Half-yearly report - Replacement
The announcement released by the Company entitled Half-Yearly Report
at 11:37 on 28 July 2008 contained an error. At the foot of the
Unaudited Summarised Balance Sheet, Net asset value per share as at
31 May 2008 should have been stated as 93.8p instead of 97.3p which
appeared in error. Elsewhere in the announcement Net asset value per
share was correctly stated.
The full corrected text of the announcement is as follows:
Downing Protected VCT V plc
Half Yearly Report for the six months ended 31 May 2008
PERFORMANCE SUMMARY
31 May 31 May 30 Nov
2008 2007 2007
pence pence pence
Net asset value per Ordinary share 93.8 95.6 97.0
Cumulative distributions per Ordinary share 3.5 1.0 1.0
Total return per Ordinary share 97.3 96.6 98.0
CHAIRMAN'S STATEMENT
The last six months have seen a continued deterioration in the
economy, with the impact of the "credit-crunch" being felt far and
wide and showing no signs of easing. Both residential and commercial
property sectors have now been hit hard, providing a very different
environment for your Company from that which existed at its outset.
Portfolio Activity
The Company is now approaching the end of its investment phase.
Three VCT-qualifying investments were made in the period at a cost of
�2.25 million.
�1 million was invested in Hoole Hall Spa and Leisure Club Limited.
These funds will help finance the development of spa and leisure club
facilities in the grounds of Hoole Hall Country Club near Chester. A
further VCT-qualifying investment of �250,000 was made in Hoole Hall
Country Club Limited. This company owns and operates the country
club at Hoole Hall, which is used for weddings, banqueting and
conferences.
A �1 million VCT-qualifying was made in West Tower Holdings Limited.
Using these funds, the company acquired The West Tower, a popular,
upmarket dining and wedding venue with 12 bedrooms, near Ormskirk.
The Company also made three non-qualifying investments in the
period. An investment of �1.25 million was made in Hoole Hall Hotel
Limited. Based on the same site as the other Hoole Hall companies
mentioned above, this company operates the hotel facilities on the
site.
An investment of �750,000 was made in New Swan Holding Company
Limited, which acquired The Swan, a restaurant, bar, conference and
function venue, also near Ormskirk. The management team is the same
team as that involved in West Tower, so this investment complements
the qualifying investment described above.
Finally, a non-qualifying investment of �650,000 was made in Cymbal
Contracting Limited, after an opportunity arose for your Company to
make a short-term loan at an attractive yield and with a high level
of security. Cymbal is well known to the Investment Manager and is
undertaking a contract developing commercial premises on the Ealing
Studios site in West London.
Fixed interest portfolio
To provide funding for the investments described above, the bonds and
other fixed interest securities previously held were gradually sold
over the period. These disposals produced a small realised gain of
�31,000 for the period.
Valuations
The Board has reviewed the progress of each of the Company's
investments at the period end. In most cases, progress has been
satisfactory or to plan and the valuations been held at the previous
carrying values, often supported by security that has been taken over
assets. The investment in Vermont Developments Limited is one
exception. The Company made an investment of �1 million in Vermont
to partially fund the purchase of development land in Salford, with a
charge being taken over the land. The sharp change in the property
market has resulted in the development of the site being delayed and
has now created some considerable uncertainty over the current market
value of the land. In view of this uncertainty, the Board has
decided that it is appropriate to make a provision of 50% against
this investment, equivalent to �500,000.
Net Asset Value and Results
At 31 May 2008, the Net Asset Value per share ("NAV") of the Company
stood at 93.8p, a small decrease of 0.7p (0.7%) since the previous
year end of 30 November 2007 (after adjusting for the 2.5p dividend
paid during the period). The loss on ordinary activities after
taxation for the period was �162,000, comprising a revenue profit of
�307,000 and a capital loss of �469,000.
Share repurchase
The Company operates a policy, subject to certain restrictions, of
buying its own shares when any become available in the market. 6,289
shares were purchased in the period for cancellation at a price of
85.0p per share.
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is now
required in the Company's half year results, to report on principal
risks and uncertainties facing the Company over the remainder of the
financial year.
The Board has concluded that the key risks facing the Company over
the remainder of the financial period are as follows:
(i) investment risk associated with investing in small and immature
businesses; and
(ii) failure to maintain approval as a VCT.
In order to make VCT-qualifying investments, the Company has to
invest in small businesses which are often immature. The Investment
Manager follows a rigorous process in vetting and careful structuring
of new investments, including taking a charge over the assets of the
business wherever possible, and, after an investment is made, closely
monitoring the business. The Board is satisfied that this approach
reduces the investment risk as far as reasonably possible.
The Company's compliance with the VCT regulations is continually
monitored by the Administration Manager, who reports regularly to the
Board on the current position. The Company also retains
PricewaterhouseCoopers to provide regular reviews and advice in this
area. The Board considers that this approach reduces the risk of a
breach of the VCT regulations to a minimal level
Outlook
Since the period end, the Company has made one further VCT-Qualifying
investment and has commitments to invest further funds in three
existing portfolio investments over the coming months. This will
take your Company comfortably above the 70% VCT Qualification test
and complete the investing phase.
