RNS Number:4274I
Baronsmead VCT 4 PLC
04 September 2006
Baronsmead VCT 4 plc
To: Company Announcements
From: Baronsmead VCT 4 plc
Date: 4 September 2006
Interim Results for the period to 30 June 2006
Highlights
* NAV per ordinary share increased by 8.2% to 118.95p before payment of a
2.5p interim dividend.
* NAV per C share of 95.36p before payment of a 0.5p interim dividend.
* After the declared dividends are paid, the NAV per ordinary share will be
116.45p and the C share will be 94.86p at 30 June 2006.
* The total return since launch in December 2001 on the ordinary shares is
39.4% (Association of Investment Trust Companies (AITC) Method), which is
equivalent to an annualised investment return of 7.6%.
The Chairman, Philip Dunne, said
"The unquoted investments have continued to progress well with good uplifts in
value. The resulting 8.2% increase in NAV per ordinary share in the six months
to 30 June 2006 has been achieved against a backcloth of increasingly uncertain
and volatile stock markets.
The Finance Act 2006 confirmed the earlier proposed VCT legislative revisions.
As a result, the Directors have decided to cease issuing new shares for the time
being. This means the Company will suspend the existing Dividend Reinvestment
Scheme (DRIS) for new shares. A Dividend Reinvestment Plan (DRIP) will replace
the DRIS, whereby existing ordinary shares will be issued in lieu of cash
dividends to ordinary shareholders who elect to participate.
RESULTS | In the six months to 30 June 2006, the Net Asset Value (NAV) per
ordinary share increased by 8.2% from 109.91p (after the final dividend) to
118.95p before payment of the interim dividend. A 2.5p interim dividend for
ordinary shares has been declared and will be paid on 27 October 2006.
The first two investments have been made for C shareholders and this new capital
will be increasingly invested over the period to 31 December 2008. The total
return for the C shares increased by 0.4% to 95.36p per share resulting from the
net revenue earned on the gilt and cash portfolio. After the declared interim
dividend of 0.5p per C share (payable on 27 October 2006), the resulting NAV per
C share was 94.86p at 30 June 2006.
The six VCT tests relating to the running of Baronsmead VCT 4 were met during
the period. The most visible of these tests is that more than 70% of the
portfolio has been invested in qualifying investments beyond the first three
accounting periods from when new share capital was subscribed. At the period
end, 96% of the capital raised prior to 30 November 2003 was invested in VCT
qualifying investments, and we are also on course to satisfy this ratio for the
next tranche of capital raised in the period to 31 December 2005.
172,700 new ordinary shares were issued at a price of 113.66p per share, to
existing shareholders who had subscribed to the DRIS in March 2006. The Company
bought back 580,000 ordinary shares at an average price of 104p representing a
discount of approximately 10% to NAV per share. 205,000 of these shares are
currently held in Treasury
LONG TERM PERFORMANCE | The total return since inception is 39.4% for the
ordinary shares (after taking account of a performance fee accrual as detailed
below) which compares to an increase of 39.0% for the FTSE All-Share Index over
the same period. The total return since inception is 0.4% for the C shares.
These returns are stated net of running costs but prior to launch costs being
taken into account. The ordinary share total return is over 20% ahead of the
peer group average of five generalists VCTs.
From inception in 2001, the Managers have had the incentive to grow the value of
the portfolio such that any performance fee becomes payable once the total
return of the ordinary shares is more than 40% and subsequently rises at 8%
simple annually thereafter. This level was achieved earlier than expected by 30
June 2006 and a performance fee of #330,000 (including VAT) has been accrued
assuming that the performance is sustained in the remaining six months. This is
based on the Managers receiving 20% of the total return in excess of the trigger
and is equivalent to 1.0p per ordinary share. No performance fee has yet been
achieved by the C share pool of assets.
From an investor's perspective, if a shareholder had invested #100 (before #5
launch costs) in 2001/2002, the NAV per share assuming dividends reinvested is
#133 to which the income tax subscription relief can be added.
THE PORTFOLIO | In the six months under review, 5 new investments were made and
after the sale of the investments in Language Line and Accuma Group plus the
write off of Spaform, the portfolio increased to 50 companies. Further rounds of
investment were made in Jelf Group and Driver Group. The C share portfolio now
has two investments valued at #0.5 million. New investments are allocated
between the Ordinary and C shares in proportions approved quarterly by the Board
giving due consideration to the constraints of the VCT legislation.
