Preliminary Results
Eclipse VCT 3 plc
Year ended 31 August 2007
About Eclipse VCT 3 plc
Eclipse VCT 3 plc ("Eclipse 3" or "Company") is a Venture Capital
Trust ("VCT") which aims to provide shareholders with attractive
tax-free dividends and long-term capital growth.
Eclipse 3 invests primarily in unquoted and AIM-quoted companies and
aims to deliver absolute returns on its investments. Eclipse 3 was
launched in August 2005 and raised approximately �29.1 million (�28.7
million net of expenses) through an offer for subscription which
closed on 5 April 2006.
The Investment Manager is Octopus Investments Limited ("Octopus" or
"Manager"). Eclipse 3 co-invests with three other Eclipse funds
which are all managed by the same investment team at Octopus. This
allows Eclipse 3 to invest in a wider range of opportunities and in
larger and more developed companies than are typically available to a
single VCT.
Financial Highlights
Year to 31 August Period to 31
2007 August 2006
Net assets (�'000s) 29,825 28,247
Net profit after tax (�'000s) 1,809 183
Net asset value per share 101.1p 95.7p
Proposed dividend per share 1.5p 0.7p
Cumulative dividends since launch -
paid and proposed 2.2p 0.7p
Chairman's Statement
I am delighted to report an uplift in the Net Asset Value ("NAV") of
the portfolio in the year to 31 August 2007.
Results Review
In the year to 31 August 2007, the NAV per share increased over 5.6%
from 95.7p to 101.1p net of dividends. The Investment Manager
realised a gain of nearly �1.1 million during the year from the
disposal, either wholly or partially, of a number of investments
which are discussed below. Further details are included within the
Investment Manager's Review including a review of the performance of
the investments, the key performance indicator by which the Board
measures the performance of the Company. Consequently, the Board has
proposed a dividend of 1.5p per share to be paid on 19 February 2008
to shareholders on the register on 25 January 2008. This will take
cumulative dividends to 2.2p per share since the Fund's launch. The
total return to shareholders, before payment of this dividend, is
7.2%. This is before taking into account the 40% upfront tax relief
received by initial subscribers.
The table below shows the movement in NAV per share and lists the
dividends that have been paid since the launch of Eclipse 3:
Period Ended NAV Dividends paid NAV + cumulative dividends
28 February 2006 94.9p - 94.9p
31 August 2006 95.7p - 95.7p
28 February 2007 103.0p 0.7p 103.7p
31 August 2007 101.1p - 101.8p
Investment Portfolio
During the year, sixteen new investments were made and four
investments fully disposed of. New investments totalled over �9.5
million in seven unquoted companies and nine AIM-quoted companies.
As well as the full disposals, profits were also taken in a further
four AIM investments. Of particular significance were our
investments in Worthington Nicholls plc and James Harvard
International Limited which generated returns of 134% and 120%
respectively. Within the portfolio we have a further �1.7 million of
unrealised profit on our investments.
On a less positive note a provision has been made against the
investment in NPI Media Group Limited and a further provision has
been made against our investment in Red-M. Octopus considers these
provisions, totalling �1,035,000, to be prudent, based on
underperformance against the respective investment plans. Further
information is provided within the Investment Manager's Review.
Further information on all the holdings in the portfolio can be found
in the Investment Manager's review.
Share Price
Eclipse 3's mid market share price currently stands at 85p compared
to the NAV of 101.1p. The discount to NAV is primarily due to the
low level of secondary market activity in Eclipse 3 shares. In order
to address this, Octopus is working towards developing strategies to
stimulate trade in VCT shares and increase liquidity in the market.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice on the ongoing compliance with HM Revenue & Customs rules
and regulations concerning VCTs. The Board has been advised that
Eclipse VCT 3 plc is in compliance with the conditions laid down by
HM Revenue & Customs for maintaining approval as a VCT.
