Maven Income 1 Regulatory News (MIG1)

12 May 2005 12:45

Murray VCT 4 PLC12 May 2005 Murray VCT 4 PLC Preliminary results for the year ended 28 February 2005 The Directors announce preliminary results, subject to the conclusion of theaudit process, of Murray VCT 4 PLC for the year ended 28 February 2005. • 46 investments in the unlisted portfolio, with a total cost of £27.0 million. • Net Asset Value of 75.7p per share. • Proposed final dividend of 0.6p per share. • Total return since launch, being the sum of dividends paid plus Net Asset Value, of 86.3p per share. • New Management and Administration Deed signed with Murray Johnstone Limited. Investment activity Further unlisted investment during the year ended 28 February 2005 totalled£6.15 million. At 28 February 2005 the portfolio stood at 46 investments with atotal cost of £27.0 million. In addition to follow-on financings, the following new investments have beenmade since the publication of the Interim Report:- • Working People Group (September 2004) - £216,000 - Working People Group trades as Driver Hire and provides temporary labour to the logistics market throughout the UK from its base in Bingley, Yorkshire. • Cello Group* (October 2004) - £750,000 - Cello is based in London and aims to consolidate niche businesses in the marketing and media industry. • 1st Dental Laboratories* (November 2004) - £300,000 - 1st Dental is based in Harrogate and provides dental laboratory services from locations throughout the UK. • Careforce Group* (November 2004) - £500,000 - Careforce is based in Hertford and provides domiciliary care services. • Augean* (December 2004) - £500,000 - Augean is based near Wetherby and provides waste management services. • Avanti Screen Media* (December 2004) - £196,000 - Avanti provides media advertising via screens in retail and other outlets from its London base. • Sanastro (December 2004) - £750,000 - Sanastro is a B2B publishing company which is based in London. • Tanfield* (December 2004) - £500,000 - Tanfield is based in Co Durham and is a specialist engineering and manufacturing group. * Quoted on AIM Portfolio developments In the Interim Report, the early repayment of loan stock by Black Teknigas wasreported; since then, Link-Up Mitaka has also repaid its loan stock (£204,000)ahead of the schedule agreed at the time of the investment together withinterest which had been rolling up in addition to the paid yield. Further proceeds of £234,000 were received from Conveco during the period sincepublication of the Interim Report. This brings to £2,073,000 the total capitalrecovered from the investment, which together with interest paid of £236,000compares with the total cost of the investment of £2,386,000; it is expectedthat further recoveries will be made as the final retention money associatedwith the sale are finalised. Since the period end, the Company has sold the investment in First Line for aconsideration of £631,000, including a deferred element of £61,000, whichcompares to the cost of the investment of £641,000. Income of £246,000 has beenreceived over the life of the investment. Exits from the majority of the portfolio of private equity investments are notbeing actively sought, but will be pursued in cases where the Manager believesthat the potential upside from the investment is limited. Performance The Net Asset Value (NAV) at 28 February 2005 was 75.7p per share ("pps")compared with 73.7pps at 29 February 2004. The Manager has increased the Company's exposure to the Alternative InvestmentMarket ("AIM") during the course of the year and the Board is pleased to reportthat, to date, this policy has been successful. Over the full year, the value of the unlisted portfolio is broadly unchangedwhen new investments and realisations are taken into account. This has beenachieved despite a full provision having been taken against the cost of TuscanEnergy Group, one of the largest holdings by value at 29 February 2004, and asubstantial reduction in the value of Synexus, compared to the value at theInterim stage. That value had been based on a prospective sale of the business,which was anticipated to complete within a few months following the interimannouncement, but the sale could not complete when the proposed purchaserencountered difficulties with its own market value. The Company has suffered a significant reduction in its income during the year.The majority of this reduction is accounted for by provisions taken against theaccumulated income due from Tuscan Energy, which arose in