RNS Number:1500Q
T&G AIM VCT PLC
24 September 2003
T & G AIM VCT PLC
INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
Since the end of the war in Iraq stock market indices have shown a steady
improvement, although it is too early to tell if this is the start of a
sustained recovery. Despite such continued uncertainty during the period under
review, the Company has made a positive return reflecting the cautious
investment approach adopted by the Investment Management.
Net asset value
The net asset value (NAV) of the Company at 30 June 2003 was 96.4p per Ordinary
share. This represents an increase of 1.5% over the post issue costs NAV of 95p
per share on the first date of admission on 27 March 2002. This increase in NAV
has been achieved over a period where the FTSE AIM index rose 0.7%.
Investments
In the six months to 30 June 2003, the Company made one further qualifying
investment at a cost of #120,000, representing 6% of the company's enlarged
investment portfolio.
The total amount invested in qualifying investments at the end of the period was
approximately #330,000. A list of these qualifying investments is given on page
9 showing a small increase in market value over cost in their combined value at
the end of the period to #345,898.
In line with the Company's cautious approach, the majority of the proceeds of
the issue of Ordinary shares have initially been invested in fixed income
securities and cash deposits, details of which can be found on page 9. During
the period a further three such investments were made totalling #676,896.
The fixed income security portfolio has given rise to an unrealised gain during
the six months of #38,606.
Results and dividends
Gross revenue and profit after tax for the period was #53,705 and #9,020
respectively for the Ordinary shares, and #3,143 and #3,143 for the C Shares.
The Board's policy is to pay out as high a level of dividends as is possible
either generated from income received or capital profits realised on the sale of
investments. However, no dividend is proposed at this stage in the life of the
Company.
Repurchase of shares
The Directors are aware that the Company's share price is likely to be affected
in future by the relative illiquidity of its shares in the market, resulting
from the requirement that shareholders must hold their shares for at least three
years to retain their tax benefits.
With this in mind, and in line with the intention shown in the Prospectus dated
16 November 2001, the Company is currently in the process of cancelling its
share premium account. This will mean that the Company, where appropriate and at
the Directors' discretion, will have the ability to buy back its own shares in
the market for cancellation.
'C' Share offer
The Company is currently raising further funds through a 'C' share offer. This
is in order to increase the size of the Company both to improve cost
efficiencies and enable greater portfolio diversity in the long term. During
the six months to 30 June 2003, the Company raised #420,686 through additional
subscriptions. Existing and potential shareholders have the opportunity to
subscribe if they wish via the application form in the 'C' share Prospectus.
Outlook
On 8 August 2003, the Company made one further qualifying investment in Micap
Plc representing 6% of the Company's enlarged investment portfolio. As at 22
September this investment had risen by approximately 23%. A number of other
opportunities, either new issues or additional share placings by existing AIM
companies, are currently under review.
The Investment Manager has continued to adopt a highly selective investment
approach focusing upon established, potentially cash generative businesses with
proven operational and financial controls and experienced and incentivised
management teams. This cautious outlook is reflected in the relatively low level
of qualifying investments completed.
Over the next fifteen months the Board will monitor closely the Company's
progress towards the requirement to invest 70% of the net proceeds of the issue
of Ordinary shares in qualifying securities before the Inland Revenue's deadline
of 31 December 2004.
While progress towards this requirement to date has been slow, the Board is
confident that the Company can capitalise upon the relatively low level of new
money raised recently by VCTs and the increase in new issues to the AIM market.
The Board feels that the likely reduced equity valuations of forthcoming new
issues should enable the Investment Manager to create a portfolio of qualifying
investments offering the prospect of substantial capital growth.
A. Wiegman
Chairman
22 September 2003
INVESTMENT MANAGER'S REPORT
Existing investments
By the end of June, the Company had invested #1,679,045 in gilt-edged
securities, a European Investment Bank bond and preference shares, with an
estimated gross yield of more than 4.52% over UK deposit rates. These fixed
interest securities account for 53% of total net assets.
A further investment in a qualifying AIM company was made in the first half of
2003; Smart Approach Group Plc, which accounted for 4.7% of funds available for
investment at the purchase date. This company reversed a cash shell, Robert H.
Lowe Plc, and is involved in the provision of computer based training software
and associated courseware for use in the training, testing and certification of
airport personnel engaged in the operation of checkpoint x-ray screening of
baggage.
Since the end of June 2003, a further investment has been made. Micap Plc is a
technology company with many interesting biotech and consumer goods
applications. The company combines yeast with different compounds to enhance
and accelerate drug delivery as well as enhancing many other applications, such
as flavourings in snacks. One large contract has already been signed and some
of the proceeds of the issue are being used to buy patents. The investment in
Micap Plc amounted to 4.8% of the total funds available for investment.
Two further investments under consideration have been delayed by technical
factors.
