Final Results
28 February 2001 - 3:50AM
UK Regulatory
RNS Number:6158Z
Pennine Downing Ethical VCT PLC
27 February 2001
Preliminary Announcement of Results
for the period ended 30 September 2000
Financial Highlights
NAV/Total Return
pence
Net asset value per share 94.50
Total dividends per ordinary share 0.75
95.25
Revenue return per ordinary share 1.10
Net assets #10.2 million
Introduction
I am pleased to present the Company's first Report and Accounts for the period
ended 30th September 2000. The Company started raising funds in October 1999
and was fully subscribed in March 2000 having raised #10.8 million.
The portfolio has been apportioned approximately 40% into AIM stocks, 40% into
unquoted stocks and the balance into low risk fixed interest securities and
cash deposits. Details of the venture capital investments made during the
period are discussed in the Investment Managers' reports by Rathbone
Investment Management Ltd, in respect of the AIM portfolio, and Classic Fund
Management Limited, in respect of the unquoted portfolio. Additional details
are also given in the Review of Investments.
Venture capital investments
At the end of the period #6.3 million had been invested in forty companies.
Since the period end the Company has invested a further #1.4 million in
venture capital investments. The Company is now close to achieving its target
of at least 70% of its investments comprising qualifying holdings well within
the three year deadline which expires on 30 September 2002.
The Company has welcomed the huge volume of opportunities to invest in
start-ups and very young companies. However, during the period the market for
internet and technology stocks experienced significant volatility. This has
created difficult conditions in which to invest. In order to avoid
over-exposure to any particular stage of company, the Company's portfolio has
been spread between start-ups, young and more mature companies.
The Company has been able to make two realisations during the period with part
disposals of holdings in Tardis Transcommunications Plc and OverNet Data Plc
generating gains of #315,000 and #120,000 respectively. On the other hand the
Board have made provisions against some investments, the largest being #
150,000 against the Company's investment in Boxman.com Plc, the internet CD
retailer, which failed soon after the period end.
Ethical Committee
The Ethical Committee has been very active during the period. The Committee
has had a significant impact on the investment process and this should be
reflected in the views of a number of investee companies.
Listed investments
As a result of uncertainty in the fixed interest securities markets, it has
been decided to hold the funds earmarked for investment in these securities as
cash deposits for the time being. The Board receive regular reports from
Rathbone Investment Management Limited, the fixed interest Investment Manager,
and continue to monitor the situation with a view to making fixed interest
investments at an appropriate time.
Results and dividend
Gross revenue for the period was #250,000 and net revenue after taxation was #
85,000. Net asset value per share (NAV) at the period end was 94.5 pence, a
small reduction compared to the initial NAV of 95.0, pence after taking into
account issue costs.
Your Board is proposing to pay a final dividend of 0.75p per share on 30 March
2001 to shareholders on the register at 9 March 2001.
Share Repurchase
The Board is conscious that the Company's share price is affected by the
illiquidity of its shares in the market, which is largely a result of the
requirement that most shareholders must retain their shares at least five
years in order to retain their tax benefits. In line with accepted practice
with VCTs, the Company has authorisation to purchase its own shares however
this authority was not utilised during the period.
Annual General Meeting
The first Annual General Meeting of the Company will be held at 69 Eccleston
Square, London SW1V 1PJ at 11am on 27 March 2001. Two items of Special
Business are proposed as Special Resolutions in the Notice of Meeting; (1) to
authorise the Directors to allot shares other than pro-rata to existing
shareholders and (2) seeking to renew the Company's authority to purchase up
to 1,077,150 ordinary shares in the market, representing approximately 10% of
the current issued ordinary share capital.
Publication of share price
The Company's share price is quoted in the Financial Times on a daily basis in
the "Investment Companies" sector.
Outlook
The Company now has a sizeable portfolio of VCT qualifying investments and,
accordingly, much of the emphasis for the future will be in managing the
existing portfolio to maximise returns to shareholders. To a lesser extent,
the Company will continue to make further venture capital investments, in
particular in the AIM market.
In line with the Company's ethical policy, priority will be given to
investment opportunities in companies which make a positive contribution to
society through the provision of useful products or services, the creation of
jobs and through good management. The Ethical Committee will continue to
screen all new investments as well as reviewing significant developments
within existing investee companies.
STATEMENT OF TOTAL RETURNS (incorporating the revenue account)
for the period ended 30 September 2000
Period ended 30 September 2000
Revenue Capital Total
#'000 #'000 #'000
(Losses)/gains on investments
- realised - 435 435
- unrealised - (415) (415)
Income 250 - 250
Investment management fees (31) (94) (125)
Other expenses (113) - (113)
Return on ordinary activities before tax 106 (74) 32
Tax on ordinary activities (21) 19 (2)
Return attributable to equity shareholders 85 (55) 30
Dividends in respect of equity shareholders (81) - (81)
Transfer to reserves 4 (55) (51)
Return per ordinary share 1.1 (0.7) 0.4
Revenue per ordinary share is based on the net revenue after taxation of #
85,000 but before deduction of dividends of #81,000, in respect of 8.08
million ordinary shares, being the weighted average number of ordinary shares
in issue during the period.
Capital return per ordinary share is based on the net capital loss for the
financial period of #55,000 in respect of 8.08 million ordinary shares, being
the weighted average number of ordinary shares in issue during the period.
BALANCE SHEET
as at 30 September 2000
2000
#'000
Fixed Assets
Venture capital investments 5,917
Current assets
Debtors 63
Cash at bank and in hand 4,379
4,442
Creditors: amounts falling due within one year (177)
Net current assets 4,265
Net assets 10,182
Capital and reserves
Called up share capital 539
Share premium account 9,694
Capital reserve - realised 360
Capital reserve - unrealised (415)
Revenue reserve 4
Total equity shareholders' funds 10,182
Net asset value per ordinary share 94.5p
Net asset value per ordinary share is based on net assets at the period end,
and on 10,771,500 ordinary shares, being the number of ordinary shares in
issue at the period end
CASHFLOW STATEMENT
for the period ended 30 September 2000
Period ended
30 Sept 2000
#'000
Net cash inflow from operating activities 43
Investing activities
Purchase of venture capital investments (6,498)
Sale of venture capital investments 601
Net cash outflow from investing activities (5,897)
Net cash outflow before financing (5,854)
Financing
Issue of ordinary shares 10,772
Expenses of share issue (539)
Net cash inflow from financing 10,233
Increase in cash and cash equivalents 4,379
Reconciliation of net cash flow to movement in net funds
Increase in cash during the year 4,379
Net funds at 17 September 1999 -
Net funds at 30 September 2000 4,379
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the period ended 30 September 2000. The
statutory accounts for the period ended 30 September 2000 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.
A copy of the full annual report and financial statements for the period ended
30 September 2000 will be printed and posted to shareholders. Copies will also
be available to the public at the registered office of the company at 69
Eccleston Square, London SW1V 1PJ.
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