Half-yearly Report
Baronsmead VCT 3 plc
Half-Yearly Financial Report
For the six months ended 30 June 2012
The Directors announce the unaudited Half-Yearly Financial Report for the six
months to 30 June 2012 as follows:-
Investment Objective
Baronsmead VCT 3 plc is a tax efficient listed company which aims to achieve
long-term investment returns for private investors.
Investment policy
* To invest primarily in a diverse portfolio of UK growth businesses, whether
unquoted or traded on AIM.
* Investments are made selectively across a range of sectors in companies
that have the potential to grow and enhance their value.
Dividend policy
The Board of Baronsmead VCT 3 aims to sustain a minimum annual dividend level
at an average of 4.5p per Ordinary Share, mindful of the need to maintain net
asset value. The ability to meet these twin objectives depends significantly on
the level and timing of profitable realisations and it cannot be guaranteed.
There will be variations in the amount of dividends paid year on year.
Since launch the average annual tax free dividend paid to ordinary shareholders
including the 3.0p interim dividend, has been 5.8p per share (equivalent to a
pre-tax return of 7.7p per share for a higher rate taxpayer). For shareholders
who claimed tax reliefs on initial subscription of 20 per cent, 30 per cent or
40 per cent, their returns would have been higher.
Share price discount policy
The Company buys back its shares if, in the opinion of the Board, a repurchase
would be in the best interests of the Company's shareholders as a whole. Shares
are bought back through the market rather than directly from shareholders. This
minimises the number of shares bought back by the Company while maximising the
opportunity for investors to invest in the Company's existing shares.
Through the operation of the Company's share buy back policy the mid share
price was at an average discount to net asset value of approximately 10 per
cent in the two years to 30 June 2012. The difference between the buy and sell
price for the Company's shares averaged 1.1p over the same two year period.
Shareholder choice
The Board provides shareholders with a number of choices that enable them to
utilise their investment in Baronsmead VCT 3 in ways that best suit their
personal investment and tax planning, in a way that treats all shareholders
equally.
* Fund raising - from time to time the Company seeks to raise additional
funds by issuing new shares at a premium to the latest published net asset
value to account for issue costs. On 12 January 2012 the Company launched
an offer for subscription to raise £4.135 million (£3.939 million after
costs). On 7 February 2012 the Company announced that this offer was fully
subscribed.
* Dividend Reinvestment Plan - the Company offers a Dividend Reinvestment
Plan which enables shareholders to purchase additional shares through the
market in lieu of cash dividends. Approximately 1,106,000 shares were
bought in this way between April and December 2011.
* Buy back of shares - from time to time the Company buys its own shares
through the market in order to maintain a mid share price discount of
approximately 10 per cent to net asset value. In the six months to
30 June 2012, 656,897 shares were bought back representing 0.9 per cent
of the shares in issue at 30 June 2012 at prices which represented an
average discount of 10 per cent to the latest published net asset values.
* Secondary market - the Company's shares are listed on the London Stock
Exchange and can be bought using a stockbroker or authorised share dealing
service in the same way as shares of any other listed company. In addition
to the shares bought by participants of the Dividend Reinvestment Plan,
approximately 114,000 shares were bought by investors in the Company's
existing shares in the six months to 30 June 2012.
FINANCIAL HEADLINES
* +7.8%- Net asset value ("NAV") per share increased 7.8 per cent to 108.0p
before deduction of the interim dividend.
* 3.0p - Interim dividend of 3.0p payable on 21 September 2012 for the six
month period to 30 June 2012.
* 64.0p - Cumulative tax free dividends total 64.0p paid to shareholders in
the last 10 years, including the declared 3.0p interim dividend
* £3.9m - Net proceeds raised in January/February 2012.
Performance Summary to 30 June 2012
Total return* 6 months 1 year 3 years 5 years 10 years
% % % % %
Net Asset Value†+7.8 +4.2 +31.1 +16.9 +96.8
FTSE All-Share +3.3 (3.1) +47.4 +2.0 +80.9
* Source: ISIS EP LLP and AIC.
