Source - GNW

For immediate release   
                                                                                                                                    31 August 2016

Hygea vct plc

 

Unaudited Half-Yearly Report for the Six Months Ended 30 June 2016

Financial Headlines

69.1p Net Asset Value per share at 30 June 2016

 

 
24.25p Cumulative dividends paid to date

 

 
93.35p Total return per share since launch

 

Financial Summary

  Six months to
30 June 2016
Six months to
30 June 2015
Year to
31 December 2015
Net assets (£'000s) 5,606 6,951 6,129
Return on ordinary activities after tax (£'000s) (523) (383) (1,205)
Earnings per share (6.4p) (4.7p) (14.9p)
Net asset value per share 69.1p 85.7p 75.5p
Dividends paid to date 24.25p 24.25p 24.25p
Total return per share 93.35p 109.95p 99.75
Dividends declared for the period - - -

Enquiries:

John Hustler, Hygea vct plc on 01428 727985 or [email protected]
Roland Cornish, Beaumont Cornish Limited on 020 7628 3396

Chairman's Statement

I am pleased to present the unaudited results for the six months ended 30 June 2016. The Company's net asset value ('NAV') per share at 30 June 2016 was 69.1p compared to 75.5p at 31 December 2015 and 85.7p at 30 June 2015.

Results and Dividends
The total negative return for the period amounted to 6.4p per share (June 2015: negative 4.7p). This is made up of a negative revenue return of 0.7p (June 2015: negative 0.9p) and a negative capital return of 5.7p (June 2015: negative 3.8p), 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 21.5p per share to 16.25p per share. No changes have been made to the unquoted portfolio except for the addition of a further small investment in Exosect Limited.

As explained in the 2015 Annual Report, distributions to shareholders will come from portfolio realisations and the Board's view continues to be that the current state of the AIM market is not conducive to significant realisations. We remain committed to the return of funds to shareholders as soon as practicable.

Portfolio review
At 30 June 2016, the fund consisted of 15 holdings with four companies quoted on AIM and 11 unquoted companies. As mentioned above, we made a £20,000 additional investment in Exosect, principally to avoid dilution in this company which we believe has good opportunities under its new management. In order to effect this, as well as provide liquidity for operating expenses, we have realised our small holding in Reneuron plc at a small profit to the carrying value at the last year end.

At 30 June 2016 the overall value of our AIM portfolio had fallen to less than half of the Company's assets. This is, of course, primarily due to the continued volatility of the Scancell holding.  All the scientific news flow surrounding Scancell remains positive and we are pleased to see some recovery in the bid price which, at the date of this report, has risen from 16.25p to 17.5p. After accounting for the related performance fee, this increase alone would have increased our NAV per share from 69.1p to 70.7p.

Details of AIM holdings are now included in the Investment Portfolio on page 4 so that shareholders are able to calculate the current value of our AIM portfolio. Any significant sales from the AIM 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.

Progress in respect of the unquoted portfolio remains positive but we have not seen sufficient third party evidence to allow us to increase the value of any individual holding. Details of the individual shareholdings have not been included under Investment Portfolio since we hold several different classes and there is no published data against which to compare the individual holdings; however we have continued to show our percentage share.

Hallmarq is the most developed company within the unquoted portfolio - key developments in 2016 have been i) the next two installations of PetVet (the first ones since the initial installation over two years ago), ii) a framework supply agreement for PetVet with VCA (North America's largest network of >600 small animal veterinary hospitals), and iii) agreement to introduce Toshiba's CT scanning to UK vets.

As previously reported, we have increased our overdraft facility to £200,000 of which £186,000 had been utilised at 30 June 2016.

VCT qualifying status
The Board believes 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 reduce the length of this report, 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 Annual Reports, which, together with previous Half-yearly Reports, are available for viewing on the Company's website at www.hygeavct.com.

Outlook
The last six months has seen a number of changes to qualification conditions for VCTs. However, while we remain fully invested and/or until we make a significant realisation, we do not believe that these changes will give rise to any problems for your Company. Likewise any uncertainties surrounding the departure from the EU are unlikely to affect us directly.

The Annual Report contained views on AIM's deficiencies in relation to sub-£50 million market cap companies. Your board is aware of several leading NOMADs now recognising this problem as an opportunity and we have started discussions with one of them regarding a potential solution.

At our AGM in June, which was attended by a number of shareholders, the majority view remains that the portfolio holds significant potential and we should minimise the sale of our portfolio holdings at the present time. Your Board agrees and remains optimistic of the outcome for the fund notwithstanding the continuing delays in the timetable for any realisations.

John Hustler
Chairman
30 August 2016

Investment Portfolio

Unquoted InvestmentsEquity Held
(%)
Investment at cost (£'000)Unrealised profit/(loss) (£'000)Carrying value at
30 June 2016
(£'000)
Movement in the six months to
30 June 2016
(£'000)
Hallmarq Veterinary Imaging Limited 10.2 1,116 289 1,405 -
OR Productivity Limited 13.8 765 (101) 664 -
Fuel 3D Technologies Limited <1.0 299 146 445 -
Glide Pharmaceutical Technologies Limited 1.2 326 (7) 319 -
Arecor Limited 2.1 127 16 143 -
ImmunoBiology Limited 2.5 868 (742) 126 -
Insense Limited 8.1 509 (421) 88 -
Microarray Limited 4.3 132 (65) 67 -
Exosect Limited 1.8 271 (188) 83 -
Axon Limited 13.7 374 (374) - -
Wound Solutions Limited - 350 (350) - -
Total Unquoted Investments 5,137(1,797)3,340-
 