earlier years and wascarried on the balance sheet into the reporting year and against which aprovision has now been taken to reflect the fact that the amounts are unlikelyto be recovered. Provisions have also been taken against income due frominvestments where the Manager believes that there is some doubt as to therecoverability of the income; it is important to emphasise that these provisionsdo not indicate that the amount is being forgiven and the Manager will pursuerecovery of these amounts before and during an exit from the investment. Afurther factor has been the early repayment of loan stocks by some companiesduring the year. The effect of these reductions in income has been to reduce thelevel of final dividend being proposed. Investment strategy The Board continues to review the performance of the investment portfolio andthe investment strategy with the Manager. Progress has been made on the agreedprime objectives in respect of the existing portfolio, although it may be sometime yet before the benefits of portfolio management are seen in improvedrealisations. The Manager continues to press for the resumption of yieldpayments to the Company from the portfolio companies which have been unable tomeet their obligations due to their performance. The aim of these objectives isto generate value and, ultimately, achieve successful disposals from a strongerposition in an improved market. Where it is believed that future potential froman investment justifies it, further financial support will be given. It willalso be the aim to sell underperforming investments and to recycle the proceedsinto opportunities which show greater growth potential. The Company is not fully invested and will continue to invest in new unquotedand AIM investment opportunities as they arise. Where possible, new investmentactivity will be targeted on larger companies through co-investment with otherprivate equity funds. While many of the unlisted holdings are not yet matureenough to actively seek exits, these will be pursued where any offer isparticularly attractive. Valuation process Investments held by Murray VCT 4 in unlisted companies are valued at fair valuein accordance with the British Venture Capital Association guidelines. In linewith normal market practice for investment companies and investment trusts,investments listed on AIM are valued at their mid-market price, discounted toreflect any trading restrictions. Dividends and returns to date The Board declared an interim dividend for the year ended 28 February 2005 of0.5pps (2004 - 0.5pps), which was paid to Shareholders on 10 December 2004. TheBoard is proposing a final dividend of 0.6pps (2004 - 1.2pps), to be paid on 22July 2005 to Shareholders on the register at close of business on 22 June 2005. Since the Company's launch, most Shareholders will have received 10.6pps intax-free dividends. The total return since launch is 86.3pps, being the sum ofdividends paid plus NAV, for a Shareholder who subscribed at launch at aneffective initial investment cost of 80pps. The most important measures for a VCT are the long term record of income andcapital gains dividend payments and the timing of these payments over the lifeof the Company. In the short term, the NAV on its own is a less importantmeasure of performance as the underlying investments are long-term in nature andnot readily realisable. Share buy-back policy During the year, a total of 752,728 shares were bought back for cancellation ata weighted average price of 52.25pps. Purchases of shares will continue to bemade within guidelines established from time to time by the Board, at pricesbelow the prevailing NAV per share. Under the rules of the UK Listing Authority,the maximum price at which the Company can acquire shares is 5% above theaverage market value of the shares over the five business days immediatelypreceding the purchase. Shares purchased in this way will be cancelled and theCompany will only deal with member firms of the London Stock Exchange. Sharepurchases will be funded from distributable reserves and to the extent thatshares are purchased at a discount to NAV, the NAV of the remaining shares willincrease. Constitution of the Board As announced on 22 March 2005, Mr W E Holt resigned as a Director on 21 March2005; the Directors would like to take this opportunity to thank Mr Holt for hisguidance and support during his time in office. Also as announced on 22 March 2005, having attained the age of 70, Mr A EWhitworth will stand down as Chairman after the Annual General Meeting