Oxford Tech 3 VCT Oxford Technology 3 Vct Plc : Half-year Report
October 23 2017 - 2:00AM
UK Regulatory
TIDMOTT
Oxford Technology 3 Venture Capital Trust Plc
Unaudited Half-Yearly Report
For the period
1 March 2017 to 31 August 2017
Financial Headlines
6 Months Ended Year Ended
31 August 2017 28 February 2017
Net Assets at Period End GBP5.53m GBP5.60m
Net Asset Value per Share 81.6p 82.5p
Cumulative Dividend per Share 36.0p 32.0p
Total NAV Return per Share 117.6p 114.5p
Share Price at Period End 42.5p 52.5p
Earnings per Share 3.1p (4.1)p
Company Number: 4351474
Registered Address: The Magdalen Centre, Oxford Science Park, Oxford OX4
4GA
Statement on behalf of the Board
I am pleased to present the unaudited results for the six month period
ended 31 August 2017.
Results and Dividends
The Company's net asset value (NAV) per share has decreased from 82.5p
at 28 February 2017 by 0.9p to 81.6p at 31 August 2017. The underlying
NAV per share rose by 3.1p but was offset by the payment of a 4p per
share dividend on 21 July 2017. Further dividends are likely to require
a profitable investee company exit.
Portfolio Review
The companies within the portfolio continue to develop, and where
required and permitted under VCT rules your company continues to invest
to support that development. During the period, additional investments
were made into Immbio (GBP31k), Plasma Antennas (GBP50k) and Scancell
(GBP50k).
Following a successful first in human clinical trial, Immbio is now
negotiating commercial licences for its Pneumococcal Vaccine Pnubiovax.
Plasma Antennas continues to develop its unique technology while looking
for commercial partners. Scancell has a strong novel cancer related
clinical development pipeline. SCIB1, targeting malignant melanoma, has
had good Phase1/2 results and a Phase 2 combination trial with an immune
checkpoint inhibitor is planned for 2018. SCIB2 targets non-small lung
cancer and Modi-1 targets breast and ovarian cancers and osteosarcoma.
Four Phase1/2 trials on each target are also planned for 2018.
Another of the listed companies within the portfolio Abzena raised money
within the period by way of a placing at 33p per share. Your company did
not participate in the placing.
The directors have reviewed the valuation of each investee company in
the unquoted portfolio. Changes have been made to a number of
valuations to reflect company performance primarily Ixaris and Glide
Pharmaceutical. Ixaris has continued to grow sales significantly and
generate cash. As a result, our loan of GBP108k along with accrued
interest of GBP79k will be repaid shortly after period end. On a
negative note Glide went into administration after the period end after
both the two previous major investors refused to put up further funds or
renegotiate their preference shares leading to your company having to
write off the remaining GBP48k of investment.
The Directors along with the Investment Advisor continue to take an
active interest in the remaining companies within the portfolio, both to
support their management teams to achieve company development, but also
to prepare companies for realisation at the appropriate time. It should
be noted that the current portfolio is highly concentrated with Ixaris
representing 58% and Scancell 15% of investments and the VCT NAV is very
sensitive to changes in these valuations.
Liquidity
At period end we had net current assets of GBP711k which continues to
provide us with flexibility to make follow-on investments if attractive.
VCT qualifying status
The Board has procedures in place to ensure that the Company continues
to comply with the conditions laid down by HMRC for maintaining approval
as a VCT.
Presentation of half-yearly report
In order to reduce the length of this report, we have omitted details of
the Company's objectives and investment strategy, its Advisers and
Registrar and how to buy and sell shares in the Company. These details
are all included in the Annual Reports, which together with previous
half-yearly reports, are available for viewing on the Oxford Technology
website.
Outlook
Your directors continue to monitor changes to VCT legislation, and its
potential impact on both the VCT and its investee companies. The recent
publication of the Patient Capital Review makes many recommendations
regarding investment into early stage high growth companies. It is
expected that this may drive additional changes to tax efficient
investment schemes. Your directors do not expect that this will have any
material impact on the current portfolios or on current investors as the
VCT is fully invested. Likewise, whilst the impact of Brexit remains
unclear, your directors do not expect its eventual outcome to have a
material impact on portfolio valuations.
We were pleased to welcome a large number of shareholders to our AGM in
July. Two of our investee companies made presentations: Arecor and
Immbio. These presentations are on the Oxford Technology website.
The directors' view remains that the portfolio, while concentrated,
still holds significant potential over the medium term but is not
without risk. Finally I would like to take this opportunity to thank
shareholders for their continued support.
