RNS Number : 2299C
Leisure & Media VCT PLC
28 August 2008
LEISURE & MEDIA VCT PLC
HALF-YEARLY ANNOUNCEMENT OF UNAUDITED RESULTS
The Directors announce the statement of results for the period ended 30 June 2008 as follows:
INVESTMENT OBJECTIVE & FINANCIAL HIGHLIGHTS
The Company*s objective is to maximise tax-free capital and income distributions to shareholders, principally from the successful
realisation of its investments in the leisure and media sectors.
At At
30 June 31 December
2008 2007
(unaudited) (audited)
Total assets less current liabilities �7,316,000 �8,246,000
Net asset value per Ordinary Share (pence) 79.9 90.0
Revenue dividend paid 2001 0.8 0.8
(pence)
Capital dividend paid 2004 14.0 14.0
(pence)
Capital dividend paid 2006 5.0 5.0
(pence)
Total cumulative return per Ordinary Share (pence) 99.7 109.8
Middle market quotation per Ordinary Share (pence) 44.5 60.0
Market discount to net asset value (%) 44.3 33.3
CHAIRMAN*S STATEMENT
I am pleased to report to you on the Company*s results for the six months ended 30 June 2008. Net asset value at the end of June was 79.9
pence and, including dividends paid since inception to the original shareholders, the total return is 99.7 pence, compared with the 95.0
pence raised (net of issue costs) in 2001. Assuming full income tax reliefs, the net cost to the original shareholders was 80.0 pence per
share, and to the C shareholders the net cost was 60.0 pence.
As the Company became fully invested in 2007, only one follow-on investment was made in the first half of 2008, of �100,000 in convertible
loan stock of The Creative Experience Company Limited. The Investment Manager, North Atlantic Value LLP, has been focusing on realising
investments, and dealing with the challenges faced by some of the portfolio companies in the current difficult economic climate, which have
led to several write downs in the period.
While we still anticipate an imminent sale of Nu Nu plc, the disposal of the investment in Cross Border Limited is not likely to occur this
year, following the recent withdrawal of an offer for that business.
Since inception, the Company has realised the following investments, producing a combined Internal Rate of Return of 19.4%:
Initial
investment Date Net Gain/
date realised Cost proceeds (loss) IRR(1)
� � �
Renowned Holiday Villages Aug 2001 Mar 2004 333,000 403,000 70,000 7.6%
Limited
Dolphin Nurseries Limited Jan 2003 Dec 2004 700,000 1,436,000 736,000 46.2%
Odyssey Clubs Group Limited(2) Feb 2002 Dec 2004 739,000 401,000 (338,000) -
XN Checkout Holdings plc(2) Oct 2001 Oct 2004 * Mar 2005 803,000 1,863,000 1,060,000 38.9%
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 Developments Feb 2006 Dec 2006 300,000 - (300,000) -
Limited(4)
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 began in early 2007.
Following is a brief report on the status of the investments in the portfolio:
� Audio Network plc has continued its very strong growth, and has expanded to the United States. A further write-up in the valuation of
�321,000 has been made reflecting the growth in its music catalogue and recent share transactions.
� Balance Leisure Limited saw an improvement in results at the start of 2008, but since then results have been very disappointing. The
Investment Manager is working with the landlord of Kettering Leisure Village on plans to redevelop the club to incorporate a day spa
element, and has recently changed management at the club. In view if its uncertain future, a full provision against the value of the
investment has been taken totalling �538,000.
� Although The Bar Group Limited made good progress at most of its sites in 2007, the impact of the smoking ban and generally adverse
conditions affecting the drinks-led High Street pub sector, especially resulting from cheap supermarket beers, has resulted in significant
cash pressures. Following negotiations with its bank and brewer, a Company Voluntary Arrangement (*CVA*) was proposed in August 2008. In
light of this, we have written off certain loans and made a further reduction in the equity valuation totalling �350,000 in all, to reflect
the likely impact of the CVA on the value of the investment. However, until the CVA has been approved, the ultimate value cannot be
determined.
� British Country Inns plc continues to trade well, with its portfolio of nine food-led freehold country pubs largely immune to the
issues affecting The Bar Group Limited.
� The Investment Manager has been actively involved in changes at The Creative Experience Company Limited, including a further round of
fundraising in which your Company invested �100,000. Having opened late in the 2007 season, this tourist attraction business did not achieve
the early profitability that its founders had forecast. Ticket sales have steadily increased this year and it is expected that break-even
will be achieved in the near future. However, the investment has been written down by �100,000 to reflect the early losses.
