Last checked at 
22 Oct 2010 15:25
Maven Income and Growth VCT PLC
Interim results for the six months ended 31 August 2010 (unaudited)
The Directors announce the unaudited Interim Management Report for the six months ended 31 August 2010.
Manager's review
The first half of 2010 was characterised by significant fluctuations in the UK financial markets. Uncertainty over the general election, sovereign debt concerns and the fear of a 'double dip' recession all contributed to an unpredictable environment for investors.
Nevertheless, in the reporting period to 31 August 2010, your Company continued to make steady progress and achieved an increase in NAV total return in tandem with a continuation of the successful investment strategy, focused on investing in later stage and income producing private companies.
Two new unlisted and four follow-on investments were completed and a total of £1.35 million was invested. At 31 August 2010, the portfolio stood at 65 unlisted and AIM/PLUS quoted investments at a total combined cost of £25.1 million.
The following investments were completed during the reporting period:
| Investment | Date | Activity | Investment cost £'000 |
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| Beckford Capital | May 2010 | Leisure & Hotels | 640 | No website available |
| Camwatch | June 2010 | Communications | 98 | www.camwatch.co.uk |
| Countcar | May 2010 | Oil & Gas | 101 | www.atrgroup.co.uk |
| Lawrence Recycling & Waste Management | April 2010 | Support Services | 104 | www.lawrenceskiphire.co.uk |
| TC Communications Holdings | June 2010 | Support Services | 50 | www.tccommunications.co.uk |
| Venmar (trading as XPD8 Solutions) | June 2010 | Oil & Gas | 358 | www.xpd8solutions.com |
| Total investment |
| 1,351 |
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Two new substantial investments were added to the portfolio during the six months ended 31 August 2010. These were Beckford Capital, a company established to look at acquisitions in the Leisure and Hotels industry; and Venmar (trading as XPD8 Solutions), which operates in the fast growing condition monitoring and asset integrity segment of the oil and gas industry. The continuation of this later stage and yield based investment strategy should ensure that the Company is well placed to be able to support its long term dividend policy.
Realisations
In line with the strategy of reducing exposure to the quoted markets in favour of later stage private equity transactions, the Manager has continued to pursue the structured realisation of the AIM/PLUS portfolio.
The table below gives details of realisations during the reporting period.
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| Year first invested | Complete/ partial exit | Cost of shares disposed of £'000 | Sales proceeds £'000 | Realised gain/ (loss) £'000 | Realised gain/(loss) over February 2010 valuation £'000 |
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| Cyclotech | 2007 | Complete | - | 15 | 15 | 15 |
| Driver Hire Investments Group | 2004 | Partial | 21 | 1 | (20) | (20) |
| House of Dorchester | 2002 | Partial | 76 | 76 | - | - |
| Torridon Capital (LitComp) | 2010 | Partial | 505 | 505 | - | - |
| Total unlisted disposals |
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| 602 | 597 | (5) | (5) |
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| Animalcare Group | 2008 | Partial | 72 | 155 | 83 | 82 |
| Avanti Communications Group | 2007 | Partial | 31 | 82 | 51 | 51 |
| Brookwell | 2008 | Partial | 44 | 20 | (24) | (24) |
| Melorio | 2007 | Complete | 99 | 152 | 53 | 53 |
| SDI Group | 2007 | Complete | 96 | 5 | (91) | (91) |
| Total AIM disposals |
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| 342 | 414 | 72 | 71 |
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| Total disposals |
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| 944 | 1,011 | 67 | 66 |
Performance
The NAV total return per Ordinary Share at 31 August 2010 was 99.3p, an increase of 1.9p or 2.0% over the equivalent figure at 28 February 2010. The NAV per Ordinary share at 31 August 2010, after payment of the final dividend of 3.0p in respect of the year ended 28 February 2010, was 61.2p compared with 62.3p at 28 February 2010.
Recovery of VAT
The Company received an offer from Aberdeen Asset Managers Limited (Aberdeen), to refund all VAT charged on investment management fees for the period from 1 October 2005 to 1 October 2008. This offer was accepted by the Directors subject to reserving the Company's rights in respect of sums not repaid for earlier periods. The amount of £256,926 was received during the period but had already been recognised within the Financial Statements for the year ended 28 February 2010 and allocated to revenue and capital in accordance with the underlying accounting policy. The Board will continue its dialogue with Aberdeen with a view to making further recovery of amounts due to the Company.
