Interim Results
July 18 2007 - 10:54AM
UK Regulatory
RNS Number:4699A
Close IHT AIM VCT PLC
18 July 2007
CLOSE IHT AIM VCT PLC
Interim results for the six months to 31 May 2007
Close IHT AIM VCT PLC (the "Company"), which invests in companies listed on the
Alternative Investment Market and PLUS, across a variety of sectors, today
announces interim results for the six months ended 31 May 2007. This
announcement was approved by the Board of Directors on 18 July 2007.
CHAIRMAN'S STATEMENT
It is pleasing to be able to report satisfactory progress on a number of fronts
in the six months to 31 May 2007. In a volatile stock market the Net Asset
Value (NAV) has progressed, a good rate of investment has been maintained and
the share price discount to NAV has remained narrow.
Performance
Shareholders may recall that there were serious fears amongst investors
worldwide at the end of February and in early March 2007. Some of those fears
have started to resurface, prompted mainly by the problems in the sub-prime
lending markets in the United States and AIM in general cannot be wholly immune
from such worldwide financial market trends and changes in sentiment. However,
it appears at present that many of the smaller companies on AIM continue to
trade well, so despite stock market volatility, the NAV has risen in the six
months to 31 May 2007.
In that period the AIM All Share Index has risen 19%, nearly twice the rate of
increase of the FTSE All Share Index. In comparison the NAV of your company has
increased by 7.9%. The rise in the index has been driven to a significant
extent by a number of the larger international companies, (in particular the oil
and gas and mining companies, which account for 30% of AIM), in which your
Company is unable to invest. Against this background, and given that your
Company is not yet fully invested and so retains a substantial cash balance,
your Board regards this performance as satisfactory.
Dividends
Your Board believes in maximising tax free dividends to shareholders and it is
the Board's intention to produce a steady and appropriate dividend stream. In
the short term, however, dividend progression will be constrained as new
investments are made and the cash balance reduced.
Following the 1.0p per share paid to all shareholders last March, a first
interim dividend of 1.0p per share has been declared. The dividend will be paid
on 24 August 2007 to shareholders on the register on 27 July 2007.
Buy-back Policy
The Board has adopted a share buy-back policy whereby the Company, when able,
will buy back shares at around an 8% discount to the prevailing net asset value
per share. This is designed to improve the marketability of the shares and to
encourage the shares to trade at a narrower discount to their underlying worth.
During the period, the Company bought back 20,400 shares at 90p.
Shareholders wishing to sell their shares should first contact the Investment
Manager, Close Investments Limited. Shareholders should note that if they sell
their shares within three years of the original purchase, they would lose any
tax relief that has been obtained.
Portfolio Activity
Over the period, various holdings within the portfolio reported positive
results. Brulines continues to trade well as their major pub chain customers
embark on extensive roll out programs of its flow monitoring system throughout
their estates. Both Hatpin and Hexagon reported good results as both appear to
be benefiting from a buoyant recruitment sector backdrop. Vertu Motors, the
acquiror and consolidator of UK based motor retail businesses, made its first
major acquisition earlier this year after raising a further #26m. It has since
made 3 further acquisitions. In March this year, BBI acquired Theratese, a UK
listed manufacturer and supplier of specialist enzymes to the medical
diagnostics industry. The company's recent announcement confirmed that BBI
continues to trade well and that the integration process is on track.
In my statement with the last accounts, I remarked that the Investment Manager
anticipates making several new investments in forthcoming months. I am pleased
to report that that has been the case and that, in total seven new investments
have been made. At the date of writing, one further investment has been made
since the end of May 2007. Altogether these new holdings amount to #3.61m, of
which #3.1m was invested in the six months to 31 May 2007.
The following new investments were made during the period under review:
Hexagon PLC
Hexagon is a profitable multi-discipline interim and permanent recruitment
consultant.
