Final Results

AIM VCT2 PLC 23 January 2004 To: Company Announcements From: AiM VCT2 plc Date: 23 January 2004 Investment Objective To provide shareholders with a tax efficient means of gaining long term capital growth and an attractive dividend stream primarily through investment in a diversified portfolio of AiM companies and unquoted companies seeking a stock market listing within 18 months. • Net asset value per share of 88.59 pence. • 29 new investments made during the year, taking the total equity portfolio to 62 companies. • Total dividends of 1.2 pence per share. • All VCT tests met by a comfortable margin. Introduction I AiM VCT2 has weathered one of the most difficult bear markets of recent times and ends its third year in a strong position to capitalise on the stock market's recovery. The adverse conditions experienced during the early part of the year have given way to a feeling of greater confidence in the future by investors. Against this background, the Investment Managers have made great strides with the investment programme, taking advantage of a surge in corporate activity and fundraising by small AiM companies. The Board are pleased to report that by the Company's critical third anniversary, all VCT qualifying tests have been met, including the important 70% test. Results and Dividends I As in previous years the majority of the Company's earnings have been derived from the income earned on the holding in a government security. At £522,000 these earnings were less than last year due to this government security being gradually sold in order to provide funds for the investment programme. As a result, the proposed final dividend of 0.6 pence per share is also lower than last year. However, since launch AiM VCT2 will have paid 5.5 pence per share in income dividends. It is hoped that in future the income dividend will be supplemented with capital dividends derived from the profitable sale of investments. Performance I The FTSE AIM Index ended the twelve months to 30 November 2003 up 35.1%. Even after this strong recovery the FTSE AiM market is still 44.5% below its level in December 2000, when AiM VCT2 was launched. In the year to 30 November 2003 AiM VCT2's net asset value (NAV) per Ordinary Share rose by 14.3% after taking into account the proposed final dividend. Whilst behind the FTSE AIM Index, this masks robust performance from the underlying qualifying equity holdings and reflects the cautious approach to investment taken by the Investment Managers since launch. They have followed a plan of gradual investment in qualifying companies whilst maintaining a high level of government security during the difficult market conditions of the past three years. This undoubtedly resulted in better conservation of shareholder value than if all those funds had been invested directly in the AiM market since launch. After two years of outperformance in a deteriorating market it is inevitable that having such a high proportion of total assets in cash or gilts in a rising market would hold back AiM VCT2's progress. Nevertheless, the Board feels this was the correct plan to follow given that since launch the NAV per share has fallen by just 6.8% against the fall in the FTSE AiM market of 44.5%. In addition, shareholders will have received dividends of 5.5 pence per share over the first three years, as well as initial income tax relief of 20 pence per pound invested. Taken altogether the simple cumulative total return to shareholders is 114 (an increase of 14% in their initial investment). This compares favourably with AiM VCT2's peer group of other AiM VCTs launched at or around December 2000 with AiM VCT2 producing returns at the top end of this group. Investment Programme I At 30 November 2003, 78% of the Company's investments were held in qualifying companies. In order to ensure that the Company exceeded the requirement of the 70% test by a comfortable margin, £1 million was placed in a non-interest bearing account (which is not regarded as investments for VCT purposes) until investments to the equivalent value had been made in qualifying companies. On 9 January 2004 the non interest bearing account was closed and this money has been reinvested in a government security. This mechanism is recognised by the Inland Revenue as an acceptable way of meeting the 70% test and may be used again in the future should circumstances dictate. Advisers I The Board has undertaken a thorough review of the Company's advisers during the year in order to ensure that AiM VCT2 receives the best available advice at reasonable cost. The Board is pleased to say that as a result of this review we have appointed PricewaterhouseCoopers (PwC) as adviser on key VCT related matters, in particular the monitoring of the qualifying investment portfolio. PwC has built a strong reputation in the VCT sector and currently advises the majority of VCTs as well as taking a leading role in lobbying the treasury and Inland Revenue on behalf of the VCT industry. Shortly after the year-end the Board also appointed new brokers and financial advisers to AiM VCT2. The brokers are Teather & Greenwood who, over the period of the past few years, have established a focused commitment to the VCT sector and are now brokers to a number of VCTs. The Board recognises the importance of the secondary market for AiM VCT2's shares and shareholders. It is hoped that by working closely with the new brokers AiM VCT2 might be better able to narrow and manage the discount to net asset value at which the share price currently stands. Managing Shareholder Needs I During the past year the Company's share price has increased from 57.5 pence to 72.5 pence. However, this is still a substantial discount to the net asset value of 88.6 pence per share. A number of initiatives have been put in place in order to help provide better liquidity for investors in AiM VCT2 shares which, over time, the Board hope will have the effect of narrowing the discount still