Maven I&g 4 Regulatory News (MAV4)

23 Feb 2007 15:04

Aberdeen Grwth Opp VCT2 PLC23 February 2007 Aberdeen Growth Opportunities VCT 2 PLC Preliminary Announcement for the year ended 31 December 2006 The Board is delighted to report a very successful year for your company. Amongthe highlights are: • NAV at year end of 112.2p per share (pps) up 15.2% over the year • Total Return of 114.2pps at year end • 4 successful exits from unlisted companies during the year generating gains of 14.7pps • 1 further exit since the reporting period end for a further gain equivalent to 2.9pps • Net realised gains from AIM stocks of 2.8pps for the year • Revenue dividend declared of 0.5pps in addition to capital dividends of 5.5p paid from gains made during the year • Launch of S Share Issue targeting an additional £15 million in new capital. Performance The Net Asset Value (NAV) per Ordinary share at 31 December 2006, before paymentof a dividend in respect of the year then ended, was 112.2p compared with 97.4pat 31 December 2005. The increase in NAV of 15.2% compares with an increase inthe FTSE SmallCap index of 13.5% over the period, and an increase in the FTSEAIM Index of 4.2%. The effect of the dividend paid on 19 January and payment ofthe proposed dividend will be to reduce the NAV to 108.2p The most important measure for a VCT is the total return being the long termrecord of income and capital gains dividend payments plus the current NAV. Inthe short term, the NAV on its own is a less important measure of theperformance as the underlying investments are long-term in nature and notreadily realisable. The Total Return per Ordinary Share at 31 December 2006 was114.2pps, an increase of 17.2% over the equivalent figure at December 2005.Based on announcements made by other VCTs to date, this performance makes yourcompany one of the best performing VCTs of its vintage. Dividends It was stated in the Company's Prospectus that in the early years dividends, ifany, would be small until such time as capital realisations occurred. Due to theexceptional gains achieved this year, the Board has however declared two interimdividends of 2.0p and 3.5p which were paid in July 2006 and January 2007respectively. The Board recommends the payment of a final dividend of 0.5p perOrdinary share, to be paid on 18 May 2007 to shareholders on the register on 20April 2007. When the final dividend in respect of the year ended 31 December 2006 is paid,Ordinary shareholders will have received 6.0p per share in tax free dividendssince launch. All dividends are paid tax free to shareholders and a net dividendof 6.0p is equivalent to a yield of 10% to a higher rate taxpayer; if theinitial tax relief of 40% is taken into account the effective annual yield risesto 16.7%. It is intended that regular dividends will be paid from realised gains and theBoard envisages being able to pay dividends of at least 4.0p in respect of theyear to 31 December 2007, but that will depend on continuing progress being madeduring the year. It is intended to target a dividend rate of 4.0p each year, andit is hoped that this level may be increased over time, but this will depend onthe timing of future profitable realisations and cannot be guaranteed. Investment Strategy The strategy remains to build a diversified portfolio of unlisted and AIMinvestments which offer excellent growth prospects and therefore the opportunityfor capital gains in the medium and longer term while maintaining VCT qualifyingstatus. Investment Activity During the year ended 31 December 2006, fifteen new unlisted and AIM investmentswere completed and a total of £1.7 million was invested. At the year end, theportfolio stood at 33 unlisted and AIM investments at a total cost of £4.0million. Since 31 December 2006, two further new investments have been made at acost of £433,000 and one unlisted investment has been sold. The following new investments have been completed since the publication of theInterim Report:- Investment Date Activity £'000 WebsiteUnlisted Buildstore Sep 2006 Online services to the self 98 www.buildstore.co.uk build sector. Enpure Nov 2006 Project engineering