Half-yearly Report
SPARK VCT PLC
HALF YEARLY FINANCIAL REPORT 2010
FINANCIAL HIGHLIGHTS
Per ordinary share (pence) 30.06.10 31.12.09 30.06.09
Net asset value 18.8 22.7 24.3
Dividends
Dividend paid (1) 4.0 - -
Cumulative dividend (2) 57.7 53.7 53.7
Total return (3)
SPARK VCT plc 76.5 76.4 78.0
Return including tax benefits (6) 96.5 96.4 98.0
Total return to former shareholders of:
Quester VCT 2 plc per 100p invested in shares of that company (4) 62.3 62.3 63.9
Return including tax benefit (6) 82.3 82.3 83.9
Quester VCT 3 plc per 100p invested in shares of that company (5) 36.3 36.1 37.7
Return including tax benefit (6) 56.3 56.1 57.7
(1) Dividend paid in the financial period ended on the date stated
(2) Cumulative dividends paid by SPARK VCT plc
(3) Net asset value plus cumulative dividend per share to ordinary shareholders
in SPARK VCT plc since the launch of the Company (then called Quester VCT plc)
in April 1996
(4) Total return to original shareholders in Quester VCT 2 plc, launched in
March 1998, which merged with SPARK VCT plc (then called Quester VCT plc) in
June 2005, the share exchange ratio for former shareholders in Quester VCT 2
plc being 1.0249
(5) Total return to original shareholders in Quester VCT 3 plc, launched in
February 2000, which merged with SPARK VCT plc (then called Quester VCT plc) in
June 2005, the share exchange ratio for former shareholders in Quester VCT 3
plc being 0.9816
(6) Return after 20% income tax relief but excluding capital gains deferral
The Directors propose an interim dividend of 1.0 pence per share for the year
ending 31 December 2010.
The Interim management report comprises the Chairman's statement, the
Investment manager's report, the Fund summary and note 9 to the condensed
financial statements.
CHAIRMAN'S STATEMENT
Introduction
The economic uncertainty that has unsettled financial and commercial markets
since the summer of 2008 continues to make conditions very difficult for small
companies and particularly so for early stage technology companies. While
there are early indications that the UK is emerging from its longest recession
in recent history the strength of recovery remains fragile and investor
sentiment nervous. The UK banks are beginning to emerge from the crisis which
engulfed them but bank funding and credit facilities for small, early stage
companies still remain extremely difficult to obtain. Nevertheless, there are
some signs that, as a result of the various Government initiatives and
improvements in the wider UK and global economies, trade buyers are beginning
to regain confidence. Our new strategy of realising existing investments and
moving towards relatively lower risk investment opportunities should benefit
from these trends.
Performance
Net assets per share, before the payment of the 4p final dividend for the year
ended 31 December 2009, moved ahead marginally from 22.7p on 31 December 2009
to 22.8p on 30 June 2010. This is the first positive movement in net assets
that the Company has experienced since 2007.
Against the background of continuing difficult markets, it is encouraging to
report that in June 2010 the Company was able to sell its investment in Secerno
Limited to Oracle Corporation at a gain of £655,000 over its carrying value.
Cash proceeds received to date amount to £917,000 net of transaction and
warranty claim insurance costs. In addition, a further £293,000 is being held
in escrow against potential warranty claims and is due to be released to the
Company in June 2012. As a result of this transaction, the Company recorded a
post tax profit for the six months to 30 June 2010 of £101,000. This compares
to a loss in the equivalent period last year of £2.8m and a loss of £4.6m in
the full year to 31 December 2009.
No new investments were made during the period under review, but two modest
follow on investments were made to businesses from which worthwhile exits are
anticipated. A secured loan of £143,000 was advanced on attractive interest
terms to Sift Group Limited ("Sift"), as part of a £800,000 debt facility from
shareholders and a £400,000 facility from its bankers. These funds have been
applied to the acquisition of an adjacent business, which is expected to
contribute to Sift's profitable growth and increase the probability of a
satisfactory sale in the medium term.
A further £25,000 investment in preferred investment stock was made alongside
the management of Haemostatix Limited to support the business while discussions
continue with potential trade partners.
