Half-yearly Report
TRIVEST VCT PLC
Interim Results for the six months ended 31 March 2007
Chairman's Statement
I am pleased to present the Company's Interim Results for the six months ended
31 March 2007.
Portfolio
At 31 March 2007, the Company's NAV per share was 111.73 pence (30 September
2006: 112.89 pence).
Whilst the Net Asset Value (NAV) overall has fallen marginally to 111.73 pence
over the last six months, it should be noted that positive progress in the MPEP
portfolio has been counterbalanced by a fall in the share price of several of
the quoted technology stocks within the Foresight portfolio. However these
figures are after the final dividends totalling 3.75 pence per share have been
accounted for and paid. Thus, after stripping out those dividends, the overall
net assets actually rose during the period.
The UK economy has continued to grow strongly across the board despite a
tighter monetary policy. This positive economic background has provided a good
backdrop for the majority of our investee companies, a significant number of
which are showing good progress in sales and/or profitability.
Both the FTSE 100 and AIM All-Share Indices showed strong growth over the six
month period to 31 March 2007 (despite the correction in markets in March of
this year), which has contributed to the continued activity in the M&A market
in the UK and Europe.
In the Foresight portfolio among the quoted holdings, Corero (formerly Mondas),
ANT and smartFOCUS all achieved strong trading progress. Oxonica, currently the
largest holding in the portfolio, recently reported its annual results.
Subsequently, however, the company announced that the results of a trial for
its fuel additive with Petrol Ofisi had proved inconclusive which caused
Oxonica on 27 April 2007 to request a temporary suspension of its share price
pending clarification of the position. This may impact materially upon the
valuation of this investment. The Board and Investment Manager are monitoring
this situation closely.
Overall, the MPEP portfolio has performed well with strong trading performances
being shown by some of the older investments; foremost among these are HWA,
Brookerpaks, Image Source and Original Additions, all of which have now
returned income to TriVest in excess of the original cost of investment. The
past six months has seen two companies added to the portfolio, namely, in
December 2006, £790,912 was invested into PXP Holdings, a company formed on the
£14 million management buy out ("MBO") of Pinewood Structures, a leading UK
manufacturer and supplier of timber frame components to the housebuilding
market. This was followed by a £550,852 investment in the MBO of Racoon
International, the UK's foremost supplier of hair extensions to professional
salons. Overall, the value of the MPEP portfolio has increased by a further £
2.2 million, including acquisitions of £1.3 million, since the year-end and at
31 March 2007 stands at almost £21 million, or 167% of current cost.
Within the Nova portfolio, NexxtDrive has been developing technology to
increase fuel efficiency and performance of both conventional and hybrid
vehicles. During the period TriVest made a further investment of £212,014 in
NexxtDrive as part of a £1.3 million funding round. This company is considering
an IPO. Elsewhere, Tikit, an AIM-quoted company, specialising in providing
consultancy services and software solutions to law firms, enjoyed strong
revenue growth, improved margins and increased profits. This has been reflected
in a 45.3% increase in their share price during the period. IDOX, an AIM-quoted
company providing knowledge management software and solutions to the public
sector, has reorganized itself, and has focused on account management and
pricing structures. This has been reflected in a positive start to 2007 with
the share price increasing by 34.7%.
Revenue account
For the period under review, the revenue return available for distribution to
shareholders was £283,866 (31 March 2006; £199,160). As in previous years, the
Board does not propose to declare an interim dividend but expects to be able to
propose a final dividend for the year ending 30 September 2007.
Investment company status
The Company revoked its investment company status on 30 November 2005. This
enables the Company to make distributions out of capital gains that have
started to be realised as the portfolio matures.
Share buy-backs
During the six months ended 31 March 2007, the Company bought back 300,000
Ordinary Shares (representing 0.67% of the shares in issue at the beginning of
the period) at a total cost of £249,330 (net of expenses). These shares were
subsequently cancelled by the Company.
