18th May 2007 15:26
Northern 3 VCT PLC18 May 2007 18 MAY 2007 NORTHERN 3 VCT PLC UNAUDITED INTERIM RESULTSFOR THE SIX MONTHS ENDED 31 MARCH 2007 Northern 3 VCT PLC is a Venture Capital Trust (VCT) managed by NVM PrivateEquity (formerly Northern Venture Managers). It invests mainly in unquotedventure capital holdings and aims to provide high long-term tax-free returns toshareholders through a combination of dividend yield and capital growth. Financial highlights:(comparative figures as at 31 March 2006 in italics) 2007 2006 • Net assets £29.5m £30.3m • Net asset value per share 97.0p 97.2p • Return per share Revenue 1.4p 1.4p Capital 2.2p 1.7p Total 3.6p 3.1p • Interim dividend per share in respect of the period Revenue 1.4p 1.0p Capital 0.6p 1.0p Total 2.0p 2.0p • Cumulative returns to shareholders since launch Net asset value per share 97.0p 97.2p Dividends paid per share* 12.9p 8.9p Net asset value plus dividends paid per share 109.9p 106.1p • Share price at end of period 85.0p 85.0p *Excluding interim dividend For further information, please contact:NVM Private Equity Limited 0191 244 6000Alastair Conn, Managing DirectorWebsite: www.nvm.co.uk Lansons Communications 020 7294 3685Karen Mignon NORTHERN 3 VCT PLC CHAIRMAN'S STATEMENT The Chairman of Northern 3 VCT PLC, John Hustler, included the following pointsin his statement to shareholders: I am pleased to report that the company has continued to make steady progressduring the half year to 31 March 2007. Results The unaudited net asset value per share at 31 March 2007 was 97.0p, an increaseof 1.9% over the audited figure of 95.2p at 30 September 2006. The return pershare for the half year was 3.6p, compared with 3.1p in the corresponding periodlast year. The revenue element of the return per share for the period was unchanged at1.4p. The directors have declared a first interim dividend of 2.0p per share(2006 2.0p), comprising 1.4p revenue and 0.6p capital distribution, which willbe paid on 20 July 2007 to shareholders on the register on 22 June 2007. Thiswill bring the cumulative total of dividends paid by the company to 14.9p pershare. Investments During the half year five new investments totalling £2.4 million were completed: • Brulines (Holdings) (£183,000) - AIM-quoted provider of revenue protection systems for the licensed trade, Stockton-on-Tees • Product Support (Holdings) (£1,000,000) - logistics services contractor to the defence industry, Kingswinford • Gentronix (£119,000) - drug development support services, Manchester • Promanex Group Holdings (£1,000,000) - engineering and maintenance services contractor, Nuneaton • Vastox (£114,000) - AIM-quoted provider of drug discovery services, Abingdon (acquired in a share-for-share exchange for the former holding in Daniolabs) Since 31 March we have completed an investment of £198,000 in Maelor, anAIM-quoted specialist pharmaceutical and medical devices company, and ourmanagers have approved four further venture capital investments (three unquoted,one quoted on AIM) totalling £2.9 million which we hope to complete during thesix months ending 30 September 2007. This is a satisfactory level of activitygiven the current strong competition for new deals in the market in which ourmanagers operate. Daniolabs was the only disposal from the venture capital portfolio during theperiod, but since 31 March bids for our AIM-quoted holdings in Computer SoftwareGroup and PM Group have been declared unconditional, generating cash proceeds of£510,000 and realised gains of £267,000. Sale negotiations are currently inprogress in relation to several other investments. The board reviews the portfolio regularly with the directors of NVM and it isencouraging that most of our companies are currently making good progress.However Nightingales Holdings, the mail order and internet retailer of women'sclothing in which we invested just over a year ago, has found trading conditionsdifficult in recent months and consequently a 50% provision has been madeagainst the cost of the investment to reflect its under-performance. Ourmanagers are working intensively with the company during this challengingperiod. Shareholder issues During the six months to 31 March 2007 the company bought back for cancellation438,018 shares, representing approximately 1.4% of the issued capital. This isin line with the level of buy-backs in the preceding financial year. In the medium term your directors would like to see an active secondary marketin the company's shares develop, and we recognise that the best way ofencouraging this is to achieve good performance and in particular to maintain astrong dividend yield. At