20 May 2008 11:30
Preliminary Announcement for
Oxford Technology 3 Venture Capital Trust plc for the year ended
29 February 2008
Chairman's Statement
Investment Portfolio
The Board of Oxford Technology 3 VCT is pleased with the development of the portfolio as a whole. Some companies are making very good progress while others have experienced problems of one sort or another.
Ultimately, success for OT3 as a whole, 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:
OT3 owns 15.1% of BioAnaLab, which is continuing to make very good progress. Sales increased from £1.16m in the year to October 06 to £1.8m in the year to October 07, and the company made a net profit after tax of £233k. In February 2008, BioAnaLab moved to larger dedicated lab premises on the Oxford Science Park.
Glide Pharma continues to make good progress, and the first trials with the use of Glide's delivery device for vaccines showed significantly better results than when the same vaccines were injected using a conventional needle and syringe. Some of the world's largest pharmaceutical companies are now in active talks with Glide. At least two have asked for exclusivity over various products and product areas. OT3 owns 7.4% of Glide.
OT3 owns only a small % of Commerce Decisions (2%), but the company is making good progress. The company is profitable and, for the first time, paid a dividend, in March 08.
OT3 owns 12.4% of Inscentinel. Inscentinel has yet to achieve its first commercial sales, but received a visit before Christmas from one of the world's largest defence companies which has expressed a desire to partner with Inscentinel, on developing bee-based systems for various security applications.
The regulatory process is notoriously slow, but Insense has at last received approval for the sale of the first of its range of active wound-healing dressings, Oxyzyme, which actively transports oxygen to the wound surface. The first sales of Oxyzyme were achieved in the UK and Europe in autumn 2007, and are now growing month by month. The results from the clinical trials, where Oxyzyme is being used on hard-to-heal wounds, continue to be very encouraging, with some persistent wounds which have remained raw for several years, being healed with dry skin forming in a matter of weeks. Sales of the second dressing in the range, Iodozyme, which produces slow release iodine to deal with infected wounds, as well as producing oxygen, are expected to start in the spring, hopefully in the US as well as in Europe. But OT3 owns only a relatively small shareholding (3.6%).
OT3 owns 2.9% of Orthogem (OT2 owns a much larger shareholding), but Orthogem is making good progress. Its artificial bone graft, Tripore, is now being sold mainly for use in spinal surgery both in the Europe and the US. A white paper giving the one year results of the first ten spinal patients has now been published.
OT3 owns 28.6% of Telegesis. Telegesis has achieved the first sales of its Zigbee modules and sales have been growing fast. Sales in the quarter to June 07 were £49k. Sales in the quarter to September 07 were £165k. Sales in the quarter to December 07 were £618k. Sales in the quarter to March 08 were slightly below those in the December quarter, but there is the possibility of some much larger orders in future.
Some of these companies have the potential to deliver very significant returns.
Fundraising
On 4 April OT3VCT completed a rights issue which raised £411,983.10 which has resulted in an additional 404,407 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 £23,000 (2007: £9,000) in the year.
Net revenue after taxation and management expenses was a loss of £125,000 (2007: loss of £152,000) and revenue return for the year was a loss of 2.31p (2007: loss of 2.81p) per share.
Capital return was a gain of 13.95p (2007: loss of 3.4p) per share. The graph on page 7 shows the historical Net Current Assets (chiefly cash) and other Investments (the fund's venture capital investments) per share. Together, these two figures make up the total Net Asset Value per share.
AGM
Shareholders should note that the AGM for Oxford Technology 3 VCT will be held on Monday 23rd June 2008, 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
9 May 2008
Statement of total return (incorporating the revenue account) for the year ended 29 February 2008
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* 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.
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Balance sheet at 29 February 2008
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| 29 February 2008 Audited | 28 February 2007 Audited | ||
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| £000 | £000 | £000 | £000 |
| Fixed assets |
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| Investments at fair value |
| 5,379 |
| 4,613 |
| Current assets |
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| Debtors & prepayments | 2 |
| 3 |
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| Cash at bank | 40 |
| 59 |
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| _____ |
| _____ |
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| 42 |
| 61 |
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| Creditors: amounts falling due within one year | (134) |
| (16) |
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| _____ |
| _____ |
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| Net current assets/liabilities |
| (92) |
| 45 |
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| _____ |
| _____ |
| Net assets |
| 5,287 |
| 4,658 |
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| ===== |
| ===== |
| Capital and reserves |
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| Called up share capital |
| 541 |
| 541 |
| Share premium account |
| 4,658 |
| 4,658 |
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Other reserves: |
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| Capital reserve - realised |
| (44) |
| (44) |
| Capital reserve - unrealised |
| 726 |
| (28) |
| Revenue reserve |
| (594) |
| (469) |
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| Shareholders' funds |
| 5,287 |
| 4,658 |
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| ===== |
| ===== |
| Net asset value per share |
| 98p |
| 86p |
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Cash flow statement for the year ended 29 February 2008
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| 2008 Audited | 2007 Audited |
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| £000 | £000 |
| Net cash (outflow) from operating activities | (7) | (139) |
| Capital expenditure and financial investment |
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| Purchase of investments | (12) | (49) |
| Disposal of investments | - | 10 |
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| ______ | ______ |
| Net cash outflow from capital expenditure and financial investment | (12) | (39) |
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| ______ | ______ |
| Decrease in cash | (19) | (178) |
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Notes:
1. Basis of preparation
The preliminary announcement has 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. The principal accounting policies are set out in the company's financial statements for the year ended 29 Februrary 2008.
2. Return per Ordinary Share
The calculation of revenue return per share is based on the loss of £125,000 (2007: loss of £152,000) for the financial period divided by the weighted average number of ordinary shares of 5,406,480 (2007: 5,406,480) in issue during the period.
The calculation of capital return per share is based on the net capital return for the financial period of £754,000 (2007: loss of £184,000) divided by the weighted average number of ordinary shares of 5,406,480 (2007: 5,406,480) in issue during the period.
3. 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 29 February 2008 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.