TIDMOSEC
Octopus AIM VCT 2 plc
Final Results
13 February 2020
Octopus AIM VCT 2 plc, managed by Octopus Investments Limited, today
announces the final results for the year ended 30 November 2019.
These results were approved by the Board of Directors on 13 February
2020.
You may view the Annual Report in full at
https://www.globenewswire.com/Tracker?data=pQfvr0fFGNUQNNfmOA0nreHFiefTDexhyfwd07fYPXY-MetV_tmEA7ny2gwmNL7HwLEKlY7vyVWu7b4k7tonD52M_R04dgkh3etSQ-Xzm02A2ne7ozqK-HdAESSRZsGL
www.octopusinvestments.com in due course. All other statutory
information will also be found there.
Financial Summary
30 November 2019 30 November 2018
-------------------------------------- ---------------- ----------------
Net assets (GBP'000s) 80,040 90,630
Loss after tax (GBP'000s) (476) (3,234)
Net asset value ("NAV") per share (p) 72.4 80.8
Dividends paid in year (p) 8.1 4.2
Total return (%) * (0.4) (2.4)
Final dividend proposed (p)** 2.1 2.1
-------------------------------------- ---------------- ----------------
* Total return is an alternative performance measure calculated as
movement in NAV per share in the period plus dividends paid in the
period, divided by the NAV per share at the beginning of the period.
** Subject to shareholder approval at the Annual General Meeting, the
proposed final dividend will be paid on 22 May 2020 to shareholders on
the register on 1 May 2020.
Chairman's Statement
Introduction
I am pleased to present the Annual Report of AIM VCT 2 for the year
ended 30 November 2019. I would like to welcome all new shareholders who
have joined in the year and I do hope that I will see some of you at the
AGM on 30 April 2020.
In the year under review the challenges around international trade,
politics and the visibility of the nature of any Brexit settlement
continued to prey on sentiment, with the result that stock markets
remained vulnerable to bouts of nervousness and volatility throughout
the year. Investors remained cautious about risk, and as a consequence
smaller companies underperformed as an asset class. It was not all bad
news however; despite almost daily negative press, the economy continued
to grow in 2019 and employment levels remained high. At the micro-level
many companies in the portfolio reported good figures in the September
results season. The level of fundraisings on AIM was subdued, with an
emphasis on support for existing companies rather than new issues.
Against this background the VCT made GBP4.3 million of new VCT
qualifying investments in the year, down from GBP8.1 million in the
previous year.
Performance
The NAV on 30 November 2019 was 72.4p per share, a decrease on the NAV
of 80.8p reported at 30 November 2018. Adding back the 8.1p of dividends
paid in the year, to adjust the year end NAV to 80.5p, gives a total
negative return of 0.4%. In the same year, the FTSE All Share Index rose
by 11%, the FTSE SmallCap (excluding investment companies) Index rose by
5.3% and the FTSE AIM All Share Index rose by 0.7%, all on a total
return basis.
Once again stock specific factors had a significant impact on
performance, both positive and negative, and these are covered in more
detail in the Investment Manager's Review. In addition, the
underperformance of smaller companies became more marked as the year
went on and domestic political problems weakened sterling and confidence
in companies exposed to the domestic economy.
In the year under review AIM raised GBP3.6 billion of new capital, a
sharp decrease on the GBP6.2 billion raised in the previous year,
although it still showed itself able to support its existing members,
with the majority of the drop accounted for by a lack of new issues.
Dividends
In November 2019 an interim dividend of 2.1p and a special dividend of
3.9p was paid to all shareholders. The special dividend was made
following from a number of partial and total sales of holdings from the
portfolio in the year. The Board is recommending a final dividend in
respect of the year to 30 November 2019 of 2.1p per share, making 8.1p
in total paid in respect of the year. Subject to the approval of
shareholders at the AGM the dividend will be paid on 22 May 2020 to
shareholders on the register on 1 May 2020.
It remains the Board's intention to maintain a minimum annual dividend
payment of 3.6p per share or a 5% yield based on the year end share
price, whichever is greater. This will usually be paid in two
instalments during each year.
Cancellation of Share Premium Account
At the last General Meeting, shareholders voted to cancel share premium
to create a pool of distributable reserves to the amount of
GBP11,575,000.
