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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Arc Growth | LSE:AGCV | London | Ordinary Share | GB00B067NY94 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:2110Z Arc Growth Company VCT plc 28 June 2007 ARC Growth Company VCT plc (the "Company") Preliminary announcement of results for the year ended 28 February 2007 ARC Growth Company VCT plc announces preliminary results for the period ended 28 February 2007. Date of issue: 25 June 2007. Chairman's Statement During the past year, the VCT has made exciting progress towards its objective of maximising capital returns for shareholders Funds raised The VCT was listed in June 2005 and raised a further #634,045 during the year under review making total subscriptions #1.77m. Net Asset Value ('NAV') At 28 February 2007, the VCT had made seven investments and realised one of them. The net asset value per share of 123.5p is an exceptional performance for a VCT at such an early stage of its development. It compares with an initial asset value per share of 94.5p after fund raising costs. Portfolio Progress In addition to realising its first investment in Talisker Pharma Ltd at double its investment cost, the VCT has seen three of its investee companies obtain listings on AIM. As a consequence, each of these investments has seen a significant improvement in value. Prior to the listing of Traction Technology Holdings plc in late December 2006, the Company recouped its initial investment by means of a prospectus offer at a price of 28 pence per share, which generated a profit of #135,000 after deal costs. Due to the relative illiquidity of the AIM stocks held, the directors have taken a cautious approach to their holding values and have discounted the value of these investments by 25% of their bid values as at 28 February 2007. The net effect of these successful investments is that the VCT has one of the highest NAVs of all VCTs launched in the same period. Dividends The VCT's policy is to maximise dividends to its shareholders. One of the benefits of the VCT structure is that these dividends are paid tax-free whether they arise from income or capital gains. Thanks to the realised capital profit the VCT has achieved, the directors are recommending a maiden final dividend of 7p per share. The timing of the payment of the dividend will be subject to the Company being granted Court approval to reduce the Share Premium Account and create a distributable reserve, the necessary resolutions for which will be proposed at the forthcoming EGM of the Company to be held on the same day as the 2007 AGM at which the C Issue will be approved. VCT qualifying status The VCT must be 70% invested in qualifying companies by the end of its third accounting period to comply with VCT regulations. The Board is conscious of this absolute rule and will monitor progress towards it as time goes by. As at 28 February 2007, the VCT had invested 28.2% in qualifying companies. James Cowper, Accountants & Business Advisers, have been appointed to monitor progress against this requirement. Following the three investments after the Balance Sheet Date, the Company now has invested 55.3% in qualifying investments. The directors consider this to be a very satisfactory position as the timescale for the 70%-qualifying investment requirement approaches. Share price and buy-back facility The VCT's mid-market share price currently stands at 100p and, as is normal with a VCT in its early stages, there have been no transactions. We will be asking shareholders at the annual general meeting to grant the Board the power to purchase shares in the market for cancellation. This would allow us to buy-back shares at a 10% discount to the prevailing NAV. This should assist the marketability of the shares and help prevent the shares from trading at a wide discount to NAV. Further fundraising The Board recognises that the VCT is too small to pay an adequate management fee to its manager because of the 3.6% cap on total annual running costs and the impact of fixed costs such as audit and Stock Exchange fees. Our Manager also specialises in investing in deals which will easily pass the revised VCT rules which will require the amount raised from EIS and VCT sources in any one year to be no more than #2m after 1 July 2007. As a result the Board has decided to issue a prospectus to raise further funds in the form of "C" Shares. We expect to issue the prospectus shortly and investors will have the chance to re-invest the dividend we are now declaring in a preferential way. Outlook During the accounting year ended 28 February 2007, the VCT has performed outstandingly well and we are delighted to be able to declare a maiden dividend. This has been achieved by an opportunistic approach to investments that look likely to achieve an early cash exit or IPO. The Board does not want to restrain the Investment Manager from this opportunism but is conscious that we now hold a number of relatively illiquid AIM stocks and need to adopt a clear policy on their gradual realisation. We also want to see a steady broadening of the type of investment as the VCT develops. Since the year end, the Investment Manager has continued to seek suitable investment opportunities and further investments have been made recently in Smart Implant Holdings plc, ClickNow Holdings plc and M2FX plc. Deal flow remains healthy and further investments can be expected by the end of the half year to 31 August 2007. The Board remains committed to its objective of maximising capital returns for its shareholders over the longer term and is delighted with the early progress towards this objective Richard Hargreaves Chairman 25 June 2007 Arc Growth Company VCT plc ('the Company') Income statement