Proven Growth Regulatory News (PGOO)

29 Sep 2005 13:01

Proven Growth & Income VCT PLC29 September 2005 PROVEN GROWTH & INCOME VCT PLC INTERIM REPORT FOR THE SIX MONTHS ENDED 31 AUGUST 2005 FINANCIAL SUMMARY Six months Six months Year ended ended ended 31 August 31 August 28 February 2005 2004 2005 Revenue return per share (0.3)p 0.1p 0.3p Total return per share 7.3p 2.7p 11.9p Dividend per share 3.0p 3.0p 6.5p Cumulative dividends per share 15.4p 8.9p 12.4p Net asset value per share 120.2p 109.2p 115.3p Net asset value plus cumulative dividends per 135.6p 118.1p 127.7pshare Shareholders' funds (£000) 7,839 7,514 7,752 Mid-market price per share 101p 97.5p 98p CHAIRMAN'S STATEMENT Introduction I have pleasure in presenting the interim report for ProVen Growth & Income VCTplc (formerly ProVen Media VCT plc) for the six months ended 31 August 2005.Your company changed its name following shareholder approval at the annualgeneral meeting on 5 July 2005. Despite the wider concerns in the international economy from the continuedconflict in the Middle East and rising oil prices, the period has seen the totalreturn on the FTSE All Share Index increase by 9%. Your company continued tocomply with the requirements of the VCT regulations during the period. Investment Portfolio Details of your company's investment activity are provided in the accompanyingInvestment Manager's Review. At 31 August 2005 your company's unquoted and listed portfolio comprised 18investments at a total cost of £4.9 million and a valuation of £6.7 million. Inaddition, your company had net current assets of £1.1 million. Net Asset Value & Dividends The net asset value total return per share at 31 August 2005 was 135.6pcomprising a net asset value per share of 120.2p and dividends paid or proposedof 15.4p. This represents an increase of 6% over the net asset value totalreturn at 28 February 2005 and an increase of 43% over the initial net assetvalue at launch of 95p per share. This compares favourably with the total returnon the FTSE All Share Index from initial listing to 31 August 2005 of just 9%and makes your company the top performing VCT started in tax year 2001/2002 by aconsiderable margin *. Your company will be paying an interim dividend of 3p per share for the period.This will be paid on 4 November 2005 to shareholders on the register at 14October 2005. In each of the last two years your company has paid out dividendstotalling 6.5p per year, equivalent to a tax free return of 16.25% pa forinvestors who took full advantage of available tax reliefs on initialsubscription in 2001. Share Capital Issues & Buy Backs During the period your company purchased 199,325 shares in the market at a totalcost of £207,000, representing a discount of 10% to the net asset value at 28February 2005. Shareholders are reminded that if they wish to sell their sharesin the company they should contact Downing Corporate Finance. Prospects The investment portfolio of your company continues, on the whole, to performwell, reflecting the underlying quality of the portfolio companies' products andservices, their management teams and the contribution made to the companies bythe investment manager. In my statement in the last Annual Report and Accounts I outlined the proposalfor future fund raising to build upon the success of the VCT to date and to takeadvantage of the current favourable conditions for fund raising. Your board andthe investment manager, following extensive consultation with industrycommentators and investors, has decided, subject to shareholder approval, toraise further funds through a C share issue. This will enable shareholders tocontinue to benefit from the performance of the existing ordinary shares, whilealso giving them the opportunity to place further funds under the management ofa proven and successful team. Further information and details will becirculated to shareholders shortly. The performance of your company to date, the track record of success of themanager and the prospect of raising new funds gives your board grounds to beconfident of the future prospects for your company. Andrew Davison29 September 2005 * Source: Allenbridge Tax Shelter Report (www.taxshelterreport.co.uk) INVESTMENT MANAGER'S REVIEW Introduction This review covers the six month period ended 31 August 2005 during which thenet asset value total return of the fund increased by 6%. The company continuedto comply with the VCT regulations during the period. Portfolio Activity During the period under review we have been proactive about realising value fromthe existing portfolio. Several potential new investment opportunities are alsocurrently under review although no new or follow on investments were made duringthe period. In August Copyright Promotions Group was sold generating a significant