Final Results
Aberdeen Growth Opps VCT PLC
30 December 2005
Aberdeen Growth Opportunities VCT PLC
Preliminary Announcement
The Directors announce the preliminary results for the year ended 30 November
2005.
Performance
The Net Asset Value (NAV) per share at 30 November 2005, before payment of a
dividend in respect of the year then ended, was 98.1p compared with 93.6p at 30
November 2004. The increase in NAV of 4.8% compares with the increase in stock
market indices generally and, in particular, the FTSE SmallCap index, which rose
by 16.4% over the period, and the FTSE AIM Index which rose by 2.0%. The
performance of the portfolio is governed to some extent by the investment in
instruments designed to protect the capital while providing a measure of income,
where typically the valuations of such instruments does not follow general stock
market indices. In addition, many of the unlisted holdings are relatively new
and are still held at cost. The most important measures for a VCT are the long
term record of income and capital gains dividend payments and the timing of
these payments over the life of the Company. In the short term, the NAV on its
own is a less important measure of the performance as the underlying investments
are long-term in nature and not readily realisable. The effect of paying the
proposed dividend will be to reduce the NAV to 97.6p.
Dividends
It was stated in the Company's Prospectus that in the early years dividends, if
any, would be small until such times as capital realisations occurred. The Board
did not declare an interim dividend but recommends the payment of a final
dividend of 0.5p per share, to be paid on 28 April 2006 to shareholders on the
register on 31 March 2006. In addition, the Company intends to revoke Investment
Company status which will facilitate the future payment of capital dividends.
The Board are intending to pay a dividend of 1.5p per share from the realised
gains made on investments to date. The dividend will be paid, subject to
revoking Investment Company status while retaining for Shareholders all the
benefits of VCT status, during the second quarter of 2006.
Since the Company's launch, and including the proposed final dividend,
Shareholders will have received 3.5p per share in tax free dividends over the
period; the total return since launch will be 101.6p being the sum of dividends
paid plus current NAV.
Investment Activity
During the year ended 30 November 2005, twenty new unlisted and AIM investments
were completed and a total of £4.9 million was invested. At the year end, the
portfolio stood at 46 unlisted and AIM investments at a total cost of £7.1
million. Since 30 November 2005, one further new investment has been made at a
cost of £200,000.
The following investments have been completed since the publication of the
Interim Report:-
Bond Aviation Solutions (November 2005) - £300,000: Bond provides commercial
pilot training services from its Gatwick base. (www.flyastraeus.com)
Chiltern UK (November 2005) - £300,000: Chiltern negotiates and manages
standstill agreements and repayment plans for financially distressed individuals
who cannot currently service their debts. (www.chiltern.uk.com)
Fieldstreet (Investments) (October 2005) - £301,000: Fieldstreet is the name of
the vehicle which acquired Cox Insurance in a public to private deal. Cox is a
mid-sized insurance business focused on predominately niche risk areas within
motor insurance. (www.cox.co.uk)
Kingsley Cards (July 2005) - £250,000: Kingsley designs and produces greeting
cards, supplying a number of the main high street retailers and trade
distributors. (www.ckny.co.uk)
Vibration Technology (September 2005) - £150,000: Vibration Technology was
formed in 1996 to develop a lightweight, cable-free, seismic acquisition system
for use in land seismic surveys. (www.vibtech.co.uk)
Datong Electronics* (October 2005) - £164,000: Datong produces devices that
enable government intelligence and defence agencies to covertly track vehicles
and mobile phones. (www.datong.co.uk)
NeutraHealth* (August 2005) - £151,000: NeutraHealth has acquired BioCare a
leading provider of vitamins, mineral supplements, probiotics and other food
supplements to health practitioners and specialist retailers.
(www.biocare.co.uk)
United Clearing* (August 2005) - £202,000: United Clearing is a support services
company which provides software based solutions to mobile communications
operators. It offers a financial clearing service which provides settlement of
international roaming traffic. (www.unitedclearing.com)
* Quoted on AIM
Aberdeen Growth Opportunities VCT has co-invested with Aberdeen Development
Capital, Aberdeen Growth VCT I, Aberdeen Growth Opportunities VCT 2, Talisman
First Venture Capital Trust and Murray VCT 4 in some or all of the above
transactions and is expected to continue to do so with these as well as other
clients of the Manager. The advantage is that, together, the funds are able to
underwrite a wider range and size of transaction than would be the case on a
stand alone basis.