Special distributable reserve
In the Annual Report for the year ended 28 February 2010, the Board highlighted that its proposals for the cancellation of the share premium account and the capital redemption reserve of the Company had been approved by Shareholders at a General Meeting held on 17 March 2010. The Companies Court has sanctioned these proposals and, as highlighted in Note 2, the special distributable reserve has been increased accordingly from the amount standing at the year end.
Dividend policy
The Board continues to target regular annual dividend payments subject to the availability of distributable reserves. The Board has declared an interim capital dividend of 1.0p per Ordinary share to be paid on 10 December 2010 to Shareholders on the Register at 12 November 2010.
The Company paid dividends totalling 4.0p per Ordinary Share in respect of the year ended 28 February 2010, which represents a yield of 5.0% per annum on the Ordinary Shares based on their net cost after initial tax relief and is equivalent to 5.33p gross from a UK equity share for a 40% rate tax payer. Based on the mid-market price of 50.0p at 31 August 2010, the annualised equivalent yield is 8.0%, which is paid tax-free and is equivalent to 10.7% for a 40% rate tax payer.
Principal risks and uncertainties
The Board has reviewed the principal risks and uncertainties facing the Company in the second half of its financial year: these are unchanged from those it faced at the start of the year, which are set out in the Annual Report and are the risks involved in investment in small and unquoted companies.
In order to reduce its exposure to investment risk, the Company has invested in a broadly-based portfolio of investments in unlisted and AIM/PLUS quoted companies in the United Kingdom. The VCT qualifying level of the portfolio is reviewed regularly by your Board and monitored on a continuous basis by the Manager in order to ensure that the Company consistently satisfies all of the criteria for VCT status.
Constitution of the Board
As indicated in the Annual Report for the year ended 28 February 2010, John Pocock assumed the role of Chairman of the Company after the conclusion of AGM on 8 July 2010. He replaced Fiona Wollocombe, who will remain as a Director of the Company until 28 February 2011, by which time it is anticipated that the Directors will have been able to identify another candidate to join the Board.
Outlook
Whilst there is a range of opinions on the general economic outlook in the UK, what appears to be in evidence is that both low growth and low interest rates are likely to persist for at least the medium term. Government spending cuts are yet to fully impact on the economy and consumer confidence, which gives further credence to this view. Bank debt will also remain scarce for private companies and, where available, will be significantly more expensive.
In these conditions, opportunities will continue to emerge for well managed, private equity focussed VCTs to take advantage of any dislocation or shortfall in the market for funding good quality private companies. The market has shifted noticeably in recent years, with private and public capital increasingly available to satisfy the funding gap experienced by many established companies across the UK. However, notwithstanding the wider opportunity to invest, competition for the better quality assets has increased markedly over the past 12 months with the emergence of alternative providers of capital to smaller companies, and this trend is expected to continue.
Maven Capital Partners UK LLP
Manager
22 October 2010
| Summary of Investment Changes for the six months ended 31 August 2010 | ||||||
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| Valuation 28 February 2010 | Net investment/ (disinvestment) | Appreciation/ (depreciation) | Valuation 31 August 2010 | ||
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| £'000 | % | £'000 | £'000 | £'000 | £'000 |
| Unlisted investments |
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| Equities | 4,516 | 20.7 | 122 | 585 | 5,223 | 22.5 |
| Preference shares | 1,062 | 4.9 | - | (2) | 1,060 | 4.6 |
| Loan stock | 10,203 | 46.8 | 632 | 57 | 10,892 | 46.8 |
| Total unlisted investments | 15,781 | 72.4 | 754 | 640 | 17,175 | 73.9 |
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| AIM/PLUS investments | 1,565 | 7.2 | (414) | 36 | 1,187 | 5.1 |
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| Listed fixed income investments | 1,218 | 5.6 | (1,205) | (13) | - | - |
| Total investments | 18,564 | 85.2 | (865) | 663 | 18,362 | 79.0 |
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| Other net assets | 3,233 | 14.8 | 1,650 | - | 4,883 | 21.0 |
| Net assets | 21,797 | 100.0 | 785 | 663 | 23,245 | 100.0 |
| Investment Portfolio Summary as at 31 August 2010 | |||||
