Eclipse VCT 2 plc
Unaudited interim results for the 6 months ended 31 July 2006
Financial Summary
Six months Period ended Period ended
ended 31 July 2005 31 January
31 July 2006 (re-stated)** 2006
* Net assets �17,684,000 �17,632,000 �17,650,000
* Net asset value 95.2p 94.9p 95.0p
per share
* Net return �115,000 �126,000 �255,000
after tax
* Revenue return 0.6p 1.3p 2.2p
per share*
* Total 1.4p (0.2)p -
return/(loss) per share*
* Based on a weighted average of 18,584,646 shares in issue during
the period (31 July 2005: 9,931,733; 31 January: 11,576,195).
**Comparative figures have been extracted from the interim results
for the period ended 31 July 2005 and have been re-stated in
accordance with FRS26 in respect of the valuation of quoted
investments and the treatment of investments at fair value through
profit and loss as disclosed in note 1 to the interim results. This
restatement has no effect on the net asset value per share at 31
January 2006.
Eclipse VCT 2 plc ('Eclipse 2' or 'Fund') is a Venture Capital Trust
('VCT') and is managed by Octopus Investments Limited ('Octopus' or
'Manager'). Eclipse 2 was launched in January 2005 and raised over
�18.4 million (�17.7 million net of expenses) through an offer for
subscription. It invests primarily in unquoted and AIM-quoted
companies.
Chairman's Statement
I am pleased to present the interim results for the six months to 31
July 2006. This is the second interim report of Eclipse 2 and it
covers the progress made by Octopus in building the investment
portfolio.
Background
Eclipse 2 was launched in January 2005 and raised �18.4 million by
June 2005, to invest alongside Eclipse, which launched in 2004 and
raised �30.7 million. Octopus has subsequently raised a further
�58.2 million in a dual fund, Eclipse 3 & 4.
Eclipse 2 co-invests with these three other Eclipse funds which are
all managed by the same investment team at Octopus. This is viewed as
a benefit as it means they will not only be able to invest in a wider
range of opportunities but also in larger and more developed
companies than are typically available to a single VCT. Each of the
Eclipse funds will initially invest in deals pro-rata to their
respective fund size.
Net Asset Value ('NAV')
The NAV at 31 July 2006 was 95.2p. During the six months to 31 July
2006, one follow-on and nine new investments were made in
unquoted and AIM-quoted companies. At the end of the period under
review, Eclipse 2 had a portfolio of 23 investments in qualifying
companies, representing 48% of the Fund. The unquoted companies have
been valued in accordance with International Private Equity and
Venture Capital ('IPEVC') guidelines and are all held at cost as this
is deemed to be the fair value of the investments, with the exception
of two investments which have increased in value (Covion and
Lilestone Holdings), and one which has decreased in value
(Red-M). As set out in the IPEVC guidelines, valuations of unquoted
investments are not usually changed for at least twelve months from
the date of investment unless the investee company has performed
significantly behind plan (in which case the investment is written
down in value), or we have participated in a follow-on fundraising
for the company.
In the case of Red-M, we consider it prudent to make a modest
provision following disappointing results in one part of their
business. However, we are pleased to report that our investment in
Covion, one of the Fund's earliest investments, has been written up
in value to reflect the strong performance of the underlying
business. The valuation of Lilestone Holdings has been written up due
to the follow-on investment which was carried out at a premium set by
a significant third party investor.
The value of the portfolio of AIM investments was �1,797,000
representing an increase of 18% when compared to the cost
of �1,525,000.
Further information on portfolio holdings can be found in the
Manager's review.
Dividend
As the fund is at an early stage in its investment cycle, dividends
are derived from income from money market securities. In the
medium-term, we aim to produce a regular tax-free income stream for
shareholders and, as such, we will realise profits for distribution
on holdings where we can maximise value.
Share Price and Buy-Back Facility
Eclipse 2 has a share buy-back facility, proposing to buy-back shares
at no more than a 10% discount to the prevailing NAV. This should
assist the marketability of the shares and help prevent the shares
from trading at a wide discount to NAV. The Fund's mid-market share
price currently stands at 98p compared to the NAV of 95.2p.
