Oxford Tech 3 VCT Oxford Technology 3 Vct Plc : Half-year Report

 
TIDMOTT 
 
 
   Oxford Technology 3 Venture Capital Trust Plc 
 
   Unaudited Half-Yearly Report 
 
   For the period 
 
   1 March 2017 to 31 August 2017 
 
   Financial Headlines 
 
 
 
 
                                 6 Months Ended      Year Ended 
                                 31 August 2017    28 February 2017 
Net Assets at Period End            GBP5.53m          GBP5.60m 
Net Asset Value per Share            81.6p              82.5p 
Cumulative Dividend per Share        36.0p              32.0p 
Total NAV Return per Share           117.6p            114.5p 
Share Price at Period End            42.5p              52.5p 
Earnings per Share                    3.1p                   (4.1)p 
 
 
   Company Number: 4351474 
 
   Registered Address: The 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 2017. 
 
   Results and Dividends 
 
   The Company's net asset value (NAV) per share has decreased from 82.5p 
at 28 February 2017 by 0.9p to 81.6p at 31 August 2017.  The underlying 
NAV per share rose by 3.1p but was offset by the payment of a 4p per 
share dividend on 21 July 2017. Further dividends are likely to require 
a profitable investee company exit. 
 
   Portfolio Review 
 
   The companies within the portfolio continue to develop, and where 
required and permitted under VCT rules your company continues to invest 
to support that development.  During the period, additional investments 
were made into Immbio (GBP31k), Plasma Antennas (GBP50k) and Scancell 
(GBP50k). 
 
   Following a successful first in human clinical trial, Immbio is now 
negotiating commercial licences for its Pneumococcal Vaccine Pnubiovax. 
Plasma Antennas continues to develop its unique technology while looking 
for commercial partners. Scancell has a strong novel cancer related 
clinical development pipeline. SCIB1, targeting malignant melanoma, has 
had good Phase1/2 results and a Phase 2 combination trial with an immune 
checkpoint inhibitor is planned for 2018.  SCIB2 targets non-small lung 
cancer and Modi-1 targets breast and ovarian cancers and osteosarcoma. 
Four Phase1/2 trials on each target are also planned for 2018. 
 
   Another of the listed companies within the portfolio Abzena raised money 
within the period by way of a placing at 33p per share. Your company did 
not participate in the placing. 
 
   The directors have reviewed the valuation of each investee company in 
the unquoted portfolio.  Changes have been made to a number of 
valuations to reflect company performance primarily Ixaris and Glide 
Pharmaceutical. Ixaris has continued to grow sales significantly and 
generate cash. As a result, our loan of GBP108k along with accrued 
interest of GBP79k will be repaid shortly after period end. On a 
negative note Glide went into administration after the period end after 
both the two previous major investors refused to put up further funds or 
renegotiate their preference shares leading to your company having to 
write off the remaining GBP48k of investment. 
 
   The Directors along with the Investment Advisor continue to take an 
active interest in the remaining companies within the portfolio, both to 
support their management teams to achieve company development, but also 
to prepare companies for realisation at the appropriate time. It should 
be noted that the current portfolio is highly concentrated with Ixaris 
representing 58% and Scancell 15% of investments and the VCT NAV is very 
sensitive to changes in these valuations. 
 
   Liquidity 
 
   At period end we had net current assets of GBP711k which continues to 
provide us with flexibility to make follow-on investments if attractive. 
 
 
   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. 
 
   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 its 
potential impact on both the VCT and its investee companies. The recent 
publication of the Patient Capital Review makes many recommendations 
regarding investment into early stage high growth companies. It is 
expected that this may drive additional changes to tax efficient 
investment schemes. Your directors do not expect that this will 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. 
 
   We were pleased to welcome a large number of shareholders to our AGM in 
July. Two of our investee companies made presentations: Arecor and 
Immbio. These presentations are on the Oxford Technology website. 
 
   The directors' view remains that the portfolio, while concentrated, 
still holds significant potential over the medium term but is not 
without risk. Finally I would like to take this opportunity to thank 
shareholders for their continued support. 
 
