OTT.L Regulatory News (OTT)

6 May 2005 16:27

Oxford Technology 3 VCT PLC06 May 2005 Preliminary Announcement for Oxford Technology 3 Venture Capital Trust plc for the year ended 28 February 2005 Chairman's Statement Investment Portfolio Net Assets per share in Oxford Technology 3 VCT (OT3VCT) at 28 February 2005were £1.08 compared to £1.01 on 28 February 2004 and £1.12 on 31 August 2004. The Oxford Technology VCTs exist to invest in early-stage and start-uptechnology companies, most of which have no revenue and some not even a productat the time of the initial investment. The risks associated with such companiesare high and real, and it is to be expected that there will be failures, andthat these failures may occur quite quickly. The other side of the coin is thehope that there will also be some successes, and although these may take longerto come through, the gains from these successes may be substantial. In thejargon of the industry, lemons ripen before plums. The theoretical expectationis therefore that the Net Asset Value will show a J curve over time, with earlyfailures resulting in a fall in net asset values, with later successes causing arise, one hopes a large rise, in net asset values later on. In the case of OT3VCT, there was a relatively early rise in Net Asset Valuecaused by the substantial increase in the value of Ixaris. At 31 August 2004,there were 27 investments in the portfolio, but in the last six months three ofthese have failed, in the sense that their value has been written down tonothing or very close to nothing. Novarc was unable to prevent cracking and thermal distortion as it scaled up itsspray moulding technology, so that it failed to win the contract from Ford inthe US which would have come with technical success. It was decided that itwould not be sensible to invest more and the company is therefore beingliquidated. While IFM made some good technical progress, and also secured its firstsignificant order for clocks to be used externally on railway station platforms,the emergence of bright LEDs and the large fall in the price of these devicesand other technologies which compete with IFM reduced the upside potential andmade IFM a less attractive investment opportunity. The headcount was thereforereduced to nil, and the company put into a dormant state. The value of theinvestment has been written down to £6,000 (being that proportion of the netcash which would accrue to OT3VCT). Although Datasoft Medical did achieve its first significant sales to hospitalsin the UK and the US, these sales were judged to be too little too late, andshareholders were unwilling to provide further capital to the business. Thevalue of the investment has been written down to zero, and at the time ofwriting a purchaser is being sought. Armstrong Healthcare failed to achieve its sales projections, requiredadditional capital and raised this by means of a discounted rights issue, sothat the value of this investment also fell. The reduction in the Net Asset Value caused by these events has been partiallyoffset by a rise in the value of other investees during the period. On balance, the Board is pleased with the development of the portfolio as awhole. Results for the year Interest on gilts, bank deposits and other interest produced gross revenue of£56,000 (2004: £91,000) in the year. Net revenue after taxation and managementexpenses was a loss of £104,000 (2004: loss of £66,000) and revenue return forthe period was a loss of 1.92p (2004: loss of 1.24p) per share. Capital returnwas 9.14p (2004: gain of 5.26p) per share. AGM Shareholders should note that the AGM for Oxford Technology 3 VCT will be heldon Friday 10th June 2005, at the Magdalen Centre, Oxford Science Park, startingat 12.00 pm and will include presentations by some of the companies in which theOxford Technology VCTs have invested. A formal Notice of AGM has been includedat the back of these Accounts together with a Form of Proxy for those notattending. Fuller information on each of the investee companies is given in the April 2005newsletter. John Jackson Chairman 6 May 2005 Statement of total return (incorporating the revenue account)* for the year ended 28 February 2005 2005 2004 Audited Audited Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Gains on investments - 494 494 - 280 280Income 56 - 56 91 - 91Investment advisory fee (105) - (105) (99) - (99)Other expenses (55) - (55) (58) - (58) _____ _____ _____ _____ _____ _____Net return / (loss) on ordinary activities (104) 494 390 (66) 280 214before taxationTax on net return/(loss) on ordinary - - - - - -activities _____ _____ _____ _____ _____ _____Return / (loss) attributable to equity (104) 494 390 (66) 280 214shareholders and transfers to / (from)reserves ====== ====== ====== ====== ====== ======Loss per ordinary share (1.92)p 9.14p 7.22p (1.24)p 5.26p 4.02p ====== ====== ====== ====== ====== ====== * The revenue column of this statement is the profit and loss account of thecompany. All revenue and capital items in the above statement derive from continuingoperations. There were no recognised gains or losses for the year other thanthose shown above. Balance sheet at 28 February 2005 28 February 2005 29 February 2004 Audited Audited £000 £000 £000 £000Fixed assetsInvestments 4,880 4,908Current assetsDebtors 5 19Cash at bank 958 527 _____ _____ 963 546Creditors: amounts falling due (4) (5)within one year _____ _____Net current assets 959 541 _____ _____Net assets 5,839 5,449 ===== =====Capital and reservesCalled up share capital 541 541Share premium account 4,658 4,658Other reserves:Capital reserve - realised (4) -Capital reserve - unrealised 828 330Revenue reserve (184) (80) _____ _____Shareholders' funds 5,839 5,449 ===== =====Net asset value per share 108p 101p ===== ===== Cash flow statement for the year ended 28 February 2005 2005 2004 Audited Audited £000 £000Net cash (outflow) / inflow from (91) (6)operating activitiesCapital expenditure and financialinvestment Purchase of investments (778) (3,342) Disposal / redemption of investments 1,300 1,800 ______ ______Net cash outflow from capital 522 (1,542)expenditure and financialinvestment ______ ______Net cash outflow before financing 431 (1,548)Financing Issue of shares - 891 Expenses paid in connection with share - (27) issue ______ ______Net cash inflow from financing - 864 ______ ______(Decrease) / increase in cash 431 (684) ====== ====== Notes: 1. Basis of preparation The preliminary announcement has been prepared in accordance with applicableaccounting standards up to and including FRS 19 and with the Statement ofRecommended Practice 'Financial statements of investment trust companies' issuedin January 2003. The principal accounting policies have remained unchanged fromthose set out in the company's 2003 financial statements. 2. Return per Ordinary Share The calculation of revenue return per share is based on the loss of £104,000(2004: loss of £66,000) for the financial period divided by the weighted averagenumber of ordinary shares of 5,406,480 (2004: 5,324,714) in issue during theperiod. The calculation of capital return per share is based on the net capital returnfor the financial period of £494,000 (2004: £280,000) divided by the weightedaverage number of ordinary shares of 5,406,480 (2004: 5,324,714) in issue duringthe period. 3. General The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The balance sheet at 28 February 2005 and the statement of total return,cash flow statement and associated notes for the year then ended have beenextracted from the company's 2005 statutory financial statements on which theauditors' opinion is unqualified and does not include any statement undersection 237 of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange