Final Results
Baronsmead VCT 3 plc
Annual Financial Report Announcement
11 February 2009
Investment Objective
To achieve long-term capital growth and generate tax-free dividends for private investors.
Audited Annual Financial Report Announcement - Year ended 31 December 2008
Baronsmead VCT 3 plc
FINANCIAL HEADLINES
-12.5% NAV per share decrease to 105.72p before deduction of dividends. After payment of dividends totalling 7.5p per share in the year to 31 December 2008, the NAV was 98.2p. The interim dividend of 3p per share was paid in September 2008 and the proposed final dividend of 4.5p per share is payable in March 2009. The FTSE All-Share Index fell 32.8% over the same period.
+49.6% NAV total return since launch in 2001 of 149.6p per 100p invested, representing annualised total return of 5.2% (on original subscription at launch) which equates to 7.7% for higher rate taxpayers.
8.3% Dividend yield tax-free to qualifying shareholders (gross equivalent yield for a higher rate taxpayer is 12.3 per cent) based on the 7.5p dividend in the year divided by the mid share price of 90.5p at the year end.
CHAIRMAN'S STATEMENT - for the year ended 31 December 2008
The impact of the credit crunch has had severe implications, initially for equity and property asset values and currently for consumer spending both of which have led to depressed prospects for the UK economy. Whilst disappointing, the resulting fall in Net Asset Value per share for Baronsmead VCT 3 during the period is materially less than for most UK Stock Exchange Indices.
A good level of new investment in the first half of the year under review balanced by realisations have sustained our cash resources and will permit us to take advantage of future investment opportunities as they arise.
INVESTMENT PERFORMANCE
Results to 31 December 2008 | In the 12 months to 31 December 2008, the Net Asset Value (NAV) per share decreased by 12.5 per cent from 120.44p to 105.72p before payment of the interim dividend and final proposed dividend totalling 7.5p per share. These dividends are made up of 2.4p per share generated from net revenue while the balance came from net realised capital profits.
Over the same period the FTSE All-Share index fell by 32.8 per cent while the FTSE indices for UK smaller companies fell further.
The values of the unquoted investments have held up relatively well despite the market turmoil. It must be remembered that these are based largely on historic data. Much management effort is focussed on preparing for the difficult economic environment in 2009. However, the exceptional falls in quoted markets during the second half of 2008 has led to the value of our AiM portfolio decreasing dramatically and this has been the main contributor to the decline in NAV this year. The continuing relevance of the AiM element of the portfolio and the future strategy to improve returns is discussed below in the Portfolio section of this statement.
The six VCT tests relating to the management of Baronsmead VCT 3 were met during the year. At the period end over 75 per cent of the ordinary share capital raised prior to 31 December 2006 was invested in qualifying investments, which is well above the 70 per cent minimum level.
Longer term performance | Dividends paid/proposed to founder shareholders now total 40.8p per share. This is an average annual dividend throughout the 8 year period of 5.1p per share. C shareholders who subscribed in the four month period to 3 January 2006 have received 13.4p of dividends for each £1 invested.
The table on page 2 of the Annual report and accounts shows the total returns generated over 1, 3, 5 years and since launch compared against the FTSE All-Share Total Return index. The share price total return of Baronsmead VCT 3 is the direct comparator and has exceeded this FTSE index over each of these periods.
These total returns are stated before the inclusion of VCT tax relief's, which are designed to redress the VCT constraints and investing in a limited range of companies, which by their smaller size can be higher risk. At a time of lower and sometimes negative investment returns, the proportional benefits from these reliefs are greater. Quantification of the scale of these gains depends on the individual circumstances of each shareholder but the table at the bottom of page 3 of the Annual report indicates some of the yields achieved for those who subscribed in 2001 and 2005.
The up front income tax relief's have also varied between 20 per cent, 40 per cent and 30 per cent over the years and so any adjusted performance measure including this relief will vary depending on the date of subscription. There is the additional benefit of receiving dividends tax free and has been worth an equivalent of another 19.6p per share for a higher rate founder shareholder.