Shareholders should note that if they sell their shares within three
years of the original purchase they forfeit any income tax relief
obtained. If you need to sell your shares, please contact Octopus on
020 7710 2800.
VCT Qualifying Status
As you may be aware, Eclipse 2 must be 70% invested in qualifying
companies by 31 January 2008 in order to comply with VCT
regulations. At 31 July 2006, Eclipse was 48% invested in qualifying
holdings. Following two new investments in unquoted companies
(Golddigga and Audio Visual Machines) and some small follow-on
investments in a number of AIM-quoted companies this percentage has
now risen to 57%.
The Directors will continue to monitor the Fund's progress towards
meeting HM Revenue and Customs conditions for VCT approval and have
retained PricewaterhouseCoopers LLP, one of the UK's leading firms of
accountants, to advise in this area. Given the investment rate to
date and current deal flow, we would expect that Eclipse 2 will meet
the relevant conditions by the deadline of 31 January 2008.
Outlook
The challenge for all venture capital funds is to attract a strong
flow of high quality investment opportunities. We believe the Manager
has developed a high profile in the market through a combination of
funds under management and investment activity. This has been
supported by recruitment to the investment team which has given them
greater depth of resource.
In the year to September 2006 Octopus invested in 12 deals involving
unquoted companies with a total value of over �60 million. This
represented more transactions than any of their competitors (source:
Private Equity Insight) and suggests that Eclipse 2 should continue
to have good access to a significant proportion of the investment
opportunities in their target market. The early signs from the
portfolio continue to be encouraging and I will update you on
specific progress in future reports.
.
Marc Vlessing
Chairman
20 October 2006
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.
Introduction
We are pleased with the progress made by the Fund since launch.
During the six months to 31 July 2006 the Fund invested a further �3
million in ten companies bringing the total invested by Eclipse 2 to
�9 million. A further two investments in unquoted companies and some
small follow-on investments in a number of AIM-quoted companies have
been made since the end of the reporting period.
Qualifying Status
VCTs have three years to invest 70% of the money raised into
qualifying companies. We're pleased to report that, at 31 July 2006,
18 months through the three-year period, Eclipse 2 was 48% invested
in qualifying companies. With the additional investments made since
the end of the period, the proportion of the Fund invested has
increased to 57%.
Review of Investments
At 31 July 2006, the Fund's portfolio comprised investments in 11
AIM-quoted and 12 unquoted companies. The remainder of the Fund has
been invested in money market securities.
Once we have made an investment, we take an active approach in
monitoring its performance. This includes regular meetings with
management teams and, in the case of most unquoted investments,
attending board meetings of the portfolio companies. We are keen to
invest in additional rounds of funding in portfolio companies, where
we are familiar with the qualities of the management team and where
the performance has been closely monitored.
Portfolio Activity
During the last six months, the Fund made nine new and one follow-on
investment. These investments are discussed below.
Cohort plc
Business Services
Eclipse 2 invested �85,000 in the AIM flotation of Cohort in February
2006. Cohort was incorporated to acquire Systems Consultants Services
('SCS'), a UK-based company providing training support and equipment
trials to the defence sector. The market for technical services,
outside of the recently privatised Government agency QinetiQ, is
largely fragmented but has been consolidating. Cohort's strategy is
to acquire complementary technical services companies and position
them alongside the fast-growing SCS business.
Ovum plc
Information Technology
In March 2006, Eclipse 2 invested �94,000 in the AIM flotation of
Ovum. Ovum is a leading information, technology and communications
research consultancy. The company acts as a source of industry data,
knowledge and expertise on the commercial impact of technology,
regulatory and market changes. This data is packaged into detailed
research documents and distributed through a range of bespoke and
tailored products. Current clients include IBM, BT, Vodafone and
Government bodies such as the Department of Trade and Industry.
Perfect Pizza Limited
Pizza home delivery
Eclipse 2 invested �675,000 alongside the other Eclipse funds in the
�7 million management buy-in of Perfect Pizza from Papa Johns, the US
parent company. Perfect Pizza is the third largest home delivery
pizza business in the UK with 114 franchised stores.