the current quoted offer price of 90p and on the basisof last year's dividend of 4.0p, Northern 3 VCT shares are currently yielding4.4% free of tax. Your board and managers will continue to work withrepresentative bodies such as the Association of Investment Companies to presentthe investment merits of VCTs to the private investor market. The company's dividend investment scheme has continued to operate, enablingshareholders to re-invest their dividend in new ordinary shares with the benefitof VCT tax reliefs at the current rates. Shareholders interested in joining thescheme should contact the company secretary for further information. The annual general meeting in April 2007 was held in London and the directorswere pleased to meet a number of shareholders on that occasion. The next annualgeneral meeting will be held in Edinburgh in July 2008. VCT qualifying status Your board continues to monitor progress towards HM Revenue & Customs'qualifying targets with the help of PricewaterhouseCoopers LLP, who are retainedto advise on this and other tax matters. We are satisfied that the company hascontinued to fulfil the conditions for maintaining VCT status. As I reportedlast year, in order to maximise the time available for satisfying the VCTqualifying tests in respect of the funds raised in 2005, the directors havedecided to extend the company's current financial year by changing theaccounting year end to 31 March. The next audited accounts will be drawn up forthe 18 months ending 31 March 2008 and in the meantime unaudited interimaccounts will be published for the 12 months ending 30 September 2007. We intendto pay a second interim dividend in January 2008. Prospects The flow of new investment opportunities is currently good and we hope toachieve some profitable exits from existing portfolio companies in theforeseeable future. The recent Budget changes may have the effect of reducing investor demand fornew VCT issues in future, as well as restricting the investment flexibility ofnew funds. We believe that this will increase the relative attraction of thoseestablished VCTs which can demonstrate a maturing portfolio and the prospect ofa tax-free dividend yield. Our investments will continue to be managed activelywith a view to capital growth and dividend generation for the benefit ofshareholders. John Hustler Chairman The unaudited interim financial statements for the six months ended 31 March2007 are set out below. INCOME STATEMENT(unaudited) for the six months ended 31 March 2007 Six months ended 31 March 2007 Six months ended 31 March 2006 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000Loss ondisposal ofinvestments - (13) (13) - (185) (185)Unrealisedadjustmentsto fairvalueof - 876 876 - 926 926investments ---------- ---------- ---------- ---------- ---------- ---------- - 863 863 - 741 741Income 745 - 745 770 - 770Investmentmanagement (86) (258) (344) (80) (316) (396)feeOther (96) - (96) (96) - (96)expenses ---------- ---------- ---------- ---------- ---------- ----------Return onordinaryactivitiesbefore tax 563 605 1,168 594 425 1,019Tax onreturnon ordinary (124) 80 (44) (158) 100 (58)activities ---------- ---------- ---------- ---------- ---------- ----------Return onordinaryactivitiesafter tax 439 685 1,124 436 525 961 ---------- ---------- ---------- ---------- ---------- ----------Return pershare 1.4p 2.2p 3.6p 1.4p 1.7p 3.1p Year ended 30 September 2006 Revenue Capital Total £000 £000 £000Loss on disposal ofinvestments - (106) (106)Unrealised adjustments tofair valueof investments - 605 605 ---------- ---------- ---------- - 499 499Income 1,372 - 1,372Investment management fee (167) (502) (669)Other expenses (180) - (180) ---------- ---------- ----------Return on ordinary activitiesbefore tax 1,025 (3) 1,022Tax on return on ordinaryactivities (265) 160 (105) ---------- ---------- ----------Return on ordinary activitiesafter tax 760 157 917 ---------- ---------- ----------Return per share 2.4p 0.5p 2.9p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS(unaudited) for the six months ended 31 March 2007 Six months Six months Year ended ended ended 31 March 2007 31 March 2006 30 September 2006 £000 £000 £000Equity shareholders' funds at1 October 2006 29,281 30,136 30,136Return on ordinaryactivities after tax 1,124 961 917Dividends recognised inthe period (614) (535) (1,153)Net proceeds of shareissues 72 56 126Shares purchased forcancellation (371) (324) (745) ---------- ---------- ----------Equity shareholders' funds at31 March 2007 29,492 30,294 29,281 ---------- ---------- ---------- BALANCE SHEET(unaudited) as at 31 March 2007 31 March 2007 31 March 2006 30 