 
         
Quoted InvestmentsShares HeldInvestment at cost (£'000)Unrealised profit/(loss) (£'000)Carrying value at
30 June 2016 (£'000)
Movement in the six months to
30 June 2016
 (£'000)
Scancell plc 13,249,730 801 1,352 2,153 (696)
Omega Diagnostics plc 2,293,868 328 119 447 92
EKF Diagnostics plc 1,059,033 214 (82) 132 16
Genedrive plc (formerly EpiStem Holdings plc) 34,300 43 (12) 31 (9)
Total Quoted Investments 1,3861,3772,763(597)
Total Investments 6,523(420)6,103(597)

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
30 August 2016

Income Statement

 Six months to 30 June 2016Six months to 30 June 2015Year to 31 December 2015
 RevenueCapitalTotalRevenueCapitalTotalRevenueCapitalTotal
  £'000£'000£'000£'000£'000£'000£'000£'000£'000
                   
Gain on disposal of fixed asset investments -33 - 5 5 - 3 3
                 
Loss on valuation of fixed asset investments -(597)(597) - (407) (407) - (1,355) (1,355)
                 
Performance fee -131131 - 95 95 - 301 301
                 
Investment income --- - - - - - -
                 
Other expenses (60)-(60) (76) - (76) (154) - (154)
                 
Return on ordinary activities before tax(60)(463)(523) (76) (307) (383) (154) (1,051) (1,205)
Taxation on loss on ordinary activities --- - - - - - -
                 
Return on ordinary activities after tax(60)(463)(523) (76) (307) (383) (154) (1,051) (1,205)
Earnings per share - basic and diluted(0.7p)(5.7p)(6.4p) (0.9p) (3.8p) (4.7p) (1.9p) (13.0p) (14.9p)
                
  • 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 2016As at 30 June 2015As at 31 December 2015
 £'000£'000£'000£'000£'000£'000
            
Fixed asset investments*  6,103   7,655   6,753
Current assets:          
Debtors 15  12   6  
  15  12   6  
Creditors:           
Amounts falling due within one year (56)  (46)   (60)  
Cash at Bank (186)  (64)   (169)  
Net current assets  (227)   (98)   (223)
           
Performance fee payable  (270)   (606)   (401)
           
Net assets 5,606   6,951   6,129
            
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  236   (62)   144
  - holding gains/(losses)  (420)   1,085   135
Revenue reserve  (1,703)   (1,565)   (1,643)
Total equity shareholders' funds 5,606   6,951   6,129
Net asset value per share 69.1p   85.7p   75.5p

*At fair value through profit and loss

          

Balance Sheet
                                                                                                         

Statement of Changes in Equity

 Share Capital Special distributable reserveCapital redemption reserveCapital reserve gains/
(losses)
Capital reserve  holding gains/
(losses)
Revenue reserveTotal
 £'000£'000£'000£'000£'000£'000£'000
As at 1 January 2015 4,058 3,397 38 (165) 1,495 (1,489) 7,334
Revenue return on ordinary activities after tax - - - - - (76) (76)
Performance fee allocated as capital expenditure - - - 95 - - 95
Current period gains on disposal - - - 5 - - 5
Current period losses on fair value of investments - - - - (407) - (407)
Prior years' unrealised losses now realised - - - 3 (3) - -
Balance as at 30 June 20154,0583,39738(62)1,085(1,565)6,951
As at 1 January 2015 4,058 3,397 38 (165) 1,495 (1,489) 7,334
Revenue return on ordinary activities after tax - - -     (154) (154)
Performance fee allocated as capital expenditure - - - 301 - - 301
Current period gains on disposal - - - 3 - - 3
Current period losses on fair value of investments - - - - (1,355) - (1,355)
Prior years' unrealised gains now realised - - - 5 (5) - -
Balance as at 31 December 20154,0583,39738144135(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 20164,0583,39738236(420)(1,703)5,606

Statement of Cash Flows

 Six months to 30 June 2016Six months to 30 June 2015Year to 31 December 2015
 £'000£'000£'000
Cash flows from operating activities     
Return on ordinary activities before tax (523) (383) (1,205)
Adjustments for:      
(Increase)/decrease in debtors (9) (4) 2
Decrease in creditors (136) (110) (301)
Gain on disposal of fixed asset investments (3) (5) (3)
Loss on valuation of fixed asset investments 597 407 1,355
Cash from operations(74) (95) (152)
Income taxes paid - - -
Net cash generated from operating activities(74) (95) (152)
      
Cash flows from investing activities     
Purchase of fixed asset investments (20) - (49)
Sale of fixed asset investments 77 15 16
Total cash flows from investing activities57 15 (33)
      
Cash flows from financing activities- - -
Total cash flows from financing activities- - -
      
Decrease in cash and cash equivalents(17) (80) (185)
      
Opening cash and cash equivalents(169) 16 16
      
Closing cash and cash equivalents(186) (64) (169)

  

Notes to the Half-Yearly Report

1.             Basis of preparation
The unaudited half-yearly results which cover the six months to 30 June 2016 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 39-41.

2.             Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 30 June 2016 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 2015 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 2016 are calculated on the basis of 8,115,376 shares (31 December 2015: 8,115,376 and 30 June 2015: 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 2016 divided by 8,115,376 (31 December 2015: 8,115,376 and 30 June 2015: 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 2015. 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 2015. 

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 2015 Annual Report and Accounts, which can be viewed on the Company's website.

7.             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