Invocas plc
Insolvency practitioner
In March 2006, Eclipse 2 invested �50,000 in the AIM flotation of
Invocas. The company is the leading provider of personal insolvency
solutions in Scotland with a 16% share of the Protected Trust Deed
market. Invocas has been profitable and cash generative for the past
seven years. Demand in Scotland for Protected Trust Deeds, which
help individuals who are having difficulty servicing their debt, grew
by 14% in 2005 and is expected to grow by 20% in 2006.
Blanc Brasseries Holdings plc
Restaurant operator
Eclipse 2 invested �62,000 in April 2006 in a �6 million private
placement funding round for Blanc Brasseries, which owns the Le Petit
Blanc chain of quality restaurants. The business was acquired from
Loch Fyne Restaurants (LFR) and will continue to be managed by the
LFR management team, which successfully built up this chain to around
30 restaurants.
BBI Holdings plc
Diagnostics
In May 2006, Eclipse 2 invested �53,000 in BBI Holdings (BBI). BBI is
an AIM-quoted developer and manufacturer of diagnostic tests. The
company derives income from the manufacture and supply of gold
colloids, bespoke product development for third parties and the
manufacture of diagnostic tests for industry partners. The funding
provided by Eclipse and other investors was used to fund the
acquisition of Alchemy Laboratories Ltd, a Dundee based company with
operations in similar fields to BBI.
CSL Dualcom Ltd
Security Systems
Eclipse 2 invested �514,000 in the Octopus led �6 million management
buy-out of CSL Dualcom, alongside the other Eclipse funds. 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 mobile phone
network provided by Vodafone, which 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 and by extending the company's
products to the fire sector, where recent legislation has created a
large market opportunity.
Worthington Nicholls Group plc
Air conditioning
In June 2006, Eclipse 2 invested �400,000 in the AIM flotation of
Worthington Nicholls. The company is the leading UK installer of air
conditioning units in the hotel, retail and leisure markets. The
company, which supplies over 50% (by number of rooms) of the 3* plus
UK hotel market, is expected to achieve a profit before tax of �3.6
million on turnover of �25.0 million for the year ended September
2006.
Lilestone Holdings Limited
Branded consumer goods
In July 2006, Eclipse 2 invested �187,000 alongside other Octopus
managed funds and a significant new third party investor in a �1.6
million funding round for Lilestone plc, the holding company for the
Myla brand. Myla is a luxury brand selling premium priced lingerie
together with bedroom accessories to style and fashion conscious
women. The company has recently started selling through a concession
in Harrods and has opened a number of other outlets in the UK and
Europe. The funding round was at a small premium to our first
investment, as set by a significant third party investor.
First Sports Group Ltd
Retail of sportswear and equipment
Eclipse 2 invested �985,000 alongside other Eclipse funds in a �2
million funding round for First Sports Group. First Sports Group is
the largest sports retail service provider to the UK Private Health
and Fitness Club market. Sportswear and equipment is sold through
lockable self service display units called Cubes and through more
than 20 pro-shops.
Portfolio Valuation
At 31 July 2006, the Fund's portfolio comprised investments in 23
companies with a total cost of �8.7 million and a carrying value of
�9 million. The Fund also held �8.3 million in cash and money market
securities awaiting investment in qualifying holdings.
Investment Unrealised appreciation/ Carrying
at Cost (depreciation) Value
Unquoted investments �'000 �'000 �'000
Luther Pendragon 1,000 - 1,000
Limited
James Harvard 1,000 - 1,000
International Limited
First Sports Group 985 - 985
Limited
Plastics Capital 799 - 799
Limited
Perfect Pizza Limited 675 - 675
The Kendal Group 576 - 576
Limited
Covion Limited 429 114 543
CSL DualCom Limited 514 - 514
Lilestone Holdings 467 19 486
Limited
The Capital Pub 350 - 350
Company 2 plc
Red-M Group Limited 300 (63) 237
Blanc Brasseries 62 - 62
Holdings plc
7,157 70 7,227
AIM-quoted
investments
Worthington Nicholls 400 72 472
Group plc
Tanfield Group plc 250 69 319
InterQuest Group plc 171 102 273
Autoclenz Holdings 206 (30) 176
plc
Healthcare Locums plc 150 3 153
Cohort plc 85 10 95
Ovum plc 94 (12) 82
Invocas plc 50 31 81
Abcam plc 44 25 69
BBI Holdings plc 53 7 60
Belgravium 22 (5) 17
Technologies plc
1,525 272 1,797
8,682 342 9,024
Ten Largest Holdings
Luther Pendragon Limited
Luther provides a fully integrated corporate public relations service
specialising in 'issues management', which involves developing
communications strategies to combat any potential risks to a client's
reputation or to influence public perception to achieve a strategic
goal. The company was established in 1992 and has grown to 45
partners and staff. The company has a range of public sector and
blue chip private sector clients from a range of industries.
