Last checked at 
13 Aug 2010 07:00
SPARK VCT PLC
HALF YEARLY FINANCIAL REPORT 2010
FINANCIAL HIGHLIGHTSPer ordinary share (pence) 30.06.10 31.12.09 30.06.09 Net asset value 18.8 22.7 24.3 Dividends Dividend paid (1) 4.0 - - Cumulative dividend (2) 57.7 53.7 53.7 Total return (3) SPARK VCT plc 76.5 76.4 78.0
Return including tax benefits (6) 96.5 96.4 98.0 Total return to former shareholders of: Quester VCT 2 plc per 100p invested in shares of that company (4) 62.3 62.3 63.9 Return including tax benefit (6) 82.3 82.3 83.9 Quester VCT 3 plc per 100p invested in shares of that company (5) 36.3 36.1 37.7 Return including tax benefit (6)
56.3 56.1 57.7
(1) Dividend paid in the financial period ended on the date stated (2) Cumulative dividends paid by SPARK VCT plc
(3) Net asset value plus cumulative dividend per share to ordinary shareholders
in SPARK VCT plc since the launch of the Company (then called Quester VCT plc)
in April 1996 (4) Total return to original shareholders in Quester VCT 2 plc, launched in
March 1998, which merged with SPARK VCT plc (then called Quester VCT plc) in
June 2005, the share exchange ratio for former shareholders in Quester VCT 2
plc being 1.0249 (5) Total return to original shareholders in Quester VCT 3 plc, launched in
February 2000, which merged with SPARK VCT plc (then called Quester VCT plc) in
June 2005, the share exchange ratio for former shareholders in Quester VCT 3
plc being 0.9816 (6) Return after 20% income tax relief but excluding capital gains deferral The Directors propose an interim dividend of 1.0 pence per share for the year ending 31 December 2010.
The Interim management report comprises the Chairman's statement, the Investment manager's report, the Fund summary and note 9 to the condensed
financial statements. CHAIRMAN'S STATEMENTIntroductionThe economic uncertainty that has unsettled financial and commercial marketssince the summer of 2008 continues to make conditions very difficult for smallcompanies and particularly so for early stage technology companies. Whilethere are early indications that the UK is emerging from its longest recessionin recent history the strength of recovery remains fragile and investorsentiment nervous. The UK banks are beginning to emerge from the crisis whichengulfed them but bank funding and credit facilities for small, early stagecompanies still remain extremely difficult to obtain. Nevertheless, there aresome signs that, as a result of the various Government initiatives andimprovements in the wider UK and global economies, trade buyers are beginningto regain confidence. Our new strategy of realising existing investments andmoving towards relatively lower risk investment opportunities should benefitfrom these trends.PerformanceNet assets per share, before the payment of the 4p final dividend for the yearended 31 December 2009, moved ahead marginally from 22.7p on 31 December 2009to 22.8p on 30 June 2010. This is the first positive movement in net assetsthat the Company has experienced since 2007.Against the background of continuing difficult markets, it is encouraging toreport that in June 2010 the Company was able to sell its investment in SecernoLimited to Oracle Corporation at a gain of £655,000 over its carrying value. Cash proceeds received to date amount to £917,000 net of transaction andwarranty claim insurance costs. In addition, a further £293,000 is being heldin escrow against potential warranty claims and is due to be released to theCompany in June 2012. As a result of this transaction, the Company recorded apost tax profit for the six months to 30 June 2010 of £101,000. This comparesto a loss in the equivalent period last year of £2.8m and a loss of £4.6m inthe full year to 31 December 2009.No new investments were made during the period under review, but two modestfollow on investments were made to businesses from which worthwhile exits areanticipated. A secured loan of £143,000 was advanced on attractive interestterms to Sift Group Limited ("Sift"), as part of a £800,000 debt facility fromshareholders and a £400,000 facility from its bankers. These funds have beenapplied to the acquisition of an adjacent business, which is expected tocontribute to Sift's profitable growth and increase the probability of asatisfactory sale in the medium term.A further £25,000 investment in preferred investment stock was made alongsidethe management of Haemostatix Limited to support the business while discussionscontinue with potential trade partners.We have continued to monitor the performance of all underlying investmentsclosely and have made an additional provision of £167,000 against theinvestment in We7 Limited. This is in anticipation that the company will needto raise further funds and that, in current market conditions, this may be at adiscount to the last investment round.In our small AIM quoted portfolio, the holding in Vernalis plc has beendisposed of for net cash proceeds of £30,000, a loss of £35,000 on its carryingvalue at 31 December 2009. A part disposal of Celldex Therapeutics, Inc produced net proceeds of £26,000 and a gain of £11,000. The three remainingAIM investments have been marked down by the market by an aggregate £82,000.
