Inc&gwth Vct Regulatory News (IGV)

1 Dec 2005 07:01

TriVest VCT PLC01 December 2005 TRIVEST VCT PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005 CHAIRMAN'S STATEMENT I am pleased to present to Shareholders the preliminary results of the Companyfor the year ended 30 September 2005. The performance of the portfolio this year has been excellent. Capital gainshave been realised in the year which has resulted in the Board proposing to payto Shareholders an interim capital dividend of 2.5 pence per share in respect ofthe year ending 30 September 2006. Provided that the performance of theportfolio is satisfactory, the Board expects to be able to pay a similar capitaldividend at the beginning of the 2007 calendar year. This interim capitaldividend is in addition to the proposed final dividend for the year ended 30September 2005 of 0.75 pence per share to be paid from income. Net Asset Value At 30 September, 2005, the Company's Net Asset Value (NAV) per share had risento 122.98 pence (2004: 80.02 pence), a rise of nearly 54%. The Company,including the proposed final income dividend of 0.75 pence per share and theproposed capital dividend of 2.5 pence per share referred to above, will havedistributed dividends of 8.7 pence per share since the Company's launch. Thistotal return since launch (including these dividends) of 129.18 pence compareswith the initial NAV (after the launch expenses of the issue) of 94.5 pence pershare (excluding tax reliefs available to Shareholders). Economic Background The economy has been growing modestly at around 1.5% pa over the recent period.Notwithstanding the impact of oil prices the FTSE 100 has continued to rise,possibly aided by the low interest rate environment. The AIM index has alsorallied well since its low point in May 2005. Commentators suggest continuedpositive growth in the economy, although there are worries in the retailingsector, to which the Company is not overly exposed. TriVest's Portfolio At present, Foresight Venture Partners Limited (Foresight) manage some 54% ofthe portfolio with Matrix Private Equity Partners (MPEP) managing 39% and NovaCapital Management Limited (Nova) the balance. By market sector, the portfoliois dominated by investments in technology companies at 59%, with manufacturingcompanies at 11%, construction and building materials at 9% and the balance in avariety of other sectors. When the portfolio is considered by stage ofdevelopment, the portfolio is more evenly spread with over 44% invested in MBO /MBI situations, 43% in AIM quoted stocks, 11% in development capital companiesand 2% in early stage investments. The last six and twelve months have seen active periods in the Foresightportfolio. In June and September 2005 further investments of £62,496 and£159,624 were made into Aigis Engineering Solutions Limited. In September 2005this company changed its name to Aigis Blast Protection Limited. In May andAugust 2005 additional investments of £28,181 and £100,000 were made intoCamwood Limited and Aquasium Technology Limited respectively. A furtherinvestment of £62,000 was made as a loan to DCG Datapoint Group Limited inSeptember 2005. Disappointingly, Broadreach Group did not prove a successfulinvestment for the Manager. TriVest's investment in Broadreach Train ServicesLimited was disposed of for £16,050 in September and Broadreach Networks Limitedwas sold shortly after the year-end. In January 2005 a further investment of£459,375 was made into Oxonica Limited as part of a rights issue. In May 2005the company made a pre-float capital re-organisation which was followed in Julythis year by the conversion by shareholders of the loan stocks into equity. On20 July 2005, Oxonica was floated on the AIM market. The company is currentlystanding at a substantial premium to both our cost and float prices. Blue CurveLimited was sold to Mondas plc during November 2005. Within the MPEP portfolio Holloway White Allom ("HWA") continues to tradestrongly. In April 2005, TriVest made a partial divestment of 16,472 ordinaryshares of HWA at a price of £63.15 per share which realised proceeds of £1.16mand profit of £1.13m. In June 2005 TriVest also realised its CumulativeConvertible Redeemable Participating Preference Shares in HWA for £250,000crystallising a capital profit of £212,000. In May 2005, a further investment of£436,047 was made into the Hunter Rubber Company. In August 2005, a newinvestment of £150,000 was made into the ordinary shares of Sectorguard plc, asecurity company providing manned guarding, mobile patrols and alarm responseservices. In September 2005, this was followed by a new investment of £721,280into Ministry of Cake Limited (previously Maynard Scott Limited), a manufacturerand seller of frozen desserts to the foodservice industry. In October 2005,after the year end, a new investment of £1,000,000 was made into the YoungmanGroup Limited a manufacturer and supplier of aluminium access towers andladders. Within the Nova portfolio, TriVest's interest in Watkins Books was disposed ofin