Northern 3 Vct Regulatory News (NTN)

20 May 2005 08:52

Northern 3 VCT PLC20 May 2005 20 MAY 2005NORTHERN 3 VCT PLCUNAUDITED INTERIM RESULTSFOR THE SIX MONTHS ENDED 31 MARCH 2005 Northern 3 VCT PLC is a Venture Capital Trust (VCT) managed by Northern VentureManagers. It invests mainly in unquoted venture capital holdings and aims toprovide high long-term returns to shareholders through a combination of dividendyield and capital growth. Financial highlights (comparative figures as at 31 March 2004): • Net assets £25,736,000 £18,592,000 • Net asset value per share 93.8p 94.7p • Profit/(loss) on ordinary activities before tax:Revenue £280,000 £198,000Capital £(192,000) £(175,000) • Earnings/(loss) per share:Revenue 0.9p 0.8pCapital (0.6)p (0.7)p • Interim dividend per share 0.7p 0.5p • Cumulative return toshareholders since launch:Dividends per share 7.2p 2.6pNet asset value plus dividends 101.0p 97.3p For further information, please contact: Alastair Conn, Managing Director 0191 244 6000Northern Venture Managers LimitedWebsite: www.nvm.co.ukCharles Ansdell/Marlene Scott 020 7655 0540Polhill Communications NORTHERN 3 VCT PLCCHAIRMAN'S STATEMENT The Chairman of Northern 3 VCT PLC, John Hustler, included the following pointsin his statement to shareholders: Since my last report to shareholders in November 2004, conditions have remainedfavourable for VCT fund-raising and I am pleased to report that in the tax year2004/05 our series of top-up share issues raised a total of £10.2 million beforeexpenses. The company's net assets at 31 March 2005 were £25.7 million andsubsequent share allotments during April have taken the total to just under £30million. Your directors consider that the initial objective of raisingsufficient funds to ensure long-term viability has been attained, so that we cannow concentrate on the continuing build-up of the VCT-qualifying investmentportfolio. On behalf of the board I would like to thank all our existing and newshareholders for their support. Net asset valueThe unaudited net asset value per share at 31 March 2005 was 93.8p, marginallyup from the corresponding figure of 93.4p at 30 September 2004. This reflectsthe fact that the unquoted investment portfolio is relatively immature at thisstage, with 16 of the 24 holdings still valued at cost. InvestmentsAs I noted in my last report, there has been a welcome upturn in new investmentactivity since the middle of 2004. During the half year ten new investmentstotalling £2.9 million were completed in the following companies: • SMS Agencies (£500,000) - vehicle driver staffing agency, Crawley • LEDA Holdings (£385,000) - temporary staff recruitment agency, Leeds • Arleigh International (£210,000) - supplier of spares and consumables for caravans and leisure boats, Nuneaton • Cello Group (£251,000) - AIM-quoted marketing and communication services provider, London • Direct Valeting (£427,000) - car valeting contractor, Newcastle-under-Lyme • Andor Technology (£201,000) - AIM-quoted manufacturer of scientific imaging and spectroscopy equipment, Belfast • Envirotec (£455,000) - manufacturer of air curtains and air handling units, High Wycombe • e-know.net (£225,000) - application service provider, Telford • Daniolabs (£75,000) - development of therapeutics for neurological and ophthalmological diseases, Cambridge • Computer Software Group (£133,000) - AIM-quoted developer of business solutions software, Wimbledon Four further investments totalling £1.2 million have been completed since theend of March. The increase in the size of the company now allows us to take alarger share of each new investment made by Northern Venture Managers' funds.Our managers have increased the size of their investment team from 13 to 16 overthe past 12 months in order to resource the increased rate of new investment aswell as the resulting portfolio management workload. The unquoted