RNS Number:0786R
Baronsmead VCT 4 PLC
12 February 2007
To: RNS
From: Baronsmead VCT 4 plc
Date: 12 February 2007
Investment Objective
To achieve long-term capital growth and generate tax-free dividends for private
investors.
Audited Preliminary Results - Year Ended 31 December 2006
* NAV per ordinary share increased to 125.71p before deduction of dividends.
After dividends totaling 6.0p the NAV was 119.71p.
* NAV per C share increased to 97.61p before deduction of dividends.
After dividends totaling 1.5p the NAV was 96.11p.
* Total return to ordinary shareholders, since launch in 2001, is 47.5 per
cent, equivalent to an annualised return of 8.0% before income tax relief
and 12.9% afterwards.
The Chairman, Philip Dunne said:
"There has been strong valuation growth in both the unquoted and AiM parts of
the portfolio. In the last year there has been an improving asset mix and the
ordinary share portfolio is now 80 per cent invested by value.
The full year dividend of 6p per ordinary share shows a progressive record since
launch in January 2001 and consistent growth in both the Net Asset Value (NAV)
per ordinary share and the share price.
RESULTS | In the year to 31 December 2006, the NAV per ordinary share increased
by 14.4 per cent from 109.91p to 125.71p before dividends. The proposed final
dividend of 3.5p per ordinary share will be paid to shareholders on 30 March
2007, subject to shareholder approval. This brings the total ordinary dividends
for the year to 6p. Since launch in 2001, the total return for the ordinary
shares is 47.5 per cent net of all running costs.
The NAV per C share increased by 2.7 per cent from 95p at launch on 10 March
2006 to 97.61p before dividends. The proposed final dividend of 1p per ordinary
share will be paid to shareholders on 30 March 2007, subject to shareholder
approval and brings the total C share dividends for the period to 1.5p. Since
close of the fundraising offer in February 2006, the total return for the C
shares is 2.7 per cent.
I am pleased that the performance over the last year has continued the upward
path since our formation in December 2001. The Manager's performance fee is
only payable after the total return of 140 per cent, on ordinary shares, has
been achieved by the end of the fifth year and rises at 8 per cent simple
annually thereafter. A return of 2 per cent simple must be achieved on the C
share pool of assets. Both these levels have now been exceeded and a fee of
#0.99 million is payable of which #0.93 million, exclusive of VAT, is
attributable to the ordinary shares and #0.06 million to the C shares, both
representing 20 per cent of the return in excess of their respective hurdle
rates.
LONG TERM PERFORMANCE | The total return of 47.5 per cent represents an annual
compound growth rate of 8.0 per cent. These returns are stated before the
inclusion of VCT tax reliefs. If the original 20 per cent subscription relief
is taken into account the subsequent return is 84.4 per cent and the annual
compound growth rate increases to 12.9 per cent.
The total return compares to the advance by the FTSE All-Share Index of 53.0 per
cent. The total return at 31 December 2006 is some 24 per cent in excess of the
average of the peer group of four generalist VCTs. Compared with the 19
investment trusts that focus on Private Equity, the Company's total return is
below the average for this group of trusts at 58 per cent but is higher if the
initial income tax reliefs are taken into account.
Dividends of 17p have now been paid out or declared to founder ordinary
shareholders, with 45 per cent coming from net realised profits on the sale of
investments. On the share price of 109.5p at the year end, the cash yield
equates to 5.5 per cent tax-free to qualifying investors, which compares
favourably to the FTSE All-Share yield of 2.9 per cent. The overall dividend
has averaged 3.4p per share per annum and for the higher rate tax payer becomes
equivalent to a grossed up 5.0p.
To give potential purchasers of the shares more information, the total returns
are also being stated over 1, 3 and 5 years to 31 December 2006.
Ordinary Shares (%growth) One year Three years Five years
NAV total return 14.3 40.1 47.5
FTSE All-Share total return 16.8 60.8 50.2
THE PORTFOLIO | The ordinary share portfolio became more fully invested during
the year moving from 60 per cent to over 80 per cent by value split 61: 39
between unquoted and AiM investments.