Despite these adverse movements, it is encouraging that the value of the portfolio overall has stabilized and that a long-standing investment (the initial investment in Secerno was made in 2007) has been brought to trade sale.
Nevertheless, the Board remains very conscious that the Company's performancein the long term has been far from satisfactory and is actively exploring arange of options to enhance shareholders' interests. The Board hopes to be in aposition to inform shareholders of these opportunities more fully in the nearfuture.
As part of our efforts to reduce costs, the Board has taken the decision to release the half yearly results electronically through the stock market and on the Company's website rather than in hard copy.
Net assets
The movement in net assets is summarised in the table below:
Bonds Venture and Net Capital Current Pence Invest-ments Assets Total per £'000 £'000 £'000 Share Net asset value at 31 December 2009 14,870 10,160
25,030 22.7
Net gain on disposal of investments 631 24
655 0.6
Net loss on valuation of investments (249) -
(249) (0.2) Income - 108 108 0.1 Operating expenses - (413) (413) (0.4) Net investment (1,098) 1,098 - - Net assets before dividends and share buybacks 14,154 10,977 25,131 22.8 Dividend paid - (4,430) (4,430) (4.0) Share buybacks - - - - Net asset value at 30 June 2010 14,154 6,547 20,701 18.8Dividends
Following the disposal of Secerno Limited and other realisations, the Board hasapproved an interim dividend per share of 1p (2009: nil) to be payable on 24September 2010 to shareholders on the register at 27 August 2010.
Summary
This has proved a more satisfactory period for your Company. The improvingmarket conditions and successful disposal of Secerno indicate that more exitopportunities may be available in the medium term. The Board, however, remainsvery conscious that a change of approach is necessary and is actively seekingto progress this.Robin FieldChairman12 August 2010
Director's responsibility statement The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the Half-Yearly Financial Report have been prepared in accordance with the Accounting Standards Board's Statement 'Half-Yearly Financial Reports'; and · the interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R of important
events that have occurred during the first six months of the financial year and
their impact on the condensed financial statements, and a description of the
principal risks and uncertainties for the remainder of the financial year; and · the condensed financial statements (note 9) includes a fair review of
the information concerning related parties transactions as required by Disclosure and Transparency Rule 4.2.8R.
The Half-Yearly financial report was approved by the Board on 12 August 2010
and the above responsibility statement was signed on its behalf by the
Chairman.
INVESTMENT MANAGER'S REPORT
Over the half year to 30 June 2010 the activity of the Investment Manager hasbeen conducted against the background of the new strategy agreed with the Boardat the beginning of the year and summarised in the Chairman's statement in thelast annual report.
The key points of strategy in terms of investment management are:
in the current economic climate, fresh investment in early stage venture capital investments, of a type similar to the majority of the companies in SPARK VCT's existing portfolio, is no longer considered to present an appropriate investment for VCT shareholders;
the Company's existing portfolio investments should be realised as soon as theymature and suitable exits are achievable: it is acknowledged that this islikely to take several years and that some highly selective follow-on fundingmay be required where it is possible to enhance realisation prospects;the remaining cash funds not required for follow-on investments should be usedto make new, qualifying investments, within the Company's existing investmentpolicy, enabling the Company to maintain its VCT tax status; such investmentsshould be focused towards relatively lower risk opportunities, where investeecompanies are more advanced in their development - either generating revenuesand able to pay dividends or well positioned for exit in a short time frame.
In considering the above strategy it is recognised that the current portfolio does contain businesses of promise and that there are expected to be opportunities for profitable realisations.
