Octopus Aim 2 Regulatory News (OSEC)

18 Jul 2007 14:53

Close IHT AIM VCT PLC18 July 2007 CLOSE IHT AIM VCT PLC Interim results for the six months to 31 May 2007 Close IHT AIM VCT PLC (the "Company"), which invests in companies listed on theAlternative Investment Market and PLUS, across a variety of sectors, todayannounces interim results for the six months ended 31 May 2007. Thisannouncement was approved by the Board of Directors on 18 July 2007. CHAIRMAN'S STATEMENT It is pleasing to be able to report satisfactory progress on a number of frontsin the six months to 31 May 2007. In a volatile stock market the Net AssetValue (NAV) has progressed, a good rate of investment has been maintained andthe share price discount to NAV has remained narrow. Performance Shareholders may recall that there were serious fears amongst investorsworldwide at the end of February and in early March 2007. Some of those fearshave started to resurface, prompted mainly by the problems in the sub-primelending markets in the United States and AIM in general cannot be wholly immunefrom such worldwide financial market trends and changes in sentiment. However,it appears at present that many of the smaller companies on AIM continue totrade well, so despite stock market volatility, the NAV has risen in the sixmonths to 31 May 2007. In that period the AIM All Share Index has risen 19%, nearly twice the rate ofincrease of the FTSE All Share Index. In comparison the NAV of your company hasincreased by 7.9%. The rise in the index has been driven to a significantextent by a number of the larger international companies, (in particular the oiland gas and mining companies, which account for 30% of AIM), in which yourCompany is unable to invest. Against this background, and given that yourCompany is not yet fully invested and so retains a substantial cash balance,your Board regards this performance as satisfactory. Dividends Your Board believes in maximising tax free dividends to shareholders and it isthe Board's intention to produce a steady and appropriate dividend stream. Inthe short term, however, dividend progression will be constrained as newinvestments are made and the cash balance reduced. Following the 1.0p per share paid to all shareholders last March, a firstinterim dividend of 1.0p per share has been declared. The dividend will be paidon 24 August 2007 to shareholders on the register on 27 July 2007. Buy-back Policy The Board has adopted a share buy-back policy whereby the Company, when able,will buy back shares at around an 8% discount to the prevailing net asset valueper share. This is designed to improve the marketability of the shares and toencourage the shares to trade at a narrower discount to their underlying worth.During the period, the Company bought back 20,400 shares at 90p. Shareholders wishing to sell their shares should first contact the InvestmentManager, Close Investments Limited. Shareholders should note that if they selltheir shares within three years of the original purchase, they would lose anytax relief that has been obtained. Portfolio Activity Over the period, various holdings within the portfolio reported positiveresults. Brulines continues to trade well as their major pub chain customersembark on extensive roll out programs of its flow monitoring system throughouttheir estates. Both Hatpin and Hexagon reported good results as both appear tobe benefiting from a buoyant recruitment sector backdrop. Vertu Motors, theacquiror and consolidator of UK based motor retail businesses, made its firstmajor acquisition earlier this year after raising a further £26m. It has sincemade 3 further acquisitions. In March this year, BBI acquired Theratese, a UKlisted manufacturer and supplier of specialist enzymes to the medicaldiagnostics industry. The company's recent announcement confirmed that BBIcontinues to trade well and that the integration process is on track. In my statement with the last accounts, I remarked that the Investment Manageranticipates making several new investments in forthcoming months. I am pleasedto report that that has been the case and that, in total seven new investmentshave been made. At the date of writing, one further investment has been madesince the end of May 2007. Altogether these new holdings amount to £3.61m, ofwhich £3.1m was invested in the six months to 31 May 2007. The following new investments were made during the period under review: Hexagon PLC Hexagon is a profitable multi-discipline interim and permanent recruitmentconsultant. Neuropharm PLC Neuropharm is a UK based pharmaceutical company focussed on the development ofproducts that treat conditions affecting the brain and nerves, mainly autism. Claimar Care Group PLC Claimar is a provider of domiciliary care services for Local Authorities acrossthe UK. BGlobal PLC BGlobal manufactures smart metering and data retrieval services for electricity,natural gas and water utilities. IDOX PLC IDOX develops integrated and adaptable software systems for document, contentand information management. Pressure Technologies PLC Pressure Technologies designs, manufactures and provides testing services for arange of niche high pressure and seamless steel gas cylinders. Mount Engineering PLC Mount Engineering manufactures and distributes a range of valves and threadconversion components to the oil & gas and other process markets. Including the amount invested up to 30 November 2006, your Company has invested£7.2m since February 2006. At the time of writing, the fund was 36% invested inqualifying holdings. Your Board believes that the target of a minimum level of70% required by HM Revenue & Customs for VCT status will be achieved in thethree year timescale. Budget Changes to VCTs Shareholders will, no doubt, be aware of the Chancellor's changes to VCTregulations in the Budget in March 2007. One change relating to the treatmentof investment sale proceeds should prove helpful to your Company in the future.However, changes affecting the nature of eligible investments do not have adirect bearing on your Company or the present portfolio. Outlook Although the rate of new issues has slowed down over the last year, theInvestment Manager has managed to acquire a number of qualifying investments atsensible valuations for the portfolio. Despite the probability of a lull duringthe summer months, a reasonable rate of new investment activity should continue. That trend should be helped by the UK economy which continues to grow, despitethe trend of higher interest rates and the potential for a slowdown in consumerspending as the year progresses. There remain, however, concerns for investorsacross a number of areas, ranging from inflation and growth rates to volatilityin the credit markets. Potentially some of these issues may mean that ratings and valuations of newinvestments come down from initial expectations to the advantage of long-terminvestors in a VCT. That remains to be seen. In the meantime companies in theexisting portfolio generally report reasonable trading and I look forward toreporting on further progress in the full accounts early next year. Keith MullinsChairman18 July 2007 Income Statement Unaudited Unaudited Period to Audited Six months to 31 May 2006 Year ended 31 May 2007 30 November 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 2,092 2,092 - 137 137 - 56 56Investment income 466 - 466 310 - 310 760 - 760Investment management fees (73) (220) (293) (42) (124) (166) (114) (342) (456)Other expenses (93) - (93) (40) - (40) (119) - (119) Return on ordinary activities 300 1,872 2,172 228 13 241 527 (286) 241before finance costs andtaxationFinance costs - - - - - - (4) - (4) Return on ordinary activities 300 1,872 2,172 228 13 241 523 (286) 237before taxationTaxation on ordinary (47) 42 (5) (20) - (20) (95) 65 (30)activities Return attributable to equity 253 1,914 2,167 208 13 221 428 (221) 207shareholders Return per share (pence) - basic and diluted 1.01 7.66 8.67 1.51 0.10 1.61 1.86 (0.96) 0.90 All of the Company's activities derive from continuing operations. No operations were acquired or discontinued during the period. The Company has no recognised gains or losses other than those disclosed above,accordingly a statement of total recognised gains and losses is not required. The total column of the Income Statement represents the profit and loss of theCompany. The supplementary revenue return and capital return columns have beenprepared in accordance with the Association of Investment Companies' Statementof Recommended Practice. Balance Sheet Unaudited Unaudited Audited 31 May 2007 