We have continued to monitor the performance of all underlying investments
closely and have made an additional provision of £167,000 against the
investment in We7 Limited. This is in anticipation that the company will need
to raise further funds and that, in current market conditions, this may be at a
discount to the last investment round.
In our small AIM quoted portfolio, the holding in Vernalis plc has been
disposed of for net cash proceeds of £30,000, a loss of £35,000 on its carrying
value at 31 December 2009. A part disposal of Celldex Therapeutics, Inc
produced net proceeds of £26,000 and a gain of £11,000. The three remaining
AIM investments have been marked down by the market by an aggregate £82,000.
Despite these adverse movements, it is encouraging that the value of the
portfolio overall has stabilized and that a long-standing investment (the
initial investment in Secerno was made in 2007) has been brought to trade sale.
Nevertheless, the Board remains very conscious that the Company's performance
in the long term has been far from satisfactory and is actively exploring a
range of options to enhance shareholders' interests. The Board hopes to be in a
position to inform shareholders of these opportunities more fully in the near
future.
As part of our efforts to reduce costs, the Board has taken the decision to
release the half yearly results electronically through the stock market and on
the Company's website rather than in hard copy.
Net assets
The movement in net assets is summarised in the table below:
Bonds
Venture and Net
Capital Current Pence
Invest-ments Assets Total per
£'000 £'000 £'000 Share
Net asset value at 31 December 2009 14,870 10,160 25,030 22.7
Net gain on disposal of investments 631 24 655 0.6
Net loss on valuation of investments (249) - (249) (0.2)
Income - 108 108 0.1
Operating expenses - (413) (413) (0.4)
Net investment (1,098) 1,098 - -
Net assets before dividends and share buybacks 14,154 10,977 25,131 22.8
Dividend paid - (4,430) (4,430) (4.0)
Share buybacks - - - -
Net asset value at 30 June 2010 14,154 6,547 20,701 18.8
Dividends
Following the disposal of Secerno Limited and other realisations, the Board has
approved an interim dividend per share of 1p (2009: nil) to be payable on 24
September 2010 to shareholders on the register at 27 August 2010.
Summary
This has proved a more satisfactory period for your Company. The improving
market conditions and successful disposal of Secerno indicate that more exit
opportunities may be available in the medium term. The Board, however, remains
very conscious that a change of approach is necessary and is actively seeking
to progress this.
Robin Field
Chairman
12 August 2010
Director's responsibility statement
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the
Half-Yearly Financial Report have been prepared in accordance with the
Accounting Standards Board's Statement 'Half-Yearly Financial Reports'; and
· the interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R of important
events that have occurred during the first six months of the financial year and
their impact on the condensed financial statements, and a description of the
principal risks and uncertainties for the remainder of the financial year; and
· the condensed financial statements (note 9) includes a fair review of
the information concerning related parties transactions as required by
Disclosure and Transparency Rule 4.2.8R.
The Half-Yearly financial report was approved by the Board on 12 August 2010
and the above responsibility statement was signed on its behalf by the
Chairman.
INVESTMENT MANAGER'S REPORT
Over the half year to 30 June 2010 the activity of the Investment Manager has
been conducted against the background of the new strategy agreed with the Board
at the beginning of the year and summarised in the Chairman's statement in the
last annual report.
The key points of strategy in terms of investment management are:
in the current economic climate, fresh investment in early stage venture
capital investments, of a type similar to the majority of the companies in
SPARK VCT's existing portfolio, is no longer considered to present an
appropriate investment for VCT shareholders;
the Company's existing portfolio investments should be realised as soon as they
mature and suitable exits are achievable: it is acknowledged that this is
likely to take several years and that some highly selective follow-on funding
may be required where it is possible to enhance realisation prospects;
the remaining cash funds not required for follow-on investments should be used
to make new, qualifying investments, within the Company's existing investment
policy, enabling the Company to maintain its VCT tax status; such investments
should be focused towards relatively lower risk opportunities, where investee
companies are more advanced in their development - either generating revenues
and able to pay dividends or well positioned for exit in a short time frame.
In considering the above strategy it is recognised that the current portfolio
does contain businesses of promise and that there are expected to be
opportunities for profitable realisations.
