Interim Results
June 23 2006 - 9:05AM
UK Regulatory
RNS Number:0920F
Pennine AIM VCT 5 PLC
23 June 2006
Pennine AIM VCT 5 plc
Interim Statement for the period ended 31 March 2006
CHAIRMAN'S STATEMENT
The period to 31 March 2006 has been a productive one for your Company, with a
significant level of new investments being made and some excellent progress
being made by portfolio investments.
Net asset value
At the period end, the Net Asset Value per share ("NAV") of the Company stood at
102.0p, an increase of 6.9p (7.2%) since 30 September 2005 (after adjusting for
the dividend of 1p per share paid in the period).
Venture capital investments
During the period the Company invested #4.3 million in 12 AIM-quoted companies,
such that at the period end, the Company had a portfolio comprising of 21
investments with a cost of #8.3 million. Of the investments at the period end,
all were AIM-quoted stocks with the exception of two which were unquoted and one
which is quoted on Ofex.
The large majority of investments experienced share price increases over the
period with the portfolio producing unrealised gains of #1.5 million. The
opportunity to take profits on one investment was also taken during the period,
with the disposal of part of the holding in MyHome International plc giving rise
to a realised gain of #21,000.
Fixed income securities portfolio
As set out in the Company's prospectus, it was intended that the balance of the
Company's funds not used in the Venture Capital portfolio be invested in fixed
income securities. During the period, the Company acquired a portfolio of four
gilts at a total cost of #13.5 million. These securities will be held until
funds are required for new AIM-quoted and other investments.
One gilt was sold during the period, giving rise to a small realised loss. This
portfolio also showed an unrealised loss over the period of #81,000.
Results
The revenue return after taxation for the period amounted to #166,000,
representing 0.7p per share.
As stated in the Company's prospectus it is not the Director's intension to pay
an interim dividend.
Share repurchase
The Company does operate a policy, subject to certain restrictions, of buying
shares that become available in the market at a 10% discount to the latest
published NAV. However, no shares were purchased in the period under review.
Outlook
The Board is very satisfied with the progress made by the Investment Manager to
date in building a well-diversified portfolio with good prospects for growth.
The Company has a significant level of funds to be invested, however deal flow
remains strong so prospects that this good early performance can continue.
The suggestion by some commentators that more difficult times might lay ahead
for equity markets is a concern however, by ensuring that only the best quality
investment opportunities are pursued.
Andrew Davison
Chairman
INCOME STATEMENT
for the six months ended 31 March 2006
Six months ended Year ended
31 Mar 2006 30 Sept 2005
(as restated)
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Income 370 - 370 499
Gains/(losses) on investments
- Realised - 9 9 -
- Unrealised - 1,499 1,499 240
370 1,508 1,878 739
Investment management fees (48) (146) (194) (203)
Other expenses (102) - (102) (139)
Return on ordinary activities before taxation 220 1,362 1,582 397
Taxation (54) 28 (26) (35)
Return attributable to equity shareholders 166 1,390 1,556 362
Return per share 0.7p 6.1p 6.8p 2.2p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31 March 2006
Six months ended Year ended
31 Mar 2006 30 Sept 2005
(restated)
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Return attributable to equity shareholders 166 1,390 1,556 362
Total recognised gains for the period 166 1,390 1,556 362
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 March 2006
31 Mar 30 Sept
2006 2005
(restated)
#'000 #'000
Fixed asset investments 21,980 4,260
Net current assets 1,107 17,496
Net assets 23,087 21,756
Capital and reserves
Called up share capital 2,264 2,264
Capital redemption reserve 1 1
Share premium 19,142 19,142
Capital reserve - realised (231) (123)
Capital reserve - unrealised 1,738 240
Revenue reserve 173 232
Total equity shareholders' funds 23,087 21,756
Net asset value per share 102.0p 96.1p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
31 Mar 30 Sept
2006 2005
(restated)
#'000 #'000
Opening shareholder's funds 21,756 -
Share capital issued - 22,653
Expenses of share issue - (1,246)
Repurchase of own shares - (13)
Total recognised gains for the period 1,556 362
Distributions paid in period (225) -
Closing shareholder's funds 23,087 21,756
UNAUDITED CASH FLOW STATEMENT
for the period ended 31 March 2006
31 Mar 30 Sept
2006 2005
Note #'000 #'000
Net cash (outflow)/inflow from operating activities and
returns on investments 1 (22) 186
Capital expenditure
Purchase of investments (17,829) (4,020)
Proceeds from sale of investments 1,569 -
Net cash outflow from capital expenditure (16,260) (4,020)
Equity dividends paid (225) -
Net cash (outflow)/inflow before financing (16,507) (3,834)
Financing
Proceeds from share issue - 22,654
Share issue costs - (1,246)
Purchase of own shares - (13)
Net cash inflow from financing - 21,395
(Decrease)/increase in cash 2 (16,507) 17,561
Notes to the cash flow statement:
1 Net cash inflow from operating activities and returns on investments
Net revenue before taxation 220 309
Amortisation 48 -
Expenses charged to capital (146) (152)
Increase in other debtors (122) (29)
(Decrease)/increase in other creditors (22) 58
Net cash (outflow)/inflow from operating activities (22) 186
2 Analysis of net funds
Beginning of period 17,561 -
Net cash (outflow)/inflow (16,507) 17,561
End of period 1,054 17,561
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 March 2006
Cost Valuation Unrealised % of portfolio
gain/(loss) by value
in period
#'000 #'000 #'000
Top ten venture capital investments
Hill Station Public Limited Company 500 875 375 3.8%
Cadbury House Hotel & Country Club plc * 755 755 - 3.3%
Daniel Stewart Securities plc 403 640 236 2.8%
Chariot (UK) plc 400 598 198 2.6%
MyHome International plc ** 190 547 340 2.4%
XKO Group plc 374 535 58 2.3%
Core Control International Limited * 532 532 - 2.3%
AT Communications plc 445 508 63 2.2%
Cellcast plc 388 503 120 2.2%
Disperse Group plc 500 484 47 2.1%
4,487 5,977 1,437 26.0%
Other venture capital investments 3,842 4,123 94 17.7%
Listed fixed income securities 11,961 11,880 (32) 51.5%
20,290 21,980 1,499 95.2%
Net assets (including cash at bank) 1,107 - 4.8%
Total investments 23,087 1,499 100.0%
All venture capital investments are quoted on the Alternative Investment Market
("AIM") unless otherwise stated.
