Financial Results

Marwyn Value Investors II Ltd 29 March 2007 29 March 2007 Marwyn Value Investors II Limited Results for the period 5 September 2006 to 31 December 2006 Marwyn Value Investors II Limited, the AIM listed company which allows investors to gain access to the investment strategy pursued by the Marwyn Neptune Fund, today announces its results for the financial period from 5 September 2006 to 31 December 2006. Highlights â€¢Â£31.16 million investment in the Marwyn Neptune Fund LP â€¢Marwyn Value Investors II Limited's net asset value per share increased by 6.3% from 31 October 2006 to 31 December 2006 â€¢Marwyn Neptune Fund LP net asset value increased by 6.4% from 31 October 2006 to 31 December 2006 For the period 31 October 2006 to 31 December 2006 â€¢Net asset value per share of 104.16p as at 31 December 2006 â€¢Increase in net asset value of 6.3% For the period from 31 October 2006 to 28 February 2007 â€¢Net asset value per share of 112p as at 28 February 2007 â€¢Increase in net asset value of 14.3% David Williams, Executive Chairman said: 'As a result of the investment in the Marwyn Neptune Fund LP, Marwyn Value Investors II Limited has achieved 14.3% growth in net asset value in the short period since 31 October 2006. These results demonstrate the successful implementation of a strategy of selecting well-managed businesses with the potential for above-average growth.' - Ends - For further information, please call: Finsbury 020 7251 3801 Faeth Birch / Ed Simpkins Operational Review Marwyn Value Investors II Limited (the 'Company') was floated on the AIM market of the London Stock Exchange on 6 October 2006, raising Â£33,000,000 from the issue of 33,000,000 shares and 16,500,000 series one warrants and 16,500,000 series two warrants. The Company was principally established to provide a listed entity for investors to gain exposure to the investment strategy being pursued by the Marwyn Neptune Fund LP (the 'Master Fund'), details of which are set out below under Investment Approach, Objective and Strategy. The investment objective of the Company is to achieve maximum total returns, primarily through the capital appreciation of its investment in the Master Fund. After absorbing the initial costs of the launch, the net asset value per share of the Company increased by 6.3% during the period from 31 October 2006 and by 14.3% from 31 October 2006 to 28 February 2007, reflecting the strong performance of the Master Fund. The 4% and 10.5% increase in the share price of the Company during the period and to 28 February respectively did not therefore fully reflect the performance of the Company. As at 31 December 2006 the share price was at a 0.1% discount to the net asset value per share. As at 28 February 2007, this discount was 1.36%. Share price and net asset value per share Date Share NAV per Price Share GBp GBp 31 Oct 06 103.00 98.00 30 Nov 06 104.00 99.20 31 Dec 06 104.00 104.16 31 Jan 07 104.00 108.02 28 Feb 07 110.50 112.00 --------- ---------- ---------- Comparative performance Nov 06 Dec 06 Jan 07 Feb 07 Total ------- ------- ------- -------- ------- ------- Marwyn Value Investors II NAV month-on-month 1.2% 4.9% 3.8% 3.7% cumulative 1.2% 6.2% 10.2% 14.3% 14.3% FTSE All Share index month-on-month -0.7% 3.3% -0.3% -0.4% cumulative -0.7% 2.6% 2.3% 1.8% 1.8% AIM All Share month-on-month 1.7% 3.5% 2.3% 2.2% cumulative 1.7% 5.2% 7.6% 10.1% 10.1% MSCI month-on-month -0.3% 3.8% 2.1% -2.0% cumulative -0.3% 3.5% 5.6% 3.5% 3.5% ------------ ------- ------- ------- -------- ------- ------- --- Investment Approach, Objective and Strategy The Master Fund invests in smaller businesses (under Â£500 million market capitalisation) primarily in the UK and Europe and will consider investments across all sectors, with particular emphasis on sectors with high degrees of regulation or those which are experiencing or likely to experience significant structural or regulatory change or benefit from such structural or regulatory change. The Master Fund seeks to achieve the objective of maximum total returns by applying origination, valuation and transaction capabilities, together with the participation of sector experienced managers, to investments in a range of securities issued by listed and unlisted companies. The strategy focuses on value creation based upon the range of life stages of an investment. The initial focus is on creating value through investment in platform equity, preferred equity and price arbitrage on the acquisition of assets. Value creation in the latter