The Board reviews the relative health of portfolio companies quarterly in terms
of profitability as well as other non-financial benchmarks. At the period-end,
90% of the portfolio companies were reporting better or steady progress.
Five unquoted investments were revalued for the first time. Good trading
progress was also sustained at Martin Audio, Occam, RLA Group and Americana so
that there was a 6.9p NAV per ordinary share uplift well spread across this part
of the portfolio.
There was considerable volatility in the prices of AiM-traded companies as the
market rose strongly until the end of May and then went sharply into reverse
reducing the gains although leaving the value of the AiM portfolio almost #1
million ahead from 31 December 2005.
The main gains came from Begbies Traynor and Debtmatters (together over #1
million increase in value), which operate in the corporate and individual debt
management markets. The original cost of these two investments of #710,000 has
now been realised but their residual value remains at #2.1m. Elsewhere
additional gains for IPT and Jelf were offset by share price downgrades
following negative trading statements from Hamsard, IDOX, WIN and Zoo Digital.
INTRODUCTION OF THE DIVIDEND REINVESTMENT PLAN (DRIP) | The Budget statement in
March 2006 signalled that the Government wished to redirect the future capital
raised by VCTs after 6 April 2006 into smaller companies with gross assets of up
to #7 million, half that of the level that applied to capital raised before this
date. An analysis of the last 40 investments made by Baronsmead VCT 4 highlights
that most of these could have qualified within the revised level although a
significant minority of investees would not have subsequently qualified for
further rounds of capital.
The Board has decided not to issue new shares in the short-term until the impact
of the revisions is better understood. The immediate consequence is that the
current DRIS is suspended and the Board has introduced a DRIP to purchase
existing ordinary shares, which is similar to more conventional dividend
reinvestment schemes. Purchasing existing shares can provide investment
attractions for ordinary shareholders who wish to build their capital as opposed
to receiving cash dividends.
Shareholders who increase their holding via the DRIP will be buying into a
well-diversified portfolio, which has shown consistent overall growth. Realised
capital profits and net revenue have historically supported the current dividend
policy and this is also the future intention. Dividends generated by the DRIP
shares will be tax-free for qualifying ordinary shareholders and the shares are
not subject to capital gains tax.
If shareholders wish to participate in the DRIP the Registrars need to receive
the application no later than 6 October 2006 in order for the interim dividend
to qualify for the DRIP. The DRIP scheme is not available to C shareholders as
existing shares are unlikely to be available in the market until after
conversion into ordinary shares in early 2009.
The resolution at the EGM to enable the Board to re-issue shares out of Treasury
was passed on the 31 August 2006 with 92% of shareholders voting in favour, some
22% of the shareholder base. The authority will help satisfy demand in the event
that there are insufficient existing ordinary shares available in the market.
DEVELOPMENT OF THE SECONDARY MARKET | The track record of Baronsmead VCT 4 over
the last four years demonstrates a strong positive total return.
The share price has typically been 10% less than the NAV per ordinary share. The
Board believes that the yield on the ordinary shares may well be a more
appropriate basis for judging share price. The historic yield of dividends paid
in 2005 is 4.3% for basic rate taxpayers (which compares to a yield of 3% for
the FTSE All-Share Index) or 6.3% for those paying tax at the higher rate, which
are attractive levels for shareholders with a preference for income.
Following the VCT legislation revisions, the Managers will carry out a
shareholder survey later in 2006 so that the Board can consider how to develop
the secondary market and ensure that they maintain an up to date understanding
of shareholders' main priorities for the future.
OUTLOOK | During 2006 quoted markets have become increasingly volatile and we
have seen the first rise in UK interest rates for some time. Given this, we are
encouraged by the Manager's intention to build further on its unquoted
investment capabilities by enhancing the skills of its focused VCT investment
team as well as expanding the regional "ISIS" network. The medium-term aim is to
deliver a portfolio mix with sufficient diversity to mitigate economic
uncertainty, and to have a greater emphasis on unquoted investments, which have
historically generated stronger returns to shareholders due to the Manager's
active investment style."
