RNS Number:0965T
TriVest VCT PLC
10 December 2003
TRIVEST VCT PLC
Chairman's Statement
I am pleased to present to Shareholders the third Annual Report of the Company
for the year ended 30 September, 2003.
Net Asset Value
At 30 September, 2003, the Company's Net Asset Value (NAV) per share was 72.56
pence (30 September 2002: 77.05 pence). This compares with the initial NAV
(after the launch expenses of the issue) of 94.5 pence per share. The Company
will have distributed accumulated dividends of 4.2 pence per share, including
the proposed final dividend of 1.25 pence per share detailed below, since
launch.
Economic Background
Since March 2003 the main and AIM stock markets in the United Kingdom have
enjoyed sharp rises. Commentators are also predicting further increases next
year in anticipation of an economic pick-up in the United States and the UK.
However, private equity-backed companies as a whole have not yet seen a
substantial improvement in economic conditions and, in particular, the
technology arena is still difficult. In the light of this uncertain
environment, it is difficult to predict the short-term outlook of the portfolio.
TriVest's Portfolio
Whilst overall the portfolio has seen a fall in the NAV from last year,
encouraging indications of improved value are beginning to be seen in some areas
of the portfolio.
Of the eight investments within the GLE portfolio four are showing unrealised
gains which in aggregate amount to over #1.5m. Three new investments,
Brookerpaks Limited (an importer, packer and distributor of garlic, vacuum
packed vegetables and other fresh produce), HWA Limited (a specialist in the
refurbishment, restoration and construction of notable public buildings) and
Image Source Group Limited (a royalty free picture library), totalling #2.5m,
were made during the year. Of these, HWA has already enjoyed an uplift of
#800,000 over our cost, reflecting its strong continuing performance and has
advised the Company that it wishes to redeem its preference shares early in
2004. In addition, T J Brent has seen an uplift in value of over #528,000 and is
intending to redeem 50% of its loan stock shortly. Further investments were
made in Letraset Limited and Special Mail Services Limited, the former of which
has also enjoyed a small uplift in value.
Since its acquisition of LICA in late 2002, Nova has been working hard to
stabilise that portfolio and to create value from it. Overall, this portfolio
has seen further realised and unrealised losses in excess of #2 million. One
small new investment of #50,000 was made into Biomer Technology Limited (a
proprietor of intellectual property associated with the development of novel
polymers for use in medical devices). Of the two AIM quoted stocks, Tikit Group
plc is performing well and has currently enjoyed an uplift in value of just over
#100,000. Of the remaining investments, the business of Trident Publishing was
sold out of administration in June 2003; the Good Book Guide and Watkins Books
have been written down to #50,000 and #112,500 respectively; and DriveTec is
undertaking a further funding round as it continues to develop its innovative
transmission technologies.
Within the VCF technology portfolio there are currently twelve investments.
During the year, new investments were made into Broadreach Networks Limited (a
public access Wireless Local Area Network (WLAN) and fixed line Internet Service
Provider) and Camwood Limited (a provider of software repackaging services),
together equalling #1.25m. Further investments totalling nearly #1.5m were made
into Alaric Systems, ANT, Aquasium Technology, Monactive, Oxonica and Sarantel.
Soon after TriVest's year end, Sarantel acquired Heritage Image Partnerships
(HIP), another TriVest investee company. The investment in HIP has been written
down by a further #55,000 in accordance with its implied value at the time of
the acquisition. In addition, the Board has made further provisions of
#1,048,370 in aggregate, to the investments in ANT, Blue Curve, Wire-e and
Monactive.
The last two years have seen a reduction in the number of suitable high quality
investment opportunities and this private equity market has proved a particular
challenge to the Board in meeting the legislative requirement that the Company
should apply at least 70% of the funds raised from share issues in the period to
30 September 2001 in VCT qualifying holdings by 30 September 2003 and
thereafter. The Managers have and are continuing to apply rigorous criteria in
recommending appropriate opportunities to the Board and are committed to
selecting investments that they believe will enhance the value of the investment
portfolio and shareholder value. The Board are satisfied that the Company
exceeded the required 70% qualifying level at 30 September 2003 and will
continue to do so.
Revenue Account
Net income has fallen from #948,492 to #569,961, a fall of #378,531. Total
income received fell by #694,041. This was mainly due to a decline in income
from the higher yielding fixed-interest portfolio of #923,632 from the previous
year, as funds were withdrawn to make lower income yielding qualifying
investments. This fall was partially offset by an increase in dividends and loan
stock interest of #312,459 from these investments.
Fund management fees fell by #42,780, due to the fall in net asset values, while
other expenses for the year fell by #123,616, of which lower interest provisions
accounted for #68,079, with the balance of #55,537 due to falls in
administrative costs, particularly professional fees.
Dividend
The Company's revenue return was 1.37 pence per share. Your Board will be
recommending a final dividend of 1.25 pence per Ordinary Share in respect of the
year under review at the Annual General Meeting to be held on 28 January 2004.
