Northern Venture Trust Regulatory News (NVT)

10 May 2006 16:41

Northern Venture Trust PLC10 May 2006 10 MAY 2006 NORTHERN VENTURE TRUST PLC UNAUDITED INTERIM RESULTSFOR THE SIX MONTHS ENDED 31 MARCH 2006 Northern Venture Trust PLC is a Venture Capital Trust (VCT) managed by NorthernVenture Managers. The trust was one of the first VCTs launched on the LondonStock Exchange in 1995. It invests mainly in unquoted venture capital holdingsand aims to provide high long-term returns to shareholders through a combinationof dividend yield and capital growth. Financial highlights:(comparative figures as at 31 March 2005, where applicable, in italics) 2006 2005 As re-statedORDINARY SHARES• Net assets* £32,053,000 £33,680,000• Net asset value per share* 82.4p 89.7p• Return per shareRevenue 1.2p 1.1pCapital 1.2p (1.3)pTotal 2.4p (0.2)p• Interim dividend per shareproposed in respect of the periodRevenue 1.0p 1.0pCapital 2.0p 2.0pTotal 3.0p 3.0p• Cumulative return toshareholders since launchDividends per share** 56.0p 47.0pNet asset value plus dividends 135.4p 133.7p C SHARES• Net assets £15,020,000• Net asset value per share 94.5p• Return per shareRevenue 0.2pCapital (0.3)pTotal (0.1)p• Interim dividend per shareproposed in respect of the period Nil * Before deducting proposed interim dividend **Including proposed interim dividend For further information, please contact:Northern Venture Managers Limited Alastair Conn, Managing Director 0191 244 6000 Website: www.nvm.co.ukLansons Communications Alison Boucher 020 7294 3616 NORTHERN VENTURE TRUST PLC CHAIRMAN'S STATEMENT The Chairman of Northern Venture Trust PLC, Professor Sir Frederick Holliday CBEFRSE, included the following points in his statement to shareholders: I am delighted to report a successful outcome to our company's offer of new Cshares for subscription in the 2005/06 tax year, launched in November 2005. Atotal of £20.7 million was raised by the closing date on 5 April 2006, and Iwould like to take this opportunity to welcome new shareholders and thank themfor their support. The proceeds of the issue will be managed and accounted foras a separate pool of funds until the scheduled date for conversion of the Cshares into ordinary shares in 2009. The timing of the C share issue was opportune, as the Government has announcedproposals to make some radical changes to the VCT legislation relating to fundsraised after 6 April 2006 - including a reduction in initial income tax relieffrom 40% to 30%, a minimum investment holding period of five years and newrestrictions on the size of company which can be treated as a VCT-qualifyinginvestment. As a result of the increase in share capital our company now has total assets inexcess of £50 million, which gives us a very strong foundation for the future. Results The results for the six months ended 31 March 2006 have been affected by twochanges in accounting standards. Quoted investments are now valued at bid pricerather than mid-market price, and proposed dividends are not deducted fromreported net assets until either payment has been made or there is a firmcommitment to make payment (eg approval by the shareholders in general meeting). The comparative results for earlier periods have been re-stated on the newbasis. The net asset value (NAV) per ordinary share at 31 March 2006 was 82.4p,compared with the re-stated year-end figure of 86.0p at 30 September 2005. Themovement of 3.6p over the half year comprised a positive return per share of2.4p as shown in the income statement, less the final dividend of 6.0p declaredin respect of the year ended 30 September 2005 and approved by shareholders inDecember 2005. The revenue return per ordinary share for the half year was 1.2p, slightly upfrom the corresponding period. The directors propose an unchanged interimdividend of 3.0p per ordinary share, comprising 1.0p revenue and 2.0p capitaldistribution, which will be paid on 9 June 2006 to shareholders on the registeron 19 May 2006. This takes the cumulative ordinary dividends paid by thecompany to 56p per share. 