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4 Jul 2011 16:04
Investec Structured Products Calculus VCT plc Interim Management Statement 4 July 2011
The Investec Structured Products Calculus VCT plc (the "Company") announces its Interim Management Statement for the period from 1 March 2011 to 31 May 2011. This Statement also includes relevant financial information between the end of the period to the date of this Statement.
The Company is a tax efficient listed company which aims to achieve a regular tax free dividend stream together with capital growth for private investors. The Company brings together Investec's award winning expertise in structured products and Calculus Capital's award winning expertise in venture capital.
The Company's offer for subscription of C Shares closed on 30 April 2011 and a total of £1.93 million (before expenses) was raised.
The initial investment strategy has been successfully undertaken and details of the investments made to date are listed below.
Headlines
* The Company launched an issue of further Ordinary Shares on 20 September 2010. The offer closed on 10 December 2010, raising £873,383 net of expenses. * The Company then launched an offer to purchase C Shares from 7 January 2011 to 30 April 2011. The offer allowed investors to invest for either the 2010 /11 tax year or the 2011/12 tax year. £1,728,661 was raised net of expenses for the 2010/11 tax year and £93,124 was raised net of expenses for the tax year 2010/11. The total amount raised was £1,821,785 net of expenses. * The total number of Ordinary and C Shares in issue at 31 May 2011 was 4,738,463 and 1,931,095 respectively. The total number of the voting rights in the Company was 6,669,558. * The unaudited net asset value ("NAV") per Ordinary Share as at 31 May 2011 was 102.87 pence. * The unaudited net asset value ("NAV") per C Share as at 31 May 2011 was 93.60 pence. * Shareholders approved a final dividend of 5.25 pence per share payable on 29 July 2011 to Ordinary shareholders on the register on 3 June 2011.
Investment in Structured Products
As at 31 May 2011, the following investments have been made in structured products. These investments relate to the Ordinary Shares fund only; as at 31 May 2011 there had been no investments in structured products to date for the C Shares Fund. The structured products will achieve their target return subject to the Final Index Level of the FTSE 100 being higher than the Initial Index Level*.
Issuer Strike FTSE 100 No. of Unit Maturity Return/ % of Date Initial Units Purchase Date Capital Investable Index Price at Risk Application Level (CAR) Money Royal Bank of 05/05/ 5342 275,000 £0.9600 12/05/ 162.5% 5.90% Scotland plc 2010 2015 if FTSE 100 higher* Investec Bank 14/05/ 5263 500,000 £0.9791 19/11/ 185% if 10.94% plc 2010 2015 FTSE 100 higher* Santander 25/05/ 4941 350,000 £0.9898 19/11/ 185% if 7.74% Global 2010 2015 FTSE 100 Banking and higher* Markets (Abbey National Treasury Services plc) Nomura Bank 28/05/ 5188 350,000 £0.9800 15/02/ 137% if 7.66% International 2010 2013 FTSE 100 higher* Morgan 10/06/ 5133 500,000 £1.0000 10/12/ 134% if 11.17% Stanley 2010 2012 FTSE 100 higher* HSBC Bank 01/07/ 4806 500,000 £1.0000 06/07/ 125.1% 11.17% plc 2010 2012 if FTSE 100 higher*
\* The Final Index Level is calculated using `averaging', meaning that we take the average of the closing levels of the FTSE 100 on each Business Day over the last 2 - 6 months of the structured product plan term (the length of the averaging period differs for each plan). All of the above Structured Products have Capital at Risk (CAR) if the FTSE 100 falls by more than 50 per cent. of the Initial Index Level at any time during the term and fails to recover at maturity such that the Final Index Level is below the Initial Index Level.
The use of averaging to calculate the return can reduce adverse effects of a falling market or sudden market falls shortly before maturity. Equally, it can reduce the benefits of an increasing market or sudden market rises shortly before maturity.
The total amount invested in structured products as at 31 May 2011 was £2,442,980, representing 54.58 per cent. of net funds raised.
