TIDMAMD
The AIM Distribution Trust plc
Half-Yearly Report for the six months ended 30 September 2009
PERFORMANCE SUMMARY
30 31 30
Sept Mar Sept
2009 2009 2008
Pence Pence Pence
Net asset value per share 39.5 33.6 42.5
Cumulative distributions per share 55.8 55.8 55.8
Total return per share 95.3 89.4 98.3
CHAIRMAN'S STATEMENT
Introduction
The six-months ended 30 September 2009 has seen fairly steady general
increases in share prices, including AIM-quoted stocks. This has
helped your Company to achieve a reasonable increase in its Net Asset
Value per share ("NAV") over the period. However, the increases seen
recently are small compared to the level of falls which accumulated
in the AIM market since autumn 2007.
Net Asset Value
As at 30 September 2009, the Company's NAV stood at 39.5p, an
increase of 5.9p, equivalent to 17.6%, since 31 March 2009.
VCT Investment Portfolio
There was a limited amount of investment activity during the period.
The Company invested GBP92,000 in two new investments and one follow-on
investment of GBP20,000 was also made. GBP50,000 was invested into
Financial News Publishing Limited, a financial publisher which has
arisen from Sanastro Limited, a previous investment which eventually
failed. An investment of GBP42,000 was also made in Tristel plc, a
manufacturer of infection control products. The follow-on investment
was made in Hoole Hall Spa and Leisure Limited.
There were a small number of realisations in the period, generating
proceeds of GBP151,000 and realised losses of GBP14,000.
The existing quoted portfolio showed a increase in value over the six
months of GBP531,000. The most notable risers were Connaught plc,
Printing.com plc and Spice plc.
As usual, the Board also reviewed the valuation of the unquoted
investments the period end and made a small number of changes to
previous carrying values. The net movement on the unquoted
valuations was an increase of GBP161,000, such that total unrealised
gains across the VCT portfolio for the six-months were GBP692,000.
Summary details of the portfolio together with the additions and
disposals in the period are shown below.
Other investments
The Company holds a small portfolio of non-VCT-qualifying investments
comprising two hedge funds and a holding of permanent interest
bearing shares (PIBS). At the period end, the portfolio was valued
at GBP726,000 with unrealised gains over the period of GBP123,000.
Results
The return on ordinary activities after taxation for the period was
GBP774,000 comprising a revenue loss of GBP1,000 and a capital return of
GBP775,000.
Dividend
Shareholders will be aware of the fact that the Company had intended
to pay a dividend of 2p per share on 27 March 2009. However the
Board had to cancel the dividend as the fall in the Company's NAV
would have resulted in the Company having insufficient distributable
reserves.
I am pleased to report that the increase in NAV experienced over the
last 6 months has, to some extent, corrected this position.
Accordingly, the Company is declaring an interim dividend of 1.75p
per share to be paid on 23 December 2009 to Shareholders on the
register at 11 December 2009.
Shares buybacks
The Company has currently suspended its share buyback policy while it
reviews its future plans.
Future
The Board has spent some considerable time reviewing options for the
future of the Company and believes that it has identified a path
which best satisfies the needs of a wide range of Shareholders.
The Company has today announced it has, in principle, agreed terms
for a merger with two other VCTs (Pennine AIM VCT 6 plc and Pennine
AIM VCT 5 plc). If the merger proceeds it will be effected by way of
a scheme of reconstruction (which would be outside the City Code on
Takeovers and Mergers) and will be subject to Shareholder approval.
Full details will be sent to Shareholders as soon as any formal
proposals are available.
Risk and Uncertainties
Under the Disclosure and Transparency Directive, the Board is
required, in the Company's half year results, to report on principal
risks and uncertainties facing the Company over the remainder of the
financial year.
The Board has concluded that the key risks are:
(i) investment risk associated with investing in small businesses;
(ii) investment risk arising from market volatility; and
(iii) failure to maintain approval as a VCT.
In the case of (i) and (ii) the Board is satisfied with the Company's
approach to these risks. As an AIM-focused VCT, the Company, by
definition, has significant exposure to the relatively small
businesses quoted on AIM. However, by seeking to hold a
well-diversified portfolio of businesses with strong management
teams, the impact of falling markets and challenging economic
conditions should be mitigated as much as possible given the
Company's status as a VCT and its investment policy.
The Company's compliance with the VCT regulations is continually
monitored by the Administrator, who regularly reports to the Board on
the current position. The Company also retains
PricewaterhouseCoopers to provide regular reviews and advice in this
area. The Board considers that this approach reduces the risk of a
breach of the VCT regulations to a minimal level.
