RNS Number : 0686J
Gateway VCT PLC
27 November 2008
Gateway VCT 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 economies and 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 still has a significant exposure to AIM, representing 32.7% of net assets at 30 September 2008, where there has been continued
volatility that has had a material and adverse influence on the results for the period under review. However, following the appointment of
Aberdeen Asset Managers as Manager on 31 March 2008, and the Company's related change to a more generalist investment policy as stated in
the 2008 Annual Report, the portfolio is in the process of being reconstructed with a bias towards more robust private equity investments.
These should offer a degree of protection from the sentiment of quoted markets and, as the portfolio matures, provide the basis for a recovery in the Company's Net Asset Value (NAV).
Key information
* NAV of 32.3p per share (pps) at 30 September 2008; compared to 35.5pps at 31 March 2008 and 41.9pps at 30 September 2007.
* Decrease of 9.0% in NAV per share since 31 March 2008 and of 22.9% since 30 September 2007.
* Eight unlisted and AIM/PLUS investments made during the period under review.
* Disposals of unlisted and AIM quoted investments generated net realised losses of �298,000 during the period under review.
Performance
The NAV per share at 30 September 2008 was 32.3pps, representing decreases of 9.0% and 22.9% 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.
Unlisted investments held by Gateway VCT 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. The new Manager is in the
process of restructuring the portfolio and the Company's cost base with a view to allowing distributions of revenue surpluses or from the
realisation of investments above their cost, but it is uncertain when 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, eight new unlisted and AIM quoted investments were completed and a total of
�1,078,000 was invested. At the period end, the portfolio stood at 20 unlisted and AIM quoted investments at a total cost of �5,959,000.
The following investments were completed during the period:
Investment Date Activity Cost �'000 Website
Unlisted
MoneyPlus Group July 2008 Provider of debt 200 www.moneyplusgroup.
management services co.uk
to individuals
Nessco Group Holdings June 2008 Telecommunication 199 www.nessco.co.uk
services provider
TC Communications Holdings May 2008 Marketing and 199 www.
communications tccommunications.co.
services agency uk
Training for Travel Group April 2008 Provider of 200 www.
assessment, tuition trainingfortravel.
and training in com
travel services
Total unlisted investment 798
AIM
Essentially Group May 2008 Provider of sports 133 www.
marketing, media essentiallygroup.com
management and
professional
services
OPG Power Ventures May 2008 Develops, owns and 49 www.opgpower.org
manages power
generation plants in
India
Optare July 2008 Bus manufacturer and 49 www.elcb.co.uk
low emission
technology group
Praesepe (formerly Aldgate July 2008 Pursues acquisition 49 www.aldgatecapital.
Capital) and consolidation com
opportunities in the
low-stake,
high-volume gaming
sector in the United
Kingdom and Europe
Total AIM investment 280
Total investment 1,078
Co-investment
Gateway VCT has co-invested with Aberdeen Growth Opportunities VCT, Aberdeen Growth Opportunities VCT 2, Aberdeen Growth VCT I, Aberdeen
Income and Growth VCT, Guinness Flight Venture Capital Trust and Talisman First 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
During the period under review, the unlisted investment in Jacobs Rimmell was sold generating a realised loss of �294,000 against cost,
although it is anticipated that a small element of deferred consideration will be received in due course. The valuation at 31 March 2008 had
anticipated this outcome and the Company's NAV was, therefore, unaffected by this sale.
Conditions on AIM continued to be volatile during the reporting period, which has, therefore, restricted opportunities to actively trade
this element of the portfolio.
Realisations
The table below gives details of all realisations from the unlisted and AIM portfolios during the reporting period:
Year acquired Complete/ partial Cost of shares Sales proceeds Realised gain/(loss)
exit disposed of �'000 �'000
�'000
Unlisted
Jacobs Rimmell 2000 Complete 944 650 (294)
AIM
Medigene 2006 Partial 5 2 (3)
Optare 2008 Partial 2 1 (1)
7 3 (4)
Total portfolio disposals 951 653 (298)
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 is now invested in a more broadly-based portfolio of investments in unlisted and AIM
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.
Constitution of the Board
On 15 July 2008, the Company announced the appointment of Neil Kennedy and Charles Scott as Directors with effect from 1 August 2008 and
that, subject to their re-election at the Annual General Meeting, it was intended that Michael Teacher and Neil Metcalfe would stand down as
Directors after a suitable handover period. Following the re-election of Neil Kennedy and Charles Scott at the Annual General Meeting on 12
September 2008, the Company confirmed the resignations of Michael Teacher and Neil Metcalfe as Directors of the Company, both being
effective from 30 September 2008.