further. Each year the Board renews its authority to buy back a proportion of the Company's share capital. In the past year the Company bought back for cancellation 143,000 Ordinary Shares at a cost of £102,000. During the year the Company issued a 10% Offer for Subscription to shareholders who wished to take the opportunity to 'top up' their investment and receive the VCT tax reliefs attributable to new shares. During the year some shareholders took advantage of this Offer and AiM VCT2 issued 295,303 new Ordinary Shares and raised net proceeds of £236,000. This Offer will close on 7 April 2004. The Board intends to offer shareholders a further opportunity to 'top up' their investment in 2004/2005 once the proposals announced by the Chancellor in his Pre-Budget Statement on 10 December 2003 are finalised. Outlook I This has been a very busy year for AiM VCT2 against a volatile but also steadily improving investment climate. Much of the uncertainty of the last three years has diminished and investors appear willing to broaden their time horizons once again. The increase in the level of fund raising opportunities has enabled AiM VCT2 to make considerable progress with its investment programme. The portfolio is shaping up well with many of the more recent investments being held at around cost with everything to go for in the future as their business plan progresses. Enquiries: Robert Mitchell / Bill Brown Investment Managers ISIS Asset Management plc Tel: 0207 506 1100 Rhonda Nicoll Secretary ISIS Asset Management plc Tel: 0131 465 1074 Audited Statement of Total Return (incorporating the revenue account) of the Company Year to 30 November 2003 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 4,972 4,972 Income 1,187 - 1,187 Investment management fee (194) (580) (774) Other expenses (292) - (292) Return on ordinary activities before taxation 701 4,392 5,093 Tax on ordinary activities (179) 175 (4) Return attributable to equity shareholders 522 4,567 5,089 Dividends in respect of equity shares (498) - (498) Transfer to reserves 24 4,567 4,591 Return per ordinary share: 1.26p 11.03p 12.29p Audited Statement of Total Return (incorporating the revenue account) of the Company Year to 30 November 2002 Revenue Capital Total £'000 £'000 £'000 Losses on investments - (6,855) (6,855) Income 1,711 - 1,711 Investment management fee (206) (618) (824) Other expenses (329) - (329) Return on ordinary activities before taxation 1,176 (7,473) (6,297) Tax on ordinary activities (286) 151 (135) Return attributable to equity shareholders 890 (7,322) (6,432) Dividends in respect of (871) - (871) equity shares Transfer to/(from) reserves 19 (7,322) (7,303) Return per ordinary share: 2.14p (17.61)p (15.47)p Audited Balance Sheet As at As at 30 November 30 November 2003 2002 £'000 £'000 Fixed Assets Quoted on the Alternative Investment 22,263 7,381 Market Quoted on OFEX 2,238 1,791 UK government security 7,719 18,385 Unquoted investments 4,714 4,291 36,934 31,848 Net current (liabilities)/assets (179) 182 Net assets 36,755 32,030 Financed by: Shareholders' funds 36,755 32,030 Net asset value per ordinary share: 88.59p 77.48p Ordinary shares in issue 41,490,367 41,338,064 Summarised Audited Statement of Cash Flows Year to Year to 30 November 30 November 2003 2002 £'000 £'000 Net cash flow from operating activities 1,384 1,410 Tax paid (136) (283) Capital expenditure and financial investment 1,196 (240) Equity dividends paid (662) (917) ----------- ----------- Net cash inflow/(outflow) before financing 1,782 (30) Financing 134 (303) ----------- ----------- Increase/(decrease) in cash 1,916 (333) ----------- ----------- Reconciliation of net cash flow to movement in net cash Increase/(decrease) in cash 1,916 (333) Net cash at 1 December 307 640 ----------- ----------- Net cash at 30 November 2,223 307 ----------- ----------- Reconciliation of operating profit to net cash flow from activities Net revenue before taxation 701 1,176 Management fee charged to capital (20) 34 Decrease in debtors 674 259 Increase /(decrease) in creditors 29 (59) ----------- ----------- Net cash flow from operating activities 1,384 1,410 ----------- ----------- Notes 1. The audited results which cover the year to 30 November 2003 have been drawn up in accordance with applicable accounting standards and adopting the Statement of Recommended Practice for Financial Statements of Investment Trust Companies and on the assumption that the Company maintains VCT status. 2. There were 41,490,367 ordinary shares in issue at 30 November 2003 (2002: 41,338,064). During the year 143,000 ordinary shares of 10p each were bought in by the Company for cancellation (2002: 384,269) and 295,303 ordinary shares of 10p each were issued (2002: nil). 3. Revenue and capital returns for the year to 30 November 2003 are based on a weighted average of 41,403,710 (2002: 41,579,408) ordinary shares in issue during the year. 4. Income for the year to 30 November is derived from: 2003 2002 £'000 £'000 Dividend Income 58 43 Fixed interest investment 1,081 1,628 Deposit interest 48 40 1,187 1,711 5. The final proposed dividend of 0.6 pence per ordinary share will be paid on 13 April 2004, subject to shareholder approval, to eligible shareholders on the register on 6 February 2004. 6. These are not full accounts in terms of Section 240 of the Companies Act 1985. Full audited accounts for the year to 30 November 2002 have been lodged with the Registrar of Companies. The annual report for the year to 30 November 2003 will be sent to shareholders shortly and will then be available for inspection at 100 Wood Street, London, the registered office of the Company. Both the audited accounts for the year to 30 November 2003 and 2002 contain unqualified audit reports. 7. The Annual General Meeting will be held on 8 April 2004 at 11.00am. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Maven Income and Growth VCT 5 (MIG5)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today