Outlook
Corporate activity, and new issues in particular, are both picking up in line
with an improving UK stock market, leading to confidence that suitable
investments for this Company will be found within the next fifteen months.
There appears to be more confidence returning in the UK and in the USA. There is
room for further interest rate cuts in the UK and house price inflation is
moderating, especially in the London area. The latter may help to take the steam
out of inflationary fears. Corporate activity is likely to be high given the low
level of interest rates.
J. Sweet
Investment Manager
22 September 2003
T & G AIM VCT plc
FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2003
Six months Period ended Period ended
ended 30 30 31
June June December
2003 2002 (1) 2002 (1)
#'000 #'000 #'000
(Loss)/return before taxation (11) (45) 50
Revenue return/(loss) per share - basic (pence)(2) 0.3p (1.2)p (1.8)p
Capital (loss)/return per share - basic (pence) (2) (0.7)p (3.7)p 4.7p
Investments at valuation and cash at bank 2,768 2,548 2,780
Net assets per share (pence)(2) 96.4p 93.4p 96.8p
(1)Period start date is 29 October 2001 for the period ended 30 June 2002 and 31
December 2002 respectively.
(2)Based on a weighted average of 2,863,979 ordinary shares in issue during the
period and as at 30 June 2003 (30 June 2002: 915,656 and 2,728,979 respectively)
(31 December 2002: 1,727,388 and 2,863,979 respectively)
Six months Period ended Period ended
ended 30 30 31
June June December
2003 2002 2002
#'000 #'000 #'000
Return before taxation 3 - -
Revenue return per share - basic (pence)(2) 1.5p - -
Capital (loss)/return per share - basic (pence) (2) - - -
Investments at valuation and cash at bank 417 - -
Net assets per share (pence)(3) 95.2p - -
(1)C Shares launched on 4 February 2003.
(2)Based on a weighted average of 211,247 C Shares in issue during the 6 month
period ended 30 June 2003.
(3)Based on 445,170 C Shares in issue as at 30 June 2003
T & G AIM VCT plc
STATEMENT OF TOTAL RETURN (incorporating the revenue account) (unaudited)
For the six months ended 30 June 2003
Six months ended 30 June Period ended 30 June
2003 2003
Ordinary Shares C Shares
Notes Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Income 2 54 - 54 3 - 3
Unrealised (decrease)/increase in value of - (19) (19) - - -
investments
Investment management fees - (1) (1) - - -
Other expenses (45) - (45) - - -
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION 9 (20) (11) 3 - 3
Tax on ordinary activities - - - - - -
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER 9 (20) (11) 3 - 3
TAXATION
Profit/(loss) attributable to ordinary 9 (20) (11) 3 - 3
shareholders
Dividend in respect of ordinary shares - - - - - -
PROFIT/(LOSS) TO SHAREHOLDER PER ORDINARY SHARE 3 0.3p (0.7)p (0.4)p 1.5p - 1.5p
Period ended 30 June Period ended 31 December
2002 2002
Ordinary Shares Ordinary Shares
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Income 24 - 24 67 - 67
Unrealised (decrease)/increase in value of - (21) (21) - 84 84
investments
Investment management fees (4) (13) (17) (1) (2) (3)
Other expenses (31) - (31) (98) - (98)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION (11) (34) (45) (32) 82 50
Tax on ordinary activities - - - - - -
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER (11) (34) (45) (32) 82 50
TAXATION
Profit/(loss) attributable to ordinary (11) (34) (45) (32) 82 50
shareholders
Dividend in respect of ordinary shares - - - - - -
PROFIT/(LOSS) TO SHAREHOLDER PER ORDINARY SHARE (1.2)p (3.7)p (4.9)p (1.8)p 4.7p 2.9p
The amounts dealt with in the statement of total return are all derived from
continuing activities.
The revenue columns of this statement are the profit and loss account of the
Company.
The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
No operations were acquired or discontinued in the period.
The notes on pages 8 and 9 form part of these financial statements.
