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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Electra Kingswy | LSE:EKV | London | Ordinary Share | GB0031161531 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 70.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:1225U Electra Kingsway VCT PLC 13 January 2004 Electra Kingsway VCT Plc Preliminary Results for the year ended 30 September 2003 Financial Highlights Funds raised by 30 September 2003 #19.8 million Net asset value per share at 30 September 2003 103.52p Unaudited net asset value per share at 31 December 2003 * 109.80p Total dividend per ordinary share (paid and proposed) since inception 1.65p * The unaudited valuation at 31 December 2003 was calculated on the basis of the asset valuation at 30 September 2003 adjusted to reflect income, expenses, the purchases and sales of investments up to 31 December 2003 and mid market valuations on 31 December 2003 in respect of quoted investments. On this basis, which excludes any revaluation of unquoted investments, the unaudited net asset value per share at 31 December 2003 was 109.80p. A copy of the Chairman's Statement and Preliminary Announcement are attached. Further information: Nick Ross Electra Kingsway VCT Plc 020 7831 6464 Chairman's Statement I am pleased to present my second annual statement to shareholders. Since the launch of your Company in September 2001, #19.8m has been raised. The Fund closed its extended "Top Up" offer on 30 September 2003. Market sentiment has changed sharply since I last reported to you in May, with the FTSE All-Share Index rising 17% in the six months to the end of September and recovering most of the losses incurred in the first half of the financial year. The FTSE SmallCap and FTSE AIM indices have also risen strongly and the IPO market has improved. The net asset value per share was 103.52p at 30 September 2003 compared with the 95p net launch price. This has been a satisfactory performance, especially as almost half of the qualifying investments are still held at cost, and a large proportion of the assets of the Fund are still held in cash and short dated bonds. Valuation Policy The unquoted assets of the Company are valued by the Directors in accordance with the latest BVCA valuation guidelines. Portfolio Activity During the year the Company invested in six new qualifying investments. It completed four more investments after the year end, bringing the total number of qualifying investments to 12 and has committed to one further investment in January 2004. The Company, therefore, is well positioned to meet its three year qualifying target by September 2004. The Investment Manager has maintained a disciplined and focused investment approach that has started to yield positive results. Two AIM investments, BioProgress and Centurion Electronics, have risen, since acquisition, by 214% and 182% respectively. This has allowed the Investment Manager to realise part of the investment in BioProgress. In August the Fund took advantage of an opportunity to increase its investment in Centurion Electronics by a further #200,000, bringing the total invested to #700,000. Since then, the Centurion shares have continued to rise strongly and we have realised some profits subsequent to the year end. Of the qualifying investments made so far, six are listed on AIM and seven are unquoted - a mix that is broadly in line with the Board's expectations. The portfolio is well diversified across different industry sectors. VCT Qualifying Status The Board has retained PricewaterhouseCoopers LLP to conduct an annual review of the compliance of the Company with VCT legislation. Dividend The Board is recommending a final dividend of 0.90p per ordinary share for the year ended 30 September 2003. Subject to approval at the Annual General Meeting to be held on 23 February 2004, the dividend will be paid on 27 February 2004 to shareholders on the Register of Members at close of business on 6 February 2004. Share Price The Company's mid-market share price was 85p on 30 September 2003, in comparison with the NAV of 103.52p on 30 September 2003. This represented a discount of 18%. In common with other VCT companies, there is limited secondary trading activity in the shares of the Company. However, the Board has established a facility to buy back shares for cancellation to enhance market liquidity in the Company's shares. Prospects With confidence returning to equity markets and the UK economy remaining buoyant, your Fund is firmly on track to deliver positive returns to shareholders. This is substantiated by the rise in the unaudited net asset value