David Thorp, ISIS EP LLP plc: 0207 506 1609
Rhonda Nicoll, F&C Asset Management plc: 0131 465 1074
Unaudited Income Statement
Ordinary Shares
Six months to 30 June 2006
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 3,553 3,553
Realised losses on investments (342) (342)
Income 611 - 611
Investment management fee (140) (750) (890)
Other expenses (97) - (97)
---------- ----------- -----------
Profit on ordinary activities before taxation 374 2,461 2,835
Tax on ordinary activities (96) 114 18
---------- ----------- -----------
Profit on ordinary activities after taxation 278 2,575 2,853
---------- ---------- -----------
Return per ordinary share 0.86p 7.99p 8.85p
---------- ---------- -----------
Dividends paid/proposed: Revenue Capital Total
#'000 #'000 #'000
Final dividend for the year ended 31 December 2005 of 2.5p per
ordinary share 453 356 809
Interim dividend for the year ended 31 December 2006 of 2.5p per
ordinary share 256 543 799
709 899 1,608
Unaudited Reconciliation of Movement in Shareholders' Funds
Six months to 30 June 2006
Ordinary
Shares
#'000
Opening shareholders' funds 36,367
Profit for the period 2,853
Increase in share capital in issue 189
Purchase of shares for cancellation/Treasury (602)
Dividends paid (809)
Closing shareholders' funds 37,998
Unaudited Income Statement
C Shares
Six months to 30 June 2006
Revenue Capital Total
#'000 #'000 #'000
Unrealised losses on investments - (14) (14)
Income 277 - 277
Investment management fee (35) (103) (138)
Other expenses (46) - (46)
---------- ----------- -----------
Profit/(loss) on ordinary activities before taxation 196 (117) 79
Tax on ordinary activities (44) 26 (18)
---------- ----------- -----------
Profit/(loss) on ordinary activities after taxation 152 (91) 61
---------- ---------- -----------
Return per C share 0.76p (0.46)p 0.30p
---------- ---------- -----------
Dividends proposed: Revenue Capital Total
#'000 #'000 #'000
Interim dividend for the year ended 31 December 2006 of 0.5p per C
share 100 - 100
100 - 100
Unaudited Reconciliation of Movement in Shareholders' Funds
Six months to 30 June 2006
C Shares
#'000
Opening shareholders' funds Nil
Profit for the period 61
Increase in share capital in issue 19,012
Closing shareholders' funds 19,073
Unaudited Income Statement
Total Shares
Six months to 30 June 2006
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 3,539 3,539
Realised losses on investments - (342) (342)
Income 888 - 888
Investment management fee (175) (853) (1,028)
Other expenses (143) - (143)
---------- ----------- -----------
Profit on ordinary activities before taxation 570 2,344 2,914
Tax on ordinary activities (140) 140 -
---------- ----------- -----------
Profit on ordinary activities after taxation 430 2,484 2,914
---------- ---------- -----------
Return per share 0.82p 4.76p 5.58p
---------- ---------- -----------
Dividends paid/proposed: Revenue Capital Total
#'000 #'000 #'000
Final dividend for the year ended 31 December 2005 of 2.5p per
ordinary share 453 356 809
Interim dividend for the year ended 31 December 2006 of 2.5p per
ordinary share 256 543 799
Interim dividend for the year ended 31 December 2006 of 0.5p per C
share 100 - 100
809 899 1,708
Unaudited Reconciliation of Movement in Shareholders' Funds
Six months to 30 June 2006
Total
Shares
#'000
Opening shareholders' funds 36,367
Profit for the period 2,914
Increase in share capital issue 19,201
Purchase of shares for cancellation/Treasury (602)
Dividends paid (809)
Closing shareholders' funds 57,071
Unaudited Income Statement
Six months to 30 June 2005
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 1,953 1,953
Realised losses on investments - (54) (54)
Income 527 - 527
Investment management fee (124) (374) (498)
Other expenses (129) - (129)
---------- ----------- -----------
Profit on ordinary activities before taxation 274 1,525 1,799
Tax on ordinary activities (112) 112 -
---------- ----------- -----------
Profit on ordinary activities after taxation 162 1,637 1,799
---------- ---------- -----------
Return per ordinary share 0.49p 4.99p 5.48p
_____ _____ _____
Dividends paid/proposed: Revenue Capital Total
#'000 #'000 #'000
Second interim dividend for the year ended 31 December 2004 of
1.0p per share - 328 328
Final dividend for the year ended 31 December 2004 of 1.3p per
share 427 - 427
Interim dividend for the year ended 31 December 2005 of 2.0p per
share 158 489 647
585 817 1,402
Unaudited Reconciliation of Movement in Shareholders' Funds
