Crown Place Regulatory News (CRWN)

15 Nov 2005 16:49

Murray VCT 3 PLC15 November 2005 November 2005 MURRAY VCT 3 PLC Interim results for the six months ended 31 August 2005 Murray VCT 3 PLC ("the Company"), managed by Close Venture Management Limited,today announces interim results for the six months ended 31 August 2005. Key Facts 31 August 2005 28 February % change 2005 (restated)* Assets Net Assets £16,744,000 £17,347,000 (3.5)% Cumulative returns to Shareholderssince launchBasic and diluted total return(without tax reliefs) note 1 66.8p 68.3pBasic and dilutedtotal return (withtax reliefs) note 1 and note 2 86.8p 88.3p Ordinary shares Net Asset Value 41.9p 43.4p (3.5)%Share price 32.5p 40.5p (19.8)%Discount to NetAsset Value 22.4% 6.7%Ordinary shares inissue at period end 39,952,670 39,952,670 Note 1: Sum of current Net Asset Value and dividends approved to date.Note 2: Income tax relief at 20%. * Comparative figures have been adjusted and restated as shown in notes 1 and 2to the financial statements. For further information, please contact: Patrick Reeve/ Emil Gigov John West/ Clemmie CarrClose Venture Management Limited Tavistock CommunicationsTel: 020 7422 7830 Tel: 020 7920 3150 www.closeventures.co.uk Notes to Editors: 1) Murray VCT 3 PLC is managed by Close Venture Management Limited which is a subsidiary of Close Brothers Group plc and is regulated by the FSA. 2) The financial information set out in the announcement does not constitute the Company's statutory accounts for the six months ended 31 August 2005. The financial information for the year ended 28 February 2005 is derived from the statutory accounts delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237 (2) or (3) of the Companies Act 1985. Chairman's statement The board of Murray VCT3 reports its results for the six months to 31 August2005. For the first time the interim financial statements are presented inaccordance with the revised UK GAAP which incorporates transition provisions toInternational Financial Reporting Standards. While the overall value of the investment portfolio, as adjusted for newinvestments and disposals, was broadly unchanged from that reported at 28February 2005, exceptional operating costs and provisions against incomerecognised in previous periods led to a further decline in the Company's netasset value to 41.9 pence per share at 31 August 2005 compared to 43.4 pence pershare at 28 February 2005, as restated under revised UK GAAP. A tax provision of£411,000 has been made in respect of tax claims dating back several years whichare the subject of an ongoing discussion with HM Revenue & Customs. The Companyreports a loss for the period of £586,000 after the exceptional operating costsof the shareholder action, the cost of the proposed merger with Murray VCT PLCand Murray VCT2 PLC, including the proposed tender offer, and the provisionsmentioned above. The operating profit for the year before these items is£382,000. The further costs in respect of the merger and the tender offer whichhave been incurred after the year end or are expected to be incurred amount tocirca £230,000, bringing the total cost of the merger and the tender offer toapproximately £265,000. At the AGM which took place in September, shareholders approved the payment of afinal dividend of 1p per share. As required by the revised UK GAAP the cost ofthis payment will be reflected in the final accounts for the year to 28 February2006. The board does not propose to declare an interim dividend but expects topay a final dividend for the year ending 28 February 2006. The last year has been a period of considerable change for the Company. Themanagement agreement with the previous manager, Murray Johnstone Limited, wasterminated in April and the board appointed a new manager, Close VentureManagement Limited ("Close"). Following this, a shareholder action instigated byMr Charles Clark to remove your board was roundly defeated by shareholders atthe EGM held in September of this year. During the period the Company madesignificant progress towards a merger with Murray VCT PLC and Murray VCT2 PLC.These proposals have now been finalised and shareholder support will be soughtat the forthcoming EGM on 12th December. We believe that a merger of the threetrusts should have considerable benefits for shareholders in the future. Since the appointment of Close in April, there have been a significant number ofchanges in the make-up of the investment portfolio. Close has undertaken anintensive review of the portfolio and has