It is now clear that the Company has had to invest a large proportion
of its funds during a period immediately before a sharp downturn.
While the Company's strategy has been to reduce the risks normally
associated with VCTs as much as possible, it cannot totally insulate
itself from falls in value of assets, even those over which it has
taken a charge. The Manager is therefore closely monitoring
investments and, where appropriate, is encouraged by the Board to
take decisive action. The Board is confident that this approach will
allow the Company to meet its objectives despite the challenging
conditions which now prevail.
Hugh Gillespie
Chairman
UNAUDITED INCOME STATEMENT
for the six months ended 31 May 2008
Six months ended
31 May 2008
Revenue Capital Total
�'000 �'000 �'000
Income 638 - 638
Losses on investments - (469) (469)
638 (469) 169
Investment management fees (103) - (103)
Other expenses (80) - (80)
Return on ordinary activities 455 (469) (14)
before taxation
Taxation (144) - (144)
Return attributable to equity 311 (469) (158)
shareholders
Return per share 1.4p (2.1)p (0.7)p
Six months ended Year ended
31 May 2007 30 November 2007
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Income 581 - 581 1,196
Losses on investments - (68) (68) (60)
581 (68) 513 1,136
Investment management fees (104) - (104) (207)
Other expenses (87) - (87) (168)
Return on ordinary 390 (68) 322 761
activities
before taxation
Taxation (127) - (127) (264)
Return attributable to 263 (68) 195 497
equity
shareholders
Return per share 1.2p (0.3p) 0.9p 2.3p
A Statement of Total Recognised Gains and Losses has not been
prepared as all gains and losses are recognised in the Income
Statement as noted above.
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 May 2008
31 May 31 May 30 Nov
2008 2007 2007
�'000 �'000 �'000
Fixed assets
Investments 19,690 19,532 20,505
Current assets
Debtors 225 287 325
Cash at bank and in hand 783 1,064 478
1,009 1,351 803
Creditors: amounts falling due within (523) (307) (431)
one year
Net assets less current liabilities 20,176 20,576 20,877
Creditors: amounts falling due after
more than one year (21) (21) (21)
Net assets 20,155 20,555 20,856
Capital and reserves
Called up share capital 215 215 215
Capital redemption reserve 2 2 2
Special reserve 20,099 20,105 20,105
Capital reserve - realised (50) - -
Capital reserve - unrealised (500) (89) (81)
Revenue reserve 389 322 615
Equity shareholders' funds 20,155 20,555 20,856
Net asset value per share 93.8p 95.6p 97.0p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
31 May 2008 31 May 2007 30 Nov 2007
�'000 �'000 �'000
Opening shareholders' funds 20,856 20,759 20,759
Purchase of own shares (5) (183) (183)
Dividends paid (538) (217) (217)
Total recognised gains for (158) 196 497
the period
Closing shareholders' funds 20,155 20,555 20,856
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 May 2008
31 May 31 May 30 Nov
2008 2007 2007
Note �'000 �'000 �'000
Cash inflow from operating
activities and 1
returns on investments 645 408 921
Taxation
Corporation tax paid (143) - (134)
Capital expenditure
Purchase of investments (4,900) (5,750) (14,568)
Proceeds from disposal of 5,246 6,100 13,953
investments
Net cash inflow/(outflow) from
capital 346 350 (615)
expenditure
Equity dividends paid (538) (217) (217)
Net cash inflow/(outflow) before 310 541 (45)
financing
Financing
Purchase of own shares (5) (182) (183)
Net cash outflow from financing (5) (182) (183)
Increase/(decrease) in cash 2 305 359 (228)
Notes to the cash flow statement:
1. Cash inflow from operating
activities and
returns on investments
Net loss before taxation (14) 322 761
Losses on investments 469 68 60
Decrease in other debtors 99 116 78
Increase/(decrease) in other 91 (98) 22
creditors
Net cash inflow from operating 645 408 921
activities
2. Analysis of net funds
Beginning of period 478 706 706
Net cash inflow/(outflow) 305 359 (228)
End of period 783 1,065 478
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 May 2008
Unrealised
gain/(loss) % of
in the portfolio
Cost Valuation period by value
Venture Capital Investments �'000 �'000 �'000 �'000
VCT Qualifying
Cadbury House Limited 3,000 3,000 - 14.7%
Heyford Contracting (South)
Ltd 1,650 1,650 - 8.1%
Hoole Hall Country Club Ltd 1,625 1,625 - 7.9%
Richstone Contracting Limited 1,593 1,593 - 7.8%
The Really Fine Leisure 1,100 1,100 - 5.4%
Heyford Contracting (North)
Ltd 1,037 1,037 - 5.1%
Hoole Hall Spa and Leisure
Club Limited 1,000 1,000 - 4.9%
Nu Nu plc 1,000 1,000 - 4.9%
West Tower Holdings Limited 1,000 1,000 - 4.9%
