Final Results

Matrix Venture Fund VCT PLC 01 July 2003 Matrix Venture Fund VCT plc Preliminary Results for the year ended 30 April 2003 Corporate Policy and Financial Highlights for the year ended 30 April 2003 Objective The objective of Matrix Venture Fund VCT plc ("Matrix Venture Fund") is to provide private investors with an attractive return from a portfolio of investments in fast-growing companies whose products or services depend to a significant extent on the application of new technology, including :- • Internet and e-business • Information technology • Telecommunications and media. Venture Capital Trust Status Matrix Venture Fund has been granted provisional approval under section 842AA of the Income and Corporation Taxes Act 1988, and the Directors intend to conduct the business of the Company so as to continue to comply with that section. Performance Summary 30 April 2003 30 April 2002 Net asset value per Ordinary Share 64.39p 70.34p Net assets £8,457,714 £9,271,657 Revenue and dividend Earnings per Ordinary Share 0.51p 1.35p Dividend per Ordinary Share 0.51p 1.35p Chairman's Statement It is a pleasure to present the third annual report and financial statements of Matrix Venture Fund VCT plc. You will remember that the public offer launched on 10 May 2000 at 100 pence per share raised £12,388,237 (net). Results for the year ended 30 April 2003 The results for the year ended 30 April 2003 are set out in the following pages. The total return (after tax) attributable to the Ordinary Shareholders before the recommended dividend was £(717,678) (2002: £(2,240,929)) and the net asset value per Ordinary Share at 30 April 2003 was 64.39 pence compared with 70.34 pence for the year ended 30 April 2002. Dividend The Board recommends a dividend of 0.51 pence per Ordinary Share for the year ended 30 April 2003 (2002: 1.35 pence) for Ordinary Shareholders on the register at the close of business on 29 August 2003. Subject to shareholder approval at the Annual General Meeting on 10 September 2003, these payments should be received on 24 September 2003. The after tax revenue return before net capital losses was 0.51 pence per Ordinary Share for the year to 30 April 2003 (2002: 1.35 pence). Overview The climate for investing in technology companies has continued to be challenging. The third financial year of activity has seen a continued high volume of proposals being received and evaluated by the Company's Venture Capital Fund Advisers, Matrix Private Equity Limited. Continued global turbulence and unsettled quoted markets have led to low levels of corporate activity. This has affected the unquoted market where many investment propositions have failed to receive funding. Previously unrealistic company valuations have now largely been modified reflecting a more realistic balance between risk and reward. This should make for a more profitable and stable environment when market confidence returns. As at 30 April 2003, £6.9 million had been committed to 12 companies. One new investment was completed in this financial year, and follow-on funding has been provided to three portfolio companies. Together, these investments represent an aggregate investment of 55.8% of the net funds raised under the public offer. As at 30 April 2003, the capital reserves showed a capital base of £8.5 million, struck after a cumulative capital loss of £3.9 million. Details of the full venture capital portfolio as at 30 April 2003 are given in the Venture Capital Fund Adviser's Report. The investments held by the Company have been valued in accordance with the British Venture Capital Association guidelines under which unquoted investments are not normally revalued above cost for at least 12 months after the date of the acquisition. We will, in any event, always follow a consistent and prudent valuation policy. The investments that are quoted on AIM and the fixed interest securities are carried at market value. VCT Qualifying Status During the year the Company met all the requirements of the VCT legislation and I am pleased to report that, following the year end, qualifies for full VCT status. Share Premium Account Shareholders approved the cancellation of the Company's share premium account at the Annual General Meeting held on 6 September 2002. This cancellation was sanctioned by the Court on 30 October 2002 and became effective on 2 November 2002. The cancellation of the share premium account has created a special reserve that can be used to fund buy-backs of the Company's Ordinary Shares when the Directors consider that it is in the best interests of the Company to do so. Conclusion There is no doubt that economic conditions have deteriorated markedly since the Fund was launched. The quoted market has seen a very marked decline