A key requirement is for 70% of the portfolio to be invested in
qualifying investments by the end of the third accounting period
following that in which new share capital was subscribed. As at 31
August 2007, over 49% of the share capital raised at launch was
invested in VCT qualifying investments, in line with our expectations
at this stage of the Fund's life. In light of the current deal flow,
the Board is confident of achieving the investment target with the
required time frame.
Outlook
The Board's focus is to continue to generate capital growth and to
pay attractive tax-free dividends. The underlying portfolio of
unquoted and AIM-quoted companies is comprised of solid, high quality
investments, and the Manager believes it is well placed to meet the
above objectives.
R Gregory Melgaard
Chairman
20 December 2007
Investment Manager's Review
Personal Service
At Octopus, we pride ourselves not only on our team's track record
but also on our personalised customer service. We believe in open
communication and our regular updates are designed to keep you
involved and informed.
If you have any questions about this review, or if it would help to
speak to one of the fund managers, please do not hesitate to contact
us on 020 7710 2800.
Portfolio Review
We are delighted to report encouraging progress across the portfolio
over the last year generating an uplift in the net assets of the
Company. During the year to 31 August 2007, over �9.5 million was
invested in sixteen new and one follow-on investment. This takes the
total currently invested by Eclipse 3 in unquoted and AIM listed
investments to over �11.7 million. The remaining funds are invested
in money market securities awaiting investment in suitable qualifying
opportunities.
Investment Portfolio
%
equity
Carrying held by
value at % other
31 equity funds
Unquoted Investment Unrealised August held by managed
Qualifying at cost profit/(loss) 2007 Eclipse by
Investments Sector (�'000) (�'000) (�'000) 3 Octopus
Gyro
International
Limited Media & Marketing 704 354 1,058 2.4% 15.2%
Sweet Cred
Holdings
Limited Confectioners 1,000 - 1,000 7.7% 16.8%
T4 Holdings
Limited Advertising 1,000 - 1,000 11.4% 31.1%
CSL Dualcom
Holdings
Limited Business Services 918 - 918 10.0% 30.0%
Adrenalin
Design Limited Fashion & Retail 905 - 905 11.0% 31.9%
NPI Media
Group Limited Publishing 1,761 (915) 846 12.6% 37.4%
Audio Visual
Machines
Limited Business Services 711 - 711 11.3% 33.7%
Promotion
Space Limited Support Services 517 - 517 9.7% 20.3%
Perfect Pizza
Limited Pizza Delivery 372 - 372 4.9% 29.4%
The Capital
Pubs Company 2
plc Leisure & Hotels 200 - 200 1.2% 7.0%
Red-M Group Information
Limited Technology 241 (178) 63 1.7% 7.7%
Blanc
Brasseries
Holdings plc Leisure & Hotels 55 - 55 0.7% 2.6%
Total unquoted qualifying
investments 8,384 (739) 7,645
AIM-listed
Qualifying
Investments
Tanfield Group
plc Engineering 130 892 1,022 0.2% 2.5%
Hexagon Human
Capital plc Recruitment 677 170 847 2.7% 8.8%
Insurance/Financial
CBG Group plc Services 381 111 492 2.0% 12.3%
Hasgrove plc Public Relations 400 87 487 1.8% 7.1%
Cantono plc IT Services 420 (38) 382 1.5% 8.4%
Northern Bear
plc Construction 299 4 303 1.5% 8.9%
Vertu Motors
plc Motor Retailer 250 17 267 0.5% 2.3%
Pressure
Technologies High Pressure
plc Cylinders 165 50 215 1.0% 4.3%
Healthcare Healthcare
Locums plc Recruitment 100 95 195 0.2% 0.7%
Brulines Alcohol Dispense
(Holdings) plc Monitoring 148 26 174 0.5% 2.1%
Concateno plc Drug Testing 85 55 140 0.2% 0.6%
Autoclenz
Holdings plc Valeting 125 (25) 100 1.0% 11.9%
BBI Holdings
plc Healthcare 64 36 100 0.2% 2.1%
Cohort plc Healthcare 68 21 89 0.2% 1.7%
Invocas plc Financial Services 40 - 40 0.1% 1.1%
Total AIM-listed qualifying
investments 3,352 1,501 4,853
Non-qualifying
AIM
investments 13 25 38
Non-qualifying unquoted
investments - - -
Total
non-qualifying
investments 13 25 38
Fixed income
securities 16,985 95 17,080
Total
investments 28,734 978 29,616
Net current
assets 209
Total net
assets 29,825
Review of Investments
At 31 August 2007, the Eclipse 3 portfolio comprised investments in
12 unquoted and 15 AIM-quoted companies. The unquoted investments
are in ordinary shares with full voting rights as well as loan notes
and other securities. The AIM-quoted investments are in ordinary
shares, also with full voting rights.
