RNS Number:1541S
Aberdeen Growth VCT1 PLC
11 April 2008
Aberdeen Growth VCT I PLC
The Directors announce the Company's results for the year ended 31 January 2008.
Among the highlights are:
* NAV total return on Ordinary Shares relatively stable at 79.72p per
share (pps) at year end, fractionally down 1.8% over the year.
* Net Asset Value (NAV) of Ordinary Shares at year end of 69.8pps.
* Further repositioning of the portfolio during the year towards later
stage, yielding assets.
* Strong level of new investment activity; 10 new unlisted investments
and 15 new AIM/PLUS investments completed during the reporting period.
* Successful exits from unlisted companies during the year plus receipt
of deferred consideration generated a gain of 1.9pps.
* Net realised gains from AIM/PLUS stocks of 2.9pps for the year.
* Further dividends proposed of 2.0pps bring total for year to 4.0pps.
Performance
The NAV total return per Ordinary Share at 31 January 2008 was 79.72pps, a
modest decrease of 1.8% over the equivalent figure at January 2007. The full
year position has fallen back from the advance achieved at the half year, due to
the decline in the AIM market in the second half of the year when the FTSE AIM
All-Share Index fell by 18.9%. In context, this performance has been achieved
against a background of extreme market volatility in recent months and during a
year in which the Manager has been repositioning the portfolio towards a higher
proportion of unlisted investments. The Board considers this to be a commendable
achievement and the majority of the assets in the invested portfolio are now in
well managed, growing, later-stage private companies which are not directly
affected by quoted market sentiment, and where performance remains generally
encouraging.
The most important measure for a VCT is NAV total return being the long term
record of income and capital gains dividend payments plus the current NAV. In
the short term, the NAV on its own is a less important measure of the
performance as the underlying investments are long-term in nature and not
readily realisable.
The NAV per Ordinary Share at 31 January 2008, before payment of a dividend in
respect of the year then ended, was 69.8p compared with 73.8p at 31 January
2007; however dividends totalling 2.5pps had been paid during the year which
effectively reduced the opening NAV by that amount. The effect of paying the
proposed final dividend of
2.0pps will be to reduce the NAV to 67.8pps.
Dividend policy
The Board is recommending the payment of a final dividend of 2.0pps on 27 June
2008 to Shareholders on the register on 30 May 2008. The proposed final dividend
will comprise 1.5p in respect of revenue and 0.5p in respect of capital. With an
interim capital dividend of 2.0pps having been paid on 16 November 2007, the
total dividend in respect of the year ended 31 January 2008 will, therefore, be
4.0pps.
The Board intends to pay regular dividends from realised gains and hopes that
the level of payment will be increased over time, but this cannot be guaranteed.
All dividends are, of course, paid tax-free to Shareholders and, to an investor
who subscribed at launch, a net dividend of 4.0pps is equivalent to a yield of
5.3% to a higher-rate taxpayer from an equity investment; if the initial tax
relief of 20% is taken into account, the effective annual yield rises to 6.7%.
Since the Company's launch, and after receipt of the final dividend,
Shareholders will have received 11.92pps in tax-free dividends.
Outlook
The new unlisted investments made over the course of the year are generally
trading well and should form the basis of successful realisations in future
periods, although it is too early to predict the quantum and timing of those
realisations. The Manager continues to be extremely selective in the choice of
AIM investments and those holdings should provide realised gains in due course.
AIM investments are actively traded with profit taken when it is available in
the market and this policy will continue into the future.
There is a continual need to re-invest following the realisation of successful
investments. The Company is well placed to achieve this given the Manager's
extensive network and local relationships throughout the UK from which
investments can be sourced. As part of the ongoing repositioning of the
portfolio, the Manager will continue to focus on the market for later stage
private equity transactions, seeking to invest in well priced and yielding
assets in an attempt to drive future growth in the level of total return.
