Interim Management Statement

RNS Number : 2639U

Amati VCT 2 plc

19 December 2011

 

Amati VCT 2 plc (previously known as ViCTory VCT PLC)

INTERIM MANAGEMENT STATEMENT

FOR THE PERIOD FROM 1 AUGUST TO 31 OCTOBER 2011

To the members of Amati VCT 2 plc

This interim management statement has been prepared solely to provide additional information to the shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules, and should not be relied on by any other party or for any other purpose.

This interim management statement considers the future of the fund and, as such, forward-looking assertions have been made by the Directors in good faith based on the information available to them up to the time of their approval of this report.  This statement should therefore be treated with due caution due to the inherent uncertainties of the effect of both economic and business risk factors in considering forward-looking information.

This interim management statement relates to the period from 1 August 2011 to 31 October 2011 and contains information that covers this period and up to the date of publication of this interim management statement. 

Our operations

The objective of Amati VCT 2 plc ("the Company") is to provide shareholders with an attractive and competitive investment return from a portfolio of companies whose shares are primarily traded on the Alternative Investment Market ("AIM").  The Manager's continuing objective is to manage the current portfolio so as to maximise returns for investors for the qualifying period and beyond.

Performance during the period from 1 August 2011 to 31 October 2011

The period to 31 October 2011 precedes the completion of the merger with the former Amati VCT 2 Plc (originally called Invesco Perpetual AiM VCT plc).  The Performance and Top 10 Holdings information therefore only relate to the former ViCTory VCT PLC.

The NAV Total Return fell by 7.8% over the period, which compares with a decline of 15.8% in the FTSE AIM All Share Total Return Index.  The period under review was characterised by extreme stock market volatility and encompasses the heavy losses suffered by markets in August as well as the partial recovery in asset prices in October.  The August falls were precipitated by a deteriorating global macro-economic outlook and the spread of sovereign debt fears beyond peripheral Eurozone states to much larger economies such as Italy.

The main positive contributor to performance was Parseq, which was the subject of a takeover bid by management, backed by private equity.  The recommended cash offer of 9p was an improvement on the original offer of 7.5p and our belief is that the revised price represents fair value for the business.  There was also a positive contribution from Eros, the India-based acquirer and producer of Bollywood films.  Eros benefited from the box office success of its latest production entitled "RA.One", as well as having a strong pipeline of major productions for release before the year end.  On the negative side Symphony Environmental was affected by rumours that one of its significant customers had stopped using Symphony's additive in their biodegradable plastic bags.  This news was followed by below par results, although by this stage the holding had been reduced to a minor position.  Synergy Healthcare also drifted lower following a strong run in the share price in the second and third calendar quarters.  However, we are not aware of any underlying trading issues within Synergy and we remain confident on the robustness of the business model and hopeful that the share price will continue to recover. 

One new qualifying holding, MyCelx, was added during the period.  MyCelx has a unique technology to remove hydrocarbon residues from waste water, and sales are predominantly focused on the oil industry.  Its solution offers compelling benefits over incumbent technologies and it has some major reference customers who offer solid validation of its advantages.  Besides this, we increased our exposure in Asian Citrus, taking advantage of a weak share price to do so, and acquired a small position in XP Power, a designer and manufacturer of essential power control systems.  We exited some of the smaller qualifying positions, including Avingtrans and Hightex.  

	As at 31 October 2011	As at 31 July 2011
	("unaudited") pre-merger	("unaudited")
Total Net Asset Value ("NAV")	£16.7m	£18.5m
Shares in issue *	39,416,860	39,642,549
NAV per share **	42.0p	46.7p

* prior to the merger with the former Amati VCT 2 Plc and subsequent ordinary share reconstruction

** taking account of amounts receivable or chargeable to the VCT's income account.

 The top ten investments in the Company's portfolio are listed below.

Top ten holdings as at 31 October 2011

	Percentage of
	the fund's net
	asset value as
	at
	31 October 2011
Lo-Q plc	7.4
IDOX plc	5.0
Synergy Health plc	4.7
Prezzo plc	4.6
Fulcrum Utility Services Ltd	4.2
China Food Company plc Convertible 8% Loan Note	3.8
Tikit Group plc	3.6
Green Compliance plc	3.1
Ubisense Group plc	3.1
Asian Citrus Holdings Limited	2.9
	42.4

Detailed monthly updates on portfolio activity and performance are posted on the Amati Global Investors website (see http://www.amatiglobal.com).   

Merger with the former Amati VCT 2 plc (originally called Invesco Perpetual AiM VCT plc) and share capital reconstruction

On 8 November 2011 the Company merged under a scheme of reconstruction with the former Amati VCT 2 plc, which had previously been known as Invesco Perpetual AiM VCT plc.  The merger ratio for former Amati VCT 2 PLC holders was 0.621926751, and under this formula 27,063,870 shares in the Company were issued to holders of the former Amati VCT 2 PLC, taking the total number of shares in issue following the merger to 66,480,730.  The merger was intended to mark an effective re-launch of the Company and there was also a reconstruction of the share capital of the Company shortly following the completion of the scheme which rebased the NAV per share from around 42.06p to 99.8p per share.  The share reconstruction ratio was 0.4220842, and the total number of shares in issue following the reconstruction was 28,058,200.

As a result of the share reconstruction all share certificates have been re-issued. In all cases these are in the name of Amati VCT 2 plc. Share certificates in the name of ViCTory VCT PLC, Singer & Friedlander AIM 3 VCT plc and Invesco Perpetual AiM VCT plc are no longer valid, and should be destroyed. If you are in any doubt about how many shares you own, think you may have lost your share certificate, or wish to change the address registered with your shares, please contact The City Partnership (UK) Limited, the company secretary, on 0131 2437210.

For further information please contact Doreen Nic on 0131 243 7210 or email

[e-mail].

19 December 2011

 

END

 

 

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