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eTechnology VCT (ETH)

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Wednesday 09 November, 2005

eTechnology VCT

Interim Results

eTechnology VCT 
09 November 2005

                              eTechnology VCT plc
                              -------------------
                          
                          Interim Financial Statements
                             For the 6 months ended
                                30 September 2005
                                        


Financial Summary
=================


              6 months ended           6 months ended          Audited
              30 September 2005        30 September 2004       Year ended
              (unaudited)              (unaudited)             31 March 2005
                                                                   
Net asset
value at
period end
before
distributions            64.70p                  61.68p             69.55p

Net asset
value after
distributions            64.70p                  61.68p             69.55p

Total return
for the                 (4.88)p                 (0.50)p              7.36p
period





Chairman's Report
=================

We are pleased to report the interim results for the six months ended 30
September 2005. When taking into account the realised and unrealised movements
on both the listed and unlisted investments, there is an overall negative 
return of £664,000 (2004: negative return of £68,000). The shareholders' funds 
at 30 September were £8.794 million representing 64.70p per share. This 
represents a reported reduction of 4.85p per share from the year end position 
at 31 March 2005. Of this amount 0.77p per share relates entirely to the change 
in accounting policy (see below), and the balance is mostly due to the 
reduction in share price of the Company's holding in Sarantel Group plc. 
Over the twelve month period to 30 September 2005, net assets per share 
increased by 4.9% on a like for like basis.

During the period the overall movement in the valuation of our listed technology
stocks portfolio was limited, with decreases in some valuations balanced by
increases in others, and realised profits taken on some disposals. The
individual companies within the portfolio are regularly reviewed, and
adjustments are made to the holdings accordingly.

As stated above, the net asset value of the Company was particularly affected by
the Company's investment in Sarantel. The Company has a holding of approximately
2.45m shares at an average cost of 33p per share, and the bid market price per
share was 82p as at 30 September. During the period, the mid market price per
share quoted has ranged from a high of 109p per share to a low of 62.5p per
share. The Company has an option over a further 909,091 shares at an exercise
price of 33p per share. All our shares are subject to a share lock-up agreement
which expires in March 2006.

We are pleased to note that Sarantel recently announced a substantial increase
in both units shipped and annual revenues for its year ended 30 September 2005.
We believe the company should deliver further significant growth next year.

However, Sarantel's quoted share price movements have been volatile over the
period, and since the period end, the mid market price per share has touched a
recent low of 38.5p per share. Inevitably given the size of our holding, this
has a significant and potentially ongoing effect on our reported net asset
position.

During the period a number of companies within the portfolio reported progress.
Vectura Group plc has entered into a major licensing agreement with Novartis and
is undertaking clinical trials of one of its products with Sosei Co. Ltd, a
leading Japanese biopharmaceutical group. Pilat Media Global plc announced the
signing of a significant contract with the US broadcast group Fox Television,
and is anticipating revenue and profits to increase in 2005. Jacobs Rimell Ltd
has secured a further significant contract for its provisioning software with a
major new customer in the cable services sector.

Avidex Ltd continues to report progress in respect of clinical trials of its
product for the treatment of Rheumatoid Arthritis. However the market conditions
for new investment into emerging biotechnology companies continues to be
unfavourable, and we have therefore decided to reduce the current carrying value
of our holding in the company by £291,000.

During the period we continued to examine new investment opportunities and
completed the process for one follow-on investment of £50,000 into Burgundy
Global Ltd. We will continue to look at new and follow-on investment
opportunities where we feel this is appropriate.

During the period we disposed of part of our shareholding in Pilat Media Global
plc, realising cash of approximately £137,000 and profits in excess of cost of
approximately £77,000. Accordingly, the directors are therefore pleased to
declare a dividend to be paid to ordinary shareholders of 1p per share in
respect of the results for the six months ended 30 September 2005. Future
dividend policy will be reviewed following significant profitable realisations.
This dividend will be paid on 30 December 2005 to ordinary shareholders on the
Register on 25 November 2005. Prior to the payment of the dividend, the Company
will revoke its status as an Investment Company. This will enable the payment of
this, and any future, dividend out of capital profits, as well as simplifying
the presentation of the Annual Report and Accounts.

There has been a change in accounting policy which impacts upon the results of
the Company for the period. The introduction of FRS26 'Financial Instruments:
Measurement' has resulted in the valuation of AIM listed investments at bid
price, rather than the previous policy of mid market price. As mentioned above,
the impact on this change in policy of the net asset value of the ordinary
shares is a reduction of 0.77p per share.