†This return for Baronsmead VCT 3 ignores up front tax reliefs and the impact
of receiving dividends tax free.
Cash Returned to Shareholders
The table below shows the cash returned to shareholders dependent on their
subscription cost, including their income tax reclaimed on subscription.
Year subscribed Subscription Income tax Net Cumulative Net Gross
price reclaim cash dividends annual yieldâ€
p p invested paid* yield± %
p p %
2001 (January) 100.0 20.0 80.0 66.3 7.3 9.7
2005 (March) - C 100.0 40.0 60.0 35.3 8.0 10.7
Shares**
2010 (March) 103.1 30.9 72.2 18.0 11.0 14.6
Note - The total return could be higher for those shareholders who were able to
defer a capital gain on subscription and the net sum invested may be less.
± Net annual yield represents the cumulative dividends paid expressed as an
annualised percentage of the net cash invested.
†The gross equivalent yield if the dividends had been subject to higher rate
tax (currently 32.5 per cent on dividend income). The additional rate of tax on
dividend income of 42.5 per cent which came into force from the 2010/11 tax
year for those shareholders who earned more than £150,000 has not been
included. For those shareholders who would otherwise pay this additional rate
of tax on dividends, the future gross equivalent yield will be higher than the
figures shown.
** Dividends paid to C shareholders post conversion have been adjusted by the
conversion ratio (0.85642528).
CHAIRMAN'S STATEMENT
I am delighted to report growth of 7.8 per cent in Net Asset Value to 108.01p
per share which was mainly attributable to increases in the valuations of the
AIM portfolio. In the six months to 30 June 2012, the Company raised £3.9 million
net of expenses and invested £6.4 million in five new and six follow-on
investments.
In the absence of substantial realisations in the period the interim dividend
of 3.0p per share will be funded by Capital reserves.
Results
The Net Asset Value increased to 108.01p per share from 100.16p before taking
account of the interim dividend. This 7.8 per cent increase compares to the
gain in the FTSE All-Share Index of 3.3 per cent.
Pence per
share
NAV as at 1 January 2012 100.16
Valuation uplift (7.8 per cent) 7.85
NAV as at 30 June 2012 108.01
Less Interim dividend payable on (3.00)
21 September 2012
105.01
Long Term Performance
Over the last ten years the cumulative tax free dividends paid to shareholders,
including the interim dividend of 3.0p, amount to 64.0p per share. The NAV
total return over ten years has been 196.8p for each 100p invested compared
with 180.9p for the FTSE All-Share index.
In previous years we have provided the performance record since the launch of
the Company in January 2001. However, recognising that most investment
companies typically report on ten year performance, we have set out the ten
year record in the financial summary to this half-yearly report. In view of our
policy of providing full disclosure and transparency we have also set out the
full record of performance on our website www.baronsmeadvct3.co.uk.
Portfolio Review
The net assets of £68.3 million were invested as follows:
• 52 per cent in unquoted companies
• 29 per cent in AIM-traded and other listed companies
• 5 per cent in Wood Street Microcap Investment Fund
• 14 per cent in liquid assets or UK government securities.
The portfolio has progressed well during the last six months with a steady
increase in unquoted values of 5 per cent and a significant uplift in the
quoted portfolio of 23 per cent. The latter gain reflected a re-rating of the
small cap sector from January 2012 following a large reduction during the last
quarter of 2011.
The most significant gain in the unquoted portfolio was an uplift of £1.37 million
in the value of Independent Living Services Limited, a domiciliary care
business based in Scotland and on the quoted side IDOX plc, an AIM traded
software company, increased in value by £1.76 million. Each quarter the
direction of trading and profitability of these companies is recorded so that
the Board can monitor the overall health and trajectory of the portfolio. At
30 June 2012, 86 per cent of companies in the portfolio were progressing steadily
or better.
The largest unquoted investment, Nexus Vehicle Holdings, and the largest AIM
investment, IDOX plc, represented 6.9 and 6.5 per cent of net asset value
respectively.