Further information can be found at the company's website
www.luther.co.uk.
Investment date 30 November 2005
Equity held 19.2%
Cost �1,000,000
Valuation �1,000,000
Valuation basis Cost (New Investment)
Dividends/Interest received during the year Nil
Last Audited Accounts December 2005
Net Assets �1,921,000
Profit before taxation �702,000
James Harvard International Limited
James Harvard (JHI) is one of the leading recruitment agencies in the
growing, but fragmented, European clinical trials market. The funds
raised were used to acquire EXCO, thereby extending the range of
functional areas covered by JHI as well as providing access to a
broader range of clients. Since completion of our investment, JHI
has made a further modest acquisition, ASA Medical, from Hotgroup.
Further information can be found at the company's website
www.jamesharvard.com.
Investment date 30 November 2005
Equity held 10.9%
Cost �1,000,000
Valuation �1,000,000
Valuation basis Cost (New Investment)
Dividends/Interest received during �9,000
the year
First audited financial information Will be available for the period
to December 2005
First Sports Group Limited
First Sports Group ('FSG') provides and manages retail solutions
within sports and leisure clubs. The company's clients include
Esporta, Holmes Place and David Lloyd. As well as managing more than
20 pro-shops, FSG has developed a stand alone unmanned retail display
unit, from which customers can buy sports goods, paying at the club
reception.
Further information can be found at the company's website
www.first4sports.com.
Investment date 26 June 2006
Equity held 18.5%
Cost �985,000
Valuation �985,000
Valuation basis Cost (New Investment)
Dividends/Interest received during the year Nil
Last Audited Accounts March 2006
Net Assets �511,000
Loss before taxation �(750,000)
Plastics Capital Limited
Plastics Capital was set up to build a group of niche plastics
manufacturing companies, each with a strong market position and good
cash generation characteristics. The group currently comprises three
separate businesses with factories located in Knaresborough,
Leicester, Dartford and Poole with an aggregate turnover in excess of
�15 million.
The first company acquired was Bell Plastics, which manufactures
plastic mandrels for use in the manufacturing process for high
pressure hoses. Our funding was used to acquire Trimplex, a company
that manufactures creasing matrices for cardboard box manufacturing,
and BNL, which manufactures plastic bearing components.
Investment date 30 November 2005
Equity held 9.5%
Cost �799,999
Valuation �799,999
Valuation basis Cost (New Investment)
Dividends/Interest received during the year Nil
Last Audited Accounts March 2005
Net Assets �826,000
Profit before taxation �68,000
Perfect Pizza Limited
Perfect Pizza is the third largest pizza delivery business in the UK
with 114 franchised stores throughout the country. The home delivery
pizza market is expected to continue to be a growth area as a result
of the long-term trend away from home cooking.
Further information can be found at the company's website
www.perfectpizza.co.uk.
Investment date 8 March 2006
Equity held 9.1%
Cost �674,996
Valuation �674,996
Valuation basis Cost (New Investment)
Dividends/Interest received during �23,000
the year
First audited financial information Will be available for the period
to 31 March 2006
The Kendal Group Limited
The Kendal Group is the holding company for the Zoggs and PureLime
brands.
Zoggs is a leading swim equipment and swimwear brand, founded in
Australia and well known for its swim goggles and flotation aids. It
has recently introduced swimwear to the range. Further information is
available at www.zoggs.com.
PureLime is a ladies fitness and active wear brand, originally from
Denmark. Further information is available at www.purelime.com.