14 new investments were made and 5 investments realised taking the net portfolio
to 56 companies, of which 18 are unquoted. Investments totalled #7.5 million
across 4 new unquoted and 10 new AiM-traded investees, together with follow-on
investments in 1 unquoted and 3 AiM-traded investees. The allocation policy
between ordinary and C shares is approved quarterly by the Board giving due
consideration to the constraints of the VCT legislation.
Six VCT tests relating to the running of the Company have to be, and were, met
for each day of the year to 31 December 2006. 70 per cent of the ordinary
share portfolio has to be invested in qualifying investments by the end of the
third accounting period, following that in which new share capital was
subscribed. At the year end, approximately 74 per cent of the ordinary capital
raised (net of launch costs), prior to 31 December 2004, was invested in VCT
qualifying investments.
The 'direction of travel' or relative health of portfolio companies is measured
quarterly in terms of profitability as well as other non-financial benchmarks.
At the year end, 89 per cent of the portfolio companies were reporting higher,
or steady profits which is one of the highest percentages since mid 2004, while
the portfolio has more than doubled to 56 investees over this time.
The sale of investments totalled #2.8 million realising net profit of some #1.1
million before the #533,000 write off of Spaform. The investment in Country
Artist was fully provided for whilst the loan stock investment in Hawskmere,
which was fully provided for last year, was written back to cost as trading has
recovered.
DEVELOPMENT OF THE SECONDARY MARKET | A shareholder survey was completed in the
last quarter of the year by 29 per cent of both ordinary and C shareholders,
some 870 shareholders in total. The responses confirmed the previous survey
results, from autumn 2004, that 73 per cent had no intention of selling in the
longer term and, overall, 64 per cent indicated a preference toward capital
growth rather than maximising income from dividend payments. This reinforces
the dual nature of the investment objectives; growth in the NAV per share as
well as, where possible, a progressive dividend policy.
The other survey questions focused on the secondary market. The ISA-style tax
reliefs up to #200,000 per year and continuing growth in total return were
indicated as the main priorities for purchasers. Buying existing shares, in the
Company, can provide investment attractions for ordinary shareholders who wish
to build their capital in a mature portfolio as opposed to receiving cash
dividends.
The new dividend investment plan (DRIP) was taken up by 280 ordinary
shareholders and 78,834 ordinary shares were issued in October 2006 to satisfy
the DRIP. No shares have been bought back by the Company since June 2006,
although the number of natural purchasers is minimal. This may remain the case
until the benefits, of the dividend yield and ISA-style tax reliefs, of
purchasing in the secondary market are better understood.
The ability of the Board to re-issue shares out of Treasury is being deferred
until HM Revenue & Customs has confirmed that these shares can be issued under
the pre 6 April 2006 VCT legislation. This view may not be forthcoming, in
which case the Board will have to reconsider its policy towards the use of
Treasury shares as a means to improve shareholder liquidity, which was the
original intent behind the introduction of Treasury Shares legislation in
December 2003.
INVESTMENT MANAGEMENT | In December 2006, the Board announced that it had agreed
with the Manager that the co-invest plan, originally introduced in November
2004, be extended so that the investment executives will invest 12 per cent in
all the Manager-led unquoted investments made by the generalist Baronsmead VCTs.
However, to ensure that shareholders are not disadvantaged in any way, the
Board has agreed a reduction over the two years from 1 April 2007, to the
performance fee paid to the Manager from its current level of 20 per cent to 10
per cent of the excess over the hurdle rate. The Board carefully examined the
combined effect of these amendments and believes that these changes are likely
to lead to improved performance levels. If performance were to deteriorate, the
changes would be likely to have only a neutral effect on shareholder returns.
The Company now has approximately 2,900 ordinary and C shareholders and the task
as a Board is to ensure that we meet and understand their requirements. The AGM
will be held on 27 March 2007 at 12 noon at the London Stock Exchange, 10
Paternoster Square, London EC4M 7LS.