Realisations
During the half year significant steps have been taken in the implementation ofthis strategy, in particular towards the realisation of existing portfolioinvestments, and we are pleased to report the sale of Secerno Limited. ThisOxford-based data security business has been sold to Oracle Corporation in atransaction completed in June - this has produced proceeds of £1,210,000(including a proportion retained in escrow), against a carrying value at 31December 2009 of £555,000, resulting in a profit in the half year to 30 June2010 of £655,000.The opportunity has also been taken to realise cash from certain of the quotedventure capital investments, with the sale of the entire holding in Vernalisplc and part of the holding in Celldex Therapeutics, Inc. Overall, proceedsgenerated from these transactions, together with certain other cash recoveries,have totalled £1,368,000 in the half year to 30 June 2010.
These realisations have enabled the Board to declare an interim dividend of 1.0p per share.
Progress of investments
In the Business review in the last annual report we analysed SPARK VCT'sventure capital investments into three categories: "maturing" venture capitalinvestments, "developing" venture capital investments and "early stage"investments. Following the realisations referred to above, the proportionsthat investments in each category represent in the venture capital portfolio byvaluation at 30 June 2010 are as follows: Percent. of venture capital portfolio by valuation
"Maturing" venture capital investments: companies with stable and growing revenue streams, achieving profitable trading or very close to it, and
with stable cash positions
examples: Elateral Holdings Limited, Imagesound plc, Lab M Holdings Limited, Sift Group Limited, UniServity Limited , Workshare Limited
59.9%
"Developing" venture capital investments: companies with developed business models and growing revenue streams, though still facing uncertainties, and breaking through into cash-flow positive trading examples: Antenova Limited, Cluster Seven Limited, Level 19.3%Four Software Limited "Early stage" investments
companies still establishing their business model or, in the case of businesses in the life sciences sector, still at the product development stage examples: Academia Networks Limited, Haemostatix Limited, Isango! Limited, Perpetuum Limited, Vivacta Limited, We7
Limited 20.8% The percentage of the venture capital portfolio now represented by "maturing"venture capital investments provides a reasonably stable base to the portfolioand means that the net asset value of SPARK VCT is much less exposed thanpreviously to the risks associated with early stage investment.
Significant recent business developments within the portfolio are summarised below:
• Elateral Limitedhad another very successful year to 31 March 2010 delivering17% revenue growth and a substantial improvement in EBITDA margin. New client wins forthe year included NetApp and major customers Coca Cola and SAP renewed theircontracts, taking additional services and territorial licences at the sametime.
• Imagesound Limited: after a satisfactory year to 31 December 2009 has continued to perform close to budget on revenues in its current financial year and ahead on EBITDA, remaining profitable and cash generative despite a difficult trading environment.
• Level Four Software Limited has seen sales growth of 35% in its year to 30June 2010 and has reached profitability: it continues to show impressive growthin the range of its customer contacts within the banking industry for its ATMtesting tools business, and potential for further expansion both geographicallyand into other sectors.
• Sift Group Limited is delivering revenues above last year and forecasting further growth and improved profitability for the year as a whole.
• UniServity Limited: following management changes towards the end of last yearand a dramatic reduction in the cost base, financial performance hassignificantly improved. Sales have remained ahead of budget despiteuncertainty about policy changes and public procurement following the change ofGovernment, and profitability is now strong and consistent. After a successfullaunch of the 'parent portal' product, resources are now being concentrated oncompleting the build of a new technology platform ready for launch at thebeginning of the new year.• Workshare Limitedcontinues to enjoy very high market penetration in the legalIT market for its document comparison software. New management has undertakensome significant restructuring, with a particular focus on the sales model anddistribution network, reducing the overall level of operating cost andimproving profitability, while the company maintains a robust cash position.Follow-on funding provided to existing portfolio companies in the half year hasbeen limited to a total of £168,000, including £143,000 advanced to Sift GroupLimited in a loan instrument with an attractive coupon (alongside the company'smanagement and SPARK's syndicate partner) to provide additional working capitaland £25,000 to Haemostatix Limited to support product development.Against the background of the overall strategy for SPARK VCT referred to above,and with the growing maturity of some of the key investments, members of theSPARK management team are increasingly focused on working with portfoliocompany managements on positioning the companies as attractive acquisitioncandidates for major corporates. A number of the companies are now reachingthe stage at which a transaction of this type can realistically be planned forsome time over the next two years, enabling the businesses concerned to betaken forward to the next stage of growth under new ownership and achievingcash realisations for SPARK VCT.Subject to no deterioration in business and financial conditions, we expect tobe able to announce a number of positive developments in this respect by thedate of release of the annual report.
