Final Results
Murray VCT 4 PLC
26 April 2007
Murray VCT 4 PLC
Preliminary results for the year ended 28 February 2007
The Directors are pleased to report that the improvement in the performance of
the Company which has been achieved since late 2004 has continued over the past
year. The Company has now seen an increase in NAV total return at each reporting
period end since August 2004, and the payment of an increased level of dividends
during that period. Among the highlights are:
• NAV at year end of 81.1p per share ('pps'), up 9.4% over the year (after
adjusting for dividends paid);
• Total return 99.6pps at year end, up 8.0% over the year;
• Five successful exits from unlisted companies during the year, generating
gains of more than £4.0 million;
• Net realised gains from AIM stocks of £1.2 million for the year;
• Capital dividends paid during the year of 4.6pps, with a further dividend
paid on 23 March 2007 of 4.0pps; and
• Final dividend proposed of 2.8pps (comprising 0.8pps revenue and 2pps
capital).
Performance
The Net Asset Value (NAV) per Ordinary Share at 28 February 2007, before payment
of a dividend in respect of the year then ended, was 81.1pps compared with
79.1pps at 28 February 2006. The NAV has increased by 9.4% compared to the value
at 28 February 2006, after adjusting for the dividends paid during the year
totalling 5.4pps, which compares with a decrease in the FTSE AIM All-share Index
of 6.2%.
The uplift achieved in the NAV during the year ended 28 February 2007, after
adjusting for the effect of dividends paid and shares bought back, governs the
level of management fee payable for that period and, based on the performance
during the year, a fee of £599,000 (excluding VAT) was payable.
Dividends
The Company has paid a total of 5.4pps to Shareholders during the course of the
year. This includes both the final revenue dividend of 0.8pps in respect of the
year ending 28 February 2006 and the capital dividends of 1.6pps per share paid
in July 2006 and 3.0pps paid in December 2006. This has been achieved due to
capital gains arising in the year ended February 2007 and in earlier years. In
addition, subsequent to the year-end, a further capital dividend of 4.0pps was
paid to Shareholders in March 2007.
In light of the results for the year ended 28 February 2007, the Board is now
recommending the payment of a final dividend of 2.8pps, comprising 0.8pps of
revenue and 2.0pps of capital, to be paid on 27 July 2007 to Shareholders on the
register on 29 June 2007. Upon payment of the final dividend, the Company will
have paid 12.2pps in the twelve month period to 27 July 2007, equivalent to an
annual yield of 20.3% to a higher-rate tax payer on an effective initial
investment of 80pps, or 29.2% based on the current mid-market share price of
55.75p. Since the Company's launch, and including the payment of the proposed
final dividend, Ordinary Shareholders will have received 25.3pps in tax-free
dividends.
The effect of paying the capital dividend in March and the proposed dividend
will be to reduce the NAV as at 28 February 2007 to 74.3pps.
The Board intends to pay regular dividends from realised capital gains and,
while not making a formal forecast, the Board expects the Company to declare
dividends totalling at least 4.0pps in respect of the year ending 28 February
2008. This would be equivalent to an annual yield of 6.7% to a higher-rate
taxpayer on an effective initial investment of 80pps, or 9.6% based on the
current mid-market share price of 55.75p.
The most important measure for a VCT is the NAV total return, being the long
term record of income and capital gains dividend payments plus the current NAV.
In the short term, the NAV on its own is a less important measure of the
performance as the underlying investments are long-term in nature and not
readily realisable. The NAV total return per Ordinary Share at 28 February 2007
was 99.6pps, an increase of 8.0% over the equivalent figure at February 2006.
Investment activity
At the year end, the portfolio stood at 63 unlisted and AIM investments at a
total cost of £26.5 million. A total of £4.9 million was invested during the
year ended 28 February 2007, with twelve new unlisted and AIM investments being
completed. Realisations achieved during the year have resulted in a reduced
unlisted portfolio; since these realisations occurred, the Manager had made two
new unlisted investments by 28 February 2007 and a further five have been
completed early in the current year, in addition to five new AIM investments.
There is also a healthy pipeline of in-progress transactions which will rebuild
the portfolio.
