Interim Results
Baronsmead VCT 3 PLC
17 August 2001
Investment Objective
Baronsmead VCT 3 plc aims to achieve long-term capital growth and to generate
tax-free dividends for private investors.
Interim Results - Period Ended 30 June 2001
£32.8 million funds raised
First interim dividend of 1.0 pence per share
Net asset value per share of 94.5 pence
First five qualifying investments made
The Board are delighted to present the first interim report to the 2,078
shareholders that have subscribed to Baronsmead VCT 3 in the seven weeks to 6
March 2001. The Company raised £32.8 million gross proceeds during the period
under review.
The Board's intention is to communicate to shareholders the progress of the
Company as clearly as possible, particularly the nature of the underlying
portfolio investments so that shareholders can appreciate how the performance
is achieved.
Performance is measured by calculating the total return generated for
shareholders from the growth in net asset value (NAV) per share combined with
the reinvestment of dividends. In the period since inception of the Company
on 26 January 2001 to 30 June 2001, the total return has been 0.5 per cent.
This compares with a fall in the FTSE All-Share Index of 10 per cent over the
same period. The initial NAV per share has fallen slightly from 95.0p to
94.5p per share and a first interim dividend has been declared of 1.0p per
share which will be paid on 17 September 2001 to shareholders on the register
at the close of business on 31 August 2001. The Board intends to pay capital
dividends to shareholders in the future once capital profits have been
realised on the sale of investments. These distributions are, however,
unlikely to occur before the fund is more fully invested and the investees
have had time to progress their plans towards a satisfactory outcome.
Building the portfolio To fulfil the investment policy, the intention is to
build the equity portfolio to over 30 companies across a range of different
sectors and stages of corporate growth. Baronsmead VCT 3 will invest in
unquoted companies as well as companies whose shares are traded on the
Alternative Investment Market (AiM). VCT legislation requires that over £22
million be invested in qualifying holdings by 31 December 2003. At 30 June
2001, £20.9 million was retained in cash awaiting investment into fixed rate
securities and qualifying holdings.
At 30 June 2001, five investments totalling £2 million had been completed in
accordance with the Company's investment policy. To date of the equity
investments, 50% has been invested in consumer markets, 27% in business
services and 23% in the healthcare sector.
Management buy-in/buy-out Thomas Sanderson, based in Waterlooville, is the
UK market leader in pleated conservatory blinds. Two directors from Staybrite
Windows and seven incumbent senior managers acquired the company from the
founding shareholders. As part of the £6 million fund raising, Baronsmead VCT
3 provided £667,000.
Early stage expansion Vectura is based in Bath and is a drug discovery
business specialising in particle science and pulmonary inhalation. It was
formed in collaboration with Bath University in 1997 and in the second round
financing raised £10.5 million. Baronsmead VCT 3 invested £445,000.
Growth by acquisition Blooms of Bressingham, based in Maidenhead, is a chain
of retail garden centres. Blooms of Bressingham was listed on AiM in December
1999 and in April 2001 it acquired the share capital of a similar business,
Jardinerie, increasing the number of garden centres to thirteen and extending
geographically across the southern half of England. Baronsmead VCT 3 invested
£320,000 as part of a total equity fund raising on AiM of £4 million before
expenses.
AiM flotation Capcon based in central London is a stock auditing and
surveillance company servicing the pub and transport industry. It floated on
AiM on April 2001 raising £1.75 million before expenses of which Baronsmead
VCT 3 subscribed £137,000.
Shareholder reconstruction/expansion Kidsunlimited based in Cheshire manages
32 day care nursery centres for children under 5 years old. Two new directors
acquired a minority shareholding from the founders and in all £4.95 million
was raised to increase the number of day care centres, including work place
day centres for businesses. Baronsmead VCT 3 invested £400,000.
Outlook Economic confidence has fallen during 2001 as lower profits are
declared by larger quoted companies which has been reflected in lower stock
market prices and signals more difficult trading conditions for unquoted
companies. In the short-term, the high level of fixed interest securities in
the portfolio provides a buffer during the period that the qualifying
portfolio is built up. The Company is well positioned to take advantage of
these lower valuations and benefit once stronger economic conditions return.
