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Murray VCT 3 PLC (MYV)

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Wednesday 16 April, 2003

Murray VCT 3 PLC

Final Results

Murray VCT 3 PLC
16 April 2003


Preliminary Results for the Year ended 28 February 2003

The Directors announce the preliminary results, subject to final audit, of
Murray VCT 3 PLC for the year ended 28 February 2003.

Key facts

• Realisation of Palgrave Brown, resulting in special dividend of 4.26p per
  share ('pps').

• Final dividend of 1.1pps.

• Total dividends paid since launch of 22.9pps - representing 28% of the
  effective initial cost returned to investors.

• Qualifying investment level of 79%.

• Net Asset Value ('NAV') of 68.0pps before dividends.

• Total return since launch, being the sum of dividends paid plus NAV, of

Investment activity

Further investment during the year ended 28 February 2003 totalled £6.5 million.
At 28 February 2003 the portfolio stood at 41 investments having a total cost of
£31.2 million and representing a qualifying investment level of 79%.

Three new investments have been made since the publication of the interim

Palgrave Brown (Holdings) Limited (October 2002) - £250,000: Based in Chorley,
Palgrave Brown manufactures specialist timber products, roof trusses and wooden
windows, servicing major house builders and builders' merchants. In October
2002, the Company participated in the secondary buy out of Palgrave Brown (UK)
to retain an interest in the future developments of this investee company. See
portfolio developments below.

PLM Dollar Group Limited (November 2002) - £198,538: Based in Inverness, PLM
which trades as PDG Helicopters, is an operator of a fleet of commercial

Public Service Communication Agency Limited (December 2002) - £627,600: Based in
Newcastle Upon Tyne, Public Service Communication Agency produces high quality
publications aimed at public sector officials in central and local government.

Portfolio developments

Palgrave Brown (UK) was sold in a secondary buy-out transaction which was funded
by clients of Aberdeen Murray Johnstone Private Equity, including a small new
investment by the selling VCTs, although this will be non-qualifying. Murray VCT
3 realised a gain of £1,745,559, equivalent to 4.26pps, over the cost of the
investment and this gain will be distributed after Inland Revenue approval has
been obtained.


Market conditions continue to be difficult and this is evident in reduced
investor confidence in the stock market and increasing reports of weakening

These conditions continue to have an adverse impact on corporate performance and
therefore on the valuations of the Company's investment portfolio. Realisations
are difficult to achieve in these depressed markets although the disposal of
Palgrave Brown in the period was a significant and very positive result for the

The NAV per share at 28 February 2003, before payment of all dividends in
respect of the year then ended, was 68.0p compared with 84.7p at 28 February
2002. This decrease in NAV of 19.7% compares with the significant reduction in
stock market indices generally and, in particular, the FTSE Small Cap Index
which fell by 28.57% over the period and the FTSE AIM Index which fell by

Investment strategy

The Company is almost fully invested. The Manager is concentrating on intense
portfolio management to help the investee companies manage through current
market conditions, the aim being to restore value and ultimately achieve
successful disposals from a position of strength when market conditions recover.
In these circumstances it is not only capital valuations which are under
pressure but also the ability of the investee companies to pay dividends and
interest to investors. The Manager is working to assist certain companies to
enable them to resume payments to the Company.

At the moment, the Company has approximately 27% of its assets in cash and
gilts. The manager is retaining this in order to be able to support with new
investment, where required, those investee companies which are believed to have
potential. In the longer term, surplus funds from realisations will be invested
where possible in larger companies through co-investment with the other Murray

Valuation process

Murray VCT 3's investments in unlisted companies are valued in accordance with
the British Venture Capital Association guidelines. Investments are normally
valued at cost or cost less a provision until they have been held for at least
one year. As a result, should performance be ahead of plan, which may imply an
increase in the value of the investment, this would not be reflected for at
least 12 months; on the other hand any material underperformance would be
immediately reflected in a reduced valuation. Listed equities and AIM stocks are
valued at their mid market price, discounted where necessary to reflect any
trading restrictions.

In the short-term, the NAV is a less important measure of performance as the
underlying investments are long-term in nature and not readily realisable. The
most important measures for a VCT are the long term record of income and capital
gain dividend payments and the timing of those payments over the life of the

Dividends and returns to date

An interim dividend of 0.5p for the year ended 28 February 2003 was paid to
shareholders on 10 December 2002. The Board is proposing a final dividend of
1.1p to be paid to shareholders on 18 July 2003 to shareholders on the register
on 20 June 2003. The dividend of 4.26pps arising from the sale of Palgrave Brown
will be paid when approval has been obtained from the Inland Revenue. The total
dividend for the year ended 28 February 2003 will therefore amount to 5.86pps.