in the 100 www.enpure.co.uk water and waste water sector. AIMConcateno Oct 2006 Testing services for 98 www.concateno.com alcohol and drugs for employers. Eleco Dec 2006 Specialist construction 99 www.eleco.com products company. Hasgrove Nov 2006 Communication services for 49 www.hasgrove.com public relations. Individual Dec 2006 Restaurants 60 www.individualrestaurants.co.ukRestaurantGroup Velosi Aug 2006 Quality control services to 99 www.velosi.com the oil and gas sector. Aberdeen Growth Opportunities VCT 2 has co-invested with Aberdeen DevelopmentCapital, Aberdeen Growth VCT I, Aberdeen Growth Opportunities VCT, TalismanFirst Venture Capital Trust and Murray VCT 4 in some or all of the abovetransactions and is expected to continue to do so with these as well as otherclients of the Manager. The advantage is that, together, the funds are able tounderwrite a wider range and size of transaction than would be the case on astand alone basis. Portfolio Developments Aberdeen Growth Opportunities VCT 2 is continuing to build a diversifiedportfolio of unlisted and AIM investments with good growth prospects and,therefore, the opportunity to generate capital gains in the medium and longerterm. In the Interim Report reference was made to the increasing maturity of anumber of the private equity investments and further realisations being expectedover the course of the remainder of the year. This has proved to be the casewith three substantial sales achieved from unlisted investments in the secondhalf of the year. Bond Aviation Solutions was sold to an Indian investmentcompany realising £423,000 generating a gain of £173,000. Styles & Wood achieveda listing on the London Stock Exchange and the holding was sold. Proceeds were£799,000 providing a gain of £599,000 over cost. Vibration Technology was soldto a major seismic exploration company 13 months after the investment wascompleted generating a gain of £189,000 from proceeds of £339,000. In each casethe holding period has been shorter than would normally be the case for anunlisted investment ranging from 11 to 13 months with cash multiples of 1.7x to4.0x. The AIM portfolio continued to be actively traded when the opportunity arose,recognising the second half of the reporting year covers the summer period whenmarkets are traditionally quieter and the market correction which occurred inMay 2006. Net gains of £48,000 were generated in the second half of the year.The total gain arising on the AIM portfolio for the year was £221,000. The AIMMarket has fallen over the second half of the year with the AIM 100 indexfalling by 9.5%; the performance of the Company's portfolio is better than themarket showing a decline of 7.6% over the second half of the year. For the fullyear the value of the AIM portfolio again fell by 6.8% compared to an AIM 100Index decline of 8.7%. In addition to the realised gains mentioned above details of which can be foundin the table overleaf, unrealised gains compared to valuations at December 2005totalling £20,000 arose on the investment portfolio. Of the total, £192,000arose on unlisted investments with losses of £172,000 arising on AIMinvestments. The major changes in value were on EIG (Investments) which wasincreased by £194,000 in anticipation of the contracted sale of that holding inJanuary 2007 and a number of AIM investments but notably Leisure & Gaming wherelegislation was introduced in the US to outlaw internet gambling which reducedthe value of all companies in that sector. Investments in the unlisted portfolio are generally trading well but, if thereis any underperformance, particular attention is paid to those companies by theManager to effect an improvement and protect the value of the investment. Realisations during the financial year Date first Complete/ Cost of Sales Realised gain invested partial exit shares proceeds /(loss) disposed of £'000 £'000 £'000Original PoolUnlistedBond Aviation 2005 Complete 250 423 173Original Shoe 2005 Complete 250 250 -Styles & Wood 2005 Complete 200 799 599Travel Class 2005 Complete 125 312 187Vibration Technology 2005 Complete 150 339 189Total unlisted 975 2,123 