Valuation changes
Valuations of the unquoted investments have been determined under theapplication of the International Private Equity and Venture Capital ValuationGuidelines. The quoted venture capital investments (shares traded on AIM, theFrankfurt stock exchange and NASDAQ) have been valued at their bid prices at 30June 2010.Given the profitable exit from Secerno, the portfolio has recorded a positiveresult for the half year, after operating costs have been deducted. Themovement on other investments has shown a downward revaluation of £249,000, ofwhich £167,000 was in respect of one of the early stage investments and £82,000was in respect of quoted venture capital investments.Principal risks and uncertainties
As a Venture Capital Trust the Company invests in unquoted and AIM-traded UK companies in accordance with its investment policy. In addition to its
venture capital porfolio, the Company maintains liquidity balances in the
form of cash held for follow-on financing and new venture capital investment and debtors and creditors that arise directly from its operations. Its
principal risks are therefore market risk, credit risk and liquidity risk. Other risks faced by the Company include economic, loss of approval as a VCT, investment and strategic, regulatory, reputational, operational and financial risks. These risks, and the ways in which they are managed, are described in more detail in the Company's Annual Report and Accounts for theyear ended 31 December 2009. The Company's principal risks and uncertaintieshave not changed materially since the date of that report.
Outlook
Earlier evidence of an improving M&A market is confirmed not only by the transactions completed by SPARK VCT in the year to date but also by transactions seen elsewhere, with major corporates looking for growth now clearly interested in strategic acquisition opportunities among venture-backed companies.
As long as business and financial conditions remain stable, we believe that opportunities should emerge during the remainder of the current year and over 2011 and 2012 for significant realisations and the extraction of value for SPARK VCT shareholders.
This will enable both the distribution of substantial amounts of cash by way ofdividend and a start to be made on a programme of investment in new qualifyinginvestments: in line with the new strategy, this will be focused on companiesmore advanced in their development and representing relatively lower riskopportunities. SPARK Venture Management LimitedManager12 August 2010
Fund summary as at 30 June 2010 Accounting Cost
(1) Valuation Equity % of fund
Industry sector
£'000 £'000 % held by value
Fifteen largest venture capital investments
Elateral Holdings Limited (2) TMT 1,009 1,990 23.4% 9.6% Imagesound plc TMT 2,848 1,920 11.7% 9.3% Sift Group Limited TMT 2,658 1,782 21.1% 8.6% UniServity Limited TMT 1,208 1,208 16.5% 5.8% Cluster Seven Limited TMT 1,569 1,197 9.0% 5.8% Vivacta Limited Healthcare 1,210 1,145 7.3% 5.5% Workshare Limited TMT 695 928 1.9% 4.5% Level Four Software Limited TMT
855 855 7.8% 4.1% Haemostatix Limited Healthcare 527 527 12.5% 2.5% Lab M Holdings Limited (2) Healthcare 690 440 26.8% 2.1% Antenova Limited TMT 1,307 343 4.7% 1.7%
Academia Networks Limited TMT
103 280 4.1% 1.4% Isango! Limited TMT 1,000 250 9.1% 1.2% Perpetuum Limited TMT 686 228 7.0% 1.1%
Community Internet Group Limited (2) TMT
28 211 20.9% 1.0% 16,393 13,304 64.2%
Other venture capital investments
We7 Limited TMT 816 167 13.1% 0.8%
Atego Limited (formerly Artisan) (2) TMT
120 120 28.4% 0.6% Symetrica Limited TMT 108 114 2.4% 0.6% MediGene AG Frankfurt Healthcare 316 107 0.1% 0.5% TeraView Limited Healthcare 1,172 100 4.8% 0.5% Other investments: valuations less than £100,000 (4 investments) 2,660 242 1.2% 5,192 850 4.2% Total venture capital investments 21,585 14,154 68.4% Total unquoted venture capital investments 19,992 13,886 67.1% Total quoted venture capital investments 1,593 268 1.3% Total investments 21,585 14,154 68.4% Cash and other net assets 6,547 6,547 31.6% Net assets 28,132 20,701 100.0%
(1) Amounts shown as accounting cost represent the acquisition cost in the case of
investments originally made be the Company and/or the valuation attributed to the investments acquired from Quester VCT 2 plc and Quester VCT 3 plc at the date of the merger in 2005, plus any subsequent acquisition cost, as reduced in certain cases (2) by amounts written off as representing an impairment in value.
