Half Yearly Report

RNS Number : 0058Q

Maven Income & Growth VCT PLC

31 October 2012

 



Maven Income and Growth VCT PLC

Interim results for the six months ended 31 August 2012 (unaudited)        

The Directors are pleased to announce the unaudited Interim Management Report for the six months ended 31 August 2012.

Overview

We are pleased to report a very successful six month period for your Company with net assets increasing by a further 7.4% to £28.6 million, including the proceeds of the successful Offer for Subscription which closed fully subscribed on 1 March 2012. Most of the private company investments have continued to trade positively, despite a difficult economic environment, and the portfolio continues to generate strong levels of revenue. This is an important component in your Company's ability to sustain a healthy level of distributions, and is reflected in an increased interim dividend compared with the same period last year.

The continuing focus for your Company is on delivering further improvements in Shareholder value through the on-going expansion of the private equity asset base. The Company has a widely diversified portfolio of holdings in established UK businesses, the majority of which pay a yield. The current scarcity of bank finance means that Maven's investment team, operating from six key regional centres throughout the UK, is being introduced to a steady flow of good quality private companies as these businesses look for alternative sources of funding.

As testament to the Maven approach we are pleased to note that, since the publication of the Annual Report, there has been a wide range of independent industry recognition of the success of Maven's VCT investment strategy and ability to deliver a consistent level of shareholder returns. In August Maven was announced as the winner in the UK Small Buyout House of the Year category for the ACQ Finance Magazine Global Awards 2012. These awards aim to recognise experience and skills demonstrated across UK and international markets, and particularly those managers that have produced exceptional performance levels during the most difficult period that the global economy has experienced for decades.

Maven was also recently named as winner of VCT Exit of the Year at the 2012 unquote" British Private Equity Awards for the 3 times cost exit from Walker Technical Resources in 2011, as well as being a finalist in the VCT House of the Year category. These awards acknowledge innovation and excellence in the private equity and venture capital sectors.

Maven has also been nominated for VCT Fund Manager of the Year as part of the Investor AllStars 2012 awards, which focus on all-round professional excellence in the European venture capital and private equity sector, and your Company has been announced as a VCT finalist in the annual Investment Company of the Year Awards for close-ended fund management.

Financial highlights

Balance Sheet

·      NAV total return of 117.1p per share at 31 August 2012, up 4.6% over the period;

·      NAV of 69.5p per share after payment of the 2012 final dividend of 3.5p;

·      Interim dividend of 2.0p per share declared; and

·      Cash position, including gilts, increased from £1.4 million to £6.5 million.

Portfolio

·      Three new VCT qualifying investments added to the portfolio, and six follow-on investments;

·      Disposal of ATR Holdings for a total return of 2.4 times cost;

·      Sale of TPL (Midlands) for a total return of 1.8 times cost; and

·      Realisation of Nessco Group Holdings for a total return of 2.7 times cost.

Dividends

The Company paid dividends totalling 5.0p per share in respect of the year ended 29 February 2012, which represents a yield of 8.3% per annum to Shareholders based on the mid-market price at 31 August 2012.

The Board has declared an increased interim dividend of 2.0p per share (2011: 1.5p), comprising 1.0p of capital and 1.0p of revenue, to be paid on 7 December 2012 to Shareholders on the Register at 9 November 2012.

Investment activity

During the period the Maven team completed three qualifying private equity investments at a cost of £1.8 million on behalf of your Company, and also made six follow-on investments in existing portfolio companies. At the period end, the portfolio was comprised of 54 unlisted and AIM/PLUS quoted investments at a total cost of £21.7 million, with quoted holdings representing 2.2% of the portfolio by value.

Two new private company investments were added to the portfolio during the period under review:

·      Vodat International Holdings, a provider of payment and communications solutions to high street businesses, which enable retailers to reduce costs, boost store productivity and increase sales in an increasingly competitive trading environment. The company has an established and diverse customer base, has consistently improved profitability in recent years and enjoys high levels of recurring revenue from a number of long-term service and support contracts; and

·      CatTech International, a niche industrial services business offering catalyst handling products and services to petro-chemical plants operating in the major international markets. The business specialises in servicing equipment used in applications where operational efficiency is critical and there is an increasing global focus on health and safety issues, and has developed a range of patented products and processes to improve the efficiency, speed and safety of catalyst operations.

A number of follow-on investments were made to support the development of existing portfolio businesses and, in the case of Glacier Energy Services Group and 6⁰ Group, to fund acquisitions.