On the basis that this amount is not material, no prior year adjustment has been
made in respect of this change.

The Board have decided to recommend the adoption of a change of name for the
Company. This is to reflect the broader nature of the current investment
portfolios which are in a range of investments in technology related, non
technology and general business applications.

Accordingly, an Extraordinary General Meeting of shareholders has been scheduled
for 13 December 2005 in order to obtain shareholder approval to rename the
Company to Gateway VCT plc, and a formal notice of the meeting is enclosed.

Although we believe that the outlook for some aspects of the UK economy is mixed
with projections of UK growth being revised downward, we believe that investment
on an opportunistic basis remains attractive. In particular, we are hopeful the
AIM market will remain supportive of both our existing portfolio companies and
those within the portfolio who may join the market, such that we may achieve
profitable realisations in due course.


Michael Teacher
CHAIRMAN
9 November 2005





Statement of Total Return (incorporating the Revenue Account)
=============================================================



                        Unaudited                     Unaudited
                        6 months                      6 months
                        ended 30 September 2005       to 30 September 2004
                        -----------------------       --------------------
                         
                        Revenue   Capital   Total     Revenue   Capital   Total
                           £000      £000    £000        £000      £000    £000

(Losses)/gains on
investments
- Realised                    -        28      28           -       (27)   (27)
- Unrealised                  -      (591)   (591)          -        61     61

Income                       56         -      56          47         -     47
Investment
management fee              (64)      (43)   (107)        (58)      (38)    96)
Other expenses              (30)      (20)    (50)        (32)      (21)   (53)
                         --------   ------- -------     -------  --------  -----

Net return
before finance
costs and
taxation                    (38)     (626)   (664)        (43)      (25)   (68)
                         --------   ------- -------     -------  --------  -----
                                                        
Return on
ordinary
activities
before taxation             (38)     (626)   (664)        (43)      (25)   (68)

Tax on return on              -         -       -           -         -      -
ordinary activities
                         --------   ------- -------     -------  --------  -----
                                                        
Return
attributable to
equity
shareholders                (38)     (626)   (664)        (43)      (25)   (68)

Dividends                     -         -       -           -         -      -
                         --------   ------- -------     -------  --------  -----
Transfer to
reserves                    (38)     (626)   (664)        (43)      (25)   (68)
                         --------   ------- -------     -------  --------  -----

Return per
ordinary share
-                         (0.28)p   (4.60)p (4.88)p     (0.32)p   (0.18)p 0.50)p
basic and diluted




                                                     Audited
                                                     Year ended
                                                     31 March 2005
                                                     ---------------
                                                     

                                                     Revenue   Capital   Total
                                                        £000      £000    £000

(Losses)/gains on investments
- Realised                                                -       (35)    (35)
- Unrealised                                              -     1,262   1,262

Income                                                   99         -      99
Investment management fee                              (138)      (92)   (230)
Other expenses                                          (56)      (38)    (94)
                                                      -------    ------  ------

Net return before finance costs and taxation            (95)    1,097   1,002
                                                      -------    ------  ------
Return on ordinary activities before taxation           (95)    1,097   1,002

Tax on return on ordinary activities                      -         -       -
                                                      -------    ------  ------
Return attributable to equity shareholders              (95)    1,097   1,002

Dividends                                                 -         -       -
                                                      -------    ------  ------
Transfer to reserves                                    (95)    1,097   1,002
                                                      -------    ------  ------

Return per ordinary share -                           (0.70)p    8.06p   7.36p
basic and diluted





Balance Sheet
=============


                       Unaudited            Unaudited            Audited
                       As at                As at                As at
                       30 September 2005    30 September 2004    31 March 2005
                       -----------------    -----------------    -------------

                          £000                 £000                 £000

Investments               8,425                7,965                9,199

Net current assets          369                  428                  264
                       ---------            ---------           ---------
Net assets                8,794                8,393                9,463
                       ---------            ---------           ---------

Capital and Reserves

Called-up share capital        679               680                 680
Capital redemption reserve       1                 -                   -
Share premium                    -            12,115                   -
Special distributable
reserve                      8,102                 -               8,107
Capital reserve - realised     (77)           (3,358)                  -
Capital reserve -
unrealised                     331              (892)                880
Revenue reserve               (242)             (152)               (204)
                            --------          -------           --------
Total shareholders' funds    8,794              8,393              9,463
                            --------          -------          ---------

Net asset value per
ordinary share               64.70p             61.68p            69.55p








