 1,033 512 511 0.7 9.7 44.0
Holdings Limited Services
Music Festivals Consumer 400 400 400 0.6 N/A
N/A
plc Loan note Markets
Other 4,346 1,084 440 0.7 investments Total unquoted 27,732 29,489 35,348 51.8 AIM IDOX plc TMT 1,038 2,661 4,421 6.5 3.2 9.6 Netcall plc TMT 869 842 1,337 1.9 4.1 20.4
Murgitroyd Group Business 319 791 843 1.2 3.1
6.2plc Services Jelf Group plc Financial 761 877 762 1.1 1.4 6.3 Services Escher Group TMT 614 564 759 1.1 1.9 9.7Holdings plc Tasty plc Consumer 469 547 741 1.1 2.5 17.1 Markets TLA Worldwide Business 620 620 651 1.0 4.9 24.3plc Services Dods Group plc TMT 1,219 105 649 0.9 6.3 29.9 FFastFill plc TMT 314 448 601 0.9 0.9 6.1
Driver Group plc Business 563 259 568 0.8 4.1
19.4 Services Accumuli plc TMT 338 473 556 0.8 3.5 19.9
Vianet Group plc Business 646 388 518 0.7 1.8
9.6 Services Sinclair IS Healthcare & 524 399 479 0.7 0.4 2.4Pharma plc Education Paragon Healthcare & 200 425 400 0.6 3.1 17.3Entertainment Education Limited Anpario plc Healthcare & 275 315 339 0.5 2.0 14.8 Education Zattikka plc TMT 316 - 325 0.5 1.4 7.1
Quadnetics Group Business 296 261 319 0.5 0.6
2.1plc Services
Plastics Capital Business 473 321 317 0.5 1.7
9.8plc Services Electric Word TMT 616 312 312 0.5 5.2 28.8plc
Inspired Energy Business 300 217 310 0.4 2.4
11.8plc Services Other 5,910 3,128 3,098 4.6 investments Total AIM 16,680 13,953 18,305 26.8 Listed
Vectura Group Healthcare & 771 900 1,227 1.8 0.5
1.3plc Education Chime TMT 369 293 269 0.4 0.2 1.3Communications plc Marwyn Financial 525 81 68 0.1 0.3 1.8Management Services Partners plc Marwyn Value Financial 64 44 37 0.1 1.3 6.0Investors Services Limited Total listed 1,729 1,318 1,601 2.4 Listed interest bearing securities UK T-Bill 23/07/12 2,799 - 2,799 4.1 UK T-Bill 17/09/12 3,598 - 3,598 5.3 BlackRock ICS 490 1,590 490 0.7 plc - Institutional Sterling Liquidity Fund JP Morgan 490 1,590 490 0.7 Liquidity Funds - Sterling Liquidity Fund Total interest 7,377 3,180 7,377 10.8 bearing securities Collective 3,525 2,826 3,769 5.5 investment vehicle Wood Street Microcap Investment Fund Total collective 3,525 2,826 3,769 5.5 investment vehicle Total 57,043 50,766 66,400 97.3 investments Net current 1,853 2.7 assets Net assets 68,253 100.0
†The total investment valuation at 31 December 2011 per the table above does not agree to the audited accounts due to the purchases and sales since that date.
* All funds managed by the same investment manager, ISIS EP LLP including Baronsmead VCT 3.
AIM & Listed Portfolio Concentration Analysis as at 30 June 2012
Investment ranking Book cost Valuation % ofby valuation £'000 £'000 quoted portfolio Top Ten 6,994 11,991 60.2 11-20 4,247 4,133 20.8 21-30 3,836 2,724 13.7 31+ 3,332 1,058 5.3 Total 18,409 19,906 100.0
Independent Review Report to Baronsmead VCT 3 plc
Introduction
We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the Income Statement, Reconciliation of Movement inShareholders' Funds, Balance Sheet and Statement of Cash Flows and the relatedexplanatory notes. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements.This report is made solely to the Company in accordance with the terms of ourengagement to assist the Company in meeting the requirements of the Disclosureand Transparency Rules ("the DTR") of the UK's Financial Services Authority("the UK FSA"). Our review has been undertaken so that we might state to theCompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the Company for our review work, forthis 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 FSA.