Since the Company's launch and including the dividend due on the realisation of
Palgrave Brown, most shareholders will have received 22.9p in tax free
dividends, comprising 14.3pps in income dividends and 8.6pps in distributions of
capital gains. To an investor who took advantage of the initial income tax
relief, this represents a return of over 28% of the effective initial investment
cost of 80p per share. Including dividends from capital gains, this is
equivalent to an annual dividend yield of 8.1% from a conventional listed equity
for a higher rate taxpayer. This yield ignores the benefit of capital gains tax
deferrals which some shareholders may have received and compares with the FTSE
SmallCap yield of 2.9% and the FTSE All-Share yield of 2.7%. The total return
since launch is 85.1pps being the sum of dividends paid and NAV per share.


The preliminary results reported here reflect continuing poor market conditions
and the prospects for the current year remain uncertain. The Board and the
Manager expect that the coming year will be every bit as testing as the last.
Existing portfolio investments will be the subject of careful attention to help
them develop further.

The portfolio includes a core of investments with good prospects, but it could
be some time before those prospects can be demonstrated in further profitable
realisations. The Manager is continuing to work with the portfolio companies to
improve performance with a view to maximising the proceeds from eventual exits.

The falls in stock market indices over the last three years have led to more
realistic pricing expectations in the private equity market. This, together with
the continuing strong deal flow being generated by the Aberdeen Murray Johnstone
Private Equity regional network of offices, should lead to greater investment
activity and ensure that there will be adequate opportunity to reinvest proceeds
from future realisations as they are achieved.

Murray VCT 3 PLC
for the year ended 28 February 2003
                                                     Year ended     Year ended
                                                    28 February    28 February
                                                           2003           2002
                                                          £'000          £'000

Investment income and deposit interest                    1,495          2,155
Investment management fees                                (983)        (1,126)
Other expenses                                            (165)          (221)
                                                     ----------     ----------

Operating profit                                            347            808
Profit/(loss) on realisation of investments               1,143          (206)
                                                     ----------     ----------

Profit on ordinary activities before                      
taxation                                                  1,490            602
Tax on ordinary activities                                 (20)          (282)
                                                     ----------     ----------

Profit on ordinary activities after taxation              1,470            320
Dividends                                               (2,753)        (2,036)
                                                     ----------     ----------

Balance transferred from reserves                       (1,283)        (1,716)
                                                     ----------     ----------

Earnings per share (pence)                                  3.6            0.8
                                                     ----------     ----------

for the year ended 28 February 2003
                                                     Year ended     Year ended
                                                    28 February    28 February
                                                           2003           2002
                                                          £'000          £'000

Profit on ordinary activities after taxation              1,470            320
Unrealised loss on revaluation of                       (8,040)        (2,615)
Current tax attributable to unrealised losses on             48            272
loan relationships                                   ----------     ----------

Total recognised losses relating to the year            (6,522)        (2,023)
                                                     ----------     ----------

for the year ended 28 February 2003
                                                     Year ended     Year ended
                                                    28 February    28 February
                                                           2003           2002
                                                          £'000          £'000

Profit on ordinary activities before taxation             1,490            602
Realisation of revaluation gains of previous                604            809
years                                                ----------     ----------
Historical cost profit on ordinary activities             2,094          1,411
before taxation                                      ----------     ----------

Historical cost loss for the year retained after          
taxation and dividends                                    (671)          (916)
                                                     ----------     ----------

All items in the above statement 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.

Murray VCT 3 PLC
as at 28 February 2003

                                          28 February 2003    28 February 2002
                                          £'000      £'000     £'000     £'000
Fixed assets
Investments                                         25,795              33,848

Current assets
Debtors                                   2,110                1,791
Cash and short-term deposits                107                  233
                                      ---------             --------
                                          2,217                2,024

Amounts falling due within one year       2,516                1,185
                                      ---------             --------

Net current (liabilities) assets                     (299)                 839
                                                  --------             -------
                                                    25,496              34,687
                                                  ========             =======

Capital and reserves
Called up share capital                              4,098               4,094
Share premium account                               20,395              20,145
Revaluation reserve                               (11,536)             (2,932)
Capital redemption reserve                              72                  41
Profit and loss account                             12,467              13,339
                                                  --------             -------
Equity Shareholders' funds                          25,496              34,687
                                                  ========             =======

Net Asset Value per Ordinary share                    
(pence)                                               62.2                84.7

