Interim Results

19th Aug 2008 13:37

 Neptune-Calculus Income and Growth VCT plc

 Half-yearly results for the six months ended 30 June 2008

CORPORATE POLICY AND PERFORMANCE SUMMARY

Objective

The Neptune-Calculus Income and Growth VCT is a generalist VCT which has the objective of providing investors with both capital growth and income. 

It is intended that approximately 75 per cent. of the Company's funds will be invested over a three year period in a diversified portfolio of holdings in qualifying investments including AIM companies. The Company does not invest in start-up and seed capital situations. The balance of the Company's investments will be invested in a combination of Neptune income funds and a portfolio of similar income generating UK listed shares and money market instruments.

Managers

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

Performance summary

	Ordinary Shares	C Shares
	Six months to	Six months to
	30 June 2008	30 June 2008
Return per share	(0.8)p	(2.5)p
Net asset value per share	97.0p	90.1p
Cumulative dividends paid and proposed	7.0p	3.0p

  Chairman's Statement 

I am delighted to present our half-yearly results for the Company for the six months ended 30 June 2008.

In a period of significant turbulence in the market and in the overall economy, I am pleased to be able to report a reasonably satisfactory set of results. Having said that, we still have to report that net asset values per share for the Ordinary Shares and the C Shares have fallen by 1.1 per cent. and 2.8 per cent. respectively. Clearly we have not been immune from the decline in the quoted market with the FTSE All-share index falling around 11 per cent. in the period, which has affected the values of our non-qualifying portfolios.

However, the values of our qualifying portfolios have remained relatively stable over the period, with the Ordinary and C Share portfolios showing modest rises equivalent to 3.1 pence and 2.9 pence respectively in terms of the impact on each fund's net asset value despite difficult market conditions. We have been encouraged by the performance of our unquoted qualifying investments, particularly Cater Plus Services and RMS Group Holdings. In our AIM portfolio, Portland Gas, Pressure Technologies and Epistem Holdings all posted significant increases in the six months.

Activity in the qualifying portfolio as far as further investment is concerned has been relatively quiet reflecting both the Manager's cautious stance and the fact that we are moving towards meeting the requirement for 70 per cent. of the portfolio to be invested in VCT qualifying investments by 31 December 2008. As is reported in the Investment Managers' Review (Qualifying Investments), good progress has been made and as at 30 June 2008, 66.3 per cent. of the combined Ordinary and C Share portfolios had been invested in qualifying investments.

Notwithstanding the negative return over the period, the Directors are pleased to declare interim dividends in respect of the Ordinary Shares and the C Shares each of 1p per Share at a cost to the Ordinary and C Share Funds of £41,008 and £87,768, respectively. Both dividends will be payable on 20 October 2008, to shareholders on the register on 26 September 2008. At the end of 2007, we launched an offer for subscription to raise new funds for the Company. The offer closed on 3 April 2008 and net of expenses raised £290,888 and £340,288 for the Ordinary and C Share Funds, respectively.

For some years a debate has been taking place between the Investment Trust movement and HMRC concerning the charging of VAT on management fees. I am pleased to report that HMRC have recently agreed to exempt VCTs from VAT on management fees and that recovery of VAT paid can be backdated for three years. We are taking action to reclaim the VAT which has been paid on management fees and are holding discussions with our Investment Managers. The timing and amount of any payment is still uncertain. As a result no contingent asset has been included within these financial statements.

As I said in my statement with the Annual Report, we hoped that the current turbulence in the equity markets and the economy might lead to more attractive qualifying investment opportunities in both the unquoted and quoted sectors. We believe that there is evidence to support this view, but we remain cautious and selective in our investment policy. 

Philip Stephens

Chairman 

  INVESTMENT MANAGERS' REVIEWS

Investment Manager's review (Qualifying investments)

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

Portfolio developments

At the 30 June, the Ordinary Share Fund's and C Share Fund's qualifying investments comprised 20 and 16 companies respectively. At 31 December 2007, we had met the HM Revenue & Customs requirement for the Ordinary Share Fund to be at least 70 per cent. invested in qualifying investments. The major VCT test which the Company needs to meet this year is to be at least 70 per cent. invested in qualifying investments for the Ordinary Share and C Share Funds combined by 31 December 2008. The Company has made good progress toward this target and at 30 June was 66.3 per cent. invested (calculated on an HM Revenue & Customs basis).