portfolio continues to develop well. The majority of theinvestments are, as mentioned above, still held at cost, but in several cases itis now appropriate to reflect improved performance by increasing the valuation.GB Industries, which was fully provided against last year, continues its gradualrecovery but at this stage a revaluation would be premature. Our six quotedventure capital investments (one fully listed and five on AIM) are all makingsatisfactory progress. Earnings and dividendThe revenue earnings per share for the half year were 0.9p, compared with 0.8pfor the corresponding period to 31 March 2004. The directors have declared anincreased interim revenue dividend of 0.7p (last year 0.5p), payable on 22 July2005 to shareholders on the register on 17 June 2005. This brings the cumulativetotal of dividends declared by the company to 7.2p per share. The dividend investment scheme introduced in October 2004 was taken up by 20% ofshareholders, representing approximately 17% of the company's issued capital.£148,000 was reinvested in ordinary shares during the half year, withsubscribers benefiting from the attractive tax reliefs currently available onnew VCT investments. Shareholders who are interested in joining the schemeshould contact the company secretary for further information. Format of financial statementsIn October 2004 Northern 3 VCT revoked its status as an investment company underthe Companies Act 1985 in order to allow the payment of dividends out ofrealised capital gains. This means that the company is now obliged to include aprofit and loss account, a statement of total recognised gains and losses and anote of historical cost profits and losses in its financial statements and theseare set out below. Share buybacksAt the annual general meeting in January 2005 shareholders renewed thedirectors' authority to make market purchases of shares for cancellation. Duringthe half year to 31 March 2005 the company bought back for cancellation 207,110shares at a discount of approximately 10% to net asset value. The secondarymarket for VCT shares is currently very quiet, due largely to the relativeattraction of subscribing for new shares with the benefit of 40% income taxrelief, and subject to market conditions we will continue to buy back shareswithin the limits of our authority. VCT qualifying statusYour board continues to monitor progress towards the Inland Revenue qualifyingtargets, with the help of PricewaterhouseCoopers LLP who have been retained toadvise on this and other tax matters. In November 2004 I stated that it had beennecessary to place funds on non-interest bearing deposit in order to remainwithin the 70% qualifying investment limits; I am very pleased to report that asa result of the increase in the level of VCT-qualifying holdings this measure isnow no longer necessary. We are satisfied that the company has continued tofulfil the conditions for maintaining VCT status. ProspectsThere are increasing signs of an economic slowdown in the UK, with thehousebuilding and retail sectors reporting reduced activity. Against thisbackground our managers are focussed on building a portfolio of investmentswhich will come through difficult conditions in good shape and producesatisfactory long-term returns for shareholders. JOHN HUSTLER Chairman The unaudited interim financial statements for the six months ended 31 March2005 are set out below. PROFIT AND LOSS ACCOUNT(unaudited) for the six months ended 31 March 2005 Six months Six months ended 31 March ended 31 March 2005 2004 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Profit/(loss)recognised in theperiodon realisationof investments - 9 9 - (5) (5)Income 437 - 437 338 - 338Investmentmanagement fee (67) (201) (268) (57) (170) (227)Other expenses (90) - (90) (83) - (83) ------ ------ ------ ------ ------ ------Profit/(loss) onordinary activitiesbefore tax 280 (192) 88 