Interim Management Statement
October 18 2011 - 10:38AM
UK Regulatory
TIDMATI2
AMATI VCT 2 plc (formerly known as Invesco Perpetual AiM VCT plc)
(the "Company")
INTERIM MANAGEMENT STATEMENT
FOR THE 3 MONTHS TO 31 August 2011
To the members of Amati VCT 2 plc
This interim management statement has been prepared solely to provide
additional information to the shareholders as a body to meet the relevant
requirements of the UK Listing Authority's Disclosure and Transparency Rules,
and should not be relied on by any other party or for any other purpose.
This interim management statement considers the future of the fund and, as
such, forward-looking assertions have been made by the Directors in good faith
based on the information available to them up to the time of their approval of
this report. This statement should therefore be treated with due caution due to
the inherent uncertainties of the effect of both economic and business risk
factors in considering forward-looking information.
This interim management statement relates to the period from 1 June 2011 to 31
August 2011 and contains information that covers this period and up to the date
of publication of this interim management statement.
Our operations
The objective of the Company is to provide a tax free dividend return to
shareholders primarily through the realisation of capital gains while
maintaining the capital value of the shares. The Company is managed as a VCT in
order that shareholders may benefit from the tax reliefs available.
The intention is that substantially all of the funds will be invested in a
spread of AIM-traded stocks and unquoted companies, with approximately 80% of
the Company's Qualifying Holdings comprising AIM-traded stocks, subject to
availability of suitable investment opportunities and market conditions. The
remaining investments will be split between PLUS Markets' stocks, fully listed
stocks, AIM-traded non-qualifying stocks or unquoted companies and cash. Amati
Global Investors (the "Manager" adopts an active investment strategy and seeks
to moderate risk by careful stock selection and portfolio construction. The
Manager tends to invest relatively small amounts across a wide range of
companies, to achieve the appropriate balance between risk and reward for the
overall portfolio.
Proposed merger with ViCTory VCT PLC
A circular was sent to shareholders on 3 October 2011 to provide information on
and seek shareholders formal approval for the proposal for a merger with
ViCTory VCT PLC by way of a scheme of reconstruction of the Company and a
cancellation of listing of the Company's shares. The circular is also available
on the Manager's website.
Performance and transactions during the period
During the period, the NAV per share declined by 6.5% against a benchmark (FTSE
AIM All-Share Total Return Index) fall of 13.3%. The quarter witnessed a
significant correction in asset prices as Eurozone sovereign debt fears
resurfaced and the strength of the global economic recovery was brought into
question. At the beginning of August there was a sudden and savage sell-off in
equities as investors rushed into safe havens such as gold and US Treasuries.
The portfolio saw declines in value amongst some of the largest core holdings,
such as Brooks Macdonald Group, Asian Citrus Holdings and Software Radio
Technology, despite news from these companies being very positive over the
period. Brooks Macdonald Group has bounced back up substantially during
September, following the publication of strong results. Across the market,
there was widespread selling of equities wherever liquidity could be found. In
addition businesses perceived as having cyclical or consumer exposure were
strongly affected, although the portfolio is underweight in these areas. On the
other hand, some portfolio companies performed well despite the negative
backdrop, the most significant being Cupid, the holding company for a
collection of online dating businesses. Cupid announced an acquisition that
takes the company into Brazil as well as half year results that reported a 189%
increase in revenues. Like many of the core holdings in the portfolio, Cupid is
a business that should be able to perform well even in a difficult economic
environment. Other qualifying holdings such as Cohort and Green Compliance also
saw share price rises over the period following results announcements.
Restructuring of the portfolio continued during the period in line with the
approach outlined to shareholders previously. This involved a continued
reduction in equity holdings of companies capitalised at less than GBP15m,
replacing these with larger, more mature businesses, whilst continuing to add
to the non-qualifying portfolio. Amongst qualifying investments, Proteome
Sciences and Byotrol were sold and the position in Tristel reduced. Three new
qualifying investments were made: MyCelx Technologies, which has developed an
innovative water-treatment filtration system for use in the oil industry;
Manroy, an equipment supplier to the UK and US military, which raised funds to
acquire a 49% stake in Manroy USA; and Ubisense, a designer of real time
location systems for manufacturing facilities which enable accurate tracking of
assets such as tools and vehicles. New additions to the non-qualifying
portfolio included: African Barrick Gold, to take advantage of the disconnect
between the gold price and valuation of gold mining stocks; Hargreaves
Services, a coal business with interests in mining, transport, importing,
refining and processing; New Britain Palm Oil, a producer of sustainable palm
oil, which is an increasingly popular ingredient in processed foods;
Waterlogic, a manufacturer of point-of-use drinking water purification systems
with a novel "Firewall" UV technology; and XP Power, a designer and
manufacturer of power control solutions.
As at 31 August 2011 As at 31 May 2011
("unaudited") ("unaudited")
Total Net Asset Value GBP12.9m GBP13.8m
("NAV")
Shares in issue 43,126,171 43,126,171
NAV per share * 29.6p 31.7p
* taking account of amounts receivable or chargeable to the VCT's income
account.
The top ten investments in the Company's portfolio are listed below.
Top ten holdings as at 31 August 2011
Percentage of
the fund's net
asset value as at
31 August 2011
Brooks Macdonald Group plc 7.3
Cupid plc 5.6
Infrared Integrated Systems Limited 5.3
Software Radio Technology plc 4.7
Staffline Group plc 3.9
Kiotech International plc 3.8
Brainjuicer Group plc 3.6
Futura Medical plc 2.6
Asian Citrus Holdings Limited 2.6
Anglo Pacific Group plc 2.5
41.9
For further information please contact:
Paul Jourdan or Doug Lawson Doreen Nic
0131 243 0411 0131 243 7215
Amati Global Investors The City Partnership (UK) Limited
Manager Company Secretary
or email vct-enquiries@amatiglobal.com.
18 October 2011
Ends
Detailed monthly updates on portfolio activity and performance are posted on
the Amati Global Investors website
(see http://www.amatiglobal.com/avct2_monthly_investment_reports.php).
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
END
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