Final Results
15 Julio 2003 - 10:18AM
UK Regulatory
RNS Number:5818N
i-Net VCT PLC
15 July 2003
i-NET VCT plc
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 30 APRIL 2003
FINANCIAL HIGHLIGHTS
2003 2002
pence pence
Net asset value per share at 30 April 2003 42.9 74.0
Final dividend of 0.5p per share payable on 13 August 2003 0.5 0.5
Cumulative dividends 2.0 1.5
Total return to shareholders since launch 44.9 75.5
Net assets #4.7 million #8.1 million
The statement to shareholders by the Chairman, Clive Parritt, includes the
following comments:
Introduction
As shareholders will be aware, investor sentiment towards the technology and
related sectors has seen a dramatic deterioration since the "dot com" boom of
1999 and early 2000. Valuations of technology stocks have fallen sharply over a
long period since the peak of the market.
When i-NET VCT was launched in July 2000 technology stocks had already started
to fall from their peak values. At that time there was little indication of the
severity of the downturn which we have experienced since. In order to comply
with the VCT regulations your Company had to undertake the majority of its
investing within its first three years. It is now clear that the Company has
made a significant number of investments at valuations which are no longer
realistic. This has, of course, impacted heavily on the Company's net asset
value ("NAV").
At 30 April 2003 the NAV stood at 42.9p. This is a fall of 31.1p per share or
42% over the year. By way of comparison the FTSE Techmark Index fell by 26.7%
over the same period and 78.7% since the Company was launched.
Venture capital investments
At the year end the Company had invested #5.8 million in 15 investments. It is
disappointing to report that several investee companies failed during the year.
Listed fixed income securities
Downing Corporate Finance Limited continues to manage the fixed income
portfolio. At the year end the portfolio was valued at #1.0 million.
Results and dividend
Gross revenue for the year was #204,000 and net revenue after taxation was
#46,000. Your Board is proposing to pay a final dividend of 0.5p per share,
which, subject to Shareholder approval, will be paid on 13 August 2003 to
shareholders on the register at 25 July 2003.
Share repurchase
Your Board is conscious that the Company's share price is affected by the
illiquidity of its shares in the market. This results principally from the
requirement that most shareholders must retain their shares for at least three
years in order to retain their tax benefits. In line with accepted practice for
VCTs, the Company has a policy of purchasing its own shares. A Special
Resolution to continue with this policy is proposed for the forthcoming AGM.
During the year the Board used this power to repurchase 97,051 shares during the
year for an average consideration of 46.9p per share.
Annual General Meeting
The Annual General Meeting of the Company will be held at 69 Eccleston Square,
London SW1V 1PJ at 3:00pm on 12 August 2003. Three items of Special Business
are proposed:
(i) to authorise the Directors to allot shares other than pro-rata to existing
shareholders;
(ii) to authorise the Directors to disapply pre-emption rights; and
(iii) to renew the Company's authority to purchase up to 1,083,375 ordinary
shares in the market, representing approximately 10% of the current issued
shares.
Publication of share price
The Company's share price is quoted in the Financial Times on a daily basis in
the "Investment Companies" sector and can be obtained from the Downing website
at www.downing.co.uk.
Outlook
The Board are naturally disappointed with the performance of the Company to
date. The Company is nearly fully invested and is not intending to make any
major new investments but will retain some of the remaining funds for follow on
investments should they be appropriate. With exit opportunities in the current
climate being very rare, the Investment Manager, encouraged by the Board,
continues to focus on the existing portfolio to ensure that the full potential
of the investee companies is realised.
Recently there have been some early signs that the general economic climate may
be starting to improve. However it is unlikely that any recovery will be
reflected in the NAV of the Company in the short term. Even the investee
companies that are showing signs of progress still face many challenges if they
are to be ultimately successful.
Clive Parritt
Chairman
UNAUDITED STATEMENT OF TOTAL RETURN (incorporating the revenue account)
FOR THE YEAR ENDED 30 April 2003
Year ended Year ended
30 April 2003 30 April 2002
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Losses on investments
- realised - (1,156) (1,156) - (712) (712)
- unrealised - (2,190) (2,190) - (1,290) (1,290)
Income 204 - 204 272 - 272
Investment management fees (12) (38) (50) (36) (107) (143)
Other expenses (135) (8) (143) (161) - (161)
Return on ordinary activities before tax 57 (3,392) (3,335) 75 (2,109) (2,034)
Tax on ordinary activities (11) 11 - (15) 15 -
Return on ordinary activities after tax 46 (3,381) (3,335) 60 (2,094) (2,034)
Dividends (54) - (54) (55) - (55)
Transfer to reserves (8) (3,381) (3,389) 5 (2,094) (2,089)
Return per ordinary share 0.4p (31.1p) (30.7p) 0.5p (19.2p) (18.7p)
The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
UNAUDITED BALANCE SHEET AT 30 April 2003
2003 2002
#'000 #'000 #'000 #'000
Fixed Assets
Venture capital investments 2,964 5,806
Listed fixed income securities 1,029 2,115
3,993 7,921
Current assets
Debtors 175 155
Cash at bank and in hand 562 106
737 261
Creditors: amounts falling due within one year (79) (96)
Net current assets 658 165
Net assets 4,651 8,086
Capital and reserves
Called up share capital 108 109
Special reserve 4,386 -
Share premium account - 10,275
Capital redemption reserve 1 -
Capital reserve - realised 120 (795)
Capital reserve - unrealised - (1,547)
Revenue reserve 36 44
Total equity shareholders' funds 4,651 8,086
Net asset value per ordinary share 42.9p 74.0p
The Special Reserve arose on the cancellation of the share premium account
following court approval on 10 July 2002 and is available to the Company to
enable the purchase of its own shares in the market without affecting its
ability to pay dividends. During the year the Special Reserve was utilised to
eliminate accumulated realised losses and net unrealised losses on the Capital
Reserve.
Net asset value per ordinary share is based on net assets at the year end, and
on 10,833,747 (2002: 10,930,798) ordinary shares, being the number of ordinary
shares in issue at the year end.
UNAUDITED CASHFLOW STATEMENT FOR THE YEAR ENDED 30 April 2003
Year Year
ended ended
30 April 30 April
2003 2002
#'000 #'000
Net cash outflow from operating activities (5) (16)
Taxation
Corporation tax - (18)
Capital expenditure
Purchase of listed fixed income securities - (2,785)
Purchase of venture capital investments (1,343) (3,578)
(1,343) (6,363)
Sale of venture capital investments 820 -
Sale of listed fixed income securities 1,085 4,661
Net cash inflow/(outflow) from capital expenditure 562 (1,702)
Equity dividends paid (55) (109)
Net cash inflow/(outflow) before financing 502 (1,845)
Financing
Shares repurchased (46) -
Net cash outflow from financing (46) -
Increase/(decrease) in cash 456 (1,845)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash during the year 456 (1,845)
Net funds at 1 May 2002 106 1,951
Net funds at 30 April 2003 562 106
Announcement based on draft accounts (unqualified audit report)
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 30 April 2003. The statutory
accounts for the year ended 30 April 2003 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
The financial information for the year ended 30 April 2002 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; this report was unqualified
and did not contain a statement under section 237(2) or (3) of the Companies Act
1985.
A copy of the full annual report and financial statements for the period ended
30 April 2003 will be printed and posted to shareholders. Copies will also be
available to the public at the registered office of the Company at 69 Eccleston
Square, London SW1V 1PJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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