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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pennine Down | LSE:PDE | London | Ordinary Share | GB0009365254 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1376A
Pennine Downing Ethical VCT PLC
24 June 2004
Pennine Downing Ethical VCT plc
Interim Statement for the six months ended 31 March 2004
CHAIRMAN'S STATEMENT
The period ended 31 March 2004 has seen a mixed performance for the investments
held by your Company. At 31 March 2004, the Company's net asset value ("NAV")
stood at 46.3p per share, a small fall of 0.4p, or approximately 1%, since the
previous year-end of 30 September 2003.
Venture capital investments
During the period, the Company made follow-on investments in two companies
totalling #81,000 and one new investment of #75,000 in Floors 2 Go plc.
Some small part disposals of AIM stocks were made giving rise to realised gains
of #43,000.
Of the remaining investments, the AIM portfolio gave rise to an unrealised loss
of #251,000. This was primarily caused by disappointing results and specific
issues affecting a small number of companies, most notably Oasis Healthcare and
Conder Environmental, which, between them, accounted for a total, fall in
valuation of #177,000.
Within the unquoted portfolio, SPC International, a hardware support business,
produced a very encouraging performance. The original investment was made by the
Company in June 2003 and the business has progressed well since then. It should
be noted that the investment was not introduced or managed by the Classic Fund
Management Limited. As a result of the good performance, the Board agreed an
uplift of its valuation by #258,000. There is less positive news from the
remainder of the unquoted portfolio, which was managed by Classic Fund
Management Limited. Most notably, Lamda Polytech continued to fail to perform
and, consequently, a further provision of #74,000 was made against loan stock
held by the Company. Overall the unquoted portfolio showed an increase in value
of #198,000 over the period.
Listed fixed income securities
This portfolio continues to be managed by Rathbone Investment Management Limited
and was valued at #1,260,000 at the period end.
Investment Management of Unquoted Portfolio
As Shareholders will be aware from my comments in the last Annual Report, the
Board has been very disappointed with the performance of the Company's unquoted
portfolio and, consequently, decided to give notice to the unquoted manager,
Classic Fund Management Limited.
I can report that the Board were ultimately able to negotiate an earlier
termination of the agreement on 15 April 2004, significantly before the end of
the notice period. The termination involved the payment of approximately
#10,000 by your Company, being approximately 50% of the fees due if the
agreement had run to the end of the notice period. In view of the Board's
growing lack of confidence in Classic Fund Management, the Directors agreed that
this route was in the best interests of Shareholders.
Directorate
In view of the relatively low level of unquoted investments that the Company now
holds, the Board felt it would be inefficient to seek to appoint a new unquoted
investment manager at this time.
As an alternative, Chris Kay accepted an invitation to join the Board as a
non-executive director with special responsibilities for overseeing the
monitoring of the unquoted portfolio. Chris is an experienced venture
capitalist who has been involved with several VCTs as a non-executive director
and also as an investment manager. Chris joined the Board on 15 April 2004.
On the same date, Dennis Hallahane and Giles Chitty decided to step down from
the Board in order to be able to adopt more time to the needs of their other
businesses. Both
Directorate (continued)
had been Directors since the Company's launch in 1999, and I would personally
like to thank them for their reliable contributions since that time.
Ethical Committee
Following Giles Chitty's resignation, the Ethical Committee now comprises
Elizabeth Haigh and Mark Mansley. In view of the lower level of new investments
now being undertaken by the Company, the Board
and Ethical Committee agreed not to seek to appoint a replacement committee
member.
The Committee has continued to monitor investee companies and new investments
for compliance with the Company's Ethical Policy and are pleased to report that
no breaches of the policy were identified during the period.
Results and dividend
The revenue profit after taxation for the period amounted to #4,000,
representing 0.1p per share. In line with previous years, no interim dividend
will be paid.
Share repurchase
The Directors are conscious that the Company's share price is affected by the
illiquidity of its shares in the market resulting from the requirement that most
shareholders must retain their shares for at least five years in order to retain
their tax benefits and that purchasers of shares in the secondary market do not
receive income tax relief on their investment.
During the period the Company purchased 73,000 of its own shares at a price of
35p per share. The Directors continue to monitor the market in the Company's
shares and will consider making share purchases when appropriate.
Publication of share price
The Board is currently reviewing the running costs of the Company and is
considering ceasing to publish the Company's share price daily in the Financial
Times.
The Company's share price can now be found on many financial websites. The
Company's EPIC/Short code is "PDE".
Outlook
With the termination of the investment management agreement with Classic Fund
Management, the Board is now able to more clearly assess the future options for
the Company.
The high level of funds lost in failed companies, mainly in the unquoted
portfolio, makes it difficult for the Company's NAV to recover much of the lost
ground. To an extent the losses are as a result of investing in what can now be
seen as a peak in the market. Conditions are undoubtedly better and providing
this continues the reasonably diverse portfolio, particularly of AIM stocks, may
be able to provide some positive news to shareholders in the medium term.