OUTLOOK | There has been steady and now upward progress over the last five years
as the Company has become more fully invested. The portfolio is in good shape
and the Manager's intention is to sustain this progress through rigour in
investment selection and subsequent active management.
Subscribers since 2001 will be benefiting from both this performance and the VCT
tax reliefs. The Board believes it appropriate to introduce measures to develop
an active secondary market so that purchasers are attracted to the investment
merits of the Company and the ability to grow the total return including the
progressive payment of tax-free dividends."
Enquiries: David Thorp 0207 506 1609 ISIS EP LLP
Rhonda Nicoll 0131 718 1074 F&C Asset Management plc
Baronsmead VCT 4 plc
Audited Income Statement
Year to 31 December 2006
Ordinary Shares
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 5,678 5,678
Realised gains on investments - 506 506
Income 1,299 - 1,299
Investment management fee (290) (1,964) (2,254)
Other expenses (240) - (240)
Profit on ordinary activities before taxation 769 4,220 4,989
Tax on ordinary activities (146) 172 26
Profit on ordinary activities after taxation 623 4,392 5,015
Return per ordinary share: 1.94p 13.69p 15.63p
Audited Reconciliation of Movements in Shareholders' Funds
2006
Ordinary
Shares
#'000
Opening shareholders' funds 36,367
Profit for the year 5,015
Increase in share capital 189
Purchase of shares (603)
Dividends paid (1,607)
Closing shareholders' funds 39,361
Baronsmead VCT 4 plc
Audited Income Statement
Year to 31 December 2006
C Shares*
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 346 346
Realised gains on investments - 64 64
Income 693 - 693
Investment management fee (92) (343) (435)
Other expenses (124) - (124)
Profit on ordinary activities before taxation 477 67 544
Tax on ordinary activities (136) 110 (26)
Profit on ordinary activities after taxation 341 177 518
Return per ordinary share: 1.71p 0.88p 2.59p
* The C shares launched on 10 March 2006.
Audited Reconciliation of Movements in Shareholders' Funds
2006
C Shares
#'000
Profit for the year 518
Increase in share capital 19,003
Dividends paid (100)
Closing shareholders' funds 19,421
Baronsmead VCT 4 plc
Audited Income Statement
Year to 31 December 2006
Total
Revenue Capital Total
#'000 #'000 #'000
Unrealised gains on investments - 6,024 6,024
Realised gains on investments - 570 570
Income 1,992 - 1,992
Investment management fee (382) (2,307) (2,689)
Other expenses (364) - (364)
Profit on ordinary activities before taxation 1,246 4,287 5,533
Tax on ordinary activities (282) 282 -
Profit on ordinary activities after taxation 964 4,569 5,533
Return per ordinary share: 2.00p 9.47p 11.47p
Audited Reconciliation of Movements in Shareholders' Funds
2006
Total
#'000
Opening shareholders' funds 36,367
Profit for the year 5,533
Increase in share capital 19,192
Purchase of shares (603)
Dividends paid (1,707)
Closing shareholders' funds 58,782
Baronsmead VCT 4 plc
Audited Income Statement
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
Audited Reconciliation of Movements in Shareholders' Funds
2005
#'000
Opening shareholders' funds 33,929
Profit for the year 4,209
Decrease in share capital (369)
Dividends paid (1,402)
Closing shareholders' funds 36,367
Baronsmead VCT 4 plc
Audited Balance Sheet
As at
As at 31 December 2006 31 December
2005
Ordinary C
Shares Shares Total Total
#'000 #'000 #'000 #'000
Fixed assets
Traded on AiM 12,235 993 13,228 9,509
Interest bearing securities 6,678 16,423 23,101 11,706
Unquoted investments 19,286 948 20,234 12,598
38,199 18,364 56,563 33,813
Net current assets 1,162 1,057 2,219 2,554
Net assets 39,361 19,421 58,782 36,367
Financed by:
Shareholders' funds 39,361 19,421 58,782 36,367
Net asset value per share (Basic): 123.21p 97.11p - 112.41p
Net asset value per share (Treasury): 123.12p - - -
Shares in issue 31,945,938 20,000,000 - 32,353,238
Shares in Treasury 205,000 - - -
Baronsmead VCT 4 plc