Six months to 30 June 2005
Ordinary
Shares
#'000
Opening shareholders' funds 33,929
Profit for the period 1,799
Increase in share capital in issue 181
Purchase of shares for cancellation (321)
Dividends paid (755)
Closing shareholders' funds 34,833
Audited Income Statement
Ordinary Shares
Year to 31 December 2005
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 3,217 3,217
Realised gains on investments - 948 948
Income 1,369 - 1,369
Investment management fee (258) (774) (1,032)
Other expenses (296) - (296)
---------- ----------- -----------
Profit on ordinary activities before taxation 815 3,391 4,206
Tax on ordinary activities (186) 189 3
---------- ----------- -----------
Profit on ordinary activities after taxation 629 3,580 4,209
---------- ---------- -----------
Return per ordinary share 1.93p 10.96p 12.89p
---------- ---------- -----------
Dividends paid/proposed: Revenue Capital Total
#'000 #'000 #'000
Second interim dividend for the year ended 31 December 2004 of
1.0p per ordinary share - 328 328
Final dividend for the year ended 31 December 2004 of 1.3p per
ordinary share 427 - 427
Interim dividend for the year ended 31 December 2005 of 2.0p per
ordinary share 158 489 647
Final dividend for the year ended 31 December 2005 of 2.5p per
ordinary share 453 356 809
1,038 1,173 2,211
Audited Reconciliation of Movement in Shareholders' Funds
Year to 31 December 2005
Ordinary
Shares
#'000
Opening shareholders' funds 33,929
Profit for the year 4,209
Net decrease in share capital in issue (369)
Dividends paid (1,402)
Closing shareholders' funds 36,367
Unaudited Balance Sheet
As at 30 June 2006
Ordinary Shares C
Shares Total
#'000 #'000 #'000
Fixed Assets
Quoted on AiM 10,854 481 11,335
Unquoted investments 15,483 - 15,483
Listed interest bearing securities 10,219 15,177 25,396
_______ _______ _______
36,556 15,658 52,214
Net current assets 1,442 3,415 4,857
______ ______ ______
Total assets less current liabilities 37,998 19,073 57,071
______ ______ ______
Financed by:
Shareholders' funds 37,998 19,073 57,071
______ ______ ______
Net asset value per ordinary/C share: 118.95p 95.36p
Ordinary/C shares in issue 31,945,938 20,000,000
Treasury net asset value per share+ 118.86p
Number of ordinary shares in issue 31,945,938
Number of ordinary shares held in Treasury 205,000
Number of listed ordinary shares 32,150,938
+ At an EGM held on 31 August 2006, shareholders renewed the existing authority
to disapply pre-emption rights in relation to the allotment or sale from
Treasury of up to 10 per cent of the listed share capital. The Board is now
mandated to sell Treasury shares at a discount to the prevailing NAV.
Accordingly the shares held in Treasury at 30 June 2006 have been valued at
middle market price.
Unaudited Balance Sheet
As at 30 June 2005
Ordinary
Shares
#'000
Fixed Assets
Quoted on AiM 8,240
Unquoted investments 10,028
Listed interest bearing securities 15,598
_______
33,866
Net current assets 967
______
Total assets less current liabilities 34,833
______
Financed by:
Shareholders' funds 34,833
______
Net asset value per ordinary share: 106.81p
Ordinary shares in issue 32,610,959
Audited Balance Sheet
As at 31 December 2005
Ordinary
Shares
#'000
Fixed Assets
Quoted on AiM 9,509
Unquoted investments 12,598
Listed interest bearing securities 11,706
_______
33,813
Net current assets 2,554
______
Total assets less current liabilities 36,367
______
Financed by:
Shareholders' funds 36,367
______
Net asset value per ordinary share: 112.41p
Ordinary shares in issue 32,353,238
Summarised Unaudited Statement of Cash Flows
Six months to 30 June 2006
Ordinary C Total
Shares Shares
#'000 #'000 #'000
Net cash inflow from operating activities 20 17 37
Capital expenditure and financial investment 439 (15,672) (15,233)
Equity dividends paid (809) - (809)
----------- ----------- -----------
Net cash outflow before financing (350) (15,655) (16,005)
Net cash (outflow)/inflow from financing (413) 19,137 18,724
----------- ----------- -----------
(Decrease)/increase in cash (763) 3,482 2,719
----------- ----------- -----------
Reconciliation of net cash flow to movement in net cash
(Decrease)/increase in cash (763) 3,482 2,719
Opening net cash 2,645 - 2,645
----------- ----------- -----------
Net cash at end of period 1,882 3,482 5,364
----------- ----------- -----------
Reconciliation of operating profit before taxation to net cash flow from
operating activities
