Br.smaller Cos. Regulatory News (BSV)

12 Jun 2007 14:42

British Smaller Companies VCT PLC12 June 2007 BRITISH SMALLER COMPANIES VCT PLC UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2007 British Smaller Companies VCT plc ("the Company") today announces its unauditedpreliminary results for the year ended 31 March 2007. Chairman's Statement For the fourth successive year, I am pleased to be able to report further growthin the net asset value per share of your Company. For the year to 31 March 2007,the total return, which takes into account both this net asset value andcumulative dividend distributions, has increased by 8.3 pence per share to 136.3pence per share, an increase of 6.5%; with the five year increase amounting to57.4%. There has also been a pleasing increase in the total return of the Cshares of 9.1 pence per share. This year has seen a continuation of the successful realisations delivered inprevious years that has not only delivered a significant part of the growth inthe year, but has enabled your board to continue its dividend policy resultingin our recommendation to pay a final dividend of 3 pence per Ordinary share. Investment Portfolio This year saw further realisations totalling £2.21 million (£1.96 million inrespect of the Ordinary shares and £0.25 million in respect of the C shares).The most significant realisation was of the unquoted investment in TektonLimited (previously known as Intuita Limited). This company was sold to avehicle backed by the private equity investor Inflexion. Your Company'sinvestment of £0.4 million was realised for £0.9 million having held theinvestment for less than thirteen months. The opportunity was taken to invest£0.2 million of these proceeds in the enlarged group alongside the management. The opportunity was also taken to realise some of the AiM portfolio with a totalof £0.3 million realised in the year. A total of £1.4 million was invested into 3 businesses in the year; £1.1 millionfrom the Ordinary share pool and £0.3 million from the C share pool. Two ofthese investments were in companies at the time of their successful admission toAiM, all of which have traded at a premium to their admission price. The otherwas in unquoted company Cater Plus Services Limited, an established businessbased in Watford that provides catering services to the care home sector.Further information about these new investments can be found in the InvestmentAdviser's Review. This contains a summary of all businesses in the currentportfolio and a note of their website addresses to enable shareholders to getfurther information if they wish to do so. Financial Results and Dividend The net asset value of the Ordinary shares at 31 March 2007 was 101.3 pence pershare, and 110.8 pence per share for the C shares. Taking account of thedividends paid to date on the Ordinary shares, the total return for eligiblefounder Ordinary shareholders at the balance sheet date was 136.3 pence pershare and the C shareholders 111.3 pence per share. The Ordinary shares recorded a pre-tax profit of £1.23 million after takingaccount of unrealised valuation gains of £1.04 million. The C share pool alsorecorded pre-tax profits, delivering £0.1 million for the year. The performance of both the Ordinary and C shares has been pleasing withincreases in valuation and profitable performances delivered in both pools. Yourboard announced its intention to merge the two pools on the closing of thisyear's fundraising offers. As a consequence the C shares were converted toOrdinary shares on 9 May 2007 with the issue of 1.1247 Ordinary shares for everyC share held. An interim dividend of 1.5 pence per share was declared on the Ordinary sharesand paid in November 2006. No interim dividend was paid on the C shares. YourBoard is now proposing a final dividend of 3.0 pence per share on the Ordinaryshares. If approved, these dividends will be paid on 8 August 2007 toshareholders on the register at 22 June 2007. The final dividend has not beenrecognised in the accounts under IFRS as the contractual obligation did notexist at the balance sheet date. Shareholders and Fundraising Shareholders will be aware that, on 8 December 2006, your Board publishedproposals offering investors the opportunity to subscribe for up to 15 millionnew Ordinary shares in the Company at an offer price of 102.5 pence per