Interim Results
T&G AIM VCT PLC
09 September 2004
T&G AIM VCT plc
UNAUDITED INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2004
FINANCIAL HIGHLIGHTS
• Net asset value per ordinary share decreased by 10.4 per cent to 86.9p from
97.0p.
• As at 30 June 2004 £1,441,776 of the ordinary share funds had been invested
in 11 qualifying investments. Together with four new further investments
made since the end of June, the proportion of the VCT's Ordinary Share net
assets now invested in qualifying equities amounted to approximately 70 per
cent. We are confident that the key compliance test for VCTs set out in
Taxes Act 1988 s842AA, that at least 70 per cent by value of the Company's
investments is represented by shares or securities comprising qualifying
holdings within three years of the VCT's inception i.e. 31 December 2004
and thereafter, will be met.
• NAV per C share decreased by 3.7 per cent to 91.8p from 95.3p.
• £217,457 of the C share funds have been invested in eight qualifying
companies, a seven fold increase in the last six months.
PERFORMANCE SUMMARY
________________________________________________________________________________________________________________
30 June 31 December
2004 2003 % change
________________________________________________________________________________________________________________
Ordinary shares
Amount invested in qualifying investments (cost) (£'000) 1,442 583 147.3
Net asset value per share 86.9p 97.0p (10.4)
Share price (mid price) 77.5p 77.5p -
(Discount)/premium to net asset value (%) (10.8) (20.1) -
________________________________________________________________________________________________________________
Net assets (£'000) 2,480 2,768 (10.4)
________________________________________________________________________________________________________________
C Shares
Amount invested in qualifying investments (cost) (£'000) 217 27 706.6
Net asset value per share 91.8p 95.3p (3.7)
Share price (mid price) 100.0p 100.0p -
Premium/(Discount) (%) 8.2 4.7 -
________________________________________________________________________________________________________________
Net assets (£'000) 582 555 4.9
________________________________________________________________________________________________________________
Six months Six months
ended ended
30 June 2004 30 June 2003
________________________________________________________________________________________________________________
Total (loss)/return per share
Ordinary shares (10.1)p (0.4)p
C Shares (3.6)p 1.5p
________________________________________________________________________________________________________________
Net asset value
The net asset value (NAV) per ordinary share as at 30 June 2004 was 86.9p. This
represents a decrease of 10.4 per cent from 97.0p as at 31 December 2003. This
decrease in NAV is due to a number of shareholdings falling in value,
principally Monstermob, Immedia and Micap. In addition, the non qualifying
investment portfolio (cash and bonds), has suffered against a background of
rising interest rates.
The net asset value (NAV) per C Share as at 30 June 2004 was 91.8p. This
represents a decrease of 3.7 per cent from 95.3p as at 31 December 2003. This
decrease in NAV is mainly due again to share price falls in Monstermob and
Immedia.
CHAIRMAN'S STATEMENT
Investments
In the six months to 30 June 2004, the Company made five new qualifying
investments at a cost of £943,617 and a further investment in Cytomyx of
£135,000, representing 65.0 per cent on a cost basis of the Company's enlarged
qualifying investment portfolio.
The total amount invested in qualifying investments at the end of the period was
approximately £1,659,223. A list of these qualifying investments is given on
page 9. The investments were valued at £1,463,541 at the end of the period, an
unrealised loss of £195,682.
The C share pool represented approximately 13.1 per cent on a cost basis of
these qualifying investments.
Results and dividends
Gross revenue and profit after tax for the period was £56,897 and £15,173
respectively for the Ordinary shares. The C share pool had a gross revenue and
loss after tax for the period of £8,551 and £163 respectively.
The Board's policy is to pay out as high a level of dividends as is possible.
However, no interim dividend is proposed at this stage as there are no
distributable reserves available.
Outlook
Since 30 June 2004, the Company has made four further qualifying investments in
Fountains Plc, TRL Electronic Plc, Smallbone Plc and Business Direct Group Plc
respectively, totalling £477,500. A number of other opportunities, either new
issues or additional share placings by existing AIM companies, are currently
under review.
