Interim Results
Northern 3 VCT PLC
18 May 2007
18 MAY 2007
NORTHERN 3 VCT PLC
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2007
Northern 3 VCT PLC is a Venture Capital Trust (VCT) managed by NVM Private
Equity (formerly Northern Venture Managers). It invests mainly in unquoted
venture capital holdings and aims to provide high long-term tax-free returns to
shareholders through a combination of dividend yield and capital growth.
Financial highlights:
(comparative figures as at 31 March 2006 in italics)
2007 2006
• Net assets £29.5m £30.3m
• Net asset value per share 97.0p 97.2p
• Return per share
Revenue 1.4p 1.4p
Capital 2.2p 1.7p
Total 3.6p 3.1p
• Interim dividend per share
in respect of the period
Revenue 1.4p 1.0p
Capital 0.6p 1.0p
Total 2.0p 2.0p
• Cumulative returns to
shareholders since launch
Net asset value per share 97.0p 97.2p
Dividends paid per share* 12.9p 8.9p
Net asset value plus dividends
paid per share 109.9p 106.1p
• Share price at end of period 85.0p 85.0p
*Excluding interim dividend
For further information, please contact:
NVM Private Equity Limited 0191 244 6000
Alastair Conn, Managing Director
Website: www.nvm.co.uk
Lansons Communications 020 7294 3685
Karen Mignon
NORTHERN 3 VCT PLC
CHAIRMAN'S STATEMENT
The Chairman of Northern 3 VCT PLC, John Hustler, included the following points
in his statement to shareholders:
I am pleased to report that the company has continued to make steady progress
during the half year to 31 March 2007.
Results
The unaudited net asset value per share at 31 March 2007 was 97.0p, an increase
of 1.9% over the audited figure of 95.2p at 30 September 2006. The return per
share for the half year was 3.6p, compared with 3.1p in the corresponding period
last year.
The revenue element of the return per share for the period was unchanged at
1.4p. The directors have declared a first interim dividend of 2.0p per share
(2006 2.0p), comprising 1.4p revenue and 0.6p capital distribution, which will
be paid on 20 July 2007 to shareholders on the register on 22 June 2007. This
will bring the cumulative total of dividends paid by the company to 14.9p per
share.
Investments
During the half year five new investments totalling £2.4 million were completed:
• Brulines (Holdings) (£183,000) - AIM-quoted provider of revenue
protection systems for the licensed trade, Stockton-on-Tees
• Product Support (Holdings) (£1,000,000) - logistics services contractor
to the defence industry, Kingswinford
• Gentronix (£119,000) - drug development support services, Manchester
• Promanex Group Holdings (£1,000,000) - engineering and maintenance
services contractor, Nuneaton
• Vastox (£114,000) - AIM-quoted provider of drug discovery services,
Abingdon (acquired in a share-for-share exchange for the former holding in
Daniolabs)
Since 31 March we have completed an investment of £198,000 in Maelor, an
AIM-quoted specialist pharmaceutical and medical devices company, and our
managers have approved four further venture capital investments (three unquoted,
one quoted on AIM) totalling £2.9 million which we hope to complete during the
six months ending 30 September 2007. This is a satisfactory level of activity
given the current strong competition for new deals in the market in which our
managers operate.
Daniolabs was the only disposal from the venture capital portfolio during the
period, but since 31 March bids for our AIM-quoted holdings in Computer Software
Group and PM Group have been declared unconditional, generating cash proceeds of
£510,000 and realised gains of £267,000. Sale negotiations are currently in
progress in relation to several other investments.
The board reviews the portfolio regularly with the directors of NVM and it is
encouraging that most of our companies are currently making good progress.
However Nightingales Holdings, the mail order and internet retailer of women's
clothing in which we invested just over a year ago, has found trading conditions
difficult in recent months and consequently a 50% provision has been made
against the cost of the investment to reflect its under-performance. Our
managers are working intensively with the company during this challenging
period.
Shareholder issues
During the six months to 31 March 2007 the company bought back for cancellation
438,018 shares, representing approximately 1.4% of the issued capital. This is
in line with the level of buy-backs in the preceding financial year.
In the medium term your directors would like to see an active secondary market
in the company's shares develop, and we recognise that the best way of
encouraging this is to achieve good performance and in particular to maintain a
strong dividend yield. At the current quoted offer price of 90p and on the basis
of last year's dividend of 4.0p, Northern 3 VCT shares are currently yielding
4.4% free of tax. Your board and managers will continue to work with
representative bodies such as the Association of Investment Companies to present
the investment merits of VCTs to the private investor market.