The qualifying portfolio comprises both unquoted and AIM quoted smaller companies. Both the Ordinary and C Share portfolios showed an uplift in value over the period, with an increase in the valuation of the unquoted investments offsetting a slight decline in the valuation of the quoted stocks. Conditions since the beginning of the year have been challenging. The FTSE AIM All-share Index has fallen over 8 per cent. during the period. The index has a heavy weighting of strongly performing natural resources stocks which, in general, are not eligible to be VCT qualifying investments. Without these, the index drop would have been much larger. 

Against this backdrop of difficult macro-economic and quoted market conditions, we are encouraged by the performance of both the unquoted and quoted components of the portfolios. Although there has been volatility within the portfolios with some stocks showing sharp rises and others heavy falls, , the Ordinary Share qualifying portfolio and the C Share qualifying portfolio each showed a rise equivalent to approximately 3.1 pence and 2.9 pence, respectively in terms of the impact on each Fund's net asset value. We are happy with the constituents of the portfolio. Most of the companies are making good progress, even where their share prices, if quoted, may not currently reflect this. Many of the quoted shares in the portfolio are on ratings which, historically, look exceptionally good long term value. The portfolio has little exposure to technology or early stage companies which may be more at risk in time of economic downturn. One should also highlight the fact that, in our AIM portfolio, we enjoyed some good performances, namely from Portland Gas, Pressure Technologies and Epistem Holdings, all of which have posted significant increases in the six months.

We have maintained a disciplined and selective approach to investment since the beginning of the year, conscious of the risks in investing in an environment in which asset values were generally falling. During the period, we increased our investment in two existing portfolio companies:

Company and activity	Type of investment	Ordinary Share Fund	C Share Fund
Relax Group plc (formerly Debts.co.uk plc) Consumer debt advisory and corporate insolvency services	Equity	£75,000	£175,000
Heritage House Media Limited Publishing and media services to the heritage sector	Equity Loan stock	£21,051 £22,454	£42,017 £44,915

Subsequent to the period end, we invested £300,000 as ordinary equity in AIM quoted Optare plc (formerly Darwen Holdings plc) which manufactures a range of diesel and hybrid low emission buses. The market for buses is being stimulated by central and local government transportation policies and operators' demand for fuel efficient and low emission vehicles. The investment was made on behalf of the C Share Fund.

All of the above investments were subscribed as part of a package of acquisition finance. In the case of Heritage House Media, the acquisition was of publishing contracts from VisitBritain, Britain's national tourism agency.

Outlook 

We continue to seek out attractive opportunities for unquoted investment. Such funding can cover the provision of expansion finance, finance for acquisitions and support for management buy-ins and buy-outs. These situations often offer an attractive balance of risk and reward but tend to be more complex and time consuming to complete than investment in quoted stocks. 

There is clear evidence that the UK economy is starting to slow as a weaker housing market, rising inflation and liquidity issues in the banking sector reduce GDP below historic trend. At present, it is not possible to say how sharp the slowdown will be. The Company has funds available for investment in qualifying investments. Whilst it can be uncomfortable to be in the midst of adverse economic and market conditions, we believe that such challenging conditions can be helpful in providing a flow of opportunities at attractive entry level valuations.

John Glencross

Calculus Capital Limited

  Investment manager's review (non-qualifying investments) 

Portfolio developments

The Neptune-Calculus Income and Growth VCT invests in the Neptune Income Fund and the Neptune Quarterly Income Fund along with a portfolio of individual stocks that broadly follows the aforementioned funds.

During the six months under review the FTSE All-share index fell 11.2 per cent.* It was led lower by the FTSE Small Cap and FTSE 250 indices, which lost 14.9 per cent.* and 12.7 per cent.* respectively. The period saw large-cap companies outperforming the rest of the market, excluding AIM, with the FTSE 100 falling 10.8 per cent.* As a result, the portfolio of non-qualifying investments benefited owing to our high large-cap weighting. As a guide to the portfolio's performance, the Neptune Income Fund and Neptune Quarterly Income Fund fell 12.2 per cent. and 9.2 per cent. respectively during the six months. This performance placed both funds in the top quartile of the IMA UK Equity Income sector over the same period, where the average fund declined by 14.6 per cent.*

UK equity markets failed to escape the bearish sentiment that has gripped global equities. The first quarter of 2008 was characterised by excessive volatility, a raft of profit warnings at company-specific level and further evidence that developing world economies were slowing. We also saw continued turmoil in the financials sector with the demise of Bear Stearns, a former heavyweight in the financial world, as well as further asset write-downs by the UK banks.

