SDV 2025 ZDP PLC (SDVP)
SDV 2025 ZDP PLC: Half-yearly results
06-Dec-2019 / 14:14 GMT/BST
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SDV 2025 ZDP plc
Half-Yearly Report
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 [1] 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 SUMMARY
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 GBP10,980,000 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 GBP1,802,000 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 GBP1,462,500 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 GBP104,500 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 GBP208,500 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):
· The Company's assets comprise investments in equities in order to
achieve its investment objectives. It is the aim of the Company to provide
both income and capital growth predominantly through investment in mid and
smaller capitalised UK companies admitted to the Official List of the UK
Listing Authority and traded on the London Stock Exchange Main Market or
traded on AIM.
· The Company will not invest in preference shares, loan stock or notes,
convertible securities or fixed interest securities or any similar
securities convertible into shares; nor will it invest in the securities
or other investment trusts or in unquoted companies.
· There is no set limit on the Company's gearing.
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 GBP12.4 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 GBP1.4 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 GBP0.1 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 GBP0.2 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 GBP19,311,100 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 [1] or is available for inspection at the NSM,
which is situated at www.morningstar.co.uk/uk/nsm [2]
David Horner
Chelverton Asset Management Limited
6 December 2019
PRINCIPAL RISKS
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:
· the condensed set of financial statements has been prepared in
compliance with the IAS34 'Interim Financial Reporting' and gives a true
and fair view of the assets, liabilities and financial position of the
Company; and
· the interim management report and notes to the Half-Yearly Report
include a fair view of the information required by:
(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
Six months ended Year to 30 April 2019
31 October 2019 (audited)
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income - - - - - -
- 302 302 - 582 582
Provision for
contribution
from SDV
regarding the
capital
entitlement of
the ZDP shares
Return before - 302 302 - 582 582
finance costs
and taxation
Appropriations - (302) (302) - (582) (582)
in respect of
ZDP shares
Net return - - - -
after finance
costs and
before
taxation - -
Taxation - - - - - -
Net return - - - - - -
after taxation
Return per ZDP - 2.08p 2.08p - 4.02p 4.02p
share (see
note 3)
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
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