RNS Number : 0252J
Talisman First Venture Cap Tst PLC
26 November 2008
Talisman First Venture Capital Trust PLC
Interim Announcement for the six months ended 30 September 2008 (unaudited)
The Directors announce the unaudited Interim Results for the six months ended 30 September 2008.
This Interim Management Report covers a period of extreme volatility in financial markets throughout the world, with equity values
generally having seen a downward trend in the face of tighter credit conditions. Most commentators are predicting that negative growth in
the UK economy will continue into 2009 and share prices are likely to remain unstable given the ongoing uncertainty over economic forecasts.
Your Company has a significant exposure to the AIM/PLUS market, representing 56.1% of net assets at 30 September 2008, where there has been
continued volatility that has affected the results for the period under review. However, despite these significant and adverse influences,
the Company's portfolio is now more diversified and the Manager has continued to increase its bias towards more robust private equity
investments, which continue to mature and enhance their value and the performance of which has offered a degree of protection from the
sentiment of quoted markets.
Key information
* NAV of 43.3p per share (pps) at 30 September 2008; compared to 48.0pps at 31 March 2008 and 50.3pps at 30 September 2007.
* Decrease of 9.8% in Net Asset Value (NAV) per share since 31 March 2008 and of 13.9% since 30 September 2007.
* Five unlisted and AIM/PLUS investments made during the period under review.
* Disposals generated net realised gains of £47,000 during the period under review.
Performance
The NAV per share at 30 September 2008 was 43.3pps, representing decreases of 9.8% and 13.9% over the equivalent figures at 31 March
2008 and 30 September 2007 respectively. There is no venture capital trust index with which to compare the overall performance of the
Company. However, the FTSE AIM All-share index decreased by 35.2% over the reporting period and by 44.4% since September 2007 and the Board
considers that, against this background, the relative performance of the Company's portfolio represents a commendable achievement.
Unlisted investments held by Talisman First Venture Capital Trust are valued in accordance with the International Private Equity and
Venture Capital Valuation Guidelines. Investments which are traded on the Alternative Investment Market (AIM) or a recognised stock exchange
are valued at their bid price.
Dividends
The Board is not proposing that the Company should pay an interim dividend for the year ending 31 March 2009 as it currently does not
have sufficient reserves from which one could be paid. Reserves will be created by the continued realisation of investments above their cost
and the generation of further positive revenue returns from which the Company is now able to meet its recurring expenses. The reserves
position has improved since the appointment of Aberdeen Asset Managers, but it remains likely that it will be some time before the Company
will be in a position to pay a dividend.
VCT qualifying status
The VCT qualifying status of your Company is monitored on a continuous basis to ensure that all of the criteria required to maintain VCT
status are being achieved.
Investment activity
During the six-month period ended 30 September 2008, five new unlisted and AIM/PLUS quoted investments were completed and a total of
£133,000 was invested. At the period end, the portfolio stood at 53 unlisted and AIM/PLUS quoted investments at a total cost of £3.6
million.
The following investments were completed during the period:
Investment Date Activity Cost £'000 Website
Unlisted
Broomco (4136) July 2008 Provider of CCTV and 8 www.id-
air conditioning supportservices.co.
services throughout uk
UK
Nessco Group Holdings June 2008 Telecommunication 50 www.nessco.co.uk
services provider
Training For Travel Group April 2008 Provider of 50 www.
assessment, tuition trainingfortravel.
and training in com
travel services
Total unlisted investment 108
AIM/PLUS
Betbrokers September 2008 Provider of 8 www.betbrokers.com
independent betting
brokerage services
Brookwell June 2008 Closed-ended 17 www.
investment company brookwelllimited.com
established to
acquire quoted
securities from
financial
institutions
Total AIM/PLUS investment 25
Total investment 133
Co-investment
Talisman First Venture Capital Trust has co-invested with Aberdeen Growth Opportunities VCT, Aberdeen Growth Opportunities VCT 2,
Aberdeen Growth VCT I, Aberdeen Income and Growth VCT, Gateway VCT and Guinness Flight Venture Capital Trust in some or all of the above
transactions and is expected to continue to do so with these as well as other clients of the Manager. The advantage is that, together, the
funds are able to underwrite a wider range and size of transaction than would be the case on a stand alone basis.
Portfolio developments
Unlisted investments
During the period under review, the unlisted investment in ID Support Services Holdings was sold generating a gain of £49,000 which is a
return, including the interest received during the life of the investment, of 1.8 times the cost of £75,000 over the fifteen month holding
period. In addition, a further £88,000 was received by the Company from the repayment of loan stock at par by Homelux Nenplas and Spectral
Fusion Technologies.
AIM/PLUS investments
A strategic decision was taken to dispose of the AIM quoted holding in Autoclenz, at market value, to an active investor that will
aggregate the holdings from a number of managers and seek to realise them at higher values than could be achieved individually. In addition,
the holding in Imprint was sold under compulsory purchase provisions when an offer for that company by Premier Group was accepted by
shareholders. In the case of both of these investments, the carrying value at 31 March 2008 had largely recognised the losses realised and,
therefore, the impact on the NAV of the Company in the period under review was minimal.
Conditions in the AIM/PLUS market continued to be volatile during the reporting period, which limited opportunities to actively trade
the portfolio. However, net gains of £58,000 were realised on the trading of holdings other than those mentioned above and these can be seen
in the table below.
Realisations
The table below gives details of all realisations during the reporting period:
Year acquired Complete/ partial Cost of shares Sales proceeds Realised gain/(loss)
exit disposed of £'000 £'000
£'000
Unlisted
Homelux Nenplas 2006 Partial 13 13 -
ID Support Services Holdings 2007 Complete 74 123 49
Spectral Fusion Technologies 2002 Partial 75 75 -
Total unlisted disposals 162 211 49
AIM/PLUS
Associated Network Solutions 2000 Partial 10 28 18
Autoclenz 2005 Complete 45 17 (28)
Imprint 2005 Complete 52 20 (32)
Optare 2007 Partial 14 39 25
Other AIM/PLUS disposals 89 104 15
Total AIM/PLUS disposals 210 208 (2)
Total portfolio disposals 372 419 47
Subsequent to the period end, further disposals of AIM quoted holdings generated net realised gains of £8,000.
Principal risks and uncertainties
The Board has reviewed the principal risks and uncertainties facing the Company in the second half of its financial year; these are
unchanged from those it faced at the start of the year, being the risks involved in investment in small and unquoted companies. In order to
reduce the exposure to investment risk, the Company has invested in a broadly-based portfolio of investments in unlisted and AIM/PLUS quoted
companies in the United Kingdom. The Company remains compliant with the regulations governing venture capital trusts and the Manager closely
monitors the position of the Company to ensure that it complies with the various tests at all times.
Outlook
The performance of the quoted markets generally during the period has been volatile and events affecting the banking sector have caused
further uncertainty since the period end. Although there has been some stimulus from the support provided to banks by central government, it
would appear that the uncertain conditions may prevail for some time given the continuing speculation over the future of the economy.
Opportunities to invest in companies seeking to achieve an IPO on AIM have, therefore, been limited and little change in this situation is
anticipated in the short term. Whilst the Company's AIM quoted investments have obviously suffered as a result of the extended period of
volatility which continues to affect the equity markets, most of the underlying businesses in which that portfolio is invested are
performing in line with the Manager's expectations and it is anticipated that this will be reflected in positive share price movements when
market conditions improve, although the timing and extent of any recovery is uncertain.
Shareholders should also take comfort from the composition of the unlisted portfolio, which is now largely invested in a number of
mature private companies which are paying a regular yield while continuing to demonstrate reasonable growth potential and whose values are
not directly affected by the short term fluctuations of the quoted markets. The investments in these businesses are still relatively new,
but are maturing and successful realisations may be possible in due course, resulting in a continuing requirement to re-invest the proceeds
in accordance with the VCT Regulations. The Manager intends to maintain the current strategy and invest selectively from its flow of
introductions sourced by its regional network of offices with a view to further increasing the Company's exposure to this asset class which,
in turn, should improve the stability of its portfolio and enable it to continue to meet its recurring expenses and to improve Net Asset
Value and reserves.
