RNS Number:9682D
Close Second AIM VCT PLC
02 June 2006
CLOSE SECOND AIM VCT PLC
ANNUAL RESULTS
2 June 2006
Close Second AIM VCT PLC ("the Company"), which invests in companies listed on
the Alternative Investment Market, across a variety of sectors, today announces
annual results for the year ended 28 February 2006.
Chairman's statement
I am pleased to present your Company's fifth annual report for the year ended 28
February 2006. I would like formally to welcome all new shareholders to the
Company. These accounts relate to a period during which time only Ordinary
shares were in issue. However I look forward to seeing as many Ordinary, C and
D shareholders as possible at the forthcoming AGM.
Since I last wrote to all Ordinary shareholders with the interim results last
November, we have successfully raised #20.25m for Close Second AIM VCT PLC. As
detailed in the Shareholder Circular (and subsequent Prospectus), we launched a
novel VCT offering which gave investors the opportunity to shield their
investment from inheritance tax. The C share class followed the traditional VCT
structure, whereas the D share class (with a minimum investment of #25,000)
offered investors the opportunity to obtain inheritance tax relief under present
legislation. The total fund raising between the C and D shares was #8.2m and
#12m respectively. The new money raised will result in the Company benefiting
from a reduction in the total expense ratio, as the fixed costs are spread over
a larger fund. The Investment Manager believes that investors will benefit from
exposure to an expanding range of smaller companies with growth potential and
continues to see a healthy pipeline of qualifying AIM companies raising money.
New accounting standards
The Company has adopted new Financial Reporting Standards issued by the
Accounting Standards Board as part of the convergence process with International
Financial Reporting Standards. The main impact is that the Company's portfolio
is now valued at the bid price, rather than, as previously, the mid market
price. This has reduced the net asset value by 3%. The comparatives shown in
these accounts have been restated to reflect these changes.
Performance
Your Fund's Net Asset Value (NAV) has recovered from the first half of the year.
As a result, the aggregate of NAV and dividends paid out in the year was up by
3.2% for the year to the end of February 2006 compared to a 4.2 % rise in the
AIM Index (with dividends reinvested) over the same period. This is attributable
to good progress shown by many of the investments in the portfolio and partly
due to a general market recovery since the fall in AIM in October last year. The
NAV performance over the year reflects the positive long-term changes that the
Investment Manager has carried out. The Investment Manager has achieved many of
the objectives it set out to fulfil for your Fund when it took over the
investment management and your Board believes this will have a positive impact
on the NAV performance going forward.
At the end of the year, the Fund was 87% invested in qualifying companies.
Dividends
Ordinary Shares
In November HM Revenue & Customs approved a dividend of 1p per share paid out of
realised capital profits, which had been declared by the Board. This was then
paid on 23 December 2005 to all Ordinary shareholders. The Board is not
proposing to declare a final dividend for the year to the end of February 2006.
However, it is still the Directors' intention to pay a dividend to Ordinary
shareholders following the announcement of the interim results in October 2006.
C and D shares
It is the Directors' intention to pay a dividend to C and D shareholders
following the announcement of the interim results in October 2006.
Cancellation of shares and management of the discount
The Company has a share-buy back policy to aid the marketability of your Fund's
shares.
During the period under review, the Company repurchased 523,360 shares at an
average price of 53.90p. At the end of February 2006 the discount of the share
price to NAV per share was 10.4% compared to 7.6 % at the end of February 2005.
The Company will endeavour to maintain the discount at around 10%.
Shareholders wishing to sell their shares should first contact the Investment
Manager, Close Investment Limited.
Changes in VCT Regulations
In the Budget in March 2006, there were a number of changes to the VCT
legislation, some of which were unexpected. The key changes are that the 40%
income tax relief has now been reduced to 30% and that investors must now hold
their shares for a minimum period of 5 years in order to qualify for income tax
relief. Moreover, the gross assets limit for investee companies has been reduced
from #15m to #7m, reflecting the government's intention to target VCT money
towards smaller companies. These new rules only apply to money raised in the tax
year 2006/7 and subsequently, and so will not affect the Ordinary, C and D
shares' investment criteria, as they will continue to fall under the "old"
rules.
Outlook
The year started well with the NAV rising to the end of April. However the
outlook has been clouded by the recent sharp correction in markets brought about
by fears over inflation and the probability of interest rate rises around the
world. The Investment Manager is still seeing a healthy pipeline of new and
existing qualifying AIM fundraisings. The market for new issues and fund
raisings on AIM remained strong throughout the year to the end of February 2006
and the Investment Manager anticipates making several new investments in the
portfolio, which your Board believes would benefit shareholders in the future.
