Oxford Tech 3 VCT Oxford Technology 3 Venture Capital Trust Plc : Half-year Report
19 Settembre 2019 - 8:00AM
UK Regulatory
TIDMOTT
Oxford Technology 3 Venture Capital Trust Plc
Unaudited Half-Yearly Report
For the period
1 March 2019 to 31 August 2019
Financial Headlines
6 Months Ended Year Ended
31 August 2019 28 February 2019
Net Assets at Period End GBP6.64m GBP6.07m
Net Asset Value per Share 97.8p 89.5p
Cumulative Dividend per Share 36.0p 36.0p
Total NAV Return per Share 133.8p 125.5p
Share Price at Period End 47.5p 62.5p
(Mid-Market)
Earnings per Share 8.3p 3.3p
----------------------------- --------------- -----------------
Company Number: 4351474
Registered Address: Magdalen Centre, Oxford Science Park, Oxford OX4 4GA
Statement on behalf of the Board
I am pleased to present the unaudited results for the six month period
ended 31 August 2019.
Results and Dividend
The Company's net asset value (NAV) per share has increased from 89.5p
at 28 February 2019 by 8.3p (9.3%) to 97.8p at 31 August 2019. This is
primarily due a 20% increase in the valuation for Ixaris partially
offset by a reduction for Orthogem.
Total return which includes net asset value and dividends paid per share
increased from 125.5p to 133.8p over the same period - still just below
the threshold where a performance fee may become payable.
During the period, your company made no disposals. A further investment
of GBP20k was made into ImmBio to support the company before revenue is
received from the Chinese licencing deal.
The Directors are not proposing a dividend at the present time.
Portfolio Review
During the period, with the exception of Ixaris and Orthogem as
mentioned above, the portfolio has remained stable with steady progress
being reported by most of our larger companies. The portfolio has become
increasingly dominated by Ixaris which now represents over 70% of the
net assets:
-- Your company first invested GBP110k in Ixaris in 2002, when the company
consisted of three founders with an idea for a transaction-based
financial solution that would give anybody the ability to pay online.
Today Ixaris is one of the leading companies in the field and its
payments system is widely used by travel agents and tour operating
companies worldwide who have to make thousands of payments in multiple
different currencies on a daily basis. Ixaris enables them to do this
very efficiently and at low cost. Sales are continuing to grow fast
and prospects look good. One potential concern could be a chaotic Brexit,
but Ixaris have set up an office in Brussels and plan to be able to sell
in Europe from there.
-- In March 2019 we invested a further GBP20k in ImmBio. This investment
enables ImmBio to go through the process of technology transfer of
PnuBioVax vaccine strains to the Chinese National Biotech Company as
required by the license agreement. Discussions are also ongoing with
pharma companies in other regions of the world.
-- Arecor have started dosing in their Phase 1 clinical trial of rapid
action insulin. They have also signed multiple development agreements to
develop room temperature liquid formulations with global pharma
companies.
-- Scancell, the Company's only quoted investment, continues to make
progress. It has received approval to start the UK Phase 2 melanoma
combination trial of SCIB1 and has begun screening potential patients in
Nottingham. It has also started the first joint programme on its new
AvidiMab anti-glycan antibody technology, having partnered with a large
unnamed pharma. AvidiMab antibodies target sugars rather than proteins on
the cell surface.
-- Scancell raised GBP3.9 million through the issue of new shares at 5p per
share, a significant discount to previous placings, to Vulpes Life
Science Fund in June. The money will support the transition of Modi-1 to
the clinic. Vulpes now owns 16.67% of Scancell and Martin Diggle from
Vulpes was appointed to the Scancell board, which we believe will
increase the chance of a successful outcome for them. The Scancell share
price has risen following the Vulpes investment and our investment has
been valued at 6.8p, the AIM share price at 31 August.
-- Orthogem have agreed terms with a new UK distributor, TRB Chemica. The
valuation of Orthogem has been reduced to reflect that sales of the putty
product have been slow to arrive. Overseas regulatory approval has been
much slower than anticipated, significantly in Australia which has been a
leading market for Orthogem.
