Final Results
April 30 2008 - 11:02AM
UK Regulatory
Keydata Income VCT 2
KEYDATA INCOME VCT 2 plc
Preliminary Announcement of Final Results for the year ending 29 February 2008
Financial Highlights
2008 2007 % change
Capital Values:
Net assets (�000) 7,160 6,997 +2.3%
Net asset value per share 98.00p 95.76p +2.3%
Cumulative distributions paid 1.33p 0.33p
Net asset value total return 99.33p 96.09p +3.4%
Share price (mid) 75p 90p
Discount to net asset value 23.5% 6.0%
Earnings per share: 3.23p 1.09p +196%
Total expense ratio 2.06% 2.08%
Dividends (per share)
Interim paid - -
Final proposed 3.0p 1.0p
Total for year 3.0p 1.0p +200%
Chairman's Statement
I am pleased to report that your company made good progress in the year ended 29
February 2008.
Investment Update
On 27 June 2007, Keydata Income VCT 2 ("the company") invested �6,227,000 in a
series of renewable energy power generation projects based on the technology of
the gasification of recycled wood. The Company's principal partners in these
projects are Biomass Engineering Limited ("Biomass") a leading company in the
field of sustainable energy (see www.biomass-uk.com) and Centralgrange
Environmental Waste Limited ("CEW") a business based in St Helens, Lancashire
specialising in waste reclamation. Advance tax clearance has been obtained from
HMRC to confirm that these investments will be qualifying investments for VCT
purposes. The investments made in the period represent 90% of total funds
raised, comfortably ahead of the required 70% investment within 3 years. The
other 10% of funds (amounting to �693,000 at 29 February 2008) are held on bank
deposit.
The Company invested an aggregate of �4,248,000 in five newly formed renewable
energy companies (RECs). It is intended that each REC will build, own and
operate either a 1 megawatt (MW) or 0.5 MW Gasification Unit in St Helens,
Merseyside, to be fuelled by clean recycled wood provided by CEW which operates
a waste reclamation station on the site. Planning permission has been granted in
respect of the Gasification Units. The total annual operating capacity of the 5
RECs will be 4.5 MW of electricity (sufficient to fuel 4,500 homes), four
companies producing 1MW and one company producing 0.5MW. Biomass will provide
the Gasification Units and construction is underway with completion and grid
connection scheduled to be on or before 31 March 2009.
The sub-station construction is currently well advanced. On completion of the
civil works, final assembly and testing of the gasification units and fuel feed
system will commence. The completion date has slipped 5 months from our original
completion date due to various technical and operational issues which have now
been resolved.
Under the terms of their investments, the RECs have each entered into a long
term contract to supply all their electricity and heat to a newly formed
company, Docherty Heat and Energy Distributor Limited and have agreed tolling
fees. The effect of this arrangement will be to reduce the financial risk of the
REC investments that would otherwise arise from potentially volatile feedstock
and electricity prices.
The company has also invested an aggregate of �1,979,000 in two newly formed
RECs set up to supply various support services (eg fuel feed system, condensate
filter and cooling tower and the plant required to connect to grid) to the five
operating companies detailed above.
Finally, at the same time, the company has made a small non-qualifying
investment in Docherty Heat and Energy Distributor Limited for a 5% equity
interest. This will provide the opportunity for the company to benefit directly
in the event of sustained high electricity prices.
Results
The net asset value per share at 29 February 2008 was 98.00 pence, an increase
of 2.3% in the year. Adjusted for dividends paid of 1.33p, the total return is
99.33 pence, a 4.6% uplift since launch.
Earnings per share for the period were 3.23 pence per share (comprising revenue
earnings of 3.23 pence and capital earnings of nil).
Dividends
A final dividend of 3 pence per share is proposed payable on 30 June 2008,
subject to AGM approval, to shareholders on the register on 6 June 2008.
Outlook
Although disappointed at the delay in expected commissioning to March 2009, the
underlying spike in power prices provides confidence that the investments will
meet the Company's investment objectives and enable a target dividend of 5 pence
per annum once fully operational.
The Company intends to establish a share buy back scheme after the investments
are fully operational and generating sufficient cash flow.
Shareholder Communication
The Company's daily share price can be found on various financial websites under
the EPIC code "KIV2" or on our own dedicated website at
www.keydata.co.uk/incomevct
Stephen Oxenbridge
Chairman
30 April 2008
Consolidated income statement for the year ending 29 February 2008
2008 (unaudited)
Revenue Capital Total
�000 �000 �000
Realised losses on investments - - -
Unrealised losses on investments - - -
Investment income 443 443
-------- --------
443 ----------- 443
Management fees - - -
Other expenses (148) - (148)
-------- -------- --------
Profit before taxation 295 - 295
Taxation (59) - (59)
-------- -------- --------
Profit after taxation 236 236
-------- ---------- --------
Earnings per share (Note 2) 3.23p - 3.23p
The total column of this statement is the income statement of the Group. All revenue
and capital items in the above statement derive from continuing operations.
Consolidated income statement for the year ending 28 February 2007
2007(audited)
Revenue Capital Total
�000 �000 �000
Investment Income 240 - 240
Management fees - - -
Other expenses (145) - (145)
-------- -------- --------
Profit before taxation 95 - 95
Taxation (18) - (18)
-------- -------- --------
Profit after taxation 77 77
------------------ --------
Earnings per share (Note 2) 1.09 - 1.09
The total column of this statement is the income statement of the Group. All
revenue and capital items in the above statement derive from continuing
operations.
