NCA.L Regulatory News (NCA)

23 Jun 2008 14:40

NEW CENTURY AIM VCT PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AS AT 29 FEBRUARY 2008 Financial Summary \* T Year ended Period ended 29 February 2008 28 February 2007Revenue return per share (pence) for the period 1.17 0.66Total return per share (pence) for the period -18.92 10.42Dividends per share (pence) 1.90 0.70Cumulative dividends per share (pence) 2.20 1.50Net asset value per share (pence) 115.46 136.5Cumulative value of shareholder investment (net asset value plus cumulative dividends per share) (pence) 117.20 136.50Shareholders' funds (£'000) 9,773 11,434\* T Chairman's Statement The past twelve months has continued to be difficult with the FTSE AIM Indexfalling by 7.9%. This index contains many strong performing natural resourcesstocks, without which the index would have been much lower. The majority ofnatural resources stocks are not eligible as qualifying investments for VCT's.Reflecting this, your fund Net Asset Value fell by 14.8% over the period.Liquidity played a major part in the weakness of the AIM market. Price fallswere often disproportionate to the size of sales. Good results and encouragingstatements often saw little reaction to the underlying share prices whileanything negative tended to lead to heavy mark downs. During the year, we realised net profits of £1.677million. Most importantly,qualifying investments rose to 77.1% of the total investment cost, i.e. wellabove the 70% level required to retain VCT qualifying status. Our gross income increased to £166,208 from which we propose to pay a dividendof 1.9p per share, costing £160,826 or 96.8% of the gross income received. While the recent performance has been disappointing, the investment managementteam believe that many of the constituents of your fund have fallen to levels atwhich they represent exceptionally good value and this augurs well for thefuture. On your behalf, I would like to thank the management team for their hard workduring these trying times. I would also like to thank our two assistants who, inthe interest of saving costs, copied and collated all the annual reports forshareholders. To reduce the amount of work involved and to reduce costs further,it would help, if you have not already done so, to arrange for your futurereports to be sent by e-mail. This can be arranged by contacting Alison orJackie on 01268 493333. Annual General Meeting The annual general meeting will be held at 11.30 a.m. on 28 August 2008 at 17-21New Century Road, Laindon, Essex SS15 6AG. I look forward to meeting thoseshareholders who are able to attend. John BriceChairman27 May 2008 Investment Managers' Review With smaller company funds like New Century AIM VCT, one of the most difficultproblems facing fund managers is the liquidity of the holdings. While it isrelatively easy to sell large holdings of bigger companies, the same is not truefor many AIM companies. When a company floats on the Stock Market for the firsttime, or when it comes back to the Stock Market to raise extra capital, it isoften possible to obtain a meaningful holding in the company, typically between£100,000 and £500,000 in value. However, when it comes to selling, it can provedifficult to shift holdings of this size. For this reason, we have to take along term approach regarding investment. Maintaining at least 70% of the fund inVCT qualifying stocks also necessitates us to view such shares as long terminvestments. To reduce such risks, we carefully analyse each investment prior to purchase andin the case of the largest holdings, we spend as much time as possible meetingthe management of the companies in order to understand their business and longterm prospects. To help mitigate the risks of liquidity, we aim to build up anever increasing spread of investments, made up of smaller and smaller holdings.Thus, over the past year, we have increased the number of holdings from 48 to67. The advantage of this approach is that, if any one investment goes wrong, ithas a less detrimental impact on the overall performance of the fund; while thesmaller the size holding, the easier it is to dispose of. We also look to banksome of the profits when holdings become disproportionately large. Wherepossible, we try to adhere to the old adage of running our successfulinvestments but cutting those that go wrong. During the year we benefited from takeovers of Computer Software Group, BrokerNetwork Holdings and Synexus Clinical Research. These three investments nettedyour fund profits of just over £185,000. We took profits or partial profits on16 other investments, the most notable being on Tanfield where we secured aprofit of over £1.56million. We reduced or disposed of holdings in eightcompanies where we believed the prospects had diminished. In total, we cutlosses of just over £250,000 on these investments. We have continued to invest in companies that will benefit from new legislation,particularly relating to environmental issues. These have included: BGlobal - Provides smart metering services to record and monitor energyconsumption. Eaga - Engaged in making residential improvements in the environmental, socialjustice and energy efficiency arenas. Superglass Holdings - Manufacturing and supplying glass wool thermal insulationproducts. Kurawood - Manufactures and distributes organically hardened softwood using aproprietary and innovative timber treatment process. Southern Bear - Installs energy efficient heating systems to social housing. Prospects You may feel concerned and disappointed to have seen a reduction in the netasset value of your fund. Indeed, I regret to say that since the year end, wehave continued on a downward trend and at the time of writing, 27th May 2008,the net asset value per share has fallen further