The second quarter saw investors grappling with a toxic cocktail of rising inflation expectations as oil and food prices soared, falling growth forecasts, low consumer confidence levels and further bad news from the financials sector as the credit crisis refused to abate. Against this uncompromising backdrop, the UK equity market continued to move lower, albeit after a rally extending to the midpoint of the quarter - a classic bear market rally in our opinion.

The majority of our performance can be attributed to our sector allocation and bias towards large-cap stocks. In terms of sectors, we had good exposure to the strongest performing areas in the market, which included energy, materials and healthcare, and equally importantly we maintained our zero-weight position in banks, which significantly underperformed. We made few changes other than to reduce our consumer weighting in favour of materials and energy. These changes reflect our views on the weak UK consumer and the combination of emerging market demand and tight supply driving prices of resources higher over the year.

  

Outlook

Looking forward to the remainder of 2008, we expect continuing volatility in global markets and remain cautious of financials and consumer-facing stocks. However, we are optimistic on the prospects for real world growth and expect evidence in the coming months of continuing strong growth in China, India, Latin America and Russia. The portfolio is positioned to benefit from exposure to global themes and from market leadership by large-cap stocks in the UK. Critically, our unconstrained approach gives the freedom to invest with conviction in the numerous investment opportunities remaining while - equally importantly - avoiding the poorest performing areas of the market.

Robin Geffen

Neptune Investment Management Limited

* Performance figures sourced from Lipper; based in Sterling; net income reinvested.

  INVESTMENT PORTFOLIOS 

Ordinary Share Fund portfolio

The ten largest holdings by value are included below:

As at 30 June 2008

	Cost	Valuation	Percentage of portfolio
	£	£	%
AIM investments (quoted equity)
Portland Gas plc*	160,052	373,267	9.5
Epistem Holdings plc*	125,434	181,901	4.6
Pressure Technologies plc	100,401	173,852	4.4
Other AIM investments	1,606,337	814,218	20.6
Unquoted equity investments
RMS Group Holdings Ltd	32,000	160,320	4.1
Cater Plus Services Limited	17,500	82,317	2.1
Triage Holdings Limited	16,000	66,400	1.7
Heritage House Media Limited	49,121	24,757	0.6
Other unquoted equity investments	100,558	30,000	0.8
Unquoted preference shares
Triage Holdings Limited preference shares	119,240	119,240	3.0
Cater Plus Services Limited preference shares	40,833	40,833	1.0
Unquoted bonds
Heritage House Media Limited loan stockƗ	212,252	212,252	5.4
RMS Group Holdings Limited loan stock	128,000	128,000	3.2
Cater Plus Services Limited loan stock	116,667	116,667	3.0
Triage Holdings Limited loan stock	24,760	24,760	0.6
Other unquoted loan stocks	120,000	120,000	3.0
Non-qualifying equity investments and loan stockƗ*	(25,202)	(22,270)	(0.6)
Total qualifying investments	2,943,955	2,646,514	67.1
Quoted funds
Neptune Quarterly Income Fund Income Units	439,047	531,533	13.5
The Neptune Income Fund Income A Class	435,453	494,507	12.5
Unquoted funds
Goldman Sachs Sterling Liquid Reserve Fund	250,000	250,000	6.3
Other unquoted funds	415	415	0.0
Non-qualifying equity investments and loan stockƗ*	25,202	22,270	0.6
Total non-qualifying investments	1,150,117	1,298,725	32.9
Total investments	4,094,072	3,945,239	100.0

*The valuations of certain Ordinary Share Fund investments include small purchases made which are non-qualifying investments. These cost £7,334 and are valued at £4,402.

