Interim Results
15 November 2003 - 4:45AM
UK Regulatory
RNS Number:1170S
ProVen Media VCT PLC
14 November 2003
ProVen Media VCT plc
Interim Statement for the six months ended 31 August 2003
Financial Summary
Six Six Year
months months ended
ended ended 28
31 August 31 August February
2003 2002 2003
Revenue return per share 0.2p 1.2p 1.6p
Total return per share 13.0p (1.1)p (7.3)p
Dividend per share - 1.0p 1.0p
Cumulative dividend per share 2.4p 2.4p 2.4p
Net asset value per share 97.3p 90.4p 84.1p
Net asset value plus cumulative dividend per share 99.7p 92.8p 86.5p
Shareholders' funds (#000) 6,885 6,444 5,997
Mid-market price per share 80p 100p 100p
CHAIRMAN'S STATEMENT
I have pleasure in presenting the interim report for the six months ended 31
August 2003. During this time, UK stock markets made significant gains from
their low point during March and venture capital activity showed signs of
continued improvement.
I am pleased to announce that the Company was recently awarded the "VCT of the
Year" award at the recent Investor Allstars awards in London. This event
highlighted private equity funds that had an exceptional year and the investment
professionals who manage the funds. I am delighted that the Company has
achieved this recognition from its peers in the industry and, more importantly,
that it has delivered significant increases in asset value over the period under
review.
Investment Portfolio
During the period the Company added one new investment to the portfolio and made
follow-on investments in two existing companies, totalling #490,000. Since the
end of August, a further follow-on investment of #35,000 has been made. Further
details of these investments are provided in the investment manager's review.
Completion of these investments has brought the Company's qualifying investments
total to 59%.
At 31 August 2003, the Company's unquoted and AIM portfolio comprised 16
companies at a total cost of #4.3 million and a valuation of #4.7 million.
Thirteen of these companies were qualifying for VCT purposes. During the period
the AIM portfolio rose in value by 78% compared to rises of 28% in the FTSE AIM
Index and 17% in the FTSE All Share Index. All AIM investments performed
strongly ahead of the AIM index. The unquoted portfolio rose by 13%, lower than
the rise in the AIM index, due in large part to many investments being
relatively recent and, therefore, being valued at cost.
The Company benefited in particular from a revaluation of its investment in
Espotting Media, following the company agreeing terms to merge with
FindWhat.com, a US NASDAQ listed company. Even allowing for the risk that the
transaction does not proceed, Espotting has made significant progress since our
investment which, the directors believe, justifies its valuation in this report.
Net Asset Value
The unaudited net asset value per share at 31 August 2003 was 97.3p. This
represents an increase of 16% over the net asset value as at 28 February 2003.
Together with dividends paid since the launch of your Company, this means that
the net asset value total return to shareholders (net asset value plus
cumulative dividends) is now broadly in line with the original cost of shares to
investors before any tax reliefs.
As I mentioned in my statement in the last Annual Report, future dividends are
likely to be substantially dependent upon future realised capital profits.
Accordingly, your board does not recommend the payment of an interim dividend
for the period under review.
Share Buy Backs
Shareholders are reminded that the Company is authorised to make market
purchases of its own shares. In July 2003, the Company purchased 50,000 shares
in the market at a cost of #35,000, representing a discount of 17% to the net
asset value at 28 February 2003. Any shareholder wishing to sell shares should
contact Downing Corporate Finance.
Board Changes
On 16 May 2003, the board 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.
Gordon Power has resigned from the board with effect from today's date to pursue
a number of other activities. Gordon has been a director since the launch of the
Company and your board has greatly appreciated his insight and experience in
this capacity.
Prospects
ProVen Media VCT is now 59% invested in VCT qualifying investments and both your
board and the investment manager are committed to ensuring that the 70%
investment target is met by 28 February 2004. At the date of this report,
further investments of #755,000 were required to meet this target.
Your board is encouraged by the recent gains in stock markets and although it is
not clear if, and for how long, this recovery will last, we are cautiously
optimistic about future prospects for the venture capital industry in general
and the Company in particular.
Tom Sooke
14 November 2003
INVESTMENT MANAGER'S REVIEW
Introduction
This review covers the six month period ended 31 August 2003 during which the
climate for venture capital activity showed continued signs of improvement. Our
focus during the period has been on identifying qualifying investments of
appropriate size and quality to meet the VCT qualifying investment target of 70%
by 28 February 2004, whilst at the same time monitoring our existing portfolio
companies to ensure their potential is fully realised. The qualifying
investment total at 31 August 2003 was 60% and at the date of this report was
59%, leaving the Company with an investment target of #755,000 to meet the
qualifying threshold.