August 2005 for £17,299. An additional investment of £87,170 was made inSeptember 2005 into Biomer Technology. Revenue Account The return on ordinary activities after taxation has fallen by £88,464.Principally, this is because underlying total income has fallen by £67,231. Thisdecline is due to the redemption/disposal of several loan stocks and apreference share investment that generated higher loan interest and dividends inthe previous year. Such income fell by £178,233. Against this, the proceedsarising from these transactions generated higher levels of income from the loweryielding OEIC money-market funds, which earned £424,720 this year, compared to£313,817 last year, a rise of £110,903. Fund management fees charged to the revenue account increased this year by£41,546 as the increase in underlying portfolio values during the year startedto feed through to higher fees. Overhead costs have remained broadly constant. Dividends The Company's revenue return per Ordinary Share was 0.80 pence per share (2004:0.99 pence per share). As noted above, your Board will be recommending a finaldividend of 0.75 pence per Ordinary Share in respect of the year under review atthe Annual General Meeting to be held on 31 January 2006. The Board alsoproposes to pay an interim capital dividend of 2.5 pence per Ordinary Share inrespect of the year ending 30 September 2006. The dividends will be paid on 14February 2006 to shareholders on the Register on 13 January 2006. Dividend Investment Scheme We are also proposing to offer to Shareholders the opportunity to re-invest allor part of their dividends into new Ordinary Shares of the Company at the latestpublished NAV per share at the time of issue. Members of the Board haveindicated that they will be mandating their holding to the Dividend InvestmentScheme for the purposes of the dividends referred to above. Full details of theDividend Investment Scheme are included with this Report, together with anelection form. The form should be returned to Capita Registrars at the addressgiven on the form to arrive by 31 January 2006 to ensure that, subject toShareholder approval at the AGM, you qualify to participate in the DividendInvestment Scheme for the dividends referred to above. Valuation Policy All quoted stocks have been valued at their mid-market prices. It is worthcommenting that the Fund does hold a number of relatively early stage AIM listedstocks. AIM stocks can experience considerable volatility. Additionally,limited marketability can mean that the price at which a sizeable block ofshares could be traded, if at all, may vary significantly from the market priceused. Next year, in compliance with IFRS, the Company will apply bid prices toits quoted investments. If applied to this year's valuations, this would havereduced valuations by £472,000, or 3% of the quoted portfolio, and a reductionin the net asset value of 1.12 pence per share. Share buy-backs During the year ended 30 September 2005, the Company continued to implement itsbuy-back policy and, accordingly, bought back 1,122,264 Ordinary Shares(representing 2.8%) of the shares in issue at the period end) at a total cost of£869,045 (net of expenses). These shares were subsequently cancelled by theCompany. Summary Financial Statement You will have received an earlier letter from me proposing to distribute aSummary of the Annual Report to Shareholders rather than the full version(unless you opted to receive the latter). In recent years the Company's AnnualReport and Accounts have become longer and more complex, principally due to therequirements of new statutory, corporate governance and other reportingregulations. As a result, we have decided to follow the example of a number ofother companies and produce a Summary Financial Statement for the year to 30September 2005 and subsequent financial years. We hope that this will be moreinformative for many of our Shareholders and that running costs will be reduced. TriVest Website The Company is about to finalise its own website and the full Annual Report andAccounts will be available once published at www.trivestvct.co.uk. Investor Allstars 2005 Awards At the recent Investor Allstars 2005 Awards ceremony, Matrix Private EquityPartners won the award for the Venture Capital Trust Manager of the Year basedin part upon its TriVest performance numbers. Foresight Venture Partners,another of our Managers, was also a finalist in this category. Jamie Richards, amanager with Foresight Venture Partners, won the award for Young Personality ofthe Year. This has been a busy and a positive year for the Board with a number ofinitiatives having been undertaken, which are highlighted above. The Board ispleased with the growth the portfolio has made and we look forward to continuingthis progress over the coming months. I would like to take this opportunity tothank Shareholders for their continued support. Colin HookChairman30 November 2005 STATEMENT OF TOTAL RETURN(incorporating the Revenue Account of the Company)for the year ended 30 September 