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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Quester Vct 5 | LSE:QUV | London | Ordinary Share | GB0031102071 | 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% | 41.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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Quester VCT 5 plc
Interim statement for the six months ended 30 June 2004
Financial highlights
Per ordinary share (pence) 6 months to Year to 31 6 months to
30 June 2004 December 2003 30 June 2003
Capital values
Net asset value 92.9 92.7 93.3
Share price 97.5 96.0 96.0
Return and dividends
Dividend - 1.0 -
Cumulative dividend 1.5 1.5 0.5
Total return* 94.4 94.2 93.8
*Net asset value plus cumulative dividend per share
Highlights from the Chairman's statement and Investment manager's report
* Total return of £6,000 (0.02p per share) for the six months to 30 June 2004
* Two profitable partial realisations from the venture capital portfolio
* The portfolio now comprises six AIM traded and 17 unquoted companies
* The 2003/04 top-up issue of shares closed during the period having raised a
further £1.7million for the Company
* It is the intention that there will be a further offer for shares in autumn
2004
* The Directors do not propose to pay a dividend
CHAIRMAN'S STATEMENT
INTRODUCTION
During the six months ended 30 June 2004 further progress has been made towards
completion of the initial phase of the Company's investment programme. There
has been modest increase in net asset value of 0.2p per share and two early
part-realisations from the venture capital portfolio have been achieved.
NET ASSETS, REVENUE AND DIVIDENDS
The Statement of Total Return shows a total return of £6,000 (0.02p per share)
for the six months to 30 June 2004. Of this, a profit of £56,000 is
attributable to the Revenue Account, which is in effect the Company's profit
and loss account. This is partially offset by a net capital loss of £50,000
arising during the period. The directors are not declaring an interim dividend.
As at 30 June 2004, the share price stood at a premium of 5.0% to net asset
value. Subsequent to the year end, the share price has fallen to stand at a
modest discount to net asset value.
INVESTMENT PROGRESS AND PORTFOLIO PERFORMANCE
During the half year, five further venture capital investments were made taking
the number of such investments held as at 30 June 2004 to 23, with an aggregate
cost of £6.7million. The portfolio now comprises six AIM traded and 17 unquoted
companies. This represents a diversified portfolio of companies operating in a
wide range of markets with high growth potential. The recent AIM investments
have also resulted in a broadening of both the spread of investment stages and
the profile of the portfolio. Taking reserves for follow-on investments into
account, the fund is now considered to be approximately 50% invested.
Investment performance itself over the period has generally been good and there
have been two successful part realisations from the venture capital portfolio.
Further details on investment progress and portfolio performance are provided
in the Investment Manager's report.
FUNDRAISING
The 2003/04 top-up issue of shares closed during the period having raised a
further £1.7million for the Company. Of this, £1.4million was raised during the
current period.
Following the recent changes announced in the 2004 Budget, the income tax
advantages for private investors who subscribe for shares in a VCT have been
enhanced with income tax relief of up to 40% being available. However, it is
now no longer possible for investors to shelter current capital gains tax
liabilities; previously sheltered gains remain unaffected.
Provided that the directors consider it to be in the best interests of
shareholders and the Company, it is the intention that there will be a further
offer for shares in autumn 2004 during this favourable environment for
fundraising.
OUTLOOK
It is currently expected that the venture capital portfolio will expand to
approximately 30 investments, although this number may vary depending upon any
future fundraisings. Reserves will be retained to cover the future potential
funding requirements of these investments.
Given the nature of the Company's investments, the payment of a final dividend
for the current year and for future years will largely be dependent upon the
future realisation of capital profits from the investment portfolio.
Whilst it has been encouraging to have been able to report the two partial
realisations achieved during the period, it should be appreciated that the
unquoted investments held by the Company are, in most cases, still at an early
stage and will take time to mature. However, we believe that the portfolio
holds attractive investments with the potential to produce good future returns
to shareholders.
