TIDMOOA
Octopus AIM VCT plc
Final Results
20 May 2018
Octopus AIM VCT plc, managed by Octopus Investments Limited, today
announces the final results for the year ended 28 February 2019.
These results were approved by the Board of Directors on 17 May 2019.
You may view the Annual Report in full at
https://www.globenewswire.com/Tracker?data=5ujeMguFCkkyoeGMjiNCs2R6djj440zsh8t2VGOj8qyAZGZLGIJzs9G4pIFfzudMaN_FKrHfh6GowE9JKRGkr6-VgQ0Fdg_6oJ1UELTcMefSIC3Q11XAPb2g3obhbXpo
www.octopusinvestments.com in due course. All other statutory
information will also be found there.
Financial Summary
Year to Year to
28 February 2019 28 February 2018
------------------------------------- ----------------- -----------------
Net assets (GBP'000) 122,504 127,070
------------------------------------- ----------------- -----------------
Loss /profit after tax (GBP'000) (13,097) 6,476
------------------------------------- ----------------- -----------------
Net asset value (NAV) per share (p) 101.0 116.1
------------------------------------- ----------------- -----------------
Dividends per share paid in year (p) 5.5 5.5
------------------------------------- ----------------- -----------------
Total return(**) (%) (8.3) 6.3
------------------------------------- ----------------- -----------------
Final dividend proposed **(p) 3.0 3.0
------------------------------------- ----------------- -----------------
(*) Subject to shareholder approval at the Annual General Meeting, the
proposed final dividend will be paid on 2 August 2019 to shareholders on
the register on 5 July 2019.
(**) Total return is an alternative performance measure calculated as
(movement in NAV per share + dividends paid in the period) divided by
the NAV per share at the beginning of the period.
Chairman's Statement
Introduction
The year to 28 February 2019 saw the challenges around international
trade politics and the eventual shape of any Brexit settlement intensify,
particularly in the second half. This led to an increasingly nervous
and unsettled stock market as investors became less comfortable with
risk and as a consequence smaller company shares underperformed as an
asset class. It was not all bad news however, and despite almost daily
negative press, the UK economy continued to grow in 2018 with employment
levels remaining high. Post the period end, at the micro-level, many
companies in the portfolio have been reporting good figures in the
recent March results season. The level of fundraisings on AIM has
remained healthy, particularly in relation to existing companies raising
new capital which exceeded the amount raised from new issues in the
year. Against this background the VCT made GBP10.6m of new VCT
qualifying investments in the period.
During the year Andrew Buchanan, who had been involved in the management
of this Company's investments since its launch in 1998, retired from
Octopus. I would like to take this opportunity to thank him on behalf
of the Board for all his hard work and engagement over the years, and to
wish him a happy retirement. Your Company's investments will continue
to be managed by the Octopus Smaller Companies team, members of which
also have a long association with the Company dating back to the year
2000.
In the year under review, your Company raised GBP17.4 million net of
costs by the issue of new shares and continued to buy back shares from
shareholders wishing to sell.
Performance
Adding back the 5.5p of dividends paid out in the year, the NAV per
share total return was -8.3%. In the same twelve months the FTSE AIM All
Share Index fell by 11.3%, the FTSE SmallCap (excluding investment
companies) Index fell by 6.5% and the FTSE All Share Index rose by 1.7%,
all on a total return basis.
Once again stock specific factors had a significant impact on
performance, both positive and negative, and these are covered in more
detail in the Manager's report. In addition, there was a sharp
reduction in the valuation of growth stocks in the second half of the
period, and this caused the fund to give up the gains that had been
reported in the interim accounts with the fund suffering some
particularly volatile months.
In the year under review AIM has raised GBP5.2bn of new capital, a
decrease from the GBP6.9 billion raised in the previous year, but still
demonstrating its ability to provide additional growth capital for its
members. Against this background the Investment Manager has invested
GBP10.6 million into qualifying companies up from GBP8.4 million in the
previous year.
Further details of performance are contained in the Investment Managers'
Review below.
