RNS Number:2254O
Mithras Investment Trust PLC
01 August 2003
MITHRAS INVESTMENT TRUST PLC
STOCK EXCHANGE ANNOUNCEMENT: 1 August 2003
INTERIM RESULTS FOR THE YEAR ENDING 31 DECEMBER 2003
ANNOUNCEMENT OF UNAUDITED RESULTS
This preliminary announcement is prepared on the same basis as set out in the
report and accounts for the year ended 31 December 2002. The results for the six
months ending 30 June 2003 and 30 June 2002 are unaudited and do not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. Full
statutory accounts for the year ended 31 December 2002 included an unqualified
audit report and were filed with the Registrar of Companies on 24 April 2003.
RETURN ON EQUITY*
Mithras' Total Return* All-Share Index
Six months ended 30 June 2003 18.2% 6.3%
From flotation on 21 February 1994 to date 108.8% 58.6%
* Total return after tax on opening shareholders funds.
RESULTS AND DIVIDENDS
Six months ended Six months ended
30 June 2003 30 June 2002
Revenue return on ordinary
activities before tax #1.8 million #0.92 million
Net dividends per ordinary share 2.00 pence** 1.80 pence***
** Special dividend (in lieu of 2003 interim dividend) declared in March
2003 in respect of year ended 31 December 2002
*** Special dividend (in lieu of 2002 interim dividend) declared in March
2002 in respect of year ended 31 December 2001
NET ASSET VALUES AND SHARE PRICES
As at As at
30 June 2003 31 December 2002
Net asset value per share 71.3 pence 61.0 pence
Fully diluted net asset value per share 71.3 pence 59.5 pence
Mid market quoted share price 42.0 pence 38.5 pence
MANAGER'S REPORT
Overview
Despite the continuing unsettled market conditions, Mithras has performed well
over the last six months. The Company has made a total return of 18.2% in the
first half against the All-Share at 6.3%. The Company's net asset value
("NAV"), including undistributed current year revenue, is up from 59.5 pence to
71.3 pence per share, an increase of 19.8%. The reduced level of dilution
resulting from the lapse of unexercised warrants on 28 May 2003 has contributed
1.1 pence per share to the NAV.
The Company's revenue return has performed strongly against last year's interim,
almost doubling its return to #1.8m, and is the highest, at half year, since
1999. As a result of specific portfolio initiatives, provision against interest
on non-performing loans has been reduced.
During the last six months the Company has not made any new mezzanine
investments but has made a #2 million equity investment in LGV 3 Private Equity
Fund. The Company has achieved a positive cash flow from its investment
activities with realisations and redemptions amounting to #2.4 million.
Results for Six Months
* Net assets per share are up from 59.5 pence at 31 December 02 to 71.3 pence,
an increase of 19.8%
* Revenue return on ordinary shares before tax is up from #0.92 million for the
six months to 30 June 2002 to #1.8 million for the six months to 30 June
2003.
* Total return for the period is 18.2% compared to the All-Share Index of 6.3%
Dividends
As reported in the December 2002 Report & Accounts and approved by shareholders
at April's AGM, a special dividend of 2.0 pence per share (2002: 1.80 pence) was
declared in March 2003 in respect of the year ended 31 December 2002. The
special dividend will be paid in lieu of the Company's 2003 interim dividend.
The special dividend is payable on 24 October 2003 to shareholders on the
register at the close of business on 19 September 2003.
New Investment Activity
During the last six months, LGV has concentrated on the management of Mithras'
existing portfolio. The Company made no new mezzanine investments but has made a
#2.0 million investment in the LGV 3 Private Equity Fund, out of a total
commitment of #7.5 million (LGV 3 is a #154.8 million private equity fund). LGV
together with a consortium of private equity investors acquired the Warner
Village UK cinema chain and merged it with SBC, a small cinema operation based
in the UK. This combined entity has been renamed Vue Entertainment. Vue
comprises 42 cinemas and is the largest multiplex cinema chain in the UK. The
LGV 3 Private Equity Fund has invested #40 million in Vue.
Realisations
Mithras had four redemptions amounting to #2.4 million during the first half.
The redemptions were from Bourne Leisure, Bristol Street, Tally and TCG. In
March 2003 Bourne Leisure repaid all its institutional loan stock, the Company's
share being #849k.
Bristol Street was sold on 31 January 2003 to the management with IRR of 11.6%
for the mezzanine. Mithras' mezzanine loan had been previously repaid. The gain
on its equity kicker was #296k.
Tally and TCG had both previously repaid part of their mezzanine loans amounting
to #591k and #304k respectively.
