29th May 2012 07:12
THE INCOME & GROWTH VCT PLC
Half-Year Results for the six months ended 31 March 2012
Investment Objective
The objective of The Income & Growth VCT plc ("I&G VCT" or "the Company") is to provide investors with an attractive return, by maximising the stream of dividend distributions from the income and capital gains generated by a diverse and carefully selected portfolio of investments.
The Company invests in companies at various stages of development. In some instances this may include investments in new and secondary issues of companies which may already be quoted on the Alternative Investment Market ("AiM") or PLUS.
Financial HighlightsSix months to 31 March 2012
- Dividends totalling 24.0 pence per share have been paid to shareholders during
the period. - Increase of 23.8% in total return (share price basis) to Shareholders
- Increase of 6.9% in total return (net asset value (NAV) basis) to Shareholders
- Strong liquidity has been further enhanced by a successful fundraising, in
which the Company has raised an additional £4.9 million (including £1.7
million allotted during the period).
Performance Summary
The net assets of the `O' and 'S' Share Funds were merged to form one shareclass of Ordinary Shares on 29 March 2010. At that date, the net assets of themerged VCT were £35.7 million, which have increased to £45.7 million at 31March 2012. The merger was effected by converting the relevant `O' Shares into`S' Shares using a conversion ratio of 0.7578. All the issued and unissuedformer `S' Shares were subsequently redesignated as Ordinary Shares on a 1 for1 basis.To help shareholders in each former share class understand the trend inperformance of their investment, comparative data for each former share classis shown below:- Net NAV Cumulative Total return Share Total return assets per dividends (NAV basis) price 1 (share price Share paid per to (p) basis) to (p) Share (p) shareholders shareholders since launch (p) (£m) per Share (p)Ordinary Shares raised 2007/08 (`S' Shares until 29 March 2010)As at 31 March 2012 45.77 105.4 28.5 133.9 90.5 119.0As at 30 September 2011 49.2 120.8 4.5 125.3 91.6 96.1As at 30 September 2010 36.6 99.0 0.5 99.5 87.0 87.5As at 30 September 2009 11.0 93.2 0.0 93.2 94.5 94.5As at 30 September 2008 11.2 94.6 0.0 94.6 100.0 100.0 Former `O' Share Fund raised 2000/01As at 31 March 2012 - 79.9 43.7 123.6 - -As at 30 September 2011 - 91.5 25.5 117.0 - -As at 30 September 2010 - 75.0 22.5 97.5 - -As at 30 September 2009 24.9 71.5 20.5 92.0 54.8 75.3As at 30 September 2008 29.6 83.6 16.5 100.1 79.5 96.0 83.6Note:
The data for all periods shows the return on an initial subscription price of 100p at the date of inception of each Fund. Data as at 31 March 2012 is supported by the table below divided by £10,000.
1 Source: London Stock Exchange.
Return before and after tax relief
The table below shows the total returns (NAV basis) at 31 March 2012 for ashareholder in each original class that invested £10,000 at £1 a share at eachFund's inception. Ordinary Former `O' Shares Shares 2007/08 1 2000/2001 Original investment (10,000 shares at £1 each) (£) 10,000 10,000Number of shares held post merger 10,000
7,578
Rate of income tax relief % 30% 20% 2Cost net of income tax relief (£) 7,000 8,000NAV at 31 March 2012 (£) 10,542 7,987Dividends paid to Shareholders since subscription (£) 2,850 4,367Total return (NAV basis) to Shareholders since subscription (£) 13,392 12,354Profit before income tax relief 3 (£) 3,392 2,354Profit after income tax relief 4 (£)
6,392 4,354
1 Formerly,`S' Shares
2 Additional capital gains tax deferral relief of up to £4,000 available to qualifying shareholders
3 NAV total return minus initial investment cost (before applicable income tax relief)
4 NAV total return minus cost net of income tax relief
Chairman's Statement
I am pleased to present the Company's Half-Year Report for the six months ended 31 March 2012.
The persisting uncertainty in the UK and global economies has continued toimpact on the Company during this six month period under review and we are nowexperiencing once again some resurgence of the earlier volatility, primarilyas a result of continuing unresolved debt problems in several of the Eurozonecountries. However, there are some positive economic indicators coming out ofthe United States. Nevertheless, most commentators are predicting a long roadto recovery for the UK economy.Many of the companies in the portfolio continue to make good progress in spiteof the challenging conditions that have prevailed in recent months. In thissix month period under review, news from the portfolio was dominated by theannouncement that the Company had sold its shareholding in App-DNA GroupLimited realising net proceeds of £14,542,468. This resulted in a specialinterim dividend of 20p per Share being paid to all Shareholders in January ofthis year.
Net asset value and total return to shareholders
As at 31 March 2012 the Company's NAV per share was 105.4 pence (30 September2011: 120.8 pence or 96.8 pence after deducting dividends of 24.0 pence pershare paid to Shareholders during the period). The NAV total return per share(being the closing net asset value plus total dividends paid to date) hasrisen to 133.9 pence compared to 125.3 pence at the year-end representing anincrease of 6.9% over the period, explained below. This is an increase of41.7% over the NAV per share of 94.5 pence at inception of the Fund.For Shareholders who held the former `O' Share class, the NAV total return isnow 123.6 pence per share, representing an increase of 30.8% over the NAV pershare of 94.5 pence at inception. Further details are contained in the tablesshowing the performance of both share classes in the Financial Highlights setout above.The above increase in NAV total return of 6.9% for the period compares with anincrease of 13.9% in the FTSE SmallCap Index and a rise of 16.2% in the FTSEAiM All-Share Index, both on a total return basis, over the same period. Itshould be noted however that the recent growth in the AiM index has beenlargely driven by oil related stocks, which are outside the investment mandatefor most VCTs. The Board is satisfied that the performance of the VCT comparesfavourably with its peers.The NAV per share has benefited in this half-year from recognising the gainsarising from the sales of App-DNA and DiGiCo and the net increase in the valueof the remaining portfolio companies.Shareholders should note that a performance incentive fee could be payable forthe current financial year ending 30 September 2012 in respect of therealisation of App-DNA. This sum has been accrued in the Accounts at 31 March2012 and the NAV per share reported above therefore includes this provision ofapproximately 6 pence per Share.