Dividends
An interim dividend of 2.5p was paid to shareholders in January 2019 in
addition to the 3.0p final dividend that had been paid in July 2018. It
is the Board's intention to continue to pay a minimum of 2.5p each half
year and to adjust the final dividend annually, based on the year-end
share price, so that shareholders receive either 5p per annum or a 5%
yield, whichever is the greater at the time. The Board has considered
the level of dividend in the context of recent share price movements and
on this occasion has chosen to maintain the final dividend of 3.0p,
which brings the total dividend for the year to 5.5p which is a 5.7%
yield based on the share price of 96.0p on 28 February 2019 and greater
than the targeted minimum of 5p.
Dividend Reinvestment Scheme
In common with many other VCTs in the industry, the Company has
established a Dividend Reinvestment Scheme (DRIS). Some shareholders
have already taken advantage of this opportunity. For investors who do
not require income, but value the additional tax relief on their
reinvested dividends, this is an attractive scheme and I hope more
shareholders will find it useful. In the course of the year 889,210 new
shares have been issued under this scheme. The dividend referred to
above will be eligible for the DRIS.
Share Buybacks
During the year to 28 February 2019 the Company continued to buy back
and cancel shares in the market from selling shareholders and purchased
3,313,707 Ordinary shares for a total consideration of GBP3,596,915. We
have maintained a discount of approximately 4.5% (equating to a 5.0%
discount to the selling shareholder after costs), which the Board
monitors and intends to retain as a policy which fairly balances the
interests of both remaining and selling shareholders. Buybacks remain an
essential practice for VCTs, as providing a means of selling is an
important part of the initial investment decision and has enabled the
Company to grow. As such I hope you will all support the appropriate
resolution at the AGM.
Share Issues
On 13 April 2018 119,802 new shares were issued in connection with the
2017/2018 prospectus offer which had closed fully subscribed. An offer
to raise up to GBP12 million with an overallotment facility of up to a
further GBP6 million alongside the Octopus AIM VCT 2 plc was launched on
3 August 2018. The offer closed to new applications on 28 September 2018
fully subscribed, having raised the full GBP18 million. As at 28
February 2019 there was GBP0.2m outstanding in the applications account
to be allotted in the new tax year.
VCT Status
PricewaterhouseCoopers LLP (PwC) provides the Board and Investment
Manager with advice concerning continuing compliance with HMRC
regulations for VCTs. The Board has been advised that Octopus AIM VCT is
in compliance with the conditions laid down by HMRC for maintaining
approval as a VCT. A key requirement is to maintain at least a 70%
qualifying investment level which will rise to 80% for financial years
ending after 6 April 2019. As at 28 February 2019 some 89.6% of the
portfolio as measured by HMRC rules was invested in qualifying
investments.
Risks and Uncertainties
In accordance with the Listing Rules under which the Company operates
the Board has to comment on the potential risks and uncertainties which
could have a material impact on the Company's performance. A risk arises
from the requirement to maintain compliance with HMRC regulations
requiring 70% of the Company's assets to be invested in qualifying
holdings which will rise to 80% by the year to 28 February 2020. Other
risks include economic conditions which impact particularly on smaller
companies in which the Company invests and this could have an adverse
impact on share prices. Further details of the risks faced by the
Company and the processes in place to mitigate them are set out in the
Business Review of the Annual Report and Accounts.
Annual General Meeting (AGM)
The AGM will be held on 18 July 2019. I very much hope that you will be
able to come. After the formal business our Investment Managers will
make a presentation and there will be a chance for you to ask questions.
At the AGM, a resolution will be proposed to extend the life of the
Company until 2025 in order to preserve the VCT status of the Company.
Outlook
The newspapers are still dominated by negative stories about
international trade tensions, domestic politics and the problem of what
our future relationship with the European Union might eventually look
like. The heightened level of uncertainty now appears to be having an
impact on business confidence, with reports of some companies deciding
to delay investment. This has fuelled the recent increase in volatility
in domestic stock market indices which were already un-nerved by stock
market falls elsewhere in the world. This volatility is likely to
continue until the outlook becomes clearer although it is encouraging
that UK economic growth has remained positive if unexciting in 2018,
with a similar outlook currently being forecast for 2019.
