Oxford Technology Oxford Technology Vct Plc : Half-year Report
October 23 2017 - 2:00AM
UK Regulatory
TIDMOXT
Oxford Technology 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 GBP2.85m GBP2.89m
Net Asset Value per Share 52.6p 53.2p
Cumulative Dividend per Share 55.0p 54.0p
Total NAV Return per Share 107.6p 107.2p
Share Price at Period End 35.0p 35.0p
Earnings per Share 0.4p (6.7)p
Company Number: 3276063
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 by 0.6p from
53.2p at 28 February 2017 to 52.6p at 31 August 2017. The underlying
NAV per share rose by 0.4p but was offset by the payment of a 1p per
share dividend on 21 July 2017.
Portfolio Review
The companies within the portfolio continue to develop.
Select Technology, a photocopier (or more generally Multi Function
Device, or MFD) software company, remains the largest holding in your
Company's portfolio. The company is profitable and continues to grow,
despite the continued execution of a planned transition to reduce
dependency on one particular supplier, which will have the effect of
increasing business resilience. Taking these developments into account,
we have reverted to a valuation methodology based on a sales multiple to
more appropriately reflect the prospects of the business, although the
impact of this is small during the half year period.
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 Phase
1/2 trials on each target are also planned for 2018. Scancell raised
GBP5 million at 10p per share during the reporting period in an
oversubscribed AIM placing - your company did not take part in this due
to restrictive VCT rules. The net proceeds of the placing (GBP4.7
million after expenses) are being used to support the Company's clinical
development pipeline of novel cancer immunotherapies and to continue to
support the pipeline arising from the ImmunoBody platform.
The bid price of Scancell's shares used for the calculation of the
Company's net asset value on 31 August 2017 was 14.0p, unchanged from
the bid price on 28 February 2017.
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 Select
representing 51% and Scancell 35% of the VCT's equity - your Company's
NAV is therefore very sensitive to changes in the valuations of these
two portfolio companies.
Liquidity
At period end we had net current assets of GBP123k.
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.
The directors' view remains that the portfolio, while concentrated,
still holds significant potential over the medium term but is not
without risk. In our previous quarterly update, the Board announced
that it wishes to have in place appropriate plans to ensure any further
realisations do not result in your VCT becoming sub-economic, and to
this end the Board is continuing to consider all the options open to
your VCT. Should the Board consider any such proposal to be in the best
interests of existing shareholders, a further announcement will be made.
However, there can be no certainty that any of these discussions will
lead to a concrete proposal, at this time or in the future.
Finally, I would like to take this opportunity to thank shareholders,
many whom we were able to welcome to our AGM in July, for their
continued support.
Alex Starling
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 OT1 All OT of fund investment value
Photocopier
Select Technology interfaces 488 1,400 21 30.0 58.6 51.3
Antibody
Scancell based cancer
(bid price 14p) therapeutics 344 964 - 2.2 3.8 35.3
Aerial
Getmapping photography 518 249 21 3.9 3.9 9.1
Bactericidal
powder
Biocote coating 85 119 13 6.6 6.6 4.3
Total Investments 1,435 2,732 55 100%
Other Net Assets 123
Net Assets 2,855
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:
Alex Starling - Chairman
20 October 2017
Income Statement
Six months to 31 Aug 2017 Six months to 31 Aug 2016 Year to 28 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/(Loss) on disposal of fixed asset investments - - - - - - - - -
Unrealised gain/(loss) on valuation of fixed asset
investments - 55 55 - 30 30 - (393) (393)
Investment income 7 - 7 - - - 110 - 110
Investment management fees (4) (11) (15) (4) (13) (17) (8) (25) (33)
Other expenses (27) - (27) (24) - (24) (51) - (51)
Return on ordinary activities
before tax (24) 44 20 (28) 17 (11) 51 (418) (367)
Taxation on ordinary activities - - - - - - - - -
Return on ordinary activities
after tax (24) 44 20 (28) 17 (11) 51 (418) (367)
Earnings per share - basic and diluted (0.4)p 0.8p 0.4p (0.5)p 0.3p (0.2)p 1.0p (7.7)p (6.7p)
-- 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 28 February
2017 2016 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments* 2,732 3,102 2,678
Current assets:
Debtors 14 18 2
Creditors: Amounts falling due within one year (9) (6) (8)
Cash at Bank 118 131 217
Net current assets 123 143 211
Net assets 2,855 3,245 2,889
Called up equity share capital 543 543 543
Share premium 176 176 176
Unrealised capital reserve 1,297 1,666 1,242
Profit and Loss account reserve 839 860 928
Total equity shareholders' funds 2,855 3,245 2,889
52.6p 59.7p 53.2p
Net asset value per share
* 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 543 176 1,346 1,262 3,327
Revenue
return on
ordinary
activities
after tax - - - (28) (28)
Expenses
charged to
capital - - - (13) (13)
Current
period
gains on
fair value
of
investments - - 30 - 30
Prior years'
unrealised
losses now
realised - - 290 (290) -
Dividends
paid - - - (71) (71)
Balance as
at 31
August
2016 543 176 1,666 860 3,245
As at 1
March 2016 543 176 1,346 1,262 3,327
Revenue
return on
ordinary
activities
after tax - - - 51 51
Expenses
charged to
capital - - - (25) (25)
Current
period
losses on
fair value
of
investments - - (393) - (393)
Prior years'
unrealised
losses now
realised - - 289 (289) -
Dividends
paid - - - (71) (71)
Balance as
at 28
February
2017 543 176 1,242 928 2,889
As at 1
March 2017 543 176 1,242 928 2,889
Revenue
return on
ordinary
activities
after tax - - - (24) (24)
Expenses
charged to
capital - - - (11) (11)
Current
period
gains on
fair value
of
investments - - 55 - 55
Dividends
paid - - - (54) (54)
Balance as
at 31
August
2017 543 176 1,297 839 2,855
Statement of Cash Flows
Six
months Year to
to 31 28
Six months to 31 Aug Aug February
2017 2016 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Return on ordinary activities before tax 20 (11) (367)
Adjustments for:
Increase in debtors (12) (15) -
Increase/(decrease) in creditors 2 (4) (1)
Gain on disposal of fixed asset
investments investm - - -
(Gain)/loss on valuation of fixed asset
investments (55) (30) 393
(Outflow)/inflow from operating
activities (45) (60) 25
Cash flows from investing activities
Purchase of fixed asset investments - - -
Sale of fixed asset investments - 9 10
Total cash flows from investing
activities - 9 10
Cash flows from financing activities
Dividends paid (54) (71) (71)
Total cash flows from financing
activities (54) (71) (71)
Increase/(decrease) in cash and cash
equivalents (99) (122) (36)
Opening cash and cash equivalents 217 253 253
Closing cash and cash equivalents 118 131 217
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 (5,431,655 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
OT1 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/vct1.
Board Directors: Alex Starling, Robin Goodfellow, Richard Roth and David
Livesley
Investment Manager: OT1 Managers Ltd with services contracted to Oxford
Technology Management Ltd
Website: www.oxfordtechnology.com/vct1
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 VCT plc via Globenewswire
http://www.oxfordtechnology.com/
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