Oxford Tech 3 VCT Oxford Technology 3 Vct Plc : Half-yearly Report
October 19 2016 - 6:00AM
UK Regulatory
TIDMOTT
Oxford Technology 3 Venture Capital Trust Plc
Unaudited Half-Yearly Report
For the period
1 March 2016 to 31 August 2016
Financial Headlines
6 Months Ended Year Ended
31 August 2016 29 February 2016
Net Assets at Period End GBP5.92m GBP6.89m
Net Asset Value per Share 87.3p 101.6p
Cumulative Dividend per Share 32.0p 17.0p
Total NAV Return per Share 119.3p 118.6p
Share Price 57.5p 62.5p
Earnings per Share 0.7p 13.0p
Company Number: 4351474
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 2016.
Results and dividends
The Company's net asset value per share has reduced from 101.6p at 29
February 2016 by 14.3p to 87.3p at 31 August 2016. The underlying NAV
per share rose by 0.7p but was offset by the payment of a 15.0p interim
dividend per share on 13 May 2016. Further dividends are likely to
require a profitable investee company exit.
Portfolio review
The new VCT rules have not prevented us from investing GBP709k to
support our existing portfolio companies. We exercised our warrants in
Ixaris for GBP425k along with the major shareholder in advance of their
expiry date at an attractive discount, thereby not only preventing
dilution but also slightly increasing our equity percentage. The
valuation of our share of Ixaris has been increased by GBP529k. We
invested GBP200k in Plasma Antennas to position them for a further
funding round. GBP50k was invested in ImmBio at attractive terms at the
end of their successful trials. Finally we invested GBP34k in Scancell's
placing and open AIM offer, the maximum we could make under VCT rules.
The Directors have reviewed the valuations of each investee company in
the unquoted portfolio but have made only minor changes. In the AIM
portfolio the Scancell price remained flat and the Abzena price declined
from 49p to 41p per share. Based on the revised NAV at 31 August 2016,
the performance fee accrual at 29 February 2016 of GBP23k has been
reversed as the revised escalating performance fee threshold has now
just increased above the current NAV.
Shareholders should remain aware that the portfolio is very concentrated
with just three holdings representing about 65% of NAV. The value of the
portfolio is thus very sensitive to changes in valuations of these three
holdings: Ixaris, Glide and Scancell. The directors continue to take an
active interest in the investee companies and look forward to continuing
to work with OTM to maximise shareholder value and to secure profitable
exits from these investee companies at the appropriate time and to
enable further dividends to be paid.
Liquidity
At period end we had net current assets of GBP1.03m. Post period end we
have committed to invest in Arecor, Orthogem and Glide.
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
Registrars 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
The last six months has seen a number of changes to qualification
conditions for VCTs. However, as we are not looking to invest in new
companies we do not believe that these changes will give rise to any
issues for our Company. Likewise any uncertainties surrounding the
departure from the EU are unlikely to affect us directly. We were
pleased to welcome a large number of shareholders to our AGM in July.
Three of our investee companies made presentations: Scancell, Ixaris and
Plasma Antennas. These presentations are on the Oxford Technology
website. The directors' view remains that the portfolio still holds
significant potential over the medium term but is not without risk.
Finally I would like to take this opportunity to thank shareholders for
their continued support.
Robin Goodfellow - Chairman
19 October 2016
Investment Portfolio as at 31 August 2016
Change
in
value
Net Cost for the
of 6 month
investment Carrying value at 31/8/16 period % Equity held % Equity held %
Company Description GBP'000 GBP'000 GBP'000 OT3 All OT of fund investment value
Ixaris Internet payments 643 2,202 529 7.6 7.6 44.8
Needle free
Glide Technologies injector 225 814 - 3.3 9.0 16.5
Antibody based
Scancell cancer
(bid price 17.5p) therapeutics 359 810 35 1.8 4.4 16.5
Directional
Plasma Antennas antennas 308 277 200 12.3 45.1 5.6
ImmBio Novel vaccines 400 237 50 4.4 13.9 4.8
Photocopier
Select Technology interfaces 47 147 3 2.8 58.5 3.0
Allinea Software Parallel computing 15 146 (16) 1.9 1.9 3.0
Abzena Protein & peptide
(bid price 41p) based drugs 69 82 (16) 0.2 0.3 1.7
Protein
Arecor stabilisation 24 56 9 0.7 7.3 1.1
Insense Wound healing 333 44 - 4.1 12.1 0.9
Orthogem Bone graft material 134 42 - 4.0 14.6 0.9
Data transformation
Inaplex software 58 22 - 13.3 34.8 0.5
Low power
Invro electronics 40 20 - 33.1 33.1 0.4
Production of metal
Metal Nanopowders powders 153 13 - 20.0 36.7 0.3
Production of hard
Superhard Materials materials 11 5 - 21.8 40.0 0.1
