Final Results
26 April 2003 - 2:11AM
UK Regulatory
RNS Number:4075K
Pennine AIM VCT PLC
25 April 2003
PENNINE AIM VCT PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 JANUARY 2003
FINANCIAL HIGHLIGHTS
Ordinary Shares 'C' Shares
2003 2002 2003 2002 pence
pence pence pence
Net asset value per share 71.72 119.34 94.50 -
Distribution per share 0.20 0.10 - -
Cumulative return since launch per share 75.06 55.06 - -
Total return per share 146.78 174.40 94.50 -
Revenue return per share (1.89) (2.03) - -
Net assets #2.9 million #4.9 million #1.8 million -
The statement to shareholders by the Chairman, Hugh Gillespie, includes the
following comments:
The year ended 31 January 2003 has seen the continuation of what has now become
the longest bear market in recent history. Political tensions, particularly in
relation to the Middle East, and the threat of terrorism ensure that investor
confidence remains very weak. The global economic outlook is also uncertain.
Any significant recovery in stock markets is difficult to predict.
Net Asset Value
The Net Asset Value per share ("NAV") of the Ordinary share fund at the year end
was 91.7p (before taking into account the proposed distribution), a fall of
23.1% over the year. Although a disappointing drop, this performance compares
favourably with the FTSE AIM index, which fell by 33.1% over the same period.
'C' share issue
I have pleasure in welcoming new shareholders who have subscribed for the
Company's 'C' shares, under the fundraising launched on 7 October 2002. By 31
January 2003 the Company had raised #1.9 million and to date has raised a total
of #5.5 million. Since the issue was announced, it has become clear that the
current market for new VCT funds is very depressed. The fundraising has,
however, been relatively successful compared with other VCTs competing for the
same pool of new funds.
The Offer for Subscription was originally due to close on 30 April 2003, but the
Directors have today announced that they will extend the Offer until 31 July
2003. Existing holders of Ordinary Shares will now be able to give
consideration to re-investing the proceeds of the capital distribution described
below in the 'C' Share Offer.
The NAV of the 'C' Share fund at the year end was 94.5p, representing net funds
raised after issue costs of 5.5p per share.
The 'C' Shares will be converted into Ordinary shares on 31 October 2003 under
the method prescribed in the Prospectus dated 7 October 2002 ("Prospectus").
Further details of the conversion will be included in the interim report to 31
July 2003.
Qualifying investments
In line with the general trend on the AIM market, most investments in the
portfolio have shown a fall in value over the year.
Aero Inventory continued to make excellent progress during the year, with the
investment showing an increase in value of #47,000 or 26.6%. CRC also showed an
improved share price earlier in the year and the opportunity was taken to make a
profitable partial disposal of the holding. The share price has fallen since
then so that the investment shows an unrealised loss for the year of #40,000.
In spite of this, our investment still shows a substantial unrealised gain
against original cost of #278,000.
The Company made a number of other disposals during the year and wrote off some
failed investments. Our disposals and write-offs during the year are summarised
as follows:
MV at 31/1 Profit/
/02 (loss)
Cost Proceeds
#'000 #'000
#'000 #'000
Sale of investment
Aero Inventory Partial 32 83 107 23
CRC Group Partial 57 148 178 30
I S Solutions Full 48 54 5 (49)
Mission Testing Full 148 57 54 (3)
Optoplast Full 153 27 26 (1)
Sopheon Full 58 12 5 (7)
Square Sum Full 51 55 55 1
Synergy Partial 1 1 1 -
In liquidation
e-gosystems 90 27 - (27)
Freeserve Motorists Club 108 - - -
Simply Hub 50 - - -
796 464 431 (33)
Listed fixed income securities
During the year all three of the listed fixed income securities matured,
generating proceeds of #890,000 and realised losses of #8,000. The proceeds
were held as cash at the year end.
Results and dividend
Gross revenue for the year was #123,000 (2002 - #131,000) and net revenue loss
after taxation was #56,000 (2002 - #65,000).
The Directors propose a capital distribution of previously realised gains to
Ordinary shareholders of 20p per share (2002: 10p per share) for the year ended
31 January 2003 to be paid on 13 June 2003 to Ordinary shareholders on the
register at 23 May 2003.
As stated in the Prospectus, no dividends will be paid to holders of the 'C'
shares for the year ended 31 January 2003.
Share repurchase
Your Board is conscious that the Company's share price is affected by the
illiquidity of its shares in the market. This results principally from the
requirement that most shareholders must retain their shares for at least three
years in order to retain their tax benefits. In line with accepted practice for
VCTs, the Company has a policy of purchasing its own shares. A Special
Resolution to continue with this policy is proposed for the forthcoming AGM.
The Board used this power to acquire 95,750 Ordinary shares during the year at
an average consideration of 94.3p per share.
Outlook
The depressed climate for investors has ensured that the flow of companies
joining the Alternative Investment Market has remained at a low level throughout
the last year. It does, however, appear that the companies that are now coming
to the market are more developed and more realistically priced than has been the
case for some time.
