RNS Number:6576D
Singer & Friedlander AIM 3 VCT PLC
26 May 2006
Singer & Friedlander AIM 3 VCT PLC
Preliminary Announcement for the year ended 31 January 2006
Performance Summary
31 January 2006 31 January 2005
(restated)
Total net assets #27,515,787 #31,865,949
Net asset value per share 88.42p 101.09p
Net dividends for the year (proposed) #0.00 #157,154
Dividend per ordinary share (proposed for the year) 0.00p 0.50p
Qualifying investments of the current investment portfolio 80.6% 82.0%
Total dividends paid and recommended to date 3.25p 3.25p
Board Review of the Year
The Board is pleased to present its Annual Report for the year to 31 January
2006. This report covers the period prior to the merger with the other Singer &
Friedlander VCTs which took effect on 22 February 2006. The Interim Report for
the six months to 31 July 2006 will be the first to cover the combined entity.
Performance
In common with many of our peers our last financial year has proved to be
disappointing. Your Net Asset Value (NAV) fell by 12.5% compared to a rise of
5.9% by the AIM Index. As we have discussed before the AIM Index has many
constituents in which VCTs cannot invest including most oil, mining and
financial companies, which continued to exert considerable influence over the
market and largely accounted for the strength of AIM. The market also
experienced unprecedented new issue activity during 2005 and there is evidence
to suggest that this diverted attention and investment away from existing AIM
quoted companies. As we mentioned at the Interim stage our NAV was also
adversely impacted by new accounting rules explained in greater detail below.
Your Directors are concerned that the recent performance of the Trust has been
disappointing. In June 2005, we held a "beauty parade" of fund managers when
three fund managers, including Singer & Friedlander, were asked to present to
the Board. Following those presentations Singer & Friedlander were re-appointed.
Your Board will continue to closely monitor their performance.
Since the Trust launched in early 2001 your NAV (allowing for dividend payments)
has declined 3.5% whilst the AIM Index has declined by 16.2%. By way of
comparison the FT All-Share Index has increased by 1.8% over the same period.
Presentation of Financial Statements
As part of the process of bringing UK standards into line with international
standards, the Trust is now required to follow changes in UK Generally Accepted
Accounting Practice. The main change is to the valuation of quoted investments
which are now valued at bid price rather than at mid-market price. The effect of
this has been to reduce the net asset value as at 31 January 2005 by #888,859.
Dividends
Dividends of 3.25 pence have been paid to date. The Directors are not
recommending the payment of a final dividend for the year ended 31 January 2006.
The Board has agreed to proceed with the revocation of the Trust's investment
company status in order that we have the ability to pay dividends from capital
gains.
Portfolio commentary and developments
The portfolio has maintained its VCT qualifying status throughout the year and
at 31 January 2006 consisted of 60 separate investments. Of these, 3 are
currently private, whilst the remainder are quoted on AIM. The portfolio
suffered a number of disappointments from investee companies during the year
leading to the underperformance. The majority of these disappointments were
company specific rather than due to wider economic factors and largely appear to
be one off in nature. Indeed, some of these companies have confirmed that they
are now back on track and their share prices have begun to recover. It is to be
hoped that this trend will continue, however, it is illustrative of the volatile
nature of investment in young and growing companies. We have however experienced
good performance from several investments and this has enabled us to take
further profits from the portfolio which may be returned to shareholders by way
of dividends in due course.
Investment Strategy
The objective of the Company is to provide investors with an attractive return
from a portfolio of investments primarily in companies whose shares are traded
on AIM. Returns will be enhanced as a consequence of dividends and capital gains
being free of tax in the hands of private investors.
Merger Completion and Running Costs
The previously announced merger of the three Singer & Friedlander VCTs was
completed on 22 February 2006. The merger has created a much larger fund with
assets approaching #50 million. The rationale for the merger was to reduce
running costs as a percentage of the fund value, to further diversify the
portfolio and to provide a smoother flow of dividends.
The running costs of the Trust stood at 3.2% during the year, a figure which
compares favourably to many of our competitors but which is expected to fall
further following the merger. The merger prospectus made reference to our
expectation that on-going running costs would be less than 2.7% based on the
NAVs as at 30 November 2005. The Board continues to believe that this
percentage expense level will be met in future.
Share Repurchases
During the year we repurchased 860,000 shares or some 2.76% of our issued share
capital for cancellation at a discount of 15% to NAV. It is our intention to
continue to buy back shares within the powers granted at the AGM each year, in
order to aid liquidity for shareholders who wish to sell. The Board has recently
resolved to narrow the discount at which we repurchase shares to 10% (waiting
for decision to be made)
The Board
Following the merger the composition of your Board has changed. Michael Edelson
has stepped down due to increased business commitments elsewhere; the Board
would like to thank Michael for his contribution and guidance since the Trust's
launch in 2001. Andrew Banks has also stepped down to reflect 'best practice' in
the investment trust industry; he will, however, continue as our lead fund
manager. Jamie Hambro and Mike Killingley have joined the Board. Jamie joins as
Deputy Chairman having previously been Chairman of Singer & Friedlander AIM 2
VCT. Mike was a Non-Executive Director of Singer & Friedlander AIM VCT. Further
information on the Directors appears on pages 15 of the Annual Report.
