Half Yearly Report

RNS Number : 4112R

Neptune-Calculus Income &Growth VCT

20 August 2010

 

Neptune-Calculus Income and Growth VCT plc

 

 

Neptune-Calculus Income and Growth VCT is a tax efficient listed company which has the objective of generating long term capital growth and tax free dividends for investors. The Company is managed as a VCT in order that shareholders may benefit from the tax reliefs available.

The Company's investment policy is to invest approximately 75 per cent of the Company's funds in a diversified portfolio of holdings in qualifying investments, whether unquoted or traded on AIM. Investments are made selectively across a diverse range of sectors in companies which have the potential to generate growth and enhance their value. The Company does not invest in start-up and seed capital situations. The balance of the Company's investments can be invested in a combination of Neptune income funds and a portfolio of similar income generating UK listed shares and money market instruments.

Qualifying investments are managed by Calculus Capital Limited and non-qualifying investments are managed by Neptune Investment Management Limited.

 

Performance summary

	Six months to 30 June 2010
Return per Ordinary Share	(8.3)p
Net asset value per Ordinary Share	67.8 p
Cumulative dividends paid	11.0 p
Proposed interim dividend	1.0 p
	As at 31 July 2010*
Net asset value per Ordinary Share	67.5 p

*Being the latest practicable date prior to publication and including net revenue after 30 June 2010.

 

An analysis of the change in net assets per Ordinary Share is given in the Chairman's statement.

 

I am pleased to present our interim results for the Company for the six months ended 30 June 2010. Disappointingly, net assets per Ordinary Share on 30 June 2010 were 67.8 pence compared with 78.1 pence as at 31 December 2009. The decline is due to a combination of factors and these are summarised below:

Net assets per Ordinary Share as at 31 December 2009	78.1p
Payment of 2009 final dividend	(2.0)p
Movement in AIM investments	(3.7)p
Movement in Heritage House Media investment	(2.5)p
Movement in other unquoted investments	(1.1)p
Movement in Neptune funds	(1.4)p
Net income for the period	0.4p
Net assets per Ordinary Share as at 30 June 2010	67.8p

As shown above, we paid the 2009 final dividend of 2.0 pence per Ordinary Share in June following shareholder approval at the AGM. This payment took the total cumulative dividends paid on the Ordinary Shares since inception to 11.0 pence, giving a total return to date of 78.8 pence.

Our qualifying investments, which are in a combination of AIM companies and unquoted companies, are managed by Calculus Capital. Over the period under review, the quoted portfolio fell, on a like for like basis, by 18.0 per cent, compared with an increase in the FTSE AIM All-Share Index of 1.2 per cent. It should be noted however that this index is not a perfect benchmark since it is dominated by resource companies whose businesses are mainly or exclusively outside the UK, and which, in general, are not VCT qualifying.

The fall in the value of the AIM companies over the period is particularly disappointing. It primarily relates to two companies, EpiStem Holdings, a life sciences company, and Pressure Technologies, which supplies the global energy industry. The fundamentals of EpiStem Holdings have not changed, and are, arguably, stronger than at the start of the period, but sustained selling by some smaller shareholders in an illiquid market for the company's shares has negatively impacted the share price. Pressure Technologies' performance and share price have also suffered. The company designs and manufactures high pressure gas cylinders for use mainly by the global energy industry. New rig construction, which is a major driver of demand for Pressure Technologies' products, has been at a cyclical low and depressed the company's recent results. The effect on the share price has been compounded by the announcement of a moratorium on deep water drilling in the Gulf of Mexico and evidence of some protectionism in South Korea, which has a significant rig construction industry and is also an important market for the company's products. However, the impact of these factors is expected to be short term and the company remains well funded with a strong balance sheet.

There have been some counterbalancing uplifts in value, including Expansys, an online retailer of wireless technology. In early July, Expansys announced a £38 million reverse takeover of two telecoms businesses, Data Select Network Solutions and P J Media, as part of its strategy to become a much broader online electronics retailer.

The overall value of the unquoted portfolio has also fallen. This is due mainly to the reduction in the value of Heritage House Media and this is discussed further below. Terrain Energy, however, has increased in value following better than expected production results from a side track well drilled at the Keddington oil field in Lincolnshire. The company raised a further £750,000 in July with the intention of developing the existing portfolio and acquiring additional licence interests. Waterfall Services, a leading provider of catering services to the retirement home and education sectors, also continues to perform well, and has been a strong generator of employment. It is interesting to note that the group now employs nearly 2,500 people, which means that organic growth has created about 1,500 jobs. We have increased the fair value of our investment to reflect the continuing good performance.