Dividend Reinvestment Scheme
In common with a number of other VCTs, the Company has established a
Dividend Reinvestment Scheme (DRIS) following approval at the AGM in
2014. Some shareholders have already taken advantage of this
opportunity. For investors who do not need income, but value the
additional tax relief on their reinvested dividends, this is an
attractive scheme and I hope that more shareholders will find it useful.
In the course of the year 2,086,088 new shares have been issued under
this scheme, returning GBP1.5 million to the Company. The final dividend
referred to above will be eligible for the DRIS.
Share Buybacks
During the year to 30 November 2019 the Company continued to buy back
shares in the market from selling shareholders and purchased 3,838,793
ordinary shares for a total consideration of GBP2,781,484. We have
maintained a discount of approximately 4.5% to NAV (equating to a 5.0%
discount to the selling shareholder after costs), which the Board
monitors and intends to retain as a policy which fairly balances the
interests of both remaining and selling shareholders. Buybacks remain an
essential practice for VCTs, as providing a means of selling is an
important part of the initial investment decision and has enabled the
Company to grow. As such I hope you will all support the appropriate
resolution at the AGM.
Share Issues
An offer to raise up to GBP8 million with an overallotment facility of
up to a further GBP4 million alongside the Octopus AIM VCT plc was
launched on 29 November 2019.
Risks and Uncertainties
In accordance with the Listing Rules and the Companies Act 2006 under
which the Company operates, the Board has to comment on potential risks
and uncertainties, which could have a material impact on the Company's
performance.
Liquidity
There has been much discussion about the issue of liquidity within
investment funds over the past year. Shareholders may be interested to
know that at the year end 27% of the Company's portfolio was held in
cash or collective investment funds providing short-term liquidity, 69%
in individual quoted shares and less than 3% of the company's assets
were held in unquoted single company investments. It should be noted
that a proportion of the quoted securities, which accounts for 69% of
the Company's portfolio, may have limited liquidity owing to the size of
the investee company and proportion held by the Company.
VCT Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice concerning continuing compliance with HMRC regulations for
VCTs. The Board has been advised that the Company is in compliance with
the conditions laid down by HMRC for maintaining approval as a VCT. From
1st December 2019 a key requirement is to maintain at least an 80%
qualifying investment level, up from the previous level of 70%. As at 30
November 2019, 91% of the Copmany's portfolio were in qualifying
investments.
Annual General Meeting ("AGM")
The AGM will take place on 30 April 2020 at 11:00 a.m. I hope to meet as
many shareholders as possible at this event, which provides an
opportunity for you to meet the Board, Investment Managers and to get an
update on the Company's activities and future plans. At the AGM a
resolution will be proposed to extend the life of the Company until 2025
in order to preserve its VCT status for the benefit of both existing
shareholders and new investors who are participating in the latest
offer. We will do our best to address as many shareholder questions as
possible in this meeting.
Outlook
There was a significant improvement in sentiment after the General
Election in December 2019 and as a result December was a very positive
month for many of the shares in the portfolio resulting in good progress
for the NAV. The subsequent recovery in sterling has favoured some of
those shares that had formerly been held back by their exposure to the
domestic economy which is now expected to be boosted by the government's
spending plans. However, there is still a degree of uncertainty about
the exact nature of the UK's eventual relationship with the EU and
international trade concerns remain. The recent outbreak of Coronavirus
in mainland China is currently dominating the headlines although it is
too early at this stage to assess the scale of any impact on the wider
global economy.
The portfolio now contains 76 holdings across a range of sectors and
many of them have already demonstrated their management's ability to
grow their businesses successfully in difficult economic conditions. The
balance of the portfolio towards profitable companies remains, and the
manager expects to find good opportunities to invest the cash as a
recovery in confidence feeds through to an increased demand from
companies for more growth capital.
Keith Mullins
Chairman
13 February 2020
Investment Manager's Review
Introduction
In our interim review we highlighted the effects that international
trade tensions and continuing Brexit uncertainty were having on UK share
prices, with smaller companies in particular having underperformed as
investors sought the comfort of larger more liquid stocks and exposure
to foreign currency earnings. The effect was even more pronounced in the
second half of the year resulting in some very volatile months for the
stock market and declines in both the smaller companies and AIM indices
in the year to 30 November 2019. Sentiment began to recover in November
but only improved decisively in December post the General Election
result. Despite a strong recovery in the NAV in the month of November,
it is disappointing to have to report a small negative total return for
the year of 0.4%, although we are pleased to report the maintenance of
the 5% yield objective and the additional payment of a 3.9p special
dividend in the year. The latest unaudited NAV on 10 February is 76.1p,
5% up from the November year end.