15.9 million of the new C shares were issued in the period up to 31 March 2006and are reflected in the balance sheet at that date. The net asset value per Cshare, after deducting issue expenses, was 94.5p. As indicated in theprospectus, no interim dividend will be paid in respect of the C shares in thecurrent financial year. Investments During the six months to 31 March 2006 the ordinary and C share funds invested atotal of £329,000 in Wear Inns, a new company formed to acquire an estate ofmanaged public houses in the North East of England, and the C share fundinvested £198,000 in Twenty, an Aim-quoted marketing services company. Theunusually low number of completions in the period does not reflect our managers'continuing activity aimed at identifying and progressing suitable opportunities,and we expect to report an increased level of new investment in the second halfof the year. Since the end of March an investment of £993,000 in Nightingales,the women's clothing retailer, has been completed and two other investments havebeen approved. Proceeds of disposals from the ordinary share venture capital portfolio duringthe half year totalled £3.7 million. The company's shareholding in OmnicoPlastics was sold to SIG plc for £1.3 million in cash and a surplus over cost of£649,000, and £1.7 million was raised from the quoted portfolio by selling BBIHoldings and BioFocus and reducing Alizyme and Computer Software Group - allrealising at least twice their original cost. The unquoted portfolio has generally made good progress but there were twosignificant and disappointing failures in the period. As reported at the lastyear end, VPTA went into administration in October 2005 after the discovery ofapparent financial reporting irregularities which led to withdrawal of banksupport. Investigations into the circumstances are continuing. SMS Agencies,the vehicle for a management buy-out/buy-in of a recruitment business in 2004,was unable to achieve planned levels of performance and suffered mountingliquidity problems which led to the appointment of administrators in February2006. The cost of these investments, totalling £2.3 million, has been fullywritten off - £1.9 million was provided for in the accounts at 30 September 2005and the balance of £0.4 million in the half year to 31 March 2006. Shareholder issues Following the successful tender offer to ordinary shareholders in 2005, thecompany has continued to promote shareholder liquidity by purchasing its sharesin the market for cancellation. In the half year to 31 March 2006 a total of456,141 ordinary shares, representing approximately 1.2% of the issued ordinarycapital, were re-purchased at a cost of £344,000. The dividend investment scheme introduced in 2004 will continue to operate inthe current financial year. A number of VCTs have recently announced thesuspension of such schemes in response to the recent Budget changes, but yourboard wishes to keep this facility available to shareholders and believes thatit remains potentially attractive under the new legislation. Shareholdersinterested in joining the scheme should contact the company secretary forfurther information. I recently wrote to shareholders with details of a shareholder presentation tobe held in London on 16 May 2006. The annual general meeting this year will beheld in Edinburgh on 14 December 2006. Your directors look forward to meetingas many shareholders as possible on these occasions. Management performance incentive At the annual general meeting in December 2005 shareholders gave approval to thenew performance incentive scheme recommended by the directors, wherebyexecutives of Northern Venture Managers will co-invest in venture capitalinvestments made by the company. The scheme has recently begun to operate andwill be kept under close review by the board. Our managers have continued tostrengthen their investment team. VCT qualifying status The company retains PricewaterhouseCoopers LLP as advisers on matters relatingto VCT status. The directors are satisfied that the qualifying conditions laiddown by HM Revenue & Customs for VCT approval have continued to be met. Outlook The past 18 months have been a busy period for our company on several fronts,particularly through the C share issue which has secured a good supply of fundsfor future investment. Our managers are continuing to identify attractive newopportunities as well as seeking to generate further cash from disposals to funddividend distributions. Economic conditions in the UK remain broadly favourableand we believe that the long-term prospects for our enlarged business are good. PROFESSOR SIR FREDERICK HOLLIDAYChairman The unaudited interim financial statements for the six months ended 31 March2006 are set out below. INCOME STATEMENT - Ordinary Shares (unaudited) for the six months ended 31 March 2006 Six months ended 31 March 2006 Six months ended 31 March 2005 As re-stated Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000(Loss)/gain on disposal of investments held at fair value - (490) (490) - 590 590Unrealised adjustments to fair value of investments - 1,164 1,164 - (952) (952)Income 806 - 806 813 - 813Investment management fee (92) (276) (368) (104) (311) (415)Other