Interim Results
Aberdeen Grwth Opp VCT2 PLC
23 August 2006
Aberdeen Growth Opportunities VCT 2 PLC
Interim results
The Directors announce the unaudited interim results for the six months ended 30
June 2006.
Net Asset Value
The Net Asset Value (NAV) per share at 30 June 2006 was 100.6p per share ("pps")
compared with 97.4pps as at 31 December 2005 and 95.8pps on 30 June 2005. The
increase in NAV over the six months of 3.3% compares with the FTSE AIM All-Share
Index which increased by 3.6% over the period.
Since launch, the NAV has increased by 5.6p equivalent to 5.9% of the Net Asset
Value immediately after payment of the launch expenses. In the same period, the
FTSE AIM All-Share index has risen by 0.2%. The increase in NAV ignores the
benefit of the income tax recovered by shareholders on the amount invested.
Unquoted investments held by Aberdeen Growth Opportunities VCT 2 are valued in
accordance with the International Private Equity and Venture Capital Valuation
Guidelines, which superseded the British Venture Capital Guidelines for
reporting periods beginning after 1 January 2005.
Investments which are quoted or traded on the Alternative Investment Market
(AIM) or a recognised stock exchange are valued at their bid prices, discounted
where necessary to reflect any trading restrictions.
Co-investment
Aberdeen Growth Opportunities VCT 2 has co-invested with other funds managed by
the Aberdeen Asset Management Group in a number of investments and is expected
to continue to do so. The advantage of this arrangement 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. In addition, following the agreement of all
Aberdeen Asset Managers Growth Capital clients, the staff co-investment scheme
made its first investment on 30 May 2006 and has co-invested alongside the
Company in each investment made since then. Details of the scheme were contained
in the Annual Report for 2005.
Dividends and returns to date
The board intends to pay a capital dividend of 2p per share from gains generated
to date subject to the approval of the Court of Session to the cancellation of
the share premium account, application for which has already been made. As is
usual with VCTs, the Company will also change its status for tax purposes in
order to be able to distribute capital gains. The board has also decided to
suspend the operation of the dividend reinvestment scheme until further notice,
when it is clearer how the new VCT regulations will be applied to the management
of reinvested funds.
Investment activity
During the six-months to 30 June 2006, one new unquoted and six new AIM
investments were made at a total cost of £820,000. In addition, one AIM
investment was realised in a share-for-share transaction with the proceeds
re-invested in the acquiring company. A total of £955,000 was invested during
the six month period, including amounts invested in existing investee companies,
resulting in an investment portfolio consisting of thirty-one unquoted and AIM
investments having a total cost of £4.1 million at 30 June 2006.
The following seven new investments, of which four are non-qualifying for VCT
purposes, have been made since the publication of the Annual Report:
Unlisted Investment
Homelux Nenplas Limited (May 2006) - £199,000: Homelux Nenplas Limited is a
manufacturer of tile trims and other wet room furnishing accessories. Its
products are distributed through major DIY retail outlets and trade product
distributors.(No website available)
AiM investments
Fairground Gaming Holdings plc (June 2006) - £74,000: Fairground has been formed
with the intention of acting as a consolidator of companies in the online gaming
industry. (www.fairgroundgaming.com)
Gold Frost plc (March 2006) - £100,000: Gold Frost designs, develops &
distributes kosher food products. (No website available)
Hambledon Mining plc (March 2006) - £130,000: Hambledon is a mining and
exploration company developing precious metal deposits in Kazakhstan.
(www.hambledon-mining.com)
MTI Wireless Edge plc (March 2006) - £70,000: MTI is a developer and
manufacturer of sophisticated antennas and antenna systems for fixed broadband
wireless communications. (www.mtiwe.com)
Work Group plc (February 2006) - £150,000: Work Group is a leading UK
recruitment services provider that helps employers to recruit and retain their
staff more effectively. (www.workcomms.com)
Worthington Nicholls Group plc (June 2006) - £99,000: Worthington Nicholls
installs and maintains air conditioning units in the hotel and retail markets.