1,148 AIMAvanti Screenmedia 2005 Partial 24 26 2Axeon 2005 Partial 40 55 15Billing Services Group 2006 Complete 129 67 (62)Hambledon Mining 2006 Partial 25 47 22Leisure & Gaming 2005 Partial 52 94 42MTI Wireless 2006 Partial 29 39 10Neutrahealth 2005 Partial 56 72 16Software Radio Technology 2005 Partial 13 24 11Talarius 2005 Complete 84 193 109United Clearing 2005 Complete 159 217 58Others 45 43 (2)Total AIM 656 877 221 Total 1,631 3,000 1,369 The year has seen four very successful exits from the unlisted investmentportfolio, which together have generated gains of more than £1.1 million while afurther sale has concluded after the reporting period end realising a furthergain of £231,000. One of those exits, Travel Class, occurred in the first halfof the year and was recorded in the Interim Report. Net gains have also beenrealised from the AIM portfolio totalling £48,000 in the second half in additionto the £173,000 which arose in the first half of the year. The gain in thesecond half is after a loss of £60,000 which arose on the disposal of BillingServices which acquired United Clearing in a share for share transaction earlierin the year. The Manager did not support the sale to Billing Services and soldthe resulting holding at the earliest opportunity; since then the BillingServices share price has declined further. The early realisations of four unlisted investments has resulted in a portfoliowhich is weighted more to AIM stocks than was originally planned; this hasarisen due to circumstances rather than by design and the Manager has alreadycompleted two new unlisted investments early in 2007 which will begin to redressthe balance back in favour of the majority of assets being invested in unlistedcompanies. S Share Issue The Board announced proposals in August 2006 to raise up to £15 million beforethe deduction of expenses in an S share issue. The Directors believe that theissue will benefit the Company by reducing the total expense ratio, increasingthe spread of risk across a larger number of investments and, due to anincreased fund size, an improvement in the liquidity of the Company's shares inthe secondary market. Unlike many new issues undertaken by other VCTs, theinvestments made by the S share pool will not be merged in future with those ofthe original pool as the rules under which the new pool will invest were changedin the Budget of 2006 in that the maximum gross assets of the investee companymust be no more than £7 million. The two pools will invest alongside each otherin many situations in future dependent upon the availability of liquidity inboth pools, the amount of investment required and the gross assets of theinvestee company. The new issue will be strictly limited to £15 million. The Future Following the very successful realisations which occurred during the year, theimmediate focus has changed to building the unlisted portfolio in a diversifiedportfolio of good quality smaller company assets which will deliver sustainedlong term performance. The Manager has a number of potential investments in handwhich will form the basis of the first step in this process. ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC INCOME STATEMENT For the year ended 31 December 2006 Year ended 31 December 2006 70 weeks ended 31 December 2005 (unaudited) (audited) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Gains on investments - 1,304 1,304 - 219 219Income from investments 309 - 309 211 - 211Other income 17 - 17 38 - 38Investment management fees (21) (84) (105) (13) (52) (65)Other expenses (213) - (213) (213) - (213)Profit on ordinary activities before taxation 92 1,220 1,312 23 167 190 Tax on ordinary activities (14) 14 - (3) 3 -Profit on ordinary activities after taxation 78 1,234 1,312 20 170 190 Earnings per share (pence) 1.00 15.7 16.7 0.4 3.9 4.3 A Statement of Total Recognised Gains and Losses has not been prepared, as allgains and losses are recognised in the Income Statement. All items in the above statement are derived from continuing operations. TheCompany has only one class of business and derives its income from investmentsmade in shares, securities and bank deposits. The total column of this statement is the Profit and Loss Account of theCompany. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 31 December 2006 Year ended 70 weeks ended 31 December 2006 31 December 2005 (unaudited)Opening Shareholders' funds 7,634 -Total profit for year 1,312 190Net proceeds of issue of shares - 7,444Dividends paid (157) -Closing Shareholders' funds 8,789 7,634 ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC BALANCE SHEET As at 31 December 2006 31 December 31 December 2005 2006 (unaudited) (audited) £'000 £'000 Investments at fair value through profit and loss 8,109 7,269 Current assetsDebtors 263 62Cash and overnight deposits 503 401 766 463Creditors: amounts falling due within one year (86) (98)Net current assets 680 365Total net assets 8,789 7,634 Capital and reservesCalled up share capital 784 784Share premium - 6,660Distributable reserve 6,660 -Capital reserves - realised 1,121 (21)Capital reserves - unrealised 126 191Revenue reserve 98 20Net assets attributable to Ordinary Shareholders 8,789 7,634 Net asset value per ordinary share (pence) 112.2 97.4 ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC CASH FLOW STATEMENT For the year ended 31 December 2006 Year to 31 December 70 weeks ended 31 2006 December 2005 (unaudited) (audited) £'000 £'000 £'000 £'000Operating activitiesInvestment income received 245 174Deposit interest received 15 37Investment management fees paid (81) (61)Secretarial fees paid (61) (37)Cash paid to and on behalf of Directors (93) (48)Other cash payments (93) (44)Net cash (outflow)/inflow from operating activities (68) 21 TaxationCorporation tax - - Financial investmentPurchase of investments (3,288) (10,396)Sale of investments 3,615 3,332Net cash inflow/(outflow) from financial investment 327 (7,064) Equity dividends paid (157) - Net cash inflow/(outflow) before financing 102 (7,043) FinancingIssue of redeemable preference shares - 50Redemption of redeemable preference shares - (50)Issue of ordinary shares - 7,836Expense of share issue - (392)Net cash inflow from financing - 7,444Increase in cash 102 401 ABERDEEN GROWTH OPPORTUNITIES VCT 2 Investment Portfolio Summary (unaudited) As at 31 December 2006 % of equity Bookcost Valuation % of % of held by 31/12/2006 31/12/2006 total equity otherInvestment Name Nature of Business £'000 £'000 assets held clients* UnlistedEIG(Investments) Insurance business 250 482 5.5% 0.1% 1.3% focussed mainly on niche risk areas in motor insuranceHomelux Nenplas Extruder of plastic 199 314 3.6% 3.4% 41.6% tiling trims and related productsMoney Plus Manages agreements 225 225 2.6% 4.5% 26.4% and repayment plans for credit card holdersRiverdalePublishing Publisher of 92 175 2.0% 1.1% 10.6% greeting cardsOled-T Developer of flat 167 167 1.9% 3.9% 14.7% panel display technologiesEssentialViewingSystems Developer of an 155 155 1.8% 9.5% 39.9% advanced delivery technology for video over mobile telephonesEnpure Project engineering 100 100 1.1% 0.4% 79.2% in the water and waste water sectorBuildstore Services to self 98 99 1.1% 0.8% 9.2% build homeownersKingsley Cards Greetings card 200 - 0.0% 2.5% 25.0% distributor ------- ------- ------ ------ ------ 1,486 1,717 19.6% ------- ------- ------ ------ ------AIMWorthingtonNicholls Group Installer and 100 232 2.6% 0.3% 1.6% maintainer of air conditioning units in the hotel and retail marketsSoftware RadioTechnology Digital wireless 131 212 2.4% 0.6% 2.9% communication development businessHambledonMining Exploration and 105 168 1.9% 0.3% 0.1% mining of precious metals in KazakhstanWork Group Provider of 151 146 1.7% 0.7% 2.7% recruitment servicesLitcomp National supplier 100 135 1.6% 0.0% 4.9% of medical reports in the support of legal actionsConcateno Provider of 98 130 1.5% 0.3% 2.6% services for the testing of employees for drugs and alcoholImprint Provider of a 152 128 1.5% 0.1% 0.4% result and search serviceATCommunicationsGroup Leading 141 124 1.4% 0.6% 1.2% communications integratorAmazingHoldings Leisure and hotel 151 118 1.3% 0.5% 1.8% developerDatongElectronics Producer of tracker 151 114 1.3% 0.9% 1.1% devices to