30th Mar 2006 16:27
Triven VCT PLC30 March 2006 TRIVEN VCT PLC 30th March 2006 PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2006 CHAIRMAN'S STATEMENT Net Asset Value At 31 January 2006, the Company's Net Asset Value (NAV) per share was 53.28pence (2005: 55.33 pence as restated). Net assets fell from £10.14m (restated)to £9.29m. This was due to realised losses on the disposal of investments andfurther purchases of the Company's own shares, in accordance with the Company'sshare buy-back policy. The Company has distributed accumulated dividends of 4.2pence per share since the Company's launch. The total return since launch of57.48 pence compares with the initial NAV (after the launch expenses of theissue) of 95.25 pence per share. Economic and Stock Market Background Whatever the underlying trends were in the UK economy, 2005 was a much betteryear for investors than was generally predicted at the outset, although much ofthis activity related to higher capitalisation stocks. The FTSE 100 index rose16.6%, the FTSE Small Cap index rose 19.8%, and the FTSE AIM all share indexrose 4.0%. These rises were fuelled by high liquidity, a search for yields, andconsiderable takeover activity. The AIM market expanded considerably, with over400 companies listed during the year, causing some saturation in the summermonths. At the level of relatively early stage companies in which TriVeninvests, the main consequences of these general trends were increasedcompetition for deals, and on the whole, a better climate for moving investeecompanies forward and planning for realisation of value through exit. The Portfolio At the year-end, Matrix Private Equity Partners (MPEP) managed 79% of theportfolio with Elderstreet Private Equity Limited (Elderstreet) managing 21%.Nova Capital Management Limited (Nova) has now realised all the investments inits portfolio. By market sector, the portfolio is fairly evenly spread withinvestments in consumer services companies at 41%, technology companies at 26%,business service companies at 24% and the balance in media companies. Whenconsidered by stage of development, the portfolio is dominated by investments inmanagement buy-out/in situations ("MBO/MBI") at 46% and development capitalcompanies at some 38% with 14% of the portfolio being quoted (primarily in AIMstocks) and with nearly 2% in early stage investments. This spread ofinvestments reflects the current investment strategy of containing the level ofrisk in the portfolio whilst enjoying the opportunity of seeing some attractiverewards. The portfolio as a whole has suffered from the earlier performance of that partof the portfolio which was managed by LICA (and now subsequently managed byNova), but I do believe that the portfolio overall has now been stabilised andthere is evidence that it is beginning to move in the right direction. The Boardare looking actively at ways of improving the performance of the portfolio andof increasing value to shareholders. The Elderstreet portfolio continues to see some improvement. Within theElderstreet managed quoted component of the portfolio, Computer Software Groupplc, which previously floated at 53p, traded at 74.25p at the year-end whilstMediasurface plc, which floated at 12p was valued at the year-end at 12.25p butas recently as 29 March 2006, the date of this Report, these stocks traded at84p and 12.75p respectively. Within the MPEP portfolio in the six months to 31 January 2006, there has beensome significant activity with five new investments having been made. A newinvestment of £150,000 was made into SectorGuard plc, an AIM listed securitycompany providing manned guarding, mobile patrols and alarm response services,in August 2005. In September 2005, this was followed by a new investment of£328,720 into Ministry of Cake Limited (previously Maynard Scott Limited), amanufacturer and seller of frozen desserts to the food service industry. InOctober 2005, a new investment of £500,000 was made into the Youngman GroupLimited a manufacturer and supplier of aluminium access towers and ladders, andin January 2006 a new investment of £100,000 was made into Vectair HoldingsLimited, a provider of air care and sanitary washroom products. In the samemonth £152,620 was invested in Campden Media Limited, a publisher specialisingin the healthcare and private wealth management sectors. In October 2005, Nova divested the portfolio of its investment in CaxtonPublishing Limited. This realised proceeds of £25,000 together with a dividendof £250,000 which was received upon the sale. Revenue Account The revenue return for the year is a positive £58,829, compared to a negativereturn last year of £7,321 as restated, an improvement of £66,150. This ismainly due to an increase in loan stock interest of £40,191, an absence ofprovisions against income receivable this year compared to £11,100 last year, anincrease in OEIC money market fund interest of £11,589, a fall in overhead costsof £13,310 and a consequent increase in corporation tax chargeable to therevenue account of £10,822. The increase in loan stock interest is due to new loan stock investments made inthe year or at the end of last year (Tottel Publishing, FH Ingredients, Ministryof Cake and Youngman), and income from Inca Interiors, an existing investment,all of which more than replaced the two main sources of such income last year(Higher Nature and TJ Brent). The rise in liquidity fund interest reflects thehigher level of funds held for much of the year after last year's disposal of TJBrent. The fall in overheads is due to a fall in professional fees. Dividend The Company's revenue gain per Ordinary Share was 0.33 pence per share (2005:loss of 0.04 pence per share as restated). Your Board will be recommending afinal dividend of 0.25 pence per Ordinary Share in respect of the year underreview at the Annual General Meeting to be held on 24 May 2006. The dividendwill be paid on 7 June 2006 to shareholders on the Register on 12 May 2006. Valuation Policy Quoted stocks have been valued at bid prices, rather than mid-market prices forthe first time for the year under review in accordance with new accountingstandards. For further information on the new Standards please see Notes 1 and2 below. This has had the effect of reducing the valuation by £16,745 or by1.7% of the quoted portfolio and the net asset value per share by 0.1 pence. It is worth commenting that the Company does hold a number of relatively earlystage AIM listed stocks with limited marketability. In such cases, the price atwhich a sizeable block of shares could be traded, if at all, may varysignificantly from the market price used. Share buy-backs During the year ended 31 January 2006 the Company continued to implement itsbuy-back policy and bought back 900,000 Ordinary Shares (representing 4.91%) ofthe shares in issue at 1 February 2005 at a total cost of £386,600 (excludingexpenses). These shares were subsequently cancelled by the Company. Summary Financial Statement You will have received an earlier letter from me proposing to distribute aSummary of the Annual Report to Shareholders rather than the full version(unless you opted to receive the latter). In recent years the Company's AnnualReport and Accounts have become longer and more complex, principally due to therequirements of new statutory, corporate governance and other reportingregulations. As a result, we have decided to follow the example of a number ofother companies and produce a Summary Annual Report for the year to 31 January2006 and subsequent financial years. We hope that this will be more convenientfor many of our Shareholders and that running costs will be reduced. TriVen Website The Company has now set up its own website and the full Annual Report andAccounts is available at www.trivenvct.co.uk. Investor Allstars 2005 Awards At the Investor Allstars 2005 Awards ceremony in late 2005, Matrix PrivateEquity Partners won the award for the Venture Capital Trust Manager of the Year. Colin Hook Chairman 29 March 2006 INVESTMENT PORTFOLIO SUMMARY AT 31 JANUARY 2006 Cost at Valuation at Valuation at % of portfolio 31-Jan-05 by value 31-Jan-06 31-Jan-06 £ £ £ELDERSTREET PRIVATE EQUITY LIMITED Computer Software Group plc 489,452 407,937 590,784 9.87% European Telecommunications & Technology 300,244 300,244 300,244 5.02%Limited Mediasurface plc 297,481 236,377 246,456 4.12% SIFT Group Limited 125,000 62,500 62,500 1.04% Cashfac Limited 260,101 32,828 49,397 0.83% Netstore plc 50,000 12,750 13,500 0.22% Sparesfinder Limited 250,000 75,539 - 0.00% Other investments in the portfolio 773,062 - - 0.00% Total 2,545,340 1,128,175 1,262,881 21.10% MATRIX PRIVATE EQUITY PARTNERS LIMITED Higher Nature Plc 500,000 1,218,814 1,433,675 23.95% Maven Management Limited 175,000 800,000 594,726 9.93% Youngman Group Limited 500,000 - 500,000 8.35% Tottel Publishing Limited 235,200 235,200 400,163 6.68% Stortext FM Limited (formerly F-M Image 561,820 375,968 375,968 6.28%Management Limited Ministry of Cake Limited 