Interim Results for the period ended 30 June 2006
Investment Objective
Core VCT II plc ("Core VCT II" or "the Company") is a tax efficient listed
company which aims to achieve long-term capital and income growth, and to
distribute tax free dividends of realised gains and investors' capital.
Investment Approach
* The Company invests management buyout and development capital, typically in
established, private companies, which show:
* Sufficient operating critical mass and an established economic model; and
* Quality management teams with the key skills in place to deliver a
well-defined business model
* The Company is managed by Core Growth Capital LLP ("Core Growth Capital" or
"the Manager") which invests amounts generally in the range of �2 - �5
million across the three Core VCTs in companies valued at �5 - �25 million
Fund Structure
Core VCT II is structured as follows:
* No annual management fees
Only when Shareholders have received the first 60 pence of distributions, which
together with an assumed 40 pence of initial tax relief will have realised them
100 pence per share, will the Manager be entitled to 30% of distributions from
the Company.
* Maximise distributions of income and capital
Core VCT II has a policy to distribute all proceeds from realised investments.
The Company has no fixed life, but intends to naturally liquidate and
distribute its assets over time. The Manager's incentives are structured to
align its interests in delivering this liquidity for Shareholders as well as
maximising overall investment performance.
Performance Summary
30 June 2006
Ordinary Shares B Shares
Net asset value per share 95.04 pence 0.01 pence
Net asset value total return in 95.04 pence 0.01 pence
period
Share price (mid- market) 100 pence 3.50 pence
Earnings per share 0.50 pence 0.00 pence
Dividends per share 0.0 pence 0.0 pence
Chairman's Statement
I am delighted to present the first interim results of the Company for the
period from incorporation on 23 September 2005 to 30 June 2006, and to welcome
you as a shareholder of Core VCT II plc.
Closing of the Offer for Subscription
Core VCT II closed the original Offer for Subscription on 24 March 2006, having
raised the targeted �15 million under the terms of the Offer for Subscription
set out in the Company's Prospectus dated 24 October 2005 ("the Prospectus").
In order to satisfy investor demand, the Company launched a further offer (the
'New Offer') of up to 1,500,000 Ordinary Shares in the capital of the Company
at an issue price of 100p per share. The New Offer, having reached full
capacity, closed on 27 March 2006 meaning that the Company successfully raised
a total of �16.5 million before costs.
Following the closing of the Offer, in accordance with the Prospectus,
sufficient B shares were issued to represent 60% of the aggregate total number
of Ordinary and B shares in issue. The Manager was entitled to subscribe for
50% of the total number of B shares at par value and the remaining 50% of the B
shares were issued to Ordinary Shareholders by way of a bonus issue financed
from the Ordinary Share Premium Account. This meant that three B Shares were
allotted to Ordinary Shareholders for every four Ordinary Shares held.
Shareholders are reminded that the B Shares form an integral part of their
investment.
Results
During the period ended 30 June 2006, the Company was primarily involved in
attracting investors and accordingly, no dividends are proposed. All Ordinary
shares were issued at 100p per share. The funds raised were held primarily in
cash managed by Credit Suisse First Boston and produced interest income in the
period of �158,000. The NAV per Ordinary Share of 95.04p as at 30 June 2006
represents a small increase over the opening NAV per Ordinary Share of 94.5p,
(being 100p issue price per share less fixed issue costs of 5.5p per share).
Investments
The Company has completed three new investments in this initial six month
period, in each case investing alongside Core VCT I plc and Core VCT III plc.
The Manager's dealflow is strong, enabling the selection and negotiation of
larger investments in accordance with the Company's overall investment
objective.
Cancellation of share premium account
In accordance with the Prospectus, the Company has authority, obtained at an
Extraordinary General Meeting held on 7 October 2005, to apply to the Court to
cancel 50% of the amount standing to the credit of the share premium account.
The Directors are proceeding with the application for cancellation and it is
anticipated that Court approval will be obtained within the next few months.
The cancellation of the share premium account will create a special reserve
that can be used, amongst other things, to fund buy-backs of the Company's
Shares when the Directors consider that it is in the best interests of the
Company to do so.