In the year to 30 November 2019 AIM, in common with the wider
stockmarket, saw a sharp decline in the number of new entrants seeking a
listing although it has continued to raise new capital for its existing
members and the Company has deployed existing cash steadily throughout
the period. The decisive General Election result in December has changed
the mood of the market and there are early signs that the supply of new
issues should start to pick up in 2020.
The Alternative Investment Market
AIM trailed larger company indices in 2019, producing a NAV total return
of 0.7% in the twelve months to November, well behind the FTSE All share
return of 11% and behind the Smaller Companies Index (excluding
Investment Trusts) figure of 5.3%. These figures are in part a
consequence of the timing of the VCT's year end which fell just before
the General Election and at the end of a prolonged period of Brexit
uncertainty. With sterling and sentiment weak, investors had sought the
perceived safety of large companies which tend to have a much greater
proportion of their businesses based overseas. Conversely, AIM has the
highest proportion of very small companies in it, something which held
it back in the period.
In the interim report we highlighted the fall in the number of new
companies floating on AIM. This was also the case in the second half of
the financial year with AIM raising a total of only GBP0.4 billion for
new listings, down from a figure of GBP1.7 billion in the previous year.
In the year to 30 November 2019, AIM raised a further GBP3.2 billion of
new capital for existing companies which compares to a figure of GBP4.5
billion the previous year. The shortage of new issues in 2019 was
frustrating and has been attributed to a number of factors including the
popularity of private equity and other alternative financing as a result
of a sustained period of low interest rates as well as volatile markets
exacerbated by the uncertainty around Brexit. It is encouraging that AIM
has continued to raise capital for its existing constituents despite all
of these perceived concerns and we hope that the greater certainty
promised by a majority government helps to restore the flow of new
entrants to the market. VCTs play a significant part in the funding
process and we identify below the companies we have invested in during
the year.
Performance
Adding back the 8.1p of dividends paid in the year, the NAV total return
decreased by 0.4%. This compares with a positive total return for the
FTSE AIM All Share Index of 0.7%, the FTSE SmallCap (excluding
investment companies) of 5.3% and the FTSE All Share Index of 11%. It
was a year characterised by individual months of significant market
volatility, with a tendency for shares to react particularly strongly to
any bad trading news. The market remained wary of smaller companies that
have yet to make a profit (of which there are several in the VCT) and
favoured those exposed to foreign currencies.
Performance as ever was dominated by stock specific factors, with the
market still prepared to reward companies that met or exceeded
expectations with higher share prices and this resulted in some good
contributions to performance from some of the more established and
profitable companies in the portfolio, as well as from some of the
younger companies whose businesses made significant progress in the
year. Where a company is established and has grown in size we will
continue to hold the shares if we still believe it has the capacity to
grow further on a medium term time horizon. This helps to balance the
portfolio as newly raised cash is invested in earlier stage companies
which could take some time to achieve profitability.
Among the larger and more established holdings, GB Group had an
excellent year, successfully integrating the substantial acquisition of
IDology which was followed by upgrades to forecasts and strong interim
results. It was also a beneficiary of weak sterling. Ergomed was another
very good performer in the year. It has increased the profitability of
its business and now has a range of services it can offer large
pharmaceutical companies including the monitoring of drugs for
regulatory purposes and the conducting of drugs trials for very rare
diseases. We expect it to continue to achieve good profitable organic
growth in the coming year. RWS also performed very well, helped by
upgrades to forecasts and we took the opportunity to realise some
profits. Learning Technologies also produced robust trading statements
and was rewarded with a recovery in its share price from depressed
levels at the beginning of the period. Judges Scientific was another
very good performer benefitting from upgrades to forecasts as a result
of good demand for its specialist equipment and currency tail-winds. A
less significant performer was Breedon Group which had been suffering
from fears about its exposure to the UK economy. Its share price started
to recover from recent lows in the period but this has accelerated
since.
Among the more recent investments, Ixico made excellent progress,
announcing some meaningful contracts on large drugs trials which involve
the monitoring of the brain using scans. The company is now profitable.
Diaceutics also got off to a good start and has announced better than
expected figures post the period end. Sosandar has also produced higher
than expected sales growth with new product lines being launched at the
beginning of 2020.
