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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Northern Venture Trust Plc | LSE:NVT | London | Ordinary Share | GB0006450703 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 57.50 | 56.00 | 59.00 | 57.50 | 57.50 | 57.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -9.13M | -9.92M | -0.0568 | -10.12 | 100.49M |
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TIDMNVT
16 MAY 2019
NORTHERN VENTURE TRUST PLC
UNAUDITED HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHSED 31 MARCH
2019
Northern Venture Trust PLC is a Venture Capital Trust (VCT) whose
investment adviser is NVM Private Equity. The trust was one of the
first VCTs launched on the London Stock Exchange in 1995. It invests
mainly in unquoted venture capital holdings and aims to provide high
long-term tax-free returns to shareholders through a combination of
dividend yield and capital growth.
Financial highlights (comparative figures as at 31 March 2018 and 30
September 2018)
Six months Six months
ended ended Year ended
31 March 31 March 30 September
2019 2018 2018
---------- ---------- --------------
Net assets GBP92.0m GBP93.7m GBP93.9m
Net asset value per share 70.4p 70.7p 70.8p
Return per share:
Revenue 0.7p 0.4p 1.0p
Capital 0.8p 0.7p 2.3p
Total 1.5p 1.1p 3.3p
Dividend per share declared in
respect of the period
Interim dividend 2.0p 2.0p 2.0p
Final dividend -- -- 2.0p
Total 2.0p 2.0p 4.0p
Cumulative return to shareholders
since launch:
Net asset value per share
Dividends paid per share* 70.4p 70.7p 70.8p
Net asset value plus dividends 166.5p 162.5p 164.5p
paid per share 236.9p 233.2p 235.3p
Mid-market share price at end of
period 64.50p 66.25p 66.00p
Tax-free dividend yield (based
on the net asset per share)** 5.7% 6.3% 5.5%
*Excluding interim dividend not yet paid.
**The annualised dividend yield is calculated by dividing the dividends
in respect of the 12 month period ended on each reference date by the
net asset value per share at the start of the period.
For further information, please contact:
NVM Private Equity LLP
Simon John/James Bryce 0191 244 6000
Website: www.nvm.co.uk
HALF-YEARLY MANAGEMENT REPORT FOR THE SIX MONTHSED 31 MARCH 2019
The past six months have been another productive period for the company,
with four new investments completed and three successful realisations.
We launched a top-up share offer in January, raising our GBP6.6 million
target in just eight days and remain well capitalised to pursue further
investment opportunities. The profile of the unquoted portfolio is
evolving as expected as we continue to acquire investments in earlier
stage innovative UK companies with high growth potential. As previously
indicated, the profile of the new investments will lead to greater
volatility in the timing and quantum of returns and maintaining the
current net asset value per share whilst continuing to pay regular
dividends remains a priority for your board. After careful
consideration, we have decided once again to declare an interim dividend
of 2.0p per share in respect of the period to 31 March 2019.
Results and dividend
The unaudited net asset value (NAV) per share at 31 March 2019 was 70.4p,
compared with the audited figure of 70.8p at 30 September 2018. The
total return per share before dividends for the six months ended 31
March 2019 as shown in the income statement was 1.5p (six months ended
31 March 2018: 1.1p), equivalent to 2.1% of the NAV at the start of the
period. Investment income of GBP1.5 million was higher than in the
corresponding period last year (six months to 31 March 2018: GBP1.1
million) due largely to the benefit of a one-off receipt of interest
arrears following an investment disposal.
Venture capital investments
Four new VCT-qualifying holdings were acquired during the period, for
total consideration of GBP2.5 million. These have all been in
innovative earlier stage companies, developing a variety of disruptive
products and services and requiring capital to scale up. We expect that
most of the earlier stage businesses we are backing will require further
capital in order to realise their growth potential fully and we continue
to channel an increasing proportion of our investment activity into
follow-on funding rounds. A total of GBP3.5 million was invested across
seven existing portfolio companies during the period.
Two notable investment realisations were completed during the period
delivering total proceeds of GBP4.3 million and generating a gain of
GBP1.8 million over cost. Closerstill Group was the subject of a
secondary buy-out led by Providence Equity Partners. Since our original
investment in the business was acquired in 2008, Northern Venture Trust
has participated in several refinancing rounds with the original
investment ultimately delivering seven times its cost over the entire
holding period. Lanner Group was sold to a multinational trade acquirer,
delivering a return of two times cost over the life of the investment.