per share to December 2003 which is calculated at 109.80p. Rupert Pennant-Rea, Chairman 12 January 2004 Investment Manager's Review Qualifying Investments During the year the Fund invested in six qualifying investments and completed a further four investments after the year end and committed to one further investment. Details of all qualifying investments are listed below. In general, the Investment Manager has maintained an active deal flow and has a number of potential investments in various stages of due diligence. Advanced Medical Solutions Advanced Medical Solutions ("AMS") and its completed acquisition, Medlogic, are both focused on the R&D, manufacture, and subsequent commercial development of a range of woundcare products for both the professional and retail markets. The professional range centres around liquid wound sealants and the retail products concentrate on moist wound dressings. In both cases the unique selling point is greater efficacy in healing wounds and reducing scar tissue. Each product range is sold either by way of joint ventures to large branded players such as Johnson & Johnson, or directly through distributors. The professional range is the more important, with margins of circa 35% and accounting for 80% of the present turnover. AMS moved from the main market to AIM in 2002. A consortium of investors raised #4m to enable AMS to purchase Medlogic and integrate the two businesses. AMS was valued at #8m pre new money which included cash of #5m and tax losses of #7m. The Fund invested #500,000 and has a 4.1% stake. In the audited accounts for the period ended 31 December 2002 AMS reported losses of #1.48m before tax, a retained loss of #1.2m and net assets of #14.1m. Nectar Taverns Nectar Taverns is an independent pub company managed by Honeycombe Leisure, a quoted pub company specialising in the acquisition and management of public houses in the north west of England. Nectar has a strong balance sheet since it raised #4m of equity and #7.5m of debt financed by the Bank of Scotland. The strategy is to acquire pubs at low prices, renovate them in a very cost effective way and then improve returns by installing stronger management and trading competitively by utilising improved beer purchasing terms. To date, Nectar have acquired 14 pubs, and in aggregate they are trading above expectations. The management team at Honeycombe Leisure hope that Nectar will be operating 25 units before the Bank of Scotland debt facility is fully utilised. The Fund invested #750,000 and has an 18.5% stake. In the audited accounts for the period ended 27 April 2003 Nectar made of loss of #59,000 before tax, and had net assets of #3.65m. Signature Brands Group Signature Brands is a retailer of women's fashion wear operating under four distinct brands: Dannimac, Four Seasons, Giant and Paul Costelloe. It was incorporated in 1999 when Ashley Meyer, Chairman and Chief Executive led a management buy-out of Four Seasons. The company then proceeded to acquire three underperforming brands aiming to return them to profitability by implementing tighter in-house design and cost controls. The company designs its own ranges and outsources manufacturing to companies in Hong Kong and Portugal. The majority of these garments are sold through concessions in department stores such as John Lewis and House of Fraser. The Fund invested #750,000 as part of a #1.8m funding round in October 2002 and has a 10.0% stake. The company reported a loss before tax of #961,931 in the year to 31 July 2003 and had net assets of #705,125. Centurion Electronics Centurion specialises in the design, marketing and distribution of DVD and video systems for the in-car entertainment market. The company has two main products which are either sold to be fitted to new cars, or as a Plug and Play device to the retail market through established outlets such as Halfords and Dixons. In the last year, it is estimated that the number of in-car vision units sold in the UK has grown by approximately tenfold on the previous year. The prospects for the company are encouraging. New customers include Toyota and Nissan and, on the retailing side, CD Bramall, resulting in a strong current year order book. The results of Centurion to date highlight a consistent growth trend and a historic pre-tax profit of #435,000. The Fund invested #500,000 in November 2002 and a further #200,000 in August 2003, as part of a financing to support the company's growing working capital requirements. The Fund held a 7.8% stake at the year end. The company reported a profit before tax of #1.2m in the year to 30 September 2003 and had net assets of #4.5m. Berkeley Morgan Berkeley Morgan is an independent financial intermediary operating under two divisions. The investment division is the amalgamation of three IFA businesses specialising in pensions and mortgages and a service company providing compliance and training services to IFAs. The Protection Division comprises four separate IFAs providing a range of products including health insurance, general insurance and life assurance. The company has grown through the successful integration of a number of bolt-on acquisitions with the management team demonstrating a good track record in controlling expenses and costs. The Fund invested #741,000, for a 12.7% stake. The company reported a loss before tax of #2.7m for the year to 30 April 2003, a retained loss of #2.5m and had net assets of #1.5m. Online Travel Corporation Online Travel Corporation ("OTC") is an internet based, travel technology and distribution business. It offers consumers a comprehensive travel service on the internet, as well as through its call centre. It is also a tour operator offering its own specialist holidays and tailor-made packages to suit individual client needs. In order to satisfy the demand for niche markets, OTC forms alliances with other companies, for example Superbreaks for UK holidays and ABC Holiday Extras for airport parking and hotels. OTC was founded in January 1998 and in May 2000 became a publicly listed company quoted on AIM. Although the last two years have been difficult ones for the travel industry, the longer term prospects look more encouraging and further consolidation is anticipated. The Fund invested #900,000, for a 3.5% stake, to provide further working capital to the group. In the audited accounts to 31 October 2003, OTC reported a loss before tax of #5.9m, a retained loss of #5.2m and had net assets of #7.4m. BioProgress BioProgress is engaged in the research, development and marketing of a film used to coat tablets and liquid capsules for the pharmaceutical and health products market. The company's key technology is a coating material made from a derivative of wood pulp. This material has not previously been used as a film or coating but has a number of core properties which make it an attractive substitute for gelatin. Gelatin is widely used in the coating and wrapping of capsules but because it is made from animal renderings it has possible health concerns relating to BSE and is unacceptable to certain religious groups. In addition to its product advantages, the manufacturing process is significantly cheaper than gelatin production. The company was originally listed on the Over The Counter market in the US although most of its operations are UK based. In 2003 the company transferred to AIM and raised #5m to finance working capital. The company was forecasting a breakeven position by the end of 2003. The Fund invested #300,000 in the AIM float and held a 1.8% stake at the year end. In the audited accounts to 31 December 2002, BioProgress reported losses before tax of $6.7m and net assets of $0.3m. Keycom Keycom provides telephone and internet services to students. The company has negotiated contracts with 52 UK universities and now has over 25,000 students able to use its ISP service. Demand for Keycom's services is driven by students' requirements for cheap, unlimited access to the internet and the ability to call home on cheap evening tariffs. Keycom markets unlimited internet access for #16 per month, which is an extremely attractive price relative to other ISP offerings. In addition to the on-campus students the company aims to attract the larger numbers of off-campus students to its services. The company was spun off from Key Students Services in 2000 and has undergone a troublesome development period which has entailed a number of funding rounds. The majority of other operators in the sector have gone into receivership leaving Keycom as the only major player. The Fund invested #950,000 as part of syndicated funding rounds to provide working capital to the company. The Fund has a 9.3% stake. In the audited accounts to 30 September 2002 the company made a loss before taxation of #1.9m, a retained loss of #1.7m and had net assets of #91,000. Non Qualifying Funds In line with the investment policy set out in the Prospectus, #1.3m has been invested in two funds managed by Electra Partners. Electra Investment Trust specialises in private equity with net assets of #495m as at 30 September 2003. Electra Active Management is a specialist smaller company fund which invests in undervalued smaller companies where a corporate catalyst can create a valuation uplift. Both funds