WW Passmore
Chairman
16 September 2004
INVESTMENT MANAGER'S REPORT
OVERVIEW
The six months to 30 June 2004 have seen two profitable partial realisations
from the venture capital portfolio, an increase in the number of venture
capital investments held and a small net gain in net asset value on the back of
unrealised gains in investments.
Steady progress has been made towards completion of Quester VCT 5's initial
investment phase and, taking reserves for follow-on investments into account,
the fund is now considered to be approximately 50% allocated to venture capital
investments.
The opportunity was taken during the period to broaden the spread of investment
stages represented within the portfolio by investing in a number of companies
raising capital on AIM, which has seen increasing levels of new issue activity.
PROGRESS WITH VENTURE CAPITAL INVESTMENT
During the six months ended 30 June 2004, four new investments were made at an
initial cost of £732,000. Each of these investments are traded on AIM. In
addition, a further £509,000 was invested in six existing unquoted portfolio
companies, either as further tranches of originally agreed commitment or as
follow-on investment. As can be seen in the table below these investments cover
a range of different sectors.
Sector £'000
New investments
Offshore Hydrocarbon Mapping plc Industrial products 175
Polaron plc Industrial products 250
Public Recruitment Group plc Business services 250
Quadnetics Group plc Industrial products 57
732
Follow-on investments
Advanced Valve Technologies Limited Industrial products 8
Anadigm Limited Semiconductors 150
Antenova Limited Communications 75
HTC Healthcare Group plc Consumer services 214
Mesophotonics Limited Electronics 53
REQIO Limited Software 9
509
Total 1,241
The portfolio so far established is balanced by sector and well spread. A
summary of the sectors covered by the portfolio at 30 June 2004 is provided in
the table below:
Sector Percentage of venture Valuation at Number of
capital portfolio at 30 June 2004 investments
valuation%
£ `000
Healthcare & life sciences 29.4 2,051 6
Software 23.3 1,622 4
Communications 10.0 698 2
Electronics 9.5 660 2
Business services 9.2 643 2
Industrial products 8.0 556 4
Semiconductors 7.5 524 2
Consumer services 3.1 214 1
100.0 6,968 23
The VCT legislation requires that by 31 December 2004 at least 70% of the net
funds raised up to and including 31 December 2002, which amounted to £
18.7million, must be invested in qualifying holdings (within the definitions
laid down by the Inland Revenue). In order to satisfy this rule and also to
retain sufficient investment reserves to meet the likely requirements of the
venture capital portfolio, it is intended that part of the Company's funds
should be switched into non-interest bearing cash accounts, which do not
represent investments within the relevant definition.
REALISATION OF VENTURE CAPITAL INVESTMENTS
We are pleased to be able to report two successful part realisations effected
during the half year.
Thirty six percent of the holding of Amino Technologies plc was sold following
its admission to trading on AIM. This sale resulted in a realised gain of £
91,000 on a cost of £51,000. In addition, the residual holding of this company
was valued at £303,000 at the period end, giving rise to an unrealised gain of
£212,000. Subsequent to the period end, 39% of the remaining holding has been
sold generating further profits of £114,000.
Fifty seven percent of the holding of Offshore Hydrocarbon Mapping plc, a new
investment made in the period, was also sold generating a realised gain of £
26,000 on a cost of £99,000. The remaining holding, which was showing an
unrealised gain of £30,000 as at 30 June 2004, was sold in full post the half
year generating cash proceeds of £104,000. In aggregate, the total realised
gain from this investment amounted to £54,000 on an original cost of £175,000.
VALUATION OF THE VENTURE CAPITAL PORTFOLIO
During the six months to 30 June 2004, there was a net unrealised gain of £
15,000 in the value of the company's venture capital investments. This
comprises net gains of £336,000 in the value of the Company's investments
traded on AIM, offset by provisions totalling £321,000.
As at 15 September 2004, the mid-market price of AIT Group plc had fallen by
48% since 30 June 2004 causing the valuation of this investment to fall by £
422,000.