Outlook
The principal aim of the Company at this stage in its life is to complete
private equity investments of the size, type and quality consistent with its
stated objectives. The unique performance-only rewards for the Manager create
the right incentives for Core Growth Capital to select and negotiate
investments that are structured to deliver attractive cash returns to investors
over the next 3 to 5 years.
Information for Shareholders
The Board supports open communication with investors and welcomes any comments
or questions you may have. Company contact information is provided at the end
of this announcement.
Share Price
Both the Ordinary Shares (CR2) and the B Shares (CR2B) are fully listed shares.
Prices are available on www.londonstockexchange.com and the Ordinary Share
price is published daily in the Financial Times. Shareholders are reminded that
disposing of shares within three years will result in loss of tax relief, and
that their holding of B Shares forms an integral part of their investment along
with their holding of Ordinary Shares.
Peter Smaill
Chairman
Manager's Review
Core VCT II is 14.2% invested in qualifying VCT investments and on the basis of
current dealflow and opportunities being reviewed by the Manager, it expects to
meet the 70% requirement by 31 December 2008.
New Investments
The following three new investments have been completed in the six month period
to 30 June 2006:-
Blanc Brasseries Holdings plc - Cost �1,000,000, April 2006
Core Growth Capital completed this Management Buy Out ("MBO") with total
funding of �10 million in April. It led, managed and arranged this transaction
with the Core VCTs collectively investing �3 million, and raised a further �3
million in EIS funds from private investors and other smaller VCTs.
Blanc Brasseries currently operates five units in the premium casual dining
market and is looking to grow to 20 units within 3 years. The restaurants are
situated in prime locations in Birmingham, Cheltenham, Manchester, Oxford and
Tunbridge Wells. The partners at Core Growth Capital have previously backed the
management team in a number of successful leisure businesses, including Luminar
Leisure and Loch Fyne Restaurants, which won the 2005 Best Exit Award at the
EIS Association Awards.
Colway Limited - Cost �1,000,000, May 2006
(trading as London Graphic Centre)
In our second MBO in as many months, Core Growth Capital led, managed and
arranged this investment with total funding of �12 million. The Core VCTs
collectively invested �3 million in a mix of ordinary shares and loan notes
with an 8% per annum yield. The balance of the total funding was raised through
an innovative senior and mezzanine debt structure.
London Graphic Centre is a long established office and graphic supplies
business with turnover of over �15 million. The management team are well placed
to grow the business organically, but also have the funding in place to grow by
acquisition and to act as a consolidator of smaller suppliers in the industry.
Highpitch Limited - Cost �72,333, June 2006
The Company invested this small amount in a mezzanine debt layer to fund the �
7.5 million MBO of Highpitch. The Core VCTs' secured loan note ranks ahead of a
significant equity investment by the management. It carries an effective yield
of 12.5% per annum and is typical of the terms available in smaller mezzanine
transactions not currently served by other debt or equity providers.
Highpitch comprises two businesses - MNet, a fast growing provider of Internet
Protocol (IP) networks to mid sized UK companies, with turnover of circa �8
million, and MBS, a long established reseller of Canon photocopiers. Both
companies provide services under long term contracts to a similar customer
base.
Occasionally opportunities arise where a corporate transaction in an entity,
representing a typical target business, has characteristics requiring,
initially at any rate, only relatively small amounts of external finance. Core
VCT II is able to adapt its position to such lower risk situations where the
ratio of risk to reward suggests that participation could lead to a
commercially attractive financial relationship.
Additional Funds
In one of the most successful VCT fund raisings in the 2005/06 tax year, Core
Growth Capital raised �33 million in a joint Offer for Subscription for the
Company and Core VCT III plc, giving the Manager combined funds under
management, including Core VCT I plc which raised �10.7 million in 2005, of
some �44 million. This enables Core Growth Capital to complete investments in
the range of �2-�5 million entirely from funds under its management so that it
is are able to take more significant stakes in larger companies without the
need for syndication. These three Companies have identical economic structures
with an identical Board of Directors, so that they will be invested effectively
in parallel with the Company, facilitating the completion of investments in
larger businesses for the Company in accordance with our investment mandate.
