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Value Catalyst Fund (VCF)

  Print      Mail a friend       Annual reports

Monday 17 November, 2008

Value Catalyst Fund

Final Results

RNS Number : 2464I
Value Catalyst Fund Limited (The)
17 November 2008
 



The Value Catalyst Fund Limited ('VCF' or 'the Company')

Preliminary Results for the year ended 30 June 2008


The Board of The Value Catalyst Fund Limited announces its results for the year ended 30 June 2008.

 

For further information, please contact:

 

Azhic Basirov / Siobhan Sergeant

Smith & Williamson Corporate Finance Limited

+44 (0)20 7131 4000



Investment Advisor's Report


For the twelve month period to the 30th June, 2008, The Value Catalyst Fund ('VCF') returned -8.58%. From the period of inception to the 30th June, 2008 VCF has returned 168.05%.


Well it has taken a while, and we have been hoping for it to happen for a year now, but in September it finally did. Discounts widened sharply across the board throwing up big discounts in every sort of fund, jurisdiction and asset class. In the UK the big benchmark global equity fund Alliance Trust cruised to a 20% discount. In the UK, REIT majors are showing some of the biggest discounts to NAV since 1981 (after adjusting for the change in tax status of the sector since 2007).  In the US many liquid general equity funds hit high 20% discounts. Chinese local funds hit 30% discounts. And in Australia discounts of 40% and over are not uncommon.


That's without having to look at the likes of Vietnam where some funds - darlings of the world and on premiums until recently - now trade at 50% discounts and below cash. They will, of course, spend that cash so we don't believe they should be looked at as trading below cash however, the Chinese funds hold about 30% cash and fixed interest, which they must hold and may not invest in equities, so perhaps such an approach of working out how cheaply we can buy the equities is fair for the Chinese domestic funds.


Over the last couple of years we have held approximately half the portfolio in funds and half in equities where we have been active, but that has been changing recently and we have been concentrating on the fund opportunities that have now emerged. We are sticking to criteria of funds with no leverage, liquid assets and sensible legal jurisdictions. There is no need to look at esoteric assets or go near funds that appear to have a dominant shareholder. We will just keep it as simple as possible.


There are many unintended consequences of such rapid changes in the financial make-up but this is clearly an environment where shareholders are keener than normal to support distributions of cash and re-organisations. We have recently called an EGM in Australia and we see the next twelve months as extremely busy in terms of actions and active steps to capture the discounts these funds trade on.


The following is a review of current positions, some of which have been developed during the current fall out that has led to this increased level of opportunity in closed-end funds. We expect to have much more to report on in the coming periods.


Update: ASA Ltd


ASA Ltd is a US listed but Bermuda incorporated closed-end management investment company that invests in the stocks of companies conducting, as a major part of their business, gold mining and related activities.


A large discount and a shareholder friendly jurisdiction led us to ASA. At the company's April, 2008 AGM we won our proxy battle with the ASA board and Andrew Pegge (with Phillip Goldstein and Julian Reid) was appointed to the board.


ASA also agreed to conduct a tender for 25% of the shares in issue (at 98% of NAV), followed by two further annual tenders for 10% of the shares in issue.


On the 13th June, 2008, ASA commenced a tender for 25% of the shares in issue at 98% of NAV and your Fund tendered 42% of its holding.


As at 30th June, 2008 VCF had a 2.32% economic interest in ASA, worth $13,991,342, 5.22% of VCF's NAV. 


Australian CEFs


Everest Babcock and Brown Alternative Investment Trust ('EBI')


Everest Babcock & Brown Alternative Investment Trust has exposure to a portfolio of leading international absolute return funds and selected direct investments in subordinated debt and equity co-investments. The objective of the investment portfolio is to generate attractive risk-adjusted absolute returns over the medium-to-long term while maintaining a constant focus on capital preservation.


As one of the largest unitholders, with a declared stake of 16.78%, earlier this year we were in talks with the EBI management to address the discount at which the shares had been trading to NTA. The EBI board responded with a limited buy-back of units and then in May declared that it would introduce more lasting discount containment measures including a buy-back of 10% of the fund at a 5% discount to NTA each half-year, should the fund trade at more than a 10% discount to NTA over a three month period.