The portfolio now contains 77 holdings across a range of sectors and
many of them have already demonstrated their management's ability to
grow their businesses successfully despite difficult market conditions.
The balance of the portfolio towards profitable companies remains, and
the cash available for new investments will allow us to take advantage
of any future lowering of valuations resulting from the current period
of share price weakness.
Roger Smith
Chairman
17 May 2019
Investment Manager's Review
Introduction
The year to 28 February 2019 was very much one of two halves, with the
gains of the first half eroded in much more nervous market conditions
between September and December. The tendency of the market to reward
growth companies that exceeded expectations with higher share prices and
higher ratings came to an end in the second half of the year as
attention focused increasingly on risk in the face of increased
uncertainty about the future international trade and possible
repercussions of Brexit. Against this background smaller companies
underperformed with investors favouring the relative security of the
FTSE 100 with its superior liquidity and exposure to foreign currency
earnings. This had an impact on the NAV which more than reversed the
earlier gain reported at the interim stage, resulting in a negative
return for the year as a whole of 8.3%. There have been some notable
contributors to the portfolio, both positive and negative, but we are
pleased to report the maintenance of the 5% yield objective.
In the year to 28 February 2019 AIM has continued to raise new capital
for companies, both already quoted and new flotations, and your Company
has deployed existing cash throughout the year as well as raising
GBP17.4 million net of costs for future investments. The rate at which
cash was invested tailed off a little towards the end of 2018 and 2019
had a slower start although we have seen a steady stream of existing AIM
companies requiring further funds for growth as well as some earlier
stage companies intending to float in the next twelve months, many of
which will be VCT qualifying. We have invested GBP0.9m since the year
end.
The Alternative Investment Market
After two years of outperformance, AIM trailed larger company indices in
the year, producing a total return of -11.3% in the twelve months to
February. This was well behind the FTSE All Share Index which achieved a
small positive return over the same period and behind the Smaller
Companies Index (ex-Investment Trusts). This reflected growing concerns
about the possible effects on the domestic economy of a disorderly
Brexit added to fears about international growth prospects which
resulted in a much more cautious attitude to perceived risky assets such
as smaller companies. Although the September results season was broadly
supportive, attention focused on the valuations of some of the more
highly rated growth stocks on AIM which had been large contributors to
the Index's previous rise and which were unable to hang onto their
ratings in a more cautious market.
Companies have continued to raise new capital throughout the year. In
the twelve months to 28 February 2019 AIM raised a further GBP3.7
billion of new capital for existing companies as well as a total of
GBP1.5 billion for new companies floating on the market, demonstrating
AIM's ability to provide finance for good growth companies as well as
attracting new entrants. VCTs play a significant part in that funding
process and we identify below the companies we have invested in during
the second half of the year.
Performance
Adding back the dividends paid during the year to show the total return,
the NAV decreased by 8.3% in the year (2018: 6.3% increase). This
compares with a total return for the FTSE SmallCap Index ex-Investment
Trusts of -6.5% and for the FTSE AIM All Share Index of -11.3%. The
FTSE All Share Index fared better, showing a positive total return of
1.7%. It was a year of two halves and the fund gave up all of its first
half gains and more in the second half when much more volatile market
conditions caused smaller companies to underperform. Once again the
market proved wary of smaller companies that have yet to make a profit
(of which there are several in the VCT), although even more established
companies meeting expectations were not immune from bouts of share price
weakness, particularly those perceived as growth stocks on higher than
average ratings. Breedon Aggregates and Learning Technologies, both top
ten holdings, underperformed in the year for this reason despite
delivering on profit expectations. GB Group also gave up some of its
very good performance of the first half in the second half of the year
although it still made a positive impact for the year as a whole.
Investors were particularly unforgiving of companies that disappointed
by missing market expectations and this led to significant share price
weakness in some cases.