The following new investments have been completed during the year:-
Investment Date Activity £'000 Website
Unlisted
Buildstore Sep 2006 On-line services to self-build 98 www.buildstore.co.uk
home owners.
Crossco (982) (Martel Jan 2007 Production of hand held 796 www.martelinstruments.com
Instruments) printers and terminals.
Enpure Holdings Nov 2006 Project engineering in the 100 www.enpure.co.uk
water and waste water sector.
Homelux Nenplas May 2006 Manufacturer of tile trims and 522 www.homelux.co.uk
other wet room furnishing
accessories.
Oliver Kay Holdings Jan 2007 Distributor of fresh produce 771 www.oliverkayproduce.co.uk
to the on-trade catering
industry.
Riverdale Publishing Apr & Nov Greetings cards publisher. 343 www.riverdalepublishing.co.uk
2006
AIM
Brulines (Holdings) Oct 2006 System for monitoring flow 121 www.brulines.co.uk
rates of beer in public
houses.
Concateno Oct & Dec Testing services for alcohol 296 www.concateno.com
2006 and drugs for employers.
Hasgrove Nov 2006 Communication services for 174 www.hasgrove.com
public relations.
Hexagon Human Capital Feb 2007 Executive search and 99 www.hexagonhc.com
recruitment.
Individual Restaurant Dec 2006 Restaurant operator. 176 www.individualrestaurants.co.uk
Company
Tangent Feb 2007 Digital printing and marketing 99 www.documedia.co.uk
Communications services.
Murray VCT 4 has co-invested with Aberdeen Development Capital, Aberdeen Growth
VCT I, Aberdeen Growth Opportunities VCT, Aberdeen Growth Opportunities VCT 2
and Talisman First Venture Capital Trust in some or all of the above
transactions and is expected to continue to do so with these as well as other
clients of the Manager. The advantage is that, together, the funds are able to
underwrite a wider range and size of transaction than would be the case on a
stand alone basis.
Co-investment scheme of the Manager
A co-investment scheme which allows executive members of the Manager to invest
alongside the Company was implemented during the year. The scheme operates
through a nominee company which invests alongside the Company in each and every
transaction made by the Company, including any follow-on investments.
The impact of the scheme in terms of dilution is negligible, but the scheme more
closely aligns the interests of the executives and the Company's Shareholders
while introducing an incentive to enable the Manager to retain the existing
skills and capacity of its investment team in a highly competitive market.
Realisations
The year has seen five profitable exits from the unlisted investment portfolio
which, together, have generated gains of over £4.0 million. All of those exits
occurred in the second half of the year, although four had been anticipated and
their valuations in the Interim Report reflected the eventual proceeds. Net
gains have also been realised from the AIM portfolio totalling £1.2 million for
the year. Details of all realisations from the portfolio during the year are
given in the table below:
Date first Complete/ Cost Sales Realised
invested partial exit of shares proceeds gain/
disposed of (loss)
£'000 £'000 £'000
Unlisted
Bond Aviation Solutions 2005 Complete 750 1,302 552
EIG (Investments) 2006 Complete 751 1,456 705
GW1016/Mercury Inns 2002 Complete 896 469 (427)
Heathcotes Restaurants 2001 Complete 1,583 722 (861)
Mining Communications 2003 Complete 750 1,180 430
Original Shoe Company 2005 Complete 750 750 -
Styles & Wood Holdings 2005 Complete 400 1,597 1,197
TMI Foods 2003 Complete 230 1,391 1,161
Others 328 518 190
Total unlisted 6,438 9,385 2,947
AIM
AssetCo 2003 Partial 116 111 (5)
Avanti Screenmedia 2005 Partial 99 120 21
Axeon 2005 Partial 67 92 25
Billing Services Group* 2006 Complete 370 192 (178)
Cello Group 2004 Partial 292 359 67
Fountains 2004 Partial 84 76 (8)
Leisure & Gaming 2005 Partial 188 278 90
Mattioli Woods 2005 Partial 93 154 61
Synexus 2001 Partial 296 543 247
Talarius 2005 Complete 190 471 281
Tanfield Group 2004 Partial 263 731 468
United Clearing* 2005 Complete 280 370 90
Others 215 272 57
Total AIM 2,553 3,769 1,216
Total 8,991 13,154 4,163
*During the year, Billing Services Group used the compulsory purchase provisions
of the Companies Act to acquire United Clearing in a share-for-share
transaction.