The Manager does not plan to raise further `equity' based funds until Core VCTs
I, II and III are more substantially invested. It is, however, planning to
raise a new VCT fund which will target substantial mezzanine debt
opportunities, with a lower risk and return profile. Certain of these
investments may potentially be alongside Core VCTs I, II and III and therefore
complementary to our investment approach.
New Partners appointed at Core Growth Capital
As part of the expansion of the manager resource, aimed at securing additional
skilled talent to aid the investment of the increased capital represented by
the subscription monies raised by the Company and Core VCT III plc, the Manager
has announced the following appointments:-
Mark Storey is joining Core Growth Capital as a Partner. He has an impressive
track record of investing in small to medium sized companies over an 18 year
period. He was Managing Director of BancBoston Capital, investing �110 million
in 29 companies and returning �221 million, with an IRR of 34% per annum. In
addition, he has substantial experience of mezzanine transactions, and is a
director of Mediterranean Mezzanine.
Core Growth Capital has also secured the services of Ian Henderson-Londo*o, who
worked closely with Mark Storey at BancBoston Capital, and was most recently
working with YFM Group, and has 9 years private equity and mezzanine
experience.
Future Investments
Core Growth Capital is aiming to build a highly selective investment portfolio
where its unique approach and focus on larger investments with the most able
and ambitious management teams will add value and liquidity. Whilst the Manager
rejects a high proportion of the deals offered, it is clearly differentiated
from other VCT managers and is confident that attractive private equity
investments will be made.
Investment Portfolio Summary
as at 30 June 2006
Date of Book cost Valuation % of net
investment �'000 �'000 assets by
value
Qualifying investments
Unquoted investments
Blanc Brasseries Holdings plc April 2006 1,000 1,000 6.4%
Premium casual dining
brasseries
Colway Limited May 2006 1,000 1,000 6.4%
(trading as London Graphic
Centre)
Office and graphic supplies
------ ------ ------
Total qualifying investments 2,000 2,000 12.8% 1
------ ------ ------
Non-qualifying investments
Short dated fixed interest 10,089 10,083 64.3%
securities
Money market funds 2 1,798 1,798 11.5%
Highpitch Limited June 2006 72 72 0.5%
Provider of internet services
and photocopiers
------ ------ ------
Total non-qualifying 11,959 11,953 76.3%
investments
------ ------ ------
Total investments 13,959 13,953 89.1%
Other assets 1,817 11.6%
Current liabilities (95) (0.7)%
------ ------
Net assets 15,675 100.0%
===== =====
1 Book value of total qualifying investments represents 14.3% of the total
book value of investments. The VCT tests are measured broadly on the original
cost of investments, including cash balances, and this gives a figure of
14.2% quoted in the Manager's Review above in relation to progress toward
achieving a minimum of 70% of total investments invested in qualifying
investments before 31 December 2008.
2 Disclosed within Current assets as Current investments in the Balance
Sheet.