Realisations
During the half year significant steps have been taken in the implementation of
this strategy, in particular towards the realisation of existing portfolio
investments, and we are pleased to report the sale of Secerno Limited. This
Oxford-based data security business has been sold to Oracle Corporation in a
transaction completed in June - this has produced proceeds of £1,210,000
(including a proportion retained in escrow), against a carrying value at 31
December 2009 of £555,000, resulting in a profit in the half year to 30 June
2010 of £655,000.
The opportunity has also been taken to realise cash from certain of the quoted
venture capital investments, with the sale of the entire holding in Vernalis
plc and part of the holding in Celldex Therapeutics, Inc. Overall, proceeds
generated from these transactions, together with certain other cash recoveries,
have totalled £1,368,000 in the half year to 30 June 2010.
These realisations have enabled the Board to declare an interim dividend of
1.0p per share.
Progress of investments
In the Business review in the last annual report we analysed SPARK VCT's
venture capital investments into three categories: "maturing" venture capital
investments, "developing" venture capital investments and "early stage"
investments. Following the realisations referred to above, the proportions
that investments in each category represent in the venture capital portfolio by
valuation at 30 June 2010 are as follows:
Percent. of venture
capital portfolio by
valuation
"Maturing" venture capital investments:
companies with stable and growing revenue streams,
achieving profitable trading or very close to it, and
with stable cash positions
examples: Elateral Holdings Limited, Imagesound plc, Lab
M Holdings Limited, Sift Group Limited, UniServity
Limited , Workshare Limited 59.9%
"Developing" venture capital investments:
companies with developed business models and growing
revenue streams, though still facing uncertainties, and
breaking through into cash-flow positive trading
examples: Antenova Limited, Cluster Seven Limited, Level 19.3%
Four Software Limited
"Early stage" investments
companies still establishing their business model or, in
the case of businesses in the life sciences sector, still
at the product development stage
examples: Academia Networks Limited, Haemostatix Limited,
Isango! Limited, Perpetuum Limited, Vivacta Limited, We7
Limited 20.8%
The percentage of the venture capital portfolio now represented by "maturing"
venture capital investments provides a reasonably stable base to the portfolio
and means that the net asset value of SPARK VCT is much less exposed than
previously to the risks associated with early stage investment.
Significant recent business developments within the portfolio are summarised
below:
• Elateral Limitedhad another very successful year to 31 March 2010 delivering
17% revenue growth and a substantial improvement in EBITDA margin. New client wins for
the year included NetApp and major customers Coca Cola and SAP renewed their
contracts, taking additional services and territorial licences at the same
time.
• Imagesound Limited: after a satisfactory year to 31 December 2009 has
continued to perform close to budget on revenues in its current financial year
and ahead on EBITDA, remaining profitable and cash generative despite a
difficult trading environment.
• Level Four Software Limited has seen sales growth of 35% in its year to 30
June 2010 and has reached profitability: it continues to show impressive growth
in the range of its customer contacts within the banking industry for its ATM
testing tools business, and potential for further expansion both geographically
and into other sectors.
• Sift Group Limited is delivering revenues above last year and forecasting
further growth and improved profitability for the year as a whole.
• UniServity Limited: following management changes towards the end of last year
and a dramatic reduction in the cost base, financial performance has
significantly improved. Sales have remained ahead of budget despite
uncertainty about policy changes and public procurement following the change of
Government, and profitability is now strong and consistent. After a successful
launch of the 'parent portal' product, resources are now being concentrated on
completing the build of a new technology platform ready for launch at the
beginning of the new year.
• Workshare Limitedcontinues to enjoy very high market penetration in the legal
IT market for its document comparison software. New management has undertaken
some significant restructuring, with a particular focus on the sales model and
distribution network, reducing the overall level of operating cost and
improving profitability, while the company maintains a robust cash position.
Follow-on funding provided to existing portfolio companies in the half year has
been limited to a total of £168,000, including £143,000 advanced to Sift Group
Limited in a loan instrument with an attractive coupon (alongside the company's
management and SPARK's syndicate partner) to provide additional working capital
and £25,000 to Haemostatix Limited to support product development.