Revaluation and Provisions
During the first half, several revaluations and provisions have been made within
the Company's portfolio, the most significant being the revaluation of Aluminium
Dunkerque that was announced to the Stock Exchange on 9 July 2003. The Company
along with other financial investors in this aluminium smelter project has
committed to sell its interest to Pechiney with completion due to take place on
30 December 2003.
Four other investments have been revalued upwards and provisions have been made
against two investments giving a net valuation uplift of #0.1 million.
As at 30 June 2003, the Company's portfolio has been valued in accordance with
the basis as set out in the Company's report and accounts as at 31 December
2002. The British Venture Capital Association ("BVCA") has recently issued new
valuation guidelines, which come into effect from 1 August 2003. Mithras will
be reviewing its valuation basis in accordance with these guidelines and where
practicable will adopt these guidelines in its 30 September 2003 NAV
calculation.
Borrowing Facilities and Currency Hedging
As at 30 June 2003, the Company's debt was #39.1 million against #38.5 million
as at 31 December 2002. The positive cashflow from its investment activities
together with #0.7 million received from the exercise of warrants was partially
offset by the dividend payment made in April 2003. In addition the strengthening
of the euro against sterling has increased the sterling equivalent of the debt
outstanding since most of the Company's borrowings are in euros. As Mithras
hedges all its non-sterling mezzanine investments against these borrowings, the
Company has neither made a gain or loss on these currency movements.
Outlook
While there are signs of increased optimism in the private equity market and
expectations of increased activity levels, LGV will continue to adopt a
selective approach to new investment opportunities. The key areas of focus for
Mithras during the second half of 2003 will be cash generation and continued
value creation from the portfolio.
Legal & General Ventures Limited
31 July 2003
CONSOLIDATED STATEMENT OF TOTAL RETURN
(INCORPORATING THE REVENUE ACCOUNT)
Six months to 30 June 2003
Notes Revenue Capital Total
#'000 #'000 #'000
Gains on investments 2 - 3,430 3,430
Income 3 3,746 - 3,746
Total gross return 3,746 3,430 7,176
Investment management fees (243) (243) (486)
Other expenses 4 (5) - (5)
Provisions against interest income (658) - (658)
Net return before finance costs and tax 2,840 3,187 6,027
Interest payable and similar charges (1,053) - (1,053)
Return on ordinary activities before tax 1,787 3,187 4,974
Tax (charge)/credit on ordinary
activities (682) 187 (495)
Return on ordinary activities after tax
for the period 1,105 3,374 4,479
Dividends in respect of equity shares 5 - - -
Transfer to reserves 1,105 3,374 4,479
Return per ordinary share (pence) 6 2.7 8.3 11.0
Net asset value per share (including 30 June 2003 31 December 2002
current year revenue)
Undiluted (pence) 7 71.3 61.0
Diluted (pence) 7 71.3 61.0
Fully diluted (pence) 7 71.3 59.5
CONSOLIDATED STATEMENT OF TOTAL RETURN (CONTINUED)
(INCORPORATING THE REVENUE ACCOUNT)
Six months to 30 June 2002
Revenue Capital Total
#'000 #'000 #'000
Gains on investments - 756 756
Income 3,613 - 3,613
Total gross return 3,613 756 4,369
Investment management fees (280) (280) (560)
Other expenses (93) - (93)
Provisions against interest income (1,325) - (1,325)
Net return before finance costs and tax 1,915 476 2,391
Interest payable and similar charges (991) - (991)
Return on ordinary activities before tax 924 476 1,400
Tax (charge)/credit on ordinary (430) 84 (346)
activities
Return on ordinary activities after tax 494 560 1,054
for the period
Dividends in respect of equity shares - - -
Transfer to reserves 494 560 1,054
Return per ordinary share
Basic (pence) 1.2 1.4 2.6
Diluted (pence) 1.2 1.4 2.6
CONSOLIDATED STATEMENT OF TOTAL RETURN (CONTINUED)
(INCORPORATING THE REVENUE ACCOUNT)
Year ended 31 December 2002
Notes Revenue Capital Total
#'000 #'000 #'000
Losses on investments - (6,979) (6,979)
Income 6,750 - 6,750
Total gross return 6,750 (6,979) (229)
Investment management fees (516) (516) (1,032)
Other expenses (538) - (538)
Provision against interest income (1,020) - (1,020)
Net return before finance costs and tax 4,676 (7,495) (2,819)
