15th Sep 2005 09:13
Triven VCT PLC15 September 2005 TRIVEN VCT PLC 15 September 2005 Interim results for the six months ended 31 July 2005 Chairman's Statement I am pleased to present the Interim results for the six months ended 31 July 2005. Portfolio During the six-month period ended 31 July 2005 the FT 100 index rose 10.55%, theFT all share index rose by 9.91% but the AIM index fell by 2.06%. The AIM newissue market has been active although it went through a quiet phase at thebeginning of the period. On the investment side there is no shortage of equity and debt providers lookingfor good propositions, and competition to finance such situations is strong.Looking ahead, it is not clear whether the markets generally will continue torise and remain unaffected by the current global security position, the prospectof higher energy prices and higher taxation (in one guise or another), and thepossibility of a return to higher inflation and interest rates. The performance of the portfolio, although in line with the AIM index, has beenslightly disappointing. During this period, the value of the portfolio hasfallen marginally with the net asset value per share slipping to 53.47p, adecrease of 3%. As the Company edges closer to finally disposing of the last ofits remaining old LICA investments, the Board anticipates that a positive trendin the net asset value will be resumed. At present MPEP manage some 71% of the portfolio with Elderstreet and Novamanaging 23% and nearly 6% respectively. By market sector, the portfoliocontinues to be well spread with investments in consumer service companies at44%, technology companies at some 29%, business services just under 17% and withthe balance in media companies at some 10%. When the portfolio is considered bystage of development, 45% is invested in development capital, 37% in MBO / MBIsituations, with nearly 14% of the portfolio in quoted stocks whilst only 4% ofthe funds are invested in early stage opportunities. The above spread ofinvestments reflects the current investment strategy that TriVen has chosen toadopt. Within the Elderstreet managed component of the portfolio, a further investmentof £80,000 was made in Computer Software Group plc. Sapphire InternationalLimited was placed in Creditors Voluntary Liquidation on 20 April 2005. Within the MPEP portfolio, F-M Image Management Limited merged with anothercompany in a similar business, Stortext Group Limited, on 5 April 2005 to createStortext-FM Limited, a larger provider of document management services. Afurther investment of £50,000 was made shortly after the merger. A newinvestment of £183,303 was made in February 2005 into F H Ingredients Limited, aprocessor of fresh herbs to produce a frozen product used by food processingcompanies in the production of ready meals. An investment of £150,000 intoSectorGuard plc, an AIM listed security company providing manned guarding,mobile patrols and alarm response services was made after the period end. Within the Nova component, our investment in Watkins Books Limited was sold for£32,700 just before the period end. Only Caxton Books Limited now remains in theNova portfolio. Board of Directors You will recall from one of my earlier reports that I referred to HelenSinclair's intention to resign from the Board due to a possible perceivedconflict of interests resulting from her directorship of Matrix Private EquityPartners Limited. However, Helen resigned from MPEP with effect from 16 May2005. No potential conflict of interest, therefore, arises and, accordingly, theBoard invited Helen to remain as a Director. Revenue Account At 31 July 2005, revenue reserves available for distribution to shareholderswere £120,885. As in previous years, the Board does not propose to declare aninterim dividend but expects to be able to propose a single final dividend forthe year ended 31 January 2006. The total return per share as at 31 July 2005was (1.92p) pence (0.90 pence as at 31 July 2004). Share buy-backs During the six months ended 31 July 2005, the Company bought back 400,000Ordinary Shares (representing 2.2% of the shares in issue at the period end) ata total cost of £175,400 (net of expenses). These shares were subsequentlycancelled by the Company. Colin Hook, Chairman 15 September 2005 Investment Portfolio Summary at 31 July 2005 Total cost at Valuation at Valuation at % of % of Portfolio Equity by value 31-Jul-05 31-Jul-05 31-Jan-05 held (unaudited) (audited) £ £ £Elderstreet Private Equity Limited Computer Software Group plc 489,452 443,586 380,413 1.40% 8.59%Provider of