Interim Results
Murray VCT 4 PLC
08 November 2006
Murray VCT 4 PLC
Interim Announcement for the six months ended 31 August 2006 (unaudited)
The Directors are pleased to announce the unaudited Interim Results for the six
months ended 31 August 2006.
Highlights
• Increase in total return since launch to 94.4p, excluding tax relief.
• Capital dividend of 3.0p per Ordinary share declared.
• Net Asset Value of 78.9p per Ordinary share at 31 August 2006; compared to
76.7p (adjusted for dividends paid) at 28 February 2006.
• Increase of 2.9% in Net Asset Value per share over the six months ended 31
August 2006, compared to reductions of 10.8% in the FTSE AIM All-Share
Index and 1.6 % in the FTSE Small Cap Index.
• Successful exit achieved from Styles & Wood Holdings on 7 November 2006.
The effect is equivalent to a further 2.0p per share of Net Asset Value.
Returns and Net Asset Value
The total return since launch, excluding tax relief, has increased by 2.2p to
94.4p, a rise of 2.4% over the six-month period, which reflects a continuation
of the improved performance achieved since August 2004; the total return has
increased by 12.2% since that date, being the nearest valuation point to the
date when the current management team assumed responsibility for the portfolio.
The Net Asset Value (NAV) per share at 31 August 2006 was 78.9p per share
compared with 76.7p as at 28 February 2006 (adjusted for payment of dividends
totalling 2.4 pps in July 2006). The increase in adjusted NAV over the period of
2.9% compares favourably with the FTSE AIM All-Share Index, which decreased by
10.8% over the period and the FTSE Small Cap Index, which decreased by 1.6%.
Dividends
Following the tax-free payment of a capital dividend of 1.6p on 28 July 2006, in
respect of capital gains which had accrued up to 28 February 2006, the Board now
declares a further capital dividend arising out of gains on the sale of
investments of 3.0p to be paid on 15 December 2006 to Shareholders on the
register on 24 November 2006.
In respect of a revenue distribution for the year ended 28 February 2007, the
Directors have adopted a prudent approach to the accrual of the income due from
the portfolio and, as there was an insufficient surplus at 31 August 2006 to
represent a meaningful revenue distribution, the Board has resolved not to
declare an interim dividend. However, a revenue distribution for the full year
will be considered in the light of the final results.
Investment activity
During the six-months to 31 August 2006, one new unlisted investment was made at
a cost of £0.5 million. 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 £1.9 million was invested during the six month period,
including amounts invested in existing investee companies and the amount
effectively re-invested as a result of the share for share exchange. At the
period end, the unlisted and AIM portfolio consisted of 47 active investments
and a total portfolio cost of £27.7 million.
The following new unlisted investment, which is qualifying for VCT purposes, was
made in the reporting period:
Homelux Nenplas Limited (May 2006) - £522,000: 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)
Co-investment
Murray VCT 4 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 by investing 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 of the boards of the VCTs managed by
the Growth Capital team of Aberdeen Asset Managers, 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 the year ended 28 February 2006.
Portfolio developments
Unlisted investments
Successful realisations up to 28 February 2006 enabled the payment of the
Company's first capital dividend in December 2005 followed by a further capital
dividend which was paid in July 2006; further realisations have been achieved as
shown in the table below.
ELE Advanced Technologies has repaid the second tranche of loan stock, including
a redemption premium of £45,000 which is treated as income to the Company. The
maximum deferred consideration was received from the sale of Enterprise Food
Group and the remaining operating subsidiary, Patisserie (UK), was sold during
the period resulting in aggregate proceeds of £191,000 all of which is a gain
over the cost of the investment. In total, a gain of £228,000 has been realised
from the investment in Enterprise Food Group and the Company still retains a
6.0% stake in the business.
As a continuation of the policy of seeking exits from underperforming legacy
investments, the holdings in Mercury Inns and the sister company GW1016 were
sold during the period, which resulted in a combined loss of £427,000 but a
modest gain over the February 2006 carrying value. The sale of Original Shoe
Company also completed for cost following the acceptance by the major
shareholder of an offer for his shares. An approach was made by a privately
owned competitor seeking to increase its geographic coverage. Minor recoveries
were also made from the investment in Citel Technologies, when it achieved an
IPO on AIM during July, and from investments in Businesshealth, Conveco and
First Line.