Aberdeen Growth VCT I PLC
INCOME Statement*
For the year ended 31 January 2008
Year ended Year ended
31 January 2008 31 January 2007
(audited) (audited)
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains on investments (406) (406) - 1,373 1,373
Income from investments 761 - 761 398 - 398
Other income 37 - 37 19 - 19
Investment management fees (50) (449) (499) (49) (442) (491)
Other expenses (237) (237) (219) - (219)
-
Net return/(loss) on ordinary activities 511 (855) (344) 149 931 1,080
before tax
Tax on ordinary activities (115) 115 - - - -
Profit/(loss) attributable to equity 396 (740) (344) 149 931 1,080
Shareholders
Earnings per Ordinary Share (pence) 1.76 (3.29) (1.53) 0.66 4.12 4.78
* The total column of this statement is the Profit and Loss Account of the
Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains and losses are recognised in the Income Statement.
Aberdeen Growth VCT I PLC
REconciliation of movements in shareholders' funds
For the year ended 31 January 2008
Year ended Year ended
31 January 2008 31 January 2007
(audited) (audited)
�'000 �'000
Opening Shareholders' funds 16,601 16,943
Total (loss)/profit for the year (344) 1,080
Repurchase and cancellation of shares - (241)
Dividends paid - revenue (112) (273)
Dividends paid - capital (450) (908)
Closing Shareholders' funds 15,695 16,601
ABERDEEN GROWTH VCT I PLC
BALANCE SHEET
As at 31 January 2008
31 January 2008 31 January 2007
(audited) (audited)
�'000 �'000 �'000 �'000
Investments at fair value through profit or 15,156 12,015
loss
Current assets
Debtors 440 638
Cash and overnight deposits 136 4,000
576 4,638
Creditors
Amounts falling due within one year (37) (52)
Net current assets 539 4,586
Net assets 15,695 16,601
Capital and reserves
Called up share capital 2,248 2,248
Share premium account 10,535 10,535
Capital reserve - realised (2,992) (2,157)
Capital reserve - unrealised (2,684) (2,779)
Distributable reserve 7,942 8,392
Capital redemption reserve 212 212
Revenue reserve 434 150
Equity Shareholders' funds 15,695 16,601
Net Asset Value per Ordinary Share (pence) 69.8 73.8
ABERDEEN GROWTH VCT I PLC
CASH FLOW STATEMENT
For the year ended 31 January 2008
Year ended Year ended
31 January 2008 31 January 2007
(audited) (audited)
�'000 �'000 �'000 �'000
Operating activities
Investment income received 601 523
Deposit interest received 56 17
Investment management fees paid (499) (593)
Secretarial fees paid (71) (85)
Directors' expenses paid (77) (71)
Other cash payments (97) (103)
Net cash outflow from operating activities (87) (312)
Financial investment
Purchase of investments (7,628) (6,358)
Sale of investments 4,413 11,790
Net cash (outflow)/inflow from financial (3,215) 5,432
investment
Equity dividends paid (562) (1,181)
Net cash (outflow)/inflow before financing (3,864) 3,939
Financing
Share repurchases - (241)
Net cash outflow from financing (241)
-
(Decrease)increase in cash (3,864) 3,698
Notes
Accounting Policies - UK Generally Accepted Accounting Practice
(a) Basis of preparation
The Financial Statements have been prepared under the historical cost
convention, modified to include the revaluation of investments, and in
accordance with the Statement of Recommended Practice 'Financial Statements of
Investment Trust Companies' (the SORP) issued in 2005.
(b) Income
Dividends receivable on equity shares and unit trusts are treated as revenue for
the period on an ex-dividend basis.
Where no ex-dividend date is available, dividends receivable on or before the
year end are treated as revenue for the period. Provision is made for any
dividends not expected to be received. The fixed returns on debt securities and
none equity shares are recognised on a time apportionment basis so as to reflect
the effective interest rate on the debt securities and shares. Provision is made
for any fixed income not expected to be received. Interest receivable from cash
and short term deposits and interest payable are accrued to the end of the year.