share.These proposals were by way of two offers closing on 5 April 2007 and 30 April2007 respectively. Both Ordinary and C shareholders, were given priority toapply for shares in the first twelve weeks of the Offers. I am pleased to reportthat the Offers raised a total of £9.7 million before expenses. Your boardregards this as a very creditable result and your Company has begun to takeadvantage of the opportunities that are available as a result of the additionalinvestment capacity. It is anticipated that this increase in the size of yourCompany will deliver the reduction in the Total Expense Ratio that was envisagedin the fundraising documents. The Company continues to operate a share buy back policy to enable shareholdersto obtain some liquidity in an otherwise illiquid market where there is a needto dispose of their stock. This policy is kept under review to ensure that anydecisions taken are in the best interests of shareholders as a whole. Inaccordance with this policy, the Company purchased for cancellation a total of1,039,560 shares during the year, at an average price of 88.68 pence per share.The existing buy back authority which currently expires on 31 January 2008 isproposed to be extended to 1 August 2008. A resolution to this effect will beproposed at the Company's AGM on 1 August 2007. Outlook Your Company has achieved further profitable realisations and has begun toincrease the rate of new investment that is developing a portfolio containingmaturing and growing investments with the emphasis remaining on unquotedinvestments. There remains a focus on continuing to actively support the investments in theportfolio maximising and realising value wherever possible. The current markethas enabled further new investment to take place with your board increasing newinvestments as a result of the number of opportunities that it has seen. Inrecent years there has been a much higher level of investment in the younger,developing businesses. As these businesses are continuing to grow, your board,through its investment adviser, believes it is well placed to continue to takeadvantage of this growing source of opportunities. The changes relating to VCTs announced in the Budget, particularly the reductionin the number of employees to 50 being part of the test for a qualifyingcompany, will have some impact on the industry but, with your Board and itsInvestment Adviser already focusing primarily on this market, the changes areexpected to have less of an impact on your Company than some others. Sir Andrew Hugh Smith12 June 2007 Unaudited Income Statementfor the year ended 31 March 2007 Notes Ord shares C shares Total Ord shares C shares Total 2007 2007 2007 2006 2006 2006 £000 £000 £000 £000 £000 £000 Income 327 41 368 413 38 451Administrative expenses: Investment advisory fee (352) (29) (381) (314) (18) (332)Other expenses (216) (18) (234) (202) (13) (215) ------ ------ ------ ------ ------ ------ (568) (47) (615) (516) (31) (547)Gain on realisation of investments 423 80 503 806 1 807Gains on investments held at fair value 1,043 39 1,082 1,477 95 1,572 ------ ------ ------ ------ ------ ------Profit on ordinary activities before taxation 1,225 113 1,338 2,180 103 2,283 Taxation - - - - - - ------ ------ ------ ------ ------ ------Profit for the year from continuingoperations 1,225 113 1,338 2,180 103 2,283 ------ ------ ------ ------ ------ ------Basic and diluted earnings per share 3 7.82p 8.98p 7.91p 14.55p 8.38p 13.89p ====== ====== ====== ====== ====== ====== Unaudited Balance Sheetat 31 March 2007 Notes Ord shares C shares Total Ord shares C shares Total 2007 2007 2007 2006 2006 2006 £000 £000 £000 £000 £000 £000 Assets Non-current assetsFinancial assets at fair value through profit or loss 11,056 571 11,627 10,382 427 10,809 ------ ------ ------ ------ ------ ------Current assetsTrade and other receivables 501 11 512 448 10 458Cash and cash equivalents 4,042 825 4,867 4,531 864 5,395 ------ ------ ------ ------ ------ ------ 4,543 836 5,379 4,979 874 5,853Liabilities Current liabilitiesTrade and other payables (205) (13) (218) (101) (14) (115) ------ ------ ------ ------ ------ ------Net current assets 4,338 823 5,161 4,878 860 5,738 ------ ------ ------ ------ ------ ------Net assets 15,394 1,394 16,788 15,260 1,287 16,547 ====== ====== ====== ====== ====== ====== Shareholders' equityShare