(2) Cost reduced by amounts written off as representing an impairment in value
(Elateral Holdings Limited reduction of £1,117,000, Lab M Holdings Limited of £ 486,000, Community Internet Group Limited of £698,000 and Atego Limited of £ 2,002,000). Income statement Six months to 30 June Six months to 30 June 2009 Year to 31 December 2010 (unaudited) (unaudited) 2009 (audited) Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Loss on valuation of investments at 3 fair value though profit or loss - (249) (249)
- (2,462) (2,462) - (3,933) (3,933)
Gain/(loss) on disposal of investments at fair value through 3
profit or loss - 655 655 - 60 60 - (40) (40) Income 108 - 108 131 - 131 241 - 241 Investment management fee (243) - (243) (288) - (288) (549) - (549) Other expenses (170) - (170) (195) - (195) (342) - (342)
Profit/(loss) on ordinary activities before taxation (305) 406 101
(352) (2,402) (2,754) (650) (3,973) (4,623)
Tax on profit/(loss) on ordinary activities - - - - - - - - -
Profit/(loss) on ordinary activities after taxation (305) 406 101
(352) (2,402) (2,754) (650) (3,973) (4,623)
Basic and fully diluted earnings/ 4 (loss) per share (0.3)p 0.4p 0.1p (0.3)p (2.2)p (2.5)p (0.6)p (3.6)p (4.2)p
The 'Total' column of this statement is the profit and loss account of the
Company; the supplementary revenue return and capital return columns have been
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from investments made in shares and securities and from bank deposits.
There are no gains and losses for the period other than those disclosed in the
income statement of the Company. The accompanying notes are an integral part of this statement.
Balance sheet 30
June 2010 31 December 2009 30 June 2009
(unaudited) (audited) (unaudited) Notes £'000 £'000 £'000 Fixed assets Investments at fair value through profit or loss 6 14,154 15,873 17,923 Current assets Debtors 761 457 1,747 Cash at bank 6,150 8,900 7,618 6,911 9,357 9,365
Creditors: amounts falling due within one year
(364) (200) (367) Net current assets 6,547 9,157 8,998 Net assets 20,701 25,030 26,921 Capital and reserves Called-up equity share capital 5,519 5,519 5,538 Share premium account 150 150 150 Capital redemption reserve 765 765 746 Special reserve 21,524 22,685 23,068 Investment holding losses (7,431) (7,941) (6,697) Profit and loss account 174 3,852 4,116
Total equity shareholders' funds
20,701 25,030 26,921 Net asset value per share 7 18.8p 22.7p 24.3p
The accompanying notes are an integral part of this statement.
Cash flow statement Six months Six months to Year to to 30.06.10 31.12.09 30.06.09 (unaudited) (audited) (unaudited) Notes £'000 £'000 £'000 Cash (outflow)/inflow from operating activities 8
(445) 529 (299) Financial investment Purchase of venture capital investments
(168) (854) (352)
Sale of venture capital investments 1,266 396 280 Sale/redemption of listed fixed interest investments
1,000 1,850 1,000
Amounts recovered from investments previously written off 27 92 80 Total net financial investment 2,125 1,484 1,008 Equity dividends paid 5 (4,430) - - Financing Buyback of ordinary shares - (78) (56) (Decrease)/increase in cash for the period (2,750) 1,935 653 Reconciliation of net cash flow to movement in net funds (Decrease)/increase in cash for the period (2,750) 1,935 653 Net funds at the start of the period
8,900 6,965 6,965
Net funds at the end of the period
6,150 8,900 7,618
The accompanying notes are an integral part of this statement. Net funds comprise cash at bank and on short-term deposit.