The company has a high proportion of sales through fitness centres
and swimming pool locations and is starting to gain distribution
through retail outlets such as Tesco and Early Learning Centre. The
Zoggs brand has a significant presence in Australia and plans to grow
through licensing in other countries. Overall, sales of the Zoggs
brand grew by approximately 17% in 2005.
Further information can be found at the company's website,
www.thekendalgroup.com.
Investment date 18 November 2005
Equity held 6.4%
Cost �576,002
Valuation �576,002
Valuation basis Cost (New Investment)
Dividends/interest received during the year Nil
Last audited accounts December 2005
Net assets �1,375,000
Loss before taxation �(727,000)
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 mobile phone network. CSL Dualcom has been partnered with
Vodafone for the last six years.
Further information can be found at the company's website,
www.csldual.com.
Investment date June 2006
Equity held 6.4%
Cost �513,735
Valuation �513,735
Valuation basis Cost (New Investment)
Dividends/interest received during the year Nil
Last audited accounts March 2006
Net assets �(317,661)
Loss before taxation �(86,445)
Covion Limited
Covion provides a full range of support services, including cleaning,
security and maintenance work for clients such as LogicaCMG, Sara Lee
and Anglian Windows.
The company has annualised sales of more than �20 million, making it
the fastest growing business in the Thames Valley region in 2004
(source: BDO). Covion came fourth in the Sunday Times Fast Track 100
(October 2005) and was rated the 39th fastest growing in Europe. Two
founder directors, David Steventon and Frank Rodrigues, have also
received an Entrepreneur of the Year award sponsored by Ernst &
Young.
Further information can be found at the company's website
www.covion.co.uk.
Investment date 27 May 2005
Equity held 5.2%
Cost �428,918
Valuation �543,000
Valuation basis Earnings Multiple
Dividends/interest received during the year Nil
Last audited accounts December 2005
Net assets �1,412,780
Profit before taxation �786,606
Lilestone Holdings Limited
Lilestone Holdings is the ultimate holding company for the Myla
luxury brand of lingerie and lifestyle products. The business
operates boutiques and concessions in London, Paris and New York and
has a thriving mail order and web business. Founded in 2000 the
company is headquartered in Portobello Road, London. Distribution of
Myla products has recently increased with new concessions in Harrods
and Brown Thomas.
A further investment was made in July 2006 to support the company's
growth plans. The fundraising included an investment of �800,000 by
an overseas retail group who will assist distribution into parts of
South and East Europe. The investment was made at a small premium to
the valuation that was established in the first round.
Further information can be found at the company's website,
www.myla.com.
Investment date 8 September 2005
Equity held 20.0%
Cost �467,000
Valuation �486,000
Valuation basis Latest round of investment
Dividends/interest received during the Nil
year
Last audited accounts September 2005
Net assets �(586,138)
Loss before taxation �(810,735)
Worthington Nicholls Group plc
The company is the leading UK installer of air conditioning units in
the hotel, retail and leisure markets. The company, which supplies
over 50% (by number of rooms) of the 3* plus UK hotel market, is
expected to achieve a profit before tax of �3.6 million on turnover
of �25 million for the year ended September 2006.
Further information can be found at the company's website,
www.worthington-nicholls.co.uk.
Investment date 5 June 2006
Equity held 1.2%
Cost �400,000
Valuation �472,000
Valuation basis Bid Price
Dividends/interest received during the year Nil
Last audited accounts September 2005
Net assets �772,000
Loss before taxation �(753,000)
Recent Transactions
Since the end of the period under review, we have completed two new
investments which are detailed below.
Adrenalin Design Limited
Eclipse 2 invested �550,000 alongside the other Eclipse funds to
finance the �18.5 million management buy-out of the Adrenalin Design
Limited which owns the Golddigga fashion brand. Golddigga, launched
in 1995, is a fast growing fashion brand targeting girls between 15
and 25. Turnover has grown strongly from �4.5 million in 2004 to �10
million in 2006.
Further information can be found at the company's
website, www.golddigga.co.uk.
Audio Visual Machines Limited ('AVM')
Eclipse 2 invested �453,000 (alongside the other Eclipse funds) in
AVM in early October 2006. The business is a leading audio visual
systems integrator and service provider. AVM works with some of the
UK's leading businesses including BP, PricewaterhouseCoopers and
LloydsTSB as well as public sector bodies such as Surrey Police,
Transport for London and Westminster City Council.
