RNS Number:8262R
Capital For Companies VCT PLC
07 November 2003
CAPITAL FOR COMPANIES VCT PLC
Interim Results
Interim results for the 6 months ended 30 September 2003
Capital for Companies VCT plc (the "Company") the venture capital trust
specialising in companies trading on the Alternative Investment Market ("AIM"),
today announces its interim results for the 6 months to 30 September 2003.
FINANCIAL HIGHLIGHTS 6 months ended 6 months ended 12 months ended
30 September 2003 30 September 2002 28 February 2003
Net assets #12.0m #12.1m #10.5m
Net asset value per share 74.20p 73.54p 64.33p
Revenue return before tax #123,000 #133,000 #245,000
Revenue return per share 0.75p 0.77p 1.40p
Profit/(loss) on ordinary activities before #151,000 #62,000 (#390,000)
tax
Earnings/(losses) per share 0.93p 0.38p (2.37p)
Dividends per share 1.00p 1.00p 2.00p
Total dividends returned to investors* 32.00p 30.00p 31.00p
Qualifying investments (value) #6.5m #6.1m #5.1m
Number of qualifying investments 36 37 35
(* since flotation)
Commenting on the results William Cran, Chairman, said "I am pleased to report
that in the period from 1 April 2003 to 30 September 2003 the AIM Index has
continued its recovery and was some 38% higher whilst the FTSE 100 index
increased by 13%. Over the same period our net asset value (NAV) has increased
by 15% after the provision for an interim dividend of 1p. Although encouraging,
the increase in our NAV is somewhat less than the AIM Index as our conservative
investment policy dictated that we retained some 46% of net assets at 30
September 2003 in fixed interest securities, unit trusts and quoted equities
which are predominantly invested in companies in the FTSE 100.
During the half year the company invested #320,000 in 3 qualifying investments
(2 new investments and 1 further investment in an existing investee company)"
For further information contact:
Barry Anysz Capital for Companies VCT plc 0113 243 8043
Jonathan Wragg Capital for Companies VCT plc 0114 275 5100
Chairman's Statement
Introduction
I am pleased to report that since my last statement (published on 25 June 2003)
which accompanied the annual report and financial statements for the year ended
31 March 2003, the improvement in Stock Market conditions has continued through
the first half of our financial year. In the period from 1 April 2003 to 30
September 2003 the AIM Index improved by some 38% whilst the FTSE 100 Index
increased by 13% over the same period
Net Asset Value (NAV)
Our own NAV increased by 15% during the six months to 30 September 2003 to 74.2
pence per share after providing for the interim dividend. Although encouraging,
the increase is somewhat less than the increase in the AIM Index as our
conservative investment policy dictated that we retained some 46% of net assets
at 30 September 2003 in fixed interest securities, unit trusts and quoted
equities which are predominantly invested in companies in the FTSE 100.
Investments
During the half year the company invested #320,000 in 3 qualifying companies.
The qualifying portfolio, which cost #7.6 million, had a valuation of #6.5
million at 30 September 2003. The new investments were #150,000 in Computer
Software Group which provides software to the sports and other industries and
#130,000 in Cobra Bio-Manufacturing, which provides services to the
pharmaceutical industry. We also made a further #40,000 investment in AdVal
Group. During the period we realised #508,000 from the sale and redemptions of
investments which includes #137,000 recovered from the administrators of TIB plc
in respect of a subordinated loan. This loan had been written off in previous
years and so its recovery contributes in total to the net gain on the disposal
of qualifying investments of #174,000.
Results
Total return on ordinary activities before tax for the half year to 30 September
2003 was a gain of #151,000 (2002: #62,000). Unrealised gains on the revaluation
of investments were #1,616,000 (2002: loss of #2,214,000).
Dividends
I am pleased to report that the Company made a positive revenue return on
ordinary activities after tax of #121,000 (2002: #126,000) equivalent to 0.75
pence per share (2002: 0.77 pence per share). As in previous years we intend to
distribute these profits together with a proportion of retained reserves as a
dividend of 1 pence per share (2002: 1 pence per share) on 30 January 2004 to
shareholders on the register at 30 December 2003. We have now distributed a
total of 32 pence per share since the Company was established. Provided the
market and our net assets continue to improve, we anticipate being in a position
to pay an increased final dividend (2003: 1 pence per share).
VCT Status
The qualifying test of requiring at least 70% of net funds raised in any year to
be invested in qualifying companies within three years has been achieved and
maintained for all funds raised prior to 31 March 2001. For funds raised in the
year to 31 March 2002, this test does not have to be achieved until 31 March
2004 and the Board remains confident of achieving this target well within the
timescale allowed.
Reduction in Share Premium Account
At the AGM held on 31 July 2003, the Board received shareholder approval to seek
a reduction in the share premium account by transferring the balance to the
special reserve, which can be utilised to purchase the Company's shares. I am
pleased to report that we received Court approval to reduce the share premium
account on 12 September 2003.