Robin Goodfellow - Chairman
20 October 2017
Investment Portfolio as at 31 August 2017
Change
in
value
Net Cost for the
of 6 month
investment Carrying value at 31/8/17 period % Equity held % Equity held %
Company Description GBP'000 GBP'000 GBP'000 OT3 All OT of fund investment value
Ixaris Group Internet
Holdings payments 535 2,802 152 7.3 7.3 58.1
Antibody based
Scancell cancer
(bid price 14p) therapeutics 409 718 70 1.6 3.8 14.9
Directional
Plasma Antennas antennas 358 290 40 12.4 48.9 6.0
ImmBio Novel vaccines 432 277 39 4.9 16.2 5.7
Protein
Arecor stabilisation 224 256 - 2.6 11.3 5.3
Bone graft
Orthogem material 234 142 - 7.6 20.2 2.9
Photocopier
Select Technology interfaces 47 131 2 2.8 58.6 2.7
Protein &
Abzena peptide based
(bid price 44p) drugs 69 88 15 0.1 0.1 1.8
Insense Wound healing 333 60 - 2.3 6.8 1.3
Data
transformation
Inaplex software 58 22 - 13.3 34.8 0.5
Low power
Invro electronics 40 20 - 33.1 33.1 0.4
Production of
Metal Nanopowders metal powders 153 13 - 20.0 36.7 0.3
Production of
hard
Superhard Materials materials 11 3 - 21.8 40.0 0.1
Microarray Insense spinout 2 0 - 2.0 2.0 -
Needle free
Glide Technologies injector 225 0 (48) - - -
Total Investments 3,130 4,822 270 100%
Other Net Assets 711
Net Assets 5,533
Responsibility Statement of the Directors in respect of the half-yearly
report
We confirm that to the best of our knowledge:
-- the half-yearly financial statements have been prepared in accordance
with the statement "Interim Financial Reporting" issued by the Financial
Reporting Council;
-- the half-yearly report includes a fair review of the information required
by the Financial Services Authority Disclosure and Transparency Rules,
being:
-- an indication of the important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements.
-- a description of the principal risks and uncertainties for the remaining
six months of the year.
-- a description of related party transactions that have taken place in the
first six months of the current financial year that may have materially
affected the financial position or performance of the Company during that
period and any changes in the related party transactions described in the
last annual report that could do so.
On behalf of the Board:
Robin Goodfellow - Chairman
20 October 2017
Income Statement
Six months to 31 Aug 2017 Six months to 31 Aug 2016 Year to 29 February 2017
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain on disposal of fixed asset investments - 9 9 - - - - 154 154
Unrealised gain/(loss) on valuation of fixed asset
investments - 247 247 - 85 85 - (417) (417)
Performance fee accrual - - - - 23 23 - 23 23
Investment income 9 - 9 - - - 84 - 84
Investment management fees (7) (21) (28) (9) (26) (35) (17) (52) (69)
Other expenses (28) - (28) (27) - (27) (55) - (55)
Return on ordinary activities before tax (26) 235 209 (36) 82 46 12 (292) (280)
Taxation on ordinary activities - - - - - - - - -
Return on ordinary activities after tax (26) 235 209 (36) 82 46 12 (292) (280)
Earnings per share - basic and diluted (0.4)p 3.5p 3.1p (0.5)p 1.2p 0.7p 0.2p (4.3)p (4.1)p
-- The 'Total' column of this statement is the profit and loss account of
the Company; the supplementary Revenue return and Capital return columns
have been prepared under guidance published by the Association of
Investment Companies.
-- All revenue and capital items in the above statement derive from
continuing operations.
-- The accompanying notes are an integral part of the half-yearly report.
-- The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market
funds.
The Company has no recognised gains or losses other than the results for
the period as set out above. Accordingly, a Statement of Comprehensive
Income is not required.