Liquidity
Your company has GBP167k of cash which adequately balances future
operating cost cover and unexpected investee support requirements.
VCT qualifying status
The Board has procedures in place to ensure that the Company continues
to comply with the conditions laid down by HMRC for maintaining approval
as a VCT. The Directors are closely assessing the implications of
meeting the new 80% qualifying holding limit, required to be in place by
29 February 2020. Whilst the Company currently exceeds this limit, as
qualifying investments are realised and distributions made to
shareholders maintaining compliance will require close and regular
scrutiny.
Presentation of half-yearly report
In order to reduce the length of this report, we have omitted details of
the Company's objectives and investment strategy, its Advisers and
Registrar and how to buy and sell shares in the Company. These details
are all included in the Annual Reports, which together with previous
half-yearly reports, are available for viewing on the Oxford Technology
website.
Outlook
Your Directors continue to monitor changes to VCT legislation, and their
potential impact on both the VCT and its investee companies. Recent rule
changes to tax efficient investment schemes are not causing any material
impact on the current portfolio or to current investors as your VCT is
fully invested. Likewise, whilst the impact of Brexit remains unclear,
your Directors do not expect its eventual outcome to have a material
impact on portfolio valuations. Ixaris has the greatest exposure due to
its European activities but, we understand, has robust plans in place.
The Board continues to review the future structure and cost base of your
Company, with particular focus on the impact of the reduction of the
asset base as funds are returned to shareholders. We continue to
believe your VCT is an appropriate structure to hold your Company's
investments, albeit it would be preferable to have a larger asset base
to share the operating costs.
As foreshadowed in the annual report, your Board has continued to have
detailed conversations with potential parties who may be interested in
increasing the asset base. Although these discussions are encouraging,
they are not currently sufficiently far enough advanced to be able to
announce terms. Your Board has always made clear that there is no
certainty such a deal can be reached but will continue to seek and
actively progress suitable opportunities.
Meanwhile your Board and Investment Manager continue to work together so
as to best position your VCT such that, when valuations and
opportunities allow, holdings can be exited. Subject to ongoing
liquidity requirements, proceeds will then be distributed to
shareholders.
Finally, I would like to take this opportunity to thank shareholders,
many of whom we were able to welcome to our AGM in July, for their
continued support.
Robin Goodfellow
Chairman
18 September 2019
Investment Portfolio as at 31 August 2019
Net Cost
of Change in value for the % Equity % Equity
investment Carrying value at 31/08/19 6 month period held held All % Net
Company Description GBP'000 GBP'000 GBP'000 OT3 OTVCTs assets
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Ixaris Group Internet
Holdings payments 535 4,744 798 7.2 7.2 71.5
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
ImmBio Novel vaccines 482 523 3 6.7 22.2 7.9
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Protein
Arecor stabilisation 443 501 - 3.1 10.5 7.5
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Scancell(bid price Cancer
6.8p) therapeutics 409 349 (10) 1.1 2.7 5.3
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Select -- STL Photocopier
Management Ltd interfaces 47 172 9 2.8 58.6 2.6
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Bone graft
Orthogem material 317 94 (145) 11.2 29.8 1.4
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Insense Wound healing 333 60 - 2.3 6.8 0.9
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Low power
Invro electronics 40 10 (10) 33.1 33.1 0.2
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Directional
Plasma Antennas antennas 358 3 - 12.4 48.8 -
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Data
Inaplex Integration 58 1 (4) 13.3 34.8 -
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Production of
metal
Metal Nanopowders powders 153 - - 20.0 36.7 -
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Production of
hard
Superhard Materials materials 11 - - 21.8 40.0 -
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Insense
Microarray spinout 2 - - 0.2 0.2 -
------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Total Investments 3,188 6,457 641 97.3
----------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
Other Net Assets 179 2.7
----------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
Net Assets 6,636 100
----------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
Responsibility Statement of the Directors in respect of the half-yearly
report
We confirm that to the best of our knowledge:
-- the half-yearly financial statements have been prepared in accordance
with the statement "Interim Financial Reporting" issued by the Financial
Reporting Council;
-- the half-yearly report includes a fair review of the information required
by the Financial Services Authority Disclosure and Transparency Rules,
being:
-- an indication of the important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements.