The dividend will be paid on 11 February 2004 to shareholders on the Register on
9 January 2004.
Colin Hook
Chairman
10 December 2003
STATEMENT OF TOTAL RETURN
(Incorporating the Revenue Account of the Company) for the year ended 30
September 2003
Year ended 30 September 2003 Year ended 30 September 2002
Revenue Capital Total Revenue Capital Total
# # # # # #
Unrealised losses on - (1,270,291) (1,270,291) - (5,655,183) (5,655,183)
investments
Realised losses on investments - (261,901) (261,901) - (393,904) (393,904)
Income 1,457,698 - 1,457,698 2,151,739 - 2,151,739
Investment management fees (193,129) (579,389) (772,518) (203,825) (611,473) (815,298)
Other expenses (451,401) - (451,401) (575,017) - (575,017)
------------ ------------ ------------ ------------ ------------ ------------
Return on ordinary
activities before taxation 813,168 (2,111,581) (1,298,413) 1,372,897 (6,660,560) (5,287,663)
Tax on ordinary activities (243,207) 182,120 (61,087) (424,405) 173,260 (251,145)
------------ ------------ ------------ ------------ ------------ ------------
Return on ordinary
activities after taxation 569,961 (1,929,461) (1,359,500) 948,492 (6,487,300) (5,538,808)
Dividend (521,837) - (521,837) (731,009) - (731,009)
------------ ------------ ------------ ------------ ------------ ------------
Transfer to/(from) reserves 48,124 (1,929,461) (1,881,337) 217,483 (6,487,300) (6,269,817)
------------ ------------ ------------ ------------ ------------ ------------
Return per Ordinary
Share - basic and diluted 1.37p (4.63)p (3.26)p 2.27p (15.52)p (13.25)p
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the period.
BALANCE SHEET
AS AT 30 SEPTEMBER 2003
as at 30 September 2003 as at 30 September 2002
Revenue Capital Total Revenue Capital Total
# # # # # #
Fixed Assets
Investments 15,867,353 29,986,724
Current Assets
Debtors and prepayments 304,694 669,423
Current investments 6,750,709 2,651,158
Cash at bank 8,136,664 18,025
------------ ------------
15,192,067 3,338,606
Creditors: amounts falling
due within one year
Corporation tax 97,918 269,186
Other creditors 542,930 14,882
Accruals 126,346 853,879
------------ ------------
Net current assets (767,194) (1,137,947)
------------ 14,424,873 ------------ 2,200,659
------------ ------------
Net assets 30,292,226 32,187,383
------------ ------------
Capital and reserves
Called up share capital 417,470 417,720
Capital redemption reserve 545 295
Special reserve 39,059,851 39,073,671
Capital reserve - realised (3,267,224) (1,198,879)
Capital reserve - unrealised (6,223,996) (6,362,880)
Revenue reserves 305,580 257,456
------------ ------------
30,292,226 32,187,383
------------ ------------
Net asset value per
Ordinary Share - basic and 72.56p 77.05p
diluted
CASH FLOW STATEMENT
for the year ended 30 September 2003
Year ended Year ended
30 September 30 September
2003 2002
# # # #
Operating activities
Investment income received 1,634,004 1,983,788
Dividend income 81,892 3,261
Investment management
fees paid (717,189) (1,164,109)
Other cash payments (398,022) (659,754)
------------ ------------
Net cash inflow from
operating activities 600,685 163,186
Taxation
UK Corporation tax paid (232,355) (19,951)
Investing activities
Acquisition of investments (18,230,872) (42,092,881)
Disposal of investments 30,825,561 22,091,997
-------------- --------------
12,594,689 (20,000,884)
Dividends
Payment of equity dividend (731,009) (501,618)
-------------- --------------
Cash outflow before
financing and liquid
resource management 12,232,010 (20,359,267)
Management of liquid
resources
Increase in monies held
pending investment (4,099,551) (920,722)
Financing
Purchase of own shares (13,820) (17,903)
-------------- --------------
(13,820) (17,903)
-------------- --------------
Increase/(Decrease) in
cash for the year 8,118,639 (21,297,892)
-------------- --------------
INVESTMENT PORTFOLIO SUMMARY
Cost Valuation Valuation
at at at % of
30 September 30 September 30 September portfolio
2003 2002 2003 by value
GLE Development Capital
Limited
HWA Limited (trading as
Holloway White Allom Limited) 1,000,000 n/a 1,811,687 11.42%
Refurbishment, restoration and
construction of notable public
building and top-end residential
dwellings in and around London
T J Brent Limited 900,000 1,030,111 1557,950 9.82%
Specialist contractor to the water
utility sector
Letraset Limited 1,000,000 500,000 1,098,050 6.92%
Manufacturer and worldwide
distributor of graphic arts
products
BG Consulting Group Limited 1,000,000 1,000,000 1,000,000 6.30%
Technical training business and
outplacement careers consultancy
Image Source Group Limited 1,000,000 n/a 1,000,000 6.30%
Royalty free picture library
Special Mail Services Limited 1,125,000 1,000,000 562,500 3.55%
Specialist, secure credit card
delivery business
Brookerpaks Limited (formerly
Newington Foods Limited) 500,000 n/a 500,000 3.15%
Importer and distributor of garlic and