Offer for Subscription to 'C' Shares
The C Shares issued in April 2005 were converted to Ordinary Shares on 12
December 2005. The conversion ratio was 1.1368 Ordinary Shares for every C Share
held. Since issue and up until 31 January C share investors have seen a total
return of 5.8% from the initial NAV of 95 pence.
Outlook
After a year of considerable change, your Board view the future with cautious
optimism. Following the merger of the three VCTs it will take a while for the
Fund Manager to rationalise the portfolio. The manager will be encouraged to
seek investment opportunities in qualifying companies that can demonstrate good
growth prospects and are managed by experienced management teams. Whilst last
year's performance was disappointing we believe our strategy is sound and we
look forward to improved returns as the newly merged Trust moves forward.
Christopher Moorsom (Chairman)
James Hambro
Mike Killingley
David Page
Dominic Wheatley
Investment Portfolio Summary
AIM Quoted Sector Nature of business Cost at Valuation Percentage Percentage
Companies acquisition at of of Company
31 January portfolio managed by
2006 Investment
Manager
# # % %
1st Dental Healthcare Dental laboratories group 450,000 351,000 1.28 4.18
Laboratories
Aero Inventory Aerospace & defence Distribution of aircraft 481,041 1,002,924 3.64 4.59
components
Asfare Group Engineering & Manufacturer of ladders 370,835 298,730 1.09 18.25
machinery for rescue services
AT Communications Software & computer Business to business 36,457 34,593 0.13 0.77
services systems integrator
Autoclenz General retailers Car valeting and vehicle 52,900 50,900 0.18 2.83
preparation services
Aquilo Speciality & other Accident management 589,375 314,773 1.14 14.63
finance services
BBI Holdings Pharmaceuticals & Developer and manufacturer 239,708 488,341 1.77 3.99
biotechnology of rapid result diagnostic
tests
Belgravium Technology hardware Designer and maker of 22,059 21,769 0.08 1.26
Technology & equipment real-time data capture
systems
Blooms of General retailers Garden centres 571,007 618,892 2.25 6.88
Bressingham
Holdings
Bright Things Household goods & Developer of intellectual 352,500 99,875 0.36 2.34
textiles property for a new
educational games platform
Camaxys Group Software & computer Developer of computerised 254,825 103,507 0.38 17.38
services management systems for
health and safety
applications
Capcon Holdings Speciality & other Audit, stocktaking and 700,000 96,676 0.35 11.49
finance commercial investigation
services
Cellcast Group Media & Develops, aggregates and 31,000 32,125 0.12 0.18
entertainment distributes a range of
mobile and participation
tv applications
Centurion Automobiles & parts Conception, design, 187,950 112,770 0.41 2.64
Electronics marketing and distribution
of in-car audio-visual
products
Chromogenex Healthcare Design, manufacture and 42,045 45,450 0.17 1.69
distribute aesthetic and
therapeutic laser and
aesthetic light based
technology devices
CMS Webview Media & Real-time market data 401,674 105,399 0.38 5.02
entertainment collection, processing and
distribution
Corpora Software & computer Research, development and 652,206 359,167 1.31 6.84
services sale of knowledge
discovery technologies
Datong Electronics Electronic & Products sold to 46,174 32,922 0.12 1.69
electrical equipment government, military and
federal law enforcement
agencies to assist their
operatives in covertly
tracking hostile vehicles,
packages, containers and
mobile phones
First Artist Media & Sports management company 500,000 199,472 0.72 6.11
Corporation entertainment
Fishworks Travel & leisure Operation of fish 63,750 58,125 0.21 0.92
restaurants and
fishmongers
Fulcrum Pharma Pharmaceuticals & Customised global drug 279,532 85,051 0.31 2.34
biotechnology development solutions
Glisten Food producers & Manufacturer of 240,000 996,750 3.62 3.97
processors confectionery products
Huveaux Media & Aims to build a broadly 664,082 1,003,030 3.65 3.52
entertainment based media and related
services group by means of
acquisition
ID Data Information Provider of corporate 448,250 236,692 0.86 5.47
technology hardware smart cards
ILX Group Support services Leading provider of 374,960 640,407 2.33 5.19
project management, IT,
and business finance
training
Imprint Search & Support services Recruitment services 360,000 1,353,375 4.92 1.73
Selection
Knowledge Media & Live UK financial news and 127,362 74,252 0.27 5.75
Technology entertainment data products
Solutions
Kuju Software & computer Developer of interactive 549,999 267,045 0.97 11.29
services games software
Lo-Q Travel & leisure Theme park guest services 760,000 89,292 0.32 5.79
systems
Matrix Software & computer Delivering customer 310,000 429,694 1.56 1.09
Communications services focused IT solutions
Group
Medal Media & Creation and exploitation 602,509 543,828 1.98 8.80
Entertainment & entertainment of intellectual property
rights through acquisition
Media
Mediwatch Healthcare Design, manufacturing and 677,870 649,919 2.36 10.24
marketing of medical
diagnostic services
Music Copyright Media & Exploitation of music 375,000 198,529 0.72 7.79
Solutions entertainment catalogues and royalty
administration
Neutrahealth Food & drug Acquisition of 58,941 47,153 0.17 6.51
retailers nutraceutical product
manufacturers and
distributors
NWD Group Media & Marketing services 466,750 62,760 0.23 8.96
entertainment business
Oasis Healthcare Healthcare Dental healthcare provider 631,180 232,748 0.85 6.19
Pixology Software & computer Developer of digital photo 399,000 157,463 0.57 1.43
services printing software
solutions
PM Group Transport Design, manufacture and 579,232 1,504,555 5.47 5.08
service of on board
vehicle weighing systems
Prezzo Travel & leisure Restaurant operator 290,795 1,638,175 5.95 2.37
Quadnetics Group Electronic & Design, integration and 225,632 206,261 0.75 1.58