These measures had limited success in addressing the discount beyond an all too common short lived contraction immediately following a buy-back. At a discount of 33% (as at 19th September, 2008) EBI announced new measures - and in what it terms the most effective course of action - unitholders, at the October AGM, will be asked to approve EBI delisting from the Australian Securities Exchange. Following the delisting, major unitholders who wish to exit may elect to receive an in specie redemption of the underlying portfolio; minor unitholders, provided they do not tender more than 10% of the outstanding units, will have the opportunity to exit at a 7.5% discount to NTA prior to delisting. Once the trust delists, remaining unitholders will next have the opportunity to exit at a 25% redemption facility on the 31st December, 2009 and then on a semi-annual basis from the 31st December, 2010.


We don't like these proposals. We had been expecting an in-specie distribution of the assets via a SWAP, not via a fund structure with Everest Babcock & Brown as manager charging fees on the assets. We think the correct course of action would be to allow unitholders to vote on EBI's future via a resolution to wind up the trust and then on the appointment of a new responsibility entity (manager) should unitholders wish for the trust to continue. Consequently, Laxey Partners has requisitioned EBI to put these two extraordinary resolutions to all unitholders.


As at 30th June, 2008 VCF had a 1.92% economic interest in EBI, worth $10,571,345, 3.95% of VCF's NAV. 


Lion Selection Limited ('Lion')


An Australian resource investment company, Lion invests in small and medium sized mining and exploration companies. With just over a 10% stake across all funds, our suggestions as to what Lion could do to address the discount at which its shares had been trading were ignored.


Lion preferred to work with the idea of turning itself into a gold miner (instead of being an investor in mines) but then in response to a bid from Indophil, one of its portfolio companies, decided that it would divest significant investments in its mining companies and return the proceeds to unitholders. This was very much dependent on the approval of unitholders, the majority of which voted the same way as us to block Lion's attempt to sell its biggest holding at $1 a share in favour of tendering the stake to a bid at the much higher price of $1.28 per share.


Since then, unitholders approved a plan to see Lion return between $1.35 and $1.50 in cash to holders and on the 25th September, Lion announced details of an off-market buy-back worth AUS$1 50m at a 5% discount to an NTA of $1.79 per share. With an additional $40m in cash and the liquidation of more non-core assets expected, this is a good deal for unitholders.


As at 30th June, 2008 VCF had a 1.96% economic interest in Lion Selection, worth $6,395,168, 2.39% of VCF's NAV.


Update: Charles Voegele Holding AG


Charles Voegele is an international clothing retailer based in Switzerland. It operated stores in SwitzerlandGermanyAustria, the Benelux and Eastern Europe. Although the recent slowdown in consumer sentiment has hurt its share price the company has managed to retain its market share in all its markets.


Laxey Partners, acting in concert with funds managed by Cheyne Capital and Sterling Strategic Value, were successful in appointing two new directors to the Charles Voegele board at the company's AGM in April. In August, Voegele announced that the outgoing CEO had to leave the company immediately due to illness. As a result, the chairman assumed interim responsibilities until a replacement CEO could be found. The announcement of the appointment of a new CEO is expected very shortly.


We remain in concert - with a joint holding of just under 25% - and in dialogue with the Voegele board to work with management to better reflect the company's fundamentals in its share price. And we look forward to working with the new CEO.


As at 30th June, 2008 VCF had a 2.32% economic interest in Charles Voegele, worth $15,937,646, 5.95% of VCF's NAV.


Civica Plc


The software and services group that focuses on the public sector announced in March agreed terms for a recommended cash offer by Cornwall Bidco (a company backed by 3i Group Plc) to acquire the entire issued and to be issued share capital of Civica at 270 pence cash per share, which at that time represented a premium of approximately 33.7% to the offer day closing price of 202 pence per share.


Laxey Partners tendered its entire stake of approximately 11%.


As at 30th April, 2008 VCF had a 0.17% economic interest in Civica, worth $569,002, 0.21% of VCF's NAV. The full position was tendered on the 6th May, 2008.