-- a description of the principal risks and uncertainties for the remaining
six months of the year.
-- a description of related party transactions that have taken place in the
first six months of the current financial year that may have materially
affected the financial position or performance of the Company during that
period and any changes in the related party transactions described in the
last annual report that could do so.
On behalf of the Board:
Robin Goodfellow
Chairman
18 September 2019
Income Statement
Six months to 31 Aug 2019 Six months to 31 Aug 2018 Year to 28 Feb 2019
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Gain/(loss)
on disposal
of fixed
asset
investments - - - - 10 10 - (8) (8)
Unrealised
gain on
valuation
of fixed
asset
investments - 620 620 - - - - 344 344
Investment
income - - - - - - 2 - 2
Investment
management
fees (7) (23) (30) (7) (22) (29) (15) (44) (59)
Other
expenses (26) - (26) (28) - (28) (54) - (54)
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Return on
ordinary
activities
before tax (33) 597 564 (35) (12) (47) (67) 292 225
Taxation on
ordinary
activities - - - - - - - - -
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Return on
ordinary
activities
after tax (33) 597 564 (35) (12) (47) (67) 292 225
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Earnings per
share --
basic and
diluted (0.5)p 8.8p 8.3p (0.5)p (0.2)p (0.7)p (1.0)p 4.3p 3.3p
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
There was no other Comprehensive Income recognised during the year.
The 'Total' column of the Income Statement is the Profit and Loss
Account of the Company, the supplementary Revenue and Capital return
columns have been prepared under guidance published by the Association
of Investment Companies.
All Revenue and Capital items in the above statement derive from
continuing operations.
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
funds.
Balance Sheet
As at 31 Aug As at 31 Aug As at 28 Feb
2019 2018 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------- ------- ------- ------- ------- --------
Fixed asset investments
(At fair value through profit and loss) 6,457 5,221 5,816
Current assets:
Debtors 18 20 2
Creditors: Amounts falling due within one
year (6) (10) (12)
Cash at Bank 167 569 266
----------------------------------------- ------- ------- ------- ------- ------- --------
Net current assets 179 579 256
Net assets 6,636 5,800 6,072
----------------------------------------- ------- ------- ------- ------- ------- --------
Called up equity share capital 679 679 679
Share premium 718 718 718
Unrealised capital reserve 3,269 2,061 2,649
Profit and Loss account reserve 1,970 2,342 2,026
Total equity shareholders' funds 6,636 5,800 6,072
Net asset value per share 97.8p 85.5p 89.5p
----------------------------------------- ------- ------- ------- ------- ------- --------
Statement of Changes in Equity
Share Share Profit & Loss
Capital Premium Unrealised Capital Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------- ------- -------------------------- ------------- --------
As at 1
March 2018 679 718 2,061 2,389 5,847
Revenue
return on
ordinary
activities
after tax - - - (35) (35)
Expenses
charged to
capital - - - (22) (22)
Current
period
gains on
disposal - - - 10 10
Balance as
at 31
August
2018 679 718 2,061 2,342 5,800
------------ ------- ------- -------------------------- ------------- --------
As at 1
March 2018 679 718 2,061 2,389 5,847
Revenue
return on
ordinary
activities
after tax - - - (67) (67)
Expenses
charged to
capital - - - (44) (44)
Current
period loss
on
disposal - - - (8) (8)
Current
period
gains on
fair value
of
investments - - 344 - 344
Prior period
unrealised
losses now
realised - - 244 (244) -
Balance as
at 28
February
2019 679 718 2,649 2,026 6,072
------------ ------- ------- -------------------------- ------------- --------
As at 1
March 2019 679 718 2,649 2,026 6,072
Revenue
return on
ordinary
activities
after tax - - - (33) (33)
Expenses
charged to
capital - - - (23) (23)
Current
period
gains on
fair value
of
investments - - 620 - 620
Balance as
at 31
August
2019 679 718 3,269 1,970 6,636
------------ ------- ------- -------------------------- ------------- --------
Statement of Cash Flows
Six months to Six months to Year to 28 Feb
31 Aug 2019 31 Aug 2018 2019
GBP'000 GBP'000 GBP'000