Craneware caught investors' attention as it started to demonstrate some
initial revenues from its newly developed Trisus platform. This extends
the number of products that it can offer to US hospitals to increase
their efficiency and is expected to lead to significantly increased
revenues per hospital account. The shares could not sustain their very
high rating in the less certain market conditions at the end of 2018 but
the company was still a significant contributor to performance for the
year as a whole. Among the larger and more established companies, RWS,
GB Group, Gamma and Next Fifteen Communications were all positive
contributors for the year despite share price weakness in the second
half. We continue to hold them for the longer-term growth opportunities
that we feel they still have. Two recent investments, Creo Medical and
the Panoply Holdings have both performed very well since we invested.
Some companies suffered from specific headwinds which resulted in poor
share price performance. The biggest detractor from performance in the
year was Gear4music. A trading update in January 2019 revealed that
they had suffered difficulties in fulfilling the level of demand they
had experienced in the run up to Christmas. This resulted in lower sales
than management had expected which will have a knock-on effect on
margins and profits for the year to March 2019. Investors took this
very badly indeed despite the fact that the Group is still growing its
sales by nearly 40% per annum and expanding its footprint in Europe.
Another major disappointment in the second half of the year came from Yu
Group, the supplier of energy to small and medium sized businesses.
Post its listing on AIM in 2016, it had reported strong growth in
revenue and profits and had produced a confident statement with its
interim results in September 2018. However, this was followed by a
statement that the accounts and accounting practices were being reviewed
and that the Group would be lossmaking for the year to December. A
further announcement in December did not really clarify the extent of
the problem and in view of headwinds being reported by other alternative
suppliers we sold the shares at a loss. Two other negative contributors
were Velocity, which had a series of downgrades to forecasts followed by
management changes, and DP Poland which reported increased competition
from takeaway delivery aggregators pointing to a slower path to
breakeven and a need for further funds. Quixant shares fell after they
failed to produce an expected upgrade to forecasts in the January
trading update and instead guided analysts to a second half weighted
2019. We had taken some profits in the holding in the summer of 2018
but still view this as a core holding for its longer term growth
prospects.
After performing very well for most of the year, Staffline had a
turnaround in its fortunes right at the end of the period and when it
was a top five holding in the portfolio. It was unable to publish its
figures as expected at the end of January due to a last minute
allegation over payment practices in its staffing division. The shares
fell by 40% before being suspended later that day. After some weeks and
an exhaustive investigation by its auditors it was able to put a
statement out to the market and re-list its shares, allowing them to
recover from their lows although not yet to the level they fell from.
The shares in Staffline are shown in the accounts at the suspension
price of 669p. Further recovery should be possible once the audited
accounts are published. At the time of writing the share price has
improved to 861p.
Elsewhere, early stage companies yet to reach profitability once again
held back performance of the NAV, some of which had setbacks or found
themselves in need of cash to achieve the next milestone. Futura Medical,
Osirium, Microsaic, Midatech Pharma and Haydale Graphene all came into
that category.
There are a number of more recent constituents of the portfolio that
have yet to make an impression in public markets and whose shares have
underperformed while awaiting evidence of progress in their businesses.
These include some recent new holdings from the past two years such as
Trackwise Designs, Maestrano, Maxcyte, appScatter and Escape Hunt.
Investing for a VCT involves backing companies when they are small and
still at an early stage of development and share price progress depends
on them being noticed by a wider circle of investors as they produce
results and develop their businesses over time. Although the earlier
stage companies in the portfolio represent a relatively small proportion
by value we expect them to contribute to future performance when they
start to demonstrate growth in their businesses. In the year under
review there were some examples of companies that demonstrated that they
had started to achieve that in the period and whose shares outperformed
including Ixico, Scientific Digital Imaging, Access Intelligence, Beeks
Financial Cloud, and Mycelx. The latter was helped by a stronger oil
price and increased demand for its technology to clean hydrocarbons out
of water which led to several upgrades to revenues during the year and
the restoration of profitability. The shares had a significant positive
effect on the performance of the NAV.
The non-qualifying element of the equity portfolio comprises the funds
raised in share offers awaiting deployment into qualifying investments.
Further investments were made into Octopus Portfolio Manager and the
Octopus UK Micro Cap Growth fund and a new investment was made into the
Octopus Multi-Cap Income fund in the period.