Investment portfolio
As reported in the Annual Report, the substantial disposal of App-DNA and thepartial disposal of DiGiCo towards the end of 2011 have contributed to netcash proceeds of £16,629,038 from portfolio realisations, which also includeda number of smaller loan stock repayments.There were two new investments during the six month period to finance the MBOsof Equip (including the Rab and Lowe Alpine brands) and EMaC (a provider ofoutsourced service plans in the automotive sector) totalling some £3.3m whilsta further £6m was invested into a number of companies preparing to trade. Asmall follow-on investment of £6,710 was made into Data Continuity Group.There were two partial loan stock repayments made during the period byFullfield and Focus Pharma totalling some £275k and the VCT accepted £254,000from NexxtDrive in full repayment of this company's outstanding loan stock andarrears of interest.
Details of all these transactions are contained in the Investment Manager's Review below.
The MPEP invested portfolio generally had an encouraging period and the valueof that portfolio has increased by 8.9% on a like for like basis, mainly dueto the uplift from the partial sale of DiGiCo. PXP continues to give cause forconcern although it is hoped that a restructuring will benefit this business.In contrast, ATG Media, DiGiCo and Iglu.com continue to trade well with Iglu'svaluation seeing an improvement of £548k over the period. The difficulties atImage Source Group were the largest negative contributor to the value of thispart of the portfolio.The ex-Foresight portfolio had a positive period with the portfolio up by some£1,321k (excluding the realisation of App-DNA referred to above). AlaricSystems and Aquasium Technology both saw good uplifts in their respectivevaluations. Since the period-end the Company has sold its interest in Camwoodfor £942,947 giving a further boost to realised gains of some £762,190compared to cost.
Revenue Account
The net revenue return for the period has increased by £36,352 over the comparable period last year, to £268,220. Income has continued to benefit from a higher level of loan stock interest, up by £98,103 (including interest received from recent loan stock investments) and higher dividends, up by £38,627 compared to last year.
Against this, fund management fees have risen by £155,149, due to the highernet assets at the start of the year. Running costs have increased by £104,133including a rise in trail commission payments of £38,637 reflecting the levelof net assets at the start of the year. Higher directors' fees of £34,725which include a one-off payment of £10,000 made to each of the Directors inrespect of additional work carried out on specific projects for the Companyhave also contributed to this increase.
Dividends
The Company has paid total dividends of 24.0 pence per share since theyear-end. An interim capital dividend in respect of the year ended 30September 2011 of 20.0p pence per share was paid on 30 January 2012 and afinal dividend of 4 pence per share (comprising 2.0 pence from capital and 2.0pence from income) was approved by Shareholders at the Annual General Meetingheld on 9 February 2012 and paid on 28 March 2012. The Company's DividendInvestment Scheme applied to both of these dividends using an issue priceequal to the average of the middle market price for the Shares taken from theLondon Stock Exchange Daily Official List for the five business daysimmediately preceding the payment date. It is pleasing to note that £1.26million of dividends were re-invested through the Scheme.Cumulative dividends per share paid to date amount to 28.5 pence (pre-merger:0.5 pence; post-merger: 28.0 pence) for the current share class (former `S'Shares) and 43.67 pence (pre-merger: 22.45 pence; 21.22 pence post merger) forthe former `O' Shares.The Board remains firmly committed to providing an attractive dividend streamto Shareholders as and when circumstances allow. Accordingly, the Board willconsider the level of dividends at the year-end.
Dividend Investment Scheme
The Company's Dividend Investment Scheme ("the Scheme") is a convenient, easyand cost effective way to build up your shareholding in the Company. Insteadof receiving cash dividends you can elect to receive new shares in theCompany. By opting to receive your dividend in this manner, there are threebenefits to you:
- The dividend is tax free to you;
- Shareholders are allotted new ordinary shares which will, subject to your
particular circumstances, attract VCT tax reliefs applicable for the tax year in
which the shares are allotted. The tax relief currently available to investors in
new VCT shares is 30% for the 2012/13 tax year for investments up to £200,000 in
any one tax year; and
- The Scheme also has one unique advantage. Under its terms, a member is able to
re-invest at an advantageous price, being the average market price of the shares
for the five business days prior to the dividend being paid. This price is likely
to be at a discount of 10% to the underlying net asset value.
Elections under the Scheme may be received by the Scheme Administrator, CapitaRegistrars, at any time, but no later than 15 days prior to a dividend paymentdate should you wish your election to be used in respect of that particulardividend.
Linked Offer for Subscription
A Linked Offer for Subscription was launched on 20 January 2012 across threeMatrix VCTs, of which the Company was one, to raise £7 million each. To datethe Company has raised £4.9 million gross. The Offer will remain open until 30June 2012.
Cash available for investment
During this economic downturn, both the Board and the Manager have continuedto work to ensure that the Company's cash deposits continue to remain assecure as possible. We have for some time been spreading cash deposits betweena number of the leading global cash funds and depositing directly to carefullyselected individual banks, thereby limiting our exposure to any one particularbank. The Board and Manager both continue to believe strongly that at thistime the security and protection of the Company's capital is more importantthan striving for a small increase in deposit rates at the cost of much higherrisk.Cash and liquidity fund balances as at 31 March 2012 amounted to £16.0million. In addition, a further £6 million has been invested into a series ofacquisition vehicles pending further investment (and a further £1 millionafter the period-end). As at the date of this Report, cash and liquidity fundbalances had increased to £18.3 million as a result of the subscriptions underthe Joint Offer.Share buy-backs
During the six months ended 31 March 2012 the Company bought back 449,818 (2011: 904,909) Shares (representing 1.11% (2011: 2.45%) of the Shares in issue at the beginning of the year) at a total cost of £399,876 (2011: £805,142) (inclusive of expenses). These shares were subsequently cancelled by the Company.
The Board regularly reviews its buyback policy and, given the less volatile outlook for the valuation of the portfolio, has undertaken to reduce the discount to NAV to allow the Company's shares to trade at around 10% below the published NAV.
Shareholder communications
May I remind you that the Company continues to have its own website which is available at www.incomeandgrowthvct.co.uk.
The Investment Manager held a successful and well attended Shareholder workshop in January 2012. The Board understands that the Manager intends to hold this as an annual event.
Outlook
Equity markets around the world, most notably in Europe, have recentlysuffered sharp falls. The trigger for the latest sell-off was the news thatthe European Central Bank had suspended its lending to Greek banks at the sametime as many depositors were looking to withdraw their money. It has felt likea long two years since 25 March 2010 when Greece received its first bailoutpackage from the EU and the IMF. Much has happened since but little seems tohave been achieved. However, the coming months look crucial for Europe and forthe future of the single currency. The UK, like many member states of the EU,is in or close to recession and is facing strict austerity measures. Therecent political changes within Europe merely add to the uncertainty. As atthe date of publication of this Report, it is unclear whether Greece willleave the Eurozone, either voluntarily or by being pushed.As a result of this economic scenario, the Company has continued to retain asignificant cash position. Moreover, the recent fundraising will enable theCompany to be able to use its substantial cash balance to better advantage.However, amid all this political and economic uncertainty, the Manager hasseen a surge in enquiries for funding and, indeed, interest in investments inthe Company's portfolio. This places the Company in an excellent position totake advantage of what are expected to be increasingly attractive purchaseopportunities which should become available as and when the economy climbs outof recession. Therefore, your Board still expects to see attractive investmentopportunities with the potential for improved performance and portfolio valuesover the longer term.
