Inc&gwth Vct Regulatory News (IGV)

27 May 2005 11:59

TriVest VCT PLC27 May 2005 TRIVEST VCT PLC Interim Results for the six months ended 31 March 2005 Chairman's Statement I am pleased to present the Company's Interim Report for the six months ended 31March 2005. During the six-month period ended 31 March 2005 the FTSE 100 index rose 5.8%,the FTSE All-Share index rose 9.2%, and the AIM index rose 18.4%, reflectingrelatively high institutional liquidity, and an increased willingness to investin earlier stage, higher risk investments. The AIM new issue market was active,and as a result successful flotations from the Foresight portfolio wereachieved. On the investment side there is no shortage of equity or debt providers lookingfor good propositions, and competition to finance such situations is strong.Looking ahead, it is not clear whether the market characteristics set out abovewill continue or remain unaffected by the fiscal outfall of the UK election, theprospect of higher energy prices, and the possibility of higher inflation andinterest rates. Reflecting this, the IPO market has, in the last few weeks,become more risk averse, and share prices in small cap stocks more volatile. Portfolio The portfolio during this period has enjoyed strong growth with the net assetvalue per share rising to 103.67p, an increase of 29.55% over the period. Thisis a gratifying result for the Board and a credit to the Investment Managers. Within the Foresight portfolio, there were several notable highlights with threeIPOs. The first of these was SmartFOCUS Group plc, which floated on AIM on 20October 2004 at 9p. TriVest invested a further £200,000 as part of thisflotation. As at 31 March 2005 the price per share had increased to 9.5p. As at26 May 2005 this had risen to 12.63p. Sarantel Group plc was the next investmentto float, also on AIM, on 2 March 2005 at 82p per share. TriVest invested£200,000 as part of an £18m placing on flotation and subsequently sold 60,000shares at 129p per share. As at 31 March 2005 the price per share was 105p. ANTplc floated on AIM on 16 March 2005 at 126p per share. TriVest sold 900,000shares on flotation to realise gross proceeds of £1.13m, retaining 656,596shares with a valuation of approximately £1.2m (cost: £0.46m). The share priceof ANT on 31 March 2005 was 184.5p but it had fallen back to 142.5p as at 26 May2005. Further investments of £100,000 and £28,181 into Blue Curve Limited andCamwood Limited were agreed on 1 March 2005 and 16 March 2005 respectively.During the period TriVest made further investments into Oxonica Limitedtotalling £459,374 as part of a re-structuring and rights issue in anticipationof a possible flotation on AIM. Within the Matrix Private Equity Partners (MPEP) portfolio, HWA Limited, tradingas Holloway White Allom (HWA), continues to trade very successfully. TheInvestment Manager expects this strong performance to continue. The board of HWAhas decided to distribute the company's surplus cash by way of a capitaldistribution. Since the period end TriVest has received £1.16m, with a furtherpayment of £250k expected by 30 June without suffering any dilution. Newinvestments of £514,800 and £403,303 were made respectively into TottelPublishing Limited, a specialist law and tax publisher, in October 2004 and F HIngredients Limited, a processor of fresh herbs, in February 2005. Within the Nova portfolio, Stortext Group Limited merged with another company,FM Image Management Limited, on 5 April 2005 to create Stortext-FM Limited, aprovider of document management services. Board of Directors You will recall from one of my earlier reports that I referred to HelenSinclair's intention to resign from the Board due to a possible perceivedconflict of interests resulting from her directorship of Matrix Private EquityPartners Limited. Helen has now signalled her intention to leave MPEP in thenear future. In which event, no potential conflict of interest will arise and,accordingly, I am delighted to advise you that the Board has invited Helen toremain as a Director. Revenue Account At 31 March 2005, revenue reserves available for distribution to shareholderswere £323,870. As in previous years, the Board does not propose to declare aninterim dividend but expects to be able to propose a final dividend for the yearended 30 September 2005. The net asset value per share as at 31 March 2005 was103.67p (76.57p as at 31 