RNS Number:8427R
Enterprise Venture Capital TrustPLC
07 November 2003
Chairman's Statement
Results and Review of Business
The six months to 30th September brought a general improvement in UK equity
markets. The increase in AIM values (approximately 18%) was particularly helpful
to Enterprise shareholders and I am delighted to report that, on advice from
Noble Fund Managers, our AIM portfolio significantly outperformed the market and
increased in value by 66%. We do, of course, have a heavy weighting in unquoted
companies but, nonetheless, the total capital value of our portfolio rose by 13%
during the six month period and we are able to report realised and unrealised
gains during the period of almost #1m.
We took advantage of early redemptions in our loan portfolio to accelerate the
return of funds to the holders of O shares. Half the asset value was returned to
O shareholders by way of a 35p per share dividend, which was paid in June.
Inevitably, this resulted in significantly lower income from interest earnings
during the six months to 30 September 2003.
It continues to be our intention to return the remainder of the funds
attributable to O shareholders in April 2004, shortly after the year end. Future
dividends to A shareholders will depend, as is the case with most other VCTs, on
the generation and realisation of capital gains.
Since April this year, shareholders have invested over #500,000 in acquiring new
A shares. This demonstration of confidence in the potential within our equity
portfolio is very pleasing and it is our intention to give O shareholders a
further opportunity to reinvest in A shares when we return the remainder of the
O Share capital in the Spring.
Investment Valuations
On 1st August 2003, the revised guidelines for valuing equity investments, drawn
up by the British Venture Capital Association (BVCA), took effect. After careful
consideration, and consultation with the Company's auditors, the Board decided
to adopt these guidelines as the basis for valuing the unquoted portfolio. With
regard to quoted investments, the Board decided to continue to value quoted
stocks at mid-market price in accordance with UK Generally Accepted Accounting
Practice.
Outlook
The flow of investment opportunities has remained strong and with the
improvement in values in quoted markets, it is unsurprising that, recently,
these have been concentrated in the AIM sector. We continue to be selective in
our choice of investments but we have the cash resources to take advantage when
attractive opportunities arise.
It is anticipated that, if the recent recovery in quoted markets is maintained,
benefits will flow through into the unquoted sector. Enterprise has an interest
in a number of established unquoted businesses which make it well placed to take
advantage of any sustained improvement in capital values. It was encouraging to
see that, in the recently published list of The Times 100 fastest growing
technology businesses, both Optos and Voxar were in the top 20. Indeed Optos was
at number 1.
Much depends on the general economic situation and, if recent trends continue,
the prospects for the Company are encouraging and we should continue, over time,
to be able to realise acceptable profits on our investments.
Patrick Lawrence
Chairman
7th November 2003
Statement of Total Return
(incorporating the Revenue Account*) of the Company
for the six months ended 30th September 2003
------------- ------------- ------------
Six months ended Six months ended Year ended
30th September 2003 30th September 2002 31st March 2003
(unaudited) (unaudited) (audited)
--------------- ---------------- ---------------
------- ------- ------ ------- ------- ------- ------ ------- -------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000 #000 #000 #000
------- ------ ------ ------- ------- ------ ------- ------ ------
Gains/
(losses) on
investments - 981 981 - (1,104) (1,104) - (2,006) (2,006)
Income 237 - 237 445 - 445 778 - 778
Investment
management
fees (127) - (127) (139) - (139) (264) - (264)
Other
Expenses (182) - (182) (125) - (125) (300) - (300)
------- ------ ------ ------- ------- ------ ------- ------ ------
Return on
ordinary
activities
before tax (72) 981 909 181 (1,104) (923) 214 (2,006) (1,792)
Tax on
ordinary
activities 14 - 14 (45) - (45) (37) - (37)
------- ------ ------ ------- ------- ------ ------- ------ ------
Return on
ordinary
activities
after tax (58) 981 923 136 (1,104) (968) 177 (2,006) (1,829)
Dividends
paid or
proposed (8,293) - (8,293) - - - (474) - (474)
------- ------ ------ ------- ------- ------ ------- ------ ------
Transfer
(from)/to (8,351) 981 (7,370) 136 (1,104) (968) (297) (2,006) (2,303)
reserves
------- ------ ------ ------- ------- ------ ------- ------ ------
Return per share
Basic per O
Share 0.14p (0.01)p 0.13p 0.47p (0.03)p 0.44p 0.89p (0.05)p 0.84p
Basic per A
Share (0.57)p 6.16p 5.59p 0.15p (7.01)p (6.86)p (0.22)p (12.73)p (12.95)p
* The revenue column of this statement is the profit and loss account of the
Company.
