RNS Number:1976T
Leisure & Media VCT PLC
19 March 2007
LEISURE & MEDIA VCT PLC
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS
The Directors announce the statement of results for the year ended 31 December
2006 as follows:
CHAIRMAN'S STATEMENT
I am pleased to report to shareholders on the Company's progress during the
financial year ended 31 December 2006. Four new investments were completed, in
youth-orientated media, radio and TV production, freehold pubs and health &
fitness clubs.
At the year-end, the net asset value ("NAV") per share was 93.7 pence, compared
with 103.8 pence at the end of 2005, with the decrease principally attributable
to the 5.0 pence capital dividend paid in April, the write off of one stock and
the write down of one media investment during the year. Adding dividends of
19.8 pence paid since inception, produces a total return of 113.5 pence per
share, compared with the initial 95.0 pence raised (net of issue costs) in 2001.
This places your Company's cumulative performance in the top quartile of its
peer group of twelve private equity VCTs launched in 2001-2002.
Since inception, the Company has realised the following investments, producing a
combined Internal Rate of Return ("IRR") of 19.4%:
Initial
investment Date Net Gain/
date realised Cost proceeds (loss) IRR1
# # #
Renowned Holiday Aug 2001 Mar 2004 333,000 403,000 70,000 7.6%
Villages Limited
Dolphin Nurseries Jan 2003 Dec 2004 700,000 1,436,000 736,000 46.2%
Limited
Odyssey Clubs Group Feb 2002 Dec 2004 739,000 401,000 (338,000) -
Limited 2
XN Checkout Holdings plc 2 Oct 2001 Oct 2004 - 803,000 1,863,000 1,060,000 38.9%
Mar 2005
Lindley Catering Limited Jul 2001 Jul 2005 604,000 1,727,000 1,123,000 32.0%
Brodie & Knight Limited 2 Sep 2002 Jul 2005 656,000 320,000 (336,000) -
Reformed Spirits Company Dec 2003 Jan 2006 755,000 1,344,000 589,000 35.9%
Limited 2
Top Ten Holdings plc 3 Oct 2003 Feb 2006 32,000 42,000 10,000 24.3%
Interactive Media Feb 2006 Dec 2006 300,000 - (300,000) -
Developments Limited4
Total realised investments 4,922,000 7,536,000 2,614,000 19.4%
Note:
1 Internal Rate of Return.
2 Cost and proceeds include equity, loans and interest thereon.
3 Partial realisation of AIM quoted shares.
4 Written off as winding-up proceedings begun in early 2007.
During 2006, the Company completed the following new investments:
* #300,000 in Interactive Media Developments Limited ("IMD"), a
youth-orientated media business;
* #750,000 in Somethin' Else Sound Directions Limited, a well-established
and profitable radio production company that has expanded into TV and other
media;
* #502,000 in British Country Inns plc, for the development of a portfolio
of freehold pubs; and
* #301,000 (out of a total commitment of #520,000) in Fitspace Limited, for
the development of the first two of a planned group of budget-priced health
& fitness clubs.
The Company also had the opportunity to make a number of smaller follow-on
investments at attractive prices in Audio Network plc, Cross Border Limited,
Echo Publishing Limited, Nu Nu plc, and Top Ten Holdings plc, which together
reflected unrealised gains at the year-end of #29,000.
Also during the year, the Company completed the funding of a #205,000 working
capital commitment to Balance Leisure Limited, to reposition its health &
fitness club in light of the ongoing redevelopment of Kettering Leisure Village.
Following the year-end, the Company completed an investment of #500,000 in The
Creative Experience Company Limited, as part of a #1.7 million fundraising for
the production of a permanent multi-media tourist attraction based on the
Carnival, which is expected to open in a theatre in Venice, Italy, by the Summer
of 2007.
In January 2006, the sale was completed of the Company's investment in Reformed
Spirits Company Limited, realising the gain of #589,000 which was reported in
the 2005 accounts. A small number of shares in the AIM quoted Top Ten Holdings
plc were sold at a profit in February 2006. Except for IMD, which began
winding-up proceedings in February 2007 and is treated as realised in the above
table, there were no other realisations during the year.
During 2006, uplifts were recorded in the valuation of two investments.
However, as previously reported, our investment in Media Steps Group plc did not
prove successful and, although it has retained its AIM quoting and attracted
some new capital, we have written down the investment in this company to nil
value pending further developments.
