Oxford Tech 4 VCT Oxford Technology 4 Venture Capital Trust Plc : Half-year Report
19 Settembre 2019 - 8:00AM
UK Regulatory
TIDMOXF
Oxford Technology 4 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 GBP5.00m GBP5.64m
Net Asset Value per Share 43.4p 49.0p
Cumulative Dividend per Share 43.0p 40.0p
Total NAV Return per Share 86.4p 89.0p
Share Price at Period End 26.5p 29.5p
(Mid-Price)
Earnings per Share (2.6)p 6.1p
----------------------------- --------------- -----------------
Company Number: 5038854
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 decreased from 49.0p
at 28 February 2019 by 5.6p to 43.4p at 31 August 2019. This is
partially down to reductions in the valuations of Diamond Hard Surfaces
and Orthogem, although the 3.0p dividend per share paid in April
accounts for over 50% of the reduction.
Total return which includes net asset value and dividends paid per share
reduced by the smaller amount of 2.6p from 89.0p to 86.4p over the same
period.
During the period, your company disposed of a further 520,000 Castleton
shares at GBP0.95 per share realising GBP494,000. This enabled a
dividend payment of 3.0p per share to be paid on 26 April 2019. The
Castleton share price has risen from 89p to 98p during the period.
A further investment of GBP38,433 was made into ImmBio to support the
company before revenue is received from the Chinese licencing deal.
Following the decision to cease trading after the withdrawal of the
Innovate UK grant, ZuvaSyntha was dissolved on 11 June 2019. As the
investment was already fully provided for, this had no impact on either
the NAV or the P&L.
Portfolio Review
During the period, the portfolio has remained stable with steady
progress being reported by most companies:
-- 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 pharmaceutical
companies.
-- 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, for example in Australia which has been a
leading market for Orthogem.
-- ImmBio have begun the processes of technology transfer to the national
Chinese biotechnology company CNBG as foreseen by the license agreement.
Discussions are also ongoing with pharma companies in other regions of
the world.
-- Select distributes high quality document management software via its
global channel partners while adding significant value through its
development team by providing integrations or bespoke solutions.
Select's sales grew to just over GBP7m in the year to July 2019, an
all-time high for the company, and resulted in a small profit.
-- Castleton reported revenue growth of 13% to GBP26.4m and EBITDA growth of
24% on the previous year. The share price was 98.0p at 31 August 2019,
up on the start of our financial year but down from a peak of 111p at the
beginning of April. The National Housing Federation has chosen Castleton
as its preferred supplier of Housing Management Solutions.
-- DHS continues to pursue sales opportunities, particularly for its
electronics heat dissipation product, but sales have not grown as
expected and therefore the valuation has been decreased.
Liquidity
The Directors are not proposing to recommend a further dividend at this
present time.
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 may become more difficult.
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 expected to have any
material impact on the current portfolios or on current investors as the
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.
The Board continues to review the future structure and cost base of your
Company, with particular focus on the impact of the reduction of 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. We have had detailed conversations with potential
parties who may be interested in increasing the asset base, but to date,
have not been in a position to agree terms. We have always made clear
that there is no certainty such an opportunity can be found but the
Directors will continue seeking such 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.
David Livesley
Chairman
18 September 2019
Investment Portfolio as at 31 August 2019
Net Cost
of % Equity % Equity
investment Carrying value at 31/08/19 Change in value for the held held All % Net
Company Description GBP'000 GBP'000 6 month period GBP'000 OT4 OTVCTs Assets
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Select -- STL Photocopier
Management Ltd interfaces 237 1,123 60 18.4 58.6 22.5
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
ImmBio Novel vaccines 827 1,018 6 12.8 22.2 20.3
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Protein
Arecor stabilisation 590 907 - 5.6 10.5 18.1
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Mobile
Castleton Technology software for
(bid price 98.0p) contractors 72 859 (384) 1.1 1.1 17.2
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Separation
Dynamic Extractions technology 377 313 - 30.4 30.4 6.3
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Diamond
Diamond Hard Surfaces coatings 640 148 (189) 49.9 49.9 3.0
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Bone graft
Orthogem material 309 93 (134) 10.7 29.8 1.9
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Active wound
healing
Insense dressings 476 67 - 2.5 6.8 1.3
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Antibiotics
Novacta Development 347 59 - 2.3 2.3 1.2
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Directional
Plasma Antennas antennas 700 41 - 30.9 48.8 0.8
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Rechargeable
Oxis Energy batteries 305 41 (49) 0.2 0.3 0.8
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Virtual
MirriAd Advertising product
(bid price 13.0p) placement - 6 (1) 0 0 0.1
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Production of
metal
Metal Nanopowders nanopowders 52 - - 16.7 36.7 -
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Very hard
Superhard Materials materials 9 - - 18.2 40.0 -
--------------------- -------------- ---------- -------------------------- ----------------------- -------- -------- ------
Total Investments 4,941 4,675 (691) 93.5