Outlook
Despite continuing concerns over the global economy, the UK economy appears to
be performing relatively well. A number of smaller companies trading on AIM have
enjoyed a remarkable recovery in terms of market capitalisation. Many of the
companies in our portfolio are reporting improved results and their share prices
have begun to recover. We are hopeful this trend will continue and providing
there are no major new threats to the economy, we are confident that the smaller
companies sector will continue to benefit.
However, many smaller companies are finding it difficult to raise any new equity
in the current climate resulting in a noticeable downturn in the number of
companies raising funds from initial public offerings. It would appear,
therefore, to be an appropriate time for the Government to consider improving
the tax benefits available to VCT investors. It would be possible to achieve
this by increasing the income tax relief from 20% to 40% available on initial
subscriptions.
Shareholder Communication
We are currently in the process of upgrading our website so that better
information is available to shareholders. Our website (www.cfc-vct.co.uk)
includes the latest NAV and share price. Our share price is also quoted daily in
the Financial Times, Yorkshire Post and Daily Express under 'Investment
companies'.
William M Cran
Chairman
7 November 2003
Investment Portfolio Summary
as at 30 September 2003
% of total
Book cost Valuation net assets
#000 #000 (by value)
---------- ---------- ----------
Ten largest qualifying investments
Huveaux plc 248 580 4.83
Glisten plc 250 533 4.43
PM Group plc 201 378 3.15
Connaught Group plc 133 343 2.85
MacLellan Group plc 171 340 2.83
Honeycombe Leisure plc 254 329 2.74
Computer Software Group plc 150 309 2.58
Primal Pictures Ltd 400 286 2.38
Oasis Healthcare plc 353 281 2.34
CRC Group plc 235 215 1.79
---------- ---------- ----------
2,395 3,594 29.92
Other qualifying investments 5,219 2,909 24.22
---------- ---------- ----------
Total qualifying investments 7,614 6,503 54.14
---------- ---------- ----------
Non-qualifying investments
Listed fixed interest investments 2,871 2,873 23.91
Unit trusts 2,227 2,115 17.61
Other non-qualifying investments 535 564 4.69
---------- ---------- ----------
Total non-qualifying investments 5,633 5,552 46.21
---------- ---------- ----------
---------- ---------- ----------
Total investments 13,247 12,055 100.35
---------- ---------- ----------
Net current liabilities (42) (0.35)
---------- ----------
Net assets 12,013 100.00
---------- ----------
Profit and Loss Account
for the six months ended 30 September 2003
6 months ended 30 September 2003 6 months ended 30 September 2002
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) on sale of - 174 174 - 83 83
investments
Income 197 - 197 201 - 201
Investment management fee (42) (126) (168) (45) (134) (179)
Other expenses (32) (20) (52) (23) (20) (43)
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) on ordinary
activities
before tax 123 28 151 133 (71) 62
Tax on profit/(loss) on ordinary (2) 2 - (7) 7 -
activities
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) on ordinary
activities
after tax 121 30 151 126 (64) 62
Equity dividends (121) (41) (162) (126) (42) (168)
---------- ---------- ---------- ---------- ---------- ----------
Retained profit/(loss) for the - (11) (11) - (106) (106)
period
---------- ---------- ---------- ---------- ---------- ----------
Earnings/(loss) per ordinary share 0.75p 0.18p 0.93p 0.77p (0.39)p 0.38p
---------- ---------- ---------- ---------- ---------- ----------
Profit and Loss Account (continued)
for the six months ended 30 September 2003
12 months ended 31 March 2003
Revenue Capital Total
#000 #000 #000
---------- ---------- ----------
Profit/(loss) on sale of - (365) (365)
investments
Income 367 - 367
Investment management fee (76) (228) (304)
Other expenses (46) (42) (88)
---------- ---------- ----------
Profit/(loss) on ordinary
activities
before tax 245 (635) (390)
Tax on profit/(loss) on ordinary
activities (15) 15 -
---------- ---------- ----------
Profit/(loss) on ordinary
activities
after tax 230 (620) (390)
Equity dividends (230) (101) (331)
Retained profit/(loss) for the - (721) (721)
period
Earnings/(loss) per ordinary share 1.40p (3.77)p (2.37)p
Statement of Total Recognised Gains and Losses
for the six months ended 30 September 2003
6 months ended 30 September 2003 6 months ended 30 September 2002
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) on ordinary
activities after
tax 121 30 151 126 (64) 62
Unrealised gains/(losses) on
revaluation of investments - 1,616 1,616 - (2,214) (2,214)
---------- ---------- ---------- ---------- ---------- ----------
Total recognised gains and losses
during the period 121 1,646 1,767 126 (2,278) (2,152)
---------- ---------- ---------- ---------- ---------- ----------
Total recognised gains and losses
per ordinary share 0.75p 10.11p 10.86p 0.77p (13.81)p (13.04)p
---------- ---------- ---------- ---------- ---------- ----------
Statement of Total Recognised Gains and Losses (continued)
for the six months ended 30 September 2003
12 months ended 31 March 2003
Revenue Capital Total
#000 #000 #000
---------- ---------- ----------
Profit/(loss) on ordinary
activities after
tax 230 (620) (390)
Unrealised gains/(losses) on
revaluation of investments - (3,119) (3,119)
---------- ---------- ----------
Total recognised gains and losses
during the period 230 (3,739) (3,509)
---------- ---------- ----------
Total recognised gains and losses
per ordinary share 1.40p (22.75)p (21.35)p
---------- ---------- ----------
Balance Sheet
as at 30 September 2003
2003 2002 2003
30 Sept 30 Sept 31 March
#000 #000 #000
---------- ---------- ----------
Fixed assets
Investments 12,055 12,051 10,295
Current assets
Debtors 102 117 99
Cash at bank and in hand 133 167 317
---------- ---------- ----------
235 284 416
Creditors: (amounts due within one year) (277) (259) (234)
---------- ---------- ----------
Net current (liabilities)/assets (42) 25 182
---------- ---------- ----------
Net assets 12,013 12,076 10,477
---------- ---------- ----------
Capital and reserves
Called up share capital 1,619 1,642 1,629
Share premium account - 7,495 7,495
Capital redemption reserve 80 56 70
Revaluation reserve (1,192) (2,893) (2,879)
Special reserve 12,633 5,610 5,368
Profit and loss account (1,127) 166 (1,206)
---------- ---------- ----------
Equity shareholders' funds 12,013 12,076 10,477
---------- ---------- ----------
Net asset value per share 74.20p 73.54p 64.33p
---------- ---------- ----------
Cash Flow Statement
for the six months ended 30 September 2003
6 months 6 months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2003 2002 2003
#000 #000 #000
---------- ---------- ----------
Operating activities
Profit/(loss) on ordinary activities before tax 151 62 (390)
(Increase)/decrease in debtors (3) 8 22
Increase/(decrease) in creditors 43 (31) (54)
Decrease in tax withheld at source - - 4
(Profit)/loss on disposal of investments (174) (83) 365
---------- ---------- ----------
Net cash inflow/(outflow) from operating activities 17 (44) (53)
---------- ---------- ----------
Capital expenditure and financial investment
Purchase of investments (478) (1,266) (2,258)
Proceeds from the sale of investments 508 1,225 2,620
---------- ---------- ----------
Net cash inflow/(outflow) from capital expenditure and financial investment 30 (41) 362
---------- ---------- ----------
Dividends
Equity dividends paid (162) (346) (510)
---------- ---------- ----------
Financing
Issue of ordinary shares - 44 44
Expenses paid in connection with share issues - (2) (2)
Buy-back of ordinary shares (55) (88) (168)
Costs of cancelling share premium (14) - -
---------- ---------- ----------
Net cash outflow from financing (69) (46) (126)
---------- ---------- ----------
Decrease in cash (184) (477) (327)
---------- ---------- ----------
Analysis in changes in net funds:
Net cash at 1 April 2003 317 644 644
Net cash outflow for the period (184) (477) (327)
---------- ---------- ----------
Net cash at 30 September 2003 133 167 317
---------- ---------- ----------
Notes:
1. Earnings per share is based on the net profit on ordinary
activities after tax of #151,000 (March 2003: loss of #390,000; September 2002:
profit of #62,000) and 16,270,493 ordinary shares (March 2003: 16,434,110;
September 2002: 16,499,605), being the weighted average number of shares in
issue during the period.
2. Total recognised gains and losses per share are based on total
gains recognised during the period of #1,767,000 (March 2003: loss of
#3,509,0000; September 2002: loss of #2,152,000) and 16,270,493 ordinary shares
(March 2003: 16,434,110; September 2002: 16,499,605), being the weighted average
number of shares in issue during the period.
3. The net asset value per share at 30 September 2003 is based on
net assets of #12,013,000 and on 16,189,302 ordinary shares, being the number of
ordinary shares in issue on that date.
4. The information contained in the 31 March 2003 balance sheet,
profit and loss account and cash flow statement does not constitute full
financial statements and has been extracted from the latest published financial
statements for the year ended 31 March 2003 which have been delivered to the
Registrar of Companies. The report of the auditors on these financial statements
was unqualified. The profit and loss accounts and cash flow statements for the
six month periods and the balance sheets as at 30 September 2003 and 30
September 2002 are unaudited.
5. This report is being sent to all shareholders and will be
available to the public at the Company's registered office and on our website at
www.cfc-vct.co.uk.
End
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