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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Renn Universal | LSE:RUG | London | Ordinary Share | GB0007325185 | 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% | 223.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
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RENN UNIVERSAL GROWTH INVESTMENT TRUST PLC (the "Company")
HALF YEARLY REPORT
for the period ended 30 September 2014 (unaudited)
Investment objective
To conduct an orderly realisation of the assets of the Company, to be effected
in a manner that seeks to achieve a balance between returning cash to
shareholders promptly and maximising the value of the Company's portfolio.
Investment policy
The Company's investments will be realised in an orderly manner in accordance
with the investment objective.
The Company may not make any new investments save that (a) subject to Board
approval, further investment may be made into existing investments in order to
preserve the value of such investments; and (b) realised cash may be invested
in liquid cash-equivalent securities, denominated in Sterling, including
short-dated corporate bonds, government bonds, cash funds or bank cash deposits
pending its return to shareholders in accordance with the Company's investment
objective.
No more than 10% of the Company's total assets may be invested in any single
cash equivalent instrument or placed on deposit with any single institution
except that this limit does not apply to investment in government bonds, which
shall be unconstrained.
The Company may not employ gearing.
The Company will continue to comply with the restrictions imposed by the
Listing Rules in force from time to time.
SUMMARY OF RESULTS AND FINANCIAL HIGHLIGHTS
% change
31 March
2014 to
30 September 31 March 30 September 30 September
2014 2014 2014 2013
Total net assets £37,829,000 £39,936,000 (5.27) £54,214,000
Net asset value ("NAV")
per Ordinary share
- pence 289.25 305.35 (5.27) 310.90
- US cents 468.92 509.06 (7.89) 503.47
Mid-market price per
Ordinary share 232.25p 274.50p (15.39) 236.00p
Discount to NAV 19.71% 10.10% - 24.09%
Net revenue return after
taxation £(480,000) £(1,021,000) - £(627,000)
Revenue return per
Ordinary share (3.67)p (5.92)p - (3.60)p
Costs of running the
Company*
- Investment Manager's fee £323,000 £677,000 - £350,000
- Other expenses £162,000 £498,000 - £282,000
- Performance fee £nil £nil - £nil
As a percentage of average
net assets*
- Investment Manager's fee 0.87% 1.27% - 0.62%
- Other Expenses 0.45% 1.18% - 0.50%
Exchange rate -
US Dollar/Sterling 1.62115 1.66715 (2.76) 1.61940
S&P 500 Index (Total
Return) 3,592.25 3,375.51 6.42 3,000.18
S&P 500 Index (Total
Return) - Sterling
adjusted 2,214.84 2,023.57 9.45 1,853.91
Russell 2000 Index (Total
Return) 5,178.71 5,477.96 (5.46) 4,982.85
Russell 2000 Index (Total
Return) - Sterling
adjusted 3,192.99 3,283.95 (2.77) 3,079.06
* Calculated in accordance with the AIC recommended methodology for the
calculation of 'Ongoing Charges' issued in May 2012.
LETTER FROM THE CHAIRMAN
Dear Shareholder,
During the six month period to the end of September 2014, the Company's share
price fell 15.4% from a high of 274.50 pence on 1 April 2014 to a low of
232.25 pence on 30 September 2014. The Company's NAV per share fell from 305.35 pence
at 31 March 2014 to 289.25 pence, a fall of 5.3%, reaching a high in the period
of 300.22 pence in April 2014, and a low of 276.24 pence in July 2014. The
discount to NAV increased from 10.1% at the start of the period to 19.7% at
30 September 2014, the high for the six months under review, reaching a low of
3.3% in June 2014. Sterling declined against the US Dollar by 2.8% from 1.66715
to 1.62115. The Russell 2000 index, sterling adjusted, fell by 2.8% in the six
months under review.