The only new qualifying investment made during the period was in February, when we invested a further £126,000 in Heritage House Media, which is the market leader in the provision of services to the UK heritage market (museums, historic houses and other similar visitor attractions), as part of a £600,000 fundraising. The fundraising formed part of a package of measures to improve performance and the company expects to appoint a new Chief Executive in the very near future to help drive the business forward. Market conditions for UK attractions continue to be challenging however, and in light of these issues we have reduced the fair value of our investment.

Our non-qualifying investments are managed by Neptune Investment Management and comprise holdings in the Neptune Income Fund and Neptune Quarterly Income Fund as well as £810,000 held in cash funds. Both Neptune Funds are biased towards large cap stocks and fell by 6.4 and 3.9 per cent respectively over the period. The market's strength rapidly unwound during the period from April to June as various economic indicators pointed to a sub-trend growth environment.

A more detailed analysis of investment performance can be found in the respective Investment Managers' Reviews that follow this statement.

In line with our policy of maximising tax-free dividends to shareholders, the Directors are pleased to declare an interim dividend of 1 penny per Ordinary Share payable on 18 October 2010 to shareholders on the register on 24 September 2010.

As mentioned in the 2009 annual report, our current intention is to focus any new investment on more mature unquoted companies where we can maintain closer scrutiny of performance and exert greater influence. Economic conditions for companies doing business in the UK remain challenging although the economic environment and company performance, in general, seem to be better than in 2009. However, it remains to be seen how forthcoming reductions in public spending will impact upon overall economic performance.

 

 

Philip Stephens

Chairman

 

Calculus Capital advises the Company in respect of qualifying investments made by the Company.

At 30 June the portfolio of qualifying investments comprised 16 companies, made up of both AIM quoted and unquoted stocks. The overall qualifying percentage, calculated on an HM Revenue & Customs basis, at the end of June 2010 was 74.8 per cent. Although this is slightly lower than the qualifying percentage reported in the Interim Management Statement released on 18 May 2010, the calculation now includes the funds raised in the 2008 top-up offers. If the funds raised in the 2008 top-up offers were excluded, the overall qualifying percentage at the end of June would be 78.3 per cent.

The overall value of the quoted portfolio has declined by 18.0 per cent over the last six months. This compares with a rise in the FTSE AIM All Share Index of 1.2 per cent over the same period, although it should be noted that the FTSE AIM All Share Index has a heavy weighting towards energy and resource companies whose businesses are generally outside the UK and which are not VCT qualifying. The fall is very disappointing because it relates mainly to the decline in the share price of two companies, EpiStem Holdings and Pressure Technologies, both of which we regard as having sound long term prospects.

The 'fundamentals' of EpiStem Holdings, a life sciences company, are arguably stronger than at the beginning of the period. In a trading statement issued in July, the company said that sales in all of its business divisions had made strong progress and it expected to report growth in year on year after tax profit for the financial year to 30 June 2010. Trading in the company's shares on AIM is relatively light and sustained selling by some small shareholders has led to a fall in the share price.

Pressure Technologies designs and manufactures high pressure cylinders for use mainly by the global energy industry. New rig construction, which is a major driver of demand for the company's products, is still recovering from a cyclical low which depressed its recent results. The effect on the share price has been compounded by the announcement of a moratorium on deepwater drilling in the Gulf of Mexico and evidence of some protectionism in South Korea, which has a significant rig construction industry and is a major market for Pressure Technologies' products. Nevertheless, the company announced interim pre-tax profits for the period to 3 April 2010 of £1.5 million and the balance sheet remains strong. We regard the market pressures as short term.

The best performer in the AIM portfolio over the last six months has been Expansys, a leading online retailer of wireless technology. In January, the board of Expansys was strengthened with the appointment of the ex-Managing Director of the Carphone Warehouse as the new Chief Executive. Reaction to the appointment was positive, and as at 30 June 2010, Expansys shares had risen to a bid price of 13.25 pence, up from 7 pence as at 31 December 2009. In early July, Expansys announced a £38 million reverse takeover of two telecoms businesses, Data Select Network Solutions and P J Media, as part of its strategy to become a much broader online electronics retailer.

Other positive developments in the quoted portfolio include Optare, which announced in May that it had won a £15 million order from the Greater Manchester Integrated Transport Authority to supply and maintain a fleet of 66 hybrid buses. The company believes there will be significant further growth in this area as the environmental regulations that operators must meet continue to tighten. In July, Optare announced that Ashok Leyland Limited, part of the Hinduja Group, intends to acquire a shareholding of 25 per cent for an investment of £5 million.