Individual companies suffered from specific headwinds which resulted in
poor share price performance. We wrote about Gear4Music and Quixant in
the half-yearly report. Gear4Music has since announced more encouraging
interim results which showed a recovery in its margins. Quixant is still
being held back by the loss of market share of its largest customer. It
has some exciting new products aimed at the broadcasting sector which
have yet to establish themselves. Craneware also saw its shares fall
from a high after the sales growth rate disappointed as a result of a
slower than expected uptake from its new Trisus platform. The company
retains its strong positioning in the US hospital market and stands out
as a cash generative software company with growing annual recurring
revenues.
One of the disappointments of the year was Staffline which we wrote
about in the interim accounts. Having initially been unable to publish
its accounts for the year to December 2018 the consequence was a
significant effect on trading in 2019, a fundraising to bolster the
balance sheet and further downgrades to forecasts. We have subsequently
disposed of the holding post year end.
Two other negative contributors were MyCelx Technologies (MyCelx) and
LoopUp Group. MyCelx had a series of downgrades to forecasts as a result
of lower than expected revenues from its Saudi Arabian based operations.
Other markets have been slower than hoped to open up although the
potential opportunity for its water cleaning technology remains
significant. LoopUp disappointed after the acquisition of Meetingzone
failed to deliver the expected benefits.
Elsewhere, early stage companies yet to reach profitability once again
held back performance of the Company's NAV. Some of these had setbacks
or found themselves in need of cash to achieve the next milestone; DP
Poland, Osirium Technologies, Escape Hunt and Maestrano all fall into
that category. Investing for a VCT involves backing companies when they
are small and still at an early stage of development and share price
progress depends on them being noticed by a wider circle of investors as
they produce results and develop their businesses over time. This quite
often takes longer than expected and they remain potentially vulnerable
until they achieve profitability.
Although the earlier stage companies in the portfolio represent a
relatively small proportion by value we expect them to contribute to
future performance when they start to demonstrate growth in their
businesses. In the year under review there were some examples of
companies that demonstrated that they had started to achieve that in the
period and whose shares outperformed including Ixico, SDI Group,
Sosandar, Diaceutics, and Renalytix. The latter was spun out of the
holding in EKF since when it has made better than expected progress with
its commercialisation strategy for its kidneyintelx test in the US.
Portfolio Activity
Having made two new qualifying investments at a total cost of GBP0.9
million in the first half of the year, we added four further new
qualifying holdings at a cost of GBP2.8 million in the second half, as
well as two further qualifying investments of GBP0.2 million into Popsa
Holdings Ltd and GBP0.4 million into Osirium Technologies, both of which
were follow on investments in existing holdings. This made a total
investment of GBP4.3 million in qualifying investments for the year,
which was considerably lower than last year's GBP8 million, reflecting a
quieter AIM market for fundraisings.
The other four were new investments into existing AIM companies that
were seeking growth capital. They were all companies whose progress we
had been monitoring for some time. Sosandar is a fast-growing on-line
clothing brand aimed at women who have graduated from throwaway fashion
and are seeking a higher quality product. Intelligent Ultrasound has
developed intelligent software installed on simulators to train medical
practitioners in the use of ultrasound machines and to increase their
safety and effectiveness. Cloudcall is another software company
providing communication functionality to companies for their customer
relationship management systems and C4X Discovery has a technology
platform which can help pharmaceutical companies design better molecules
for drugs and hence save time and cost. All of these investments have
significant growth prospects although none of them have yet reached
profitability.
Non-qualifying investments are used to manage liquidity while awaiting
new qualifying investment opportunities. Although we have continued to
hold existing non-qualifying AIM holdings where we see the opportunity
for further progress we did reduce the size of many of these holdings in
the year under review. We have also invested the funds raised at the end
of the previous year into a mixture of the Octopus managed portfolios
with a small proportion going into the FP Octopus Multi-Cap Income Fund.
This strategy is designed to obtain a better return on funds awaiting
investment than the very low rates available on cash. In the period
under review GBP0.6 million was invested into the FP Octopus Multi-Cap
Income Fund. A net divestment of GBP1.3 million was made in each of the
Octopus Portfolio Manager ("OPM") funds; OPM 3 and OPM 4.