In addition to the transactions mentioned above, further realisations were
achieved after the period end. TMI Foods was sold generating proceeds of
£1,391,000 compared to the cost of £230,000 and resulting in a gain of
£1,161,000. Bond Aviation Solutions realised £1,302,000 compared to its cost of
£750,000 and resulted in a gain of £552,000 over cost. The disposal of Mining
Communications generated £1,181,000 compared to cost of £750,000 generating a
gain of £431,000. Heathcotes Restaurants was also sold and, although the
proceeds of £722,000 resulted in a loss of £861,000 when compared to an original
cost of £1,583,000, the majority of the reduction in value had previously been
provided for. The investment in Astraeus has been re-organised as a result of a
new investment from a trade partner which has invested £5 million in the
business. While the Company's equity holding has inevitably been reduced as a
result, the business has been placed on a much sounder footing and will benefit
in future from additional trading opportunities introduced by the new investor.
Valuations
The valuations of House of Dorchester and Styles & Wood Holdings have been
increased from the valuation at the Company's year end to reflect improving
performance and, in certain other cases, valuations have been revised to reflect
the actual proceeds received from an exit occurring shortly after the period
end. However, the valuations of ELE Advanced Technologies, PSCA International,
Sanastro and Transrent Holdings have been reduced to reflect a decline in
performance.
Unlisted investments held by Murray VCT 4 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 price, discounted where necessary to reflect any trading restrictions.
AIM investments
The UK stock markets, including AIM, entered a period of instability around mid
May 2006, resulting in a fall in the FTSE AIM 100 index of around 21% between
then and the end of the reporting period. Against this background and over full
the six-month period to 31 August 2006, the value of the Company's AIM portfolio
declined by £483,000, representing 8.2% of the value of the portfolio in
contrast to the FTSE AIM 100 index which declined by 16.0% over the same period.
The AIM portfolio has continued to be actively managed, resulting in net
realised gains over cost of £690,000 during the reporting period, equivalent to
around 1.9p per share. Significant gains were realised from Avanti Screenmedia,
Cello Group, Leisure & Gaming, Mattioli Woods, Talarius and Tanfield Group.
A gain of £248,000 arose on Synexus Clinical Research as approximately half of
the holding was traded out for cash. The Manager had supported the management
buy-out of the business in 2001 and the company had successfully obtained an AIM
listing in November 2005. Through share price performance, it subsequently
became the largest investment in the AIM portfolio and the Manager considered it
prudent to reduce the size of the holding. A total gain of £324,000 has now been
achieved on this investment, while the Company continues to hold a 2.4% stake in
the business which is currently valued at a premium of more than 76% to its cost
of £328,000.
In addition, Billing Services Group used the compulsory purchase provisions of
the Companies Act to acquire the holding in United Clearing in a share for share
transaction following a take-over bid. Although a net loss of £88,000 was
realised on the overall disposal of this investment during the period, the share
price has fallen further since the final sale of the holding.
Realisations
The table below shows details of all of the sales from the investment portfolio
made by the Company during the reporting period.
Date first Exit Cost of shares Sales Realised gain/
invested disposed of proceeds (loss)
£'000 £'000 £'000
Unlisted
Businesshealth 2001 Partial 6 6 -
Citel Technologies 2001 Partial 9 9 -
Conveco 2001 Partial 26 26 -
ELE Advanced Technologies 2000 Partial 149 149 -
Enterprise Food Group/ 2003 Deferred - 191 191
consideration
Patisserie (UK)
First Line 2000 Deferred 46 46 -
consideration
GW1016/ Mercury Inns 2002 Complete 896 469 (427)
Original Shoe Company 2005 Complete 750 750 -
Total unlisted 1,882 1,646 (236)
AIM
Ist Dental Laboratories 2004 Partial 8 7 (1)
Asfare 2003 Partial 66 54 (12)
Autoclenz 2005 Partial 20 21 1
Avanti Screenmedia 2004 Partial 99 120 21
Axeon 2005 Partial 67 92 25
Cello Group 2004 Partial 266 326 60
Inspicio 2005 Partial 44 54 10
Leisure & Gaming 2005 Partial 188 278 90
Mattioli Woods 2005 Partial 93 154 61
Neutrahealth 2005 Partial 56 73 17
Spectrum Interactive 2005 Partial 8 4 (4)
Synexus Clinical Research 2001 Partial 295 543 248
Talarius 2005 Partial 51 103 52
Tanfield Group 2004 Partial 205 415 210
United Clearing* 2005 Complete 280 370 90
Billing Services Group* 2006 Complete 370 192 (178)
Total AIM 2,116 2,806 690
Total 3,998 4,452 454
*During the period under review, Billing Services Group acquired United
Clearing.
Post balance sheet disposals
Disposals from the unlisted and AIM portfolio which completed between 31 August
and 31 October 2006 are detailed in the table below.