 ƗThe valuation of Heritage House Media Limited loan stock includes £17,868 of rolled up interest which is non-qualifying.

  

INVESTMENT PORTFOLIOS 

C Share Fund portfolio

The ten largest holdings by value are included below:

As at 30 June 2008

	Cost	Valuation	Percentage of portfolio
	£	£	%
AIM investments (quoted equity)
Portland Gas plc	290,886	678,704	9.3
FSG Security plc	250,000	183,333	2.5
Epistem Holdings plc	125,001	181,453	2.5
Other AIM investments	1,663,226	862,524	11.9
Unquoted equity investments
RMS Group Holdings Limited	68,044	340,730	4.7
Cater Plus Services Limited	32,629	152,944	2.1
Triage Holdings Limited	32,000	132,800	1.8
Heritage House Media Limited	98,248	49,517	0.7
Other unquoted equity investments	351,116	125,000	1.7
Unquoted preference shares
Triage Holdings Limited preference shares	238,480	238,480	3.3
Cater Plus Services Limited preference shares	75,834	75,834	1.0
Unquoted bonds
Heritage House Media Limited loan stockƗ	424,511	424,511	5.9
RMS Group Holdings Limited loan stock	272,000	272,000	3.7
Cater Plus Services Limited loan stock	216,666	216,666	3.0
Triage Holdings Limited loan stock	49,520	49,520	0.7
Non qualifying equity investments and loan stockƗ*	(36,321)	(36,201)	(0.5)
Total qualifying investments	4,151,839	3,947,815	54.4
Quoted funds
Neptune Quarterly Income Fund Income Units	810,000	784,815	10.8
The Neptune Income Fund Income A Class	825,000	769,051	10.6
Other quoted equities	1,432,213	1,357,130	18.7
Unquoted funds
Goldman Sachs Sterling Liquid Reserve Fund	250,000	250,000	3.5
Other unquoted funds	108,507	108,507	1.5
Non-qualifying equity investments and loan stockƗ*	36,321	36,201	0.5
Total non-qualifying investments	3,462,041	3,305,704	45.6
Total investments	7,613,880	7,253,519	100.0

The valuations of certain C Share Fund investments include small purchases made which are non-qualifying investments. These cost £584 and are valued at £464.

 ƗThe valuation of Heritage House Media Limited loan stock includes £35,737 of rolled up interest which is non-qualifying..

  UNAUDITED INCOME STATEMENTS 

for the six months to 30 June 2008

Ordinary Share Fund

			Six months to 30 June 2008			Six months to 30 June 2007			Year to 31 December 2007
		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		-		(18)	(18)	-	227	227	-	(421)	(421)
Investment income		59		-	59	61	-	61	129	-	129
Other income		3		-	3	3	-	3	4	-	4
Investment management fee		(11)		(33)	(44)	(13)	(38)	(51)	(19)	(57)	(76)
Other expenses		(32)		-	(32)	(27)	-	(27)	(55)	-	(55)
Return/(deficit) on ordinary  activities before taxation		19		(51)	(32)	24	189	213	59	(478)	(419)
Taxation on ordinary activities		(1)		-	(1)	(1)	-	(1)	(2)	-	(2)
Return/(deficit) attributable  to equity shareholders		18		(51)	(33)	23	189	212	57	(478)	(421)
Return per Ordinary Share	3	0.45p		(1.29)p	(0.84)p	0.60p	5.00p	5.60p	1.51p	(12.59)p	(11.08)p

 

The accompanying notes are an integral part of this statement.

C Share Fund

			Six months to 30 June 2008			Six months to 30 June 2007			Year to 31 December 2007
			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			-	(196)	(196)	-	431	431	-	(752)	(752)
Investment income			133	-	133	134	-	134	272	-	272
Other income			7	-	7	3	-	3	7	-	7
Investment management fee			(23)	(69)	(92)	(26)	(77)	(103)	(38)	(115)	(153)
Other expenses			(66)	-	(66)	(59)	-	(59)	(119)	-	(119)
Return/(deficit) on ordinary activities before taxation			51	(265)	(214)	52	354	406	122	(867)	(745)
Taxation on ordinary activities			(2)	-	(2)	(1)	-	(1)	(3)	-	(3)
Return/(deficit) attributable to equity shareholders			49	(265)	(216)	51	354	405	119	(867)	(748)
Return per C Share	3		0.57p	(3.08)p	(2.51)p	0.61p	4.22p	4.83p	1.42p	(10.34)p	(8.92)p

