Triple Point VCT 2011 VCT plc

LEI: 213800AOOAQA5XQDEA89

Interim Results

The directors of Triple Point VCT 2011 VCT plc are pleased to announce its Interim results for the six months to 31 August 2017

For further information please contact Triple Point Investment Management LLP on 020 7201 8989. The Interim report will be available in full at www.triplepoint.co.uk

Financial Summary

Triple Point VCT 2011 plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM" and "Triple Point"). The Company was incorporated in July 2010.

·      Ordinary Shares: On 28 April 2011 the Company raised £19.3 million and as at the date of this report has a total of 20,349,869 Ordinary Shares in issue from that offer. At 31 August 2017 a total of £16.2 million had been returned to the Ordinary Shareholders.

·      A Shares: On 30 April 2015 the A Share Class offer closed having raised £10.3 million with a total of 9,951,133 A Shares being issued.

·      B Shares: On 29 April 2016 the B Share Class offer closed having raised £6.97 million with a total of 6,824,266 B Shares being issued.

Chairman's Statement

I am writing to present the Financial Statements for Triple Point VCT 2011 plc ("the Company") for the period ended 31 August 2017.

During the period the Company completed the realisation of the investment portfolio attributable to the Ordinary Share Class, continued to monitor the ongoing operation of the A Share Class investments and continued to monitor the construction of the gas power plants in the B Share Class portfolio.

Investment Portfolio

The Company's funds at 31 August 2017 were 94% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of relevant funds must be invested in qualifying investments. At 31 August 2017 qualifying investments represented 66% of the total Investment Portfolio and 86% of the funds that are required to meet the 70% condition.

The Investment Manager's review on pages 4 to 6 gives an update on the portfolio of investments in 12 small unquoted businesses.

Ordinary Share Class

The Company and the Investment Manager have successfully realised the remaining investments held by the Ordinary Share Class during the period.

At 31 August 2017 the net asset value ("NAV") per share stood at 4.30p. Taken together with the cumulative dividends paid of 110.75p per share this gives a total return per share of 115.05p. This compares to a minimum target return at launch of 108.4p per share.

On 13 April 2017 a dividend of £1.0 million equal to 5p per share was paid to Ordinary Class Shareholders and on 23 June 2017 a further dividend was paid to Ordinary Class Shareholders of £406,997 equal to 2p per share.

The Board has resolved to pay a further dividend to Ordinary Class Shareholders of £671,546 equal to 3.30p per share which will be paid on 24 November 2017 to shareholders on the register on 10 November 2017. This will bring the total paid by way of dividends to the Ordinary Class Shareholders to 114.05p per share. Following payment of this dividend the shares will be cancelled and a final distribution of 1p paid to Ordinary Class Shareholders during the first quarter of 2018.

A Share Class

The A Share Class has investments in six companies in the Hydroelectric Power sector which between them own seven hydroelectric schemes in the Scottish Highlands. All schemes have been successfully commissioned and are operational.

The A Share Class has recorded a profit over the period of 2.34p per share and as at 31 August 2017 the NAV per share stood at 102.41p. The Board are conscious that the share class, during the initial deployment stage, targets a cash return to investors of £1 by the end of year six from a combination of the initial income tax rebate, tax free dividends and a capital realisation. At the outset an average annual dividend of 5p per share was anticipated.  On 23 June 2017 the A Class Shareholders were paid their first dividend of £398,045 equal to 4p per share, which was restricted by the amount of distributable reserves in the Company. In order to go some way toward alleviating this restriction on future periods, TPIM have agreed not to charge their management fees for the A share class for the financial year ending 28 February 2018. This will enable the A Share Class to build up distributable reserves improving the share class ability to make dividend payments for this financial next year.

B Share Class 

The B Share Class has invested £5.1 million into two companies that reached financial close during May 2017. Both companies are constructing gas power plants which are due to be operational in Q1 2018.

The B Share Class has recorded a small loss over the period of 0.03p per share due to running costs exceeding income while investments are under construction. The NAV per share stood at 99.73p.

TPIM have agreed not to charge its management fees from 1 January 2017 on the amounts invested in gas power projects, which represents circa 75% of the B Share Class NAV, until these investments start to generate income for the B Share Class.

Principal Risks

The Board believes that the principal risks facing the Company are:

·    investment risk associated with the VCT's portfolio of unquoted investments;

·    risk of failure to maintain approval as a qualifying VCT;

·    risk of inability to realise investments in order to return funds to investors in line with expectations.

The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks within the scope of the Company's established investment strategy.

Outlook

The Company and the Investment Manager continue to focus on fully exiting the Ordinary Share Class; monitoring ongoing operation of the A Share Class investments in Hydroelectricity generation businesses; and ensuring that the companies in which the B Share Class has invested, construct respective facilities on time and within budget.

If you have any questions about your investment, please do not hesitate to contact Triple Point on 020 7201 8990.

Jane Owen

Chairman

12 October 2017

Investment Manager's Review

Sector Analysis

The unquoted investment portfolio can be analysed as follows:

The Company's funds at 31 August 2017 were 94% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of relevant funds must be invested in qualifying investments. At 31 August 2017 qualifying investments represented 66% of the total Investment Portfolio and 86% of the funds that are required to meet the 70% condition.