Mr Teacher had served as Chairman of the Company and, in the Annual Report for the year ended 31 March 2008, he had stated that his
successor would be nominated from the remaining Board members. On 10 October 2008, the Board announced that Charles Scott had accepted the
nomination of his fellow Directors and had been appointed Chairman of the Company with immediate effect. The Board wishes to record its
thanks to Michael Teacher and Neil Metcalfe for their assistance in ensuring an orderly handover of their responsibilities.
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 the Directors anticipate that this should be demonstrated by increasing share prices
when market conditions improve, although the timing and extent of any recovery is uncertain.
Shareholders will note the change in the composition of the portfolio. The new Manager intends to continue its strategy of investing
across a more diverse range of industrial sectors and in an increasing number of mature and profitable private companies, the values of
which are not directly affected by the short term fluctuations of the quoted markets. It is anticipated that these investments will pay a
regular yield, which will help the Company to meet its recurring expenses, demonstrate reasonable growth potential and develop to an extent
where successful realisations may be possible in due course. This will result in an ongoing requirement to re-invest the proceeds in
accordance with the VCT regulations and the Manager will continue to invest selectively from its flow of introductions sourced by its
regional network of offices.
Gateway VCT plc
Summary of Portfolio Performance
Six months ended 30 September 2008
Opening valuation 31 Purchases Sales Realised gain/(loss) Unrealised Closing valuation Total
gain/
March 2008 over opening gain/(loss) over 30 Sept 2008
(loss)
valuation opening valuation
�'000 �'000 �'000 �'000 �'000 �'000
�'000
Legacy portfolio
Unlisted 1,424 - (650) (294) 294 774
-
Listed 1,542 - (369) (15) 26 1,184
11
AIM 1,572 - (2) (3) (344) 1,223
(347)
Total legacy portfolio 4,538 - (1,021) (312) (24) 3,181
(336)
Investments made after the appointment of Aberdeen Asset Managers
Unlisted - 798 - - - 798
-
AIM - 280 (1) (1) (65) 213
(66)
Total new portfolio - 1,078 (1) (1) (65) 1,011
(66)
Total portfolio* 4,538 1,078 (1,022) (313) (89) 4,192
(402)
Gateway VCT plc
Investment Portfolio Summary
As at 30 September 2008
% of
% of equity
held
Valuation Cost % of net equity by other
Investment � � assets held
clients*
Unlisted
Networks by Wireless 700 700 15.9 14.6
-
Training For Travel Group 200 200 4.6 2.3
27.7
MoneyPlus Group 200 200 4.6 23.3
51.7
TC Communications Holdings 199 199 4.5 4.1
31.2
Nessco Group Holdings 199 199 4.5 2.6
35.2
Other unlisted investments 74 1,350 1.7
Total unlisted 1,572 2,848 35.8
AIM
Vectura Group 533 553 12.1 0.4
-
Medigene 231 576 5.3 0.2
-
Pilat Media Global 180 240 4.1 2.0
-
Deltex Medical Group 112 200 2.6 0.8
-
Essentially Group 103 133 2.3 0.7
2.3
OMG 89 175 2.0 0.4
-
Praesepe (formerly Aldgate 45 49 1.0 1.2
10.6
Capital)
OPG Power Ventures 42 49 1.0 0.1
0.4
Galapagos 33 127 0.8 -
-
Sarantel Group 24 810 0.5 3.2
-
Optare 24 47 0.5 0.1
1.6
Other AIM/PLUS investments 20 152 0.5
Total AIM 1,436 3,111 32.7
Listed fixed income
Treasury 5.75% 31/12/09 1,184 1,213 26.9
Total assets 4,192 7,172 95.4
*Other clients of the Aberdeen Asset Management Group.
Unlisted investments include assets with a total impairment value of �1,350,000 and AIM investments include assets with a total impairment
value of �25,000.
Gateway VCT plc
Income Statement
Six months ended 30 September 2008 (unaudited)
Revenue Capital Total
�'000 �'000 �'000
Loss on realisation of investments - (313) (313)
Income 49 - 49
Investment management fee (17) (11) (28)
GAM investment adviser termination fees - - -
Other expenses (51) - (51)
Loss on ordinary activities before taxation (19) (324) (343)
Tax on ordinary activities - - -
Loss on ordinary activities after taxation (19) (324) (343)
Earnings per share (pence) (0.1) (2.4) (2.5)
Gateway VCT plc
Income Statement
Six months ended 30 September 2007 (unaudited)
Revenue Capital Total
�'000 �'000 �'000
Loss on realisation of investments - - -
Income 59 - 59
Investment management fee (32) (21) (53)
GAM investment adviser termination fees - - -
Other expenses (48) - (48)
Loss on ordinary activities before taxation (21) (21) (42)
Tax on ordinary activities - - -
Loss on ordinary activities after taxation (21) (21) (42)
Earnings per share (pence) (0.2) (0.1) (0.3)
Gateway VCT plc
Income Statement
Year ended 31 March 2008 (audited)
Revenue Capital Total
�'000 �'000 �'000
Loss on realisation of - (91) (91)
investments
Income 110 - 110
Investment management fee (40) (27) (67)
GAM investment adviser (45) (30) (75)
termination fees
Other expenses (140) - (140)
Loss on ordinary activities (115) (148) (263)
before taxation
Tax on ordinary activities - - -
Loss on ordinary activities (115) (148) (263)
after taxation
Earnings per share (pence) (0.8) (1.1) (1.9)
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.
