Final Results
24 Gennaio 2008 - 3:55PM
UK Regulatory
RNS Number:4943M
Bluehone AIM VCT PLC
24 January 2008
To: Company Announcements
From: Bluehone AiM VCT plc
Date: 24 January 2008
Investment Objective
To achieve long term capital growth through investment in a diversified
portfolio of companies raising new capital on AiM.
* Net asset value ("NAV") decreased by 11.1 per cent to 60.54 pence per
share before deduction of interim dividend
* Proposed final capital dividend of 1.5 pence per share
* NAV value total return of -9.6 per cent since launch
* 'C' shareholders NAV total return of -57.3 per cent since issue
The Chairman, Gordon Harvey, said:
Performance
"The cautious optimism which I expressed in my interim report last July for
smaller companies to move ahead in the autumn of 2007 now appears misplaced.
The emergence of the world wide credit crisis in August had a severe negative
impact on the valuations of smaller companies as investors became more risk
averse and moved away from this end of the market. This resulted in the AiM
market giving up most of the gains made in the first half and left the FTSE AIM
Index up 3.4 per cent for the twelve months to 30 November 2007. The performance
of AiM would have been worse had the positive influence of the large resource
sector been excluded. It must be remembered that most companies in this sector
do not qualify for inclusion in VCT portfolios. It is also interesting to note
that the valuation of smaller companies quoted on the main London Stock Market,
as measured by the FTSE SmallCap Index, fell by 11.7 per cent over the year and
by 23.2 per cent in the six months to 30 November 2007 and this is perhaps a
clearer indicator for how smaller companies have fared during this difficult
period. There is widespread concern amongst economic commentators about the
possible impact of the credit crisis and whether this will lead to a slowdown in
economic activity or even a recession during 2008. It appears that smaller
company valuations have fallen ahead of this even though many have yet to see
any change in their operating performance.
Against very challenging conditions in the AiM market, it is disappointing that
the progress made by the Company's NAV per share during the first half of the
year was undone in the second half. The NAV decreased by 11.1 per cent from
68.13p to 60.54p (before taking into account the interim dividend), having been
79.6p at the interim stage. Whilst the fall in value of smaller companies in
general was an unhelpful background for the portfolio, progress was also
hampered by a number of holdings in companies which disappointed, including poor
share price performance from one of its largest holdings Transense Technologies
which has been a longstanding holding in the portfolio and where, the Manager
took advantage of a strong performance in this company's shares earlier in the
year by selling a third of the holding at a profit. Unfortunately, the value of
the remaining part of the holding suffered from an aborted merger in the second
half of the year, resulting subsequently in management changes and a refinancing
which the Manager hopes will now help the company commercialise its exciting
sensor technology.
On a more positive note, a number of individual investments continued to make
progress with their business plans which resulted in an improvement in their
valuations, although not enough to compensate for the fallers. The Company
continued to benefit from exposure to its largest holding Egdon Resources which
experienced a 16 per cent increase in its share price over the year and
accounted for 19.4 per cent of the Company's total assets at the year end.
Egdon's shares performed strongly during the summer and the Manager took
advantage of this strength to continue to take profits from the holding,
realising a further �415,000. It is worth pointing out that over the past few
years a sum of �1.7 million has been realised from the holding in Egdon,
crystallising a profit of �1.6 million and helping to fund recent capital
dividends to shareholders.
Earnings and Dividends
Earnings for the period amounted to a loss of �189,000 and as in the past the
Board is not in the position to recommend a final income dividend. However,
buoyant market conditions at the start of the year enabled the realisation, in
part or as a whole, of a number of holdings at a profit which resulted in the
payment of an interim capital dividend of 1.5 pence per share in August and
allows the Board to recommend the payment of a final capital dividend of a
further 1.5 pence per share, making a total distribution of 3 pence per share
for the year - the same as last year. Although market conditions during the
second half of the year were less conducive to the profitable realisation of
investments, it continues to be the Board's belief that distributions are the
most effective and fairest way of returning capital as they are received by all
shareholders. To this end, the Board will continue to encourage the Manager to
realise investments, as market conditions and the development of individual
business plans permit, in order to facilitate further capital dividends.