Once again, I would like to take this opportunity to thank Shareholders for their continued support.
Colin HookChairman
Principal risks and uncertainties, Responsibility Statement and Going Concern and Cautionary Statement
Principal risks and uncertainties
In accordance with Disclosure and Transparency Rule (DTR) 4.2.7, the Boardconfirms that the principal risks and uncertainties facing the Company havenot materially changed since the publication of the Annual Report and Accountsfor the year ended 30 September 2011. The Board acknowledges that there isregulatory risk and continues to manage the Company's affairs in such a manneras to comply with section 274 Income Tax Act 2007. The principal risks facedby the Company are:- economic risk;- risk of loss of approval as a Venture Capital Trust;- investment and strategic risk;- regulatory risk;- financial and operating risk;- market risk;- asset liquidity risk;- market liquidity risk;- counterparty risk.
A detailed explanation of these risks can be found in the Directors' Report on pages 28 - 29 and in Note 20 on pages 67 - 74 of the Annual Report and Accounts of the Company for the year ended 30 September 2011 ("the Annual Report") copies of which are available on the Company's website:
www.incomeandgrowthvct.co.uk.
Responsibility Statement
In accordance with DTR 4.2.10 the Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements, which has been prepared in
accordance with the statement, "Half-Yearly Reports", issued by the Accounting
Standards Board, gives a true and fair view of the assets, liabilities,
financial position and profit of the Company, as required by DTR 4.2.4; and
(b) the interim management report, included within the Chairman's Statement,
Investment Portfolio Summary and the Investment Manager's Review includes a
fair review of the information required by DTR 4.2.7 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.
(c) There are no related party transactions that are required to be disclosed in
accordance with DTR 4.2.8.
Going Concern
The Board has assessed the Company's operation as a going concern. TheCompany's business activities, together with the factors likely to affect itsfuture development, performance and position are set out in the ManagementReport which is included within the Chairman's Statement, the InvestmentPortfolio Summary, the Investment Manager's Review and in the equivalentsections, including the Directors' Report, of the Annual Report. The Directorshave satisfied themselves that the Company continues to maintain a significantcash position and is currently raising additional funds. The majority ofcompanies in the portfolio continue to trade profitably and the portfoliotaken as a whole remains resilient and well diversified. The major cashoutflows of the Company (namely investments, buy-backs and dividends) arewithin the Company's control. The Board's assessment of liquidity risk anddetails of the Company's policies for managing its capital and financial risksare shown in Note 20 on pages 67 - 74 of the Annual Report. Accordingly, theDirectors continue to adopt the going concern basis of accounting in preparingthe annual financial statements.
Cautionary Statement
This report may contain forward looking statements with regards to thefinancial condition and results of the Company, which are made in the light ofcurrent economic and business circumstances. Nothing in this report should beconstrued as a profit forecast.On behalf of the BoardColin HookChairmanInvestment PolicyThe Company's policy is to invest primarily in a diverse portfolio of UKunquoted companies. Investments are structured as part loan and part equity inorder to receive regular income and to generate capital gains from trade salesand flotations of investee companies.
Investments are made selectively across a number of sectors, primarily in management buy-out transactions (MBOs) i.e. to support incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable.
The Company has a small legacy portfolio of investments in companies from itsperiod prior to 30 September 2008, when it was a multi-manager VCT. Thisincludes investments in early stage and technology companies and in companiesquoted on the AiM or PLUS.
Uninvested funds are held in cash and lower risk money market funds.
UK companies
The companies in which investments are made must have no more than £15million, in the case of funds raised under the original prospectus in 2000/01,and £7 million, in the case of funds raised after 6 April 2006, (including theformer `S' Share Fund raised in 2007/08) of gross assets at the time ofinvestment to be classed as a VCT qualifying holding.
VCT regulation
The investment policy is designed to ensure that the Company continues toqualify and is approved as a VCT by HM Revenue & Customs ("HMRC"). Amongstother conditions, the Company may not invest more than 15% of its investmentsin a single company and must have at least 70% by value of its investmentsthroughout the period in shares or securities comprised in VCT qualifyingholdings, of which a minimum overall of 30% by value must be in ordinaryshares which carry no preferential rights (save as may be permitted under VCTrules). In addition, although the Company can invest less than 30% of aninvestment in a specific company in ordinary shares it must have at least 10%by value of its total investments in each VCT qualifying company in ordinaryshares which carry no preferential rights (save as may be permitted under VCTrules).
The VCT regulations in respect of funds raised after 6 April 2011 will change, such that 70% of such funds must be invested in equity.
Asset mix
The Company initially holds its funds in a portfolio of readily realisable interest-bearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 70% of net funds raised in qualifying investments.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses acrossdifferent industry sectors. To reduce the risk of high exposure to equities,each qualifying investment is structured to maximise the amount which may beinvested in loan stock. Initial investments in VCT qualifying companies aregenerally made in amounts ranging from £200,000 to £1 million at cost. Noholding in any one company will represent more than 10% of the value of theCompany's investments at the time of investment. Ongoing monitoring of eachinvestment is carried out by the Investment Manager, generally through takinga seat on the board of each VCT qualifying company.
Co-investment
The Company aims to invest in larger, more mature unquoted companies throughinvesting alongside the three other VCTs advised by the Investment Managerwith a similar investment policy. This enables the Company to participate incombined investments advised on by the Investment Manager of up to £5 million.
Borrowing
The VCT has never borrowed and has no current plans to undertake any borrowing.
Management
The Board has overall responsibility for the Company's affairs including thedetermination of its investment policy. Investment and divestment proposalsare originated, negotiated and recommended by the Manager and are then subjectto formal approval by the Directors.