Gateway VCT plc
Statement of Total Recognised Gains and Losses
Six months ended 30 September 2008 (unaudited)
Revenue Capital Total
�'000 �'000 �'000
Loss on ordinary activities after taxation (19) (324) (343)
Loss on revaluation of investments - (89) (89)
Total losses recognised during the period (19) (413) (432)
Gateway VCT plc
Statement of Total Recognised Gains and Losses
Six months ended 30 September 2007 (unaudited)
Revenue Capital Total
�'000 �'000 �'000
Loss on ordinary activities after taxation (21) (21) (42)
Loss on revaluation of investments - (713) (713)
Total losses recognised during the period (21) (734) (755)
Gateway VCT plc
Statement of Total Recognised Gains and Losses
Year ended 31 March 2008 (audited)
Revenue Capital Total
�'000 �'000 �'000
Loss on ordinary activities after taxation (115) (148) (263)
Loss on revaluation of investments - (1,357) (1,357)
Total losses recognised during the period (115) (1,505) (1,620)
The accompanying Notes are an integral part of the Financial Statements.
Gateway VCT 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 4,824 6,444 6,444
Loss attributable to Equity (432) (755) (1,620)
Shareholders
Closing Shareholders' funds 4,392 5,689 4,824
The accompanying Notes are an integral part of the Financial Statements.
Gateway VCT plc
Balance Sheet
30 September 30 September 31 March
2008 2007 2008
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Fixed assets
Investments available for sale 4,192 5,656 4,538
Current assets
Debtors 54 37 45
Cash and overnight deposits 202 107 316
256 144 361
Creditors
Amounts falling due within one 56 111 75
year
Net current assets 200 33 286
Net assets 4,392 5,689 4,824
Capital and reserves
Called up share capital 679 679 679
Special distributable reserve 12,110 12,110 12,110
Capital redemption reserve 1 1 1
Capital reserve - realised (6,158) (5,832) (5,834)
Capital reserve - unrealised (1,606) (748) (1,517)
Revenue reserve (634) (521) (615)
Net assets attributable to 4,392 5,689 4,824
Ordinary Shareholders
Net Asset Value per Ordinary 32.3 41.9 35.5
Share (pence)
The accompanying Notes are an integral part of the Financial Statements.
Gateway VCT plc
Cash Flow Statement
Six months Six months ended Year
ended ended
30 September 31 September 2007 31 March
2008 2008
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Operating activities
Investment income received 57 55 102
Deposit interest received 4 3 5
Investment management fee paid (10) (30) (121)
GAM investment adviser - - (75)
termination fee
Other cash payments (85) (41) (96)
Net outflow from operating (34) (13) (185)
activities
Taxation
Corporation tax - - -
Financial investment
Purchase of investments (1,078) - -
Sale of investments 998 - 382
Net cash (outflow)/inflow from (80) - 382
financial investment
Equity dividends paid - - -
(Decrease)/increase in cash (114) (13) 197
The accompanying Notes are an integral part of the Financial Statements.
Gateway VCT 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. Movement in reserves
Special Capital redemption Capital reserve - Capital reserve - Revenue reserve
distributable reserve realised unrealised
reserve
�'000 �'000 �'000 �'000 �000
At 31 March 2008 12,110 1 (5,834) (1,517) (615)
Losses on realisation of - - (313) - -
investments
Net decrease in value of - - - (89) -
investments
Investment management fee - - (11) - -
Loss on ordinary activities - - - - (19)
after taxation
At 30 September 2008 12,110 1 (6,158) (1,606) (634)
3. Returns per Ordinary Share
Six months ended
30 September 2008
�'000
The returns per Ordinary Share are based on the following
figures:
Weighted average number of Ordinary Shares 13,591,734
Revenue return (�19,000)
Capital return (�324,000)
The NAV per Ordinary Share has been calculated using the number of Ordinary Shares in issue at 30 September 2008 of 13,591,734.
Gateway VCT 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.aberdeen-asset.com/gatewayvct. 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
27 November 2008
This information is provided by RNS
The company news service from the London Stock Exchange
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