September 2006 £000 £000 £000Venture capital investmentsUnquoted 13,000 8,665 10,012Quoted 2,405 2,228 1,997 ---------- ---------- ----------Total venture capitalinvestments 15,405 10,893 12,009Listed fixed-interestinvestments 11,894 15,466 13,229 ---------- ---------- ----------Total fixed assetinvestments 27,299 26,359 25,238 ---------- ---------- ----------Current assets:Debtors 430 480 600Cash at bank 1,852 3,657 3,606 ---------- ---------- ---------- 2,282 4,137 4,206Creditors (amounts falling duewithin one year) (89) (202) (163) ---------- ---------- ----------Net current assets 2,193 3,935 4,043 ---------- ---------- ---------- Net assets 29,492 30,294 29,281 ---------- ---------- ---------- Capital and reserves:Called-up equity sharecapital 1,520 1,558 1,538Share premium 22,827 22,693 22,759Capital redemptionreserve 99 53 77Capital reserve -realised 2,643 4,291 3,703Capital reserve -unrealised 1,696 1,139 629Revenue reserve 707 560 575 ---------- ---------- ----------Total equityshareholders' funds 29,492 30,294 29,281 ---------- ---------- ----------Net asset value pershare 97.0p 97.2p 95.2p CASH FLOW STATEMENT(unaudited) for the six months ended 31 March 2007 Six months Six months Year ended ended ended 31 March 2007 31 March 2006 30 September 2006 £000 £000 £000 £000 £000 £000Net cashinflow fromoperating 462 61 525activitiesTaxation:Corporation (105) (81) (81)tax paidFinancialinvestment:Purchase of (6,205) (4,399) (9,740)investmentsSale/repaymentof 5,007 2,823 9,043investments ---------- ---------- ----------Net cashoutflow fromfinancial (1,198) (1,576) (697)investmentEquity (614) (535) (1,153)dividends paid ---------- ---------- ----------Net cashoutflow before (1,455) (2,131) (1,406)financingFinancing:Issue of 73 70 145ordinarysharesShare issue (1) (14) (19)expensesPurchase ofordinarysharesfor (371) (324) (745)cancellation ---------- ---------- ----------Net cashoutflow from (299) (268) (619)financing ---------- ---------- ----------Decrease in (1,754) (2,399) (2,025)cash at bank ---------- ---------- ---------- Reconciliationof returnbefore taxto net cashflow fromoperatingactivities Return onordinaryactivitiesbefore tax 1,168 594 1,022Loss ondisposal of 13 185 106investmentsUnrealisedadjustments tofair valueof investments (876) (926) (605)Decrease in 170 137 17debtors(Decrease)/increase in (13) 71 (15)creditors ---------- ---------- ----------Net cashinflow fromoperating 462 61 525activities ---------- ---------- ---------- Analysis ofmovement innet funds 1 October 2006 Cash flows 31 March 2007 £000 £000 £000Cash at bank 3,606 (1,754) 1,852 ---------- ---------- ---------- INVESTMENT PORTFOLIO SUMMARY as at 31 March 2007 Cost Valuation % of net assets £000 £000 by valuationFifteen largest venture capitalinvestments:John Laing Partnership 305 1,173 4.0Product Support (Holdings) 1,000 1,000 3.4Promanex Group Holdings 1,000 1,000 3.4Pivotal Laboratories Holdings 679 874 3.0Envirotec 455 841 2.9Longhirst Group 480 736 2.5IG Doors 500 647 2.2Touchstone Asset Management 593 593 2.0Crantock Bakery 442 576 1.9KCS Global Holdings 338 496 1.7Nightingales Holdings 992 496 1.7Ithaca Holdings 307 489 1.6Abermed Group 375 450 1.5Direct Valeting 427 427 1.4Arleigh International 210 420 1.4 ---------- ---------- ---------- 8,103 10,218 34.6Other venture capital investments 5,463 5,187 17.6 ---------- ---------- ----------Total venture capital investments 13,566 15,405 52.2Listed fixed-interest investments 12,037 11,894 40.3 ---------- ---------- ----------Total fixed asset investments 25,603 27,299 92.5 ----------Net current assets 2,193 7.5 ---------- ----------Net assets 29,492 100.0 ---------- ---------- The above summary of results for the six months ended 31 March 2007 does notconstitute statutory financial statements within the meaning of Section 240 ofthe Companies Act 1985 and has not been delivered to the Registrar of Companies.The figures for the year ended 30 September 2006 have been extracted from thefinancial statements for that year, which have been delivered to the Registrarof Companies; the independent auditors' report on those financial statementsunder Section 235 of the Companies Act 1985 was unqualified. The first interim dividend of 2.0p per share for the 18 month period ending 31March 2008 will be paid on 20 July 2007 to shareholders on the register at theclose of business on 22 June 2007. A copy of the interim report for the six months ended 31 March 2007 is expectedto be posted to shareholders on 1 June 2007 and will be available to the publicat the registered office of the company at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Northern 3 Vct