� Cross Border Limited continues to perform well. A loss-making title was sold, with proceeds used to fund a modest share buy-back in
July. However, as noted above, the sale of this investment is not now expected to occur during 2008.
� Performance at both of Fitspace Limited*s original clubs has been good, and the Company has completed the integration of six sites
acquired from Fitness First Limited, although this process took longer than planned.
� Kidspace Adventures Limited opened its second site, in Croydon, in late 2007; both sites are trading profitably and new sites are
under review to continue the expansion.
� Nu Nu plc*s children*s nurseries continue to perform well despite a challenging market, and despite some delay in the process, the
expected sale of the business is now well underway.
� Odyssey Group Holdings Limited*s remaining health and fitness club is performing well, and the business benefits from management fees
from a second club. However, we do not envisage further expansion of the group, and expect that our convertible debt will be redeemed in due
course.
� After the sale of its failed advertising business, TSE Group plc (formerly Sandford plc) has acquired two media companies. We hope
these will lead to a recovery in the share price.
� Somethin* Else Sound Directions Limited has seen continued good growth in its radio, TV and talent agency revenues, but profits have
been adversely affected by expansion costs and some mis-steps in the business, which are now being addressed.
� Tomahawk Pubs* remaining two freehold sites continue to perform well, also being food-led and therefore less susceptible to the
travails of the wider pub sector.
� Results at Top Ten Holdings plc have been adversely badly by the smoking ban and changes in gambling regulations, and its share price
has been severely depressed, resulting in a decrease in the AIM valuation of �131,000 during the first half of 2008.
The valuation changes referred to above result in a net reduction of �820,000 in the net asset value, as shown in the income statement for
the first half of 2008.
Without any proceeds from realisations, it has not been possible to offer to buy-back any of the Company*s shares, with the result that the
discount to net asset value has increased significantly. It is expected that funds that become available from realisations, after repayment
of bank debt, and subject to follow-on investments in the portfolio, will be used for limited buy-backs if shares are available at
attractive prices, and thereafter will be distributed to shareholders in the form of capital dividends.
As indicated in the Annual Report, the Directors have been working with the Investment Manager to reduce the Company*s operating costs,
including a reduction in the size of the Board from four Directors to two. An agreement in principle has been reached for a reduction in the
basic management fee from 2% to 1.5% of net assets, and for the current performance fee to be replaced by a new arrangement that will
provide for 5% of future capital dividends exceeding 100 pence per share to be paid as a performance fee to the Investment Manager. These
fee arrangements are expected to result in a reduction in total fees payable to the Investment Manager, compared with the previous
arrangements, while providing an incentive to maximise returns to shareholders.
Your Board has also been working with the Investment Manager to investigate the advisability of merging the Company with another VCT.
Following a detailed review, it has been determined that this would not lead to any certainty of better realisations to shareholders, and
accordingly, the Directors anticipate that a resolution will be put to the shareholders in early 2009, proposing that the Company be placed
at that time into voluntary liquidation. This would lift all of the VCT regulations applying to the Company and allow for a low-cost
winding-up, which would need to be completed within three years of its commencement. We believe this will maximise the amount returned to
shareholders.
The following information is included in the half-yearly report for the first time, pursuant to the Disclosure and Transparency Rules
(*DTR*).
Investment Objective
The objective of Leisure & Media VCT PLC is to maximise tax-free capital and income distributions to shareholders, principally from the
successful realisation of its investments in the leisure & media sectors.
Material Events
In June 2007, the European Court of Justice ruled that investment trust management fees should be exempt from VAT. HM Revenue and Customs
("HMRC") accepted this decision in November 2007 and have recently issued guidance confirming that VCTs are also exempt. Your Company is
taking appropriate steps to reclaim the relevant VAT that has been paid on management fees. The timing and amount of this recovery are still
to be determined. At this time, no contingent asset has been included in these financial statements.
Material Transactions
The Company made one follow-on investment, of �100,000, during the period, and increased borrowings by �225,000 to fund this and operating
expenses pending realisations.
Risk Profile
The Directors have identified three main areas of risk arising from the Company*s operations: investment risk, financial risk and VCT
qualifying status risk. The Board reviews and agrees policies with the Investment Manager in evaluating and managing these risks.