In addition to the investment sales, both Graza and Volumatic Holdings
redeemed loan stock totalling GBP1.2 million during the period.
Following the venture capital investments and disposals during the
period, around 50% by value of our venture capital portfolio at the
period-end still comprises investments in more mature businesses
acquired under previous VCT rules. We hope that this portfolio will
continue to provide investment income and a series of profitable
realisations in the years ahead as the earlier stage portfolio develops.
Shareholder issues
Having reviewed the forecast cash requirements for 2019 and beyond, we
launched a top-up offer of new ordinary shares in January, to raise up
to GBP6.6 million. Strong demand was experienced and the offer was
fully subscribed by existing shareholders approximately one week after
opening. Your directors would like to thank all applicants for their
show of support in the company and its investment strategy.
Our dividend investment scheme, which enables shareholders to re-invest
their dividends in new ordinary shares free of dealing costs and with
the benefit of the tax reliefs available on new VCT share subscriptions,
continues to operate.
We have maintained our policy of being willing to buy back the company's
shares in the market, when necessary in order to maintain liquidity, at
a 5% discount to NAV. During the six months ended 31 March 2019 a total
of 2,791,000 shares were repurchased by the company for cancellation,
representing around 2.1% of the opening ordinary share capital.
VCT legislation and regulation
Following significant changes to the VCT legislation announced in
November 2017, the Chancellor of the Exchequer did not include any
further updates in his most recent Autumn Budget. The previously
announced amendments are still being introduced on a phased basis and
the main change in the short term is that the minimum proportion of
investments required to be held in VCT-qualifying holdings will increase
from 70% to 80%. This change will first apply to your company from 30
September 2019 and we will continue to work closely with our investment
adviser, NVM in order to maintain compliance with the relevant
legislation at all times.
HM Revenue and Customs (HMRC) launched a consultation in December 2016
to consider how to streamline the advanced assurance service - the
process whereby potential investments may be given an indicative opinion
of eligibility. The consultation conclusions called for a greater level
of self-assurance by VCTs, but provided little guidance on how this
should work in practice. Since the consultation NVM has been in
discussions with HMRC, professional advisers and other market
participants on this topic and progress has recently been made, with
formal guidance on the self-assurance process now available. Your board
has therefore concluded that it is appropriate for the company to
self-assure those investments meeting certain criteria, where a
professional opinion has been obtained by NVM supporting their
eligibility.
VCT qualifying status
The company has continued to meet the stringent qualifying conditions
laid down by HM Revenue & Customs for maintaining its approval as a VCT.
NVM, monitors the position closely and reports regularly to the board.
Philip Hare & Associates LLP has continued to act as independent adviser
to the company on VCT taxation matters.
Outlook
The political and economic environment has remained uncertain over the
past few years and the lack of clarity over the outcome of the ongoing
negotiations between Britain and the rest of the EU looks set to
continue. We remain committed to expanding the portfolio of innovative
earlier stage companies and believe that the potential returns from
these investments in the medium to long term remain attractive.
On behalf of the Board
Simon Constantine
Chairman
Extracts from the unaudited half-yearly financial statements for the six
months ended 31 March 2019 are set out below.
INCOME STATEMENT
(unaudited) for the six months ended 31 March 2019
Six months ended 31 March Six months ended 31 March
2019 2018
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gain on disposal of
investments - 511 511 - 415 415
Movements in fair value of
investments - 1,148 1,148 - 1,018 1,018
---------- ---------- ---------- ---------- ---------- ----------
- 1,659 1,659 - 1,433 1,433
Income 1,489 - 1,489 1,088 - 1,088
Investment management fee (222) (667) (889) (216) (648) (864)
Other expenses (250) - (250) (241) (11) (252)
---------- ---------- ---------- ---------- ---------- ----------
Return on ordinary activities