328,720 - 328,720 5.49% Letraset Limited 500,000 439,172 291,268 4.87% Inca Interiors Limited 350,000 200,000 200,000 3.34% FH Ingredients Limited 183,804 - 183,804 3.07% Campden Media Limited 152,620 - 152,620 2.55% SectorGuard plc 150,000 - 135,000 2.25% Vectair Holdings Limited 100,000 - 100,000 1.67% BG Consulting Group Limited/Duncary 4 230,796 25,000 27,967 0.47%Limited Food on the Go Limited in liquidation 570,000 - - 0.00% Total 4,537,960 3,294,154 4,723,911 78.90% NOVA CAPITAL MANAGEMENT LIMITED Zynergy Group Limited 1,250,000 - - 0.00% Other investments in the portfolio - - 0.00% 870,000 Total 1,250,000 870,000 - 0.00% INVESTMENT MANAGERS' TOTALS 8,333,300 5,292,329 5,986,792 100.00% INCOME STATEMENT (incorporating the Revenue Account of the Company) FOR THE YEAR ENDED 31 JANUARY 2006 Year ended 31 January 2006 Year ended 31 January 2005 (unaudited) (restated) Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised gains on - 44,589 44,589 - 250,609 250,609investments held at fair value Realised (losses)/gains - (725,431) (725,431) - 401,162 401,162on investments held at fair value Income 336,287 250,000 586,287 276,673 - 276,673 Investment management (31,774) (95,322) (127,096) (24,722) (74,166) (98,888)fees Other expenses (232,828) - (232,828) (257,238) (257,238) - RETURN ON ORDINARY 71,685 (526,164) (454,479) (5,287) 577,605 572,318ACTIVITIES BEFORETAXATION Tax on ordinary (12,856) 12,856 - (2,034) 2,034 -activities RETURN ATTRIBUTABLE TO 58,829 (513,308) (454,479) (7,321) 579,639 572,318EQUITY SHAREHOLDERS BASIC AND DILUTED RETURN 0.33p (2.91)p (2.58)p (0.04)p 3.09p 3.05pPER ORDINARY SHARE The total column of this statement is the profit and loss account of theCompany. All revenue and capital items in the above statement derive fromcontinuing operations. No operations were acquired or discontinued in the year. Various changes in accounting policies, as discussed in Notes 1 and 2 below,have had the cumulative effect of increasing reported net assets by £51,280 forthe year ended 31 January 2005. STATEMENT OF RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 JANUARY 2006 Year ended 31 January 2006 (unaudited) Year ended 31 January 2005 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Return attributable 58,829 (513,308) (454,479) (7,321) 579,639 572,318to equityshareholders Creditor for - 7,510 7,510 - - -previously capitalised fees nolonger payable Total recognised 58,829 (505,798) (446,969) (7,321) 579,639 572,318gains/(losses) in theyear Total recognised gain 0.33p (2.86)p (2.53)p (0.04)p 3.09p 3.05pper Ordinary Share BALANCE SHEET AS AT 31 JANUARY 2006 as at 31 January 2006 (unaudited) as at 31 January 2005 £ £ £ £ £ £NON-CURRENT ASSETSInvestments at fair value 5,986,792 5,292,329 CURRENT ASSETSDebtors and prepayments 67,469 84,578Investments at fair value 2,038,915 4,184,083Cash at bank 1,449,729 703,125 3,556,113 4,971,786 CREDITORS: AMOUNTS FALLING DUEWITHIN ONE YEARCorporation tax - -Other creditors 159,634 23,889Accruals 96,593 99,529 (256,227) (123,418)NET CURRENT ASSETS 3,299,886 4,848,368 NET ASSETS 9,286,678 10,140,697 CAPITAL AND RESERVESCalled up share capital 871,434 916,434Capital redemption reserve 83,325 38,325Special reserve 16,536,695 16,925,416Capital reserve - realised (6,048,574) (1,504,898)Capital reserve - unrealised (2,315,719) (6,322,808)Revenue reserve 159,517 88,228 Equity shareholders' funds 9,286,678 10,140,697 Net asset value per share 53.28p 55.33p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS FOR THE YEAR ENDED 31 JANUARY 2006 Year ended Year ended 31 January 2006 31 January 2005 (unaudited) £ £ Opening shareholders' funds as previously 10,089,417 9,820,275reportedPrior year adjustment 51,280 70,513Opening shareholders' funds (restated) 10,140,697 9,890,788Purchase of own shares (388,721) (275,023)Total recognised gains and losses before (446,969) 572,318dividendsDividends paid (18,329) (47,386)CLOSING SHAREHOLDERS' FUNDS 9,286,678 10,140,697 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JANUARY 2006 Year ended 31 January 2006 Year ended 31 January 2005 (unaudited) £ £ £ £OPERATING ACTIVITIESNet investment interest 303,108 280,236Dividend income 263,571 30,534Other income 2,446 -Investment management fees paid (95,671) (106,965)Other cash payments (220,538) (242,425)Non-cash movement 5,170 - NET CASH INFLOW/(OUTFLOW) FROM 258,086 (38,620)OPERATING ACTIVITIES INVESTING ACTIVITIESPurchase of investments (1,519,870) (383,605)Sale of investments 144,569 2,716,742NET