On 10 October 2014, the Company announced that, due to the degree of portfolio
concentration and the desire for RENN Capital Group, Inc. (the "Investment
Manager") to continue to realise assets in a timely fashion, it intended to
recommend to shareholders that the Company enters into voluntary liquidation as
soon as practicable. Accordingly, a circular was published on 14 November 2014,
recommending the Company's voluntary liquidation and the appointment of
liquidators. The General Meeting of the Company will be held on 10 December
2014.
During the period under review, the Investment Manager has continued to realise
assets but it has proved difficult for the Company to make further significant
disposals as the Board has been mindful of the requirement to maintain a
suitably diversified portfolio in order to preserve the Company's investment
trust status. Throughout this process, the Board has been taking advice on the
level of portfolio diversification required to avoid jeopardising the Company's
investment trust status and the favourable tax treatment that comes with it.
Provided that the Company qualifies as an investment trust at the time it
enters into voluntary liquidation, this status will usually be preserved.
As at 30 September 2014, the Company's portfolio held five core positions,
representing 92.4% of the net assets. The entry into voluntary liquidation is
intended to provide the Investment Manager with the flexibility to implement
the realisation of the Company's portfolio effectively and without jeopardising
its tax status. The decision to move to liquidation slightly earlier than
originally envisaged should not impact the proposed realisation programme.
However, the Board recognises that certain underlying investments are illiquid,
including AnchorFree (which represents 45% of the Company's net assets), and
while the Investment Manager continues to target a full realisation by the end
of March 2015, it is possible that the underlying illiquidity in certain key
investments will require time and patience to maximise returns to the
shareholders.
If the resolution is passed at the General Meeting, the liquidators will be
appointed, all powers of the Board will cease and the liquidators will be
responsible for the affairs of the Company until it is wound up. Steve Bates
and I will however remain as Directors and will be able to assist the
liquidators with their work. We will be unremunerated except for the
reimbursement of general expenses incurred in the execution of our duties. It
is intended that if the resolution is passed the Company will request that the
listing of its shares be cancelled shortly thereafter. Following the
appointment of the liquidators, we expect the Investment Manager to make steady
progress along the road to realisation and returning cash to shareholders.
Andrew Barker
Chairman
25 November 2014
INTERIM MANAGEMENT REPORT
Introduction
The establishment of the new investment policy and objective on 17 April 2013
shifted the focus of the Investment Manager towards the realisation of the
portfolio by 31 March 2015. Many positions have been sold, resulting in the
March 2014 tender offer returning £12.95 million to shareholders and leaving a
cash balance of £2.5 million at 30 September 2014. If the resolutions at the
General Meeting are approved, we expect that as cash builds, the liquidators
will distribute these assets to shareholders.
Top five holdings
AnchorFree, Inc. (Private): 45.0% of net assets, Primary Industry Group:
Internet Software & Services
AnchorFree is the world's leading advertising and subscription supported
virtual private network. Over 300 million people have downloaded AnchorFree's
HotSpot Shield to protect their identities. Hotspot Shield encrypts users'
internet communications and detects and blocks malware, protecting all internet
communication and securing customer and employee data. The company platform
accommodates desktop and all forms of mobile devices. In May 2012, Goldman
Sachs invested $52 million in AnchorFree. The company continues to make
progress through the addition of new partners and new subscription revenue with
multiple offerings. AnchorFree continues to benefit from increased demand on
the back of rising concerns about internet privacy. The company has millions of
daily active users and is currently ranked 12th on iOS App Store's productivity
category in the US.
As explained in the Company's Annual Report and Financial Statements for the
year ended 31 March 2014, the Board obtained an independent valuation of the
Company's holding in AnchorFree. Having reviewed this valuation report, the
Board decided to maintain the US Dollar valuation of the holding which, as at
31 March 2014, remained unchanged since the previous fiscal year end. This
valuation was towards the lower end of the valuation range given by the
independent valuer. The company is in the process of changing its business
model from one based on advertising to one reliant on subscriptions. The Board
sees no justification to change the valuation of this holding at this point,
but any change in the future could clearly have a significant impact, in either
direction, on net assets.