expenses (113) - (113) (121) - (121) ------ ------ ------ ------ ------ ------Return on ordinary activities before tax 601 398 999 588 (673) (85)Tax on return on ordinary activities (134) 86 (48) (151) 151 - ------ ------ ------ ------ ------ ------Return on ordinary activities after tax 467 484 951 437 (522) (85) ------ ------ ------ ------ ------ ------ Return per share 1.2p 1.2p 2.4p 1.1p (1.3)p (0.2)p Year ended 30 September 2005 As re-stated Revenue Capital Total £000 £000 £000Gain on disposal of investments held at fair value - 626 626Unrealised adjustments to fair value of investments - (1,638) (1,638)Income 1,601 - 1,601Investment management fee (200) (599) (799)Other expenses (230) - (230) ------ ------ ------Return on ordinary activities before tax 1,171 (1,611) (440)Tax on return on ordinary activities (289) 278 (11) ------ ------ ------Return on ordinary activities after tax 882 (1,333) (451) ------ ------ ------ Return per share 2.3p (3.4)p (1.1)p INCOME STATEMENT - C Shares (unaudited) for the six months ended 31 March 2006 Six months ended 31 March 2006 Revenue Capital Total £000 £000 £000Gain on disposal of investments held at fair value - - -Unrealised adjustments to fair value of investments - - -Income 37 - 37Investment management fee (7) (21) (28)Other expenses (15) - (15) ------ ------ ------Return on ordinary activities before tax 15 (21) (6)Tax on return on ordinary activities (5) 5 - ------ ------ ------Return on ordinary activities after tax 10 (16) (6) ------ ------ ------ Return per share 0.2p (0.3)p (0.1)p INCOME STATEMENT - Company (unaudited) for the six months ended 31 March 2006 Six months ended 31 March 2006 Six months ended 31 March 2005 As re-stated Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000(Loss)/gain on disposal of investments held at fair value - (490) (490) - 590 590Unrealised adjustments to fair value of investments - 1,164 1,164 - (952) (952)Income 843 - 843 813 - 813Investment management fee (99) (297) (396) (104) (311) (415)Other expenses (128) - (128) (121) - (121) ------ ------ ------ ------ ------ ------Return on ordinary activities before tax 616 377 993 588 (673) (85)Tax on return on ordinary activities (139) 91 (48) (151) 151 - ------ ------ ------ ------ ------ ------Return on ordinary activities after tax 477 468 945 437 (522) (85) ------ ------ ------ ------ ------ ------Return per share 1.1p 1.0p 2.1p 1.1p (1.3)p (0.2)p Year ended 30 September 2005 As re-stated Revenue Capital Total £000 £000 £000Gain on disposal of investments held at fair value - 626 626Unrealised adjustments to fair value of investments - (1,638) (1,638)Income 1,601 - 1,601Investment management fee (200) (599) (799)Other expenses (230) - (230) ------ ------ ------Return on ordinary activities before tax 1,171 (1,611) (440)Tax on return on ordinary activities (289) 278 (11) ------ ------ ------Return on ordinary activities after tax 882 (1,333) (451) ------ ------ ------Return per share 2.3p (3.4)p (1.1)p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - Ordinary Shares (unaudited) for the six months ended 31 March 2006 Six months ended Six months ended Year ended 31 March 2006 31 March 2005 30 September 2005 As re-stated As re-stated £000 £000 £000Ordinary shareholders' funds at 1 October 2005 As previously reported 31,285 35,345 35,345 Prior year adjustment 2,247 3,936 3,936 ------- ------- ------- As re-stated 33,532 39,281 39,281Return on ordinary activities 951 (85) (451)after taxDividends recognised in the (2,340) (3,943) (5,110)periodNet proceeds of share issues 254 1,386 2,901Shares purchased for (344) (2,959) (3,089)cancellation ------- ------- -------Ordinary shareholders' funds at 31 March 2006 32,053 33,680 33,532 ------- ------- ------- RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - C Shares (unaudited) for the six months ended 31 March 2006 Six months ended 31 March 2006 £000C shareholders' funds at 1 October 2005 -Return on ordinary activities after tax (6)Net proceeds of share issues 15,026 -------C shareholders' funds at 31 March 2006 15,020 ------- RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - Company (unaudited) for the six months ended 31 March 2006 Six months Six months Year ended ended ended 30 September 31 March 2006 31 March 2005 2005 As re-stated As re-stated £000 £000 £000Total equity shareholders' funds at 1 October 2005 As previously reported 31,285 35,345 35,345 Prior year adjustment 2,247 3,936 3,936 ------- ------- ------- As re-stated 33,532 39,281 39,281Return on ordinary activities 945 (85) (451)after taxDividends recognised in the period (2,340) (3,943) (5,110)Net