The majority of the Company*s investments are VCT qualifying holdings in small and medium-sized unquoted companies. By their nature these
investments involve a higher level of risk and lower liquidity than investments in large quoted companies. The Board endeavours to limit the
risk to the portfolio as a whole by careful selection and timely realisation of investments, and reviews the portfolio with the Investment
Manager on a regular basis.
As most of the investments in the portfolio involve a medium to long-term commitment and are relatively illiquid, the Directors consider
that it is generally inappropriate to finance the Company*s activities through borrowing. However, with the Company*s funds having been
fully invested in 2007, a short-term borrowing facility was established to assist in managing expenses, reinvestments and realisations. The
Company does not have any exposure to foreign currency risk and does not enter into derivative transactions.
The Company is required to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status at all
times. If the Company were to lose this status, it could lead to it losing its exemption from corporation tax on capital gains, its
shareholders would become liable to pay income tax on any dividends received from the Company, and shareholders would potentially have to
repay the initial income tax relief received in respect of their investment. The Investment Manager continually reviews the Company*s VCT
qualifying status and reports to the Board on this subject on a regular basis. The Company also retains Grant Thornton UK LLP to advise it
on compliance with VCT requirements.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company continue to be as described in the risk profile above. Further information on
each of these areas, together with the risks associated with the Company's financial instruments are shown in the Directors' Report and
notes to the financial statements within the Annual Report and Accounts for the year ended 31 December 2007.
Related Party Transactions
These are listed in note 7 to the half-yearly report.
Directors* Responsibilities
The Directors are responsible for preparing the half-yearly report in accordance with applicable law and regulations. The Directors confirm
that to the best of their knowledge the interim financial statements, within the half-yearly report, give a true and fair view of the
assets, liabilities, financial position and loss for the period, and have been prepared in accordance with the Accounting Standards Board*s
Statement *Half-Yearly Financial Reports*. The Directors further confirm that the Chairman*s Statement includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FSA*s Disclosure and Transparency Rules.
The half-yearly report has not been reviewed or audited by the Company*s Auditors.
The half-yearly report was approved by the Board on 28 August 2008 and the above responsibility statement was signed on its behalf by:
Andrew Wates James Leek
Chairman Director
INVESTMENTS
at 30 June 2008
Cost Valuation Cost Valuation
30 June 30 June 31 December 31 December
2008 2008 2007 2007
�'000 �'000 �'000 �'000
Leisure and media investments:
Audio Network plc 251 1,125 251 834
Audio Network plc* 16 81 16 60
Balance Leisure Limited 500 - 500 333
Balance Leisure Limited* 205 @ - 205 @ 205
The Bar Group Limited 787 @ 301 787 @ 501
The Bar Group Limited* 150 - 150 150
British Country Inns plc 502 600 502 600
The Creative Experience 500 500 500 500
Company Limited
The Creative Experience 100 - - -
Company Limited*
Cross Border Limited 250 582 250 582
Cross Border Limited* 9 18 9 18
Echo Publishing Limited 328 - 328 -
Echo Publishing Limited* 212 @ - 212 @ -
Fitspace Limited 670 670 670 670
Kidspace Adventures 716 @ 909 708 901
Limited
Nu Nu plc 628 741 628 741
Nu Nu plc* 31 38 31 38
Odyssey Group Holdings 409 @ 409 380 @ 380
Limited*
Somethin' Else Sound 750 750 750 750
Directions Limited
Tomahawk Pubs 901 1,135 901 1,135
Top Ten Holdings plc 250 � 17 250 � 75
Top Ten Holdings plc* 265 � 21 265 � 94
TSE Group plc** 300 � 12 300 � 25
Total 8,730 7,909 8,593 8,592
@ Including capitalised interest
* Non-qualifying investment
� AIM quoted
* Formerly Sandford plc
PORTFOLIO REVIEW
at 30 June 2008
Since inception in 2001, the Company*s investments have reflected the following results:
Realised gains Initial investment Date realised Cost(1) Proceeds(1) Realised gains
date
� � �
Renowned Holiday Villages Aug 2001 Mar 2004 333,000 403,000 70,000
Limited
Dolphin Nurseries Limited Jan 2003 Dec 2004 700,000 1,436,000 736,000
XN Checkout Holdings plc Oct 2001 Oct 2004-Mar 2005 803,000 1,863,000 1,060,000