Impact of possible changes to the VCT tax rules on the VCT's investment policy
Changes to the VCT tax legislation, which may be introduced with effect from 6 April2012 were published in the Finance Bill 2012 on 29 March 2012. The proposals arebeing considered by Parliament and will be subject to EU state aid approval, but areexpected to be approved. The current proposals could impact on the Company'sInvestment Policy as follows: (1) The size of companies in which investment can be made is proposed to be increasedback to pre 6 April 2006 levels of £15 million immediately before and £16 millionimmediately after the investment. (2) The maximum number of permitted employees for an investee company at the time ofinvestment is proposed to be increased from 50 to 250 (this limit does not apply toVCT funds raised before 6 April 2007). (3) The £1 million limit on the amount of investment a VCT may make into a particularcompany within a tax year is to be abolished. A new rule will require that aninvestee company should not receive more than £5 million from State Aid sources,including VCTs, within any twelve month rolling period. (4) If the proposals are adopted in their current form it will no longer be possible forthe Manager to carry out certain types of MBO transactions using funds raised after5 April 2012. If this turns out to be the case, the Company still intends to useother types of MBO transactions and therefore does not anticipate that this changewill have a significant impact on the Company's investment policy.Investment Portfolio Summaryas at 31 March 2012 Additional Total cost at
Valuation at 30 investments Valuation at
31 March September in the 31 March 2012 2011 period 2012 (unaudited) (audited) (unaudited) £ £ £ £ IDOX plc 872,625 1,796,667 - 2,409,167Provider of document storagesystems Ingleby (1879) Limited (EMaC) 1,878,124 - 1,878,124 1,878,124Provider of service plans for themotor trade ATG Media Holdings Limited 888,993 1,675,368 - 1,790,091Publisher and online auctionplatform operator Fullfield Limited (Motorclean) 1,603,643 1,718,189 - 1,782,645Provider of vehicle cleaningand valet services Iglu.com Holidays Limited 152,326 888,657 - 1,437,057Online ski and cruise travelagent Blaze Signs Holdings Limited 1,338,500 1,354,238 - 1,422,207Manufacturer and installerof signs EOTH Limited (Rab and Lowe 1,383,313 - 1,383,313 1,383,313Alpine)Provider of branded outdoorequipment and clothing ASL Technology Holdings 1,769,790 1,674,630 - 1,318,602
Limited
Printer and photocopier services
RDL Corporation Limited 1,441,667 1,383,792 - 1,310,775Recruitment consultants for thepharmaceutical, businessintelligence and IT industries CB Imports Group Limited 1,000,000 1,025,448 - 1,089,194(Country Baskets)Importer and distributor ofartificial flowers, floral sundriesand home dec³r products Ackling Management Limited 1,000,000 - 1,000,000 1,000,000Company preparing to tradein the food manufacturing,distribution and brandmanagement sectors Almsworthy Trading Limited 1,000,000 - 1,000,000 1,000,000Company preparing to tradein the specialist construction,building support services,building products andrelated sectors Culbone Trading Limited 1,000,000 - 1,000,000 1,000,000Company preparing to tradein the outsourced servicessector Fosse Management Limited 1,000,000 - 1,000,000 1,000,000Company preparing to trade inthe brand management, consumerproducts and retail sectors Madacombe Trading Limited 1,000,000 - 1,000,000 1,000,000Company preparing to trade in the engineering sectorPeddars Management Limited 1,000,000 - 1,000,000 1,000,000Company preparing to trade inthe database management,data mapping and managementservices to the legal and buildingindustries Camwood Enterprises Limited 180,757 499,182 - 942,947Provider of software repackagingservices Aquasium Technology Limited 700,000 486,319 - 893,108Design, manufacture and marketingof bespoke electron beam weldingand vacuum furnace equipment Newincco 1124 Limited 876,497 - 876,497 876,497(DiGiCo Europe)Designer and manufacturer ofaudio mixing desks Image Source Group Limited 1,754,558 238,977 1,449,558 730,722Royalty free picture library Youngman Group Limited 1,000,052 682,203 - 700,992Manufacturer of ladders andaccess towers British International Holdings 590,909 646,718 - 679,283
Limited
Helicopter service operator
Duncary 8 Limited 634,923 535,699 - 641,605City-based provider of specialisttechnical training Westway Services Holdings 353,589 928,577 - 628,150(2010) LimitedInstallation, service andmaintenance of air conditioningsystems Brookerpaks Limited 55,000 576,042 - 608,314Importer and distributor ofgarlic and vacuum-packedvegetables Alaric Systems Limited 595,802 167,114 - 590,281Software development,implementation and supportin the credit/debit cardauthorisation and paymentsmarket Original Additions Topco 25,696 537,948 - 537,948
Limited
Manufacturer and distributor ofbeauty products Machineworks Software 20,471 407,310 - 431,349LimitedSoftware for CAM and machinetool vendors Focus Pharma Holdings 405,407 628,706 - 405,654LimitedLicensor and distributor ofgeneric pharmaceuticals Tikit Group plc 132,017 458,094 - 386,866Provider of consultancyservices and softwaresolutions for law firms Letraset Limited 650,010 234,385 - 300,381Manufacturer and distributorof graphic art products Faversham House 487,744 487,744 - 291,984Publisher, exhibition organiserand operator of websites forthe environmental, visualcommunications and buildingservices sectors Omega Diagnostics Group plc 279,996 291,663 - 233,330In-vitro diagnostics for foodintolerance, autoimmunediseases and infectiousdiseases The Plastic Surgeon Holdings 406,082 101,521 - 214,033LimitedSupplier of snagging andfinishing services to theproperty sector Racoon International Holdings 550,852 157,755 - 151,050
Limited
Supplier of hair extensions,hair care products and training Vectair Holdings Limited 53,400 139,125 - 150,837Designer and distributor ofwashroom products ANT plc 462,816 144,451 - 137,885Provider of embeddedbrowser/email softwarefor consumer electronicsand internet appliances Lightworks Software Limited 20,471 54,138 - 83,184
Software for CAD vendors
Oxonica plc 2,524,527 69,624 - 69,624International nanomaterialsgroup Corero plc 600,000 35,363 - 55,991Provider of e-businesstechnologies Monsal Holdings Limited 468,610 42,446 - 42,446Supplier of engineering servicesto water and waste sectors Sarantel Group plc 1,881,252 39,485 - 40,847Developer and manufacturer ofantennae for mobile phonesand other wireless devicesData Continuity Group Limited 90,034 - 6,710 38,749(formerly DCG Group Limited)Design, supply and integrationof data storage solutions NexxtDrive Limited 487,014 162,500 - -Developer and exploiter ofpatented transmission technologies PXP Holdings Limited 920,176 - - -(Pinewood Structures)Designer, manufacturer andsupplier of timber frames forbuildings Aigis Blast Protection Limited 272,120 - - -Specialist blast containmentmaterials company Legion Group plc 150,000 - - -(in administration)Provision of manned guarding,mobile patrols, and alarmresponse services Biomer Technology Limited 137,170 - - -Developer of biomaterials formedical devices Watchgate Limited 1,000 - - -Holding company Realised investments -App-DNA Group Limited - 11,633,974 -Provider of software -repackaging services DiGiCo Europe Limited - 1,258,330 - -Designer and manufacturerof audio mixing desks Backbarrow Limited - 1,000,000 - -Company that was preparing totrade in food manufacturing,distribution and brandmanagement sectors Bladon Castle Management - 1,000,000 - -LimitedCompany that was preparingto trade in brand management,consumer products and retailsectors Rusland Management Limited - 1,000,000 - -Company that was preparing totrade in brand management,consumer products and retailsectors Torvar Limited - 1,000,000 - -Company that was preparingto trade in database management,mapping, data mapping andmanagement services to thelegal and building industries. -------- -------- -------- --------Total 36,097,933 37,162,382 11,594,202 32,685,232 -------- -------- -------- --------
Investment Manager's Review
The period began with two new investments and two significant realisations which are described in more detail below. We are continuing to see good quality, realistically priced investment opportunities and are finding that management buy-out ("MBO") teams are increasingly turning to us as a source of deliverable, long-term finance as an alternative to bank funding. We are therefore pleased with and encouraged by the current level of deal flow, enabling us to pursue a number of deals which we expect to come to fruition over the coming months. We are also discussing a number of interesting realisation opportunities with both trade and private equity investors.