* Unquoted
** Quoted on OFEX
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Adoption of FRS 21
These accounts have been prepared in accordance with FRS 21, which requires the
Company to account for dividends in the period they are liable to be paid rather
than in respect of the period in respect for which they are declared.
Comparative figures have been restated accordingly. The effect of the above
change on the reported net assets and net asset per share is as follows:
30 Sept 2005
Net asset
Net value per
assets share
#'000 p
As reported previously 21,530 95.1
Add: proposed dividends in respect of period not accounted
for until declared and paid 226 1.0
As restated 21,756 96.1
2.Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally Accepted
Accounting Practice ("UK GAAP"). Where presentation guidance set out in the
Statement of Recommended Practice "Financial Statements of Investment Trust
Companies" revised December 2005 ("SORP") is consistent with the requirements of
UK GAAP, the Directors have sought to prepare the financial statements on a
basis compliant with the recommendations of the SORP.
The financial statements are prepared under the historical cost convention
except for the revaluation of certain financial instruments.
Presentation of Income Statement
In order to better reflect the activities of an investment trust company and in
accordance with guidance issued by the AITC, supplementary information which
analyses the income statement between items of a revenue and capital nature has
been presented alongside the income statement. The net revenue is the measure
the directors believe appropriate in assessing the Company's compliance with
certain requirements set out in Section 842 Income and Corporation Taxes Act
1988.
Investments
All investments are designated as "fair value through profit or loss" assets and
are initially measured at cost. Thereafter the investments are measured at
subsequent reporting dates at fair value.
Listed fixed income investments and investments quoted on the Alternative
Investment Market ("AIM") are designated measured using bid prices with
illiquidity discounts applied where deemed appropriate.
In respect of unquoted instruments, fair value is established by using
International Private Equity and Venture Capital Valuation Guidelines. Where no
reliable fair value can be estimated for such unquoted equity investments they
are carried at cost, subject to any provision for impairment. Where an investee
company has gone into receivership or liquidation the investment, although not
physically disposed of, is treated as being realised.
Gains and losses arising from changes in fair value are included in the income
statement for the year as a capital item and transaction costs on acquisition or
disposal of the investment expensed.
It is not the Company's policy to exercise either significant or controlling
influence over investee companies. Therefore the results of these companies are
not incorporated into the revenue account except to the extent of any income
accrued.
Income
Dividend income from investments is recognised when the shareholders' rights to
receive payment has been established, normally the ex dividend date.
Interest income is accrued on a timely basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount, and only where there
is reasonable certainty of collection.
Expenses
All expenses are accounted for on accruals basis. In respect of the analysis
between revenue and capital items presented within the income statement, all
expenses have been presented as revenue items except that expenses which are
incidental to the disposal of an investment are deducted from the disposal
proceeds of the investment.
Deferred taxation
Deferred taxation is provided in full on timing differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements.
3.All revenue and capital items in the Income Statement derive from continuing
operations.
4.The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
5.The comparative figures were in respect of the period ended 31 March 2005 and
the year ended 30 September 2005 respectively.
Return per share for the period has been calculated on 22,638,778 shares, being
the weighted average number of shares in issue during the period.
6.Dividends
31 March 2006 30 Sept
2005
(as
restated)
Revenue Capital Total Total
#'000 #'000 #'000 #'000
Paid in year
2005 Final 225 - 225 -
225 - 225 -
Proposed
2005 Final - - - 225
7.Reserves
Share Capital Capital Capital Revenue
Premium redemption reserve - reserve - Reserve
reserve reserve unrealised realised
#'000 #'000 #'000 #'000 #'000
At 1 October 2005 19,142 1 240 (123) 6
Restatement of unpaid dividends in line with
FRS 21 - - - - 226
Expenses capitalised - - - (146) -
Tax on capital expenses - - - 28 -
Realised gains - - - 9 -
Unrealised gains - - 1,499 - -
Transfer between reserves - - (1) 1 -
Retained net revenue for the year - - - - 166
Dividends paid in year - - - - (225)
At 31 March 2006 19,142 1 1,738 (231) 173
The Special Reserve, Capital Reserve - realised and Revenue Reserve are all
distributable reserves.
8.The unaudited financial statements set out herein do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985 and have
not been delivered to the Registrar of Companies. The figures for the year
ended 30 September 2005 have been extracted from the financial statements for
that year, which have been delivered to the Registrar of Companies; the
auditors' report on those financial statements was unqualified.
9.Copies of the unaudited interim results will be sent to shareholders shortly.
Further copies can be obtained from the Company's Registered Office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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