Against the background of the overall strategy for SPARK VCT referred to above,
and with the growing maturity of some of the key investments, members of the
SPARK management team are increasingly focused on working with portfolio
company managements on positioning the companies as attractive acquisition
candidates for major corporates. A number of the companies are now reaching
the stage at which a transaction of this type can realistically be planned for
some time over the next two years, enabling the businesses concerned to be
taken forward to the next stage of growth under new ownership and achieving
cash realisations for SPARK VCT.
Subject to no deterioration in business and financial conditions, we expect to
be able to announce a number of positive developments in this respect by the
date of release of the annual report.
Valuation changes
Valuations of the unquoted investments have been determined under the
application of the International Private Equity and Venture Capital Valuation
Guidelines. The quoted venture capital investments (shares traded on AIM, the
Frankfurt stock exchange and NASDAQ) have been valued at their bid prices at 30
June 2010.
Given the profitable exit from Secerno, the portfolio has recorded a positive
result for the half year, after operating costs have been deducted. The
movement on other investments has shown a downward revaluation of £249,000, of
which £167,000 was in respect of one of the early stage investments and £82,000
was in respect of quoted venture capital investments.
Principal risks and uncertainties
As a Venture Capital Trust the Company invests in unquoted and AIM-traded UK
companies in accordance with its investment policy. In addition to its
venture capital porfolio, the Company maintains liquidity balances in the
form of cash held for follow-on financing and new venture capital investment
and debtors and creditors that arise directly from its operations. Its
principal risks are therefore market risk, credit risk and liquidity risk.
Other risks faced by the Company include economic, loss of approval as a
VCT, investment and strategic, regulatory, reputational, operational and
financial risks. These risks, and the ways in which they are managed, are
described in more detail in the Company's Annual Report and Accounts for the
year ended 31 December 2009. The Company's principal risks and uncertainties
have not changed materially since the date of that report.
Outlook
Earlier evidence of an improving M&A market is confirmed not only by the
transactions completed by SPARK VCT in the year to date but also by
transactions seen elsewhere, with major corporates looking for growth now
clearly interested in strategic acquisition opportunities among venture-backed
companies.
As long as business and financial conditions remain stable, we believe that
opportunities should emerge during the remainder of the current year and over
2011 and 2012 for significant realisations and the extraction of value for
SPARK VCT shareholders.
This will enable both the distribution of substantial amounts of cash by way of
dividend and a start to be made on a programme of investment in new qualifying
investments: in line with the new strategy, this will be focused on companies
more advanced in their development and representing relatively lower risk
opportunities.
SPARK Venture Management Limited
Manager
12 August 2010
Fund summary as at 30 June 2010
Accounting
Cost (1) Valuation Equity % of fund
Industry sector £'000 £'000 % held by value
Fifteen largest venture capital investments
Elateral Holdings Limited (2) TMT 1,009 1,990 23.4% 9.6%
Imagesound plc TMT 2,848 1,920 11.7% 9.3%
Sift Group Limited TMT 2,658 1,782 21.1% 8.6%
UniServity Limited TMT 1,208 1,208 16.5% 5.8%
Cluster Seven Limited TMT 1,569 1,197 9.0% 5.8%
Vivacta Limited Healthcare 1,210 1,145 7.3% 5.5%
Workshare Limited TMT 695 928 1.9% 4.5%
Level Four Software Limited TMT 855 855 7.8% 4.1%
Haemostatix Limited Healthcare 527 527 12.5% 2.5%
Lab M Holdings Limited (2) Healthcare 690 440 26.8% 2.1%
Antenova Limited TMT 1,307 343 4.7% 1.7%
Academia Networks Limited TMT 103 280 4.1% 1.4%
Isango! Limited TMT 1,000 250 9.1% 1.2%
Perpetuum Limited TMT 686 228 7.0% 1.1%
Community Internet Group Limited (2) TMT 28 211 20.9% 1.0%
16,393 13,304 64.2%
Other venture capital investments
We7 Limited TMT 816 167 13.1% 0.8%
Atego Limited (formerly Artisan) (2) TMT 120 120 28.4% 0.6%
Symetrica Limited TMT 108 114 2.4% 0.6%
MediGene AG Frankfurt Healthcare 316 107 0.1% 0.5%
TeraView Limited Healthcare 1,172 100 4.8% 0.5%
Other investments: valuations less than £100,000 (4 investments) 2,660 242 1.2%
5,192 850 4.2%
Total venture capital investments 21,585 14,154 68.4%
Total unquoted venture capital investments 19,992 13,886 67.1%
Total quoted venture capital investments 1,593 268 1.3%
Total investments 21,585 14,154 68.4%
Cash and other net assets 6,547 6,547 31.6%
Net assets 28,132 20,701 100.0%
(1) Amounts shown as accounting cost represent the acquisition cost in the case of
investments originally made be the Company and/or the valuation attributed to
the investments acquired from Quester VCT 2 plc and Quester VCT 3 plc at the
date of the merger in 2005, plus any subsequent acquisition cost, as reduced in
certain cases (2) by amounts written off as representing an impairment in
value.