During the year we sold part of the holdings in RWS, Clinigen, Quixant,
Gamma, Restore, Next Fifteen, Advanced Medical Solutions, LoopUp, Ixico,
Creo Medical and VR Education as well as disposing of the entire Abcam
and Iomart holdings, all at a profit. Synnovia, a long-term qualifying
holding, was sold as the result of a takeover bid. In all disposals made
a GBP1.9 million profit over original cost and generated GBP5.3 million
of cash proceeds. A proportion of the proceeds were paid out in a 3.9p
special dividend in November. Post the period end we accepted a cash
offer for the balance of our holding in Brady Group and took profits in
Ixico and Learning Technologies.
VCT Regulations
There have been no further changes to the VCT regulations since
publication of the previous set of audited accounts. As a reminder, the
current requirements are that any funds raised after 6th April 2019
should be 30% invested in qualifying holdings within 12 months of the
end of the accounting period in which the shares were issued, and for
financial years ending after 6 April 2019 the portfolio will also have
to maintain a minimum of 80% invested at cost in qualifying holdings. We
are determined to maintain a threshold of quality and to invest where we
see the potential for returns from growth. However, the emphasis of the
new regulations is definitely to encourage investment into earlier stage
companies and to that extent, it seems likely over a number of years,
that the portfolio will see a rise in the number of smaller companies
receiving our initial investment. We would expect to invest further in
those companies as they demonstrate their ability to grow.
At present there has been little change to the profile of the portfolio,
as we continue to hold the larger market capitalisation companies, in
which we invested several years ago as qualifying companies, or which we
bought in the market prior to the rule changes where we see the
potential for them to continue to grow.
In order to qualify, companies must:
-- have fewer than 250 full time equivalent employees; and
-- have less than GBP15 million of gross assets at the time of
investment and no more than GBP16 million immediately post investment;
and
-- be less than seven years old from the date of its first
commercial sale (or 10 years if a knowledge intensive company) if
raising State Aided (i.e. VCT) funds for the first time; and
-- have raised no more than GBP5 million of State Aided funds in
the previous 12 months and less than the lifetime limit of GBP12 million
(or since 6th April 2018 GBP10 million in 12 months GBP20 million
lifetime limit if a knowledge intensive company); and
-- produce a business plan to show that the funds are being
raised for growth and development.
The latest changes are to encourage VCTs to keep their investment rate
up after raising money. However, allowing knowledge intensive companies
to raise up to GBP10 million of the GBP20 million lifetime limit in a
twelve month period rather than the existing GBP5 million has given the
VCT more flexibility. In addition, the rules around the amount of time
allowed for re-investment of cash from sales of qualifying holdings have
shifted from six to twelve months from April 2019 which has further
created some head room.
Outlook
The new financial year started well for the Company, with share prices
reacting favourably to the General Election result in December, and the
extent of the Government's majority surprising most commentators.
Although the UK left the EU last month, the relationship with the EU
remains similar as the country is now in a transition period until 31
December 2020. As such, the uncertainty remains with regards to the UK's
future relationship with the EU. The threat of an ineffective hung
Parliament has been removed and this feels like a considerable step
forward from the uncertainty which dominated events prior to that. In
contrast to the year to November 2019 it has been the domestically
focused companies that have led the recent market performance,
particularly helped by positive noises from the new administration about
increasing expenditure on infrastructure and the regions. There should
be the potential for UK equities to return to favour and narrow the
valuation discount that they currently trade on and in time we hope that
this will trickle down to smaller companies and increase the flow of new
companies coming to market.
The portfolio now contains 76 holdings with investments across a range
of sectors including both domestic and international exposure. The
balance of the portfolio towards profitable companies remains. The
recent outbreak of Coronavirus in China is of course a concern, and
although it is too early to quantify any impact on individual companies
we are watching the situation closely. The VCT is currently in the
middle of a fundraise which will provide cash for new investments.
The AIM Team
Octopus Investments Limited
13 February 2020
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report and the
Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with the Financial
Reporting Standard applicable in the United Kingdom and Republic of
Ireland ("FRS 102"). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period.
In preparing these financial statements the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgments and accounting estimates that are reasonable and
prudent;
-- state whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and explained in
the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
-- prepare a strategic report, a Directors' report and Directors'
remuneration report which comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions, to
disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for ensuring that the Annual Report and
Accounts, taken as a whole, are fair, balanced, and understandable and
provides the information necessary for shareholders to assess the
Company's performance, business model and strategy.
