29 May 2009 13:17
Preliminary Announcement for
Oxford Technology 3 Venture Capital Trust plc for the year ended 28 February 2009
Chairman's Statement
Investment Portfolio
The Board of Oxford Technology 3 VCT (OT3) is pleased with the development of the portfolio as a whole.
Ultimately, success for OT3, meaning a good return to OT3 shareholders, is more likely to come about because one or more of the investees become stars, and therefore very valuable, than because many companies deliver good returns. It is good to be able to report that many companies in the OT3 portfolio continue to have the potential to become stars. Included among these are the following:
Glide Pharma continues to make excellent progress with its needle-free drug-delivery technology. In November 2008 Glide began trials of a drug in man for the first time, an important milestone. A second non-clinical vaccine study confirmed improved efficacy for the Glide technology as compared to a conventional needle and syringe. One of the world's largest vaccine companies is currently undertaking a feasibility study with two of its blockbuster vaccines. At February 2009, Glide had collaborations with six pharma companies, including some of the world's largest.
Commerce Decisions in which OT3 invested £100,000 was sold to Qinetiq in autumn 2008, generating £233,939 for the fund.
OT3 owns 11% of Inscentinel, which is based at Rothamsted Research and which is developing instruments for detecting trace vapours using the exquisitely sensitive olfactory sense of bees. Inscentinel has made good progress on the engineering front during the last year. In particular Inscentinel now has a plastic injection-moulded bee holder which also incorporates the electronics which detects the proboscis extension reflex and memory to store results and which can communicate with the controlling PDA or computer. In summer 2009, Inscentinel will conduct the first field trial of its VASOR, a hand-held device which holds 6 cassettes of six bees each, and which will be capable of detecting five different explosives. The hope is that Inscentinel will then transition from an R&D company to a commercial company with a product/service to sell.
Since the first investment in Insense in 2003, the company has come a long way. Its active wound healing dressings, Oxyzyme and Iodozyme, which promote wound healing by producing low level iodine and also oxygen at the wound surface, have now been approved for sale in Europe, but still not yet in the US. Sales in Europe are growing steadily, although more slowly than initially hoped. Sales exceeded £40,000 in a month for the first time in March 2009. Very heartening stories continue to come from patients, many of whom have had wounds of many years standing completely healed in a few weeks after using Oxyzyme and/or Iodozyme. In one case a patient was about to have a leg amputated since his ten-year old wounds were not responding to any treatment. Fortunately he was put on Insense dressings, and so saved his leg. Insense hopes to reach breakeven by the end of 2009. Insense is also developing a range of products for dermatology applications.
OT3 owns 29% of Telegesis. Telegesis specialises in designing and manufacturing Zigbee modules. Zigbee is a relatively new communications protocol (like Bluetooth) but is for sending small amounts of data over distances of 300 metres, using very low power so that a battery may last 5 years. Zigbee chips automatically make a self-healing mesh network, so that the data hops from chip to chip. Telegesis has grown as Zigbee has grown. Sales in the year to June 2007 were just over £250,000. Sales to June 2008 were £1.5m. Sales since then have been lower as one large customer has delayed its roll-out of automatic meter reading, but Telegesis is in negotiation with a growing number of potential customers some of whom have large potential orders.
Some of these companies and also others in the OT3 portfolio have the potential to deliver significant returns.
Net assets per share at 28 February 2009 were 92p per share compared to 98p at 29 February 2008.
Fundraising
On 3 April 2009 OT3 completed a rights issue which raised £259,250 and which has resulted in an additional 261,510 shares being allotted. This is a post balance sheet event and is not reflected in the Net Asset Value figures. We will now be in a better position to be able to support our investee companies in their additional fundraising rounds.
Results for the year
Interest on bank deposits and investee loans together with dividend income produced gross revenue of £9,000 (2008: £23,000) in the year.
Net revenue after taxation and management expenses was a loss of £134,000 (2008: loss of £125,000) and revenue return for the year was a loss of 2.32p (2008: loss of 2.31p) per share.
Capital return was a loss of 4.17p (2008: gain of 13.95p) per share.