During the year, four investments were disposed of in their entirety;
James Harvard International Limited, Ovum plc, Abcam plc and
Worthington Nicholls plc crystallising a profit of over �1.0
million. The Fund's investment in AIM quoted company Worthington
Nicholls plc was particularly successful, generating a return of
134%. Unquoted company, James Harvard International Limited, was
also a great success generating a 120% return. Additional proceeds
may be received through an earn-out over the next three years.
In addition, some top-slicing of profits in Tanfield Group plc
crystalised a further �50,000 profit. However, Eclipse 3 still owns
shares in Tanfield Group plc with a book cost of �143,000 and a
valuation as at 31 August 2007 of �1.06 million. We will continue to
maximise the return from this successful investment by taking profits
where necessary.
A summary of these realisations is shown below:
Cost of
Initial investment Proceeds of Total
investment realised investment gain/(loss)
Realisations date (�'000) (�'000) (�'000)
Worthington Nicholls
plc 12 June 2006 502 1,172 670
James Harvard 30 November
International Limited 2005 245 539 294
Tanfield Group plc 26 May 2005 20 72 52
10 March
Ovum plc 2006 75 118 43
31 October
Abcam plc 2006 45 64 19
887 1,965 1,078
New Investments
During the year, Eclipse 3 made sixteen new investments. Details of
these investments are set-out below:
Unquoted investments
Audio Visual Machines Limited
Investment date: September 2006
Cost: �711,441 (ordinary shares and loan
notes)
Valuation: �711,441
Audio Visual Machines is a leading audio visual systems integrator
and service provider with a blue chip client base. It generates
revenue from the installation of AV systems and from providing
ongoing maintenance and support to its customers. The strategy is to
grow by acquisition over the next 2 to 3 years.
NPI Media Group Limited
Investment date: January 2007
Cost: �1,760,539 (ordinary shares and loan
notes)
Valuation: �846,142
NPI is the UK market leading publisher of distinctive 'local
interest' history books. The company is based in Stroud with
subsidiary operations in France, Germany, Ireland and the US.
Funding was provided to facilitate the acquisitions of three of its
key competitors: Sutton Publishing, Jarrold Publishing and
Phillimore. The titles range from specialist local history books
such as "The Iron History of the Forest of Dean" to more general
history books such as "Ivan the Great". More recently NPI has
expanded into sports history. The amalgamation of these businesses
gives NPI a significant market share in its niche area.
Sweet Cred Holdings Limited
Investment date: March 2007
Cost: �1,000,000 (ordinary shares and loan
notes)
Valuation: �1,000,000
Sweet Cred sells a wide range of products which combine sweets with
toys that are themed around the five cartoon characters in the Sweet
Cred gang. The range is sold through distribution partners in Europe,
the US and the Middle East. In the UK, distribution is through the
main wholesalers and retail distribution through the major multiple
retailers, motorway service stations and leading toyshop chains. In
March 2007 Octopus committed �5 million to fund working capital
relating to the orders pipeline. �3 million was drawn down at
completion, with the balance to be provided against achievement of
milestones.