Of the Company's 23 venture capital investments, four are valued at above cost,
15 at cost and four at below cost. The Company's unquoted venture capital
investments are valued in line with the current BVCA valuation guidelines.
LISTED EQUITY AND BOND PORTFOLIOS
The listed equity portfolio was showing an unrealised gain of £64,000 as at 30
June 2004 on a cost of £2.4million. In total, £3.2million has been set aside
for investment in listed equities, with the currently uninvested balance of £
800,000 being held in bonds.
The listed fixed interest portfolio into which funds awaiting investment in the
venture capital portfolio have been invested was showing a loss of £13,000 as
at the half year. A proportion of this portfolio will be switched into venture
capital investments during the remainder of the current year and in coming
years. In order to ensure that the 70% qualifying holdings test, as referred to
above, is satisfied, part of the remaining bond portfolio will be switched into
non-interest bearing bank deposits with effect from 31 December 2004. As a
result, there will be a reduction in the level of interest income for the
Company over the remainder of the current year and for the following years.
CONCLUSION
Promising progress has continued to be made in the initial investment phase
with the creation of a portfolio containing 23 venture capital investments. It
is envisaged that the portfolio will increase to approximately 30 investments.
However, this number may vary subject to any further fundraising activity by
the Company.
It has been pleasing to see some early profitable realisations from the
portfolio and its continued evolution on the back of additional investment
activity. We continue to believe that the portfolio contains a number of
investments with promise and we remain optimistic about long term future
performance and upside potential.
Quester Capital Management Limited
Manager
16 September 2004
FUND SUMMARY
As at 30 June 2004
Cost Valuation % equity % of fund
£'000 £'000 held by value
Quoted venture capital investments
AIT Group plc 565 882 2.9% 4.0%
Amino Technologies plc 91 303 0.8% 1.4%
Offshore Hydrocarbon Mapping plc 76 106 0.2% 0.5%
Polaron plc 250 262 1.2% 1.2%
Public Recruitment Group plc 250 243 0.8% 1.1%
Quadnetics Group plc 57 55 0.2% 0.2%
Total quoted venture capital 1,289 1,851 8.4%
investments
Unquoted venture capital investments
Advanced Valve Technologies Limited 267 134 10.2% 0.6%
Anadigm Limited 237 237 1.7% 1.1%
Antenova Limited 300 300 2.7% 1.4%
Arithmatica Limited 287 287 2.5% 1.3%
Avidex Limited 367 367 1.1% 1.6%
Azea Networks Inc. 398 398 2.0% 1.8%
Cyclacel Limited 500 500 0.6% 2.2%
Digital Union UK Limited 214 214 5.3% 1.0%
Footfall Limited 400 400 3.1% 1.8%
HTC Healthcare Group plc 214 214 3.5% 1.0%
Lorantis Holdings Limited 400 400 0.9% 1.8%
Mesophotonics Limited 357 357 2.4% 1.6%
Oxford Immunotec Limited 250 250 3.9% 1.1%
Oxxon Therapeutics Limited 367 367 3.5% 1.6%
REQIO Limited 242 125 1.3% 0.6%
Workshare Limited 400 400 2.6% 1.8%
Xention Discovery Limited 167 167 2.4% 0.7%
Total unquoted venture capital 5,367 5,117 23.0%
investments
Total venture capital investments 6,656 6,968 31.4%
Listed fixed interest investments 10,484 10,471 47.1%
Listed equity investments 2,364 2,428 10.9%
Total investments 19,504 19,867 89.4%
Cash and other net assets 2,347 2,347 10.6%
Net assets 21,851 22,214 100.0%
UNAUDITED FINANCIAL STATEMENTS
STATEMENT OF TOTAL RETURN
Incorporating the revenue account of the Company
6 months ended 30 June 6 months ended 30 June Year
2004 2003 ended 31
December
2003
Note Revenue Capital Total Revenue Capital Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Profit/(loss) on - 82 82 - (27) (27) 64
investments
Income 317 - 317 340 - 340 647
Investment (132) (132) (264) (93) (93) (186) (392)
management fee
Other expenses (131) - (131) (144) - (144) (227)
Return/(loss) on 54 (50) 4 103 (120) (17) 92
ordinary
activities
before taxation
Tax on ordinary 2 - 2 - - - -
activities
Return/(loss) on 56 (50) 6 103 (120) (17) 92
ordinary
activities after
taxation
Proposed - - - - - - (221)
dividend
Transfer to/ 56 (50) 6 103 (120) (17) (129)
(from) reserves
Earnings/(loss) 3 0.24p (0.22)p 0.02p 0.49p (0.57)p (0.08)p 0.43p
per share
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 and securities and from bank deposits.
