Interim Results
12 Febrero 2004 - 5:07AM
UK Regulatory
THIS ANNOUNCEMENT IS INTENTIONALLY BEING RELEASED FOR A SECOND TIME. IT WAS
PREVIOUSLY RELEASED AT 7.00AM ON 12 FEBRUARY 2004.
INTRINSIC VALUE PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
The Directors announce the unaudited statement of results for the period
1 July 2003 to 31 December 2003 as follows:
Chairman's Statement
During the six months under review the Net Asset Value per share of your
Company rose from 57.17p to 84.61p, a rise of 48%. This compares very
favourably with the benchmark FTSE-All Share Index which rose 12%.
The trends I alluded to in September, when I wrote the Chairman's Statement in
the Annual Report, continued in the final quarter of 2003. Furthermore, the
promised listing of one of the unlisted companies materialised in December when
Immedia was floated on AIM. Indeed, the Managers have now demonstrated, with 3
of their unlisted companies coming to the market in 2003, a successful niche
area in pre-IPO (initial public offering) finance. A unique achievement, we
believe, by a non-VCT Small Company Investment Trust. The value of these three
investments increased by 165% as at 31 January 2004.
A number of changes have been made to the top ten holdings since 30 June,
including divestments of Brit Insurance(CULS), Chaucer (Ords) and City Centre
Restaurants. Since the period end, following significant out-performance, we
have top-sliced our holdings in Protherics, Celsis, Domino's Pizza and
Independent Media Distribution. The latter two holdings, whilst exhibiting
strong growth and cash flow have risen to valuation levels that justify our
top-slicing. We look forward to the demerger of Moneybox from Ambient that
should evidence the underlying value of that company's assets. Two new arrivals
in the period include Healthcare Enterprises and Invox. The former exhibits
value from exciting growth opportunities, and the latter shows excellent cash
generation, yield and dividend growth prospects.
Last October, your Company commenced discussions regarding investing in another
private company. By November, terms had been agreed between all parties and the
legal documentation was concluded in mid December. Subject to the completion of
the acquisition our investment is part financing, the first installment will be
invested shortly. The total contractual commitment is �1million. Based on our
current holdings, and following completion of this investment, the unquoted
portfolio will represent less than 10% of your Company's gross assets.
Whilst the last six months have been good for equity markets generally and
small companies in particular, the very nature of size does matter when
investing in small companies. They are not a short-term investment; volatility
is high. To minimise risk in these areas requires patience, skill,
understanding and above all, a partnership with the management of the invested
companies. The Managers assist in their invested companies' growth, which is
mutually beneficial. We are providing capital in an area of the market much
neglected by the financial services industry, an area that has been addressed
in the recent HM Treasury Small Business Service document, entitled `Bridging
the Finance Gap: Next Steps in Improving Access to Growth Capital for Small
Businesses,' published in December 2003.
Your Company has 15 declared holdings of over 3%, listed in the Interim Report.
As in previous years the Board does not propose to pay an interim dividend. A
dividend for the full year will be reviewed at the year-end.
There has been no change to the level of borrowings, and full use of the �2
million revolving credit facility has been made, leaving your Company
approximately 10% geared.
Requisitioned EGM and the Future of the Company
Shareholders will be aware of the EGM requisition, which the Board discussed in
its circular to Shareholders of 4 February. It is against that background that
we feel it necessary to bring the new unquoted investment (discussed above) to
the attention of Shareholders.
When I wrote to all Shareholders on 4 February explaining the background to the
Requisition, I commented that, with regret, the Board believed a managed
liquidation of the Company was in the best interests of Shareholders, as
Shareholders representing a substantial proportion of the Company's equity base
had stated that they wished to realise their investment for cash. In that
letter I commented that the Board was uncertain as to the requisitionist's
intentions. To date no proposals have been forthcoming and even their letter to
Shareholders of 6 February did not indicate any concrete plans should they gain
control of the Board; although the requisitionist has stated that it has no
interest in assuming the management of the Company.