Promotion Space Limited
Investment date: April 2007
Cost: �517,234 (ordinary shares and loan
notes)
Valuation: �517,234
Promotion Space works directly with major brands who wish to access
consumers in shopping centres. It also works with shopping centres to
generate revenue by organising promotional activities. Octopus
provided �1.5 million of funds to develop an organic Retail
Merchandising Unit (RMU) business within major shopping centres and
also to follow a buy and build strategy.
Adrenalin Design Limited
Investment date: September 2006
Cost: �905,000 (ordinary shares and loan
notes)
Valuation: �905,000
Adrenalin owns the Golddigga girls clothing brand targeting 15-25
year olds. The company designs two major seasons per year and two
minor ones from its headquarters in Derby. The clothes and
accessories retail through approximately 650 outlets in the UK and a
similar number abroad through distributors. The strategy is to grow
sales in the UK and overseas with a view to a trade sale in the
medium term.
Gyro International Limited
Investment date: October 2006
Cost: �704,302 (ordinary shares and loan
notes)
Valuation: �1,058,000
Gyro is the UK's leading integrated B2B brand communications agency
and has offices across Europe and in the US. The company provides a
range of services including brand strategy, direct marketing, on and
off-line advertising, media planning, web marketing and event
management. Octopus led a �3 million equity fund raising, in
February 2005, to finance the buy-out of one of the two original
founders and provide additional working capital. The syndicate
subsequently invested a further �6 million in October 2006 to support
the acquisition plans of the company. The company has expanded
significantly since our initial investment was made, from 4 offices,
to 10 offices. Recent acquisitions have been completed in France,
Manchester and Sweden.
T4 Holdings Limited
Investment date: August 2007
Cost: �1,000,000 (ordinary shares and loan
notes)
Valuation: �1,000,000
T4 is based in London and, through subsidiaries Ad Barriers and Ad
Gates, is the leading provider of advertising solutions on railway
station gates and car park ticket equipment. T4 has a blue chip
advertising customer base including Visa, Fox (The Simpsons), M&S,
Bank of Scotland and Costa Coffee.
Aim-quoted investments
Concateno plc
Investment date: October 2006
Cost: �85,000
Valuation: �140,000
Concateno plc is an acquiror and consolidator of businesses in the
drug and alcohol testing sector. In November 2006 Concateno
completed its first acquisition with the purchase of Medscreen Ltd.
This was followed with the acquisition of Altrix Healthcare Ltd in
January 2007, TrichoTech Ltd in February 2007 and Euromed Ltd in
April 2007. More recently Concateno has completed its first
international acquisition with the purchase of Swedish-based
Marconova in May 2007 and in July 2007 it acquired CPL International.
Brulines (Holdings) plc
Investment date: October 2006
Cost: �147,600
Valuation: �174,000
Brulines (Holdings) plc is the leading provider of volume and revenue
protection systems for draught alcoholic drinks to the pub sector.
The principal activity of the company is to measure, remotely
harvest, and audit important operational data, primarily for owners
of licensed premises but also for licensees.
Hasgrove plc
Investment date: November 2006
Cost: �400,000
Valuation: �486,666
Hasgrove plc is a pan European marketing and communications services
group. The company offers its clients high quality consultancy and
implementation solutions at affordable prices across a range of
disciplines including brand designs, creative advertising, public
relations and public affairs.
Vertu Motors plc
Investment date: December 2006
Cost: �250,000
Valuation: �266,667
Vertu Motors plc is a consolidator of the UK motor retail sector.
The company has completed a number of transactions since its float
and is now the tenth largest motor retailer in the UK.
Hexagon Human Capital plc
Investment date: February 2007
Cost: �677,000
Valuation: �846,864
Hexagon Human Capital plc is the UK's leading provider of interim
executive management and one of the UK's leading executive search
businesses. We originally invested in Hexagon, as an unquoted
company, in December 2006 to finance the acquisition of BIE, the UK's
largest interim management firm, alongside �10 million from Barclays
Bank. The company subsequently floated successfully on AIM in
February 2007.
