SDV 2025 ZDP PLC (SDVP)
SDV 2025 ZDP plc
for the six months ended 31 October 2019
The Half-Yearly Report can be accessed via the Investment Manager's website at www.chelvertonam.com or by contacting the Company Secretary on 01245 398950.
This interim report should be read in conjunction with the Half-Yearly report of Chelverton UK Dividend Trust PLC ('SDV').
Company Activities, Strategy & Business Model
SDV 2025 ZDP PLC ('SDVP' or the 'Company') was incorporated on 25 October 2017 as a wholly owned subsidiary of SDV, together referred to as the 'Group'. SDVP was especially formed for the issuing of Zero Dividend Preference ('ZDP') shares. It raised £10,980,000 before expenses on 8 January 2018 by the conversion of ZDPs from Chelverton Small Companies ZDP PLC ('SDVP') of 10,977,747 ZDP shares and £1,802,000 on 8 January 2018 by placing of 1,802,336 ZDP Shares, which are listed in the UK Official List and admitted to trading on the London Stock Exchange.
On the 11 April 2018 £1,462,500 was raised before expenses by placing an additional 1,419,917 ZDP shares, which are listed on the UK Official List and admitted to trading on the London Stock Exchange.
On the 10 May 2018 £104,500 was raised before expenses by placing an additional 100,000 ZDP shares, which are listed on the UK Official List and admitted to trading on the London Stock Exchange.
On the 15 May 2018 £208,500 was raised before expenses by placing an additional 200,000 ZDP shares, which are listed on the UK Official List and admitted to trading on the London Stock Exchange.
Pursuant to a loan agreement between SDVP and SDV, SDVP has lent the proceeds of the placing to SDV. The loan is non-interest bearing and is repayable three business days before the ZDP share redemption date of 30 April 2025 or, if required by SDVP, at any time prior to that date in order to repay the ZDP share entitlement. The funds are to be managed in accordance with the investment policy of SDV.
SDVP investment objective & policy
The objective of SDVP is to provide the final capital entitlement of the ZDP shares to the holders of the ZDP shares at the redemption date of 30 April 2025. The proceeds of the placing of the ZDP shares have been lent to SDV under a loan agreement and the funds are managed in accordance with the investment policy of SDV, which is as follows (as extracted from the Annual Report of SDV):
SDVP has a capital structure comprising unlisted Ordinary shares and ZDP shares listed on the Official List and traded on the London Stock Exchange by way of a standard listing. SDVP is a wholly owned subsidiary of SDV which is a closed-ended investment company. On 8 January 2018, 10,977,747 ZDP shares were converted from SDVP at 100p per share, and 1,802,336 ZDP shares were placed at 100p per share and this raised a net total of £12.4 million. The expenses of the placing were borne by SDV. On 11 April 2018, SDVP placed an additional 1,419,917 ZDP shares at 103p per share and this raised a net total of £1.4 million. On 10 May 2018, SDVP placed an additional 100,000 ZDP shares at 104.5p per share and this raised a net total of £0.1 million. On 15 May 2018, SDVP placed an additional 200,000 ZDP shares at 104.25p per share and this raised a net total of £0.2 million. The expenses of the placing were borne by SDV.
A contribution agreement between SDV and SDVP has also been made whereby SDV will undertake to contribute such funds as would ensure that SDVP will have in aggregate sufficient assets on 30 April 2025 to satisfy the final capital entitlement of the ZDP shares of 133.18p per share, being £19,311,100 in total. This assumes that the parent company and the Company have sufficient assets as at 30 April 2025 to repay the ZDP shares. To this extent the Company is reliant upon the investment performance of the parent company and subject to the principal risks as set out in the Annual Report of SDV.
To protect the interests of ZDP shareholders, the loan agreement contains a restriction on the Group incurring any other borrowings (other than short-term indebtedness in the normal course of business, such as when settling share transactions) except where such borrowings are for the purpose of paying the final capital entitlement due to holders of ZDP shares.
Based on the value of the Group's assets as at 31 October 2019 they would have to fall at a rate of 38.1% per annum for the Company to be unable to meet the full capital repayment entitlements of the ZDP shares on the scheduled repayment date of 30 April 2025.
Registered in England No: 11031268
INTERIM MANAGEMENT REPORT
For details of the Group's activities, development and performance during the six months ended 31 October 2019 shareholders should refer to the Half-Yearly Report of SDV, which can be found on the Investment Manager's website. www.chelvertonam.com or is available for inspection at the NSM, which is situated at www.morningstar.co.uk/uk/nsm
Chelverton Asset Management Limited
6 December 2019
The principal risks facing the Company are substantially unchanged since the date of the Annual Report for the year ended 30 April 2019 and continue to be as set out on page 10 and 11 of that report.