ANALYSIS OF THE PORTFOLIO
Portfolio valuations | Investments are valued at fair value, which for quoted securities is either bid price or the last traded price. Unquoted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines developed by the British Venture Capital Association (BVCA) in conjunction with the European Venture Capital Association (EVCA) and the Association Francaise des Investisseurs en Capital (AFIC).
Despite the substantial fall in the rating of smaller quoted companies, the 21 unquoted portfolio investments have shown only a smaller fall in value over all. Some companies were down rated but several others performed well with rises in profits that helped to reduce the overall fall to 5.2 per cent. For instance eight out of the top ten investments have shown year on year profits growth.
The AiM market has suffered a severe drop in value. At the year end, the portfolio of 53 AiM investees had fallen in value by 46 per cent over the 12 month period. The FTSE AiM index has fallen by 62 per cent over the same period.
Baronsmead VCT 3 was launched as a generalist VCT with the unquoted investments complemented by AiM-traded stocks to provide a more liquid and diversified element to the portfolio. The AiM investments have performed well in the past and the Manager believes that the current lower valuations reflect the poor liquidity currently experienced on AiM and a change in the taxation status of AiM securities (affecting their beneficial capital gains tax status) as well as the difficult economic outlook affecting most UK companies.
The strategy relating to AiM investments has been refined to incorporate more of the private equity investment process. In particular, we are focussing on taking more influential stakes in a smaller number of investments where a likely exit strategy can be envisaged, while looking to sell the long tail of older investments as and when the constraints of the VCT legislation allow. As explained further in the Manager's report the AiM team utilise the knowledge and skills of the wider private equity team to provide input to the selection of new investments and during their ongoing development. It is expected that these refinements to the investment strategy for AiM investments together with the current lower valuations will have a positive impact on returns over the coming years.
Realisations and New Investments | The private equity disciplines developed by ISIS over the last ten years have generated a series of successful exits for unquoted investments taking advantage of the timing of the investment cycle. The oldest unquoted investment is now one that was made in 2004. Total sale proceeds of unquoted investments, yielded £7.9 million and after accounting for one major write off, the unquoted portfolio generated profits of £4.5 million during the year.
A number of AiM investments were sold resulting in overall proceeds representing some 45 per cent of their £1.3 million aggregate cost. Write offs from one full list investment in Ardana and four AiM-traded investments totalled £2.1 million, most of which had an earlier stage technology bias (although we had had a number of technology investment gains during 2005 - 2007). New investment totalled £8.2 million across ten unquoted companies and £2.75 million in 13 AiM-traded companies. Details are set out in the Manager's Review below.
Asset allocation | At the year end, the percentage of unquoted investments is at 50 per cent of NAV. The percentage of private equity investments held in the portfolio is expected to continue to increase gradually as realisation opportunities at premium prices are likely to be lower in the near term. With this higher level of retention, the Manager will be able to manage more actively the AiM portfolio as opportunities arise.
We continue to have a large pool of cash and other liquid resources of £15.9 million within the fund available for unexpected eventualities. A significant proportion of the cash available was raised prior to April 2006 so it can be used for larger qualifying investees with gross assets up to £15 million pre investment.
SHAREHOLDER ISSUES
Risk Management | The Board manages the risks associated with the Company through the framework established within the Combined Code for all fully listed public companies. At quarterly Board meetings all the key performance indicators are reviewed as well as wider topics which are spread annually across these meetings. In the current difficult conditions we have paid particular attention to the security of the uninvested funds, which have been moved into Government securities, and to the diverse challenges facing the portfolio companies. The Managers' experience in navigating through a downturn is of substantial value to our unquoted companies but they are less able to influence our AiM investments.
VAT reclaim | It was announced in March 2008 that VAT is no longer to be charged on management fees from 1 October 2008. Subsequently HMRC announced that VAT paid from a number of previous years could also be reclaimed. Where VAT recoverable can be quantified with a degree of certainty, the reclaim can be recognised in the financial statements. At 31 December 2008, £1,304,000 was accrued representing VAT reclaimed by ISIS and a further claim by F&C (the former parent company of the Manager). In all equivalent to 2.4p per share.