been actively engaging with investeecompanies in efforts to restore and develop shareholder value. In the six monthsto 31 August the Company has exited in whole or in part from 8 investeecompanies realising proceeds of £2.3 million. Since the year end we achieved afull or partial exit from a further 2 investments realising total proceeds of£0.8m. Certain companies in the portfolio have been performing strongly, in particularSynexus, the recruiter of patients for clinical trials, which floated on AIMearlier this month resulting in a strong uplift in value. In addition,disappointments in the performance of some companies have been balanced bystrong trading performances in companies such as ELE Advanced Technology, amanufacturer of engineering components, Unique Communications, thecommunications media consultancy and TV production business and Enterprise FoodGroup, which provides supply chain management in the food industry. Close's strategy for new investments, meanwhile, is to build up a portfolio thatconcentrates on two complimentary areas; the first is lower risk, often propertybased investments that provide a strong income stream combined with a capitalprotection. Such investments have constituted the majority of new investments byvalue. These are balanced by a smaller number of higher risk companies withgreater growth prospects. Together, it is intended that these two categories ofinvestment, which are common to the majority of Close's VCTs, will enable thecompany to produce a predicable dividend stream with the prospect of gradualrecovery in capital value. Consistent with this approach, Close has invested in a total of 10 businessessince becoming the manager of the company, with a total investment of £1.4million. Across Murray VCT PLC, Murray VCT2 PLC and Murray VCT3 PLC Close hasinvested £3.2 million since April. The new investments range from a healthcareservice business and a provider of internet services to the travel industry, tofreehold cinemas, pubs and hotels. It is Close's policy to have a first chargewherever possible on any underlying freehold and other assets in order to reduceinvestment risk and in any event, the majority of new investee companies have noexternal borrowings. Prospects The next key step for the Company is to complete the proposed merger with MurrayVCT PLC and Murray VCT2 PLC. This will have a variety of benefits forshareholders, including a broadening of the investment portfolio, a reduction inrunning costs, and a higher degree of liquidity in the Company's shares. It isalso intended that, following the merger, the enlarged company will have apolicy of ensuring, so far as is practicable, a regular and predictable dividendflow to shareholders, as the board believes that this is an important part inrestoring shareholders' confidence in the Company. Together with the merger proposals, shareholders will have the opportunity tovote for a tender offer which will enable those shareholders who wish to realisesome or all of their shareholdings to do so. Following completion of the merger,the enlarged company will be undertaking a strict policy of limiting thediscount at which the shares trade to net asset value through an active sharebuy-back programme. Lastly, and most importantly, Close continues to seek toturn round the existing investments and to transform the investment portfoliointo a broadly based portfolio that combines a strong income stream with capitalprotection and offers the prospect of a recovery in capital value. ChairmanPeter Timms14 November 2005 Investment Portfolio Summary As at 31 August 2005 Unlisted Nature of Business Valuation % ofinvestments as at 31 August net 2005 assets £'000s------------------ --------------------- -------- -------UnquotedInvestmentsSynexus Patient recruitment for clinical trials. 1,034 6.2ELE Advanced Technologies Manufacturer of precision engineering 955 5.7 components for the industrial gas turbine, aerospace and automotive marketsTender LovingChildcare Operator of daycare nurseries 759 4.5MiningCommunications Magazine publisher 554 3.3HeathcotesRestaurants Restaurants operation 534 3.2PSCA Magazine publisher 531 3.2RMS Europe Port operator 511 3.1GW 1016 Hotel holding company 435 2.6Clamonta Manufacturer of aircraft engine components 422 2.5J&S Marine Acoustic, electromechanical and data network 410 2.5 systemsEnterpriseFood Sales, marketing and procurement services to 393 2.3 the baking industryUnique Comms Communications and media consultancy 322 1.9BoothDispensers Manafacturer of vending machine components 296 1.8Palgrave Brown Manufacturer of specialist timber products 287 1.7 including roof trusses, windows and doors.Link Up Mitaka Translation services. 