Dividend Investment Scheme
184 Shareholders, who between them hold a total of 2,034,908 Ordinary Shares
representing 5.2% of the Company, are members of the Dividend Investment
Scheme. 68,881 shares were issued to them on 15 February 2007 in respect of the
Dividend.
Valuation policy
Quoted stocks are now valued at bid prices, rather than mid-market prices in
accordance with new accounting standards. It is worth commenting that the Fund
does hold a number of relatively early stage AIM listed stocks with limited
marketability. In such cases, the price at which a sizeable block of shares
could be traded, if at all, may vary significantly from the market price used.
TriVest website
May I remind you that the Company has its own website which is available at
www.trivestvct.co.uk.
Colin Hook
Chairman
Investment Portfolio Summary
as at 31 March 2007
Total cost at Valuation at Additional Valuation at
31 March 2007 30 September investments 31 March 2007
2006 in the period (unaudited)
(audited)
£ £ £ £
Foresight Venture
Partners
Oxonica plc 2,136,763 7,245,512 - 6,083,892
Specialist in the
design, manipulation
and engineering of
properties of
materials at the
nano-scale
Aquasium Technology 700,000 1,059,610 - 1,581,176
Limited
Design, manufacture
and marketing of
bespoke electron beam
welding and vacuum
furnace equipment
smartFOCUS Group plc 366,667 1,856,969 - 1,375,504
Provider of analytic
software to support
targeting and
execution of marketing
campaigns
Camwood Limited 1,028,181 1,669,520 - 1,028,181
Provider of software
repackaging services
Alaric Systems Limited 595,803 595,763 - 595,763
Software development,
implementation and
support in the credit/
debit card
authorisation and
payments market
Sarantel Group plc 1,670,252 798,621 - 587,221
Antennae for mobile
phones and other
wireless devices
Corero plc (formerly 600,000 238,255 - 524,327
Mondas plc)
Specialist provider of
software solutions to
the banking and
securities and
education markets
Aigis Blast Protection 272,120 333,320 - 333,320
Limited
Specialist blast
containment materials
company
DCG Datapoint Group 312,074 311,853 - 311,853
Limited
Design, supply and
integration of data
storage solutions
ANT plc 462,816 393,958 - 262,638
Provider of embedded
browser/email software
for consumer
electronics and
internet appliances
Rapide Communications 379,983 66,667 - 40,000
Limited
Mobile phone software
company
Other investments in 339,285 - - -
the portfolio *
--------------- --------------- --------------- ---------------
8,863,944 14,570,048 - 12,723,875
--------------- --------------- --------------- ---------------
Matrix Private Equity
Partners LLP
HWA Limited (trading 69,105 3,348,323 - 4,140,454
as Holloway White
Allom)
Specialist contractor
in the high-value
residential and
heritage property
refurbishment market
Image Source Group 1,000,000 3,232,667 - 3,525,992
Limited
Royalty free picture
library
Youngman Group Limited 1,000,052 2,368,418 52 2,768,443
Manufacturer of
ladders and access
towers
Original Additions 1,000,000 3,127,944 - 2,714,557
(Beauty Products)
Limited
Manufacturer and
distributor of beauty
products
BBI Holdings plc 496,119 1,227,231 - 1,337,958
Manufacturer of gold
conjugate for the
medical diagnostics
industry
Tottel Publishing 514,800 759,048 - 829,207
Limited
Specialist law and tax
imprint
PXP Holdings Limited 790,912 - 790,912 790,912
(Pinewood Structures)
Designer, manufacturer
and supplier of timber
frames for buildings
Ministry of Cake 721,280 556,169 - 760,428
(Holdings) Limited
Manufacturer of
desserts and cakes for
the food service
industry
Racoon International 550,852 - 550,852 550,852
Holdings Limited
(formerly Castlegate
435 Limited)
Supplier of hair
extensions, hair care
products and training
British International 500,000 500,000 500,000
Holdings Limited
Helicopter service
operator
Brookerpaks Limited 55,000 621,555 - 426,317
Importer and
distributor of garlic
and vacuum-packed
vegetables
VSI Limited 388,853 388,842 11 388,853
Provider of software
for CAD and CAM
vendors
Blaze Signs Holdings 360,969 360,969 360,969
Limited
Manufacturer and
installer of signs
Campden Media Limited 334,880 334,880 - 344,124
Magazine publisher and
conference organiser
Pastaking Holdings 292,405 292,405 292,405