(c) Expenses
All expenses are accounted for on an accruals basis and charged to the income
statement. Expenses are charged
through the revenue account except as follows:
* expenses which are incidental to the acquisition and disposal of an
investment are charged to capital; and
* expenses are charged to realised capital reserves where a connection
with the maintenance or enhancement of the value of the investments can be
demonstrated. In this respect, the investment management fee has been allocated
10% to revenue and 90% to realised capital reserves to reflect the Company's
investment policy and prospective income and capital growth.
(d) Taxation
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the Balance Sheet date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the Balance Sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the underlying timing differences can be deducted. Timing
differences are differences arising between the Company's taxable profits and
its results as stated in the Financial Statements which are capable of reversal
in one or more subsequent periods.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences are expected to
reverse, based on tax rates and laws enacted or substantively enacted at the
Balance Sheet date.
The tax effect of different items of income/gain and expenditure/loss is
allocated between capital reserves and revenue account on the same basis as the
particular item to which it relates using the Company's effective rate of tax
for the period.
(e) Investments
In valuing unlisted investments the Directors follow the criteria set out below.
These procedures comply with the revised International Private Equity and
Venture Capital Valuation Guidelines for the valuation of private equity and
venture capital investments. Investments are recognised at their trade date and
are valued at fair value, which represent the Directors' view of the amount for
which an asset could be exchanged between knowledgeable willing parties in an
arm's length transaction. This does not assume that the underlying business is
saleable at the reporting date or that its current shareholders have an
intention to sell their holding in the near future.
A financial asset or liability is generally derecognised when the contract that
gives rise to it is settled, sold, cancelled or expires.
1. For investments completed within the 12 months prior to the reporting
date and those at an early stage in their development, fair value is determined
using the Price of Recent Investment Method, except that adjustments are made
when there has been a material change in the trading circumstances of the
company or a substantial movement in the relevant sector of the stock market.
2. Whenever practical, recent investments will be valued by reference to a
material arm's length transaction or a quoted price.
3. Mature companies are valued by applying a multiple to their fully-taxed
prospective earnings to determine the enterprise value of the company.
a. To obtain a valuation of the total ordinary share capital held by
management and the institutional investors, the value of third party debt,
institutional loan stock, debentures and preference share capital is deducted
from the enterprise value. The effect of any performance related mechanisms is
taken into account when determining the value of the ordinary share capital.
b. Preference shares, debentures and loan stock are valued using the Price
of Recent Investment Method. When a redemption premium has accrued, this will
only be valued if there is a reasonable prospect of it being paid. Preference
shares which carry a right to convert into ordinary share capital are valued at
the higher of the Price of Recent Investment Method basis and the price/earnings
basis, both described above.
4. Where there is evidence of impairment, a provision may be taken against
the previous valuation of the investment.
5. In the absence of evidence of a deterioration, or strong defensible
evidence of an increase in value, the fair value is determined to be that
reported at the previous Balance Sheet date.
6. All unlisted investments are valued individually by Aberdeen Private
Equity's Portfolio Management Team. The resultant valuations are subject to
detailed scrutiny and approval by the Directors of the Company.
7. In accordance with normal market practice, investments listed on AIM/
PLUS or another recognised stock exchange are valued at their bid market price.
(f) Gains and losses on investments
When the Company revalues its investments during the year, any gains or losses
arising are credited/charged to the income statement.
Movement in reserves
Share Capital Capital Special Capital Revenue
reserves - reserves - redemption reserve
premium distribut-able reserve
account realised unrealised reserve
�'000 �'000 �'000 �'000 �000 �'000
At 1 February 2007 10,535 (2,157) (2,779) 8,392 212 150
Losses on sales of
investments - (501) - - - -
Investment management fees - (449) - - - -
Net increase in value of
investments - - 95 - - -
Dividends paid - - (450) - (112)
-
Tax effect of capital
items - 115 - - - -
Profit on ordinary
activities - - - - - 396
As at 31 January 2008 10,535 (2,992) (2,684) 7,942 212 434
Returns per Ordinary Share
The returns per Ordinary Share are based on the following figures:
Year ended Year ended
31 January 2008 31 January 20087
�'000 �'000
Weighted average number of Ordinary 22,483,497 22,601,544
Shares in issue
Revenue return �396,000 �149,000
Capital return (�740,000) �931,000
Total return (�344,000) �1,080,000
Net Asset Value per Ordinary Share
Net Asset Value per Ordinary Share as at 31 January 2008 has been calculated
using the number of Ordinary Shares in issue at that date of 22,483,497(2007:
22,483,497).