before tax 1,017 992 2,009 631 774 1,405
Tax on return on ordinary
activities (143) 143 - (96) 96 -
---------- ---------- ---------- ---------- ---------- ----------
Return on ordinary activities
after tax 874 1,135 2,009 535 870 1,405
---------- ---------- ---------- ---------- ---------- ----------
Return per share 0.7p 0.8p 1.5p 0.4p 0.7p 1.1p
Year ended 30 September
2018
Revenue Capital Total
GBP000 GBP000 GBP000
Gain on disposal of investments - 4,997 4,997
Movements in fair value of
investments - (1,039) (1,039)
---------- ---------- ----------
- 3,958 3,958
Income 2,491 - 2,491
Investment management fee (427) (1,281) (1,708)
Other expenses (449) (11) (460)
---------- ---------- ----------
Return on ordinary activities
before tax 1,615 2,666 4,281
Tax on return on ordinary
activities (257) 257 -
---------- ---------- ----------
Return on ordinary activities
after tax 1,358 2,923 4,281
---------- ---------- ----------
Return per share 1.0p 2.3p 3.3p
BALANCE SHEET
(unaudited) as at 31 March 2019
31 March 2019 31 March 2018 30 September 2018
GBP000 GBP000 GBP000
Fixed assets:
Investments 71,183 72,988 69,318
---------- ---------- ----------
Current assets:
Debtors 229 312 141
Cash and cash equivalents 27,245 20,539 24,557
---------- ---------- ----------
27,474 20,851 24,698
Creditors (amounts falling
due within one year) (6,697) (120) (106)
---------- ---------- ----------
Net current assets 20,777 20,731 24,592
---------- ---------- ----------
Net assets 91,960 93,719 93,910
---------- ---------- ----------
Capital and reserves:
Called-up equity share
capital 32,641 33,159 33,142
Share premium 1,133 481 817
Capital redemption reserve 1,576 663 879
Capital reserve 49,028 50,767 51,617
Revaluation reserve 5,599 7,036 6,346
Revenue reserve 1,983 1,613 1,109
---------- ---------- ----------
Total equity shareholders'
funds 91,960 93,719 93,910
---------- ---------- ----------
Net asset value per share 70.4p 70.7p 70.8p
STATEMENT OF CHANGES IN EQUITY
(unaudited) for the six months ended 31 March 2019
---------------Non-distributable Distributable
reserves--------------- reserves Total
Called Capital
up share Share redemption Revaluation Capital Revenue
capital premium reserve reserve* reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2018 33,142 817 879 6,346 51,617 1,109 93,910
Return on ordinary
activities
after tax - - - (747) 1,882 874 2,009
Dividends paid - - - - (2,651) - (2,651)
Net proceeds of share
issues 196 316 - - - - 512
Shares purchased (1,820) - (1,820)
for cancellation (697) - 697 -
Cancellation of share
premium reserve - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 31 March 2019 32,641 1,133 1,576 5,599 49,028 1,983 91,960
---------- ---------- ---------- ---------- ---------- ---------- ----------
STATEMENT OF CHANGES IN EQUITY
(unaudited) for the six months ended 31 March 2018
---------------Non-distributable Distributable
reserves--------------- reserves Total
Called Capital
up share Share redemption Revaluation Capital Revenue
capital premium reserve reserve* reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2017 26,256 6,941 544 5,972 34,150 2,397 76,260
Return on ordinary
activities
after tax - - - 1,064 (194) 535 1,405
Dividends paid - - - - (2,643) (1,319) (3,962)
Net proceeds of share
issues 7,022 13,311 - - - - 20,333
Shares purchased
for cancellation (119) - 119 - (317) - (317)
Cancellation of share
premium reserve - (19,771) - - 19,771 - -
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 31 March 2018 33,159 481 663 7,036 50,767 1,613 93,719
---------- ---------- ---------- ---------- ---------- ---------- ----------
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2018
---------------Non-distributable Distributable
reserves--------------- reserves Total
Called Capital
up share Share redemption Revaluation Capital Revenue
capital premium reserve reserve* reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2017 26,256 6,941 544 5,972 34,150 2,397 76,260
Return on ordinary
activities
after tax - - - 374 2,549 1,358 4,281
Dividends paid - - - - (3,966) (2,646) (6,612)
Net proceeds of share
issues 7,221 13,647 - - - - 20,868
Shares purchased
for cancellation (335) - 335 - (887) - (887)
Cancellation of share
premium reserve - (19,771) - - 19,771 - -
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 30 September 2018 33,142 817 879 6,346 51,617 1,109 93,910
---------- ---------- ---------- ---------- ---------- ---------- ----------
*The revaluation reserve is generally non-distributable other than that
part of the reserve relating to gains/losses on readily realisable
quoted investments, which is distributable.