New Investments
During the six months to 30 June 2012 approximately £6.4 million was invested
in five new companies as well as a number of follow on investments.
An unquoted investment of £833,000 was made into Happy Days Consultancy, an
established childcare day nursery based in Newquay covering South-West England.
A follow on investment of £360,000 was also made into Crew Clothing Holdings
Limited.
In addition, £3.0 million has been invested into three unquoted acquisition
companies chaired by experienced operating partners with whom ISIS has
successfully worked in the recent past. These companies have been formed to
enable investment into established trading entities over the next two years.
After the period end £1.0 million was invested in Pho, an unquoted restaurant
group that specialises in Vietnamese street food.
£1.2 million of new investments were made into four quoted companies as set out
in the Table of Investments and Realisations below.
Finally, a further investment of £1.0 million was made into Wood Street
Microcap Investment Fund.
Investment realisations
Six investments were realised during the period. On the unquoted portfolio TVC
Group, a marketing communications agency based in London, was sold for an
undisclosed but profitable multiple. This investment was made in July 2008 but
very quickly encountered difficult trading conditions such that by March 2010
operating profits had fallen significantly and the company was valued at 25 per
cent of cost. Since then its recovery has been significant with credit due to
the management for attracting a new senior team, winning new profitable
contracts and tightening its financial management, in which efforts it was
supported heavily by our Investment Manager ISIS. The final sale to the
Economist Group in March 2012 represented a fivefold gain in value from the low
point.
Five AIM companies were divested, Clarity Commerce Solutions, Real Good Food
Company (The), Prologic, Stagecoach Theatre Arts and Colliers International UK
were legacy AIM-traded companies that were valued below cost and were divested
largely to reduce the tail of older and poorer performing investments. Their
combined value at 31 December 2011 was £449,000 but together realised £251,000
in excess of this.
VCT Legislation
The Finance Bill in March 2012 announced some changes designed to improve
Venture Capital Trust ("VCT") legislation and to obtain continued EU State Aid
approval for the VCT scheme. These changes received Royal Assent on 17 July 2012
and are summarised below:
* Increasing the size of companies which can receive VCT funds (from those
with assets of £7 million to £15 million)
* Allowing companies with a greater number of employees to receive funding
(up from a headcount of 50 to 250)
* Enabling companies to receive more money from VCTs and other similar
schemes (up from £2 million to £5 million per year)
* Restricting the use of VCT and EIS funds for the acquisition of shares in
another company. This change will apply only to VCT funds raised after
5 April 2012.
In addition, from 6 April 2012, the annual limit of £1 million that a VCT can
invest in a qualifying investment in any tax year has been removed.
Shareholder Choice
The Board has always tried to offer shareholders a wide choice of options
regarding their investment in Baronsmead VCT 3. To explain those options we
have set out on the inside front cover of this half-yearly report the Board's
share price discount policy and our approach to buy backs. The Board believes
that the buy back policy, which is operated primarily by our brokers using the
secondary market, is in the best interests of the Company's shareholders as a
whole. It facilitates realisation, if that is required, without limiting the
ability of the Board to offer "top-up" fund raisings to existing shareholders.
There is no intention to introduce an `enhanced buy back' scheme since such a
scheme does not generate additional funds for the Company and could also limit
our ability to raise additional funds through more cost effective
non-prospectus offers.
Website
The Company's website has recently been redesigned and is continually updated
to provide easier access to information about the Company. Please do visit the
web site at the following location and your feedback will be most appreciated:
www.baronsmeadvct3.co.uk
Outlook
The outlook for the UK economy is uncertain with the volatility caused by the
Eurozone debt crisis and the continued lack of bank finance manifesting in
limited growth. The Manager's focus on identifying high growth niches within
its specialist sectors, on limiting the amount of leverage in the portfolio and
its hands on approach to supporting and guiding its investments has ensured
that the portfolio has largely avoided distress to date. The Board believes
that this approach should ensure that Baronsmead VCT 3 is well placed to steer
through these current economic conditions and continue to prosper.