(2) Cost reduced by amounts written off as representing an impairment in value
(Elateral Holdings Limited reduction of £1,117,000, Lab M Holdings Limited of £
486,000, Community Internet Group Limited of £698,000 and Atego Limited of £
2,002,000).
Income statement
Six months to 30 June Six months to 30 June 2009 Year to 31 December
2010 (unaudited) (unaudited) 2009 (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Loss on valuation of investments at 3
fair value though profit or loss - (249) (249) - (2,462) (2,462) - (3,933) (3,933)
Gain/(loss) on disposal of
investments at fair value through 3
profit or loss - 655 655 - 60 60 - (40) (40)
Income 108 - 108 131 - 131 241 - 241
Investment management fee (243) - (243) (288) - (288) (549) - (549)
Other expenses (170) - (170) (195) - (195) (342) - (342)
Profit/(loss) on ordinary activities
before taxation (305) 406 101 (352) (2,402) (2,754) (650) (3,973) (4,623)
Tax on profit/(loss) on ordinary activities - - - - - - - - -
Profit/(loss) on ordinary activities
after taxation (305) 406 101 (352) (2,402) (2,754) (650) (3,973) (4,623)
Basic and fully diluted earnings/ 4
(loss) per share (0.3)p 0.4p 0.1p (0.3)p (2.2)p (2.5)p (0.6)p (3.6)p (4.2)p
The 'Total' column of this statement is the profit and loss account of the
Company; the supplementary revenue return and capital return columns have been
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made in shares and securities and from bank deposits.
There are no gains and losses for the period other than those disclosed in the
income statement of the Company.
The accompanying notes are an integral part of this statement.
Balance sheet
30 June 2010 31 December 2009 30 June 2009
(unaudited) (audited) (unaudited)
Notes £'000 £'000 £'000
Fixed assets
Investments at fair value through profit or loss 6 14,154 15,873 17,923
Current assets
Debtors 761 457 1,747
Cash at bank 6,150 8,900 7,618
6,911 9,357 9,365
Creditors: amounts falling due within one year (364) (200) (367)
Net current assets 6,547 9,157 8,998
Net assets 20,701 25,030 26,921
Capital and reserves
Called-up equity share capital 5,519 5,519 5,538
Share premium account 150 150 150
Capital redemption reserve 765 765 746
Special reserve 21,524 22,685 23,068
Investment holding losses (7,431) (7,941) (6,697)
Profit and loss account 174 3,852 4,116
Total equity shareholders' funds 20,701 25,030 26,921
Net asset value per share 7 18.8p 22.7p 24.3p
The accompanying notes are an integral part of this statement.
Cash flow statement
Six months Six months
to Year to to
30.06.10 31.12.09 30.06.09
(unaudited) (audited) (unaudited)
Notes £'000 £'000 £'000
Cash (outflow)/inflow from operating activities 8 (445) 529 (299)
Financial investment
Purchase of venture capital investments (168) (854) (352)
Sale of venture capital investments 1,266 396 280
Sale/redemption of listed fixed interest investments 1,000 1,850 1,000
Amounts recovered from investments previously written off 27 92 80
Total net financial investment 2,125 1,484 1,008
Equity dividends paid 5 (4,430) - -
Financing
Buyback of ordinary shares - (78) (56)
(Decrease)/increase in cash for the period (2,750) 1,935 653
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash for the period (2,750) 1,935 653
Net funds at the start of the period 8,900 6,965 6,965
Net funds at the end of the period 6,150 8,900 7,618
The accompanying notes are an integral part of this statement.