The new funds being raised from the 'C' share issue will be invested over the
course of the next two to three years. Although the long awaited recovery has
still not arrived, the Directors are hopeful that this period will see improved
deal flow and opportunities for the Company to expand and develop its venture
capital portfolio. The Company should then be able to benefit from the relative
cost savings and greater diversification of the investment portfolio available
to a larger fund.
Hugh Gillespie
Chairman
STATEMENT OF TOTAL RETURN (incorporating the Revenue Account)
FOR THE YEAR ENDED 31 JANUARY 2003
Year ended Year ended
31 January 2003 31 January 2002
Revenue Capital Total Revenue Capital Total
#'000
#'000 #'000 #'000 #'000 #'000
(Losses)/gains on investments
- realised - (41) (41) - 590 590
- unrealised - (1,023) (1,023) - (1,197) (1,197)
Income 123 - 123 131 - 131
Investment management fees (73) - (73) (90) - (90)
Other expenses (104) - (104) (106) - (106)
Return on ordinary activities (54) (1,064) (1,118) (65) (607) (672)
before tax
Tax on ordinary activities (2) - (2) - - -
Return on ordinary activities after
tax for the financial year (56) (1,064) (1,120) (65) (607) (672)
Dividends in respect of non-equity
shares (22) - (22) (22) - (22)
Return attributable to equity
shareholders (78) (1,064) (1,142) (87) (607) (694)
Dividends in respect of equity
shareholders - (808) (808) - (414) (414)
Transfer from reserves (78) (1,872) (1,950) (87) (1,021) (1,108)
Return per Ordinary share of 10p (1.89p) (25.94p) (27.70p) (2.03p) (14.16p) (16.19p)
Return per 'C' share of 10p - - - - - -
The revenue return per Ordinary share is based on the net loss on ordinary
activities after taxation and after deduction of dividends in respect of
non-equity shares of #78,000 (2002: #87,000), and on 4,100,852 Ordinary shares,
being the weighted average number of Ordinary shares in issue throughout the
year.
The revenue return per 'C' share is based on the net revenue on ordinary
activities after taxation of #Nil (2002: #Nil), and on 1,198,406 'C' shares,
being the weighted average number of 'C' shares in issue throughout the year.
The capital return per Ordinary share is based on the net capital losses for the
financial year (before the deduction of the capital distribution) of #1,064,000
(2002: #607,000), and on 4,100,852 Ordinary shares, being the weighted average
number of Ordinary shares in issue throughout the year.
The capital return per 'C' share is based on the net capital losses for the
financial year (before the deduction of the capital distribution) of #Nil (2002:
#Nil), and on 1,198,406 'C' shares, being the weighted average number of 'C'
shares in issue throughout the year.
BALANCE SHEET AT 31 JANUARY 2003
2003 2002
#'000 #'000 #'000 #'000
Fixed Assets
Investments 2,834 5,078
Current assets
Debtors 20 60
Cash at bank and in hand 2,819 263
2,839 323
Creditors: amounts falling due within one year (975) (461)
Net current assets 1,864 (138)
Net assets 4,698 4,940
Capital and reserves
Called up share capital 594 414
Capital redemption reserve 57 47
Special reserve 1,235 3,690
Share premium account 1,607 -
Capital reserve - realised 1,466 1,962
Capital reserve - unrealised - (990)
Revenue reserve (261) (183)
Total equity shareholders' funds 4,698 4,940
Net asset value per Ordinary share 71.72p 119.34p
Net asset value per 'C' share 94.50p -
Net asset value per share is based on net assets at the year end, and on
4,043,635 Ordinary shares (2002 - 4,139,385) and on 1,901,834 'C' shares (2002 -
Nil) being the number of shares in issue at the year end.
The Special Reserve is available to the Company to enable the purchase of its
own shares in the market.
CASHFLOW STATEMENT FOR THE YEAR ENDED 31 JANUARY 2003
Year Year
ended ended
31 Jan 2003 31 Jan 2002
#'000 #'000
Net cash outflow from operating activities (36) (109)
Return on investments and servicing of finance
Preference dividends paid (24) (22)
Taxation - 13
Capital expenditure
Purchase of investments (141) (1,863)
Disposal of investments 1,321 1,425
Net cash inflow/(outflow) from capital expenditure 1,180 (438)
Equity dividends paid (414) (441)
Net cash inflow/(outflow) before financing 706 (997)
Financing
New share issue 1,941 -
Purchase of own shares (91) (234)
Net cash inflow/(outflow) from financing 1,850 (234)
Increase/(decrease) in cash 2,556 (1,231)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash during the year 2,556 (1,231)
Net funds at 31 January 2002 263 1,494
Net funds at 31 January 2003 2,819 263
Announcement based on draft accounts (unqualified audit report)
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 January 2003. The statutory
accounts for the year ended 31 January 2003 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 31 January 2002 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 31
January 2003 will be printed and posted to shareholders. Copies will also be
available to the public at the registered office of the Company at Port of
Liverpool Building, Pier Head, Liverpool, L3 1NW.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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