Update: Implenia AG


Implenia AG was formed following the merger of two leading Swiss construction companies in March 2006. It provides general contracting, industrial and commercial construction services as well as real estate development. With a market cap of approximately $550m, Implenia has a high quality balance sheet and a valuable land bank. Due to its attractive positioning in Switzerland - Implenia is the undisputed market leader at around three times the size of its closest rival - and its expertise in infrastructure development it is of strategic interest to leading European and global contractors.


Laxey Partners began to acquire shares in Implenia in 2006. On 2nd November, 2007, having amassed more than a 33 1/3% stake, we announced a mandatory cash bid for the company at CHF33.23 per share. When the mandatory offer expired in March 2008, we declared the bid unsuccessful because our pre-condition that the company register our full stake with voting rights, beyond the so far only recognized 4.9%, was not met. (Implenia refuses to recognize our full stake because it alleges that a clause in its articles would allow it to restrict registration of foreign shareholders - a proposition that is vehemently disputed by us.)


Following the lapse of the mandatory cash offer, until the September 2008 close we had been bound to the best price rule insofar that we could only acquire stock at or below the bid price of CHF33.23 per share. Buying stock at a higher level would have triggered a new bid. However, we are now free to buy stock at prevailing market levels, without being obliged to launch an offer ever again.


In regards the allegation that we broke Swiss disclosure rules and the subsequent - flawed, in our opinion - ruling by the Swiss Banking Commission that we did, our appeal against the ruling continues and we remain confident that it will conclude in our favour.


Implenia has offered to place our entire stake with 'friendly' investors. We doubt this initiative will result in what we would consider a fair price for our controlling stake or deliver the significant value potential - for all the shareholders of Implenia - that could be created by a new strategic owner.


As at 30th June, 2008 VCF had a 8.61% economic interest in Implenia AG, worth $51,541,782, 19.24% of VCF's NAV.


Update: Roto Smeets De Boer NV ('RSDB')


Based in the Netherlands and listed on Euronext, RSDB is a printer, processor and reproducer of information supplied by third parties. In April this year, the Dutch printing company announced that it had started constructive talks with an investor (HHBV) about a possible offer for it. In June, HHBV and RSDB announced jointly that they had reached an unconditional agreement for HHBV to acquire all of the issued and outstanding shares of RSDB at €40 per share (cum dividend). Laxey Partners signed an irrevocable undertaking to tender the entire stake in the event of a successful bid.

 

Despite both parties reaching agreement, the deadline for the offer was postponed three times before eventually expiring because the bidder, in the current market environment, was unable to secure financing in time.


However, the acquisition by HHBV of RSDB is part of a bigger transaction to merge three companies; HHBV has already acquired Quebecor's European printing asset. To this end, HHBV's advisors told us that a new approach will follow once financing is secured. We have been assured by RSDB that the fundamentals of the business have not changed since the initial approach in April.


As at 30th June, 2008 VCF had a 5.33% economic interest in RSDB, worth $10,172,749, 3.80% of VCF's NAV.


Shaftesbury Plc


This UK REIT is one of the largest landlords in the West End of London, owning a freehold portfolio of over £1 .2bn mostly concentrated across three principal 'villages' - Carnaby Street, Covent Garden and China Town. The holdings are unusual in that in all these three locations, the company owns most or, in some cases, all the buildings in the target investment areas. The high incidence of substantial contiguous blocks of holdings means that there is an opportunity to asset-manage the estate and drive above average rental growth. The nature of the holdings makes the company's assets almost unique amongst UK real estate companies.


As at 30th June, 2008 VCF had a 0.80% economic interest in Shaftesbury Plc, worth $8,784,022, 3.28% of VCF's NAV.


Update: TDG Plc


TDG Plc is one of Europe's major supply chain management and logistics service providers with revenues of £670m in 2007. TDG operates in the UKIrelandFranceSpain, the Netherlands and Belgium. Headquartered in London, the TDG group employs approximately 7,300 staff and has specialist skills in the areas of paper and packaging logistics, speciality chemicals logistics and freight forwarding. It also has substantial property assets owning the freehold/long term leasehold on 45 sites out of its 125 locations.