Net funds comprise cash at bank and on short-term deposit.
Reconciliation of movements in shareholders' funds
Profit
Share Capital Investment and
premium redemp-tion Special holding loss
Called-up equity share capital account reserve reserve losses account Total
Six months to 30 June 2010 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2010 5,519 150 765 22,685 (7,941) 3,852 25,030
Shares purchased for
cancellation - - - - - - -
Realisation of prior years'
net unrealised losses on
investments - - - - 759 (759) -
Transfer from special
reserve to profit and loss
account - - - (1,161) - 1,161 -
Investment holding loss on
valuation of investments - - - - (249) 249 -
Profit on ordinary
activities after taxation - - - - - 101 101
Dividends - - - - - (4,430) (4,430)
At 30 June 2010 5,519 150 765 21,524 (7,431) 174 20,701
Year to 31 December 2009
At 1 January 2009 5,553 150 731 23,751 (4,842) 4,388 29,731
Shares purchased for
cancellation (34) - 34 (78) - - (78)
Realisation of prior years'
net unrealised losses on
investments - - - - 834 (834) -
Transfer from special
reserve to profit and loss
account - - - (988) - 988 -
Investment holding loss on
valuation of investments - - - - (3,933) 3,933 -
Loss on ordinary activities
after taxation - - - - - (4,623) (4,623)
Dividends - - - - - - -
At 31 December 2009 5,519 150 765 22,685 (7,941) 3,852 25,030
Six months to 30 June 2009
At 1 January 2009 5,553 150 731 23,751 (4,842) 4,388 29,731
Shares purchased for
cancellation (15) - 15 (56) - - (56)
Realisation of prior years'
net unrealised losses on
investments - - - - 607 (607) -
Transfer from special
reserve to profit and loss
account - - - (627) - 627 -
Investment holding loss on
valuation of investments - - - - (2,462) 2,462 -
Loss on ordinary activities
after taxation - - - - - (2,754) (2,754)
Dividends - - - - - - -
At 30 June 2009 5,538 150 746 23,068 (6,697) 4,116 26,921
The accompanying notes are an integral part of this statement.
Notes
1. The Financial Statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments, and
in accordance with applicable UK accounting standards and the Statement
of Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' issued by the Association of
Investment Companies in January 2009.
2. The total reserves available for distribution by way of a dividend is
£14,267,000 (31 December 2009: £18,596,000, 30 June 2009 £20,487,000),
being made up of the Special reserve and Profit and loss account less
Investment holding losses.
3. The overall gain/(loss) on investments at fair value through profit
or loss disclosed in the profit and loss account is analysed as follows:
Six months Six months
to to Year to
30.06.10 30.06.09 31.12.09
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Loss on valuation of investments at fair value through profit or loss
Net loss on valuation of investments (249) (2,462) (3,933)
Write-off of investments - - -
( (249) (2,462) (3,933)
Gain/(loss) on disposal of investments at fair value through profit or loss
Net gain/(loss) on disposal 628 (20) (132)
Recoveries made in respect of investments previously written off 27 80 92
655 60 (40)
406 (2,402) (3,973)
'Net gain/(loss) on disposal' represents the difference between proceeds
received and the carrying values of those investments sold during the period.
4. The revenue loss per share of 0.3p (31 December 2009: loss 0.6p and
30 June 2009: loss 0.3p) is based on the revenue loss on ordinary
activities after tax of £305,000 (31 December 2009: loss £650,000 and 30
June 2009: loss £352,000) and on the weighted average number of
ordinary shares in issue during the period of 110,370,134 (31 December
2009: 110,631,989 and 30 June 2009: 110,781,028).
The capital profit per share of 0.4p (31 December 2009: loss 3.6p and 30
June 2009: loss 2.2p) is based on the capital profit on ordinary
activities after tax of £406,000 (31 December 2009: loss £3,973,000 and
30 June 2009: loss £2,402,000) and on the weighted average number of
ordinary shares in issue during the period of 110,370,134 (31 December
2009: 110,631,989 and 30 June 2009: 110,781,028).