Investment strategy
The strategy remains to invest in unlisted and AIM companies which offer
excellent growth prospects and to realise capital gains in the medium and longer
term from those investments while maintaining VCT qualifying status. The Company
has exited from eight major unlisted investments during the year and, in the
short term, it is unlikely that further exits from unlisted investments will
occur until the process of rebuilding the unlisted portfolio is completed.
As the process of rebuilding of the portfolio continues, the Board considers
that it may be an appropriate time for the Company to take advantage of its
ability to use gearing for the purpose of maintaining its investment strategy
and, if necessary, borrow an amount of up to 10% of Net Asset Value. The Manager
also continues to have discretion to make investments in companies which do not
represent qualifying holdings for VCTs, but always subject to ensuring that the
Company itself continues to qualify as a VCT at all times.
Valuation process
Investments held by Murray VCT 4 in unquoted companies are valued in accordance
with the International Private Equity and Venture Capital Valuation Guidelines.
Investments quoted or traded on a recognised stock exchange, including the
Alternative Investment Market ('AIM'), are valued at their bid price.
Constitution of the Board
As intimated in the 2006 Annual Report, the Board was aware that Anthony
Whitworth intended to retire at the Annual General Meeting to be held on 17 July
2007 and he has confirmed to the Board that he does not intend to seek
re-election. Anthony has been a Director of the Company since launch and served
as Chairman from October 2002 until July 2005. The Directors would like to take
this opportunity to extend to Anthony the sincere appreciation of the Board for
the significant and valuable contribution he has made to the deliberations of
the Board during his time in office and for his leadership during the period
when he was Chairman, which included a time of some difficulty for the Company.
The Board had already put in place a succession plan. During the second half of
the year, the Directors conducted a thorough selection process, including the
use of an independent agency, before making a final decision on an appointment.
As announced on 26 January 2007, John Pocock was appointed as a Director with
effect from 1 March 2007. John is an experienced entrepreneur and will bring to
the Board a breadth of knowledge in the smaller companies and financial services
sectors. As required by company law, John will require to stand for re-election
by Shareholders at the first AGM following his appointment and the Directors
hope that Shareholders will support the Board's recommendation and vote in
favour of the Resolution put before the meeting.
Change of name of the Company
Since August 2004, the closest date to when the Manager changed its lead fund
manager, the investment portfolio has undergone a full restructuring. The NAV
total return has increased by 18.4% and the amount paid in dividends has
increased from a total of 9.5pps paid in the four years before that date to a
total (including the dividend paid in March and the proposed final dividend) of
15.8pps paid in the two and a half years since that date. Over that period, the
Board has had some considerable debate as to whether there were any residual
benefits to the Company and its Shareholders in retaining the name of Murray VCT
4 in the longer term.
With the full restructuring of the portfolio now largely complete and a clear
investment strategy for the future having been established, the Board now
considers that the time is right for the Company to change its name to Aberdeen
Growth and Income VCT PLC. The Directors believe that this name would better
reflect the future direction of the Company and its strategy to continue to
invest in both private and AIM quoted companies and to distribute realised
capital gains whenever possible, whilst retaining some funds to allow investment
in businesses offering excellent growth prospects. The Board also believes that
the benefits of the additional marketing expertise and higher profile that
Aberdeen can provide outweigh any need for the Company to retain its original
name.
A Resolution will, therefore, be put to the Annual General Meeting to propose
that the name of the Company be changed to Aberdeen Growth and Income VCT PLC.
The Directors hope that Shareholders will recognise the reasons for this and
support the proposal.