Elsewhere, there has been some disappointing news. As mentioned in the 2009 annual report, Hexagon Human Capital entered administration in March. The company was engaged in a 'buy and build' strategy in the executive recruitment sector but struggled under the weight of its borrowings and the difficult market conditions. The holding in Sport Media Group was also disposed of during March as it was felt that there was little prospect of an uplift in value.

The value of the unquoted portfolio has also fallen. Whilst we have reduced the fair value of the holdings in Triage Holdings, Heritage House Media and RMS Holdings, we have increased the fair value of the holdings in both Terrain Energy and Waterfall Services.

Drilling took place at the Keddington oil field in Lincolnshire during April, where Terrain Energy has a 15 per cent interest in the licence. Early production from the side track well has exceeded pre-drill estimates and high levels of gas have been observed. The operator of the Keddington licence, Egdon Resources, is now monitoring the field to establish its long term production capacity and examine the possibility of utilising the gas produced to generate electricity and improve cashflow. In July, Terrain Energy raised a further £750,000 with the intention of developing the existing portfolio and acquiring additional licence interests. Further updates concerning Terrain Energy are available under the 'news' section of the Calculus Capital website.

In February, Waterfall Services began a five year contract with Jewish Care worth £6 million per annum. The company achieved turnover of over £36 million in the year to 28 March 2010 and continues to perform well and win new contracts. Since we invested back in 2007, the group has been a strong generator of employment and now employs nearly 2,500 people. Organic growth has created about 1,500 jobs, including approximately 500 relating to the Jewish Care contract. We have increased the fair value of the investment to reflect the continuing good performance.

The only new investment in the period was the £126,000 follow-on investment in Heritage House Media made during February. The company expects to appoint a new Chief Executive shortly to help drive the business forward, but as trading conditions continue to be challenging, we have reduced the fair value of the investment.

There are now signs of progress in the long-running business rates dispute between the Valuation Office Agency and UK port operators, which includes RMS Group Holdings. In early June, the new coalition government announced a moratorium on the backdated bills until April 2011 whilst it examines options to cancel the demands altogether. We continue to be conservative in our valuation of RMS Group Holdings, allowing for the effects of higher current rates charges as well as any backdated liability. In trading terms, 2010 to date has been more buoyant than in the previous year and the company expects to redeem part of the mezzanine financing provided by the investment syndicate before the end of 2010.

The Chief Executive of Triage Holdings has been replaced by the Finance Director following a period of disappointing performance. As part of this process we purchased the Company's pro-rata share of the outgoing Chief Executive's equity, with the intention of selling these shares back to the management team in the future should they meet agreed performance targets. 2010 to date has been more promising as the company is ahead of budget and is winning new business.

The outlook for the UK economy remains cautious, although the environment for UK focused companies seems to be better than 2009. Over the medium term, the key factors shaping the future path of the UK economy are likely to be the reversal of an expansionary monetary policy coupled with a reduction in public expenditure. Evidence also indicates that inflation is picking up, and this may pose a further medium term threat. However, we believe that the current market remains attractive for investment as access to finance for smaller companies remains tight and valuations have reached more realistic levels.

 

John Glencross

Calculus Capital Limited

20 August 2010

 

The Neptune-Calculus Income and Growth VCT invests in the Neptune Income Fund and the Neptune Quarterly Income Fund. As a guide to the portfolio's performance, the Neptune Income Fund and Neptune Quarterly Income Fund posted negative returns of 6.4 per cent and 3.9 per cent respectively for the six months under review. By comparison, the FTSE All-Share Index fell by 6.2 per cent over the same period.*

The first three months of 2010 saw markets continue to rally, with the banking, information technology, materials and industrials sectors leading the FTSE All Share higher. This was a challenging market for UK equity income funds as the best performers were cyclical stocks which do not pay high dividends. We remained underweight in banks, holding positions in the only two that pay reasonable dividends. This hurt our relative performance as RBS, Barclays and Lloyds all outperformed in the first quarter. We were, however, overweight in industrials, with two of the best performing stocks in the portfolio being Premier Farnell and Electrocomponents, suppliers and distributors of electrical components. The industry is experiencing structural growth and market consolidation which the top two players are benefiting from. These companies are well-placed to continue to generate good profit growth due to their superior internet-based ordering systems and excellent distribution services.