Date first Exit Cost of Sales Realised
invested shares proceeds gain/
disposed of (loss)
£'000 £'000 £'000
Unlisted
Bond Aviation Solutions 2005 Full 750 1,302 552
Heathcotes Restaurants 2001 Full 1,583 722 (861)
Mining Communications 2003 Full 750 1,181 431
TMI Foods 2003 Full 230 1,391 1,161
Total unlisted 3,313 4,596 1,283
AIM
Asfare 2003 Partial 31 30 (1)
Cello Group 2004 Partial 26 33 7
Talarius 2005 Partial 34 68 34
Tanfield Group 2004 Partial 16 55 39
Total AIM 107 186 79
Total 3,420 4,782 1,362
In addition, Styles & Wood Holdings was successfully floated on the main market
of the London Stock Exchange on 7 November 2006. While not reflected in the
results for the six months ended 31 August 2006, the flotation provided the
opportunity for the Company to realise its investment for £1,603,000, an
increase of £723,000 over the valuation at which the Company carried the
investment at 31 August 2006. The effect of this would be to increase the NAV of
the Company by 2.0p per share, representing 2.5% of the NAV at 31 August 2006.
Outlook
A number of investments in the unlisted portfolio are approaching a level of
maturity when a realisation is likely to be sought. The Board intends to make
further tax-free dividend payments out of the gains arising from realisations,
but the quantum and timing of these payments cannot be predicted. The cost of
any holdings realised will be re-invested by the Manager in accordance with the
agreed strategy of selecting larger, profitable unlisted businesses while
continuing the active management of the AIM portfolio. The Manager's network of
regional offices is providing an increasing flow of new and interesting
opportunities for unlisted investment, and in the AIM market which has
stabilised following the disruption experienced during May.
Murray VCT 4 PLC
Summary of Investment Changes
For the six months ended 31 August 2006
Valuation Net investment/ Appreciation/ Valuation
(disinvestment) (depreciation)
28 February 2006 31 August 2006
£'000 % £'000 £'000 £'000 £'000
Unlisted investments
Equities 6,305 22.1 (466) 1,981 7,820 27.9
Preference shares 657 2.3 (27) (222) 408 1.4
Loan stock 10,732 37.7 (427) (397) 9,908 35.3
17,694 62.1 (920) 1,362 18,136 64.6
AIM investments
Equities 8,357 29.4 (2,340) (589) 5,428 19.3
Listed investments
Fixed income 1,855 6.5 612 (8) 2,459 8.8
Total investments 27,906 98.0 (2,648) 765 26,023 92.7
Other net assets 582 2.0 1,465 - 2,047 7.3
Net assets 28,488 100.0 (1,183) 765 28,070 100.0
Murray VCT 4 PLC
Investment Portfolio Summary
As at 31 August 2006
% of equity
Book cost Valuation % of % of held by
total equity other
Investment Nature of business £'000 £'000 assets held clients*
Unlisted
Transys Projects Engineering services to the rail 825 2,874 10.2 20.9 20.9
industry
TLC (Tender Loving Operator of daycare nurseries 1,516 1,516 5.4 23.2 -
Childcare)
TMI Foods Manufacturer of cooked bacon and 230 1,391 5.0 23.5 23.5
vegetable products
Bond Aviation Commercial pilot training 750 1,302 4.6 12.0 28.0
Solutions services
Mining Publisher of specialist trade 750 1,180 4.2 14.1 6.4
Communications journals
House of Dorchester Chocolate manufacturer 910 1,015 3.6 44.2 -
RMS Europe Provider of stevedoring and 784 934 3.3 9.1 19.1
ships agency services
Styles & Wood Independent provider of store 400 880 3.1 1.5 44.8
Holdings fit outs to the UK retail sector
EIG (Investments) Insurance business focussed 751 751 2.7 0.4 1.1
mainly on niche risk areas in
motor insurance
MoneyPlus Group Provider of debt management 750 750 2.7 15.0 16.0
services to individuals
Heathcotes Restaurant chain 1,583 722 2.6 19.1 10.0
Restaurants
PSCA International Producer of publications aimed 660 660 2.4 7.6 15.5
at public sector officials
Astraeus Charter airline and provider of 616 616 2.2 9.0 40.9
airline management activities
ELE Advanced Precision engineering 342 565 2.0 11.3 -
Technologies
Homelux Nenplas Extruder of plastic tiling trims 522 522 1.9 8.9 36.1
and related products
Transrent Holdings Rental and sale of trailers 873 450 1.6 3.0 33.3
Sanastro Business to business financial 750 402 1.4 9.6 3.5