Unaudited Income Statement
(incorporating the Revenue Account of the Company for the period from 23
September 2005 to 30 June 2006)
Period from 23 September 2005 to
30 June 2006
Revenue Capital Total
� � �
Unrealised losses on - (5,931) (5,931)
investments
Costs of investment - (180) (180)
transactions
Income 232,071 - 232,071
Transactions costs - (37,331) (37,331)
Other expenses (96,349) - (96,349)
------ ------ ------
Return on ordinary 135,722 (43,442) 92,280
activities before taxation
Tax on ordinary activities (33,041) 7,093 (25,948)
------ ------ ------
Return attributable to 102,681 (36,349) 66,332
equity shareholders
===== ===== =====
Return per Ordinary share 0.77p (0.27)p 0.50p
Unaudited Balance Sheet
as at 30 June 2006
As at
30 June 2006
�
Fixed assets
Investments 12,154,950
------
Current assets
Debtors and prepayments 1,716,473
Current investments 1,797,627
Cash at bank 100,840
------
3,614,940
Creditors amounts falling due within one (95,003)
year
------
Net current assets 3,519,937
-------
Net assets 15,674,887
======
Capital and reserves
Called up Ordinary Share capital 1,649
Called up B Share capital 2,474
Share premium account 15,604,432
Capital reserve - realised (30,418)
Capital reserve - unrealised (5,931)
Revenue reserve 102,681
------
Total equity Shareholders funds 15,674,887
======
Net asset value per share (attributable
assets basis)
Net asset value per Ordinary Share 95.04p
Net asset value per B Share 0.01p
------
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 30 June 2006
Period from
23 September 2005
to 30 June 2006
�
Opening Shareholders funds before -
restatement
Net share capital subscribed for in the 15,608,555
period
Profit for the period 66,332
------
Closing Shareholders' funds at 30 June 15,674,887
2006
=====
Unaudited Summarised Cash Flow Statement
for the period from 23 September 2005 to 30 June 2006
Period from
23 September 2005
to 30 June 2006
�
Operating activities
Income received 295,346
Transaction costs paid (60,245)
Other cash payments (284,308)
------
Net cash outflow from operating (49,207)
activities
Investing activities
Acquisitions of investments (12,160,881)
------
Net cash outflow from investing (12,160,881)
activities
------
Cash outflow before financing and liquid (12,210,088)
resource management
Financing
Share capital raised 14,968,380
Issue costs of ordinary shares (859,825)
------
Net cash inflow from financing 14,108,555
Management of liquid resources
Increase current investments (1,797,627)
-------
Increase in cash for the period 100,840
=====
Notes:
1. The accounts have been prepared under the fair value rules of the Companies
Act 1985, and in accordance with applicable accounting standards and, to
the extent that it does not conflict with the Companies Act 1985, the 2003
Statement of Recommended Practice, `Financial Statements of Investment
Trust Companies', revised December 2005.
2. 75% of the investment management expense is charged against capital. This is
in line with the Board's expected long-term split of returns from the
investment portfolio of the Company.
3. With effect from 1 January 2006, the Company has adopted the following
Financial Reporting Standards (FRS):
FRS 21 (Events after the Balance Sheet Date) - Dividends paid by the Company
are accounted for when irrevocably payable. Previously, the Company accrued
dividends in the period in which the net revenue, to which those dividends
related, was accounted for.
FRS 25 (Financial Instruments: Disclosure and Presentation) and FRS 26
(Financial Instruments: Measurement) - The Company has designated its
investment assets as being measured at "fair value through profit and loss".
The fair value of quoted investments is deemed to be the bid value of these
investments at the close of business on the relevant date.
The corresponding amounts in these financial statements are restated in
accordance with these new policies.
4. The revenue return per Ordinary Share is based on the net revenue on
ordinary activities after taxation of �102,681 and is based on 13,327,783
Ordinary Shares, being the weighted average number of Ordinary Shares in issue
during this period. The capital loss per Ordinary Share is based on ordinary
activities after taxation of �36,349 and is based on 13,327,783 Ordinary
Shares, being the weighted average number of Ordinary Shares in issue during
the period.
5. Net asset value per Ordinary Share is based on net assets at 30 June 2006,
and on 16,512,380 Ordinary Shares, being the number of Ordinary Shares in issue
on that date.
6. The financial information for the period ended 30 June 2006 has neither been
audited nor reviewed.
7. Copies of the Interim Report for the six months ended 30 June 2006 are being
sent to all Shareholders. Further copies are available free of charge from the
Company's registered office, One Jermyn Street, London SW1Y 4UH.
Contact details for further enquiries:
Sarah Penfold of Matrix-Securities Limited (the Company Secretary) on 020 7925
3300 or by e-mail on CoSec@matrixgroup.co.uk
Core Growth Capital LLP (the Investment Manager), on 020 7317 0155 or by e-mail
on info@Core-Cap.com
END
Core Vct Ii (LSE:CR2)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Core Vct Ii (LSE:CR2)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024
