18 Aug 2009 13:39
Neptune-Calculus Income and Growth VCT plc
Half-yearly results for the six months ended 30 June 2009
CORPORATE POLICY AND PERFORMANCE SUMMARY
Objective
Neptune-Calculus Income and Growth VCT is a tax efficient listed company which has the objective of generating long term capital growth and tax fee 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.
Managers
Qualifying investments are managed by Calculus Capital Limited and non-qualifying investments are managed by Neptune Investment Management Limited.
Performance summary
| Ordinary Shares | |
| Six months to | |
| 30 June 2009 | |
| Return per share | (2.6)p |
| Net asset value per share | 77.8 p |
| Cumulative dividends paid and proposed | 9.0 p |
| As at | |
| 31 July 2009* | |
| Net asset value per share | 77.6 p |
*Being the latest practicable date prior to publication and including net revenue after 30 June 2009.
Chairman's Statement
I am pleased to present our interim results for the Company for the six months ended 30 June 2009.
All of the Company's C Shares were converted into Ordinary Shares on 30 April 2009 and the Ordinary Share portfolio and C Share portfolio were combined at that date. The Company now only has Ordinary Shares in issue and the performance of these shares to 30 June 2009 reflects the performance of the enlarged portfolio. After paying the final dividend of 1 penny per Ordinary Share, net assets per Ordinary Share on 30 June 2009 were 77.8p compared with 77.9p as at 31 December 2008.
Our qualifying investments, which are in a combination of AIM companies and unquoted companies, are managed by Calculus Capital. The FTSE AIM All-Share market has rallied over the last six months and our AIM portfolio has also seen an overall improvement. Our best performing quoted investment continued to be EpiStem Holdings which increased in value by 56 per cent during the period. Portland Gas and Relax Group also performed well. However Hexagon and Sport Media Group were adversely affected by the difficult economic environment and FSG Security also saw a decrease in value. There has been a modest overall increase in the value of our unquoted investments which have continued to face challenging conditions. Waterfall Services, in particular, has shown resilience.
We only made one investment in the qualifying portfolio during the period, of £120,000 in Managed Support Services, reflecting the Investment Manager's cautious stance during a period of considerable economic turbulence.
Our non-qualifying investments are managed by Neptune Investment Management. The investments in the Neptune Income Fund and the Neptune Quarterly Income Fund are biased towards large cap stocks which have performed less well than the market as a whole. As noted in the Investment Manager's review (non-qualifying investments), during the period the FTSE All-Share index increased by 0.8 per cent whereas the FTSE 100 declined by 1.6 per cent. However over £1.5 million of the non-qualifying portfolio is held in cash funds following the liquidation of the mirror portfolio last year and, as a result, the overall percentage decline in the non qualifying portfolio was only 1 per cent.
Dividend
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 19 October 2009, to shareholders on the register on 25 September 2009.
Changes in accounting policy
You may notice that the comparative figures for the six months to 30 June 2008 have been restated. At 31 December 2008, in order to comply with FRS 25, we changed our accounting policy in relation to the C Shares that were then in issue to treat them as a liability of the Ordinary Shares. Although the C Shares were converted into Ordinary Shares on 30 April 2009, we are required to restate the comparative figures for the six months to 30 June 2008 to reflect the change in accounting policy.
VAT reclaim
As I mentioned in the report and accounts for the year ended 31 December 2008, we are in discussions with Neptune Investment Management to recover VAT which had been paid on management fees following the decision by HM Revenue and Customs to exempt VCTs from VAT on management fees. The timing and amount of any payment is still uncertain. As a result no contingent asset has been included within these financial statements.
Outlook
We met our target of being 70 per cent invested in qualifying companies for funds subscribed in 2005 and 2006 and we retain sufficient cash to support portfolio companies if required. Funds subscribed in the top up offers have to be invested between two and three years after subscription and as a result we are able to take a cautious investment stance. The economic environment remains challenging. The consensus amongst portfolio companies is that economic conditions are no longer declining but there are few, if any, signs of economic recovery evident. We take encouragement, nonetheless, from the way the portfolio has maintained its value over the very difficult past few months.