255 1.5Sequoia Distributor of electronic components and 241 1.5 equipmentSanastro B2B financial publishing 214 1.3PLM Dollar On-shore helicopter services. 172 1.0Working People Supplier of temporary drivers. 156 0.9City ScreenBrixton Cinema owner and operator 145 0.9GB Pub Co Freehold pub owner 100 0.6IndependentBeer Freehold pub owner 80 0.5Forward Media Radio broadcast services 76 0.5GrosvenorHealthcare Healthcare services 73 0.4Bold Pub Co Freehold pub owner 70 0.4First Line Distributor of automotive parts 53 0.3Conveco Investment sold. Valuation represents future 48 0.3 expected distributions.Carmichael Valuation represents expected recovery from 31 0.2 receivership ----- ---- 9,157 54.8 ----- ----AIM QuotedInvestmentsCello GroupPlc Market research, brand advertising, direct 381 2.3 marketing and database management.Tanfield GroupPlc Supplier of engineering services and electric 256 1.5 vehicles.Avanti ScreenMedia Plc Suppliers of retail television services to 196 1.2 high street retail and pub and bar marketAugean GroupPlc Waste Management 193 1.1 -------- ---- 1,026 6.1 ----- ----Listed fixedincome investmentsTreasury 7.5%2006 2,186 13.0Treasury 4.5%2007 583 3.5Treasury 8.5%12/2005 101 0.6 -------- ---- 2,870 17.1 -------- ----Totalinvestments 13,053 78.0 -------- ---- Profit and Loss Account For the six months ended 31 August 2005 Six months to Six months to Year to 31 August 2005 31 August 2004 28 February 2005 (unaudited) (unaudited and restated)* (audited and restated)* ------- ------ ------ ------- ------ ------ ------- ------ ------ Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000------------------ ------- ------ ------ ------- ------ ------ ------- ------ ------Investment anddeposit income 658 - 658 473 - 473 985 - 985 Investmentmanagement fees (30) (90) (120) (136) (206) (342) (146) (439) (585) Other expenses (156) - (156) (130) - (130) (416) - (416)------------------ ------- ------ ------ ------- ------ ------ ------- ------ ------ 472 (90) 382 207 (206) 1 423 (439) (16) Exceptionaloperating expenses Provisionagainst IncomeTax recoverable (411) - (411) - - - - - -Bad debtprovision (810) - (810) - - - - - -InvestmentManagementterminationfees - - - - - - (86) (260) (346)Other expensesin respect oftermination (34) - (34) - - - (101) - (101)Merger costs (35) - (35) - - - - - -Shareholderaction costs (178) - (178) - - - - - - ------- ------ ------ ------- ------ ------ ------- ------ ------ (1,468) - (1,468) - - - (187) (260) (447) ------- ------ ------ ------- ------ ------ ------- ------ ------ Operating(loss)/profit (996) (90) (1,086) 207 (206) 1 236 (699) (463) Profit onrealisation ofinvestments - 238 238 - 512 512 - 954 954 Amountswritten offon investments - - - - (569) (569) - (569) (569) Unrealisedgains oninvestments - 262 262 - - - - - ------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------(Loss)/profiton ordinaryactivitiesbeforetaxation (996) 410 (586) 207 (263) (56) 236 (314) (78)Tax onordinaryactivities - - - (61) 61 - (56) 56 ------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------(Loss)/profiton ordinaryactivitiesafter taxation (996) 410 (586) 146 (202) (56) 180 (258) (78) Ordinary dividendson equity shares Capitaldividends nil(2005: 0.2p) - - - - (83) (83) - (82) (82) Final dividendnil(2005:1.8p) - - - (738) - (738) (738) - (738)------------------ ------- ------ ------ ------- ------ ------ ------- ------ ------Balancetransferred toreserves (996) 410 (586) (592) (285) (877) (558) (340) (898)------------------ ------- ------ ------ ------- ------ ------ ------- ------ ------Basic and diluted(loss)/earnings pershare (pence) (2.5) 1.0 1.5 0.4 (0.5) (0.1) 0.4 (0.6) (0.2)------------------ ------- ------ ------ ------- ------ ------ ------- ------ ------ * Comparative figures have been extracted from the unaudited interim accountsfor the period ended 31 August 2004 and the statutory accounts for the yearended 28 February 2005, and have been restated in accordance with FRS21. Statement of Total Recognised Gains and Losses For the six months ended 31 August 2005 Six months to Six months to Year to 31 August 2005 31 August 2004 28 February 2005 (unaudited) (unaudited) (audited) ------ ------ ------ ------ ------ ------ ------ ------ ------ Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ ------ ------ ------(Loss)/profiton ordinaryactivitiesafter taxation (996) 410 (586) 146 (202) (56) 180 (258) (78) Unrealisedgain/(loss) onrevaluation ofinvestments - - - - 76 76 - (5,216) (5,216) Current taxattributableto unrealisedgains andlosses oninvestments - - - 61 (61) - - - -------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------Totalrecognised(losses)/gainsrelating tothe period (996) 410 (586) 207 (187) 20 180 (5,474) (5,294)------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ Balance sheet As at 31 August 2005 31 August 2005 31 August 2004 28 February 2005 (unaudited) (unaudited and restated)* (audited and restated)* £'000 £'000 £'000-------------------------------------------------------------------------------------------------------FixedassetsInvestments 13,053 20,983 16,403 CurrentassetsDebtors 403 1,715 1,638 Cash andovernightdeposits 3,812 650 214------------------------------------------------------------------------------------------------------- 4,215 2,365 1,852 Creditors: Amountsfalling due within one year (353) (328) (737) -------------------------------------------------------------------------------------------------------Net currentassets 3,862 2,037 1,115-------------------------------------------------------------------------------------------------------Total assetsless currentliabilities 16,915 23,020 17,518-------------------------------------------------------------------------------------------------------Provisionsforliabilities and charges (171) - (171)------------------------------------------------------------------------------------------------------- Net assets 16,744 23,020 17,347-------------------------------------------------------------------------------------------------------Capital andreservesCalled upshare capital 3,995 4,084 3,995Revaluationreserve - (10,815) (15,287)Capitalredemptionreserve 250 161 250Profit andloss account 12,499 29,590 28,389-------------------------------------------------------------------------------------------------------Equityshareholders'funds 16,744 23,020 17,347-------------------------------------------------------------------------------------------------------Net assetvalue perordinaryshare 41.9 56.4 43.4(pence) * Comparative figures have been extracted from the unaudited interim accounts for the period ended 31 August 2004 and the statutory accounts for the year ended 28 February 2005, and have been restated in accordance with FRS21. This interim report was approved by the Board of Directors on 14 November 2005. Signed on behalf of the Board of Directors by Mr P K Timms Chairman14 November 2005 Cash flow statement for the six months ended 31 August 2005 ------------ ----------- ------------ Six months to Six months to Year to 31 August 2005 31 August 2004 28 February 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 ------------ ----------- ------------ Operating activitiesInvestment incomereceived 535 600 1,262Deposit interest received 14 6 15Other income - 21 21Investment managementfees paid (107) (349) (691)Secretarial fees paid (20) (34) (57) Cash paid to and onbehalf of Directors (48) (31) (52)Other cash payments (717) (63) (122) ------ ------ ------Net cash (outflow)/inflowfrom operating activities (343) 150 376Taxation recovered 78 - - Financial investmentPurchase of investments (605) (6,004) (10,830)Sales of investments 4,608 6,735 11,201 ------ ------ ------Net cash inflow fromfinancial investment 4,003 731 371 ------ ------ -----Equity dividends paid - (738) (820) ------ ------ ------Net cash inflow/(outflow)before financing 3,738 143 (73) FinancingRepurchase of ownshares (140) (146) (366) ------ ------ ------Net cash outflow fromfinancing (140) (146) (366) ------ ------ ------Increase/(decrease) incash 3,598 (3) (439)---------------------- ------------ ----------- ------------ Notes to the Financial Statements 1.Accounting policies The financial information for the six months ended 31 August 2005 and the sixmonths ended 31 August 2004 comprises non-statutory accounts within the meaningof Section 240 of the Companies Act 1985. The financial information contained inthis report has been prepared on the basis of the accounting policies set out inthe Annual Report for the year ended 28 February 2005, with the exception of thechanges stated in the notes below. The results for the year ended 28 February2005 have been extracted from the full accounts for that year, which received anunqualified report from the auditors and have been filed with the Registrar ofCompanies. The Company is no longer an investment company within the meaning