CASH OUTFLOW FROM INVESTING (1,375,301) 2,333,137ACTIVITIES CASH (OUTFLOW)/INFLOW BEFORE FINANCING (1,117,215) 2,294,517AND LIQUID RESOURCE MANAGEMENT DIVIDENDSPayment of dividend (18,329) (47,386) FINANCINGPurchase of own shares (263,020) (275,023) MANAGEMENT OF LIQUID RESOURCESDecrease/(increase) in monies held in 2,145,168 (1,312,791)money market funds INCREASE IN CASH FOR THE YEAR 746,604 659,317 Notes 1. With effect from 1 February 2005, The Company has adopted the followingFinancial Reporting Standards (FRS): FRS 21 (Events after the Balance Sheet Date) - Dividends paid by the Company areaccounted for in the period in which the Company is liable to pay them.Previously, the Company accrued dividends in the period in which the netrevenue, to which those dividends related, was accounted for. FRS 25 (Financial Instruments: Disclosure and Presentation) and FRS 26(Financial Instruments: Measurement) - The Company has designated its investmentassets as being measured at "fair value through profit and loss". 2. Investments are stated at "fair value through profit and loss", inaccordance with the International Private Equity and Venture Capital Valuation(IPEVCV) guidelines published in 2005, which are similar to the BVCA (BritishVenture Capital Association) guidelines followed in previous years. The fair value of quoted investments is the bid value of those investments atthe close of business on 31 January 2006. Unquoted investments are stated at fair value by the Directors in accordancewith the following rules, which are consistent with the IPEVCV guidelines: (i) Investments which have been made in the last 12 months are valued atcost unless another methodology gives a better indication of fair value. (ii) Investments in companies at an early stage of their development are alsovalued at cost unless another methodology gives a better indication of fairvalue. (iii) Where investments have gone beyond the stage in their development in(ii) above, the shares may be valued, in the absence of overriding factors, byapplying a suitable price-earnings ratio to that company's historic, current orforecast earnings (the ratio used being based on a comparable listed company orsector but the resulting value being discounted to reflect lack ofmarketability). Where overriding factors apply, alternative methods of valuationwill be used These will include the application of a material arms lengthtransaction by an independent third party, cost, cost less provision forimpairment, discounted cashflow, or a net asset basis; (iv) Where a value is indicated by a material arms-length transaction by athird party in the shares of a company, this value will be used. (v) Where a company's underperformance against plan indicates a permanentdiminution in the value of the investment, provision against cost is made andcharged to the realised reserve Capital gains and losses on investments, whether realised or unrealised,are dealt with in the capital reserve - realised and unrealised respectively,and shown in the Statement of Total Return. Although the Company holds more than 20% of the equity of certaincompanies, it is considered that the investments are held as part of aninvestment portfolio. Accordingly, and as permitted by FRS 9 'Associate andJoint Ventures', their value to the Company lies in their marketable value aspart of that portfolio. It is not considered that any of our holdings representsinvestments in associated companies. 3. In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 8 February1999, the Directors have charged 75% of the investment management expenses tothe capital reserve. 4. The revenue return per Ordinary Share is based on the returnattributable to equity shareholder of £58,829 and is based on 17,668,953Ordinary Shares, being the weighted average number of Ordinary Shares in issueduring the period. 5. The financial information set out in these statements does notconstitute the Company's statutory accounts for the year ended 31 January 2006but is derived from those accounts. Statutory accounts will be delivered to theRegistrar of Companies after the Annual General Meeting. 6. The Company proposes to pay a final dividend of 0.25 pence pershare on 7 June 2006 to all shareholders on the register on 12 May 2005. 7. The Annual General Meeting of the Company will be held at12.00 noon on 24 May 2006 at One Jermyn Street, London SW1Y 4UH. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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