for the year ended 28 February 2007 Year to 28 February 2007 Period to 28 February 2006 ------------------------ -------------------------- Revenue Capital Total Revenue Capital Total #'000 #'000 #'000 #'000 #'000 #'000 Bank and other interest 57 - 57 27 - 27 Investment management (fee) / clawback 24 - 24 37 - 37 Other expenses (73) - (73) (63) - (63) Realised gains on investment disposals - 119 119 - - - Unrealised appreciation in investment values - 387 387 - - - ------ ------ ------ ------ ------ ------ Return on ordinary activities before tax 8 506 514 1 - 1 Tax charge on ordinary activities (1) - (1) - - - ------ ------ ------ ------ ------ ------ Return on ordinary activities after tax 7 506 513 1 - 1 Transfer to reserves (7) (506) (513) (1) - (1) ------ ------ ------ ------ ------ ------ - - - - - - ------ ------ ------ ------ ------ ------ Return per ordinary share 0.37p 30.63p 31.00p 0.13p - 0.13p ------ ------ ------ ------ ------ ------ The total column of this Income Statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with the Association of Investment Trust Companies' Statement of Recommended Practice. There were no other recognised gains or losses other than the results for the year as disclosed above. Accordingly a statement of total recognised gains and losses is not required. 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. Reconciliation of movements in shareholders' funds 2007 2006 #'000 #'000 Shareholders' funds at 1 March 2006 1,072 - Total gains and losses recognised in period 513 1 Net proceeds of share issue 598 1,071 Dividends paid - - ---------- ----------- Shareholders' funds at 28 February 2007 2,183 1,072 ---------- ----------- Arc Growth Company VCT plc ('the Company') Balance Sheet as at 28 February 2007 2007 2006 --------- ------- ------- ---------- #'000 #'000 #'000 #'000 Fixed asset investments 1,120 110 ------- ---------- Current assets Debtors 186 140 Cash and cash equivalents 891 898 ---------- ------- 1,077 1,038 Current Liabilities Creditors 14 76 ------- ---------- Net current assets 1,063 962 ------- ---------- Net assets 2,183 1,072 ------- ---------- Called up equity share capital 177 113 Share premium 1,492 958 Revenue reserve 8 1 Capital Reserve 506 - ------- ---------- Total equity shareholders' funds 2,183 1,072 ------- ---------- Net asset value per share 123.51p 94.63p ------- ---------- Arc Growth Company VCT plc ('the Company') Cash flow statement for the year ended 28 February 2007 2007 2006 ------- ------- ------- ------- #'000 #'000 #'000 #'000 Net cash inflow from operating activities Profit / (Loss) on ordinary activities before 514 1 tax Adjusted for: Realised gains on investment disposals (119) - Unrealised appreciation in investment values (387) - ------- ------- Cash generated from operations before changes 8 1 in working capital Increase in debtors (46) (140) (Decrease) / increase in creditors (63) 76 ------- ------- Net cash generated from operating activities (101) (63) Cash flows from investing activities Purchases of investments (752) (110) Sales proceeds of investments 248 - ------- ------- Net cash flow generated from investing activities (504) (110) Cash flows from financing activities Financing : Issue of own shares 634 1,133 Share issue expenses (36) (62) ------- ------- Total financing 598 1,071 ------- ------- Net increase in cash and cash equivalents (7) 898 ------- ------- Reconciliation of net cash flow to movements in cash and cash equivalents Net increase in cash and cash equivalents (7) 898 Cash and cash equivalents at 1 March 2006 898 - ------- ------- Cash and cash equivalents at 28 February 891 898 2007 ======= ======= Notes 1 Revenue return per share Basic and diluted The revenue return per share is based on profit from ordinary activities after tax of #513,104 (2006 : #1,470) and on 1,655,169 ordinary shares of 10p (2006 : 1,133,497 shares), being the weighted average number of shares in issue during the year. The net assets per share is based on total net assets of #2,129,673 (2006 : #1,072,059) and 1,767,557 ordinary shares (2006 :1,133,497 shares). There are no potentially dilutive capital instruments in issue. 2 Dividend The directors are proposing a dividend of 7p per share for the year ending 28 February 2007. 3 Accounts The results set out above are not full accounts within the meaning of section 240 of the Companies Act 1985 and have not been reported on but have been agreed with the company's auditors. The Annual Report and Accounts for the year ended 28 February 2007 will be filed at the Registrar of Companies following the annual general meeting and will be posted to shareholders shortly. 4 Announcement A copy of this announcement will be available at the offices of the Company for 14 days from the date of this announcement. This preliminary announcement is not being posted to shareholders. Details of advisers Secretary and Registered Office Graham K Urquhart FCIS 22 Lovat Lane London EC3R 8EB Registered Number 05323692 Solicitors Fladgate Fielder 28 North Row London W1K 6DJ Investment Manager Arc Fund Management Limited ("AFM") 22 Lovat Lane London EC3R 8EB Independent auditors Spofforths LLP 1 Horsham Gates North Street Horsham West Sussex, RH13 5PJ Sponsor, Financial Adviser and Stockbrokers Beaumont Cornish Limited 5th Floor, 10-12 Copthall Avenue London EC2R 7DE VCT Status Advisers James Cowper 3 Wesley Gate Queen's Road Reading Berkshire RG1 4AP Bankers Barclays Bank plc United Kingdom House 180 Oxford Street London W1D 1EA Registrars Neville Registrars Limited Neville House, 18 Laurel Lane Halesowen West Midlands B63 3DA This information is provided by RNS The company news service from the London Stock Exchange END FR UWOARBURNUAR
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