Outlook
The improved market conditions have been a welcome relief, however
the Company's NAV, much like the FTSE AIM All-Share Index, is still
well below its levels of two years ago. The Company remains at an
uneconomic size for a VCT and accordingly the Board believes that the
merger discussions mentioned above may lead to a satisfactory
solution.
Since the period end, one of the Company's investments, Aero
Inventory plc, announced that it had identified some stock valuation
issues whilst preparing to move from AIM to the Official List. Very
shortly afterwards, the Company was forced to appoint administrators
after losing the support of its bankers. This is a big
disappointment and illustrates how vulnerable even relatively strong
companies can be in the current climate. A full provision against
this investment will be equivalent to a fall in NAV of approximately
1p per share.
Although the general economic outlook is brighter than it has been
for some time, there are still concerns that there may be further
difficulties ahead. A merger, such as the one being discussed, would
not necessarily provide Shareholders with protection from further
falls in stock prices should they arise, however, as part of a larger
entity, the Board believes the Company would be better positioned to
endure difficult conditions. For this reason among several others,
the Board hopes to be able to put formal proposals to Shareholders in
the very near future.
Sir Aubrey Brocklebank
Chairman
INCOME STATEMENT
for the six months ended 30 September 2009
Six months ended
30 September 2009
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Income 87 - 87
Gains/(losses) on investments - 801 801
87 801 888
Investment management fees (8) (26) (34)
Other expenses (80) - (80)
Return/(loss) on ordinary activities before (1) 775 774
taxation
Taxation - - -
Return/(loss) attributable to equity (1) 775 774
shareholders
Return per share - 5.9p 5.9p
Six months ended Year ended
30 September 2008 31 March 2009
Revenue Capital Total Total
GBP'000 GBP'000 GBP'000 GBP'000
Income 85 - 85 146
Gains/(losses) on - (996) (996) (2,121)
investments
85 (996) (911) (1,975)
Investment management fees (13) (39) (52) (90)
Other expenses (80) - (80) (155)
Return/(loss) on ordinary (8) (1,035) (1,043) (2,220)
activities before taxation
Taxation - - - -
Return/(loss) attributable (8) (1,035) (1,043) (2,220)
to equity shareholders
Return per share (0.1p) (7.7p) (7.8p) (16.7p)
All Revenue and Capital items in the above statement derive from
continuing operations. The total column within the Income Statement
represents the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been
prepared as all gains and losses are recognised in the Income
Statement as noted above.
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 September 2009
30 Sept 2009 30 Sept 2008 31 Mar 2009
GBP\'000 GBP'000 GBP'000
Fixed assets
Investments 4,369 5,264 3,978
Current assets
Debtors 53 196 53
Cash at bank and in hand 812 183 435
865 379 488
Creditors: amounts falling due (47) (53) (53)
within one year
Net current assets 818 326 435
Net assets 5,187 5,590 4,413
Capital and reserves
Called up share capital 3,285 3,285 3,285
Capital redemption reserve 1,126 1,126 1,126
Share premium 348 348 348
Investment holding losses (4,671) (5,052) (5,825)
Capital reserve - realised 5,075 5,835 5,454
Revenue reserve 24 48 25
Equity shareholders' funds 5,187 5,590 4,413
Basic and diluted net asset 39.5p 42.5p 33.6p
value per share
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
30 Sept 2009 30 Sept 2008 31 Mar 2009
GBP'000 GBP'000 GBP'000
Opening shareholders' funds 4,413 6,832 6,832
Purchase of own shares - (199) (199)
Total recognised gains/(losses) 774 (1,043) (2,220)
for the period
Closing shareholders' funds 5,187 5,590 4,413
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 September 2009
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 Mar
2009 2008 2009
Note GBP'000 GBP'000 GBP'000
Cash outflow from operating activities
and returns on investments 1 (33) (79) (129)
Capital expenditure
Purchase of investments 523 (201) (201)
Sale of investments (113) 703 1,005
Net cash inflow from capital 410 502 804
expenditure
Equity distributions paid - - -
Net cash inflow before financing 377 423 675
Financing
Purchase of own shares - (199) (199)
Net cash outflow from financing - (199) (199)
Increase in cash 2 377 224 476
Notes to the cash flow statement:
1 Cash outflow from operating
activities and returns on investments
Return/(loss) on ordinary activities
before taxation 774 (1,043) (2,220)
(Gains)/losses on investments (801) 996 2,121
Decrease/(increase) in other debtors 1 (17) (16)
Decrease in other creditors (7) (15) (14)
Net cash outflow from operating (33) (79) (129)
activities
2 Analysis of net funds