Principal risks and uncertainties
The Company's invest in financial instruments, comprising securities and other
investments, cash balances, overnight deposits and debtors and creditors that
arise directly from its operations, for example, in respect of sales and
purchases awaiting settlement, and debtors for accrued income. The Company may
not enter into derivative transactions in the form of forward foreign currency
contracts, futures and options without the written permission of the Directors.
No derivative transactions were entered into during the year.
The main risks the Company faces from its financial instruments are: (i) market
price risk, being the risk that the value of investment holdings will fluctuate
as a result of changes in market prices caused by factors other than interest
rate or currency movement; (ii) interest rate risk; and (iii) liquidity risk. In
line with the Company's investment objective, the portfolio comprises UK
securities and therefore has no exposure to foreign currency risk. The Manager's
has policies in place for managing these risks and they have been applied
throughout the year. Additional risks faced by the Company, and the mitigation
approach adopted by the Board, are as follows:
* investment objective: the Board's aim is to maximise absolute returns
to Shareholders while managing risk by ensuring an appropriate
diversification of investments;
* investment policy: inappropriate stock selection leading to
underperformance in absolute and relative terms is a risk which the Manager
mitigates by operating within investment guidelines and regularly monitoring
performance against the peer group. The regulations affecting venture capital
trusts are central to the Company's investment policy;
* discount volatility: due to lack of liquidity in the secondary market,
venture capital trust shares tend to trade at discounts to net asset values
which the Board seeks to manage, through the Manager and the Company's Broker
by ensuring that sufficient information on the Company is available to
potential buyers of its shares; and
* regulatory risk: the Company operates in a complex regulatory
environment and faces a number of related risks. A breach of section 842AA of
the Income and Corporation Taxes Act 1988 could result in the Company being
subject to capital gains tax on the sale of its investments. A breach of the
VCT Regulations could result in the loss of VCT status and consequent loss of
tax reliefs currently available to Shareholders. A serious breach of other
regulations, such as the UKLA Listing Rules or the Companies Act, would lead
to suspension from the Stock Exchange, loss of VCT status and reputational
damage. The Board receives quarterly reports from the Manager in order to
monitor compliance with regulations.
The Board considers all of the above risks and the measures in place to manage
them at least twice each year.
Other information
The Annual General Meeting will be held on 18 June 2008, commencing at
10.30 a.m.
This Announcement has been prepared on the same basis as the Annual Report and
Financial Statements for the year ended 31 January 2007. The Annual Report and
Financial Statements for the year ended 31 January 2008 will be filed with the
Registrar of Companies and issued to Shareholders in due course.
The financial information contained within this Announcement does not constitute
the Company's statutory Financial Statements as defined in Section 240 of the
Companies Act 1985. The statutory Financial Statements for the year ended 31
January 2007 have been delivered to the Registrar of Companies and contained an
audit report which was unqualified and did not constitute statements under
Sections 237(2) or (3) of the Companies Act 1985.
Copies of this announcement will be available to the public at the office of
Aberdeen Asset Managers Limited, 149 St Vincent Street, Glasgow; at the
registered office of the Company, One Bow Churchyard, Cheapside, London and on
the Company's website at www.agvct.co.uk
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge:
* the Financial Statements have been prepared in accordance with the
applicable accounting standards and give a true and fair view of the assets,
liabilities and financial position of the Company as at 31 January 2008 and
for the year to that date; and
* the Directors' Report includes a fair review of the development and
performance of the Company, together with a description of the principal
risks and uncertainties that it faces.
By Order of the Board
ABERDEEN ASSET MANAGEMENT PLC
SECRETARIES
11 April 2008
This information is provided by RNS
The company news service from the London Stock Exchange
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