capital 1,519 629 2,148 1,566 629 2,195Share premium account 1,258 555 1,813 781 555 1,336Capital redemption reserve 221 - 221 117 - 117Special reserve 2,408 - 2,408 3,330 - 3,330Retained earnings 9,988 210 10,198 9,466 103 9,569 ------ ------ ------ ------ ------ ------Total shareholders'equity 15,394 1,394 16,788 15,260 1,287 16,547 ====== ====== ====== ====== ====== ======Net asset value per share 4 101.3p 110.8p 102.1p 97.5p 102.2p 97.9p ====== ====== ====== ====== ====== ====== Unaudited Statement of Changes in Equity Share Share Capital Special Retained Total capital premium redemption reserve earnings equity account reserve £000 £000 £000 £000 £000 £000 Balance at 31 March 2005 1,637 112 75 3,661 7,842 13,327Profit for the year - - - - 2,283 2,283Dividends - - - - (556) (556)Purchase of own shares (42) - 42 (331) - (331)Issue of C share capital 504 505 - - - 1,009Issue costs of C share capital - (62) - - - (62)Issue of Ordinary share capital 90 788 - - - 878Issue costs of Ordinary share capital - (47) - - - (47)Issue of share capital on DRIS* 6 40 - - - 46 ------ ------ ------ ------ ------ ------Balance at 31 March 2006 2,195 1,336 117 3,330 9,569 16,547Profit for the year - - - - 1,338 1,338Dividends - - - - (709) (709)Purchase of own shares (104) - 104 (922) - (922)Issue of Ordinary share capital 57 517 - - - 574Issue costs of Ordinary share capital - (40) - - - (40) ------ ------ ------ ------ ------ ------Balance at 31 March 2007 2,148 1,813 221 2,408 10,198 16,788 ====== ====== ====== ====== ====== ====== The above table includes prior year comparatives. *DRIS being the Dividend Re-investment Scheme. The special distributable reserve was created following approval of the Courtand the resolution of the Shareholders to cancel the Company's share premiumaccount and is available for use for other corporate purposes of the Company. Included within retained earnings, in respect of unrealised gains on investmentsheld at fair value through profit or loss is £6,803,000 (2006:£6,622,000). Thesegains are not distributable under the Companies Act 1985. Unaudited Cash Flow Statementfor the year ended 31 March 2007 Ord shares C shares Total Ord shares C shares Total 2007 2007 2007 2006 2006 2006 £000 £000 £000 £000 £000 £000 Net cash (outflow) inflow fromoperating activities (262) (5) (267) (54) 2 (52) ------ ------ ------ ------ ------ ------Cash flows from (used in)investing activitiesPurchase of fixed asset investments (1,111) (269) (1,380) (899) (330) (1,229)Proceeds from sale of fixed asset investments 1,943 255 2,198 3,518 - 3,518 ------ ------ ------ ------ ------ ------Net cash from (used in) investing activities 832 (14) 818 2,619 (330) 2,289 ------ ------ ------ ------ ------ ------Cash flows(used in)from financing activitiesIssue of C shares - - - - 1,009 1,009Costs of C share issue - (3) (3) - (62) (62)Issue of Ordinary shares 574 - 574 878 - 878Costs of Ordinary share issue (80) - (80) - - -Purchase of own Ordinary shares (796) - (796) (367) - (367)Dividends paid (703) (6) (709) (510) - (510) ------ ------ ------ ------ ------ ------Net cash (used in) from financing activities (1,005) (9) (1,014) 1 947 948 ------ ------ ------ ------ ------ ------Net(decrease) increase in cash and cash equivalents (435) (28) (463) 2,566 619 3,185 Cash and cash equivalents at the beginning of the year 4,531 864 5,395 1,970 246 2,216 Effect of market value changes incash equivalents (54) (11) (65) (5) (1) (6) ------ ------ ------ ------ ------ ------Cash and cash equivalents at theend of the year 4,042 825 4,867 4,531 864 5,395 ====== ====== ====== ====== ====== ====== Notes to Financial Statementsfor the year ended 31 March 2007 1. Accounting Policies This preliminary announcement does not constitute statutory accounts within themeaning of Section 240 of the Companies Act 1985. The information for the year ended 31 March 2006 is an extract from thestatutory accounts to that date which have been delivered to the Registrar ofCompanies. Those accounts included an audit report which was unqualified andwhich did not contain a statement under Section 237(2) or (3) of the CompaniesAct 1985. The accounting policies set out in those accounts have continued to befollowed. The statutory accounts for the year ended 31 March 2007, upon whichthe auditors have still to report, will be delivered to the Registrar