Cash Flow Statement
===================
                                 Unaudited       Unaudited       Audited
                                 6 months        6 months        Year ended
                                 ended           ended
                                 30 September    30 September    31 March 2005
                                 2005            2004
                                 -----------     -----------     -------------
                                                                 
                                  £000    £000    £000    £000   £000   £000

Net cash outflow from                     (138)           (106)         (203)
operating activities

Capital expenditure and
financial investments
Purchase of
investments                       (146)           (277)          (473)
Sale of investments                357             113            267
                                  ------          ------         ------

Net cash
inflow/(outflow) from                      211            (164)         (206)
financial investments

Financing
Payments to redeem the
Company's shares                            (5)              -             -
                                          ------          ------        ------
Increase/(decrease) in
cash at bank                                68            (270)         (409)
                                          ------          ------        ------

Analysis of cash balance
At 1 April                                 366             775           775
Net cash
inflow/(outflow) for
the period                                  68            (270)         (409)
                                          ------          ------        ------
Cash balance at 30
September 2005                             434             505           366
                                          ======          ======        ======

Notes :-

1.     The financial information given above does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
figures for the year ended 31 March 2005 have been extracted from the financial
statements for that period; the auditors' report on those financial statements
under section 235 of the Companies Act 1985 was unqualified.

2.     Returns per Ordinary Share are based on 13,606,072 ordinary shares, being
the weighted average number of shares in issue for this period (13,606,734 for
all other periods).

3.     The net asset values per Ordinary Share are based on 13,591,734 shares in
issue at this period end (13,606,734 at other period ends).

4.     Copies of the Interim Report are being sent to shareholders and can be
obtained from the registered office: Chelsea House, West Gate, London, W5 1DR.




Investment Portfolio
====================


                                                 ------------------
                                                 Per unaudited Balance Sheet as
                                                 at 30 September 2005
                                                 ------------------                                                    
               Holding
               Shares      Loan          Cost    Bid-Market  % of     Gain/
                           Notes                 Value       Net      (Loss) 
                                            £             £  Assets       £

Qualifying
Investments

AIM
Biofocus plc      43,862               127,200      47,371     0.54    (79,829)
OMG plc          233,333               175,000      37,333     0.43    137,667)
Deltex Medical
plc              800,000               200,000     156,000     1.77     44,000)
Vectura Group
plc            1,147,035               553,165     940,569    10.70    387,404
Pilat Media
Global plc     1,200,000               240,000     516,000     5.87    276,000
Sarantel Group
plc            2,452,448               810,222   2,011,007    22.87  1,200,785

Unlisted
Avidex Ltd         1,353    36,453     581,066     290,533     3.30   (290,533)
Jacobs Rimell
Ltd              246,489               943,930     427,620     4.86   (516,310)
Burgundy
Global Ltd       255,754   500,000   1,350,000   1,100,000    12.51   (250,000)
Networks by
Wireless Ltd     700,000               700,000     700,000     7.96          -

Qualifying
Investments
Sub Total                            5,680,583   6,226,433    70.81    545,850

Non-Qualifying
Investments
Quoted                                 815,701     584,122     6.64   (231,579)
Stocks
Gilts -
Treasury 5.75%
2009           1,500,000             1,597,895   1,614,535    18.36     16,640

Non Qualifying
Investments                          2,413,596   2,198,657    25.00   (214,939)
Sub Total
                                       -------    --------  -------    -------
Total
Investment
Portfolio                            8,094,179   8,425,090    95.81    330,911
                                       =======    ========  =======    =======

Notes:-

1.               Balance sheet values in respect of quoted stocks have been
calculated using bid market prices at 30 September 2005. Previously quoted
stocks have been calculated using mid market prices. This change in accounting
policy was brought about due to the adoption of Financial Reporting Standard 26
which is mandatory for listed companies with accounting periods beginning on or
after 1 January 2005. The comparative periods ending 30 September 2004 and 31
March 2005 have not been restated and the quoted stocks for these periods are at
mid prices.

The effect of this change in accounting policy for the period ending 30
September 2005 is as follows:-

                                 At Bid Market Value       At Mid Market Value

Market value of investments               £8,425,090                £8,532,113
Unrealised losses                           £591,367                  £484,345
Net asset value                                64.70p                    65.47p
Total return for the period                   (4.88)p                   (4.11)p

2.               Unquoted investments are stated at historic cost or fair value
(as per the BVCA Reporting and Valuation guidelines) unless, in the opinion of
the directors, there has been a diminution in value, in which case this has been
provided for.

3.               Shares are non-qualifying if they have been acquired in the
market rather than as a result of a new issue.




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