   Robin Goodfellow - Chairman 
 
   20 October 2017 
 
   Investment Portfolio as at 31 August 2017 
 
 
 
 
                                                                             Change 
                                                                               in 
                                                                              value 
                                       Net Cost                              for the 
                                          of                                 6 month 
                                      investment  Carrying value at 31/8/17  period   % Equity held  % Equity held              % 
Company              Description       GBP'000             GBP'000           GBP'000       OT3           All OT      of fund investment value 
Ixaris Group         Internet 
 Holdings             payments               535                      2,802      152            7.3            7.3                       58.1 
                     Antibody based 
Scancell              cancer 
 (bid price 14p)      therapeutics           409                        718       70            1.6            3.8                       14.9 
                     Directional 
Plasma Antennas       antennas               358                        290       40           12.4           48.9                        6.0 
ImmBio               Novel vaccines          432                        277       39            4.9           16.2                        5.7 
                     Protein 
Arecor                stabilisation          224                        256        -            2.6           11.3                        5.3 
                     Bone graft 
Orthogem              material               234                        142        -            7.6           20.2                        2.9 
                     Photocopier 
Select Technology     interfaces              47                        131        2            2.8           58.6                        2.7 
                     Protein & 
Abzena                peptide based 
 (bid price 44p)      drugs                   69                         88       15            0.1            0.1                        1.8 
Insense              Wound healing           333                         60        -            2.3            6.8                        1.3 
                     Data 
                      transformation 
Inaplex               software                58                         22        -           13.3           34.8                        0.5 
                     Low power 
Invro                 electronics             40                         20        -           33.1           33.1                        0.4 
                     Production of 
Metal Nanopowders     metal powders          153                         13        -           20.0           36.7                        0.3 
                     Production of 
                      hard 
Superhard Materials   materials               11                          3        -           21.8           40.0                        0.1 
Microarray           Insense spinout           2                          0        -            2.0            2.0                          - 
                     Needle free 
Glide Technologies    injector               225                          0     (48)              -              -                          - 
Total Investments                          3,130                      4,822      270                                                     100% 
Other Net Assets                                                        711 
Net Assets                                                            5,533 
 
 
   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 
 
   20 October 2017 
 
   Income Statement 
 
 
 
 
                                                     Six months to 31 Aug 2017  Six months to 31 Aug 2016   Year to 29 February 2017 
                                                     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                -        9        9        -        -        -        -      154       154 
Unrealised gain/(loss) on valuation of fixed asset 
 investments                                               -      247      247        -       85       85        -    (417)     (417) 
Performance fee accrual                                    -        -        -        -       23       23        -       23        23 
Investment income                                          9        -        9        -        -        -       84        -        84 
Investment management fees                               (7)     (21)     (28)      (9)     (26)     (35)     (17)     (52)      (69) 
Other expenses                                          (28)        -     (28)     (27)        -     (27)     (55)        -      (55) 
 
Return on ordinary activities before tax                (26)      235      209     (36)       82       46       12    (292)     (280) 
Taxation on ordinary activities                            -        -        -        -        -        -        -        -         - 
 
Return on ordinary activities after tax                 (26)      235      209     (36)       82       46       12    (292)     (280) 
 
Earnings per share - basic and diluted                (0.4)p     3.5p     3.1p   (0.5)p     1.2p     0.7p     0.2p   (4.3)p    (4.1)p 
 
 
   -- The 'Total' column of this statement is the profit and loss account of 
      the Company; the supplementary Revenue return 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 accompanying notes are an integral part of the half-yearly report. 
 
   -- 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. 
 
 
   The Company has no recognised gains or losses other than the results for 
the period as set out above. Accordingly, a Statement of Comprehensive 
Income is not required. 
 
   Balance Sheet 
 
 
 
 
                                                    As at 31 Aug      As at 31 Aug    As at 29 February 
                                                        2017              2016              2017 
                                                  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
 
Fixed asset investments *                                    4,822             4,917              4,552 
Current assets: 
Debtors                                               226                17               103 
Creditors: Amounts falling due within one year       (29)              (52)              (55) 
 
  Cash at Bank                                        514             1,064               995 
 
Net current assets                                             711             1,029              1,043 
 
Creditors: Amounts falling due in more than one 
 year                                                            -              (24)                  - 
Net assets                                                   5,533             5,922              5,595 
 
Called up equity share capital                                 679               679                679 
 
Share premium                                                  718               719                718 
 