followingthe Company's annual general meeting. The accounts have been prepared on a going concern basis and in accordance withthe International Financial Reporting Standards (IFRS) as adopted by theEuropean Union, and those parts of the Companies Act 1985 applicable tocompanies reporting under IFRS. The financial statements are prepared in accordance with IFRS andinterpretations in force at the reporting date. The Company has not adopted anystandards or interpretations in advance of the required implementation dates. Itis not expected that adoption of standards or interpretations which have beenissued by the International Accounting Standards Board but have not been adoptedwill have a material impact on the financial statements. 2. Dividends A final dividend of 3 pence per Ordinary share (£792,000) is proposed. Thisdividend has not been recognised in the results for the year ended 31 March 2007as the obligation did not exist at the balance sheet date. 3. Earnings (Loss) per Share The earnings per share is based on net profit from ordinary activities after taxof £1,338,000 (2006: £2,283,000) and 16,923,000 (2006: 16,432,000) shares, beingthe weighted average number of shares in issue during the year. The earnings per Ordinary share is based on net profit from ordinary activitiesafter tax of £1,225,000 (2006: £2,180,000) and 15,664,000 (2006: 14,979,000)shares, being the weighted average number of shares in issue during the year. The earnings per C share is based on net profit from ordinary activities aftertax of £113,000 (2006: £103,000) and 1,259,000 (2006: 1,228,000) shares, beingthe weighted average number of shares in issue during the year. The Company has no securities that would have a dilutive effect in either periodand hence the basic and diluted net asset values per share are the same. Since the year end the company has issued 9,802,240 Ordinary shares and the1,258,676 C shares have been converted into 1,415,585 Ordinary shares, takingthe total number of Ordinary shares in issue to 26,409,189. Had thesetransactions occurred before the year end, they would have significantlyaffected the number of shares used in the earnings per share calculation. 4. Net Asset Value per Share The net asset value per share is calculated on attributable assets of£16,788,000 (2006: £16,547,000) and 16,450,040 (2006: 16,912,836) shares inissue at the year end. The net asset value per Ordinary share is calculated on attributable assets of£15,394,000 (2006: £15,260,000) and 15,191,364 (2006: 15,654,160) shares inissue at the year end. The net asset value per C share is calculated on attributable assets of£1,394,000 (2006: £1,287,000) and 1,258,676 (2006: 1,258,676) shares in issue atthe year end. The Company has no securities that would have a dilutive effect in either periodand hence the basic and diluted net asset values per share are the same. Since the year end the company has issued 9,802,240 Ordinary shares and the1,258,676 C shares have been converted into 1,415,585 Ordinary shares, takingthe total number of Ordinary shares in issue to 26,409,189. Had thesetransactions occurred before the year end, they would have significantlyaffected the number of shares used in the net asset value per share calculation. 5. Total Return per Ordinary Share The total return per Ordinary share takes into account the closing net assetvalue per share and cumulative dividends paid per share at the balance sheetdate to eligible founder shareholders. For the year ended 31 March 2007 2006 2005 2004 Net asset value per Ordinary share 101.3p 97.5p 86.6p 78.3pCumulative dividend paid per Ordinary share 35.0p 30.5p 26.8p 19.4p ------ ------ ------ ------ Total Return per Ordinary share 136.3p 128.0p 113.4p 97.7p ====== ====== ====== ====== 6. Annual Report Copies of the full financial statements for the year ended 31 March 2007 will beavailable to the public at the registered office of the Company at Saint MartinsHouse, 210-212 Chapeltown Road, Leeds, LS7 4HZ. For further information, please contact: David Hall YFM Private Equity Limited Tel: 0161 832 7603Alan Davies YFM Private Equity Limited Tel: 0113 294 5000Jonathan Becher Teather & Greenwood Limited Tel: 0207 426 3269Michael Bellamy Teather & Greenwood Limited Tel: 0207 426 9547 This information is provided by RNS The company news service from the London Stock Exchange