The following new investments have been completed during the period:

Investment	Date	Sector	Investment cost  £'000	Website
Unlisted
Camwatch Limited	July 2012	Telecommunication services	328	www.camwatch.co.uk
CatTech International Limited	March 2012	Support services	627	www.cat-tech.com
Glacier Energy Services Group Limited	June 2012	Oil equipment services	55	www.glacier.co.uk
Nessco Group Holdings Limited	March 2012	Oil equipment services	119	www.nesscogroup.com
TC Communications Holdings Limited	July 2012	Support services	23	www.tccommunications.co.uk
Tosca Penta Exodus Mezzanine Limited Partnership Trading as 60 Group)	July 2012	Telecommunication services	199	www.6dg.co.uk
Trojan Capital Limited	May 2012	Support services	640	No website available
Venmar Limited (trading as XPD8 Solutions)	June 2012	Oil & gas	342	www.xpd8solutions.com
Vodat International Holdings Limited	March 2012	Telecommunication services	567	www.vodat-int.com
Total unlisted investment			2,900
Listed fixed income
Treasury 7 March 2013	June 2012	UK government	1,973
Treasury Bill 24 December 2012	July 2012	UK government	4,344
Total listed fixed income investment			6,317
Total investment			9,217

Maven Income and Growth VCT has co-invested in some or all of the above transactions with Maven Income and Growth VCT 2, Maven Income and Growth VCT 3, Maven Income and Growth VCT 4, Maven Income and Growth VCT 5, Talisman First Venture Capital Trust and Ortus VCT. Co-investment allows these companies to underwrite a wider range and larger size of transaction than would be the case on a stand-alone basis.

Realisations

There were three significant private company realisations during the period. In March 2012, Maven completed the realisation of ATR Holdings for £19.25 million via a secondary buy-out funded by the private equity manager NBGI, realising a total return of 2.4 times the initial cost. ATR provides rental services for specialist plant, equipment and consumables, along with a comprehensive range of support services, to offshore and onshore energy services maintenance contractors operating in highly regulated environments.

At the start of June 2012 the holding in TPL (Midlands) was sold to German engineering group Vossloh Kiepe for a 1.8 times total return on investment cost for your Company. During July 2012 the realisation of the holding in Nessco Group Holdings completed with a sale to NASDAQ listed RigNet Inc. for a 2.7 times return on the cost of investment.

The Manager has continued its policy of disposing of quoted holdings for best possible value in cases where the investments were underperforming. The table below gives details of realisations during the reporting period:

	Year first invested	Complete/ partial exit	Cost of shares disposed of £'000	Value at 29 February 2012 £'000	Sales proceeds £'000	Realised gain/ (loss) £'000	Gain/(loss) over 29 February 2012 value £'000
Unlisted
ATR Holdings Limited	2007	Complete	220	523	460	240	(63)
Beckford Capital Limited	2010	Complete	640	640	640	-	-
Dalglen (1150) Limited (trading as Walker Technical Resources)	2009	Complete	-	-	5	5	5
House of Dorchester Limited	2002	Partial	87	87	87	-	-
Nessco Group Holdings Limited	2008	Complete	710	1,117	1,551	841	434
Oliver Kay Holdings Limited	2008	Partial	8	8	8	-	-
PLM Dollar Group Limited	1999	Complete	455	432	448	(7)	16
Space Student Living Limited	2011	Partial	91	91	91	-	-
TPL (Midlands) Limited	2007	Complete	2,771	2,874	4,408	1,637	1,534
Uctal Limited (formerly Unique Communications)	2001	Partial	4	-	9	5	9
Total unlisted disposals			4,986	5,772	7,707	2,721	1,935
AIM/PLUS
Brookwell Limited	2011	Partial	3	2	2	(1)	-
Spectrum Interactive PLC	2005	Complete	209	16	176	(33)	160
Total AIM/PLUS disposals			212	18	178	(34)	160
Listed fixed income
Treasury 7 March 2013	2012	Complete	1,970	n/a	1,968	(2)	n/a
Treasury 7 June 2012	2011	Complete	336	340	336	-	(4)
Total listed fixed income disposals			2,306	340	2,304	(2)	(4)
Total disposals			7,504	6,130	10,189	2,685	2,091

One AIM quoted holding was struck off the Register during the period resulting in a realised loss of £314,000 (cost £314,000). This had no impact on NAV as a full provision against the cost of the investment had been taken in previous periods.

Principal risks and uncertainties

The Board has reviewed the principal risks and uncertainties facing the Company, which are set out in the Annual Report. The Company has invested in a broadly based portfolio of UK private company investments. The VCT qualifying status of the Company is reviewed regularly by your Board and monitored on a continuous basis by the Manager in order to ensure that all of the criteria for VCT status are met. The Board has confirmed that all tests continue to be satisfied.