Portfolio Developments
Aberdeen Growth Opportunities VCT is continuing to build a diversified portfolio
of unlisted and AIM investments with good growth prospects and, therefore, the
opportunity to generate capital gains in the medium and longer term. In the
Interim Report, reference was made to the increasing maturity of a number of the
private equity investments and this has manifested itself in the form of one
complete and one partial exit, in both cases recovering a gain on sale.
A complete sale has been achieved of the investment in ScotNursing resulting in
a gain of £31,000 on the £135,000 invested. A partial exit has been achieved
from Enterprise Food Group resulting in a gain of £8,000 on the investment of
£150,000 whilst retaining equity holdings in two profitable businesses which
have a combined value of £24,000. The terms of the sale provide for further
deferred consideration to be payable dependent on the actual audited profit for
the calendar year for the businesses sold. Regarding another investment, Elam T,
the business was sold to a successor company in which the Company has retained
an equity interest but a small loss of £13,000 has been sustained on the
transaction.
Separately, the AIM portfolio has been actively managed throughout the year from
which net gains of £283,000 have been generated. Details of all gains and losses
for the year are shown in the table below.
Year Original Sales proceeds Realised gain/
acquired cost (loss)
£'000 £'000 £'000
Unlisted
Elam T 2003 163 150 (13)
Enterprise Food Group 2003 150 158 8
Essential Viewing 2001 30 30 -
FFC (UK) 2005 50 50 -
Llanllyr Water 2003 50 50 -
PSCA 2002 19 19 -
Room 2 2002 116 116 -
ScotNursing 2002 135 166 31
713 739 26
AIM
Accuma 2005 101 130 29
Augean 2004 211 216 5
Avanti Screenmedia 2004 80 160 80
Begbies Traynor 2004 153 350 197
Careforce 2004 91 114 23
Gladstone 2005 175 128 (47)
Imagesound 2004 83 33 (50)
NeutraHealth 2005 3 5 2
Tanfield 2004 50 87 37
Zetar 2005 19 27 8
966 1,250 284
Total 1,679 1,989 310
In the Company's Prospectus, it was expected that the portfolio would not
comprise more than 20% in AIM quoted investments. The Board had previously
increased this limit to a maximum of 30% but, in view of the growth and
increasing maturity of the AIM market and the performance of the Manager in this
area, the Directors have now decided to increase to 35% the proportion of the
portfolio which may be invested in AIM quoted stocks. As the AIM market
experiences above-average volatility in pricing and spreads, the percentage
limits referred to above are monitored by reference to the cost of each AIM
investment. It is not expected that the AIM investment limit will be increased
beyond 35%, and it will continue to be kept under review by your Board as the
Company continues its progress in accumulating unlisted investments.
Investments in the unlisted portfolio are generally trading well but, where
there is underperformance, particular attention is paid to those companies by
the Manager to effect an improvement and protect the value of the investment.
Share Buy-back Policy
Purchases of the Company's shares will be made within guidelines established by
the Board, at prices below the prevailing NAV per Ordinary share and in
accordance with the rules of the UK Listing Authority. Share purchases will be
funded from distributable reserves and, to the extent that shares are purchased
at a discount, the Net Asset Value of the remaining shares will increase. The
Board has recently adopted a policy of purchasing shares in the market at a
discount of 10% to the prevailing NAV. During the year, 451,064 shares were
bought back for cancellation at an average price of 75.7p and an aggregate cost,
including expenses, of £341,585.
"C" Share Issue
In November this year, the Board announced proposals for an offer for
subscription of up to 15 million "C" Ordinary Shares to raise up to £15 million
before the deduction of expenses. I am pleased to say that the resolutions
relating to the "C" Ordinary Share offer were passed at the Extraordinary
General Meeting held on 14 December 2005 and that, as a Shareholder, you will
shortly receive a copy of the Prospectus in the form of a Securities Note and
Summary. Further information is given in the Registration Document which is
available from the Manager on request.
The Directors believe that the "C" Share Issue offers an opportunity to
Shareholders to participate in future investments made by the fund while
benefiting from the advantages associated with a new VCT investment. The
benefits to the Company, as it approaches full investment, include a reduction
in the total expense ratio, an increased spread of risk across a larger number
of investments, the opportunity to invest in larger investments after
consolidation of the "C" shares and, due to an increased fund size, an
improvement in the liquidity of the Company's shares in the secondary market.
Co-Investment Scheme of the Manager
A Co-Investment scheme which will allow executive members of the Manager to
invest alongside the Company has been agreed with the Manager for implementation
during the coming year. This incentive scheme will replace the existing fee
based arrangement and will align much more closely the interests of the
executives and the Shareholders of the Company. The scheme will operate through
a nominee company which will invest alongside the Company in each and every
transaction made by the Company, including any follow-on investments.
