Final Results
17 May 2003 - 2:52AM
UK Regulatory
RNS Number:2319L
ProVen Media VCT PLC
16 May 2003
ProVen Media VCT plc
Preliminary Announcement of Results for the year to 28 February 2003
Chairman's Statement
I am pleased to report that ProVen Media VCT completed the year to 28 February
2003 with 49% of your company's total investments being represented by twelve
qualifying venture capital investments.
Although the year was characterised by economic uncertainty, the investment
manager took advantage of improved pricing conditions in your company's target
market for venture capital investment, and a total of #2.5 million was invested
during the year. Despite this high level of investment activity, the continuing
decline in quoted media valuations impacted on the portfolio valuation at the
year-end, principally through the VCT's direct ownership of AIM-listed stocks.
More recently the markets have shown some signs of improvement and, in the major
equity markets worldwide, media-related companies have risen faster than the
main indices, giving some cause for optimism about future valuations.
Investment Portfolio
The year to 28 February 2003 was one of considerable activity in the portfolio.
Seven new investments and five follow-on investments were completed, and there
was a partial redemption of loan stock by one investee company. Investment
activity has continued since the end of February, with one new company added to
the portfolio and another follow-on investment completed. Completion of these
investments has brought the qualifying investments' total to 56% as at today's
date.
Your Board is pleased with the progress made in building the company's portfolio
of fifteen companies at the balance sheet date. This portfolio now covers a
broad spectrum of business sectors, reflecting companies at different stages of
development and a range of sizes.
Your company's share price has held up well during the year. Over the short
life of your company it has invested in a portfolio which has a cost of #3.8
million compared to a year-end balance sheet value of #3.2 million. The
portfolio declined in value by #490,000 during the year and, whilst
disappointing, this 13% fall in value was significantly less than the decline in
the public markets, where the FTSE AIM Index and the FTSE AllShare Index fell by
33% and 29% respectively. The high proportion of new investments in the
portfolio contributed to this relative performance and your Board considers that
the portfolio is well-diversified and well-placed to realise its potential over
the long-term.
Revenue and Dividends
The company's revenue return for the year to 28 February 2003 is in line with
that of 2002. Net profit after tax for the year was #112,000 compared to
#115,000 in the previous period, and the revenue return per share was 1.6p (2002
- 1.8p). During the financial year under review, ProVen Media VCT paid an
interim dividend of #71,000, equivalent to 1.0p per share.
ProVen Media VCT is a relatively small VCT and although its running costs are
capped at 3.6% of net assets in any financial year, its ability to generate
revenue profits is limited by its scale of activity. There was a significant
reduction in income from listed fixed interest investments in the second half of
the financial year under review, consistent with the increase in investment in
the unquoted qualifying portfolio. Your Board expects that as the fixed
interest portfolio reduces further to fund investment in qualifying investments,
there is a likelihood that the running costs of the company could soon outstrip
its income. Accordingly, the Directors consider it prudent to retain the
balance of this year's income in the revenue reserve and they will not be
recommending the payment of a final dividend for the year.
The company has reached a stage in its development where future dividend
payments are likely to be substantially dependent on capital profits generated
from investment realisations; however, the extent and timing of capital gains
are difficult to predict with any certainty and shareholders should not expect
regular dividend payments going forward.
Net Asset Value
The net asset value per share at 28 February 2003 was 84.1p after deducting the
interim dividend paid, compared to 92.4p at the end of the previous financial
year. This decline equates to 7.9% over the year after adding back the effect
of the dividend, and compares well to the falls in the FTSE AIM and FTSE
AllShare Indices mentioned previously in this review.
Share Buy Backs
In order to maintain the company's ability to purchase its own shares where this
is in the interests of shareholders, the Board will at the forthcoming annual
general meeting once again be seeking shareholder approval to renew its
authority to purchase shares in the market. Any shareholder wishing to sell
shares should contact Downing Corporate Finance in the first instance.
Board Change
The Board has today appointed Alexander Spiro Jr. as a non-executive director of
the company. Mr Spiro is a senior managing director of Beringea LLC, the
investment manager's US parent company.
