Interim Results

British Smaller Companies VCT PLC 5 December 2001 BRITISH SMALLER COMPANIES VCT PLC Unaudited interim results for the 6 months to 30 September 2001 * Ongoing active investment/disposal programme * £1.9m invested in 7 companies * £0.8m disposals from 6 companies * 1.1p dividend * Outlook positive for the longer term British Smaller Companies VCT plc ('the Company') today announces its unaudited interim results for the six months to 30 September 2001. FINANCIAL HIGHLIGHTS Unaudited Unaudited Audited 6 months to 6 months to 12 months to 30 September 30 31 March 2001 2001 September 2000 Gross revenue £416,000 £373,000 £730,000 Revenue return after tax: £252,000 £195,000 £376,000 Revenue return per share: 1.60p 1.23p 2.38p Total return per share: (4.20)p (3.39)p (4.38)p Total dividend: 1.1p 1.2p 2.3p Net assets: £12.22m £13.42m £13.09m Net asset value per share: 77.7p 85.0p 82.9p Number of venture capital investments: 32 24 28 Value of venture capital investments: £9.71m £8.55m £9.61m Announcing the results, the Chairman, Sir Andrew Hugh Smith, said the current market presented opportunities to invest at attractive valuations. However, given the existing business uncertainty, the portfolio had been valued cautiously for the period. Whilst some companies in the portfolio were showing good progress, it was felt that this would be better assessed at the end of the full year, when the impact on UK businesses of recent events would be clearer. INVESTMENTS A total of £1.9m was invested in seven companies during the period, £1.4m of which was invested in innovative businesses involved in the application of new technologies. These included £500,000 in Weston Antennas Limited, a manufacturer of large diameter satellite dishes for the communications market; £500,000 in Cozart Bioscience Limited, a specialist medical diagnostics company; £350,000 in Tamesis Limited, a company which develops and sells real time trading software for investment banks; and a further round of funding for Imerge Limited, which develops next generation media technology software for licensing to Original Equipment Manufacturers (OEMs) and hi-fi manufacturers. Three investments were made in more established businesses with strong growth potential - £225,000 in Tikit plc on its admission to AIM; a further £170,000 in Oasis Healthcare plc, the AIM listed dental services provider; and £128,000 in Synergy Healthcare plc on its admission to AIM. REALISATIONS There were six full or partial disposals during the period. Just before the period end, half of the holding in Synergy Healthcare plc was sold for a £ 21,000 profit; GB International Limited was sold to a trade buyer, resulting in a profit of £260,000; Denison Mayes Group Limited was sold back to management and this disposal will represent a net accounting gain of £200,000. The other disposals were in part holdings in AIM stocks - CRC Group plc, Connaught plc and Oasis Healthcare plc - resulting in realised gains of £ 107,000. PERFORMANCE The Company continues to comfortably exceed the venture capital trust legislative compliance targets in relation to investments held in qualifying companies and the percentage of those qualifying holdings in ordinary shares. DIVIDEND An interim dividend of 1.1p per share (2000: 1.2p) will be paid on 21 December 2001 to shareholders on the register on 14 December 2001. OUTLOOK Commenting on the Company's prospects for the current year, the Chairman said: 'The current economic outlook is uncertain and presents challenges to actual and potential investee companies. The fall in quoted market prices has led to many companies reappraising their financing strategy resulting in them turning increasingly to venture capital funding rather than the IPO or trade sale routes they may otherwise have taken. As a result, Yorkshire Fund Managers Limited is maintaining its flow of enquiries and pricing of these deals is becoming more realistic. Closing them, however, is taking much longer. Whilst, in the short-term, this has implications for the valuation of the existing portfolio it also presents opportunities to invest in businesses offering real growth potential at attractive valuations and thus offers the potential for increased capital gains in the longer term.' For further information, please contact: Phil Cammerman, Yorkshire Fund Managers Ltd Tel: 0113 294 5050 David Hardy, Binns & Co Tel: 020 7786 9600 Simon Mountford, Simon Mountford Communications Tel: 01347 844844 Chairman's statement During the six-month period under review your Board has continued to implement the policy announced in last year's interim statement of extending the investment criteria to include businesses involved in the development and application of new technologies. In addition, your Board and the Company's Investment Adviser, Yorkshire Fund Managers Limited, have been actively looking at other strategies for improving the underlying net asset value of the Company. A realisation programme has been put in place to unlock under-performing investments and release value in more mature investments. The realisations will be reinvested in accordance with the revised investment criteria into companies with greater growth potential. The events of 11 September will inevitably have a major impact on the performance of the portfolio. Whilst there were already clear indications before that date of recessionary trends, these are likely to have been increased by these events and business and consumer confidence has deteriorated quite sharply. A lower level of economic activity will have a direct and indirect impact on the reported net asset value of your Company. Some companies have been hit directly, others, particularly the AIM-listed investments, have been affected through the general fall in Stock Market prices, although the Board's policy of limiting your Company's exposure to AIM has kept this to a manageable level. Indeed, we