Final Results

Keydata AIM VCT PLC 08 December 2005 KEYDATA AIM VCT plc Preliminary Announcement of Final Results for the period ending 30 September 2005 Financial Highlights Period to 30 September 2005 Capital Values: Net assets (Â£000) 14,870 Net asset value per share 103.71p Share price (mid) 99.0p Discount 4.54% Returns per share: Revenue return 0.14p Capital return 12.15p Total return 12.29p Total expense ratio 2.49% Chairman's Statement Introduction This is my first annual statement as Chairman of Keydata AIM VCT which covers the period from date of incorporation on 16 August 2004 to 30 September 2005. I would like to welcome you as a shareholder and thank you for your support in the launch of the VCT. The initial Offer for Subscription closed on 30 April 2005 with gross funds raised of around Â£14.3 million from 863 investors. The costs of the launch were set at 5% of the gross funds raised and the net proceeds retained by the company were Â£13.6 million with an initial net asset value per share of 95p. Results and Investments The Investment Manager, Hargreave Hale, has invested Â£4.1 million in fifteen qualifying AIM companies during the period. The bid value of these investments at 30 September 2005 was around Â£5.5 million, representing a 32.7% uplift. We have a further Â£9.4 million available to invest, Â£4.0 million of which is held in short dated gilts and Â£5.4 million in bank deposit. This increase in the value of investments led to a capital return of 12.15p per share over the period, which, in addition to a revenue surplus of 0.14p per share, resulted in a total return of 12.29p per share (based on the weighted average number of shares in issue during the period). The net asset value per share at 30 September 2005 was 103.71p, a 9.2% increase on the initial NAV of 95p. We are pleased with progress to date with a healthy increase in NAV and over 30% of funds now invested in qualifying investments but our primary focus remains to deliver long term returns to shareholders. The directors do not propose to recommend a final dividend for the period. Outlook New and secondary issues on AIM have increased strongly in number this year. There were 1,292 companies on AIM with a combined market capitalisation of over Â£48 billion as at 31 August 2005. In the first 8 months of this year, over Â£4.4 billion was raised by AIM companies (both qualifying and to a large extent non-qualifying) either at the time of floating on AIM or in secondary fund raisings. The quality of such issues has however been variable and the Investment Manager has been selective in making new investments. Our focus is investment in new listings or secondary top ups of AIM companies. While we can invest in OFEX and pre-IPO companies, due to the lack of liquidity in these companies, we will generally do so only in exceptional circumstances. Post balance sheet event We are pleased to have obtained shareholder approval on 11 October 2005 to a C share offer for subscription of up to Â£25 million. This will be managed as a separate fund and should benefit existing ordinary shareholders through a lower total expense ratio to the extent that overheads will in future be allocated pro rata across both investment funds. Shareholder Communication The Company's daily share price can be found on various financial websites under the EPIC code 'KEY' or on our own dedicated website at www.keydataaimvct.co.uk Sir Aubrey Brocklebank Bt Chairman 7 December 2005 Statement of total return (incorporating the revenue account) for the period ending 30 September 2005 For the period 16 August 2004 to 30 September 2005 Note Revenue Capital Total Â£000 Â£000 Â£000 Gains on investments 7 - 1,316 1,316 Income 2 303 - 303 -------- -------- -------- 303 1,316 1,619 Management fees 3 (28) (84) (112) Other expenses 4 (258) - (258) -------- -------- -------- (286) (84) (370) -------- -------- -------- Return on ordinary activities before 17 1,232 1,249 taxation Tax on ordinary activities 5 (3) 3 - -------- -------- -------- Return for the period attributable to 14 1,235 1,249 equity shareholders -------- -------- -------- Return per share 6 0.14p 12.15p 12.29p The revenue column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. Balance sheet as at 30 September 2005 Note As at 30 September 2005 Â£000 Fixed assets Investments 7 9,501 Current assets Debtors 9 45 Cash at bank and in hand 5,368 -------- 5,413 Creditors: amounts falling due within one year 10 (44) -------- Net current assets 5,369 -------- Net assets 14,870 -------- Capital and Reserves Called up share capital 11 143 Special reserve 12 13,478 Capital reserve - realised 12 (113) Capital reserve - unrealised 12 1,348 Revenue reserve 12 14 -------- Equity shareholders' funds 14,870 -------- Net asset value per share 13 103.71p Cash flow statement for the period ending 30 September 2005 Note For the period 16 August 2004 to 30 September 2005 Â£000 Net cash outflow from operating activities 15 (68) Net financial investment 15 (8,185) -------- Cash outflow before