(www.worthington-nicholls.co.uk)
Portfolio developments
The fund has achieved its first exits from the unlisted portfolio; a profit has
been realised from the sale of Travel Class to a major plc. Proceeds of £311,970
were received compared to the cost of investment of £125,000 resulting in a gain
of £186,970, equivalent to approximately 2.4p per share. The sale of Original
Shoe Company has also been completed for cost. The major shareholder accepted an
offer for his shares following an approach from a privately owned competitor
seeking to increase its geographic coverage. A yield greater than would have
been earned in bank interest was paid over the life of the investment.
While it is very early in the development of the unlisted portfolio, there are
signs of increasing maturity in some investments, and further realisations may
be possible over the course of the remainder of the year.
The AIM portfolio has continued to be actively managed during the reporting
period resulting in gains of £173,000 equivalent to around 2.2p per share.
The UK stock markets, including AIM, entered a period of instability around the
middle of May 2006 resulting in a fall in the FTSE AIM index of around11%
between mid-May and the end of that month before a recovery was experienced in
June. Despite the fall in the market, the net effect of market movements on the
portfolio was minimal.
The table below shows details of all of the sales made by the Company during the
reporting period. The gains shown below together with the gains reported in the
2005 Annual Report of £25,000 bring the total to £385,000, which are now
available for distribution.
S Share Issue
The Board proposes an offer for subscription of up to 15 million "S" Ordinary
Shares to raise up to £15 million before the deduction of expenses. The
resolutions relating to the "S" Ordinary Share offer will be put to an
Extraordinary General Meeting to be held on 4 October 2006 and, as a
shareholder, you are encouraged to support the proposal which does not
disadvantage existing shareholders in any way. The Directors believe that the S
share issue offers an opportunity to shareholders to participate in future
investments made by the fund while benefiting from the terms associated with a
new VCT investment.
As a result, the Company will be run at a reduced cost per share and all
shareholders will benefit from improved profitability and dividends. In
addition, an increase in the size of the fund should improve the liquidity of
the Company's shares in the secondary market.
The reason that a separate class of shares is being issued is that the rules
governing the size of investment which a VCT can make were changed in the Budget
of 2006. For funds raised after 6 April 2006, qualifying investments must be in
companies with gross assets no greater than £7 million before investment and £8
million after investment. The original pool of funds raised will still be able
to invest in companies with up to £15 million gross assets, although in practice
many investments which the Fund has previously made would still qualify under
the new rules. In future where an investment qualifies under the new rules, both
pools will invest in proportion to their respective net asset values provided
each has sufficient liquidity to do so.
Outlook
The outlook for new investments remains positive, with an increasing flow of
both unquoted and AIM opportunities available for consideration by the Manager.
The primary focus is to build, in a measured fashion, a diversified portfolio of
good quality smaller company assets which will deliver sustained long term
performance. Asset quality will not be sacrificed for short term growth in the
qualifying investment portfolio.
Realisations during the reporting period
Date first Complete/ Cost of Sales Realised
invested partial exit shares proceeds gain/
disposed of (loss)
£'000 £'000 £'000
Unlisted
Original Shoe 2005 Complete 250 250 -
Travel Class 2005 Complete 125 312 187
Total unlisted 375 562 187
AIM
Axeon 2005 Partial 40 55 15
Billing Services 2006 Partial 6 4 (2)
Datong Electronics 2005 Partial 12 13 1
Gold Frost 2006 Partial 14 16 2
Hambledon Mining 2006 Partial 25 47 22
Leisure & Gaming 2005 Partial 52 94 42
MTI Wireless Edge 2006 Partial 29 39 10
Neutrahealth 2005 Partial 31 39 8
Software Radio Holdings 2005 Partial 2 4 2
Spectrum Interactive 2005 Partial 19 14 (5)
Talarius 2005 Partial 22 42 20
United Clearing 2005 Complete 159 217 58
Total AIM 411 584 173
Total 786 1146 360
Uplift on December 2005 valuation 262
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
INCOME STATEMENT
For the six months ended 30 June 2006
Six months ended 30 June 2006
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 243 243
Income from investments 152 - 152
Other income 4 - 4
Investment management fees (14) (56) (70)
Other expenses (83) - (83)
__________ __________ __________
Profit on ordinary activities 59 187 246
before taxation
Tax on ordinary activities (10) 10 -
__________ __________ __________
Profit on ordinary activities after taxation 49 197 246
__________ __________ __________
Earnings per share (pence) 0.6 2.5 3.1
__________ __________ __________
Reconciliation of movements in Shareholders' Funds
Six months ended
30 June 2006
Opening Shareholders' funds 7,634
Total profit for period 246
Net proceeds of issue of shares -
__________
Closing Shareholders' funds 7,880
__________
The accompanying notes are an integral part of the financial statements.
