Final Results
ProVen VCT plc
Unaudited Preliminary Announcement of Results for the Year Ended 28
February 2007
FINANCIAL HIGHLIGHTS
2007 2006
pence pence
Ordinary shares
Net asset value (per Ordinary share) 108.3 111.3
Cumulative gross distributions paid (from launch to 28 53.2 18.7
Feb 2007)
Total return (net asset value plus paid cumulative 161.5 130.0
distributions paid and declared)
Interim dividend (per Ordinary share) 31.0 3.0
Second interim dividend (per Ordinary share) - paid 5 15.0 3.5
April 2007
46.0 6.5
No 'C' shares had been allotted as at 28 February 2007.
The Statement to Shareholders by the Chairman, Andrew Davison,
includes the following:
I am pleased to present the Annual Report for ProVen VCT plc for the
year ended 28 February 2007 and welcome new shareholders who
subscribed to the Company's recent 'C' Share issue to the Company.
Net Asset Value
At the year end, the Company's net asset value per Ordinary share
("NAV") stood at 108.3p, an increase of 31.5p per share or 28.3% over
the year after adjusting for the dividends of 34.5p per Ordinary
share which were paid during the year.
Total return (NAV plus cumulative dividends paid) to Ordinary
Shareholders who invested at the outset of the Company now stands at
161.5p per share, compared to an original investment net of income
tax relief of 80p per share.
Board change
Alexander Spiro Jr stepped down from the Board on 25 January 2007 as
a result of his changing role within Beringea LLC, the group which
provides investment management services to the Company. I wish to
thank Alexander for his strong support and perceptive and relevant
contribution since joining the Board in May 2003 and wish him well in
his future activities.
On the same date, David Eberly joined the Board as a non-executive
director representing Beringea. David is a Senior Managing Director
and co-founder of Beringea LLC and also sits on the board of Beringea
Limited, the Company's investment manager. David has previously been
a director of European Gateway Acquisition Corp. (1996-1998) and also
Williams Controls Inc (2002-2003). I am sure that, with his
extensive experience in investment banking, David will be a valuable
addition to the Board.
'C' Share issue
In November 2006 the Company launched a 'C Share fundraising. No
shares were issued before the 28 February 2007 year-end, with the
first 'C' Shares being allotted on 6 March 2007. I am pleased to
report that at the date of this Report the Offer had raised £13.8
million.
The 'C' Share issue significantly increases the size of your Company,
which is beneficial to all Shareholders as the fixed running costs of
the Company will be spread over a larger asset base.
Venture Capital Investments
It has been an active year within the Company's investment portfolio
with the highlight being the highly profitable exit that was achieved
from the investment in Mergermarket Limited. The investment, which
originally cost £780,000, was sold for proceeds of £10.7 million.
This is one of the most successful investments made by this or any
other VCT and the Board congratulates the Investment Manager on an
excellent outcome.
Another successful exit was achieved from the restaurant chain, Ma
Potters, and the Company also invested £1.6 million in one new and
two follow-on investments.
In reviewing the investment valuations at the year end, the Board has
agreed a number of valuation increases and decreases. Overall the
unrealised valuation movement on the portfolio has been an increase
of £2.6 million.
Results and dividend
The return on activities after taxation for the year was £7,394,000
(2006: £1,782,000), comprising a revenue return of £199,000 and a
capital return of £7,195,000.
On 7 December 2006, an interim capital dividend of 31p per Ordinary
share (2006: 3.0p per share) was paid to Ordinary Shareholders. A
second interim dividend of 15p per Ordinary Share (14p capital and 1p
revenue) was paid on 5 April 2007. Original Ordinary Shareholders
have now received dividends totalling 68.2p per share since the
Company's launch in 2000.
In view of the dividend paid on 5 April 2007, the Board is not
proposing to pay a final dividend for the year.
Repurchase of Shares
The Directors are conscious that the Company's share prices are
affected by the illiquidity of its shares in the market resulting
from the fact that investors purchasing "second-hand" shares do not
benefit from income tax relief on their investment.
The Directors continue to monitor the market in the Company's shares
and will make share purchases when appropriate. During the period
the Company repurchased 719,459 Ordinary Shares, at an average price
of 98.4p per share, for cancellation. Generally, share buybacks are
undertaken at a 10% discount to the latest NAV published by the
Company. The Board intend to continue with this policy and will put
a resolution to Shareholders at the AGM.