Future running costs are also reduced by around 0.4 per cent p.a.
Shareholder liquidity | An important risk that the Board monitors relates to those few shareholders who have wished to realise their shareholding, normally achieved by share buy backs. The policy of buying back shares from the market makers at an approximate price of 10 per cent less than NAV per share was established at launch so that shareholders have been able to sell on this basis since then. The main market maker, Landsbanki, ceased trading in October but Teathers were appointed two months later who restored the previously adopted discount level.
During the year, 1.37 million shares were bought back by the company and separately another 0.3 million ordinary shares were acquired in the secondary market to satisfy the Dividend Reinvestment Plan (DRIP). Shares acquired through the DRIP are bought at the prevailing market prices at the time dividends are paid. In September 2008 DRIP shares were bought at an average discount to NAV of 7.3 per cent.
Fund Raising | As reported at the interim stage, the top up offers in February 2008 resulted in applications from 121 existing shareholders totalling £1.12 million for new ordinary shares.
A top up offer to raise up to the Sterling equivalent of 2.5 million euros will be sent to shareholders in February 2009 to coincide with the publication of the Annual Report.
Board succession | The new Listing Rules requirements for Investment Companies Director's independence mean that there may have to be Board changes before these rules come into force for VCTs in September 2010. In addition the current Board members have been in place since 2001 and therefore, whilst being conscious of the need for continuity, it is also time to consider the introduction of some new blood. Andrew Karney, as the Senior Independent Director, is co-ordinating the plan for Board succession.
ANNUAL GENERAL MEETING
We have approximately 3,000 ordinary shareholders and our task as a Board is to ensure that we meet and understand your requirements. I look forward to welcoming as many shareholders as possible to the eighth AGM on 18 March 2009 at 11 a.m. followed by an investee presentation, a buffet lunch and a shareholder workshop finishing by 2.00 p.m.
OUTLOOK
The UK economy is officially in recession and this will pose challenges for all our portfolio companies. This is also likely to reduce the level of realisations in the near term. Most of our portfolio companies have a relatively low level of bank debt leverage, which should provide some protection from financing pressures faced by many companies.
The Manager is taking an active role working with our unquoted portfolio companies to help them through these conditions. The strategy with respect to AiM investments is evolving so that larger, more influential investments can be made in companies where a clear exit strategy can be envisaged, thereby utilising much of the private equity skill and experience of the Manager.
In such circumstances the Manager and the Board will continue to monitor the portfolio closely and seek to minimise the impact of these adverse conditions on the fund. The priority for portfolio companies is therefore to face any recessionary pressures in a measured way and be strong enough not to be diverted from a longer term growth path. The Manager will remain focussed on these investment fundamentals.
Baronsmead VCT 3 does not have an over stretched balance sheet. We therefore have the capacity to both protect the existing portfolio and take advantage of potentially significant investment opportunities once a measure of stability returns but at lower prices than in recent years.
Mark Cannon Brookes
Chairman
11 February 2009
MANAGER'S REVIEW
Following a high level of investment in the first half of 2008, the priority now is to work closely with portfolio companies to ensure their stability and that they can then thrive once we move out of the current economic downturn. The unquoted portfolio is showing good resilience currently although the valuation of AiM investees has been adversely affected in line with market falls. The dedicated origination team at ISIS is focussed on finding new attractive investment opportunities and to invest the cash resources available for this purpose.
Portfolio Review
The total portfolio comprised 74 investee companies at the year end. There were fifteen new investments and eight full exits plus six write offs. Including further rounds of capital raising, £11.0 million was invested, split £8.2 million into ten unquoted investments and £2.8 million into 13 AiM-traded investments. Sale proceeds from all realisations totalled £8.5 million. All new investment and the exits are scheduled on page 9 of the annual report and accounts.
Interest bearing securities and cash amounted to £21.4 million at the start of the year and by 31 December 2008 totalled £15.9 million. During October 2008 the holdings in money market OEICS were switched into Gilts and Treasury Bills leaving cash deposits of approximately £2 million for immediate operational requirements. This structure will be reviewed regularly and some reversion back to higher yielding OEICs will be considered once financial markets are exhibiting more conventional behaviour.
