TIDMHYG
For immediate release 15 September 2017
Hygea vct plc
("Hygea" or "the Company")
Unaudited Half-Yearly Report
For the Six Months Ended 30 June 2017
Financial Headlines
64.4p Net Asset Value per share at 30 June 2017
24.25p Cumulative dividends paid to date
88.65p Total return per share since launch
Financial Summary
Six months to Six months to Year to
30 June 30 June 31 December
2017 2016 2016
Net assets (GBP'000s) 5,225 5,606 5,547
Return on ordinary activities
after tax (GBP'000s) (322) (523) (582)
Earnings per share (3.9p) (6.4p) (7.2p)
Net asset value per share 64.4p 69.1p 68.3p
Dividends paid to date 24.25p 24.25p 24.25p
Total return per share 88.65p 93.35p 92.55p
Dividends declared for the period - - -
Chairman's Statement
I present the unaudited results for the six months ended 30 June 2017.
The Company's net asset value ('NAV') per share at 30 June 2017 was
64.4p compared to 68.3p at 31 December 2016 and 69.1p at 30 June 2016.
Results
The total negative return for the period amounted to 3.9p per share
(June 2016: negative 6.4p). This is made up of a negative revenue return
of 0.7p (June 2016: negative 0.7p) and a negative capital return of 3.2p
(June 2016: 5.7p), net of performance fee reduction.
Our AIM portfolio has shown a net reduction in value since the year end,
principally due to the reduction in value of Scancell plc shares from
14.5p per share to 12.5p per share following its fund raising during the
period. Our unquoted portfolio has also been reduced in value following
a discounted share issue by ImmunoBiology Limited.
Portfolio review
During the period we have realised the remaining holding in EKF
Diagnostics plc, following a strengthening of its price on recent
company news, which resulted in a profit in the period of GBP26,000.
Scancell continues to make good clinical progress on SCIB1 and has
recently announced the grant of patents in Europe. Despite this, the
fund raising climate for early stage Life Science companies remains very
difficult and the company had to raise a modest extra sum at a discount
to our valuation at the year end and the valuation at the half year
reflects this. One glimmer of hope is the emergence on the Scancell
share register of significant institutions, whose investing decisions
are not driven by tax breaks - the absence of the latter makes them more
appropriate shareholders for this stage of Scancell's development.
Notwithstanding the disappointing reduction in the bid price during the
period, we are encouraged that these new shareholders share our view for
the prospects of Scancell and are pleased to see a reasonable recovery
in the bid price since the period end. We, therefore, remain supportive
of the current management team under its new chairman and are also
optimistic of the progress being achieved.
On a more positive note, Omega Diagnostics Group plc has raised funds at
a modest premium to our valuation at 31 December 2016 and since the fund
raising the price has strengthened.
We were disappointed by the terms of the fundraising by ImmunoBiology,
where the rights attaching to the new shares effectively diminish any
value attaching to our shareholding at the current post money valuation.
We have therefore written down the value of our holding to nil but,
should the company achieve its aspirations, we would expect value to
return to our holding.
The other significant fundraise by a portfolio company during the period
was by Fuel 3D - this was on terms which required no change to our
carrying value. Meanwhile our two most important unquoted companies
(Hallmarq Veterinary Imaging Limited and OR Productivity plc) continue
to make positive progress but it is not appropriate to reconsider our
valuations at the half year.
Details of our AIM portfolio are included in the Investment Portfolio on
Page 4 so that shareholders are able to calculate the current value of
the AIM portfolio. Any significant sales from this portfolio will be the
subject of an announcement; however, small sales of shares for liquidity
purposes will only be reported on a quarterly basis together with an up
to date NAV at the quarter end.
Following the sale of our holding in EKF Diagnostics, the overdraft at
30 June 2017 has been reduced to GBP112,000.
VCT qualifying status
The Directors believe that the Company continues to comply with the
conditions laid down by HMRC for maintaining approval as a VCT.
Presentation of half-year report
In order to simplify this report and reduce costs, we have omitted
details of the Company's objectives and investment strategy, its
Advisers and Registrars and how to buy and sell shares in the Company.
These details are all included in the latest Annual Report, available on
the Company's website at www.hygeavct.com.
Outlook
Our accounting has now been taken over by Pennywise Accounting Limited
leading to a reduction in running costs. We remain focussed on cost
reduction but with the current structure further opportunities are
difficult to see without eroding shareholder benefits.
Our 2017 AGM once again gave rise to a good discussion with interesting
feedback which the Board values. We remain confident for the overall
return on the portfolio but disappointed that opportunities for
realisations on appropriate terms have been much slower to materialise
than we would have expected or wished - we are, therefore, grateful for
the overall patience shown by our shareholders.