Moving into the second half of the period under review, the market's strength rapidly unwound as fears over European sovereign debt, mixed economic data in the US and lower forecast growth for China all pointed to a sub-trend growth environment. We also saw the removal of some of the stimulus packages, such as the US's first-time homebuyer tax credit and the announcement of higher taxes in the UK, including a rise in VAT to 20 per cent.

The market applauded the severity of the UK Emergency Budget as it should halt any fears regarding sterling or UK debt. It will, however, limit growth in consumer spending given the higher taxes and the inevitable thousands of job cuts in the public sector. This high level of uncertainty led to the outperformance of the defensive sectors, such as consumer staples and utilities, while the materials and industrials sectors pared back the gains they made in the first quarter of 2010.

BP's disaster was a significant shock to the UK income sector, with its share price falling 48 per cent in the quarter and the subsequent suspension of its dividend - a crucial consideration for the funds. We therefore exited our positions in BP. Conversely, high quality companies that delivered earnings in line or ahead of expectations continued to perform well. For example Halma, a manufacturer of safety sensors, was one of the top performers in both the Neptune Income and the Neptune Quarterly Income funds whilst, significantly, its dividend increase was the thirty-first consecutive year that the company raised it by more than 5 per cent.

Looking to the second half of the year, the funds will maintain their focus on high quality, well-funded companies that are capable of growing in a tough economic environment. Furthermore, we believe that dividend yields will form an important component of total return this year. Therefore we will ensure that every stock in the portfolio contributes to a sustainable stream of income and that the funds continue to protect and grow their capital.

 

Robin Geffen

Neptune Investment Management Limited

20 August 2010

 

*Source: Lipper, A Accumulation share class performance, IMA UK Equity Income sector, in sterling with no initial charges, net income reinvested to 30.06.10. Past performance is not a guide for future performance.

 

This review has been prepared for Neptune-Calculus Income and Growth VCT only and should not be relied upon by parties seeking to make their own investments. This review may contain analysts' personal recommendations and as such this review is deemed to be impartial research. We do not undertake to advise anyone other than Neptune-Calculus Income and Growth VCT as to any change of our views. Neptune Investment Management Limited is authorised and regulated by the Financial Services Authority.

 

The ten largest holdings by value are included below:

 

 

As at 30 June 2010

	Cost	Valuation	Percentage of portfolio
	£	£	%
AIM investments (quoted equity)
EpiStem Holdings plc*	251,261	697,462	8.3
Other AIM investments*	2,697,215	1,169,070	14.0
Unquoted equity investments
RMS Group Holdings Limited*	100,044	370,037	4.4
Triage Holdings Limited*	50,589	76,982	0.9
Waterfall Services Limited	50,129	406,326	4.8
Terrain Energy Limited	410,000	459,200	5.5
Heritage House Media Limited	147,369	-	-
Other unquoted equity investments	125,000	8,438	0.1
Unquoted preference shares
Triage Holdings Limited preference shares	357,720	357,720	4.3
Waterfall Services Limited preference shares	116,667	116,667	1.4
Unquoted bonds
Heritage House Media Limited loan stock Ɨ	1,148,599	839,481	10.0
RMS Group Holdings Limited loan stock	400,000	400,000	4.8
Waterfall Services Limited loan stock	333,333	333,333	4.0
Triage Holdings Limited loan stock	74,280	74,280	0.9
Other unquoted loan stocks	45,000	45,000	0.5
Non-qualifying equity investments and loan stock* Ɨ	(318,353)	(14,771)	(0.2)
Total qualifying investments	5,988,853	5,339,225	63.7
Quoted funds
Neptune Quarterly Income Fund Income Units	1,249,318	1,112,738	13.3
The Neptune Income Fund Income A Class	1,260,819	1,107,682	13.2
Unquoted funds
Fidelity Sterling Fund distributing shares class A	494,059	494,059	5.9
GS Sterling Liquid Reserves	375	375	-
SWIP Global Liquidity Fund	317,000	317,000	3.7
Non-qualifying equity investments and loan stock* Ɨ	318,353	14,771	0.2
Total non-qualifying investments	3,639,924	3,046,625	36.3
Total investments	9,628,777	8,385,850	100.0

 

* The valuations of certain investments include small purchases made which are non-qualifying investments. These cost £9,235 and are valued at £14,771.

Ɨ The valuation of Heritage House Media Limited loan stock includes rolled up interest which is non-qualifying. This cost £309,118 and is valued at £nil.

