Final Results
17 Dezembro 2008 - 2:23PM
UK Regulatory
RNS Number : 3333K
Northern AIM VCT PLC
17 December 2008
17 DECEMBER 2008
NORTHERN AIM VCT PLC
RESULTS FOR THE YEAR ENDED 31 OCTOBER 2008
Northern AIM VCT PLC is a Venture Capital Trust (VCT) managed by NVM Private Equity. The trust was launched in October 2000. Its
portfolio of VCT-qualifying investments is focused on companies quoted on AIM but also includes a number of later-stage unquoted holdings.
Financial highlights - year ended 31 October 2008:
(comparative figures as at 31 October 2007 in italics):
2008 2007
* Net assets �7.2m �13.9m
* Net asset value per share 32.8p 64.0p
* Return/(loss) per share
Revenue 1.0p 0.3p
Capital (29.2)p 6.8p
Total (28.2)p 7.1p
* Dividend per share proposed
in respect of the year
Revenue 1.0p 0.3p
Capital 2.0p 2.7p
Total 3.0p 3.0p
* Cumulative return to
shareholders since launch
Net asset value per share 32.8p 64.0p
Dividends paid per share* 16.3p 13.3p
Net asset value plus dividends
paid per share 49.1p 77.3p
* Share price at end of year 40.0p 52.0p
*Excluding proposed final dividend
For further information, please contact:
NVM Private Equity Limited
Alastair Conn/Christopher Mellor 0191 244 6000
Website: www.nvm.co.uk
Lansons Communications
Karen Mignon 020 7294 3685
NORTHERN AIM VCT PLC
CHAIRMAN'S STATEMENT
The Chairman of Northern AIM VCT PLC, James Dawnay, included the following points in his statement to shareholders:
Overview of the year
Market conditions over the past year have been the most challenging in the lifetime of our company and indeed in living memory. The FTSE
AIM All-share index fell by over 60% during the 12 months to 31 October 2008 against a background of crisis in the banking system and the
onset of recession in the UK economy. Although the fall in our company's net asset value (NAV) per share over the year has not been on quite
the same scale, the investment portfolio (both AIM-quoted and unquoted) has inevitably been affected by the decline in price-earnings ratios
and the downward pressure on company profitability, and has in broad terms halved in value. As a result the encouraging progress of the
preceding financial year has been more than reversed.
Net asset value, return and dividend
The NAV per share as at 31 October 2008 was 32.8p, compared with 64.0p a year earlier. The return per share for the year as shown in the
income statement was minus 28.2p compared with a positive return of 7.1p in the previous year, reflecting the impact of �5.3 million of
unrealised revaluation losses resulting from the fall in the markets.
The company's unaudited NAV per share at 30 November 2008 was 31.7p, down by 3.4% from the year-end figure. The FTSE AIM All-share
index fell by 9.4% over the month.
Last year your board announced a dividend of 3.0p per share and stated its objective of maintaining the dividend at this level on a
continuing basis, subject to the availability of sufficient distributable profits. There were relatively few investment realisations during
the year and the balance sheet at 31 October 2008 shows only a small cash balance, but I am pleased to report that our largest investment,
Stainton Metal Company, was sold shortly after the year end for �1.4 million in cash and another of our unquoted holdings is in advanced
sale discussions. Given these developments, and in view of the limited availability of new investment opportunities at the present time,
your board has decided to propose a dividend of 3.0p per share in respect of the year, in line with our objective. The dividend will,
subject to shareholders' approval at the annual general meeting, be paid on 6 March 2009 to shareholders on the register on 6 February
2009.
Investments
The portfolio has continued to be relatively fully invested. The AIM new issue market has remained subdued and only two new AIM-quoted
investments were made during the year, at a cost of �439,000, whilst two new unquoted investments were completed at a cost of �500,000. It
is encouraging to note that all of the new holdings appear to be making good progress despite difficult market conditions, but several of
the companies in which we invested in earlier periods have reported a deterioration in performance and this has been reflected in the
year-end valuations. We also suffered a significant disappointment in the demise of DMN, our largest unquoted holding a year ago, where an
improving outlook was overturned by severe problems arising from a contract for a major telecommunications group, as a result of which the
company was eventually sold for a nominal consideration.