Notes
1. Earnings for the first six months should not be taken as a guide to
the results for the full year.
2. The financial information contained in this report has been prepared
on the basis of the accounting policies adopted by the Company.
3. All revenue and capital items in the above statement derive from
continuing operations.
4. Unquoted investments have been valued in accordance with BVCA
guidelines. Quoted investments and investments traded on AIM are stated at
middle market price as at close of play on 30th September 2003 in accordance
with Generally Accepted Accounting Practice.
5. Basic revenue return per O Share and A Share is based on the net
revenue on ordinary activities after taxation. For the six months ended 30th
September 2003 this return is based on 23,693,369 O Shares and 15,956,947 A
Shares (30th September 2002: 23,693,369 O Shares and 15,650,473 A Shares), being
the weighted number of shares in issue during the period.
6. The net asset value per share for both the O Shares and the A Shares
has been calculated on the appropriate split allocation of the Company's assets
and liabilities.
7. The financial information for the six months ended 30th September
2003 and 30th September 2002 has not been audited and does not comprise full
financial statements within the meaning of Section 240 of the Companies Act
1985. The financial information for the year ended 31st March 2003 has been
abridged from the full Company financial statements for that year and those
statements have been filed with the Registrar of Companies. The auditors have
reported on those financial statements and that report was unqualified and did
not contain a statement under Section 237(2) of the Companies Act 1985.
8. Copies of the interim report have been mailed to shareholders and are
available from the Company Secretary and the registered office of the Company.
Balance Sheet
as at 30th September 2003
--------- --------- ---------
30th September 30th September 31st March
2003 2002 2003
(unaudited) (unaudited) (audited)
--------- --------- ---------
#000 #000 #000
--------- --------- ---------
Fixed assets
Investments 14,539 18,377 17,195
Monies pending investment 8,257 11,954 12,336
--------- --------- ---------
22,796 30,331 29,531
Current assets
Debtors 14 127 80
Cash at bank - 252 -
--------- --------- ---------
14 379 80
Creditors: amounts falling due
within one year (405) (219) (369)
--------- --------- ---------
Net current (liabilities)/assets (391) 160 (289)
--------- --------- ---------
Net assets 22,405 30,491 29,242
--------- --------- ---------
Capital and reserves
Called up share capital 3,999 3,932 3,941
Capital redemption reserve 41 27 30
Share premium account 532 25,443 25,534
Special reserve 30,236 4,789 4,772
Capital reserves (realised) 396 260 300
Capital reserves (unrealised) (4,194) (4,139) (5,081)
Revenue reserves (8,605) 179 (254)
--------- --------- ---------
Equity Shareholders' Funds 22,405 30,491 29,242
--------- --------- ---------
Net asset value per O Share 34.10p 70.57p 68.96p
Net asset value per A Share 87.76p 88.14p 82.11p
Reconciliation of movements inshareholders' funds
--------- --------- ---------
O A
Shares Shares Total
--------- --------- ---------
Total net assets attributable at 1st
April 2003 16,339 12,903 29,242
Purchase of own shares - (69) (69)
Capital subscribed - 636 636
Expenses of issue - (34) (34)
Total recognised gains and losses
for the period 34 889 923
Dividends appropriated in the
period (8,293) - (8,293)
--------- --------- ---------
Total net assets attributable at
30th September 2003 8,080 14,325 22,405
--------- --------- ---------
Cash Flow Statement
for the six months ended 30th September 2003
---------- ----------- -----------
Six months ended Six months ended Year ended
30th September 30th September 31st March
2003 (unaudited) 2002 (unaudited) 2003(audited)
------------ ------------ ----------
------ ------ ------ ------ ------ ------
#000 #000 #000 #000 #000 #000
------ ------ ------- ------- ----- ------
Operating activities
Investment income
received -