2005 Year ended 30 September 2005 Year ended 30 September 2004 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised gains on investments - 16,602,058 16,602,058 - 2,774,109 2,774,109 Realised gains on investments - 1,080,192 1,080,192 - 666,281 666,281 Income 1,163,788 - 1,163,788 1,163,180 - 1,163,180 Investment management fees (193,717) (581,150) (774,867) (152,171) (456,512) (608,683) Other expenses (537,493) - (537,493) (441,468) - (441,468) Return on ordinary activities before taxation 432,578 17,101,100 17,533,678 569,541 2,983,878 3,553,419 Tax on ordinary activities (106,870) 106,047 (823) (155,369) 131,914 (23,455) Return on ordinary activities after taxation 325,708 17,207,147 17,532,855 414,172 3,115,792 3,529,964 Dividend (299,376) - (299,376) (515,996) - (515,996) Transfer to/(from) reserves 26,332 17,207,147 17,233,479 (101,824) 3,115,792 3,013,968 Return per Ordinary Share - basic and diluted 0.80p 42.19p 42.99p 0.99p 7.48p 8.47p The revenue column is the profit and loss account of the Company.All revenue and capital items in the above statement derive from continuingoperations.No operations were acquired or discontinued in the period. BALANCE SHEET as at 30 September 2005 as at 30 September 2005 as at 30 September 2004 £ £Fixed assetsInvestments 39,223,922 20,746,041 Current assetsDebtors and prepayments 1,386,381 424,795Current investments 6,345,873 7,926,941Cash at bank 2,926,233 4,633,219 10,658,487 12,984,955Creditors: amounts falling due within one yearCorporation tax - 24,456Other creditors 335,798 546,681Accruals 159,721 128,131 (495,519) (699,268) Net current assets 10,162,968 12,285,687 Net assets 49,386,890 33,031,728 Capital and reservesCalled up share capital 401,574 412,797Capital redemption reserve 16,441 5,218Special reserve 32,229,429 38,777,875Capital reserve - realised 3,410,293 (3,215,081)Capital reserve - unrealised 13,099,065 (3,152,837)Revenue reserve 230,088 203,756 49,386,890 33,031,728 Net asset value per Ordinary Share - basic and diluted 122.98p 80.02p CASH FLOW STATEMENTfor the year ended 30 September 2005 Year ended Year ended 30 September 2005 30 September 2004Operating activities £ £Investment income received 1,105,903 1,028,129Investment management fees paid (774,866) (601,168)Other cash payments (426,129) (415,146)Net cash (outflow)/inflow from operating activities (95,092) 11,815 TaxationUK Corporation tax paid (25,279) (96,917) Investing activitiesAcquisition of investments (3,660,979) (4,589,395)Disposal of investments 2,885,804 3,151,097 (775,175) (1,438,298)Equity DividendsPayment of equity dividends (514,191) (521,837) Cash outflow before financing and liquid resource management (1,409,737) (2,045,237) Management of liquid resourcesDecrease/(increase) in monies held pending investment 581,068 (1,176,232) FinancingPurchase of own shares (878,317) (281,976) (878,317) (281,976) Decrease in cash for the year (1,706,986) (3,503,445) INVESTMENT PORTFOLIO SUMMARYas at 30 September 2005 Cost at Valuation at Valuation at % of portfolio 30-Sep-05 30-Sep-04 30-Sep-05 by valueForesight Venture PartnersOxonica plc 2,136,763 1,677,389 8,984,935 22.91% Specialist in the design, manipulation and engineering ofproperties of materials at the nano-scale Sarantel Group plc 1,611,752 2,156,625 3,820,125 9.74%Developer and manufacturer of antennae for mobile phonesand other wireless devices Aquasium Technology Limited 700,000 600,000 2,067,997 5.27%Business engaged in the design, manufacturing and marketingof bespoke electron beam welding and vacuum furnaceequipment SmartFOCUS Group plc 700,000 893,333 1,920,454 4.90%Provider of analytic software to support targeting andexecution of marketing campaigns Camwood Limited 1 1,028,181 1,000,000 1,780,937 4.54%Provider of software repackaging services Alaric Systems Limited 1 595,802 588,059 595,762 1.52%Software developer and provider of support services in thecredit/debit card authorisation and payments market ANT plc 462,816 1,323,106 489,164 1.25%Provider of embedded browser/email software for consumerelectronics and Internet appliances Blue Curve Limited 567,000 396,666 450,183 1.15%Provider of software for automating the production anddistribution of research information by banks and fundmanagers Aigis Blast Protection Limited 1 272,120 50,000 333,320 0.85%(formerly Aigis Engineering Solutions Limited)Specialist blast containment materials company DCG Datapoint Group Limited 312,074 250,000 312,074 0.80%Design, supply and integration of data storage solutions Wire-e Limited 500,000 250,000 250,000 0.64%Provider of mobile data communication services Monactive Limited 339,285 218,749 160,667 0.41%Provider of software management tools that monitor usage ofsoftware versus licences held Broadreach Networks Limited 1,143,000 1,143,000 15,000 0.03%Public access WLAN and fixed line Internet Service Provider - Broadreach Train Services Limited n/a 107,000 n/a 0.00% Other investments in the portfolio 2 250,000 Nil Nil 0.00% 10,618,793 10,653,927 21,180,618 54.01% Matrix