John Hustler
Chairman
14 September 2017
Enquiries:
John Hustler, Hygea vct plc at john.hustler@btconnect.com
Roland Cornish, Beaumont Cornish Limited on 020 7628 3396
Investment Portfolio
Carrying value at Movement in the six months to
Investment Unrealised 30 June 30 June
Unquoted Equity Held at cost profit/(loss) 2017 2017
Investments (%) (GBP'000) (GBP'000) (GBP'000) (GBP'000)
Hallmarq
Veterinary
Imaging Limited 10.2 1,116 913 2,029 -
OR Productivity
Limited 11.1 765 (101) 664 -
Fuel 3D
Technologies
Limited <1.0 299 (23) 276 -
Arecor Limited 2.1 142 45 186 -
Insense Limited 8.1 509 (388) 121 -
Exosect Limited 1.8 270 (150) 120 -
Microarray Limited 2.9 132 (65) 67 -
Glide
Pharmaceutical
Technologies
Limited <1.0 326 (314) 12 -
ImmunoBiology
Limited 2.5 868 (868) - (126)
Axon Limited 13.7 374 (374) - -
Total Unquoted
Investments 4,801 (1,326) 3,475 (126)
Carrying value at Movement in the six months to
Investment Unrealised 30 June 30 June
at cost profit/(loss) 2017 2017
Quoted Investments Shares Held (GBP'000) (GBP'000) (GBP'000) (GBP'000)
Scancell plc 13,249,730 801 855 1,656 (265)
Omega Diagnostics
plc 2,293,868 328 102 430 29
Genedrive plc
(formerly EpiStem
Holdings plc) 34,300 43 (29) 14 (5)
Total Quoted
Investments 1,172 928 2,100 (242)
Total Investments 5,973 (398) 5,575 (368)
Responsibility Statement of the Directors' in respect of the half-yearly
report
We confirm that to the best of our knowledge:
-- the half-yearly financial statements have been prepared in accordance
with the statement "Interim Financial Reporting" issued by the Financial
Reporting Council;
-- the half-yearly report includes a fair review of the information required
by the Financial Services Authority Disclosure and Transparency Rules,
being:
-- an indication of the important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements.
-- a description of the principal risks and uncertainties for the remaining
six months of the year.
-- a description of related party transactions that have taken place in the
first six months of the current financial year that may 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:
John Hustler
Chairman
14 September 2017
Income Statement
Six months to 30 June Six months to 30 June
2017 2016 Year to 31 December 2016
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain on
disposal of
fixed asset
investments - 26 26 - 3 3 - 25 25
Loss on
valuation
of fixed
asset
investments - (368) (368) - (597) (597) - (624) (624)
Performance
fee - 80 80 - 131 131 - 146 146
Investment
income - - - - - - - - -
Other
expenses (60) - (60) (60) - (60) (129) - (129)
Return on
ordinary
activities
before tax (60) (262) (322) (60) (463) (523) (129) (453) (582)
Taxation on
loss on
ordinary
activities - - - - - - - - -
Return on
ordinary
activities
after tax (60) (262) (322) (60) (463) (523) (129) (453) (582)
Earnings per
share -
basic and
diluted (0.7p) (3.2p) (3.9p) (0.7p) (5.7p) (6.4p) (1.6p) (5.6p) (7.2p)
-- The 'Total' column of this statement is the profit and loss account of
the Company; the supplementary Revenue return and Capital return columns
have been prepared under guidance published by the Association of
Investment Companies.
-- All revenue and capital items in the above statement derive from
continuing operations.
-- The accompanying notes are an integral part of the half-yearly report.
-- The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market
funds.
The Company has no recognised gains or losses other than the results for
the period as set out above. Accordingly a Statement of Comprehensive
Income is not required.
As at 30 June As at 31 December
2017 As at 30 June 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments* 5,575 6,103 6,038
Current assets:
Debtors 9 15 4
9 8 4
Creditors:
Amounts falling due within one year (72) (56) (55)
Cash at Bank (112) (186) (185)
Net current assets (175) (227) (236)
Performance fee payable (175) (270) (255)
Net assets 5,225 5,606 5,547
Called up equity share capital 4,058 4,058 4,058
Share premium - - -
Special distributable reserve 3,397 3,397 3,397
Capital redemption reserve 38 38 38
Capital reserve - gains/(losses) on
disposal (38) 236 (121)
- holding
gains/(losses) (398) (420) (53)
Revenue reserve (1,832) (1,703) (1,772)
Total equity shareholders' funds 5,225 5,606 5.547
Net asset value per share 64.4p 69.1p 68.3p
*At fair value through profit and loss
Balance Sheet
Statement of Changes in Equity
Special Capital
Share distributable redemption Capital reserve gains/ Capital reserve holding gains/ Revenue
Capital reserve reserve (losses) (losses) reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
January
2016 4,058 3,397 38 144 135 (1,643) 6,129
Revenue
return on
ordinary
activities
after tax - - - - - (60) (60)
Performance
fee
allocated
as capital
expenditure - - - 131 - - 131
Current
period
gains on
disposal - - - 3 - - 3
Current
period
losses on
fair value
of
investments - - - - (597) - (597)
Prior years'
unrealised
losses now
realised - - - (42) 42 - -
Balance as
at 30 June
2016 4,058 3,397 38 236 (420) (1,703) 5,606
As at 1
January
2016 4,058 3,397 38 144 135 (1,643) 6,129
Revenue
return on
ordinary
activities
after tax - - - (129) (129)
Performance
fee
allocated
as capital
expenditure - - - 146 - - 146
Current
period
gains on
disposal - - - 25 - - 25
Current