As disclosed in note 1, the annual financial statements of the Company areprepared in accordance with UK Accounting Standards and applicable law (UKGenerally Accepted Accounting Practice). The condensed set of financialstatements included in this half-yearly financial report has been prepared inaccordance with the Statement Half-Yearly Financial Reports as issued by the UKAccounting Standards Board.Our responsibilityOur responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financialand accounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordancewith International Standards on Auditing (UK and Ireland) and consequently doesnot enable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion.ConclusionBased on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 30 June 2012 is not prepared, in allmaterial respects, in accordance with the Statement Half-Yearly FinancialReports as issued by the UK Accounting Standards Board and the DTR of the UKFSA.Catherine Burnetfor and on behalf ofKPMG Audit PlcChartered AccountantsEdinburgh17 August 2012
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 Statement 'Half-yearly financial reports' issued by the UK Accounting Standards Board; * 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 Company during that period; and any changes in the
related party transactions described in the last annual report that could do so. On behalf of the Board,Anthony TownsendChairman17 August 2012Unaudited Income Statement
For the six months to 30 June 2012
Six months to 30 June Six months to 30 June Year to 31 December 2012 2011 2011* Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Unrealised gains on - 5,206 5,206 - 5,418 5,418 - 1,403 1,403 investments Realised gains on - 285 285 - 211 211 - 1,824 1,824 investments Income 343 - 343 876 - 876 1,963 - 1,963 Investment management (202) (606) (808) (198) (594) (792) (385) (1,155) (1,540)fee Other expenses (188) - (188) (185) - (185) (365) - (365) (Loss)/ profit on (47) 4,885 4,838 493 5,035 5,528 1,213 2,072 3,285 ordinary activities before taxation Taxation on ordinary - - - (88) 88 - (244) 244 - activities (Loss)/ profit on (47) 4,885 4,838 405 5,123 5,528 969 2,316 3,285 ordinary activities after taxation Return per ordinary share: Basic (0.08p) 7.82p 7.74p 0.67p 8.48p 9.15p 1.61p 3.85p 5.46p
* Figures as at 31 December 2011 are audited.
Unaudited Reconciliation of Movement in Shareholders' Funds
For the six months to 30 June 2012
Six Six Year to months to months to 31 December 30 June 30 June 2011 2012 2011 £'000* £'000 £'000 Opening shareholders' funds 60,095 64,643 64,643 Profit for the period 4,838 5,528 3,285
Gross proceeds of share issues 4,135 -
-
Purchase and sale of shares for treasury (616) (736) (613)
Expenses of share issue and buybacks (199) (4)
(6) Dividends paid - (2,729) (7,214) Closing shareholders' funds 68,253 66,702 60,095
* Figures as at 31 December 2011 are audited.
Notes
1. The unaudited interim results which cover the six months to 30 June 2012 have been prepared in accordance with applicable accounting standards and adopting the accounting policies set out in the statutory accounts of the Company for the year to 31 December 2011.
2. Return per share is based on a weighted average of 62,481,892 ordinary shares in issue (30 June 2011 - 60,393,473, 31 December 2011 - 60,112,945).
3. Earnings for the first six months to 30 June 2012 should not be taken as a guide to the results of the full financial year to 31 December 2012.
4. During the six months to 30 June 2012 the Company purchased 656,897 ordinaryshares to be held in treasury at a cost of £616,000. At 30 June 2012 theCompany holds 8,279,214 ordinary shares in treasury. These shares may bere-issued below Net Asset Value as long as the discount at issue is narrowerthan the average discount at which the shares were bought back.
Excluding treasury shares, there were 63,194,037 ordinary shares in issue at 30 June 2012 (30 June 2011 - 59,862,534, 31 December 2011 - 59,997,534).
5. The interim dividend of 3.0 pence per ordinary share (3.0 pence capital) will be paid on 21 September 2012 to shareholders on the register on 7 September 2012. The ex-dividend date is 5 September 2012.
6. The financial information contained in this half-yearly financial reportdoes not constitute statutory accounts as defined in Section 434 of theCompanies Act 2006. The information for the year to 31 December 2011 has beenextracted from the latest published audited financial statements. The auditedfinancial statements for the year to 31 December 2011, which were unqualified,have been filed with the Registrar of Companies. No statutory accounts inrespect of any period after 31 December 2011 have been reported on by theCompany's auditors or delivered to the Registrar of Companies.
7. In accordance with the Companies (Shareholders Rights) Regulation 2009, copies of the half-yearly financial report have been made available to shareholders and will be available from the Registered Office of the Company at 100 Wood Street, London EC2V 7AN.
Unaudited Balance SheetAs at 30 June 2012 As at As at As at 30 June 30 June 31 December 2012 2011 2011 £'000 £'000 £'000* Fixed assets Unquoted investments 35,348 31,115 30,787 Traded on AIM 18,305 14,472 14,402 Listed on LSE 1,601 1,799 1,318 Traded on NYSE - 175 -
Collective investment vehicle (Wood Street Microcap Investment Fund) 3,769 3,140
2,826
Listed interest bearing securities 7,377 15,694 9,979 Investments 66,400 66,395 59,312 Current assets Debtors 305 632 562 Cash at bank and on deposit 2,052 179 683 2,357 811 1,245 Creditors (amounts falling due within (504) (504) (462)one year) Net current assets 1,853 307 783 Net assets 68,253 66,702 60,095 Capital and reserves Called-up share capital 7,147 6,762 6,762 Share premium account 18,566 15,012 15,012 Capital redemption reserve 10,862 10,862 10,862 Capital reserve 22,047 25,553 24,262 Revaluation reserve 9,357 7,770 2,876 Revenue reserve 274 743 321 Equity shareholders' funds 68,253 66,702 60,095
* Figures as at 31 December 2011 are audited.