For most of 2008 we have been working on an agreed bid with the management of TDG. A first for us, a 'take private', it has involved an enormous amount of work - we did most of the corporate finance in-house - over a longer time period than usual (partially the nature of 'take privates', but also the challenge to arrange the debt financing in the current market environment). Back in April the company was then also approached by its competitor Wincanton, which was willing to offer 290p per share, but required us, as the reference 22% shareholder in TDG, to accept their offer. In May the Takeover Panel issued a 'put up or shut up' notice, requiring Wincanton and us to follow through on the offer or walk away, so TDG could eventually return to concentrating on its underlying business. The 'put up or shut up' notice was a welcome development as it created momentum and on 4th July we were able to announce a bid for TDG at a price of 250p per share, with the support of the board and pension fund trustees.


TDG now forms part of a new trading company, LIT Plc, listed on AIM, with Laxey as the majority shareholder. Laxey will work with the management team of TDG to grow the business and enhance the value of its assets. The company's extensive property portfolio offers a number of development opportunities.


This transaction is a landmark development not just for Laxey and VCF, but for the asset management industry in general as it represents one of the first 'take privates' by a hedge fund, marking the increasing trend of conversion between private equity and hedge funds. The transaction further develops our activist model, at the core of our value investors philosophy, to work alongside management actively influencing the value creation process.


As at 30th June, 2008 VCF had a 5.43% economic interest in TDG Plc, worth $20,109,923, 7.5 1% of VCF's NAV.


Celtic Property Developments SA


Celtic Property Developments SA is a commercial and residential property development company based in WarsawPoland, and listed on the Frankfurt Stock Exchange.


Celtic's property portfolio includes over 100 hectares of land and the potential to build out in excess of 1 million square metres of commercial and residential developments. In 2008, Celtic has completed, fully let, and subsequently sold one office building in Warsaw with another nearing completion. At 30th June, Celtic had cash reserves of €21m and its board is viewing the recent market turmoil as a potential buying opportunity as more highly leveraged companies are forced to dispose of assets.


As at 30th June, 2008 VCF had a 13.22% economic interest in Celtic Property Developments SA, worth $80,253,379, 29.96% of VCF's NAV.


The Throgmorton Trust Plc


The UK incorporated investment trust that aims to provide total return from investment predominately in listed UK smaller companies.


On an average discount over the twelve month period to mid September 2008 of 18.14%, hitting a low of 28.44% on the 15th April earlier this year, shareholders, including Laxey Partners, encouraged the company to take steps to address its discount and longevity.


Following the appointment of BlackRock as the new investment manager on the 1st July together with proposals to introduce a 40% tender offer, subsequent regular tender offers and a change in investment policy, Throgmorton announced notice of a September EGM. Shareholders were asked to vote on proposals to purchase up to 40% of shares in issue via a mix and match facility, approve a change in company investment policy (to allow the company to invest up to 30% of its assets in CFDs) as well as the authority to make regular tender offers, amongst other things.

 

Overwhelming shareholder approval for these proposals was given at the EGM on the 11th of September. Laxey Partners tendered 90% of its holding in ordinary shares and 61% of its holding in CFDs, and received the proceeds at the end of September.


As at 30th June, 2008 VCF had a 1.27% economic interest in The Throgmorton Trust Plc, worth $4,907,343, 1.83% of VCF's NAV.

  

Portfolio Statement

As at 30th June, 2008

2008

2008

2007

2007

Description


Market

value

US$


% of total

net assets


Market

value

US$


% of total

net assets


Investment funds - long

165,653,586

61.84

155,855,950

53.02

Investment funds - short

(1,461,128)

(0.55)

(13,378,791)

(4.55)

Investment funds - long swaps

(3,455,000)

(1.29)

9,485,620

3.23

Investment funds - short swaps

-

-

(292,167)

(0.10)

Equities - long

271,097,693

101.20

273,628,909

93.08

Equities - short

(12,102,599)

(4.52)

(20,377,652)

(6.93)

Equities - long swaps

(38,153)

(0.01)

147,007

0.05

Equities - short swaps

-

-

(3,038,663)

(1.03)

Equities - warrants

2,760,161

1.03

-

-

Fixed income

-

-

136,307

0.05

Index swaps - short

666,225

0.25

(230,301)

(0.08)

Futures - long

-

-

-

-

Futures - short

3,245,755

1.21

(1,347,372)

(0.46)