period
losses on
fair value
of
investments - - - - (624) - (624)
Prior years'
unrealised
losses now
realised - - - (436) 436 - -
Balance as
at 31
December
2016 4,058 3,397 38 (121) (53) (1,772) 5,547
Revenue
return on
ordinary
activities
after tax - - - - - (60) (60)
Performance
fee
allocated
as capital
expenditure - - - 80 - - 80
Current
period
gains on
disposal - - - 26 - - 26
Current
period
losses on
fair value
of
investments - - - - (368) - (368)
Prior years'
unrealised
losses now
realised - - - (23) 23 - -
Balance as
at 30 June
2017 4,058 3,397 38 (38) (398) (1,832) 5,225
Statement of Cash Flows
Six months to 30 Six months to 30 Year to 31
June 2017 June 2016 December 2016
GBP'000 GBP'000 GBP'000
Cash flows from
operating
activities
Return on ordinary
activities before
tax (322) (523) (582)
Adjustments for:
(Increase)/decrease
in debtors (5) (9) 2
Decrease in
creditors (63) (136) (151)
Gain on disposal of
fixed asset
investments (26) (3) (25)
Loss on valuation of
fixed asset
investments 368 597 624
Cash from operations (48) (74) (132)
Income taxes paid - - -
Net cash used in
operating
activities (48) (74) (132)
Cash flows from
investing
activities
Purchase of fixed
asset investments - (20) (35)
Sale of fixed asset
investments 121 77 151
Total cash flows
from investing
activities 121 57 116
Cash flows from
financing
activities - - -
Total cash flows
from financing
activities - - -
Increase/(Decrease)
in cash and cash
equivalents 73 (17) (16)
Opening cash and
cash equivalents (185) (169) (169)
Closing cash and
cash equivalents (112) (186) (185)
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 30 June
2017 have been prepared in accordance with the Financial Reporting
Council's (FRC) Financial Reporting Standard 104 Interim Financial
Reporting ('FRS 104') and the Statement of Recommended Practice (SORP)
for Investment Companies re-issued by the Association of Investment
Companies in November 2014. Details of the accounting policies and
valuation methodologies are included within the Annual Report on Pages
39-42.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 30 June 2017
do not constitute statutory accounts within the meaning of Section 415
of the Companies Act 2006. The comparative figures for the year ended 31
December 2016 have been extracted from the audited financial statements
for that year, which have been delivered to the Registrar of Companies.
The independent auditor's report on those financial statements, in
accordance with chapter 3, part 16 of the Companies Act 2006, was
unqualified. This half-yearly report has not been reviewed by the
Company's auditor.
3. Earnings per share
The earnings per share at 30 June 2017 are calculated on the basis of
8,115,376 shares (31 December 2016 8,115,376 and 30 June 2016:
8,115,376) being the weighted average number of shares in issue during
the period.
There are no potentially dilutive capital instruments in issue and,
therefore, no diluted returns per share figures are relevant.
4. Net asset value per share
The net asset value per share is based on net assets as at 30 June 2017
divided by 8,115,376 (31 December 2016: 8,115,376 and 30 June 2016:
8,115,376) shares in issue at that date.
5. Principal risks and uncertainties
The Company's assets consist of equity and fixed interest investments,
cash and liquid resources. Its principal risks are therefore market risk,
credit risk and liquidity risk. Other risks faced by the Company include
economic, loss of approval as a Venture Capital Trust, investment and
strategic, regulatory, reputational, operational and financial risks.
These risks, and the way in which they are managed, are described in
more detail in the Company's Annual Report and Accounts for the year
ended 31 December 2016. The Company's principal risks and uncertainties
have not changed materially since the date of that report.
6. Related party transactions
The Board of the Company acts as the investment manager of the Company
through its Commercial Advisory Committee. During the period under
review, no remuneration was paid to the Board in their capacity as
investment manager. The Directors received remuneration for their roles
as non-executive Directors to Hygea on the terms as set out in the
Directors' Remuneration Report of the Company's Annual Report and
Accounts for the year ended 31 December 2016.
The Commercial Advisory Committee is entitled to receive a performance
incentive fee, of up to 20% of sums returned to shareholders by way of
dividends and capital distributions of whatever nature, which in
aggregate exceeds the sum of 80p per share (including dividends paid to
date, i.e. 24.25p, but excluding any sums returned to shareholders from
HMRC in the year of subscription). Full details are included in the
Directors' Remuneration Report and in Note 5 of the 2016 Annual Report
and Accounts, which can be viewed on the Company's website.
Copies of this statement are available from the Registrar's office at
Neville House, 18 Laurel Lane, Halesowen, B63 3DA, and on the company's
website - www.hygeavct.com.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Hygea VCT plc via Globenewswire
(END) Dow Jones Newswires
September 15, 2017 02:00 ET (06:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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