The Investment Manager continues to adopt a selective investment approach
focusing upon established, potentially cash generative businesses with proven
operational and financial controls and experienced and incentivised management
teams.
Taking into account the four new investments made since the end of June, the
Company's Ordinary Share net assets are now approximately 70 per cent invested
in qualifying securities, on the verge of achieving the VCT rule that at least
70 per cent by value of investments is represented by shares or securities
consisting of qualifying holdings before the three-year deadline of 31 December
2004.
The C Shares are now approximately 50 per cent invested.
The Board is confident that over the autumn the Investment Manager will identify
sufficient qualifying investments to bring the percentage of the Ordinary Share
net assets invested in qualifying holdings to approximately 75%, as indicated in
the Prospectus and further invest the C Share net proceeds towards the 70 per
cent level requirement.
A. Wiegman
Chairman
8 September 2004
INVESTMENT MANAGER'S REPORT
Ordinary Share pool of capital
By the end of June 2004, the Company had invested £1,275,766 in ten AIM
qualifying holdings and £166,000 in one OFEX qualifying holding, Sprue Aegis,
amounting to a total of £1,441,766 or 53.1 per cent of Ordinary Share net
assets. This compares with 21 per cent of total net assets invested in six AIM
qualifying shares by the end of December 2003. An additional investment was
made in an existing holding, Cytomyx Holdings, through a placing.
Investments in preference shares, gilt-edged securities and a European
Investment Bank bond amounted to £1,148,632, or 42.3 per cent of Ordinary Share
net assets (31 December 2003: 61.9 per cent). The reduction in both absolute
and percentage terms was due to some of these holdings being realised to provide
funds to invest in qualifying share investments and because of the Investment
Manager's concern over general UK interest rate rises. As a result, no new
investments in fixed interest securities were made during the period under
review.
'C' Share pool of capital
By the end of June 2004, the Company had invested £183,547 in seven AIM
qualifying shares and £34,000 in one OFEX qualifying share, Sprue Aegis,
amounting to a total of £217,547 or 36.3 per cent of the 'C' Share net assets,
compared with 4.9 per cent by the end of December 2003.
New Investments
New investments made to both classes of share were Sprue Aegis, a manufacturer
of domestic smoke alarm products, sold internationally; Capcon Holdings, a
security, investigations and stocktaking audit company; AttentiV Systems Group,
a provider of software to financial firms, building societies in particular;
Wyatt Group, an on-line publisher and provider of health and safety advice and
assessment to principally small companies; and Brady, a commodity related
software provider and installer.
Performance
Fixed interest securities were slightly affected by the increase in UK base rate
to 4.5 per cent during the period under review. Existing share holdings were
affected by the profit warnings of Lloyds British Testing and Monstermob
(although a partial profit taking was made in the latter prior to the warning),
delays on order news from Micap and Smart Approach, as well as general modest
weakness in the smaller companies market at the end of the period. AttentiV has
traded well since its first set of reported results as a listed company, which
were very satisfactory.
Outlook
Since the end of June 2004, four further investments in AIM qualifying shares
have been made with respect to both classes of shares. These are Fountains, a
forestry and environmental services group, Smallbone, a manufacturer, designer
and display retailer of luxury kitchens and supplier of stone floors in the UK
and the USA, TRL Electronics, a satellite interception, security and
surveillance equipment group, and Business Direct Group, a designer and
developer of intelligent outdoor locker distribution systems.
These four new investments have brought the percentage of Ordinary Share net
assets invested in qualifying securities to approximately 70 per cent, in line
with the Taxes Act 70 per cent qualifying holding threshold.
New issue activity continues to look reasonably promising, although as always
selectivity will be critical. Corporate takeovers amongst UK smaller companies
are essential if liquidity for new company investment is to be maintained.
Interest rates now appear to be on an upward trend in both the US and the UK,
although, in the absence of further increases in fuel and house prices, pressure
on interest rates and inflation should remain at modest levels.