management of liquid resources (8,253) Financing 15 13,621 ------- Increase in cash 5,368 -------- Reconciliation of movement in shareholders' funds For the period 16 August 2004 to 30 September 2005 Â£000 Revenue return for period 14 Capital return for the period 1,235 -------- 1,249 Issue of ordinary shares 13,621 Issue of redeemable preference share 50 Redemption of redeemable preference shares (50) -------- Closing shareholders' funds 14,870 -------- Investment portfolio summary as at 30 September 2005 Qualifying investments Book cost Valuation % of net assets Â£000 Â£000 % Accuma Group PLC 380 760 5.1 Ascribe PLC 250 479 3.2 Centrom Group PLC 300 240 1.6 Egdon Resources PLC 249 556 3.7 FDM Group PLC 250 326 2.2 Hardide PLC 200 235 1.6 Internet Business Group PLC 300 281 1.9 K3 Business Technology Group PLC 270 270 1.8 Maxima Holdings PLC 251 246 1.7 Neutrahealth PLC 315 420 2.8 Sarantel Group PLC 343 343 2.3 SectorGuard PLC 250 232 1.6 Torex Retail PLC 244 425 2.9 York Pharma PLC 250 267 1.8 Zenith Hygiene Group PLC 281 402 2.7 -------- -------- -------- Total qualifying investments 4,133 5,482 36.9 ------- ------- -------- Non-qualifying investments Treasury 4.5% Stock 2007 4,020 4,019 27.0 ------- ------- ------- Total investments 8,153 9,501 63.9 Cash 5,368 5,368 36.1 Other net current assets 1 1 0.0 -------- -------- -------- Net assets 13,522 14,870 100.0 -------- -------- -------- Notes to the financial statements 1. Accounting policies A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set out below. Basis of preparation The financial statements have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments and in accordance with UK GAAP and applicable accounting standards and with the Statement of Recommended Practice (SORP) for 'Financial Statements of Investment Trust Companies' issued by the Association of Investment Trust Companies. Investments Listed investments and investments traded on AIM are stated at closing bid market prices. Unquoted investments are stated at Directors' valuation in accordance with current British Venture Capital Association guidelines for the valuation of venture capital investments. In determining this valuation the Directors give consideration to the period of investment, the performance of the investment against plan, appropriately discounted comparative listed companies' price earnings ratios and any recent transactions. Any capital gains or losses, whether realised or unrealised, arising on fixed asset investments are taken directly to capital reserves. Income Equity dividends are taken into account on the ex-dividend date, net of any associated tax credit. Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course. All other income, including deposit interest receivable, is recognised on an accruals basis. Expenditure All expenditure is accounted for on an accruals basis. 75% of investment management fees are allocated to the capital reserve - realised and 25% to the revenue account in line with the Board's expected long term split of investment returns in the form of capital gains and income respectively. Expenses incidental to the acquisition or disposal of an investment are included within the cost of the investment or deducted from the disposal proceeds as appropriate. All other expenditure is charged to the revenue account. Capital Reserves Realised profits and losses on the disposal of investments and 75% of Investment management fees are accounted for in the Capital Reserve -realised. Increases and decreases in the valuation of investments held at the year end are accounted for in the Capital Reserve - unrealised. Taxation The tax effect of expenditure is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the accounting period. Any liability to corporation tax is based on net revenue for the period. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and its results as stated in the accounts. Deferred tax assets are only recognised to the extent they are recoverable. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis. 2. Income 2005 Â£000 Income from listed investments: UK dividends - Unfranked investment income - ------ - Other income: Deposit interest 303 ------ Total income 303 ------ 3. Management Fees 2005 Revenue Capital Total Â£000 Â£000 Â£000 Management fees 24 71 95 Irrecoverable VAT thereon 4 13 17 ------ ------ ----- 28 84 112 ------ ------ ----- The Company's Investment Manager is Hargreave Hale Limited. The investment management agreement dated 10 September 2004 will continue for a period of 3 years from 29 October 2004, the date of Admission, and thereafter terminate on 12 calendar months' notice, subject to earlier termination in certain circumstances. The Investment Manager receives an investment management fee of 0.9% per annum of the net asset value of the company, calculated and payable quarterly in arrears. At 30 September 2005, Â£11,000 was owed in respect of management fees. A performance related incentive fee will be payable at the rate of 20% of any dividends paid to shareholders in excess of 6p per ordinary share per annum, provided that the net asset value per share is at least 95p. The first payment will be made after 30 September 2007 provided cumulative distributions in the first three accounting periods exceed 18p per ordinary share. Thereafter, a performance related incentive fee will be payable annually provided the hurdles have been exceeded, with any cumulative shortfalls below 6p per ordinary share having to be made up in subsequent years before the incentive fee becomes payable. Any performance related incentive fee payable will be shared equally between the Investment Manager and Keydata Investment Services Limited ('KISL'). 