31 May 2006 30 November 2006 £'000 £'000 £'000Fixed asset investments -at fair value through profit or lossQualifying investments 7,768 3,021 3,768Non-qualifying investments 16,322 3,193 18,574 24,090 6,214 22,342 Current assetsDebtors 156 165 139Cash at bank 2,048 17,549 1,551 2,204 17,714 1,690 Creditors: (720) (81) (357)Amounts falling due within one year Net current assets 1,484 17,633 1,333 Net assets 25,574 23,847 23,675 Capital and reservesCalled up share capital 3 3 3Share premium - 23,623 -Special reserve 23,605 - 23,623Realised capital reserve (237) (73) (209)Unrealised capital reserve 1,930 86 (12)Revenue reserve 273 208 270 Equity shareholders' funds 25,574 23,847 23,675 Net asset value per share (pence) 102.38 95.39 94.70 Reconciliation of movements in shareholders' funds for the six months to 31 May 2007 Called up Share Capital Capital Revenue Total share premium Special reserve reserve reserve capital reserve realised unrealised £'000 £'000 £'000 £'000 £'000 £'000 £'000Period ended 31 May 2007As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675Net return after taxation - - - (28) 1,942 253 2,167for the periodDividends paid - - - - - (250) (250)Shares purchased for - - (18) - - - (18)cancellation As at 31 May 2007 3 - 23,605 (237) (1,930) 273 25,574 Called up Share Capital Capital Revenue Total share premium Special reserve reserve reserve capital reserve realised unrealised £'000 £'000 £'000 £'000 £'000 £'000 £'000Period ended 31 May 2006As at 4 August 2005 - - - - - - -Issue of equity 3 24,998 - - - - 25,001Issue costs of equity - (1,375) - - - - (1,375)Net return after taxation - - - (73) 86 208 221for the period As at 31 May 2006 3 23,623 - (73) 86 208 23,847 Called up Share Capital Capital Revenue Total share premium Special reserve reserve reserve capital reserve realised unrealised £'000 £'000 £'000 £'000 £'000 £'000 £'000Period ended 30 November2006As at 4 August 2005 - - - - - - -Issue of equity 3 24,998 - - - - 25,001Issue costs of equity - (1,375) - - - - (1,375)Transfer to special reserve - (23,623) 23,623 - - - -Net return after taxation - - - (209) (12) 428 207for the periodDividends paid - - - - - (158) (158) As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675 Cash Flow Statement for the six months to 31 May 2007 Unaudited Unaudited Audited Six months to Period to Period ended 31 May 2007 31 May 2006 30 November 2006 £'000 £'000 £'000 Operating activitiesInvestment income received 420 144 192Deposit interest received 32 - 438Investment management fees paid (326) (143) (409)Other expenses paid (74) (1) (66) Net cash inflow from operating activities 52 - 155 Servicing of financeInterest paid - - (4) Capital expenditure and financial investmentPurchase of qualifying investments (2,698) (3,160) (18,272)Purchase of non-qualifying investments (17) (3,250) (4,176)Disposal of qualifying investments 419 333 380Disposal of non-qualifying investments 3,009 - - Net cash inflow/(outflow) from investing activities 713 (6,077) (22,068) DividendsEquity dividends paid (250) - (158) FinancingIssue of equity net of expenses - 23,626 23,626Cancellation of shares (18) - -Net cash (outflow)/inflow from financing (18) 23,626 23,626 Increase in cash 497 17,549 1,551 1. Details about the Investment Manager Close IHT AIM VCT PLC is managed by Close Investments Limited. Close InvestmentsLimited is authorised and regulated by the Financial Services Authority and is asubsidiary of Close Brothers Group plc. 2. Statutory accounts The information for the period ended 30 November 2006 does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. A copyof the statutory accounts for the year has been delivered to the Registrar ofCompanies. This interim announcement has not been audited. 3. Changes in equity There were no changes in equity other than those arising from capitaltransactions with the owners and distribution to owners. 4. Accounting policies This information is prepared on the basis of the accounting policies as statedin the latest statutory accounts. For further information, please contact: Andrew Buchanan / Freda Isingoma Karen WaggClose Investments Limited Polhill CommunicationsTel: 020 7426 4000 Tel: 0207 6550500 This information is provided by RNS The company news service from the London Stock Exchange