Further information can be found at the company's
website, www.avmachines.com.
Summary of investments made by other funds managed by Octopus
Investments Limited
It is a requirement that Octopus discloses the full extent of its
interest across all of its funds in any companies in which Eclipse 2
holds an investment. Details of these are shown below.
% equity held by % equity held by other
Eclipse 2 funds managed by Octopus
Abcam plc 0.1% 0.5%
Autoclenz Holdings plc 1.6% 11.3%
BBI Holdings plc 0.2% 4.4%
Belgravium Technologies
plc 0.2% 1.4%
Blanc Brasseries Holdings
plc 0.7% 2.6%
The Capital Pub Company 2
plc 2.1% 6.2%
Cohort plc 0.2% 1.6%
Covion Limited 5.2% 10.1%
CSL Dualcom Holdings 6.4% 33.6%
First Sports Group Limited 18.5% 20.0%
Healthcare Locums plc 0.4% 1.5%
InterQuest Group plc 1.1% 3.3%
Invocas plc 0.2% 1.1%
James Harvard
International Limited 10.9% 16.0%
Lilestone Holdings Limited 20.0% 33.5%
Luther Pendragon Limited 19.2% 19.2%
Ovum plc 0.4% 2.9%
Perfect Pizza Limited 9.1% 15.4%
Plastics Capital Limited 9.5% 11.8%
Red-M Group Limited 2.6% 4.9%
The Kendal Group Limited 6.4% 11.5%
Tanfield Group plc 0.5% 5.2%
Worthington Nicholls Group
plc 1.2% 7.1%
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
Income Statement
Six months Period Period
ended 31 ended ended
July 2006 31 July 2005* 31January 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Unrealised
gains/(losses)
on investments - 276 276 - (53) (53) - (53) (53)
Income 354 - 354 229 - 229 558 - 558
Investment
management
fees (51) (154) (205) (32) (94) (126) (83) (251) (334)
Other expenses (161) - (161) (71) - (71) (160) - (160)
Return on
ordinary
activities
before tax 142 122 264 126 (147) (21) 315 (304) 11
Tax on profit
on ordinary
activities (27) 29 2 - - - (60) 48 (12)
Return on
ordinary
activities
after tax 115 151 266 126 (147) (21) 255 (256) (1)
Return per
share 0.6p 0.8p 1.4p 1.3p (1.5)p (0.2)p 2.2p (2.2)p -
* The total column of this statement is the profit and loss account of the
Company.
* All revenue and capital items in the above statement derive from continuing
operations.
* The accompanying notes are an integral part of the interim results.
* The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market
securities.
*Comparative figures have been extracted from the interim accounts
for the period ended 31 July 2005 and have been re-stated in
accordance with FRS26 in respect of the valuation of quoted
investments and the treatment of investments at fair value through
profit and loss as disclosed in note 1 to the interim results. This
restatement has no effect on the net asset value per share at 31
January 2006.
Reconciliation of movements in shareholders'
funds
31 January
31 July 2006 31 July 2005 2006
�'000 �'000 �'000
Equity shareholders' funds as at
1 February 2006 17,650 - -
Total gains and losses
recognised in period 266 (21) (1)
Shares purchased for
cancellation - (4) (14)
Issue of redeemable
non-preference shares - (50) (50)
Redemption of redeemable
non-voting preference shares - 50 50
Net proceeds of share issue - 17,657 17,665
Dividends recognised in period (232) - -
Equity shareholders' funds at
31 July 2006 17,684 17,632 17,650
Balance Sheet
As at 31 July As at 31
2006 As at 31 July 2005 January 2006
(restated)*
�'000 �'000 �'000 �'000 �'000 �'000
Fixed asset
investments 9,024 797 5,574
Current assets
Investments 6,973 14,686 9,408
Debtors 393 3 190
Cash at bank 1,358 2,184 2,509
8,724 16,873 12,107
Creditors: amounts
falling due within
one year (64) (38) (31)
Net current assets 8,660 16,835 12,076
Net assets 17,684 17,632 17,650
Called up equity
share capital 1,858 1,859 1,858
Share premium 15,807 15,798 15,807
Capital redemption
reserve 2 1 2
Capital reserve
realised (328) (94) (203)
Capital reserve
unrealised 223 (53) (53)
Revenue reserve 122 121 239
Total equity
shareholders'
funds 17,684 17,632 17,650
Net asset value
per share 95.2p 94.9p 95.0p
* Comparative figures have been extracted from the interim accounts
for the period ended 31 July 2005 and have been restated in
accordance with FRS26 in respect of the valuation of quoted
investments and the treatment of investments at fair value through
profit and loss as disclosed in note 1 to the interim results. This
restatement has no effect on the net asset value per share at 31
January 2006.