Annual General Meeting
The Annual General Meeting ("AGM") of the Company will be held at 39
Earlham Street, London WC2H 9LT at 2:15pm on 26 July 2007.
Outlook
This has been an extremely successful year for your Company. Working
towards exits on the Company's more mature investments will remain an
important element of the Investment Manager's role, however the year
ahead presents a new set of challenges.
Proceeds from the recent disposals, along with the new funds raised
by the 'C' Share offer, have produced a significant level of funds to
be invested. I am pleased to report that, since the year end, the
Investment Manager has made a solid start in investing these funds.
The Board is monitoring the deal flow that the Manager is generating
and is satisfied that the level of opportunities being pursued is
appropriate for the task in hand.
I look forward to updating Shareholders on the progress in making new
investments in the newly-introduced interim management statement
(which the Company will prepare shortly for the period to 31 May
2007) and with the interim results to 31 August 2007.
BALANCE SHEET
as at 28 February 2007
2007 2006
Ordinary
Ordinary 'C' shares and
shares shares Total Total
£'000 £'000 £'000 £'000
Fixed Assets
Investments 15,629 - 15,629 17,653
Current assets
Debtors 968 - 968 180
Current investments 4,750 - 4,750 5,700
Cash at bank and in hand 4,218 4,491 8,709 3,484
9,936 4,491 14,427 9,364
Creditors: amounts falling due (316) (4,491) (4,807) (284)
within one year
Net current assets 9,620 - 9,620 9,080
Net assets 25,249 - 25,249 26,733
Capital and reserves
Called up share capital 1,165 - 1,165 1,201
Capital redemption reserve 132 - 132 96
Special reserve 13,145 - 13,145 15,468
Share premium account 3,759 - 3,759 3,759
Capital reserve - realised 4,348 - 4,348 2,287
Capital reserve - unrealised 2,376 - 2,376 3,319
Revenue reserve 324 - 324 603
Total equity shareholders' 25,249 - 25,249 26,733
funds
Net asset value per share 108.3p - 111.3p
INCOME STATEMENT
for the year ended 28 February 2007
Year ended 28 February 2007 Year ended 28 February
2006
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Income 576 - 576 1,030 - 1,030
Gains on - 9,059 9,059 - 1,694 1,694
investments
576 9,059 9,635 1,030 1,694 2,724
Investment (160) (479) (639) (191) (574) (765)
management fees
Performance - (1,416) (1,416) - - -
incentive fees
Other expenses (181) (5) (186) (177) - (177)
Return on ordinary
activities 235 7,159 7,394 662 1,120 1,782
before tax
Tax on ordinary (36) 36 - (114) 114 -
activities
Return
attributable to 199 7,195 7,394 548 1,234 1,782
equity
shareholders
Return per 0.8p 29.7p 30.5p 2.3p 5.1p 7.4p
Ordinary Share
The Income Statement above relates to the Ordinary shares and to the
Company as a whole. There are no movements relating to the 'C'
shares to be disclosed within the Income Statement.
All Revenue and Capital items in the above statement derive from
continuing operations.
A Statement of Total Recognised Gains and Losses relating to each
class of share has not been prepared as all gains and losses are
recognised in the relevant Income Statements as shown above.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 28 February 2007
Year ended Year ended
28 February 2007 28 February 2006
Ordinary
Ordinary 'C' shares and
shares shares Total Total
£'000 £'000 £'000 £'000
Opening 26,733 - 26,733 24,785
shareholders' funds
Issue of shares - - - 3,097
Share issue costs - - - (136)
Purchase of own (711) - (711) (1,276)
shares
Total recognised 7,394 - 7,394 1,782
gains for the year
Distributions (8,167) - (8,167) (1,519)
Closing 25,249 - 25,249 26,733
shareholders' funds
CASH FLOW STATEMENT
for the year ended 28 February 2007
Year ended Year ended
28 February 2007 28 February 2006
Ordinary 'C' Ordinary
shares Shares Total Shares
and
Total
£'000 £'000 £'000 £'000
Net cash
(outflow)/inflow from (1,557) - (1,557) 170
operating activities
Capital expenditure
Purchase of (1,679) - (1,679) (2,483)
investments
Sale of investments 11,884 - 11,884 8,202
Net cash inflow from
capital expenditure 10,205 - 10,205 5,719
Equity dividends paid (8,167) - (8,167) (1,519)
Management of liquid
resources
Purchase of current
investments held as - - - (3,900)
liquidity funds
Withdrawal from 950 - 950 900
liquidity funds
Net cash
inflow/(outflow) from 950 - 950 (3,000)
liquid resources
Net cash inflow before 1,431 - 1,431 1,370
financing
Financing
Proceeds from share - 4,491 4,491 3,097
issue
Share issue costs - - - (136)
Purchase of own shares (697) - (697) (1,276)
Net cash (outflow)/ (697) 4,491 3,794 1,685
inflow from financing
Increase in cash 734 4,491 5,225 3,055
Notes
Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies" revised December 2005 ("SORP").