Anthony Townsend
Chairman
17 August 2012
Table of Investments and Realisations
Investments in the six months to 30 June 2012
Company Location Sector Activity Book
cost
£'000
Unquoted investments
New
Ingleby (1885) Limited London Business Company seeking to 1,000
Services acquire businesses in the
business services sector
Ingleby (1886) Limited London Business Company seeking to 1,000
Services acquire businesses in the
business services sector
Ingleby (1887) Limited London Consumer Company seeking to 1,000
Markets acquire businesses in the
consumer markets sector
Happy Days Consultancy Newquay Healthcare Provider of nursery based 833
Limited & Education childcare in Cornwall &
Plymouth across 16
settings
Follow on
Crew Clothing Holdings London Consumer Multi-channel clothing 360
Limited Markets retailer
Total unquoted investments 4,193
AIM-traded & listed investments
New
Zattikka plc London TMT* Online games development 316
Follow on
Dods Group plc London TMT* Political information and 678
communication
Inspired Energy plc Kirkham Business Energy procurement 100
Services consultancy services
Driver Group plc Rossendale Business Dispute resolution 60
Services
Accumuli plc Salford TMT* Managed IT security 5
Total AIM-traded and listed 1,159
investments
Collective investment vehicle
Follow on
Wood Street Microcap 1,000
Investment Fund
Total collective investment vehicle 1,000
Total investments in the period 6,352
* Technology, Media and Telecommunications ("TMT")
Realisations in the six months to 30 June 2012
Company First 31 Realised Overall
investment December profit/ multiple
date 2011 (loss) return
valuation this
£'000 period
£'000
Unquoted realisations
TVC Group Limited Full trade sale Jul 08 1,298 26 ^
MLS Limited Loan repayment Jul 06 121 - 1.0
Total unquoted 1,419 26
realisations
AIM-traded & listed
realisations
Stagecoach Theatre Full trade sale Dec 01 153 140 0.7
Arts plc
Real Good Food Company Full market sale Dec 03 160 65 0.4
(The) plc
Prologic plc Full trade sale Jun 04 103 48 0.5
Clarity Commerce Full trade sale Oct 09 29 2 0.6
Solutions plc
Colliers International Written off Jul 01 4 (4) 0.0
UK plc
Total AIM-traded & listed realisations 449 251
Total realisations in the period 1,868 227â€
^ Not disclosed
†Proceeds of £8,000 were also received in respect of Getting Personal Limited,
which had been sold in the year ended 31 December 2011.
Investment Classification at 30 June 2012
By Sector* %
Business Services 31
Consumer Markets 18
Financial Services 2
Healthcare & Education 16
Technology, Media & Telecommunications 33
("TMT")
Total Assets* %
Unquoted - loan stock 38
Unquoted - ordinary & preference shares 13
AIM, listed & collective investment vehicle 35
Listed interest bearing securities 11
Net current assets 3
Time Investment Held* %
Less than 1 year 20
Between 1 and 3 years 14
Between 3 and 5 years 15
Greater than 5 years 51
* at 30 June 2012 valuation
Summary Investment Portfolio
Company Sector Book 31 30 June % of % of % of
cost December 2012 net equity equity
£'000 2011 valuation assets held by held
valuation £'000 Baronsmead by
£'000 †VCT 3 plc all
funds*
Unquoted
Nexus Vehicle Business 2,368 5,658 4,713 6.9 12.6 57.4
Holdings Limited Services
CableCom TMT 1,381 3,707 3,881 5.7 10.6 48.0
Networking
Holdings Limited
Crew Clothing Consumer 1,344 2,676 3,047 4.5 6.1 25.5
Holdings Limited Markets
Fisher Outdoor Consumer 1,423 1,777 2,771 4.0 10.5 44.0
Leisure Holdings Markets
Limited