Murray VCT 3 PLC
for the year ended 28 February 2003

                                                Year ended          Year ended
                                               28 February         28 February
                                                      2003                2002
                                           £'000     £'000     £'000     £'000
Operating activities
Investment income received                 1,682               1,632
Deposit interest received                     16                  17
Investment management fees paid          (1,019)             (1,144)
Secretarial fees paid                       (54)                (54)
Cash paid to and on behalf of               (29)                (50)
Other cash payments                         (90)               (103)
                                        --------             -------
Net cash inflow from operating                         506                 298

Corporation tax                                          -               (509)

Financial investment
Purchase of investments                 (13,187)             (7,991)
Sale of investments                       13,785               3,474
Net cash inflow/(outflow) from financial               598             (4,517)

Equity dividends paid                              (1,375)             (2,029)
                                                   -------             -------
Net cash outflow before financing                    (271)             (6,757)

Issue of Ordinary shares                     346                 337
Repurchase of Ordinary shares              (201)               (108)
                                        --------             -------
Net cash inflow from financing                         145                 229
                                                   -------             -------
Decrease in cash                                     (126)             (6,528)
                                                   -------             -------

Earnings per Ordinary share have been calculated using the weighted average
number of shares in issue over the year to 28 February 2003 of 40,920,990. The
final dividend and Net Asset Value per Ordinary share calculations are based on
the 40,978,009 shares in issue at the financial year end.

A summary of investment changes during the year and the portfolio of investments
as at 28 February 2003 are attached.

The proposed final dividend for the year ended 28 February 2003 of 1.1p will be
paid on 18 July 2003 to holders of Ordinary shares on the register at close of
business on 20 June 2003.

A full copy of the annual accounts will be printed and issued to shareholders.

The results stated above for the year ended 28 February 2002 are abridged from
the full accounts for that year, which received an unqualified report from the
auditors and have been filed with the Registrar of Companies.

The annual report and accounts for the year ended 28 February 2003 will be filed
with the Registrar of Companies.

Copies of this announcement will be available to the public at the office of
Aberdeen Asset Management, 123 St Vincent Street, Glasgow and at the registered
office of the Company, One Bow Churchyard, London.

By Order of the Board



16 April 2003

For the period to 28 February 2003

                 Valuation       Net investment     Appreciation       Valuation
                28 February     (disinvestment)    (depreciation)     28 February 
                    2002                                                  2003
               £'000       %              £'000             £'000    £'000       %
Equities       9,021    26.0            (1,946)           (2,486)    4,589    18.0
Preference     1,094     3.2                474             (610)      958     3.7
Loan stock    13,524    38.9              3,877           (3,923)   13,478    52.9
             -------  ------         ----------        ----------  -------  ------
              23,639    68.1              2,405           (7,019)   19,025    74.6
             -------  ------         ----------        ----------  -------  ------

Equities          19     0.1               (23)                 4        -       -
Fixed         10,190    29.4            (3,532)               112    6,770    26.6
income       -------  ------         ----------        ----------  -------  ------

Total         33,848    97.6            (1,150)           (6,903)   25,795   101.2
investments  -------  ------         ----------        ----------  -------  ------

Other net        839     2.4            (1,138)                 -    (299)   (1.2)
assets/      -------  ------         ----------        ----------  -------  ------

Total         34,687   100.0            (2,288)           (6,903)   25,496   100.0
assets       -------  ------         ----------        ----------  -------  ------

As at year ended 28 February 2003

                                                                           % of
                                                            Valuation     total
Unlisted              Nature of business                        £'000    assets

Conveco               Convenience store operator                1,674       6.6
CCM Motorcycles       Motorcycle manufacturer                   1,579       6.2
TLC (Tender Loving    Operator of day care nurseries            1,188       4.7
Businesshealth        Provider of health management             1,059       4.2
Intron                Manufacturer and distributor of           1,000       3.9
                      entrance doors
Tuscan Energy Group   Oil production                              850       3.3
Poulter               Independent communications agency           770       3.0
Booth Dispensers      Manufacturers of coolers and                753       3.0
Sequoia               Distributor of electronic components        750       2.9
                      and equipment
ELE Advanced          Manufacturer of precision components        750       2.9
Technologies          for jet engines and gas turbines
First Line            Supplier of automotive parts to the         750       2.9

Other investments valued individually at less than              7,902      31.0
£750,000                                                     --------   -------
                                                               19,025      74.6

Listed fixed income investments

Treasury 8.5% Stock 2005                                        2,240       8.8
Treasury 6.75% Stock 2004                                       2,116       8.3
Treasury 5% Stock 2004                                          2,044       8.0
Treasury 8% Stock 2003                                            370       1.5
                                                             --------   -------
                                                                6,770      26.6
                                                             --------   -------
Total investments                                              25,795     101.2
                                                             --------   -------

                      This information is provided by RNS
            The company news service from the London Stock Exchange

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