Lindley Catering Limited Jul 2001 Jul 2005 604,000 1,727,000 1,123,000
Reformed Spirits Company Dec 2003 Jan 2006 755,000 1,344,000 589,000
Limited
Top Ten Holdings plc(2) Oct 2003 Feb 2006 32,000 42,000 10,000
Total realised gains 3,588,000
Unrealised gains Initial investment Cost(1) Valuation Unrealised gains
date
� � �
Audio Network plc Jan 2005 267,000 1,206,000 939,000
British Country Inns plc May 2006 502,000 600,000 98,000
Cross Border Limited Mar 2004 259,000 600,000 341,000
Kidspace Adventures Limited May 2005 716,000 909,000 193,000
Nu Nu plc Feb 2003 659,000 779,000 120,000
Tomahawk Pubs Aug 2004 901,000 1,135,000 234,000
Total unrealised gains 1,925,000
Total realised and unrealised gains 5,513,000
Valued at original cost(3) Initial investment Cost(1)
date
�
Fitspace Limited Jun 2006 670,000
Odyssey Group Holdings Limited Dec 2004 409,000
Somethin* Else Sound May 2006 750,000
Directions Limited
Realised losses Initial investment Date realised Cost(1) Proceeds(1) Realised losses
date
� � �
Odyssey Clubs Group Limited Feb 2002 Dec 2004 739,000 401,000 338,000
Brodie & Knight Limited Sep 2002 Jul 2005 656,000 320,000 336,000
Interactive Media Developments Feb 2006 Dec 2006 300,000 - 300,000
Limited(4)
Total realised losses 974,000
Unrealised losses Initial investment Cost(1) Valuation Unrealised losses
date
� � �
Balance Leisure Limited Jun 2003 705,000 - 705,000
The Bar Group Limited Sep 2003 937,000 301,000 636,000
The Creative Experience Feb 2007 600,000 500,000 100,000
Company Limited
Echo Publishing Limited May 2005 540,000 - 540,000
Top Ten Holdings plc Oct 2003 515,000 38,000 477,000
TSE Group plc Jun 2005 300,000 12,000 288,000
Total unrealised losses 2,746,000
Total realised and unrealised losses 3,720,000
Note:
(1) Cost and proceeds include equity, loans and interest thereon, where applicable.
(2) Partial realisation. Cost based on weighted average entry price.
(3) Fair value is considered to be the original cost of the investment.
(4) Written off as winding-up proceedings began in early 2007.
Existing portfolio (listed in order of original investment):
Nu Nu plc
Nu Nu owns and operates ten freehold children*s nurseries principally in the Midlands and North-West of England, with more than 920 nursery
places. Despite the difficult economic situation, Nu Nu's results have continued to be very satisfactory. Following the appointment of
advisors in 2007, several expressions of interest were received for the business, and it is expected to be sold this year at a price
approximating the current carrying value. The Company*s investment is carried at fair value.
Balance Leisure Limited
Balance owns and operates a leasehold health and fitness club in Kettering. After making its original equity investment, the Company made
loans for working capital and to fund changes at the club which helped to reduce operating costs. The redevelopment of Kettering Leisure
Village, in which the club is situated, is nearly complete, the final phase being the construction of an hotel, and as part of this
development discussions are underway with the landlord with a view to repositioning the club as a spa and fitness facility in an alternative
format. Despite an improvement in operating results in the first quarter of 2008, the economic climate and local competition led to
disappointing results in the second quarter, requiring further restructuring of expenses, including a change in management, and it was
decided that a full provision would be taken against the loans and equity value
The Bar Group Limited
Following a programme of adding sites under temporary management agreements, the number of pubs operated by The Bar Group had increased to
39 including 24 owned by The Bar Group. While the increase in the size of the estate helped better absorb overhead expenses, the impact of
the smoking ban in 2007 and the generally poor climate in the pubs' sector led to disappointing results in the first half of 2008. With high
gearing, this led to cash pressure requiring negotiations with the bank and brewer which resulted in the proposal of a Company Voluntary
Arrangement (*CVA*) in August 2008. As a result, working capital loans provided to The Bar Group have been written down to nil and a further
reduction has been recorded in the equity valuation to reflect the impact of the CVA on the value of the investment. However, until the CVA
has been approved, the ultimate value of the investment cannot be determined. The equity investment is carried at fair value, reflecting
write-downs taken in 2005 and 2008. Warrants received in respect of certain loans are carried at nil value.
