DJ SDV 2025 ZDP PLC: Full Year Results for the year ended 30 April 2021
SDV 2025 ZDP PLC (SDVP)
SDV 2025 ZDP PLC: Full Year Results for the year ended 30 April 2021
24-Jun-2021 / 07:00 GMT/BST
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SDV 2025 ZDP plc
Annual Report and Accounts for the year ended 30 April 2021
This Report and Accounts should be read in conjunction with the Report and Accounts of Chelverton UK Dividend Trust PLC
("SDV").
The financial information set out below does not constitute the Company's statutory accounts for the year ended 30
April 2021. The financial information for 2021 is derived from the statutory accounts for that year. The auditors,
Hazlewoods LLP, have reported on the 2021 accounts. Their report was unqualified and did not include a reference to any
matters to which the auditors draw attention by way of emphasis without qualifying their report. The financial
information for 2020 is derived from the statutory accounts for that year. The following text is copied from the Annual
Report & Accounts.
Strategic Report
The Strategic Report has been prepared in accordance with Section 414A of the Companies Act 2006 (the "Act"). Its
purpose is to inform members of the Company and help them understand how the Directors have performed their duty under
Section 172 of the Act to promote the success of the Company. The Directors are conscious of their duties to promote
the success of the Company under Section 172 of the Companies Act 2006, for the bene?t of the shareholders, giving
careful consideration to wider stakeholders' interests and the environment in which it operates. The Board recognises
that its decisions are material to the Company but also the Company's key stakeholders. Further details of how the
Directors have performed their duty under Section 172 is contained within the Annual Report of SDV. A copy of the full
SDV Annual Report can be found on the Investment Manager's website, www.chelvertonam.com or is available for inspection
at the National Storage Mechanism ("NSM") which is situated at www.morningstar.co.uk/uk/nsm.
Chairman's Statement
The Chairman's report on the Group's activities for the year ended 30 April 2021 is contained within the Annual Report
of SDV. A copy of the full SDV Annual Report can be found on the Investment Manager's website, www.chelvertonam.com or
is available for inspection at the National Storage Mechanism ("NSM") which is situated at www.morningstar.co.uk/uk/nsm
.
Howard Myles
Chairman
24 June 2021
Investment Manager's Report
For details of the Group's activities, development and performance during the year to 30 April 2021 shareholders should
refer to the Annual 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.
David Horner
Chelverton Asset Management Limited
24 June 2021
Other Statutory Information
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 ZDP's from Chelverton Small
Companies ZDP PLC ("SDVP") of 10,977,747 ZDP shares and GBP1,802,000 before expenses on 8 January 2018 by a placing of
1,802,336 ZDP shares, which are listed on the UK Official List and admitted to trading on the London Stock Exchange.
Between 11 April and 15 May 2018, the Company placed an additional 1,719,917 shares to raise a total of GBP1,775,500.
Further detail is given in the Capital Structure section below.
Pursuant to a contribution agreement between SDVP and SDV, SDVP has lent the proceeds of ZDP share placings 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
contribution 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 will invest in equities in order to achieve its investment objectives, which are 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.
Capital Structure & Contribution Agreement
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.
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 104p per share and this raised a net total of GBP104,500.
On 15 May 2018, SDVP placed an additional 200,000 ZDP shares at 105p per share and this raised a net total of GBP208,500.
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 contribution 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.
The value of the Group's net assets would have to fall by 69.7% (2020: 53.9%) for it to be unable to meet the full
capital repayment entitlement of the ZDP shares on the scheduled repayment date of 30 April 2025.
Performance
The Board reviews performance by reference to a number of key performance indicators ("KPIs") and considers that the
most relevant KPI is that which communicates the financial performance and strength of the Company as a whole being:
- Total return per ZDP share
This is set out below:
2021 2020
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Return per ZDP share - 4.34p 4.34p - 4.19p 4.19p
Further KPIs for the parent company can be found in SDV's Annual Report.
Principal Risks and Uncertainties Facing 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.
Employees, Environmental, Human Rights and Community Issues
The Board recognises the requirement under Section 414C of the Act to detail information about employees, environmental, human rights and community issues, including information about any policies it had in relation to these matters and the effectiveness of these policies. The Company has no employees and the Board is comprised entirely of non-executive Directors. Day-to-day management of the Company and SDV is delegated to the Investment Manager (details of the respective management agreements are set out in the Director's Report of SDV's Annual Report). The Company itself has no environmental, human rights or community policies. However in carrying out its activities in relationships with suppliers, by way of SDV, the Company aims to conduct itself responsibly, ethically and fairly.
Culture and values
The Company's values are to act responsibly, ethically and fairly at all times. The Company's culture is driven by its values and is focused on providing the final capital entitlement of the ZDP shares to the holders of the ZDP shares at the redemption date of 30 April 2025, as set out on page 3. As the Company has no employees, its culture is represented by the values, conduct and performance of the Board, the Investment Manager and its key service providers.
Current and Future Developments
The current and future developments of the Company can be reviewed as part of the Group's activities for the year ended 30 April 2021 by reference to the Annual Report and financial statements of SDV.
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