During the year a total of 45,286 ordinary shares were issued under the Dividend
Reinvestment Scheme.
Portfolio Developments
The three priorities for the use of the free cash within the Company are: to
make distributions; to enable the Manager to maintain a balanced and refreshed
portfolio and; to undertake share buy backs from time to time. It may not be
possible to do all three of these at any one time. They depend on the Manager's
ability to manage the portfolio in order to generate the necessary cash and this
is dependent upon the state of the smaller companies market as well as the
optimum timing of divestments from individual investments. By managing our key
strategic holdings and generating liquidity, the Manager's strategy has been to
continue to broaden the diversity of the portfolio by bringing in new
opportunities as well as supporting existing investments. During the year, but
mostly in the first half when market conditions were more favourable, a sum of
�2.54 million was realised from disposals, including part sales of the holdings
in Egdon Resources, Transense Technologies, TEG Environmental, Worthington
Nicholls and Bond International as well as benefiting from the take-over of
Blooms of Bressingham. A total of �725,000 was reinvested into the portfolio in
three new holdings and to support fundraisings from five existing holdings. In
addition, the Board renewed its authority to buy back, as well as issue, a
proportion of the Company's shares at last year's AGM held in March 2007. The
volume of shares offered by the market for cancellation during the year was
1,193,554 and these were acquired at a cost of �765,425 and represented 5.65 per
cent of the issued share capital at the end of the financial year.
Outlook
Stock markets generally have started this year in a bearish mood being affected
by concerns about a possible recessionary period in the USA and its impact on
global economic growth. Here in the UK, it appears likely that the first half of
the year will see lower levels of economic growth than in recent years, with the
housing market softening further and consumers paring back their spending
habits. Stock markets will remain volatile, with little appetite being shown by
investors for riskier assets. However, after their recent sell-off, equity
markets, and in particular smaller company shares, are not expensive by
historical standards and with interest rates reaching their peak in the current
cycle and now on a downward trend there is room for appreciation in valuations.
It is hoped, that market sentiment will improve as the year progresses. It is
interesting to observe that there has been a recent marked increase in Director
share purchases, giving some justification for an anticipated recovery of the
market from these levels. Bluehone AiM VCT has a number of investments at
interesting and critical points in their development which I hope will have a
beneficial impact on the value of the Company as they come to fruition in the
coming year.
Enquiries:
Robert Mitchell / Sally Mills
Investment Managers
Bluehone Investors LLP Tel: 0207 496 8929
Rhonda Nicoll
Company Secretary
F&C Asset Management plc Tel: 0207 628 8000
Audited Income Statement of the Company
As at 30 November
2007 2007 2007
Revenue Capital Total
�'000 �'000 �'000
Profit on realisation of investments - 479 479
Unrealised losses - (1,782) (1,782)
Income 95 - 95
Investment management fee (50) (152) (202)
Other expenses (234) - (234)
Loss on ordinary activities before taxation (189) (1,455) (1,644)
Tax on ordinary activities - - -
Loss on ordinary activities after taxation (189) (1,455) (1,644)
Return per ordinary share: (0.87)p (6.73)p (7.60)p
Reconciliation of Movements in Shareholders' Funds
As at 30
November
2007
�'000
Opening shareholders' funds 15,826
Loss for the year (1,644)
Increase in share capital 31
Purchase of shares (765)
Dividends paid (989)
Closing shareholders' funds 12,459
Audited Income Statement of the Company
As at 30 November
2006 2006 2006
Revenue Capital Total
�'000 �'000 �'000
Profit on realisation of investments - 1,007 1,007
Unrealised gains - 637 637
Income 77 - 77
Investment management fee (79) (239) (318)
Other expenses (240) - (240)
(Loss)/profit on ordinary activities before taxation (242) 1,405 1,163
Tax on ordinary activities - - -