Treasury shares
During the year ended 28 February 2007, within established guidelines, the
Company bought back a total of 561,984 shares for cancellation and the Board
intends that the Company should retain its ability to buy back its own shares in
future. The Board have also decided that it would be in the interests of
Shareholders for the Company to be able to hold shares in Treasury as well and
an appropriate authority will be sought at this year's AGM. This would give the
Directors the ability to re-issue these shares to meet any demand in the market
rather than issue new shares. While shares re-issued from Treasury do not
qualify for the initial income tax relief, any dividend payments will be
tax-free and, on disposal, no capital gains tax will be paid by qualifying
Shareholders. Treasury shares may also be cancelled at any time.
Outlook
Following the successful realisations which occurred during the year, the
immediate focus is to rebuild the unlisted element of a diversified portfolio of
good quality smaller company assets which will deliver sustained long term
performance. The Manager has completed ten new unlisted and AIM investments
since the end of the reporting period and has a number of further potential
investments in hand.
The Manager applies an active management style to both its unlisted and AIM
quoted portfolios and this more dynamic approach has resulted in the improved
performance of the Company over the last two years. If economic conditions
remain favourable, the Directors are optimistic that this level of performance
can be maintained which, in turn, should continue to generate further positive
returns for Shareholders.
Murray VCT 4 PLC
Income Statement*
For the year ended 28 February 2007
Year ended Year ended
28 February 2007 28 February 2006
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income and deposit interest 687 - 687 1,053 - 1,053
Investment management fees (141) (563) (704) (165) (660) (825)
Other expenses (193) - (193) (187) - (187)
Gains on investments - 2,748 2,748 - 1,931 1,931
Profit on ordinary activities before taxation 353 2,185 2,538 701 1,271 1,972
Tax on ordinary activities (51) 51 - (196) 196 -
Profit on ordinary activities after taxation 302 2,236 2,538 505 1,467 1,972
Earnings per share (pence) 0.8 6.3 7.1 1.4 4.0 5.4
A Statement of Total Recognised Gains and Losses has not been prepared, as all
gains and losses are recognised in the Income Statement.
*The total column of this statement is the Profit and Loss Account of the
Company.
Reconciliation of Movements in Shareholders' Funds
For the year ended 28 February 2007
Year ended Year ended
28 February 2007 28 February 2006
(unaudited) (audited)
£'000 £'000
Opening Shareholders' funds 28,488 28,632
Total profit for year 2,538 1,972
Repurchase and cancellation of shares (356) (979)
Dividends paid - revenue (286) (406)
Dividends paid - capital (1,639) (731)
Closing Shareholders' funds 28,745 28,488
MURRAY VCT 4 PLC
BALANCE SHEET
As at 28 February 2007
28 February 2007 28 February 2006
(unaudited) (audited)
£'000 £'000 £'000 £'000
Investments at fair value through profit or 21,559 27,906
loss
Current assets
Debtors 899 834
Cash and overnight deposits 6,922 242
7,821 1,076
Creditors
Amounts falling due within one year 635 494
Net current assets 7,186 582
Net assets 28,745 28,488
Capital and reserves
Called up share capital 3,546 3,602
Share premium account 17,235 17,235
Realised capital reserve 452 (3,192)
Unrealised capital reserve (5,270) (3,862)
Capital redemption reserve 339 283
Profit and loss account 12,443 14,422
Net assets attributable to Ordinary 28,745 28,488
Shareholders
Net Asset Value per 81.1 79.1
Ordinary Share (pence)
MURRAY VCT 4 PLC
CASH FLOW STATEMENT
For the year ended 28 February 2007
28 February 2007 28 February 2006
(unaudited) (audited)
£'000 £'000 £'000 £'000
Operating activities
Investment income received 1,065 1,706
Deposit interest received 44 23
Investment management fees paid (700) (460)
Secretarial fees paid (50) (66)
Directors' expenses paid (64) (49)
Other cash payments (89) (88)
Net cash inflow from operating activities 206 1,066
Financial investment
Purchase of investments (6,283) (12,190)
Sale of investments 15,038 13,322
Net cash inflow from financial investment 8,755 1,132
Equity dividends paid (1,925) (1,137)
Net cash inflow before financing 7,036 1,061
Financing
Repurchase of Ordinary Shares (356) (1,079)
Net cash outflow from financing (356) (1,079)
Increase/(decrease) in cash 6,680 (18)
MURRAY VCT 4 PLC
Other information (unaudited)
This Preliminary Announcement has been prepared on the same basis as the Annual
Report and Financial Statements for the year ended 28 February 2006.