Top Ten Holdings plc
Top Ten is the third largest bingo group in the UK, and it also operates amusement arcades and snooker clubs. The smoking ban and changes in
gaming regulations have had a significant adverse impact on the sector, and Top Ten has not been immune to this with a significant loss
reported for its financial year ended 30 March 2008. As a result its share price has been very depressed. A recent court ruling may help
alleviate the impact of VAT on the sector, although the matter is still being challenged by HMRC. The Company*s investment is carried at the
AIM bid price.
Cross Border Limited
Cross Border is a leading publisher of investor relations magazines, and organises conferences and awards events. After disappointing
performance in 2006, results in 2007 and 2008 have been much improved. An offer for the business was withdrawn in July 2008, apparently due
to temporary uncertainty about the impact of the poor credit climate on the financial sector, where Cross Border's publishing is focused. A
small share buy-back took place in July, to return to shareholders the proceeds of the sale of an unprofitable title. The Company*s
investment is carried at fair value, which reflects the estimated value that would have been achieved if the recently aborted deal had
proceeded, and multiples of comparable business.
Tomahawk Pubs
Following the 2006 sale of three pubs to its site operator, Geronimo Inns Limited, Tomahawk owns two freehold pubs in the London area.
Geronimo has an option to acquire these remaining sites. Both sites are performing satisfactorily. The investment is carried at fair value,
reflecting the underlying values of the pubs.
Odyssey Group Holdings Limited
Performance at Odyssey's freehold health club in Knebworth has been satisfactory, despite the difficult economic climate, and Odyssey
continues to manage a club in the Midlands. The proposed acquisition of a multi-site leasehold group did not proceed, however. The Company*s
investment is carried at fair value (which is equal to cost plus interest).
Audio Network plc
Performance at Audio Network continues to be excellent, with steady growth in its catalogue of recorded music, leading to increases in
licence fees and royalties. An office has been opened in the USA. The Company*s investment is carried at fair value reflecting the
underlying growth of the music catalogue and recent third-party share transactions.
Kidspace Adventures Limited
Performance of the original site in Romford has been good, and the second site, in Croydon, is developing well. Several additional sites
have been identified, and Kidspace is seeking funding for this expansion. The Company*s investment is carried at fair value.
Echo Publishing Limited
In 2007, a full write-down was taken of the investment in Echo, reflecting its continuing losses and the failure to find a buyer for its
London Sports magazine. The business is still trading but we do not have any expectations of a recovery in value at this time. We have sold
our loan notes to another shareholder for nominal consideration but retained our equity.
TSE Group plc
After the failure of the original advertising concept for which this company was floated, TSE acquired two sports consulting businesses. The
Company's investment is carried at the AIM bid price.
Somethin* Else Sound Directions Limited
Somethin* Else is a well-established and profitable radio production company that has expanded its business to television, interactive
media, and talent management, resulting in significant growth in turnover, although this has not yet been fully reflected in profitability.
The investment is carried at fair value (which is equal to cost).
Fitspace Limited
Results at the first Fitspace health & fitness club, in Bournemouth, have been very good, and the second site, on Holloway Road, London, is
building steadily since its June 2007 opening. In September 2007, Fitspace completed an agreement with Fitness First Limited which led to
the acquisition of six existing Fitness First Limited clubs, which have now been converted to the Fitspace concept. The investment is
carried at fair value (which is equal to cost).
British Country Inns plc
British Country Inns has a portfolio of nine freehold country pubs in Southeast England. Performance has been very satisfactory. The
investment is carried at fair value.
The Creative Experience Company Limited
Creative operates a permanent tourist attraction in Venice, which tells the history of the city through the medium of the carnival.
Following the delayed opening of the attraction in July 2007, which did not fully capitalise on the 2007 season, additional funding was
raised in early 2008, and a number of management changes were made to reduce costs and maximise revenues. This investment is carried at fair
value, reflecting the �100,000 write-down taken in 2008.