426,366,540

159.16

400,588,847

136.27

Other assets less liabilities

(158,472,910)

(59.16)

(106,615,469)

(36.27)

Total net assets

267,893,630

100.00

293,973,378

100.00




2008

2007

Analysis of investments by currency



% of

% of

British pound



investments

23.30

investments

23.03

United States dollar



4.08

8.17

Euro



37.77

28.41

Other



34.85

40.39




100.00

100.00





2008

2007

Analysis of investments by geographical sector

% of

investments

% of

investments

Asia ex. Japan

1.20

-

Europe Developed ex UK

6.67

15.28

European Emerging

14.44

(0.46)

European Regional Developed

11.67

7.77

Greece

(0.20)

0.12

Hungary

-

0.38

Japan

1.77

-

Netherlands

3.70

2.49

Norway

0.36

2.77

Other

5.10

17.71

South Korea

3.71

5.86

Switzerland

21.99

19.55

Taiwan

-

-

UK

29.15

26.39

USA

0.44

2.14


100.00

100.00

  

Income Statement

For the year ended 30th June, 2008




2008

US$

2007

US$

Income

Dividends on long equity securities and investment funds

14,839,017

12,498,548

Interest

- Cash balances

1,968,776

2,793,342

- Debt securities

296,911

126,417

- Derivatives

18,365

90,961

- Others

59,361

360,469

Net realised gains on financial assets and liabilities at fair value

through the profit and loss

- Equities and funds

25,901,691

92,799,481

- Debt securities

53,454

5,133

- Derivatives

11,658,365

(33,089,944)

- Forwards

(25,392,803)

(12,189,331)

Net unrealised (loss)/gains on financial assets and liabilities other

than currency forwards at fair value through the profit and loss

- Equities and funds

(28,947,487)

42,286,132

- Debt securities

14,354

(13,875)

- Derivatives

(1,545,242)

(1,354,657)

Net unrealised (loss)/gains on currency forwards

(6,064,868)

2,288,616

Total investment (expense)/income

(7,140,106)

106,601,292

Expenses

Dividends payable on short equity securities and investment funds

829,246

928,531

Interest expense

- Cash balances

9,373,982

11,108,367

- Derivatives

2,665,704

2,221,255

Investment expenses

12,868,932

14,258,153

Investment management fee

2,050,669

6,103,682

Performance fee

-

9,345,689

Administration fee

481,233

449,041

Audit fees

43,256

31,950

Directors' fees

122,815

113,125

Other expenses

1,764,467

1,239,503

Total other expenses

4,462,440

17,282,990

Total expenses



17,331,372

31,541,143

Net (loss)/profit



(24,471,478)

75,060,149

(Loss)/Earnings per ordinary share

Basic and fully diluted

US$(0.19)

US$0.60




  