Limited
Manufacturer and
supplier of fresh
pasta meals
B G Consulting Group 1,153,976 128,344 - 273,128
Limited/Duncary 4
Limited
Technical training
business and
outplacement careers
consultancy
Vectair Holdings 215,914 215,914 - 222,080
Limited
Provider of air care
and sanitary washroom
products
SectorGuard plc 150,000 150,000 - 150,000
Provision of manned
guarding, mobile
patrolling, and alarm
response services
Letraset Limited 650,000 622,737 - 102,691
Manufacturer and
distributor of graphic
art products
Inca Interiors Limited 350,000 50,000 - 50,000
Supplier of quality
kitchens to house
developers
Other investments in 1,719,785 - - -
the portfolio *
--------------- --------------- --------------- ---------------
12,314,902 18,285,446 1,341,827 20,529,370
--------------- --------------- --------------- ---------------
Nova Capital
Management Limited
Tikit Group plc 500,000 960,868 - 1,421,737
Provider of
consultancy services
and software solutions
for law firms
Biomer Technology 137,170 753,837 - 753,837
Limited
Developer of
biomaterials for
medical devices
NexxtDrive Limited 812,014 468,750 212,014 738,264
Developer of patented
transmission
technology
IDOX plc 737,625 366,083 - 509,333
Developer of products
for document, content
and information
management
--------------- --------------- --------------- ---------------
2,186,809 2,549,538 212,014 3,423,171
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
TOTAL 23,365,655 35,405,032 1,553,841 36,676,416
========= ========= ========= =========
* 'Other investments in the portfolio' comprises those investments that have
been valued at nil and from which the Directors only expect to receive small
recoveries: Monactive Limited in the Foresight portfolio and F H Ingredients
Limited, The Hunter Rubber Company Limited and Stortext-FM Limited in the MPEP
portfolio.
Investment Managers' Review
Foresight Venture Partners (Foresight)
During the period markets generally experienced benign trading conditions with
particular benefit to mid and large cap stocks. Technology stocks, however,
continued to remain out of favour and the Company's quoted technology
investments suffered accordingly with several companies dropping in value
during the period, often despite good underlying progress.
Among the portfolio's quoted holdings, Oxonica, Corero (formerly Mondas), ANT
and smartFOCUS achieved strong trading progress.
Oxonica, currently the largest holding in the portfolio, recently reported its
annual results which showed an eightfold increase in sales to £10.2 million and
reduced operating losses to £3,245,000 (2005: £4,504,000) and were in line with
market expectations for the year ended 31 December 2006. Revenue and cash flow
were positively impacted by the Petrol Ofisi and Becton Dickinson contract wins
in the second half of the year and, as a result, the company's year end cash
position was ahead of expectations. More recently, however, the share price has
eased following an announcement that the results of a trial for its fuel
additive with Petrol Ofisi at the second data point had proved inconclusive.
This has since led to the temporary suspension of the share price until the
position of the company has been determined.
Corero recently announced that it had made strong progress for the year ended
31 December 2006, achieving record revenues and profits. The Blue Curve
division (formerly a Foresight portfolio company) had a particularly successful
year, more than doubling its revenues compared to 2005. Significant licence
revenues have been derived both from existing customers, and from new clients
added during the year. The company produced operating profits of approximately
£400,000 on revenues of approximately £6.3 million in the year ended 31
December 2006, which is a turnaround of just under £1.2 million from the £
770,000 operating loss incurred in the previous year. It also reported that all
business units were profitable. Corero has also substantially improved its
working capital position and operating cashflow is positive, putting it in an
excellent position to take advantage of the momentum built during the year and
the opportunities that have been created across all its business units.