Investment activity
As referred to in the Annual Report, two new investments were completedshortly after the year-end in October and November 2011, financing the MBOs ofEquip Outdoor Technologies (EOTH Limited) and EMaC. In the first of these I&GVCT made an investment of £1,383,313 to provide mezzanine finance as part of a£7.8m transaction to support the acquisition of the international intellectualproperty and assets of Lowe Alpine Srl from administration in Italy by EquipOutdoor Technologies Limited, a company specialising in owning anddistributing brands focused on the outdoor sector including the Rab brand. Thesecond was a new investment of £1,878,124 to support the MBO of EMaC Limited,the UK's leading provider of outsourced service plans to franchised dealers inthe automotive sector.Four of the Company's investments in companies preparing to trade wererealised during the period as in our view insufficient progress was being madein negotiating suitable, attractive opportunities. Nevertheless the OperatingPartner programme as a whole has continued to generate successful investmentsfor the Company and accordingly seven new investments have been made (one ofwhich was completed after the period-end).Image Source was the only company in the portfolio to require significantfurther investment during the six months to 31 March 2012. A furtherinvestment in the form of a loan of £1,449,558 was made in December 2011 tohelp support the resolution of a legal dispute with a former employee andshareholder in that company. This company continues to suffer from challengingmarket conditions.The Company accepted a repayment of £254,000 from NexxtDrive in full repaymentof this company's outstanding loan stock (held at a cost of £325,000) andarrears of interest. Two partial loan stock pre-payments were received inJanuary 2012 from Focus Pharma (£111,493 plus a premium of £50,039 totalling£161,532) and Fullfield (£114,546).As also referred to in the last Annual Report, I&G VCT made two majorrealisations following the year-end, in November and December 2011. In thefirst of these, I&G VCT realised in full its investment in AppDNA by way of atrade sale to Citrix Systems Inc in November 2011. The total cashconsideration from the sale of £14,542,468 contributed to total proceeds tothe Company over the life of the investment of £15,054,113, which representeda 29 times return on the Company's original investment of £514,090. Thisfigure increases to 32 times if approximately £1.8 million of potentialdeferred consideration is also brought into the calculation. In December 2011,I&G VCT made a partial disposal of its investment in DiGiCo in a transactionfinanced by ISIS Equity Partners. I&G VCT received cash proceeds of £1,405,642representing a 3 times cash return on this investment to date. In addition,I&G VCT received a loan stock and equity (1.57%) investment in Newincco 1124(the company that has acquired DiGiCo) with a valuation of £876,497, bringingthe total return on this investment to 4.4 times the original investment cost.The Company sold an additional 49,985 shares in Tikit Group plc during theperiod realising a 2.7 times return on the original cost of these shares.Following the period-end in April 2012, I&G VCT sold its investment in CamwoodEnterprises to this company's management team for a cash consideration of£942,947 compared to a year-end valuation of £499,182. Total proceeds to I&GVCT over the life of the investment amounted to £1,458,302 representing a 2.8xreturn on I&G VCT's investment cost of £514,090.
Portfolio review
Overall, the portfolio as 31 March 2012 is valued at £32.7 million (September2011: £37.2) million against a cost of £36.1 million (September 2011: £29.6million). The MPEP portfolio accounts for 78% of the cost which now represents91.5% of the portfolio value.The portfolio's performance as a whole continues to be robust. DiGiCo,Iglu.com Holidays and ATG Media have once again produced the strongestperformances and this is reflected in their valuations. Many other portfoliocompanies have also continued to increase sales and profits despite thechallenges of the economic environment. Focus Pharma continues to trade welland expects to progress further with several additional product launchesplanned for 2012. PXP continues to be affected by the depressed state oftrading in the construction and house building sectors. The originalinvestment has been written down to nil although a small additional investmentinto this company has been approved which is expected to generate a positivereturn. Plastic Surgeon has made considerable inroads into new markets whichhave driven growth in profitability and are expected to continue to develop.Elsewhere the position is more mixed. Blaze Signs continues to consolidate itsrecovery and is starting to benefit from some contract gains whilstprofitability remains well below peak levels. Westway suffered from lowerrevenues last year but is now growing profits again and has strong customerrelationships. RDL had a disappointing first year with a net reduction incontract staff placements in its core pharmaceuticals and IT markets. Of thenew investments made during the twelve months prior to 31 March 2012,Fullfield (Motorclean Group) and Ingleby (EMaC) have both made promisingstarts whilst EOTH (Rab and Lowe Alpine) has grown revenues in a moreproblematic market for outdoor performance wear.
The performance of the remaining ex-Foresight investments has been encouraging, primarily reflecting the record levels of profitability achieved by Aquasium and Alaric.