The VCT was established to fund small and medium sized enterprises. It has three share classes with separate portfolio as detailed on page 4. At the year end the overall portfolio comprised investments in 12 small, unquoted companies in two sectors: electricity generation and SME funding.

The Company's portfolio is spread between businesses which are at start-up stage and those which are more mature. Generally performance during the year across the portfolio has been in line with expectations, with the A Share Class recording an uplift in net asset value from the performance of its portfolio.

Review & Outlook

Ordinary Share Class

April 2016 marked the end of the Company's five year minimum VCT holding period. The successful realisation of the Ordinary Share Class investments was completed during the period.  

To date the Company has distributed to the Ordinary Class Shareholders 110.75p per share. A dividend of 3.30p per share has been declared, payable on 24 November 2017. The Company will apply to cancel the Ordinary shares and make a final payment to the Ordinary Shareholders during the first half 2018.

A Share Class

The A Share Class has investments in six companies which between them own seven hydroelectric schemes in the Scottish Highlands. All seven schemes have been commissioned and are operational.

In 2016 the autumn and winter periods were uncharacteristically dry, and river levels were significantly below the long term average which resulted in reduced generation in the first full year of operation. The performance during 2017 has improved, in particular during the last quarter when rainfall has been above average.

Some contractual issues have arisen at one of the recently commissioned plants which the investee company is attempting to resolve and the Board of the VCT are monitoring the situation.

In February 2017, the Scottish Government announced a 12.5% limit on business rates increases in the hydro sector for up to 1 MW for the year to 31 March 2018.  The British Hydropower Association continued to lobby the Scottish Government and on 12 September 2017, the Scottish Government announced 60% relief on business rates for small-scale hydro schemes from 1 April 2018.  The Company has two schemes above 1MW and the position for such schemes still remains unclear.  Longer term, the Scottish Government has recognised the anomalies in setting rates for hydro schemes and will work alongside industry organisations to fast track a review of the Plant and Machinery Order, which should address these issues.

With all seven schemes now operational an Asset Manager has been appointed with a view to further enhance the operational performance. Their work includes reviewing the scheme layout, hydrology data, performance data and reporting on any inefficiencies and making recommendations on where improvement could be made to enhance performance.

In addition to earning RPI-linked Feed-in Tariffs, the schemes have also earned revenue through the sale of electricity under Power Purchase Agreement (PPA). Six of the seven PPA contract terms expired on 30 September 2017, and, due to the export market rising, the companies were able to secure terms better than were originally forecast,

Looking forward to the coming year, we will focus our attention on looking at ways to increase performance through asset management, and working with Green Highland Renewables and the British Hydro Association to assess and potentially challenge the proposed new business rates.

TPIM have agreed not to charge their management fees for the A share class for the financial year ending 28 February 2018, this will enable the A Share Class to build up distributable reserves improving the share class ability to make dividend payments for this financial year.

B Share Class

The Company has invested in two companies constructing gas power plants. The power plants utilise simple technology, typically provided by Clarke Energy or Rolls Royce, to provide a reliable and secure energy supply. Both companies are expecting to be operational in Q1 2018. A more detailed review will be included once the plants are commissioned.

TPIM have agreed not to charge their management fees from 1 January 2017 on the amounts invested in gas power projects, which represents circa 75% of the B Share Class NAV, until these investments start to generate income for the B Share Class.

Non Qualifying Investments

SME Funding

The Company has investments in four finance companies which provide short and medium term funding to a range of small and medium sized businesses.

If you have any questions, please do not hesitate to call us on 020 7201 8990.

Ben Beaton

Managing Partner

For Triple Point Investment Management LLP

12 October 2017

Investment Portfolio

Directors' Responsibility Statement

The Directors have elected to prepare the Interim Financial Report for the Company in accordance with International Financial Reporting Standards ("IFRS").

In preparing the Interim Financial Report for the 6 month period to 31 August 2017, the Directors confirm that to the best of their knowledge:

a)  the Interim Financial Report has been prepared in accordance with International Accounting Standard IAS34, "Interim Financial Reporting" issued by the International Accounting Standards Board;

b)  the Interim Financial Report includes a fair review of important events during the period and their effect on the Financial Statements and a description of principal risks and uncertainties for the remainder of the accounting period;

c)  the Interim Financial Report gives a true and fair view in accordance with IFRS of the assets, liabilities, financial position and of the results of the Company for the period and complies with IFRS and the Companies Act 2006; 

d)  the Interim Financial Report includes a fair review of related party transactions and changes therein. There were no related party transactions for the accounting period; and

e)  the Directors believe that the Company has sufficient financial resources to manage its business risks in the current uncertain economic outlook.

The Directors have reasonable expectations that the Company has adequate resources to continue in operational existence for at least the next 12 months. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

This Interim Financial Report has not been audited or reviewed by the auditors.

Jane Owen

Chairman

12 October 2017

Non-Statutory Analysis - The Ordinary Share Fund

Non-Statutory Analysis - The A Share Fund

Non-Statutory Analysis - The B Share Fund