Cash flow statement
Six months ended Period ended 31 Period
31 July 2006 July 2005 ended
31 January 2006
�'000 �'000 �'000 �'000 �'000 �'000
Net cash
(outflow)/inflow
from operating
activities (180) 67 (160)
Financial
investment
Purchase of
investments (3,104) (850) (5,578)
Net cash outflow
from financial
investment (3,104) (850) (5,578)
Management of
liquid resources
Decrease /
(increase) in cash
funds 2,365 (14,686) (9,408)
Taxation - - -
Equity dividends
paid (232) - -
Financing
Issue of own shares - 18,418 18,428
Share issue
expenses - (760) (757)
Repurchase of own
shares - (5) (16)
Total financing - 17,653 17,655
Increase in cash
resources (1,151) 2,184 2,509
Reconciliation of net revenue Six months Period Period ended
before taxation to cash flow from ended ended 31 January
operating activities 31 July 31 July 2006
2006 2005
�'000 �'000 �'000
Return on ordinary activities 264 (21) 11
before tax
Increase in debtors (203) (3) (190)
Increase in creditors 35 38 19
Unrealised (gain)/loss on fixed (346) 53 -
asset investments
Unrealised loss on current asset 70 - -
investments
Net cash (outflow)/inflow from
operating activities (180) 67 (160)
Notes to the interim results
1. The Company is required to comply with a number of new UK
Financial Reporting Standards (FRSs) in presenting its financial
statements for the year ending 31 January 2007. These standards have
been introduced as part of the process of converging UK standards
with International Financial Reporting Standards (IFRS). The
financial information provided in the unaudited interim results for
the six months ended 31 July 2006 has been prepared on a consistent
basis with the accounting policies as disclosed in the Company's
annual report and accounts for the period ended 31 January 2006
except for such changes as are required by the new FRSs. These
changes arise from "FRS26 "Financial Instruments: Measurement".
The nature and effect of these changes for the six months ended 31
July 2006 are explained below:
Under FRS26, quoted investments are valued at bid price rather than
mid-market price. The effect of this is to decrease the valuations at
which such investments are stated in the balance sheet and to
decrease the unrealised gains on investments shown in the capital
column of the statement of total return. This change resulted in
reductions of �22,000 in the valuation of fixed asset investments at
31 July 2005 and a corresponding decrease in the unrealised capital
reserve at those dates. This restatement has no effect on the net
asset value per share at 31 January 2006.
The unaudited interim results for the six months ended 31 July 2006
and the period ended 31 July 2005 do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985
and have not been delivered to the Registrar of Companies.
2. The calculation of the revenue and capital return per share
is based on the return on ordinary activities after tax for the
period and on 18,584,646 (31 July 2005 - 9,931,733 and 31 January
2006 - 11,576,195) ordinary shares, being the weighted average number
of shares in issue during the period from 1 February 2006 to 31 July
2006.
3. The calculation of net asset value per share as at 31 July
2006 is based on net assets of �17,684,000 divided by the 18,584,646
ordinary shares in issue at that date. (31 July 2005 - �17,632,000:
18,585,172 and 31 January - �17,650,000: 18,584,646).
4. During the six months to 31 July 2006 the Fund paid a 1.25p
dividend per share amounting to �232,000 in respect of the period
ended 31 January 2006.
5. Copies of the interim report are being sent to all
shareholders. Further copies are available free of charge from
Octopus Investments Ltd at 8 Angel Court, London EC2R 7HP.
- ---END OF MESSAGE---
Copyright � Hugin ASA 2006. All rights reserved.
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