Philip Stephens
Chairman
18 August 2009
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 30 June the portfolio of qualifying investments comprised 21 companies, made up of both AIM quoted and unquoted stocks. We met the HM Revenue & Customs requirement for the VCT as a whole to be at least 70 per cent invested in qualifying investments by 31 December 2008, and the overall qualifying percentage at the end of June 2009 was 74.2 per cent (calculated on an HM Revenue & Customs basis).
The qualifying portfolio has increased in value over the last six months, brought about by rises in both quoted and unquoted stocks. Consequently, after paying the 2008 final dividend of 1 penny per Ordinary Share on 5 June 2009, the net asset value of the VCT fell by only 0.1 pence to 77.8 pence as at 30 June 2009. The FTSE 100 index fell by 1.6 per cent over the same period*, whilst the FTSE AIM index increased by 34.5 per cent as confidence returned and investors took advantage of the attractive yields and valuations offered. The recent increases in oil and commodity prices also contributed to the rise as many such companies are AIM quoted.
There have been positive contributions from a number of AIM quoted companies, and the largest of these has come from EpiStem Holdings, a life sciences company. At the beginning of March it announced a major collaborative agreement with Novartis, the Swiss drug manufacturer. Under the terms of the agreement, EpiStem will receive an upfront cash payment of $4 million, research funding for two years and up to $45 million in milestone payments for each product developed, plus tiered royalties on any future worldwide sales. The agreement is likely to significantly enhance future performance and, as of 30 June 2009, its shares had risen to a bid price of 320 pence.
Other notable increases have come from Portland Gas, a sub-surface gas storage company and Relax Group, a provider of consumer debt management services. Portland's shares have risen following the news that the company has commenced a new funding process for its major development at Portland in Dorset. This development had previously been halted in November 2008 owing to the liquidity crisis. In the case of Relax, the economic downturn has led to a sharp increase in demand for its services.
In contrast, shares in Pressure Technologies, a designer and manufacturer of seamless steel high pressure gas cylinders, declined from 245 pence at 31 December 2008 to 165 pence at the period end, primarily due to weakening conditions in the oil and gas market. The company failed to win £4 million of oil and gas contracts for the 2010 financial year due to protectionist policies in place in South East Asia. As a consequence the company's board believes that revenues in 2010 will be slightly lower than those achieved in 2009.
The value of the unquoted portfolio has also increased slightly during the last six months. This is mainly due to improvements in the prevailing price-earnings multiples for comparable companies as the stock market recovers. It is these multiples, derived from quoted companies, which underpin the valuation of companies within the unquoted portfolio. As a result, there have been modest uplifts in the valuations of Waterfall Services (formerly Cater Plus Services) and Triage Holdings.
Waterfall Services, the outsourced catering provider, is performing particularly well following its acquisition of Taylor Shaw in June 2008. Its core markets in the aged care and education sectors have provided some degree of insulation during the downturn and, encouragingly, there is a significant amount of sales activity in the pipeline.
The rates dispute between UK port operators (including RMS Group Holdings) and the Valuation Office Agency (VOA) referred to in my previous report continues. Last year the VOA levied additional business rates upon the port operators and backdated these demands to April 2005. As a consequence our valuation of RMS Group allows for the effect of a higher rates charge and the backdated liability. However, despite the inclusion of the backdated rates liability, the valuation of RMS has only declined by £30,000 since December 2008.