vacuum-packed vegetables to
supermarkets and the wholesale
trade
Inca Interiors Limited 350,000 350,000 300,000 1.89%
Supplier of quality kitchens
Total 6,875,000 3,880,111 7,830,187 49.35%
Cost Valuation Valuation
at at at % of
30 September 30 September 30 September portfolio
2003 2002 2003 by value
Nova Capital Management
Limited
Tikit Group plc 517,624 417,391 521,738 3.29%
Provider of consultancy, services and
software solutions for law firms
i-documentsystems group plc 517,625 510,417 458,333 2.89%
Provider of document storage
systems
DriveTec (UK) Limited 500,000 500,000 417,750 2.62%
Developer of transmissions
technologies for applications
in the automative, construction and
industrial sectors
Watkins Books Limited 500,000 500,000 112,500 0.71%
Supplier of books in alternative
sciences, health, philosophy
and related sectors
Biomer Technology Limited 50,000 n/a 50,000 0.32%
Developer of biomaterials for
medical devices
The Good Book Guide Limited 800,000 310,000 50,000 0.32%
Multi-channel book retailer
Stortext Group Limited 380,435 18,089 18,079 0.11%
Integrated outsourced document
storage business
Other investments in the portfolio 3,988,529 314,500 0 0.00%
Total 7,254,213 2,570,397 1,628,400 10.26%
Cost Valuation Valuation
at at at % of
30 September 30 September 30 September portfolio
2003 2002 2003 by value
VCF Partners
Sarantel Limited 1,175,405 590,621 1,175,405 7.41%
Developer and manufacturer of
antennae for mobile phones
and other wireless devices
Camwood Limited 1,000,000 n/a 1,000,000 6.30%
Provider of software repackaging
services
Oxonica Limited 900,033 428,522 900,033 5.67%
Specialist in the design,
manipulation
and engineering of
properties of materials at the
nano- scale
Aquasium Technology Limited 600,000 500,000 600,000 3.78%
Business engaged in the design,
manufacturing and marketing
of bespoke electron beam welding
and vacuum furnace equipment
Alaric Systems Limited 557,413 400,000 557,413 3.51%
Software developer and provider of
support services in the
credit/debit card authorisation and
payments market
SmartFOCUS Holdings Limited 500,000 500,000 500,000 3.15%
Provider of analytic software to
support targeting and
execution of marketing campaigns
ANT Limited
Provider of embedded browser/email 1,090,000 950,000 490,500 3.09%
software for consumer
electronics and Internet appliances
Blue Curve Limited 500,000 500,000 396,666 2.50%
Provider of software for automating
the production and
distribution of research information
by banks and fund managers
Broadreach Networks Limited 250,000 n/a 250,000 1.58%
Public access WLAN and fixed line
Internet Service Provider
Wire-e Limited 500,000 500,000 250,000 1.42%
Provider of mobile data
communication services
Monactive Limited 339,285 250,000 218,749 1.38%
Provider of software management
tools that monitor usage
of software versus licences held
Heritage Image Partnerships
Limited 300,000 150,000 95,000 0.60%
On-line image library
Other investments in the portfolio 250,000 0 0
Total 7,962,136 4,769,143 6,408,766 40.39%
-------------- -------------- -------------- -----------
Managers' totals 22,091,349 11,219,651 15,867,353 100.00%
Fixed interest portfolio 0 18,767,073 0 0.00%
Total 22,091,349 29,986,724 15,867,353 100.00%
Notes
1. The revenue column of the statement of total return is the
profit and loss account of the Company.
2. In accordance with the policy statement published under "
Management and Administration" in the Company's Prospectus dated 13 October
2000, the Directors have charged 75% of the investment management expenses to
capital reserve.
3. The basic revenue return per Ordinary Share is based on
the net revenue from ordinary activities after tax of #569,961 (2002: #948,492)
and is based on 41,754,219 (2002: 41,794,736) Ordinary Shares, being the
weighted average number of Ordinary Shares in issue during the year.
4. The basic capital return per Ordinary Share is based on
net realised capital losses of #261,901 (2002: #393,904) on net unrealised
losses of #1,270,291 (2002: #5,655,183) and on 41,754,219 (2002: 41,794,736)
Ordinary Shares, being the weighted average number of Ordinary Shares in issue
during the year.
5. The financial information set out in these statements does
not constitute the Company's statutory accounts for the year ended 30 September
2003 but is derived from those accounts. Statutory accounts will be delivered
to the Registrar of Companies after the Annual General Meeting.
6. The Company proposes to pay a final dividend of 1.25p per
share on 11 February 2004 to all shareholders on the Register on 9 January 2004.
7. The Annual General Meeting will be held at 11.00am on 28
January 2004 at Gossard House, 7-8 Savile Row, London W1S 3PE.
This information is provided by RNS
The company news service from the London Stock Exchange
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