publishing
PLM Dollar Group On-shore helicopter services 402 402 1.4 4.6 26.2
Riverdale Publishing Publisher of greeting cards 2 350 1.3 22.2 42.8
Voxsurf Software development 744 303 1.1 0.6 -
The BigWord Holdings Translation services 199 199 0.7 - -
Driver Hire Supplier of temporary drivers 171 171 0.6 1.0 38.7
Other unlisted investments (11) valued individually 7,027 181 0.6
at less than £100,000
21,557 18,136 64.6
AIM
Strategic Retail Retailer of home furnishings 700 596 2.1 2.6 2.6
Cello Group Marketing and media services 485 591 2.1 1.5 0.5
Synexus Clinical trials 328 578 2.1 2.4 1.8
Tanfield Group Technical solutions and 164 499 1.8 0.7 0.6
manufacturing group
Avanti Screenmedia Provider of screens and media 321 387 1.4 0.6 1.1
advertising
AT Communications Leading communications
Group integrator 301 337 1.2 1.4 0.6
Talarius High street amusement centres 138 274 1.0 0.3 0.6
Leisure & Gaming Provider of on-line gaming 313 209 0.7 0.5 0.4
services
Amazing Holdings Leisure and hotel developer 251 208 0.7 0.9 1.4
Axeon Developer of semi-conductor 184 200 0.7 1.3 6.7
intellectual properties
Fountains Land management services 252 195 0.7 1.3 1.4
System C Healthcare Provider of information services 311 164 0.6 0.6 0.7
and IT systems to the healthcare
sector
Imprint Provider of recruitment and 203 159 0.6 0.2 0.4
search services
Autoclenz Provider of valeting services 185 158 0.6 1.4 0.3
Public Recruitment Public sector staffing in 467 144 0.5 1.2 0.8
Group healthcare and education
Careforce Group Provider of domiciliary care 137 126 0.4 0.9 0.4
services
Neutrahealth Provider of Biocare products to 94 112 0.4 0.7 1.5
health practitioners and
specialist retailers
Citel Technologies Integrated solutions for the 170 97 0.3 - 0.5
telephony and communications
sector
Mattioli Woods Provider of pension consultancy, 59 96 0.3 0.3 -
troubleshooting and
administration services
1st Dental Provider of dental laboratory 180 87 0.3 1.4 -
Laboratories services
Asfare Manufacture and supply of 106 85 0.3 2.1 1.3
equipment for the emergency
services
Inspicio Acquisition and management of 70 79 0.3 0.1 0.2
businesses in the inspection and
testing sector
Spectrum Interactive Provider of payphones and 209 47 0.2 0.7 0.9
internet access throughout the
UK
Award International Sourcing and delivery of 350 - - 10.8 7.7
Holdings merchandising materials
Elevation Events Events management 200 - - 3.4 7.2
Group
6,178 5,428 19.3
Listed fixed income
Treasury 7.5% 2006 1,150 1,147 4.1
Treasury 4.5% 2007 975 973 3.5
Treasury 7.25% 2007 342 339 1.2
2,467 2,459 8.8
Total investments 30,202 26,023 92.7
*Other clients of the Aberdeen Asset Management Group
Murray VCT 4 PLC
Income Statement
Six months ended 31 August 2006 (unaudited)
Revenue Capital Total
£'000 £'000 £'000
Investment income and deposit 253 - 253
interest
Investment management fees (40) (161) (201)
Other expenses (77) - (77)
Gains on investments - 765 765
Profit on ordinary activities before 136 604 740
taxation
Tax on ordinary activities (14) 14 -
Profit on ordinary activities after 122 618 740
taxation
Earnings per share (pence) 0.4 1.7 2.1
Murray VCT 4 PLC
Income Statement
Six months ended 31 August 2005 (unaudited)
Revenue Capital Total
£'000 £'000 £'000
Investment income and deposit 494 - 494
interest
Investment management fees (59) (235) (294)
Other expenses (86) - (86)
Gains on investments - 42 42
Profit on ordinary activities before 349 (193) 156
taxation
Tax on ordinary activities (110) 110 -
Profit on ordinary activities after 239 (83) 156
taxation
Earnings per share (pence) 0.6 (0.2) 0.4
Murray VCT 4 PLC
Income Statement
Year ended 28 February 2006 (audited)
Revenue Capital Total
£'000 £'000 £'000
Investment income and deposit 1,053 - 1,053
interest
Investment management fees (165) (660) (825)
Other expenses (187) - (187)
Gains on investments - 1,931 1,931
Profit on ordinary activities before 701 1,271 1,972
taxation
Tax on ordinary activities (196) 196 -
Profit on ordinary activities after 505 1,467 1,972
taxation
Earnings per share (pence) 1.4 4.0 5.4
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.