The Portfolio companies are reviewed quarterly in terms of their financial health and there has been a fall in those companies exhibiting steady or better trading progress from 83 per cent to 70 per cent at the year end. In addition financial gearing is measured regularly both as a ratio of debt to current enterprise value as well as the debt divided by operating profits. The ratios for the unquoted portfolio are currently at reasonably prudent levels both historically and against industry standards.
Over the last few years, we have endeavoured to build a portfolio that can perform relatively well even in challenging circumstances. There has been a focus on investing in more robust business models and away from more cyclical sectors where growth strategies are less dependent on overall economic growth. A good example of this is Scriptswitch where the demand driver for its unique prescribing software is reducing cost within Primary Care Trusts' drug budgets. This and three other case studies of unquoted companies across a number of different market sectors within the portfolio are set out on pages 14 and 15 of the annual accounts.
A proportion of the unquoted portfolio has been affected by the economic downturn and this has been reflected in the unquoted valuations. A full provision and partial provision have been made in Green Issues and TVC respectively where, in each case their main customers reduced demand. We are active in challenging and supporting the management of all investees, especially where there is any degree of underperformance.
During early 2008 the climate still allowed good assets to be sold at attractive valuations. SLR, Hawksmere and Kidsunlimited were sold at 6.0, 2.5 and 4.7 times original cost. However the sale of the business within The Art Group recouped only 15 per cent of cost. This company had struggled with declining profitability in recent years and then a sharp drop off in demand in the first half of 2008 proved impossible to reverse.
The severe AiM market de-rating has adversely affected the NAV performance over the last year which has also seen price/earnings multiples more than halved for both the AiM All Share and the FTSE Small Cap indices (source: Blue Oar Securities). This de-rating was partially offset by earnings growth within the majority of portfolio companies although there was an impact with a number of portfolio companies issuing negative trading statements in the final quarter.
THE ROLE OF THE MANAGER IN A DOWN TURN
Trading conditions for companies during the economic recession are more volatile making forecasts difficult to believe. These greater uncertainties can be translated into new investment opportunities. Whilst bank finance is scarce your Company has adequate cash resources and is therefore relatively well placed to take advantage of opportunities that arise.
As an example of the Manager's involvement with unquoted portfolio companies the appointment of an external chairman and one or more non-executive directors typically instils good standards of governance and key decision-making. This is normally reinforced by the alignment between all the shareholders including the executive directors who are incentivised to grow the business prior to exit.
Active portfolio management | The Manager constantly strives to achieve greater consistency through all stages of the investment process. The present focus is on financial control and managing the relationship with the company's bankers. Regular monthly meetings enable a constant challenge and refinement of the value strategy, development of the executive team and formulation of an exit strategy to deliver the investment return.
AiM investing | The intent is to apply private equity disciplines when possible in AiM investees. These inputs range from use of sector knowledge, prior contact before float as an unquoted company, board appointment introductions and experience of exits for similar unquoted companies. 76 per cent of the value of the Listed and AiM portion of the portfolio is within 19 stocks and this will be where the focus will be while the tail of investments is slowly reduced as market conditions allow.
Getting ready for the upswing | The Manager has an experienced Private Equity team a number of whom lived through the last significant recession in the early 1990s. Currently asset prices are on the decline, accelerated by lack of credit and corporate distress. These circumstances will create attractive opportunities in the future, both for well managed portfolio companies to take advantage of weaker competitors and for new investments at lower entry prices.
The investment strategy is also driven by the considerable sector knowledge that has been built up over the years and understanding what industry factors are the key growth drivers within specific sub-sectors. This has been supported by a programme of proactively contacting interesting companies to build relationships well ahead of a transaction being triggered. This historic knowledge of targets reduces the investment risk when an opportunity eventually arises. For example, the investment team knew the management of Playforce for two years prior to the investment completing in January 2008.