electrical equipment control of advanced CCTV
and networked video
systems
Real Good Food Food producers & Prepared foods 596,112 407,688 1.48 1.06
Company processors manufacturer
Ringprop Engineering & Production and marketing 366,999 167,267 0.61 3.79
machinery of new marine propeller
Symphony Plastic Chemicals Manufacturer of fully 460,339 291,649 1.06 4.74
degradable plastic carrier
Technologies bags
Synergy Healthcare Healthcare Medical support services 455,000 1,356,750 4.93 1.33
Tanfield Group Support services Manufacturer of electric 987,403 623,394 2.27 2.95
vehicles and specialist
engineering
The Clapham House Travel & leisure Acquiring and developing 453,872 796,903 2.90 3.00
Group restaurants
Tikit Group Software & computer IT consultancy services 400,000 576,522 2.09 2.74
services and IT solutions
Tissue Science Healthcare Medical device company for 656,267 757,850 2.75 1.76
Laboratories surgical implants
Torex Retail Software & support Independent provider of 234,321 746,644 2.71 0.39
services point of sale productivity
tools to high street,
convenience and petroleum
retailers
Tristel Healthcare Healthcare business 35,608 31,157 0.11 0.48
specialising in infection
control in hospitals
UBC Media Group Media & Content supplier to radio, 409,908 362,835 1.32 1.42
entertainment internet and digital tv
Vianet Group Information Remote monitoring of 577,778 367,391 1.33 10.29
technology hardware vending machines
Xpertise Group Support services Provision of IT training 485,178 261,580 0.95 18.43
courses
20,585,385 21,592,019 78.46
All investments are in ordinary shares unless otherwise stated
Sector Nature of business Cost at Valuation Percentage Percentage
acquisition at of of Company
Private Companies 31 January portfolio managed by
2006 Investment
Manager
# # % %
Flexbenefits Software & computer Employee benefits and 517,500 172,845 0.63 8.27
services financial services
Lilestone PLC General retailers Lingerie design and retail 405,000 40,500 0.15 1.80
Lilestone General retailers Lingerie design and retail 65,218 65,218 0.24 0.07
Holdings
U4EA Information Data transfer management 374,989 36,201 0.13 1.49
technology hardware
U4EA (preference Information Data transfer management 695,658 698,658 2.54 9.65
shares firm technology hardware
placing)
2,058,365 1,013,422 3.69
All investments are in ordinary shares unless otherwise stated
Other qualifying Sector Nature of business Cost at Valuation Percentage Percentage
investments acquisition at of of Company
31 January portfolio managed by
2006 Investment
Manager
# # % %
Award Media & Provider of promotional 209,990 36,748 0.13 15.40
International entertainment goods and services to
Holdings enhance brand awareness
(delisted)
Lilestone Loan General retailers Lingerie design and retail 84,782 84,782 0.31 10.87
Stock
Xpertise Group Support services Provision of IT training 200,000 200,000 0.73 100.00
Loan Stock courses
494,772 321,530 1.17
All investments are in ordinary shares unless otherwise stated
Sector Nature of business Cost at Valuation Percentage Percentage
acquisition at of of Company
Full listing 31 January portfolio managed by
2006 Investment
Manager
# # % %
Singer & Equity investment 1 1 - 7.51
Friedlander AIM instruments
Singer & Equity investment 1 1 - 4.06
Friedlander AIM 2 instruments
2 2 -
All investments are in ordinary shares unless otherwise stated
Other fixed Sector Nature of business Cost at Valuation Percentage Percentage
interest securities acquisition at of of Company
and non-qualifying 31 January portfolio managed by
investments 2006 Investment
Manager
# # % %
Debentures and loan
stocks
Treasury 4.5%Stock 989,397 1,001,672 3.64 0.09
7/3/2007
Treasury 4 % Stock 1,087,025 1,090,419 3.96 0.07
7/3/2009
2,076,422 2,092,091 7.60
Other
non-qualifying
investments
Aquilo Speciality & other Accident management 487,500 260,363 0.95 14.63
finance services
Blooms of General retailers Garden centres 534,993 579,858 2.11 6.88
Bressingham
Holdings
Cardpoint Speciality & other Independent ATM deployer 489,774 963,280 3.50 1.16
finance
Formation Group Media & Football management and 519,751 212,658 0.77 2.90
entertainment marketing services
ID Data Information Provider of corporate 225,000 118,808 0.43 5.47
technology hardware smart cards
Medal Entertainment Media & Creation and exploitation 51,170 46,186 0.17 8.80
& Media entertainment of intellectual property
rights through
acquisition
2,308,188 2,181,153 7.93
Investments held at Sector Nature of business Cost at Valuation Percentage Percentage
nil valuation* acquisition at of of Company
31 January portfolio managed by
2006 Investment
Manager
# # % %
Coinmaster Gaming Travel & leisure Production of electronic 350,000 - - -
gaming machines
Exertris Software & computer Developer of exercise 503,445 - - -
services bikes
Exertris Conv Debt Software & computer Developer of exercise 100,000 - - -
services bikes
Firmgrowth Software & computer Student careers directory 250,000 - - -
services & internet portal
Flying Scotsman Travel & leisure Owner of a steam 400,800 - - -
locomotive
Global Money Speciality & other Money transfer service 300,000 - - -
Transfer finance
(loan notes)
Laminate Flooring General retailers Specialise in supplying 450,000 - - -
real wood and laminate
flooring
Monotub Industries Household goods & Washing machine 260,000 - - -
textiles manufacturer
Recycled Waste Support services Environmental control 374,994 - - -
Stanhope Telecom Telecommunication Telecom products 500,000 - - -
services
3,489,239 - -
*These companies are in liquidation and, with the exception of Exertris and
Global Money Transfer, they are shown within the Investment Portfolio Summary
since they count towards the VCT investment test which states that 70% of the
company's assets will be invested in VCT qualifying investments by January 2004.