return onthe initial investment. We continue to hold a small amount of loan notes whichwill be redeemed later this year. The success of this disposal demonstrates thevalue added by our investment executives after the initial investment. Weidentified the opportunity to appoint a new Chairman to the board of the companywho has worked with a strong incumbent management team to improve companyperformance. This has ultimately provided a strong return for shareholders. In the quoted portfolio, further disposals of shareholdings in both Cardpointand Miva Inc (formerly FindWhat) were made realising profits of £215,000. In addition, we are currently at an advanced stage with a number of portfoliocompanies on realisation and refinancing strategies which could result infurther profits for shareholders. We are optimistic that some, if not all, ofthese will conclude during the current financial year. Portfolio Valuation At 31 August 2005 the company's unquoted and listed portfolio comprised 18investments at a total cost of £4.9 million and a valuation of £6.7 million. Inaddition, the company had net current assets of £1.1 million. The portfolio continues on the whole to perform very well. The board hasincreased the valuations for several of the companies, most notablyMergermarket, which has increased in value by £400,000, LFR and Nectar Taverns. Prospects The VCT industry has benefited from the £500 million raised either side of the2005 tax year end. We expect there to be further significant funds raised in theremainder of the 2005/2006 tax year. This lifts the profile of the industry andthe possible opportunities for both investments and realisations. We continue to be pleased with the overall performance of the portfoliocompanies and of their future prospects. However, the fund has reached aposition where it is effectively fully invested and may no longer be able totake advantage of attractive investment opportunities presented to it. The fundraising outlined in the Chairman's Statement, if approved by shareholders, wiIlprovide further opportunities for portfolio diversification. We will look toinvest funds raised mainly in unquoted companies (as opposed to AIM companies)where we believe the best potential for strong returns exists and where we canleverage our expertise of working closely with management to generate furthersignificant returns for shareholders. Beringea Limited29 September 2005 INVESTMENT PORTFOLIO At 31 August 2005 Book Cost Valuation % of net £000 £000 assetsQualifying holdingsMergermarket Limited 317 1,194 15.2Espresso Broadband Limited 523 1,037 13.2Ma Potter's Limited 300 751 9.6Ashford Colour Press Limited 550 693 8.8Nectar Taverns plc 300 628 8.0Gyro International Limited 500 500 6.4LFR plc (t/a Loch Fyne Restaurants) 351 451 5.8UBC Media Group plc * 400 428 5.4JVTV Limited 200 200 2.6Pilat Media Global plc * 74 162 2.1Zenith Group Limited 426 133 1.7Cardpoint plc * 39 111 1.4Oasis Healthcare plc * 170 51 0.7Sports Holdings Limited 260 44 0.5Immedia Broadcasting plc * 171 40 0.5 Total qualifying holdings 4,581 6,423 81.9** Non-qualifying holdingsBaby Innovations S.A. (t/a Steribottle) 209 209 2.7Miva Inc # (formerly Findwhat.com) 73 63 0.8Copyright Promotions Group Limited 19 19 0.2 Total non-qualifying holdings 301 291 3.7 Total investment portfolio 4,882 6,714 85.6 Net current assets 1,125 14.4 Shareholders' funds 7,839 100.0 * Investment traded on the Alternative Investment Market ('AIM'). # Investment traded on the US NASDAQ Market ** Expressed as a percentage of the company's net assets at 31 August 2005 asdistinct from total investments (as defined in the Venture Capital Trustregulations). UNAUDITED STATEMENT OF TOTAL RETURN (incorporating the Revenue Account)For the six months ended 31 August 2005 Six months ended 31 August 2005 Revenue Capital Total £000 £000 £000Gains on investments- realised - 378 378- unrealised - 188 188Income 73 - 73Investment management fee (20) (61) (81)Other expenses (72) - (72) Return on ordinary activities before taxation (19) 505 486 Tax (charge)/credit on ordinary activities - - - Return on ordinary activities after taxation (19) 505 486 Dividends - (192) (192) Transfers (from)/to reserves (19) 313 294 Return per ordinary share Basic and fully diluted (0.3)p 7.6p 7.3p Six months ended Year ended 31 August 2004 28 February 2005 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Gains on investments- realised - 216 216 - 551 551- unrealised - - - - 337 337Income 105 - 105 215 - 215Investment management fee (12) (37) (49) (31) (92) (123)Other expenses (81) - (81) (158) - (158) Return on ordinary activities before taxation 12 179 191 26 796 822 Tax (charge)/credit on ordinary activities (2) 2 - (3) 3 - Return on ordinary activities after taxation 10 181 191 23 799 822 Dividends - (206) (206) - (442) (442) Transfers (from)/to reserves 10 (25) (15) 23 357 380 Return per ordinary shareBasic and fully diluted 0.1p 2.6p 2.7p 0.3p 11.6p 11.9p All revenue and capital items in the above statement are from continuingoperations. Other than shown above, the company had no recognised gains andlosses. The company has only one class of business and derives its income frominvestments made in shares and securities and from bank deposits. UNAUDITED BALANCE SHEETAt 31 August 2005 31 August 31 August 28 February 2005 2004 2005 £000 £000 £000Fixed assetsInvestments - unquoted 5,859 4,249 5,390Investments - AIM quoted 792 1,243 1,132Investments - other listed 63 557 184 6,714 6,049 6,706 Net current assets 1,125 1,465 1,046 Net assets 7,839 7,514 7,752 Capital & reservesShare capital 65 69 67Reserves 7,774 7,445 7,685 Equity shareholders' funds 7,839 7,514 7,752 Net asset value per share 120.2p 109.2p 115.3p UNAUDITED CASH FLOW STATEMENTFor the six months ended 31 August 2005 Six months Six months Year ended ended ended 31 August 31 August 28 February 2005 2004 2005 £000 £000 £000Net revenue from operating activitiesNet revenue from ordinary activities before tax (19) 12 26Decrease/(increase) in debtors 32 (22) (57)(Decrease)/increase in creditors (49) (30) 16Capitalised interest receipts - - (23)Management fees charged to capital (61) (37) (92) Net cash outflow from operating activities (97) (77) (130) Financial investmentPurchases of investments - (489) (1,000)Sales of investments 426 361 972 Net cash inflow/(outflow) from financial investment 426 (128) (28) Corporation tax paid - - - Equity dividends paid (237) (248) (453) Net cash inflow/(outflow) before financing 92 (453) (611) FinancingPurchase of ordinary shares for cancellation (252) (191) (303) Net cash outflow from financing (252) (191) (303) Decrease in cash in period (160) (644) (914) Analysis of cash balanceAt start of period 1,362 2,276 2,276Net cash outflow for the period (160) (644) (914) At end of period 1,202 1,632 1,362 NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1 The unaudited interim financial statements for the six monthsended 31 August 2004 and 31 August 2005 do not constitute statutory accountswithin the meaning of Section 240 of the Companies Act 1985 and have not beendelivered to the Registrar of Companies. The results for the year ended 28February 2005 have been extracted from the financial statements for that year,which have been delivered to the Registrar of Companies; the auditors' report onthose financial statements under Section 235 of the Companies Act 1985 wasunqualified. 2 True and fair override The company is no longer an investment company within the meaning of Section 266of the Companies Act 1985, having revoked investment company status in July 2004in order to pay a capital dividend. However, the company continues to conductits affairs as a venture capital trust for taxation purposes under s842AA of theIncome and Corporation Taxes Act 1988. The financial statements are prepared in accordance with applicable accountingstandards and with the Statement of Recommended Practice "Financial Statementsof Investment Trust Companies" (SORP). This is consistent with the presentationadopted in previous periods. Ordinarily, the absence of Section 266 status wouldrequire the company to adopt a different presentation of the accounts than thatrecommended by the SORP. However, the directors consider it appropriate tocontinue to present the accounts in accordance with the SORP. The departure hasno effect on the total return or balance sheet. 3 The financial information contained in this interim report has beenprepared on the basis of the accounting policies set out in the Annual Report2005. Unquoted investments are valued in accordance with International PrivateEquity And Venture Capital Valuation Guidelines These guidelines were issued inMarch 2005 and have been endorsed by the British Venture Capital Association.AIM quoted investments are valued at mid market prices discounted, wherenecessary, to reflect any lack of liquidity. 4 Returns per ordinary share are based on 6,640,115 ordinary shares,being the weighted average number of shares in issue during the period. Therewere 6,521,970 ordinary shares in issue at 31 August 2005. 5 Earnings for the period should not be taken as a guide to theresults for the full year. 6 The directors will be paying a dividend of 3p per share for theperiod ended 31 August 2005 to be paid on 4 November 2005 to shareholders on theregister at 14 October 2005. 7 Copies of the Interim Report will be mailed to shareholders and areavailable from the Registered Office of the company at 39 Earlham Street, LondonWC2H 9LT. This information is provided by RNS The company news service from the London Stock Exchange