In addition, and due to the Company's dependence on SDV to repay the loan and provide a contribution to meet the capital entitlement of the ZDP shareholders, the other risks faced by the Company are considered to be the same as for SDV. These are defined in note 24 of SDV's Annual Report for the year ended 30 April 2019 and include the following; market risk, market price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF
THE HALF-YEARLY REPORT
We confirm that to the best of our knowledge:
(a) DTR 4.2.7R of the 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; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) 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.
This Half-Yearly Report was approved by the Board of Directors on 6 December 2019 and the above responsibility statement was signed on its behalf by:
Howard Myles, Chairman.
STATEMENT OF COMPREHENSIVE INCOME (unaudited)
for the six months ended 31 October 2019
The total column of this statement is the Statement of Comprehensive Income of the Company, prepared in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the EU. The supplementary revenue and capital return columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies ('AIC').
All items in the above statement derive from continuing operations.
Statement of Changes in Net Equity
for the six months ended 31 October 2019
BALANCE SHEET (unaudited)
as at 31 October 2019
NOTES TO THE HALF-YEARLY REPORT
For the six months ended 31 October 2019
1. General information
The financial information contained in this Half-Yearly Report does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. The statutory financial statements for the year ended 30 April 2019, which contained an unqualified auditors' report, have been lodged with the Registrar of Companies and did not contain a statement required under the Companies Act 2006. The financial statements of the Company have been prepared in conformity with IFRSs issued by the International Accounting Standards Board (as adopted by the EU), and Interpretations issued by the International Financial Reporting Interpretations Committee, and applicable requirements of UK company law, and reflect the following policies which have been adopted and applied consistently.
The financial information of the Company for the period ended 31 October 2019 has also been consolidated into the results of SDV for the six months ended 31 October 2019.
This Half-Yearly Report has not been reviewed by the Company's Auditors.
This Half-Yearly Report has been prepared using accounting policies set out in note 2 of the Company's audited financial statements for the year ended 30 April 2019.
There is no charge to United Kingdom income taxation as the Company does not have any income. There are no deferred tax assets in respect of unrelieved excess expenses as all expenses are borne by SDV.
3. Return per ZDP share
The capital return per ZDP share is based on appropriations, (the accrued entitlement to date) of £302,000 (30 April 2019: £582,000) and on 14,500,000 (30 April 2019: 14,489,863) being the weighted average number of ZDP shares in issue during the period.
4. Net asset value per ZDP share
The net asset value per ZDP share is based on the net assets attributable of £15,597,000 (30 April 2019: £15,295,000) and on 14,500,000 (30 April 2019: 14,500,000) being the number of ZDP shares in issue during the period.
5. Going concern
The Company will fulfil its investment objective through the contribution agreement it has with SDV. The contribution from SDV will provide the capital entitlement of the ZDP shareholders. The principal risk the Company faces, is therefore, that SDV would not have sufficient assets to repay the loan and to make a contribution to fulfil the amount of the capital entitlement due to the ZDP shareholders. Covenants are in place between SDV and the Company that ensure that SDV will not undertake certain actions in relation to both itself and the Company.
Due to the Company's dependence on SDV to repay the loan and provide a contribution to meet the capital entitlement of the ZDP shareholders, other risks faced by the Company are considered to be the same as for SDV and these are defined in note 23 of SDV's Annual Report.
SDVT has considerable financial resources and therefore the Directors believe that the Company is well placed to manage its business risks and also believe that SDVT will have sufficient resources to continue in operational existence for the foreseeable future. Accordingly, they have prepared this Half-Yearly Report on the going concern basis.
6. Related party transactions
The funds lent to SDV are managed by Chelverton Asset Management Limited, a company in which Mr van Heesewijk, a Director of the Company, has an interest. The Investment Manager is remunerated by SDV and the amounts in respect of its services as Investment Manager of the Company are not separately identifiable.
DIRECTORS AND ADVISERS
Principal Group Advisers
Sources of further information
The Company's ZDP shares are listed on the London Stock Exchange.
The Company's ZDP NAV is released to the London Stock Exchange on a daily basis and published monthly via the AIC.
Share registrar enquiries
The register for the ZDP shares is maintained by Share Registrars Limited. In the event of queries regarding your holding, please contact the Registrar on 01252 821390. Changes of name and/or address must be notified in writing to the Registrar.
|OAM Categories:||1.2. Half yearly financial reports and audit reports/limited reviews|
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