There has been a further reduction in the fair value of Pharmasmart, whilst the fair value of Heritage House Media has been maintained at its previous level. Pharmasmart provides recruitment services to pharmaceutical companies, and has been hit hard by consolidation within the industry with many companies withdrawing from the recruitment market. Heritage House suffered in the early part of the year due to the uncertainty over potential visitor numbers this year at many UK attractions, and many customers delayed orders as a result. However, the good weather over the Easter holiday and since has encouraged customers to increase orders in recent months though it is unlikely that this will compensate for the very slow start to the year.
We have maintained a disciplined and selective approach to investment since the beginning of the year. In February we invested a further £120,000 in the equity of Managed Support Services, a provider of maintenance services for air conditioning systems. This was part of a £6 million fundraising to provide funds for its management to exploit acquisition opportunities. Managed Support Services subsequently acquired Delrac Services at the beginning of May, a London based competitor in order to further its expansion plans across Southern England.
Outlook
The economic environment looks set to remain challenging in the short term, and the expectation is that any recovery will be slow. However, we continue to work closely with portfolio companies to ensure they are well positioned to move out of the downturn. The Company retains the cash reserves to support the existing portfolio if needed, as well as to take advantage of any future investment opportunities. There are opportunities at attractive entry levels in the current climate as many smaller companies with growth potential are struggling to access finance, and we continue to seek these out.
John Glencross
Calculus Capital Limited
18 August 2009
* Source: Lipper as at 30.06.09, based in sterling, net income reinvested with no initial charges.
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.
Over the six months under review, the FTSE All-Share Index returned 0.8 per cent. As a guide to the portfolio's performance, the Neptune Income Fund and Neptune Quarterly Income Fund posted negative returns of 3.5 per cent and 0.5 per cent respectively for the same period.*
Having undertaken continual research into the stability of the financial sector, we began to gradually re-orientate the portfolios of the Income and Quarterly Income funds at the beginning of April. This decision was reached on the basis that the approximately $3 trillion of losses now acknowledged is not far out of line with our own estimate of the cost of the recent financial crisis, catalysed by US sub-prime and the financing based upon it. We felt that the losses had been recognised to a very large extent by the banking system and that the global economy's rate of decline had, in our view, reached its climax.
We therefore meaningfully increased our exposure to the financials sector, including banks, for the first time in close to two years. In order to accommodate these new positions, we sold some of our more defensive, less cyclical stocks, such as Centrica and Diageo. These stocks served us well through the volatility of the last year, but we took profits and in place bought HSBC and Standard Chartered Bank.** Less exposed to toxic assets than other Western banks, HSBC and Standard Chartered offer significant exposure to the emerging markets, superior growth, and are in a strong position to take market share. These two banks therefore represent a low risk entry into the financials sector, an area where we feel that the risk is now in not being invested rather than being invested.
Elsewhere, we have taken positions in British Land. Bought at a distressed valuation, this real estate investment trust (REIT) is attractive not only for the potential for capital appreciation, but also in terms of income generation, given the requirement for REITs to distribute at least 90 per cent of their taxable income to shareholders. Energy is also a significant weighting in the portfolios. The sector is benefiting significantly from the recovery of the oil price and we have utilised some of our overseas weighting to gain exposure to favoured stocks abroad, such as Statoil and PetroChina.
One of our top performing holdings was FTSE 250 listed Halma. Having increased our position here, this industrials holding reported strong figures in June, resulting in a 5.0 per cent rise in its annual dividend. Overall, however, we have maintained our bias towards large-cap stocks and, with the FTSE 250's 18.4 per cent return for the six months outperforming the FTSE 100's negative 1.6 per cent return*, the funds marginally underperformed their Index, the FTSE All-Share.
Outlook
We believe that our gradual sector rotation, which has seen us complementing our defensive positions, such as in multinational consumer staples, with stocks more sensitive to the market rally, has been successful in creating well-balanced portfolios that will meet the funds' dual objectives of income generation alongside capital growth.
Robin Geffen
Neptune Investment Management Limited
18 August 2009
* Source: Lipper as at 30.06.09, based in sterling, net income reinvested with no initial charges.