**All investments listed on pages 6 to 7 are incorporated and quoted within the
UK.
Summary Cost at Valuation at Percentage of
acquisition 31 January portfolio
2006
# # %
Total qualifying portfolio* 23,138,522 22,926,971 83.32
Fixed interest/non-qualifying 4,384,612 4,273,246 15.53
portfolio
Investments held at nil 3,489,239 - -
valuation
Subtotal 31,012,373 27,200,217 98.85
Net current assets - 315,570 1.15
Total 31,012,373 27,515,787 100.00
*The figure of 83.32% simply shows the share of total market values represented
by qualifying holdings. The figure calculated in accordance with the
requirements of the VCT legislation is 80.6% (2005: 82%).
Table of largest ten investments by value
Name of company Percentage Percentage Profit/ Retained Net asset Accounting
of portfolio held by (loss) profit/ value reference
Company before tax (accumulated date
loss)
% % #000's #000's #000's
Prezzo 5.95 1.22 4,145 2,686 27,591 02/01/2005
PM Group 5.47 4.17 1,062 267 7,351 30/06/2005
Synergy Healthcare 4.93 0.82 8,449 3,198 67,094 03/04/2005
Imprint Search & Selection 4.92 1.24 4,533 2,743 42,640 31/12/2005
Blooms of Bressingham Holdings 4.36 5.30 670 1,753 17,897 30/01/2005
Treasury 4.5% Stock 7/3/2009 3.96 0.01 - - - -
Huveaux 3.65 1.59 2,136 1,703 44,041 31/12/2005
Aero Inventory 3.64 1.04 7,156 3,337 41,189 30/06/2005
Treasury 4% Stock 7/3/2007 3.64 0.01 - - - -
Glisten 3.62 2.23 1,622 1,021 17,954 30/06/2005
The figures relating to profit/(loss) before tax; retained profit/(accumulated
loss) and net asset value are taken from the most recently available audited
accounts of the underlying companies.
The aggregate value of these top ten holdings is #12,146,400.
Sector analysis Cost at Valuation at Percentage of
acquisition 31 January portfolio
2006
# # %
Aerospace & defence 481,041 1,002,924 3.64
Automobiles & parts 187,950 112,770 0.41
Chemicals 460,339 291,649 1.06
Electronic & electrical equipment 271,806 239,183 0.87
Engineering & machinery 737,834 465,997 1.70
Equity investment instruments 2 2 -
Fixed interest investments 2,076,422 2,092,091 7.60
Food & drug retailers 58,941 47,153 0.17
Food producers & processors 836,112 1,404,438 5.10
General retailers 1,713,900 1,440,150 5.24
Healthcare 2,947,970 3,424,874 12.45
Household goods & textiles 352,500 99,875 0.36
Information technology hardware 2,321,675 1,457,750 5.29
Media & entertainment 4,359,196 2,877,822 10.46
Pharmaceuticals & biotechnology 519,240 573,392 2.08
Software & computer services 3,354,308 2,847,480 10.35
Speciality & other finance 2,266,649 1,635,092 5.94
Support services 2,407,541 3,078,756 11.20
Technology hardware & equipment 22,059 21,769 0.08
Transport 579,232 1,504,555 5.47
Travel & leisure 1,568,417 2,582,495 9.38
Investments held at nil valuation 3,489,239 - -
Subtotal 31,012,373 27,200,217 98.85
Net current assets - 315,570 1.15
Total 31,012,373 27,515,787 100.00
Aero Inventory The company is a provider of e-based procurement and inventory management
solutions to the aerospace industry. Results to June 2005 demonstrated strong
growth and recovery from the SARS epidemic and the success of the business model. The
company has recently raised significant further funds to exploit new customer
prospects.
Aquilo Aquilo provides support services to the property and motor insurance sector
and network management for a group of independent bodyshops. Services include
claims management, inspection, repair and vehicle hire.
Asfare Group Asfare is a specialist supplier of products and services for the emergency
services and homeland security markets. It is the UK's leading manufacturer of
ladders for the rescue services. It is also involved in the manufacture of
gantries and ancillary equipment to both UK and overseas customers. The acquisition
last year of Todd Research has added X-ray scanners to the product range.
AT Communications AT is one of the UK's leading business to business systems integrators. AT
offers a comprehensive portfolio of voice, data, mobile and video solutions,
specialising in IP technology, alongside design consultancy and bespoke support to
corporate customers.