Enquiries:
David Thorp
Friends Ivory & Sime Private Equity plc : Tel. 0207 506 1100
Rhonda Nicoll
Friends Ivory & Sime plc : Tel. 0131 465 1000
Unaudited Statement of Total Return (incorporating the revenue account) of
the Company
Period from 22 November 2000 to
30 June 2001
Revenue Capital Total
£'000 £'000 £'000
Unrealised losses on investments - (48) (48)
Income 640 - 640
Investment management fee (66) (199) (265)
Other expenses (93) - (93)
Return on ordinary activities
before tax 481 (247) 234
Tax on ordinary activities (138) 65 (73)
Return attributable to
equity shareholders 343 (182) 161
Dividend payable (330) - (330)
Transfer to/(from) reserves 13 (182) (169)
Return per ordinary share: 1.23p (0.66p) 0.57p
Unaudited Statement of Total Return (incorporating the revenue account) of the
Company
Period from 22 November 2000 to
31 May 2001
Revenue Capital Total
£'000 £'000 £'000
Unrealised gains on investments - 59 59
Income 495 - 495
Investment management fee (52) (156) (208)
Other expenses (44) - (44)
Return on ordinary activities
before tax 399 (97) 302
Tax on ordinary activities (104) 41 (63)
Return attributable to
equity shareholders 295 (56) 239
Dividend payable - - -
Transfer to/(from) reserves 295 (56) (239)
Return per ordinary share: 1.10p (0.21p) 0.89p
Unaudited Balance Sheet
As at As at
30 June 31 May
2001 2001
£'000 £'000
Fixed Assets
Quoted on the Alternative Investment Market 520 582
Unquoted investments 1,512 1,112
Listed fixed interest investments 8,248 8,293
________ ________
10,280 9,987
Net current assets 20,901 21,602
_______ _______
Net assets 31,181 31,589
________ ________
Financed by:
Shareholders' funds 31,181 31,589
________ ________
Net asset value per ordinary share: 94.49p 95.72p
Ordinary shares in issue 32,999,999 32,999,999
Summarised Unaudited Statement of Cash Flows
Period from Period from
22 November 22 November
2000 to 2000 to
30 June 31 May
2001 2000 to
£'000 £'000
Net cash outflow from operating activities (89) (68)
Capital expenditure and financial investment (10,328) (9,482)
Net cash outflow before financing (10,417) (9,550)
Financing 32,069 32,069
Increase in cash 21,652 22,519
Reconciliation of net cash flow to movement in net cash
Increase in cash 21,652 22,519
Net cash at 30 June/31 May 21,652 22,519
Reconciliation of operating profit to net cash flow from activities
Net return before taxation 481 399
Management fee charged to capital (199) (156)
Increase in debtors (610) (543)
Increase in creditors 239 232
Net cash flow from operating activities (89) (68)
Notes
1. The unaudited interim results which cover the period from incorporation on
22 November 2000 to 30 June 2001 have been drawn up in accordance with the
applicable accounting Statement of Recommended Practice for Financial
Statements of Investment Trust Companies. In order to comply with UK Listing
Authority regulations it is necessary to present two sets of interim figures,
from 22 November 2000 to 31 May 2001 being the first six month period and 22
November to 30 June 2001.
2. The Company was launched on 26 January 2001 at which date 5,721,688
ordinary shares were issued. A further 27,278,311 ordinary shares were issued
during the period to 30 June 2001.
3. Earnings for the period from incorporation on 22 November 2000 to 30 June
2001 should not be taken as a guide to the results for the full year and are
based on a weighted average of 28,021,335 ordinary shares in issue during the
period since launch.
4. Income for the period from incorporation on 22 November 2000 to 30 June
2001 is derived from:
2001
£'000
Government securities and corporate bonds 170
Deposit interest 470
___
640
5. The interim dividend of 1.00p will be paid on 17 September 2001 to
shareholders on the register on 31 August 2001.
6. These are not statutory accounts in terms of Section 240 of the Companies
Act 1985 and are unaudited.
7. Copies of the interim report have been mailed to shareholders and are
available from the Registered Office of the Company at 100 Wood Street, London
EC2V 7AN.