TIDMIBSA
RNS Number : 3169P
IBIS Media VCT 1 plc
30 September 2013
IBIS Media VCT 1 plc
Half-Yearly Report
for the period ended 31 July 2013
Incorporated in England and Wales
with registered number: 5660269
Financial Summary
Period ended 31 July 31 July 31 January
2013 2012 2013
------------------------------- ------------- --------------- ---------------
Net assets 5,957,111 GBP6,365,220 GBP5,918,319
------------------------------- ------------- --------------- ---------------
Net asset value per share 57.26p 60.80p 56.80p
------------------------------- ------------- --------------- ---------------
Investment income GBP101,361 GBP50,790 GBP128,033
------------------------------- ------------- --------------- ---------------
Return on ordinary activities
before tax
- Revenue GBP(161,382) GBP(32,734) GBP(22,365)
- Capital GBP222,065 GBP(1,431,137) GBP(1,690,683)
- Total GBP60,683 GBP(1,463,871) GBP(1,713,048)
------------------------------- ------------- --------------- ---------------
Return per share
- Revenue (1.55)p (0.33)p (0.22)p
- Capital 2.13p (14.47)p (16.61)p
- Total 0.58p (14.80)p (16.83)p
------------------------------- ------------- --------------- ---------------
Dividend per share declared
in respect of the period
- Revenue Nil Nil Nil
- Capital Nil Nil 1.5p
- Total Nil Nil 1.5p
------------------------------- ------------- --------------- ---------------
Share price at end of period 50p 64p 55p
------------------------------- ------------- --------------- ---------------
Investment Policy
The objective of IBIS Media VCT 1 plc ("IBIS" or the "Company")
is to make investments in unquoted companies within the media
sector that have the potential to grow and to achieve capital
appreciation on a subsequent exit.
Whilst the Company's directors ("Directors") and the Company's
investment committee ("Investment Committee") are primarily
targeting investments in privately owned companies, suitable
opportunities to acquire VCT qualifying investments in smaller
AIM-quoted stocks will also be considered where there is potential
to achieve the level of return targeted by the Company's board of
directors ("Board"). It is also the intention of the Directors to
build a balanced portfolio with interests in a mixture of cyclical
and non-cyclically exposed media companies operating both in mature
and high growth areas of the market. IBIS is, however, unlikely to
invest in all media sub-sectors as factors such as growth
prospects, the competitive environment and valuations may mean that
the prospective investment performance of certain of those
sub-sectors would be unlikely to provide satisfactory rates of
return.
Investments in business start-ups will generally be avoided
unless the management team has a strong profile in the media sector
and a track record of value creation for shareholders.
The Company's investment adviser is IBIS Private Equity Partners
LLP ("Investment Adviser").
Chairman's Statement
Company Overview
The main features of the six month period ended 31 July 2013
were:
-- An increase in the valuation of the IBIS' unquoted investments of GBP260,875
-- An increase in the Company's net asset value per share of 0.46p to 57.26p (+0.8%)
-- Shareholder approval to pay the sixth consecutive annual
dividend of 1.5p per share with respect to the 2012/13 financial
year, bringing the cumulative dividend to 9.0p per share
-- A third successful Share Realisation and Reinvestment Programme ("SRRP")
-- The commencement of a private placement to provide continuing
support to existing IBIS portfolio companies
Financial Performance
In the six months to 31 July 2013, a sixth consecutive annual
dividend of 1.5p per share was approved by shareholders, bringing
the total dividends per share since the launch of IBIS to 9.0p per
share. The net asset value total return per share (comprising the
sum of the net asset value per share and the cumulative dividends
paid per share) as at 31 July 2013 was 64.76p, an increase of 0.72%
from the 31 January 2013 return of 64.30p. Shareholders who
invested in 2005/06 and (i) recovered the full 40% income tax
relief of 40p per GBP1 subscribed and (ii) who subsequently sold
the shares acquired in 2005/06 and reinvested the full proceeds
under the Company's 2010/11 SRRP and received a further 30% income
tax relief on the full reinvested sum and (iii) received each of
the six 1.5p per share dividends paid by the Company to date will
have enjoyed a total cash return of 77.21p per share as at 30
September 2013.