to beheld on 7 July 2005 and, at that time, Mrs Fiona Wollocombe will take his placeas Chairman of the Company. Mr Whitworth is willing to remain a Director of theCompany and will be standing for annual re-election at the Annual GeneralMeeting. The Manager You will be aware that the Company announced on 8 February 2005 that it hadgiven notice, under the terms of its management contract, with the intention ofawarding the management contract to Close Venture Management at the end of thenotice period. The Board subsequently entered into negotiations with MurrayJohnstone Limited ("Murray Johnstone"), the existing Manager, and further to theannouncement made on 24 March 2005, the Board is pleased to announce that theCompany has today entered into a new Management and Administration Deed withMurray Johnstone Limited, which confirms Murray Johnstone's continuingappointment for the portfolio management and company secretarial responsibilityfor the Company. The notice of termination served on Murray Johnstone, which wasto expire on 8 August 2005, has now been withdrawn. In future, the management fee will be largely dependent upon the uplift in NAVachieved each year with a minimum fee, substantially below the historic fee,payable where an increase is not achieved. The Board believes thesearrangements, which align the interests of Shareholders and the Manager, are inthe best interests of the Shareholders. The key features of the new investmentmanagement agreement with Murray Johnstone are included in a separate statement,which is also being released today, and will be disclosed in the Annual Report. During the period immediately following the announcement of 8 February 2005, anumber of Shareholders wrote to the Company expressing views which were criticalof the amount of information which was contained in the Company's Annual Report.The Board and the Manager have considered those views and, as a result, agreater level of disclosure has been provided in this Statement and will also beprovided in the Annual Report. Outlook Since Autumn 2004 there have been significant changes to the senior managementteam of the Manager and intense negotiations regarding changes in the managementcontract. That difficult period is past and the Manager's priority is tocontinue the improvement in NAV which has been achieved over the course of theyear. The Manager will continue to make new investments, on a selective basis, arisingout of the deal flow through the regional network of offices, provided thepricing of new opportunities remains attractive. Murray VCT 4 PLCProfit and Loss AccountFor the year ended 28 February 2005 Year ended Year ended 28 February 2005 29 February 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Investment income and deposit interest 1,093 - 1,093 1,518 - 1,518Investment management fees (284) (426) (710) (358) (536) (894)Other expenses (220) - (220) (221) - (221) _______ _______ _______ _______ _______ _______Operating profit 589 (426) 163 939 (536) 403Profit/(loss) on realisation of investments - 714 714 - (32) (32)Amounts written off fixed asset investments - (569) (569) - - - _______ _______ _______ _______ _______ _______Profit on ordinary activities before taxation 589 (281) 308 939 (568) 371Tax on ordinary activities (158) 132 (26) (254) 174 (80) _______ _______ _______ _______ _______ _______Profit on ordinary activities after taxation 431 (149) 282 685 (394) 291Dividends (413) - (413) (655) - (655) _______ _______ _______ _______ _______ _______Balance transferred to/(from) reserves 18 (149) (131) 30 (394) (364) _______ _______ _______ _______ _______ _______Earnings per share (pence) 1.1 (0.4) 0.7 1.8 (1.0) 0.8 _______ _______ _______ _______ _______ _______ Statement of Total Recognised Gains and LossesFor the year ended 28 February 2005 Year ended Year ended 28 February 2005 29 February 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Profit on ordinary activities after taxation 431 (149) 282 685 (394) 291Unrealised gain/(loss) on revaluation of investments - 690 690 - (1,777) (1,777)Current taxation attributable 158 (132) 26 254 (174) 80to unrealised losses on investments _______ _______ _______ _______ _______ _______Total recognised gains and losses relating to the year 589 409 998 939 (2,345) (1,406) _______ _______ _______ _______ _______ _______ Note of Historical Cost Profits and LossesFor the year ended 28 February 2005 Year ended Year ended 28 February 2005 29 February 2004 £'000 £'000 Profit on ordinary activities before taxation 308 