Also, despite achieving a good increase in revenues, IMD's business was not able
to achieve profitability, and we decided not to invest further. IMD is now
disposing of its businesses and has begun winding-up proceedings. We have
therefore written off this investment.
Your Company holds a well-diversified portfolio; its ten leisure investments
include three companies operating health & fitness clubs, one that is developing
children's play centres, a children's nursery group, three pub operators, the
Venice Carnival attraction and a bingo company. Excluding Media Steps Group
plc, the media portfolio includes four companies, including publishers of music,
sports magazines and financial magazines, and a radio and TV production company.
At the end of 2006, four investments reflected unrealised gains, seven were
unchanged, two reflected unrealised losses, and The Bar Group Limited reflected
a partial write down.
At 31 December 2006, a total of #1.356 million was held in cash and gilts. Of
this sum, #500,000 was invested in February 2007 in The Creative Experience
Company Limited and an aggregate of #550,000 was earmarked for investments in
Kidspace Adventures Limited and Fitspace Limited. The changes in the 2006
Budget have limited the amount of cash that VCTs may hold for future investment,
with the result that a portion of uninvested cash may need to be distributed as
dividends if sufficient new investment opportunities are not identified.
Of the funds raised in 2001, 78% was held at the year-end in VCT-qualifying
investments; non-qualifying investments principally included cash from
realisations temporarily invested in gilts, and loans to certain portfolio
companies. None of the proceeds of the 2005 "C" Share issue had been invested
at the end of 2006, but the investment in The Creative Experience Company
Limited in February 2007 was made from these funds, accounting for 50% of the
net "C" Share proceeds. It is expected that the funding commitments for
Kidspace Adventures Limited and Fitspace Limited will also be made from these
funds, so that the 70% VCT-qualifying minimum with respect to these be achieved,
as required, by 31 December 2007.
The Company is no longer raising new funds, and is almost fully-invested with
the completion of a further investment in February 2007. The Investment Manager
is not planning to make any new investments but will be actively pursuing
realisations. It is expected that any proceeds from realisations will be
distributed to shareholders in the form of capital dividends rather than being
used for further investment purposes.
The Board wishes to express its thanks to the Investment Manager and Humberts
Leisure Limited for the success of the Company's investment portfolio. Since
inception in 2001, the Company has invested in twenty-three leisure, media and
brand development opportunities.
In 2005, your Board initiated a programme of share buy-backs to provide a
measure of liquidity to shareholders wishing to sell their shares. A total of
approximately #355,000 was paid in 2006 to acquire and cancel approximately
388,000 shares. The average price of these buy-backs was 91.6 pence per share,
resulting in a modest uplift in the underlying NAV held by the remaining
shareholders. I am pleased to report that the effect of this share buy-back
programme has been to further reduce the discount to NAV at which the Company's
shares have traded, from 36.3% (restated) at 31 December 2004 and 12.8% at 31
December 2005, to 5.0% at 31 December 2006.
I look forward to welcoming you to the Annual General Meeting of the Company, to
be held on 15 May 2007 at 3:00 p.m., in the Board Room, Ryder Court, 14 Ryder
Street, London, SW1Y 6QB.
Andrew Wates
Chairman
19 March 2007
INCOME STATEMENT
for the year ended 31 December
2006 2005
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
(Losses)/gains on investments - (249) (249) - 1,217 1,217
at fair value
Dividends and interest 157 - 157 224 - 224
Investment management fees (62) (186) (248) (51) (153) (204)
Operating expenses (160) - (160) (171) - (171)
(Deficit)/return on ordinary (65) (435) (500) 2 1,064 1,066
activities before taxation
Taxation on ordinary - - - - - -
activities
(Deficit)/return on ordinary (65) (435) (500) 2 1,064 1,066
activities after taxation
Pence Pence Pence Pence Pence Pence
(Deficit)/return per Ordinary (0.7) (4.7) (5.4) 0.0 11.3 11.3
Share
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital columns are prepared under
guidance published by the Association of Investment Companies ("AIC").