  UNAUDITED INCOME STATEMENTS

for the six months to 30 June 2008

Total

			Six months to  30 June 2008			Six months to  30 June 2007			Year to 31 December 2007
			Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments at  fair value			-	(214)	(214)	-	658	658	-	(1,173)	(1,173)
Investment income			192	-	192	195	-	195	401	-	401
Other income			10	-	10	6	-	6	11	-	11
Investment management fee			(34)	(102)	(136)	(39)	(115)	(154)	(57)	(172)	(229)
Other expenses			(98)	-	(98)	(86)	-	(86)	(174)	-	(174)
Return/(deficit) on ordinary  activities  before taxation			70	(316)	(246)	76	543	619	181	(1,345)	(1,164)
Taxation on ordinary activities			(3)	-	(3)	(2)	-	(2)	(5)	-	(5)
Return/(deficit) attributable to equity  shareholders			67	(316)	(249)	74	543	617	176	(1,345)	(1,169)

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

  

UNAUDITED RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the six months to 30 June 2008 

Ordinary Share Fund

	Share capital	Share premium	Special reserve	Capital reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
For the period 1 January 2008 to  30 June 2008
1 January 2008	379	21	3,187	100	34	3,721
Issue of shares	31	277	-	-	-	308
Expenses of share issue	-	(17)	-	-	-	(17)
Net (deficit)/return after taxation for the period	-	-	-	(51)	18	(33)
30 June 2008	410	281	3,187	49	52	3,979
For the period 1 January 2007 to  30 June 2007
1 January 2007	379	21	3,187	681	33	4,301
Net return after taxation for the period	-	-	-	189	23	212
Dividends paid	-	-	-	(91)	(30)	(121)
30 June 2007	379	21	3,187	779	26	4,392
For the year 1 January 2007 to  31 December 2007
1 January 2007	379	21	3,187	681	33	4,301
Net (deficit)/return after taxation for the year	-	-	-	(478)	57	(421)
Dividends paid	-	-	-	(103)	(56)	(159)
31 December 2007	379	21	3,187	100	34	3,721

  UNAUDITED RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the six months to 30 June 2008 

C Share Fund

	Share capital	Share premium	Special reserve	Capital reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
For the period 1 January 2008 to 30 June 2008
1 January 2008	839	-	7,097	(230)	74	7,780
Issue of shares	39	321	-	-	-	360
Expenses of share issue	-	(19)	-	-	-	(19)
Net (deficit)/return after taxation for the period	-	-	-	(265)	49	(216)
30 June 2008	878	302	7,097	(495)	123	7,905
For the period 1 January 2007 to 30 June 2007
1 January 2007	839	-	7,097	675	85	8,696
Net return after taxation for the period	-	-	-	354	51	405
Dividends paid	-	-	-	-	(84)	(84)
30 June 2007	839	-	7,097	1,029	52	9,017
For the year 1 January 2007 to 31 December 2007
1 January 2007	839	-	7,097	675	85	8,696
Net (deficit)/return after taxation for the year	-	-	-	(867)	119	(748)
Dividends paid	-	-	-	(38)	(130)	(168)
31 December 2007	839	-	7,097	(230)	74	7,780

  UNAUDITED RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the six months to 30 June 2008 

Total

	Share capital	Share premium	Special reserve	Capital reserve	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
For the period 1 January 2008 to 30 June 2008
1 January 2008	1,218	21	10,284	(130)	108	11,501
Issue of shares	70	598	-	-	-	668
Expenses of share issue	-	(36)	-	-	-	(36)
Net (deficit)/return after taxation for the period	-	-	-	(316)	67	(249)
30 June 2008	1,288	583	10,284	(446)	175	11,884
For the period 1 January 2007 to 30 June 2007
1 January 2007	1,218	21	10,284	1,356	118	12,997
Net return after taxation for the period	-	-	-	543	74	617
Dividends paid	-	-	-	(91)	(114)	(205)
30 June 2007	1,218	21	10,284	1,808	78	13,409
For the year 1 January 2007 to 31 December 2007
1 January 2007	1,218	21	10,284	1,356	118	12,997
Net (deficit)/return after taxation for the year	-	-	-	(1,345)	176	(1,169)
Dividends paid	-	-	-	(141)	(186)	(327)
31 December 2007	1,218	21	10,284	(130)	108	11,501