In January 2009 the Manager has added Energy and Environmental as an additional sector as the volume of investment opportunities in this area has grown.
OUTLOOK
It will take some time for the turbulence in financial markets to settle down but our role will be to stick to our investment principles during the current period of uncertainty whether seeking to protect the existing portfolio or investing afresh. We are confident that new investment opportunities will arise and at keener pricing than for some time.
ISIS EP LLP
Investment Manager
11 February 2009
New Investments
|
Unquoted investments
|
|
|
|
|
|
Company
|
Location
|
Sector
|
Activity
|
Investment cost (£’000)
|
|
Active Assistance Ltd
|
Sevenoaks
|
Healthcare
|
Provision of live-in care to spinally injured clients
|
679
|
|
Carnell Contractors Ltd
|
Penkridge
|
Business Services
|
Support service provider in the highways sector
|
1,499
|
|
CSC (World) Ltd
|
Pudsey
|
IT Support Services
|
Software for structural engineers
|
1,606
|
|
Kafevend Holdings Ltd*
|
Crawley
|
Consumer
|
Vending Services
|
6
|
|
Kidsunlimited Group Ltd
|
Wilmslow
|
Business Services
|
Daycare provider
|
113
|
|
Nexus Vehicle Holdings Ltd
|
Leeds
|
Business Services
|
Vehicle rental broker
|
1,868
|
|
Occam DM Ltd*
|
Bath
|
Business Services
|
Integrated data services
|
47
|
|
Playforce Holdings Ltd
|
Wiltshire
|
Business Services
|
Provider of playground equipment
|
1,033
|
|
TVC Group Ltd
|
London
|
Media
|
Broadcast public relations firm
|
1,233
|
|
Xention Discovery Ltd*
|
Cambridge
|
Healthcare
|
Developer of ion channel modulating drugs
|
152
|
|
|
|
|
|
|
|
Total Unquoted investments
|
|
8,236
|
||
|
* Follow on investment
|
|
|
||
|
AiM-traded investments
|
|
|
|
|
|
Company
|
Location
|
Sector
|
Activity
|
Investment cost (£’000)
|
|
Advanced Computer Software plc
|
London
|
IT Support Services
|
Consolidation of Healthcare IT businesses focused on primary care, particularly focused on patient record data management 525
|
525
|
|
Brulines Holdings plc*
|
Stockton-On-Tees
|
Business Services
|
Pub management systems
|
298
|
|
Character Group plc
|
New Malden
|
Media
|
Design, development and international distribution of toys and games
|
144
|
|
Electric Word plc
|
London
|
Media
|
Specialist information business serving the sport and education sectors
|
17
|
|
Essentially Group plc*
|
Jersey
|
Media
|
Sports marketing
|
240
|
|
Ffastfill plc*
|
London
|
IT Support Services
|
Trading platform software provider
|
205
|
|
Independent Media Distribution plc
|
London
|
IT Support Services
|
Media logistics
|
15
|
|
IS Pharma plc
|
Chester
|
Healthcare
|
Specialist hospital medicines group
|
246
|
|
Praesepe plc
|
London
|
Consumer
|
Gaming
|
525
|
|
Relax Group plc
|
Chesterfield
|
Consumer
|
IVA and debt management group
|
262
|
|
Silverdell plc
|
Barking
|
Business Services
|
Asbestos removal, asbestos abatement and asbestos management firm
|
14
|
|
STM Group plc
|
Gibraltar
|
Business Services
|
Offshore trust and company administration services for high net worth individuals
|
140
|
|
Tasty plc*
|
London
|
Consumer
|
Restaurant chain
|
116
|
|
Total AiM-traded investments
|
|
2,747
|
||
|
Total Investments
|
|
|
|
10,983