371Realisation of revaluation losses of previous years (1,331) (675) _______ _______Historical cost loss on ordinary (1,023) (304)activities before taxation _______ _______ Historical cost loss for the year retained aftertaxation and dividends (1,153) (836) _______ _______ MURRAY VCT 4 PLCBALANCE SHEETAs at 28 February 2005 28 February 2005 29 February 2004 £'000 £'000 £'000 £'000Fixed assetsInvestments 27,386 22,350 Current assetsDebtors 1,382 1363Cash and overnight deposits 260 5461 _______ _______ 1,642 6824 CreditorsAmounts falling due within one year 472 807 _______ _______Net current assets 1,170 6,017 _______ _______Net assets 28,556 28,367 _______ _______ Capital and reservesCalled up share capital 3,774 3,849Share premium account 17,235 17,236Revaluation reserve (5,214) (6,952)Capital redemption reserve 111 36Profit and loss account 12,650 14,198 _______ _______Equity Shareholders' funds 28,556 28,367 _______ _______Net Asset Value per 75.7 73.7 Ordinary share (pence) MURRAY VCT 4 PLCCASH FLOW STATEMENTFor the year ended 28 February 2005 28 February 2005 29 February 2004 £'000 £'000 £'000 £'000Operating activitiesInvestment income received 1,007 1,200Deposit interest received 13 9Investment management fees paid (627) (1,145)Secretarial fees paid (50) (80)Cash paid to and on behalf of Directors (53) (53)Other cash payments (94) (118) _______ _______Net cash inflow/(outflow) from operating activities 196 (187) Taxation - - Financial investmentPurchase of investments (11,834) (9,064)Sale of investments 7,387 6,251 _______ _______Net cash outflow from financial investment (4,447) (2,813) Equity dividends paid (649) (770) _______ _______Net cash outflow before financing (4,900) (3,770) FinancingIssue of Ordinary shares (1) 154Repurchase of Ordinary shares (300) (41) _______ _______Net cash (outflow)/inflow from financing (301) 113 _______ _______Decrease in cash (5,201) (3,657) _______ _______ This preliminary announcement has been prepared on the same basis as that setout in the statutory Financial Statements for the prior year. Although the Company is no longer an investment company, as investment companystatus was revoked in order to permit the distribution of capital profits, theDirectors believe that the presentation of the profit and loss account and thestatement of total recognised gains and losses is enhanced by showing additionalnon-statutory information on the returns attributable to revenue and to capital. The Profit and Loss Account and Statement of Total Recognised Gains and Losseshave been prepared in accordance with Schedule 4 of the Companies Act 1985 andFinancial Reporting Standard No. 3 "Reporting Financial Information". Asmentioned above, for illustrative purposes, non-statutory information comprisingrevenue and capital accounts has also been presented. In respect of the year ended 28 February 2005, earnings per Ordinary share havebeen calculated using the average number of shares in issue during the year of38,112,746. Net Asset Value per Ordinary share as at 28 February 2005 has beencalculated using the number of share in issue at that date of 37,743,567. A summary of investment changes for the year ended 28 February 2005 and aportfolio summary as at 28 February 2005 are attached. The results for the year ended 28 February 2005, which are subject to finalaudit, will be filed with the Registrar of Companies. A full copy of the Annual Report and Financial Statements will be printed andissued to Shareholders. 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 28 February 2003 have been delivered to the Registrar ofCompanies and contained an audit report which was unqualified and did notconstitute statements under Sections 237(2) or (3) of the Companies Act 1985. The Annual General Meeting will be held on 7 July 2005, commencing at 2.15 p.m. Copies of this announcement will be available to the public at the registeredoffice of the Company, One Bow Churchyard, Cheapside, London EC4M 9HH and at theoffice of Aberdeen Asset Managers Limited, 123 St Vincent Street, Glasgow G25EA. By Order of the BoardMurray Johnstone LimitedSecretary12 May 2005 MURRAY VCT 4 PLCSUMMARY OF INVESTMENT CHANGESFor the year ended 28 February 2005 Valuation Net investment/ Appreciation/ Valuation 29 February 2004 Transfers (disinvestment) (depreciation) 28 February 2005 £'000 % £'000 £'000 £'000 £'000 % Unlisted investments Equities 3,574 12.6 - 1,007 (384) 4,197 14.7 Preference shares 702 2.5 - 80 10 792 2.8 Loan stocks 12,184 43.0 - (1,296) 42 10,930 38.2 _______ _______ _______ _______ _______ _______ _______ 16,460 58.1 - (209) (332) 15,919 55.7 AIM investments Equities 516 1.8 - 3,447 1,233 5,196 18.2 Listed investments Equities - - - - - - - Fixed income 5,374 18.9 - 963 (66) 6,271 22.0 _______ _______ _______ _______ _______ _______ _______ Total investments 22,350 78.8 - 4,201 835 27,386 95.9 Other net assets 6,017 21.2 - (4,847) - 1,170 4.1 _______ _______ _______ _______ _______ _______ _______ Total assets 28,367 100.0 - (646) 835 28,556 100.0 _______ _______ _______ _______ _______ _______ _______ MURRAY VCT 4 PLCINVESTMENT PORTFOLIO SUMMARYAs at 28 February 2005 28 February 2005 29 February % of 2004 Valuation total Bookcost Valuation Nature of business £'000 assets £'000 £'000Unlisted investmentsTLC (Tender Loving Operator of day care nurseries 1,516 5.3 1,516 1,321Childcare)PSCA International Producer of publications aimed at public 1,211 4.2 750 1,125 sector officialsTransys Projects Engineering services to the rail 1,200 4.2 825 894 industryHeathcotes Restaurant chain and providers of 976 3.4 975 771Restaurants outside cateringSynexus Management of clinical trials 927 3.2 927 927TMI Foods Manufacturer of cooked bacon and 878 3.1 750 530 vegetable productsRMS Europe Provider of stevedoring and ships agency 771 2.7 771 - servicesSanastro B2B financial publishing 750 2.6 750 -ScotNursing Provider of temporary and agency nursing 750 2.6 750 750 care staffTransrent Holdings Rental and sale of trailers 718 2.5 644 530Room2 Retailer of textiles, furniture, 700 2.5 700 625 lighting & home accessoriesFirst Line Automotive aftermarket parts 632 2.2 641 403Enterprise Food Group Supply chain and management services 598 2.1 598 598 bakeryELE Advanced Precision engineering 588 2.1 641 641TechnologiesMining Communications Publisher of specialist trade journals. 563 2.0 750 750Astraeus Charter airline 550 1.9 550 550PLM Dollar Group On-shore helicopter services 402 1.4 402 402Link-Up Mitaka Language management business. 398 1.4 398 601House of Dorchester Chocolate manufacturer 325 1.1 650 650GW1016 Operator of managed public houses 322 1.1 590 429Black Teknigas Manufacturer of gas controls 311 1.1 180 420Voxsurf Software development 221 0.8 662 221Swan Plant Services Grounds maintenance plant hire 215 0.8 330 250Driver Hire Supplier of temporary drivers 171 0.6 171 -Citel Technologies Integrated solutions for the telephony 75 0.3 156 32 and communications sectorUnique Communications TV production and communications 66 0.2 798 66Group consultancyConveco Convenience stores 48 0.2 758 1,903Businesshealth Group Provider of health management services 37 0.1 548 135Bibliotech Holding Provider of internet services to the - - 250 - education sectorCCM Motorcycles Motorcycle manufacturer - - 2,124 -GW 665 Animation developer - - 9 -Interak Distributor of household items - - 530 -Jupiter II Building products - - 600 86Mercury Inns Group Public house management services - - 307 -Tuscan Energy Group Oil production company - - 850 850 _______ _______ _______ _______ 15,919 55.7 22,851 16,460 _______ _______ _______ _______AIM investmentsCello Group Marketing and media services 946 3.3 751 -Augean Waste management 711 2.5 501 -Careforce Group Provider of domiciliary care services 690 2.4 501 -Tanfield Group Technical solutions and manufacturing 601 2.1 501 - groupBond International Human resources software 508 1.8 186 300SoftwarePublic Recruitment Public sector staffing in healthcare and 432 1.5 467 -Group education1st Dental Provider of dental laboratory services 411 1.4 301 -LaboratoriesFountains Land management services 296 1.0 251 -Avanti Screen Media Provision of in-store media services to 213 0.8 141 - the retail and leisure sectorAward International Sourcing and delivery of merchandising 210 0.8 350 - materialsAsfare Manufacture and supply of equipment for 178 0.6 188 216 the emergency services _______ _______ _______ _______ 5,196 18.2 4,138 516 _______ _______ _______ _______Listed fixed income investmentsTreasury 7.25% 1,490 5.2 1,500 -December 2007Treasury 7.5% 2006 1,465 5.1 1,473 -Conversion 9.5% 2005 1,197 4.2 1,197 -Treasury 4.5% 2007 1,065 3.8 1,068 -Treasury 8.5% 1,054 3.7 1,047 857December 2005EIB 6% 2004 - - - 2,530Treasury 5% June 2004 - - - 968Treasury 6.75% 2004 - - - 1,019 _______ _______ _______ _______ 6,271 22.0 6,285 5,374 _______ _______ _______ _______Total investments 27,386 95.9 33,274 22,350 _______ _______ _______ _______ This information is provided by RNS The company news service from the London Stock Exchange