Balance Sheet

As at 30th June, 2008

2008

2007

Assets

Investment funds - long at fair value through profit or loss

US$

165,653,586

US$

155,855,950

Investment funds - long swaps at fair value through profit or loss

118,180

10,993,051

Investment funds - short swaps at fair value through profit or loss

-

136,673

Equities - long at fair value through profit or loss

271,097,693

273,628,909

Equities - long swaps at fair value through profit or loss

131,991

969,188

Equities - short swaps at fair value through profit or loss

-

20,467

Equities - warrants at fair value through profit or loss

2,760,161

-

Index swaps - short at fair value through profit or loss

666,225

49,059

Debt securities at fair value through profit or loss

-

136,307

Futures - short at fair value through profit or loss

3,326,317

64,652

Amounts receivable on currency forwards

1,203,688

3,709,082

Cash at bank and brokers

6,653,509

234,299

Cash held as margin at brokers

13,175,093

57,456,973

Amounts due from outstanding sale settlements

1,027,541

3,974,779

Other debtors and accrued income

3,335,926

1,535,978

Loans receivable

2,649,991

2,723,784

Total assets

471,799,901

511,489,151

Equity

Share capital

1,420

1,361

Share premium

154,115,451

141,579,776

Retained earnings

113,776,759

152,392,241

Total shareholders' funds

267,893,630

293,973,378

Liabilities

Investment funds - short at fair value through profit or loss

1,461,128

13,378,791

Investment funds - short swaps at fair value through profit or loss

-

428,840

Investment funds - long swaps at fair value through profit or loss

3,573,180

1,507,431

Equities - short at fair value through profit or loss

12,102,599

20,377,652

Equities - long swaps at fair value through profit or loss

170,144

822,181

Equities - short swaps at fair value through profit or loss

-

3,059,130

Index swaps - short at fair value through profit or loss

-

279,360

Futures - short at fair value through profit or loss

80,562

1,412,024

Amounts payable on currency forwards

6,719,991

3,160,517

Overdrawn balances at brokers

160,004,564

157,692,846

Amounts due for outstanding purchase settlements

18,886,169

571,834

Other creditors and accrued expenses

907,934

14,825,167

Total liabilities

203,906,271

217,515,773

Total liabilities and equity

471,799,901

511,489,151

Net asset value per ordinary share

US$2.03

US$2.33


  Statement of Changes in Shareholders' Capital For the year ended 30th June, 2008


Share

capital

US$

Share

premium

US$

Retained

earnings

US$

Total

US$

Balance at 1st July, 2006

1,327

135,071,990

87,571,852

222,645,169

Increase in net assets arising from operations

-

-

75,060,149

75,060,149

Dividend

-

-

(10,239,760)

(10,239,760)

Issue of shares

34

6,507,786

-

6,507,820

Balance at 30th June, 2007

1,361

141,579,776

152,392,241

293,973,378

Balance at 1st July, 2007

1,361

141,579,776

152,392,241

293,973,378

Decrease in net assets arising from operations

-

-

(24,471,478)

(24,471,478)

Dividend

-

-

(14,144,004)

(14,144,004)

Issue of shares

59

12,535,675

-

12,535,734

Balance at 30th June, 2008

1,420

154,115,451

113,776,759

267,893,630


  

The Value Catalyst Fund Limited

Statement of Cash Flows

For the year ended 30th June, 2008




2008

US$

2007

US$

Cash flows from operating activities

Dividends received

13,719,501

12,827,416

Interest received

2,531,343

3,196,364

Dividends paid on short positions

(902,702)

(872,479)

Management fee paid

(6,137,399)

(5,737,458)

Administration fee paid

(485,915)

(444,535)

Performance fee paid

(9,394,758)

(906,394)

Other expenses paid

(1,798,743)

(1,337,820)

Interest paid

(12,528,988)

(13,238,974)

Increase in prepaid expenses

(868,462)

-

Decrease/(increase) in loans receivable

73,793

(2,723,784)

Decrease/(increase) in cash held as margin

44,281,880

(30,342,560)

Purchase of investments

(358,718,591)

(548,661,648)

Sale of investments

335,944,803

597,260,078

Net cash inflow from operating activities

5,715,762

9,018,206

Financing activities

Dividend paid

(3,146,409)

(3,731,940)

Subscriptions received

1,538,139

-

Net cash outflow from financing activities

(1,608,270)

(3,731,940)

Increase in cash and cash equivalents

4,107,492

5,286,266

Opening cash and cash equivalents

(157,458,547)

(162,744,813)

Closing cash and cash equivalents



(153,351,055)

(157,458,547)

Non cash flow movement

Relates to re-invested dividend

10,997,595

6,507,820


  Notes 


1.    Accounting policies


The financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of financial assets and liabilities (including derivative financial instruments) at fair value through profit or loss. The accounting policies are in accordance with and comply with International Financial Reporting Standards ('IFRS').


The Company has adopted the US$ as its measurement and reporting currency in which shares are issued:



2.

Dividend



2007 Dividend

US$


Paid 30th November 2007 - Dividend of US$0. 1121 per ordinary share

14,144,004


2006 Dividend



Paid 30th September 2006 - Dividend of US$0.0834 per ordinary share

10,239,760


The Directors have proposed a capitalisation in lieu of a dividend of US$0.13 per ordinary share for the year ended 30th June, 2008.


3.