Pressure Technologies plc
Investment date: June 2007
Cost: �165,000
Valuation: �214,500
Pressure Technologies is the holding company of Chesterfield Special
Cylinders ("CSC"). CSC designs, manufactures and offers testing and
refurbishment services for a range of speciality high pressure,
seamless steel gas cylinders for global energy and defence markets.
CBG Group plc
Investment date: June 2007
Cost: �380,700
Valuation: �491,400
Based in Manchester, CBG Group plc is a corporate general insurance,
risk management and financial services intermediary. The company
offers a range of services principally in the area of Commercial
Insurance, Business Risk Management, Healthcare and Employee
Benefits. We expect the company to continue to acquire further
businesses in the North-West of England.
Northern Bear plc
Investment date: August 2007
Cost: �299,425
Valuation: �303,555
Northern Bear is a building services group based in North East
England. It provides central strategic and financial functions for a
group of otherwise autonomous companies, each of which provides
products and/or services to the construction industry and house
builders. We expect the company to complete further acquisitions
over the next twelve months.
Cantono plc
Investment date: August 2007
Cost: �420,000
Valuation: �382,200
Cantono is a provider of Managed IT Services and hosting solutions
for small to medium sized organisations. Its typical client has from
100 -1,000 users. Cantono provides a range of services from
individual applications to fully managed IT environments. Cantono's
services are backed by robust service level agreements, expert
technicians, and a high level of customer service.
Ten Largest Holdings
Listed below are the ten largest investments by value as at 31 August
2007:
NPI Media Group Limited
NPI is the UK market leading publisher of distinctive 'local
interest' history books. The company is based in Stroud with
subsidiary operations in France, Germany, Ireland and the US.
Funding was provided to facilitate the acquisitions of three of its
key competitors: Sutton Publishing, Jarrold Publishing and
Phillimore. The acquisition of NPI followed by the integration of
three other businesses was an ambitious plan. Post investment the
business experienced some of the predicted difficulties. In August
2007 we took the decision to invest a further �1.5 million (Eclipse 3
fund invested �270,000 prior to the year end and �137,000 after the
year end) to provide the company with further working capital
facilities.
The integration of the different companies has proved more
challenging than expected and trading results are behind the
investment plan. This has resulted in some management changes and
Octopus has invested considerable time in working through the
required structural changes to ensure that performance recovers.
Whilst the project is ambitious we continue to believe in the
underlying investment proposition. However, as a result of
performance a full provision has been made against the equity and a
partial provision against the loan notes held by the Fund,
representing approximately 50% of the overall investment.
Initial investment date: January 2007
Cost: �1,760,539
Valuation: �846,142
Valuation basis: Provision
Equity held: 12.6%
Last audited accounts: N/A
Tanfield Group plc
Tanfield has a range of subsidiaries that are focused on providing
zero emission vehicles and industrial products. Smith Electric
Vehicles is one of the largest manufacturers of electric vehicles in
the world with more than 500 customers operating both in the private
and public sectors. Norquip is one of the world's leading providers
of ground support equipment in the form of airport service vehicles
and passenger transfer units. Aerial Access is a manufacturer of
electrically powered aerial lifts and access platforms. Complementary
to Aerial Access is its Upright subsidiary, which specialises in
scissor lifts and is globally renowned.
Initial investment date: May 2005
Cost: �130,000
Valuation: �1,022,125
Valuation basis: Bid price (AiM investment)
Equity held: 0.2%
Last audited accounts: December 2006
Profit before interest & tax: �3.6 million
Net assets: �43.4 million
Gyro International Limited
Gyro is the UK's leading integrated B2B brand communications agency
and has offices across Europe and in the US. The company provides a
range of services including brand strategy, direct marketing, on and
off-line advertising, media planning, web marketing and event
management. Octopus led a �3 million equity fund raising, in
February 2005, to finance the buy-out of one of the two original
founders and provide additional working capital. The syndicate
subsequently invested a further �6 million in October 2006 to support
the acquisition plans of the company. The company has expanded
significantly since Octopus first invested, from 4 offices, to 10
offices. Recent acquisitions have been completed in France,
Manchester and Sweden.