There are no gains and losses for the year other than those passing through the
profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing
operations.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December
Capital
Share Share Special redemption Capital Revenue
capital premium reserve reserve reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Year ended 31 December
2006
1 January 2006 95 960 6,869 5 2,199 (223) 9,905
Share buy-backs in the (4) - (355) 4 - - (355)
year
Net deficit after taxation - - - - (435) (65) (500)
for the year
Capital dividend paid - - (470) - - - (470)
31 December 2006 91 960 6,044 9 1,764 (288) 8,580
Capital
Share Share Special redemption Capital Revenue
capital premium reserve reserve reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Year ended 31 December
2005
1 January 2005 91 - 7,265 - 1,135 (225) 8,266
Issue of shares via "C" 9 960 - - - - 969
Share issue
Share buy-backs in the (5) - (396) 5 - - (396)
year
Net return after taxation - - - - 1,064 2 1,066
for the year
31 December 2005 95 960 6,869 5 2,199 (223) 9,905
BALANCE SHEET
as at 31 December
2006 2005
#'000 #'000
Fixed assets
Investments at fair value through profit or loss 8,448 7,254
Current assets
Debtors 35 78
Investments - 119
Cash at bank 215 2,541
250 2,738
Creditors: amounts falling due within one year (118) (87)
Net current assets 132 2,651
Total assets less current liabilities 8,580 9,905
Capital and reserves
Called-up share capital 91 95
Share premium 960 960
Special reserve 6,044 6,869
Capital redemption reserve 9 5
Capital reserve - realised 1,668 1,634
- unrealised 96 565
Revenue reserve (288) (223)
Equity shareholders' funds 8,580 9,905
Pence Pence
Net asset value per Ordinary Share 93.7 103.8
CASHFLOW STATEMENT
for the year ended 31 December
2006 2005
#'000 #'000
Operating activities
Investment income received 80 111
Deposit interest received 20 59
Investment management fees paid (229) (149)
Other expenses paid (160) (150)
Net cash outflow from operating activities (289) (129)
Capital expenditure and financial investment
Purchases of fixed asset investments (2,405) (1,973)
Purchases of Treasury Bills (6,595) (6,551)
Proceeds from the sale of fixed asset investments 1,426 3,360
Proceeds from the sale of Treasury Bills 6,345 5,660
Net cash (outflow)/inflow from capital expenditure and financial investment (1,229) 496
Dividends paid
Capital dividend paid (470) -
Net cash (outflow)/inflow before financing (1,988) 367
Financing
Net "C" Share proceeds - 939
Share buy-backs in year (338) (396)
Net cash (outflow)/inflow from financing (338) 543
(Decrease)/increase in cash (2,326) 910
Notes:
1) The above results have been prepared using the accounting standards and
policies adopted at the previous year-end.
2) The Board does not recommend the payment of a final dividend for the year
ended 31 December 2006 (2005: capital dividend of 5.0 pence per share paid in
April 2006).
3) The revenue return per Ordinary Share is based on the net deficit on ordinary
activities after taxation for the year of #65,000 (2005: #2,000 gain) and on
9,300,777 (2005: 9,439,510) Ordinary Shares, being the weighted average number
of Ordinary Shares in issue throughout the year.
The capital return per Ordinary Share is based on the net capital loss for the
year of #435,000 (2005: #1,064,000 gain) and on 9,300,777 (2005: 9,439,510)
Ordinary Shares, being the weighted average number of Ordinary Shares in issue
throughout the year.
The total return per Ordinary Share is based on the net deficit for the year of
#500,000 (2005: #1,066,000 gain) and on 9,300,777 (2005: 9,439,510) Ordinary
Shares, being the weighted average number of Ordinary Shares in issue throughout
the year.
4) The net asset value per Ordinary Share is based on net assets at 31 December
2006 of #8,580,000 (2005: #9,905,000) and on 9,158,072 (2005: 9,545,832)
Ordinary Shares being the issued share capital at that date.
5) The financial information set out above does not constitute the Company's
statutory financial statements for the year ended 31 December 2006, but is
derived from and has been prepared on the same basis as those draft financial
statements.
The statutory accounts for the year ended 31 December 2006 will be finalised on
the basis of the financial information presented by the Directors in this
preliminary announcement, and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The Annual General Meeting will be held on Tuesday 15 May 2007 at 3:00pm in the
Board Room, Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. The
Annual Report will be posted to shareholders and those individuals on the
Company's mailing list as soon as practicable after printing and will also be
available on request from the Company Secretary, J O Hambro Capital Management
Limited, at Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB.
The above results for the year ended 31 December 2005 are an abridged version of
the statutory accounts for the year ended 31 December 2005 that have been
delivered to the Registrar of Companies. The auditors have reported on the 31
December 2005 year-end accounts and their report was unqualified and did not
include references to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and did not contain statements under
section 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
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