AGM
Shareholders should note that the AGM for OT3 will be held on Friday 3rd July 2009, at the Magdalen Centre, Oxford Science Park, starting at 12.00 noon and will include presentations by some of the companies in which the Oxford Technology VCTs have invested. A formal Notice of AGM has been included at the back of these Accounts together with a Form of Proxy for those not attending.
John Jackson
Chairman
20 May 2009
Statement of total return (incorporating the revenue account) for the year ended 28 February 2009
* The revenue column of this statement is the profit and loss account of the company. All revenue and capital items in the above statement derive from continuing operations. There were no recognised gains or losses for the period other than those shown above. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet at 28 February 2009
| | 28 February 2009 Audited | 29 February 2008 Audited | |||
| | £000 | £000 | £000 | £000 | |
| | Fixed assets | | | | |
| | Investments at fair value | | 5,163 | | 5,379 |
| | Current assets | | | | |
| | Debtors & prepayments | 2 | | 2 | |
| | Cash at bank | 361 | | 40 | |
| | _____ | | _____ | | |
| | 363 | | 42 | | |
| | Creditors: amounts falling due within one year | (214) | | (134) | |
| | | _____ | | _____ | |
| | Net current assets/liabilities | | 149 | | (92) |
| | | | _____ | | _____ |
| | Net assets | | 5,312 | | 5,287 |
| | | | ===== | | ===== |
| | Capital and reserves | | | | |
| | Called up share capital | | 581 | | 541 |
| | Share premium account | | 5,018 | | 4,658 |
| | Other reserves: | | | | |
| | Capital reserve - realised | | 76 | | (44) |
| | Capital reserve - unrealised | | 365 | | 726 |
| | Revenue reserve | | (728) | | (594) |
| | | | | | |
| | Shareholders’ funds | | 5,312 | | 5,287 |
| | | | ===== | | ===== |
| | Net asset value per share | | 92p | | 98p |
| | | | | | |
| | | | ===== | | ===== |
| | | | | | |
Cash flow statement for the year ended 28 February 2009
|
| 2009 Audited | 2008 Audited | |||
|
| £000 | £000 | |||
| Net cash (outflow)/inflow from operating activities | (54) | (7) | |||
| Capital expenditure and financial investment |
|
| |||
| Purchase of investments | (244) | (12) | |||
| Disposal/redemption of investments | 219 | - | |||
|
| ______ | ______ | |||
| Net cash (outflow)/inflow from capital expenditure and financial investment | (25) | (12) | |||
| Net cashflow before financing | (79) | (19) | |||
|
| ______ | ______ | |||
| Financing - Issue of shares | 412 | - | |||
| Expenses paid in connection with share issue | (12) | - | |||
| Net cash inflow from financing | 400 | - | |||
| Increase/(Decrease) in cash | 321 | (19) | |||
|
| ====== | ====== |
Notes:
1. Basis of preparation
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments. The financial statements have been prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice 'Financial statements of investment trust companies' issued in December 2005.
2. Earnings per Ordinary Share
The calculation of earnings per share for the period is based on the profit attributable to shareholders divided by the weighted average number of shares in issue during the period.
3. Valuation of Investments
Quoted investments are stated at the bid price. Unquoted investments are stated at fair value, where fair value is estimated after following the guidelines laid down by the International Private Equity and Venture Capital Guidelines. The Directors' policy is to initially state investments at cost and then to review the valuation every six months. The Directors' may then apply an appropriate methodology which, as far as possible, draws on external, objective market data such as where fair value is indicated by:
• a material arms length transaction by a third party in the shares of the company; or
• a suitable revenue or earnings multiple where the company is well established and generating maintainable profits. The multiple will be based on comparable listed companies but may be discounted to reflect a lack of marketability; or
• the net assets of the business.
Where such objective data is not available the Directors' may choose to maintain the value of the company as previously stated or to discount this where indicated by underperformance against plan.
The directors consider that this basis of valuation of unquoted investments is consistent with the International Private Equity and Venture Capital Guidelines.
4. General
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The balance sheet at 28 February 2009 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the company's 2008 statutory financial statements on which the auditors' opinion is unqualified and does not include any statement under section 237 of the Companies Act 1985.