Independent Healthcare & 1,599 1,293 2,667 3.9 16.2 65.7
Living Services Education
Limited
CSC (World) TMT 1,606 1,940 2,282 3.3 8.8 40.0
Limited
Kafevend Consumer 1,252 1,991 2,204 3.2 15.8 66.5
Holdings Limited Markets
Valldata Group Business 1,616 1,694 1,749 2.5 8.9 40.6
Limited Services
Inspired Business 796 1,368 1,382 2.0 5.0 22.5
Thinking Group Services
Limited
Independent Healthcare & 1,346 1,346 1,346 2.0 10.9 55.0
Community Care Education
Management
Limited
MLS Limited TMT 389 1,043 1,122 1.6 5.3 22.5
Arcas Business 1,000 1,000 1,000 1.5 9.6 48.6
Investments Services
Limited
HealthTech Healthcare & 1,000 1,000 1,000 1.5 9.6 48.6
Innovation Education
Partners Limited
Quest Venture Business 1,000 1,000 1,000 1.5 9.6 48.6
Partners Limited Services
Ingleby (1885) Business 1,000 - 1,000 1.5 9.6 48.6
Limited Services
Ingleby (1886) Business 1,000 - 1,000 1.5 9.6 48.6
Limited Services
Ingleby (1887) Consumer 1,000 - 1,000 1.5 9.6 48.6
Limited Markets
Happy Days Healthcare & 833 - 833 1.2 8.4 42.5
Consultancy Education
Limited
Playforce Business 1,033 512 511 0.7 9.7 44.0
Holdings Limited Services
Music Festivals Consumer 400 400 400 0.6 N/A N/A
plc Loan note Markets
Other 4,346 1,084 440 0.7
investments
Total unquoted 27,732 29,489 35,348 51.8
AIM
IDOX plc TMT 1,038 2,661 4,421 6.5 3.2 9.6
Netcall plc TMT 869 842 1,337 1.9 4.1 20.4
Murgitroyd Group Business 319 791 843 1.2 3.1 6.2
plc Services
Jelf Group plc Financial 761 877 762 1.1 1.4 6.3
Services
Escher Group TMT 614 564 759 1.1 1.9 9.7
Holdings plc
Tasty plc Consumer 469 547 741 1.1 2.5 17.1
Markets
TLA Worldwide Business 620 620 651 1.0 4.9 24.3
plc Services
Dods Group plc TMT 1,219 105 649 0.9 6.3 29.9
FFastFill plc TMT 314 448 601 0.9 0.9 6.1
Driver Group plc Business 563 259 568 0.8 4.1 19.4
Services
Accumuli plc TMT 338 473 556 0.8 3.5 19.9
Vianet Group plc Business 646 388 518 0.7 1.8 9.6
Services
Sinclair IS Healthcare & 524 399 479 0.7 0.4 2.4
Pharma plc Education
Paragon Healthcare & 200 425 400 0.6 3.1 17.3
Entertainment Education
Limited
Anpario plc Healthcare & 275 315 339 0.5 2.0 14.8
Education
Zattikka plc TMT 316 - 325 0.5 1.4 7.1
Quadnetics Group Business 296 261 319 0.5 0.6 2.1
plc Services
Plastics Capital Business 473 321 317 0.5 1.7 9.8
plc Services
Electric Word TMT 616 312 312 0.5 5.2 28.8
plc
Inspired Energy Business 300 217 310 0.4 2.4 11.8
plc Services
Other 5,910 3,128 3,098 4.6
investments
Total AIM 16,680 13,953 18,305 26.8
Listed
Vectura Group Healthcare & 771 900 1,227 1.8 0.5 1.3
plc Education
Chime TMT 369 293 269 0.4 0.2 1.3
Communications
plc
Marwyn Financial 525 81 68 0.1 0.3 1.8
Management Services
Partners plc
Marwyn Value Financial 64 44 37 0.1 1.3 6.0
Investors Services
Limited
Total listed 1,729 1,318 1,601 2.4
Listed interest
bearing
securities
UK T-Bill 23/07/12 2,799 - 2,799 4.1
UK T-Bill 17/09/12 3,598 - 3,598 5.3
BlackRock ICS 490 1,590 490 0.7
plc -
Institutional
Sterling
Liquidity Fund
JP Morgan 490 1,590 490 0.7
Liquidity Funds
- Sterling
Liquidity Fund
Total interest 7,377 3,180 7,377 10.8
bearing
securities
Collective 3,525 2,826 3,769 5.5
investment vehicle
Wood Street
Microcap
Investment Fund
Total collective 3,525 2,826 3,769 5.5
investment vehicle
Total 57,043 50,766 66,400 97.3
investments
Net current 1,853 2.7
assets
Net assets 68,253 100.0
†The total investment valuation at 31 December 2011 per the table above does
not agree to the audited accounts due to the purchases and sales since that
date.
