RNS Number:9555P
British Smaller Tech Cos VCT PLC
19 September 2003
19 September 2003
BRITISH SMALLER TECHNOLOGY COMPANIES VCT PLC
Unaudited preliminary results for the 6 months to 30 June 2003
* Good progress in a number of investee companies
* 5.3% increase in net asset value
British Smaller Technology Companies VCT plc ("the Company"), the venture
capital trust specialising in growing smaller technology companies across a
range of industrial sectors, today announces its unaudited preliminary results
for the six months to 30 June 2003.
Financial Highlights:
Unaudited Unaudited Audited year
six months six months ended
ended ended 31 December
30 June 2003 30 June 2002 2002
Gross revenue #38,000 #72,000 #126,000
Net loss before and after tax #(205,000) #(172,000) #(394,000)
Revenue return per share (1.49)p (1.25)p (2.87)p
Total return per share 2.85p (13.50)p (27.70)p
Net assets #7.62m #9.18m #7.23m
Net asset value per share 55.4p 66.8p 52.6p
Announcing the results, the Chairman, Sir Andrew Hugh Smith, reported that,
despite continued difficult market conditions in the period under review, there
were a number of unquoted companies in the portfolio that continued to show
progress toward market acceptance of their products. To reflect this, the Board
had made a modest increase in the valuation of these businesses. The most
significant increase was in Cozart Bioscience, which, due to the securing of
major new contracts and general market penetration, was increased in value by
50%.
In the six months to 30 June 2003, the net asset value had increased by 5.3%
which is comparable to the increase in the FTSETM techMARKTM All-Share index
over that same period.
Investments
With the VCT fully invested, the Board and its Investment Adviser, Yorkshire
Fund Managers Limited, are focusing on supporting those companies within the
portfolio that have demonstrated the potential for significant growth. During
the period a total of #238,000 was invested in three existing portfolio
businesses. Two companies were placed into receivership in the period but as
these investments were already substantially provided against this had only a
minimal effect on net asset value.
Financial Results
Commenting on the financial results, Sir Andrew said that, "It is encouraging to
be able to report an increase in total return since the last year end of 2.85
pence per share and a modest recovery of the net asset value to 55.4 pence per
share."
The total return comprised of a loss on revenue account of 1.49 pence per share
and an increase on capital account of 4.34 pence per share. No dividend can be
paid.
Shareholder Relations
The Board continues to look at ways to enhance communications with Shareholders
and improving liquidity in the Company's shares. The procedures to enable the
buy back of the Company's own shares, which started with the approval of
proposals at the Annual General Meeting on 15 May 2003, should be completed by
November of this year.
In addition, Yorkshire Fund Managers has held three investor workshops in the
period to date with a fourth to be held in Edinburgh on 15 October 2003. These
workshops have proved very popular and a new programme is being arranged for
next year.
Outlook
Commenting on the prospects for the medium and longer term, Sir Andrew said that
continued progress in the development of the portfolio depends as much on the
progress of the US and world economies in general as on the UK economy.
Following the removal of a large part of the international political uncertainty
earlier this year, he concluded, "Provided that this progress continues, we
would expect corporate activity to improve leading to further valuation
increases along with enhanced prospects for exits."
For further information, please contact:
Phil Cammerman, Yorkshire Fund Managers Limited Tel: 0113 294 5050
Neil Baldwin, Brewin Dolphin Securities Limited Tel: 0113 241 0130
Chairman's Statement
Although economic conditions remained difficult throughout the six months to 30
June 2003, I am pleased to report some improvement in the performance of your
Company. The net asset value has increased by 5.3% from 52.6 to 55.4 pence per
share. This is comparable to the increase in the FTSE(TM) techMARK(TM) All-Share
index over the same period, which, given the focus of businesses that your
Company is looking to invest in, remains the most appropriate quoted index
benchmark. The FTSE(TM) All-Share index, a more general comparator, rose by 4.1%
over the period.
Much of the political uncertainty present during the early part of the year has
largely been resolved and the UK and US economies are beginning to show
tentative signs of improvement.
Investment Operations
Your Company remains fully invested. Your Board and its Investment Adviser are
currently focusing on the development of those businesses that have demonstrated
the potential for significant growth by market acceptance of their products.
During the period #238,000 was invested in three existing portfolio businesses.
All three, Amino Holdings, Imerge and Vibration Technology, have demonstrated
progress during the period. Each investment was part of a larger syndication.
Financial Results
It is encouraging to be able to report an increase in total return since the
last year end of 2.85 pence per share and a modest recovery of the net asset
value to 55.4 pence per share. This was made up from increases to capital
account of 4.34 pence per share and a loss on revenue account of 1.49 pence per
share. The increase on capital account has been arrived at from the upward
revaluation of a number of companies within the portfolio. The majority of these
were a write back of prior period provisions to recognise the progress of these
businesses, albeit that they remain behind original plan. The main exception to
this was Cozart Bioscience where continued positive performance in securing new
contracts led to a 50% increase in the valuation of this investment. During the
reporting period both Weston Antennas and LANergy were placed into receivership.
As these investments had been substantially provided against this had only a
minimal effect on net asset value.
Revisions to valuations, both up and down, have been made in accordance with the
British Venture Capital Association (BVCA) valuation guidelines as at 30 June
2003. Shareholders should be aware that, with effect from 1 August of this year,
these guidelines have been revised, particularly in so far as they relate to
early stage technology investments. The move is away from a cost basis and
standard provisioning in bands of 25% to more intuitive measurements of a
company's performance, discounted cash flows and other perceptions of value.