Since 31 May 2011, £250,000 has been invested in a six year structured product issued by the Royal Bank of Scotland plc. £200,000 will be allocated to the C Shares fund, and £50,000 to the Ordinary Shares fund. This structured product gives the opportunity to make a potential fixed return equivalent to 10.5 per cent. gross for each year. If the FTSE 100 is greater than or equal to the Initial Index Level on any annual set early expiry date or on the maturity date, the structured product will mature at that time paying 10.5 per cent. gross plus full return of initial capital. If the structured product has not previously matured on any set early expiry date and the FTSE 100 at maturity is lower than the Initial Index Level then, providing the FTSE 100 has not fallen by more than 50 per cent. of the Initial Index Level between the start date and maturity date then the structured product will provide full return of capital at maturity. If the FTSE 100 has fallen by more than 50 per cent., and the FTSE 100 is below the Initial Index Level, then capital will be reduced at maturity on a one for one basis.
Qualifying Venture Capital Investments
As at 31 May 2011, there have been three qualifying venture capital investments made, all relating to the Ordinary Shares fund. There have been no qualifying investments to date for the C Shares fund.
Terrain Energy Limited ("Terrain") holds a portfolio of oil and gas assets onshore in the UK. The Company initially invested £250,000 in Terrain in July 2010, followed by another £50,000 in March 2011. Drilling commenced in April 2011 on a second horizontal well, Keddington-4z, which is currently on test production. Terrain also acquired a 10 per cent. interest in the PL1/10 licence in the Larne-Lough Neagh Basin in Northern Ireland in a 2:1 farm-in during March 2011. The main prospect is a conventional gas play with potentially significant reserves. The following licence developments are also planned for the second half of 2011: obtaining c. 250km of 2D seismic on the Northern Ireland licence, a work over of Dukes Wood-1 well to restore production from Dukes Wood-1 and Kirklington-3z and applications for further licence interests in the 14th Onshore Licensing Round.
Lime Technology Limited ("Lime") produces zero carbon and cost effective building products which meet the higher level Code for Sustainable Homes and BREEAM (BRE Environmental Assessment Method) excellent standards. Recent projects include Marks and Spencer's Cheshire Oaks store, six houses for the Joseph Rowntree Trust, a development of sixteen social houses at Stanton Harcourt, recently opened by the Prime Minister in his constituency, and a warehouse for the Wine Society. Following investment, the company is undergoing reorganisation and restructuring, including management changes, the introduction of new products and greater operational efficiency.
Additionally, in early April, £300,000 was invested in MicroEnergy Generation Services Limited ("MicroEnergy"). MicroEnergy is a company set up to acquire renewable, microgeneration facilities, including (but not limited to) wind, anaerobic digestion, hydro and micro CHP (Combined Heat and Power). MicroEnergy is currently in negotiations to acquire its first renewable energy assets. The investment was provided as £150,000 as ordinary equity and £150,000 in the form of long-term loan stock with a coupon of 7 per cent.
Cash resources
At 31 May 2011, the Company held cash resources of £2.79 million, of which £0.94 million was attributable to the Ordinary Share fund and £1.85 million was attributable to the C Shares fund. The majority of the cash is held in three near cash funds managed by Fidelity, Goldman Sachs and Scottish Widows whilst awaiting investment in Structured Products and Qualifying Venture Capital investments. All the money market funds have AAA credit ratings.
Annual General Meeting and Separate Class Meetings
At the Annual General Meeting held on 30 June 2011 all resolutions were passed on a show of hands.
The Separate Class Meetings of the holders of Ordinary Shares and C Shares also convened for 30 June 2011 were adjourned until 11.00 am and 11.05 am respectively on 12 July 2011.
Other than as discussed above, the Board is not aware of any significant events or transactions which have occurred in the period from 31 May 2011 to the date of this Statement and which have a material impact on the financial position of the Company.
For further information, please contact:
Gary Dale (Investec Structured Products) 020 7597 4065
John Glencross (Calculus Capital Limited) 020 7493 4940
XLON