Portfolio Activity
Having made twelve qualifying investments into eleven companies at a
total cost of GBP8.1 million in the first half of the year, we added two
further new qualifying holdings at a cost of GBP1.9 million in the
second half, as well as two follow-on qualifying investment of GBP0.1
million into Access Intelligence Group and GBP0.5 million into Maxcyte.
Total investment of GBP10.6 million in qualifying investments for the
year was considerably higher than last year's GBP8.4 million, reflecting
a still healthy AIM market.
One of the two new qualifying investments, the Panoply Holdings plc, was
a new issue. It helps its customers to increase the efficiency of their
operations using technology such as artificial intelligence and software
design. The other, Falanx plc, is an existing AIM company. It informs,
protects and defends businesses from the growing threat of cyber
security breaches.
The manager continued to use non-qualifying investments to manage
liquidity while awaiting new qualifying investment opportunities. We
have held onto existing AIM holdings where we see the opportunity for
further development but have invested any new funds raised into a
mixture of the Octopus managed portfolios with a small proportion going
into the FP Octopus UK Micro Cap Growth fund and the FP Octopus UK Multi
Cap Income fund. This strategy is designed to obtain a better return on
funds awaiting investment than the very low rates available on cash.
During the year we realised profits in holdings in Quixant, Learning
Technologies, GB Group, Gooch and Housego, Beeks Financial, RWS Holdings
and Creo Medical after good performances. Escher Group, Sinclair Pharma,
Free Agent, and CityFibre were all the subject of takeover bids for
cash. In addition we sold the entire holdings in Faron Pharmaceuticals,
Futura Medical and Yu Group and part of the holding in Diurnal at a
loss. The holding in TLA was sold at a small profit over book cost. In
all disposals raised GBP9.0 million in cash and made an aggregated
profit on original cost of GBP1.6 million.
New VCT Regulations
The budget in November 2018 contained no significant changes to the VCT
regulations. As a reminder, any funds raised in accounting periods
beginning on or after 6th April 2018 should be 30% invested in
qualifying holdings within 12 months of the end of the accounting period
in which the shares were issued, and for financial years ending after 6
April 2019 the portfolio will have to maintain a minimum qualifying
investment of 80% (currently 70%).
We are determined to maintain a threshold of quality and to invest where
we see the potential for returns from growth. However, the emphasis of
the new regulations is definitely to encourage investment into earlier
stage companies, and to that extent it seems likely that over a number
of years the portfolio will see a rise in the number of younger
companies receiving an initial investment. We would expect to invest
further in those companies as they demonstrate their ability to grow.
At present there has been little change to the profile of the portfolio,
as we continue to hold the larger market capitalisation companies, in
which we invested several years ago as qualifying companies, or which we
bought in the market prior to the rule changes where we see the
potential for them to continue to grow.
In order to qualify companies must:
-- have fewer than 250 full time equivalent employees; and
-- have less than GBP15 million of gross assets at the time of
investment and no more than GBP16 million immediately post investment;
and
-- be less than seven years old from the date of their first
commercial sale (or 10 years if a knowledge intensive company) if
raising State Aided (ie VCT) funds for the first time; and
-- have raised no more than GBP5 million of State Aided funds in
the previous 12 months and less than the lifetime limit of
GBP12 million (or from 6th April 2018 GBP10 million in 12 months and a
GBP20 million lifetime limit if a knowledge intensive company); and
-- produce a business plan to show that the funds are being raised
for growth and development.
The latest changes are to encourage VCTs to keep their investment rate
up after raising money -- hence the 70% limit will rise to 80% from 28
February 2020. However, allowing knowledge intensive companies to raise
up to GBP10m of the GBP20m lifetime limit in a twelve month period
rather than the existing GBP5m will improve flexibility as will the
proposed change to the amount of time allowed for re-investment of cash
from sales of qualifying holdings from six to twelve months.
Outlook and Future Prospects
Equity markets have got off to a better start to 2019, however all of
the uncertainties about the eventual shape of our future relationship
with the EU, domestic political instability and the resilience of our
economic growth remain challenges at the present time and this means
that markets are likely to remain volatile. Against this background it
is also unlikely that shares that suffered from sharp falls in their
ratings in the final quarter of 2018 will recover these fully in the
short term.