198 (175) 23Tax on profiton ordinaryactivities (65) 54 (11) (47) 43 (4) ------ ------ ------ ------ ------ ------Profit/(loss) onordinary activitiesafter tax forthe period 215 (138) 77 151 (132) 19Dividends -interim (230) - (230) (91) - (91)- final - - - - - - ------ ------ ------ ------ ------ ------Retainedprofit/(loss)for the period (15) (138) (153) 60 (132) (72) ------ ------ ------ ------ ------ ------Earnings/(loss) per share 0.9p (0.6)p 0.3p 0.8p (0.7)p 0.1pDividend pershare 0.7p - 0.7p 0.5p - 0.5p Year ended 30 September 2004 Revenue Capital Total £000 £000 £000Profit recognised in the yearon realisation of investments - 442 442Income 796 - 796Investment management fee (119) (357) (476)Other expenses (172) - (172) ------ ------ ------Profit on ordinary activitiesbefore tax 505 85 590Tax on profit on ordinary activities (116) 94 (22) ------ ------ ------Profit on ordinary activitiesafter tax for the financial year 389 179 568Dividends - interim (91) - (91)- final (245) (623) (868) ------ ------ ------Retained profit/(loss) for the year 53 (444) (391) ------ ------ ------Earnings per share 2.0p 0.9p 2.9pDividend per share 1.6p 2.8p 4.4p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES(unaudited) for the six months ended 31 March 2005 Six months Six months ended 31 March ended 31 March 2005 2004 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Profit/(loss) onordinary activitiesafter tax 215 (138) 77 151 (132) 19Unrealised gains onrevaluation ofinvestments - 187 187 - 23 23 ------ ------ ------ ------ ------ ------Total recognised gainsand lossesduring theperiod 215 49 264 151 (109) 42 ------ ------ ------ ------ ------ ------ Year ended 30 September 2004 Revenue Capital Total £000 £000 £000Profit on ordinary activitiesafter tax 389 179 568Unrealised gains onrevaluation of investments - 16 16 ------ ------ ------Total recognised gains and lossesduring the period 389 195 584 ------ ------ ------ NOTE OF HISTORICAL COST PROFITS AND LOSSES(unaudited) for the six months ended 31 March 2005 Six months Six months ended 31 March ended 31 March 2005 2004 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Reported profit/(loss)on ordinaryactivitiesbefore tax 280 (192) 88 198 (175) 23Realisation ofinvestmentrevaluationgains of priorperiods - 19 19 - 111 111 ------ ------ ------ ------ ------ ------Historical cost profit/(loss)for the periodbefore tax 280 (173) 107 198 (64) 134 ------ ------ ------ ------ ------ ------Historical cost profit/(loss) for theperiod aftertax anddividends (15) (119) (134) 60 (21) 39 ------ ------ ------ ------ ------ ------ Year ended 30 September 2004 Revenue Capital Total £000 £000 £000Reported profit on ordinary activitiesbefore tax 505 85 590Realisation of investment revaluationgains of prior periods - 173 173 ------ ------ ------Historical cost profitfor the period before tax 505 258 763 ------ ------ ------Historical cost profit for theperiod after tax and dividends 53 (271) (218) ------ ------ ------ BALANCE SHEET(unaudited) as at 31 March 2005 31 March 2005 31 March 2004 30 September 2004 £000 £000 £000Venture capital investments:Unquoted 6,760 3,859 4,312Quoted 1,092 380 456 ------- ------- -------Total venture capitalinvestments 7,852 4,239 4,768Listed fixed-interestinvestments 12,000 8,675 7,413 ------- ------- -------Total fixed assetinvestments 19,852 12,914 12,181 ------- ------- -------Current assets:Investments - 2,992 -Debtors 400 244 395Cash at bank 5,878 2,685 9,184 ------- ------- ------- 6,278 5,921 9,579Creditors (amounts falling duewithin one year) (394) (243) (958) ------- ------- -------Net current assets 5,884 5,678 8,621 ------- ------- ------- Net assets 25,736 18,592 20,802 ------- ------- ------- Capital and reserves:Called-up equity sharecapital 1,371 982 1,113Share premium 18,731 11,480 13,922Capital redemption reserve 15 3 5Revaluation reserve 107 8 (61)Profit