Shareholder issues
A year ago we announced that the company would cease buying back its own shares in the market for cancellation at a fixed 10% discount
to net asset value. We felt that this practice was likely to lead to a gradual diminution in the company's capital base and that returns of
cash to shareholders should be in the form of dividend distributions which would benefit all shareholders equally. Market conditions over
the past year have brought about a much more significant reduction in our assets. Whilst we would expect a measure of recovery at some point
in the future, this may be long delayed and in the meantime we will continue to give careful consideration to the best strategic way forward
for shareholders from our present position.
It was also announced last year that the directors had appointed Landsbanki Securities (formerly Teather & Greenwood) as brokers to the
company, on the basis that they would also act as market-makers in the company's shares. Unsurprisingly there has been relatively little
secondary market activity in the shares over the past 12 months. As shareholders may be aware, Landsbanki Securities was affected by the
recent financial difficulties of its Icelandic parent and had to cease its market-making activities. Following a further review, the
directors have appointed Teathers, a new firm which has recruited a number of former Landsbanki Securities personnel, as brokers to the
company.
VAT on management fees
The Government announced in the 2008 Budget that, with effect from 1 October 2008, investment management fees paid by VCTs would be
exempt from VAT. HM Revenue & Customs has subsequently accepted that under European Union VAT law the exemption of management fees from VAT
should have applied from 1990 onwards, and has indicated that claims may be made for repayment of VAT previously paid by VCTs, subject to
certain restrictive time limits. At this stage the directors are reasonably certain that the amount of past VAT recoverable by the company
will be at least �100,000 and this amount has been recognised in the accounts as a separate credit in the income statement.
VCT qualifying status
The company continues to meet the qualifying conditions laid down by HM Revenue & Customs for maintaining its approval as a venture
capital trust. The board retains PricewaterhouseCoopers LLP as advisers on VCT taxation matters.
Prospects
Although there is no doubt that by historical standards many of our holdings look very good value at current price levels, it is
difficult to foresee any sustained recovery in valuations whilst the current gloom in the world's economy and financial markets persists.
There is no obvious reason why an upturn should be anticipated in the near term and it therefore seems likely that another difficult year
lies ahead of us. Nevertheless the directors believe that a number of our portfolio companies have excellent prospects for the longer term.
James Dawnay
Chairman
The audited financial statements for the year ended 31 October 2008 are set out below.
INCOME STATEMENT
for the year ended 31 October 2008
Year ended 31 October 2008 Year ended 31 October 2007
Revenue Capital Total Revenue Capital Total
�000 �000 �000 �000 �000 �000
Gain/(loss) on disposal
of investments - (1,009) (1,009) - 380 380
Movements in fair value
of investments - (5,254) (5,254) - 1,393 1,393
------ ------ ------ ------ ------ ------
- (6,263) (6,263) - 1,773 1,773
Income 467 - 467 318 - 318
Investment management fee (65) (194) (259) (79) (236) (315)
Recoverable VAT 25 75 100 - - -
Other expenses (190) - (190) (170) - (170)
------ ------ ------ ------ ------ ------
Return/(loss) on ordinary
activities before tax 237 (6,382) (6,145) 69 1,537 1,606
Tax on return/(loss) on
ordinary activities (29) 29 - - - -
------ ------ ------ ------ ------ ------
Return/(loss) on ordinary
activities after tax 208 (6,353) (6,145) 69 1,537 1,606
------ ------ ------ ------ ------ ------
Return/(loss) per share 1.0p (29.2)p (28.2)p 0.3p 6.8p 7.1p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 October 2008
Year ended Year ended
31 October 2008 31 October 2007
�000 �000
Equity shareholders' funds
at 1 November 2007 13,914 13,250
Return/(loss) on ordinary
activities after tax (6,145) 1,606
Dividends recognised in the year (652) (228)
Net proceeds of share issues 77 26
Shares purchased for cancellation (42) (722)