OutlookWe believe that the portfolio overall is resilient and is creating value whichwill be realised in the medium to long term. The Company is very well placedto cover both any portfolio needs and funding for attractive new investmentopportunities that may arise and its cash position has been further enhancedby the current fundraising.Unaudited Income Statement
for the six months ended 31 March 2012
Six months ended 31 March 2012 Six months ended 31 March 2011 (unaudited) (unaudited) Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £Unrealised gainson investments 8 - 2,273,414 2,273,414 - 1,541,682 1,541,682 Net realised gainson investments 8 - 3,155,198 3,155,198 - 379,561 379,561Income 2 751,588 - 751,588 576,851 - 576,851 Investmentmanagementexpense 3 (148,768) (3,306,304) (3,455,072)
(110,981) (332,942) (443,923)
Other expenses (293,755) - (293,755) (189,622) - (189,622) Provision forlitigation costsno longerrequired/(charged) 4 - 1,337,456 1,337,456 - - - -------- -------- -------- -------- -------- --------Profit on ordinaryactivities beforetaxation 309,065 3,459,764 3,768,829
276,248 1,588,301 1,864,549
Tax on profit/(loss)on ordinaryactivities 5 (40,845) 40,845 - (44,380) 44,380 - -------- -------- -------- -------- -------- --------Profit/(loss) onordinary activitiesafter taxation 268,220 3,500,609 3,768,829
231,868 1,632,681 1,864,549
-------- -------- -------- -------- -------- -------- Basic and dilutedearnings perOrdinary Share 6 0.65p 8.48p 9.13p 0.62p 4.36p 4.98p Year ended 30 September 2011 (audited) Notes Revenue Capital Total £ £ £Unrealised gainson investments 8 - 10,870,219 10,870,219 Net realised gainson investments 8 - 343,231 343,231Income 2 1,654,663 - 1,654,663 Investmentmanagementexpense 3 (237,946) (713,837) (951,783)Other expenses (375,837) - (375,837) Provision forlitigation costsno longerrequired/(charged) 4 - (1,337,456) (1,337,456) -------- -------- --------Profit on ordinaryactivities beforetaxation 1,040,880 9,162,157 10,203,037 Tax on profit/(loss)on ordinaryactivities 5 (176,808) 176,808 - -------- -------- --------Profit/(loss) onordinary activitiesafter taxation 864,072 9,338,965 10,203,037 -------- -------- -------- Basic and dilutedearnings perOrdinary Share 6 2.21p 23.83p 26.04pThe 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. There were no other recognised gains or losses in theperiod. Other than revaluation movements arising on investments held at fairvalue through profit and loss, there were no differences between theprofit/(loss) as stated above and at historical cost.Unaudited Balance Sheetas at 31 March 2012 31 March 2012 31 March 2011 30 September 2011 (unaudited) (unaudited) (audited) Notes £ £ £Non-current assetsInvestments at fair value 8 32,685,232 28,756,485 37,162,382 Current assetsDebtors and prepayments 9 350,297 1,718,335 280,709Current asset investments 10 13,917,141 6,768,945 11,682,461Cash at bank 2,056,750 2,566,232 1,577,420 -------- -------- -------- 16,324,188 11,053,512 13,540,590 Creditors: amounts fallingdue within one year (3,307,167) (291,383) (212,717) -------- -------- --------Net current assets 13,017,021 10,762,129 13,327,873 Provision for liabilities andcharges 4 - - (1,337,456) -------- -------- --------Net assets 45,702,253 39,518,614 49,152,799 -------- -------- -------- Capital and reserves 11Called up share capital 433,544 394,792 406,920Share premium account 8,584,454 3,728,433 5,669,141Capital redemption reserve 191,807 179,860 187,309Revaluation reserve 2,882,155 2,563,342 12,350,858Special reserve 14,101,218 21,307,003 17,139,273Profit and loss account 19,509,075 11,345,184 13,399,298 -------- -------- --------Equity shareholders' funds 45,702,253 39,518,614
49,152,799
-------- --------
--------
Basic and diluted net assetvalue:Basic net asset value perOrdinary Share 12 105.42p 100.10p 120.79p
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 March 2012
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 (unaudited) (unaudited) (audited) Notes £ £ £ Opening shareholders' funds 49,152,799 36,604,696 36,604,696 Share capital bought backin the period 11 (399,876) (805,142) (1,475,019) Share capital subscribed inthe period 11 2,946,435 3,393,424 5,353,709 Profit for the period 3,768,830 1,864,549 10,203,037 Dividends paid in period 7 (9,765,934) (1,538,913) (1,533,624) -------- -------- --------
Closing shareholders' funds 45,702,253 39,518,614
49,152,799 -------- -------- --------
Unaudited Cash Flow Statement
for the six months ended 31 March 2012
Six months ended Six months ended Year ended 30 31 March 2012 31 March 2011 September 2011 (unaudited) (unaudited) (audited) £ £ £ Operating activitiesInvestment income received 614,011 424,952 1,571,454Investment management fees paid (599,772) (653,033) (1,160,893)Recoverable VAT and interest received thereon - 34,370 34,370Other income - 3,582 3,647Other cash payments (264,049) (136,645) (480,615) -------- -------- --------Net cash outflow from operating activities (249,810) (326,774) (32,037) Investing activitiesAcquisitions of investments (11,465,139) (1,559,531) (2,739,946)Disposals of investments 21,499,964 2,835,173 4,907,493 -------- -------- --------Net cash inflow from investing activities 10,034,825 1,275,642 2,167,547 DividendsEquity dividends paid (8,509,703) (1,538,914) (1,533,624) -------- -------- --------Cash inflow/(outflow) before financingand liquid resource management 1,275,312
(590,046) 601,886
Management of liquid resources(Increase)/decrease in currentinvestments (2,234,680) 1,939,628 (2,973,888) FinancingIssue of Ordinary shares 1,690,204 1,950,890 5,353,709Purchase of own shares (251,506) (840,776) (1,510,823) -------- -------- -------- 1,438,698 1,110,114 3,842,886 -------- -------- --------Increase in cash for the period 479,330 2,459,696 1,470,884 -------- -------- --------
Reconciliation of profit on ordinary activities before taxation to net cash outflow from operating activities
for the six months ended 31 March 2012
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 £ £ £Profit on ordinary activitiesbefore taxation 3,768,829 1,864,549 10,203,037 Net unrealised gains oninvestments (2,273,414) (1,541,682) (10,870,219) Net gains on realisations ofinvestments (3,155,198) (379,561) (343,231) Increase in debtors (143,661) (108,138) (118,633) Increase/(decrease) in creditors 1,593,634 (161,942) 1,097,009 -------- -------- --------Net cash outflow fromoperating activities (249,810) (326,774) (32,037) -------- -------- --------
The notes below form part of these half-year financial statements
Notes to the Unaudited Financial Statements
1. Principal accounting policies
The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report.
a) Basis of accounting
The unaudited results cover the six months to 31 March 2012 and have been
prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent
with the accounting policies set out in the statutory accounts for the year
ended 30 September 2011 and the 2009 Statement of Recommended Practice,
`Financial Statements of Investment Trust Companies and Venture Capital Trusts'
("the SORP").