Elizabeth Kennedy
Chairman
2 June 2006
Income statement
for the year ended 28 February 2006
Year ended Restated*
28 February 2006 Year ended
28 February 2005
Revenue Capital Total Revenue Capital Total
# # # # # #
Gains/(losses) on - 330,452 330,452 - (569,888) (569,888)
investments
Dividends and interest 35,212 - 35,212 37,609 - 37,609
Investment management fees (29,176) (87,529) (116,705) (32,050) (96,148) (128,198)
Other expenses (141,200) - (141,200) (112,105) - (112,105)
Return on ordinary
activities before finance
costs and taxation (135,164) 242,923 107,759 (106,546) (666,036) (772,582)
Finance costs (30) - (30) - - -
Return on ordinary
activities before taxation (135,194) 242,923 107,729 (106,546) (666,036) (772,582)
Taxation on ordinary
activities - - - - - -
Return attributable to
equity shareholders (135,194) 242,923 107,729 (106,546) (666,036) (772,582)
Return per ordinary share
(pence)
- basic and diluted (1.61) 2.90 1.29 (1.21) (7.56) (8.77)
* Comparative figures have been restated in accordance with FRS 26 in respect of
financial instruments as disclosed in the notes at the end of this
announcement.
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the
year as set out above, accordingly a statement of total recognised gains or
losses is not required.
The total column of the income statement represents the profit and loss account
of the Company. The supplementary revenue return and capital return columns have
been prepared in accordance with the Association of Investment Trust Companies'
Statement of Recommended Practice.
Balance Sheet
as at 28 February 2006
28 February Restated*
2006 28 February
2005
# #
Fixed assets
Investments 4,913,398 5,365,333
Current assets
Debtors 40,687 45,934
Cash at bank and in hand 176,823 -
217,510 45,934
Creditors: amounts falling due
within one year (80,793) (103,783)
Net current assets/(liabilities) 136,717 (57,849)
5,050,115 5,307,484
Net assets
Capital and reserves
Called up share capital 404,037 430,205
Special reserve 7,564,471 7,846,610
Capital redemption reserve 40,381 14,213
Capital reserve - realised (3,849,126) (2,344,572)
Capital reserve - unrealised 1,295,781 (368,737)
Revenue reserve (405,429) (270,235)
Equity shareholders' funds 5,050,115 5,307,484
Net asset value per ordinary share (pence) 62.50 61.69
* Comparative figures have been restated in accordance with FRS 26 in respect of
financial instruments as disclosed in the notes at the end of this
announcement.
Reconciliation of movements in Shareholders' funds
For the year ended 28 February 2006
Called up Special Capital Capital Capital Revenue Total
share reserve redemption reserve - reserve - reserve
capital reserve realised unrealised
# # # # # # #
As at 28 February 2005 430,205 7,846,610 14,213 (2,344,572) (368,737) (270,235) 5,307,484
Brought forward losses - - - (1,380,761) 1,380,761 - -
realised in the year
Net realised gains on - - - 46,695 - - 46,695
investments in the year
Capitalised management - - - (87,529) - - (87,529)
fees
Share redemptions (26,168) (282,139) 26,168 - - - (282,139)
Unrealised appreciation - - - - 283,757 - 283,757
of investments
Capital dividends paid - - - (82,959) - - (82,959)
in the year
Revenue loss for the - - - - - (135,194) (135,194)
year
As at 28 February 2006 404,037 7,564,471 40,381 (3,849,126) 1,295,781 (405,429) 5,050,115
As at 29 February 2004 444,418 8,001,269 - (1,586,158) (253,502) (163,689) 6,442,338
as previously stated
Adjustment as required - - - - (207,613) - (207,613)
by adoption of FRS26
As at 29 February 2004 444,418 8,001,269 - (1,586,158) (461,115) (163,689) 6,234,725
as restated
Movement in the year as
previously reported
Brought forward losses - - - (227,751) 227,751 - -
realised in the year
Net realised losses on - - - (434,515) - - (434,515)
investments in the year
Capitalised management - - - (96,148) - - (96,148)
fees
Share redemptions (14,213) (154,659) 14,213 - - - (154,659)
Unrealised depreciation - - - - (171,725) - (171,725)
on investments
Revenue loss for the - - - - - (106,546) (106,546)
year
(14,213) (154,659) 14,213 (758,414) 56,026 (106,546) (963,593)
Movement in valuation of - - - - 36,352 - 36,352
portfolio at fair value
Movement in the year as (14,213) (154,659) 14,213 (758,414) 92,378 (106,546) (927,241)
restated
As at 28 February 2005 430,205 7,846,610 14,213 (2,344,572) (368,737) (270,235) 5,307,484
Cash Flow Statement
for the year ended 28 February 2006
Year to Year to
28 February 28 February
2006 2005
# #
Operating activities
Investment income received 26,924 26,703
Deposit interest received 8,940 9,235
Other expenses paid (216,607) (295,269)
Net cash outflow from operating activities (180,743) (259,331)
Servicing of finance
Interest paid (30) -
Capital expenditure and financial investment
Purchase of investments (1,800,333) (2,588,405)
Disposal of investments 2,592,187 2,753,900
Net cash inflow from investing activities 791,854 165,495
Dividends
Equity dividends paid (82,959) -
Financing
Redemption of Ordinary share capital (336,520) (99,158)
Increase/(decrease) in cash 191,602 (192,994)
Notes:
1. Details about the Investment Manager
Close Second AIM VCT PLC is managed by Close Investment Limited. Close
Investment Limited is authorised and regulated by the Financial Services
Authority and is a subsidiary of Close Brothers Group plc.