Although the investment has been made within the last twelve months
the value has been uplifted modestly. This reflects the fact that
Octopus has been an investor in Gyro since 2005 and the valuations
are in line with those presented by Eclipse VCT, and are based on
financial performance.
Initial investment date: Octopus 2006
Cost: �704,302
Valuation: �1,058,000
Valuation basis: Earnings multiple
Equity held: 2.4%
Last audited accounts: October 2006
Profit before interest & tax: �1.8 million
Net assets: �6.6 million
Sweet Cred Holdings Limited
Sweet Cred sells a wide range of products which combine sweets with
toys that are themed around the five cartoon characters in the Sweet
Cred gang. The range is sold through distribution partners in Europe,
the US and the Middle East. In the UK, distribution is through the
main wholesalers and retail distribution through the major multiple
retailers, motorway service stations and leading toyshop chains. In
March 2007 Octopus committed �5 million to fund working capital
relating to the orders pipeline. �3 million was drawn down at
completion, with the balance to be provided against achievement of
milestones.
Initial investment date: March 2007
Cost: �1,000,000
Valuation: �1,000,000
Valuation basis: Cost
Equity held: 7.7%
Last audited accounts: December 2006
Profit before interest & tax: �0.4 million
Net assets: �1.1 million
T4 Holdings Limited
T4 is based in London and, through subsidiaries Ad Barriers and Ad
Gates, is the leading provider of advertising solutions on railway
station gates and car park ticket equipment. T4 has a blue chip
advertising customer base including Visa, Fox (The Simpsons), M&S,
Bank of Scotland and Costa Coffee.
Initial investment date: August
2007
Cost: �1,000,000
Valuation: �1,000,000
Valuation basis: Cost
Equity held: 11.4%
Last audited accounts: December 2006
Profit before interest & tax: �0.7 million
Net assets: �530,465 million
CSL DualCom Limited
CSL DualCom is the UK's leading supplier of dual path signalling
devices, which link burglar alarms to the police or a private
security firm. The devices communicate using a telephone line and a
Vodafone wireless link. Vodafone has been a partner of CSL DualCom
for the last six years. The company is poised to grow rapidly on the
back of a recent new product launch using the GRPS network and by
extending its products to the fire sector, where recent legislation
has created a large market opportunity.
Initial investment date: June 2005
Cost: �918,202
Valuation: �918,202
Valuation basis: Cost
Equity held: 10.0%
Last audited accounts: March 2007
Profit before interest & tax: �0.8 million
Net assets: �6.6 million
Adrenalin Design Limited
Adrenalin owns the Golddigga girls clothing brand targeting 15-25
year olds. The company designs two major seasons per year and two
minor ones from its headquarters in Derby. The clothes and
accessories retail through approximately 650 outlets in the UK and a
similar number abroad through distributors. The strategy is to grow
sales in the UK and overseas with a view to a trade sale.
Initial investment date: September 2006
Cost: �905,000
Valuation: �905,000
Valuation basis: Cost
Equity held: 11.0%
Last audited accounts: August 2006
Profit before interest & tax: �2.1 million
Net assets: �3.3 million
Hexagon Human Capital plc
Hexagon Human Capital plc is the UK's leading provider of interim
executive management and one of the UK's leading executive search
businesses. We originally invested in Hexagon, as an unquoted
company, in December 2006 to finance the acquisition of BIE, the UK's
largest interim management firm, alongside �10 million from Barclays
Bank. The company subsequently floated successfully on AIM in
February 2007.
Initial investment date: February 2007
Cost: �677,000
Valuation: �846,864
Valuation basis: Bid price (AiM investment)
Equity held: 2.7%
Last audited accounts: March 2007
Profit before interest & tax: �0.8 million
Net assets: �14.2 million
Audio Visual Machines Limited
Audio Visual Machines is a leading audio visual systems integrator
and service provider with a blue chip client base. It generates
revenue from the installation of AV systems and from providing
ongoing maintenance and support to its customers. The strategy is to
grow by acquisition over the next 2 to 3 years. A small acquisition,
AVE, has been made since the year end, funded through the Company's
own resources.