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| Investments | Valuation £'000 | Cost £'000 | % of net assets | % of equity held | % of equity held by other clients1 |
| Unlisted | |||||
| THL Midlands (formerly Transys Holdings) | 1,600 | 2,771 | 6.9 | 31.7 | 40.1 |
| House of Dorchester | 1,498 | 683 | 6.4 | 44.2 | - |
| Homelux Nenplas | 1,034 | 391 | 4.4 | 7.9 | 32.1 |
| Oliver Kay Holdings | 1,003 | 771 | 4.3 | 4.9 | 15.1 |
| ELE Advanced Technologies | 942 | 192 | 4.0 | 11.3 | - |
| Westway Services | 927 | 523 | 4.0 | 4.9 | 17.0 |
| Camwatch | 884 | 884 | 3.8 | 14.6 | 28.5 |
| Martel Instruments Holdings | 807 | 807 | 3.5 | 14.9 | 29.3 |
| Torridon Capital (LitComp) | 790 | 341 | 3.4 | 3.7 | 29.4 |
| Lawrence Recycling & Waste Management | 750 | 750 | 3.2 | 9.7 | 48.3 |
| Atlantic Foods Group | 677 | 522 | 2.9 | 2.9 | 5.9 |
| Steminic | 656 | 656 | 2.8 | 8.8 | 42.8 |
| Dalglen 1150 (trading as Walker Technical Resources) | 647 | 527 | 2.8 | 11.3 | 51.7 |
| Beckford Capital | 640 | 640 | 2.8 | 46.1 | 53.9 |
| Adler & Allan Holdings | 623 | 623 | 2.7 | 2.2 | 4.8 |
| Nessco Group Holdings | 472 | 472 | 2.0 | 6.2 | 31.6 |
| Training for Travel Group | 462 | 446 | 2.0 | 5.1 | 24.9 |
| Intercede (Scotland) 1 (trading as Electo-Flow Controls) | 428 | 428 | 1.8 | 4.7 | 23.8 |
| PLM Dollar Group | 402 | 402 | 1.7 | 4.7 | 25.5 |
| Venmar (trading as XPD8 Solutions) | 358 | 358 | 1.5 | 5.4 | 29.6 |
| Dalglen 1148 (trading as PSP/AHC) | 300 | 1,075 | 1.3 | 17.5 | 57.5 |
| TC Communications Holdings | 256 | 248 | 1.1 | 8.4 | 53.0 |
| Tosca Penta Investments (esure Holdings) | 250 | 250 | 1.1 | 0.1 | 0.2 |
| Countcar | 244 | 123 | 1.0 | 13.8 | 39.3 |
| PSCA International | 154 | 154 | 0.7 | - | - |
| Enpure Holdings | 137 | 100 | 0.6 | 0.4 | 2.2 |
| Driver Hire Investments Group | 79 | 203 | 0.4 | 1.1 | 1.4 |
| Other unlisted investments | 155 | 4,972 | 0.8 | ||
| Total unlisted investments | 17,175 | 20,312 | 73.9 |
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| System C Healthcare | 196 | 311 | 0.9 | 0.5 | 0.5 |
| Cello Group | 136 | 310 | 0.6 | 0.8 | 0.3 |
| Avanti Communications Group | 111 | 42 | 0.5 | 0.1 | 0.1 |
| Plastics Capital | 104 | 281 | 0.4 | 1.0 | 2.7 |
| Animalcare Group | 92 | 53 | 0.4 | 0.5 | 1.1 |
| OPG Power Ventures | 90 | 78 | 0.4 | 0.1 | 0.4 |
| Hasgrove | 70 | 168 | 0.3 | 0.6 | 1.1 |
| Betbrokers | 60 | 132 | 0.3 | 0.4 | 1.5 |
| Neutrahealth | 43 | 91 | 0.2 | 0.6 | 1.3 |
| AMZ Holdings | 41 | 251 | 0.2 | 0.8 | 1.4 |
| Fuse 8 (formerly Award International Holdings) | 35 | 366 | 0.1 | 0.1 | 0.2 |
| Brulines Group | 35 | 37 | 0.1 | 0.1 | 0.3 |
| Chime Communications | 29 | 26 | 0.1 | - | 0.3 |
| Mount Engineering | 25 | 35 | 0.1 | 0.2 | 2.3 |
| Tangent Communications | 23 | 98 | 0.1 | 0.4 | 0.8 |
| Other AIM/PLUS investments | 97 | 2,493 | 0.4 | ||
| Total AIM/PLUS investments | 1,187 | 4,772 | 5.1 |
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| Total investments | 18,362 | 25,084 | 79.0 | ||
| 1Other clients of Maven Capital Partners UK LLP. | |||||
| Maven Income and Growth VCT PLC | |||
| Income Statement | |||
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| Six months ended 31 August 2010 (unaudited) | ||
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| Revenue | Capital | Total |
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| Investment income and deposit interest | 376 | - | 376 |
| Investment management fees | (32) | (128) | (160) |
| Other expenses | (136) | - | (136) |
| Gains/(losses) on investments | - | 663 | 663 |
| Net return on ordinary activities before taxation | 208 | 535 | 743 |
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| Tax on ordinary activities | (27) | 18 | (9) |
| Return attributable to Equity Shareholders | 181 | 553 | 734 |
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| Earnings per share (pence) | 0.48 | 1.48 | 1.96 |
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| Maven Income and Growth VCT PLC | |||
| Income Statement | |||
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| Six months ended 31 August 2009 (unaudited) | ||
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| Revenue | Capital | Total |
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| £'000 | £'000 | £'000 |
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| Investment income and deposit interest | 586 | - | 586 |
| Investment management fees | (32) | (127) | (159) |
| Other expenses | (85) | - | (85) |
| Gains/(losses) on investments | - | (412) | (412) |
| Net return on ordinary activities before taxation | 469 | (539) | (70) |
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| Tax on ordinary activities | (127) | 35 | (92) |
| Return attributable to Equity Shareholders | 342 | (504) | (162) |
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| Earnings per share (pence) | 0.97 | (1.43) | (0.46) |