The company's dividend investment scheme has continued to operate, enabling
shareholders to re-invest their dividend in new ordinary shares with the benefit
of VCT tax reliefs at the current rates. Shareholders interested in joining the
scheme should contact the company secretary for further information.
The annual general meeting in April 2007 was held in London and the directors
were pleased to meet a number of shareholders on that occasion. The next annual
general meeting will be held in Edinburgh in July 2008.
VCT qualifying status
Your board continues to monitor progress towards HM Revenue & Customs'
qualifying targets with the help of PricewaterhouseCoopers LLP, who are retained
to advise on this and other tax matters. We are satisfied that the company has
continued to fulfil the conditions for maintaining VCT status. As I reported
last year, in order to maximise the time available for satisfying the VCT
qualifying tests in respect of the funds raised in 2005, the directors have
decided to extend the company's current financial year by changing the
accounting year end to 31 March. The next audited accounts will be drawn up for
the 18 months ending 31 March 2008 and in the meantime unaudited interim
accounts will be published for the 12 months ending 30 September 2007. We intend
to pay a second interim dividend in January 2008.
Prospects
The flow of new investment opportunities is currently good and we hope to
achieve some profitable exits from existing portfolio companies in the
foreseeable future.
The recent Budget changes may have the effect of reducing investor demand for
new VCT issues in future, as well as restricting the investment flexibility of
new funds. We believe that this will increase the relative attraction of those
established VCTs which can demonstrate a maturing portfolio and the prospect of
a tax-free dividend yield. Our investments will continue to be managed actively
with a view to capital growth and dividend generation for the benefit of
shareholders.
John Hustler
Chairman
The unaudited interim financial statements for the six months ended 31 March
2007 are set out below.
INCOME STATEMENT
(unaudited) for the six months ended 31 March 2007
Six months ended 31 March 2007 Six months ended 31 March 2006
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
Loss on
disposal of
investments - (13) (13) - (185) (185)
Unrealised
adjustments
to fair
value
of - 876 876 - 926 926
investments
---------- ---------- ---------- ---------- ---------- ----------
- 863 863 - 741 741
Income 745 - 745 770 - 770
Investment
management (86) (258) (344) (80) (316) (396)
fee
Other (96) - (96) (96) - (96)
expenses
---------- ---------- ---------- ---------- ---------- ----------
Return on
ordinary
activities
before tax 563 605 1,168 594 425 1,019
Tax on
return
on ordinary (124) 80 (44) (158) 100 (58)
activities
---------- ---------- ---------- ---------- ---------- ----------
Return on
ordinary
activities
after tax 439 685 1,124 436 525 961
---------- ---------- ---------- ---------- ---------- ----------
Return per
share 1.4p 2.2p 3.6p 1.4p 1.7p 3.1p
Year ended 30 September 2006
Revenue Capital Total
£000 £000 £000
Loss on disposal of
investments - (106) (106)
Unrealised adjustments to
fair value
of investments - 605 605
---------- ---------- ----------
- 499 499
Income 1,372 - 1,372
Investment management fee (167) (502) (669)
Other expenses (180) - (180)
---------- ---------- ----------
Return on ordinary activities
before tax 1,025 (3) 1,022
Tax on return on ordinary
activities (265) 160 (105)
---------- ---------- ----------
Return on ordinary activities
after tax 760 157 917
---------- ---------- ----------
Return per share 2.4p 0.5p 2.9p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(unaudited) for the six months ended 31 March 2007
Six months Six months Year ended
ended ended
31 March 2007 31 March 2006 30 September
2006
£000 £000 £000
Equity shareholders' funds at
1 October 2006 29,281 30,136 30,136
Return on ordinary
activities after tax 1,124 961 917
Dividends recognised in
the period (614) (535) (1,153)
Net proceeds of share
issues 72 56 126
Shares purchased for
cancellation (371) (324) (745)
---------- ---------- ----------
Equity shareholders' funds at
31 March 2007 29,492 30,294 29,281
---------- ---------- ----------
BALANCE SHEET
(unaudited) as at 31 March 2007
31 March 2007 31 March 2006 30 September
2006
£000 £000 £000
Venture capital investments
Unquoted 13,000 8,665 10,012
Quoted 2,405 2,228 1,997
---------- ---------- ----------
Total venture capital
investments 15,405 10,893 12,009
Listed fixed-interest
investments 11,894 15,466 13,229
---------- ---------- ----------
Total fixed asset
