Interim Results
Baronsmead VCT 3 PLC
02 August 2004
Baronsmead VCT 3 plc
To: Company Announcements
From: Baronsmead VCT 3 plc
Date: 2 August 2004
Interim Results for the period to 30 June 2004
Highlights
• NAV per ordinary share increased by 4.9 per cent to 101.95p from 97.15p
before deduction of interim dividends
• After interim dividends paid of 1.8p per ordinary share, NAV per ordinary
share was 100.15p
• Total return of 18.3 per cent since launch in January 2001
• Nine new investments were made during the period taking the total equity
portfolio to 41 companies
Results During the six months to 30 June 2004, the Net Asset Value (NAV) per
share increased by 4.9 per cent to 101.95p per share before deducting dividends.
The Board has declared an interim dividend of 1.8p per share payable on 12
August 2004, comprising 0.3p from net revenue and 1.5p distribution of capital
profits.
By combining the growth in NAV per share and assuming dividends have been
reinvested, the total investment return since launch in January 2001 has grown
by 18.3 per cent. Over the same period the FTSE All-Share fell by 18.2 per cent.
The positive differential of 36.5 per cent increases further if the benefits
from the available VCT tax reliefs are taken into account.
Portfolio progress | The increase in NAV is mainly due to the revaluation of a
number of unquoted investments, under BVCA valuation guidelines. The largest
gains have come from RLA Media, Martin Audio and Americana. Each has experienced
strong profitable growth in their different market niches. Not all investments
progress as anticipated and partial provisions have been made against BodyCare
and Spaform. The initial trading at Spaform has been not as profitable as
expected. Sales and profits growth has recovered at AssA and enabled the Board
to write back the previous partial provision on this investment, which is now
valued at cost.
Nine new investments at a cost of £3.6 million were made in the six months
taking the portfolio to 41 investees. The early stage portfolio of Bioscience
and IT companies increased to 11 in number with new investment Domantis and
further rounds into Ardana and Vectura. As a measure of portfolio progress, the
latest year-end results of each investee are compared with previous performance
to give an overall sense of 'direction of travel'. 35 of the 41 strong portfolio
have reported better or steady results as at 30 June 2004.
During the period, shares in Huveaux and neuTec Pharma were sold at a profit of
£166,434. Vectura, a biotech company, was the first unquoted company to be
floated on AiM on 2 July 2004 at a price of 15 per cent more than aggregate
cost. It raised £20 million of additional capital. Baronsmead VCT 3 is subject
to a lock-in period of six months on its shareholding. kidsunlimited exchanged
contracts on 22 July 2004 to merger with Asquith Court. The combined group will
become the largest UK day care centre business for children less than 5 years
old.
The level of funds retained in the non-interest bearing account had fallen to £2
million by 30 June pending investment into further qualifying investments. The
£7.8 million balance of the capital available for investment is held in a gilt
and money market OEIC designed to earn interest at minimal capital risk.
Meeting shareholder needs | During the first six months of 2004, shareholders
had held their shares for more than the minimum holding period of three years.
620,000 shares were bought back and cancelled at an average discount of 10 per
cent. 331,991 shares were issued to existing shareholders in a top up offer and
358,769 shares were issued within the dividend reinvestment scheme (DRIS).
The Board has appointed Computershare as the Company's registrar, with effect
from 2 July 2004.
Outlook | The Board continues to make progress building the portfolio and
generating positive returns by way of dividend payments and the net asset values
staying firm.
The Board expects to be fully invested in the next 6/12 months with more than
80% of the portfolio invested in qualifying unquoted and AiM traded companies.
Based on this anticipated investment rate and favourable market conditions, the
Board may consider a major fund raising in the second half of 2005.
