20 May 2008 11:35
Preliminary Announcement for
Oxford Technology Venture Capital Trust plc for the year ended
29 February 2008
Chairman's Statement
Investment Portfolio
As explained in previous reports, many of the companies in the Oxford Technology VCT portfolio have had problems. The best hope for a satisfactory outcome, meaning a good return to shareholders, rests with Select, although there are other investee companies which should also provide some returns.
OTVCT owns 32% of Select Technology. During the last two years, Select has been working very closely with Ricoh, the world's largest manufacturer of MFDs (modern photocopiers, which as well as photocopying, scan, fax, email and print). Select has developed a piece of software for Ricoh, known as MyUI (My User Interface) which enables anyone to control an MFD wirelessly using the screen on their own laptop, mobile phone or PDA. The key point is that this enables people to use an interface which is tailored to their particular needs. So a completely blind person can now use an MFD using voice commands spoken into their PDA. The PDA receives a signal from the MFD, saying "About to print ten copies A4 black and white, please say Go to confirm." The visually impaired can have very large type. Ricoh are excited by this and in September 2007, awarded Select its "innovator of the year" award. The frustration for Select has been the very slow process of getting to first sales. Ricoh decided to launch the product globally, and went through very thorough testing using MyUI on every one of the hundreds of different models and in combination with hundreds of other software packages. This testing showed up various problems with software/hardware clashes in some situations, none of which were anything to do with Select or its software, but they caused delays. But all these problems have now been solved. The product is now available in the UK and is to be launched worldwide by Ricoh in May. A sale is effected by a dealer anywhere in the world accessing a website and ordering a launch key which is then downloaded. Select receives $375 per sale. Ricoh is the largest manufacturer of MFDs in Europe and the US. What is as yet unknown is what percentage will be sold with MyUI. Select is also working with other manufacturers and its existing business of supplying various specialist products for use with photocopiers, such as payment systems, continues steadily.
OTVCT owns 19% of Membrane Extraction Technology. Although still small, with just six employees, MET is making steady progress and in the last year to July 2007 recorded a profit of £50,000 on sales of just over £400,000. The company, whose founder Andrew Livingston is the professor of Chemical Engineering at Imperial College, is now developing its own range of membranes which are used mainly by pharmaceutical companies to separate the wanted from the unwanted products of chemical reactions. So far the membranes have been sold only in small volumes for use at laboratory scale to improve the efficiency of various production processes. More than 50 "METCells" have been sold to laboratories worldwide for use in testing of this sort. The cells enable laboratories to try out many different membranes at lab scale. The hope is that pharmaceutical or other companies will eventually opt to use some of these membranes at production scale, at which point MET's sales will jump.
OTVCT owns 7% of Scancell which is developing novel cancer vaccines. The company has been making encouraging progress and recently David Evans, formerly CEO of Axis Shield and Chairman of a number of AIM listed healthcare companies, joined as Chairman.
Other companies have had problems and their value has been written down. OTVCT has paid dividends to date of 27.7p per share. Including these dividends the total return per share at 29 February 2008 was 73p, ie NAV of 45p + dividends of 27.7p per share. This compares to 74p at 31 August 2007, and 75p at 28 February 2007.
Fundraising
On 4 April 2008 OTVCT completed a rights issue which raised £97,727.70 and has resulted in an additional 208,232 shares being allotted. This is a post balance sheet event and is not reflected in the Net Asset Value figures. This will enable us to offer modest support to our investee companies in their additional fundraising rounds.
Results for the year
Interest on bank deposits and investee loans produced gross income of £31,000 (2007: £47,000) in the year. Loss for the year was £123,000 (2007 : £462,000) and earnings per share for the year showed a loss of 2.5p (2007: 9.5p) per share. The graph on page 7 shows the historical Net Current Assets and other investments per share. Together, these two figures make up the total Net Asset Value per share. The graph also shows cumulative dividends paid to date.
AGM
Shareholders should note that the AGM for Oxford Technology 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
Profit and Loss Account for the year ended 29 February 2008
| | Year ended 29/02/08 | | Year ended 28/02/07 | |
| | £000 | | £000 | |
| Gain/(loss) on disposal of investments held at fair value | - | | (224) | |
| Unrealised gain/(loss) on fair value of investments | (85) | | (183) | |
| Other income | 31 | | 47 | |
| Investment management fees | (28) | | (27) | |
| Other expenses | (41) | | (75) | |
| | _______ | | _______ | |
| | | | | |
| Profit/(loss) on ordinary activities after taxation | (123) | | (462) | |
| Taxation on profit/(loss) on ordinary activities | - | | - | |
| | ====== | | ====== | |
| Profit/(loss) on ordinary activities after tax | (123) | | (462) | |
| | ====== | | ====== | |
| | | | | |
| Earnings per share (basic and diluted) | (2.5)p | | (9.5)p | |
| | | | | |
| | ====== | | ====== | |
| | | | | |
Historic cost profits and losses note
|
| Year ended 29/02/08 |
| Year ended 28/02/07 |
|
| £000 |
| £000 |
| Loss for the year: | (123) |
| (462) |
| Unrealised loss on fair value of investments | 85 |
| 183 |
| Realisation of prior year's net gains | - |
| 35 |
| Historical cost loss before tax | (38) |
| (240) |
| Historical cost loss after tax | (38) |
| (240)
|
Balance sheet at 29 February 2008
| | 29 February 2008 Audited | 28 February 2007 Audited | ||
| | £000 | £000 | £000 | £000 |
| Fixed assets | | | | |
| Investments at fair value | | 1,652 | | 1,740 |
| Current assets | | | | |
| Debtors & prepayments | 2 | | 3 | |
| Cash at bank | 526 | | 562 | |
| | _____ | | _____ | |
| | 528 | | 565 | |
| Creditors: amounts falling due within one year | (4) | | (6) | |
| | _____ | | _____ | |
| Net current assets | | 524 | | 559 |
| | | _____ | | _____ |
| Net assets | | 2,176 | | 2,299 |
| | | ===== | | ===== |
| Capital and reserves | | | | |
| Called up share capital | | 485 | | 485 |
| Profit and loss account | | 1,676 | | 1,714 |
| | | | | |
| Revaluation reserve | | 15 | | 100 |
| | | | | |
| | | | | |
| | | | | |
| Shareholders’ funds | | 2,176 | | 2,299 |
| | | ===== | | ===== |
| Net asset value per share | | 45p | | 47p |
| | | | | |
| | | ===== | | ===== |
| | | | | |
Cash flow statement for the year ended 29 February 2008
| | 2008 Audited | 2007 Audited |
| | £000 | £000 |
| Net cash inflow from operating activities | (39) | (53) |
| Capital expenditure and financial investment | | |
| Purchase of investments | (20) | (131) |
| Disposal of investments | 23 | 78 |
| | ______ | ______ |
| Net cash inflow from capital expenditure and financial investment | | |
| Dividends paid | - | (1,213) |
| | ______ | ______ |
| Decrease in cash | (36) | (1,319) |
| | ====== | ====== |
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. Earnings per Ordinary Share
The calculation of earnings per share (basic and diluted) is based on the net loss for the financial period of £123,000 (2007: £462,000) divided by the weighted average number of ordinary shares of 4,852,900 (2007: 4,852,900) in issue during the year.
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.