* All funds managed by the same investment manager, ISIS EP LLP including
Baronsmead VCT 3.
AIM & Listed Portfolio Concentration Analysis as at 30 June 2012
Investment ranking Book cost Valuation % of
by valuation £'000 £'000 quoted
portfolio
Top Ten 6,994 11,991 60.2
11-20 4,247 4,133 20.8
21-30 3,836 2,724 13.7
31+ 3,332 1,058 5.3
Total 18,409 19,906 100.0
Independent Review Report to Baronsmead VCT 3 plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended
30 June 2012 which comprises the Income Statement, Reconciliation of Movement in
Shareholders' Funds, Balance Sheet and Statement of Cash Flows and the related
explanatory notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Services Authority
("the UK FSA"). Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with UK Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice). The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with the Statement Half-Yearly Financial Reports as issued by the UK
Accounting Standards Board.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2012 is not prepared, in all
material respects, in accordance with the Statement Half-Yearly Financial
Reports as issued by the UK Accounting Standards Board and the DTR of the UK
FSA.
Catherine Burnet
for and on behalf of
KPMG Audit Plc
Chartered Accountants
Edinburgh
17 August 2012
Responsibility statement of the Directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in accordance
with the Statement 'Half-yearly financial reports' issued by the UK
Accounting Standards Board;
* the Chairman's Statement (constituting the interim management report)
includes a fair review of the information required by 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;
* the Statement of Principal Risks and Uncertainties below is a fair review
of the information required by DTR 4.2.7R being a description of the
principal risks and uncertainties for the remaining six months of the year;
and
* the financial statements include a fair review of the information required
by 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 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,
Anthony Townsend
Chairman
17 August 2012
Unaudited Income Statement
For the six months to 30 June 2012
Six months to 30 June Six months to 30 June Year to 31 December
2012 2011 2011*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Unrealised gains on - 5,206 5,206 - 5,418 5,418 - 1,403 1,403
investments
Realised gains on - 285 285 - 211 211 - 1,824 1,824
investments
Income 343 - 343 876 - 876 1,963 - 1,963
Investment management (202) (606) (808) (198) (594) (792) (385) (1,155) (1,540)
fee
Other expenses (188) - (188) (185) - (185) (365) - (365)
(Loss)/ profit on (47) 4,885 4,838 493 5,035 5,528 1,213 2,072 3,285
ordinary activities
before taxation
Taxation on ordinary - - - (88) 88 - (244) 244 -
activities
(Loss)/ profit on (47) 4,885 4,838 405 5,123 5,528 969 2,316 3,285
ordinary activities
after taxation
Return per ordinary
share:
Basic (0.08p) 7.82p 7.74p 0.67p 8.48p 9.15p 1.61p 3.85p 5.46p
* Figures as at 31 December 2011 are audited.
Unaudited Reconciliation of Movement in Shareholders' Funds
For the six months to 30 June 2012
Six Six Year to
months to months to 31 December
30 June 30 June 2011
2012 2011 £'000*
£'000 £'000
Opening shareholders' funds 60,095 64,643 64,643
Profit for the period 4,838 5,528 3,285
Gross proceeds of share issues 4,135 - -
Purchase and sale of shares for treasury (616) (736) (613)
Expenses of share issue and buybacks (199) (4) (6)
Dividends paid - (2,729) (7,214)
Closing shareholders' funds 68,253 66,702 60,095
* Figures as at 31 December 2011 are audited.