4. Other Expenses 2005 Â£000 General expenses 196 Directors fees 48 Auditors remuneration - for audit services 12 - for non-audit services 2 ----- 258 ----- The maximum aggregate Directors emoluments authorised by the Articles of Association are Â£200,000 per annum. 5. Tax on ordinary activities The tax charge for the period is lower than the standard rate of UK Corporation Tax of 30%. The differences are explained below: 2005 Â£000 Revenue on ordinary activities before taxation 17 --- UK Corporation Tax at 30% 5 Smaller companies relief (2) ----- Actual current tax charge 3 ----- There is no taxation in relation to capital gains or losses. No asset or liability has been recognised in relation to capital gains or losses on revaluing investments. The Company is exempt from such tax as a result of its intention to qualify as a Venture Capital Trust. Factors that may affect future tax charges: There is an unrecognised deferred tax asset of Â£13,000 which relates to surplus management expenses of Â£67,000. The directors believe that there will be no taxable profits in the future against which the deferred tax assets can be offset and therefore the asset has not been recognised. 6. Return per ordinary share 2005 Revenue Capital Total Return per ordinary share: - basic 0.14p 12.15p 12.29p ------- -------- -------- Revenue return per ordinary share is based on a net revenue profit on ordinary activities after taxation of Â£14,000 and on 10,164,185 ordinary shares, being the weighted average number of ordinary shares in issue during the period. Capital return per ordinary share is based on a net capital profit of Â£1,235,000 for the period and on 10,164,185 ordinary shares, being the weighted average number of ordinary shares in issue during the period. 7. Investments 2005 2005 2005 AIM Quoted Listed Total Investments Investments Investments Â£000 Â£000 Â£000 Investments 5,482 4,019 9,501 ------- ------ ------ Movement in period: Opening valuation - - - Purchases at cost 4,208 4,020 8,228 Sales - proceeds (43) - (43) - realised losses (32) - (32) Movements unrealised 1,349 (1) 1,348 ------- ------- ------ Closing valuation 5,482 4,019 9,501 Closing book cost 4,133 4,020 8,153 ------- ------- ------ Closing unrealised 1,349 (1) 1,348 ------- ------ ------ Realised loss on sales (32) - (32) Unrealised profit on investments 1,349 (1) 1,348 ------- ------ ------ Gain on investments 1,317 (1) 1,316 ------- ------ ------ 8. Significant Interests At the period end the Company held 3% or more of the issued share capital of the following investments: Centrom Group PLC - 3.90% Internet Business Group PLC - 3.72% 9. Debtors 2005 Â£000 Prepayments and accrued income 45 ---- 10 Creditors: amounts falling due within one year 2005 Â£000 Accruals and deferred income 44 ---- 11. Called up share capital 2005 Â£000 Authorised: 50,000,000 ordinary shares of 1p each 500 ----- Allotted, called-up and fully paid: 14,337,731 ordinary shares of 1p each 143 ----- During the financial period to 30 September 2005, ordinary shares of 1p each were issued as follows: Date of issue Number of shares Issue price Gross proceeds issued (pence) Â£000 16 August 2004 (on incorporation) 2 1p - 27 October 2004 to 11 May 2005 14,337,729 100p 14,338 ------------- -------- 14,337,731 14,338 ------------- -------- The Company issued 50,000 Redeemable Preference shares of Â£1 on 1 September 2004 for a consideration of Â£50,000. On 27 October 2004, the Company redeemed in full the 50,000 Redeemable Preference shares with a consideration paid of Â£50,000. On redemption the authorised share capital of Â£50,000 was converted into an additional 5,000,000 ordinary shares of 1p each. The authorised ordinary share capital increased from 45,000,000 to 50,000,000 ordinary shares of 1p each. 12. Reserves Share Capital Capital Special Revenue premium reserve-realised reserve-unrealised reserve reserve Â£000 Â£000 Â£000 Â£000 Â£000 Proceeds from issue of shares 14,194 - - - - Costs related to issue of shares (716) - - - - Cancellation of share premium (13,478) - - 13,478 - Unrealised profit on investments - - 1,348 - - Net realised losses on disposals - (32) - - - Management fees charged to capital - (84) - - - reserve Tax relief - 3 - - - Net revenue return for period - - - - 14 ------ ------- ------- -------- ----- At 30 September 2005 Nil (113) 1,348 13,478 14 ------ ------ ------- -------- ----- The Company obtained court approval to cancel its ordinary share premium account which became effective on 30 August 2005. The special reserve created may be treated as a distributable reserve for all purposes. 