As at As at As at 30 June 30 June 31 December 2012 2011 2011 £'000 £'000 £'000* Net asset value per share 108.01p 111.43p 100.16p Number of ordinary shares in 63,194,037 59,862,534 59,997,534circulation Treasury net asset value per share 106.56p 109.68p
99.16p
Number of ordinary shares in 63,194,037 59,862,534 59,997,534 circulation Number of ordinary shares held in 8,279,214 7,757,317 7,622,317 treasury Number of listed ordinary shares in 71,473,251 67,619,851 67,619,851 issue
* Figures as at 31 December 2011 are audited.
Unaudited Statement of Cash Flows
For the six months to 30 June 2012
Six months Six months Year to to to 30 June 30 June 31 December 2012 2011 2011 £'000 £'000 £'000*
Net cash outflow from operating activities (383) (260) (74)
Capital expenditure and financial (1,568) 2,640 7.322 investment Equity dividends paid - (2,729) (7,214)
Net cash (outflow)/inflow before financing (1,951) (349) 34
Net cash inflow/(outflow) from financing 3,320 (740) (619) Increase/(decrease) in cash 1,369 (1,089) (585)
Reconciliation of net cash inflow/(outflow)
to movement in net cash Increase/(decrease) in cash 1,369 (1,089) (585) Opening cash position 683 1,268 1,268 Closing cash position 2,052 179 683 Reconciliation of profit on ordinary activities before taxation to net cash outflow from operating activities Profit on ordinary activities before 4,838 5,528 3,285 taxation Gains on investments (5,491) (5,629) (3,227) Changes in working capital and other 270 (159) (132)non-cash items
Net cash outflow from operating activities (383) (260) (74)
* Figures as at 31 December 2011 are audited.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed interest investments, cash andliquid resources. Its principal risks are therefore market risk, credit riskand liquidity risk. Other risks faced by the Company include economic, loss ofapproval as a Venture Capital Trust, investment and strategic, regulatory,reputational, operational and financial risks. These risks, and the way inwhich they are managed, are described in more detail under the headingPrincipal risks, risk management and regulatory environment within the BusinessReview and Notes in the Company's Annual Report and Accounts for the year to 31 December 2011. The Company's principal risks and uncertainties have not changedmaterially since the date of that report.
Related Parties
ISIS EP LLP ('the Manager') manages the investments of the Company. The Manageralso provides or procures the provision of secretarial, accounting,administrative and custodian services to the Company. Under the managementagreement, the Manager receives a fee of 2.5 per cent per annum of the netassets of the Company. This is described in more detail under the headingManagement within the Report of the Directors in the Company's Annual Reportand Accounts for the year to 31 December 2011. During the period, the Companyhas incurred management fees of £808,000 and secretarial and accounting fees of£60,000 payable to the Manager.
Going Concern
After making enquiries, and bearing in mind the nature of the Company'sbusiness and assets, the Directors consider that the Company has adequateresources to continue in operational existence for the foreseeable future. Inarriving at this conclusion the Directors have considered the liquidity of theCompany and its ability to meet obligations as they fall due for a period of atleast twelve months from the date that these financial statements wereapproved. As at 30 June 2012 the Company held cash balances, investments in UKGilts and Money Market Funds with a combined value of £9,429,000. Cash flowprojections have been reviewed and show that the Company has sufficient fundsto meet both its contracted expenditure and its discretionary cash outflows inthe form of the share buyback programme and dividend policy. The Company has noexternal loan finance in place and is therefore not exposed to any gearing
covenants.Corporate InformationDirectors Registrar and Transfer Office Anthony Townsend (Chairman)‡ Computershare Investor Services PLC Andrew Karney†PO Box 82 Gillian Nott OBE* The Pavilions Ian Orrock Bridgwater Road Bristol BS99 6ZZ Secretary Tel: 0870 889 3250 ISIS EP LLP Brokers Registered Office Matrix Corporate Capital LLP 100 Wood Street One Vine Street London EC2V 7AN London W1J 0AH Investment Manager Auditors ISIS EP LLP KPMG Audit Plc 100 Wood Street Saltire Court London EC2V 7AN 20 Castle Terrace Edinburgh EH1 2EG FPPE LLP (liquid assets only) Solicitors 100 Wood Street Norton Rose London EC2V 7AN 3 More London Riverside London SE1 2AQ Investor Relations Michael Probin VCT Status Adviser 020 7506 5796 PricewaterhouseCoopers LLP 1 Embankment Place Registered Number London WC2N 6RH 04115341
Website: www.baronsmeadvct3.co.uk
‡ Chairman of the Nomination Committee and Remuneration and Management Engagement Committee †Senior Independent Director * Chairman of the Audit and Risk Committee
Copies of the half yearly report will shortly be available from the following website: www.baronsmeadvct3.co.uk.
National Storage Mechanism
A copy of the Half-Yearly Report will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.hemscott.com/nsm.do .
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.
Related Shares:
Baronsmead 2vt