Initial investment date: September 2006
Cost: �711,441
Valuation: �711,441
Valuation basis: Cost
Equity held: 11.3%
Last audited accounts: N/A
Promotion Space Limited
Promotion Space works directly with major brands who wish to access
consumers in shopping centres. It also works with shopping centres to
generate revenue by organising promotional activities. Octopus
provided �1.5 million of funds to develop an organic Retail
Merchandising Unit (RMU) business within major shopping centres and
also to follow a buy and build strategy. Since the year end the
Company has acquired Fitting Exposure and drawn down a further
�600,000 investment from the Eclipse funds (Eclipse 3 invested
�209,000).
Initial investment date: April 2007
Cost: �517,234
Valuation: �517,234
Valuation basis: Cost
Equity held: 10.3%
Last audited accounts: N/A
Recent Transactions
Since the end of the year under review, we have completed three new
qualifying investments, as well as further investments in NPI and
Promotion Space as noted above:
The Grill Group
Eclipse 3 invested �1,983,500 (total from all Eclipse funds -
�6,000,000) in The Grill Group early in September 2007. The Group has
three restaurant brands: Smollensky's, with nine Bar & Grill and
Burgershack sites in London, and the Le Frog Bistros and Pastiche
with eight restaurants in the Midlands and North West. The investment
strategy includes the operational turnaround of Smollensky's during
the first twelve months, followed by the roll-out of the Smollensky's
and Pastiche restaurant brands.
Optimisa plc
Eclipse 3 invested �195,000 in Optimisa plc in October 2007.
Optimisa provides market research and consultancy services. Recently
Optimisa completed the earnings enhancing acquisition of EQ Group, a
business operating in a very similar sector. Historically Optmisa and
EQ have competed for contracts and we expect the larger and more
diversified group to exploit a number of synergies and cross selling
opportunities. Optimisa which is currently capitalised at �18.2
million is expected to make a profit of �3.1 million on a turnover of
�23.8 million for the year to December 2008.
Myhome International plc
Eclipse 3 invested �350,000 in Myhome International plc in November
2007. Myhome is an acquisitive national franchise group,
headquartered in London. The group has become a market leader in the
rapidly growing sector of residential cleaning under the brand of
Myhome, and has extended its offering by rolling out other franchises
including electrical, plumbing and cleaning services. These include
Nicenstripy, which provides residential gardening services throughout
the year, Ferrum UK which operates a dry cleaning and laundry
business and PlumbXpress a plumbing and drainage business. In June
2006 the company acquired Ovenclean, the UK's leading domestic oven
cleaning franchise with a ten year growth history and over 165
franchisees. More recently Myhome completed the acquisition of
ChipsAway, a mobile service delivered to customers' homes and
offices, repairing scratches, chips and other minor damage to car
paintwork using proprietary technology. Myhome which is currently
capitalised at �29 million is expected to make a profit before tax of
�5.9 million on a turnover of �16.2 million for the year to 30
September 2008.
If you have any questions on any aspect of your investment, please
call one of the team on 020 7710 2800.