VCT regulation

The Manager was pleased to note that the Finance Act received Royal Assent in July, following approval by the European Commission of Government increases to the level of investment in an individual business which qualifies for VCT funding, and to the size of business which can benefit. The gross asset limit for investee companies has been raised from £7 million to £15 million, and the maximum number of employees from 50 to 250, while the annual investment limit has been raised from £2 million to £5 million. These revised limits are consistent with the Maven focus on investing in later-stage companies, and reinforce the position of generalist VCTs as a tax-efficient means of investment in high-growth smaller businesses.

Offer for Subscription

An Offer for Subscription was made in December 2011 in parallel with similar Offers by Maven Income and Growth VCT 2 PLC, Maven Income and Growth VCT 3 PLC and Maven Income and Growth VCT 4 PLC. The Offer was closed early, having been fully subscribed, on 1 March 2012 and resulted in the issue of 1,900,367 Ordinary Shares at an issue price of 65.71p, raising an additional £1,250,000 of capital, before expenses.

Share Buy-back policy

Shareholders have given the Board authority to buy back shares for cancellation when it is in the interests of the Shareholders and the Company as a whole. Shareholders should be aware that the Board's primary objective is for the Company to retain sufficient liquid assets for making investments in line with its stated policy and for the continued payment of dividends to Shareholders. However, the Directors also acknowledge the need to maintain an orderly market in the Company's shares and have delegated authority to the Manager to buy back shares in the market for cancellation, subject always to such transactions being in the best interest of Shareholders. It is intended that, subject to market conditions, available liquidity and the maintenance of the Company's VCT status, shares will be bought back at prices representing a discount of between 10% and 20% to the prevailing NAV per share.

Outlook

During the next six months your Company will continue to focus on investing in attractively priced later-stage private companies which are capable of paying regular income and offer significant potential for capital growth. We believe this is the optimum strategy for the generation of superior Shareholder returns.

Maven Capital Partners UK LLP

Manager

31 October 2012

Summary of Investment Changes for the six months ended 31 August 2012
	Valuation 29 February 2012		Net investment/ (disinvestment)	Appreciation/ (depreciation)	Valuation 31 August 2012
	£'000	%	£'000	£'000	£'000	%
Unlisted investments
Equities	9,016	33.8	(2,597)	3,124	9,543	33.3
Preference shares	1,404	5.3	(1,374)	-	30	0.1
Loan stock	14,076	52.8	(836)	(1,213)	12,027	42.0
Total unlisted investments	24,496	91.9	(4,807)	1,911	21,600	75.4
AIM/PLUS investments
Equities	492	1.8	(178)	174	488	1.7
Listed investments
Fixed income	340	1.3	4,006	-	4,346	15.2
Total investments	25,328	95.0	(979)	2,085	26,434	92.3
Net current assets	1,334	5.0	854	-	2,188	7.7
Net assets	26,662	100.0	(125)	2,085	28,622	100.0