The portfolio now contains 77 holdings with investments across a range
of sectors including several such as Craneware, RWS, Gooch and Housego,
Cello, EKF Diagnostics, Mycelx and GB Group that have significant
international exposure. There are a number of newer holdings that we
expect to demonstrate progress over the coming twelve months and the
balance of the portfolio towards profitable companies remains. The VCT
currently has funds available for new investments which should allow us
to take advantage of any dip in valuations resulting from current weak
sentiment and we remain selective when viewing new investment
opportunities.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and
Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors are required to
prepare the financial statements and have elected to prepare the
Company's financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law) including FRS 102 -- "The Financial
Reporting Standard applicable in the UK and Republic of Ireland". Under
company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit or loss for the
Company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are reasonable and
prudent;
-- state whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and explained in
the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
-- prepare a Strategic Report, a Director's Report and Director's
Remuneration Report which comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for ensuring that the annual report and
accounts, taken as a whole, are fair, balanced, understandable and
provide the information necessary for shareholders to assess the
Company's position and performance, business model and strategy.
Website Publication
The Directors are responsible for ensuring the Annual Report and the
Accounts are made available on a website. Financial statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's website is the responsibility
of the Directors. The Directors' responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Directors' Responsibility Statement pursuant to DTR4
Roger Smith (Chairman), Stephen Hazell-Smith, Joanne Parfrey and Neal
Ransome the Directors, confirm to the best of their knowledge that:
-- the financial statements have been prepared in accordance with
the Financial Reporting Standard applicable in the United Kingdom and
Republic of Ireland ("FRS 102") and give a true and fair view of the
assets, liabilities, financial position and profit and loss of the
Company; and
-- the Annual Report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties
that it faces.
For and on behalf of the Board
Roger Smith
Chairman
17 May 2019
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the years ended 28 February 2019 or 28
February 2018 but is derived from those accounts. Statutory accounts for
the year ended 28 February 2018 have been delivered to the Registrar of
Companies and statutory accounts for the year ended 28 February 2019
will be delivered to the Registrar of Companies in due course. The
Auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to which
the Auditor drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006. The text of the Auditor's reports can be
found in the Company's full Annual Report and Accounts at
www.octopusinvestments.com
Income Statement
Year to 28 February Year to 28 February
2019 2018
---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- -------- -------- -------- --------
(Loss)/gain on disposal
of fixed asset investments -- (3,796) (3,796) -- 477 477
---------------------------- -------- -------- -------- -------- -------- --------
(Loss)/gain on valuation
of fixed asset investments -- (7,701) (7,701) -- 6,943 6,943
---------------------------- -------- -------- -------- -------- -------- --------
Gain on valuation of
current asset investments -- 53 53 -- 541 541
---------------------------- -------- -------- -------- -------- -------- --------
Investment income 794 307 1,101 843 -- 843
---------------------------- -------- -------- -------- -------- -------- --------
Investment management
fees (545) (1,635) (2,180) (432) (1,296) (1,728)
---------------------------- -------- -------- -------- -------- -------- --------
Other expenses (574) -- (574) (600) -- (600)
---------------------------- -------- -------- -------- -------- -------- --------
(Loss)/profit before
tax (325) (12,772) (13,097) (189) 6,665 6,476
---------------------------- -------- -------- -------- -------- -------- --------
Tax -- -- -- -- -- --
---------------------------- -------- -------- -------- -------- -------- --------
(Loss)/profit after tax (325) (12,772) (13,097) (189) 6,665 6,476
---------------------------- -------- -------- -------- -------- -------- --------
Earnings per share --
basic and diluted (0.3p) (11.2p) (11.5p) (0.2p) 6.7p 6.5p
---------------------------- -------- -------- -------- -------- -------- --------
-- The 'Total' column of this statement represents the statutory
Income Statement of the Company; the supplementary revenue return and
capital return columns have been prepared in accordance with the AIC
Statement of Recommended Practice.
-- All revenue and capital items in the above statement derive from
continuing operations.