Talisman First Venture Capital Trust PLC
Summary of Portfolio Performance
Six months ended 30 September 2008
Opening valuation 31 Purchases Sales proceeds Realised gain over Unrealised Closing valuation Total
gain/
March 2008 opening valuation gain/(loss) over 30 Sept 2008
(loss)
opening valuation
£'000 £'000 £'000 £'000 £'000 £'000
£'000
Unlisted 1,048 108 (211) 46 (17) 974
29
PLUS 484 - (27) 4 9 470
13
AIM 1,245 25 (181) 37 (307) 819
(270)
Total portfolio* 2,777 133 (419) 87 (315) 2,263
(228)
Talisman First Venture Capital Trust PLC
Investment Portfolio Summary
As at 30 September 2008
% of % of equity
Valuation Cost % of net equity held by other
Investment £'000 £'000 assets held clients*
Unlisted
Fotolec Technologies 135 250 5.9 4.2 -
Funeral Services Partnership 119 99 5.2 0.7 29.3
Homelux Nenplas 80 37 3.5 0.8 44.2
Camwatch 75 75 3.3 1.3 40.5
Martel Instruments Holdings 75 75 3.3 1.1 32.3
Steminic (trading as MS 74 74 3.2 1.3 43.8
Industrial Services)
Oliver Kay Holdings 70 70 3.0 0.4 19.6
Enpure Holdings 68 50 3.0 0.2 79.4
Silkwater Holdings (trading as 61 50 2.7 0.7 19.3
Cyclotech)
Adler & Allan Holdings 50 50 2.2 0.2 40.8
Training For Travel Group 50 50 2.2 0.6 29.4
Nessco Group Holdings 50 50 2.2 0.7 37.2
Countcar 24 2 1.0 0.6 26.0
Other unlisted investments 43 401 1.7
Total unlisted 974 1,333 42.4
AIM/PLUS
Associated Network Solutions 429 183 18.7 3.1 -
Concateno 129 114 5.6 0.2 2.3
Litcomp 60 50 2.6 - 4.9
Betbrokers 58 63 2.5 0.2 1.7
Lo-Q 47 181 2.0 1.2 -
Melorio 40 48 1.7 0.2 2.7
Craneware 40 22 1.7 0.1 1.7
Formation Group 39 49 1.7 0.1 1.1
Hasgrove 38 49 1.7 0.2 1.8
Mount Engineering 31 35 1.3 0.2 2.3
Datong Electronic 30 47 1.3 0.3 1.7
Optare (formerly Darwen Group) 29 29 1.3 0.2 4.3
Essentially Group 28 49 1.2 0.2 2.8
Work Group 26 101 1.1 0.5 2.8
Smart Identity 23 25 1.0 0.7 4.7
DM 21 39 0.9 0.2 1.2
Avanti Communications Group 20 25 0.9 - 1.4
Other AIM/PLUS investments 201 1,161 8.9
Total AIM/PLUS 1,289 2,270 56.1
Total investments 2,263 3,603 98.5
*Other clients of the Aberdeen Asset Management Group.
Talisman First Venture Capital Trust PLC
Income Statement
Six months ended 30 September 2008 (unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments
realised - 47 47
unrealised - (275) (275)
Investment income and deposit income 59 - 59
Investment management fees (11) (46) (57)
Performance fees - - -
Other expenses (17) (6) (23)
Net return/(loss) on ordinary activities before 31 (280) (249)
taxation
Tax on ordinary activities (3) 3 -
Return/(loss) attributable to Equity Shareholders 28 (277) (249)
Return per Ordinary Share (pence) (Note 3) 0.5 (5.2) (4.7)
Talisman First Venture Capital Trust PLC
Income Statement
Six months ended 30 September 2007 (unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments
realised - 50 50
unrealised - (176) (176)
Investment income and deposit income 46 - 46
Investment management fees (11) (46) (57)
Performance fees (2) (9) (11)
Other expenses (10) (1) (11)
Net return/(loss) on ordinary activities before 23 (182) (159)
taxation
Tax on ordinary activities - - -
Return/(loss) attributable to Equity Shareholders 23 (182) (159)
Return per Ordinary Share (pence) (Note 3) 0.4 (3.4) (3.0)
Talisman First Venture Capital Trust PLC
Income Statement
Year ended 31 March 2008 (audited)
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments
realised - 855 855
unrealised - (1,062) (1,062)
Investment income and deposit 93 - 93
income
Investment management fees (22) (91) (113)
Performance fees (2) (9) (11)
Other expenses (36) (8) (44)
Net return/(loss) on ordinary 33 (315) (282)
activities before taxation
Tax on ordinary activities (2) 2 -
Return/(loss) attributable to 31 (313) (282)
Equity Shareholders
Return per Ordinary Share 0.6 (5.9) (5.3)
(pence) (Note 3)
A Statement of Total Recognised Gains and Losses has not been prepared, as all gains
and losses are recognised in the Income Statement.
All items in the above statement are derived from continuing operations. The Company
has only one class of business and derives its income from investments made in shares,
securities and bank deposits.
The total column of this statement is the Profit and Loss Account of the Company.
The accompanying Notes are an integral part of the Financial Statements.
Talisman First Venture Capital Trust PLC
Reconciliation of movements in Shareholders' funds
Six months ended Six months ended
30 September 2008 30 September 2007
Year ended
31 March 2008
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Opening Shareholders' funds 2,547 2,829 2,829
Return/(loss) attributable to (249) (159) (282)
Equity Shareholders
Closing Shareholders' funds 2,298 2,670 2,547
The accompanying Notes are an integral part of the Financial Statements.