------------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
Other Net Assets 327 6.5
------------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
Net Assets 5,002 100
------------------------------------- ---------- -------------------------- ----------------------- -------- -------- ------
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:
David Livesley
Chairman
18 September 2019
Income Statement
Six months to 31 Aug 2019 Six months to 31 Aug 2018 Year to 28 February 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 on disposal of fixed asset investments - 29 29 - 176 176 - 185 185
Unrealised (loss)/gain on valuation of fixed asset
investments - (266) (266) - 544 544 - 617 617
Investment income - - - - - - 11 - 11
Investment management fees (7) (21) (28) (7) (20) (27) (13) (40) (53)
Other expenses (26) - (26) (28) - (28) (56) - (56)
Return on ordinary activities before tax (33) (258) (291) (35) 700 665 (58) 762 704
Taxation on ordinary activities - - - - - - - - -
--------------------------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Return on ordinary activities after tax (33) (258) (291) (35) 700 665 (58) 762 704
--------------------------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Earnings per share -- basic and diluted (0.3)p (2.3)p (2.6)p (0.3)p 6.0p 5.7p (0.5)p 6.6p 6.1p
--------------------------------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
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) 4,675 5,158 5,366
Current assets:
Debtors 18 21 2
Creditors: Amounts falling due within one
year (6) (20) (13)
Cash at Bank 315 440 284
----------------------------------------- ------- ------- ------- ------- ------- --------
Net current assets 327 441 273
Net assets 5,002 5,599 5,639
----------------------------------------- ------- ------- ------- ------- ------- --------
Called up equity share capital 1,152 1,152 1,152
Share premium 813 813 813
Unrealised capital reserve (266) (1,453) 7
Profit and Loss account reserve 3,303 5,087 3,667
----------------------------------------- ------- ------- ------- ------- ------- --------
Total equity shareholders' funds 5,002 5,599 5,639
Net asset value per share 43.4p 48.6p 49.0p
----------------------------------------- ------- ------- ------- ------- ------- --------
Statement of Changes in Equity
Share Premium Profit & Loss
Share Capital Reserve Unrealised Capital Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------- ------------- -------------------------- ------------- --------
As at 1
March 2018 1,152 813 (1,457) 4,772 5,280
Revenue
return on
ordinary
activities
after tax - - - (35) (35)
Expenses
charged to
capital - - - (20) (20)
Current
period
gains on
disposal - - - 176 176
Current
period
gains on
fair value
of
investments - - 544 - 544
Dividends
paid - - - (346) (346)
Prior years'
unrealised
gains now
realised - - (540) 540 -
Balance as
at 31
August
2018 1,152 813 (1,453) 5,087 5,599
------------ ------------- ------------- -------------------------- ------------- --------
As at 1
March 2018 1,152 813 (1,457) 4,772 5,280
Revenue
return on
ordinary
activities
after tax - - - (58) (58)
Expenses
charged to
capital - - - (40) (40)
Current
period
gains on
disposal - - - 185 185
Current
period
gains on
fair value
of
investments - - 617 - 617
Prior years'
unrealised
losses now
realised - - 847 (847) -
Dividends
paid - - - (345) (345)
------------ ------------- ------------- -------------------------- ------------- --------
Balance as
at 28
February
2019 1,152 813 7 3,667 5,639
------------ ------------- ------------- -------------------------- ------------- --------
As at 1
March 2019 1,152 813 7 3,667 5,639
Revenue
return on
ordinary
activities
after tax - - - (33) (33)
Expenses
charged to
capital - - - (21) (21)
Current
period
gains on
disposal - - - 29 29
Current
period
losses on
fair value
of
investments - - (266) - (266)
Dividends
paid - - - (346) (346)
Prior years'
unrealised
gains now
realised - - (7) 7 -
------------ ------------- ------------- -------------------------- ------------- --------
Balance as
at 31
August
2019 1,152 813 (266) 3,303 5,002
------------ ------------- ------------- -------------------------- ------------- --------
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 (291) 665 704
Adjustments for:
Increase in debtors (16) (19) -
(Decrease)/increase
in creditors (7) 10 3
Gain on disposal of
fixed asset
investments (29) (176) (185)
Loss/(gain) on
valuation of fixed
asset investments 266 (544) (617)
Outflow from
operating
activities (77) (64) (95)
-------------------------- --------------- --------------- ----------------
Cash flows from investing
activities
Purchase of fixed asset
investments (38) (87) (265)
Sale of fixed asset
investments 492 790 842
-------------------------- --------------- --------------- ----------------
Inflow from investing
activities 454 703 577
-------------------------- --------------- --------------- ----------------
Cash flows from financing
activities
Dividends paid (346) (346) (345)
-------------------------- --------------- --------------- ----------------
Outflow from financing
activities (346) (346) (345)
-------------------------- --------------- --------------- ----------------
Increase in cash and cash
equivalents 31 293 137
-------------------------- --------------- --------------- ----------------
Opening cash and cash
equivalents 284 147 147
-------------------------- --------------- --------------- ----------------
Closing cash and cash
equivalents 315 440 284
-------------------------- --------------- --------------- ----------------
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 (11,516,946 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
OT4 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: David Livesley, Alex Starling, Robin Goodfellow and
Richard Roth.
Investment Manager: OT4 Managers Ltd with services contracted to Oxford
Technology Management Ltd
Website: www.oxfordtechnologyvct.com/vct4.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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