Andrew Davison
Chairman
UNAUDITED SUMMARISED BALANCE SHEET
as at 31 March 2004
31 March 31 March 30 Sept
2004 2003 2003
#'000 #'000 #'000
Fixed assets
Venture capital investments 2,741 2,611 2,913
Listed fixed income investments 1,260 1,805 1,791
4,001 4,416 4,704
Net current assets 1,070 651 441
Net assets 5,071 5,067 5,145
Capital and reserves
Called up share capital 547 552 551
Capital redemption reserve 6 1 2
Special reserve 3,604 9,928 3,715
Capital reserve - realised 886 (1,962) 853
Capital reserve - unrealised - (3,461) -
Revenue reserve 28 9 24
Total equity shareholders' funds 5,071 5,067 5,145
Net asset value per share 46.3p 45.9p 46.7p
UNAUDITED STATEMENT OF TOTAL RETURNS
(incorporating the revenue account)
for the six months ended 31 March 2004
Six months ended Six months ended Year
31 March 2004 31 March 2003 ended
30 Sept
2003
Revenue Capital Total Revenue Capital Total Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Income 71 - 71 102 - 102 181
Losses on investments:
- Realised - 36 36 - (5) (5) (327)
- Unrealised - (70) (70) - (91) (91) (255)
71 (34) 37 102 (96) 6 (401)
Investment management fees (6) (18) (24) (18) (53) (71) (56)
Other expenses (61) - (61) (90) - (90) (145)
Return on ordinary 4 (52) (48) (6) (149) (155) (602)
activities before taxation
Tax on ordinary activities - - - - - - -
Return attributable to 4 (52) (48) (6) (149) (155) (602)
equity shareholders
Net dividends - - - - - - -
Transfer to/(from) 4 (52) (48) (6) (149) (155) (602)
reserves
Return per share 0.1p (0.5p) (0.4p) (0.1p) (1.3p) (1.4p) (5.5p)
The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.
The comparative figures were in respect of the six months ended 31 March 2003
and the year ended 30 September 2003 respectively.
UNAUDITED CASHFLOW STATEMENT
for the six months ended 31 March 2004
Six Six
months months Year
ended ended ended
31 Mar 31 Mar 30 Sept
2004 2003 2003
Note #'000 #'000 #'000
Cash inflow from operating activities and returns on investments 1 53 7 15
Taxation - - -
Capital expenditure
Purchase of listed fixed income securities (239) (1,009) (1,009)
Purchase of venture capital investments (157) (434) (522)
Proceeds on disposal of listed fixed income securities 753 1,249 1,249
Proceeds on disposal of venture capital investments 382 449 270
Net cash inflow/(outflow) from capital expenditure 739 255 (12)
Equity dividends paid - - -
Net cash inflow before financing 792 262 3
Financing
Costs of shares repurchased (26) (5) (9)
Net cash outflow from financing (26) (5) (9)
Increase/(decrease) in cash 2 766 257 (6)
Notes to the cashflow statement:
1 Cash inflow from operating activities and returns on investments
Net revenue before taxation 4 10 25
Expenses charged to capital (18) (21) (45)
Decrease in other debtors 70 24 35
Decrease in other creditors (3) (6) -
Net cash inflow from operating activities 53 7 15
2 Analysis of net funds
Beginning of period 279 285 285
Net cash inflow/(outflow) 766 257 (6)
End of period 1,045 542 279
SUMMARY OF INVESTMENT PORTFOLIO
as at 31 March 2004 % of
Cost Valuation portfolio
#'000 #'000 by value
Top ten venture capital investments
SPC International Ltd 300 558 14.0%
Aero Inventory plc * 135 404 10.1%
Oasis Healthcare plc * 300 204 5.1%
Transport Systems plc * 191 150 3.7%
Chelford Group plc 200 142 3.6%
Preston North End plc * 250 130 3.2%
Computer Software Group plc 167 127 3.2%
Infoshare Limited 80 125 3.1%
Conder Environmental plc * 200 117 2.9%
Milkround Online Limited 85 114 2.9%
1,908 2,071 51.8%
Other venture capital investments 3,043 670 16.7%
Listed fixed income securities 1,253 1,260 31.5%
Total investments 6,204 4,001 100.0%
All venture capital investments are unquoted unless otherwise stated.
* Quoted on the Alternative Investment Market ("AIM")
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The above financial information has been prepared on the basis of the
accounting policies set out in the Annual Report.
2. The calculation of the revenue and capital return per share for the period
is based upon the net revenue profit and capital loss after tax of #4,000
and #52,000 respectively, divided by the weighted average number of shares
in issue during the period of 11,005,873.
3. The unaudited financial statements set out herein do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act
1985 and have not been delivered to the Registrar of Companies. The
figures for the year ended 30 September 2003 have been extracted from the
financial statements for that year, which have been delivered to the
Registrar of Companies; the auditors' report on those financial statements
was unqualified.
4. Copies of the unaudited interim results will be sent to shareholders
shortly. Further copies can be obtained from the Company's Registered
Office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VZLFLZQBXBBQ
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