North Atlantic Value LLP
Investment Manager
28 August 2008
INCOME STATEMENT
for the six months ended 30 June
1 January to 30 June 2008 (unaudited) 1 January to 30 June 2007 (unaudited) 1 January to 31December 2007
(audited)
Revenue Capital Total Revenue Capital Total Revenue Capital
Total
�*000 �*000 �*000 �*000 �*000 �*000 �*000 �*000
�*000
Losses on investments at fair - (820) (820) - (201) (201) - (97)
(97)
value
Dividends - - - - - - 6 -
6
Interest 67 - 67 64 - 64 119 -
119
Investment management fees (22) (68) (90) (24) (74) (98) (49) (147)
(196)
(note 7)
Operating expenses (68) - (68) (81) - (81) (158) -
(158)
Deficit on ordinary activities (23) (888) (911) (41) (275) (316) (82) (244)
(326)
before finance costs and
taxation
Interest payable and similar (5) (14) (19) - - - (2) (6)
(8)
charges
Deficit on ordinary activities (28) (902) (930) (41) (275) (316) (84) (250)
(334)
before taxation
Taxation on ordinary - - - - - - - -
-
activities
Deficit on ordinary activities (28) (902) (930) (41) (275) (316) (84) (250)
(334)
after taxation
pence pence pence pence pence pence pence pence
pence
Deficit per ordinary share (0.3) (9.8) (10.1) (0.4) (3.0) (3.4) (0.9) (2.8)
(3.7)
(note 2)
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 period 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 six months ended 30 June
Capital
Share Share Special redemption Capital Revenue
capital premium reserve reserve reserve reserve Total
�*000 �*000 �*000 �*000 �*000 �*000 �*000
Six months ended 30 June 2008
(unaudited)
1 January 2008 91 960 6,044 9 1,514 (372) 8,246
Net deficit after taxation for - - - - (902) (28) (930)
the period
30 June 2008 91 960 6,044 9 612 (400) 7,316
Year ended 31 December 2007
(audited)
1 January 2007 91 960 6,044 9 1,764 (288) 8,580
Net deficit after taxation for - - - - (250) (84) (334)
the year
31 December 2007 91 960 6,044 9 1,514 (372) 8,246
Six months ended 30 June 2007
(unaudited)
1 January 2007 91 960 6,044 9 1,764 (288) 8,580
Net deficit after taxation for - - - - (275) (41) (316)
the period
30 June 2007 91 960 6,044 9 1,489 (329) 8,264
BALANCE SHEET
as at 30 June
At At At
30 June 31 December 30 June
2008 2007 2007
(unaudited) (audited) (unaudited)
�*000 �*000 �*000
Fixed assets
Investments at fair value through profit or 7,909 8,592 8,076
loss
Current assets
Debtors 80 61 41
Cash at bank - 5 240
80 66 281
Creditors: amounts falling due within one year
Bank overdraft - (9) -
Creditors (148) (103) (93)
Bank loan (525) (300) -
(673) (412) (93)
Net current (liabilities)/assets (593) (346) 188
Total assets less current liabilities 7,316 8,246 8,264
Capital and reserves
Called-up share capital 91 91 91
Share premium 960 960 960
Special reserve 6,044 6,044 6,044
Capital redemption reserve 9 9 9
Capital reserve * realised 1,433 1,515 1,594
* unrealised (821) (1) (105)
Revenue reserve (400) (372) (329)
Equity shareholders* funds 7,316 8,246 8,264
pence pence pence
Net asset value per Ordinary Share (note 4) 79.9 90.0 90.2
CASH FLOW STATEMENT
for the six months ended 30 June
1 January 1 January 1 January
to 30 June 2008 to 30 June 2007 to 31 December
2007
(unaudited) (unaudited) (audited)
�*000 �*000 �*000
Operating activities
Investment income received 8 24 38
Deposit interest received 1 8 10
Investment management fees (48) (100) (197)
paid
Other expenses paid (64) (86) (157)
Net cash outflow from (103) (154) (306)
operating activities (note 6)
Servicing of finance
Interest paid and similar (18) - (5)
charges
Capital expenditure and
financial investment
Purchases of fixed asset (100) (945) (1,332)
investments
Purchases of Treasury Bills - (1,689) (1,689)
Proceeds from the sale of - 2,830 2,830
Treasury Bills
Net cash (outflow)/inflow from (100) 196 (191)
capital expenditure and
financial investment
Net cash (outflow)/inflow (221) 42 (502)
before financing
Financing
Share buy-backs - (17) (17)
Bank loan 225 - 300
Net cash inflow/(outflow) from 225 (17) 283
financing
Increase/(decrease) in cash 4 25 (219)
Notes to the financial statements
1) Basis of preparation
The figures for the six months ended 30 June 2008 have been prepared on a basis consistent with the accounting policies adopted in the
audited financial statements for the year ended 31 December 2007.