Murray VCT 4 PLC
Reconciliation of movements in Shareholders' funds
Six months ended
Six months ended 31 August 2005
31 August 2006 Year ended
28 February 2006
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Opening Shareholders' funds 28,488 28,632 28,632
Total profit for the year 740 156 1,972
Repurchase and cancellation of shares (299) (460) (979)
Dividends paid - revenue (286) (223) (406)
Dividends paid - capital (573) - (731)
Closing Shareholders' funds 28,070 28,105 28,488
The accompanying Notes are an integral part of the Financial Statements.
Murray VCT 4 PLC
Balance Sheet
31 August 31 August 28 February
2006 2005 2006
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed assets
Investments 26,023 26,760 27,906
Current assets
Debtors 1,799 963 834
Cash and overnight deposits 439 503 242
2,238 1,466 1,076
Creditors
Amounts falling due within one year (191) (121) (494)
Net current assets 2,047 1,345 582
Net assets 28,070 28,105 28,488
Capital and reserves
Called up share capital 3,556 3,694 3,602
Share premium account 17,235 17,235 17,235
Realised capital reserve (3,459) (2,088) (3,192)
Unrealised capital reserve (3,550) (3,858) (3,862)
Capital redemption reserve 329 191 283
Profit and loss account 13,959 12,931 14,422
Net assets attributable to Ordinary 28,070 28,105 28,488
Shareholders
Net Asset Value per Ordinary share (pence) 78.9 76.1 79.1
The accompanying Notes are an integral part of the Financial Statements.
Murray VCT 4 PLC
Cash Flow Statement
Six months Six months Year ended
ended ended 28 February 2006
31 August 2006 31 August 2005
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Investment income received 276 947 1,706
Deposit interest received 9 14 23
Miscellaneous income received - 19 -
Investment management fees paid (531) (377) (460)
Secretarial fees paid (25) (41) (66)
Cash paid to and on behalf of Directors (38) (35) (49)
Other cash payments (63) (56) (88)
Net cash (outflow)/inflow from operating (372) 471 1,066
activities
Financial investment
Purchase of investments (3,152) (5,405) (12,190)
Sale of investments 4,858 5,960 13,322
Net cash inflow from financial investment 1,706 555 1,132
Equity dividends paid (855) (223) (1,137)
Net cash inflow before financing 479 803 1,061
Financing
Repurchase of Ordinary shares (282) (560) (1,079)
Net cash outflow from financing (282) (560) (1,079)
Increase/(decrease) in cash 197 243 (18)
The accompanying Notes are an integral part of the Financial Statements.
Murray VCT 4 PLC
Notes to the Financial Statements
1. Accounting policies
The financial information for the six months ended 31 August 2006 and the six
months ended 31 August 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 year ended 28 February 2006.
The results for the year ended 28 February 2006 are extracted from the full
accounts for that year, which received an unqualified report from the Auditors
and have been filed with the Registrar of Companies.
2. Movement in reserves
Share Realised Unrealised Capital Profit and
capital capital redemption loss account
premium reserve reserve reserve
account
£'000 £'000 £'000 £000 £'000
At 28 February 2006 17,235 (3,192) (3,862) 283 14,422
Gains on sales of investments - 453 - - -
Net increase in value of investments - - 312 - -
Investment management fees - (161) - - -
Repurchase and cancellation of shares - - - 46 (299)
Dividends paid - (573) - - (286)
Tax effect of capital items - 14 - - -
Profit on ordinary activities after
taxation - - - - 122
As at 31 August 2006 17,235 (3,459) (3,550) 329 13,959
3. Returns per Ordinary share
The returns per Ordinary share are based on the following figures:
Six months ended
31 August 2006
£'000
Weighted average number of Ordinary 35,793,070
shares in issue
Revenue return £122,000
Capital return £618,000
Other information
The Net Asset Value per Ordinary share has been calculated using the number of
Ordinary shares in issue at 31 August 2006 of 35,563,992.
A summary of investment changes for the six months under review and an
investment portfolio summary as at 31 August 2006 are attached 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
Aberdeen Asset Management PLC, 123 St Vincent Street, Glasgow and at the
registered office of the Company, One Bow Churchyard, Cheapside, London.
On behalf of the Board
Murray Johnstone Limited
Secretary
8 November 2006
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