Flamel Technologies Ltd (NASDAQ: FLML): 16.8% of net assets, Primary Industry
Group: Pharmaceuticals
Flamel Technologies engages in the development and commercialisation of
controlled release therapeutic products. The company is transforming itself
into a high margin specialty pharmaceutical company. The company has received
approval for Bloxiverz, the first FDA-approved version of neostigmine sulfate,
a drug used to reverse neuromuscular blocking drugs in surgical procedures. The
company expects solid revenue growth from Bloxiverz throughout 2014. On 7 March
2014, the company announced the successful completion of a $113.0 million
equity financing. On 30 June 2014, the company announced the FDA approval of
VAZCULEP, an adrenergic receptor agonist. For the quarter ended 30 June 2014,
revenues increased 46% to $8.1 million and the net loss decreased to
$21.0 million against the same period last year.
Cover-All Technologies (AMEX: COVR): 15.4% of net assets, Primary Industry
Group: Application Software
Cover-All provides software solutions for insurance companies, agents and
brokers. The company has a suite of software products installed with some of
the largest insurance companies in the world. With its deep product line, your
Investment Manager believes Cover-All could be an acquisition candidate. On
28 August 2014, Cover–All was recognised for the second year as a leading policy
vendor from Celent, a research and advisory firm. On 2 October 2014, the
company received "Best-in-Class" for user experience from CEB TowerGroup. For
the quarter ended 30 June 2014, revenues were up 25% and net income was
$328,000 compared with a loss of $1,058,400 in the same quarter last year. In
the same August press release, Cover-All mentioned, "As we stated in our July
15, 2014 press release, we are examining a number of merger and acquisition
opportunities to grow our business, including a transformative opportunity".
Bovie Medical Corporation (AMEX: BVX): 10.4% of net assets, Primary Industry
Group: Healthcare Equipment
Bovie Medical engages in the development, manufacture and marketing of
electrosurgical generators and disposables. On 13 December 2013, the company
announced the completion of a $7.0 million funding by Great Point Partners, a
leading healthcare investment firm. This new funding was earmarked to
accelerate the growth of Bovie's innovative signature technology, J-Plasma. On
the same date, the board of directors appointed Robert L. Gershon as the
company's new Chief Executive Officer. Mr. Gershon has over 25 years of
healthcare experience, most recently as a senior sales and marketing executive
at Covidien (NYSE: COV) and Henry Schein (NASDAQ: HSIC). On 5 August 2014,
Bovie announced second quarter results ended 30 June 2014 with sales up 15% and
net income of $251,000 versus a loss of $1,119,000 during the same quarter last
year. At the end of Q2, J-Plasma was in use at 40 sites with 60 surgeons now
using the technology. On 3 September 2014, J–Plasma was recognised as
"Innovation of the Year" by The Society of Laparoendoscopic Surgeons.
iSatori, Inc. (OTCBB: IFIT): 4.8% of net assets, Primary Industry Group:
Personal Products
iSatori is a developer and marketer of scientifically engineered nutritional
supplements focusing upon specific markets, including weight loss and sports
nutrition. The company has introduced a new category-defining product called
Bio-Gro. GNC (NYSE: GNC), America's largest sports supplement retailer, began
carrying Bio-Gro in January 2014. During the second quarter, the company
introduced a new diet support pill, Sinetrim, nationally into GNC, under the
BioGenetic Laboratories brand. For the three months ended 30 June 2014,
revenues increased 28% and net income increased 152% over the same period last
year. For the six months ended 30 June 2014, revenues increased by 36% to
$6.2 million and net income increased to $672,000 compared to a loss of
$130,000 for the same period last year.
Other holdings
As at 30 September 2014, the Company owned a total of eight holdings, with the
three holdings outside the top five positions representing 1.3% of net assets.