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| Maven Income and Growth VCT PLC | |||
| Income Statement | |||
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| Year ended 28 February 2010 (audited) | ||
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| Revenue | Capital | Total |
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| Investment income and deposit interest | 1,047 | - | 1,047 |
| Investment management fees | (11) | (42) | (53) |
| Other expenses | (287) | - | (287) |
| Gains/(losses) on investments | - | 114 | 114 |
| Net return on ordinary activities before taxation | 749 | 72 | 821 |
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| Tax on ordinary activities | (186) | 11 | (175) |
| Return attributable to Equity Shareholders | 563 | 83 | 646 |
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| Earnings per share (pence) | 1.61 | 0.24 | 1.85 |
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| A Statement of Total Recognised Gains and Losses has not been prepared, as all gains and losses are recognised in the Income Statement. | |||
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| All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. | |||
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| The total column of this statement is the Profit and Loss Account of the Company. | |||
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| The accompanying Notes are an integral part of the Financial Statements. | |||
| Maven Income and Growth VCT PLC | |||
| Reconciliation of movements in Shareholders' funds | |||
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| Six months ended 31 August 2010 | Six months ended 31 August 2009 | Year ended 28 February 2010 |
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| (unaudited) | (unaudited) | (audited) |
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| Opening Shareholders' funds | 21,797 | 22,371 | 22,371 |
| Net return for the period | 734 | (162) | 646 |
| Proceeds of share issue | 1,864 | - | - |
| Repurchase and cancellation of shares | (10) | (4) | (160) |
| Dividends paid - revenue | (228) | (707) | (1,060) |
| Dividends paid - capital | (912) | - | - |
| Closing Shareholders' funds | 23,245 | 21,498 | 21,797 |
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| The accompanying Notes are an integral part of the Financial Statements. | |||
| Maven Income and Growth VCT PLC | |||
| Balance Sheet | |||
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| 31 August | 31 August | 28 February |
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| (unaudited) | (unaudited) | (audited) |
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| £'000 | £'000 | £'000 |
| Fixed assets |
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| Investments at fair value through profit or loss | 18,362
| 20,325 | 18,564
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| Current assets |
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| Debtors | 568 | 1,000 | 765 |
| Cash and overnight deposits | 4,343 | 514 | 2,775 |
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| 4,911 | 1,514 | 3,540 |
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| Creditors |
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| Amounts falling due within one year | 28 | 341 | 307 |
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| Net current assets | 4,883 | 1,173 | 3,233 |
| Net assets | 23,245 | 21,498 | 21,797 |
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| Capital and reserves |
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| Called up share capital | 3,799 | 3,535 | 3,497 |
| Share premium account | 159 | 17,235 | 17,235 |
| Capital reserve - realised | (2,790) | (1,269) | (1,835) |
| Capital reserve - unrealised | (5,887) | (7,636) | (6,483) |
| Special distributable reserve | 27,791 | 8,933 | 8,777 |
| Capital redemption reserve | 2 | 350 | 388 |
| Revenue reserve | 171 | 350 | 218 |
| Net assets attributable to Equity Shareholders | 23,245 | 21,498 | 21,797 |
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| Net Asset Value per Ordinary Share (pence) | 61.2
| 60.8 | 62.3
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| The accompanying Notes are an integral part of the Financial Statements. | |||
| Maven Income and Growth VCT PLC | |||
| Cash Flow Statement | |||
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| Six months ended 31 August 2010 | Six months ended 31 August 2009 |
Year ended 28 February 2010 |
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| Operating activities |
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| Investment income received | 324 | 415 | 1,347 |
| Deposit interest received | 7 | - | 25 |
| Investment management fees paid | 97 | (239) | (390) |
| Secretarial fees paid | (30) | (43) | (72) |
| Directors' fees paid | (30) | (30) | (60) |