March 2004) and the total return per share was 23.32p(4.00p as at 31 March 2004). Share buy-backs During the six months ended 31 March 2005, the Company bought back 544,959Ordinary Shares (representing 1.34% of the shares in issue at the period end) ata total cost of £384,537 (net of expenses). These shares were subsequentlycancelled by the Company. Colin Hook,Chairman 27 May 2005 Investment Portfolio Summaryas at 31 March 2005 Valuation at 30 Valuation Total cost September Additional at 31 March at 31 March 2004 investments 2005 2005 audited in the period unaudited £ £ £ £Foresight Venture Partners Sarantel Group plc 1,611,752 2,156,625 200,000 4,775,156Antennae for mobile phones and otherwireless devicesOxonica Limited 2,136,763 1,677,389 459,374 4,601,627Specialist in the design, manipulationand engineering of properties ofmaterials at the nano-scaleANT Limited 462,816 1,323,106 - 1,198,288Provider of embedded browser/emailsoftware for consumer electronics andinternet appliancesSmartFOCUS Group plc 700,000 893,333 200,000 1,127,317Provider of analytic software tosupport targeting and execution ofmarketing campaignsCamwood Limited 1,000,000 1,000,000 - 1,000,000 Provider of software repackagingservicesAquasium Technology Limited 600,000 600,000 - 600,000Design, manufacture and marketing ofbespoke electron beam welding andvacuum furnace equipmentAlaric Systems Limited 588,059 588,059 - 588,059Software development, implementationand support in the credit/debit cardauthorisation and payments marketBroadreach Networks Limited 1,143,000 1,143,000 - 514,400Public access WLAN and fixed lineInternet Service ProviderBlue Curve Limited 500,000 396,666 - 396,666Software for automating the productionand distribution of researchinformation by banks and fund managersDatapoint Consulting Group Limited 250,000 250,000 - 250,000 Design, supply and interrogation ofdatastorage solutionsWire-e Limited 500,000 250,000 - 250,000Provider of mobile datacommunication servicesMonactive Limited 339,285 218,749 - 218,749Provider of software asset managementtools that monitor usage of softwareversus licences heldBroadreach Train Services Limited 107,000 107,000 - 107,000 Public access WLAN and on-train Internet Service Provider Aigis Engineering Solutions Limited 50,000 50,000 - 50,000 Specialist blast containment company Other investments in the portfolio 1 250,000 0 - 0 ---------------- ---------------- ---------------- ---------------- 10,238,675 10,653,927 859,374 15,677,262 Matrix Private Equity PartnersLimited HWA Limited (trading as Holloway 138,319 2,198,247 - 3,648,566White Allom)Specialist contractor in the high-value residential and heritageproperty refurbishment marketSpecial Mail Services Limited 1,340,077 651,786 36,506 2,210,669Specialist, secure credit carddeliverybusinessBrookerpaks Limited 500,000 1,140,503 - 1,602,491Importer and distributor of garlic andvacuum-packed vegetablesImage Source Group Limited 1,000,000 1,041,902 - 1,591,019Royalty free picture libraryOriginal Additions (Beauty Products) 1,000,000 1,000,000 - 1,000,000Limited Manufacturer and distributor of beautyproductsLetraset Limited 1,000,000 967,367 - 951,187Manufacturer and distributor ofgraphicart productsBBI Holdings Limited 369,890 393,500 - 668,950Manufacturer of gold conjugate for themedical diagnostics industryTottel Publishing Limited2 514,800 n/a 514,800 514,800Specialist law and tax imprintThe Hunter Rubber Company 500,000 500,000 - 427,326LimitedManufacturer of wellington boots,safety footwear and diving suitsF H Ingredients Limited2 403,303 n/a 403,303 403,303Processor of fresh herbs to produce afrozen product used by food processingcompanies in the production of readymealsInca Interiors Limited 350,000 100,000 - 367,630Supplier of quality kitchens to housedevelopersB G Consulting Group Limited 1,000,000 125,000 - 125,000Technical training business andoutplacement careers consultancy ---------------- ---------------- ---------------- ---------------- 8,116,389 8,118,305 954,609 13,510,941 Nova Capital Management Limited Tikit Group plc 517,624 623,912 - 795,651Provider of consultancy servicesand software solutions for law firmsIDOX plc 737,625 764,000 - 604,833Developer of products for document,content and informationmanagementDriveTec(UK) Limited 500,000 408,570 - 408,570Developer of patented transmissiontechnologyWatkins Books Limited 500,000 112,500 - 