  UNAUDITED BALANCE SHEETS

as at 30 June 2008

Ordinary Share Fund

		30 June 2008	30 June 2007	31 December 2007
	Note	£'000	£'000	£'000
Fixed Assets
Investments at fair value through profit or loss		3,945	4,330	3,659
Current Assets
Debtors		39	46	26
Cash at bank		42	27	57
		81	73	83
Creditors: Amounts falling due within one year
Creditors		(47)	(11)	(20)
Bank overdraft		-	-	(1)
		(47)	(11)	(21)
Net Current Assets		34	62	62
Net Assets		3,979	4,392	3,721
Represented by:
CALLED UP SHARE CAPITAL AND RESERVES
Share capital		410	379	379
Share premium		281	21	21
Special reserve		3,187	3,187	3,187
Capital reserve realised		198	206	231
Capital reserve unrealised		(149)	573	(131)
Revenue reserve		52	26	34
Total equity shareholders' funds		3,979	4,392	3,721
Net asset value per Ordinary Share	4	97.03p	115.77p	98.09p

The accompanying notes are an integral part of this statement.

  UNAUDITED BALANCE SHEETS

as at 30 June 2008

C Share Fund

		30 June 2008	30 June 2007	31 December 2007
	Note	£'000	£'000	£'000
Fixed Assets
Investments at fair value through profit or loss		7,254	8,978	7,581
Current Assets
Debtors		251	23	26
Cash at bank		503	39	217
		754	62	243
Creditors: Amounts falling due
within one year
Creditors		(103)	(23)	(44)
Net Current Assets		651	39	199
Net Assets		7,905	9,017	7,780
Represented by:
CALLED UP SHARE CAPITAL AND RESERVES
Share capital		878	839	839
Share premium		302	-	-
Special reserve		7,097	7,097	7,097
Capital reserve realised		(135)	110	(82)
Capital reserve unrealised		(360)	919	(148)
Revenue reserve		123	52	74
Total equity shareholders' funds		7,905	9,017	7,780
Net asset value per C Share	4	90.07p	107.43p	92.69p

The accompanying notes are an integral part of this statement.

  UNAUDITED BALANCE SHEETS

as at 30 June 2008

Total

		30 June 2008	30 June 2007	31 December 2007
		£'000	£'000	£'000
Fixed Assets
Investments at fair value through profit or loss		11,199	13,308	11,240
Current Assets
Debtors		290	69	52
Cash at bank		545	66	274
		835	135	326
Creditors: Amounts falling due
within one year
Creditors		(150)	(34)	(64)
Bank overdraft		-	-	(1)
		(150)	(34)	(65)
Net Current Assets		685	101	261
Net Assets		11,884	13,409	11,501
Represented by:
CALLED UP SHARE CAPITAL AND RESERVES
Share capital		1,288	1,218	1,218
Share premium		583	21	21
Special reserve		10,284	10,284	10,284
Capital reserve realised		63	316	149
Capital reserve unrealised		(509)	1,492	(279)
Revenue reserve		175	78	108
Total equity shareholders' funds		11,884	13,409	11,501

.

  

UNAUDITED CASH FLOW STATEMENTS

for the six months to 30 June 2008

Ordinary Share Fund

		Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	Note	£'000	£'000	£'000
Operating activities
Investment income received		41	51	110
Deposit income received		2	3	5
Investment management fees paid		(16)	(66)	(94)
Administration fees paid		(6)	(9)	(13)
Other cash payments		(25)	(30)	(38)
Net cash outflow from operating activities	5	(4)	(51)	(30)
Taxation		(1)	(1)	(2)
Investing activities
Purchase of investments		(369)	(1,919)	(2,683)
Sale of investments		76	2,064	2,875
Net cash (outflow)/inflow from investing activities		(293)	145	192
Equity dividends paid		-	(121)	(159)
Financing
Proceeds of share issue		308	-	-
Cost of share issue		(24)	(4)	(4)
Net cash inflow/(outflow) from financing		284	(4)	(4)
Decrease in cash		(14)	(32)	(3)

The accompanying notes are an integral part of this statement.