Autoclenz Holdings Autoclenz is the UK's leading outsourced car valeting and vehicle preparation
services providers, and one of the leading specialist providers of rapid
response deep cleaning and emergency decontamination services.
BBI Holdings BBI is a Cardiff-based rapid-test diagnostics company using gold conjugate
technology. The company generates revenues from the manufacture of gold
colloids and conjugates, from bespoke contract product development and from its own
tests.
Belgravium Technologies Belgravium is a computer design and manufacturing company specialising in
mobile computing. It has a specific focus on rugged, hand-held devices for mobile,
real time data capture.
Blooms of Bressingham Blooms operates 8 retail garden centres. The recent redevelopment of one
existing centre and the opening of one new site have transformed the prospects
for the business and the management is seeking further similar opportunities.
Bright Things Bright Things has developed an educational games console called 'Bubble' and
associated software aimed at the pre-school market. It has signed content
agreements with the rights holders to characters including Noddy, Teletubbies
and Postman Pat.
Camaxys Group Following the disposal of it's trading subsidiary Camaxys is an AIM quoted
cash shell company looking to acquire a suitable new business.
Capcon Holdings Capcon provide audit, stocktaking and investigation services. The company was
admitted to AIM 4 years ago with an experienced management team keen to grow
both organically and via acquisition.
Cardpoint Cardpoint is the UK's leading independent owner and operator of ATMs following
the recent acquisition of Moneybox. The company makes a modest charge for cash
withdrawals with the customer's permission. The group is a member of LINK and
its machines are located in areas not typically served by the banks. The
company also deploys mobile 'phone 'top-up' machines.
Cellcast Group Cellcast is a leading international provider of participation television
applications and interactive mobile content in the fast growing multi-platform
digital entertainment sector.
Centurion Electronics Centurion is a UK market leader in the field of in-car audio-visual
entertainment. It focuses on the design, marketing and distribution of product
comprising DVD, video and the latest LCD monitors. The systems can be fully
integrated and sold through car dealers or manufacturers or may also be
portable "plug and play" products.
Chromogenex Chromogenex designs, manufactures and distributes aesthetic and therapeutic
laser and light based technology devices.
CMS Webview CMS has developed extensive expertise in the area of real-time financial
market data collection, processing and distribution. Customers include the
London Metal Exchange and the Chicago Board of Trade. CMS also has the
European rights to distribute ProphetX, a PC based price reporting service.
Corpora Corpora's principal activity is the research, development and sale of the
document navigation software, jump! The core of jump! is an in-document
navigation tool enabling users to search within and between multiple documents
to find information pertinent to them. The company has added additional
functionality to its product suite with the acquisition of several
complementary businesses.
Datong Electronics Datong is a designer and manufacturer of advanced high performance
surveillance equipment. The systems are sold principally to government,
military and law enforcement agencies.
First Artist First Artist is a leading European management and representation company
looking after the commercial interests of footballers and other high profile
personalities in the football and television market. Following a recent
acquisition the company also now offers wealth management services.
First Dental Laboratories First Dental is the leading quoted provider of services and products to the
dental industry. Following last year's acquisition of Benchmark the company
has 15 laboratories and is the largest group. Further acquisitions are
expected.
Fishworks Fishworks operates a growing chain of seafood outlets, each of which provides
a distinctive combination of restaurant, fishmonger and cookery school.
Flexbenefits (unquoted) Flexbenefits has developed a system for the management, delivery and
communication of employee benefits and financial services information. These
services enable employers and financial institutions to reduce costs and
improve communication and understanding. The shares are valued on the basis of
a discount to guaranteed future revenues.
Formation Group Formation is a leading sports management and marketing agency with a
particular emphasis on football. The company has an international network of offices
and football agents and represents nearly 300 players.
Fulcrum Pharma Fulcrum Pharma offers global virtual drug development and strategic
outsourcing services to the pharmaceutical and biotechnology industries. The
company has offices in the UK, USA and Japan offering global solutions across
the full length of the drug development value chain.
Glisten The company was admitted to AIM in June 2002 with the objective of building a
food group focusing on niche sectors. The acquisition of Glisten Confectionery
based in Blackburn was made at this time. It is a manufacturer of chocolate and
sugar based confectionery, snack bars, edible decorations and ingredients. It
serves a wide range of customers including many high street retailers and the
foodservice and export sectors. The company has made various successful
acquisitions since admission and more are anticipated.
Huveaux Huveaux was admitted to AIM in December 2001 with the intention of making
acquisitions in the media sector. The experienced management team acquired
Vacher Dodd, the leading publisher of parliamentary directories in July 2002 and has
since purchased Lonsdale and Fenman, both of whom are involved in educational
publishing. It has also added to its political publishing business with the
purchase of Parliamentary Communications Ltd.
ID Data ID Data is a supplier of secure transaction systems and services to the
international telephone, banking and retail industries. Exporting to more than
30 countries, ID Data is a leading UK based manufacturer of smart cards.
ILX Group (formerly Intellexis) ILX is a financial training company involved in financial awareness training
for non-financial managers. The company has a blue chip client base from the UK, USA
and Europe and has an extensive library of e-learning courseware. Several
add-on acquisitions have been made to enhance last year's purchase of Key
Skills Ltd.
Imprint Search & Selection Imprint Search & Selection is a multi-disciplinary recruitment business.
Services provided include search, selection and value added personnel services
to companies of varying sizes in many different industries.