New Investment and Portfolio Activity
In the six months under review, a total of #400,000 was invested in one company
and a further #86,000 in follow-on investments.
Zenith Group Limited
Television production company
In March 2003, ProVen Media VCT invested #400,000 alongside other Beringea
managed funds in the management buyout of this leading independent television
production company. Zenith's successes include Inspector Morse, Byker Grove and
SM:tv Live/CD:uk.
Cardpoint plc
Independent ATM operator
ProVen Media VCT invested a further #50,000 in the heavily oversubscribed
Placing & Open Offer in June 2003. This raised funds of #6 million to enable
Cardpoint to acquire the ATM estate of Securicor Corporation.
Espresso Broadband Limited
Development & delivery of educational material to schools
Proven Media VCT invested a further #36,000 as part of its ongoing commitment to
Espresso. The company has made substantial progress in the last year. A further
#35,000 was invested in September 2003.
Realisations
In June 2003, the management of Sport Entertainment & Media Group (SEM) offered
27.5p to existing shareholders to take SEM into private ownership. The
transaction was concluded in July 2003 and ProVen Media VCT converted its
holding into ordinary shares in the new company, Sports Holdings Limited.
Since 31 August 2003, we have taken advantage of rises in the share prices of
Cardpoint and Centurion Electronics and taken profits on a small portion of our
holdings.
Portfolio Valuation
At 31 August 2003, the Company's unquoted and AIM portfolio comprised 16
companies at a total cost of #4.3 million and a valuation of #4.7 million. In
addition, the Company had listed fixed interest investments of #2.1million.
In total, the Company's unquoted and AIM portfolio increased in value by
#990,000, or 26%, over the six months to 31 August 2003, broadly in line with
the 28% rise in the FTSE AIM index over the same period.
The Company's AIM portfolio increased in value by #600,000 or 78% during the six
months. All the Company's AIM stocks performed strongly ahead of the AIM index.
The Company's unquoted portfolio increased in value by #390,000 or 13%. This in
part reflects the increase in stock markets which has affected quoted PE
multiples, and therefore the value of investments valued on this basis, and also
the strong performance of specific portfolio companies. Many investments are,
however, relatively recent and valued at cost, and so the increase is lower than
the increase in the AIM index.
The Company benefited from a revaluation of its investment in Espotting Media UK
Limited as outlined in the Chairman's Statement. The board of directors have
also accepted our recommendations to increase the value of the Company's
investments in Espresso Broadband, Ashcol and Copyright Promotions Group
following improved performance.
Prospects
Our focus in the remainder of the financial year is to meet the VCT investment
qualifying target by 28 February 2004. We are encouraged by the quality of
investment opportunities that we are seeing in the Company's target sectors and
remain confident that this target will be met. The Company's recent "VCT of the
Year" award, outlined in the Chairman's Statement, should increase the profile
of the Company and the flow of investment opportunities. The existing portfolio
has, in overall terms, performed well and the portfolio companies are well
positioned to take advantage of future opportunities in their respective
markets.
Beringea Limited
14November 2003
INVESTMENT PORTFOLIO
At 31 August 2003
Book Cost Valuation % of
Net Assets
Qualifying holdings #000 #000
Ashcol Limited 550 620 9.0
Cardpoint plc * 301 504 7.3
Zenith Group Limited 400 400 5.8
LFR plc (t/a Loch Fyne Restaurants) 351 351 5.1
Espresso Broadband Limited 439 339 4.9
mergermarket Limited 317 317 4.6
Nectar Taverns Plc 300 300 4.4
Ma Potter's Limited 300 300 4.4
UBC Media Group plc * 200 239 3.5
Centurion Electronics plc* 75 201 2.9
Pilat Media Global plc* 92 170 2.4
Oasis Healthcare plc * 170 130 1.9
Sports Holdings Limited 260 117 1.7
Total qualifying holdings 3,755 3,988 **57.9
Non-qualifying holdings
Espotting Media (UK) Limited 250 470 6.8
Copyright Promotions Group Limited 93 205 3.0
Baby Innovations S.A. (t/a Steribottle) 206 62 0.9
Total non-qualifying holdings 549 737 10.7
Total venture capital investments 4,304 4,725 68.6
Listed fixed interest investments 2,142 2,137 31.0
Total investments 6,446 6,862 99.6
Net current assets 23 0.4
Shareholders' funds 6,885 100.0
* Investment traded on the Alternative Investment Market ('AIM')
** Expressed as a percentage of the Company's net assets at 31 August 2003 as
distinct from total investments (as defined in the Venture Capital Trust
regulations) which are the basis for the calculation of the qualifying
investment totals referred to in the Chairman's Statement.