Although the Company is no longer an investment company, as investment company
status was revoked in order to permit the distribution of capital profits, the
Directors believe that the presentation of the Income Statement is enhanced by
showing additional non-statutory information on the returns attributable to
revenue and to capital.
In respect of the year ended 28 February 2007, earnings per Ordinary Share have
been calculated using the weighted average number of shares in issue during the
year of 35,650,705 (2006: 36,988,753). Net Asset Value per Ordinary Share as at
28 February 2007 has been calculated using the number of share in issue at that
date of 35,463,992 (2006: 36,025,976).
A summary of investment changes for the year ended 28 February 2007 and a
portfolio summary as at 28 February 2007 are attached.
The results for the year ended 28 February 2007 will be filed with the Registrar
of Companies and a full copy of the Annual Report and Financial Statements will
be printed and issued to Shareholders.
The financial information contained within this Preliminary Announcement does
not constitute the Company's statutory Financial Statements as defined in
Section 240 of the Companies Act 1985. The statutory Financial Statements for
the year ended 28 February 2006 have been delivered to the Registrar of
Companies and contained an audit report which was unqualified and did not
constitute statements under Sections 237(2) or (3) of the Companies Act 1985.
The Annual General Meeting will be held on 17 July 2007, commencing at 2.15 p.m.
Copies of this announcement will be available to the public at the registered
office of the Company, One Bow Churchyard, Cheapside, London EC4M 9HH and at the
office of Aberdeen Asset Managers Limited, 123 St Vincent Street, Glasgow G2
5EA.
By Order of the Board
Murray Johnstone Limited
Secretary
26 April 2007
MURRAY VCT 4 PLC
SUMMARY OF INVESTMENT CHANGES
For the year ended 28 February 2007 (unaudited)
Net investment/ Appreciation/ Valuation
Valuation
28 February 2006 (disinvestment) (depreciation) 28 February 2007
£'000 % £'000 £'000 £'000 %
Unlisted investments
Equities 6,305 22.1 (4,669) 4,358 5,994 20.9
Preference shares 657 2.3 (176) 269 750 2.6
Loan stocks 10,732 37.7 (1,054) (2,003) 7,675 26.7
17,694 62.1 (5,899) 2,624 14,419 50.2
AIM investments
Equities 8,357 29.4 (2,323) 131 6,165 21.4
Listed investments
Fixed income 1,855 6.5 (873) (7) 975 3.4
Total investments 27,906 98.0 (9,095) 2,748 21,559 75.0
Net current assets 582 2.0 6,604 - 7,186 25.0
Net assets 28,488 100.0 (2,491) 2,748 28,745 100.0
MURRAY VCT 4 PLC
INVESTMENT PORTFOLIO SUMMARY
As at 28 February 2007 (unaudited)
Bookcost Valuation % of net % of equity % of equity
held
by other
Nature of business £'000 £'000 assets held clients
Unlisted investments
Transys Projects Engineering services to the 825 10.0
rail industry 2,874 20.9 20.9
TLC (Tender Loving Operator of daycare nurseries 1,516 5.3 23.2 -
Childcare) 1,516
House of Dorchester Speciality chocolate 910 4.7
manufacturer 1,338 44.2 -
RMS Europe Provider of stevedoring and 784 3.9
ships agency services 1,117 9.7 20.4
MoneyPlus Group Arranger and manager of debt 750 3.5
management plans and IVAs 1,016 15.0 16.0
PSCA International Producer of publications aimed 660 3.3
at public sector officials 949 7.6 15.5
Homelux Nenplas Manufacturer of tile trims and 522 2.9
related products 826 8.9 36.1
Crossco 982 (Martel Manufacturer of hand-held 796 2.8
Instruments) printers and terminals 796 11.3 22.1
Oliver Kay Holdings Distributor of fresh produce to 771 771 2.7 4.9 15.1