30,000Supplier of books on alternativesciences, health, philosophy andrelated subjectsBiomer Technology Limited 50,000 50,000 - 50,000 Developer of biomaterials formedical devicesStortext-FM Limited 380,435 14,827 - 0Integrated outsourced digitaldocument storage businessOther investments in the portfolio 1 3,988,529 0 - 0 ---------------- ---------------- ---------------- ---------------- 6,674,213 1,973,809 - 1,889,054 ---------------- ---------------- ---------------- ----------------Total 25,029,277 20,746,041 1,813,983 31,077,257 ---------------- ---------------- ---------------- ---------------- 1 Other investments in the portfolio comprises those investments that have been valued at nil and from which the Directors only expect to receive small recoveries (iDesk plc in the Foresight portfolio and Le Sac Limited, Trident Publishing Limited and Zynergy Group Limited in the Nova portfolio). 2 New investment made in the six month period ended 31 March 2005. Please see the Chairman's Statement and the Investment Managers' review for further details. Investment Managers' Review Foresight Venture Partners During the six months under review and following the period end, a number ofunquoted holdings in the portfolio have either been the subject of InitialPublic Offerings (IPOs) to the AIM market or have been the subject ofpreliminary approaches from potential purchasers or merger partners. SmartFOCUS Group plc was admitted to the AIM market during October 2004 at avaluation of 9p per share. At the same time, TriVest took the opportunity toinvest a further £200,000 into the company. At the period end, this holding wasvalued at an approximate 61% increase on cost. The company provides software toenable accurate targeting and execution of marketing campaigns. Sarantel Group plc was admitted to the AIM market on 2 March 2005 at 82p pershare raising a total of £18 million to fund its ongoing expansion. Itsminiature antennae are used in mobile phones and personal digital assistantsoffering location-based services through navigation satellites. TriVest made asmall addition to its existing holding (243,902 shares at 82p per share) at IPOand subsequently disposed of 60,000 shares at 129p per share. The company wastrading at 105p per share at 31 March 2005. ANT plc is a leading provider of embedded application software and support forthe broadband TV, hospitality and consumer electronics markets. ANT software hasbeen extensively deployed by customers throughout the world including Thomson,Pace, Philips, Amino, Sagem and Samsung. ANT is now the preferred set top boxbrowser supplier for Alcatel's Open Media Suite, which is deployed in more IPTVnetworks than any other middleware solution. The company was admitted to the AIMmarket on 16 March 2005 at 126p per share and is currently trading at asignificant premium to its initial listing price. TriVest took the opportunityto realise 900,000 shares at the time of the IPO, making a significant gain oncost. Oxonica Limited engineers the properties of materials at the nano-scale levelfor application in fuel additives, UV protection and other products. Demand hasbeen encouraging for the company's products and Stagecoach has now rolled outthe fuel additive product globally. Boots has incorporated the UV protectionproduct into a sunscreen material in a Spring 2005 facial product range. TriVesttook up its rights on a further investment round and invested £459,374 into thecompany during January 2005 as part of a £2.6m fund raising round. Oxonica isconsidering an IPO on the AIM market. Matrix Private Equity Partners Limited The last six months has been a period of continued strong progress for theportfolio as well as continuing new investment activity. In October 2004,following closely behind the investment in Original Additions, TriVest supportedthe MBO of Tottel Publishing, a specialist legal and taxation publisher, withfunding of £514,800. In February 2005, £403,303 was invested in the MBO of FHIngredients, a processor and distributor of frozen herbs to the food processingindustry. All of these recent investments are performing well. A number of other investments have maintained their strong performance,particularly HWA, Brookerpaks and Image Source, whilst Special Mail Services hasreturned to significant profitability after a period of rapid change andexpansion. Inca Interiors has benefited from a resumption in