Reconciliation of movements in shareholders' funds
Profit Share Capital Investment and premium
redemp-tion Special holding loss
Called-up equity share capital account reserve reserve losses account TotalSix months to 30 June 2010 £'000 £'000
£'000 £'000 £'000 £'000 £'000
At 1 January 2010 5,519 150 765 22,685 (7,941) 3,852 25,030 Shares purchased for cancellation - - - - - - - Realisation of prior years' net unrealised losses on investments - - - - 759 (759) - Transfer from special reserve to profit and loss account - - - (1,161) - 1,161 - Investment holding loss on valuation of investments - - - - (249) 249 - Profit on ordinary activities after taxation - - - - - 101 101 Dividends - - - - - (4,430) (4,430) At 30 June 2010 5,519 150 765 21,524 (7,431) 174 20,701 Year to 31 December 2009 At 1 January 2009 5,553 150
731 23,751 (4,842) 4,388 29,731
Shares purchased for cancellation (34) - 34 (78) - - (78) Realisation of prior years' net unrealised losses on investments - - - - 834 (834) - Transfer from special reserve to profit and loss account - - - (988) - 988 - Investment holding loss on valuation of investments - -
- - (3,933) 3,933 -
Loss on ordinary activities after taxation - - - - - (4,623) (4,623) Dividends - - - - - - - At 31 December 2009 5,519 150 765 22,685 (7,941) 3,852 25,030 Six months to 30 June 2009 At 1 January 2009 5,553 150
731 23,751 (4,842) 4,388 29,731
Shares purchased for cancellation (15) - 15 (56) - - (56) Realisation of prior years' net unrealised losses on investments - - - - 607 (607) - Transfer from special reserve to profit and loss account - - - (627) - 627 - Investment holding loss on valuation of investments - -
- - (2,462) 2,462 -
Loss on ordinary activities after taxation - - - - - (2,754) (2,754) Dividends - - - - - - - At 30 June 2009 5,538 150
746 23,068 (6,697) 4,116 26,921
The accompanying notes are an integral part of this statement.
Notes
1. The Financial Statements have been prepared under the historical cost convention, except for the measurement at fair value of investments, and in accordance with applicable UK accounting standards and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies in January 2009.
2. The total reserves available for distribution by way of a dividend is
£14,267,000 (31 December 2009: £18,596,000, 30 June 2009 £20,487,000),
being made up of the Special reserve and Profit and loss account less
Investment holding losses.
3. The overall gain/(loss) on investments at fair value through profit
or loss disclosed in the profit and loss account is analysed as follows:
Six months Six months to to Year to 30.06.10 30.06.09 31.12.09 (unaudited) (unaudited) (audited) £'000 £'000 £'000
Loss on valuation of investments at fair value through profit or loss Net loss on valuation of investments
(249) (2,462) (3,933)
Write-off of investments - - - ( (249) (2,462) (3,933)
Gain/(loss) on disposal of investments at fair value through profit or loss
Net gain/(loss) on disposal 628 (20) (132) Recoveries made in respect of investments previously written off 27 80 92 655 60 (40) 406 (2,402) (3,973)
'Net gain/(loss) on disposal' represents the difference between proceeds
received and the carrying values of those investments sold during the period.
4. The revenue loss per share of 0.3p (31 December 2009: loss 0.6p and
30 June 2009: loss 0.3p) is based on the revenue loss on ordinary activities after tax of £305,000 (31 December 2009: loss £650,000 and 30
June 2009: loss £352,000) and on the weighted average number of ordinary shares in issue during the period of 110,370,134 (31 December
2009: 110,631,989 and 30 June 2009: 110,781,028).
The capital profit per share of 0.4p (31 December 2009: loss 3.6p and 30
June 2009: loss 2.2p) is based on the capital profit on ordinary activities after tax of £406,000 (31 December 2009: loss £3,973,000 and
30 June 2009: loss £2,402,000) and on the weighted average number of ordinary shares in issue during the period of 110,370,134 (31 December
2009: 110,631,989 and 30 June 2009: 110,781,028).