Profit on ordinary activities before taxation 2,835 79 2,914
Unrealised (gains)/losses on investments (3,553) 14 (3,539)
Realised losses/(gains) on investments 342 - 342
Decrease/(increase) in debtors 108 (209) (101)
Increase in creditors 288 133 421
----------- ----------- -----------
Net cash inflow from operating activities 20 17 37
----------- ----------- -----------
Summarised Unaudited Statement of Cash Flows
Six months to 30 June 2005
Ordinary Shares
#'000
Net cash inflow from operating activities 10
Capital expenditure and financial investment (3,072)
Equity dividends paid (755)
-----------
Net cash outflow before financing (3,817)
Net cash outflow from financing (134)
-----------
Decrease in cash (3,951)
-----------
Reconciliation of net cash flow to movement in net cash
Decrease in cash (3,951)
Opening net cash 5,132
-----------
Net cash at end of period 1,181
-----------
Reconciliation of operating profit before taxation to net cash flow from
operating activities
Profit on ordinary activities before taxation 1,799
Unrealised gains on investments (1,953)
Realised losses on investments 54
Decrease in debtors 95
Increase in debtors 15
-----------
Net cash inflow from operating activities 10
-----------
Summarised Audited Statement of Cash Flows
Year to 31 December 2005
Ordinary Shares
#'000
Net cash outflow from operating activities (14)
Capital expenditure and financial investment (629)
Equity dividends paid (1,402)
-----------
Net cash outflow before financing (2,045)
Net cash outflow from financing (442)
-----------
Decrease in cash (2,487)
-----------
Reconciliation of net cash flow to movement in net cash
Decrease in cash (2,487)
Opening net cash 5,132
-----------
Net cash at end of period 2,645
-----------
Reconciliation of operating profit before taxation to net cash flow from
operating activities
Profit on ordinary activities before taxation 4,206
Unrealised gains on investments (3,217)
Realised gains on investments (948)
Increase in debtors (66)
Increase in creditors 11
-----------
Net cash outflow from operating activities (14)
-----------
Notes
1. The unaudited interim results which cover the six months to 30 June 2006
have been drawn up in accordance with the applicable accounting standards and
adopting the accounting policies set out in the statutory accounts for the year
ended 31 December 2005.
2. There were 31,945,938 ordinary shares in issue at 30 June 2006 (31 December
2005: 32,353,238; 30 June 2005: 32,610,959). During the period 172,700 ordinary
shares were issued and 580,000 ordinary shares were bought in by the company at
a cost of #602,000.
During the period 20,000,000 C shares were issued. There were 20,000,000 C
shares in issue at 30 June 2006.
3. Earnings for the six months to 30 June 2006 should not be taken as a guide
to the results for the full year. The returns per ordinary share are based on a
weighted average of 32,231,641 (31 December 2005: 32,659,774; 30 June 2005:
32,610,682) ordinary shares in issue during the period. The returns per C share
are based on a weighted average of 20,000,000 C shares in issue during the
period.
4. The interim dividends of 2.5p per ordinary share (comprising 0.8p revenue
dividend and 1.7p capital dividend) and 0.5p per C share (revenue) will be paid
on 27 October 2006 to shareholders on the register on 15 September 2006.
5. On 26 July 2006, the Company received court approval to transfer
#9,012,000, being the amount standing to the credit of the share premium account
regarding the C shares, to a special distributable reserve. Shareholder approval
allows the reserve to make any distributions and accordingly, the reserve will
be amalgamated with the Profit and Loss account of the Company.
6. These are not statutory accounts in terms of Section 240 of the Companies
Act 1985 and are unaudited. The full audited accounts for the period to 31
December 2005, which were unqualified, have been lodged with the Registrar of
Companies. No statutory accounts in respect of any period after 31 December 2005
have been reported on by the Company's auditors or delivered to the Registrar of
Companies.
7. Copies of the interim report have been mailed to shareholders and are
available from the Registered Office of the Company at 100 Wood Street, London,
EC2V 7AN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FZLFBQKBZBBD
Grafico Azioni Baronsmead Vct 4 (LSE:BNS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Baronsmead Vct 4 (LSE:BNS)
Storico
Da Lug 2023 a Lug 2024