qualifying 187 354 706
Deposit and
similar interest
received - non
qualifying 98 194 201
Interest purchased
with investments - (42) (42)
Recovery of
interest purchased
with investments - - 42
Investment
management fees
paid (119) (141) (193)
Secretarial fees
paid (38) (33) (128)
Other cash (155) (166) (244)
payments
------ ------ ------- ------- ------- -------
Net cash (outflow)
/inflow from
operating
activities (27) 166 342
Taxation
UK corporation tax
received - - (67)
Financial investment
Sale of fixed
income 1,466 6,000 6,000
investments
Sale of qualifying
loans 2,742 1,000 2,300
Sale of AIM and
other quoted
investments 533 - 99
Purchase of fixed
income investments - (1,015) -
Purchase of
unquoted
investments
and investments (1,105) (830) (3,035)
quoted on AIM
------ ------ ------- ------- ------- -------
Net cash inflow 3,636 5,155 5,364
from financial
investment
Equity dividends paid
Dividends paid (8,293) (355) (830)
------ ------ ------- ------- ------- -------
Net cash (outflow)
/inflow before
use of liquid (4,684) 4,966 4,809
resources and
financing
Management of
liquid resources
Movement in 4,080 (5,084) (5,466)
deposits
Financing
New share issue 636 - 108
Repurchase of own
shares (69) (27) (43)
Share issue (34) - (6)
Net cash inflow/
(outflow) from
financing 533 (27) 59
------ ------ ------- ------- ------- -------
Decrease in cash (71) (145) (598)
------ ------ ------- ------- ------- -------
Prior to 30th September 2003, the Company held gilts and bonds primarily as
investments and not as liquid resources. Accordingly, movements in the holdings
of these investments are shown within "Financial investment" rather than within
"Management of liquid resources". As at 30th September 2003 the Company held no
such investment.
Summary of Investments
as at 30th September 2003
Cost Valuation Valuation as %
A Share Fund #000 #000 of portfolio
------------- -------- -------- -------
Unquoted
Citel Technologies Limited (Nottingham) 691 345 3.9
Diagnology Limited (Belfast) 530 - -
DNA Research Innovations Limited (Kent) 400 400 4.5
e:gosystems.com plc (Nottingham) 200 - -
DSM Geodata Limited (West Lothian) 350 - -
Global Money Transfers Holdings Limited 500 - -
(Liverpool)
Heritage Image Partnership Limited 500 125 1.4
(London)
iBase Image Systems Limited (Ilkley) 300 85 1.0
Integrated Environmental Solutions 325 - -
Limited (Glasgow)
Internet pro-video Limited (Cambridge) 494 - -
knowledge = power Limited (London) 250 - -
Meridian Technique Limited (Basingstoke) 500 500 5.7
Optos plc (Dunfermline) 500 477 5.4
Procession plc (Buckinghamshire) 500 - -
Sirus Pharmaceuticals Limited 500 225 2.5
(Cambridge)
The Message Pad Limited (Warwick) 1,225 1,818 20.6
Voxar Limited (Edinburgh) 875 875 9.9
Xention Discovery Limited (Cambridge) 175 175 2.0
YAbA Limited (Edinburgh) 300 - -
Quoted
Avionic Services plc (Surrey) 330 183 2.1
ComputerLand UK plc (Nottingham) 100 176 2.0
CRC Group plc (Thame) 138 150 1.7
Deltex Medical Holdings plc (Chichester) 415 30 0.3
GX Networks plc (London) 320 220 2.5
i-documentsystems group plc (London) 78 72 0.8
ID Data plc (Northamptonshire) 300 387 4.4
Maelor plc (Wrexham) 288 292 3.3
Medical House (The) plc (Sheffield) 200 175 2.0
Murgitroyd Group plc (Glasgow) 200 223 2.5
Neutec Pharma plc (Manchester) 188 172 2.0
Online Travel Corporation plc 200 262 3.0
(Twickenham)
Osmetech plc (Crewe) 100 159 1.8
Pharmagene plc (Royston) 486 581 6.6
VI Group plc (Gloucestershire) 400 193 2.2
Zoo Digital Group plc (Sheffield) 160 524 5.9
-------- -------- -------
Total A Share Fund Investments 13,018 8,824 100.0
-------- -------- -------
O Share Fund (Qualifying loans)
Total O Share Fund Investments 5,715 5,715 100.0
-------- -------- -------
Total Investments 18,733 14,539
-------- -------- -------
Top Ten Equity Investments
1. The Message Pad Limited (20.6%)
The provision of contact management services to companies requiring
personal telephone response, particularly in respect of sales or technical
support activities, media response and those requiring an
out of hours response service.