The Half-Year Report has not been audited, nor has it been reviewed by the
auditor pursuant to the Auditing Practices Board (APB)'s guidance on Review of
Interim Financial Information.
b) Presentation of the Income Statement
In order to better reflect the activities of a VCT and in accordance with the
SORP, supplementary information which analyses the Income Statement between
items of a revenue and capital nature has been presented alongside the Income
Statement. The revenue column of profit attributable to equity shareholders is
the measure the Directors believe appropriate in assessing the Company's
compliance with certain requirements set out in Section 274 Income Tax Act
2007. c) Investments
All investments held by the Company are classified as "fair value through
profit and loss", in accordance with the International Private Equity and
Venture Capital Valuation ("IPEVCV") guidelines, as updated in September 2009.
This classification is followed as the Company's business is to invest in
financial assets with a view to profiting from their total return in the form
of capital growth and income.
For investments actively traded in organised financial markets, fair value isgenerally determined by reference to Stock Exchange market quoted bid pricesat the close of business on the balance sheet date. Purchases and sales ofquoted investments are recognised on the trade date where a contract of saleexists whose terms require delivery within a time frame determined by therelevant market. Purchases and sales of unlisted investments are recognisedwhen the contract for acquisition or sale becomes unconditional.
Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines:
All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered:
(i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used.(ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:- a) an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference
identified by
the Investment Manager compared to the sector including, inter alia, a lack of marketability). or:- b) where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Manager, will agree the values that represent the extent to which an investment has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.
(iii) Premiums on loan stock investments are accrued at fair value when the
Company receives the right to the premium and when considered
recoverable.
(vi) Where an earnings multiple or cost less impairment basis is not
appropriate and overriding factors apply, discounted cash flow or net
asset valuation bases may be applied.
2. Income Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 (Unaudited) (Unaudited) (Audited) £ £ £ Dividends 104,973 66,346 365,331Income from money-market 57,529 22,226 56,580fundsLoan stock interest 577,445 479,342 1,212,795Bank deposit interest 11,641 5,356 16,309Other Income - 3,581 3,648 ---------- ---------- ----------Total Income 751,588 576,851 1,654,663 ---------- ---------- ----------
3. Investment Management Expense
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 £ £ £ Investment management fee 595,072 443,923 951,783Performance incentive fee 2,860,000 - - ---------- ---------- ---------- 3,455,072 443,923 951,783 ---------- ---------- ----------The Directors have charged 75% of the fees payable under the investmentadviser's agreement, and 100% of the amounts payable under the IncentiveAgreement, to the capital reserve. The Directors believe it is appropriate tocharge the incentive fee wholly against the capital return, as any fee payabledepends on capital performance, as explained below.After the merger, the Investment Mangaer's Incentive Agreement for the former`O' Share Fund has been continued while the former 'S' Share Fund's IncentiveAgreement has been terminated. Under the terms of the pre-merger 'O' ShareFund Incentive Agreement, each of the ongoing Investment Manager, MatrixPrivate Equity Partners LLP ("MPEP") and a former Investment Manager,Foresight Group LLP ("Foresight") are entitled to a performance fee equal to20% of the excess of the value of any realisation of an investment made after30 June 2007, over the value of that investment in an Investment Manager'sportfolio at that date ("the Embedded Value"), which value is itself upliftedat the rate of 6% per annum, subject to a High-watermark test.However, two amendments were made to this agreement for MPEP, the ongoingInvestment Manager. Firstly, the High Watermark was increased by £811,430,being the 'S' Share Fund's shortfall in total net assets from net asset valueof £1 per 'S' Share, at 31 December 2009. Secondly, only 70% of any newinvestment made by MPEP after the merger will be added to the calculation ofthe Embedded Value and value of the Investment Manager's portfolio, for thepurposes of assessing any excess.
The charge for the year is an estimated amount payable in respect of the current year.
4. Provision for litigation costs no longer required
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 £ £ £Income/(charge) for period 1,337,456 -
(1,337,456)
As explained in the year-end accounts, at 30 September 2011 the Company had a prima facie obligation to meet the costs of an action brought by a former director and shareholder in Image Source Group Limited ("IMSG").
Under an agreement between the Company and IMSG dated 6 December 2012, IMSGmet the cost of the settlement including the Company's pro rata share of thelegal fees incurred in defending the action up to 30 September 2011 and allthe legal costs incurred since. To facilitate the settlement, the Company haslent approximately £1.45 million to IMSG on commercial terms and repayable in5 years. The plaintiff to the action will also be entitled to a smallpercentage share of the net proceeds over and above £5 million attributable tothe ordinary shareholders from any sale of IMSG up to 31 December 2016, afterall loans and any outstanding interest costs and prior charges have beenrepaid. This loan therefore forms part of the Company's investments in note 8and has a value of £730,722 as shown in the Investment Portfolio Summary setout above. Accordingly, the obligation has been discharged by the loan to IMSGin the period, to allow IMSG to settle the claim, so the provision at 30September 2011 is no longer required at 31 March 2012 and has been credited
tothe Income Statement.5. Taxation
There is no tax charge for the period as the Company has incurred tax losses, as its expenses exceed its income.
6. Basic and diluted earnings and return per share
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 £ £ £
i) Total earnings after taxation: 3,768,829 1,864,549
10,203,037
Basic earnings per share 9.13 p 4.98 p
26.04 p
ii) Net revenue from ordinary activities
after taxation 268,220 231,868 864,072 Basic revenue return per share 0.65 p 0.62 p 2.21 p
iii) Net unrealised capital gains 2,273,414 1,541,682
10,870,219 Net realised capital gains 3,155,198 379,561 343,231 Provision for litigation costs no longer required/(charged) 1,337,456 - (1,337,456) Capital expenses (net of taxation) (3,265,459) (288,562) (537,029) ---------- ---------- ---------- Total capital return 3,500,609 1,632,681 9,338,965 Basic capital return per share 8.48 p 4.36 p 23.83 p
iv) Weighted average number of
shares in issue in the period 41,301,622 37,412,969
39,182,112
Other than the performance related incentive, there are no instruments in place that will increase the number of shares in issue in future. If shares are issued, no dilution of earnings per share will occur, as the estimated incentive fee payable has been charged in these accounts.
7. Dividends on equity shares paid and payable
Six months ended Six months ended Year ended 31 March 2012 31 March 2011 30 September 2011 £ £ £ Ordinary shares (formerly `S' Shares)Interim paid of 20p capital (2011 :2p capital) pence per share 8,138,245 776,342
765,916
Final paid of 2p capital and 2prevenue (2011 : 2p capital)per share 1,627,689 762,571 767,708 -------- -------- -------- 9,765,934* 1,538,913* 1,533,624*
* Of this amount £1,256,231 (31 March 2011: £117,370; 30 September 2011: £117,370) of new shares were issued as part of the DRIS scheme.This explains the difference between the amount of £9,765,934 above, and the £8,509,703 shown in the Cash Flow Statement.