reflecting the recession in the telecommunications sector and the slowing pace of growth in other technology sectors. The Board is encouraged that the majority of the current portfolio is well funded and in some cases achieving excellent growth rates. The time period for investment realisation has normally been between 3 and 5 years. In current depressed markets it should be expected that companies may take longer to mature to a stage suitable for exit. However, I am pleased to inform shareholders that, on 18 June 2003, it was announced that Nasdaq listed FindWhat.com plans to merge with Espotting Media (UK) Limited (Espotting) in a transaction that values Espotting at $163 million. If the investment in Espotting was revalued to the anticipated consideration on the date of the announcement, the net asset value per share would increase by approximately 10.6p. The consideration is largely in shares and so the actual impact will depend on the share price on realisation. The deal is subject to customary closing conditions, including respective company shareholder approvals, and is expected to close in the fourth quarter of 2003. The Board is hopeful that further exits will be achieved in the next 12-24 months. I would like to take this opportunity to thank all shareholders for their continuing support of the Company and I very much hope to have the pleasure of welcoming you to the Annual General Meeting on 10 September 2003. Michael Cumming Chairman 1 July 2003 Venture Capital Fund Adviser's Report The Venture Capital Fund Matrix Private Equity Limited advises the Company in respect of investments made within the Venture Capital Fund. During the year ended 30 April 2003, the team received and evaluated over 500 investment proposals, from which Matrix Venture Fund made one new investment into FootFall Limited, at a cost of £750,000. In common with many other investors we have been focused on helping our existing investee companies and have recommended three further investments of £24,443 into Sit-up.com Limited, £50,000 into Espotting Media (UK) Limited (Espotting) and £142,857 into Monactive Limited over the past year. During the year we have revalued our investment in Espotting upwards following another round of finance achieved by the company at a higher valuation. We have not yet revalued the investment to take account of the planned sale of the company referred to in the Chairman's Statement. We have also, in these accounts, written down our investment in Callserve Communications Limited due to the slower growth of the telecommunications sector and have taken a provision on our investment in Flightstore Limited, which has suffered from the difficult airline market in recent years, leading to lower growth. This was the third period in which funds were available for investment in qualifying companies for VCT purposes. The current investment portfolio of the Company as at 30 April 2003 is detailed below. Callserve Communications Limited The company provides internet telephony services or Voice over Internet Protocol ("VolP") from PCs to telephones, worldwide. Using software which is pre-installed or downloaded from the company's website, a telephone caller can use the internet to route a telephone call at a much reduced cost. Matrix Venture Fund invested as part of a syndicate arranged by KBC Peel Hunt, raising £7.3m to finance the roll-out of the service and facilitate partnering arrangements with software and hardware providers. Results from the latest audited accounts for the year ended 31 March 2002: turnover £2,681,239; loss before tax £4,885,152; net liabilities £363,814. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights October 2000 £300,000 £150,000 0.43% 1.75% Clarity Commerce Solutions plc The company provides EPOS (electronic point of sale) solutions, Customer Relationship Management ("CRM") products and services to the UK hospitality and leisure markets. It floated on AIM in July 2000, raising £2.5m primarily to increase its marketing activities and acquire two small complementary businesses. The company has continued to be acquisitive and raised £2.6m via a rights issue in October 2001. The business has grown substantially in the last year and is now trading profitably before amortisation of goodwill. Results from the latest audited accounts for the year ended 31 March 2002: turnover £7,620,000; loss before tax £221,000; net assets £7,367,000. Date of investment Amount invested Valuation % Equity/Voting Rights % of net assets July 2000 £250,000 £117,000 1.44% 1.37% The investment is valued at the mid-market price on 30 April 2003 of 58.5p per share. e-go systems plc The group provided Unified Messaging ("UM") services to global enterprises. UM consolidates messages delivered to