TOP TEN INVESTMENTS AT 30 JUNE 2004
Company Location Date of Activity Cost Valuation
first
investment £'000 £'000
Martin Audio High August Professional 786 1,431
Wycombe 2003 sound
systems
RLA Media Bournemouth December Marketing 681 1,393
2002 agency
Huveaux * London March Publishing 564 1,371
2003 group
Americana Manchester August Branded 567 1,350
2003 fashion
clothing
The Art Group London October Publisher 1,28 1,281
2003 of art 1
content
Vectura Chippenham April Drug 1,04 1,194
2001 delivery 0
Kidsunlimited Manchester June Day care 481 1,136
2001 centres
AssA Washington September Work place 1,11 1,113
2003 training 3
Brownsword Altrincham December Motor 676 868
2002 claims
investigation
Fretwell-Downing Sheffield April IT library 685 785
2002 software
INVESTMENT IN SIX MONTHS TO 30 JUNE 2004
Company Location Date of Activity Cost Valuation
investment £'000 £'000
Country Stratford June 2004 Giftware 448 448
Artists on Avon distributor
Spaform Portsmouth January Portable 867 390
2004 spa baths
Scott Crickhowell May 2004 Operators 421 385
Tod * of
independent
ATM
Domantis Cambridge May 2004 Drug 356 356
discovery
Prologic* Manchester June 2004 IT software 310 310
for fashion
retailers
MKM * Altrincham May 2004 Travel 284 291
sales
promotion
Polaron* Watford March Specialist 296 310
2004 engineering
services
Quadnetic Nottinghams* January CCTV 296 310
2004 electronic
systems
Adventis* London June 2004 Advertising 281 281
agency
AssA Washington September Work place 139 139
2004 training
Ardana Cambridge May 2004 Drug 113 113
discovery
Vectura Chippenham June 2004 Drug 100 100
delivery
* Traded on AiM
David Thorp, ISIS Equity Partners plc: 0207 506 1609
Rhonda Nicoll, ISIS Asset Management plc: 0131 465 1074
Unaudited Profit and Loss Account
Six months to 30 June 2004
Revenue Capital Total
£'000 £'000 £'000
Profit on - - -
realisation of
investments
Income 391 - 391
Investment (120) (360) (480)
management fee
Other expenses (124) - (124)
---------- ----------- -----------
Profit/(loss) on 147 (360) (213)
ordinary
activities before
taxation
Tax on ordinary (14) 14 -
activities
---------- ----------- -----------
Profit/(loss) on 133 (346) (213)
ordinary
activities after
taxation
Dividend (102) (510) (612)
paid/payable
----------- ----------- -----------
Transfer to/(from) 31 (856) (825)
reserves
---------- ---------- -----------
Return per 0.39p (1.02)p (0.63)p
ordinary share ______ ______ _____
Statement of Total Recognised Gains and Losses
for the six months to 30 June 2004
2004 2004 2004
Revenue Capital Total
£'000 £'000 £'000
Profit/(loss) on 133 (346) (213)
ordinary activities
after taxation
Unrealised profit on - 1,763 1,763
revaluation of
investments
---------- ----------- -----------
Total recognised gain 133 1,417 1,550
during the year
---------- ----------- -----------
Total recognised gain 0.39p 4.16p 4.55p
per ordinary share
Unaudited Profit and Loss Account
Six months to 30 June 2003
Revenue Capital Total
£'000 £'000 £'000
Profit on - 881 881
realisation of
investments
Income 745 - 745
Investment (95) (284) (379)
management fee
Other expenses (116) - (116)
---------- ----------- -----------
Profit on ordinary 534 597 1,131
activities before
taxation
Tax on ordinary (140) 92 (48)
activities
---------- ----------- -----------
Profit on ordinary 394 689 1,083
activities after
taxation
Dividends (308) - (308)
paid/payable
----------- ----------- -----------
Transfer to 86 689 775
reserves
---------- ---------- -----------
Return per 1.16p 2.04p 3.20p
ordinary share ______ ______ _____
Statement of Total Recognised Gains and Losses
for the six months to 30 June 2003
2003 2003 2003
Revenue Capital Total
£'000 £'000 £'000
Profit on ordinary 394 689 1,083
activities after
taxation
Unrealised loss on - (423) (423)
revaluation of
investments
---------- ----------- -----------
Total recognised gain 394 266 660
during the year
---------- ----------- -----------
Total recognised gain 1.16p 0.79p 1.95p
per ordinary share
Audited Profit and Loss Account
Year to 31 December 2003
Revenue Capital Total
£'000 £'000 £'000
Profit on - 1,199 1,199
realisation of
investments
Income 1,472 - 1,472
Investment (193) (581) (774)
management fee
Other expenses (241) - (241)
---------- ----------- -----------
Profit on ordinary 1,038 618 1,656
activities before
taxation
