Last checked at 
7 Jun 2010 14:44
Preliminary Announcement for
Oxford Technology 2 Venture Capital Trust plc for the year ended
28 February 2010
Chairman's Statement
Investment Portfolio
The company has a portfolio of 18 investee companies, some of which have experienced problems of various sorts during the last year and some of which have made good progress. Ultimate success, meaning a good financial return to OT2 shareholders, is likely to come from one or two investees which become stars, and which deliver very large returns rather than for all companies doing well. This is the nature of investing in early-stage and start-up technology companies.
On 1 March 2010, and so too late to be included in the accounts to the year end, OT2 received £196k from the sale of its shareholding in Membrane Extraction Technology, a spin-out from Imperial College. OT2 invested £75k in MET in 2002. In March 2010, MET was sold to a German chemical company, Evonik.
OT2 owns 18% of OCRobotics. Now based in a factory in Bristol, OCRobotics is arguably the world's leading designer and manufacturer of snake-arm robots in which the head may be driven through a 3D path in space, with the rest of the snake following the same path as that taken by the head. OC Robotics has so far supplied single robots, at prices of up to £1m+ for particular applications. The most recent has been for undertaking a particular maintenance task in a nuclear reactor, which can no longer be undertaken efficiently by people, because the regulations concerning the permitted radiation dose have been tightened. There are 44 reactors of this particular design in operation worldwide.
OT2 owns 8.4% of Plasma Antennas. This company designs and supplies specialist antennas, which can be priced at up to £50,000 each. The company reached an important milestone during the last year when it received its first order for many antennas of the same design, the first order for what is likely to be a long-term supply contract for a military application.
The Board is pleased with the overall development of the portfolio.
Investment Policy & Fundraising
The Company has built a balanced portfolio of investments with the following characteristics:
• unlisted, UK based, science, technology and engineering businesses
• investments typically in the range of £100,000 to £500,000
• generally located within approximately 60 miles of Oxford
After the year end, the company raised equity by the issue and allotment of ordinary shares of 10 pence each. 138,691 Shares were allotted at 41pence on 1 April 2010. An aggregate of 14,097 of these Shares were allotted to Directors. A further 19,650 Shares were allotted at the same price on 26 April 2010. None of these Shares were allotted to Directors. The issue of these Shares is a post balance sheet event and is not reflected in the Net Asset Value figures. This will enable the company to offer modest support to its investee companies in their additional fundraising rounds.
Results for the year
Interest on bank deposits and investee loans produced gross income of £18,000 in the year. The loss for the year was £871,000 (2009 : loss of £615,000) and earnings per share for the year showed a loss of 13.2p (2009: loss of 9.7p).
AGM
Shareholders should note that the AGM for Oxford Technology 2 VCT will be held on Thursday 15th July 2010, 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.
John Jackson
Chairman
7 June 2010
Profit and Loss Account for the year ended 28 February 2010
|
| Year ended 28/02/10 | Year ended 28/02/09 |
|
| £000 | £000 |
| Gain on disposal of investments held at fair value | 68 | 78 |
| Unrealised (loss)/gain on fair value of investments | (852) | (664) |
| Other income | 18 | 96 |
| Investment management fees | (69) | (71) |
| Other expenses | (36) | (54) |
|
| ________ | _______ |
|
|
|
|
| (Loss) on ordinary activities before tax | (871) | (615) |
| Taxation on profit/(loss) on ordinary activities | - | - |
|
| ====== | ====== |
| (Loss) on ordinary activities after tax | (871) | (615) |
|
| ====== | ====== |
|
|
|
|
| Earnings per share (basic and diluted) | (13.2)p | (9.7)p |
|
|
|
|
|
| ====== | ====== |
|
|
|
|
Historic cost profits and losses note
|
| Year ended 28/02/10 | Year ended 28/02/09 |
|
| £000 | £000 |
| (Loss) for the year: | (871) | (615) |
| Unrealised loss on fair value of investments | 852 | 664 |
| Realisation of prior year's net gains | (68) | (78) |
| Historical cost loss before tax | (87) | (29) |
| Historical cost loss after tax | (87) | (29)
|
Balance sheet at 28 February 2010
|
| 28 February 2010 Audited | 28 February 2009 Audited | ||
|
| £000 | £000 | £000 | £000 |
| Fixed assets |
|
|
|
|
| Investments at fair value |
| 2,478 |
| 3,179 |
| Current assets |
|
|
|
|
| Debtors & prepayments | 2 |
| 2 |
|
| Cash at bank | 256 |
| 333 |
|
|
| _____ |
| _____ |
|
|
| 258 |
| 335 |
|
| Creditors: amounts falling due within one year | (13) |
| (59) |
|
|
| _____ |
| _____ |
|
| Net current assets |
| 245 |
| 276 |
|
|
| _____ |
| _____ |
| Net assets |
| 2,723 |
| 3,455 |
|
|
| ===== |
| ===== |
| Capital and reserves |
|
|
|
|
| Called up share capital |
| 663 |
| 637 |
| Share premium |
| 330 |
| 217 |
| Profit and loss account |
| 2,131 |
| 2,362 |
|
|
|
|
|
|
| Revaluation reserve |
| (401) |
| 239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' funds |
| 2,723 |
| 3,455 |
|
|
| ===== |
| ===== |
| Net asset value per share |
| 41p |
| 54p |
|
|
|
|
|
|
|
|
| ===== |
| ===== |
|
|
|
|
|
|
Cash flow statement for the year ended 28 February 2010
|
| 2010 Audited | 2009 Audited |
|
| £000 | £000 |
| Net cash (outflow) from operating activities | (133) | (86) |
| Capital expenditure and financial investment |
|
|
| Purchase of investments | (166) | (206) |
| Disposal of investments | 83 | 578 |
|
| ______ | ______ |
| Net cash (outflow)/inflow from capital expenditure and financial investment | (83) | (372) |
| Net cash flow before financing | (216) | 286 |
| Financing |
|
|
| Issue of Shares | 148 | 258 |
| Expenses paid in connection with share issue | (9) | (4) |
|
|
|
|
| Net cash flow from financing | 139 | 254 |
| Dividends paid | - | (287) |
|
| ______ | ______ |
| (Decrease)/increase in cash | (77) | 253 |
|
| ====== | ====== |
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 2009.
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 three 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, with discounting for more junior asset classes, and reviewed for impairment; 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.
During the year ended 28 February 2006 the directors revoked the Investment Company status to enable distributions of capital profits to shareholders. Consequently the accounts have been prepared to include a statutory profit and loss account and a note of historical profits and losses in accordance with schedule 4 of the Companies Act 2006 and Financial Reporting Standard 3 (FRS 3).
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 434(3) of the Companies Act 2006. The balance sheet at 28 February 2010 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the company's 2010 statutory financial statements.
Those financial statements have been delivered to the Registrar of Companies, contain an auditors' opinion that is unqualified and do not include any statement under section 498(2) or (3) of the Companies Act 2006.