RNS Number:0934I
Gateway VCT PLC
20 November 2007
Gateway VCT plc
Interim Financial Statements
For the 6 months ended
30 September 2007
Financial Summary
-----------------
6 months ended 6 months ended Audited
30 September 2007 30 September 2006 Year ended
(unaudited) (unaudited) 31 March 2007
Net asset
value at
period end
before
distributions 41.86p 53.61p 47.41p
Net asset
value after
distributions 41.86p 52.61p 47.41p
Loss per
share 0.31p 0.61p 13.07p
for the period
Chairman's Report
-----------------
We report the half yearly results for the six months ended 30 September 2007.
When taking into account the realised and unrealised movements on both the
listed and unlisted investments, there are total losses recognised during the
period of #755,000 (2006: recognised losses of #498,000). A statement of total
recognised gains and losses is set out on page 5. The shareholders' funds at
30 September were #5.689 million representing 41.86p per share.
This represents a reported reduction of 5.55p per share from the year end
position at 31 March 2007.
During the period, having adjusted for purchases and sales of holdings, the
movement in valuation of the listed technology stocks portfolio increased by
approximately 5%. This portfolio is being managed with a view to realising
stocks when appropriate.
Excluding the listed stocks portfolio mentioned above, approximately 37%
(at bid price) of the market valuation of the overall Investment Portfolio is
quoted either on AIM, the UK main market or on the Frankfurt Stock Exchange,
comprising holdings in eight companies. Other than Vectura, the portfolio
consists entirely of smaller technology related companies, and its value fell
by approximately 26.5% over the period. The unrealised reduction in value was
nearly all concentrated in three holdings, Pilat Media Global, Vectura and
Sarantel.
Pilat Media Global announced in early September that they were lowering
expectations for the current year, as expected revenues from new contracts
had not come through as anticipated. However, they stated they were confident
that the majority of these revenues will flow through in 2008, and that
revenues will resume an upward trend from Q4 2007 into 2008 in the light of
the opportunities now under discussion.
In July 2007 Vectura's shares were admitted to trading on the Official List.
During the period Vectura issued a number of announcements in relation to new
product developments and positive results from clinical studies.
During the period Sarantel announced it raised #2.1m of new funding before
expenses, and subsequently, that it had secured two design wins in the GPS
tracker market.
However, despite these companies announcing progress, as with other holdings
within the portfolio, they can be subject to negative market sentiment and
share price volatility.
A significant event occurred during the period when Burgundy Global Limited
entered Administration in May 2007. This was fully reported and provided for
within the Annual Report and Accounts, and to date we have no further
information in relation to the potential recovery of value.
As stated in the Annual Report, the Board has been considering the future
strategy of the Company and the strategic alternatives open to it as a
Venture Capital Trust. Having considered the alternatives, the Board has
concluded that it is not in the best interest of shareholders for the
Company to continue as a self-managed Venture Capital Trust. The nature
of the venture capital market, and the limited resources available for the
independent management of a VCT of the Company's size, has led the Board
to conclude that the Company should either benefit from being stewarded by
a newly appointed and experienced management group, or return funds to
shareholders over an appropriate period through a winding-up.
The Board has explored the viability and attractiveness of benefiting from new
management and resource, through merger with another VCT, where merger terms
would be based upon relative net asset values. However, such a transaction
would incur costs for the Company (and thereby reduce shareholder value), and
is unlikely to facilitate either significant liquidity in the Company's shares
in the future, or an exit on attractive terms for any shareholder who wishes to
realise their holding in such a transaction. The Board has also considered
the alternative of appointing one of the larger and established VCT management
groups as investment manager to the Company going forward. This has the
advantage of obtaining new management and repositioning investment policies
without the transaction costs of a full merger. However, the constraints on
shareholders who wish to dispose of their shares in the short term are also
likely to apply.
The Board is of the view that shareholders should be offered a choice; the
opportunity to have such value as can be realised and returned to them through
the liquidation of the Company's investments, or the alternative whereby
shareholders could have a continuing interest in an ongoing VCT investment
vehicle. The Board intend, therefore, to send a circular to shareholders
within the next few weeks, setting out the proposals for either the winding-up
of the Company or the appointment of an alternative VCT investment manager with
significant market presence
Michael Teacher
CHAIRMAN
20 November 2007
Profit and Loss Account
-----------------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year enced
30 September 30 September 31 March
2007 2006 2007
--------- --------- --------
#000 #000 #000
(Loss)/profit on
realisation of investments - (14) 20
Impairment of investments - - (1,669)
Investments income 59 59 105
Investment management fees (53) (67) (156)
Other expenses (48) (61) (78)
--------- --------- --------
Loss on ordinary activities
before taxation (42) (83) (1,778)
Taxation on loss on ordinary - - -
activities --------- --------- --------
Loss on ordinary activities
after taxation (42) (83) (1,778)
--------- --------- --------
Loss per share (0.31)p (0.61)p (13.07)p
Statement of total recognised gains and losses
----------------------------------------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
--------- --------- -----------
#000 #000 #000
Loss on ordinary activities
after taxation (42) (83) (1,778)
Unrealised (loss)/gain on
revaluation of investments (713) (435) 573
Previous unrealised losses
realised in the period - 20 -
--------- --------- --------
Total losses recognised