Neuropharm PLC
Neuropharm is a UK based pharmaceutical company focussed on the development of
products that treat conditions affecting the brain and nerves, mainly autism.
Claimar Care Group PLC
Claimar is a provider of domiciliary care services for Local Authorities across
the UK.
BGlobal PLC
BGlobal manufactures smart metering and data retrieval services for electricity,
natural gas and water utilities.
IDOX PLC
IDOX develops integrated and adaptable software systems for document, content
and information management.
Pressure Technologies PLC
Pressure Technologies designs, manufactures and provides testing services for a
range of niche high pressure and seamless steel gas cylinders.
Mount Engineering PLC
Mount Engineering manufactures and distributes a range of valves and thread
conversion components to the oil & gas and other process markets.
Including the amount invested up to 30 November 2006, your Company has invested
#7.2m since February 2006. At the time of writing, the fund was 36% invested in
qualifying holdings. Your Board believes that the target of a minimum level of
70% required by HM Revenue & Customs for VCT status will be achieved in the
three year timescale.
Budget Changes to VCTs
Shareholders will, no doubt, be aware of the Chancellor's changes to VCT
regulations in the Budget in March 2007. One change relating to the treatment
of investment sale proceeds should prove helpful to your Company in the future.
However, changes affecting the nature of eligible investments do not have a
direct bearing on your Company or the present portfolio.
Outlook
Although the rate of new issues has slowed down over the last year, the
Investment Manager has managed to acquire a number of qualifying investments at
sensible valuations for the portfolio. Despite the probability of a lull during
the summer months, a reasonable rate of new investment activity should continue.
That trend should be helped by the UK economy which continues to grow, despite
the trend of higher interest rates and the potential for a slowdown in consumer
spending as the year progresses. There remain, however, concerns for investors
across a number of areas, ranging from inflation and growth rates to volatility
in the credit markets.
Potentially some of these issues may mean that ratings and valuations of new
investments come down from initial expectations to the advantage of long-term
investors in a VCT. That remains to be seen. In the meantime companies in the
existing portfolio generally report reasonable trading and I look forward to
reporting on further progress in the full accounts early next year.
Keith Mullins
Chairman
18 July 2007
Income Statement
Unaudited
Unaudited Period to Audited
Six months to 31 May 2006 Year ended
31 May 2007 30 November 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Gains on investments - 2,092 2,092 - 137 137 - 56 56
Investment income 466 - 466 310 - 310 760 - 760
Investment management fees (73) (220) (293) (42) (124) (166) (114) (342) (456)
Other expenses (93) - (93) (40) - (40) (119) - (119)
Return on ordinary activities 300 1,872 2,172 228 13 241 527 (286) 241
before finance costs and
taxation
Finance costs - - - - - - (4) - (4)
Return on ordinary activities 300 1,872 2,172 228 13 241 523 (286) 237
before taxation
Taxation on ordinary (47) 42 (5) (20) - (20) (95) 65 (30)
activities
Return attributable to equity 253 1,914 2,167 208 13 221 428 (221) 207
shareholders
Return per share (pence)
- basic and diluted 1.01 7.66 8.67 1.51 0.10 1.61 1.86 (0.96) 0.90
All of the Company's activities derive from continuing operations.
No operations were acquired or discontinued during the period.
The Company has no recognised gains or losses other than those disclosed above,
accordingly a statement of total recognised gains and losses is not required.
The total column of the Income Statement represents the profit and loss of the
Company. The supplementary revenue return and capital return columns have been
prepared in accordance with the Association of Investment Companies' Statement
of Recommended Practice.