Talisman First Venture Capital Trust PLC
Balance Sheet
30 September 30 September 31 March
2008 2007 2008
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed assets
Investments at fair value 2,263 2,818 2,777
through profit or loss
Current assets
Debtors 57 37 51
Cash and overnight deposits 1 56 96
58 93 147
Creditors
Amounts falling due within one 12 34 43
year
Bank overdraft 11 207 334
23 241 377
Net current (liabilities)/assets 35 (148) (230)
Net assets 2,298 2,670 2,547
Capital and reserves
Called up share capital 2,655 2,655 2,655
Share premium 2,389 2,389 2,389
Capital reserve - realised (447) (418) (445)
Capital reserve - unrealised (1,337) (958) (1,062)
Revenue reserve (962) (998) (990)
Net assets attributable to 2,298 2,670 2,547
Equity Shareholders
Net Asset Value per Ordinary 43.3 50.3 48.0
Share (pence)
The accompanying Notes are an integral part of the Financial Statements.
Talisman First Venture Capital Trust PLC
Cash Flow Statement
Six months ended
31 September 2007
Six months ended (restated and Year ended
30 September 2008 unaudited) 31 March 2008
(unaudited) (audited)
£'000 £'000 £'000
Operating activities
Investment income received 54 22 51
Deposit interest received 2 3 4
Investment management fees (85) (56) (113)
paid
Performance fees paid - (40) (40)
Other cash payments (21) (25) (39)
Net cash outflow from (50) (96) (137)
operating activities
Taxation - - -
Financial investment
Purchase of investments (133) (780) (942)
Sale of investments 419 429 551
Net cash inflow/(outflow) from 286 (351) (391)
financial investment
Equity dividends paid - - -
Financing
Bank overdraft interest paid (8) (3) (10)
Net cash inflow/(outflow) from (8) (3) (10)
financing
Increase/(decrease) in cash 228 (450) (538)
Reconciliation of net cash
flow to movements in net funds
Increase/(decrease) in cash 228 (450) (538)
for the period
Net funds at the start of the (238) 300 300
period
Net funds at the end of the (10) (150) (238)
period
The accompanying Notes are an integral part of the Financial Statements.
Talisman First Venture Capital Trust PLC
Notes to the Financial Statements
1. Accounting policies
The financial information for the six months ended 30 September 2008 and the six months ended 30 September 2007 comprises non-statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The financial information contained in this report has been prepared
on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 31 March 2008.
The results for the year ended 31 March 2008 are extracted from the full accounts for that year, which received an unqualified report
from the Auditors and have been filed with the Registrar of Companies.
2. Statement of changes in equity
Share Capital reserve - Capital reserve - Revenue reserve
premium account realised unrealised
£'000 £'000 £'000 £000
At 31 March 2008 2,389 (445) (1,062) (990)
Gains on sales of investments - 47 - -
Net decrease in value of - - (275) -
investments
(Loss)/profit on ordinary - (49) - 28
activities
At 30 September 2008 2,389 (447) (1,337) (962)
3. Returns per Ordinary Share
Six months ended Six months ended Year ended
30 September 2008 30 September 2007 31 March 2008
£'000 £'000 £'000
The returns per Ordinary Share
are based on the following
figures:
Revenue return 28 23 31
Capital return (277) (182) (313)
Total return (249) (159) (282)
Weighted average number of 5,309,102 5,309,102 5,309,102
Ordinary Shares in issue
Revenue return per Ordinary 0.5p 0.4p 0.6p
Share
Capital return per Ordinary (5.2p) (3.4p) (5.9p)
Share
Return per Ordinary Share (4.7p) (3.0p) (5.3p)
The NAV per Ordinary share has been calculated using the number of Ordinary Shares in issue at 30 September 2008 of 5,309,102.
4. Basis of restatement
The Cash Flow Statement for the six months ended 30 September 2007 has been restated to reflect the utilisation of the Company's
overdraft facility.
Talisman First Venture Capital Trust PLC
Directors' responsibility statement
The implementation of the EU Transparency Obligations Directive and the associated amendments to the rules laid down by the UK Listing
Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management
Report and Financial Statements.
The Directors confirm that, to the best of their knowledge:
* the Financial Statements for the six months ended 30 September 2008 have been prepared in accordance with applicable accounting
standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" (the SORP) issued in December
2005;
* the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of
important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months,
of the year ending 31 March 2009; and
* the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to related party
transactions and any changes therein.
Copies of this announcement will be available to the public at the registered office of the Company, One Bow Churchyard, Cheapside,
London; at the office of Aberdeen Asset Management PLC, 149 St Vincent Street, Glasgow; and, in due course, on the Company's website at
www.talismanfirst.co.uk. A full copy of the Interim Report and Financial Statements will be printed and issued to Shareholders.
On behalf of the Board
Aberdeen Asset Management PLC
Secretary
26 November 2008
This information is provided by RNS
The company news service from the London Stock Exchange
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