Investment Portfolio Summary as at 31 August 2012
Investments	Valuation £'000	Cost £'000	% of net assets	% of equity held	% of equity held by other clients1
Unlisted
Torridon Capital Limited	1,962	627	7.0	4.5	35.5
Homelux Nenplas Limited	1,644	391	5.6	7.9	32.1
Oliver Kay Holdings Limited	1,256	748	4.4	4.9	15.1
House of Dorchester Limited	1,184	369	4.1	44.2	-
Maven Co-invest Exodus Limited Partnership and Tosca Penta Exodus Mezzanine Limited Partnership (jointly trading as 6° Group)	1,081	829	3.8	4.0	14.3
Camwatch Limited	1,063	1,503	3.7	14.4	28.5
Westway Services Limited	1,038	450	3.6	4.9	17.0
Adler & Allan Holdings Limited	868	623	3.0	2.2	4.8
Lawrence Recycling & Waste Management Limited	845	845	3.0	10.4	51.6
Intercede (Scotland) 1 Limited (trading as Electro-Flow Controls)	728	428	2.5	4.7	23.8
Atlantic Foods Group Limited	719	522	2.5	2.9	5.9
Venmar Limited (trading as XPD8 Solutions)	700	700	2.4	5.4	29.6
Martel Instruments Holdings Limited	677	807	2.4	14.9	29.3
Steminic Limited	656	656	2.3	8.8	27.0
ELE Advanced Technologies limited	656	192	2.3	11.3	-
Trojan Capital Limited	640	640	2.2	47.2	50.2
Moriond Limited	630	583	2.2	11.9	38.1
CatTech International Limited	627	627	2.2	6.0	24.0
Attraction World Holdings Limited	624	314	2.2	6.2	32.2
Flexlife Group Limited	594	448	2.1	1.8	12.8
Vodat International Holdings Limited	567	567	2.0	6.6	35.2
Lemac No. 1 Limited (trading as John McGavigan)	532	532	1.9	9.1	27.7
Tosca Penta Investments Limited Partnership (trading as esure)	434	213	1.5	0.1	0.2
CHS Engineering Services Limited	360	360	1.3	4.0	19.4
LCL Hose Limited (trading as Dantec)	358	358	1.3	6.4	23.6
Glacier Energy Services Group Limited	283	283	1.0	2.2	22.8
Claven Holdings Limited	230	89	0.8	15.6	34.4
TC Communications Holdings Limited	163	326	0.6	3.5	26.5
Training for Travel Group Limited	153	446	0.5	5.1	24.9
Space Student Living Limited	79	317	0.3	4.5	25.5
PSCA International Limited	77	154	0.3	-	-
ID Support Services Group Limited	68	89	0.2	0.6	1.6
Enpure Holdings Limited	49	100	0.2	0.4	2.2
Other unlisted investments	55	3,914	-
Total unlisted investments	21,600	20,050	75.4
AIM/PLUS
Plastics Capital PLC	188	281	0.7	1.0	2.7
Cello Group PLC	118	310	0.4	0.4	0.1
Tangent Communications PLC	53	98	0.2	0.4	2.5
Hasgrove PLC	49	168	0.2	0.6	1.1
Vianet Group PLC (formerly Brulines Group PLC)	31	37	0.1	0.1	1.4
Chime Communications PLC	29	26	0.1	-	0.3
Brookwell Limited	14	32	-	-	-
Other AIM/PLUS investments	6	741	-
Total AIM/PLUS investments	488	1,693	1.7
Listed fixed income
Treasury Bill 24 December 2012	4,346	4,344	15.2
Total investments	26,434	26,087	92.3
1Other clients of Maven Capital Partners UK LLP.

Maven Income and Growth VCT PLC
Income Statement
	Six months ended 31 August 2012 (unaudited)
	Revenue	Capital	Total
	£'000	£'000	£'000
Investment income and deposit interest	1,012	-	1,012
Investment management fees	(153)	(611)	(764)
Other expenses	(114)	-	(114)
Gains on investments	-	2,085	2,085
Net return on ordinary activities before taxation	745	1,474	2,219
Tax on ordinary activities	(48)	42	(6)
Return attributable to Equity Shareholders	697	1,516	2,213
Earnings per share (pence)	1.70	3.70	5.40

Maven Income and Growth VCT PLC
Income Statement
	Six months ended 31 August 2011 (unaudited)
	Revenue	Capital	Total
	£'000	£'000	£'000
Investment income and deposit interest	813	-	813
Investment management fees	(44)	(176)	(220)
Other expenses	(93)	-	(93)
Gains on investments	-	320	320
Net return on ordinary activities before taxation	676	144	820
Tax on ordinary activities	(81)	24	(57)
Return attributable to Equity Shareholders	595	168	763
Earnings per share (pence)	1.51	0.43	1.94

Maven Income and Growth VCT PLC
Income Statement
	Year ended 29 February 2012 (audited)
	Revenue	Capital	Total
	£'000	£'000	£'000
Investment income and deposit interest	1,478	-	1,478
Investment management fees	(163)	(653)	(816)
Other expenses	(213)	-	(213)
Gains on investments	-	2,636	2,636
Net return on ordinary activities before taxation	1,102	1,983	3,085
Tax on ordinary activities	(234)	159	(75)
Return attributable to Equity Shareholders	868	2,142	3,010
Earnings per share (pence)	2.2	5.4	7.6
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.
The accompanying Notes are an integral part of the Financial Statements.

Maven Income and Growth VCT PLC
Reconciliation of Movements in Shareholders' funds
	Six months ended 31 August 2012	Six months ended  31 August 2011	Year ended 29 February 2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Opening Shareholders' funds	26,662	24,964	24,964
Net return for period	2,213	763	3,010
Proceeds of share issue	1,188	912	912
Repurchase and cancellation of shares	-	(93)	(242)
Dividends paid - revenue	(288)	(398)	(792)
Dividends paid - capital	(1,153)	(994)	(1,190)
Closing Shareholders' funds	28,622	25,154	26,662
The accompanying Notes are an integral part of the Financial Statements.