Future Films Production
Services Limited 825 825 - 4.0%
13,830 13,830 - 67.6%
Non VCT Qualifying
Hoole Hall Hotel Ltd 1,250 1,250 - 6.1%
Aminghurst Ltd 992 992 - 4.8%
New Swan Holding Company Ltd 750 750 - 3.7%
Cymbal Contracting Limited 650 650 - 3.2%
Bowman Care Homes Ltd 600 600 - 2.9%
Gatewales Ltd 500 500 - 2.4%
Vermont Developments Ltd 1,000 500 (500) 2.4%
Heyford Homes Ltd 300 300 - 1.5%
Sanguine Hospitality Ltd 243 243 - 1.2%
Coastal Partnerships Ltd 75 75 - 0.4%
6,360 5,860 (500) 28.6%
Total 20,190 19,690 (500) 96.2%
Cash at Bank 783 3.8%
Total investments 20,473 100.0%
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 31 May 2008
Additions
�'000
VCT Qualifying investments
Hoole Hall Spa and Leisure Club Spa and leisure club owner 1,000
Limited operator
www.hoolehall.com
West Tower Holdings Limited Country house, hotel and 1,000
restaurant
owner and operator
www.west-tower.co.uk
Hoole Hall Country Club Ltd Country house and restaurant 250
owner
and operator
www.hoolehall.com
Non-qualifying investments
Hoole Hall Hotel Ltd Hotel owner and operator 1,250
www.hoolehall.com
New Swan Holding Company Ltd Restaurant and bar owner and 750
operator
Cymbal Contracting Limited Building contractor 650
4,900
Disposals
Cost Proceeds Profit/(loss)
�'000 �'000 �'000
VCT Qualifying investments
Heyford Contracting (South) Ltd 350 350 -
Non-qualifying investments
Property Solutions Ltd 500 500 -
Heyford Homes VCT Ltd 300 300 -
Calthorpe Street Ltd 113 125 12
Vermont Developments Ltd - 10 10
Sanguine Hospitality Ltd 7 15 8
Fixed Interest Investments
John Hancock 6.625% 521 505 (16)
Toyota 5.25% 502 502 -
HSBC Finance (Household) 6.125% 513 497 (16)
ASIF3 (AIG) 5.625% 504 495 (9)
Metropolitan Life 5.25% 501 495 (6)
Bank of Ireland 4.75% 496 490 (6)
ING 4.75% 492 492 -
Merrill Lynch 5.125% 497 470 (27)
5,296 5,246 (50)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half yearly financial results cover the six months
to 31 May 2008 and have been prepared in accordance with the
accounting policies set out in the statutory accounts for the year
ended 30 November 2007 which were prepared under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies" revised December 2005 ("SORP").
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the six-month period
ended 31 May 2007 and the year ended 30 November 2007 respectively.
5. Return per share for the period has been calculated on 21,608,957
shares, being the weighted average number of shares in issue during
the period.
6. Dividends paid
31 May 31 May 30 Nov
2008 2007 2007
Revenue Capital Total Total Total
�'000 �'000 �'000 �'000 �'000
Paid in period/year
2007 Final 540 - 540 - -
(2.5p paid 25 April 2008)
2006 Final - - - 217 217
(1.0p paid 27 April 2007)
540 - 540 217 217
7. Reserves
Capital Capital Capital
redemption Special reserve - reserve - Revenue
reserve reserve realised unrealised reserve Total
�'000 �'000 �'000 �'000 �'000 �'000
At 30 November 2007 2 20,104 - (81) 616 20,641
Gains/(losses) on - - 31 (500) - (469)
investments
Dividends paid - - - - (538) (538)
Share buybacks - (5) - - - (5)
Retained revenue - - - - 311 311
Transfer - - (81) 81 - -
At 31 May 2008 2 20,099 (50) (500) 389 19,940
The Special Reserve was created on 6 December 2006 by the
cancellation of the Share Premium account following court approval.
The Special Reserve is available to the Company to enable the
purchase of its own shares in the market without affecting its
ability to pay capital distributions. The Special Reserve and
Revenue Reserve are both distributable reserves.
8. The unaudited financial statements set out herein do not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985 and have not been delivered to the Registrar
of Companies.
9. The Directors confirm that, to the best of their knowledge, the
half-yearly financial statements have been prepared in accordance
with the "Statement: Half-Yearly Financial Reports" issued by the UK
Accounting Standards Board and the half-yearly financial report
includes a fair review of the information required by:
a. 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 year; and
b. 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 entity during that period,
and any changes in the related party transactions described in the
last annual report that could do so.
10. Copies of the half yearly report will be sent to shareholders
shortly. Further copies can be obtained from the Company's Registered
Office or can be downloaded from www.downing.co.uk.
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