Interim Results
AIM Distribution Trust PLC (The)
21 December 2004
The AIM Distribution Trust plc
Interim Statement for the six months ended 30 September 2004
CHAIRMAN'S STATEMENT
I am pleased to present the interim statement for the six months ended 30
September 2004.
The period saw a loss of momentum of the steady upward trend which had been
experienced by stock markets and, in particular, AIM for the previous 12 months.
The FTSE AIM index showed a 1.4% increase over the period, although it should
be noted that this index includes a large proportion of companies that would not
be qualifying for VCT purposes so cannot be considered a true benchmark.
Net asset value
At 30 September 2004 the NAV stood at 64.0p per share, a fall of 1.1p or 1.6%
before taking into account the dividend described below, compared to the
Company's previous year end of 31 March 2004.
VCT investments
During the period, the Company made four new investments at a total cost of
£710,000, and follow-on investments in five companies at a total cost of
£408,000.
The new investments are summarised as follows:
£'000
Fountains Plc Environment support services provider 96
Hot Group Plc Recruitment services 200
Media Square Plc Provider of marketing and media solutions 164
Supporta plc Support services for recruitment sector 250
710
The Investment Manager has made a significant number of disposals and part
disposals during the period. This is in line with the Board's decision that the
Company's exposure to the technology sector should be gradually reduced. A
number of disposals have also been made as a result of the availability of
liquidity and strong share prices. The most notable disposal was that of the
investment in Floors 2 Go plc, where the Company invested £100,000 in March 2004
and realised its investment shortly after flotation on AIM for £200,000.
Performance of the remaining portfolio has been mixed over the period. The
investment in Neutec Pharma Plc increased in value by £148,000 as a result of
reports of positive progress on its treatments for MRSA and similar infections.
The investment in Connaught Plc also increased by £82,000 as the company
continues to develop its business.
On the negative side, the investment in Atlantic Global plc fell by £324,000 and
that in Micap Plc by £99,000. Progress in both companies is satisfactory,
albeit the share prices have been subject to volatility typical of the
technology sector. Overall the venture capital portfolio reduced in value by
£199,000 over the period.
Distribution
Since its launch the Company has made a significant level of realised gains,
some of which were distributed to Shareholders by way of capital dividends.
As a result of the review and refocusing of the portfolio by the Investment
Manager, the Company now has a reasonable level of cash and fixed interest
investments and the Board has therefore decided to distribute further realised
gains to Shareholders. A capital dividend of 2p per share will be paid on 28
January 2005 to Shareholders on the register at 7 January 2005.
Assuming adequate cash resources are available, the Board now intend to maintain
an annual dividend of a minimum of 2p per share.
Repurchase of shares
The Directors are conscious that the Company's share price is affected by the
illiquidity of its shares in the market resulting from the fact that investors
purchasing 'second-hand' shares do not benefit from income tax relief on their
investment.
The Directors continue to monitor the market in the Company's shares and will
make share purchases when appropriate. During the period the Company
repurchased 145,545 shares, at an average price of 53p per share, for
cancellation.
Publication of share price
The Company's share price continues to be quoted in the Financial Times on a
daily basis in the 'Investment Companies' sector, under the abbreviation 'AIM
Dist'. The share price can also be found on various financial websites with the
TIDM/EPIC code 'AMD'.
New share issue
Following the introduction of 40% income tax relief on investments into VCTs and
the initial work carried out by Rathbones since their appointment, the Board
feels that the Company is now an attractive proposition for existing
Shareholders to add to their holding and also for new investors.
The Company is, therefore, seeking to place up to approximately 1.6 million
shares, being 10% of the existing share capital. An offer document setting out
full details will be available shortly from Downing Corporate Finance Limited,
whose address is on the reverse of this document.
To give the Company some flexibility in considering further fundraising the
Board will also be seeking to increase its authority to issue shares. A
circular will be sent to Shareholders detailing this proposal shortly.
Outlook
New flotation and secondary issues on AIM have increased strongly in number this
year. The quality of such issues has, however, been variable and the Investment
Manager has been selective in making new investments.
Towards the end of the period and since, the AIM market has started to
experience another upward trend. This should help further support the buoyant
new issues market and continue to provide the Company with a large pool of
potential investment opportunities.
Sir Aubrey Brocklebank
Chairman
UNAUDITED STATEMENT OF TOTAL RETURN
(incorporating the revenue account)
for the six months ended 30 September 2004
Six months ended
30 September 2004
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments
- Realised - 42 42
- Unrealised - (199) (199)
Income 108 - 108
108 (157) (49)
Investment management fees (14) (41) (55)
Other expenses (94) (2) (96)
Return/(loss) on ordinary - (200) (200)
activities before taxation
Taxation - - -
Return/(loss) attributable to - (200) (200)
equity shareholders
Distributions - (329) (329)
Transfer to/(from) reserves - (529) (529)
Return/(loss) per ordinary share - (1.2p) (1.2p)
Six months ended Year ended
30 September 2003 31 March
2004
Revenue Capital Total Total
£'000 £'000 £'000 £'000
Gains/(losses) on investments
- Realised - 82 82 791
- Unrealised - 3,065 3,065 2,879
Income 82 - 82 206
82 3,147 3,229 3,876
Investment management fees (22) (68) (90) (144)
Other expenses (79) - (79) (184)
Return/(loss) on ordinary activities (19) 3,079 3,060
before taxation
3,548
Taxation - - - -
Return/(loss) attributable to equity (19) 3,079 3,060 3,548
shareholders
Distributions - - - -
Transfer to/(from) reserves (19) 3,079 3,060 3,548
Return/(loss) per ordinary share (0.1p) 18.5p 18.4p 21.3p
In order to enable the Company to make capital distributions, the Company has
revoked its investment company status and is accordingly unable to take
advantage of the accounting exemptions that status permits. The results of the
Company set out below have been prepared in accordance with the requirements of
Schedule IV of the Companies Act 1985, which requires that all realised gains
and losses, including those arising from the disposal of investments, are
included in the results for the year, and the unrealised capital gains are
excluded from the profit and loss account for the year.