Maven Income and Growth VCT PLC
Balance Sheet
	31 August	31 August	29 February
	2012	2011	2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	26,434	21,502	25,328
Current assets
Debtors	736	622	923
Cash and overnight deposits	2,119	3,241	1,074
	2,855	3,863	1,997
Creditors
Amounts falling due within one year	667	211	663
Net current assets	2,188	3,652	1,334
Net assets	28,622	25,154	26,662
Capital and reserves
Called up share capital	4,117	3,957	3,927
Share premium account	2,140	1,142	1,142
Capital reserve - realised	(7,008)	(6,182)	(7,657)
Capital reserve - unrealised	1,022	(1,945)	1,308
Special distributable reserve	27,455	27,604	27,455
Capital redemption reserve	70	40	70
Revenue reserve	826	538	417
Net assets attributable to Equity Shareholders	28,622	25,154	26,662
Net asset value per Ordinary Share (pence)	69.5	63.6	67.9
The Financial Statements were approved and authorised for issue by the Board of Directors on 31 October 2012 and were signed on its behalf by: John D W Pocock Director
The accompanying Notes are an integral part of the Financial Statements.

Maven Income and Growth VCT PLC
Cash Flow Statement
	Six months ended 31 August 2012	Six months ended 31 August 2011	Year ended 29 February 2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Operating activities
Investment income received	1,212	785	1,141
Deposit interest received	1	7	12
Investment management fees paid	(755)	(317)	(397)
Secretarial fees paid	(30)	(30)	(60)
Directors' fees paid	(30)	(31)	(61)
Other cash payments	(72)	(72)	(108)
Net cash inflow from operating activities	326	342	527
Taxation
Corporation tax	-	-	(3)
	-	-	(3)
Financial investment
Purchase of investments	(9,217)	(1,925)	(4,243)
Sale of investments	10,189	2,138	2,939
Net cash inflow/(outflow) from financial investment	972	213	(1,304)
Equity dividends paid	(1,441)	(1,392)	(1,982)
Net cash outflow before financing	(143)	(837)	(2,762)
Financing
Issue of Ordinary Shares	1,188	912	912
Repurchase of Ordinary Shares	-	-	(242)
Net cash inflow from financing	1,188	912	670
Increase/(decrease) in cash	1,045	75	(2,092)
The accompanying Notes are an integral part of the Financial Statements.

Maven Income and Growth VCT PLC

Notes to the Financial Statements

1. Accounting policies

The financial information for the six months ended 31 August 2012 and the six months ended 31 August 2011 comprises non-statutory accounts within the meaning of the Companies Act 2006. 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 year ended 29 February 2012, which have been filed at Companies House and which contained an Auditor's Report which was not qualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.

2. Movement in reserves

	Share premium account	Capital reserve - realised	Capital reserve - unrealised	Special distributable reserve	Capital redemption reserve	Revenue reserve
	£'000	£'000	£'000	£'000	£'000	£'000
As at 29 February 2012	1,142	(7,657)	1,308	27,455	70	417
Gains on sales of investments	-	2,371	-	-	-	-
Net decrease in value of investments	-	-	(286)	-	-	-
Investment management fees	-	(611)	-	-	-	-
Dividends paid	-	(1,153)	-	-	-	(288)
Tax effect of capital items	-	42	-	-	-	-
Share issue - 1 March 2012	626	-	-	-	-	-
Share issue - 5 April 2012	286	-	-	-	-	-
Share issue - 18 April 2012	86	-	-	-	-	-
Net return on ordinary activities after taxation	-	-	-	-	-	697
As at 31 August 2012	2,140	(7,008)	1,022	27,455	70	826

3. Returns per Ordinary Share

The returns per Ordinary Share are based on the following figures:

	Six months ended
	31 August 2012
Weighted average number of Ordinary Shares	41,008,674
Revenue return	£697,000
Capital return	£1,516,000

Directors' responsibility statement

The Directors confirm that, to the best of their knowledge:

·      the Financial Statements for the six months ended 31 August 2012 have been prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' issued in January 2009;

·      the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months, of the year ending 28 February 2013; and

·      the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to related party transactions and any changes therein.

Other information

The NAV per Ordinary Share has been calculated using the number of Ordinary Shares in issue at 31 August 2012 of 41,166,329.

A summary of investment changes for the six months under review and an investment portfolio summary as at 31 August 2012 are included above.

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 office of Maven Capital Partners UK LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW and at the registered office of the Company, 5th Floor, 9-13 St Andrew Street, London EC4A 3AF.

On behalf of the Board

Maven Capital Partners UK LLP

Secretary

31 October 2012

 

END

 

 

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