Balance Sheet
As at 31 Aug As at 31 Aug As at 29 February
2017 2016 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments * 4,822 4,917 4,552
Current assets:
Debtors 226 17 103
Creditors: Amounts falling due within one year (29) (52) (55)
Cash at Bank 514 1,064 995
Net current assets 711 1,029 1,043
Creditors: Amounts falling due in more than one
year - (24) -
Net assets 5,533 5,922 5,595
Called up equity share capital 679 679 679
Share premium 718 719 718
Unrealised capital reserve 1,596 1,998 1,349
Profit and Loss account reserve 2,540 2,526 2,849
Total equity shareholders' funds 5,533 5,922 5,595
Net asset value per share 81.6p 87.3p 82.5p
* At fair value through profit and loss
Statement of Changes in Equity
Share Share Profit & Loss
Capital Premium Unrealised Capital Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
March 2016 679 718 1,913 3,583 6,893
Revenue
return on
ordinary
activities
after tax - - - (36) (36)
Expenses
charged to
capital - - - (3) (3)
Current
period
gains on
fair value
of
investments - - 85 - 85
Dividends
paid - - - (1,018) (1,018)
Balance as
at 31
August
2016 679 718 1,998 2,526 5,922
As at 1
March 2016 679 718 1,913 3,583 6,893
Revenue
return on
ordinary
activities
after tax - - - 12 12
Expenses
charged to
capital - - - (29) (29)
Current
period
gains on
disposal - - - 154 154
Current
period
losses on
fair value
of
investments - - (417) - (417)
Prior years'
unrealised
gains now
realised - - (147) 147 -
Dividends
paid - - - (1,018) (1,018)
Balance as
at 28
February
2017 679 718 1,349 2,849 5,595
As at 1
March 2017 679 718 1,349 2,849 5,595
Revenue
return on
ordinary
activities
after tax - - - (26) (26)
Expenses
charged to
capital - - - (21) (21)
Current
period
gains on
disposal - - - 9 9
Current
period
gains on
fair value
of
investments - - 247 - 247
Dividends
paid - - - (271) (271)
Balance as
at 31
August
2017 679 718 1,596 2,540 5,533
Statement of Cash Flows
Six Six Year to
months to months to 28
31 Aug 31 Aug February
2017 2016 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Return on ordinary activities before tax 209 46 (280)
Adjustments for:
Increase in debtors (124) (15) (101)
Decrease in creditors (25) (49) (70)
Gain on disposal of fixed asset investments (9) - (154)
(Gain)/loss on valuation of fixed asset
Investments (247) (85) 417
Movement in investment debtors and creditors (10) - 30
Outflow from operating activities (206) (103) (158)
Cash flows from investing activities
Purchase of fixed asset investments (131) (709) (1,009)
Sale of fixed asset investments 127 - 286
Total cash flows from investing activities (4) (709) (723)
Cash flows from financing activities
Dividends paid (271) (1,018) (1,018)
Total cash flows from financing activities (271) (1,018) (1,018)
Increase/(decrease) in cash and cash
equivalents (481) (1,830) (1,899)
Opening cash and cash equivalents 995 2,894 2,894
Closing cash and cash equivalents 514 1,064 995
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 31
August 2017 have been prepared in accordance with the Financial
Reporting Council's (FRC) Financial Reporting Standard 104 Interim
Financial Reporting ('FRS 104') and the Statement of Recommended
Practice (SORP) for Investment Companies re-issued by the Association of
Investment Companies in November 2014. Details of the accounting
policies and valuation methodologies are included in the Annual Report.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 31 August
2017 do not constitute statutory accounts within the meaning of Section
415 of the Companies Act 2006. The comparative figures for the year
ended 28 February 2017 have been extracted from the audited financial
statements for that year, which have been delivered to the Registrar of
Companies. The independent auditor's report on those financial
statements, in accordance with chapter 3, part 16 of the Companies Act
2006, was unqualified. This half-yearly report has not been reviewed by
the Company's auditor.
3. Earnings per share
The calculation of earnings per share for the period is based on the
return attributable to shareholders divided by the weighted average
number of shares in issue during the period. There are no potentially
dilutive capital instruments in issue and, therefore, no diluted returns
per share figures are relevant.
4. Net asset value per share
The net asset value per share is based on the net assets at the period
end divided by the number of shares in issue at that date (6,785,233 in
each case).
5. Principal risks and uncertainties
The Company's assets consist of equity and fixed interest investments,
cash and liquid resources. Its principal risks are therefore market risk,
credit risk and liquidity risk. Other risks faced by the Company include
economic, loss of approval as a Venture Capital Trust, investment and
strategic, regulatory, reputational, operational and financial risks.
These risks, and the way in which they are managed, are described in
more detail in the Company's Annual Report and Accounts for the year
ended 28 February 2017. The Company's principal risks and uncertainties
have not changed materially since the date of that report.
6. Related party transactions
OT3 Managers Ltd, a wholly owned subsidiary, provides investment
management services to the Company for a fee of 1% of net assets per
annum.
7. Copies of this statement are available from Oxford Technology
Management, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA and
on the Company's website - www.oxfordtechnology.com/vct3.
Board Directors: Robin Goodfellow, Richard Roth, Alex Starling and David
Livesley
Investment Manager: OT3 Managers Ltd with services contracted to Oxford
Technology Management Ltd
Website: www.oxfordtechnology.com/vct3
Enquiries:
Lucius Cary, Oxford Technology Management
01865 784466
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Oxford Technology 3 VCT plc via Globenewswire
http://www.oxfordtechnology.com
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