voicemail, mobile phone, e-mail and fax into one mailbox. Telemesser (a subsidiary based in Israel) provided UM support services, including CRM. The enterprise UM service went live in May 2001. Matrix Venture Fund invested as part of a £7.2m fund-raising in September 2001. The group raised a further £5m to enable the business to expand and we invested an additional £100,000 as part of this round in October 2001. Although the trial service was available in May 2001, technical problems delayed the launch until January 2002. At this stage the company was unsuccessful in obtaining further funding and the business was placed into liquidation in January 2003. It is unlikely that there will be a distribution to shareholders. Results from the last audited accounts for the year ended 31 March 2000: turnover £725,058; loss before tax £1,151,998; net assets £3,329,413. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights September 2000/ October £600,000 Nil 3.00% Nil 2001 Espotting Media (UK) Ltd Espotting is the UK's leader in performance-based advertising through search engines, allowing advertisers to bid against each other for key words in order to achieve prominence in search engine results. Espotting raised two rounds of funds; in December 2001 and again in August 2002, to finance working capital and an expansion of the business into Europe. Matrix Venture Fund has invested £550k in total. The company has continued to grow rapidly since our investment. On 18 June 2003, Espotting announced plans to merge with Nasdaq listed FindWhat.com (see Chairman's Statement). Results from the latest audited accounts for the year ended 31 March 2001 turnover £45,044: loss before tax £1,915,995; net liabilities £1,915,994. Date of investment Amount invested Valuation % Equity/ Voting % of net assets Rights December 2001/ £550,000 £732,471 2.4% 8.59% August 2002 Flightstore Inflight Retailing Limited Flightstore uses existing seatback entertainment systems to create an airline branded, electronic and interactive magazine experience containing branded retailers and advertisers on long haul flights. It raised £3m in March 2002. The service is now installed on 3 airlines comprising 24 aircraft and has secured orders from a further 3 airlines. Results from the latest audited accounts for the year ended 31 December 2002: turnover £44,147; loss before tax £858,119; net assets £819,802. Date of investment Amount invested Valuation % Equity/ Voting % of net assets Rights March 2001 £750,000 £375,000 11.6% 4.39% FootFall Limited FootFall provides business performance information that is derived from the monitoring and analysis of pedestrian traffic flow in shopping centres and retail outlets. The company raised £2.65m from a syndicate of investors in June 2002. The company continues to show strong year-on-year growth. Results from the latest audited accounts for the year ended 31 March 2002: turnover £1,663,857; loss before tax £2,589,446; net assets £1,381,077. Date of investment Amount invested Valuation % Equity/ Voting % of net assets Rights June 2002 £750,000 At cost 5.76% 8.79% Image Com Limited The company's core expertise was in providing the technology to enable high quality live video images to be transmitted over telephone networks by compressing and decompressing the images at either end. The company raised several rounds of funding from Thompson Clive, who then invested a further £750,000 alongside a similar sum from Matrix Venture Fund to fund the development of new business. Additional funds of £750,000 were raised in October 2001, with the Fund investing £150,000. Due to a serious liquidity crisis arising partly from another party failing to complete its investment, the business was placed into liquidation in January 2003. It is unlikely that there will be a distribution to shareholders. Results for 9 months ended 31 January 2002; turnover £1,585,157; loss before tax £1,468,000; net liabilities £175,000. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights December 2000/ £900,000 Nil 21.22% Nil October 2001 Magicalia Limited Magicalia has established a network of six community websites focused on enthusiast-based participation sports such as cycling, golf, fishing and outdoor activities. It also has a growing online contract publishing business whereby Magicalia licenses their technology platform to existing online publications. The company raised £1m from a syndicate of investors in March 2001. The business continues to grow and expand its membership base. Results from the latest audited accounts for the year ended 31 December 2001: turnover £94,894; loss before tax £500,573; net assets £801,822. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights March 2001 400,000 At cost 12.73% 4.69% Monactive Limited Monactive is a leading provider of software asset management tools, having developed products based on innovative technology including automatic recognition, and a client-based, rather than server-based approach (i.e. using resident agents on PCs) to monitor software usage. The company raised £1.75m from a syndicate of investors in March 2001, and a further £500,000 in January 2003. Results from the latest audited accounts for the year ended 31 July 2002: turnover £1,548,645; loss before tax £982,394; net liabilities £893,077. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights March 2001/ £642,857 At cost 13.6% 7.54% January 2003 Sit-up.com Limited The company provides interactive broadcasting material for digital TV and the internet. The first service is Bid-up.TV, the UK's first interactive TV-based auction site. Bid-up.TV auctions create an opportunity for manufacturers and distributors to sell a wide range of products across Sky, Telewest and other platforms. The company also owns Screenshop, an infomercial channel broadcast on Sky. Matrix Venture Fund initially invested £500,000 as part of a £2.2m syndicate. A further £150,000 was provided when the business raised over £5m of expansion capital in February 2001 and £250,000 was invested in March 2002 as part of a £1.65m loan syndicate. This loan has now been repaid. The business raised approximately £5m of development capital in July 2002 and Matrix Venture Fund invested £24,443 as part of that round. The business continues to show strong annualised growth. Results from the latest audited accounts for the year ended 31 December 2001: turnover £25,961,848; loss before tax £7,475,490; net assets £11,487,713. Date of investment Amount invested Valuation % Equity/ % of net assets Voting Rights October 2000/ £675,591 £459,188 1.59% 7.93% February 2001/ July 2002 The Directors of Matrix Private Equity Limited responsible for advising on the Venture Capital Investments are: Helen Sinclair, Managing Director (Age 37). Helen is an experienced venture capitalist with over fifteen years deal doing experience. She has an MBA from INSEAD Business School and was at 3i plc for seven years where she gained wide-ranging experience of investing in and managing a portfolio of companies. She joined Matrix Private Equity in May 2000 and was made Managing Director in February 2003, upon Mark Burgess' departure for Australia. Ashley Broomberg, Director (Age 33). Ashley is a chartered accountant with a background in strategy consulting. He has an MPhil in Finance from the University of Cambridge and previously worked at Arthur D Little, where he specialised in transaction support for TMT transactions, and was prior to this at Andersens. He joined Matrix Private Equity in June 2001. Statement of Total Return Year ended 30 April 2003 Year ended 30 April 2003 Revenue Capital Total £ £ £ Gains and losses on investments - (680,522) (680,522) Income 349,189 - 349,189 Investment management fees (39,785) (119,353) (159,138) Other expenses (227,921) - (227,921) ------------ ----------- ------------ Return on ordinary activities before taxation 81,483 (799,875) (718,392) Tax on ordinary activities (14,396) 15,110 714 ---------- --------- --------- Return attributable to equity shareholders 67,087 (784,765) (717,678) Dividends in respect of equity shares (66,994) - (66,994) ------------ ------------ ------------ Transfer to/(from) reserves 93 (784,765) (784,672) ------------ ------------ ------------ Return to shareholders per Ordinary Share 0.51p (5.96)p (5.45)p Year ended 30 April 2002 Revenue Capital Total £ £ £ Gains and losses on investments - (2,278,674) (2,278,674) Income 469,379 - 469,379 Investment management fees (60,094) (180,282) (240,376) Other expenses (186,596) - (186,596) ----------- ------------ ------------ Return on ordinary activities before taxation 222,689 (2,458,956) (2,236,267) Tax on ordinary activities (44,352) 39,690 (4,662) ----------- ----------- ----------- Return attributable to equity shareholders 178,337 (2,419,266) (2,240,929) Dividends in respect of equity shares (177,938) - (177,938) ----------- -------------- -------------- Transfer to/(from) reserves 399 (2,419,266) (2,418,867) ----------- -------------- -------------- Return to shareholders per Ordinary Share 1.35p (18.35)p (17.00)p The Statement of Total Return incorporates the profit and loss account of the Company. All revenue and capital items in the Statement of Total Return derive from continuing operations. The Company has only one class of business and derives its income from investments in shares, securities, loans and bank deposits. Balance Sheet As at 30 April 2003 30 April 2003 30 April 2002 £ £ Fixed Assets Venture capital investments 3,626,615 3,493,099 Fixed