T & G AIM VCT plc
BALANCE SHEET (unaudited)
As at 30 June 2003
As at 30 June 2003 30 June 31 December
2002 2002
Ordinary C Total Ordinary Ordinary
Note Shares Shares Shares Shares
#'000 #'000 #'000 #'000 #'000
FIXED ASSETS
Investments 4 2,067 - 2,067 975 1,290
CURRENT ASSETS
Debtors and prepayments 9 31 40 46 2
Cash at bank 701 417 1,118 1,573 1,490
710 448 1,158 1,619 1,492
CREDITORS: Amounts falling due within one
year
Other creditors (17) (24) (41) (46) (11)
NET CURRENT ASSETS 693 424 1,117 1,573 1,481
NET ASSETS 2,760 424 3,184 2,548 2,771
CAPITAL AND RESERVES
Called up equity share capital 29 5 34 29 29
Share premium account 2,692 416 3,108 2,564 2,692
Capital deficit - realised (3) - (3) (13) (2)
Capital reserve/(deficit) - unrealised 65 - 65 (21) 84
Revenue (deficit)/reserve account (23) 3 (20) (11) (32)
TOTAL EQUITY SHAREHOLDERS' FUNDS 2,760 424 3,184 2,548 2,771
NET ASSET VALUE PER ORDINARY SHARE 96.4p 95.2p 96.2p 93.4p 96.8p
Number of ordinary shares in issue at end 2,863,979 445,170 3,309,149 2,728,979 2,863,979
of period
T & G AIM VCT plc
CASH FLOW STATEMENT (unaudited)
As at 30 June 2003
Six months ended Period ended Period ended 31
30 June 2003 30 June 2002 December 2002
Ordinary Ordinary Shares
Ordinary Shares C Shares Shares
#'000 #'000 #'000
Operating activities
Investment income received 31 - - 39
Bank deposit interest received 15 - 3 34
Expenses (38) - (12) (98)
Net cash inflow/(outflow) from operating 8 - (9) (25)
activities
Investing activities
Acquisition of investments (797) - (996) (1,206)
Net cash outflow from investing activities (797) - (996) (1,206)
Cash outflow before financing and management (789) - (1,005) (1,231)
of liquid resources
Financing
Issue of ordinary shares - 417 2,715 2,864
Expenses of the issue of ordinary shares - - (137) (143)
Net cash inflow from financing - - 2,578 2,721
(Decrease)/increase in cash for the period (789) 417 1,573 1,490
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
#'000 #'000 #'000
(Decrease)/increase in cash for the period (789) 417 1,573 1,490
Net funds at beginning of period 1,490 - - -
Net funds at the end of the period 701 417 1,573 1,490
At 30 June 2003, Capita IRG held #27,663 of the proceeds raised from the C Share
issue.
T & G AIM VCT plc
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
For the six months ended 30 June 2003
1.ACCOUNTING POLICIES
The unaudited interim results have been prepared on the basis of the accounting
policies set out in the statutory accounts of the Company for the period ended
31 December 2002 and the C Share prospectus dated 4 February 2003.
The unaudited financial statements set out here 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 31 December 2002 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.
Unaudited copies of the Company's interim accounts can be obtained from the
Company's Registered Office.
2.INCOME
Six months Period ended Period ended Period ended
ended 30 30 June 30 31 December
June June 2002
2003 2003 2002
Ordinary
Ordinary C Shares Ordinary Shares
Shares Shares
#'000
#'000 #'000 #'000
Listed fixed income securities 39 - 7 19
Bank interest 15 3 17 48
54 3 24 67
3.PROFIT/(LOSS) TO SHAREHOLDER PER ORDINARY SHARE
The loss to shareholders per ordinary share has been calculated on the weighted
average number of ordinary shares during the period of 2,863,979. The return to
shareholders per C Share is based on a weighted average of 211,247 C Shares in
issue. The combined weighted average shares in issue over the six month period
ended 30 June 2003 was 3,075,226 shares.
4.INVESTMENT PORTFOLIO
As at 30 June 2003
Listed fixed income securities Cost Valuation % portfolio
#'000 #'000 by value
Treasury 7.25% Stock 2007 250 257 12 %
Treasury 9.0% Stock 2008 251 250 12 %
Treasury 8.5% Stock 2007 251 245 12 %
National Westminster Bank plc 9% non cumulative preference shares 202 227 11 %
European Investment Bank 5.5% 2009 204 215 10 %
HBOS plc 9.75% non cumulative preference shares 176 183 9 %
Abbey National plc 10.375% non cumulative preference shares 144 140 7 %
Halifax plc 6.125% preference shares 99 103 5 %
Treasury 5% Stock 2004 102 101 5 %
1,679 1,721 83 %
4.INVESTMENT PORTFOLIO (CONTINUED)
Qualifying AIM investments Cost Valuation % portfolio
#'000 #'000 by value
Cytomyx Holdings Plc 80 144 7 %
Lloyds British Testing Plc 130 124 6 %
Smart Approach Group Plc 120 78 4 %
330 346 17 %
Total investments 2,009 2,067 100 %
5. The financial information set out above is unaudited and does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
6. A copy of this statement has been sent today to the company's shareholders,
and members of the public may obtain a copy on application to the company's
registered office.
A copy of this document will be submitted to the UK Listing Authority and will
be available at the UK Listing Authority's Document Viewing Facility which is
situated at Financial Services Authority, 25 The North Colonnade, Canary Wharf,
London E14 5HS.
For further information please contact Ben Wereik at Teather & Greenwood Limited
on 0207 426 3204 or by email - ben.wereik@teathers.com
This information is provided by RNS
The company news service from the London Stock Exchange
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