Notes
1. The unaudited interim results which cover the six months to 30 June 2012
have been prepared in accordance with applicable accounting standards and
adopting the accounting policies set out in the statutory accounts of the
Company for the year to 31 December 2011.
2. Return per share is based on a weighted average of 62,481,892 ordinary
shares in issue (30 June 2011 - 60,393,473, 31 December 2011 - 60,112,945).
3. Earnings for the first six months to 30 June 2012 should not be taken as a
guide to the results of the full financial year to 31 December 2012.
4. During the six months to 30 June 2012 the Company purchased 656,897 ordinary
shares to be held in treasury at a cost of £616,000. At 30 June 2012 the
Company holds 8,279,214 ordinary shares in treasury. These shares may be
re-issued below Net Asset Value as long as the discount at issue is narrower
than the average discount at which the shares were bought back.
Excluding treasury shares, there were 63,194,037 ordinary shares in issue at
30 June 2012 (30 June 2011 - 59,862,534, 31 December 2011 - 59,997,534).
5. The interim dividend of 3.0 pence per ordinary share (3.0 pence capital)
will be paid on 21 September 2012 to shareholders on the register on
7 September 2012. The ex-dividend date is 5 September 2012.
6. The financial information contained in this half-yearly financial report
does not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The information for the year to 31 December 2011 has been
extracted from the latest published audited financial statements. The audited
financial statements for the year to 31 December 2011, which were unqualified,
have been filed with the Registrar of Companies. No statutory accounts in
respect of any period after 31 December 2011 have been reported on by the
Company's auditors or delivered to the Registrar of Companies.
7. In accordance with the Companies (Shareholders Rights) Regulation 2009,
copies of the half-yearly financial report have been made available to
shareholders and will be available from the Registered Office of the Company at
100 Wood Street, London EC2V 7AN.
Unaudited Balance Sheet
As at 30 June 2012
As at As at As at
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000*
Fixed assets
Unquoted investments 35,348 31,115 30,787
Traded on AIM 18,305 14,472 14,402
Listed on LSE 1,601 1,799 1,318
Traded on NYSE - 175 -
Collective investment vehicle (Wood
Street Microcap Investment Fund) 3,769 3,140 2,826
Listed interest bearing securities 7,377 15,694 9,979
Investments 66,400 66,395 59,312
Current assets
Debtors 305 632 562
Cash at bank and on deposit 2,052 179 683
2,357 811 1,245
Creditors (amounts falling due within (504) (504) (462)
one year)
Net current assets 1,853 307 783
Net assets 68,253 66,702 60,095
Capital and reserves
Called-up share capital 7,147 6,762 6,762
Share premium account 18,566 15,012 15,012
Capital redemption reserve 10,862 10,862 10,862
Capital reserve 22,047 25,553 24,262
Revaluation reserve 9,357 7,770 2,876
Revenue reserve 274 743 321
Equity shareholders' funds 68,253 66,702 60,095
* Figures as at 31 December 2011 are audited.
As at As at As at
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000*
Net asset value per share 108.01p 111.43p 100.16p
Number of ordinary shares in 63,194,037 59,862,534 59,997,534
circulation
Treasury net asset value per share 106.56p 109.68p 99.16p
Number of ordinary shares in 63,194,037 59,862,534 59,997,534
circulation
Number of ordinary shares held in 8,279,214 7,757,317 7,622,317
treasury
Number of listed ordinary shares in 71,473,251 67,619,851 67,619,851
issue
* Figures as at 31 December 2011 are audited.