| Other cash payments | (103) | (65) | (178) |
| Net cash inflow from operating activities | 265 | 38 | 672 |
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| Taxation |
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| Corporation tax | (174) | - | (232) |
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| (174) | - | (232) |
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| Financial investment |
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| Purchase of investments | (1,447) | (1,733) | (3,288) |
| Sale of investments | 2,210 | 1,810 | 5,733 |
| Net cash inflow from financial investment | 763 | 77 | 2,445 |
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| Equity dividends paid | (1,140) | (707) | (1,060) |
| Net cash (outflow)/inflow before financing | (286) | (592) | 1,825 |
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| Financing |
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| Issue of Ordinary Shares | 1,864 | - | - |
| Repurchase of Ordinary Shares | (10) | (4) | (160) |
| Net cash inflow/(outflow) from financing | 1,854 | (4) | (160) |
| Increase/(decrease) in cash | 1,568 | (596) | 1,665 |
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| The accompanying Notes are an integral part of the Financial Statements. | |||
Maven Income and Growth VCT PLC
Notes to the Financial Statements
1. Accounting policies
The financial information for the six months ended 31 August 2010 and the six months ended 31 August 2009 comprises non-statutory accounts within the meaning of the Companies Act 2006. The financial information contained in this report has been prepared on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 28 February 2010, which have been filed at Companies Houses and which contained an Auditors' Report which was not qualified and did not contain a statement under s498 (2) or s498 (3) of the Companies Act 2006.
2. Movement in reserves
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| Share premium account | Capital reserve - realised | Capital reserve - unrealised | Special distributable reserve | Capital redemption reserve | Revenue reserve |
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| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| As at 28 February 2010 | 17,235 | (1,835) | (6,483) | 8,777 | 388 | 218 |
| Gains on sales of investments | - | 67 | - | - | - | - |
| Net increase in value of investments | - | - | 596 | - | - | - |
| Investment management fees | - | (128) | - | - | - | - |
| Dividends paid | - | (912) | - | - | - | (228) |
| Tax effect of capital items | - | 18 | - | - | - | - |
| Repurchase and cancellation of shares | - | - | - | (10) | 2 | - |
| Share issue - 1 April 2010 | 1,154 | - | - | - | - | - |
| Share issue - 5 April 2010 | 247 | - | - | - | - | - |
| Cancellation of share premium account | (18,636) | - | - | 18,636 | - | - |
| Cancellation of capital redemption reserve | - | - | - | 388 | (388) | - |
| Share issue - 30 April 2010 | 159 | - | - | - | - | - |
| Net return on ordinary activities after taxation | - | - | - | - | - | 181 |
| As at 31 August 2010 | 159 | (2,790) | (5,887) | 27,791 | 2 | 171 |
3. Returns per Ordinary Share
The returns per Ordinary Share are based on the following figures:
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| Six months ended |
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| 31 August 2010 |
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| £'000 |
| Weighted average number of Ordinary Shares in issue | 37,429,973 |
| Revenue return | £181,000 |
| Capital return | £553,000 |
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge:
·; the Financial Statements for the six months ended 31 August 2010 have been prepared in accordance with applicable accounting standards, the Companies Act 2006 and the 2009 Statement of Recommended Practice 'Financial Statements of Investment Trust Companies (the SORP);
·; the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months, of the year ending 28 February 2011; and
·; the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to related party transactions and any changes therein.
Other information
The Net Asset Value per Ordinary Share has been calculated using the number of Ordinary Shares in issue at 31 August 2010 of 37,998,258.
A summary of investment changes for the six months under review and an investment portfolio summary as at 31 August 2010 are included above.
A full copy of the Interim Report and Financial Statements will be printed and issued to Shareholders.
Copies of this announcement will be available to the public at the office of Maven Capital Partners UK LLP, 149 St Vincent Street, Glasgow G2 5NW and at the registered office of the Company, 5th Floor, 9-13 St Andrew Street, London EC4A 3AF.
On behalf of the Board
Maven Capital Partners UK LLP
Secretary
22 October 2010