Expenses charged to capital - (18)
Equity shareholders' funds ------ ------
at 31 October 2008 7,152 13,914
------ ------
BALANCE SHEET
as at 31 October 2008
31 October 31 October
2008 2007
�000 �000
Fixed asset investments
Quoted on AIM 2,995 7,491
Unquoted 3,914 5,560
------ ------
Total fixed asset investments 6,909 13,051
------ ------
Current assets:
Debtors 252 73
Cash at bank 38 837
------ ------
290 910
Creditors (amounts falling due
within one year) (47) (47)
------ ------
Net current assets 243 863
------ ------
Net assets 7,152 13,914
------ ------
Capital and reserves:
Called-up equity share capital 1,089 1,087
Share premium 1,989 1,919
Capital redemption reserve 183 178
Capital reserve - realised 7,760 8,981
Capital reserve - unrealised (4,139) 1,622
Revenue reserve 270 127
------ ------
Total equity shareholders' funds 7,152 13,914
------ ------
Net asset value per share 32.8p 64.0p
CASH FLOW STATEMENT
for the year ended 31 October 2008
Year ended Year ended
31 October 2008 31 October 2007
�000 �000 �000 �000
Net cash outflow from operating activities (61) (164)
Taxation:
Corporation tax paid - -
Financial investment:
Purchase of investments (1,472) (544)
Sale/repayment of investments 1,351 2,237
------ ------
Net cash inflow/(outflow) from financial investment (121) 1,693
Equity dividends paid (652) (228)
------ ------
Net cash inflow/(outflow) before financing (834) 1,301
Financing:
Issue of shares 77 30
Share issue expenses - (4)
Purchase of shares for cancellation (42) (722)
------ ------
Net cash inflow/(outflow) from financing 35 (696)
------ ------
Increase/(decrease) in cash at bank (799) 605
------ ------
Reconciliation of return before tax
to net cash flow from operating activities
Return/(loss) on ordinary activities before tax (6,145) 1,606
Gain/(loss) on disposal of investments 1,009 (380)
Movements in fair value of investments 5,254 (1,393)
(Increase)/decrease in debtors (179) 24
Increase/(decrease) in creditors - (3)
Expenses charged to capital - (18)
------ ------
Net cash outflow from operating activities (61) (164)
------ ------
Reconciliation of movement in net funds
1 November 2007 Cash flows 31 October 2008
�000 �000 �000
Cash at bank 837 (799) 38
------ ------ ------
INVESTMENT PORTFOLIO SUMMARY
as at 31 October 2008
Valuation % of net assets
�000 by value
Venture capital investments
(*denotes unquoted, others quoted on AiM)
Stainton Metal Company* 1,379 19.3
Crantock Bakery* 573 8.0
Britspace Holdings* 456 6.4
Longhirst Venues* 435 6.1
Pivotal Laboratories Holdings* 413 5.8
Aero Inventory 389 5.4
RCG Holdings 270 3.8
Optilan Group* 250 3.5
Axial Systems Holdings* 250 3.5
Jelf Group 249 3.5
Andor Technology 211 2.9
IDOX 193 2.7
Pilat Media Global 180 2.5
Prologic 180 2.5
Bond International Software 169 2.4
------ -----
Fifteen largest holdings 5,597 78.3
Advanced Computer Software 163 2.3
IG Doors* 158 2.2
IS Pharma 150 2.1
Cello Group 126 1.8
Quadnetics Group 111 1.5
SectorGuard 88 1.2
Fountains 80 1.1
1st Dental Laboratories 75 1.0
Intercytex Group 74 1.0
Shieldtech 49 0.7
Colliers CRE 38 0.5
Adept Telecom 33 0.5
Zenith Hygiene Group 33 0.5
First Artist Corporation 27 0.4
Belgravium Technologies 23 0.3
Twenty 20 0.3
Hartest Holdings 17 0.2
Spectrum Interactive 13 0.2
Individual Restaurant Company 13 0.2
Advance AIM Value Realisation Company 9 0.1
Baydonhill 8 0.1
Widney 4 0.1
John Laing Partnership* - -
------ -----
Total fixed asset investments 6,909 96.6
Net current assets 243 3.4
------ -----
Net assets 7,152 100.0
------ -----
BUSINESS RISKS
The board carries out a regular review of the risk environment in which the company operates. The main areas of risk identified by the
board are as follows:
Investment risk: The majority of the company's investments are in small and medium-sized AIM-quoted companies which are VCT qualifying
holdings, and which by their nature entail a higher level of risk and lower liquidity than investments in large quoted companies. The
directors aim to limit the risk attaching to the portfolio as a whole by careful selection and timely realisation of investments, by
carrying out rigorous due diligence procedures and by maintaining a wide spread of holdings in terms of financing stage, industry sector and
geographical location. The board reviews the investment portfolio with the investment managers on a regular basis.