of S266 of theCompanies Act 1985, as investment company status was revoked in order to permitthe distribution of capital profits, the Directors believe that the presentationof the Profit and Loss Account and the Statement of Total Recognised Gains andLosses is enhanced by showing the returns attributable to revenue and tocapital. The Profit and Loss Account and the Statement of Total Recognised Gains andLosses have been prepared in accordance with Schedule 4 of the Companies Act1985 and Financial Reporting Standard No.3: "Reporting Financial Information".As mentioned above, for illustrative purposes non-statutory informationcomprising revenue and capital accounts has also been presented. This financial information has been prepared using new UK accounting standards,which have been issued to begin the process of converging UK standards withInternational Financial Reporting Standards. The first change, which is inaccordance with Financial Reporting Satndard (FRS) 21, is to recognise anydividend payable as a liability only after it has been approved. The second,which is in accordance with FRS 26, is to value the listed part of the portfolioat bid prices rather than mid prices, whilst loan stock is designated as loansand receivables and is valued at amortised cost. With effect from 1 March 2005,the Company has adopted the following Financial Reporting Standards: FRS 21 Events after the balance sheet dateDividends paid by the Company are accounted for in the period in which thedividend has been approved. Previously, the Company recognised dividends in theperiod in which net revenue, to which those dividends related, was accountedfor: FRS 25 Financial Instruments: Disclosure and Presentation and FRS 26 FinancialInstruments: MeasurementEquity investments held by the Company are classified as 'fair value throughprofit or loss'. For investments actively traded in organised financial markets,fair value is generally determined by reference to Stock Exchange quoted marketbid prices at the close of business on the balance sheet date. Previously alllisted investments were valued using closing mid market prices at the balancesheet date. For unquoted investments, fair value is determined by the Directorsin accordance with the British Venture Capital Association ("BVCA") guidelines. Loan stock is designated as loans and receivables and valued at amortised cost. In accordance with the transition provisions included within FRS 26, comparativefigures have not been restated. However the opening balances of the Profit andLoss Account and the Revaluation reserve as at 1 March 2005 have been adjustedin order to reflect the impact of the new treatment under FRS 26. 2.Adjustment and Restatement to Profit and Loss Account and RevaluationReserve Under the terms of the transitional provisions contained within FRS 26comparatives in relation to movements in amortised cost of loans and receivablesand equity investment valuations have not been restated but adjusted to reflectthe impact of the adoption of FRS 26. In accordance with FRS 21, comparatives for the periods ended 31 August 2004 and28 February 2005, have been restated in recognition of the change in accountingpolicy. Reconciliations of the Profit and Loss Account and Revaluation reserveincorporating the adjustments and restatements required by the adoption of FRS21 and FRS 26 are shown below: 28 February 2005 £'000 Reconciliation of Profit and Loss Account Profit and Loss Account as previously reported 27,989Adjustment as required by FRS 21 change in accounting fordividends 400 ----Restated Profit and Loss Account at period end 28,389 Adjustment as required by FRS 26 change in valuation ofloan stock investments to amortised cost 11Reclassify Revaluation reserve as profit or loss asrequired by FRS 26 (15,315) --------Profit and Loss Account at 1 March 2005 as adjusted 13,085 -------- Reconciliation of Revaluation Reserve 28 February 2005 Revaluation reserve as previously reported (15,287)Adjustment as required by FRS 26 change in valuation ofquoted investments to bid price (28)Reclassify Revaluation reserve as profit or loss asrequired by FRS 26 15,315 --------Revaluation reserve at 1 March 2005 as adjusted - --------3. Movement in reserves Capital Profit and loss redemption account reserve £'000 £'000As at 1 March 2005(adjusted) 250 13,085Retained loss for theperiod - (586) --------- ----------As at 31 August 2005 250 12,499 --------- ---------- This information is provided by RNS The company news service from the London Stock Exchange