Total Investments 2,918 4,917 794 100%
Other Net Assets 1,005
Net Assets 5,922
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:
Robin Goodfellow - Chairman
19 October 2016
Income Statement
Six months to 31 Aug 2016 Six months to 31 Aug 2015 Year to 29 February 2016
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 on disposal
of fixed asset
investments - - - - 3 3 - 1,333 1,333
Gain/(Loss) on
valuation of
fixed asset
investments - 85 85 - 659 659 - (414) (414)
Performance fee
credit - 23 23 - 70 70 - 72 72
Other income - - - 3 - 3 19 - 19
Investment
management fees (9) (26) (35) (8) (24) (32) (16) (49) (65)
Other expenses (27) - (27) (28) - (28) (62) - (62)
Return on
ordinary
activities
before tax (36) 82 46 (33) 708 675 (59) 942 883
Taxation on loss
on ordinary
activities - - - - - - - - -
Return on
ordinary
activities after
tax (36) 82 46 (33) 708 675 (59) 942 883
Earnings per
share - basic
and diluted (0.5)p 1.2p 0.7p (0.5)p 10.4p 9.9p (0.9)p 13.9p 13.0p
-- 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 29 February
2016 2015 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments * 4,917 7,077 4,123
Current assets:
Debtors 17 118 2
Creditors:
Amounts falling due within one year (52) (59) (55)
Cash at Bank 1,064 119 2,894
Net current assets 1,029 178 2,841
Creditors:
Amounts falling due in more than one year (24) (71) (47)
Provision for performance fee - (24) (23)
Net assets 5,922 7,160 6,894
Called up equity share capital 679 679 679
Share premium 719 719 719
Unrealised capital reserve 1,998 4,912 1,913
Profit and Loss account reserve 2,526 850 3,583
Total equity shareholders' funds 5,922 7,160 6,894
Net asset value per share 87.3p 105.5p 101.6p
* 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 2015 679 719 4,315 773 6,486
Revenue
return on
ordinary
activities
after tax - - - (33) (33)
Expenses
credited to
capital - - - 46 46
Current
period
gains on
disposal - - - 3 3
Current
period
gains on
fair value
of
investments - - 659 - 659
Prior years'
unrealised
gains now
realised - - (62) 62 -
Balance as
at 31
August
2015 679 719 4,912 850 7,160
As at 1
March 2015 679 719 4,315 773 6,486
Revenue
return on
ordinary
activities
after tax - - - (59) (59)
Expenses
credited to
capital - - - 23 23
Current
period
gains on
disposal - - - 1,333 1,333
Current
period
losses on
fair value
of
investments - - (414) - (414)
Prior years'
unrealised
gains now
realised - - (1,913) 1,913 -
Dividends
paid - - - (475) (475)
Movement in
reserves - - (75) 75 -
Balance as
at 29
February
2016 679 719 1,913 3,583 6,894
As at 1
March 2016 679 719 1,913 3,583 6,894
Revenue
return on
ordinary
activities
after tax - - - (36) (36)
Expenses
charged to
capital - - - (3) (3)
Current
period gains
on disposal - - - - -
Current
period
gains on
fair value
of
investments - - 85 - 85
Dividends
paid - - - (1,018) (1,018)
Balance as
at 31
August
2016 679 719 1,998 2,526 5,922
Statement of Cash Flows
Six months Six months Year to 29
to 31 Aug to 31 Aug February
2016 2015 2016
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Return on ordinary activities before tax 46 675 883
Adjustments for:
Decrease/(increase) in debtors (15) (116) (1)
(Decrease)/increase in creditors (49) (91) (119)
Gain on disposal of fixed asset
investments - (3) (1,333)
Loss/(gain) on valuation of fixed asset
Investments (85) (659) 414
Net cash generated from operating
activities (103) (194) (156)
Cash flows from investing activities
Purchase of fixed asset investments (709) - (120)
Sale of fixed asset investments - 110 3,442
Total cash flows from investing
activities (709) 110 3,322
Cash flows from financing activities
Dividends paid (1,018) - (475)
Total cash flows from financing
activities (1,018) - (475)
Increase/(decrease) in cash and cash
equivalents (1,830) (84) 2,691
Opening cash and cash equivalents 2,894 203 203
Closing cash and cash equivalents 1,064 119 2,894
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 31
August 2016 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
2016 do not constitute statutory accounts within the meaning of Section
415 of the Companies Act 2006. The comparative figures for the year
ended 29 February 2016 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 (6,785,233 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 29 February 2016. The Company's principal risks and uncertainties
have not changed materially since the date of that report.
6. Related party transactions
OT3 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/vct3.
Board Directors: Robin Goodfellow, Richard Roth, Alex Starling and David
Livesley
Investment Manager: OT3 Managers Ltd with services contracted to Oxford
Technology Management Ltd
Website: www.oxfordtechnology.com/vct3
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 3 VCT plc via Globenewswire
http://www.oxfordtechnology.com
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