2.Statutory accounts
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the year ended 28 February 2006 or 28 February
2005, but is derived from those accounts. The financial information for the year
ended 28 February 2005 is derived from the statutory accounts delivered to the
Registrar of Companies. This financial information has been restated in order to
comply with the new financial reporting standards as detailed in note 4 below.
The financial information for the year ended 28 February 2006 has been derived
from the statutory accounts for that year which will be delivered to the
Registrar of Companies in due course. The auditors reported on both these
accounts; their reports were unqualified and did not contain statements under
either section 237(2) or (3) of the Companies Act 1985.
3. Changes in Equity
There were no changes in equity other than those arising from capital
transactions with owners and distributions to owners.
4. Changes in accounting policies
This financial information is prepared on the basis of the accounting policies
as stated in the previous year's statutory accounts with the exception of the
changes as detailed below.
With effect from 1 March 2005, the Company adopted the new Financial Reporting
Standards ("FRS") 21 to 26 that have been issued by the Accounting Standards
Board as part of the convergence process of United Kingdom Generally Accepted
Accounting Practice ("UK GAAP") with International Financial Reporting Standards
("IFRS"). The effects of the relevant accounting policies and the restatement of
the comparative figures are detailed below.
Investments
In accordance with FRS 26 "Financial Instruments: Measurement", equity
investments are designated as fair value through profit or loss. The total
column of the Income Statement represents the Company's profit and loss account.
Investments listed on recognised exchanges are valued at the closing bid prices
at the end of the accounting period. Fair value movements on equity investments
and gains and losses arising on the disposal of investments are reflected in the
capital column of the Income Statement in accordance with the AITC SORP.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of an
investment.
The Directors are conscious of the fact that because shares are traded on AIM
this does not guarantee their liquidity. The nature of AIM investments is such
that the prices can be volatile and realisation may not achieve current book
value, especially when such a sale represents a significant proportion of that
Company's market capital. Nevertheless, on the grounds that the investments are
not intended for immediate realisation, they regard bid-market price as the most
objective and appropriate method of valuation.
Dividends
In accordance with FRS 21 "Events after the balance sheet date", interim
dividends are not accounted for until paid, and final dividends are accounted
for when approved by the shareholders at an annual general meeting. Capital
dividends are charged to the realised capital reserve.
Restatement of unrealised capital reserves as at 28 February 2005 and 29
February 2004.
In accordance with FRS 26 "Financial Instruments: Measurement", comparatives for
unrealised capital reserves have been restated in recognition of a change in
accounting policy.
A reconciliation of the reserves incorporating the restatements required by the
adoption of FRS 26 is illustrated below:
Reconciliation of unrealised capital reserves
28 February 2005 29 February 2004
# #
Unrealised capital reserves previously reported (197,476) (253,502)
Adjustment as required by adoption of FRS 26
- change in valuation of quoted investments to bid price (171,261) (207,613)
Unrealised capital reserves at 28 February 2005 and
29 February 2004 as restated (368,737) (461,115)
5. Return per share
The revenue return per share is based on the net loss on ordinary activities
after taxation of #135,194 (28 February 2005: a loss of #106,546) in respect of
the weighted average number of shares in issue during the year, being 8,374,032
shares (28 February 2005: 8,815,339).
The capital return per share is based on the net capital return for the year of
#242,923 (28 February 2005 (restated): a loss of #666,036) in respect of the
same weighted average number of shares in issue as stated above.
There are no dilutive elements and hence the basic return per share is the same
as the diluted return per share.
6. Net asset value per share
Net asset value per share is based on net assets attributable to Ordinary
shareholders of #5,050,115 (28 February 2005 (restated): #5,307,484) and on
8,080,748 (28 February 2005: #8,604,108) Ordinary shares in issue at the year
end.
For further information, please contact:
Andrew Buchanan / Freda Isingoma Karen Brunskill / Laura Cronin
Close Investment Limited Lansons
Tel: 020 7426 4000 Tel: 020 7294 3685/ 0207 294 3607
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSUFFESMSEEM
Close Second Aim Vct (LSE:CSA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Close Second Aim Vct (LSE:CSA)
Historical Stock Chart
From Jul 2023 to Jul 2024