Summarised Audited Statement of Cash Flows
Year to 31 December 2006 Year to 31
December 2005
Ordinary C
Shares Shares Total Total
#'000 #'000 #'000 #'000
Net cash (outflow)/inflow from operating (62) 82 20 (14)
activities
Taxation paid - - - (73)
Capital expenditure and financial investment 1,803 (17,954) (16,151) (629)
Equity dividends paid (1,607) (100) (1,707) (1,402)
Net cash inflow/(outflow) before financing 134 (17,972) (17,838) (2,118)
Financing (414) 19,003 18,589 (369)
(Decrease)/increase in cash (280) 1,031 751 (2,487)
Reconciliation of net cash flow to movement in
net cash
(Decrease)/increase in cash (280) 1,031 751 (2,487)
Opening cash position 2,645 - 2,645 5,132
Closing cash position 2,365 1,031 3,396 2,645
Reconciliation of net revenue before taxation to net cash (outflow)/inflow from operating activities
Year to 31 December 2006 Year to 31
December 2005
Ordinary C
Shares Shares Total Total
#'000 #'000 #'000 #'000
Profit on ordinary activities before taxation 4,989 544 5,533 4,206
Profit on realisation of investments (506) (64) (570) (948)
Unrealised gains on investments (5,678) (346) (6,024) (3,217)
Decrease/(increase) in debtors 31 (282) (251) (66)
Increase in creditors 1,102 230 1,332 11
Net cash (outflow)/inflow from operating (62) 82 20 (14)
activities
Notes
1. The audited results which cover the year to 31 December 2006 have been
prepared under UK Generally Accepted Accounting Practice (UK GAAP).
In order to better reflect the activities of a VCT and in accordance with the
SORP, supplementary information which analyses the income statement between
items of a revenue and capital nature has been presented alongside the income
statement. The Net Revenue is the measure the Directors believe appropriate in
assessing the Company's compliance with certain requirements set out in Section
842 AA Income and Corporation Taxes Act 1988.
2. There were 31,945,938 ordinary shares in issue at 31 December 2006 (31
December 2005: 32,353,238). During the year the Company issued 172,700 ordinary
shares raising net proceeds of #189,000 and bought back for cancellation 375,000
ordinary shares at a cost of #382,000. Since the Company's AGM held on 9 March
2006, the Company has bought back 205,000 ordinary shares to be held in Treasury
at a cost of #221,000. The total number of ordinary shares listed at 31 December
2006 was 32,150,938.
During the year the Company issued 20,000,000 C shares raising net
proceeds of #19,012,000.
3. Revenue and capital returns for the year to 31 December 2006 are based
on a weighted average of 32,088,009 (2005: 32,659,774) ordinary shares in issue
during the year.
Revenue and capital returns for the C shares for the period from launch to 31
December 2006 are based on a weighted average of 20,000,000 C shares in issue
during the period.
4. Income for the year derived from:
2006 2005
Total Total
#'000 #'000
Dividend Income 296 147
Fixed interest investment 1,460 1,162
Deposit interest 236 60
1,992 1,369
5. The final proposed dividend of 3.5 pence per ordinary share and
1.0 pence per C share will be paid on 30 March 2007, subject to shareholder
approval, to eligible shareholders on the register on 23 February 2007.
6. These are not full accounts in terms of Section 240 of the Companies
Act 1985. Full audited accounts for the year to 31 December 2005 have been
lodged with the Registrar of Companies. The annual report for the year to 31
December 2006 will be sent to shareholders shortly and will then be available
for inspection at ISIS EP LLP, 100 Wood Street, London, the registered office of
the Company. Both the audited accounts for the year to 31 December 2006 and
year to 31 December 2005 contain unqualified audit reports.
9. The Annual General Meeting will be held on 27 March 2007 at 12 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFUSUESWSEEE
Grafico Azioni Baronsmead Vct 4 (LSE:BNS)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Baronsmead Vct 4 (LSE:BNS)
Storico
Da Set 2023 a Set 2024