Unrealised capital reserve                                   1,596             1,998              1,349 
 
Profit and Loss account reserve                              2,540             2,526              2,849 
 
Total equity shareholders' funds                             5,533             5,922              5,595 
 
Net asset value per share                                    81.6p             87.3p              82.5p 
 
 
   * At fair value through profit and loss 
 
   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 2016       679      718                       1,913          3,583     6,893 
Revenue 
 return on 
 ordinary 
 activities 
 after tax          -        -                           -           (36)      (36) 
Expenses 
 charged to 
 capital            -        -                           -            (3)       (3) 
Current 
 period 
 gains on 
 fair value 
 of 
 investments        -        -                          85              -        85 
Dividends 
 paid               -        -                           -        (1,018)   (1,018) 
Balance as 
 at 31 
 August 
 2016             679      718                       1,998          2,526     5,922 
 
As at 1 
 March 2016       679      718                       1,913          3,583     6,893 
Revenue 
 return on 
 ordinary 
 activities 
 after tax          -        -                           -             12        12 
Expenses 
 charged to 
 capital            -        -                           -           (29)      (29) 
Current 
 period 
 gains on 
 disposal           -        -                           -            154       154 
Current 
 period 
 losses on 
 fair value 
 of 
 investments        -        -                       (417)              -     (417) 
Prior years' 
 unrealised 
 gains now 
 realised           -        -                       (147)            147         - 
Dividends 
 paid               -        -                           -        (1,018)   (1,018) 
Balance as 
 at 28 
 February 
 2017             679      718                       1,349          2,849     5,595 
 
As at 1 
 March 2017       679      718                       1,349          2,849     5,595 
Revenue 
 return on 
 ordinary 
 activities 
 after tax          -        -                           -           (26)      (26) 
Expenses 
 charged to 
 capital            -        -                           -           (21)      (21) 
Current 
 period 
 gains on 
 disposal           -        -                           -              9         9 
Current 
 period 
 gains on 
 fair value 
 of 
 investments        -        -                         247              -       247 
Dividends 
 paid               -        -                           -          (271)     (271) 
Balance as 
 at 31 
 August 
 2017             679      718                       1,596          2,540     5,533 
 
 
   Statement of Cash Flows 
 
 
 
 
                                                  Six        Six      Year to 
                                               months to  months to     28 
                                                31 Aug     31 Aug    February 
                                                 2017       2016       2017 
                                                GBP'000    GBP'000    GBP'000 
Cash flows from operating activities 
Return on ordinary activities before tax             209         46      (280) 
Adjustments for: 
Increase in debtors                                (124)       (15)      (101) 
Decrease in creditors                               (25)       (49)       (70) 
Gain on disposal of fixed asset investments          (9)          -      (154) 
(Gain)/loss on valuation of fixed asset 
 Investments                                       (247)       (85)        417 
Movement in investment debtors and creditors        (10)          -         30 
Outflow from operating activities                  (206)      (103)      (158) 
 
Cash flows from investing activities 
Purchase of fixed asset investments                (131)      (709)    (1,009) 
Sale of fixed asset investments                      127          -        286 
Total cash flows from investing activities           (4)      (709)      (723) 
 
Cash flows from financing activities 
Dividends paid                                     (271)    (1,018)    (1,018) 
Total cash flows from financing activities         (271)    (1,018)    (1,018) 
 
Increase/(decrease) in cash and cash 
 equivalents                                       (481)    (1,830)    (1,899) 
 
Opening cash and cash equivalents                    995      2,894      2,894 
 
Closing cash and cash equivalents                    514      1,064        995 
 
 
 
 
   Notes to the Half-Yearly Report 
 
   1.         Basis of preparation 
 
   The unaudited half-yearly results which cover the six months to 31 
August 2017 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 
2017 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 2017 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 2017. 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, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA and 
on the Company's website - www.oxfordtechnology.com/vct3. 
 
   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.com/vct3 
 
   Enquiries: 
 
   Lucius Cary, Oxford Technology Management 
 
   01865 784466 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Oxford Technology 3 VCT plc via Globenewswire 
 
 
  http://www.oxfordtechnology.com 
 

(END) Dow Jones Newswires

October 23, 2017 02:00 ET (06:00 GMT)

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