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Chrysalis VCT Plc (CYS)

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Thursday 20 June, 2019

Chrysalis VCT Plc

Correction: Chrysalis VCT plc: Half-Yearly Report

Correction: Chrysalis VCT plc: Half-Yearly Report

Chrysalis VCT plc
20 June 2019

Correction:Half-Yearly Report for the six months ended 30 April 2019 

The dividend total stated in the penultimate paragraph of the Chairman's Statement was incorrect. This parapraph has been amended as follows:

Following the payment of the forthcoming dividends, Shareholders who invested at launch will have received distributions totalling 90.7p per Share.


Chrysalis VCT plc

Half-Yearly Report for the six months ended 30 April 2019

Recent performance summary

 30 April
30 April
31 October
Net Asset Value per share70.8078.0073.40
Cumulative dividends paid per share86.7078.7083.45
Total Return (Net Asset Value per Share plus cumulative dividends)157.50156.70156.85

I am pleased to present my statement for the six months ended 30 April 2019. The portfolio has performed satisfactorily over the period.

Net asset value and results
At 30 April 2019, the net asset value per Share (“NAV”) stood at 70.8p, an increase of 0.65p (0.9%) since the previous year end of 31 October 2018, after adding back the 3.25p dividend paid on 29 March 2019.

The Total Return (NAV plus cumulative dividends) to Shareholders who invested at the launch of the Company in 2000  is now 157.5p, compared to the original cost (net of income tax relief) of 80.0p per Share.

The return on activities after taxation for the Company for the period was £166,000, comprising a revenue profit of £64,000 and a capital return of £102,000.

Venture capital portfolio
The Board has reviewed the valuations of the unquoted portfolio and a number of adjustments have been made accordingly. As a whole, the fair value movements in respect of the Venture Capital investments amounted to a net uplift of £193,000.

The most significant fair value adjustment was in respect of Enthuse Holdings Limited, formerly MyTime Media Holdings, which owns and publishes a range of magazines. The Enthuse group underwent a significant restructuring process in recent months, in order to centralise the operations of its magazine businesses. Enthuse has also now completed a deal to acquire a majority interest in AA Media Limited. These positive developments have led to a valuation uplift of £803,000.

As Shareholders will be aware, the VCT portfolio includes three restaurant and catering businesses which constitute 16.2% of the portfolio (including cash). The restaurant trade in particular is a very competitive sector and several large and established names have suffered of late. Whilst trading conditions are challenging, the three businesses in the Chrysalis portfolio have, as a whole, performed in line with expectations during the period. Locale Enterprises Limited, the operator of a chain of Italian restaurants in London, was reduced in value by £568,000 due to a decline in profitability during the period. However, management have now taken steps to rationalise the business in order to focus on the more successful restaurant sites. Difficult trading conditions have also impacted the performance of Life’s Kitchen Limited, a provider of event management and catering services, and the investment has been reduced in value by £100,000 as a result. K10 (London) Limited, the operator of a chain of Japanese restaurants in London, has continued to perform satisfactorily against budget, leading to a valuation uplift of £24,000.

As highlighted in the summary on page 3 of the Half-Yearly Report, Coolabi Group Limited (“Coolabi”), an international media group, now constitutes 25.2% of the portfolio, an increase from 24.1% as at 31 October 2018. The Board is mindful that concentration in the portfolio is likely to increase as the number of investments decreases. The Board pays detailed and specific attention to the valuation of Coolabi and having assessed the valuation at the half-year stage considers there to have been no movement since 31 October 2018, when the Company last reported to Shareholders.

Other valuation movements in the venture capital gave rise to a net uplift of £34,000.

Portfolio activity
A small amount of retention proceeds, relating to the historic sale of Autocue Limited, was received during the period.

There were no other disposals from or additions to the venture capital portfolio during the period.

Cash, fixed income and other listed investments
The Company held £4.8 million in cash, fixed income securities and other listed investments as at 30 April 2019.

One of the two remaining fixed income securities matured during the period, generating proceeds of £688,000 and resulting in a loss against cost of £58,000. However, this loss has been more than offset by the income received over the last five years, as this bond has yielded 7% per annum.

Share buybacks
The Company operates a policy of buying in Shares that become available in the market at a discount of approximately 15% to the latest published NAV, subject to market conditions and liquidity constraints. I am pleased to report that the level of buybacks undertaken during the period has been manageable, with 184,000 Ordinary Shares repurchased for a total consideration of £113,000.

Any Shareholders wishing to either acquire more Shares, or to sell existing holdings in the Company, are recommended to contact the Company’s broker, Nplus1 Singer Capital Markets.

As outlined in the Annual Report to 31 October 2018, the Company will maintain a dividend target of 5.0p per Share per annum. In addition to this target, special dividends will be paid as and when realisations from the portfolio have provided the Company with excess liquidity.