(Loss)/profit on ordinary activities after taxation (242) 1,405 1,163
Return per ordinary share: (1.06)p 6.17p 5.11p
Reconciliation of Movements in Shareholders' Funds
As at 30
November
2006
�'000
Opening shareholders' funds 15,642
Profit for the year 1,163
Increase in share capital 224
Purchase of shares (732)
Dividends paid (471)
Closing shareholders' funds 15,826
Audited Balance Sheet
As at As at
30 November 30 November
2007 2006
�'000 �'000
Fixed assets
Traded on AiM 9,366 13,476
Listed investments 1,757 927
Quoted on PLUS Market 40 31
Interest bearing security - 550
Unquoted investments 977 822
12,140 15,806
Net current assets 319 20
Net assets 12,459 15,826
Financed by:
Shareholders' funds 12,459 15,826
Net asset value per ordinary share: 59.04p 71.13p
Ordinary shares in issue 21,103,696 22,251,964
Summarised Audited Cash Flow Statement
Year to Year to
30 November 30 November
2007 2006
�'000 �'000
Net cash outflow from operating activities (447) (466)
Capital expenditure and financial investment 2,116 956
Equity dividends paid (989) (471)
----------- -----------
Net cash inflow before financing 680 19
Financing (734) (508)
----------- -----------
Decrease in cash (54) (489)
----------- -----------
Reconciliation of net cash flow to movement in net cash
Decrease in cash (54) (489)
Opening net cash 385 874
----------- -----------
Net cash at 30 November 331 385
----------- -----------
Reconciliation of net profit before taxation to net cash outflow from
operating activities
(Loss) / profit on ordinary activities before taxation (1,644) 1,163
Unrealised losses / (gains) 1,782 (637)
Profit on realisation of investments (479) (1,007)
(Increase) / decrease in debtors (113) 34
Increase / (decrease) in creditors 7 (19)
----------- -----------
Net cash outflow from operating activities (447) (466)
----------- -----------
Notes
1. The audited results which cover the year to 30 November 2007 have been
prepared under UK Generally Accepted Accounting Practice (UK GAAP) and
on the assumption that the Company maintains VCT status.
The Company is no longer an investment Company as defined by Section 266 of
the Companies Act 1985, as Investment Company status was revoked in order
to permit the dividend of capital profits.
The principal accounting policies adopted are set out below. Where
presentational guidance set out in the Statement of Recommended Practice
("SORP") for investment trusts issued by the Association of Investment
companies ("AIC") in January 2003, revised December 2005, is consistent
with the requirements of UK GAAP, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendations of the
SORP.
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 274 of the Income Tax Act 2007.
2. There were 21,103,696 ordinary shares in issue at 30 November 2007 (2006:
22,251,964). During the year 45,286 ordinary shares of 10p were issued
under the Dividend Reinvestment Scheme and 1,193,554 ordinary shares of 10p
each were bought in by the Company for cancellation at a cost of �765,000.
3. Revenue and capital returns for the year to 30 November 2007 are based on a
weighted average of 21,619,533 (2006: 22,765,807) ordinary shares in issue
during the year.
4. Income for the year to 30 November is derived from:
2007 2006
�'000 �'000
Dividend Income 61 52
Fixed Interest Investment Income 19 7
Deposit interest 15 18
95 77
5. The final proposed capital dividend of 1.5 pence per ordinary share will be
paid on 31 March 2008, subject to shareholder approval, to eligible
shareholders on the register on 1 February 2008.
6. These are not full accounts in terms of Section 240 of the Companies Act
1985. Full audited accounts for the year to 30 November 2006 have been
lodged with the Registrar of Companies. The annual report for the year to
30 November 2007 will be sent to shareholders shortly and will then be
available for inspection at F&C Asset Management plc, Exchange House,
Primrose Street, London, EC2A 2NY, the registered office of the Company.
Both the audited accounts for the year to 30 November 2006 and 30 November
2005 contain unqualified audit reports.
7. The Annual General Meeting will be held on 18 March 2007 at 10.30am.
This information is provided by RNS
The company news service from the London Stock Exchange
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