13. Net asset value per ordinary share The net asset value per ordinary share and the net asset values attributable at the period end calculated in accordance with FRS4 and the Articles of Association were as follows: Net asset value per share Net assets attributable 2005 2005 pence Â£000 Ordinary shares - Basic 103.71 14,870 -------- -------- Net asset value per ordinary share is based on net assets at the period end and on 14,337,731 ordinary shares, being the number of shares in issue at period end. 14. Contingencies, guarantees and financial commitments There were no contingencies, guarantees or financial commitments of the Company at the period end. 15. Notes to the Cash Flow Statement (a) Reconciliation of operating profit to operating cash flows 2005 Â£000 Net revenue on ordinary activities before taxation 17 Investment management fee charged to capital (84) Increase in debtors (45) Increase in creditors 44 ----- Net cash outflow from operating activities (68) ----- (b) Analysis of cash flow for headings netted in cash flow statement 2005 Net financial investment: Â£000 Purchase of investments (8,228) Sale of investments 43 -------- (8,185) -------- 2005 Financing: Â£000 Net proceeds from issue of ordinary shares 13,621 Net proceeds from issue of redeemable preference shares 50 Redemption of redeemable preference shares (50) --------- 13,621 -------- 16. Related party transactions One of the directors of the Company, Mr S Ford, is a director of Keydata Investment Services Limited ('KISL') and has an interest in excess of 20% in that company. As such, KISL is considered to be a related party to the Company. KISL acts as Promoter and Administrator to the Company. KISL in its capacity as Promoter of the Offer for Subscription, receives annual commission of 0.9% per annum of the net asset value of the Company, calculated and payable quarterly in arrears. KISL is responsible for payment of all trail commission due to intermediaries. KISL also receives a fee of Â£35,000 per annum for administration services. In total, KISL earned fees of Â£130,000 during the period. Of those fees, Â£11,000 was still owing at the period end. KISL has agreed to indemnify the Company against annual running costs (excluding VAT) exceeding 3.5% of its net asset value. Any performance related incentive fee payable to the Investment manager (as detailed in Note 3) will be shared equally between the Investment Manager and KISL. 17. Financial instruments Investment in securities exposes the Company to certain inherent risks, the most predominant of which are market price risk, liquidity risk and interest rate risk. The Company seeks to minimise the liquidity risk by investing mainly in AIM securities. It seeks to minimise interest rate risk by using equity (as opposed to debt) funding to grow its investment portfolio. The Company's financial assets and liabilities are denominated in Sterling as follows: As at 30 September 2005 Fixed interest Non-interest bearing Floating bearing Total Â£000 Â£000 Â£000 Â£000 Investments - 4,019 5,482 9,501 Cash 5,368 - - 5,368 ------- ------- ------- -------- 5,368 4,019 5,482 14,869 Other net short term assets - - 1 1 ------- ------- ------- -------- Net assets 5,368 4,019 5,483 14,870 ------- ------- ------- -------- Interest received on cash balances is variable and is dependent on UK bank base rates. Interest on Treasury 4.5% Stock 2007 is fixed. The Company had no uncommitted borrowing facilities at the period end. The fair value of financial assets and liabilities is represented by their carrying value in the balance sheet. 18. Post balance sheet events The Company obtained shareholder approval on 11 October 2005 to raise up to Â£25 million in additional funds through a C class share issue. The financial information set out above does not constitute the Company's statutory accounts for the period ended 30 September 2005. The annual report and accounts for the period 16 August 2004 to 30 September 2005 will be delivered to the Registrar of Companies following the Company's annual general meeting. The Annual report and accounts will be posted to shareholders shortly. Copies may in due course be obtained during normal business hours from Keydata Investment Services Limited, One Angel Court, London EC2R 7HJ. The Annual General Meeting of the Company will be held at the Company's registered office, 19 Cavendish Square, London W1A 2AW on 18 January 2006 at 11.00am. 7 December 2005 For further information please contact: Roddi Vaughn-Thomas Head of Corporate Communications Keydata Investment Services Limited 020 7710 6923 Craig McNeil Company Secretary Keydata AIM VCT plc 0141 572 2300 End This information is provided by RNS The company news service from the London Stock Exchange

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