|
|
* Follow on investment
|
|
|
|
|
Realisations in the year to 31 December 2008
|
|
|
First Investment date
|
Original Cost
£’000
|
Total Proceeds £’000
|
Multiple return
|
|
Unquoted investments
|
|
|
|
|
|
|
Hawksmere Group Limited
|
Trade sale
|
December 2003
|
766
|
1,948
|
2.5
|
|
Kidsunlimited
|
Secondary buy-out
|
June 2001
|
481
|
2,285
|
4.8
|
|
Scriptswitch
|
Partial Loan Note redemption
|
May 2007
|
422
|
522
|
1.2
|
|
SLR Group Limited
|
Secondary buy-out
|
September 2002
|
494
|
2,953
|
6.0
|
|
The Art Group
|
Written off
|
October 2003
|
1,281
|
198
|
0.2
|
|
Total Unquoted realisations
|
|
3,444
|
7,906
|
|
|
|
|
|
|
|
|
|
|
AiM-traded investments
|
|
|
|
|
|
|
Appian Technology plc
|
Written off
|
December 2005
|
302
|
–
|
–
|
|
Ardana plc
|
Written off
|
August 2003
|
619
|
–
|
–
|
|
Begbies Traynor Group plc
|
Part sale
|
September 2004
|
52
|
218
|
4.2
|
|
Business Direct Group plc
|
Written off
|
August 2004
|
665
|
–
|
–
|
|
Cantono plc
|
Market sale
|
April 2005
|
375
|
19
|
0.1
|
|
Capcon Holdings plc
|
Market sale
|
May 2001
|
137
|
6
|
0.1
|
|
Loanmakers (Holdings) plc
|
Written off
|
June 2005
|
169
|
–
|
–
|
|
Micap plc
|
Written off
|
July 2003
|
325
|
–
|
–
|
|
Oxford BioMedica plc
|
Trade sale
|
April 2003
|
250
|
65
|
0.3
|
|
Universe Group plc
|
Market sale
|
May 2003
|
158
|
37
|
0.2
|
|
Xpertise Group plc
|
Trade sale
|
November 2002
|
296
|
226
|
0.8
|
|
Total AiM-traded investments
|
|
3,348
|
571
|
|
|
|
Total Investments
|
|
6,792
|
8,477
|
|
|
* Includes interest/dividends received and loan note redemptions accounted for in prior periods.
Deferred proceeds were received for Boldon James £45,000, RLA Media £81,000 and Oxxon Pharmaccines Ltd £4,000.
The Disclosure and Transparency Rules ('DTR') of the UK Listing Authority require certain disclosures in relation to the annual financial report, as follows:
– Competitive Risk – Retention of key personnel is vital to the success of the Company. Incentives to the Manager’s key staff were recently strengthened.
The Board seeks to mitigate the internal risks by setting policy, regular review of performance, enforcement of contractual obligations and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies rigorously the principles detailed in the Turnbull guidance.
Statement of Directors' Responsibilities in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards.
The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
|
|
Revenue
|
Capital
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
|
|
|
|
|
|
Unrealised losses on investments
|
–
|
(8,894)
|
(8,894)
|
|
Realised losses on investments
|
–
|
(808)
|
(808)
|
|
Income
|
2,255
|
–
|
2,255
|
|
Recoverable VAT
|
266
|
1,038
|
1,304
|
|
Investment management fee
|
(405)
|
(1,215)
|
(1,620)
|
|
Other expenses
|
(362)
|
–
|
(362)
|
|
|
|
|
|
|
Profit/(loss) on ordinary activities before taxation
|
1,754
|
(9,879)
|
(8,125)
|
|
Taxation on ordinary activities
|
(433)
|
433
|
–
|
|
|
|
|
|
|
Profit/(loss) on ordinary activities after taxation
|
1,321
|
(9,446)
|
(8,125)
|
|
|
|
|
|
|
Return per ordinary share:
|
|
|
|
|
Basic
|
2.44p
|
(17.43p)
|
(14.99p)
|
|
|
£’000
|
|
Opening shareholders’ funds
|
65,221
|
|
Loss for the year