In an unlisted investment, the transaction will normally be structured such that
70% to 90% of the investment is by way of fixed interest instrument and 10% to
30% in ordinary shares. The amount which will be invested by the nominee company
is fixed at 5% of the value of the ordinary shares which are available to the
Company except where it is only in ordinary shares. In that case the amount to
be invested by the executives will be 1.5% of the amount available to the
Company.
The impact of the scheme in terms of dilution will be small but will more
closely align the interests of the Executives and the Company's Shareholders
while introducing an incentive to enable the Manager to retain the existing
skills and capacity of the Manager's team in a highly competitive market.
The Future
It is the Board's intention to adopt a policy of paying regular dividends based
on the gains arising from the trading of the portfolio. These dividends will be
paid free of tax to Shareholders, as with all dividends paid by VCTs. The Board
would like to see the level of dividend payments increase over the course of
time.
The Board looks forward to the increasing maturity of the portfolio, which it
expects to result in an increasing number of profitable realisations. The "C"
Share Issue and the increased flexibility with respect to AIM investments will
provide added opportunities for the Company to build on its first four years of
sound progress.
ABERDEEN GROWTH OPPORTUNITIES VCT PLC
UNAUDITED STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT*)
For the year ended 30 November 2005
Year ended Year ended
30 November 2005 30 November 2004
(Audited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 501 501 - 255 255
Income from investments 322 - 322 419 - 419
Other income 23 - 23 21 - 21
Investment management fees (56) (224) (280) (52) (207) (259)
Other expenses (202) - (202) (209) - (209)
Net return/(loss) on ordinary 87 277 364 179 48 227
activities
before taxation
Tax on ordinary activities (12) 12 - (29) 30 1
Return attributable to equity 75 289 364 150 78 228
Shareholders
Ordinary dividends on equity (48) - (48) (104) - (104)
shares
Transfer to/(from) reserves 27 289 316 46 78 124
Return per Ordinary share 0.74 2.84 3.58 1.44 0.75 2.19
(pence)
* The revenue column of this statement is the Profit and Loss Account of the
Company.
ABERDEEN GROWTH OPPORTUNITIES VCT PLC
UNAUDITED BALANCE SHEET
As at 30 November 2005
As at As at
30 November 2005 30 November 2004
£'000 £'000
(Audited)
Fixed assets
Investments 8,294 4,852
Current assets
Debtors 376 149
Cash and overnight deposits 1,253 4,965
1,629 5,114
Creditors: amounts falling due within one year (223) (250)
Net current assets 1,406 4,864
Total net assets 9,700 9,716
Capital and reserves
Called up share capital 993 1,038
Share premium 4,685 4,676
Distributable reserve 3,815 4,157
Capital redemption reserve 54 8
Capital reserve - realised (400) (498)
Capital reserve - unrealised 464 273
Revenue reserve 89 62
Equity Shareholders' funds 9,700 9,716
Net Asset Value per Ordinary share (pence) 97.6 93.6
ABERDEEN GROWTH OPPORTUNITIES VCT PLC
UNAUDITED CASH FLOW STATEMENT
For the year ended 30 November 2005
Year ended Year ended
30 November 2005 30 November 2004
£'000 £'000 £'000 £'000
Operating activities
Investment income received 261 632
Deposit interest received 25 19
Investment management fees paid (273) (252)
Secretarial fees paid (60) (61)
Cash paid to and on behalf of Directors (66) (81)
Other cash payments (77) (51)
Net cash (outflow)/inflow from operating activities (190) 206
Taxation
Corporation tax 3 31
Financial investment
Purchase of investments (5,095) (5,413)
Sale of investments 2,007 9,849
Net cash (outflow)/inflow from financial investment (3,088) 4,436
Equity dividends paid (102) (207)
Net cash (outflow)/inflow before financing (3,377) 4,466
Financing
Issue of Ordinary shares 10 119
Share repurchases (345) (52)
Net cash (outflow)/inflow from financing (335) 67
