Interim Results
June 19 2003 - 6:12AM
UK Regulatory
RNS Number:5169M
Northern 3 VCT PLC
19 June 2003
19 JUNE 2003
NORTHERN 3 VCT PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2003
Northern 3 VCT PLC is a Venture Capital Trust (VCT) launched in 2001 and managed
by Northern Venture Managers. The trust intends to invest mainly in unquoted
venture capital situations and aims to provide high long-term returns to
shareholders through a combination of dividend yield and capital growth.
Financial highlights (comparative figures as at 31 March 2002 in brackets):
* Net assets #15,086,000 (#8,215,000)
* Net asset value per share 95.5p (94.6p)
* Net revenue before tax #158,000 (#18,000 loss)
* Revenue return per share 0.9p (0.7p loss)
* Interim dividend per share 0.4p (Nil)
* Share price at end of period 95p (95p)
For further information, please contact:
John Hustler (Chairman, Northern 3 VCT PLC)
Alastair Conn (Managing Director,
Northern Venture Managers Limited) 0191 244 6000
Website: www.nvm.co.uk
Lucy Copeman/Marlene Scott
Polhill Communications 020 7655 0540
CHAIRMAN'S STATEMENT
The Chairman of Northern 3 VCT PLC, John Hustler, included the following points
in his interim statement to shareholders:
In spite of difficult market conditions, I am pleased to say that your company
has made progress over the last six months. We have added six new venture
capital investments, five of which are VCT qualifying holdings. We have also
completed a public issue of new ordinary shares. I would like to take this
opportunity to welcome our new investors and to thank all shareholders for their
continuing support.
Net asset value
The unaudited net asset value per share at 31 March 2003 was 95.5p, down by 1.4%
compared with the figure of 96.9p at 30 September 2002. During the same period
the FTSE AIM index fell by 10.3% and the FTSE All Share index fell by 3.7%.
Investments
The new investments completed during the half year were:
* Crantock Bakery (#399,000) - supplier of premium hand-made Cornish pasties, Newquay
* Arrow Industrial Group (#245,000) - manufacturer of industrial doors and curtains, Hull
* RBF Industries (#250,000) - manufacturer of healthcare products and flexible heat shields, Southend-on-Sea
* Longhirst Group (#300,000) - provider of business training and conference services, Morpeth
* Alizyme (#119,000) - drug discovery company, Cambridge
* Crabtree of Gateshead (#219,000) - manufacturer of metal printing machinery, Gateshead
The majority of our investments are showing encouraging progress but under our
valuation policy, based on the British Venture Capital Association's guidelines,
it is too early to recognise any increase in their value. However some
difficulties have been experienced with one of the operating divisions of
Horncastle Industries and, as a result, a partial provision has been made
against the investment. Latest reports indicate that the company's corrective
measures are having a positive effect. Our two quoted investments, PM Group and
Alizyme, are both trading comfortably above their respective issue prices.
Revenue and dividend
The revenue return per share for the half year was 0.9p, compared with a loss of
0.7p for the corresponding period to 31 March 2002. As you will recall, an
interim dividend of 0.4p per share was paid on 6 February 2003 to coincide with
the new share issue. It is intended that a final dividend for the year ending
30 September 2003 will be paid in February 2004.
Share issue
In January 2003 we launched new public share offers for the 2002/03 and 2003/04
tax years, with the objective of raising up to #15 million of additional capital
for future investment. The outcome of the offers was disappointing, with a
total of only #3 million raised despite a two-month extension of the offer
period until June 2003. Market conditions were very difficult for those VCTs
which sought to raise funds this year, with an estimated total of #50 million
being subscribed compared to three times as much in the previous year: many
investors were deterred by the state of the stock markets, and the VCT capital
gains tax deferral relief has become less attractive due to a general absence of
capital gains and also the effect of tapering relief on marginal CGT rates.
Your directors continue to believe that VCTs offer an attractive investment
opportunity as well as providing vital equity capital to young maturing
companies. It is to be hoped that the Government will continue to recognise the
role played by VCTs in stimulating the enterprise economy and will review and
improve VCT tax reliefs for investors in the light of the reduction in capital
raised in the last year.
Share price
There has been very little trading in the company's shares at this early stage
in its life and the mid-market share price has remained steady at 95p. As
envisaged in our original prospectus, we have now obtained Court consent to the
cancellation of part of the share premium account in order to create a new
special balance sheet reserve, which can be used if required to buy back the
company's shares for cancellation.
Prospects
We are pleased that net assets are now in excess of #15 million but continue to
believe that all shareholders would benefit from a larger fund. The directors
still have authority to issue a limited number of new shares in response to
demand, and when market conditions are favourable we will be open to the
possibility of launching a further public offer. Meanwhile we have sufficient
funds to continue to build our diversified portfolio by investing significant
sums in opportunities of a reasonable size through our ability to co-invest with
other funds managed by Northern Venture Managers. With encouraging signs of
some recovery of interest in the smaller company sector, as evidenced by the
fact that the FTSE AIM index has subsequently more than recovered the loss for
the half year to 31 March 2003, and a strong deal flow, your directors look to
the future of Northern 3 VCT with confidence.
The unaudited interim financial statements for the six months ended 31 March
2003 are as shown below.
STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
(unaudited) for the six months ended 31 March 2003
Six months ended 31 March 2003 30 weeks ended 31 March 2002
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000
Gains/(losses) on investments:
Realised on disposal - - - - - -
Unrealised revaluation movements - (140) (140) - - -
------ ------ ------ ------ ------ ------
- (140) (140) - - -
Income 287 - 287 41 - 41
Investment management fee (41) (122) (163) (7) (20) (27)
Other expenses (88) (21) (109) (52) - (52)
------ ------ ------ ------ ------ ------
Return/(loss) on ordinary activities
before tax 158 (283) (125) (18) (20) (38)
Tax on ordinary activities (31) 24 (7) - - -
------ ------ ------ ------ ------ ------
Return/(loss) on ordinary activities
after tax 127 (259) (132) (18) (20) (38)
Dividend (58) - (58) - - -
------ ------ ------ ------ ------ ------
Transfer to/(from) reserves 69 (259) (190) (18) (20) (38)
------ ------ ------ ------ ------ ------
Return/(loss) per share 0.9p (1.8)p (0.9)p (0.7)p (0.7)p (1.4)p
Dividend per share 0.4p - 0.4p - - -
56 weeks ended
30 September 2002
Revenue Capital Total
#000 #000 #000
Gains/(losses) on investments:
Realised on disposal - - -
Unrealised revaluation movements - 344 344
------ ------ ------
- 344 344
Income 269 - 269
Investment management fee (34) (102) (136)
Other expenses (124) - (124)
------ ------ ------
Return on ordinary activities
before tax 111 242 353
Tax on ordinary activities (22) 20 (2)
------ ------ ------
Return on ordinary activities
after tax 89 262 351
Dividend (84) - (84)
------ ------ ------
Transfer to reserves 5 262 267
------ ------ ------
Return per share 1.2p 3.4p 4.6p
Dividend per share 0.6p - 0.6p
BALANCE SHEET
(unaudited) as at 31 March 2003
31 March 2003 31 March 2002 30 September
2002
#000 #000 #000
Venture capital
investments:
Unlisted 2,260 280 1,138
Listed 327 - 176
----- ----- -----
Total venture capital 2,587 280 1,314
investments
Listed fixed-interest 7,669 - 8,179
investments
----- ----- -----
Total fixed asset 10,256 280 9,493
investments
Net current assets 4,830 7,935 4,038
----- ----- -----
Net assets 15,086 8,215 13,531
----- ----- -----
Capital and reserves
Called-up equity share 790 434 698
capital
Share premium 7,959 7,819 12,566
Special reserve 6,260 - -
Capital reserve:
Realised (201) (20) (82)
Unrealised 204 - 344
Revenue reserve 74 (18) 5
----- ----- -----
Total equity 15,086 8,215 13,531
shareholders' funds
----- ----- -----
Net asset value per 95.5p 94.6p 96.9p
share
CASH FLOW STATEMENT
(unaudited) for the six months ended 31 March 2003
Six months ended 30 weeks 56 weeks ended
ended
30 September 2002
31 March 2003 31 March 2002
#000 #000 #000 #000 #000 #000
Cash flow statement
Net cash inflow/
(outflow) from
operating activities 48 150 (258)
Taxation:
Corporation tax paid - - -
Financial investment:
Purchase of investments (2,157) (280) (9,149)
Sale/repayment of 1,254 - -
investments
---- ---- ----
Net cash outflow from
financial investment (903) (280) (9,149)
Equity dividends paid (144) - -
---- ---- ----
Net cash outflow before
use of
liquid resources and (999) (130) (9,407)
financing
Net cash inflow/
(outflow) from
management of liquid - - (2,867)
resources
Financing:
Shares issued
Redeemable preference - 50 50
Ordinary 1,830 8,687 13,975
Share issue expenses (85) (434) (698)
Shares purchased for - - (13)
cancellation
Redemption of - (50) (50)
preference shares
---- ---- ----
Net cash inflow from 1,745 8,253 13,264
financing
---- ---- ----
Increase in cash at 746 8,123 990
bank
---- ---- ----
Reconciliation of net
revenue before
taxation to net cash
flow from
operating activities
Net revenue/(loss) from
ordinary
activities before tax 158 (18) 111
(Increase)/decrease in 29 (35) (296)
debtors
Increase in creditors 4 223 29
Management fees charged (122) (20) (102)
to capital
Other expenses charged (21) - -
to capital
---- ---- ----
Net cash inflow/
(outflow) from
operating activities 48 150 (258)
---- ---- ----
Reconciliation of
movement
in net funds
1 October Cash 31
2002 flows March
2003
#000 #000 #000
Cash at bank 990 746 1,736
Short-term investments 2,867 - 2,867
---- --- ----
Net funds 3,857 746 4,603
---- --- ----
INVESTMENT PORTFOLIO SUMMARY
as at 31 March 2003
Valuation % of net assets
#000 by valuation
Venture capital investments:
Horncastle Industries 437 2.9
Crantock Bakery 399 2.6
Longhirst Group 300 2.0
Keith Prowse 280 1.9
RBF Industries 250 1.7
Arrow Industrial Group 245 1.6
Crabtree of Gateshead 219 1.4
PM Group** 205 1.4
Alizyme* 123 0.8
Liquidlogic 88 0.6
Oxonica 41 0.3
------ -----
Total venture capital investments 2,587 17.2
Listed fixed-interest investments 7,669 50.8
------ -----
Total fixed asset investments 10,256 68.0
Net current assets 4,830 32.0
------ -----
Net assets 15,086 100.0
------ -----
* Listed on London Stock Exchange
**Traded on Alternative Investment Market
The above summary of results for the six months ended 31 March 2003 does not
constitute statutory financial statements within the meaning of Section 240 of
the Companies Act 1985 and has not been delivered to the Registrar of Companies.
A copy of the interim report for the six months ended 31 March 2003 is expected
to be posted to shareholders on 27 June 2003 and will be available to the public
at 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 Exchange
END
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