Interim Results
26 Outubro 2006 - 9:31AM
UK Regulatory
RNS Number:0933L
Pennine AIM VCT PLC
26 October 2006
Pennine AIM VCT plc
Interim Statement for the six months ended 31 July 2006
RECENT PERFORMANCE SUMMARY
2006 2005 2006
31 July 31 July 31 Jan
pence pence pence
Net asset value per Ordinary share 67.4 69.6 71.4
Cumulative distributions per Ordinary share 82.1 79.1 79.1
Total return per Ordinary share 149.5 148.7 150.5
CHAIRMAN'S STATEMENT
The six-months ended 31 July 2006 have seen a fair level of fluctuation in stock
markets, with smaller companies generally underperforming larger stocks. The
movement in the Company's Net Asset Value per share ("NAV") has reflected this
volatility, initially showing an increase but reducing towards the end of the
period.
Net Asset Value
At 31 July 2006, the Company's NAV stood at 67.4p, an decrease of 1.0p or 1.4%
since 31 January 2006 after adding back the 3p per share dividend paid in
February 2006.
Venture capital investments
During the period, the Company made three new investments within its main
portfolio and two new investments in the non-qualifying portfolio that has been
created by setting aside a small level of funds that can be more actively
traded. These are summarised below:
#'000
Main portfolio
Chariot (UK) plc 125
Core Control Limited 18
Non-qualifying portfolio
RC Group Holdings Limited 46
Cardpoint Group plc 41
Waterline plc 44
274
The Investment Manager took the opportunity to take profits in several holdings
and reduce exposure in some underperforming stocks. Disposals during the period
are summarised as follows:
Realised
Valuation gain
Cost at 31/1/06 Proceeds in period
#'000 #'000 #'000 #'000
Main portfolio
Aero Inventory plc (sale of rights) - - 89 89
The Clapham House Group plc 50 101 87 (14)
Fountains plc 138 115 91 (24)
Maclellan Group plc 38 80 88 8
Supporta plc 125 213 226 13
Non-qualifying portfolio
Daniel Stewart Securities plc 28 34 46 12
379 543 627 84
Of the investments held throughout the period, a number of stocks showed good
gains (e.g. MacLellan, Computer Software Group), however these were offset by a
number of poorer performers (e.g. Chariot (UK), Cellcast, CRC Group). The
portfolio showed a net unrealised loss of #119,000 for the period. At the 31
July 2006, the venture capital portfolio comprised 47 investments with a total
cost of #9.6 million and a total value of #9.3 million.
Fixed interest investments
The Company continues to hold one fixed interest security, which was valued at
#200,000 at 31 July 2006.
Revenue and Dividend
The loss for the period was #156,000 (2005: loss #26,000), split as revenue loss
of #121,000 and a capital loss of #35,000.
In line with our normal practice, no interim dividend will be paid.
Repurchase of shares
The Company's share price is affected by the illiquidity of its shares in the
market. This results mainly from the requirement that most shareholders must
retain their shares for at least three years in order to retain their tax
benefits and because investors do not receive income tax relief on the purchase
of "second-hand" shares.
During the period the Company purchased 262,169 ordinary shares at an average
price of 62.9p per share. These shares were subsequently cancelled.
Outlook
General market conditions will always be a major factor in determining the
performance of the Company. Although conditions have not been favourable over
six months under review, the Company's key strategy of seeking to invest in
companies with strong management and good prospects for growth provides a sound
base from which to take advantage of better conditions when they arise.
The Company's strong dividend policy and the steady demand for share buybacks
means that the Company is gradually decreasing in size. Although the Company
still remains of an economic size for a VCT, the Board is giving consideration
to issuing a 'D' Share offer which would help spread the running costs of the
Company over a wider asset base and give investors another to opportunity
benefit from the tax reliefs available on new VCT investments. I hope to bring
Shareholders further details of these plans in due course.