In line with the policy discussed above, the Company will pay a standard interim dividend of 1.75p per Share, and in view of the bond redemption that took place during the period, the Company will also pay a special dividend of 2.25p per share, bringing the total to 4.0p per share. The total dividend will be paid on 26 July 2019, to Shareholders on the register at 28 June 2019.

Following the payment of the forthcoming dividends, Shareholders who invested at launch will have received distributions totalling 90.70p per Share.

I look forward to updating Shareholders on developments in my statement in the Annual Report, which I expect to be published in January 2020.

Martin Knight


as at 30 April 2019

 CostValuationValuation movement
in the period
% of
by value
Top ten venture capital investments    
Coolabi Group Limited3,4565,144-25.2%
Locale Enterprises Limited2,5131,851(568)9.1%
Enthuse Holdings Limited561,8488039.1%
Zappar Limited3001,623-8.0%
Driver Require Limited5201,271(25)6.2%
Cambridge Mechatronics Limited3661,172-5.7%
K10 (London) Limited9501,135245.6%
Green Star Media Limited650666153.3%
IX Group Limited250372211.8%
Life’s Kitchen Limited400300(100)1.5%
Other venture capital investments 1,599206231.0%
Fixed income securities    
Lloyds Banking Group 7% perp724732(7)3.6%
Other investments    
Impact Healthcare REIT Plc*750803453.9%
Cash at bank and in hand 3,253 16.0%
Total investments 20,376 100.0%

All venture capital investments are unquoted unless otherwise stated.
*Listed and traded on the Main Market of the London Stock Exchange.

for the six months ended 30 April 2019


 CostValue at
1 Nov 2018
 £’000 £’000 £’000  £’000  £’000
Venture capital investments     
Autocue Group Limited--111
Fixed income securities     
Intermediate Capital Group plc 7% 21/12/18746688688(58)-

for the six months ended 30 April 2019


Six months ended
30 Apr 2019

Six months ended
30 Apr 2018
31 Oct
 RevenueCapitalTotal RevenueCapitalTotal Total
 £’000£’000£’000 £’000£’000£’000 £’000
Income248-248 235-235 486
Net gains/(losses) on investments        
- realised-11 -486486 (99)
- unrealised-231231 -(10)(10) 633
 248232480 235476711 1,020
Investment management fees(44)(132)(176) (49)(148)(197) (390)
Performance incentive fees--- -(37)(37) (54)
Other expenses(138)-(138) (130)(1)(131) (267)
Return on ordinary activities before taxation66100166 56290346 310
Tax on total comprehensive
income and ordinary activities
(2)2- (7)7- 9
Return attributable to equity shareholders64102166 49297346 319
Return per Share 0.2p0.4p0.6p 0.2p1.0p1.2p 7.3p

The total column within the Income Statement represents the profit and loss account of the Company. No operations were acquired or discontinued during the period.

A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement as noted above. 

as at 30 April 2019

30 Apr
 30 Apr
 31 Oct
Note£’000 £’000 £’000
Fixed assets      
Investments 17,123 18,868 17,580
Current assets      
Debtors 129 88 102
Cash at bank and in hand 3,253 4,449 3,763
  3,382 4,537 3,865
Creditors: amounts falling due within one year (65) (84) (118)
Net current assets 3,317 4,453 3,747
Net assets 20,440 23,321 21,327
Capital and reserves      
Called up share capital6288 299 290
Capital redemption reserve 100 89 98
Share premium 1,478 1,478 1,478
Merger reserve7529 1,357 529
Special reserve7127 562 406
Capital reserve - realised711,283 13,443 12,222
Capital reserve - unrealised76,049 5,569 5,782
Revenue reserve7586 524 522
Equity shareholders’ funds  20,440 23,321 21,327
Net asset value per share570.8p 78.0p 73.4p

for the six months ended 30 April 2019


Capital reserve -realisedCapital reserve -unrealisedRevenue
At 1 November 2017299891,4781,35760213,7155,90250523,947
Total comprehensive income-----(435)633121319
Transfers between reserves---(828)3541,227(753)--
Transactions with owners         
Purchase of own shares(9)9--(550)---(550)
Dividends paid-----(2,285)-(104)(2,389)
At 31 October 2018290981,47852940612,2225,78252221,327
Total comprehensive income-----(129)23164166
Transfers between reserves----(166)13036--
Transactions with owners         
Purchase of own shares(2)2--(113)---(113)
Dividends paid-----(940)--(940)
At 30 April 20192881001,47852912711,2836,04958620,440

