Northern Venture Trust Regulatory News (NVT)

10 May 2005 09:13

Northern Venture Trust PLC10 May 2005 10 MAY 2005 NORTHERN VENTURE TRUST PLC UNAUDITED INTERIM RESULTSFOR THE SIX MONTHS ENDED 31 MARCH 2005 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 2004): • Net assets £32,614,000 £36,529,000 • Net asset value per share 86.9p 92.0p • Profit on ordinary activities before tax: Revenue £588,000 £382,000 Capital £333,000 £424,000 • Earnings per share: Revenue 1.1p 0.8p Capital 1.2p 1.2p • Interim dividend per share: Revenue 1.0p 0.8p Capital 2.0p 1.2p • Cumulative return to shareholders since launch: Dividends per share 47.0p 34.0p Net asset value plus dividends 133.9p 126.0p For further information, please contact: Alastair Conn, Managing Director 0191 244 6000Northern Venture Managers LimitedWebsite: www.nvm.co.uk Charles Ansdell/Marlene Scott 020 7655 0540Polhill Communications 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: As our company approaches its tenth anniversary in September 2005, not only canwe look back on some solid achievements over the past decade but also forward tofurther progress in the future. In February shareholders approved by anoverwhelming majority the directors' proposal that the company should continueto operate as a venture capital trust for at least another five years, and webegin this new phase of our corporate life in good shape to meet the challengesahead. Results The net asset value (NAV) per share at 31 March 2005, after providing for anincreased interim dividend of 3.0p, was 86.9p compared with the year-end figureof 89.6p at 30 September 2004. For the five year period to 31 March 2005 thecompany achieved an NAV total return of 10.8% and a share price total return of36.6%, before taking account of any tax reliefs available to investors. Over thesame period the FTSE All-Share total return index fell by 8.2%. Earnings and dividend Income from investments in the half year rose by 32.8% to £813,000, reflectingthe continuing strong generation of income from the unquoted portfolio. Earningsper share amounted to 2.3p, compared with 2.0p for the six months to 31 March2004. Shareholders are reminded that the reported earnings per share includerealised gains and losses from the investment portfolio stated after excludingprevious revaluation adjustments; as the incidence of investment realisationsfluctuates from period to period, comparisons can be misleading. However I amglad to report that at the interim stage the directors are able to declare arevenue dividend of 1.0p per share (corresponding period 0.8p) and a capitaldividend of 2.0p (1.2p), making a total of 3.0p (2.0p). This takes thecumulative total of tax-free distributions since the company was launched to47.0p per share. Investments During the six months to 31 March 2005 seven new venture capital investmentstotalling £4.0 million were completed and a further £0.4 million was invested inexisting portfolio companies. The new investments were: • SMS Agencies (£893,000) - vehicle driver staffing agency, Crawley • LEDA Holdings (£688,000) - temporary staff recruitment agency, Leeds • Arleigh International (£375,000) - supplier of spares and consumables for caravans and leisure boats, Nuneaton • Direct Valeting (£732,000) - car valeting contractor, Newcastle-under-Lyme • Envirotec (£812,000) - manufacturer of air curtains and air handling units, High Wycombe • e-know.net (£360,000) - application service provider, Telford • Daniolabs (£120,000) - development of therapeutics for neurological and ophthalmological diseases, Cambridge Proceeds of disposals from the venture capital portfolio during the periodtotalled £2.0 million. The company's holding in Cedalion was sold to Charterisplc for £459,000 in cash and a gain of £59,000, and Remsdaq redeemed £430,000 ofloan stock. An opportunity arose to reduce the holding in BBI Holdings ,following its flotation on AIM last year, generating proceeds of £397,000 and arealised gain of £240,000. The UK economy has remained fairly stable, although the recent weakness in thehousing and retail sectors is likely to lead in the short term to a falling offin business confidence. Against this background we have taken a prudent approachto the valuation of the unquoted portfolio and in one case this has resulted ina substantial reduction in carrying value. We continue to see a good flow of newopportunities and these are carefully screened by our managers with a view toselecting those which are best equipped to survive and prosper throughout theeconomic cycle. The remaining portfolio of quoted equity investments managed by SarasinChiswell, valued at £2.4 million at 30 September 2004, was liquidated