Shareholder Relations
The proposals to enable your Company to buy back its own shares were approved by
Shareholders at the Annual General Meeting held on 15 May 2003. This exercise
is expected to be completed by November of this year. At which time, depending
on the cash reserves of the Company, it will be in a position to buy back a
limited small number of shares where the directors determine it is in the best
interests of other Shareholders to do so.
Over the last six months, your Board's Investment Adviser, Yorkshire Fund
Managers, has held three investor workshops - in London, Leeds and Birmingham.
Over 100 Shareholders from across three VCTs managed by Yorkshire Fund Managers
have attended. It has become clear that this provides a much better forum for
Shareholders to voice their comments than the Annual General Meeting. The final
workshop for 2003 will be held in Edinburgh on 15 October 2003.
Outlook
Continued progress in our portfolio of investments depends as much on the
progress of the US and Global economies as on the UK economy. With much of the
international political uncertainty removed during the earlier part of 2003,
there seems to be a glimmer of progress in the economies to which I have
referred. Provided that this progress continues, we would expect corporate
activity to improve leading to further valuation increases along with enhanced
prospects for exits.
Sir Andrew Hugh Smith
Chairman
Statement Of Total Return
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Notes
Revenue
Gross revenue 38 72 126
Administrative expenses (243) (244) (520)
Taxation 2 - - -
------ ------ ------
(205) (172) (394)
Capital
Realised gains (net) 25 29 67
Unrealised gains (losses) net 638 (1,646) (3,348)
Management fee allocated to (66) (66) (131)
capital
------ ------ ------
597 (1,683) (3,412)
Total return 392 (1,855) (3,806)
====== ====== ======
Appropriated:
Revenue
Transfer from revenue reserve (205) (172) (394)
------ ------ ------
Capital
Increase (decrease) on reserves 597 (1,683) (3,412)
------ ------ ------
Basic and diluted return per
Ordinary share
Revenue (1.49)p (1.25)p (2.87)p
Capital 4.34p (12.25)p (24.83)p
------ ------ ------
3 2.85p (13.50)p (27.70)p
====== ====== ======
Notes
The revenue section of this statement is the profit and loss account of the
Company.
All activity has arisen from continuing operations.
Balance Sheet
Unaudited Unaudited Audited
30 June 30 June 31 December
2003 2002 2002
Notes #000 #000 #000
Fixed assets
Investment portfolio 6,771 7,155 5,867
-------- -------- --------
Current assets
Short-term investments 814 1,953 1,287
Debtors 131 17 42
Cash and short term deposits 61 77 71
-------- -------- --------
1,006 2,047 1,400
Creditors: amounts payable within (154) (24) (39)
one year
-------- -------- --------
Net current assets 852 2,023 1,361
-------- -------- --------
Total net assets 7,623 9,178 7,228
======== ======== ========
Capital and reserves
Called-up share capital 1,375 1,375 1,375
Capital redemption reserve 2 2 2
Share premium account 11,354 11,351 11,351
Capital reserve (4,745) (3,613) (5,342)
Warrant reserve 336 336 336
Other reserve 2 2 2
Revenue reserve (701) (275) (496)
-------- -------- --------
Equity shareholders' funds 7,623 9,178 7,228
======== ======== ========
Net asset value per Ordinary share 4 55.4p 66.8p 52.6p
Summarised Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Net cash outflow from operating activities (245) (242) (539)
Financial investment (238) (530) (932)
------- ------- -------
Net cash outflow before management of liquid (483) (773) (1,471)
resources and financing
Management of liquid resources 470 619 1,310
------- ------- -------
Net cash outflow before financing (13) (153) (161)
Financing 3 15 17
------- ------- -------
Decrease in cash (10) (138) (144)
------- ------- -------
Notes to the Financial Statements
1. The interim financial statements have been prepared on a basis
consistent with the statutory financial statements for the year ended 31
December 2002. The interim financial statements, which have been approved by the
directors, are unaudited and do not constitute full financial statements as
defined in section 240 of the Companies Act 1985. The comparitive figures for
the year ended 31 December 2002 do not constitute full financial statements and
have been extracted from the Company's financial statements for the year ended
31 December 2002 which have been reported upon without qualification by the
auditors and have been delivered to the Registrar of Companies.
2. Taxation charge
Unaudited Unaudited Audited
6 months 6 months Year
ended ended Ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Return/loss on ordinary activities multiplied
by standard small company rate of corporation
tax in the UK of 20% (2002:20%) 74 (371) (733)
Effect of:
Non taxable (gains) losses on investments (i) (126) 323 632
Movement in excess management expenses (ii) 52 48 101
------- ------ ------
Current tax charge for period - - -
------- ------ ------
(i)Venture Capital Trusts are not subject to corporation tax on these items
(ii)The Company has no deferred tax liability
3. The basic revenue return per share is based on net loss
from ordinary activities after tax attributed to Shareholders of #205,000 (30
June 2002: net loss #172,000 and 31 December 2002: net loss #394,000) and on
13,747,000 shares (30 June 2002: 13,738,000 and 31 December 2002: 13,742,000),
being the weighted average number of shares in issue during the period. The
Company has no securities that would have a dilutive effect and hence basic and
diluted return per share are the same.
4. The net asset value per Ordinary share is calculated on
attributable assets of #7,623,000 and 13,748,000 shares in issue at the period
end (30 June 2002: assets of #9,178,000 and 13,746,000 shares, 31 December 2002:
assets of #7,228,000 and 13,746,000 shares).
5. Copies of the interim report can be obtained from the
Company's registered office: Saint Martins House, 210-212 Chapeltown Road,
Leeds, LS7 4HZ thereafter.
This information is provided by RNS
The company news service from the London Stock Exchange
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