integrated softwaresolutions European Telecommunications & 300,244 300,244 300,244 4.66% 5.82%Technology LimitedTelecom service integrator providingenterprise network solutions tocorporate customers Mediasurface plc 297,481 256,516 231,367 2.63% 4.97%Developer of content managementsoftware Sparesfinder Limited 250,000 75,539 75,539 2.19% 1.46%Supplier of industrial spare partson-line Sift Group Limited 125,000 62,500 62,500 0.63% 1.21%Developer of business to businessinternet communities Cashfac Limited 260,101 48,986 32,828 4.08% 0.95%Provider of virtual bankingapplication software Netstore plc 50,000 12,750 12,333 0.04% 0.25% Enterprise Application ServiceProvider Other investments in the portfolio 1 923,062 0 0 0.00% ------------------ ---------------- ---------------- --------------- 2,695,340 1,200,121 1,095,224 23.25% ------------------ ---------------- --------------- --------------Matrix Private Equity Partners Limited Higher Nature plc 500,000 1,357,003 1,218,814 11.25% 26.29%Mail order distributor of vitamins andnatural medicines Maven Management Limited 175,000 784,791 800,000 34.60% 15.20%Market research agency Inca Interiors Limited 350,000 496,992 200,000 9.75% 9.63%Designer, supplier and installer ofcontract kitchens to house developers Stortext F-M Limited 561,816 375,968 375,968 12.59% 7.28%Provider of document managementsoftware and services Tottel Publishing Limited 235,200 235,200 235,200 6.27% 4.56%Publisher of specialist legal andtaxation titles Letraset Limited 500,000 203,362 439,172 17.35% 3.94%Manufacturer and distributor ofgraphic art products FH Ingredients Limited 2 183,804 183,804 n/a 2.19% 3.56%Processor of frozen herbs for the foodmanufacturing industry BG Consulting Group Limited 200,000 25,000 25,000 4.33% 0.48%Outplacement consultancy and providerof specialist technical training Other investments in the portfolio 1 570,000 0 0 0.00% ---------------- --------------- -------------- --------------- 3,275,820 3,662,120 3,294,154 70.94% ---------------- -------------- -------------- -------------- Nova Capital Management Limited Caxton Publishing Group Limited 1,000,000 300,000 750,000 49.00% 5.81%Publishing house in the reprint andremainder sector Watkins Books Limited 3 0 0 120,000 37.40% 0.00% Supplier of books and information inthe alternative sciences, health,philosophy and related sectors Other investments in the portfolio 1 2,750,000 0 0 0.00% ----------------- --------------- --------------- --------------- 3,750,000 300,000 870,000 5.81% ----------------- ---------------- ---------------- --------------- ============ ========== ============ ==========TOTAL 9,721,160 5,162,241 5,259,378 100.00% ========== ========= ========= ========= 1 Other investments in the portfolio comprises those investments that have been valued at nil and from which theDirectors only expect to receive small recoveries, ie ComponentSource Holding Corporation, Sapphire InternationalLimited, Shopcreator plc and Travelstore.com plc in the Elderstreet portfolio; Food on the Go Limited in the MPEPportfolio; and HLM Limited, LeSac Limited and Zynergy Group Limited in the Nova Portfolio.2 New investment during the period3 Disposal during the period Investment Managers' Review TriVen has adopted a multi-manager approach. The portfolio comprises a number ofdiverse investments over a wide range of different business sectors, thusspreading risk by avoiding over-concentration in any one sector. The highlights within each section of the portfolio during the six months underreview are as set out below. Elderstreet Private Equity Limited The trading performance of the portfolio continues to improve in line with theUK software sector. Computer Software Group plc (CSG), Netstore plc, andMediasurface plc, three quoted companies where Elderstreet are activelyinvolved, continue to trade positively. CSG completed its latest three acquisitions between January and March 2005. Weinvested a further £80,000 in this period as CSG further consolidates themarket. Netstore reported strong trading and record profits for its interims to December2004. Netstore also made an acquisition in the period. Mediasurface announced its maiden interims as a quoted company in May 2005.Revenue and profit were better than the comparable period last year, andincluded the company's largest ever deal. Mediasurface also made its firstacquisition in the period. We reported previously that three portfolio companies had received indicativeoffers. One of these companies remains in early negotiations albeit with adifferent acquirer. Matrix