** Standard Chartered Bank was added to the Neptune Income Fund whilst HSBC was added to both the Income and the Quarterly Income portfolios.
INVESTMENT PORTFOLIO
The ten largest holdings by value are included below:
As at 30 June 2009
| Cost | Valuation | Percentage of portfolio | |
| £ | £ | % | |
| AIM investments (quoted equity) | |||
| EpiStem Holdings plc* | 251,261 | 646,921 | 6.8 |
| Other AIM investments* | 4,620,995 | 1,738,573 | 18.3 |
| Unquoted equity investments | |||
| RMS Group Holdings Limited* | 100,044 | 517,052 | 5.5 |
| Triage Holdings Limited | 48,000 | 485,280 | 5.1 |
| Waterfall Services Limited | 50,129 | 248,630 | 2.6 |
| Heritage House Media Limited | 147,369 | - | - |
| Other unquoted equity investments | 300,000 | - | - |
| Unquoted preference shares | |||
| Triage Holdings Limited preference shares | 357,720 | 357,720 | 3.8 |
| Waterfall Services Limited preference shares | 116,667 | 116,667 | 1.2 |
| Unquoted bonds | |||
| Heritage House Media Limited loan stockƗ | 856,284 | 856,284 | 9.0 |
| RMS Group Holdings Limited loan stock | 400,000 | 400,000 | 4.2 |
| Waterfall Services Limited loan stock | 333,333 | 333,333 | 3.5 |
| Triage Holdings Limited loan stock | 74,280 | 74,280 | 0.8 |
| Other unquoted loan stocks | 120,000 | 120,000 | 1.3 |
| Non-qualifying equity investments and loan stock*Ɨ | (151,837) | (146,868) | (1.5) |
| Total qualifying investments | 7,624,245 | 5,747,872 | 60.6 |
| Quoted funds | |||
| Neptune Quarterly Income Fund Income Units | 1,249,318 | 982,439 | 10.4 |
| The Neptune Income Fund Income A Class | 1,260,819 | 978,940 | 10.3 |
| Unquoted funds | |||
| Fidelity Sterling Fund distributing shares class A | 617,931 | 617,931 | 6.5 |
| GS Sterling Liquid Reserves | 516,491 | 516,491 | 5.4 |
| SWIP Global Liquidity Fund | 500,000 | 500,000 | 5.3 |
| Non-qualifying equity investments and loan stock*Ɨ | 151,837 | 146,868 | 1.5 |
| Total non-qualifying investments | 4,296,396 | 3,742,669 | 39.4 |
| Total investments | 11,920,641 | 9,490,541 | 100.0 |
* The valuations of certain investments include small purchases made which are non-qualifying investments. These cost £8,711 and are valued at £3,742.
Ɨ The valuation of Heritage House Media Limited loan stock includes £143,126 of rolled up interest which is non-qualifying.
UNAUDITED CONDENSED INCOME STATEMENT
for the six months to 30 June 2009
| Six months to | Six months to | Year to | ||||||||
| 30 June 2009 | 30 June 2008 | 31 December 2008 | ||||||||
| (restated)* | ||||||||||
|
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
|
| Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
| |
| Gains/(losses) on investments at fair value |
| - | 78 | 78 | - | (214) | (214) | - | (2,444) | (2,444) |
| Investment income |
| 198 | - | 198 | 192 | - | 192 | 418 | - | 418 |
| Other income |
| - | - | - | 10 | - | 10 | 31 | - | 31 |
| Investment management fee |
| (24) | (73) | (97) | (34) | (102) | (136) | (43) | (128) | (171) |
| Other expenses |
| (74) | - | (74) | (98) | - | (98) | (166) | - | (166) |
| Return/(deficit) on ordinary activities before finance charges and taxation | 100 | 5 | 105 | 70 | (316) | (246) | 240 | (2,572) | (2,332) | |
| Finance charges |
| (50) | (235) | (285) | (49) | 265 | 216 | (158) | 1,720 | 1,562 |
| Taxation on ordinary activities |
| (1) | - | (1) | (3) | - | (3) | (5) | - | (5) |
| Return/(deficit) attributable to Ordinary shareholders | 49 | (230) | (181) | 18 | (51) | (33) | 77 | (852) | (775) | |
| Return per Ordinary Share | 4 | 0.71p | (3.31)p | (2.60)p | 0.45p | (1.29)p | (0.84)p | 1.91p | (21.12)p | (19.21)p |
* Details of the restatement are set out in notes 2 and 8.