The financial statements are prepared under the historical cost
convention except for the revaluation of certain financial
instruments.
Presentation of Income Statement
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the Association of
Investment Companies ("AIC"), supplementary information which
analyses the income statement between items of a revenue and capital
nature has been presented alongside the income statement. The net
revenue is the measure the directors believe appropriate in assessing
the Company's compliance with certain requirements set out in Section
842 Income and Corporation Taxes Act 1988.
Investments
All investments are designated as "fair value through profit or loss"
assets and are initially measured at cost. Thereafter the investments
are measured at subsequent reporting dates at fair value.
Listed fixed income investments and investments quoted on AIM are
measured using bid prices with illiquidity discounts applied where
deemed appropriate.
In respect of unquoted instruments, fair value is established by
using International Private Equity and Venture Capital Valuation
Guidelines. Where no reliable fair value can be estimated for such
unquoted equity investments they are carried at cost, subject to any
provision for impairment. Where an investee company has gone into
receivership or liquidation the investment, although not physically
disposed of, is treated as being realised.
Gains and losses arising from changes in fair value are included in
the income statement for the year as a capital item and transaction
costs on acquisition or disposal of the investment expensed.
It is not the Company's policy to exercise either significant or
controlling influence over investee companies. Therefore the results
of these companies are not incorporated into the revenue account
except to the extent of any income accrued.
Income
Dividend income from investments is recognised when the shareholders'
rights to receive payment has been established, normally the ex
dividend date.
Interest income is accrued on a timely basis, by reference to the
principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset's net carrying amount, and only where there is reasonable
certainty of collection.
Expenses
All expenses are accounted for on accruals basis. In respect of the
analysis between revenue and capital items presented within the
income statement, all expenses have been presented as revenue items
except as follows:
* Expenses which are incidental to the disposal of an
investment are deducted from the disposal proceeds of the
investment.
* Expenses are split and presented partly as capital items
where a connection with the maintenance or enhancement of the value
of the investments held can be demonstrated and accordingly the
investment management fee and finance costs have been allocated 25%
to revenue and 75% to capital, in order to reflect the directors'
expected long-term view of the nature of the investment returns of
the Company.
Taxation
The tax effects of different items in the Income Statement are
allocated between capital and revenue on the same basis as the
particular item to which they relate using the Company's effective
rate of tax for the accounting period.
Due to the Company's status as a venture capital trust and the
continued intention to meet the conditions required to comply with
Section 842AA of the Income and Corporation Taxes Act (1988), no
provision for taxation is required in respect of any realised or
unrealised appreciation of the Company's investments which arises.
Deferred taxation is provided in full on timing differences that
result in an obligation at the balance sheet date to pay more tax, or
a right to pay less tax, at a future date, at rates expected to apply
when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and
expenditure in taxation computations in periods different from those
in which they are included in the financial statements.
Announcement based on draft accounts (unqualified audit report)
The financial information set out in this announcement does not
constitute the Company's statutory accounts for the year ended 28
February 2007 or 28 February 2006. The statutory accounts for the
year ended 28 February 2007 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The financial information for the year ended 28 February 2006 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors reported on
those accounts; this report was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
A copy of the full annual report and financial statements for the
year ended 28 February 2007 will be printed and posted to
shareholders. Copies will also be available to the public at the
registered office of the Company at 39 Earlham Street, London WC2H
9LT.
---END OF MESSAGE---
Latest directors dealings
- 2 days ago Mattioli Woods
- 2 days ago Morgan Advanced Materials
- 2 days ago Capita
- 2 days ago Judges Scientific
- 2 days ago Me Group International