Hugh Gillespie
Chairman
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 July 2006
31 Jul 31 Jul 31 Jan
2006 2005 2006
(restated)
#'000 #'000 #'000
Investments 9,540 10,571 9,922
Net current assets 257 77 643
Net assets 9,797 10,648 10,565
Capital and reserves
Called up share capital 1,454 1,530 1,480
Capital redemption reserve 153 77 127
Share premium 4,984 4,984 4,984
Merger reserve 1,401 1,401 1,401
Special reserve 1,380 1,718 1,532
Capital reserve - realised 1,221 1,165 1,434
Capital reserve - unrealised (272) 65 10
Revenue reserve (524) (292) (403)
Total equity 9,797 10,648 10,565
Net asset value per Ordinary share 67.4p 69.6p 71.4p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
31 Jul 31 Jul 31 Jan
2006 2005 2006
#'000 #'000 #'000
Opening shareholders' funds 10,565 9,122 9,122
Issue of shares - 1,678 1,678
Repurchase of own shares (166) - (327)
Total recognised gains for the period (156) 99 343
Distributions paid in period (446) (251) (251)
Closing shareholders' funds 9,797 10,648 10,565
UNAUDITED INCOME STATEMENT
for the six months ended 31 July 2006
Six months ended
31 Jul 2006
Revenue Capital Total
#'000 #'000 #'000
Income 63 - 63
(Losses)/gains on investments
-realised - 84 84
-unrealised - (119) (119)
63 (35) (35)
Investment management fees (84) - (84)
Other expenses (100) - (100)
Return on ordinary activities (121) (35) (156)
Taxation - - -
Return attributable to equity
shareholders (121) (35) (156)
Return per Ordinary share (0.8p) (0.2p) (1.0p)
Six months ended
31 Jul 2005 Year ended
(restated) 31 Jan 2006
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Income 123 - 123 197
(Losses)/gains on investments -realised 196 196 107
-unrealised - (59) (59) 385
123 137 260 689
Investment management fees (73) - (73) (163)
Other expenses (88) - (88) (183)
Return on ordinary activities (38) 137 99 343
Taxation - - - -
Return attributable to equity shareholders (38) 137 99 343
Return per Ordinary share (0.3p) 1.1p 0.8p 2.4p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31 July 2006
Six months ended
31 July 2006
Revenue Capital Total
#'000 #'000 #'000
Return attributable to equity shareholders (121) (35) (156)
Total recognised (losses)/gains for the period (121) (35) (156)
Restatement of 2005 accounts to Bid price
Total recognised gains since last report
Six months ended Year ended
31 Jul 2005 31 Jan 2006
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Return attributable to equity shareholders (38) 137 99 343
Total recognised (losses)/gains for the period (38) 137 99 343
- (170) (170) (170)
Restatement of 2005 accounts to Bid price (38) (33) (71) 173
UNAUDITED CASH FLOW STATEMENT
for the six months ended 31 July 2006
Six months Six months
ended ended Year ended
31 Jul 2006 31 Jul 2005 31 Jan 2006
Note #'000 #'000 #'000
Cash (outflow)/inflow from operating 1 (138) 18 (146)
activities and returns on investments
Capital expenditure
Purchase of investments (280) (2,332) (3,621)
Proceeds on disposal of investments 628 933 3,262
Net cash inflow/(outflow) from capital 348 (1,399) (359)
expenditure
Acquisitions
Purchase of subsidiary undertakings - (162) (109)
Net cash transferred from subsidiary - - (36)
undertakings
- (162) (145)
Equity dividends paid (446) (251) (251)
Net cash outflow before financing (236) (1,794) (901)
Financing
Purchase of own shares (226) - (267)
Net cash outflow from financing (226) - (267)
Decrease in cash 2 (462) (1,794) (1,168)
Notes to the cash flow statement:
1 Cash flow from operating activities and
returns on investments
Net revenue before taxation (121) (26) (149)
(Increase)/decrease in other debtors (15) (13) 14
(Decrease)/increase in accruals and deferred (2) 57 (11)
income
Net cash (outflow)/inflow from operating (138) 18 (146)
activities
2 Analysis of net funds
Beginning of period 740 1,908 1,908
Net cash outflow (462) (1,794) (1,168)
End of period 278 114 740
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 July 2006
Cost Valuation % of portfolio Movement
in the
period
#'000 #'000 by value #'000
Top twenty venture capital investments
MacLellan Group plc 343 712 7.3% 203
Computer Software Group plc 301 526 5.4% 116
Supporta plc 303 508 5.2% (19)
XKO Group plc 462 478 4.9% (75)
Connaught plc 55 409 4.2% 13
Hill Station Public Limited Company 251 354 3.6% 62
Straight plc 180 342 3.5% 77
Synergy Healthcare plc 161 339 3.5% 59
@UK plc 300 324 3.3% (55)
Pubs 'n' Bars plc 322 298 3.0% (30)
Media Square plc 242 291 3.0% 66
Cadbury House Hotel & Country Club Limited * 225 288 2.9% 63
Aero Inventory plc 246 272 2.8% (157)
Huveaux plc 145 250 2.5% (9)
Neutrahealth plc 216 247 2.5% 31
Forward Media Limited * 372 244 2.5% -
Colliers CRE plc 144 242 2.5% 41
AT Communications plc 223 239 2.4% 26
Dipford Group plc 245 227 2.3% (45)
Waterline Group plc 244 224 2.3% 42
4,980 6,814 69.6% 409
Other venture capital investments 4,631 2,526 25.8% (527)
Listed fixed income securities 201 200 2.0% (1)
Total investments 9,812 9,540 97.4% (119)
Net current assets (including cash) 257 2.6%
Total 9,797 100.0%
All venture capital investments are quoted on AIM unless otherwise stated.