Return per share for the period has been calculated on 16,505,076 Ordinary
Shares, being the weighted average number of shares in issue during the period.
UNAUDITED PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2004
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 March
2004 2003 2004
£'000 £'000 £'000
Investment income 108 82 206
Investment management fees (55) (90) (144)
Other expenses (96) (79) (184)
Operating loss (43) (87) (122)
Profit on realisation of investments 42 82 791
(Loss)/profit on ordinary activities before (1) (5) 669
taxation
Tax on ordinary activities - - -
(Loss)/profit on ordinary activities after (1) (5) 669
taxation
Distributions (329) - -
Retained (loss)/profit for the year (330) (5) 669
Basic and diluted earnings per share - - 4.0p
All returns 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.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 September 2004
£'000 £'000 £'000
(Loss)/profit on ordinary activities after (1) (5) 669
taxation
Revaluation of investments (199) 3,065 2,879
Total recognised (loss)/profit for the period (200) 3,060 3,548
UNAUDITED BALANCE SHEET
as at 30 September 2004
As at As at As at
30 Sept 30 Sept 31 March
2004
2004 2003
£'000 £'000 £'000
Fixed assets
Investments 9,716 10,032 9,646
Net current assets 796 625 1,472
Net assets 10,512 10,657 11,118
Capital and reserves
Called up share capital 4,105 4,154 4,141
Capital redemption reserve 96 47 60
Special reserve 2,387 12,293 8,397
Revaluation reserve (1,726) (5,316) (2,285)
Capital reserve - realised - (638) -
Profit and loss account 5,650 117 805
10,512 10,657 11,118
Net asset value per share 64.0p 64.1p 67.1p
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 September 2004
Six months Six months Year
Note ended ended ended
30 Sept 30 Sept 31 March
2004 2003 2004
£'000 £'000 £'000
Cash outflow from operating activities and returns on
investments 1 (65) (105) (120)
Capital expenditure
Purchase of investments (2,249) (390) (1,058)
Proceeds on disposal of investments 1,902 982 2,682
Net cash (outflow)/inflow from capital expenditure (347) 592 1,624
Equity distributions paid - - -
Net cash (outflow)/inflow before financing (412) 487 1,504
Financing
Purchase of own shares (77) - (28)
Net cash outflow from financing (77) - (28)
(Decrease)/increase in cash 2 (489) 487 1,476
Notes to the cashflow statement:
1 Cash outflow from operating activities and returns on
investments
Operating loss (43) (87) (122)
Amortisation - - (3)
Decrease/(increase) in other debtors 6 (19) (22)
(Decrease)/increase in other creditors (28) 1 27
Net cash outflow from operating activities (65) (105) (120)
2 Analysis of net funds
Beginning of period 1,618 142 142
Net cash (outflow)/inflow (489) 487 1,476
End of period 1,129 629 1,618
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 September 2004
Cost Valuation % of
portfolio
£'000 £'000 by value
Top ten VCT investments
Connaught plc 187 742 7.6%
Atlantic Global plc 360 684 7.0%
Huveaux plc 330 545 5.6%
Neutec Pharma plc 294 540 5.6%
Printing.com plc 340 425 4.4%
PM Group plc 164 422 4.4%
The Medical House plc 333 378 3.9%
CRC Group plc 207 377 3.9%
XKO Group plc * 492 338 3.5%
Aero Inventory plc 196 295 3.0%
2,903 4,746 48.9%
Other VCT investments 6,970 3,345 34.4%
Listed fixed income securities and 1,569 1,625 16.7%
bonds
Total investments 11,442 9,716 100.0%
All venture capital investments are quoted on AIM unless otherwise stated.
* Quoted on the London Stock Exchange Official List
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The above financial information has been prepared on the basis of the
accounting policies set out in the Annual Report.
2. The calculation of the earnings per share for the period is based upon the
net loss after tax of £1,000 divided by the weighted average number of shares in
issue during the period of 16,505,076.
3. The unaudited financial statements set out herein do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985
and have not been delivered to the Registrar of Companies. The figures for the
year ended 31 March 2004 have been extracted from the financial statements for
that year, which have been delivered to the Registrar of Companies; the
auditors' report on those financial statements was unqualified.
4. Copies of the unaudited interim results will be sent to shareholders
shortly. Further copies can be obtained from the Company's Registered Office.
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