housebuildingactivity and Letraset and Hunter have expanded into new product areas. BGConsulting Group, which continues to suffer from poor revenues, disposed of itsoutplacement business to a management team during the period. BBI's share pricehas advanced strongly and stands at a significant premium to the flotation priceof 47p per share. The valuation of the portfolio has again grown, reflecting its overall strengthand profitability, and now stands at 166% of current cost (31 March 2004: 124%). Nova Capital Management Limited There are nine investments in the portfolio as of 31 March 2005. No newinvestments were made in the portfolio in the period under review. The emphasisof Nova's work has been on value improvement within the existing financialresources of each company unless there is clear evidence that new investmentwill make a very significant difference. Tikit, an AIM-listed company, specialising in providing consultancy services andsoftware solutions to law firms, has increased by 30% in value over the last sixmonths. This has arisen because of strong organic growth and the acquisition ofthree smaller companies. IDOX (formerly i-documentsystems group) had a smalldecline in value but we remain optimistic about its longer-term prospects. Biomer is a company concerned with the development of novel polymers for productapplications in cardiovascular and other interventional medical devices. InNovember the company announced it had signed an exclusive licensing agreementwith an American Corporation for sales of its ZyTarTM polymers. Otherdevelopment work appears to be progressing satisfactorily. Recent increases in fuel prices and government requirements to lower CO2emissions, is forcing automotive manufacturers to consider alternativetechnologies, particularly relating to hybrid car developments. DriveTec'spatented electric power split transmission and related concepts are well placedto provide low cost solutions to both conventional and hybrid vehicles and arebeginning to generate more serious interest in the industry. A new ExecutiveChairman, formerly a main board director of a major OEM, was appointed by thecompany in March. In April, after the period end, Stortext merged with F-M Image Management, bothcompanies providing outsourced document services. The combined business willhave a turnover of circa £7m in its first year of operation, which will enableit to tender for larger contracts, which were beyond the reach of the individualbusinesses. Unaudited Statement of Total Return (incorporating the Revenue Account of the Company for the six months ended 31March 2005) Six months to 31 March 2005 (unaudited) Revenue Capital Total £ £ £Realised gains/(losses) on investments - 355,867 355,867Unrealised gains on investments - 9,331,433 9,331,433Income 553,515 - 553,515Investment management fees (87,446) (262,337) (349,783)Other expenses (305,892) - (305,892) ----------------- ----------------- -----------------Return on ordinary activities before taxation 160,177 9,424,963 9,585,140Tax on ordinary activities (41,868) 41,868 - ----------------- ----------------- -----------------Return attributable to equity shareholders 118,309 9,466,831 9,585,140Dividends in respect of equity shares 1,805 - 1,805 ----------------- ----------------- -----------------Transfer to/(from) reserves 120,114 9,466,831 9,586,945 ----------------- ----------------- -----------------Return per share 0.29p 23.03p 23.32p Six months to 31 March 2004 (unaudited) Revenue Capital Total £ £ £Realised gains/(losses) on investments - (19,813) (19,813)Unrealised losses on investments - 1,585,905 1,585,905Income 631,001 - 631,001Investment management fees (73,343) (220,029) (293,372)Other expenses (219,599) - (219,599) ----------------- ----------------- -----------------Return on ordinary activities before taxation 338,059 1,346,063 1,684,122Tax on ordinary activities (58,353) 41,806 (16,547) ----------------- ----------------- -----------------Return attributable to equity shareholders 279,706 1,387,869 1,667,575Dividends in respect of equity shares - - - ----------------- ----------------- -----------------Transfer to/(from) reserves 279,706 1,387,869 1,667,575 ----------------- ----------------- -----------------Return per share 0.67p 3.33p 4.00p Year to 30 September 2004 (audited) Revenue Capital Total £ £ £Realised gains/(losses) on investments - 666,281 666,281Unrealised