|
(8,125)
|
|
Increase in share capital in issue
|
1,118
|
|
Purchase of shares for Treasury
|
(1,398)
|
|
Dividends paid
|
(1,629)
|
|
Expenses of share issue and conversion of share premium
|
(51)
|
|
|
|
|
Closing shareholders’ funds
|
55,136
|
|
|
Ordinary Shares
|
||
|
|
|
|
|
|
|
Revenue
|
Capital
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
|
Unrealised losses on investments
|
–
|
(400)
|
(400)
|
|
Realised gains on investments
|
–
|
564
|
564
|
|
Income
|
1,548
|
–
|
1,548
|
|
Investment management fee
|
(304)
|
(912)
|
(1,216)
|
|
Other expenses
|
(234)
|
–
|
(234)
|
|
|
|
|
|
|
Profit on ordinary activities before taxation
|
1,010
|
(748)
|
262
|
|
Taxation on ordinary activities
|
(197)
|
237
|
40
|
|
|
|
|
|
|
Profit on ordinary activities after taxation
|
813
|
(511)
|
302
|
|
|
|
|
|
|
Return per ordinary share:
|
|
|
|
|
Basic
|
2.53p
|
(1.59)p
|
0.94p
|
|
|
C Shares
|
||
|
|
|
|
|
|
|
Revenue
|
Capital
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
|
Unrealised gains on investments
|
–
|
1,493
|
1,493
|
|
Realised gains on investments
|
–
|
309
|
309
|
|
Income
|
1,021
|
–
|
1,021
|
|
Investment management fee
|
(153)
|
(459)
|
(612)
|
|
Other expenses
|
(247)
|
–
|
(247)
|
|
|
|
|
|
|
Profit on ordinary activities before taxation
|
621
|
1,343
|
1,964
|
|
Taxation on ordinary activities
|
(174)
|
134
|
(40)
|
|
|
|
|
|
|
Profit on ordinary activities after taxation
|
447
|
1.477
|
1,924
|
|
|
|
|
|
|
Return per C share:
|
|
|
|
|
Basic
|
1.83p
|
6.05p
|
7.88p
|
|
|
Total
|
||
|
|
|
|
|
|
|
Revenue
|
Capital
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
|
Unrealised gains on investments
|
–
|
1,093
|
1,093
|
|
Realised gains on investments
|
–
|
873
|
873
|
|
Income
|
2,569
|
–
|
2,569
|
|
Investment management fee
|
(457)
|
(1,371)
|
(1,828)
|
|
Other expenses
|
(481)
|
–
|
(481)
|
|
|
|
|
|
|
Profit on ordinary activities before taxation
|
1,631
|
595
|
2,226
|
|
Taxation on ordinary activities
|
(371)
|
371
|
–
|
|
|
|
|
|
|
Profit on ordinary activities after taxation
|
1,260
|
966
|
2,226
|
The ‘Total’ column of this statement is the profit and loss account of the Company.
|
|
Ordinary
|
C
|
|
|
|
shares
|
shares
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
|
|
|
|
|
|
Opening shareholders’ funds
|
42,321
|
24,227
|
66,548
|
|
Profit for the year
|
302
|
1,924
|
2,226
|
|
Increase in share capital
|
680
|
1,696
|
2,376
|
|
Purchase of shares for Treasury or cancellation
|
(759)
|
–
|
(759)
|
|
Dividends paid
|
(3,698)
|
(1,472)
|
(5,170)
|
|
|
|
|
|
|
Closing shareholders’ funds
|
38,846
|
26,375
|
65,221
|
|
|
2008
|
2007
|
||
|
|
Total
|
Ordinary Shares
|
C Shares
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
|
|
|
|
|
|
Fixed assets
|
|
|
|
|
|
Investments
|
51,956
|
35,050
|
25,069
|
60,119
|
|
Current assets
|
|
|
|
|
|
Debtors
|
2,000
|
943
|
405
|
1,348
|
|
Cash at bank and on deposit
|
1,732
|
3,231
|
1,340
|
4,571
|
|
|
|
|
|
|
|
|
3,732
|
4,174
|
1,745
|
5,919
|
|
Creditors (amounts falling due within one year)
|
(493)
|
(378)
|
(354)
|
(732)
|
|
|
|
|
|
|
|
Net current assets
|
3,239
|
3,796
|
1,391
|
5,187
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
55,195
|
38,846
|
26,460