UNAUDITED STATEMENT OF TOTAL RETURN (incorporating the Revenue Account)
For the six months ended 31 August 2003
Six Six Year
months months ended
ended ended 28
31 31 February
August August 2003
2003 2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000 #000 #000 #000
Gains/(losses) on investments
- realised - (61) (61) - (34) (34) - (150) (150)
- unrealised - 984 984 - (112) (112) - (440) (440)
Income 111 - 111 195 - 195 318 - 318
Investment management fee (6) (17) (23) (8) (23) (31) (18) (56) (74)
Other expenses (88) - (88) (76) - (76) (160) - (160)
Return on ordinary activities before taxation 17 906 923 111 (169) (58) 140 (646) (506)
Tax (charge)/credit on ordinary activities (3) 3 - (22) 4 (18) (28) 11 (17)
Return on ordinary activities after taxation 14 909 923 89 (165) (76) 112 (635) (523)
Dividends - - - (71) - (71) (71) - (71)
Transfers to/(from) reserves 14 909 923 18 (165) (147) 41 (635) (594)
Return per share 0.2p 12.8p 13.0p 1.2p (2.3)p (1.1)p 1.6p (8.9)p (7.3)p
The revenue column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement are from
continuing operations. Other than shown above, the Company had no recognised
gains and losses. The Company has only one class of business and derives its
income from investments made in shares and securities and from bank deposits.
UNAUDITED BALANCE SHEET
At 31 August 2003
31 August 31 August 28 February
2003 2002 2003
#000 #000 #000
Fixed assets
Investments - unquoted 3,481 1,862 2,535
Investments - AIM quoted 1,244 738 714
Fixed interest 2,137 3,325 2,285
6,862 5,925 5,534
Net current assets 23 519 463
Net assets 6,885 6,444 5,997
Capital & reserves
Share capital 71 71 71
Reserves 6,814 6,373 5,926
Equity shareholders' funds 6,885 6,444 5,997
Net asset value per share 97.3p 90.4p 84.1p
Notes
1. The unaudited interim financial statements for the six months
ended 31 August 2002 and 31 August 2003 do not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985 and have not been
delivered to the Registrar of Companies. The results for the year to 2003 have
been extracted from the financial statements for that year, which have been
delivered to the Registrar of Companies; the auditors' report on those financial
statements under Section 235 of the Companies Act 1985 was unqualified.
2. The financial information contained in this interim report has
been prepared on the basis of the accounting policies set out in the Annual
Report 2003. Unquoted investments are valued in accordance with British Venture
Capital Association (BVCA) valuation guidelines. New guidelines were issued by
the BVCA in June 2003. AIM quoted investments are valued at mid market prices
discounted, where necessary, to reflect any lack of liquidity. The directors do
not believe that a discount is appropriate at this time.
3. Returns per ordinary share are based on 7,114,336 ordinary
shares, being the weighted average number of shares in issue during the period.
There were 7,078,978 ordinary shares in issue at 31 August 2003.
4. Earnings for the period should not be taken as a guide to the
results for the full year.
5. Copies of the Interim Report will be mailed to shareholders and
are available from the Registered Office of the Company at 17-18 Henrietta
Street, London WC2E 8QH.
UNAUDITED CASH FLOW STATEMENT
For the six months ended 31 August 2003
Six months Six months Year
ended
ended 31 ended 28
31 August February
2003
2002 2003
#000 #000 #000
Net revenue from operating activities
Net revenue from ordinary activities before tax 17 111 140
Decrease/(increase) in debtors 63 2 (18)
(Decrease)/increase in creditors (53) (22) 5
Management fees charged to capital (17) (24) (56)
Net cash inflow from operating activities 10 67 71
Financial investment
Purchase of investments (2,629) (1,434) (4,797)
Sales of investments 2,234 1,747 5,045
Net cash (outflow)/inflow from financial (395) 313 248
investment
Corporation tax paid - - (15)
Equity dividends paid - (100) (171)
Net cash (outflow)/inflow before financing (385) 280 133
Financing
Gross proceeds from share issue - 25 25
Issue expenses - (2) (2)
Purchase of ordinary shares for cancellation (35) - -
Net cash (outflow)/inflow from financing (35) 23 23
(Decrease)/increase in cash in period (420) 303 156
Analysis of cash balance
At start of period 474 318 318
Net cash (outflow)/inflow for the period (420) 303 156
At end of period 54 621 474
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DZLFFXFBZFBF