and loss account 5,512 6,119 5,823 ------- ------- -------Total equity shareholders'funds 25,736 18,592 20,802 ------- ------- -------Net asset value per share 93.8p 94.7p 93.4p CASH FLOW STATEMENT(unaudited) for the six months ended 31 March 2005 Six months Six months Year ended ended ended 31 March 2005 31 March 2004 30 September 2004 £000 £000 £000 £000 £000 £000Cash flow statementNet cash inflow fromoperating activities 146 283 192 Taxation:Corporation tax paid - - (22) Financial investment:Purchase of investments (12,616) (6,315) (12,015)Sale/repayment ofinvestments 5,141 6,755 13,628 ------ ------ ------Net cash inflow/(outflow) fromfinancial investment (7,475) 440 1,613 Equity dividends paid (877) (193) (282) ------ ------ ------Net cash inflow/(outflow) before useof liquid resources andfinancing (8,206) 530 1,501Net cash inflow/(outflow) frommanagement of liquidresources - (621) 2,371Financing:Issue of ordinary shares 5,332 2,065 4,776Share issue expenses (255) (103) (239)Purchase of ordinarysharesfor cancellation (177) (22) (61) ------ ------ ------Net cash inflow fromfinancing 4,900 1,940 4,476 ------ ------ ------Increase/(decrease) incash at bank (3,306) 1,849 8,348 ------ ------ ------ Reconciliation of profitbeforetax to net cash flowfromoperating activitiesProfit on ordinaryactivitiesbefore tax 88 23 590(Increase)/decrease indebtors (5) 164 13Increase in creditors 72 91 31(Profit)/loss recognisedonrealisation of (9) 5 (442)investments ------ ------ ------Net cash inflow fromoperating activities 146 283 192 ------ ------ ------ Analysis of movement innet funds 1 October 2004 Cash flows 31 March 2005 £000 £000 £000Cash at bank 9,184 (3,306) 5,878 ------ ------ ------ INVESTMENT PORTFOLIO SUMMARYas at 31 March 2005 Valuation % of net assets £000 by valuationVenture capital investments:IG Doors 500 1.9SMS Agencies 500 1.9Longhirst Group 495 1.9Envirotec 455 1.8Arrow Industrial Group 443 1.7Crantock Bakery 442 1.7Direct Valeting 427 1.7Omnico Plastics 414 1.6LEDA Holdings 385 1.5RBF Industries 361 1.4Warmseal Windows (Newcastle) 339 1.3Cello Group** 338 1.3John Laing Partnership 300 1.2Crabtree of Gateshead 289 1.1DxS 263 1.0Andor Technology** 253 1.0S&P Coil Products 240 0.9e-know.net 225 0.9Arleigh International 210 0.8PM Group** 170 0.7Liquidlogic 165 0.7Computer Software Group** 129 0.5AFI Aerial Platforms 115 0.4Fountains** 104 0.4Alizyme* 97 0.4Daniolabs 75 0.3Survey Inspection Systems 73 0.3Oxonica 45 0.2GB Industries - -GSM-Central - - ------- ------Total venture capital investments 7,852 30.5Listed fixed-interest investments 12,000 46.6 ------- ------Total fixed asset investments 19,852 77.1Net current assets 5,884 22.9 ------- ------Net assets 25,736 100.0 ------- ------*Listed on the London Stock Exchange**Quoted on the Alternative Investment Market The above summary of results for the six months ended 31 March 2005 does notconstitute statutory financial statements within the meaning of Section 240 ofthe Companies Act 1985 and has not been delivered to the Registrar of Companies.The figures for the year ended 30 September 2004 have been extracted from thefinancial statements for that year, which have been delivered to the Registrarof Companies; the independent auditors' report on those financial statementsunder Section 235 of the Companies Act 1985 was unqualified. The proposed interim dividend of 0.7p per share for the year ending 30 September2005 will be paid on 22 July 2005 to shareholders on the register at the closeof business on 17 June 2005. A copy of the interim report for the six months ended 31 March 2005 is expectedto be posted to shareholders by 3 June 2005 and will be available to the publicat the registered office of the company at Northumberland House, Princess #Square, Newcastle upon Tyne NE1 8ER. ENDS This information is provided by RNS The company news service from the London Stock Exchange