  UNAUDITED CASH FLOW STATEMENTS

for the six months to 30 June 2008

C Share Fund

		Six months to 30 June 2008	Six months to  30 June 2007	Year to 31  December 2007
	Note	£'000	£'000	£'000
Operating activities
Investment income received		103	133	263
Deposit income received		5	4	8
Investment management fees paid		(33)	(141)	(198)
Administration fees paid		(13)	(19)	(26)
Other cash payments		(58)	(64)	(84)
Net cash inflow/(outflow) from operating activities	5	4	(87)	(37)
Taxation		(2)	(1)	(3)
Investing activities
Purchase of investments		(512)	(2,459)	(4,033)
Sale of investments		461	2,619	4,407
Net cash (outflow)/inflow from investing activities		(51)	160	374
Equity dividends paid		-	(84)	(168)
Financing
Proceeds of share issue		361	-	-
Cost of share issue		(26)	(109)	(109)
Net cash inflow/(outflow) from financing		335	(109)	(109)
Increase/(decrease) in cash		286	(121)	57

The accompanying notes are an integral part of this statement.

  UNAUDITED CASH FLOW STATEMENTS

for the six months to 30 June 2008

Total

		Six months to 30 June 2008	Six months to 30 June 2007	Year to 31 December 2007
	Note	£'000	£'000	£'000
Operating activities
Investment income received		144	184	373
Deposit income received		7	7	13
Investment management fees paid		(49)	(207)	(292)
Administration fees paid		(19)	(28)	(39)
Other cash payments		(83)	(94)	(122)
Net cash outflow from operating activities	5	-	(138)	(67)
Taxation		(3)	(2)	(5)
Investing activities
Purchase of investments		(881)	(4,378)	(6,716)
Sale of investments		537	4,683	7,282
Net cash (outflow)/inflow from investing activities		(344)	305	566
Equity dividends paid		-	(205)	(327)
Financing
Proceeds of share issue		669	-	-
Cost of share issue		(50)	(113)	(113)
Net cash inflow/(outflow) from financing		619	(113)	(113)
Increase/(decrease) in cash		272	(153)	54

The accompanying notes are an integral part of this statement.

  NOTES TO THE FINANCIAL STATEMENTS

1  Nature of Financial Information

The unaudited half-yearly financial information does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. 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 2007. The statutory financial statements for the year ended 31 December 2007, 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 237(2) or (3) of the Companies Act 1985.

2  Dividends

The directors have declared an interim dividend of 1 penny per Ordinary Share and per C Share. Both dividends are payable on 20 October 2008 to Ordinary and C shareholders on the register on 26 September 2008.

3 Return per share

	Six months to  30 June 2008			Six months to  30 June 2007			Year to  31 December 2007
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	pence	pence	pence	pence	pence	pence	pence	pence	pence
Ordinary Share	0.45	(1.29)	(0.84)	0.60	5.00	5.60	1.51	(12.59)	(11.08)
C Share	0.57	(3.08)	(2.51)	0.61	4.22	4.83	1.42	(10.34)	(8.92)

Ordinary Shares

Revenue return per Ordinary Share is based on the net revenue on ordinary activities attributable to the Ordinary Shares of £18,000 (30 June 2007: £23,000, 31 December 2007: £57,000) and on 3,966,853 (30 June 2007: 3,793,562, 31 December 2007: 3,793,562) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period. 

  3 Return per share (continued)

Capital return per Ordinary Share is based on the net capital deficit for the period of £51,000 (30 June 2007: gain of £189,000, 31 December 2007: deficit of £478,000) and on 3,966,853 (30 June 2007: 3,793,562, 31 December 2007: 3,793,562) 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 £33,000 (30 June 2007: gain of £212,000, 31 December 2007: deficit of £421,000) and on 3,966,853 (30 June 2007: 3,793,562, 31 December 2007: 3,793,562) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.