The Board however has not changed its recommendation regarding the Requisition
and remains of the opinion that Shareholders' best interests are served by the
Company undertaking an orderly liquidation of its assets and returning cash to
Shareholders, effected by the present Investment Manager. The Board also wishes
to advise shareholders that it has received several approaches from other fund
management groups indicating an interest in offering one of their range of
funds as a rollover vehicle for those shareholders who are not seeking an exit
for cash. It is the Board's intention to pursue these approaches with a view to
adding an open ended rollover alternative to the cash exit option previously
outlined.
James West
Chairman
11 February 2004
STATEMENT OF TOTAL RETURN
(*incorporating the revenue account)
(unaudited)
Six months to Six months to
31 December 2003 31 December 2002
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains/(losses) on - 7,002 7,002 - (2,466) (2,466)
investments
Income 165 - 165 159 - 159
Investment (29) (89) (118) (21) (64) (85)
management fee
Other expenses (91) - (91) (107) - (107)
Return on ordinary 45 6,913 6,958 31 (2,530) (2,499)
activities before
finance costs and
taxation
Interest payable and (12) (37) (49) (15) (44) (59)
similar charges
Return on ordinary 33 6,876 6,909 16 (2,574) (2,558)
activities before
taxation
Taxation on ordinary - - - - - -
activities
Return on ordinary
activities after
taxation
for the period 33 6,876 6,909 16 (2,574) (2,558)
Dividends paid and - - - - - -
proposed
Transfer to/(from) 33 6,876 6,909 16 (2,574) (2,558)
reserves
pence pence pence pence pence pence
Return per Ordinary 0.13 27.44 27.57 0.07 (10.27) (10.20)
share:
* The revenue column of this statement is the revenue account of the Company.
All revenue and capital items in the above statement derive from continuing
operations.
BALANCE SHEET
As at As at As at
31 December 31 December 30 June
2003 2002 2003
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Fixed assets
Investments at market value 23,380 17,171 16,368
Current assets
Debtors 52 19 100
Cash at bank 351 87 305
403 106 405
Creditors - amounts falling due 2,546 2,418 2,445
within one year
Net current liabilities (2,143) (2,312) (2,040)
Net assets 21,237 14,859 14,328
Share capital and reserves
Share capital 251 20,050 20,050
Share premium account 4,554 4,554 4,554
Capital reserve - realised (1,969) 1,291 (1,305)
- unrealised (1,692) (11,314) (9,233)
Capital redemption reserve 19,799 - -
Revenue reserve 294 278 262
Total Shareholders funds 21,237 14,859 14,328
Total net assets for the 21,204* 14,843* 14,328
purposes of calculating net
asset value - excluding current
period revenue*
Net asset value per Ordinary 84.61p 59.22p 57.17p
share
SUMMARISED STATEMENT OF CASHFLOWS
(unaudited)
Six months to Six months to
31 December 31 December
2003 2002
�'000 �'000
Operating activities
Investment income received 207 220
Deposit interest received 5 3
Underwriting commission received - 14
Investment management fees paid (97) (90)
Secretarial fees paid (25) (21)
Other cash payments (70) (98)
Net cash inflow from operating 20 28
activities
Servicing of finance
Interest paid (37) (53)
Capital expenditure and
financial investment
Purchases of investments (8,192) (4,208)
Sales of investments 8,330 3,290
Net cash inflow/(outflow) from
capital expenditure and
financial investment 138 (918)
Equity dividends paid (75) (75)
Financing
Loan proceeds - 800
Net cash inflow/(outflow) 46 (218)
Increase/(decrease) in cash 46 (218)
The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The statutory financial
statements for the year ended 30 June 2003 which contained an unqualified
auditors' report, have been lodged with the Registrar of Companies and did not
contain a statement required under section 237(2) or (3) of the Companies Act
1985.
These financial statements have been prepared and are consistent with the
accounting standards and policies as stated at the previous year-end, save that
the Company has adopted the 2003 Statement of Recommended Practice regarding
the Financial Statements of Investment Trust Companies.
For further information, please contact:
Mark Horrocks or Harry Stevenson at
Ghaliston Limited - 020 7399 4290
END
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