|
65,306
|
|
Creditors (amounts falling due after one year)
|
(59)
|
–
|
(85)
|
(85)
|
|
|
|
|
|
|
|
Net assets
|
55,136
|
38,846
|
26,375
|
65,221
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
Called-up share capital
|
5,822
|
3,543
|
12,785
|
16,328
|
|
Share premium account
|
6,768
|
4,879
|
911
|
5,790
|
|
Capital redemption reserve
|
10,862
|
267
|
–
|
267
|
|
Revaluation reserve
|
(1,765)
|
5,954
|
2,622
|
8,576
|
|
Profit and loss account
|
33,449
|
24,203
|
10,057
|
34,260
|
|
|
|
|
|
|
|
Equity shareholders’ funds
|
55,136
|
38,846
|
26,375
|
65,221
|
|
|
|
|
|
|
|
Net asset value per share
|
|
|
|
|
|
– Basic
|
102.72p
|
120.44p
|
103.15p
|
–
|
|
– Treasury
|
101.77p
|
119.64p
|
–
|
–
|
|
|
2008
|
2007
|
||
|
|
|
Ordinary
|
|
|
|
|
Total
|
Shares
|
C Shares
|
Total
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
Investment income received
|
2,859
|
1,141
|
855
|
1,996
|
|
Deposit interest received
|
162
|
88
|
86
|
174
|
|
Investment management fees
|
(1,718)
|
(2,291)
|
(962)
|
(3,253)
|
|
Other cash payments
|
(352)
|
(246)
|
(123)
|
(369)
|
|
|
|
|
|
|
|
Net cash inflow/(outflow) from operating activities
|
951
|
(1,308)
|
(144)
|
(1,452)
|
|
|
|
|
|
|
|
Capital expenditure and financial investment
|
|
|
|
|
|
Purchases of investments
|
(52,079)
|
(10,432)
|
(18,447)
|
(28,879)
|
|
Disposals of investments
|
50,249
|
17,497
|
18,626
|
36,123
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow from capital expenditure and financial investment
|
(1,830)
|
7,065
|
179
|
7,244
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
Equity dividends paid
|
(1,629)
|
(3,698)
|
(1,472)
|
(5,170)
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow before financing
|
(2,508)
|
2,059
|
(1,437)
|
622
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
Issue of shares
|
1,118
|
709
|
1,743
|
2,452
|
|
Buy-back of ordinary shares
|
(1,398)
|
(759)
|
–
|
(759)
|
|
Expenses relating to conversion of C share premium and issue of shares
|
(51)
|
(29)
|
(47)
|
(76)
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow from financing
|
(331)
|
(79)
|
1,696
|
1,617
|
|
|
|
|
|
|
|
(Decrease)/increase in cash
|
(2,839)
|
1,980
|
259
|
2,239
|
|
|
|
|
|
|
|
Reconciliation of net cash flow to movement in net cash
|
|
|
|
|
|
(Decrease)/increase in cash
|
(2,839)
|
1,980
|
259
|
2,239
|
|
Opening cash position
|
4,571
|
1,251
|
1,081
|
2,332
|
|
|
|
|
|
|
|
Closing cash position
|
1,732
|
3,231
|
1,340
|
4,571
|
|
|
2008
|
2007
|
||||
|
|
|
|
Total (£’000)
|
Ordinary shares (£’000)
|
C shares (£’000)
|
Total (£’000)
|
|
UK franked
|
|
|
235
|
321
|
28
|
349
|
|
UK unfranked
|
|
|
1,876
|
1,126
|
900
|
1,819
|
|
Deposit interest
|
|
|
144
|
101
|
93
|
194
|
|
|
|
|
2,255
|
1,548
|
1,021
|
2,569
|
8. The Annual General Meeting will be held on 18 March 2009 at 11.00am at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS.
9. Subject to approval at the AGM, a final dividend of 4.5 pence per ordinary share will be paid on 20 March 2009 to shareholders recorded on the register on 20 February 2009. The ex-dividend date for this payment will be 18 February 2009.
This information is provided by RNS
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