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
INCOME STATEMENT
44 weeks ended 30 June 2005
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 98 98
Income from investments 44 - 44
Other income 32 - 32
Investment management fees (3) (13) (16)
Other expenses (103) - (103)
__________ __________ __________
Profit on ordinary activities (30) 85 55
before taxation
Tax on ordinary activities - - -
__________ __________ __________
Profit on ordinary activities after taxation (30) 85 55
__________ __________ __________
Earnings per share (pence) (1.3) 3.6 2.3
__________ __________ __________
Reconciliation of movements in Shareholders' Funds
44 weeks ended
30 June 2005
Opening Shareholders' funds -
Total profit for period 55
Net proceeds of issue of shares 7,352
__________
Closing Shareholders' funds 7,407
__________
The accompanying notes are an integral part of the financial statements.
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
INCOME STATEMENT
70 weeks ended 31 December 2005
(audited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 219 219
Income from investments 211 - 211
Other income 38 - 38
Investment management fees (13) (52) (65)
Other expenses (213) - (213)
__________ __________ __________
Profit on ordinary activities 23 167 190
before taxation
Tax on ordinary activities (3) 3 -
__________ __________ __________
Profit on ordinary activities after taxation 20 170 190
__________ __________ __________
Earnings per share (pence) 0.4 3.9 4.3
__________ __________ __________
Reconciliation of movements in Shareholders' Funds
70 weeks ended
31 December 2005
Opening Shareholders' funds -
Total profit for period 190
Net proceeds of issue of shares 7,444
__________
Closing Shareholders' funds 7,634
__________
The accompanying notes are an integral part of the financial statements.
A Statement of Total Recognised Gains and Losses has not been prepared, as all
gains and losses are recognised in the Income Statement.
All items in the above statement are derived from continuing operations. The
Company has only one class of business and derives its income from investments
made in shares, securities and bank deposits.
The total column of this statement is the Profit and Loss Account of the
Company.
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
BALANCE SHEET
As at 30 June 2006
30 June 30 June 2005 31 December
2006 2005
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Fixed assets
Investments 7,320 6,833 7,269
Current assets
Debtors 230 115 62
Cash and overnight deposits 445 668 401
__________ __________ __________
675 783 463
Creditors: amounts falling due within one year (115) (209) (98)
__________ __________ __________
Net current assets 560 574 365
__________ __________ __________
Total net assets 7,880 7,407 7,634
__________ __________ __________
Capital and reserves
Called up share capital 784 773 784
Share premium 2 6,660 6,579 6,660
Capital reserves - realised 2 293 18 (21)
Capital reserves - unrealised 2 74 67 191
Revenue reserve 2 69 (30) 20
__________ __________ __________
Net assets attributable to Ordinary Shareholders 7,880 7,407 7,634
__________ __________ __________
Net asset value per ordinary share (pence) 100.6 95.8 97.4
__________ __________ __________
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
CASH FLOW STATEMENT
For the six months ended 30 June 2006
Six months to 30 June 44 weeks ended 30 June 70 weeks ended 31
2006 2005 December 2005
(unaudited) (unaudited) (audited)
£'000 £'000 £'000 £'000 £'000 £'000
Operating activities
Investment income received 87 14 174
Deposit interest received 4 30 37
Investment management fees paid (47) (5) (61)
Secretarial fees paid (31) (7) (37)
Cash paid to and on behalf of Directors (14) (22) (48)
Other cash payments (48) (26) (44)
________ ________ ________ ________ ________ ________
Net cash (outflow)/inflow from operating (49) (16) 21
activities
Taxation
Corporation tax - - -
Financial investment
Purchase of investments (1,037) (7,854) (10,396)
Sale of investments 1,130 1,049 3,332
________ ________ ________ ________ ________ ________
Net cash inflow/(outflow) from financial 93 (6,805) (7,064)
investment
Equity dividends paid - - -
________ ________ ________
Net cash inflow/(outflow) before 44 (6,821) (7,043)
financing
________ ________ ________
Financing
Issue of redeemable preference shares - - 50
Redemption of redeemable preference - - (50)
shares
Issue of ordinary shares - 7,731 7,836
Expense of share issue - (242) (392)
________ ________ ________ ________ ________ ________
Net cash inflow from financing - 7,489 7,444
________ ________ ________
Increase in cash 44 668 401
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
Notes to the Financial Statements
1. Accounting Policies
The financial information for the six months ended 30 June 2006 and the 44 weeks
ended 30 June 2005 comprises non-statutory accounts within the meaning of
section 240 of the Companies Act 1985.