Private Equity Partners LimitedHWA Limited (trading as Holloway 69,105 2,198,247 3,219,023 8.20%White Allom Limited) 1Refurbishment, restoration and construction of notablepublic buildings and top-end residential dwellings in andaround London Image Source Group Limited 1 1,000,000 1,041,902 2,618,253 6.68%Royalty free picture library Special Mail Services Limited 1,230,256 651,786 2,590,494 6.60%Specialist, secure credit card delivery business Original Additions (Beauty Products) Limited 1 1,000,000 1,000,000 2,301,687 5.87%Manufacturer and distributor of beauty products Brookerpaks Limited 500,000 1,140,503 1,033,058 2.63%Importer and distributor of garlic and vacuum-packedvegetables to supermarkets and the wholesale trade BBI Holdings plc 369,890 393,500 755,520 1.93%Manufacturer of gold conjugate for the medical diagnosticsindustry Ministry of Cake Limited (fomerly Maynard Scotts Limited) 721,280 n/a 721,280 1.84%Manufacturer of desserts and cakes for the food serviceindustry Tottel Publishing Limited 514,800 n/a 514,800 1.31%Publisher of specialist legal and taxation titles Letraset Limited 1,000,000 967,367 487,737 1.24%Manufacturer and worldwide distributor of graphic artproducts FH Ingredients Limited 403,303 n/a 403,303 1.03%Processor of frozen herbs for the food manufacturingindustry Inca Interiors Limited 350,000 100,000 300,562 0.77%Design, supply and installation of quality kitchens to housedevelopers SectorGuard plc 1 150,000 n/a 150,000 0.38%Provider of manned guarding, mobile patrols and alarmresponse services B G Consulting Group Limited 1,000,000 125,000 125,000 0.32%Technical training business Stortext-FM Limited 3 380,435 n/a Nil 0.00%Integrated outsourced document storage business The Hunter Rubber Company Limited 936,047 500,000 Nil 0.00%Manufacturer of Wellington boots, safety footwear and divingsuits 9,625,116 8,118,305 15,220,717 38.80% Tikit Group plc 517,624 623,912 904,347 2.30%Provider of consultancy, services and software solutions forlaw firms Biomer Technology Limited 137,170 50,000 753,837 1.92%Developer of biomaterials for medical devices I-DOX plc 737,625 764,000 751,903 1.92%Provider of document storage systems NexxtDrive Limited (Formerly DriveTec (UK) Limited) 1 500,000 408,570 412,500 1.05%Developer of transmissions technologies for applications inthe automotive, construction and industrial sectors Stortext-FM Limited 3 n/a 14,827 Nil 0.00%Integrated outsourced document storage business Watkins Books Limited n/a 112,500 Nil 0.00%Supplier of books in alternative sciences, health,philosophy and related sectors Other investments in the portfolio 2 3,988,529 Nil Nil 0.00% 5,880,948 1,973,809 2,822,587 7.19% Total 26,124,857 20,746,041 39,223,922 100.00% 1 The percentages of equity held for these companies may be subject to furtherdilution of an additional 1% or more if, for example, management of the investeecompany exercises share options. 2 'Other investments in the portfolio' comprises those investments that havebeen valued at nil and from which the Directors only expect to receive smallrecoveries. This comprises iDesk plc in the Foresight portfolio and LeSacLimited, The Good Book Guide Limited, Trident Publishing Limited and ZynergyGroup Limited in the Nova portfolio. 3 During the year, Stortext Group Limited merged with a similar company F-MImage Management Limited to form a new company Stortext-FM Limited. The newcompany is managed as part of the MPEP portfolio. Notes 1. In accordance with the policy statement published under " Management and Administration" in the Company's Prospectus dated 13 October 2000, the Directors have charged 75% of the investment management expenses to capital reserve. 2. The basic revenue return per Ordinary Share is based on the net revenue from ordinary activities after taxation of £325,708 (2004: £414,172) and on 40,786,094 (2004: 41,647,506) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year. 3. The basic capital return per Ordinary Share is based on net realised capital return of £17,207,147 (2004: £3,115,792) and on 40,786,094 (2004: 41,647,506) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year. 4. The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 30 September 2005 but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting. 5. The Company revoked its investment company status on 30 November 2005 which means that it is now able to make capital distributions from realised profits when previously it could only pay dividends from income. 6. The Company proposes to pay a final dividend of 0.75 pence (2004: 1.25 pence) per share. The Board also intends to pay an interim capital dividend of 2.5 pence per Ordinary Share in respect of the year ending 30 September 2006. The dividends will be paid on 14 February 2006 to shareholders on the Register on 13 January 2006. 7. The Annual General Meeting will be held at 11.00 am on 31 January 2006 at One Jermyn Street, London SW1Y 4UH. This information is provided by RNS The company news service from the London Stock Exchange