(Decrease)/increase in cash (3,712) 4,533
Aberdeen Growth Opportunities VCT PLC
Summary of Investment Changes
For the year ended 30 November 2005
Valuation Transactions Appreciation/ Valuation
30 November 2004 (depreciation) 30 November 2005
£'000 % £'000 £'000 £'000 %
Unit trusts 705 7.2 - 7 712 7.3
Equities - AIM 1,707 17.6 980 661 3,348 34.5
Unlisted investments
Equities 753 7.7 865 (52) 1,566 16.2
Preference shares 135 1.4 78 (13) 200 2.1
Loan stocks 1,552 16.0 1,018 (102) 2,468 25.4
Total investments 4,852 49.9 2,941 501 8,294 85.5
Other net assets 4,864 50.1 (3,458) - 1,406 14.5
Total net assets 9,716 100.0 (517) 501 9,700 100.0
Aberdeen Growth Opportunities VCT plc
Investment Portfolio Summary
As at 30 November 2005
Book cost Valuation % of % of
£'000 £'000 total assets equity held
Unlisted investments
Fieldstreet (Investments) 301 301 3.1 0.2
Bond Aviation Solutions 300 300 3.1 11.0
Original Shoe Company 300 300 3.1 1.5
Chiltern (UK) 300 300 3.1 6.0
Travel Class 225 280 2.9 9.0
Sanastro 275 275 2.8 3.5
Cash Bases Group (formerly Deckflat) 250 250 2.6 8.3
Kingsley Cards 250 250 2.6 3.1
PSCA International 138 216 2.2 1.6
Transrent Holdings 208 208 2.1 0.8
Palgrave Brown (Holdings) 150 179 1.8 1.1
Albanet 172 172 1.8 7.0
Essential Viewing Systems 163 163 1.7 8.7
Vibration Technology 150 150 1.6 1.6
Newco 70 (Elam T) 150 150 1.6 3.5
FFC (UK) 150 150 1.6 -
RMS Europe 116 116 1.2 1.3
Driver Hire 100 100 1.0 0.6
Llanllyr Water Company 100 100 1.0 7.5
Inovas 100 100 1.0 9.2
Amgas 100 100 1.0 0.4
PLM Dollar Group 50 50 0.5 0.6
Enterprise Food Group Holdings - 17 0.2 1.5
Patisserie UK (Holdings) - 7 0.1 1.4
4,048 4,234 43.7
AIM investments
Software Radio Technology 284 459 4.7 1.4
Axeon 336 394 4.1 4.0
Avanti Screenmedia 222 296 3.0 0.5
Tanfield Group 139 280 2.9 0.8
United Clearing 202 220 2.3 1.0
NeutraHealth 148 193 2.0 1.1
Zetar 132 178 1.8 0.5
Datong Electronics 164 171 1.8 1.8
Cello Group 130 154 1.6 0.5
Careforce Group 111 134 1.4 0.7
Elevation Events Group 150 131 1.4 2.5
Inspicio 125 129 1.3 0.2
Strategic Retail 117 116 1.2 0.4
Spectrum Interactive 117 114 1.2 0.4
Fountains 102 109 1.1 0.5
Legend Communications 100 67 0.7 0.5
Air Music and Media 150 56 0.6 0.5
Asfare 56 53 0.5 1.3
Public Recruitment Group 133 41 0.4 0.4
Imagesound 68 33 0.3 0.6
Award International Holdings 100 20 0.2 3.1
3,086 3,348 34.5
Unit trusts
Aberdeen International Fixed Interest 485 502 5.2 -
Aberdeen International Sterling Bond 202 210 2.2 -
687 712 7.3
Total investments 7,821 8,294 85.5
Notes:
This Preliminary Announcement has been prepared on the same basis as that set
out in the statutory financial statements for the prior year.
Returns per Ordinary share have been calculated using the weighted average
number of shares in issue during the period of 10,170,995 (2004 - 10,389,951).
The Net Asset Value per Ordinary share has been calculated using the number of
shares in issue at 30 November 2005 of 9,934,243 (2004 - 10,375,268).
A summary of investment changes for the year under review and an investment
portfolio as at 30 November 2005 are attached.
A full copy of the Annual Report and Financial Statements will be printed and
issued to Shareholders.
The financial information contained within this Preliminary Announcement does
not constitute the Company's statutory financial statements as defined in
Section 240 of the Companies Act 1985. The statutory financial statements for
the year ended 30 November 2004 have been delivered to the Registrar of
Companies and contained an audit report which was unqualified and did not
contain statements under Sections 237(2) or (3) of the Companies Act 1985.
Copies of this announcement will be available to the public at the office of
Aberdeen Asset Managers Limited, 123 St Vincent Street, Glasgow and at the
registered office of the Company, One Bow Churchyard, London.
By Order of the Board
ABERDEEN ASSET MANAGEMENT PLC
SECRETARIES
30 December 2005
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