-------------------------- --------------- --------------- ----------------
Cash flows from
operating
activities
Return on ordinary
activities before
tax 564 (47) 225
Adjustments for:
(Increase)/decrease
in debtors (16) 3 21
(Decrease)/increase in
creditors (6) - 2
(Gain)/loss on disposal of
fixed asset investments - (10) 8
Gain on valuation of fixed
asset investments (620) - (344)
Movement in investment
debtors and creditors - (20) (20)
-------------------------- --------------- --------------- ----------------
Outflow from operating
activities (78) (74) (108)
-------------------------- --------------- --------------- ----------------
Cash flows from investing
activities
Purchase of fixed asset
investments (21) (30) (332)
Sale of fixed asset
investments - 29 62
-------------------------- --------------- --------------- ----------------
Outflow from investing
activities (21) (1) (270)
Cash flows from financing
activities
Dividends paid - - -
-------------------------- --------------- --------------- ----------------
Total cash flows from
financing activities - - -
-------------------------- --------------- --------------- ----------------
(Decrease)/increase in
cash and cash
equivalents (99) (75) 378
Opening cash and cash
equivalents 266 644 644
-------------------------- --------------- --------------- ----------------
Closing cash and cash
equivalents 167 569 266
-------------------------- --------------- --------------- ----------------
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 31
August 2019 have been prepared in accordance with the Financial
Reporting Council's (FRC) Financial Reporting Standard 104 Interim
Financial Reporting ('FRS 104') and the Statement of Recommended
Practice (SORP) for Investment Companies re-issued by the Association of
Investment Companies in November 2014. Details of the accounting
policies and valuation methodologies are included in the Annual Report.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 31 August
2019 do not constitute statutory accounts within the meaning of Section
415 of the Companies Act 2006. The comparative figures for the year
ended 28 February 2019 have been extracted from the audited financial
statements for that year, which have been delivered to the Registrar of
Companies. The independent auditor's report on those financial
statements, in accordance with chapter 3, part 16 of the Companies Act
2006, was unqualified. This half-yearly report has not been reviewed by
the Company's auditor.
3. Earnings per share
The calculation of earnings per share for the period is based on the
return attributable to shareholders divided by the weighted average
number of shares in issue during the period. There are no potentially
dilutive capital instruments in issue and, therefore, no diluted returns
per share figures are relevant.
4. Net asset value per share
The net asset value per share is based on the net assets at the period
end divided by the number of shares in issue at that date (6,785,233 in
each case).
5. Principal risks and uncertainties
The Company's assets consist of equity and fixed interest investments,
cash and liquid resources. Its principal risks are therefore market risk,
credit risk and liquidity risk. Other risks faced by the Company include
economic, loss of approval as a Venture Capital Trust, investment and
strategic, regulatory, reputational, operational and financial risks.
These risks, and the way in which they are managed, are described in
more detail in the Company's Annual Report and Accounts for the year
ended 28 February 2019. The Company's principal risks and uncertainties
have not changed materially since the date of that report.
6. Related party transactions
OT3 Managers Ltd, a wholly owned subsidiary, provides investment
management services to the Company for a fee of 1% of net assets per
annum.
7. Copies of this statement are available from Oxford Technology
Management, Magdalen Centre, Oxford Science Park, Oxford OX4 4GA and on
the Company's website.
Board Directors: Robin Goodfellow, Richard Roth, Alex Starling and David
Livesley
Investment Manager: OT3 Managers Ltd with services contracted to Oxford
Technology Management Ltd
Website: www.oxfordtechnology.comvct/vct3.html
(END) Dow Jones Newswires
September 19, 2019 02:00 ET (06:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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