ANT increased revenues by 48% to £3.7 million, reduced operating losses to £1.4
million (2005: £2.2 million) and announced an important new relationship with
Scientific Atlanta. SmartFOCUS recently announced strong revenue growth for
2006 with an increase of approximately 52% compared to 2005. It made a profit
of £918,000 in 2006 compared to a loss of £19,000 in 2005. SmartFOCUS repaid
its £333,333 loan to TriVest during the period under review.
Sarantel, although achieving a 43% increase in sales to £4.0m for the year to
30 September 2006, saw flat sales in the second half of that year and incurred
increased losses of £6.1 million from £5.3 million a year earlier. The company
is winning new orders but at a slower rate than originally envisaged.
Within the unquoted portfolio, the most significant movements were an increase
in the valuation of Aquasium Technology (£521,566) which continues to be
profitable and benefited from an increase in the price-earning sector multiple
of engineering companies and a decrease in the valuation of Camwood (£641,339).
Camwood's profits declined as it continued to invest in its new product
offerings. Following the recent release of Microsoft Vista, the company expects
an increase in demand for its products and services in 2007/8.
Matrix Private Equity Partners LLP (MPEP)
In the six months to 31 March 2007 MPEP added two new investments to the
portfolio. In December, £791k was invested into PXP Holdings, a company formed
on the £14 million management buy out ("MBO") of Pinewood Structures, a leading
UK manufacturer and supplier of timber frame components to the housebuilding
market. This was closely followed by a £551k investment in the MBO of Racoon
International, the UK's foremost supplier of hair extensions to professional
salons.
The creation of value within the portfolio is very encouraging. The older
investments have continued to show strong trading performance; foremost among
these are HWA, Brookerpaks, Image Source and Original Additions, all of which
have now returned income to TriVest in excess of the original cost of
investment.
In October, Brookerpaks repaid a total of £512k, comprising TriVest's loan
stock together with a repayment premium. In early April after the period end,
Image Source repaid TriVest's loan investment, together with a premium,
totalling £834k. This was closely followed by Original Additions re-structuring
its capital in a £12 million transaction which returned £1.7 million to TriVest
in dividends and capital against its investment cost of £1 million; TriVest
continues to retain its 11% equity stake in the company.
In all of these investments TriVest now holds valuable minority shareholdings
at low residual cost. In total, these three transactions have returned income
of almost £890k above cost to TriVest.
Also pleasing has been the early trading performance of TriVest's more recent
investments, with a number, including Youngman, PastaKing, Blaze Signs and
Vectair, exceeding profitability anticipated at the time of investment. The
only disappointment has been the investment in FH Ingredients, where poor
implementation of a major capital expenditure programme soon after the
investment led to cash pressures and efforts to re-finance the company have
proved unsuccessful; its operating subsidiary entered into administration on 26
January 2007. Full provision had already been made against this £403k
investment.
The MPEP portfolio now comprises investments in 23 companies, almost all of
which are MBOs. The value of the portfolio has increased by a further £2.2
million, including new acquisitions of £1.3 million, since the year end and at
31 March 2007 stands at almost £21 million, or 167% of current cost (31 March
2006: 159%).
Nova Capital Management Limited (Nova)
There are four investments in the portfolio as at 31 March 2007. No investments
were made into any new companies in the period under review. The emphasis of
Nova's work has been on value improvement within the existing financial
resources of each company unless there is clear evidence that new investment
will make a significant difference.
Tikit, an AIM quoted company, specialising in providing consultancy services
and software solutions to law firms, performed well in 2006, consolidating on
the acquisitions it made in 2004 and 2005. It enjoyed strong revenue growth,
improved margins and increased profits. This has been reflected in a 62%
increase in their share price during the period. We remain optimistic about its
long term prospects.
IDOX, an AIM quoted company providing knowledge management software and
solutions to the public sector also enjoyed some improvement following a
disappointing prior period. The company has reorganized itself, and has focused
on account management and pricing structures. This has been reflected in a
positive start to 2007. The share price has increased by 27%, although this
continues to be below the level of TriVest's initial investment.
