Final Results
December 19 2007 - 2:00AM
UK Regulatory
Framlington AIM VCT PLC
Preliminary announcement of results for the year ended 30 September 2007
Chairman's Statement
I reported in my interim statement in May that the Company had achieved the
main HM Revenue & Customs requirement for approval as a venture capital trust
by having over 70% of the portfolio invested in qualifying investments. I am
now pleased to report that as at 30 September 2007, the level of qualifying
investments stood at 82%.
The financial year has been one of mixed fortunes for AIM listed companies. The
FTSE AIM All-Share Index showed an 11% increase over the year. It is
disappointing to report that, in contrast, the Company's net asset value has
slipped from 98.54 pence per share in September 2006 to 95.76 pence per share
at the end of this financial year. Adding back the dividends of 4.00 pence per
share paid during the year, however, the adjusted NAV has risen to 99.76 pence.
As I have commented before, the index does not truly reflect the Company's
investment horizon as more than 55% of stocks within the index are in the
mining, oil and gas, and financial sectors, and VCT managers are allowed to
invest in these sectors only in a very limited way. These three sectors were
major contributors to the index return over the twelve months. Away from these
areas it has not been so positive and this is reflected in the Company's
performance.
One factor affecting performance was the sub-prime loans issue that prevailed
during the second half of the year. This not only reduced investor appetite for
risk but also applied pressure on prices in those companies with unproven track
records and closed the door on new corporate issuance.
In his pre-budget statement the Chancellor announced his intention to reduce
the rate of Capital Gains Tax from 40% to 18% from the start of the next tax
year and at the same time abolish taper relief such that both AIM and fully
listed shares are likely to be under the same CGT regime. It is currently
unclear how the AIM market will reflect such a change, but it has created
nervousness over quality corporate issue supply and reduced the relative
attractiveness of AIM issues to private clients. However, gains made by this
Company continue to be tax free.
These issues have continued to affect the market over the weeks since our year
end and at the time of writing, the Company's NAV is 83.63 pence per share.
I am pleased to report that the Board is recommending final dividends totalling
7.00 pence per share, an increase of 75% over last year. If approved by
shareholders at the annual general meeting the dividends will be paid on 19
February 2008 to shareholders on the register on 18 January 2008. I would
remind shareholders that dividends paid by the Company are exempt from income
tax.
The annual general meeting will be held at 12.15 pm on 14 February 2008 at the
registered office, 155 Bishopsgate, London EC2. The directors would be pleased
to meet any shareholders who are able to attend.
Tim How
Chairman
18 December 2007
Income Statement
For the year ended 30 For the year ended 30
September 2007 September 2006
Revenue Capital Total Revenue Capital Total
Return Return Return Return
�000s �000s �000s �000s �000s �000s
Realised gains - 1,582 1,582 - 844 844
Unrealised losses - (881) (881) - (389) (389)
Income 424 - 424 599 - 599
Investment management (151) (454) (605) (147) (442) (589)
fee
Other expenses (213) - (213) (215) - (215)
Net return on ordinary 60 247 307 237 13 250
activities
before taxation
Taxation on ordinary - - - - - -
activities
Return on ordinary 60 247 307 237 13 250
activities
after tax for period
Return per ordinary 0.24p 0.99p 1.23p 0.95p 0.05p 1.00p
share: Basic
The total column of this statement represents the Company's Income Statement
account prepared in accordance with UK Accounting Standards.
All items in the above statement derive from continuing operations and the
Company has no other gains and losses, hence no Statement of Total Recognised
Gains and Losses is presented. No operations were acquired or discontinued in
the year.
The supplementary revenue and capital columns are both prepared on a memorandum
basis by applying the principles of the Statement of Recommended Practice
("SORP"), published by the Association of Investment Companies.