investments 27,299 26,359 25,238
---------- ---------- ----------
Current assets:
Debtors 430 480 600
Cash at bank 1,852 3,657 3,606
---------- ---------- ----------
2,282 4,137 4,206
Creditors (amounts falling due
within one year) (89) (202) (163)
---------- ---------- ----------
Net current assets 2,193 3,935 4,043
---------- ---------- ----------
Net assets 29,492 30,294 29,281
---------- ---------- ----------
Capital and reserves:
Called-up equity share
capital 1,520 1,558 1,538
Share premium 22,827 22,693 22,759
Capital redemption
reserve 99 53 77
Capital reserve -
realised 2,643 4,291 3,703
Capital reserve -
unrealised 1,696 1,139 629
Revenue reserve 707 560 575
---------- ---------- ----------
Total equity
shareholders' funds 29,492 30,294 29,281
---------- ---------- ----------
Net asset value per
share 97.0p 97.2p 95.2p
CASH FLOW STATEMENT
(unaudited) for the six months ended 31 March 2007
Six months Six months Year ended
ended ended
31 March 2007 31 March 2006 30 September
2006
£000 £000 £000 £000 £000 £000
Net cash
inflow from
operating 462 61 525
activities
Taxation:
Corporation (105) (81) (81)
tax paid
Financial
investment:
Purchase of (6,205) (4,399) (9,740)
investments
Sale/repayment
of 5,007 2,823 9,043
investments
---------- ---------- ----------
Net cash
outflow from
financial (1,198) (1,576) (697)
investment
Equity (614) (535) (1,153)
dividends paid
---------- ---------- ----------
Net cash
outflow before (1,455) (2,131) (1,406)
financing
Financing:
Issue of 73 70 145
ordinary
shares
Share issue (1) (14) (19)
expenses
Purchase of
ordinary
shares
for (371) (324) (745)
cancellation
---------- ---------- ----------
Net cash
outflow from (299) (268) (619)
financing
---------- ---------- ----------
Decrease in (1,754) (2,399) (2,025)
cash at bank
---------- ---------- ----------
Reconciliation
of return
before tax
to net cash
flow from
operating
activities
Return on
ordinary
activities
before tax 1,168 594 1,022
Loss on
disposal of 13 185 106
investments
Unrealised
adjustments to
fair value
of investments (876) (926) (605)
Decrease in 170 137 17
debtors
(Decrease)/
increase in (13) 71 (15)
creditors
---------- ---------- ----------
Net cash
inflow from
operating 462 61 525
activities
---------- ---------- ----------
Analysis of
movement in
net funds
1 October 2006 Cash flows 31 March 2007
£000 £000 £000
Cash at bank 3,606 (1,754) 1,852
---------- ---------- ----------
INVESTMENT PORTFOLIO SUMMARY
as at 31 March 2007
Cost Valuation % of net assets
£000 £000 by valuation
Fifteen largest venture capital
investments:
John Laing Partnership 305 1,173 4.0
Product Support (Holdings) 1,000 1,000 3.4
Promanex Group Holdings 1,000 1,000 3.4
Pivotal Laboratories Holdings 679 874 3.0
Envirotec 455 841 2.9
Longhirst Group 480 736 2.5
IG Doors 500 647 2.2
Touchstone Asset Management 593 593 2.0
Crantock Bakery 442 576 1.9
KCS Global Holdings 338 496 1.7
Nightingales Holdings 992 496 1.7
Ithaca Holdings 307 489 1.6
Abermed Group 375 450 1.5
Direct Valeting 427 427 1.4
Arleigh International 210 420 1.4
---------- ---------- ----------
8,103 10,218 34.6
Other venture capital investments 5,463 5,187 17.6
---------- ---------- ----------
Total venture capital investments 13,566 15,405 52.2
Listed fixed-interest investments 12,037 11,894 40.3
---------- ---------- ----------
Total fixed asset investments 25,603 27,299 92.5
----------
Net current assets 2,193 7.5
---------- ----------
Net assets 29,492 100.0
---------- ----------
The above summary of results for the six months ended 31 March 2007 does not
constitute statutory financial statements within the meaning of Section 240 of
the Companies Act 1985 and has not been delivered to the Registrar of Companies.
The figures for the year ended 30 September 2006 have been extracted from the
financial statements for that year, which have been delivered to the Registrar
of Companies; the independent auditors' report on those financial statements
under Section 235 of the Companies Act 1985 was unqualified.
The first interim dividend of 2.0p per share for the 18 month period ending 31
March 2008 will be paid on 20 July 2007 to shareholders on the register at the
close of business on 22 June 2007.
A copy of the interim report for the six months ended 31 March 2007 is expected
to be posted to shareholders on 1 June 2007 and will be available to the public
at the registered office of the company at Northumberland House, Princess
Square, Newcastle upon Tyne NE1 8ER.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 7 hours ago Alphawave IP Group
- 8 hours ago WH Smith
- 8 hours ago Staffline Group
- 8 hours ago Manchester & London Investment Trust
- 9 hours ago Associated British Foods