proceeds of share issues 15,280 1,386 2,901Shares purchased for cancellation (344) (2,959) (3,089) ------- ------- -------Total equity shareholders' funds at 31 March 2006 47,073 33,680 33,352 ------- ------- ------- BALANCE SHEET (unaudited) as at 31 March 2006 31 March 2006 Ordinary Shares C Shares Company £000 £000 £000Fixed asset investments held at fairvalue:Venture capital investments Unquoted 23,736 198 23,934 Quoted 4,467 198 4,665 ------- ------- -------Total venture capital investments 28,203 396 28,599Other quoted investments - 3,074 3,074 ------- ------- -------Total fixed asset investments 28,203 3,470 31,673 ------- ------- -------Current assets: Debtors 250 47 283 Cash at bank 3,815 11,945 15,760 ------- ------- ------- 4,065 11,992 16,043Creditors (amounts falling due within (215) (442) (643)one year) ------- ------- -------Net current assets 3,850 11,550 15,400 ------- ------- ------- Net assets 32,053 15,020 47,073 ------- ------- ------- Capital and reserves:Called-up equity share capital 9,720 11,926 21,646Share premium 16,736 3,100 19,836Capital redemption reserve 1,676 - 1,676Capital reserve - realised 515 (16) 499Capital reserve - unrealised 2,570 - 2,570Revenue reserve 836 10 846 ------- ------- ------- Total equity shareholders' funds 32,053 15,020 47,073 ------- ------- -------Net asset value per share 82.4p 94.5p 85.9p 31 March 2005 30 September 2005 Company Company As re-stated As re-stated £000 £000Fixed asset investments held at fairvalue:Venture capital investments Unquoted 24,288 25,446 Quoted 4,871 4,939 ------- -------Total venture capital investments 29,159 30,385Other quoted investments - - ------- -------Total fixed asset investments 29,159 30,385 ------- -------Current assets: Debtors 315 165 Cash at bank 6,852 3,056 ------- ------- 7,167 3,221Creditors (amounts falling due within (2,646) (74)one year) ------- -------Net current assets 4,521 3,147 ------- ------- Net assets 33,680 33,532 ------- ------- Capital and reserves:Called-up equity share capital 9,384 9,752Share premium 15,462 16,564Capital redemption reserve 1,517 1,562Capital reserve - realised 5,145 4,353Capital reserve - unrealised 1,468 542Revenue reserve 704 759 ------- -------Total equity shareholders' funds 33,680 33,532 ------- -------Net asset value per share 89.7p 86.0p CASH FLOW STATEMENT (unaudited) for the six months ended 31 March 2006 Six months ended 31 March 2006 Ordinary Shares C Shares Company £000 £000 £000 Net cash inflow from operating 250 389 639activitiesTaxation:Corporation tax paid - - -Financial investment:Purchase of investments (765) (3,470) (4,235)Sale/repayment of investments 3,704 - 3,704Net cash inflow/(outflow) from financial investment 2,939 (3,470) (531)Equity dividends paid (2,340) - (2,340) ------ ------ ------Net cash inflow/(outflow) before 849 (3,081) (2,232)financingFinancing:Issue of shares 264 15,901 16,165Share issue expenses (10) (875) (885)Purchase of ordinary shares for (344) - (344)cancellationNet cash inflow/(outflow) from (90) 15,026 14,936financing ------ ------ ------Increase/(decrease) in cash at bank 759 11,945 12,704 ------ ------ ------ Reconciliation of return before taxtonet cash flow from operatingactivitiesReturn on ordinary activities before 999 (6) 993taxLoss/(gain) on disposal of investments held at fair value 490 - 490Unrealised adjustments to fair value of investments (1,164) - (1,164)Increase in debtors (85) (47) (132)Increase in creditors 10 442 452 ------ ------ ------Net cash inflow from operating 250 389 639activities ------ ------ ------ Analysis of movement in net funds 1 October 31 March 2005 Cash flows 2006 £000 £000 £000Cash at bank 3,056 12,704 15,760 ------ ------ ------ Six months ended Year ended 31 March 2005 30 September 2005 Company Company As re-stated As re-stated £000 £000 Net cash inflow from operating 2,745 565activitiesTaxation:Corporation tax paid - -Financial investment:Purchase of investments (4,391) (7,114)Sale/repayment of investments 4,561 5,450Net cash inflow/(outflow) from financial investment 170 (1,664)Equity dividends paid (3,943) (5,110) ------ ------Net cash inflow/(outflow) before (1,028) (6,209)financingFinancing:Issue of shares 1,438 3,000Share issue expenses (52) (99)Purchase of ordinary shares for (2,959) (3,089)cancellationNet cash inflow/(outflow) from (1,573) (188)financing ------ ------Increase/(decrease) in cash at bank (2,601) (6,397) ------ ------ Reconciliation of return before tax tonet cash flow from operatingactivitiesReturn on ordinary activities before (85) (440)taxLoss/(gain) on disposal of investments held at fair value (590) (626)Unrealised