The Directors are responsible for ensuring the Annual Report and
Accounts are made available on a website. Financial statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's website is the responsibility
of the Directors. The Directors' responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
-- the financial statements, prepared in accordance with the
Financial Reporting Standard applicable in the United Kingdom and
Republic of Ireland ("FRS 102"), give a true and fair view of the assets,
liabilities, financial position and profit and loss of the Company; and
-- the Annual Report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description or the principal risks and uncertainties
that it faces.
On Behalf of the Board
Keith Mullins
Chairman
13 February 2020
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the years ended 30 November 2019 or 30
November 2018 but is derived from those accounts. Statutory accounts for
the year ended 30 November 2018 have been delivered to the Registrar of
Companies and statutory accounts for the year ended 30 November 2019
will be delivered to the Registrar of Companies in due course. The
Auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to which
the Auditor drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006. The text of the Auditor's reports can be
found in the Company's full Annual Report and Accounts at
www.octopusinvestments.com
Income Statement
Year to 30 November 2019 Year to 30 November 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- -------- -------- -------- --------
Gain on
disposal of
fixed asset
investments - 315 315 - 1,266 1,266
Gain on
disposal of
current
asset
investments - 61 61 - - -
Loss on
valuation
of fixed
asset
investments - (900) (900) - (3,185) (3,185)
Gain/(loss)
on
valuation
of current
asset
investments - 1,390 1,390 - (155) (155)
Investment
Income 539 - 539 510 245 755
Investment
management
fees (353) (1,058) (1,411) (364) (1,093) (1,457)
Other
expenses (470) - (470) (458) - (458)
---------------- -------- -------- -------- -------- -------- --------
Loss on
ordinary
activities
before tax (284) (192) (476) (312) (2,922) (3,234)
Tax - - - - - -
---------------- -------- -------- -------- -------- -------- --------
Return on
ordinary
activities
after tax (284) (192) (476) (312) (2,922) (3,234)
---------------- -------- -------- -------- -------- -------- --------
Earnings per
share --
basic and
diluted (0.3)p (0.1)p (0.4)p (0.3)p (2.9)p (3.2)p
There is no other comprehensive income for the period.
-- the 'Total' column of this statement represents the statutory income
statement of the Company; the supplementary revenue return and capital
return columns have been prepared in accordance with the AIC Statement of
Recommended Practice
-- 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, as well as OEIC funds.
Balance Sheet
As at 30 November 2019 As at 30 November 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ----------- ----------- ----------- -----------
Fixed asset
investments 58,246 59,871
Current assets:
Investments 16,458 16,891
Money Market Funds 3,474 3,449
Debtors 134 65
Cash at bank 1,881 11,546
-------------------------- ----------- ----------- ----------- -----------
21,947 31,951
Creditors: amounts
falling due within
one year (153) (1,192)
-------------------------- ----------- ----------- ----------- -----------
Net current assets 21,794 30,759
-------------------------- ----------- ----------- ----------- -----------
Net assets 80,040 90,630
-------------------------- ----------- ----------- ----------- -----------
Called up equity share
capital 11 11
Share premium 47,044 57,045
Capital redemption
reserve 1 1
Special distributable
reserve 19,423 19,536
Capital reserve
realised (8,641) (9,898)
Capital reserve
unrealised 23,146 24,595
Revenue reserve (944) (660)
-------------------------- ----------- ----------- ----------- -----------
Total equity
shareholders' funds 80,040 90,630
-------------------------- ----------- ----------- ----------- -----------
Net asset value per 72.4p 80.8p
share
The statements were approved by the Directors and authorised for issue
on 13 February 2020 and are signed on their behalf by:
Keith Mullins
Chairman
Company No: 05528235
Statement of changes in Equity
Share capital Share premium Special distributable reserves* Capital reserve -- realised* Capital reserve -- unrealised Capital redemption reserve Revenue reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
As at 1 December 2018 11 57,045 19,536 (9,898) 24,595 1 (660) 90,630
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Comprehensive income for the year:
Management fee allocated as capital
expenditure -- -- -- (1,058) -- -- -- (1,058)
Current year gains on disposal -- -- -- 376 -- -- -- 376
Current period gains on fair value
of investments -- -- -- -- 490 -- -- 490