The financial information contained in this report has been prepared on the
basis of the accounting policies set out in the Annual Report and Financial
Statements for the 70 weeks ended 31 December 2005
The results for the 70 weeks ended 31 December 2005 are extracted from the full
accounts for that period, which received an unqualified report from the Auditors
and have been filed with the Registrar of Companies.
Share Capital Capital
premium reserves reserves Revenue
account realised unrealised reserve
£'000 £'000 £'000 £'000
2. Movement in reserves
As at 31 December 2005 6,660 (21) 191 20
Gains on sales of investments - 360 - -
Decrease in unrealised appreciation - - (117) -
Investment management fees - (56) - -
Tax effect of capital items - 10 - -
Profit on Ordinary activities after
taxation - - - 49
________ ________ ________ ________
As at 30 June 2006 6,660 293 74 69
________ ________ ________ ________
3. Return per ordinary share Six
months
ended
30 June 2006
The returns per share have been based on the following figures:
Weighted average number of ordinary shares 7,835,163
Revenue Return 49,000
Capital Return 197,000
The financial information contained in this report has been prepared on
the basis of the accounting policies set out in the Annual Report. The
results for the year ended 31 August 2001 are abridged from the full accounts
for that year, which received an unqualified report from the auditors and
have been filed with the Registrar of Companies.
A summary of investment changes for the period under review and an investment
portfolio summary as at 30 June 2006 are attached.
A full copy of the Interim Report and Financial Statements will be printed and
issued to shareholders.
Copies of this announcement will be available to the public at the registered
office of the Company, 123 St Vincent Street, Glasgow.
By Order of the Board
ABERDEEN ASSET MANAGEMENT PLC, SECRETARY
23 August 2006
ABERDEEN GROWTH OPPORTUNITIES VCT 2
SUMMARY OF INVESTMENT CHANGES
For the period ended 30 June 2006
Valuation Net investment Appreciation Valuation
31 December 2005 (disinvestment) (depreciation) 30 June 2006
£'000 % £'000 £'000 £'000 %
Unlisted investments
Equities 668 8.7 (285) 294 677 8.6
Preference 67 0.9 - - 67 0.9
Loan stocks 1,363 17.9 (77) (246) 1,040 13.2
________ ________ ________ ________ ________ ________
2,098 27.5 (362) 48 1,784 22.7
AIM investments
Equities 2,033 26.6 171 196 2,400 30.5
Listed investments
Fixed income 2,118 27.7 (1) (1) 2,116 26.9
Unit Trusts 1,020 13.4 - - 1,020 12.9
________ ________ ________ ________ ________ ________
Total investments 7,269 95.2 (192) 243 7,320 93.0
Other net assets 365 4.8 195 - 560 7.0
________ ________ ________ ________ ________ ________
Total Assets 7,634 100.0 3 243 7,880 100.0
________ ________ ________ ________ ________ ________
ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC
INVESTMENT PORTFOLIO SUMMARY
As at 30 June 2006
% of
equity
Bookcost Valuation % of % of held by
30/06/2006 30/06/2006 total equity other
Investment Name Nature of Business £'000 £'000 assets held clients
Unlisted
Bond Aviation Solutions Commercial pilot training services 250 350 4.4% 4.0% 36.0%
EIG (Investments) Insurance business focussed mainly 250 250 3.2% 0.1% 1.3%
on niche risk areas in motor
insurance
MoneyPlus Manages agreements and repayment 225 225 2.9% 4.5% 26.4%