stages of the investment life cycle focuses, with the assistance of management of the relevant investee company, on earnings enhancing mergers and acquisitions and operational improvements. MARWYN VALUE INVESTORS II LIMITED INCOME STATEMENT FOR THE PERIOD FROM 5 SEPTEMBER 2006 TO 31 DECEMBER 2006 Note Revenue Capital Total Â£ Â£ Â£ INCOME 1 Bank interest 15,658 - 15,658 Gains on investments held at fair value through profit or loss - 2,880,255 2,880,255 -------- ---------- ---------- 15,658 2,880,255 2,895,913 -------- ---------- ---------- EXPENSES 1 Directors' fees 9,616 - 9,616 Administration fees 6,411 - 6,411 Professional fees 6,445 - 6,445 Formation expenses 8,800 - 8,800 Regulatory expenses 400 - 400 Registrars fees 2,918 - 2,918 Exempt fee 2 600 - 600 Other expenses 4,260 - 4,260 -------- ---------- ---------- 39,450 - 39,450 -------- ---------- ---------- -------- ---------- ---------- PROFIT FOR THE PERIOD (23,792) 2,880,255 2,856,463 ======== ========== ========== pence pence pence Return per Ordinary Share - basic and diluted 4 (0.07) 8.73 8.66 The total column of this statement represents the Income Statement of the Company, prepared in accordance with IFRS. The revenue and capital columns represent supplementary information prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. MARWYN VALUE INVESTORS II LIMITED CASH FLOW STATEMENT FOR THE PERIOD 5 SEPTEMBER 2006 TO 31 DECEMBER 2006 Notes Â£ Net cash outflow from operating activities 6 (39,627) Net cash outflow from investing activities (31,160,000) --------- Net cash outflow before financing (31,199,627) Net cash inflow from financing activities 31,514,862 --------- Increase in cash and cash equivalents 315,235 ========= MARWYN VALUE INVESTORS II LIMITED BALANCE SHEET 31 DECEMBER 2006 Note Â£ NON CURRENT ASSETS Unquoted investments held at fair value through profit or loss 3 34,040,255 CURRENT ASSETS Prepayments and accrued interest 35,380 Cash and cash equivalents 315,235 --------- 350,615 --------- TOTAL ASSETS 34,390,870 --------- CURRENT LIABILITIES Accruals (19,545) --------- --------- NET ASSETS 34,371,325 ========= EQUITY Called up share capital 8 3,300,000 Share premium 9 26,346,979 Series One Warrant reserve 1,015,866 Series Two Warrant reserve 852,017 Capital reserve - unrealised 2,880,255 Revenue reserve (23,792) --------- TOTAL EQUITY 34,371,325 ========= pence Net asset value per Ordinary share - basic and diluted 5 104.16 MARWYN VALUE INVESTORS II LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 5 SEPTEMBER 2006 TO 31 DECEMBER 2006 Called up Share Special Series Series Capital Revenue Total share premium distributable One Two Reserve reserve capital reserve Warrant Warrant Reserve Reserve Â£ Â£ Â£ Â£ Â£ Â£ Â£ Â£ ------- -------- --------- --------- ------- -------- -------- ----- Issue of Ordinary shares and Warrants 3,300,000 27,733,798 1,069,338 896,864 33,000,000 Profit for the period 2,880,255 (23,792) 2,856,463 Share and warrant issue costs (1,386,819) (53,472) (44,847) (1,485,138) ------- --------- -------- ------- ------- ------- -------- ---------- 3,300,000 26,346,979 0 1,015,866 853,017 2,880,255 (23,792) 34,371,325 ======= ========= ======== ======= ======= ======= ======== ========== MARWYN VALUE INVESTORS II LIMITED NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2006 1. ACCOUNTING POLICIES The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'). (a) CONVENTION The financial statements have been prepared under the historical cost convention, except where stated in (c) below, modified to include the revaluation of investments and in accordance with applicable accounting standards and with the Revised Statement of Recommended Practice ('SORP'), for Financial Statements of Investment Trust Companies, issued by The Association of Investment Trust Companies in December 2005. The principal accounting policies which the directors have adopted within that convention are set out below. (b) INCOME Interest receivable on cash deposits is accounted for on an accruals basis. (c) UNQUOTED INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS Unquoted investments are stated at fair value as determined by the Directors using appropriate valuation techniques. Changes in the fair value of investments held at fair value through the profit or loss are recognised in the Income Statement. On disposal realised gains and losses are also recognised in the Income Statement. Realised gain or losses on the disposal of investments are taken to the capital reserve - realised. Unrealised gain