J. Sweet
Teather & Greenwood Investment Management
8 September 2004
STATEMENT OF TOTAL RETURN (incorporating the revenue account) unaudited)
For the six months ended 30 June 2004
Ordinary Shares C Shares Total
________________________ ______________________ _________________________
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
Income 2 57 - 57 8 - 8 65 - 65
Profit on realisation of
investments - (5) (5) - 2 2 - (3) (3)
Unrealised (decrease)/increase in
value of investments - (296) (296) - (23) (23) - (319) (319)
Investment management fees (1) (2) (3) - (1) (1) (1) (3) (4)
Other expenses (41) - (41) (8) - (8) (49) - (49)
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 15 (303) (288) - (22) (22) 15 (325) (310)
Tax on ordinary activities - - - - - - - - -
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES AFTER TAXATION 15 (303) (288) - (22) (22) 15 (325) (310)
Dividends in respect of equity
shares - - - - - - - - -
______________________________________________________________________________________________________________________
Retained gain/(loss) transferred to/
(from) reserves 15 (303) (288) - (22) (22) 15 (325) (310)
______________________________________________________________________________________________________________________
RETURN/(LOSS) PER ORDINARY/
C SHARE 3 0.5p (10.6)p (10.1)p - (3.6)p(3.6)p 0.4p (9.4)p (9.0)p
______________________________________________________________________________________________________________________
STATEMENT OF TOTAL RETURN (incorporating the revenue account) (unaudited)
For the six months ended 30 June 2003
Ordinary Shares C Shares Total
________________________ ______________________ ______________________
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
Income 2 54 - 54 3 - 3 57 - 57
Unrealised (decrease)/increase in
value of investments - (19) (19) - - - - (19) (19)
Investment management fees - (1) (1) - - - - (1) (1)
Other expenses (45) - (45) - - - (45) - (45)
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION 9 (20) (11) 3 - 3 12 (20) (8)
Tax on ordinary activities - - - - - - - - -
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
AFTER TAXATION 9 (20) (11) 3 - 3 12 (20) (8)
Dividends in respect of equity
shares - - - - - - - - -
______________________________________________________________________________________________________________________
Retained gain/(loss) transferred to/
(from) reserves 9 (20) (11) 3 - 3 12 (20) (8)
______________________________________________________________________________________________________________________
RETURN/(LOSS) PER ORDINARY/
C SHARE 3 0.3p (0.7)p (0.4)p 1.5p 1.5p 0.4p (0.6)p (0.2)p
______________________________________________________________________________________________________________________
The amounts dealt with in the statement of total return are all derived from
continuing activities.
The revenue columns of this statement are the profit and loss account of the
Company.
The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
No operations were acquired or discontinued in the period.
The notes on pages 8 and 9 form part of these financial statements.
STATEMENT OF TOTAL RETURN (incorporating the revenue account (audited)
For the year ended 31 December 2003
Ordinary Shares C Shares Total
_____________________________ _________________________ _____________________________
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
Income 2 119 - 119 9 - 9 128 - 128
Unrealised (decrease)/
increase in value of
investments - (15) (15) - 1 1 - (14) (14)
Investment management
fees (1) (2) (3) - (1) (1) (1) (3) (4)
Other expenses (97) - (97) (4) - (4) (101) - (101)
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES
BEFORE TAXATION 21 (17) 4 5 - 5 26 (17) 9
Tax on ordinary
activities - - - - - - - - -
______________________________________________________________________________________________________________________
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES
AFTER TAXATION 21 (17) 4 5 - 5 26 (17) 9
Dividends in respect
of equity shares - - - - - - - - -
______________________________________________________________________________________________________________________
Retained gain/(loss)
transferred to/(from)
reserves 21 (17) 4 5 - 5 26 (17) 9
______________________________________________________________________________________________________________________
RETURN/(LOSS) PER
ORDINARY/
C SHARE 3 0.7p (0.6)p 0.1p 1.1p 0.1p 1.2p 0.8 (0.5) 0.3
______________________________________________________________________________________________________________________
The amounts dealt with in the statement of total return are all derived from
continuing activities.
The revenue columns of this statement are the profit and loss account of the
Company.
The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
No operations were acquired or discontinued in the period.
The notes on pages 8 and 9 form part of these financial statements.