BALANCE SHEET
Note 30 June 31 December 30 June
2003
2004 2003
£'000 £'000 £'000
Fixed assets
Investments 19,867 18,288 16,931
Current assets
Debtors 273 627 346
Cash at bank 2,447 2,354 3,600
2,720 2,981 3,946
Creditors (amounts falling (327) (362) (172)
due within one year)
Net current assets 2,393 2,619 3,774
Creditors (amounts falling (46) (46) (46)
due in over one year)
Net assets 22,214 20,861 20,659
Capital and reserves
Called-up equity share 239 225 221
capital
Share premium account 1 4,992 3,580 3,260
Special reserve 1 17,311 17,390 17,400
Capital reserve - realised 1 (556) (527) (24)
- unrealised 1 163 184 (307)
Revenue reserve 1 65 9 109
Total equity shareholders' 22,214 20,861 20,659
funds
Net asset value per share 92.9p 92.7p 93.3p
SUMMARISED CASH FLOW STATEMENT
6 months Year ended 6 months
ended ended
31 December
30 June 2004 2003 30 June 2003
£'000 £'000 £'000
Net cash inflow/(outflow) from 394 92 (58)
operating activities
Corporation tax paid - (2) -
Net capital expenditure and financial (1,427) (2,732) (1,038)
investment
Dividends paid (221) (93) (79)
Financing 1,347 2,743 2,429
Increase in cash for the period 93 8 1,254
Reconciliation of net cash flow to
movement in net funds
Increase in cash for the period 93 8 1,254
Net funds at the start of the period 2,354 2,346 2,346
Net funds at the end of the period 2,447 2,354 3,600
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Movement in reserves
Share Special Capital Capital Revenue
premium reserve reserve reserve reserve
account realised unrealised
£'000 £'000
£'000 £'000 £'000
At 1 January 2004 3,580 17,390 (527) 184 9
Share issues pursuant to 1,432 - - - -
the offers for
subscription
Expenses of share issues (53) - - - -
Shares allotted under the 33 - - - -
terms of the dividend
reinvestment scheme
Share buy back and - (79) - - -
cancellation
Net gain on realisation of - - 102 - -
investments
Net unrealised loss - - - (20) -
on investments
Transfer from unrealised - - 1 (1) -
reserve
Investment management fee - - (132) - -
charged to capital
Net revenue retained for - - - - 56
the period
At 30 June 2004 4,992 17,311 (556) 163 65
2. The financial information contained in this report has been prepared on the
basis of the accounting policies set out in the 2003 Annual Report.
3. The calculation of the revenue profit and capital loss per share for the
period is based respectively on the net profit after tax of £56,000 and the
net capital loss after tax of £50,000 divided by the weighted average
number of shares in issue during the period of 23,247,562.
4. The unaudited financial statements set out above do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act
1985.
5. Copies of the unaudited interim results are expected to be sent to
shareholders on 20 September 2004. Further copies can be obtained from the
Company's registered office.
A copy of the above document is to be submitted to the UK Listing Authority,
and will shortly be available for inspection at the UK Listing Authority's
Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
END
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