Interest payable and similar charges (2,063) - (2,063)
Return on ordinary activities before tax 2,613 (7,495) (4,882)
Tax (charge)/credit on ordinary activities (593) (201) (794)
Return on ordinary activities after tax for the year 2,020 (7,696) (5,676)
Dividends in respect of equity shares (1,530) - (1,530)
Transfer to/(from) reserves 490 (7,696) (7,206)
Return per ordinary share
Basic (pence) 5.0 (19.1) (14.1)
Diluted (pence) 5.0 (19.1) (14.1)
CONSOLIDATED BALANCE SHEET
30 June 2003 31 December 2002
Notes #'000 #'000 #'000 #'000
Fixed asset investments 8 67,792 61,262
Current assets
Debtors 11 3,616 3,102
Cash at bank and in hand 10 214 1,385
Total current assets 3,830 4,487
Current liabilities
Creditors: amounts falling due
within one year 12 (7,334) (7,607)
Net current liabilities (3,504) (3,120)
Total assets less current
liabilities 64,288 58,142
Creditors: amounts falling due
after more than one year 13 (34,505) (33,578)
Net assets 29,783 24,564
Capital and reserves
Called up share capital 835 805
Reserves
Share premium account 14 8,598 7,488
Warrant reserve 14 - 1,681
Capital reserve - realised 34,703 33,457
Capital reserve - unrealised (20,350) (23,759)
Revenue reserve 5,997 4,892
28,948 23,759
Shareholders' funds (all equity interests) 29,783 24,564
Reserves
CONSOLIDATED CASH FLOW STATEMENT
Period ended Period ended Year ended
30 June 2003 30 June 2002 31 December 2002
#'000 #'000 #'000 #'000 #'000 #'000
Net cash inflow from
operating
activities (note 9) 1,349 324 1,775
Returns on investments
and servicing of
finance
Interest paid (984) (1,294) (2,097)
Tax received 191 1,115 1,115
Financial investment
Acquisitions of
investments (2,885) (6,275) (11,748)
Disposal of
investments 2,953 18,194 19,006
68 11,919 7,258
Equity dividends paid (725) (644) (1,369)
Cashflow before use of
liquid resources
and financing (101) 11,420 6,682
Management of liquid
resources
Financing
Issue of shares from
warrants exercised 740 - -
Terms and other
unsecured loans 3,230 150 9,762
Repayment of
borrowings (5,040) (10,632) (17,112)
(1,070) (10,482) (7,350)
Increase/(decrease) in
cash (note 10) (1,171) 938 (668)
NOTES TO THE INTERIM RESULTS
1 ACCOUNTING POLICIES
The accounting policies used by Mithras in preparing this interim report are
consistent with those used in preparing the statutory accounts for the year
ended 31 December 2002.
2 GAINS/(LOSSES) ON INVESTMENTS
Unquoted Investments
Equity Mezzanine Total
#'000 #'000 #'000
Realised gains on sale 5 16 21
Revaluations recognised in prior periods 30 - 30
Realised gains in current period 35 16 51
Revaluations/(provisions) 5,318 (1,728) 3,590
Net foreign currency gains on
investments 162 2,020 2,182
Foreign currency losses on borrowings
used to finance investments - (2,393) (2,393)
5,515 (2,085) 3,430
3 INCOME
Period ended Period ended Year ended
30 June 2003 30 June 2002 31 December 2002
#'000 #'000 #'000
Investment income 3,737 3,439 6,514
Dividends 3 - 13
Other income 6 174 223
3,746 3,613 6,750
4 OTHER EXPENSES
The return on ordinary activities before tax is shown after charging the following amounts:
Period ended Period ended Year ended
30 June 2003 30 June 2002 December 2002
#'000 #'000 #'000
Auditors' remuneration 11 12 26
Auditors' remuneration
(non-audit services)
- interim review - 4 9
- other services - 12 14
Directors' emoluments 39 31 70
Other administrative expenses 127 77 160
Exchange gain (172) (43) (47)
Bad debts written off - - 306
5 93 538
5 INTERIM DIVIDEND
No interim dividend has been declared in 2003 however, a special dividend of 2.0
pence per share was declared in March 2003 in respect of the year ended 31
December 2002 which will be paid as an alternative to the 2003 interim. There
were 41,754,167 shares in issue at 30 June 2003 and this dividend will absorb
#835,083. It will be paid on 24 October 2003 to shareholders on the register as
at the close of business on 19 September 2003.
6 RETURN PER ORDINARY SHARE
The return per ordinary share is based on the net revenue return on ordinary
shares before deduction of dividends of #1,105,000 (2002: #494,000) and on the
net capital return of #3,374,000 (2002: #560,000)) respectively and on
40,543,830 (2002: 40,273,958) shares being the weighted average number of
ordinary shares in issue during the period. Prior year's comparative diluted
revenue and capital returns per ordinary share were calculated on the same
basis.