during the period (755) (498) (1,205)
--------- --------- --------
Note of historical cost profits and losses
------------------------------------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
--------- --------- --------
#000 #000 #000
Loss on ordinary activities
before taxation (42) (83) (1,778)
--------- --------- --------
Historical cost loss on
ordinary activities before
taxation (42) (83) (1,778)
--------- --------- --------
--------- --------- --------
Historical cost loss on
ordinary activities
retained (42) (83) (1,778)
--------- --------- --------
Balance Sheet
-------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
--------- --------- ---------
#000 #000 #000
Investments 5,656 7,076 6,369
Net current assets 33 75 75
--------- --------- ---------
Net assets 5,689 7,151 6,444
--------- --------- ---------
Capital and Reserves
Called-up share capital 679 679 679
Special distributable
reserve 8,102 8,102 8,102
Capital redemption reserve
fund 1 1 1
Revaluation reserve (748) (1,058) (35)
Profit and loss account (2,345) (573) (2,303)
--------- --------- ---------
Total shareholders' funds 5,689 7,151 6,444
--------- --------- ---------
Net asset value per
ordinary share 41.86p 52.61p 47.41p
Changes in Equity
-----------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
--------- --------- ---------
#000 #000 #000
Shareholders' funds at
beginning of period 6,444 7,649 7,649
Total losses recognised in
the period (755) (498) (1,205)
--------- --------- ---------
5,689 7,151 6,444
--------- --------- ---------
Cash Flow Statement
-------------------
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2007 2006 2007
#000 #000 #000 #000 #000 #000
Net cash outflow from (13) (78) (163)
operating activities
Capital expenditure and
financial investments
Purchase of
investments - (6) (7)
Sale of investments - 36 95
------ ------ ------
Net cash inflow from - 30 88
financial investments
------ ------ ------
Decrease in cash at
bank (13) (48) (75)
------ ------ ------
Analysis of cash balance
At 1 April 119 194 194
Net cash outflow for
the period (13) (48) (75)
------ ------ ------
Cash balance at
period end 106 146 119
====== ====== ======
Notes :-
1. The financial information given above does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
figures for the year ended 31 March 2007 have been extracted from the financial
statements for that period; the auditors' report on those financial statements
under section 235 of the Companies Act 1985 was unqualified.
The comparative figures at 30 September 2006 have been restated to conform with
the presentation adopted in the 2007 annual report as a result of the
implementation of new accounting standards. This restatement had no effect on
net assets or net asset value per share.
2. Loss per share is based on 13,591,734 ordinary shares, being the weighted
average number of shares in issue for this period.
3. The net asset values per Ordinary Share are based on 13,591,734 shares in
issue at each of the period ends.
4. Copies of the Half-yearly financial report are being sent to
shareholders and can be obtained from the registered office: Chelsea House, West
Gate, London, W5 1DR.
5. The Statements have been prepared based on accounting policies as set out
within the Annual Report and Accounts for the year ended 31 March 2007.
6. No provision for taxation has been made in relation to the losses
incurred on ordinary activities.
7. The directors confirm that:
i. the condensed set of financial statements have been prepared in
accordance with the Statement: Half-yearly financial reports issued by the UK
Accounting Standards Board;
ii. the interim management report includes a fair review of the
information required by:
a. DTR 4.2.7R of the 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; and a description of the principal risks and uncertainties
for the remaining six months of the year; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules,
being related party transactions that have taken place in the first six months
of the current financial year and that may have materially effected the
financial position or performance of the entity during that period; and any
changes in the related party transactions described in the last annual report
that could do so.
Investment Portfolio
--------------------
------------------
Per unaudited Balance Sheet as
at 30 September 2007
------------------
Holding Cost Valuation % of Gain/
Net (Loss)
Assets
# # #
Qualifying
Investments
Listed Overseas
Medigene AG 54,478 581,066 190,150 3.34 (390,916)
AIM
Galapagos 9,868 127,200 45,886 0.81 (81,314)
Genomics NV
OMG plc 233,333 175,000 128,333 2.26 (46,667)
Deltex Medical 800,000 200,000 162,000 2.85 (38,000)
plc
Sarantel Group 2,452,448 810,223 147,147 2.59 (663,076)
plc
Pilat Media 1,200,000 240,000 516,000 9.07 276,000
Global plc
ANGLE plc 126,582 100,000 49,368 0.87 (50,633)
Official List
Vectura Group 1,147,035 553,165 831,600 14.62 278,436
plc
Unlisted
Jacobs Rimell 246,489 943,930 850,000 14.93 (93,929)
Ltd
Burgundy Global
Ltd - 147,058 750,000 - - (750,000)
ordinary B
shares
Burgundy Global
Ltd - 217,392 100,000 - - (100,000)
ordinary C
shares
Burgundy Global
Ltd - loan 500,000 500,000 - - (500,000)
notes of #1
each
Networks by 700,000 700,000 700,000 12.30 -
Wireless Ltd ------- -------- ------- -------
Qualifying
Investments Sub 5,780,584 3,620,484 63.64 (2,160,099)
Total
Unlisted
Gateway
Advisory and 1 1 1 - -
Management LLP
Non-Qualifying
Investments ------- -------- ------- -------
Quoted Stocks 693,776 513,232 9.02 (180,546)
Gilts -
Treasury 5.75% 1,597,895 1,522,650 26.76 (75,245)
2009 ------- -------- ------- -------
Non Qualifying
Investments 2,291,671 2,035,882 35.78 (255,791)
-Sub Total
------- -------- ------- -------
Total 8,072,256 5,656,367 99.42 (2,415,890)
Investment ======= ======== ======= =======
Portfolio
Notes:-
1. Balance sheet values in respect of quoted stocks have been
calculated using bid market prices.
2. Unquoted investments are stated at historic cost or fair value
(as per the International Private Equity and Venture Capital Valuation
guidelines) unless, in the opinion of the directors, there has been a diminution
in value, in which case this has been provided for.
3. Shares are non-qualifying if they have been acquired in the
market rather than as a result of a new issue.
This information is provided by RNS
The company news service from the London Stock Exchange
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