During the period under review, the Company's net assets
increased by GBP38,792. This increase can be attributed to a
decrease in the share capital and share premium account of
GBP21,891 (arising primarily from the Company's SRRP) and the
Company's return attributable to shareholders of GBP60,683. The
Company's return attributable to shareholders is made up of a
capital return of GBP222,065, comprising an unrealised gain of
GBP260,875, arising primarily from the increase in valuation of the
Company's investments in Contagious, Ginx TV and Freshwater set off
against the decrease in the valuation of Futurelex and a realised
loss of GBP38,810 representing the Investment Adviser's fee for the
period allocated to capital and a revenue loss of GBP161,382,
including GBP190,805 of accrued loan note interest due from
Futurelex written off.
Investment Performance
During the period, the valuation of the Company's portfolio of
private equity investments increased by GBP260,875 (+5.0%). With
respect to the companies in the IBIS portfolio, we have made a
number of adjustments in the carrying value of our investments:
-- Steel River Media, the holding company for Contagious, has
continued to expand its business both domestically and
internationally, winning new client contracts with brands such as
Mondelez and Google
-- Ginx TV has accelerated its deal flow to the point of being
on the verge of reaching break even. In August 2013, the company
reached its target of raising GBP750,000 via a rights issue at a
25% premium to the price per share of its previous fundraising in
order to acquire a pan-European thematic television channel that
will extend Ginx TV's viewership by 26 million homes
-- Freshwater is making encouraging progress in restoring
profits to pre-recession levels and strengthening its financial
position
-- Get Me Media had an excellent first half and is trading well ahead of last year
-- Masher Technologies has received preliminary acquisition
interest and a potential acquirer has commenced product testing of
Masher's new website
-- IBIS has supported Futurelex in its fundraising efforts by
participating in the company's restructuring, the net result of
which has seen the value of IBIS' investment in the company
decrease by GBP121,876 and a further GBP190,805 in accrued loan
note interest written off
More detail of the performance of the Company's portfolio is
given in the Investment Adviser's Review.
Corporate Developments
The Company's most recent SRRP structured as linked tender and
open offers closed on 27 February 2013. The programme gave all
shareholders the opportunity to sell their shares to the Company at
the most recently published net asset value per share, provided the
proceeds of the sale were reinvested in new shares, which
investment carried income tax relief of 30%. The SRRP was targeted
at investors whose shares were allotted on or before 28 February
2008, as these shares could be sold without jeopardising the
up-front income tax relief (40% if allotted on or before 5 April
2006 and 30% thereafter) associated with their acquisition. As at
31 July 2013, 81.5% of the shares allotted on or before 28 February
2008 had been tendered under the programme, suggesting an
encouraging level of shareholder loyalty, for which the Board is
very grateful.
During the period, IBIS launched a private placement targeting
approximately GBP675,000 of new shareholder funds to provide
continuing support to existing portfolio companies as they prepare
for exit.
Outlook
The IBIS investment portfolio contains some very promising
investments and a number of investee companies delivered pleasing
results over the period under review. Trading is up year-on-year at
Contagious, Ginx TV, Get Me Media and Freshwater while the outlook
for each remains encouraging. There have been positive developments
at Masher since the launch of its new website and IBIS' Investment
Adviser is working with the company's management towards realising
an exit for shareholders. While it remains difficult to assess the
prospects of Futurelex, IBIS has taken steps to support the company
and its fundraising efforts by restructuring its debt.
IBIS will continue to provide support for the on-going
development and initiatives of our investee companies while its
Investment Adviser plays an active role with management teams
towards achieving successful exits for IBIS shareholders.
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