-- The Company has only one class of business and derives its
income from investments made in shares and securities and from bank and
money market funds, as well as OEIC funds.
The Company has no recognised gains or losses other than the results for
the period as set out above. Accordingly a Statement of Comprehensive
Income is not required.
Balance Sheet
As at 28 February 2019 As at 28 February 2018
--------------------------- ----------------------- ------------------------
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- ----------- ----------- -----------
Fixed asset investments 81,671 91,247
--------------------------- ---------- ----------- ----------- -----------
Current assets:
--------------------------- ---------- ----------- ----------- -----------
Investments 28,852 24,959
--------------------------- ---------- ----------- ----------- -----------
Money Market Funds 1,314 4,300
--------------------------- ---------- ----------- ----------- -----------
Debtors 71 52
--------------------------- ---------- ----------- ----------- -----------
Cash at bank 11,611 7,475
--------------------------- ---------- ----------- ----------- -----------
41,848 36,786
--------------------------- ---------- ----------- ----------- -----------
Creditors: amounts falling
due within one year (1,015) (963)
--------------------------- ---------- ----------- ----------- -----------
Net current assets 40,833 35,823
--------------------------- ---------- ----------- ----------- -----------
Net assets 122,504 127,070
--------------------------- ---------- ----------- ----------- -----------
Share capital 1,213 1,094
--------------------------- ---------- ----------- ----------- -----------
Share premium 81,368 63,098
--------------------------- ---------- ----------- ----------- -----------
Capital redemption reserve 94 61
--------------------------- ---------- ----------- ----------- -----------
Special distributable
reserve 36,592 46,483
--------------------------- ---------- ----------- ----------- -----------
Capital reserve realised (28,999) (29,277)
--------------------------- ---------- ----------- ----------- -----------
Capital reserve unrealised 32,317 45,367
--------------------------- ---------- ----------- ----------- -----------
Revenue reserve (81) 244
--------------------------- ---------- ----------- ----------- -----------
Total equity shareholders'
funds 122,504 127,070
--------------------------- ---------- ----------- ----------- -----------
NAV per share -- basic 101.0p 116.1p
and diluted
--------------------------- ---------- ----------- ----------- -----------
The statements were approved by the Directors and authorised for issue
on 17 May 2019 and are signed on their behalf by:
Roger Smith
Chairman
Company number: 03477519
Statement of Changes in Equity
Capital Special Capital Capital
Share Share redemption distributable reserve reserve Revenue
Capital premium reserve reserves(*) realised(*) unrealised reserve(*) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
As at 1 March 2018 1,094 63,098 61 46,483 (29,277) 45,367 244 127,070
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Management fee allocated
as capital expenditure -- -- -- -- (1,635) -- -- --
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Current year losses
on disposal -- -- -- -- (3,796) -- -- (3,796)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Current period loss
on fair value of
investments -- -- -- -- -- (7,648) -- (7,648)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Capital investment
income -- -- -- -- 307 -- -- 307
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Loss on ordinary
activities after
tax -- -- -- -- -- -- (325) (325)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total comprehensive
income for the year -- -- -- -- (5,124) (7,648) (325) (13,097)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Contributions by
and distributions
to owners:
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Repurchase and cancellation
of own shares (33) -- 33 (3,597) -- -- -- (3,597)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Issue of shares 152 19,392 -- -- -- -- -- 19,544
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Share issue costs -- (1,122) -- -- -- -- -- (1,122)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Dividends paid -- -- -- (6,294) -- -- -- (6,294)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total contributions
by and distributions
to owners 119 18,270 33 (9,891) -- -- -- 8,531
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Other movements:
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Prior years' holding
gains now realised -- -- -- -- 5,402 (5,402) -- --
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total other movements -- -- -- -- 5,402 (5,402) -- --
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Balance as at 28
February 2019 1,213 81,368 94 36,592 (28,999) 32,317 (81) 122,504
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Capital Special Capital Capital
Share Share redemption distributable reserve reserve Revenue
Capital premium reserve reserves(*) realised(*) unrealised reserve(*) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
As at 1 March 2017 873 35,422 45 53,717 (28,020) 37,445 433 99,915
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Management fee allocated