 

 

		Six months to 30 June 2010			Six months to 30 June 2009			Year to 31 December 2009*
		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments at fair value		-	(1,079)	(1,079)	-	78	78	-	191	191
Investment income		193	-	193	198	-	198	417	-	417
Investment management fee	6	(18)	(54)	(72)	(24)	(73)	(97)	(48)	(145)	(193)
VAT recovered	6	-	-	-	-	-	-	4	11	15
Other expenses		(75)	-	(75)	(74)	-	(74)	(157)	-	(157)
Return/(deficit) on ordinary activities before finance charges and taxation		100	(1,133)	(1,033)	100	5	105	216	57	273
Finance charges		-	-	-	(50)	(235)	(285)	(50)	(235)	(285)
Taxation on ordinary activities		(8)	8	-	(1)	-	(1)	(15)	12	(3)
Return/(deficit) attributable  to Ordinary shareholders		92	(1,125)	(1,033)	49	(230)	(181)	151	(166)	(15)
Return per Ordinary Share	3	0.74p	(9.07)p	(8.33)p	0.71p	(3.31)p	(2.60)p	1.56p	(1.71)p	(0.15)p

 

* These figures are audited.

 

The total column of this statement is the profit and loss account of the Company.

 

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

 

The accompanying notes are an integral part of this statement.

 

 

 

	Share capital	Share premium	Special reserve	Capital reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
For the period 1 January 2010 to 30 June 2010
1 January 2010	1,240	631	10,271	(2,654)	202	9,690
Net (deficit)/return after taxation for the period	-	-	-	(1,125)	92	(1,033)
Dividends paid	-	-	(46)	-	(202)	(248)
30 June 2010	1,240	631	10,225	(3,779)	92	8,409
For the period 1 January 2009 to 30 June 2009
1 January 2009	410	281	3,187	(759)	77	3,196
C Share conversion	830	350	7,097	(1,729)	209	6,757
Net (deficit)/return after taxation for the period	-	-	-	(230)	49	(181)
Dividends paid	-	-	-	-	(124)	(124)
30 June 2009	1,240	631	10,284	(2,718)	211	9,648
For the year 1 January 2009 to 31 December 2009*
1 January 2009	410	281	3,187	(759)	77	3,196
C Share conversion	830	350	7,097	(1,729)	209	6,757
Net (deficit)/return after taxation for the year	-	-	-	(166)	151	(15)
Dividends paid	-	-	(13)	-	(235)	(248)
31 December 2009	1,240	631	10,271	(2,654)	202	9,690

 

* These figures are audited.

 

The accompanying notes are an integral part of this statement.

 

 

Note		30 June 2010  £'000	30 June 2009 £'000	31 December 2009* £'000
Fixed Assets
Investments at fair value through profit or loss		8,386	9,491	9,602
Current Assets
Debtors		58	69	33
Cash at bank		92	208	170
		150	277	203
Creditors: Amounts falling due within one year
Creditors		(127)	(120)	(115)
Net Current Assets		23	157	88
Net Assets		8,409	9,648	9,690
Represented by:
CALLED UP SHARE CAPITAL AND RESERVES
Share capital		1,240	1,240	1,240
Share premium		631	631	631
Special reserve		10,225	10,284	10,271
Capital reserve - investment holding loss		(1,244)	(2,430)	(2,317)
Capital reserve - other		(2,535)	(288)	(337)
Revenue reserve		92	211	202
Total Ordinary shareholders' funds		8,409	9,648	9,690
Net asset value per Ordinary Share	4	67.81p	77.80p	78.14p

 

* These figures are audited.

 

The accompanying notes are an integral part of this statement.

 

 

 

 

 

 

 

Note		Six months to 30 June 2010 £'000	Six months to 30 June 2009 £'000	Year to 31 December 2009* £'000
Operating activities
Investment income received		117	121	265
Deposit income received		-	1	1
Other income received		-	-	1
Investment management fees paid		(72)	(108)	(201)
Administration fees paid		(15)	(25)	(40)
Other cash payments		(78)	(88)	(139)
Net cash outflow from operating activities	5	(48)	(99)	(113)
Investing activities
Purchase of investments		(129)	(121)	(531)
Sale of investments		347	-	500
Net cash inflow/(outflow) from investing activities		218	(121)	(31)
Equity dividends paid		(248)	(124)	(248)
Financing
Net proceeds from C Share issue		-	1	6
Net proceeds from Ordinary Share issue		-	2	7
Net cash inflow from financing		-	3	13
Decrease in cash		(78)	(341)	(379)

 

* These figures are audited.