Prospects
ProVen Media VCT is now 56% invested in VCT qualifying investments due to the
excellent progress made during the financial year under review. Nevertheless,
both your Board and the investment manager remain aware of the need to sustain
this progress to ensure that the 70% target is achieved by February 2004. The
conditions for venture capital investment in the media sectors that the company
targets appear to be favourable, with quoted media valuations at a low level and
companies looking to repair their balance sheets. The objective of the company
remains the generation of tax-free returns to shareholders over the medium-term.
Tom Sooke
Chairman
16 May 2003
Statement of Total Return (incorporating the revenue account)
for the year to 28 February 2003
Year ended Period ended
28 February 2003 28 February 2002
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000
Losses on investments
- realised - (150) (150) - (11) (11)
- unrealised - (440) (440) - (134) (134)
Income 318 - 318 318 - 318
Investment management fee (18) (56) (74) (21) (64) (85)
Other expenses (160) - (160) (154) - (154)
Return on ordinary activities
before taxation 140 (646) (506) 143 (209) (66)
Tax (charge)/credit on ordinary activities (28) 11 (17) (28) 13 (15)
Return on ordinary activities
after taxation 112 (635) (523) 115 (196) (81)
Dividends (71) - (71) (100) - (100)
Transfer to/(from) reserves 41 (635) (594) 15 (196) (181)
Return per ordinary share
Basic and diluted 1.6p (8.9)p (7.3)p 1.8p (3.1)p (1.3)p
Balance Sheet
at 28 February
2003 2002
#000 #000
Fixed assets
Investments 5,534 6,383
Current assets
Debtors 118 89
Cash at bank and in hand 474 318
592 407
Creditors: amounts falling due within one year (129) (222)
Net current assets 463 185
Net assets 5,997 6,568
Capital and reserves
Called-up share capital 71 71
Share premium 27 6,678
Special reserve 6,674 -
Capital reserve - realised (257) (62)
Capital reserve - unrealised (574) (134)
Revenue reserve 56 15
Total equity shareholders' funds 5,997 6,568
Net asset value per ordinary share 84.1p 92.4p
Cash Flow Statement
for the year to 28 February 2003
Year
ended Period ended
28 February 28 February
2003 2002
#000 #000
Net revenue from operating activities
Net revenue from ordinary activities before tax 140 143
Increase in debtors (18) (89)
Increase in creditors 5 107
Management fees charged to capital (56) (64)
Net cash inflow from operating activities 71 97
Financial investment
Purchase of investments (4,797) (13,704)
Sale of investments 5,045 7,176
Net cash inflow/(outflow) from financial investment 248 (6,528)
Corporation tax paid (15) -
Equity dividends paid (171) -
Financing
Issue of redeemable preference shares - 50
Issue of ordinary shares 25 7,110
Share issue expenses (2) (355)
Redemption of redeemable preference shares - (50)
Buy-back of ordinary shares (2002 - 6,000) - (6)
Net cash inflow from financing 23 6,749
Increase in cash in period 156 318
Analysis of cash balance
At 28 February 2002 318 -
Net cash inflow for the period 156 318
At 28 February 2003 474 318
Notes
1 The financial information set out above does not
constitute the company's statutory accounts for the year to 28 February 2003,
but is derived from those accounts. The auditors have reported on those
accounts; their report was unqualified and did not contain statements under s237
(2) or (3) Companies Act 1985. The accounts have yet to be approved by
shareholders and delivered to the Registrar of Companies.
2 The Revenue column of the Statement of Total Return is the
revenue account of the company. The prior period comparatives cover the 63 week
period ended 28 February 2002.
3 Returns per ordinary share are based on the revenue and capital
returns on ordinary activities after taxation and on 7,126,528 (2002: 6,292,411)
ordinary shares, being the weighted average number of shares in issue during the
year. There were 7,128,778 (2002: 7,103,978) ordinary shares in issue at 28
February 2003.
4 Unlisted investments have been valued at directors' valuation in
accordance with the guidelines of the British Venture Capital Association.
Investments traded on the Alternative Investment Market have been valued at
market value.
5 The audited accounts will be posted to shareholders by 31 May
2003 and copies of this announcement are available at the company's registered
office: 17-18 Henrietta Street, London WC2E 8QH.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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