The total profit per share of 0.1p (31 December 2009: loss 4.2p and 30
June 2009: loss 2.5p) is based on the profit on ordinary activities after tax of £101,000 (31 December 2009: loss £4,623,000 and 30 June 2009 : loss £2,754,000) and on the weighted average number of ordinary shares in issue during the period of 110,370,134 (31 December 2009: 110,631,989 and 30 June 2009: 110,781,028).
5.Dividends Six months Six months to to Year to 30.06.10 30.06.09 31.12.09 (unaudited) (unaudited) (audited) £'000 £'000 £'000
Final dividend paid, period ended 31 December 2009: 4.0p per share paid
11 June 2010 4,430 - - The Directors propose an interim dividend of 1.0 pence per share for the yearended 31 December 2010. 6. Movements in investments during the six months ended 30 June 2010 are as follows: Venture Listed fixed capital interest investments investments Total £'000 £'000 £'000 Cost at 1 January 2010 22,814 1,000 23,814 Investment holding (losses)/gains at 1 January 2010 (7,944)
3 (7,941) Valuation at 1 January 2010 14,870 1,003 15,873 Movements in the period: Purchases at cost 168 - 168 Disposals - proceeds (1,266) (1,000) (2,266) - net gains/(losses) on disposal 631 (3) 628 Net loss on valuation of investments (249) - (249) Valuation at 30 June 2010 14,154 - 14,154 Book cost at 30 June 2010 21,585 - 21,585 Investment holding losses at 30 June 2010 (7,431) - (7,431) Valuation at 30 June 2010 14,154 - 14,154
Amounts shown as cost represent the fair value of the investment at the date of
the merger in 2005, or subsequent acquisition cost, less any reduction made on
account of impairment in value.
7. The net asset value per share as at 30 June 2010 of 18.8p (31 December 2009:
22.7p and 30 June 2009: 24.3p) is based on net assets of £20,701,000 (31
December 2009: £25,030,000 and 30 June 2009: £26,921,000) divided by the
110,370,141 ordinary shares in issue as at that date (31 December 2009:
110,370,141 and 30 June 2009: 110,761,138). There is no dillution effect as at
30 June 2010 (31 December 2009: nil and 30 June 2009: nil). 8. Reconciliation of operating loss to cash flow from operating activities for the period is as follows: Six months Six months to Year to to 30.06.10 31.12.09 30.06.09 (unaudited) (audited) (unaudited) £'000 £'000 £'000 Proift/(loss) on ordinary activities before tax 101
(4,623) (2,754)
(Gain)/loss on investments at fair value through profit or loss
(406)
3,973 2,402
(Increase)/decrease in debtors (304) 1,479 189 Increase/(decrease) in creditors 164
(303) (136)
Amortisation of fixed interest investments - 3 - Cash (outflow)/inflow from operating activities (445) 529 (299)
9. Spark Investors Limited (a fellow subsidiary of the Manager), of which AB
Carruthers is a director, may from time to time be eligible to receive
transaction fees and/or directors' fees from investee companies. During the
period to 30 June 2010, fees of £18,000 attributable to the investments of the
Company were received pursuant to these arrangements (year ended 31 December
2009: £26,000, period to 30 June 2009: £13,000).
During the six months to 30 June 2010 there were no transactions by Directors
in shares of companies in which the Company has invested (31 December 2009:
none; 30 June 2009 none)
10. This Half Yearly Financial Report, has been neither audited nor reviewed by the
Company's auditors and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The statutory accounts for
the period ended 31 December 2009 have been delivered to the Registrar of
Companies and received an audit report which was unqualified, did not include a
reference to any matters to which the auditors drew attention by way of
emphasis without qualifying the report and did not contain any statements under
Section 498(2) and (3) of the Companies Act 2006.
11. Interim management statements relating to the first and third quarters of the
financial year will be released via the Regulatory News Service on or shortly
before 18 May and 18 November each year. For further information, please contact: Rawlings Financial PR Limited Tel: 01653 618016
Catriona Valentine catriona@rawlingsfinancial.co.uk
Keeley Clarke keeley@rawlingsfinancial.co.uk
Spark VCT plc www.sparkvct.com Tel: 0207 8517777
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