 

The accompanying notes are an integral part of this statement.

 

The unaudited half-yearly financial information does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006 and has not been reviewed nor audited by the auditors. This information has been prepared on the basis of the accounting policies used in the statutory financial statements of the Company for the year ended 31 December 2009. The statutory financial statements for the year ended 31 December 2009, which contained an unqualified auditors' report, have been lodged with the Registrar of Companies, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The Directors have declared an interim dividend of 1 penny per Ordinary Share. This dividend is payable on 18 October 2010 to shareholders on the register on 24 September 2010.

	Six months to 30 June 2010			Six months to 30 June 2009			Year to 31 December 2009
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	pence	pence	pence	pence	pence	pence	pence	pence	pence
Ordinary Share	0.74	(9.07)	(8.33)	0.71	(3.31)	(2.60)	1.56	(1.71)	(0.15)

 

Revenue return per Ordinary Share is based on the net revenue on ordinary activities attributable to the Ordinary Shares of £92,000 (30 June 2009: £49,000, 31 December 2009: £151,000) and on 12,400,991 (30 June 2009: 6,943,963, 31 December 2009: 9,694,903) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.

 

Capital return per Ordinary Share is based on the net capital deficit for the period of £1,125,000 (30 June 2009: £230,000, 31 December 2009: £166,000) and on 12,400,991 (30 June 2009: 6,943,963, 31 December 2009: 9,694,903) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.

 

Total return per Ordinary Share is based on the total deficit on ordinary activities attributable to the Ordinary Shares of £1,033,000 (30 June 2009: £181,000, 31 December 2009: £15,000) and on 12,400,991 (30 June 2009: 6,943,963, 31 December 2009: 9,694,903) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.

	30 June 2010	30 June 2009	31 December 2009
	pence	pence	pence
Ordinary Shares of 10p each	67.81	77.80	78.14

The basic net asset value per Ordinary Share is based on net assets (including current period revenue) of £8,409,000 (30 June 2009: £9,648,000, 31 December 2009: £9,690,000) and on 12,400,991 (30 June 2009: 12,400,991, 31 December 2009: 12,400,991) Ordinary Shares, being the number of Ordinary Shares in issue at the end of the period.

	Six months to 30 June 2010 £'000	Six months to 30 June 2009 £'000	Year to 31 December 2009 £'000
Net (deficit)/return before finance charges and taxation	(1,033)	105	273
Net capital deficit/(return)	1,133	(5)	(57)
(Increase)/decrease in debtors	(25)	(4)	23
Increase/(decrease) in creditors	12	(66)	(71)
Investment management fee charged to capital	(54)	(73)	(145)
VAT recovered credited to capital	-	-	11
Income reinvested	(81)	(55)	(144)
Taxation	-	(1)	(3)
Net cash outflow from operating activities	(48)	(99)	(113)

The Company's investments are managed by Calculus Capital Limited and Neptune Investment Management Limited. John Glencross, a Director of the Company has an interest in Calculus Capital Limited. The amounts paid to the Managers are disclosed below:

	Six months to 30 June 2010 £'000	Six months to 30 June 2009 £'000	Year to 31 December 2009 £'000
Investment management fee	72	97	193
VAT recovered	-	-	(15)
	72	97	178

The half-yearly financial report, which has not been audited or reviewed by auditors pursuant to the Auditing Practices Board Guidance on Review of Half-Yearly Financial Information is the responsibility of, and has been approved by, the Directors. The Directors confirm that to the best of their knowledge the half-yearly financial report, which has been prepared in accordance with the Disclosure and Transparency rules and in accordance with applicable accounting standards including the statement 'Half-yearly financial reports' issued by the UK Accounting Standards Board, gives a true and fair view of the assets, liabilities, financial position and the deficit of the Company as at 30 June 2010.

The Directors confirm that the Chairman's Statement, the Investment Managers' Reviews, and note 6, include a fair review of the information required by DTR 4.2.7R, 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 financial year, and 4.2.8R of the Disclosure and Transparency Rules.

The Directors of Neptune-Calculus Income and Growth VCT plc are:

Philip Stephens

John Glencross

David Kempton

David McEuen

 

 

By order of the Board

Philip Stephens

Chairman

20 August 2010

 

The half yearly report will shortly be posted to shareholders. Copies of the report will also be available from the company's registered office at 104 Park Street, London, W1K 6NF or from the Qualifying Investment Manager's website at www.calculuscapital.com/neptunevct.aspx.

 

 

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