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.
UNAUDITED CONDENSED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months to 30 June 2009
| Share | Share | Special | Capital | Revenue | ||
| capital | premium | reserve | reserve | reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| 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 period 1 January 2008 to 30 June 2008 | ||||||
| 1 January 2008 (as previously stated) | 1,218 | 21 | 10,284 | (130) | 108 | 11,501 |
| Restatement of prior years* | (839) | - | (7,097) | 230 | (74) | (7,780) |
| 1 January 2008 (restated)* | 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 year 1 January 2008 to 31 December 2008 | ||||||
| 1 January 2008 (as previously stated) | 1,218 | 21 | 10,284 | (130) | 108 | 11,501 |
| Restatement of prior years* | (839) | - | (7,097) | 230 | (74) | (7,780) |
| 1 January 2008 (restated)* | 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 year | - | - | - | (852) | 77 | (775) |
| Dividends paid | - | - | - | (7) | (34) | (41) |
| 31 December 2008 | 410 | 281 | 3,187 | (759) | 77 | 3,196 |
* Details of the restatement are set out in notes 2 and 8.
The accompanying notes are an integral part of this statement.
UNAUDITED CONDENSED BALANCE SHEET
as at 30 June 2009
|
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
|
| (restated)* | |||
| Note | £'000 | £'000 | £'000 | |
| Fixed Assets |
|
| ||
| Investments at fair value through profit or loss |
| 9,491 | 11,199 | 9,236 |
| Current Assets |
| |||
| Debtors |
| 69 | 290 | 69 |
| Cash at bank |
| 208 | 545 | 549 |
|
|
| 277 | 835 | 618 |
| Creditors: Amounts falling due within one year | ||||
| Creditors |
| (120) | (150) | (186) |
| Liability to the C Share Fund | - | (7,905) | (6,472) | |
| (120) | (8,055) | (6,658) | ||
| Net Current Assets/(Liabilities) |
| 157 | (7,220) | (6,040) |
| Net Assets | 9,648 | 3,979 | 3,196 | |
|
|
| |||
| Represented by: |
| |||
| CALLED UP SHARE CAPITAL AND RESERVES |
|
| ||
| Share capital |
| 1,240 | 410 | 410 |
| Share premium |
| 631 | 281 | 281 |
| Special reserve | 10,284 | 3,187 | 3,187 | |
| Capital reserve - investment holding loss | (2,430) | (149) | (888) | |
| Capital reserve - other |
| (288) | 198 | 129 |
| Revenue reserve |
| 211 | 52 | 77 |
| Total Ordinary shareholders' funds |
| 9,648 | 3,979 | 3,196 |
| Net asset value per Ordinary Share | 5 | 77.80p | 97.03p | 77.94p |
* Details of the restatement are set out in notes 2 and 8.
The accompanying notes are an integral part of this statement.