and losses on the disposal of investments are taken to the capital reserve - unrealised. The Company's interest in the Master Fund will be valued by the Directors on the basis of the net asset value of the Master Fund as provided by the Master Fund Administrator. The net asset value of the Master Fund, Marwyn Neptune Fund L.P., will be determined by the Master Fund Administrator by deducting the fair value of the liabilities of the Master Fund from the fair value of the Master Fund's assets. (d) EXPENDITURE All expenses are accounted for on an accruals basis and are charged through the Income Statement. The Manager will not receive a management or performance fee from the Company in respect of funds invested by the company in the Master Fund. The Manager will be entitled to fees and expenses from the Master Fund. The Company will pay brokers' commissions (if any) and any issue or transfer taxes chargeable in connection with its investments transactions. Transaction costs incurred on the acquisition or disposal of an investment are charged to capital through the Income Statement in the period in which they are incurred. 2. TAXATION The company has been granted exempt status under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989, and is therefore subject to the payment of an annual fee which is currently Â£600. 3. UNQUOTED INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS At cost Marwyn Neptune Fund L.P. Class A Â£ 31,160,000 ============ At fair value Â£ 34,040,255 ============ 4. EARNINGS PER SHARE The calculation of basic earnings per share is based on the net revenue deficit, and net capital gain, on ordinary activities for the period and on 33,000,000 Ordinary Shares in issue throughout the period. As at 31 December 2006 the price of the Ordinary Shares was 104p and at no point during the period did the share price reach the exercise price of the Series One Warrants (115p) or the Series Two Warrants (130p). As the average price of the Ordinary Shares during the period was less than the exercise price of both classes of warrants there was no dilution in the Earning per Ordinary Share. 5. NET ASSET VALUE The calculation of net asset value is based on the net assets of Â£34,371,325 and on the ordinary shares in issue of 33,000,000 at the balance sheet date. As the price of the Ordinary Shares (104p) was below the exercise price of the Series One Warrants (115p) and the Series Two Warrants (130p) there was no dilution in the net asset value per ordinary share. 6. RECONCILIATION OF NET PROFIT FOR THE PERIOD TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Net profit for the period 2,856,463 Gains on investments held at fair value through profit or loss (2,880,255) Decrease/(increase) in Debtors (35,380) Increase/(decrease) in creditors 19,545 ------------ Net cash outflow from operating activities Â£ (39,627) ============ 7. WARRANTS At the placing on 6 October 2006, for each Ordinary Share the subscriber also received one half Series One Warrant and one half Series Two Warrant. Exercise End of price subscription pence period Allotted Series One Warrants 115 05 October 2008 16,500,000 Series Two Warrants 130 05 October 2009 16,500,000 8. CALLED UP SHARE CAPITAL Authorised 200,000,000 ordinary shares of Â£0.10 each Â£ 20,000,000 ============ Allotted and fully paid 33,000,000 ordinary shares of Â£0.10 each Â£ 3,300,000 ============ 9. SHARE PREMIUM ACCOUNT Premium on new share issues 27,733,798 Share and warrant issue costs (1,386,819) ------------ Balance at 31 December 2006 Â£ 26,346,979 ============ On 26 January 2007 (date of approval in the Royal Court of Guernsey) a special distributable reserve was created when, as stated in the Admission Document, the company cancelled all of its share premium account transferring it to a distributable reserve to allow, amongst other things, the buy-back and cancellation of up to 14.99% of the Ordinary Shares. 10. WARRANT RESERVES The proceeds from the issue of the placing were split between the Ordinary Shares (share capital and share premium account), the Series One Warrant reserve and the Series Two Warrant reserve based on the weighted average value of the Ordinary Shares and Warrants in issue at the close of business on the first day of trading. The weighted average value was calculated using the mid prices of the Ordinary Shares and Warrants as quoted on AIM. This information is provided by RNS The company news service from the London Stock Exchange

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