have performed well in the year and at the year end showed an uplift of 24% and 12% respectively on their cost. Bond Portfolio At the year end the bond portfolio was valued at #7.5m and comprised investments in 14 short-dated corporate bonds and gilts. The bonds have been selected on the basis of their yields and credit rating with redemption periods matched to anticipated qualifying investment rates. Investments made or committed after 30 September 2003 James & James James & James is a business to business publisher of international environmental magazines and directories. It has established leading titles in certain energy, waste and conservation sectors. The core products are three bi-monthly, advertising-led magazines: Renewable Energy World, Co-Generation & On-site Power Generation and Waste Management World. The company was seeking finance to complete the acquisition of Earthscan, a publisher of academic and professional books on environmental change and sustainable development. The strategy is to build a dedicated international environmental publisher through further bolt-on acquisitions and organic growth. The company's core focus will be on the Energy and Waste sectors. The Fund invested #750,000, for a 29.2% stake, to facilitate the acquisition of Earthscan and to provide working capital. Media Square The company was set up in 2000 and floated on AIM in 2001. Its objective was to acquire a number of companies in the design/media consultancy market to achieve a degree of scale and exploit the resultant synergies. Media Square has two divisions focusing on marketing communications consultancy and retail marketing production support. The Fund invested #600,000, for a 6.5% stake, to enable the company to complete the acquisition of Preprint. Preprint represented a good bolt-on opportunity for the retail marketing division. For the year ended 31 October 2002 the company reported an audited loss of #0.9m, a retained loss of #0.9m and net assets of #0.7m. Music Copyright Solutions ("MCS") MCS administers and owns music copyright. The company drives revenues by the collection and payment of music royalties, and the creation of rights by commissioning specific work. MCS focuses largely on products for film and TV production companies, such as Endemol and Chorion. MCS is implementing a buy-and-build strategy within the UK independent music publishing market, a market that is very fragmented below a small number of major players such as EMI and Sony. The company had raised #1.1m to acquire the administration rights of a rival, Palans, but had a shortfall of #0.9m. The Fund led a funding round, investing #500,000 to make up the difference. The Fund has a 12.1% stake. MCS is quoted on OFEX and plans to move to AIM in the first half of 2004. In the audited accounts to 31 December 2002, MCS reported a loss before taxation of #990,000 and had net assets of #1.2m. Happy Times Happy Times is an owner operator of three childrens nurseries in South West London. It was seeking expansion capital to acquire a freehold site in Fulham and a further freehold site elsewhere in the London area. The dynamics of the market remain favourable, particularly in the affluent London boroughs where the supply of nursery care facilities lags behind demand. The company has differentiated itself from the competition by operating larger nurseries of typically over 100 places and providing high standards of child care. The Fund invested #750,000 as part of a #1.5m equity funding alongside #2.6m of debt finance. The company is unquoted and reported a loss before tax of #456,000 to 31 March 2003 with net liabilities of #66,511. The Fund has a 12.2% stake. Immedia Broadcasting The company designs and operates live radio stations providing tailored commercial programming to retail outlets. It provides two distinct services: a free radio proposition to CTN and convenience stores where advertising slots are sold to the large confectionery and drinks companies; the second service is a bespoke radio station, tailored to meet the requirements of the client. The company has successfully operated a station for Lloyds Chemists and has a number of other potential contracts in the pipeline. There has been considerable interest in point of sale advertising, since a large proportion of purchasing decisions are often made in-store. Accordingly, radio advertising has the potential to increase in-store sales and, in the case of bespoke programming, provide a valuable communications tool. The company listed on AIM in December 2003 and the Fund invested #275,000 for a 5.4% stake. The company declared a loss of #651,000 to 