UNAUDITED BALANCE SHEET
AS AT 30 JUNE 2004
As at 30 June 2004 As at 30 June 2003 Year to 31 December 2003*
_____________________________ _________________________ _____________________________
Notes Ordinary C Ordinary C Ordinary C
Shares Shares Total Shares Shares Total Shares Shares Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
FIXED ASSETS
Investments 4 2,364 195 2,559 2,067 - 2,067 2,325 28 2,353
_____________________________________________________________________________________________________________________
CURRENT ASSETS
Debtors and prepayments 19 4 23 9 31 40 20 20 40
Cash at bank 126 389 515 701 417 1,118 462 511 973
______________________________________________________________________________________________________________________
145 393 538 710 448 1,158 482 531 1,013
CREDITORS: amounts falling
due within one year (29) (6) (35) (17) (24) (41) (39) (4) (43)
______________________________________________________________________________________________________________________
NET CURRENT ASSETS 116 387 503 693 424 1,117 443 527 970
______________________________________________________________________________________________________________________
NET ASSETS 2,480 582 3,062 2,760 424 3,184 2,768 555 3,323
______________________________________________________________________________________________________________________
CAPITAL AND RESERVES
Called up equity share 29 6 35 29 5 34 29 6 35
capital
Capital redemption reserve+ - - - - - - - - -
Special distributable reserve 2,685 544 3,229 - - - 2,685 544 3,229
Share premium account - 49 49 2,692 416 3,108 - - -
Realised capital reserve (9) 1 (8) (3) - (3) (4) (1) (5)
Unrealised capital reserve (229) (23) (252) 65 - 65 69 1 70
Revenue reserve 4 5 9 (23) 3 (20) (11) 5 (6)
_____________________________________________________________________________________________________________________
EQUITY SHAREHOLDERS' FUNDS 2,480 582 3,062 2,760 424 3,184 2,768 555 3,323
______________________________________________________________________________________________________________________
As at 30 June 2004 As at 30 June 2003 Year to 31 December 2003*
___________________ __________________ _________________________
Ordinary Ordinary Ordinary
Shares C Shares Shares C Shares Shares C Shares
£'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
NET ASSET PER SHARE 86.9p 91.8p 96.4p 95.2p 97.0p 95.3p
Number of Ordinary Shares in issue 2,854,979 2,863,979 2,854,979
at balance sheet date
______________________________________________________________________________________________________________________
Number of C Shares in issue at
balance sheet date 634,250 445,170 581,600
______________________________________________________________________________________________________________________
+ The capital redemption reserve has a credit of £90 as a result of the
redemption of 9,000 ordinary shares.
• These figures are audited
SUMMARISED UNAUDITED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2004
Six months to 30 June 2004 Six months to 30 June 2003 Year to 31 December 2003*
__________________________ ___________________________ _________________________
Ordinary C Ordinary C Ordinary C
Shares Shares Total Shares Shares Total Shares Shares Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
___________________________________________________________________________________________________________________
Operating activities
Investment income received 49 1 50 31 - 31 94 - 94
Deposit interest received 4 7 11 15 - 15 22 8 30
Investment management fees
(paid)/refunded
(2) (1) (3) - - - 32 - 32
Other cash payments (40) (7) (47) (38) - (38) (126) (3) (129)
___________________________________________________________________________________________________________________
Net cash inflow from operating
activities 11 - 11 8 - 8 22 5 27
___________________________________________________________________________________________________________________
Financial investment
Sale of investments 543 7 550 - - - - - -
Purchase of investments (883) (195) (1,078) (797) - (797) (1,050) (27) (1,077)
___________________________________________________________________________________________________________________
Net cash outflow from investing
activities (340) (188) (528) (797) - (797) (1,050) (27) (1,077)
___________________________________________________________________________________________________________________
Net cash outflow before
financing (329) (188) (517) (789) - (789) (1,028) (22) (1,050)
___________________________________________________________________________________________________________________
Financing
Repurchase of shares (7) - (7) - - - - - -
Issue of ordinary shares - 56 56 - 417 417 - 565 565
Expenses on the issue of
ordinary shares - (2) (2) - - - - (32) (32)
Reimbursement of launch costs - 12 12 - - - - - -
___________________________________________________________________________________________________________________
Net cash in flow from financing (7) 66 59 - 417 417 - 533 533
___________________________________________________________________________________________________________________
(Decrease)/Increase in cash and
cash equivalents (336) (122) (458) (789) 417 (372) (1,028) 511 (517)
___________________________________________________________________________________________________________________
* These figures are audited
1. ACCOUNTING POLICIES
The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Company for
the year ended 31 December 2003.