Private Equity Partners Limited The portfolio has continued to perform well overall, and the investments madewithin the last year in particular have made encouraging progress. FH Ingredients, in which TriVen invested in February of this year, has beensuccessful in winning a number of new customers, whilst Tottel Publishing hasperformed well in what is traditionally the weaker half of its year. Higher Nature continues to grow very strongly and has produced record profitsfor the year ended 31 March 2005 and has maintained this performance oversucceeding months. Inca consolidated its improved performance and returned tohistorical levels of profitability despite clear signs of a weakening housingmarket. During the period F-M Image Management merged with Stortext, another business inthe digital scanning and document management sector, to create a £6 millionturnover group better placed to undertake larger contracts. TriVen has an equitystake of just over 5% in the new holding company, following a small incrementalinvestment of £25,000. BG Consulting Group and Letraset have both continued to suffer from flat orsluggish markets, and Maven, in common with many marketing services businesses,has also been unable to generate revenue growth over the past year although itenters its new financial year with a high level of contracted revenue. Nova Capital Management Limited Caxton Publishing Group achieved breakeven for the year ended 31 December 2004.However the remainder publishing sector continues to be in decline and effortsto redirect the business towards publishing new titles has not achieved theresults which were hoped for. Discussions are taking place with potentialpurchasers of the business but it is not yet clear as to whether a satisfactoryoffer will be received. Watkins Books has been disposed of to one of the other shareholders followingunsuccessful efforts to find a purchaser for the whole business. Sales havebeen in decline such that the company was not able to generate positive cashflow. Unaudited Statement of Total Return (incorporating the Revenue Account of the Company for the six months ended 31July 2005) Six months to 31 July 2005 Six months to 31 July 2004 (unaudited) (restated) Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised (losses)/ - (298,615) (298,615) - (183,612) (183,612)gains on investmentsheld at fair value Realised (losses) / - (74,600) (74,600) - 382,823 382,823gains on investmentsheld at fair value Costs of investment - - - - - -transactions Income 190,156 190,156 145,450 - 145,450 - Investment management (15,389) (46,166) (61,555) (12,784) (38,353) (51,137)fees Other expenses (115,010) (115,010) (124,273) - (124,273) - --------------- ------------- --------------- ------------- --------------- -------------- Return on ordinary 59,757 (419,381) (359,624) 8,393 160,858 169,251activities beforetaxation Taxation on ordinary (8,771) 8,771 - (1,783) 1,783 -activities --------------- ------------ -------------- ------------- --------------- ------------- Return for the period 50,986 (410,610) (359,624) 6,610 162,641 169,251 --------------- ------------- -------------- ------------- --------------- ------------- Return per share 0.27p (2.19)p (1.92)p 0.04p 0.86p 0.90p Year to 31 January 2005 (restated) Revenue Capital Total £ £ £ Unrealised (losses)/gain on - 250,609 250,609investments held at fair value Realised (losses)/gains on - 401,162 401,162investments held at fair value Costs of investment transactions - - - Income 276,673 - 276,673 Investment management fees (24,722) (74,166) (98,888) Other expenses (257,238) - (257,238) -------------- ---------------- ---------------- Return on ordinary activities (5,287) 577,605 572,318before taxation Taxation on ordinary activities (2,034) 2,034 - -------------- ---------------- --------------- Return for the period (7,321) 579,639 572,318 -------------- ----------- ----------------Return per share (0.04)p 3.09p 3.05p Unaudited Balance SheetAs at 31 July 2005 31 July 2005 31 July 2004 31 January 2005 (unaudited) (restated) (restated) £ £ £Non-current Assets Investments at fair value 5,162,241 4,826,199 5,292,329 Current Assets Debtors and prepayments 118,372 84,221 84,578 Investments at fair value 4,287,626 4,085,113 4,184,083 Cash at bank 164,309 998,085 703,125 ----------------- --------------- ---------------- 4,570,307 5,167,419 4,971,786 Creditors: amounts falling due (146,219) (106,177) (123,418)within one year ----------------- ----------------- ------------------Net current assets 4,424,088 5,061,242 4,848,368 ---------------- ---------------- ------------------Net assets 9,586,329 9,887,441 10,140,697 --------------- --------------- ------------------ Capital and reserves Called up share capital 896,434 934,234 916,434 Capital Redemption Reserve 58,325 20,525 38,325 Special reserve 16,749,001 17,075,227 16,925,416 Capital reserve - realised (3,679,393) (1,487,675) (1,504,898) Capital reserve - unrealised (4,558,923) (6,757,029) (6,322,808) Revenue reserves 120,885 102,159 88,228 ---------------- --------------- ------------------Equity shareholders' funds 9,586,329 9,887,441 10,140,697 ---------------- --------------- ------------------- Net asset value per share 53.47p 52.92p 55.33p Unaudited Statement of Cash Flowsfor the 6 months to 31 July 2005 Six months to 31 Six months to 31 Year to 31 January July 2005 July 2004 2005 (unaudited) (unaudited) (audited) £ £ £Operating activities Net revenue on activities before taxation 59,757 8,393 (5,287) Capitalised management fees (46,166) (38,353) (74,166)Other non cash receipts (4) - - (Increase)/decrease in debtors (1,094) 54,677 54,320 Decrease in creditors (21,044) (30,728) (13,487) ----------------- ------------------- -----------------Net cash outflow from operating activities (8,551) (6,011) (38,620) TaxationUK Corporation tax received/(paid) - - - Investing activitiesSale of investments 15,210 2,346,707 2,716,742 Purchase of investments (291,033) - (383,605) ------------------ ------------------ -------------------Acquisitions and disposals (275,823) 2,346,707 2,333,137 ----------------- ------------------ ------------------- Cash (outflow)/inflow before financing and liquid (284,374) 2,340,696 2,294,517resource management Financing Equity dividends paid (18,329) (47,386) (47,386) Purchase of own shares (132,570) (125,212) (275,023) ----------------- ------------------ ------------------ (150,899) (172,598) (322,409) Management of liquid resourcesIncrease in monies held in money market funds (103,543) (1,213,821) (1,312,791) ----------------- ------------------ -----------------(Decrease)/increase in cash (538,816) 954,277 659,317 ----------------- ------------------ ----------------- Reconciliation of net cash flow to movement in netdebt (Decrease)/increase in cash for the period (538,816) 954,277 659,317 Net funds at the start of the period 703,125 43,808 43,808 ------------------ ------------------ ------------------Net funds at the end of the period 164,309 998,085 703,125 ------------------- ------------------ ------------------ NOTES 1. With effect from 1 February 2005, The Company has adopted the following Financial Reporting Standards (FRS): FRS 21 (Events after the Balance Sheet Date) - Dividends paid by the Company are accounted for in the period in which the Company is liable to pay them. Previously, the Company accrued dividends in the period in which the net revenue, 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 investment assets as being measured at "fair value through profit and loss". The fair value of quoted investments is deemed to be the bid value of these investments at the close of business on the relevant date. Non current asset investments which are not quoted are stated at Directors' best estimate of fair value, in accordance with British Venture Capital Association ("BVCA") guidelines published in July 2003. 2. In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 8th February 1999, the Directors have charged 75% of the investment management expenses to the capital reserve. This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the company. 3. Earnings for the six months to 31 July 2005 should not be taken as a guide to the results for the full year. Basic return per Ordinary Share is based on the revenue return for the period of £50,986 and is based on a weighted average of 18,757,892 Ordinary Shares (31 July 2004: 18,904,789 and 31 January 2005: 18, 730,155) in issue. 4. The financial information for the six months ended 31 July 2005 and the six months ended 31 July 2004 has not been audited. The information for the year ended 31 January 2005 does not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The financial statements for the year ended 31 January 2005 (before the restatements in this announcement) have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985. 5. A copy of these interim results will be sent to shareholders and further copies can be obtained free of charge from the Company's registered office: 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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