Biomer is a company concerned with the development of novel polymers for
product applications in cardiovascular and other interventional medical
devices. The company has signed a worldwide licence agreement for nitinol stent
coatings with Memry Corporation, which represents an important landmark in the
company's development.
NexxtDrive is developing technology which will increase fuel efficiency and
performance of both conventional and hybrid vehicles. During the period TriVest
made a further investment of £212,014 in NexxtDrive as part of a £1.3 million
funding round. At the period end, TriVest's total holding was valued at £
738,264 which includes £325,000 of convertible loan. NexxtDrive is currently
considering an IPO on the AIM market, subject to market conditions for a
company at its current stage of development.
Unaudited Profit and Loss Account
for the six months ended 31 March 2007
Six months ended 31 March 2007
(unaudited)
Revenue Capital Total
£ £ £
Unrealised gains/(losses) on - 752,297 752,297
investments
Net gains/(losses) on realisation - 160,181 160,181
of investments
Income 703,103 - 703,103
Investment management fees (114,298) (342,892) (457,190)
Other expenses (228,203) - (228,203)
-------------- -------------- --------------
Profit/(loss) before taxation 360,602 569,586 930,188
Tax on ordinary activities (76,736) 76,736 -
-------------- -------------- --------------
Profit/(loss) for the financial 283,866 646,322 930,188
period
-------------- -------------- --------------
Basic and diluted earnings per 2.38p
share:
All the items in the above
statement derive from continuing
operations.
There were no other recognised
gains or losses in the period.
Six months ended 31 March 2006
(unaudited)
Revenue Capital Total
£ £ £
Unrealised gains/(losses) on - (893,173) (893,173)
investments
Net gains/(losses) on realisation - (19,022) (19,022)
of investments
Income 596,717 - 596,717
Investment management fees (119,952) (359,854) (479,806)
Other expenses (216,430) - (216,430)
-------------- -------------- --------------
Profit/(loss) before taxation 260,335 (1,272,049) (1,011,714)
Tax on ordinary activities (61,175) 61,175 -
-------------- -------------- --------------
Profit/(loss) for the financial 199,160 (1,210,874) (1,011,714)
period
-------------- -------------- --------------
Basic and diluted earnings per (2.50)p
share:
Year ended 30 September 2006
(audited)
Revenue Capital Total
£ £ £
Unrealised gains/(losses) on (4,074,141) (4,074,141)
investments
Net gains/(losses) on realisation - 1,556,784 1,556,784
of investments
Income 1,135,895 - 1,135,895
Investment management fees (233,097) (699,292) (932,389)
Other expenses (458,520) - (458,520)
-------------- -------------- --------------
Profit/(loss) before taxation 444,278 (3,216,649) (2,772,371)
Tax on ordinary activities (101,347) 101,347 -
-------------- -------------- --------------
Profit/(loss) for the financial 342,931 (3,115,302) (2,772,371)
period
-------------- -------------- --------------
Basic and diluted earnings per (6.98)p
share:
Unaudited Note of Historical Cost Profits and Losses
For the six months ended 31 March 2007
.