STATEMENT OF CASH FLOWS
(unaudited) for the six months ended 31 March 2019
Six months Six months
ended ended Year ended
31 March 2019 31 March 2018 30 September 2018
GBP000 GBP000 GBP000
Cash flows from
operating
activities:
Return on ordinary
activities before
tax 2,009 1,405 4,281
Adjustments for:
Gain on disposal of
investments (511) (415) (4,997)
Movement in fair
value of
investments (1,148) (1,018) 1,039
(Increase)/decrease
in debtors (89) 349 520
(Decrease)/increase
in creditors (3) 39 25
---------- ---------- ----------
Net cash inflow from
operating
activities 258 360 868
---------- ---------- ----------
Cash flows from
investing
activities:
Purchase of
investments (12,963) (7,033) (14,257)
Sale/repayment of
investments 12,757 1,176 14,596
---------- ---------- ----------
Net cash
(outflow)/inflow
from investing
activities (206) (5,857) 339
---------- ---------- ----------
Cash flows from
financing
activities:
Issue of ordinary
shares 540 20,769 21,317
Share issue expenses (26) (435) (449)
Share subscriptions
held pending
allotment 6,593 - -
Purchase of ordinary
shares for
cancellation (1,820) (317) (887)
Equity dividends
paid (2,651) (3,962) (6,612)
---------- ---------- ----------
Net cash inflow from
financing
activities 2,636 16,055 13,369
---------- ---------- ----------
Net increase in cash
and cash
equivalents 2,688 10,558 14,576
Cash and cash
equivalents at
beginning of
period 24,557 9,981 9,981
---------- ---------- ----------
Cash and cash
equivalents at end
of period 27,245 20,539 24,557
---------- ---------- ----------
INVESTMENT PORTFOLIO SUMMARY
as at 31 March 2019
% of net
Cost Valuation assets
GBP000 GBP000 by valuation
Fifteen largest venture capital
investments:
Sorted Holdings 3,022 4,034 4.4%
MSQ Partners Group 1,695 3,533 3.8%
Agilitas IT Holdings 1,662 3,315 3.6%
No 1 Lounges 2,006 2,990 3.3%
Lineup Systems 975 2,910 3.2%
SHE Software Group 2,058 2,243 2.4%
Volumatic Holdings 1,078 2,112 2.3%
Entertainment Magpie Group 1,611 2,051 2.2%
Biological Preparations Group 2,366 1,928 2.1%
Currentbody.com 1,413 1,817 2.0%
AVID Technology Group 1,353 1,721 1.9%
It's All Good 1,205 1,701 1.8%
Weldex (International) Offshore
Holdings 3,262 1,670 1.8%
Intelling Group 1,222 1,647 1.8%
Intuitive Holding 1,674 1,630 1.8%
------------ ------------ ------------
26,602 35,302 38.4%
Other venture capital investments 29,662 26,191 28.5%
------------ ------------ ------------
Total venture capital investments 56,264 61,493 66.9%
Listed equity investments 9,320 9,690 10.6%
------------ ------------ ------------
Total fixed asset investments 65,584 71,183 77.4%
------------
Cash and cash equivalents 27,245 29.6%
Debtors less creditors (6,468) (7.0%)
------------ ------------
Net assets 91,960 100.0%
------------ ------------
RISK MANAGEMENT
The board carries out a regular and robust review of the risk
environment in which the company operates. The principal risks and
uncertainties identified by the board which might affect the company's
business model and future performance, and the steps taken with a view
to their mitigation, are as follows:
Investment and liquidity risk: investment in smaller and unquoted
companies, such as those in which the company invests, involves a higher
degree of risk than investment in larger listed companies because they
generally have limited product lines, markets and financial resources
and may be more dependent on key individuals. The securities of smaller
companies in which the company invests are typically unlisted, making
them illiquid, and this may cause difficulties in valuing and disposing
of the securities. The company may invest in businesses whose shares are
quoted on AIM - the fact that a share is quoted on AIM does not mean
that it can be readily traded and the spread between the buying and
selling prices of such shares may be wide. Mitigation: the directors
aim to limit the risk attaching to the portfolio as a whole by careful
selection, close monitoring and timely realisation of investments, by
carrying out rigorous due diligence procedures and maintaining a wide
spread of holdings in terms of financing stage and industry sector. The
board reviews the investment portfolio with the investment adviser on a
regular basis.
Financial risk: most of the company's investments involve a medium to
long-term commitment and many are relatively illiquid. Mitigation: the
directors consider that it is inappropriate to finance the company's
activities through borrowing except on an occasional short-term basis.
Accordingly they seek to maintain a proportion of the company's assets
in cash or cash equivalents in order to be in a position to pursue new
unquoted investment opportunities and to make follow-on investments in
existing portfolio companies. The company has very little direct
exposure to foreign currency risk and does not enter into derivative
transactions.