had already began to reduce this exposure prior to 11 September through the part disposal of certain stocks in order to crystallise profits and release cash for other unquoted investment opportunities with greater growth potential. Given the current climate of business uncertainty, your Board has been cautious in assigning values to the underlying investments at this interim stage of the year. Whilst there are companies showing good progress within the portfolio it is felt that this will be better assessed at the full year end when the impact of interest rate reductions coupled with recent events on UK businesses will be clearer. In the light of these comments, part provisions totalling £500,000 have been made against two investments during the period. Apart from this, there has been very little change in the valuation of the unquoted part of the portfolio. The AIM investments have been valued in relation to their mid-market price at the period end. This section of the portfolio has shown a 15% decrease on a like-for-like basis since last reported on 31 March 2001. Investments During the period we invested a total of £1.9m in 7 companies. £1.4m was invested in businesses involved in the application of new technologies. Weston Antennas Limited manufacture large diameter satellite dishes for the communications market. The investment of £500,000 was made to enable the company to increase the size of its manufacturing facility, allowing it to produce larger dishes and higher precision products. £500,000 was invested in Cozart Bioscience Limited, a specialist medical diagnostics company active in the areas of drugs abuse and point of care testing. Our investment was made to assist in the roll-out of the new handheld point of care testing product, RapiScan. The company was recently awarded a major contract by the UK Home Office for testing arrestees detained in Police custody. Tamesis Limited develop and sell real time trading software for investment banks. The software allows consolidation of risk data and provides clients with a capability that can change the way in which they view their own risk position and therefore significantly enhance the way in which they handle their investment business. £350,000 was invested to further product development and provide working capital. As part of the next round of fundraising, your Company invested £57,000 in Imerge Limited. Since the initial investment of £250,000 last December the company, which develops Next Generation Media Technology for licensing to Original Equipment Manufacturers (OEMs) and to hi-fi manufacturers, has continued to progress. This latest funding, in the form of convertible debt, was part of a £2.5m package to support the launch of additional products and services. As well as the investments in these technology-based companies investments were also made in more established growth potential businesses. £225,000 was invested in Tikit plc on its admission to AIM. The company provides a comprehensive range of services to help law firms make the most of their investment in information technology. As well as helping to implement complete solutions for its clients, Tikit has provided on-going support and service to many of the leading law firms for a number of years. A further £170,000 was invested in Oasis Healthcare, the AIM listed dental services provider. This was invested as part of a £3.4m fundraising package to finance the continued expansion and development of the company's estate of dental practices. £128,000 was invested in Synergy Healthcare plc on its admission to AIM. Just prior to the end of the reporting period, half of the holding was sold resulting in a profit of £21,000. Since the period end the remaining holding has been sold for a further profit of £31,000. Realisations In addition to the disposal of the recently acquired investment in Synergy Healthcare plc, there were five other full or partial disposals in the period. GB International Limited was sold to a trade buyer resulting in a profit to your Company of £260,000 - corresponding to a 22% compound return over the 4 years of the investment. The investment in Denison Mayes Group Limited, a company that had continued to struggle in difficult trading conditions, was sold back to management in September as part of a financial restructuring plan. Your company received £ 100,000 in loan interest arrears and £100,000 for its ordinary share investment. The preference shares were written off as was £200,000 of loan. The remaining £100,000 of loan, which remains provided against, has been rescheduled to commence repayment in August 2006. As the investment, including interest arrears, had been fully provided for, the disposal represents a net accounting gain of £200,000. The other disposals were in relation to part holdings in AIM stocks. These were CRC Group plc, Connaught plc and Oasis Healthcare plc and resulted in realised gains of £107,000. Financial results and dividend The net revenue return after tax was £252,000 (2000: £195,000) equivalent to 1.60p per Ordinary share (2000: 1.23p). Gross revenue was up 11% to £416,000 and expenditure reduced 9% to £137,000. The total return, after taking account of investment valuation movements and expenses charged to capital account, was a loss of £662,000 (2000: £537,000). This reflects the unquoted investment write downs and the fall in AIM stock values. Your Board has recommended an interim dividend of 1.1p per share. The dividend will be paid on 21 December 2001 to shareholders on the register on 14 December 2001. I can report that your Company continues to comfortably exceed the venture capital trust legislative compliance targets in relation to investments held in qualifying companies and the percentage of those qualifying holdings in ordinary shares. Outlook The current economic outlook is uncertain and presents challenges to actual and potential investee companies and to