interest securities - 5,047,590 Money market investments 1,643,385 810,979 ------------ ------------- 5,270,000 9,351,668 Current Assets Debtors and prepayments 77,363 155,639 Cash at bank 3,259,824 14,679 ------------- ----------- 3,337,187 170,318 Creditors: amounts falling due within one year (149,473) (250,329) ----------- ----------- Net current assets 3,187,714 (80,011) ------------- ------------- Net assets 8,457,714 9,271,657 ------------- ------------- Capital and reserves Called up share capital 131,360 131,806 Capital redemption reserve 446 - Share premium account - 12,256,431 Cancelled share premium account 12,227,160 - Capital reserve - realised (959,815) (383,852) Capital reserve - unrealised (2,941,929) (2,733,127) Revenue reserves 492 399 ------------ -------------- 8,457,714 9,271,657 ------------ ------------- Net asset value per Ordinary Share 64.39p 70.34p Cash Flow Statement Year ended 30 April 2003 Year Year ended ended 30 April 30 April 2003 2002 £ £ Net cash inflow/(outflow) from operating activities 55,156 (180,950) Taxation UK corporation tax paid (3,948) - ----------- ----------- Net cash inflow/(outflow) 51,208 (180,950) ----------- ----------- Capital expenditure and financial investment Purchase of investments - fixed income securities (2,613,686) (12,394,340) Purchase of investments - equities and loan stock (1,018,448) (950,000) ------------- ------------- (3,632,134) (13,344,340) ------------- ------------- Disposals of fixed income securities 7,615,686 7,202,573 Disposals of equities and loan stock 250,000 - ------------- ------------- Net cash inflow/(outflow) from investing activities 4,233,552 (6,141,767) Dividends Equity dividends paid (177,938) (123,140) ------------ ----------- Net cash inflow/(outflow) before financing and liquid resource management 4,106,822 (6,445,857) Management of liquid resources Movement in money market and other deposits (832,406) 6,384,538 Financing Purchase of own shares (29,271) - ----------- ----------- Net cash outflow from financing (29,271) - ----------- ----------- ------------ ------------ Net cash inflow/(outflow) as at 30 April 2003 3,245,145 (61,319) ------------ ----------- The Company held gilts and bonds primarily as investments and not as liquid resources. Accordingly, movements in the holdings of these investments are shown within investing activities in the Cash Flow Statement rather than within management of liquid resources. Notes 1. Return per share The revenue return per Ordinary Share is based on the net revenue from ordinary activities after taxation of £67,087 (2002: £178,337) and on 13,168,879 (2002: 13,180,612) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year. The capital return per Ordinary Share is based on net realised capital losses of £149,833 (2002: £208,639), net unrealised capital losses of £634,932 (2002: £2,210,627) and 13,168,879 (2002: 13,180,612) Ordinary Shares. 2. Dividend The Directors recommend a final dividend of 0.51p (2002: 1.35p) per Ordinary Share to Ordinary Shareholders on the register at the close of business on 29 August 2003. Subject to shareholders approval at the Annual General Meting on 10 September 2003 the payment should be received on 24 September 2003. 3. Net asset value per share Net asset value per Ordinary Share is based on net assets at the year end, and on 13,136,004 Ordinary Shares (2002: 13,180,612), being the number of Ordinary Shares in issue on that date. 4. On 18 June 2003, the US holding company of one of the Company's investments, Espotting Media (UK) Ltd, announced plans to merge with a NASDAQ listed company, FindWhat.com. If the Company's investment in Espotting was revalued to the anticipated consideration on the date of the announcement, the Net Asset Value per share would increase by approximately 10.6p. 5. The financial information set out in these statements does not constitute the Company's statutory accounts for the years ended 30 April 2003 and 30 April 2002 but is derived from those accounts. Statutory accounts for the year ended 30 April 2002 have been delivered to the Registrar of Companies and those for year ended 30 April 2003 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts: their reports were unqualified and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985. 6. The Annual Report will be circulated by post to all shareholders shortly and copies will be available thereafter to members of the public from the Company's registered office. 7. The Annual General Meeting will be held on 10 September 2003 at the offices of Matrix-Securities Limited, Gossard House, 7-8 Savile Row, London W1S 3PE. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Mobeus Income & Growth 2 Vct (MIG)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today