Knowledge Technology Solutions KTS is a software company using proprietary technology to develop and provide
real-time interactive market data in a reliable, cost effective manner
primarily over the internet. In contrast to other providers, the system does
not require any dedicated
hardware, software or infrastructure but will work on a standard PC. The
service is aimed mainly at the professional user but is also affordable for
private investors wanting a more sophisticated service.
Kuju Kuju is a leading interactive entertainment developer, producing games on a
range of platforms including PC, console (Playstation2, Xbox and GameCube), mobile
phones and interactive TV.
Lilestone (unquoted) Lilestone has established the Myla brand of lingerie. The company is
designing its own brand products as well as sourcing product from other
designers throughout the world. The products are being sold via mail order,
the internet and through conventional retail channels such as Selfridges and
the company's own stores both in the UK and overseas. The shares are valued on the
basis of the last funding round in October 2005 at which time new professional
management were introduced.
Lo-Q Lo-Q has developed a queue management system that places visitors to theme
parks in "virtual queues", reducing the time that customers spend physically
waiting in line for key rides to a few minutes, enabling them to enjoy, and spend
money on the other attractions in the park.
Matrix Communications Matrix is a network integrator focussing on non-Cisco hardware. Its main
hardware providers are Foundry Networks, F5 and Extreme Networks. Matrix
offers distribution, integration, security management, voice over internet
protocol (VOIP) and other related telecoms and managed services.
Medal Entertainment & Media Medal was established by an experienced management team to build a group
actively participating in the creation, exploitation and ownership of
audio-visual copyrights. The company currently has 2 main subsidiaries,
Leisureview, a specialist video/DVD publisher and Fountain Television, the largest
fully-equipped independent TV studio in the UK.
Mediwatch Mediwatch is a medical diagnostic equipment company that is developing high
speed urological screening equipment. The company's products are designed to enable
early detection of prostate and bladder cancers for the fast growing primary
care market. The company has chosen Bard as its marketing partner for the
Portascan product.
Music Copyright Solutions MCS is a music publisher principally focusing on the management of music
library assets, music copyright licensing and royalty administration,
collection and payment. The company has been building its portfolio via the
acquisition of libraries of rights and sees numerous further opportunities in
this area.
Neutrahealth Neutrahealth was established and quoted on AIM to acquire businesses in the
growing vitamin and mineral supplements market. The company recently completed
the acquisition of Biocare which is an established and profitable business. It
is regarded as the first step in establishing the group's strategy.
NWD Group NWD was a shell company established for the purpose of building a marketing
services business. The company has now made several acquisitions in this area.
These companies are involved in corporate communications, brand consultancy
and brand promotion. Further acquisitions are anticipated.
Oasis Healthcare Oasis has built up an estate of dental practices in the UK primarily by
acquisition and now has over 120 sites and 500 clinicians serving some 800,000
patients. The company is now experiencing the benefits of scale and has annualised
turnover of about #80m.
Pixology Pixology is a provider of innovative imaging software in the rapidly expanding
market of digital photography. The company has developed technology to enable
consumers to easily print (at home, on-line or in-store), organise and share
their digital pictures. The company has also developed a solution to "red-eye"
which is being sold to camera manufacturers.
PM Group The group is a leader in the design, manufacture and service of onboard
weighing systems and associated software for the bulk haulage and waste
management industries. The company has a significant market position in the
bulk haulage market but due to the introduction of new legislation in the waste
management area strong growth is now being seen.
Prezzo Prezzo owns and operates a chain of restaurants based in and around London and
trading in 2 main formats, Jonathans and Prezzo. The food offering consists of
pizza and pasta with Prezzo also selling rotisserie chicken. At the end of September
2005 the company had 60 restaurants and is operating profitably.
Quadnetics Group Quadnetics is a leader in the design, integration and control of advanced CCTV
and networked video systems. The company has a strong position in the casino
market where it has a technological advantage and has recently won some key
business. The company has recently acquired Protec.
Real Good Food Company RGF manufactures and supplies chilled and ambient products in niche areas to
food retailers. The business has been built by acquisition and organic growth. The
purchases of Five Star Fish and Napier Brown Foods have significantly
increased the scale of the business in the last year.
Ringprop Ringprop owns the rights to a marine propeller technology. As the name
suggests the propeller is enclosed by a ring which delivers certain performance and
safety advantages over conventional products. Due to the inherent strength the design
provides the propeller can be made of lighter, composite materials giving cost
advantages as well as being safer for marine and human life when in use.
Symphony Plastic Technologies Symphony is a specialist technology company concerned with degradable plastic
packaging products. Symphony's "d2wTM" technology has been licensed to several
overseas partners and production for UK customers is sub-contracted to
manufacturing partners.
Synergy Healthcare Synergy is a specialist provider of out-sourced medical support services to
the NHS.
It is the largest private sector provider of sterile instrumentation services
and linen products. The company has several long term contracts with
different NHS Trusts and hospitals around the UK. The company last year
acquired the leading Dutch sterile instrumentation service operator; this has
added further growth opportunity.
Tanfield Group Tanfield is involved in specialist manufacturing and providing technical and
assembly solutions to a wide range of sectors. Activities include specialist
electric vehicles, aerial access equipment and other purpose built vehicles
and added value products.