for the six months ended 30 April 2019


Six months ended
30 Apr 2019
 Six months ended
30 Apr 2018
 Year ended
31 Oct 2018
 £’000 £’000 £’000
Cash flows from operating activities      
Return on ordinary activities before taxation 166 346 319
Gains on investments (232) (476) (534)
(Increase)/decrease in other debtors (27) 92 78
(Decrease)/increase in other creditors (53) 22 (1)
Net cash outflow from operating activities  (146) (16) (138)
Cash flows from investing activities      
Proceeds from disposal of investments 689 878 2,223
Purchase of investments - - -
Net cash inflow from investing activities  689 878 2,223
Net cash inflow before financing activities 543 862 2,085
Cash flows from financing activities      
Equity dividends paid  (940) (972) (2,389)
Purchase of own shares (113) - (492)
Net cash outflow from financing activities (1,053) (972) (2,881)
(Decrease)/increase in cash (510) (110) (796)
Net movement in cash      
Beginning of the period 3,763 4,559 4,559
Net cash (outflow)/inflow (510) (110) (796)
End of the period 3,253 4,449 3,763


1. General information

Chrysalis VCT plc (“the Company”) is a Venture Capital Trust established under the legislation introduced in the Finance Act 1995 and is domiciled in the United Kingdom and incorporated in England and Wales.

2. Accounting policies
Basis of accounting

The unaudited half-yearly results cover the six months to 30 April 2019 and have been prepared in accordance with the accounting policies set out in the annual accounts for the year ended 31 October 2018 and in accordance with the Financial Reporting Standard 102 (“FRS 102”) and in accordance with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies” revised November 2014 (“SORP”).

3. The comparative figures were in respect of the six months ended 30 April 2018 and the year ended 31 October 2018 respectively.

4. Basic and diluted return per Share

 Six months ended
30 Apr 2019
 Six months ended
30 Apr 2018
 Year ended
31 Oct 2018
Return per Share based on:     
Net revenue return for the period (£’000)64 49 121
Capital return per Share based on:     
Net capital gain for the period (£’000)102 297 198
Weighted average number of Shares28,970,909 29,917,025 29,697,929

5. Basic and diluted net asset value per share

 30 Apr 2019 30 Apr 2018 31 Oct 2018
Net asset value per share based on:     
Net assets (£’000)20,440 23,321 21,327
Number of shares in issue at the period end28,860,025 29,917,025 29,044,025
Net asset value per share70.8p 78.0p 73.4p

6. Called up share capital

  Shares in issue £’000
Period ended 30 April 2019 28,860,025 288
Period ended 30 April 2018 29,917,025 299
Year ended 31 October 2018 29,044,025 290

7. Reserves

The special reserve is available to the Company to enable the purchase of its own shares in the market without affecting its ability to pay dividends, and also allows the Company to make transfers between reserves to offset realised capital losses arising on disposals and impairments.
Distributable reserves are calculated as follows:


Six months ended
30 Apr 2019
 Six months ended
30 Apr 2018
 Year ended
31 Oct 2018
 £’000 £’000 £’000
Special reserve127 562 406
Capital reserve - realised11,283 13,443 12,222
Revenue reserve586 524 522
Merger reserve – distributable element276 276 276
Unrealised losses – excluding unrealised unquoted gains(688) (338) (147)
 11,584 14,467 13,278

 8. Risks and uncertainties

Under the Disclosure and Transparency Directive, the Board is required in the Company’s half year results to report on principal risks and uncertainties facing the Company over the remainder of the financial year.

The Board has concluded that the key risks facing the Company over the remainder of the financial period are as follows:

- investment risk associated with investing in small and immature businesses; and
- failure to maintain approval as a VCT.

In both cases, the Board is satisfied with the Company’s approach to these risks. As a VCT, the Company is forced to have significant exposure to relatively immature businesses. This risk is mitigated to some extent by holding a well-diversified portfolio.

The Company’s compliance with the VCT regulations is continually monitored by the Administration Manager, who regularly reports to the Board on the current position. The Company also retains Philip Hare and Associates LLP to provide regular reviews and advice in this area. The Board considers that this approach reduces the risk of a breach of the VCT regulations to a minimal level.

9. Going concern

The Company has sufficient financial resources at the period end, and holds a diversified portfolio of investments. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.

The Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. For this reason, they believe that the Company continues to be a going concern and that it is appropriate to apply the going concern basis in preparing the financial statements.

10. The Directors confirm that, to the best of their knowledge, the half-yearly financial statements have been prepared in accordance with FRS 104 Interim Financial Reporting and the Half-Yearly 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, and a description of the principal risks and uncertainties for the remaining six months of the year; and

- DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

11. The unaudited financial statements set out herein do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The figures for the year ended 31 October 2018 have been extracted from the financial statements for that year, which have been delivered to the Registrar of Companies; the Independent Auditor’s Report on those financial statements was unqualified.

12. Copies of the unaudited half yearly report will be sent to Shareholders shortly. Further copies can be obtained from the Company’s registered office and will be available for download from


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