Loss after tax -- -- -- -- -- -- (284) (284)
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total comprehensive income for the
year -- -- -- (682) 490 -- (284) (476)
Contributions by and distributions
to owners:
Repurchase and cancellation of own
shares -- -- (2,782) -- -- -- -- (2,782)
Issue of shares -- 1,576 -- -- -- -- -- 1,576
Share issue costs -- (2) -- -- -- -- -- (2)
Dividends -- -- (8,906) -- -- -- -- (8,906)
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total contributions by and
distributions to owners -- 1,574 (11,688) -- -- -- -- (10,114)
Other movements:
Cancellation of share premium -- (11,575) 11,575 -- -- -- -- --
Prior years' holding gains now
realised -- -- -- 1,939 (1,939) -- -- --
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total other movements -- (11,575) 11,575 1,939 (1,939) -- -- --
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Balance as at 30 November 2019 11 47,044 19,423 (8,641) 23,146 1 (944) 80,040
----------------------------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Share capital Share premium Special distributable reserves* Capital reserve -- realised* Capital reserve -- unrealised Capital redemption reserve Revenue reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
As at 1
December
2017 10 44,186 25,444 (11,071) 28,690 -- (348) 86,911
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Comprehensive
income for the
year:
Management fee
allocated as
capital
expenditure -- -- -- (1,093) -- -- -- (1,093)
Current year
gains on
disposal -- -- -- 1,266 -- -- -- 1,266
Current period
gains on fair
value of
investments -- -- -- -- (3,340) -- -- (3,340)
Capital
investment
income -- -- -- 245 -- -- -- --
Loss after tax -- -- -- -- -- -- (312) (312)
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total
comprehensive
income for
the year -- -- -- 418 (3,340) -- (312) (3,234)
Contributions
by and
distributions
to owners:
Repurchase and
cancellation
of own
shares (1) -- (1,579) -- -- 1 -- (1,579)
Issue of
shares 2 13,662 -- -- -- -- -- 13,664
Share issue
costs -- (803) -- -- -- -- -- (803)
Dividends -- -- (4,329) -- -- -- -- (4,329)
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total
contributions
by and
distributions
to owners 12,859 (5,908) -- -- 1 -- 6,953
Other
Movements:
Prior years'
holding gains
now realised -- -- -- 755 (755) -- -- --
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Total other
movements -- -- -- -- -- -- -- --
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
Balance as at
30 November
2018 11 57,045 19,536 (9,898) 24,595 1 (660) 90,630
-------------- ------------- ------------- ------------------------------- ---------------------------- ------------------------------ -------------------------- ---------------- --------
*Included within these reserves is an amount of GBP9,838,000 (2018:
GBP8,978,000) which is considered distributable to shareholders.
Cash Flow Statement
Year to 30 November 2019 Year to 30 November 2018
GBP'000 GBP'000
-------------------------- ------------------------ ------------------------
Cash flows from operating
activities
Loss on ordinary
activitites before tax (476) (3,234)
Adjustments for:
(Increase)/decrease in
debtors (69) 33
(Decrease)/increase in
creditors (386) 35
Gains on disposal of fixed
assets (315) (1,266)
Gains on disposal of
current asset
investments (61) -
Loss on valuation of fixed
asset investments 900 3,185
(Gains)/loss on valuation
of current asset
investments (1,390) 155
EKF In-specie dividend
Renaltyx - (245)
Cash from operations (1,797) (1,337)
Income taxes paid - -
-------------------------- ------------------------ ------------------------
Net cash generated from
operating activities (1,797) (1,337)
-------------------------- ------------------------ ------------------------
Cash flows from investing
activities
Purchase of fixed asset
investments (4,959) (7,413)
Sale of fixed asset
investments 5,346 6,155
Purchase of current asset
investments (3,116) (300)
Sale of current asset
investments 5,000 -
Total cash flows from
investing activities 2,271 (1,558)
Cash flows from financing
activities
Purchase of own shares (2,782) (1,579)
Issue of shares net of
issue costs 90 12,183
Dividends paid (7,422) (3,651)
Total cash flows from
financing activities (10,114) 6,953
-------------------------- ------------------------ ------------------------
(Decrease)/Increase in
cash and cash
equivalents (9,640) 4,058
Opening cash and cash
equivalents 14,995 10,937
Closing cash and cash
equivalents 5,355 14,995
--------------------------
Cash and cash equivalents
comprise
Cash at bank 1,881 11,546
Money Market Funds 3,474 3,449
5,355 14,995
(END) Dow Jones Newswires
February 13, 2020 12:03 ET (17:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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