Balance sheet as at 29 February 2008
Group and Company
2008 2007
(unaudited) (audited)
�000 �000
Fixed assets
Investments 6,230 -
Current assets
Prepayments and accrued income 318 68
Cash 693 6,992
------- --------
1,011 7,060
Creditors: amounts falling due within one year
Accruals and deferred income (81) (63)
------- --------
Net current assets 930 6,997
------- --------
Net assets 7,160 6,997
------- --------
Capital and Reserves
Called up share capital 73 73
Share premium - 6,847
Special Reserve 6,847 -
Revenue reserve 240 77
------- --------
Equity shareholders' funds 7,160 6,997
------- --------
Net asset value per share (Note 4) 98.00p 95.76p
Cash flow statement for the year ending 29 February 2008
Group and Company
2008 2007
(unaudited) (audited)
�000 �000
Profit before taxation 295 95
(Increase) decrease in receivables (250) (43)
(Decrease) increase in payables (23) 25
Taxation paid (18) (3)
------- --------
Net cash from operating activities
Financial investment: 4 74
Purchase of investments (10,871) -
Sale of investments 4,641 -
-------- ------
Net cash used in investing activities (6,230) -
Dividends paid (73) (15)
Net cash raised from financing activities 2,632
--------- --------
Net (decrease)/ increase in cash and cash equivalents (6,299) 2,691
Opening cash and cash equivalents 6,992 4,301
------- --------
Closing cash and cash equivalents 693 6,992
------- --------
Statement of changes in equity
for the year ending 29 February 2008 (unaudited)
Group and Company
Share Share Special Revenue Total
Capital Premium Reserve Reserve
�000
�000 �000 �000 �000
Beginning of year 73 6,847 - 77 6,997
Changes in equity:
Profit for the year and total
recognised
income and expense for year
Taxation - - - 236 236
Dividends paid - - - - -
Transfer between reserves - (6,847) 6,847 - -
Dividends paid (73) (73)
--------- --------- --------- -------- --------
End of year 73 6,847 240 7,160
------- --------- ------- -------- --------
Statement of changes in equity
for the year ending 28 February 2007 (audited)
Group and Company
Share Share Special Revenue Total
Capital Premium Reserve Reserve
�000
�000 �000 �000 �000
Beginning of year 45 4,243 - 15 4,303
Changes in equity:
Profit for the year and total
recognised
income and expense for year - - - 77 77
Dividends paid - - - - -
Issue of ordinary sharers 28 2,604 - - 2,632
Dividends paid (15) (15)
--------- --------- --------- -------- --------
End of year 73 6,847 77 6,997
------- ------- --------- -------- --------
Investment portfolio summary as at 29 February 2008
Qualifying investments Equity Loan Book cost Valuation % net
Note �000 assets
�000 �000 �000 %
Nevin Energy Resources Ltd 283 660 943 943 13.2
Cooke Generation Ltd 283 660 943 943 13.2
Burley Energy Ltd 283 660 943 943 13.2
Boyle Electrical Generation Ltd 283 660 943 943 13.2
Hughes Power Ltd 143 333 476 476 6.6
Clarke Power Services Ltd 302 704 1,006 1,006 14.0
Spencer Energy Services Ltd 292 681 973 973 13.6
------- ------- -------- -------- --------
Total qualifying investments 1,869 4,358 6,227 6,227 87.0
Non-qualifying investments
Docherty Heat & Energy Distributor Ltd 3 3 0.0
-------- ------- --------
Total non-qualifying investments 3 3 0.0
3 - -------- ------- --------
Total investments 6,230 6,230 87.0
Cash on bank deposit 693 693 9.7
Net current assets 237 237 3.3
-------- -------- --------
Net assets 7,160 7,160 100.0
-------- -------- --------
Notes to the preliminary announcement
1 The financial information above has been prepared in accordance with International
Financial Reporting Standards (IFRSs). The financial information set out above does
not constitute the Group's statutory accounts for the year ended 29 February 2008 The
full statutory annual accounts will be delivered to shareholders in May 2008 and
delivered to the Registrar of Companies following the Company's AGM. Copies may in
due course be obtained during normal business hours from Keydata Investment Services
Limited, One Angel Court, London EC2R 7HJ.
Statutory accounts for the year ended 28 February 2007 have been delivered to the
Registrar of Companies and contained an unqualified audit report.
The Annual general meeting of the Company will be held at the Company's registered
office at 19 Cavendish Square, London W1A 2AW on 18 June 2008 at 1pm.
2 Earnings per ordinary share is based on a profit after tax of �236,000 (2007 -
�77,000) and on 7,306,320 (2007 - 7,067,430) ordinary shares, being the weighted
average number of ordinary shares in issue during the year.
3 The net asset value per ordinary share is based on net assets at the year end and on
7,306,320 (2007 - 7,306,320) ordinary shares, being the number of ordinary shares in
issue at year end.
30 April 2008
For further information please contact:
Craig McNeil
Company Secretary
Keydata Income VCT 2 plc
0141 228 6310
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