Investments




2008

US$

2007

US$

Long positions:

Market value

436,018,287

439,253,791

Cost

389,942,928

348,766,297

Short positions:

(9,651,747)

(38,664,945)

Market value

Proceeds

(14,575,330)

(29,654,768)


The Company has an investment in Implenia AG valued at US$51,541,782 as at 30 June 2008. On 28 March 2008, when Laxey Partners ended its takeover offer for Implenia, the funds managed by Laxey Partners Limited, the Investment Manager, have a combined shareholding of 38.1%. The Board of Directors of Implenia AG refuses to properly register the full voting rights of shares held by Laxey funds beyond a 4.9% stake. Furthermore, the Swiss Federal Banking Commission has ruled that Laxey Partners Limited violated disclosure rules when building the stake in Implenia AG. In a preliminary hearing at the commercial court of the Canton of Zurich on 3rd July 2008, the judge made clear that it is unlikely that Implenia will succeed with its complaint for the suspension of the voting rights of the Implenia shares held by the Value Catalyst Fund. Laxey Partners Limited believes, on the basis of advice received from its Swiss legal advisors, that the ruling is flawed and will continue to protect its interests and those of its investors. Further, based on the advice received, Laxey Partners Limited believes that there is no material likelihood of the funds suffering loss as a consequence of the ruling. The Directors, having reviewed thelegal advice received by Laxey Partners Limited, concur with the views of Laxey Partners Limited expressed above.


4.    Share capital


2008

Number

2008

US$

2007

Number

2007

US$

Authorised share capital

Founder shares of US$1 each

100

100

100

100

Ordinary shares of

US$0.00001 each

4,990,000,000

49,900

4,990,000,000

49,900



50,000


50,000


2008

Number

2008

US$

2007

Number

2007

US$

Issued share capital

Founder shares of US$1 each

100

100

100

100

Ordinary shares of US$0.00001 each

(previously US$0.001)

At 1st July, 2007

1,261,731

1,261

1,227,789

1,227

Issued during year

7,009

7

33,942

34

Issued on account of 100:1 Stock split

125,605,260

-

-

-

Issued on account of dividend reinvestment

5,249,198

52

-

-

At 30th June, 2008

132,123,198

1,320

1,261,731

1,261

Total issued share capital


1,420


1,361


Following a special resolution in the Annual General Meeting dated 21 November 2007, the Company issued 100 new ordinary shares of US$0.00001 each for every ordinary share of US$ 0.001 each. The Directors considered having a large number of ordinary shares with a lower market value will serve to improve the marketability and liquidity of the shares. Net asset value per ordinary share as of 30th June 2007 has been recalculated to ensure that the comparative figures are relevant.


5.     Reserves



2008

US$

2007

US$

Share premium

At 1st July, 2007

141,579,776

135,071,990

Relating to issues of shares

12,535,675

6,507,786

At 30th June, 2008

154,115,451

141,579,776

Retained earnings

At 1st July, 2007

152,392,241

87,571,852

Net (loss)/profit for the year

(24,471,478)

75,060,149

Dividend

(14,144,004)

(10,239,760)

At 30th June, 2008

113,776,759

152,392,241

  

 

6.     Net asset value per ordinary share


The net asset value per ordinary share is based on the net assets attributable to ordinary shares and the number of ordinary shares in issue at 30th June, 2008.



2008

Total

US$

Per Share

US$

2007

Total

US$

Per Share

US$

Net asset value

267,893,630

2.03

293,973,378

2.33







7.    (Loss)/ Earnings per ordinary share


The basic (loss)/earnings per ordinary share is based on the (decrease)/increase in net assets arising from operations (before appropriations) during the year of US$(24,47 1,478) (2007: profit of US$75,060,149) and the weighted average number of ordinary shares in issue during the year of 129,393,226 (2007: 124,980,713).


8.     Publication of Non-Statutory Accounts


The financial information set out in this preliminary announcement does not constitute statutory accounts. The balance sheet as at 30 June 2008 and the group profit and loss account, statement of changes in net assets, consolidated cash flow statement and associated notes for the year then ended have been extracted from the Company's 2008 financial statements upon which the auditor's opinion is unqualified.


9.     Copies of Annual Report


Copies of the annual report and accounts will be sent to shareholders. Further copies will be available from HSBC Securities Services (Isle of Man) Limited, 12-13 Hill Street, Douglas, Isle of ManIM1 1EF.




This information is provided by RNS
The company news service from the London Stock Exchange
 
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