Balance Sheet
Unaudited Unaudited Audited
31 May 2007 31 May 2006 30 November 2006
#'000 #'000 #'000
Fixed asset investments -
at fair value through profit or loss
Qualifying investments 7,768 3,021 3,768
Non-qualifying investments 16,322 3,193 18,574
24,090 6,214 22,342
Current assets
Debtors 156 165 139
Cash at bank 2,048 17,549 1,551
2,204 17,714 1,690
Creditors: (720) (81) (357)
Amounts falling due within one year
Net current assets 1,484 17,633 1,333
Net assets 25,574 23,847 23,675
Capital and reserves
Called up share capital 3 3 3
Share premium - 23,623 -
Special reserve 23,605 - 23,623
Realised capital reserve (237) (73) (209)
Unrealised capital reserve 1,930 86 (12)
Revenue reserve 273 208 270
Equity shareholders' funds 25,574 23,847 23,675
Net asset value per share (pence) 102.38 95.39 94.70
Reconciliation of movements in shareholders' funds
for the six months to 31 May 2007
Called up Share Capital Capital Revenue Total
share premium Special reserve reserve reserve
capital reserve realised unrealised
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Period ended 31 May 2007
As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675
Net return after taxation - - - (28) 1,942 253 2,167
for the period
Dividends paid - - - - - (250) (250)
Shares purchased for - - (18) - - - (18)
cancellation
As at 31 May 2007 3 - 23,605 (237) (1,930) 273 25,574
Called up Share Capital Capital Revenue Total
share premium Special reserve reserve reserve
capital reserve realised unrealised
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Period ended 31 May 2006
As at 4 August 2005 - - - - - - -
Issue of equity 3 24,998 - - - - 25,001
Issue costs of equity - (1,375) - - - - (1,375)
Net return after taxation - - - (73) 86 208 221
for the period
As at 31 May 2006 3 23,623 - (73) 86 208 23,847
Called up Share Capital Capital Revenue Total
share premium Special reserve reserve reserve
capital reserve realised unrealised
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Period ended 30 November
2006
As at 4 August 2005 - - - - - - -
Issue of equity 3 24,998 - - - - 25,001
Issue costs of equity - (1,375) - - - - (1,375)
Transfer to special reserve - (23,623) 23,623 - - - -
Net return after taxation - - - (209) (12) 428 207
for the period
Dividends paid - - - - - (158) (158)
As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675
Cash Flow Statement
for the six months to 31 May 2007
Unaudited Unaudited Audited
Six months to Period to Period ended
31 May 2007 31 May 2006 30 November
2006
#'000 #'000 #'000
Operating activities
Investment income received 420 144 192
Deposit interest received 32 - 438
Investment management fees paid (326) (143) (409)
Other expenses paid (74) (1) (66)
Net cash inflow from operating activities 52 - 155
Servicing of finance
Interest paid - - (4)
Capital expenditure and financial investment
Purchase of qualifying investments (2,698) (3,160) (18,272)
Purchase of non-qualifying investments (17) (3,250) (4,176)
Disposal of qualifying investments 419 333 380
Disposal of non-qualifying investments 3,009 - -
Net cash inflow/(outflow) from investing activities 713 (6,077) (22,068)
Dividends
Equity dividends paid (250) - (158)
Financing
Issue of equity net of expenses - 23,626 23,626
Cancellation of shares (18) - -
Net cash (outflow)/inflow from financing (18) 23,626 23,626
Increase in cash 497 17,549 1,551
1. Details about the Investment Manager
Close IHT AIM VCT PLC is managed by Close Investments Limited. Close Investments
Limited is authorised and regulated by the Financial Services Authority and is a
subsidiary of Close Brothers Group plc.
2. Statutory accounts
The information for the period ended 30 November 2006 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A copy
of the statutory accounts for the year has been delivered to the Registrar of
Companies. This interim announcement has not been audited.
3. Changes in equity
There were no changes in equity other than those arising from capital
transactions with the owners and distribution to owners.
4. Accounting policies
This information is prepared on the basis of the accounting policies as stated
in the latest statutory accounts.
For further information, please contact:
Andrew Buchanan / Freda Isingoma Karen Wagg
Close Investments Limited Polhill Communications
Tel: 020 7426 4000 Tel: 0207 6550500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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