C Shares

Revenue return per C share is based on the net revenue on ordinary activities attributable to the C Shares of £49,000 (30 June 2007: £51,000, 31 December 2007: £119,000) and on 8,605,748 (30 June 2007: 8,393,209, 31 December 2007: 8,393,209) C Shares, being the weighted average number of C shares in issue during the period.

Capital return per C Share is based on the net capital deficit for the period of £265,000 (30 June 2007: gain of £354,000, 31 December 2007: deficit of £867,000) and on 8,605,748 (30 June 2007: 8,393,209, 31 December 2007: 8,393,209) C Shares, being the weighted average number of C Shares in issue during the period.

Total return per C Share is based on the total deficit on ordinary activities attributable to the C Shares of £216,000 (30 June 2007: gain of £405,000, 31 December 2007: deficit of £748,000) and on 8,605,748 (30 June 2007: 8,393,209, 31 December 2007: 8,393,209) C Shares, being the weighted average number of C Shares in issue during the period.

  4 Net asset value per share

	30 June 2008	30 June 2007	31 December 2007
	pence	pence	pence
Ordinary Shares of 10p each	97.03	115.77	98.09
C Shares of 10p each	90.07	107.43	92.69

The basic net asset value per Ordinary Share is based on net assets (including current period revenue) of £3,979,000 (30 June 2007: £4,392,000, 31 December 2007: £3,721,000) and on 4,100,806 (30 June 2007: 3,793,562, 31 December 2007: 3,793,562) Ordinary Shares, being the number of Ordinary Shares in issue at the end of the period.

The basic net asset value per C Share is based on net assets (including current period revenue) of £7,905,000 (30 June 2007: £9,017,000, 31 December 2007: £7,780,000) and on 8,776,764 (30 June 2007: 8,393,209, 31 December 2007: 8,393,209) C Shares, being the number of C Shares in issue at the end of the period.

  

5 Reconciliation of net (deficit)/return before taxation to net cash flow from operating activities

Ordinary Share Fund

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Net (deficit)/return before taxation	(32)	213	(419)
Net capital deficit/(return)	51	(189)	478
Increase in prepayments and accrued income	(6)	(11)	(17)
Increase/(decrease) in creditors	27	(26)	(15)
Investment management fee charged to capital	(33)	(38)	(57)
Less: fixed interest reinvested	(11)	-	-
Net cash outflow from operating activities	(4)	(51)	(30)

C Share Fund

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Net (deficit)/return before taxation	(214)	406	(745)
Net capital deficit/(return)	265	(354)	867
Increase in prepayments and accrued income	(9)	(6)	(8)
Increase/(decrease) in creditors	53	(56)	(36)
Investment management fee charged to capital	(69)	(77)	(115)
Less: fixed interest reinvested	(22)	-	-
Net cash inflow/(outflow) from operating activities	4	(87)	(37)

Total

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Net (deficit)/return before taxation	(246)	619	(1,164)
Net capital deficit/(return)	316	(543)	1,345
Increase in prepayments and accrued income	(15)	(17)	(25)
Increase/(decrease) in creditors	80	(82)	(51)
Investment management fee charged to capital	(102)	(115)	(172)
Less: fixed interest reinvested	(33)	-	-
Net cash outflow from operating activities	-	(138)	(67)

  

6 Related party transactions

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:

Ordinary Share Fund

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Investment Management Fee	37	43	65
VAT thereon*	7	8	11
	44	51	76

C Share Fund

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Investment Management Fee	79	88	130
VAT thereon*	13	15	23
	92	103	153

Total

	Six months to 30 June 2008	Six months to 30 June 2007	Year to  31 December 2007
	£'000	£'000	£'000
Investment Management Fee	116	131	195
VAT thereon*	20	23	34
	136	154	229

* The current position regarding VAT charged on management fees is set out in the Chairman's Statement.  

Statement of Directors' Responsibilities

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 2008 .

The Directors confirm that the Chairman's Statement and the Investment Managers' Reviews include 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 and a description of the principal risks and uncertainties for the remaining six months of the financial year. 

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

19 August 2008

The half yearly report will shortly be posted to shareholders. Copies of the report will also be available from the company's registered office which has today been changed to 104 Park Street, London, W1K 6NF. 

ENDIR LKLFFVVBFBBK

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Related Shares:

Neptune-Calculus Income & Growth