Unaudited Statement of Cash Flows
For the six months to 30 June 2012
Six months Six months Year
to to to
30 June 30 June 31 December
2012 2011 2011
£'000 £'000 £'000*
Net cash outflow from operating activities (383) (260) (74)
Capital expenditure and financial (1,568) 2,640 7.322
investment
Equity dividends paid - (2,729) (7,214)
Net cash (outflow)/inflow before financing (1,951) (349) 34
Net cash inflow/(outflow) from financing 3,320 (740) (619)
Increase/(decrease) in cash 1,369 (1,089) (585)
Reconciliation of net cash inflow/(outflow)
to movement in net cash
Increase/(decrease) in cash 1,369 (1,089) (585)
Opening cash position 683 1,268 1,268
Closing cash position 2,052 179 683
Reconciliation of profit on ordinary activities
before taxation to net cash out
flow from operating activities
Profit on ordinary activities before 4,838 5,528 3,285
taxation
Gains on investments (5,491) (5,629) (3,227)
Changes in working capital and other 270 (159) (132)
non-cash items
Net cash outflow from operating activities (383) (260) (74)
* Figures as at 31 December 2011 are audited.
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 under the heading
Principal risks, risk management and regulatory environment within the Business
Review and Notes in the Company's Annual Report and Accounts for the year to
31 December 2011. The Company's principal risks and uncertainties have not changed
materially since the date of that report.
Related Parties
ISIS EP LLP ('the Manager') manages the investments of the Company. The Manager
also provides or procures the provision of secretarial, accounting,
administrative and custodian services to the Company. Under the management
agreement, the Manager receives a fee of 2.5 per cent per annum of the net
assets of the Company. This is described in more detail under the heading
Management within the Report of the Directors in the Company's Annual Report
and Accounts for the year to 31 December 2011. During the period, the Company
has incurred management fees of £808,000 and secretarial and accounting fees of
£60,000 payable to the Manager.
Going Concern
After making enquiries, and bearing in mind the nature of the Company's
business and assets, the Directors consider that the Company has adequate
resources to continue in operational existence for the foreseeable future. In
arriving at this conclusion the Directors have considered the liquidity of the
Company and its ability to meet obligations as they fall due for a period of at
least twelve months from the date that these financial statements were
approved. As at 30 June 2012 the Company held cash balances, investments in UK
Gilts and Money Market Funds with a combined value of £9,429,000. Cash flow
projections have been reviewed and show that the Company has sufficient funds
to meet both its contracted expenditure and its discretionary cash outflows in
the form of the share buyback programme and dividend policy. The Company has no
external loan finance in place and is therefore not exposed to any gearing
covenants.
Corporate Information
Directors Registrar and Transfer Office
Anthony Townsend (Chairman)‡ Computershare Investor Services PLC
Andrew Karney†PO Box 82
Gillian Nott OBE* The Pavilions
Ian Orrock Bridgwater Road
Bristol BS99 6ZZ
Secretary Tel: 0870 889 3250
ISIS EP LLP Brokers
Registered Office Matrix Corporate Capital LLP
100 Wood Street One Vine Street
London EC2V 7AN London W1J 0AH
Investment Manager Auditors
ISIS EP LLP KPMG Audit Plc
100 Wood Street Saltire Court
London EC2V 7AN 20 Castle Terrace
Edinburgh EH1 2EG
FPPE LLP
(liquid assets only) Solicitors
100 Wood Street Norton Rose
London EC2V 7AN 3 More London Riverside
London SE1 2AQ
Investor Relations
Michael Probin VCT Status Adviser
020 7506 5796 PricewaterhouseCoopers LLP
1 Embankment Place
Registered Number London WC2N 6RH
04115341
Website: www.baronsmeadvct3.co.uk
‡ Chairman of the Nomination Committee
and Remuneration and Management Engagement Committee
†Senior Independent Director
* Chairman of the Audit and Risk
Committee
Copies of the half yearly report will shortly be available from the following
website: www.baronsmeadvct3.co.uk.
National Storage Mechanism
A copy of the Half-Yearly Report will be submitted shortly to the National
Storage Mechanism ("NSM") and will be available for inspection at the NSM,
which is situated at: www.hemscott.com/nsm.do .
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
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