to 113.2p. Whilst we share yourdisappointment in the fall in share price, we do not see this as a cause forconcern. We are very happy with the constituents of the fund, most of which aremaking good progress in profit terms, even if their share prices are notreflecting this. Many shares within the fund are on ratings that historicallylooked exceptionally good value. That does not mean that they will not becomecheaper still but at current levels, we believe there is scope for the value ofthe shares within your fund to move considerably higher. Michael Barnard27 May 2008 Income Statement (incorporating the revenue account) for the year to 29 February 2008 \* T Year ended Period ended 29 February 2008 28 February 2007 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Gains/ (losses) on investments- realised - 1,677 1,677 - 1,176 1,176- unrealised - (3,274) (3,274) - (262) (262)Income 166 - 166 111 - 111Investment management fee (34) (103) (137) (29) (88) (117)Other expenses (33) - (33) (26) - (26) ---------- ---------- ----------- ---------- -------- ------------Return on ordinary activities before taxation 99 (1,700) (1,601) 56 826 882Tax (charge)/credit on ordinary activities (20) 20 - (17) 17 - ---------- ---------- ----------- ---------- -------- ------------Return on ordinary activities after taxation 79 (1,680) (1,601) 39 843 882 ========== ========== =========== ========== ======== ============ Return per ordinary share (pence) 0.93 (19.85) (18.92) 0.47 9.95 10.42\* T All revenue and capital items in the above statement are from continuingoperations in the current year. No operations were acquired or discontinued inthe current period. Other than shown above, the company had no recognised gainsor losses. Accordingly no statement of total recognised gains and losses hasbeen prepared. Balance Sheet At 29 February 2008 \* T Year ended Period ended 29 February 2008 28 February 2007 £000 £000 Fixed assetsInvestments 9,206 8,934 Current assetsDebtors 591 2,528 Current liabilitiesCreditors: amounts falling duewithin one year (24) (28) -------------- ------------ 9,773 11,434 ============== ============Capital and reservesCalled up share capital 846 846Share premium 7,534 7,534Capital reserve - realised 2,705 1,131Capital reserve - unrealised (1,374) 1,880Revenue reserve 62 43 -------------- ------------Total equity shareholders' funds 9,773 11,434\* T \* TNet asset value per ordinary share 115p 135p\* T Cash Flow Statement for the year to 29 February 2008 \* T Year ended Period ended Note 29 February 2008 28 February 2007 £000 £000 Net cash outflow from operating activities 4 (174) (147) Returns on investmentsInterest received 86 55Investment income 80 56 ============ ============Net cash inflow/ (outflow) for returns on investmentsand servicing of finance 166 111 Taxation - (14) Dividend paid (60) (127) Capital expenditure & financial investmentSale of investments 3,545 3,789Purchase of investments (5,414) (2,721) ============ ============Net cash inflow/ (outflow) for capital expenditure (1,869) 1,068& financial investment ------------ ------------Net cash inflow/(outflow) before financing (1,937) 891 Net proceeds of share issue - - ------------ ------------(Decrease)/ Increase in uninvested funds with broker (1,937) 891 ============ ============\* T Notes 1 Return per share The revenue return, per ordinary share, is based on the net revenue on ordinaryactivities after taxation of £78,928 (2007: £39,505) and on 8,464,500 (2007:8,464,500) ordinary shares, being the weighted average number of ordinary sharesin issue during the period. The capital return per ordinary share is based on a net realised and unrealisedcapital profit/(loss) of (£1,700,384) (2007: £809,132) and on 8,464,500 (2007:8,464,500) ordinary shares, being the weighted average number of ordinary sharesin issue during the period. 2 Dividend The directors are proposing a final dividend of 1.90p per share for the periodended 29 February 2008. 3 Accounts The financial information presented is not statutory accounts within the meaningof s.240 of the Companies Act 1985. The Annual Report and Accounts for the year ended 29 February 2008 will be filedat the Registrar of Companies following the annual general meeting and will beposted to shareholders shortly. 4 Net cash flows from operating activities \* T Year ended Period ended 29 February 2008 28 February 2007 £000 £000Operating activitiesOperating profit (1,601) 882Profit on sale of investments (1,677) (1,176)Investment income (166) (111)Unrealised losses/(gains) on investments 3,274 262(Decrease)/increase in creditors (4) (4) ------------- ----------Net cash inflow/outflow from operating activities (174) (147) ============= ==========\* T 5 Announcement A copy of this announcement will be available at the offices of the Company for14 days from the date of this announcement. This preliminary announcement is notbeing posted to shareholders. Directors John Roger Simpson Brice (Chairman) Michael David Barnard Geoffrey Gamble Robin Kirby Peter William Riley All directors are non-executive. Management and Administration \* TRegistered Office & Registered Number Investment Manager and Broker4th Floor, M D Barnard & Company Limited150-152 Fenchurch Street 17-21 New Century RoadLondon EC3M 6BB Laindon Essex SS15 6AG5352611Company Secretary Auditor & VCT Status Adviser Graham Urquhart UHY Hacker Young4th Floor, Quadrant House150-152 Fenchurch Street 17 Thomas More StreetLondon EC3M 6BB London E1W 1YWRegistrar Bankers Neville Registrars Limited Bank of ScotlandNeville House, 18 Laurel Lane New Uberior HouseHalesowen, West Midlands B63 3DA 11 Earl Grey Street Edinburgh EH3 9BNSolicitors Dundas & Wilson5th Floor, Northwest WingBush HouseAldwychLondon WC2B 4EZ\* T Copyright Business Wire 2008