your Company itself. The fall in quoted market prices has led to many companies reappraising their financing strategy resulting in them turning increasingly to venture capital funding rather than the IPO or trade sale routes they may otherwise have taken. As a result, Yorkshire Fund Managers Limited is maintaining its flow of enquiries and pricing of these deals is becoming more realistic. Closing them, however, is taking much longer. Whilst in the short-term this has implications for the valuation of the existing portfolio it also presents opportunities to invest in businesses offering real growth potential at attractive valuations and thus offers the potential for increased capital gains in the longer term. Sir Andrew Hugh Smith 5 December 2001 Summarised unaudited statement of total return Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2001 2000 2001 Notes £000 £000 £000 Revenue Gross revenue 416 373 730 Administrative expenses (137) (151) (306) Taxation 2 (27) (27) (48) ------ ------ ------ 252 195 376 ------ ------ ------ Capital Net realised (losses) gains (122) 373 286 Net unrealised losses (704) (1,005) (1,154) Management fee allocated to capital (115) (125) (243) Tax effect of capital items 27 25 42 ------ ------ ------ (914) (732) (1,069) ------ ------ ------ Total return (662) (537) (693) ===== ===== ===== Appropriated: Revenue Dividend payable on Ordinary 173 189 363 shares Transfer to revenue reserve 79 6 13 ------ ------ ------ 252 195 376 ===== ===== ===== Capital Decrease on reserves (914) (732) (1,069) ===== ===== ===== Total return per Ordinary share Revenue 1.60p 1.23p 2.38p Capital 3 (5.80p) (4.62p) (6.76p) ------ ------ ------ (4.20p) (3.39p) (4.38p) ===== ===== ===== Notes The revenue section of this statement is the profit and loss account of the company. All activity has arisen from continuing operations. There is no difference between the net return on ordinary activities before taxation and the transfer to revenue reserves for the financial period and their historic cost equivalents. Unaudited balance sheet Unaudited Unaudited Audited 30 30 31 March September September 2001 2000 2001 Notes £000 £000 £000 Fixed assets Investment portfolio 9,710 8,553 9,605 ------ ------ ------ Current assets Short-term investments 1,681 4,160 2,698 Debtors 445 328 353 Cash and short-term deposits 606 622 665 ------ ------ ------ 2,732 5,110 3,716 Creditors: Amounts payable within one (219) (246) (235) year ------ ------ ------ Net current assets 2,513 4,864 3,481 ------ ------ ------ Total net assets 12,223 13,417 13,086 ===== ===== ===== Capital and reserves Called up share capital 1,573 1,578 1,578 Capital redemption reserve 14 9 9 Capital reserve (3,201) (1,950) (2,287) Special reserve 13,741 13,770 13,769 Revenue reserve 96 10 17 ------ ------ ------ Equity shareholders' funds 12,223 13,417 13,086 ===== ===== ===== Net asset value per Ordinary share 4 77.7p 85.0p 82.9p Unaudited cash flow statement Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 30 31 March September September 2001 2000 2001 £000 £000 £000 Net cash inflow from operating activities 114 302 362 ------ ------ ------ Taxation Tax repayment received 151 71 70 ------ ------ ------ Investing Activities Purchase of investments (1,930) (1,800) (3,237) Proceeds from disposal of investment 801 1,013 1,147 ------ ------ ------ Net cash outflow from investing activities (1,129) (787) (2,090) ------ ------ ------ Equity dividends paid to shareholders (174) (253) (442) ------ ------ -------- Net cash outflow before use of liquid resources and financing (1,038) (667) (2,100) ------ ------ ------ Management of liquid resources Proceeds from the sale of fixed interest government stocks 1,007 1,313 2,790 ------ ------ ------ Financing Purchase of own shares (28) (45) (46) ------ ------ ------ (Decrease) increase in cash (59) 601 644 ------ ------ ------ Notes to the financial statements Reporting The unaudited interim financial statements have been prepared on a basis consistent with the statutory financial statements for the year ended 31 March 2001. The interim financial statements, which have been approved by the directors, are unaudited and do not constitute full financial statements as defined in section 240 of the Companies Act 1985. The comparative figures for the year ended 31 March 2001 do not constitute full financial statements and have been extracted from the Company's financial statements for the year ended 31 March 2001 which have been reported upon without qualification by the auditors and have been delivered to the Registrar of Companies. 2 Taxation charge Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2001 2000 2001 £000 £000 £000 UK taxation based on net revenue for the period: Corporation tax at 20% (2000/2001 : 20%) 27 27 48 Allocated to capital reserve (27) (25) (42) ------ ------ ------ Net charge - 2 6 ===== ===== ===== 3 Return per Ordinary share The return per share is based on net revenue from ordinary activities after tax attributable to shareholders of £252,000 (March 2001: £376,000) and on 15,752,371 shares (March 2001: 15,798,161), being the weighted average number of shares in issue during the period. There is no difference between the return per share and the fully diluted return per share in either period. 4 Net asset value per Ordinary share The net asset value per Ordinary share is calculated on attributable assets of £12,223,000 and 15,732,838 shares in issue at the period end (31 March 2001: assets of £13,086,000 and 15,777,838 shares). 5 Interim Report and Accounts Copies of the interim report are being posted to shareholders and can be obtained from the Company's registered office: Saint Martins House, 210-212 Chapeltown Road, Leeds, LS7 4HZ thereafter. Unaudited interim accounts will be lodged with the Registrar of Companies.

Companies

British Smaller Companies VCT (BSV)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today