The Clapham House Clapham House was admitted to AIM to exploit acquisition opportunities within
the UK restaurant sector. The experienced management team initially acquired
Greek restaurant and bar chain The Real Greek and has subsequently bought the
Bombay Bicycle Indian restaurant business and the Gourmet Burger Kitchen. All
formats appear to have significant rollout and growth potential.
Tikit Group The company is a provider of consultancy services and software solutions
primarily to the legal profession. The company concentrates on the top 200
law firms in the UK and has a very good reputation for quality of service and
"best of breed" solutions. Applications cover time recording, document
management, customer relationship management and knowledge management. The
company has also entered the Spanish and French markets via acquisition.
Tissue Science Laboratories Tissue Science is a medical devices company specialising in human tissue
replacement and repair products derived from porcine dermis. The company has
proprietary core technology, which has many applications in a rapidly growing
market. It has marketing agreements with several partners to sell products in
different territories.
Torex Retail Torex is a leading supplier of IT and software products to retailers
worldwide. This holding resulted from the takeover of XN Checkout last year.
Tristel Tristel is a healthcare business specialising in infection control in
hospitals. The company's chemistry is effective in destroying all types of
bacteria (including MRSA), fungi and viruses.
U4EA (unquoted) U4EA is a specialist provider of solutions for data transfer management by
large corporates. This has particular implications in improving the
performance of transfers of large amounts of data across networks. The shares
are currently unquoted and are valued on the basis of a funding round carried
out in November 2005.
UBC Media UBC is a content and programme producer for the radio, internet and digital
television industries. It is the largest independent supplier of programming
to the BBC. It supplies entertainment and traffic news services to commercial
radio and owns the Classic Gold radio channel as well as other digital radio
licences.
Vianet Group Vianet is a provider of telemetry-based solutions for maintaining and
supplying automatic vending machines. The company offers the machine operators
and brand owners a data management service to improve machine usage and
profitability. The product is now being rolled out by several customers
including Mars and Glaxo.
Xpertise Group Xpertise is a leader in providing accredited technical IT training to business
customers from centres in the North West, the North East, the Midlands and
London. The company saw a good improvement in trading last year helped by
competitors experiencing problems.
Financial Statements
Unaudited Income Statement
for the year ended 31 January 2006
Year ended Year ended
31 January 2006 31 January 2005
(restated)*
Notes Revenue Capital Total Revenue Capital Total
# # # # # #
(Losses)/gains on investments at fair value - (3,318,759) (3,318,759) - 3,043,761 3,043,761
Income 263,590 - 263,590 344,617 - 344,617
Administrative expenses
Investment management fees (141,312) (423,937) (565,249) (150,834) (452,503) (603,337)
Other expenses (304,617) - (304,617) (309,220) - (309,220)
Return on ordinary activities before (182,339) (3,742,696) (3,925,035) (115,437) 2,591,258 2,475,821
taxation
Tax on ordinary activities - - - - - -
Return on ordinary activities after (182,339-) (3,742,696) (3,925,035) (115,437) 2,591,258 2,475,821
taxation for the financial year
Basic and diluted return per ordinary share (0.59)p (12.06)p (12.65)p (0.36)p 8.00p 7.64p
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.
No operations were acquired or discontinued in the year.
There are no gains or losses other than shown in the income statement.
Unaudited Balance Sheet
Notes As at As at
31 January 31 January
2006 2005
(restated)*
# #
Fixed assets
Investments at fair value
Qualifying investments 22,926,971 27,376,768
Fixed interest securities and other non-qualifying 4,273,246 4,541,782
investments
27,200,217 31,918,550
Current assets
Debtors 264,325 118,340
Cash at bank 412,435 428,217
676,760 546,557
Creditors: amounts falling due within one year (361,190) (599,158)
Net current assets/(liabilities) 315,570 (52,601)
Net assets 27,515,787 31,865,949
Capital and reserves
Called-up share capital 1,555,894 1,576,043
Share premium account 3,121,068 2,721,969
Special reserve 25,082,853 25,774,626
Capital redemption reserve 116,500 73,500
Capital reserve - realised 1,568,267 425,432
Capital reserve - unrealised (3,812,156) 1,073,375
Revenue reserve (116,639) 221,004
Equity shareholders' funds 27,515,787 31,865,949
Net asset value per ordinary share 88.42p 101.09p
Unaudited Cash Flow Statement
Notes Year ended Year ended
31 January 31 January
2006 2005
# #
Operating activities
Investment income received 265,600 451,338
Deposit interest received 18,064 17,620
Underwriting commission received - 450
Investment management fees paid (587,355) (451,024)
Other expenses paid (306,893) (298,353)
Net cash outflow from operating activities (610,584) (279,969)
Taxation
Corporation tax paid - -
Net cash outflow from taxation - -
Capital expenditure and financial investment
Purchases of investments (2,959,275) (5,716,930)
Disposals of investments 4,235,693 6,424,275
Net cash inflow from capital expenditure and financial investment 1,276,418 707,345
Equity dividends paid (155,304) (81,777)
Net cash inflow before financing 510,530 345,599
Financing
Proceeds of C share issue 397,000 -
Cost of C share issue (8,958) -
Cost of ordinary shares purchased for cancellation (914,354) (899,526)
Net cash outflow from financing (526,312) (899,526)
Decrease in cash for the year (15,782) (553,927)
Notes to the Financial Statements
1 Changes in accounting policies
This Annual Report has been prepared using new accounting standards which have
been issued to converge UK accounting standards ("revised UK GAAP") with
International Financial Reporting Standards ("IFRS"). This has affected the net
asset value as at 31 January 2005. The first change, Financial Reporting
Standard ("FRS") 21 is to recognise any final dividend payable as a liability
only after it has been approved at a general meeting, rather than when proposed.