UNAUDITED CONDENSED CASH FLOW STATEMENT
for the six months to 30 June 2009
| Six months to | Six months to | Year to | ||
| 30 June 2009 | 30 June 2008 | 31 December 2008 | ||
| Note | £'000 | £'000 | £'000 | |
| Operating activities | ||||
| Investment income received | 121 | 141 | 328 | |
| Deposit income received | 1 | 7 | 27 | |
| Other income received | - | - | 3 | |
| Investment management fees paid | (108) | (49) | (64) | |
| Administration fees paid | (25) | (19) | (27) | |
| Other cash payments | (88) | (83) | (137) | |
| Net cash (outflow)/inflow from operating activities | 6 | (99) | (3) | 130 |
| Investing activities | ||||
| Purchase of investments | (121) | (881) | (2,447) | |
| Sale of investments | - | 538 | 2,103 | |
| Net cash outflow from investing activities | (121) | (343) | (344) | |
| Equity dividends paid | (124) | - | (41) | |
| Financing | ||||
| Distributions made to C shareholders | - | - | (87) | |
| Net proceeds from C Share issue | 1 | 334 | 334 | |
| Net proceeds from Ordinary Share issue | 2 | 284 | 284 | |
| Net cash inflow from financing | 3 | 618 | 531 | |
| (Decrease)/increase in cash | (341) | 272 | 276 | |
The accompanying notes are an integral part of this statement.
NOTES TO THE ACCOUNTS
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 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 2008. The statutory financial statements for the year ended 31 December 2008, 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 C Shares
On 30 April 2009, the 8,776,764 C Shares of 10p each in the Company were converted into Ordinary Shares of 10p each in the Company on the basis of 0.9457 Ordinary Shares for each C Share resulting in the issue of 8,300,185 Ordinary Shares. The total number of Ordinary Shares in issue post conversion of the C Shares and as at 30 June 2009 was 12,400,991.
The Company changed its accounting policy in relation to the C Shares during the year ended 31 December 2008. Under the previous accounting policy, which was in place at the time the Company prepared its half-yearly report for the six months ended 30 June 2008, the C Shares were treated as forming part of the Company's overall share capital and therefore the reserves relating to these shares were included in the total balance sheet of the Company. This was in accordance with industry practice. Under the new accounting policy which was in place at the time the Company prepared its report and accounts for the year ended 31 December 2008, in accordance with the technical interpretation of FRS 25, the C Shares were classed as debt, not equity, as they were convertible into a variable number of Ordinary Shares and were therefore shown as a liability of the Company. The comparative figures for the six months to 30 June 2008 have been restated to reflect the new accounting policy and details of the restatement are set out in note 8.
3 Dividends
The Directors have declared an interim dividend of 1 penny per Ordinary Share. This dividend is payable on 19 October 2009 to shareholders on the register on 25 September 2009.
4 Return per Ordinary Share
| Six months to 30 June 2009 | Six months to 30 June 2008 | Year to 31 December 2008 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
| pence | pence | pence | pence | pence | pence | pence | pence | pence | |
| Ordinary Share | 0.71 | (3.31) | (2.60) | 0.45 | (1.29) | (0.84) | 1.91 | (21.12) | (19.21) |
Revenue return per Ordinary Share is based on the net revenue on ordinary activities attributable to the Ordinary Shares of £49,000 (30 June 2008: £18,000, 31 December 2008: £77,000) and on 6,943,963 (30 June 2008: 3,966,853, 31 December 2008: 4,034,196) 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 £230,000 (30 June 2008: £51,000, 31 December 2008: £852,000) and on 6,943,963 (30 June 2008: 3,966,853, 31 December 2008: 4,034,196) 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 £181,000 (30 June 2008: £33,000, 31 December 2008: £775,000) and on 6,943,963 (30 June 2008: 3,966,853, 31 December 2008: 4,034,196) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.
5 Net asset value per Ordinary Share
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| pence | pence | pence | |
| Ordinary Shares of 10p each | 77.80 | 97.03 | 77.94 |
The basic net asset value per Ordinary Share is based on net assets (including current period revenue) of £9,648,000 (30 June 2008: £3,979,000, 31 December 2008: £3,196,000) and on 12,400,991 (30 June 2008: 4,100,806, 31 December 2008: 4,100,806) Ordinary Shares, being the number of Ordinary Shares in issue at the end of the period.