adjustments to fair value of investments 952 1,638Increase in debtors (120) (12)Increase in creditors 2,588 5 ------ ------Net cash inflow from operating 2,745 565activities ------ ------ INVESTMENT PORTFOLIO SUMMARY as at 31 March 2006 ORDINARY SHARES Cost Valuation % of net assets £000 £000 by valuationFifteen largest venture capital investments:CGI Group 2,325 3,237 10.1Alaric Systems 1,578 1,578 4.9Weldex (International) Offshore 200 1,242 3.9Interlube Systems 880 1,190 3.7Envirotec 812 1,167 3.6TFB Group 1,000 1,000 3.1DxS 975 940 2.9Barony Universal Products 236 918 2.9Union Snack 119 915 2.9Computer Software Group** 329 903 2.8Alizyme* 187 856 2.7IRIS Technology 850 850 2.7John Laing Partnership 355 729 2.3Pivotal Laboratories Holdings 714 714 2.2LEDA Holdings 688 688 2.1 ------- ------- ------ 11,248 16,927 52.8Other venture capital investments 14,385 11,276 35.2 ------- ------- ------Total fixed asset investments 25,633 28,203 88.0 -------Net current assets 3,850 12.0 ------- ------Net assets 32,053 100.0 ------- ------ C SHARES Cost Valuation % of net assets £000 £000 by valuation Wear Inns 198 198 1.3Twenty** 198 198 1.3 ------- ------- ------Total venture capital investments 396 396 2.6Listed fixed interest investments 3,074 3,074 20.5 ------- ------- ------Total fixed asset investments 3,470 3,470 23.1 -------Net current assets 11,550 76.9 ------- ------Net assets 15,020 100.0 ------- ------* Listed on London Stock Exchange**Quoted on Alternative Investment Market The above summary of results for the six months ended 31 March 2006 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 2005 have been extracted from thefinancial statements for that year, which have been delivered to the Registrarof Companies, adjusted in respect of the changes in accounting policies asstated below; the independent auditors' report on those financial statementsunder Section 235 of the Companies Act 1985 was unqualified. The company is required to comply with a number of new UK Financial ReportingStandards (FRS), which now represent UK Generally Accepted Accounting Principles(UK GAAP), in presenting its financial statements for the year ending 30September 2006. These Standards have been introduced as part of the process ofaligning UK accounting principles with International Accounting Standards. The revised accounting policies differ from those used in preparing the annualfinancial statements for the year ended 30 September 2005 in the followingrespects: • The company's investments have been designated as fair value through profit and loss and accordingly the unrealised gain or loss resulting from the revaluation of investments held at fair value is now recognised in the income statement, as required by FRS 26 "Financial Instruments: Measurement". • Quoted investments are valued at bid price rather than mid-market price, as required by FRS 26 "Financial instruments: Measurement". • Dividends to shareholders are accounted for in the period in which the company is liable to pay them, rather than in the period in respect of which they are declared, as required by FRS 21 "Events after the Balance Sheet Date". Dividends payable are treated as a charge on reserves and accounted for through the reconciliation of movements in shareholders' funds rather than in the profit and loss account as previously. The comparative figures for the year ended 30 September 2005 and the six monthsended 31 March 2005 have been re-stated accordingly. The effect of the above changes on the reported net assets and net asset valueper share of the company is as follows: 30 September 2005 31 March 2005 Net asset Net asset value value Net assets per share Net assets per share £000 p £000 p As reported under previous 31,285 80.2 32,614 86.9UK GAAPLess: adjustment in valuation of (93) (0.2) (101) (0.2)quoted investments to bid priceAdd: proposed dividends not 2,340 6.0 1,167 3.0accounted for until declaredand paid ------- ------- ------- -------As reported under revised 33,532 86.0 33,680 89.7UK GAAP ------- ------- ------- ------- The proposed interim ordinary share dividend of 3.0p per share for the yearending 30 September 2006 will be paid on 9 June 2006 to ordinary shareholders onthe register at the close of business on 19 May 2006. A copy of the interim report for the six months ended 31 March 2006 is expectedto be posted to shareholders on 12 May 2006 and will be available to the publicat the registered office of the company at Northumberland House, PrincessSquare, Newcastle upon Tyne NE1 8ER. ENDS This information is provided by RNS The company news service from the London Stock Exchange