Reconciliation of movement in shareholders' funds
Distributable Capital
Share Share Special Redemption Retained
Capital Premium Reserve Reserve Earnings Total
�000s �000s �000s �000s �000s �000s
At 30 September 2,498 21,233 - - 1,126 24,857
2005
Share buybacks (14) - (135) 14 - (135)
Issue of shares 13 117 - - - 130
Reduction of share - (21,233) 21,233 - - -
premium
Transfer from - - (723) - 723 -
distributable
special reserve
Dividends paid in - - - - (250) (250)
the year re 2005
Profit on ordinary - - - - 250 250
activities
Dividends paid in - - - - (250) (250)
the year re 2006
At 30 September 2,497 117 20,375 14 1,599 24,602
2006
Share Buybacks (4) - (36) 4 - (36)
Transfer from - - (454) - 454 -
distributable
special reserve
Dividends paid in - - - - (999) (999)
the year re 2006
Profit on ordinary - - - - 307 307
activities
Balance at 30 2,493 117 19,885 18 1,361 23,874
September 2007
Balance sheet as at 30 September
2007 2006
�000s �000s
Non-current assets held at fair value 23,250 22,989
through profit or loss
Current assets
Debtors 54 282
Cash at bank 817 1,613
871 1,895
Creditors: amounts falling due within (247) (282)
one year
Net current assets 624 1,613
Net assets 23,874 24,602
Capital and reserves
Called up share capital 2,493 2,497
Capital redemption reserve 18 14
Share premium account 117 117
Distributable special reserve 19,885 20,375
Retained earnings account 1,361 1,599
Equity shareholders' funds 23,874 24,602
Net asset value per share
Basic 95.76p 98.54p
Cash Flow Statement
For the year For the year
ended 30 ended 30
September 2007 September 2006
�000s �000s
Operating activities
Cash received from investments 402 411
Interest received 106 199
Revenue investment management fee (152) (147)
Cash paid to and on behalf of directors (44) (44)
Other cash payments (150) (179)
Net cash inflow from operating activities 162 240
Servicing of finance
Interest paid - -
Taxation
Taxation recovered - -
Capital expenditure and financial investment
Net sales/(purchases) of investments 532 (10,212)
Capital investment management fee (455) (443)
Equity dividends
Dividends paid (999) (500)
Net cash outflow before financing (760) (10,915)
Financing
Issue of ordinary share capital - 130
Cost of shares re-purchased (36) (135)
Net cash outflow from financing (36) (5)
Decrease in cash (796) (10,920)
1. The financial information set out in the announcement does not constitute
the Company's statutory accounts for the year ended 30 September 2007 or the
year ended 30 September 2006.
2. The financial information for the year ended 30 September 2006 is derived
from the statutory accounts for that period which have been delivered to the
Registrar of Companies. The auditors reported on those accounts; their report
was unqualified and did not contain any emphasis of matter or a statement under
s237(2) or (3) Companies Act 1985.
3. The statutory accounts for the year ended 30 September 2007 have not been
approved or audited and will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and
delivered to the Registrar of Companies following the company's annual general
meeting.
4. The financial information has been prepared on the basis of the accounting
policies set out in the Company's financial statements for the period ended 30
September 2006.
5. The accounts have been prepared in accordance with UK Generally Accepted
Accounting Practice ("GAAP"). As the Company revoked invest company status to
enable the payment of dividends out of capital gains, additional disclosures as
recommended by the Statement of Recommended Practice ("SORP") "Financial
Statements of Investment Trust Companies" published by the Association of
Investment Companies in 2005, have been presented on a memorandum basis to
better reflect the activities of the company as a venture capital trust. The
revenue and capital columns in the income statement are presented on a
supplementary basis.
6. In accordance with the SORP, the income statement (formerly called the
"Statement of Total Return" has been analysed between a revenue account and a
capital account.
7. Under FRS 25: "Financial Instruments: Disclosure and Presentation and FRS
26: " Financial Instruments: Measurement" the company has designated its
investments as being measured as "fair value through profit and loss".
8. The fair value of fixed asset investments is deemed to be the market bid
value at the close of business on the balance sheet date.
9. Under FRS 21, "Events after the balance sheet date", dividends declared and
approved by the company after the balance sheet date are not recognised as a
liability of the company at the balance sheet date.
END
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