during theperiod in order to release funds for the tender offer to shareholders referredto below. Shareholder issues At an extraordinary general meeting on 24 February 2005, shareholders consideredthree proposals by the directors: first, to extend the life of the company for afurther five years until 2010; second, to make a tender offer to buy back up to10% of the issued capital from shareholders at a 5% discount to net asset value;third, to raise new funds through a top-up issue of ordinary shares. Theseproposals received very strong support from shareholders. Accordingly thecompany made a tender offer to acquire up to 3,950,490 shares at a price of85.6p per share; by the closing date shareholders had tendered 2,965,751 shares(approximately 75% of the maximum) and these were taken up in full by thecompany at a cost of just over £2.5 million. Your directors consider this asatisfactory outcome. The top-up issue of new shares priced at a 5% premium tonet asset value, which will close on 20 June 2005, has to date raised a total of£2.3 million of which just over £1.0 million is reflected in the accounts forthe six months to 31 March 2005. The dividend investment scheme introduced in November 2004 was taken up by 14%of shareholders, representing approximately 10% of the company's issued capital.£390,000 was reinvested in ordinary shares during the period, with subscribersbenefiting from the attractive tax reliefs currently available on new VCTinvestments. Shareholders interested in joining the scheme should contact thecompany secretary for further information. On behalf of the board I would like to thank shareholders for their expressionsof continuing support for the company. VCT qualifying status The company has continued to retain PricewaterhouseCoopers LLP as advisers onmatters relating to VCT status. The directors are satisfied that the qualifyingconditions laid down by the Inland Revenue for VCT approval have been met. Outlook The venture capital portfolio is maturing well and our managers have theobjective of generating further cash from disposals in order to provide fundsfor dividend distributions and for investment in new opportunities. The companycurrently has only about 10% of its assets in liquid form and the board intendsto consider possible mechanisms for raising additional funds over the next 12months, bearing in mind the Chancellor's indication that the current 40% incometax relief on VCT investment may be available only until April 2006. In order toavoid any dilution of existing shareholders' interests in the future capitalgrowth and dividend flow from the portfolio, it is envisaged that anysignificant fund-raising would be along the lines of a "C share" issue with thenew assets segregated from the old for an appropriate period. PROFESSOR SIR FREDERICK HOLLIDAY 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 £000 Profit recognised inthe periodon realisationof investments - 644 644 - 724 724Income 813 - 813 612 - 612Investmentmanagement fee (104) (311) (415) (100) (300) (400)Other expenses (121) - (121) (130) - (130) ------ ------ ------ ------ ------ ------Profit on ordinaryactivitiesbefore tax 588 333 921 382 424 806Tax on profiton ordinaryactivities (151) 151 - (55) 55 - ------ ------ ------ ------ ------ ------Profit on ordinaryactivitiesafter tax forthe period 437 484 921 327 479 806Dividends -interim (389) (778) (1,167) (317) (477) (794)- final - - - - - - ------ ------ ------ ------ ------ ------Retainedprofit/(loss)for the period 48 (294) (246) 10 2 12 ------ ------ ------ ------ ------ ------Earnings pershare 1.1p 1.2p 2.3p 0.8p 1.2p 2.0pDividend pershare 1.0p 2.0p 3.0p 0.8p 1.2p 2.0p Year ended 30 September 2004 Revenue Capital Total £000 £000 £000 Profit recognised in the yearon realisation of investments - 4,578 4,578Income 1,671 - 1,671Investment management fee (207) (622) (829)Other expenses (224) - (224) ------ ------ ------Profit on ordinary activitiesbefore tax 1,240 3,956 5,196Tax on profit on ordinary activities (246) 239 (7) ------ ------ ------Profit on ordinary activitiesafter tax for the financial year 994 4,195 5,189Dividends - interim (318) (476) (794) - final (473) (3,470) (3,943) ------ ------ ------Retained profit for the year 203 249 452 ------ ------ ------Earnings per share 2.5p 10.5p 13.0pDividend per share 2.0p 10.0p 12.0p 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 £000 Profit on ordinaryactivitiesafter tax 437 484 921 327 479 806Unrealised gains/(losses) onrevaluation ofinvestments - (912) (912) - 2,458 2,458 ------ ------ ------ ------ ------ ------Total recognised gainsand lossesduring theperiod 437 (428) 9 327 2,937 3,264 ------ ------ ------ ------ ------ ------ Year ended 30 September 2004 Revenue Capital Total £000 £000 £000 Profit on ordinary activitiesafter tax 994 4,195 5,189Unrealised gains/(losses) onrevaluation of investments - 1,012 1,012 ------ ------ ------Total recognised gains and lossesduring the period 994 5,207 6,201 ------ ------ ------ 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 £000 Reported profit onordinary activitiesbefore tax 588 333 921 382 424 806Realisation ofinvestmentrevaluationgains/(losses)of priorperiods - (2,780) (2,780) - 72 72 ------ ------ ------ ------ ------ ------Historical cost profit/(loss)for the periodbefore tax 588 (2,447) (1,859) 382 496 878 ------ ------ ------ ------ ------ ------Historical cost profit/(loss) for theperiod aftertax anddividends 48 (3,074) (3,026) 10 74 84 ------ ------ ------ ------ ------ ------ Year ended 30 September 2004 Revenue Capital Total £000 £000 £000 Reported profit on ordinary activitiesbefore tax 1,240 3,956 5,196Realisation of investment revaluationgains/(losses) of prior periods - 2,113 2,113 ------ ------ ------Historical cost profitfor the period before tax 1,240 6,069 7,309 ------ ------ ------Historical cost profit for theperiod after tax and dividends 203 2,362 2,565 ------ ------ ------ BALANCE SHEET(unaudited) as at 31 March 2005 31 March 2005 31 March 2004 30 September 2004 £000 £000 £000Venture capital investments: Unquoted 24,288 25,454 22,301Quoted 4,972 3,991 4,993 ------- ------- -------Total venture capitalinvestments 29,260 29,445 27,294Other listed investments - 3,093 2,446 ------- ------- -------Total fixed assetinvestments 29,260 32,538 29,740 ------- ------- -------Current assets:Debtors 315 90 153Cash at bank 6,852 4,790 9,453 ------- ------- ------- 7,167 4,880 9,606Creditors (amounts falling duewithin one year) (3,813) (889) (4,001) ------- ------- -------Net current assets 3,354 3,991 5,605 ------- ------- ------- Net assets 32,614 36,529 35,345 ------- ------- ------- Capital and reserves:Called-up equity sharecapital 9,384 9,931 9,860Share premium 15,462 14,371 14,463Capital redemption reserve 1,517 547 654Revaluation reserve 1,569 3,188 (299)Profit and loss account 4,682 8,492 10,667 ------- ------- -------Total equity shareholders'funds 32,614 36,529 35,345 ------- ------- -------Net asset value per share 86.9p 92.0p 89.6p 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 £000 Cash flow statementNet cash inflow fromoperating activities 2,745 317 746Taxation:Corporation tax paid - - -Financial investment:Purchase of investments (4,391) (2,074) (6,259)Sale/repayment ofinvestments 4,561 3,694 13,085 ------ ------ ------Net cash inflow fromfinancial investment 170 1,620 6,826Equity dividends paid (3,943) (1,706) (2,500) ------ ------ ------Net cash inflow/(outflow) before financing (1,028) 231 5,072Financing:Issue of ordinary shares 1,438 122 258Share issue expenses (52) (5) (13)Purchase of ordinarysharesfor cancellation (2,959) (58) (364) ------ ------ ------Net cash inflow/(outflow)fromfinancing (1,573) 59 (119) ------ ------ ------Increase/(decrease) incash at bank (2,601) 290 4,953 ------ ------ ------ Reconciliation of profitbeforetax to net cash flowfromoperating activitiesProfit on ordinaryactivitiesbefore tax 921 806 5,196Decrease in debtors (120) 216 153Increase/(decrease) increditors 2,588 19 (25)(Profit)/loss recognisedonrealisation of investments (644) (724) (4,578) ------ ------ ------Net cash inflow fromoperating activities 2,745 317 746 ------ ------ ------ Analysis of movement innet funds 1 October 2004 Cash flows 31 March 2005 £000 £000 £000 Cash at bank 9,453 (2,601) 6,852 ------ ------ ------ INVESTMENT PORTFOLIO SUMMARYas at 31 March 2005 Valuation % of net assets £000 by valuationFifteen largest venture capital investments: CGI Group 2,325 7.1VPTA (formerly Tolwood) 1,400 4.3Interlube Systems 1,222 3.8Computer Software Group** 1,202 3.7Alaric Systems 1,184 3.6Weldex (International) Offshore 1,095 3.4Cyclacel 1,051 3.2TFB Group 1,000 3.1Alizyme* 984 3.0DxS 940 2.9SMS Agencies 893 2.7Union Snack 879 2.7Omnico Plastics 827 2.5Envirotec 812 2.5Direct Valeting 732 2.2 ------- ------ 16,546 50.7Other venture capital investments 12,714 39.0 ------- ------Total fixed asset investments 29,260 89.7Net current assets 3,354 10.3 ------- ------Net assets 32,614 100.0 ------- ------*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 3.0p per share for the year ending 30 September2005 will be paid on 10 June 2005 to shareholders on the register at the closeof business on 27 May 2005. A copy of the interim report for the six months ended 31 March 2005 is expectedto be posted to shareholders by 27 May 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