as capital expenditure -- -- -- -- (1,296) -- -- (1,296)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Current year gains
on disposal -- -- -- -- 477 -- -- 477
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Current period gain
on fair value of
investments -- -- -- -- -- 7,484 -- 7,484
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Loss on ordinary
activities after
tax -- -- -- -- -- -- (189) (189)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total comprehensive
income for the year -- -- -- -- (819) 7,484 (189) 6,476
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Contributions by
and distributions
to owners:
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Repurchase and cancellation
of own shares (16) -- 16 (1,792) -- -- -- (1,792)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Issue of shares 237 29,399 -- -- -- -- -- 29,636
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Share issue costs -- (1,723) -- -- -- -- -- (1,723)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Dividends paid -- -- -- (5,442) -- -- -- (5,442)
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total contributions
by and distributions
to owners 221 27,676 16 (7,234) -- -- -- 20,679
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Other movements:
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Prior years' holding
losses now realised -- -- -- -- (438) 438 -- --
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Total other movements -- -- -- -- (438) 438 -- --
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
Balance as at 28
February 2018 1,094 63,098 61 46,483 (29,277) 45,367 244 127,070
---------------------------- -------- -------- ----------- -------------- ------------ ----------- ----------- --------
(*) Included in these reserves is an amount of GBP7,512,000 (2018:
GBP17,450,000) which is considered distributable to shareholders.
Cash Flow Statement
Year to 28 February Year to 28 February
2019 2018
GBP'000 GBP'000
------------------------------------ ------------------- -------------------
Cash flows from operating activities
------------------------------------ ------------------- -------------------
Return on ordinary activities
before tax (13,097) 6,476
------------------------------------ ------------------- -------------------
Adjustments for:
------------------------------------ ------------------- -------------------
(Increase)/decrease in debtors (19) 280
------------------------------------ ------------------- -------------------
Increase/(decrease) in creditors 52 (7,910)
------------------------------------ ------------------- -------------------
Loss/(gain) on disposal of fixed
asset investments 3,796 (477)
------------------------------------ ------------------- -------------------
Loss/(gain) on valuation of fixed
asset investments 7,701 (6,943)
------------------------------------ ------------------- -------------------
Gain on valuation of current asset
investments (53) (541)
------------------------------------ ------------------- -------------------
Non-cash Distributions (307) --
------------------------------------ ------------------- -------------------
Cash from operations (1,927) (9,115)
------------------------------------ ------------------- -------------------
Cash flows from investing activities
------------------------------------ ------------------- -------------------
Purchase of fixed asset investments (10,581) (8,947)
------------------------------------ ------------------- -------------------
Gross investment in current asset
investments (3,840) (14,850)
------------------------------------ ------------------- -------------------
Sale of fixed asset investments 8,967 5,039
------------------------------------ ------------------- -------------------
Net cash flows from investing
activities (5,454) (18,758)
------------------------------------ ------------------- -------------------
Cash flows from financing activities
------------------------------------ ------------------- -------------------
Purchase of own shares (3,597) (1,792)
------------------------------------ ------------------- -------------------
Share issues (net of costs of
GBP1,122,000) 17,438 27,164
------------------------------------ ------------------- -------------------
Dividends paid (5,310) (4,693)
------------------------------------ ------------------- -------------------
Net cash flows from financing
activities 8,531 20,679
------------------------------------ ------------------- -------------------
Increase/(decrease) in cash and
cash equivalents 1,150 (7,194)
------------------------------------ ------------------- -------------------
Opening cash and cash equivalents 11,775 18,969
------------------------------------ ------------------- -------------------
Closing cash and cash equivalents 12,925 11,775
------------------------------------ ------------------- -------------------
Cash and cash equivalents comprise
------------------------------------ ------------------- -------------------
Cash at Bank 11,611 7,475
------------------------------------ ------------------- -------------------
Money Market Funds 1,314 4,300
------------------------------------ ------------------- -------------------
12,925 11,775
------------------------------------ ------------------- -------------------
(END) Dow Jones Newswires
May 20, 2019 08:10 ET (12:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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