8. Summary of movement on investments during the period
Traded Unlisted Preference Qualifying Total on AiM Shares Shares loans £ £ £ £ £
Valuation at 1 October 2011 2,765,723 20,166,018 70,045 14,160,596
37,162,382 Purchases at cost - 3,110,049 3,119 8,481,034 11,594,202 Sales - proceeds (154,776) (16,775,867) (14,376) (4,598,797) (21,543,816) - realised gains 15,818 1,499,732 - 1,683,500 3,199,050
Unrealised gains/(losses) 637,321 1,540,012 (5,000) 101,081
2,273,414
-------- -------- -------- --------
--------
Valuation at 31 March 2012 3,264,086 9,539,944 53,788 19,827,414
32,685,232
-------- -------- -------- --------
--------
Book cost at 31 March 2012 4,228,706 12,195,249 75,509 19,598,469
36,097,933
Unrealised (losses)/gains at31 March 2012 (964,620) 2,764,625 (21,721) 228,945 2,007,229 Permanent impairment ofvaluation of investments - (5,419,930) - - (5,419,930) -------- -------- -------- -------- --------Valuation at 31 March 2012 3,264,086 9,539,944 53,788 19,827,414 32,685,232 Gains on investments -------- -------- -------- -------- -------- Realised gains based onhistorical cost 97,293 13,652,585 (1,446) 1,192,735 14,941,167 Less amounts recognised asunrealised gains/(losses) inprevious years 81,475 12,152,853 (1,446) (490,765) 11,742,117 -------- -------- -------- -------- --------Realised gains based oncarrying value at 30September 2011 15,818 1,499,732 - 1,683,500 3,199,050Net movement in unrealised
gains/(losses) in the period 637,321 1,540,012 (5,000) 101,081
2,273,414 -------- -------- -------- -------- --------Gains/(losses) oninvestmentsfor the period ended 31March2012 653,139 3,039,744 (5,000) 1,784,581 5,472,464 -------- -------- -------- -------- --------
Transaction costs of £43,852 were incurred in the period and are treated as realised gains on investments in the Income Statement. Deducting these from realised gains above gives £3,155,198 of gains as shown in the Income Statement.
Proceeds above of £21,543,816 differ from the Cash Flow Statement figure of£21,499,964 by £43,852 relating to transaction costs. Purchases at cost aboveof £11,594,202 differ from the Cash Flow Statement figure of £11,465,139 by£129,063. This difference relates to £129,063 of costs funded by the Companyin a previous period subsequently treated as a loan.9. Debtors 31 March 2012 31 March 2011 30 September 2011 £ £ £Accrued Income 329,170 260,350 191,592Prepayments 15,090 9,865 15,044Other debtors 6,037 5,594 74,073
Share allotment proceeds receivable - 1,442,526
- ------- ------- ------- 350,297 1,718,335 280,709 ------- ------- -------
10. Current asset investments
31 March 2012 31 March 2011 30 September 2011 £ £ £Royal Bank of ScotlandSterling Liquidity Fund 3,662,549 120,079 2,881,254 Blackrock InvestmentManagement (UK) InstitutionalSterling Fund 2,427,674 969,186 2,102,821 Fidelity Institutional CashFund 1,941,050 2,690,056 2,696,550 Prime Rate Capital ManagementLLP Sterling Liquidity Fund(UK based) 2,409,220 1,560,346 2,567,767 Scottish Widows InvestmentPartnership SterlingLiquidity Fund 3,476,648 1,429,278 1,434,069 ------- ------- -------Monies held pendinginvestment 13,917,141 6,768,945 11,682,461 ------- ------- -------
These comprise investments in four Dublin based OEIC money market funds and one UK based as shown in the table above. All of this sum is subject to same day access (31 March 2011: £6,768,945; 30 September 2011: £11,682,461).
11. Capital and reserves for the six months ended 31 March 2012
Called up Share Capital Profit and share premium redemption Revaluation Special loss capital account reserve reserve reserve account Total £ £ £ £ £ £ £ At 1 October2011 406,920 5,669,141 187,309 12,350,858 17,139,273
13,399,298 49,152,799 Shares boughtback (4,498) - 4,498 - (399,876) - (399,876)
Shares issued 16,773 1,673,431 - - - - 1,690,204 Dividendsre-investedinto new sharesissued 14,349 1,241,882 - - -
- 1,256,231 Dividends paid - - - - - (9,765,934) (9,765,934) Losstransferredbetweenreserves - - - - (2,638,179) 2,638,179 - Other expensesnet of taxation - - - - - (3,265,459) (3,265,459) Net unrealisedgains oninvestments - - - 2,273,414 - - 2,273,414 Net realisedgains oninvestments - - - - - 3,155,198 3,155,198 Writeback ofprovision forsettlement oflitigationcosts (note 4) - - - - - 1,337,456 1,337,456 Realisation ofpreviouslyunrealisedgains - - - (11,742,117) - 11,742,117 - Profit for theperiod - - - - - 268,220 268,220 ------- ------- ------- ------- ------- ------- -------At 31 March2012 433,544 8,584,454 191,807 2,882,155 14,101,218
19,509,075 45,702,253
------- ------- ------- ------- ------- ------- -------12. Net asset value per share 31 March 2012 31 March 2012 30 September 2011 £ £ £ Net assets £45,702,253 £39,518,614 £49,152,799 Number of shares in issue 43,354,355
39,479,195 40,692,048
Net asset value per share - basic and diluted 105.42p 100.10p
120.79pDiluted NAV per share assumes that the Investment Manager's incentive fee issatisfied by the issue of additional shares. If shares are issued, no dilutionof NAV per share will occur, as the estimated incentive fee payable is alreadyheld as a creditor in these accounts.
13. Post balance sheet events
On 4 and 5 April and 10 May, the Company allotted a further 2,965,714 ordinary shares under the Matrix VCTs' Linked Offer launched on 20 January 2012, raising net funds of £2,985,810.
14. The financial information for the six months ended 31 March 2012 and the six months ended 31 March 2011 has not been audited.
The financial information contained in this half-year report does notconstitute statutory accounts as defined in Section 434 of the Companies Act2006. The financial statements for the year ended 30 September 2011 have beenfiled with the Registrar of Companies. The auditor has reported on thesefinancial statements and that report was unqualified and did not contain astatement under either section 498(2) or 498(3) of the Companies Act 2006.
15. Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, One Vine Street, London, W1J OAH.
XLONRelated Shares:
Inc&gwth Vct