Tax on ordinary (268) 185 (83)
activities
---------- ----------- -----------
Profit on ordinary 770 803 1,573
activities after
taxation
Dividends (747) (679) (1,426)
paid/payable
----------- ----------- -----------
Transfer to 23 124 147
reserves
---------- ---------- -----------
Return per 2.27p 2.37p 4.64p
ordinary share ______ ______ _____
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2003
2003 2003 2003
Revenue Capital Total
£'000 £'000 £'000
Profit on ordinary 770 803 1,573
activities after
taxation
Unrealised profit on - 638 638
revaluation of
investments
---------- ----------- -----------
Total recognised gain 770 1,441 2,211
during the year
---------- ----------- -----------
Total recognised gain 2.27p 4.25p 6.52p
per ordinary share
Unaudited Balance Sheet
As at As at As at
30 June 30 June 31 December
2004 2003 2003*
£'000 £'000 £'000
Fixed Assets
Quoted on the 9,208 4,337 7,645
Alternative
Investment Market
Unquoted 14,242 5,217 10,586
investments
Fixed 7,772 11,281 5,715
interest
securities
_______ _______ _______
31,222 20,835 23,946
Net current 2,864 11,675 9,048
assets
______ ______ ______
Total assets less 34,086 32,510 32,994
current
liabilities
______ ______ ______
Financed by:
Shareholders' 34,086 32,510 32,994
funds
______ ______ ______
Net asset value 100.15p 95.87p 97.15p
per share:
Ordinary shares 34,033,170 33,909,332 33,962,410
in issue
*These figures are audited.
Summarised Unaudited Statement of Cash Flows
Six months Year
Six months to to to
30 June 30 June 31 December
2004 2003 2003*
£'000 £'000 £'000
Net cash (258) 493 504
(outlfow)/inflow from
operating activities
Taxation paid - - (215)
Capital expenditure (130) 7,850 6,651
and financial
investment
Equity dividends paid (1,121) (476) (778)
----------- ----------- -----------
Net cash (1,509) 7,867 6,162
(outflow)/inflow
before financing
Financing 132 108 159
----------- ----------- -----------
(Decrease)/increase (1,377) 7,975 6,321
in cash
----------- ----------- -----------
Reconciliation of net
cash flow to movement
in net cash
(Decrease)/increase (1,377) 7,975 6,321
in cash
Opening net cash 10,908 4,587 4,587
----------- ----------- -----------
Net cash at end of 9,531 12,562 10,908
period
----------- ----------- -----------
Reconciliation of operating profit before taxation to net cash flow
from operating activities
(Loss)/profit on (213) 1,131 1,656
ordinary activities
before taxation
Profit on realisation - (881) (1,199)
of investments
(Decrease)/increase in (102) 48 66
debtors
Increase/(decrease) in 57 195 (19)
creditors
----------- ----------- -----------
Net cash (258) 493 504
(outflow)/inflow from
operating activities
----------- ----------- -----------
*These figures are audited.
Notes
1. The unaudited interim results which cover the six months to 30
June 2004 have been drawn up in accordance with the applicable
accounting standards, adopting the accounting policies set out in the
statutory accounts for the year ended 31 December 2003.
2. There were 34,033,170 ordinary shares in issue at 30 June 2004
(31 December 2003: 33,962,410; 30 June 2003: 33,909,332). During the
period 690,760 ordinary shares were issued and 620,000 ordinary
shares of 10p each were bought in by the company for cancellation.
3. Earnings for the six months to 30 June 2004 should not be taken
as a guide to the results for the full year and are based on a
weighted average of 34,031,429 (31 December 2003: 33,895,164; 30 June
2003: 33,842,855) ordinary shares in issue during the period.
4. Income for the period to 30 June is derived from:
2004 2003
£'000 £'000
Equity investment 82 50
Fixed interest investment 270 584
Deposit interest 39 111
____ ___
391 745
5. As previously announced on 7 July 2004, the interim dividend of
1.80p will be paid on 12 August 2004 to shareholders on the register
on 16 July 2004.
6. These are not statutory accounts in terms of Section 240 of the
Companies Act 1985 and are unaudited. The full audited accounts for
the period to 31 December 2003, which were unqualified, have been
lodged with the Registrar of Companies.
7. Copies of the interim report have been mailed to shareholders
and are available from the Registered Office of the Company at 100
Wood Street, London EC2V 7AN.
This information is provided by RNS
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