The total profit per share of 0.1p (31 December 2009: loss 4.2p and 30
June 2009: loss 2.5p) is based on the profit on ordinary activities
after tax of £101,000 (31 December 2009: loss £4,623,000 and 30 June 2009
: loss £2,754,000) and on the weighted average number of ordinary
shares in issue during the period of 110,370,134 (31 December 2009:
110,631,989 and 30 June 2009: 110,781,028).
5.Dividends
Six months Six months
to to Year to
30.06.10 30.06.09 31.12.09
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Final dividend paid, period ended 31 December 2009: 4.0p per share paid
11 June 2010 4,430 - -
The Directors propose an interim dividend of 1.0 pence per share for the year
ended 31 December 2010.
6. Movements in investments during the six months ended 30 June 2010 are as follows:
Venture Listed fixed
capital interest
investments investments Total
£'000 £'000 £'000
Cost at 1 January 2010 22,814 1,000 23,814
Investment holding (losses)/gains at 1 January 2010 (7,944) 3 (7,941)
Valuation at 1 January 2010 14,870 1,003 15,873
Movements in the period:
Purchases at cost 168 - 168
Disposals
- proceeds (1,266) (1,000) (2,266)
- net gains/(losses) on disposal 631 (3) 628
Net loss on valuation of investments (249) - (249)
Valuation at 30 June 2010 14,154 - 14,154
Book cost at 30 June 2010 21,585 - 21,585
Investment holding losses at 30 June 2010 (7,431) - (7,431)
Valuation at 30 June 2010 14,154 - 14,154
Amounts shown as cost represent the fair value of the investment at the date of
the merger in 2005, or subsequent acquisition cost, less any reduction made on
account of impairment in value.
7. The net asset value per share as at 30 June 2010 of 18.8p (31 December 2009:
22.7p and 30 June 2009: 24.3p) is based on net assets of £20,701,000 (31
December 2009: £25,030,000 and 30 June 2009: £26,921,000) divided by the
110,370,141 ordinary shares in issue as at that date (31 December 2009:
110,370,141 and 30 June 2009: 110,761,138). There is no dillution effect as at
30 June 2010 (31 December 2009: nil and 30 June 2009: nil).
8. Reconciliation of operating loss to cash flow from operating activities for the
period is as follows:
Six months Six months
to Year to to
30.06.10 31.12.09 30.06.09
(unaudited) (audited) (unaudited)
£'000 £'000 £'000
Proift/(loss) on ordinary activities before tax 101 (4,623) (2,754)
(Gain)/loss on investments at fair value through profit or loss
(406) 3,973 2,402
(Increase)/decrease in debtors (304) 1,479 189
Increase/(decrease) in creditors 164 (303) (136)
Amortisation of fixed interest investments - 3 -
Cash (outflow)/inflow from operating activities (445) 529 (299)
9. Spark Investors Limited (a fellow subsidiary of the Manager), of which AB
Carruthers is a director, may from time to time be eligible to receive
transaction fees and/or directors' fees from investee companies. During the
period to 30 June 2010, fees of £18,000 attributable to the investments of the
Company were received pursuant to these arrangements (year ended 31 December
2009: £26,000, period to 30 June 2009: £13,000).
During the six months to 30 June 2010 there were no transactions by Directors
in shares of companies in which the Company has invested (31 December 2009:
none; 30 June 2009 none)
10. This Half Yearly Financial Report, has been neither audited nor reviewed by the
Company's auditors and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The statutory accounts for
the period ended 31 December 2009 have been delivered to the Registrar of
Companies and received an audit report which was unqualified, did not include a
reference to any matters to which the auditors drew attention by way of
emphasis without qualifying the report and did not contain any statements under
Section 498(2) and (3) of the Companies Act 2006.
11. Interim management statements relating to the first and third quarters of the
financial year will be released via the Regulatory News Service on or shortly
before 18 May and 18 November each year.
For further information, please contact:
Rawlings Financial PR Limited Tel: 01653 618016
Catriona Valentine catriona@rawlingsfinancial.co.uk
Keeley Clarke keeley@rawlingsfinancial.co.uk
Spark VCT plc www.sparkvct.com Tel: 0207 8517777
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