2. Voxar Limited (9.9%)
Voxar has developed a software package which represents information in
3 dimensions using low powered computers. Data from medical scanners is fed into
the software tool and a 3D image is displayed. This can be manipulated so that
different layers of information can be extracted and viewed. It has particular
application in the medical field.
3. Pharmagene plc (6.6%)
Human biomaterials analysis for medical research. Pharmagene has a
database of human biomaterials and the effect that a variety of drugs has on
these body parts. Customers buy the information and also buy access to test
their drugs on the body parts.
4. Zoo Digital Group plc (5.9%)
Zoo Digital Group plc are a growing DVD technology and videogame
publishing company. The company has developed a system called 'DVD-Extra' to
take interactive products to the DVD-video platform. A recent launch on
DVD-Extra was an interactive version of Who Wants To Be A Millionaire?
5. Meridian Technique Limited (5.7%)
Meridian Technique Limited has developed an Orthopaedic digital
templating software called Orthoview. Orthoview, which was recently granted FDA
approval in the USA, is being used worldwide and allows surgeons to pre-plan
surgical procedures in a digital environment. Orthoview offers access to a large
library of digital templates and ensures pre-operative planning is accurate,
reproducible and effective.
6. Optos plc (5.4%)
Development and sale of ophthalmic equipment. In 1999, Optos gained US
regulatory approval to distribute its wide field retinal imaging machine. This
machine pictures more of the retina than its competitors and does not cause the
patient any discomfort.
7. ID Data plc (4.4%)
ID Data is the UK's leading independent card and card solutions
company, with its headquarters in Corby, Northamptonshire. ID Data provides a
wide range of solutions to the leading financial service organisations,
telephony and retail clients. The company has a proven track record in providing
complete end-to-end card based solutions to a wide range of customers, both in
the UK and overseas.
8. Citel Technologies Limited (3.9%)
The company has developed integrated telephony and computer technology
for linking or combining the telephone to the desktop computer.
9. Maelor plc (3.3%)
Maelor is a bio-medical company developing healthcare products in
areas of substantial unmet needs. The company utilises novel technologies that
will improve infusion fluids and off-patent medicines. It also produces medical
products and devices with innovative delivery systems which offer significant
advantages over other products.
10. Online Travel Corporation plc (3.0%)
OTC is an Internet-based travel technology and distribution business,
providing a comprehensive range of technological solutions, travel products and
ancillary travel services to ISP's, media and affinity groups and corporate
organisations.
Corporate Information
Directors
Sir Patrick Lawrence CBE DL
Raymond Abbott
John Andrews MBE
Philip Court
Antony Diment
John Gregory
Company Secretary Solicitors & VCTTax Adviser
Noble Group Limited Martineau Johnson
76 George Street St Philips House
Edinburgh St Philips Place
EH2 3BU Birmingham
Tel: 0131 225 9677 B3 2PP
Registered Office Venture Capital Portfolio Adviser
St Philips House Noble Fund Managers Limited
St Philips Place 76 George St
Birmingham Edinburgh
B3 2PP EH2 3BU
Auditors Bankers & Loan Portfolio Manager
Scott-Moncrieff Lloyds TSB Bank plc
Chartered Accountants PO Box 70
17 Melville Street 125 Colmore Row
Edinburgh Birmingham
EH3 7PH B3 3RD
Registrar Company Broker
Lloyds TSB Registrars Scotland Charles Stanley & Co. Ltd
POBox 28448 25 Luke Street
Finance House London
Orchard Brae EC2A 4AR
Edinburgh Tel: 020 7739 8200
EH4 1WQ
Company Registered Number
3157189
This information is provided by RNS
The company news service from the London Stock Exchange
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