Simon Rogerson
Chief Executive
Profit & Loss Account
Year to 31 Period to 31 August
August 2007 2006 (Restated)
Total �'000 Total �'000
Gain on disposal of investments
held at fair value 926 -
Unrealised gain on fair value of
investments 823 196
Other income 950 600
Investment management fees (665) (375)
Other expenses (192) (238)
Profit on ordinary activities
before tax 1,842 183
Taxation on profit on ordinary
activities (33) -
Profit on ordinary activities after
tax 1,809 183
Earnings per share - basic and
diluted 6.1p 1.0p
Note of Historical Cost Profits and Losses
Year ended 31 Period ended 31
August 2007 August 2006
�'000 �'000
Profit on ordinary activities before 1,842
taxation 183
Unrealised gain on fair value of (823)
investments (196)
Realisation of prior years' net 138
unrealised gains on investment -
Historical cost profit on ordinary 1,157
activities before taxation (13)
Historical cost profit on ordinary 1,124
activities after taxation (13)
Balance Sheet
As at 31 August 2007 As at 31 August 2006
�'000 �'000 �'000 �'000
Fixed asset investments 12,535 3,280
Current assets:
Investments 17,080 25,045
Debtors 241 15
Cash at bank 46 11
17,367 25,071
Creditors: amounts
falling due within one
year (77) (104)
Net current assets 17,290 24,967
Net assets 29,825 28,247
Called up equity share
capital 2,950 2,953
Share premium - 25,114
Special distributable
reserve 25,089 -
Capital redemption
reserve 3 -
Revaluation reserve 882 196
Revenue reserve 901 (16)
Total equity
shareholders' funds 29,825 28,247
Net asset value per share 101.1p 95.7p
Cash Flow Statement
Year to 31 Period to 31
August 2007 August 2006
�'000 �'000
Net cash (outflow)/inflow from operating
activities (111) 76
Financial investment :
Purchase of investments (9,551) (3,084)
Sale of investments 1,965 -
Management of liquid resources :
Decrease/(increase) in cash equivalent
investments 7,965 (25,045)
Dividends paid (206) -
Financing :
Issue of own shares - 29,131
Share issue expenses - (1,064)
Repurchase of own shares (25) (3)
Increase in cash resources 36 11
Reconciliation of Net Cash Flow to Movement in Cash Resources
Year to 31 August Period to 31 August
2007 2006
�'000 �'000
Increase in cash resources 36 11
Movement in liquid
resources (7,965) 25,045
Opening net cash resources 25,056 -
Net cash at 31 August 17,127 25,056
Reconciliation of Operating Profit before Taxation to Cash Flow from
Operating Activities
Year to 31 Period to 31
August 2007 August 2006
�'000 �'000
Profit on ordinary activities before
tax 1,842 183
Unrealised gains on fixed asset
investments (728) (196)
Realised gains on fixed asset
investments (940) -
Increase in debtors (225) (15)
(Decrease)/Increase in creditors (61) 104
(Outflow)/Inflow from operating
activities (112) 76
Note. Fixed asset investments
Unquoted Aim-quoted Total
investments investments investments
31 August 31 August 31 August
2007 2007 2007
�'000 �'000 �'000
Valuation and net book amount:
Book cost as at 1 September 2006 1,918 1,166 3,084
Revaluation in the period (58) 254 196
Valuation at 1 September 2006 1,860 1,420 3,280
Movement in the year:
Purchases at cost 6,711 2,840 9,551
Disposal proceeds (539) (1,426) (1,965)
Profit on realisation of investments -
current year 294 646 940
Unrealised gain in year (681) 1,410 729
Valuation at 31 August 2007 7,645 4,890 12,535
Book cost at 31 August 2007 - Ordinary shares 1,475 3,364 4,839
-
Loan notes/other securities 6,908 - 6,908
Revaluation to 31 August 2007 - Ordinary
shares 79 1,526 1,605
- - Loan notes/other securities (817) - (817)
Valuation at 31 August 2007 7,745 4,890 12,535
Further details of the fixed asset investments held by the Company
are shown within the Investment Manager's Review.
The above summary of results for the year ended 31 August 2007 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.
Statutory financial statements will be filed with the Registrar of
Companies in due course; the auditor's report on those financial
statements under S235 of the Companies Act 1985 is unqualified and
does not contain a statement under S237 (2) or (3) of the Companies
Act 1985.
A copy of the full annual report and financial statements for the
year ended 31 August 2007 is expected to be posted to shareholders
shortly and will be available to the public at the registered office
of the company at 8 Angel Court, London, EC2R 7HP.
- ---END OF MESSAGE---
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