The unaudited financial statements set out here 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 December 2003 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.
Unaudited copies of the Company's interim accounts can be obtained from the
Company's Registered Office.
2. INCOME
Six months ended 30 June 2003 Six months Year ended 31 December
30 June 2004 ended 2003
____________________________ ____________________________ ______________________________
Ordinary C Ordinary C Ordinary C
Shares Shares Total Shares Shares Total Shares Shares Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
______________________________________________________________________________________________________________________
Listed fixed income 49 - 49 39 - 39 65 - 65
Deposit income 3 7 10 15 3 18 23 9 32
Dividends 5 1 6 - - - 31 - 31
______________________________________________________________________________________________________________________
57 8 65 54 3 57 119 9 128
______________________________________________________________________________________________________________________
3. PROFIT/(LOSS) TO SHAREHOLDER PER ORDINARY SHARE
The profit/(loss) to shareholders per ordinary share has been calculated on
the weighted average number of ordinary shares during the six month period
of 2,854,979 (2003: 2,863,979). The return to shareholders per C Share is
based on a weighted average of 613,325 (2003: 211,247) C Shares in issue.
The combined weighted average shares in issue over the six month period
ended 30 June 2004 was 3,468,304 (2003: 3,075,226) shares.
4. INVESTMENT PORTFOLIO
30 June 2004 30 June 2004
_______________________ ____________________
Book Cost Valuation
_______________________ ____________________
Company Ordinary C Ordinary C
Shares Shares Shares Shares
£'000 £'000 £'000 £'000
____________________________________________________________________________________________________________
Listed investments
Treasury 7.25% Stock 2007 250 - 241 -
Treasury 9.00% Stock 2008 125 - 116 -
Treasury 8.50% Stock 2007 125 - 114 -
National Westminster Bank plc 9%
non cumulative preference shares 31 - 31 -
European Investment Bank 5.5% 2009 199 - 201 -
HBOS plc 9.75% non cumulative preference shares 176 - 166 -
Abbey National plc 10.375% non cumulative preference shares 144 - 132 -
Halifax plc 6.125% preference shares 99 - 94 -
____________________________________________________________________________________________________________
Total listed investments 1,149 - 1,095 -
____________________________________________________________________________________________________________
4. INVESTMENT PORTFOLIO (CONTINUED)
30 June 2004 30 June 2004
_______________________ ____________________
Book Cost Valuation
_______________________ ____________________
Company Ordinary C Ordinary C
Shares Shares Shares Shares
£'000 £'000 £'000 £'000
____________________________________________________________________________________________________________
Qualifying AIM investments
Lloyds British Testing plc 130 - 86 -
Cytomyx Holdings plc 180 35 197 23
Smart Approach Group plc 120 - 48 -
MICAP plc 120 - 98 -
Monstermob Group plc 49 10 25 5
Immedia Broadcasting plc 60 12 48 10
Sprue Aegis plc 166 34 123 25
Capcon Holdings Plc 163 33 157 32
Attentive Systems Group plc 205 42 237 49
Wyatt Group plc 83 17 85 17
Brady plc 166 34 165 34
____________________________________________________________________________________________________________
Total qualifying AIM investments 1,442 217 1,269 195
____________________________________________________________________________________________________________
Total Investments 2,591 217 2,364 195
____________________________________________________________________________________________________________
A copy of the unaudited Interim Results will be despatched to shareholders and
two copies will be submitted to the UK Listing Authority and will be available
for inspection at the UK Listing Authority's Document Viewing Facility which is
situated at: Financial Services Authority, 25 the North Colonnade, Canary
Wharf, London E14 5HS
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