losses on investments - 2,774,109 2,774,109Income 1,163,180 - 1,163,180Investment management fees (152,171) (456,512) (608,683)Other expenses (441,468) - (441,468) ----------------- ----------------- -----------------Return on ordinary activities before taxation 569,541 2,983,878 3,553,419Tax on ordinary activities (155,369) 131,914 (23,455) ----------------- ----------------- -----------------Return attributable to equity shareholders 414,172 3,115,792 3,529,964Dividends in respect of equity shares (515,996) - (515,996) ----------------- ----------------- -----------------Transfer to/(from) reserves (101,824) 3,115,792 3,013,968 ----------------- ----------------- -----------------Return per share 0.99p 7.48p 8.47p Unaudited Balance Sheetas at 31 March 2005 31 March 31 March 30 September 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £ Fixed AssetsInvestments 31,077,257 19,351,200 20,746,041 --------------- --------------- --------------- 31,077,257 19,351,200 20,746,041Current AssetsDebtors and prepayments 420,799 469,952 424,795Other assets 9,716,441 7,907,096 7,926,941Cash at bank 1,329,476 4,517,022 4,633,219 --------------- --------------- --------------- 11,466,716 12,894,070 12,984,955 Creditors: amounts falling due within one year (314,252) (300,786) (699,268) --------------- --------------- --------------- Net current assets 11,152,464 12,593,284 12,285,687 --------------- --------------- ---------------Net assets 42,229,721 31,944,484 33,031,728 --------------- --------------- ---------------Capital and reservesCalled up share capital 407,347 417,170 412,797Capital redemption reserve 10,668 845 5,218Special reserve 38,388,923 39,044,534 38,777,875Capital reserve - realised (2,949,067) (4,420,260) (3,215,081)Capital reserve - unrealised 6,047,980 (3,683,091) (3,152,837)Revenue reserves 323,870 585,286 203,756 ---------------- --------------- ---------------Equity shareholders' funds 42,229,721 31,944,484 33,031,728 ---------------- --------------- ---------------Net asset value per share 103.67p 76.57p 80.02p Unauditied Summarised Cash flow StatementAs at 31 March 2005 Six months to Six months to Year to 31 March 31 March 30 September 2005 2004 2004 (unaudited) (unaudited) (audited) £ £ £Operating activities Net revenue on activities before taxation 160,177 338,059 569,541Interest receivable converted into an investment (36,506) - -Capitalised fees (262,337) (220,029) (449,002)Decrease/(increase) in debtors 81,008 (165,258) (120,101)Increase in creditors 51,772 38,883 11,377 -------------- -------------- --------------Net cash (outflow)/inflow from operating activities (5,886) (8,345) 11,815 Equity dividends paid (514,191) (521,838) (521,838)Taxation paid - - (96,917)Acquisitions of investments (1,778,732) (1,963,127) (4,589,395)Disposals of investments 1,094,310 45,372 3,151,097Management of liquid resources (1,789,500) (1,156,387) (1,176,231)Financing (309,744) (15,317) (281,976) -------------- -------------- --------------Decrease in cash for the period (3,303,743) (3,619,642) (3,503,445) -------------- -------------- --------------Reconciliation of net cash flow to movement in net debtDecrease in cash for the period (3,303,743) (3,619,642) (3,503,445)Net funds at the start of the period 4,633,219 8,136,664 8,136,664 -------------- -------------- --------------Net funds at the end of the period 1,329,476 4,517,022 4,633,219 -------------- -------------- -------------- NOTES 1. Earnings for the six months to 31 March 2005 should not be taken as a guide to the results for the full year. Basic return per Ordinary Share is based on the net revenue on ordinary activities after taxation and is based on a weighted average of 41,109,734 Ordinary Shares (31 March 2004: 41,716,959). 2. The financial information for the six months ended 31 March 2005 and the six months ended 31 March 2004 has not been audited. The information for the year ended 30 September 2004 does not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The financial statements for the year ended 30 September 2004 have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985. 3. A copy of these interim results will be sent to shareholders and further copies can be obtained free of charge from the Company's registered office: One Jermyn Street, London SW1Y 4UH. END This information is provided by RNS The company news service from the London Stock Exchange