the on-trade catering industry
Astraeus Charter airline 751 751 2.6 4.5 20.0
ELE Advanced Precision engineering 342 565 2.0 11.3 -
Technologies
PLM Dollar Group On-shore helicopter services 402 402 1.4 4.6 26.2
Sanastro Business to business financial 750 402 1.4 9.6
publishing 3.5
Voxsurf Software development 750 309 1.1 4.8
-
Driver Hire Supplier of temporary drivers 171 166 0.6 1.0 38.7
Enpure Holdings Project engineering in the 100 0.3 0.4 79.2
water and waste water sector 100
The BigWord Holdings Translation services 99 99 0.3 -
-
Buildstore On-line services to self-build 98 98 0.3 0.8
homeowners 9.2
Unique Communications TV production and 798 66 0.2 5.5 7.5
communications consultancy
Riverdale Publishing Greeting cards publisher 343 59 0.2 4.0
7.7
Other unlisted 7,624 199 0.7
investments (13)
19,762 14,419 50.2
AIM investments
Tanfield Group Technical solutions and 110 923 3.2 0.4 0.3
manufacturing group
Cello Group Marketing and media services 459 2.1 1.3 0.5
600
Strategic Retail Retailer of home furnishings 700 2.0 2.6 2.6
574
Concateno Provider of services for the 270 1.5 0.7 1.9
testing of employees for drugs 427
and alcohol
Avanti Screenmedia Provider of screens and media 322 1.4 0.6 1.0
advertising 409
Synexus Clinical trials 328 1.2 1.8 1.3
339
Amazing Holdings Leisure and hotel developer 251 0.8 0.9 1.4
220
AT Communications Leading communications 301 0.7 1.4 0.6
Group integrator 208
Hasgrove Provider of communication 174 0.7 0.8 1.5
services in public relations 206
Imprint Provider of recruitment and 203 0.7 0.2 0.4
search services 192
Individual Restaurant Restaurant operator 132 0.7 0.4 0.9
Company 187
Axeon Developer of semi-conductor 184 0.6 1.3 6.7
intellectual properties 180
Brulines (Holdings) Provider of data systems that 121 156 0.5 0.4 0.9
monitor the through flow of
beer in pubs
System C Healthcare Provider of information 311 156 0.5 0.6 0.7
services and IT systems to the
healthcare sector
Fountains Land management services 168 154 0.5 0.9 0.9
Autoclenz Provider of valeting services 185 141 0.5 1.2 0.3
Careforce Group Provider of domiciliary care 137 140 0.5 0.9 0.4
services
Inspicio Acqusition and management of 71 120 0.4 0.1 0.1
businesses in the inspection
and testing sector
Mattioli Woods Provider of pension 60 111 0.4 0.3
consultancy, troubleshooting -
and administration services
Public Recruitment Public sector staffing in 467 103 0.4 1.0 0.7
Group healthcare and education
1st Dental Provider of dental laboratory 180 102 0.4 1.4
Laboratories services -
Hexagon Human Capital Executive search and 99 100 0.3 0.3 0.7
recruitment
Tangent Digital printing and marketing 99 97 0.3 0.5 0.9
Communications services company
AssetCo Manufacture and supply of 56 87 0.3 1.1 0.7
equipment for the emergency
services
Neutrahealth Provider of BioCare products to 91 78 0.3 0.6 1.4
health practitioners and
specialist retailers
Spectrum Interactive Provider of payphones and 209 70 0.2 0.7 0.9
internet access throughout the
UK
Citel Technologies Integrated solutions for the 170 53 0.2 0.5
telephony and communications -
sector
Leisure & Gaming Provider of on-line gaming 314 32 0.1 0.4 0.3
services
Award International Sourcing and delivery of 350 10.8 7.7
Holdings merchandising materials - -
Elevation Events Events management 200 - - 3.4 7.2
Group
6,722 6,165 21.4
Listed fixed income investments
Treasury 4.5% 2007 975 975 3.4
Total investments 27,459 21,559 75.0
This information is provided by RNS
The company news service from the London Stock Exchange D
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