* Unquoted
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally Accepted
Accounting Practice ("UK GAAP"). Where presentation guidance set out in the
Statement of Recommended Practice "Financial Statements of Investment Trust
Companies" revised December 2005 ("SORP") is inconsistent with the requirements
of UK GAAP, the Directors have sought to prepare the financial statements on a
basis compliant with the recommendations of the SORP.
The financial statements are prepared under the historical cost convention
except for the revaluation of certain financial instruments.
Presentation of Income Statement
In order to better reflect the activities of an investment trust company and in
accordance with guidance issued by the AITC, supplementary information which
analyses the income statement between items of a revenue and capital nature has
been presented alongside the income statement. The net revenue is the measure
the directors believe appropriate in assessing the Company's compliance with
certain requirements set out in Section 842 Income and Corporation Taxes Act
1988.
Investments
All investments are designated as "fair value through profit or loss" assets and
are initially measured at cost. Thereafter the investments are measured at
subsequent reporting dates at fair value.
Listed fixed income investments and investments quoted on the Alternative
Investment Market ("AIM") are measured using bid prices with illiquidity
discounts applied where deemed appropriate.
In respect of unquoted instruments, fair value is established by using
International Private Equity and Venture Capital Valuation Guidelines. Where no
reliable fair value can be estimated for such unquoted equity investments they
are carried at cost, subject to any provision for impairment. Where an investee
company has gone into receivership or liquidation the investment, although not
physically disposed of, is treated as being realised.
Gains and losses arising from changes in fair value are included in the income
statement for the year as a capital item and transaction costs on acquisition or
disposal of the investment expensed.
It is not the Company's policy to exercise either significant or controlling
influence over investee companies. Therefore the results of these companies are
not incorporated into the revenue account except to the extent of any income
accrued.
Income
Dividend income from investments is recognised when the shareholders' rights to
receive payment has been established, normally the ex dividend date.
Interest income is accrued on a timely basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount, and only where there
is reasonable certainty of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis
between revenue and capital items presented within the income statement, all
expenses have been presented as revenue items except expenses which are
incidental to the disposal of an investment are deducted from the disposal
proceeds of the investment.
Deferred taxation
Deferred taxation is provided in full on timing differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements.
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the period ended 31 July 2005
and the year ended 31 January 2006 respectively.
5. Return per share for the period has been calculated on 14,743,307 shares,
being the weighted average number of shares in issue during the period.
6. Dividends
31 July 31 July 31 Jan 2006
2006 2005
Revenue Capital Total Revenue Capital Total Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Paid in year
2006 Interim - 3p - 446 446 - - - -
2005 Final - 2p - - - - 251 251 251
- 446 446 - 251 251 251
Proposed
2006 Interim - 3p - - - - - - 450
- - - - - - 450
7. Reserves
Capital Special Share Capital Capital Revenue Merger
redemption reserve premium reserve reserve reserve reserve
reserve account -realised - unrealised Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 February 2006 127 1,532 4,984 1,434 10 (403) 1,401 9,085
Shares repurchased 26 (166) - - - - - (140)
Realised gains in year - - - 84 - - - 84
Increase in unrealised - - - - (119) - - (119)
depreciation
Realisation of revaluations from - - - 163 (163) - - -
previous years
Distributions paid - - - (446) - - - (446)
Transfer between reserves - 14 - (14) - - - -
Retained net revenue - - - - - (121) - (121)
At 31 July 2006 153 1,380 4,984 1,221 (272) (524) 1,401 8,343
The Special Reserve, Capital Reserve - realised and Revenue Reserve are all
distributable reserves.
8. The unaudited financial statements set out herein do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985
and have not been delivered to the Registrar of Companies. The figures for the
year ended 31 January 2006 have been extracted from the financial statements for
that year, which have been delivered to the Registrar of Companies; the
auditors' report on those financial statements was unqualified.
9. Copies of the unaudited interim results will be sent to shareholders
shortly. Further copies can be obtained from the Company's Registered Office.
A copy of the interim statement for the period ended 31 July 2006 will be
printed and posted to shareholders shortly. Copies of the interim statement
will also be available for download from www.downing.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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