Six months Six months Year ended
ended ended
30 September
31 March 2007 31 March 2006 2006
(unaudited) (unaudited) (audited)
£ £ £
Profit/(loss) on ordinary 930,188 (1,011,714) (2,772,371)
activities before taxation
(Less)/add unrealised (gains)/ (752,297) 893,173 4,074,141
losses on investments
(Less)/add realisation of (93,579) (4,417,530) (4,059,632)
revaluation (losses)/gains of
previous years
-------------- -------------- --------------
Historical cost profit/(loss) on 84,312 (4,536,071) (2,757,862)
ordinary activities before
taxation
========= ========= =========
Historical cost (loss)/profit for (1,382,310) (5,779,578) (4,062,494)
the period after taxation and
dividends
========= ========= =========
Unaudited Balance Sheet
as at 31 March 2007
31 March 2007 31 March 2006 30 September
2006
(unaudited) (unaudited) (audited )
£ £ £
Non current assets
Investments 36,676,416 39,574,724 35,405,032
--------------- --------------- ---------------
Current assets
Debtors and prepayments 920,424 1,235,863 936,772
Investments at fair value 6,041,018 5,601,089 5,969,440
Cash at bank 53,516 48,838 2,027,094
--------------- --------------- ---------------
7,014,958 6,885,790 8,933,306
Creditors: amounts falling due (251,808) (95,030) (188,060)
within one year
--------------- --------------- ---------------
Net current assets 6,763,150 6,790,760 8,745,246
--------------- --------------- ---------------
Net assets 43,439,566 46,365,484 44,150,278
--------------- --------------- ---------------
Capital and reserves
Called up share capital 388,788 396,099 391,099
Share premium account 136,594 60,973 60,974
Capital redemption reserve 30,441 22,441 27,441
Special reserve 24,509,138 26,756,241 25,025,881
Revaluation reserve 13,464,704 16,140,070 12,618,828
Profit and loss account 4,909,901 2,989,660 6,026,055
--------------- --------------- ---------------
Equity shareholders' funds 43,439,566 46,365,484 44,150,278
--------------- --------------- ---------------
Net asset value per share 111.73p 117.06p 112.89p
Unaudited Cash flow Statement
For the six months ended 31 March 2007
Six months ended Six months Year ended
ended
31 March 2007 31 March 2006 30 September
2006
(unaudited) (unaudited) (audited)
£ £ £
Operating activities
Net revenue on activities before 360,602 260,335 444,278
taxation
Capitalised fees (342,892) (359,854) (699,292)
Transaction costs (148) (17,524) (27,071)
(Increase)/decrease in debtors 16,348 (115,721) (151,700)
(Decrease)/increase in creditors 63,748 (99,308) (6,278)
--------------- --------------- ---------------
Net cash inflow/(outflow) from 97,658 (332,072) (440,063)
operating activities
Equity dividends paid (1,466,622) (1,243,507) (1,304,632)
Tax Refund
Taxation paid
Acquisitions of investments (1,553,841) (1,492,138) (2,410,773)
Disposals of investments 1,195,083 29,552 3,857,334
Management of liquid resources (71,578) 744,784 376,433
Financing (174,278) (584,014) (977,438)
--------------- --------------- ---------------
Decrease in cash for the period (1,973,578) (2,877,395) (899,139)
--------------- --------------- ---------------
Reconciliation of net cash flow to
movement in net debt
Decrease in cash for the period (1,973,578) (2,877,395) (899,139)
Net funds at the start of the 2,027,094 2,926,233 2,926,233
period
--------------- --------------- ---------------
Net funds at the end of the period 53,516 48,838 2,027,094
--------------- --------------- ---------------
Unaudited reconciliation of Movements in Shareholders' Funds
for the six months ended 31 March 2007
Six months Six months Year ended
ended ended
30 September
31 March 2007 31 March 2006 2006
(unaudited) (unaudited) (audited)
£ £ £
Opening shareholders' funds 44,150,278 49,386,890 49,386,890
Restated for application of new - (182,171) (182,171)
accounting policies
--------------- --------------- ---------------
At 1 October 2006 44,150,278 49,204,719 49,204,719
--------------- --------------- ---------------
Net share capital bought back / (174,278) (584,014) (977,438)
subscribed for in the period
Profit/(loss) for the period 930,188 (1,011,714) (2,772,371)
Dividends paid in period (1,466,622) (1,243,507) (1,304,632)
--------------- --------------- ---------------
Closing Shareholders' funds 43,439,566 46,365,484 44,150,278
--------------- --------------- ---------------
NOTES
1. The accounts have been prepared under the historical cost convention,
modified to include the revaluation of investments, and in accordance with
the Companies Act 1985, with applicable accounting standards in the United
Kingdom and with the Statement of Recommended Practice, `Financial
Statements of Investment Trust Companies', revised December 2005.