30 December 2002 with net assets of #26,106. Statement of Total Return Incorporating the Revenue Account of the Company for the year ended 30 September 2003 For the period 12 September 2001 to For the year ended 30 September 2003 30 September 2003 Revenue Capital Total Revenue Capital Total # # # # # # Unrealised gains/(losses) on investments - 2,117,035 2,117,035 - (138,156) (138,156) Realised gains/(losses) on investments - 61,369 61,369 - (17,300) (17,300) Income 668,134 - 668,134 463,104 - 463,104 668,134 2,178,404 2,846,538 463,104 (155,456) 307,648 Investment management fees (87,703) (263,109) (350,812) (49,281) (147,842) (197,123) Other expenses (344,339) - (344,339) (250,653) - (250,653) Return on Ordinary Activities before Taxation 236,092 1,915,295 2,151,387 163,170 (303,298) (140,128) Tax on ordinary activities (54,579) 49,991 (4,588) (39,047) 28,829 (10,218) Return on Ordinary Activities after Taxation 181,513 1,965,286 2,146,799 124,123 (274,469) (150,346) Dividend (178,243) - (178,243) (118,183) - (118,183) Transfer to/(from) Reserves 3,270 1,965,286 1,968,556 5,940 (274,469) (268,529) Return per Ordinary Share 1.03p 11.08p 12.11p 3.06p (6.76p) (3.70p) All revenues and capital in the above statement derive from continuing activities. The Revenue column of this statement is the Profit and Loss Account of the Company. Reconciliation of Total Shareholder Funds Period from Year ended 12 September 2001 30 September 2003 to 30 September 2002 # # Total Return 2,146,799 (150,346) Dividend on ordinary shares (178,243) (118,183) Ordinary shares issued 4,090,587 15,857,118 Repurchase of ordinary shares (34,624) (99,395) Preference shares issued - 50,000 Redemption of preference shares - (50,000) Share issue expenses charged to Share Premium account (224,981) (787,785) Movements in Total Shareholders' Funds 5,799,538 14,701,409 Total Shareholders' Funds at start of period 14,701,409 - Total Shareholders' Funds at 30 September 2003 20,500,947 14,701,409 Balance Sheet As at 30 September 2003 As at 30 September 2003 As at 30 September 2002 # # # # Fixed Assets Investments 16,517,969 9,942,610 Current Assets Debtors 372,802 325,867 Cash at bank 3,898,192 4,723,879 4,270,994 5,049,746 Creditors: amounts falling due within one year Creditors 288,016 290,947 Net Current Assets 3,982,978 4,758,799 Net Assets 20,500,947 14,701,409 Capital and Reserves Called-up share capital 198,048 157,577 Share premium account 11,551,185 14,812,361 Capital redemption reserve 435 - Special reserve 7,051,251 - Realised capital reserve (340,843) (136,313) Unrealised capital reserve 2,031,660 (138,156) Revenue reserve 9,211 5,940 Total Equity Shareholders' Funds 20,500,947 14,701,409 Net Asset Value per Ordinary Share 103.52p 93.30p 2003 2002 Number of ordinary shares in issue at 30 September 19,804,760 15,757,723 Cash Flow Statement For the period 12 September to For the year ended 30 September 2003 30 September 2002 # # # # Operating Activities Investment income received 761,125 419,980 Bank interest received 128,673 83,770 Investment management fees paid (458,124) (131,884) Other cash payments (316,337) (166,271) Net Cash Inflow from Operating Activities 115,337 205,595 Taxation (10,195) - Capital Expenditure and Financial Investments Sale of investments 7,075,679 1,000,000 Acquisition of investments (11,719,307) (11,451,654) Net Cash Outflow from Capital Expenditure and Financial Investments (4,643,628) (10,451,654) Equity Dividends Paid (118,183) - Cash Outflow before Financing (4,656,669) (10,246,059) Financing Issue of ordinary shares 4,090,587 15,857,118 Repurchase of ordinary shares (34,624) (99,395) Issue of preference shares - 50,000 Redemption of preference shares - (50,000) Expenses of the issue of ordinary shares (224,981) (787,785) Net Cash Inflow from Financing 3,830,982 14,969,938 (Decrease)/Increase in Cash for the Period (825,687) 4,723,879 The figures and financial information for the year ended 30 September 2003 do not constitute the statutory Financial Statements for that period. Those Financial Statements have not yet been delivered to the Registrar, nor have the Auditors yet reported on them. The Report and Accounts for the year ended 30 September 2003 will be sent to shareholders shortly and will thereafter be available from the Company's registered office at 65 Kingsway, London WC2B 6QT. The second Annual General Meeting of the Company will be held on Monday 23 February 2004 at 65 Kingsway, London WC2B 6QT. This information is provided by RNS The company news service from the London Stock Exchange END FR EASFAFEPLEFE
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