Beginning of period 435 (41) (41)
Net cash inflow 377 224 476
End of period 812 183 435
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 September 2009
Unrealised
gain/(loss) % of
Cost Valuation in period portfolio
GBP'000 GBP'000 GBP'000 by value
Top ten largest VCT investments (by
value)
ANS Group plc ** 201 511 52 9.7%
Connaught plc *** 30 485 123 9.4%
Doubletake Portraits Limited * 250 358 108 6.9%
Cadbury House Limited * 319 319 - 6.2%
Spice plc 256 296 95 5.7%
Printing.com plc 178 240 85 4.6%
Atlantic Global plc 310 198 (50) 3.8%
Aero Inventory plc 115 137 67 2.6%
Hoole Hall Spa and Leisure 120 120 - 2.3%
Limited *
Supporta plc 250 105 7 2.0%
2,029 2,769 487 53.2%
Other VCT investments 6,050 874 205 17.1%
Listed fixed income securities 558 287 42 5.5%
Other investments 403 439 81 8.5%
9,040 4,369 815 84.3%
Cash at bank and in hand 812 15.7%
Total investments 5,181 100.0%
All VCT investments are quoted on AIM unless otherwise stated.
* Unquoted
** Quoted on the PLUS Market
*** Listed on the Main Market of the London Stock Exchange
SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 30 September 2009
Additions
GBP'000
VCT investments
Financial News Publishing Limited 50
Hoole Hall Spa and Leisure Limited 20
Tristel plc 42
Sundry investments 1
113
Disposals
Market Gain/ Realised
value at (loss) in gain/
1 March Disposal Period (loss)
Cost 2009 proceeds vs cost
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Disposals in the market
ANS Group plc 51 114 127 76 13
Ludorum plc 2 2 2 - -
The Medical House plc 52 13 22 (30) 9
Liquidations and
dissolutions
Dipford Group plc 136 - - (136) -
Sanastro Limited 200 36 - (200) (36)
Other investments
Barclays Bank GAM
Tracker 435 372 372 (63) -
876 537 523 (353) (14)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half yearly financial results cover the six months
to 30 September 2009 and have been prepared in accordance with the
accounting policies set out in the statutory accounts for the year
ended 31 March 2009 which were prepared under UK Generally Accepted
Accounting Practice and in accordance with the Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" January 2009.
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the year ended 31 March
2009 and the six months ended 30 September 2008 respectively.
5. Return per share for the period has been calculated on 13,140,436
shares, being the weighted average number of shares in issue during
the period.
6. Net Asset Value per share for the period has been calculated on
13,140,436 shares, being the number of shares in issue at the period
end.
7. No dividends were paid or declared in the period under review.
8. Reserves
Capital Unrealised Capital
Redemption Share Special holding reserve Revenue
reserve premium reserve losses - realised reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2009 1,126 348 - (5,825) 5,454 25
Expenses - - - - (26) -
capitalised
Gains on - - - 815 (14) -
investments
Transfer between - - - 339 (339) -
reserves
Retained net revenue - - - - - (1)
loss
At 30 September 1,126 348 - (4,671) 5,075 24
2009
The special reserve is available to the Company to enable the
purchase of its own shares in the market without affecting its
ability to pay dividends/capital distributions.
Distributable reserves comprise the special reserve, capital reserve
- realised, revenue reserve and investment holding losses of
GBP4,779,000. At the period end there were GBP320,000 of reserves
available for distribution.
9. The unaudited financial statements set out herein do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006 and have not been delivered to the Registrar
of Companies. The figures for the year ended 31 March 2009 have been
extracted from the financial statements for that year, which have
been delivered to the Registrar of Companies; the auditors' report on
those financial statements was unqualified.
10. The Directors confirm that, to the best of their knowledge, the
half yearly financial report has been prepared in accordance with the
"Statement: Half Yearly Financial Reports" issued by the UK
Accounting Standards Board and the half yearly financial report
includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements, and a description of the principal risks
and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place during the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period, and any changes in the related party transactions
described in the last annual report that could do so.
11. Copies of the unaudited half yearly financial results will be
sent to Shareholders shortly. Further copies can be obtained from the
Company's Registered Office and will be available for download from
www.downing.co.uk.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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