2. Investments are stated at "fair value through profit and loss", in
accordance with the International Private Equity and Venture Capital
Valuation ("IPEVCV") guidelines. Purchase and sales of quoted investments
are recognised on the trade date where a contract of sale exists whose
terms require delivery within a time frame determined by the relevant
market. Purchases and sales of unlisted investments are recognised when the
contract for acquisition or sale becomes unconditional.
The fair value of quoted investments is the bid price of those investments at
the close of business on 31 March 2007.
Unquoted investments are stated at fair value by the Directors in accordance
with the following rules, which are consistent with the IPEVCV guidelines:
i. Investments which have been made in the last 12 months are at fair value
which, unless another methodology gives a better indication of fair value,
will be at cost;
ii. Investments in companies at an early stage of their development are valued
at fair value which, unless another methodology gives a better indication
of fair value, will be cost;
iii. Where investments have been held for more than 12 months or have gone
beyond the stage in their development in (i) or (ii) above, the shares may
be valued by applying a suitable price-earnings ratio to that company's
historic, current or forecast earnings (the ratio used being based on a
comparable listed company or sector but the resulting value being
discounted to reflect lack of marketability). Where overriding factors
apply, alternative methods of valuation will be used. These will include
the application of a material arms-length transaction by an independent
third party, discounted cash flow, or a net asset basis;
iv. Where a value is indicated by a material arms-length transaction by a third
party in the shares of a company, this value will be used;
v. Where fair value cannot be reliably measured under paragraphs (i)-(iv)
above, an investment is held at the most recent carrying value, reduced
where there is evidence of impairment by the estimated extent of
impairment.
Capital gains and losses on investments, whether realised or unrealised are
shown in the Profit and Loss Account.
Although the Company holds more than 20% of the equity of certain companies, it
is considered that the investments are held as part of an investment portfolio.
Accordingly, and as permitted by FRS 9 `Associate and Joint Ventures', their
value to the Company lies in their marketable value as part of that portfolio.
It is not considered that any of our holdings represents investments in
associated companies.
3. In accordance with the policy statement published under "Management and
Administration" in the Company's prospectus dated 13 October 2000, the
Directors have charged 75% of the investment management expenses to the
capital reserve.
4. All revenue and capital items in the above Profit and Loss account derive
from continuing operations
5. Earnings for the six months ended 31 March 2007 should not be taken as a
guide to the results for the full year.
6. Earnings and return per share
Six months Six months ended Year ended
ended
31 March 2006 30 September 2006
31 March 2007
£ £ £
Total earnings after 930,188 (1,011,714) (2,772,371)
taxation:
Basic earnings per share 2.38 (2.50) (6.98)
--------------- --------------- ---------------
Net revenue from ordinary
activities
before taxation 283,866 199,160 342,931
Revenue return per share 0.73 0.49 0.86
--------------- --------------- ---------------
Net unrealised capital 752,297 (893,173) (4,074,141)
gains/(losses)
Net realised capital 160,181 (19,022) 1,556,784
gains/(losses)
Capital expenses (266,156) (298,679) (597,945)
--------------- --------------- ---------------
Total capital return 646,322 (1,210,874) (3,115,302)
Capital return per share 1.65 (2.99) (7.84)
--------------- --------------- ---------------
Weighted average number 39,081,898 40,522,780 39,694,960
of shares in issue in the
period
7. Net asset value per Ordinary Share is based on net assets at the end of the
period, and on 38,878,803 (31 March 2006: 39,609,922, 30 September 2006:
39,109,922) Ordinary shares, being the number of Ordinary shares in issue
on that date.
8. The information for the year ended 31 March 2007 does not comprise full
financial statements within the meaning of Section 240 of the Companies Act
1985. The financial statements for the year ended 30 September 2006 have
been filed with the Registrar of Companies. The auditors have reported on
these financial statements and that report was unqualified and did not
contain a statement under Section 237(2) of the Companies Act 1985.
9. Copies of the Interim Report to Shareholders for the six months ended 31
March 2007 will be sent to all Shareholders shortly. Further copies will be
available free of charge from the Company's registered office, One Jermyn
Street, London SW1Y 4UH.
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