Accordingly, the financial statements do not record proposed final dividends.
The second, FRS 26, is to value the portfolio of investments at bid prices
rather than at mid-market prices. There has been no impact resultant from the
adoption of FRS 22 "Earnings per share" and FRS 23 "The effects of changes in
foreign exchange rates". Changes have occurred as a result of adopting FRS 25
with respect to the disclosure and presentation of financial instruments.
2 Accounting policies
A summary of the principal accounting policies is set out below.
a) Basis of accounting
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of fixed asset investments. The
financial statements have been prepared in accordance with the Companies Act
1985, with applicable accounting standards in the United Kingdom and are in
compliance with the revised December 2005 Statement of Recommended Practice
'Financial Statements of Investment Trust Companies' ("SORP").
b) Investments
All investments held by the Company are classified "at fair value through profit
or loss". Investments are initially recognised at cost, being the fair value of
consideration given. Interest accrued on fixed interest rate securities at the
date of purchase or sale is accounted for separately as accrued income, so that
the value or purchase price or sale proceeds is shown net of such items.
After initial recognition, investments are measured at fair value, with
unrealised gains and losses on investments and impairment of investments
recognised in the income statement and allocated to capital. Realised gains and
losses on investments sold are calculated as the difference between sales
proceeds and cost.
For investments actively traded in organised financial markets, fair value is
generally determined by reference to Stock Exchange quoted market bid prices at
the close of business on the balance sheet date, without adjustment for
transaction costs necessary to realise the asset.
Where trading in the securities of an investee Company is suspended, the
investment is valued at the Board's estimate of its net realisable value.
Unquoted investments are stated at the fair value with reference to the
International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines
where appropriate.
Capital gains and losses on investments, whether realised or unrealised, are
dealt with in the capital reserve.
c) Income
Dividends receivable on listed and quoted equity shares are brought into account
on the ex-dividend date. Dividends receivable on unquoted equity shares are
brought into account when the Company's right to receive payment is established
and there is no reasonable doubt that payment will be received. Fixed returns on
non-equity shares and debt securities are recognised on a time apportionment
basis so as to reflect the effective yield, provided there is no reasonable
doubt that payment will be received in due course. Underwriting commission and
interest receivable are included in the accounts on an accruals basis.
d) Expenses
All expenses are accounted on an accruals basis. Expenses are charged through
the revenue account in the income statement except as follows:
* expenses which are incidental to the acquisition of an investment are
included within the cost of the investment;
* expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds on an investment.
* expenses are charged to capital reserve - realised 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 75% to capital reserve and 25% to revenue account, in line with
the Board's expected long-term split of returns, in the form of capital
gains and income respectively, from the investment portfolio of the
Company.
e) Taxation
Deferred tax 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 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 reversals of the underlying timing differences can
be deducted. Timing differences are differences between the Company's taxable
profits and its results as stated in the financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse based on tax
rates and laws that have been enacted or substantially enacted by the balance
sheet date. Deferred tax is measured on a non-discounted basis.
Any tax relief obtained in respect of management fees allocated to capital is
reflected in the capital reserve - realised and a corresponding amount is
charged against revenue. The tax relief is the amount by which corporation tax
payable is reduced as a result of these capital expenses.
f) Capital Reserve
Realised
The following are accounted for as realised returns:
* Gains and losses on realisation of investments;
* Realised exchange differences of a capital nature;
* Expenses and finance costs, together with the related tax effect to this
reserve in accordance with the policies; and
* Realised gains and losses on transactions undertaken to hedge an exposure
of a capital nature.
Unrealised
The following are accounted for as unrealised returns:
* Increases and decreases in the valuation of investments held at the year
end;
* Unrealised exchange differences of a capital nature; and
* Unrealised gains and losses on transactions undertaken to hedge an
exposure of a capital nature.
3 Dividend
The Directors do not recommend a final dividend for the year ended 31
January 2006 (2005: 0.50 pence).
4 Earnings per share
Basic and diluted revenue return per ordinary share is based on the net
loss on ordinary activities after taxation of #182,339 (2005: loss
#115,437) and on 31,025,626 (2005: 32,383,305) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
Basic and diluted capital return per ordinary share is based on net capital
losses for the financial year of #3,742,696 (2005: gains #2,591,258) and
31,025,626 (2005: 32,383,305) ordinary shares, being the weighted average
number of ordinary shares in issue during the year.
5 Annual General Meeting
The Annual General Meeting of the Company will be held at 21 New Street ,
Bishopsgate, London EC2M 4HR on Thursday 6 July 2006 at 10.00 a.m.
6 Statutory Report and Accounts
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 January 2006. Statutory accounts
for 2006 will be finalised on the basis of the financial information
presented by the Directors in this announcement and will be delivered to
the Registrar of Companies following the Company's Annual General Meeting.
The information for the year ended 31 January 2006 does not comprise the
full financial statements with the meaning of Section 240 of the Companies
Act 1985.
The Company will be circulating the full Report and Accounts to
shareholders shortly and copies will be available from the Registered
Office of the Company, 21 New Street, Bishopsgate, London EC2M 4HR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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