track vehicles and mobile phonesEleco Specialist 99 110 1.3% 0.2% 0.5% construction companyVelosi Provider of quality 100 103 1.2% 0.3% 0.6% assurance and quality control services to the oil & gas sectorAvantiScreenmedia Provider of screens 78 98 1.1% 0.1% 1.6% and media advertisingAxeon Developer of semi 111 95 1.1% 0.8% 7.2% conductor intellectual property rightsIndividualRestaurantCompany Restaurant operator 60 80 0.9% 0.2% 1.4%Gold Frost Designer, developer 86 79 0.9% 0.5% 0.9% and distributor of kosher food productsNeutrahealth Provider of BioCare 92 70 0.8% 0.6% 1.5% products to health practitioners and specialist retailersSystem CHealthcare Provider of 150 65 0.7% 0.3% 1.0% information services and IT systems to the healthcare sectorHasgrove Provider of 50 53 0.6% 0.2% 2.0% communication services in public relationsMTI WirelessEdge Developer and 41 48 0.5% 0.2% 0.3% manufacturer of sophisticated antennas for broadbandSpectrumInteractive Provider of 98 32 0.4% 0.3% 1.3% payphones and internet access throughout the UK.FairgroundGamingHoldings An investment 75 17 0.2% 0.2% 1.0% company in the on-line gaming sectorLeisure &Gaming Online gaming 86 12 0.1% 0.2% 0.6% operatorElevationEvents Group Integrated events 100 - 0.0% 1.7% 8.9% management and corporate hospitality ------- ------- ------ ------ ------ 2,506 2,369 27.0% ------- ------- ------ ------ ------Listed FixedIncomeInvestmentsGilt -Treasury 4.5%2007 1,484 1,483 16.9% - -Bond - GE FRN04/05/07 900 900 10.2% - -Bond -Barclays FRN12/03/12 601 600 6.8% ------- ------- ------ ------ ------ 2,985 2,983 33.9% - - ------- ------- ------ ------ ------Unit TrustsAberdeenInternationalFixed Interest 1,006 1,040 11.8% - - ------- ------- ------ ------ ------ 1,006 1,040 11.8% - - ------- ------- ------ ------ ------ ------- ------- ------ ------ ------ TOTAL 7,983 8,109 92.3% ======= ======= ====== ====== ====== * other clients of the Aberdeen Asset Management Group of companies ABERDEEN GROWTH OPPORTUNITIES VCT 2 SUMMARY OF INVESTMENT CHANGES (UNAUDITED) For the period ended 31 December 2006 Net investment Valuation Appreciation Valuation 31 December 2005 (divestment) (depreciation) 31 December 2006 £'000 % £'000 £'000 £'000 %Unlisted investmentsEquities 668 8.7 (1,362) 1,428 734 8.4Preference 67 0.9 - - 67 0.8Loan stocks 1,363 17.9 (266) (181) 916 10.4 2,098 27.5 (1,628) 1,247 1,717 19.6AIM investmentsEquities 2,033 26.6 297 39 2,369 27.0 Listed investmentsFixed income 2,118 27.7 867 (2) 2,983 33.9Unit Trusts 1,020 13.4 - 20 1,040 11.8Total investments 7,269 95.2 (464) 1,304 8,109 92.3 Other net assets 365 4.8 315 - 680 7.7 Total Assets 7,634 100.0 (149) 1,304 8,789 100.0 Notes: This Preliminary Announcement has been prepared on the same basis as that setout in the statutory financial statements for the prior year. Returns per Ordinary share have been calculated using the weighted averagenumber of shares in issue during the period of 7,835,163 (2005 - 4,395,996). TheNet Asset Value per Ordinary share has been calculated using the number ofshares in issue at 31 December 2006 of 7,835,163 (2005 - 7,835,163). The results for the year ended 31 December 2006, which are subject to auditclearance, will be filed with the Register of Companies and a full copy of theAnnual Report and Financial Statements will be printed and issued toShareholders. The financial information contained within this Preliminary Announcement doesnot constitute the Company's statutory financial statements as defined inSection 240 of the Companies Act 1985. The statutory financial statements forthe year ended 31 December 2005 contain an audit report which was unqualifiedand did not contain statements under Sections 237(2) or (3) of the Companies Act1985, and have been delivered to the Registrar of Companies. Copies of this announcement will be available to the public at the registeredoffice of the Company and the office of Aberdeen Asset Managers Limited, 123 StVincent Street, Glasgow. By Order of the Board ABERDEEN ASSET MANAGEMENT PLCSECRETARIES (23) February 2007 This information is provided by RNS The company news service from the London Stock Exchange