6 Reconciliation of net return/(deficit) before finance charges and taxation to net cash (outflow)/inflow from operating activities
| Six months to | Six months to | Year to | |
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| £'000 | £'000 | £'000 | |
| Net return/(deficit) before finance charges and taxation | 105 | (246) | (2,332) |
| Net capital (return)/deficit | (5) | 316 | 2,572 |
| Increase in prepayments and accrued income | (4) | (15) | (3) |
| (Decrease)/increase in creditors | (66) | 80 | 122 |
| Investment management fee charged to capital | (73) | (102) | (128) |
| Income reinvested | (55) | (33) | (96) |
| Taxation | (1) | (3) | (5) |
| Net cash (outflow)/inflow from operating activities | (99) | (3) | 130 |
7 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:
| Six months to | Six months to | Year to | |
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| £'000 | £'000 | £'000 | |
| Investment management fee | 97 | 116 | 210 |
| Irrecoverable VAT | - | 20 | 30 |
| VAT recovered* | - | - | (69) |
| 97 | 136 | 171 |
* The current position regarding VAT reclaim is set out in the Chairman's Statement.
In the six months to 30 June 2009, Calculus Capital Limited received an arrangement fee of £3,900 as a result of the Company's investment in Heritage House Media Limited. No such fees were received in the year to December 2008.
8 C Share Restatement
As a result of the change in accounting policy in the year to 31 December 2008 relating to the classification of the C Shares as debt not equity, the comparative figures for the six months to 30 June 2008 have been restated. Reconciliations between the previously reported total figures and the restated figures are set out below.
| UNAUDITED INCOME STATEMENT | Six months to | ||
| 30 June 2008 | |||
| Total | Previous | C Share | Restated |
| Liability | |||
| Total | Total | Total | |
| £'000 | £'000 | £'000 | |
| Losses on investments at fair value | (214) | - | (214) |
| Investment Income | 192 | - | 192 |
| Other income | 10 | - | 10 |
| Investment management fee | (136) | - | (136) |
| Operating expenses | (98) | - | (98) |
| Deficit on ordinary activities before finance charges and taxation | (246) | - | (246) |
| Finance charges | - | 216 | 216 |
| Taxation on ordinary activities | (3) | - | (3) |
| Deficit attributable to Ordinary shareholders | (249) | 216 | (33) |
8 C Share Restatement (continued)
UNAUDITED BALANCE SHEET
| As at | |||
| 30 June 2008 | |||
| Previous | C Share | Restated | |
| liability | |||
| £'000 | £'000 | £'000 | |
| Fixed Assets | |||
| Investments at fair value through profit or loss | 11,199 | - | 11,199 |
| Current Assets | |||
| Debtors | 290 | - | 290 |
| Cash at bank | 545 | - | 545 |
| 835 | - | 835 | |
| Creditors: amounts falling due within one year | |||
| Creditors | (150) | - | (150) |
| Liability to the C Share Fund | - | (7,905) | (7,905) |
| (150) | (7,905) | (8,055) | |
| Net Current Assets/(Liabilities) | 685 | (7,905) | (7,220) |
| Net Assets | 11,884 | (7,905) | 3,979 |
|
|
|
| |
| Represented by: | |||
| CALLED UP SHARE CAPITAL AND RESERVES | |||
| Share capital | 1,288 | (878) | 410 |
| Share premium | 583 | (302) | 281 |
| Special reserve | 10,284 | (7,097) | 3,187 |
| Capital reserve - investment holding loss | (509) | 360 | (149) |
| Capital reserve - other | 63 | 135 | 198 |
| Revenue reserve | 175 | (123) | 52 |
| Total Ordinary shareholders' funds | 11,884 | (7,905) | 3,979 |
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 2009.
The Directors confirm that the Chairman's Statement, the Investment Managers' Reviews, and note 7, 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
18 August 2009
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.