plans for credit card holders
Styles & Wood Holdings Independent provider of store fit 200 200 2.5% 0.8% 45.6%
outs to the UK retail sector
Homelux Nenplas Extruder of plastic tiling trims and 199 199 2.5% 3.4% 41.6%
related products
Oled-T Developer of flat panel display 167 167 2.2% 3.9% 14.7%
technologies
Essential Viewing Systems Developer of an advanced delivery 150 150 1.9% 9.5% 39.9%
technology for video over mobile
telephones
Vibration Technology Seismic survey for energy 150 150 1.9% 1.3% 8.8%
exploration
Riverdale Publishing Publisher of greeting cards 1 93 1.2% 5.9% 59.1%
Kingsley Cards Greetings card distributor 200 0 0.0% 2.5% 25.0%
________ ______ ______ _______ _______
1,792 1,784 22.7%
AIM ________ ______ ______ _______ _______
Software Radio Technology Digital wireless communication 140 264 3.4% 0.7% 3.5%
development business
Hambledon Mining Exploration and mining of precious 105 181 2.3% 0.3% 0.1%
metals in Kazakstan
AT Communications Group Leading communications integrator 140 163 2.1% 0.6% 1.3%
Litcomp National supplier of medical reports 100 160 2.0% 0.0% 5.4%
in the support of legal actions
Neutrahealth Provider of BioCare products to 117 153 1.9% 0.8% 2.0%
health practitioners and specialist
retailers
Work Group Provider of recruitment services 150 153 1.9% 0.8% 2.9%
Amazing Holdings Leisure and hotel developer 150 130 1.6% 0.5% 1.8%
Imprint Provider of a result and search 151 125 1.6% 0.1% 0.4%
service
Datong Electronics Producer of tracker devices to track 151 122 1.5% 0.9% 1.1%
vehicles and mobile phones
Axeon Developer of semi conductor 111 120 1.5% 0.8% 7.2%
intellectual property rights
Leisure & Gaming Online gaming operator 85 119 1.5% 0.2% 0.7%
Gold Frost Designer, developer and distributor 86 108 1.4% 0.5% 0.9%
of kosher food products
Talarius High street gaming 60 104 1.3% 0.1% 0.8%
Avanti Screenmedia Provider of screens and media 101 103 1.3% 0.2% 2.1%
advertising
Worthington Nicholls Group Installer and maintainer of air 99 99 1.3% 0.3% 1.5%
conditioning units in the hotel and
retail markets
Fairground Gaming Holdings An investment company in the on-line 74 74 1.0% 0.3% 1.4%
gaming sector
Billing Services Provider of billing services for the 123 72 0.9% 0.1% 0.3%
telecommunications industry
System C Healthcare Provider of information services and 150 69 0.9% 0.3% 1.0%
IT systems to the healthcare sector
MTI Wireless Edge Developer and manufacturer of 41 42 0.5% 0.2% 0.3%
sophisticated antennas for broadband
Spectrum Interactive Provider of payphones and internet 98 20 0.4% 0.3% 1.3%
access throughout the UK.
Elevation Events Group Integrated events management and 100 19 0.2% 1.7% 8.9%
corporate hospitality
________ ______ ______ _______ _______
2,332 2,400 30.5%
________ ______ ______ _______ _______
Listed Fixed Income
Investments
Bond - GE FRN 04/05/07 900 900 11.5% - -
Bond - Barclays FRN 12/03/ 601 601 7.5% - -
12
Bond - BNG 4.625% 07/12/06 405 405 5.2% - -
Bond - Cades 5.25% 07/12/ 210 210 2.7% - -
06
________ ______ ______ _______ _______
2,116 2,116 26.9% - -
Unit Trusts ________ ______ ______ _______ _______
Aberdeen International 1,006 1,020 12.9% - -
Fixed Interest
________ ______ ______ _______ _______
1,006 1,020 12.9% - -
________ ______ ______ _______ _______
TOTAL 7,246 7,320 93.0%
________ ______ ______ _______ _______
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