Economic risk: events such as economic recession or general fluctuation
in stock markets, exchange rates and interest rates may affect the
valuation of investee companies and their ability to access adequate
financial resources, as well as affecting the company's own share price
and discount to net asset value. Mitigation: the company invests in a
diversified portfolio of investments spanning various industry sectors,
and maintains sufficient cash reserves to be able to provide additional
funding to investee companies where appropriate.
Stock market risk: some of the company's investments are quoted on the
London Stock Exchange or AIM and will be subject to market fluctuations
upwards and downwards. External factors such as terrorist activity can
negatively impact stock markets worldwide. In times of adverse sentiment
there may be very little, if any, market demand for shares in smaller
companies quoted on AIM. Mitigation: the company's quoted investments
are actively managed by specialist advisers, including NVM in the case
of the AIM-quoted investments, and the board keeps the portfolio and the
actions taken under ongoing review.
Credit risk: the company holds a number of financial instruments and
cash deposits and is dependent on the counterparties discharging their
commitment. Mitigation: the directors review the creditworthiness of the
counterparties to these instruments and cash deposits and seek to ensure
there is no undue concentration of credit risk with any one party.
Legislative and regulatory risk: in order to maintain its approval as a
VCT, the company is required to comply with current VCT legislation in
the UK, which reflects the European Commission's State-aid rules.
Changes to the UK legislation or the State-aid rules in the future could
have an adverse effect on the company's ability to achieve satisfactory investment returns whilst retaining its VCT approval. Mitigation: the board and the investment adviser monitor political developments and where appropriate seek to make representations either directly or through relevant trade bodies. Internal control risk: the company's assets could be at risk in the absence of an appropriate internal control regime. Mitigation: the board regularly reviews the system of internal controls, both financial and non-financial, operated by the company and the investment adviser. These include controls designed to ensure that the company's assets are safeguarded and that proper accounting records are maintained. VCT qualifying status risk: while it is the intention of the directors that the company will be managed so as to continue to qualify as a VCT, there can be no guarantee that this status will be maintained. A failure to continue meeting the qualifying requirements could result in the loss of VCT tax relief, the company losing its exemption from corporation tax on capital gains, to shareholders being liable to pay income tax on dividends received from the company and, in certain circumstances, to shareholders being required to repay the initial income tax relief on their investment. Mitigation: the investment adviser keeps the company's VCT qualifying status under continual review and its reports are reviewed by the board on a quarterly basis. The board has also retained Philip Hare & Associates LLP to undertake an independent VCT status monitoring role. OTHER MATTERS The unaudited half-yearly financial statements for the six months ended 31 March 2019 do not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006, have not been reviewed or audited by the company's independent auditor and have not been delivered to the Registrar of Companies. The comparative figures for the year ended 30 September 2018 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The auditor's report on those financial statements (i) was unqualified, (ii) did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The half-yearly financial statements have been prepared on the basis of the accounting policies set out in the annual financial statements for the year ended 30 September 2018. Each of the directors confirms that to the best of their knowledge the half-yearly financial statements have been prepared in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by (a) DTR 4.2.7R of the Disclosure Rules and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year, and (b) DTR 4.2.8R of the Disclosure Rules and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so. The directors of the company at the date of this statement were Mr S J Constantine (Chairman), Mr N J Beer, Mr R J Green, Mr T R Levett, Mr D A Mayes and Mr H P Younger. The calculation of return per share is based on the return on ordinary activities after tax for the six months ended 31 March 2019 and on 131,929,348 (2018: 127,587,005) ordinary shares, being the weighted average number of shares in issue during the period. The calculation of the net asset value per share is based on the net assets at 31 March 2019 divided by the 130,562,141 (2018: 132,635,462) ordinary shares in issue at that date. The interim dividend of 2.0p per share for the year ending 30 September 2019 will be paid on 27 June 2019 to shareholders on the register at the close of business on 7 June 2019. A copy of the half-yearly financial report for the six months ended 31 March 2019 is expected to be posted to shareholders by 30 May 2019 and will be available to the public at the registered office of the company at Time Central, 32 Gallowgate, Newcastle upon Tyne NE1 4SN and on the NVM Private Equity LLP website, www.nvm.co.uk. Neither the contents of the NVM Private Equity LLP website nor the contents of any website accessible from hyperlinks on the NVM Private Equity LLP website (or any other website) is incorporated into, or forms part of, this announcement.
(END) Dow Jones Newswires
May 17, 2019 03:31 ET (07:31 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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