Since the final exercise date of the warrants has expired no diluted return
will be calculated for 30 June 2003.
7 NET ASSET VALUE PER SHARE
The net asset value per ordinary share is based on the net assets shown in the
consolidated balance sheet at 30 June 2003, and on 41,754,167 (31 December 2002:
40,273,958) ordinary shares being the number of ordinary shares in issue at 30
June 2003.
The net asset value per ordinary share includes current year revenue reserves.
In respect of comparative for 31 December 2002, the fully diluted net asset
value per ordinary share was calculated on the assumption that the share
warrants in issue at 31 December 2002 were fully converted at #0.50 per share,
increasing the net assets shown in the consolidated balance sheet at the period
end by the subscription proceeds and giving a total of 46,501,000 shares.
Since the final exercise date of the warrants has expired no diluted net asset
value will be calculated for 30 June 2003.
8 MOVEMENTS IN INVESTMENT PORTFOLIO
Unquoted Investments
Equity Mezzanine Total
#'000 #'000 #'000
Opening book cost 16,563 57,159 73,722
Revaluations/(provisions) 792 (12,683) (11,891)
Unrealised currency movements
(partially hedged) 51 (620) (569)
Opening valuation 17,406 43,856 61,262
Movements in the year:
Purchases at cost* 3,040 620 3,660
Sales - proceeds (2,058) (895) (2,953)
- realised gains 35 16 51
Revaluations/(provisions) 5,318 (1,728) 3,590
Unrealised currency movements
(partially hedged) 162 2,020 2,182
Closing valuation 23,903 43,889 67,792
Closing book cost 17,550 56,900 74,450
Revaluations/(provisions) 6,140 (14,411) (8,271)
Unrealised currency movements
(partially hedged) 213 1,400 1,613
Closing valuation 23,903 43,889 67,792
* includes capitalised interest of #775,000
9 RECONCILIATION OF REVENUE BEFORE INTEREST AND TAX TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Period ended Period ended Year ended
30 June 2003 30 June 2002 31 December 2002
#'000 #'000 #'000
Net revenue before
interest payable
and tax 2,839 1,915 4,676
Increase/(decrease) in
creditors 153 (250) (189)
Increase in accrued
income/debtors (551) (517) (622)
Management fee charged to capital (243) (280) (516)
Capitalised interest (775) (534) (1,562)
Foreign currency
movements (74) (10) (12)
1,349 324 1,775
10 ANALYSIS OF CHANGES IN NET DEBT
At 1 Cash Foreign Currency/ At 30
January Flow Other Movements June
2003 2003
#'000 #'000 #'000 #'000
Cash at bank 1,385 (1,245) 74 214
Debt due within one year (4,954) 139 206 (4,609)
Debt due after one year (33,578) 1,671 (2,599) (34,506)
(37,147) 565 (2,319) (38,901)
11 DEBTORS
At 30 June At 31 December
2003 2002
#'000 #'000
Due within one year:
Prepayments and accrued income 2,102 2,347
Due after more than one year:
Accrued income 1,495 736
Deferred tax 19 19
3,616 3,102
12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
At 30 June At 31 December
2003 2002
#'000 #'000
Unsecured loan 4,609 4,954
Proposed dividend 805 1,530
Accruals 754 643
Corporation tax 1,166 480
7,334 7,607
The unsecured term loan consists of a revolving loan of #5 million repayable
within one year on which interest accrues at 1.4% over LIBOR or EURIBOR and an
unsecured term loan of #45 million repayable in five years (maturity is June
2007) on which interest accrues at 1.9% over LIBOR or EURIBOR. This loan can be
drawn in any currency which the facility agent confirms is available in the
London foreign exchange market.
13 CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR
At 30 June At 31 December
2003 2002
#'000 #'000
Unsecured term loan (see note 12) 34,505 33,578
34,505 33,578
14 WARRANT RESERVE
Since the lapse of unexercised warrants on 28 May 2003, which were valued at 27p
per warrant on the first day of trading on the Stock Exchange, the warrant
reserve of #1,681,301 has been transferred to the capital reserve - realised
account for those warrants that lapsed unexercised (#1,281,645) and to the share
premium account for those warrants exercised in the period (#399,656).
15 UNAUDITED INTERIM REPORT
The financial information in this interim report is unaudited and does not
constitute statutory accounts. Statutory accounts for the year ended 31
December 2002 have been delivered to the Registrar of Companies and the report
of the auditors on these accounts was unqualified and did not contain a
statement either under Section 237(2) or 237(3) of the Companies Act 1985.
This interim report is being sent to shareholders and copies will be made
available to the public at the registered office of the company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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