Financial risk: As most of the company's investments involve a medium to long-term commitment and many are relatively illiquid, the
directors consider that it is inappropriate to finance the company's activities through borrowing except on an occasional short-term basis.
The company has very little exposure to foreign currency risk and does not enter into derivative transactions.
Stock market risk: The majority of the company's investments are quoted on AIM and will be subject to market fluctuations upwards and
downwards. External factors such as terrorist activity can negatively impact stock markets worldwide and AIM is no exception to this. In
times of adverse sentiment there tends to be very little, if any, market demand for shares in the smaller companies quoted on AIM.
Liquidity risk: The company's investments may be difficult to realise. The fact that a stock is quoted on AIM does not guarantee its
liquidity and there may be a large spread between bid and offer prices. Unquoted investments are not traded on a recognised stock exchange
and are inherently illiquid.
Internal control risk: The board regularly reviews the system of internal controls, both financial and non-financial, operated by the
company and the manager. These include controls designed to ensure that the company's assets are safeguarded and that proper accounting
records are maintained.
VCT qualifying status risk: the company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the
maintenance of approved VCT status. The loss of such approval could lead to the company losing its exemption from corporation tax on capital
gains, to investors being liable to pay income tax on dividends received from the company and, in certain circumstances, to investors being
required to repay the initial income tax relief on their investment. The manager keeps the company's VCT qualifying status under continual
review and reports to the board on a quarterly basis. The board has also retained PricewaterhouseCoopers LLP to undertake an independent VCT
status monitoring role.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the annual financial report in accordance with applicable law and regulations. Company law
requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the
financial statements in accordance with UK Accounting Standards. The financial statements are required by law to give a true and fair view
of the state of affairs of the company at the end of the financial period and of the return of the company for that period. In preparing
these financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in
the financial statements; and
* prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue
in business.
The directors confirm that to the best of their knowledge:
* the financial statements for the year ended 31 October 2008 comply with the requirements set out above; and
* the annual financial report includes (i) a fair review of important events that have occurred during the financial year and their
impact on the condensed set of financial statements; (ii) a description of the principal risks and uncertainties facing the company; and
(iii) details of related party transactions that have taken place during the year and that have materially affected the financial position
or performance of the company during the year.
The above summary of results for the year ended 31 October 2008 does not constitute statutory financial statements within the meaning of
Section 240 of the Companies Act 1985 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed
with the Registrar of Companies in due course; the independent auditors' report on those financial statements under Section 235 of the
Companies Act 1985 is unqualified and does not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
The proposed final dividend of 3.0p per share for the year ended 31 October 2008 will, if approved by shareholders, be paid on 6 March
2009 to shareholders on the register at the close of business on 6 February 2009.
The full annual report including financial statements for the year ended 31 October 2008 is expected to be posted to shareholders on 16
January 2009 and will be available to the public at the registered office of the company at Northumberland House, Princess Square, Newcastle
upon Tyne NE1 8ER and on the NVM Private Equity Limited website, www.nvm.co.uk.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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