2) Deficit per Ordinary Share
The revenue return per Ordinary Share for the six months ended 30 June 2008 is based on the net deficit on ordinary activities after
taxation of �28,000 (six months ended 30 June 2007: �41,000; year ended 31 December 2007: �84,000) and on 9,158,072 (six months ended 30
June 2007 and year ended 31 December 2007: 9,158,072) Ordinary Shares, being the weighted average number of Ordinary Shares in issue
throughout the period.
The capital return per Ordinary Share for the six months ended 30 June 2008 is based on the net capital deficit of �902,000 (six months
ended 30 June 2007: �275,000; year ended 31 December 2007: �250,000) and the same number of Ordinary Shares as the revenue return
calculations.
The total return per Ordinary Share for the six months ended 30 June 2008 is based on the net deficit of �930,000 (six months ended 30 June
2007: �316,000; year ended 31 December 2007: �334,000) and the same number of Ordinary Shares as the revenue return calculations.
3) Dividends
During the six months ended 30 Jun 2008, no dividends were paid (year ended 31 December 2007 and six months ended 30 June 2007: no dividends
paid).
4) Net asset value per Ordinary Share
The net asset value per Ordinary Share is based on net assets at 30 June 2008 of �7,316,000 (31 December 2007: �8,246,000; 30 June 2007:
�8,264,000) and on 9,158,072 (31 December 2007 and 30 June 2007: 9,158,072) Ordinary Shares being the issued share capital at those dates.
5) Share buy-backs
During the six months ended 30 June 2008, no shares were bought back for cancellation (year ended 31 December 2007 and six months ended 30
June 2007: no shares were bought back for cancellation).
6) Reconciliation of total deficit on ordinary activities before finance costs and taxation to net cash outflow from operating activities
1 January to 1 January to 1 January to
30 June 2008 30 June 2007 31 December 2007
(unaudited) (unaudited) (audited)
�*000 �*000 �*000
Total deficit on ordinary (911) (316) (326)
activities before finance costs
and taxation
Losses on investments at fair 820 201 97
value
Increase in debtors (19) (6) (26)
Increase/(decrease) in 45 (8) (1)
creditors and accruals
Fixed interest reinvested (38) (25) (50)
Net cash outflow from operating (103) (154) (306)
activities
7) Related party transactions
The Investment Manager is regarded as a related party of the Company. The amounts paid to the Investment Manager are as follows:
1 January to 1 January to 1 January to
30 June 2008 30 June 2007 31 December 2007
(unaudited) (unaudited) (audited)
�*000 �*000 �*000
Investment management fee 77 83 167
Irrecoverable VAT thereon 13 15 29
90 98 196
8) Financial information
The financial information contained in this half-yearly report does not constitute full statutory financial statements as defined in Section
240 of the Companies Act 1985. The financial information for the six months ended 30 June 2008 and the six months ended 30 June 2007 has not
been audited.
The information for the year ended 31 December 2007 has been extracted from the statutory financial statements for the year ended 31
December 2007, which contained an unqualified Auditor*s Report, have been lodged with the Registrar of Companies, did not include a
reference to any matters to which the Auditors drew attention by way of emphasis without qualifying the report and did not contain
statements under Section 237(2) or (3) of the Companies Act 1985.
DIRECTORS AND ADVISORS
Directors:
A T A Wates (Chairman)
J A Leek
Investment Manager:
North Atlantic Value LLP
Authorised and regulated by the Financial Services Authority
Ground Floor
Ryder Court
14 Ryder Street
London SW1Y 6QB
Telephone: 020 7747 5678
Company Secretary & Registered Office:
J O Hambro Capital Management Limited
Ground Floor
Ryder Court
14 Ryder Street
London SW1Y 6QB
Telephone: 020 7747 5682
Facsimile: 020 7747 5611
Leisure Consultant: Auditors:
Humberts Leisure Limited Grant Thornton UK LLP
12 Bolton Street 30 Finsbury Square
Mayfair London EC2P 2YU
London W1J 8BD
Sponsor: Bankers:
Dickson Minto W.S. Allied Irish Bank, p.l.c
16 Charlotte Square St Helen*s
Edinburgh EH2 4DF 1 Undershaft
London EC3A 8AB
Registrars:
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFFVTAITFIT
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