These three holdings are in oil and gas exploration (PetroHunter Energy),
advertising (Tiger Media) and clothing and accessories (Charles & Colvard).
Conclusion
The Investment Manager sold a number of holdings enabling a return of
£12.95 million in capital to shareholders in March 2014. The pace of realising
assets has slowed down since then in order to ensure that the Company's tax
status is maintained. As explained in the Chairman's Statement, this is also
the primary objective behind the Company proposing to enter into voluntary
liquidation slightly earlier than originally envisaged.
With the exception of Flamel, the remaining holdings are either private or not
liquid enough to allow open market sales and will require negotiated exits of
some sort. The Investment Manager has experience in liquidating portfolios in
these circumstances and, subject to shareholders' approval at the General
Meeting on 10 December 2014, the Investment Manager will be working with the
liquidators to ensure the orderly and speedy realisation of the remaining
portfolio.
Russell Cleveland
RENN Capital Group, Inc.
25 November 2014
PRINCIPAL RISKS AND UNCERTAINTIES
Details of the following principal risks and uncertainties facing the Company
are detailed in the Strategic Report section of the Company's Annual Report and
Financial Statements for the year ended 31 March 2014:
Compliance with sections 1158 and 1159 of the Corporation Tax Act 2010,
valuation risk, concentration risk, liquidity/marketability risk, interest rate
risk, foreign currency risk, country risk, market price and discount volatility
risk and risks associated with the engagement of third parties.
There have been no changes to these risks since the publication of the 2014
Annual Report and Financial Statements.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements, prepared in accordance with
applicable accounting standards in the United Kingdom, gives a true and fair
view of the assets, liabilities, financial position and loss of the Company;
and
(b) this Half Yearly Report includes a fair review of the information required
by:
● 4.2.7R of the Disclosure 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
● 4.2.8R of the Disclosure 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 Company during that period; and any changes in the related
party transactions described in the last Annual Report that could do so.
This Half Yearly Report was approved by the Board of Directors on 25 November
2014 and the above responsibility statement was signed on its behalf by Andrew
Barker, Chairman.
INCOME STATEMENT(unaudited)
for the six months ended 30 September 2014
Six months ended Six months ended Year ended
30 September 2014 30 September 2013 31 March 2014
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Losses on investments at fair value
through profit or loss - (1,643) (1,643) - (2,233) (2,233) - (2,893) (2,893)
Exchange gains/(losses) on capital
items - 23 23 - (178) (178) - (323) (323)
Income (see note 4) 86 - 86 43 - 43 243 - 243
Investment management fee (see note 6) (323) - (323) (350) - (350) (677) - (677)
Bad debt expense (81) - (81) (38) - (38) (88) - (88)
Other expenses (see note 5) (162) - (162) (282) - (282) (499) - (499)
Net return before finance costs and
taxation (480) (1,620) (2,100) (627) (2,411) (3,038) (1,021) (3,216) (4,237)
Finance costs - - - - - - - - -
Net return before taxation (480) (1,620) (2,100) (627) (2,411) (3,038) (1,021) (3,216) (4,237)
Taxation on ordinary activities (see
note 9) - - - - - - - - -
Net return on ordinary activities after
taxation for the period (480) (1,620) (2,100) (627) (2,411) (3,038) (1,021) (3,216) (4,237)
pence pence pence pence pence pence pence pence pence
Return per Ordinary share (see note 2) (3.67) (12.39) (16.06) (3.60) (13.82) (17.42) (5.92) (18.63) (24.55)
The Total Column of this statement is the profit and loss account of the
Company. The supplementary revenue return and capital return columns have been
prepared in accordance with the Statement of Recommended Practice issued by the
Association of Investment Companies ("AIC"). Revenue and capital return per
share figures shown are also supplementary information.
The Financial Statements have been prepared using the accounting standards and
policies adopted at the previous year end.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
There are no recognised gains and losses other than those reflected in the
Income Statement for the period, accordingly no statement of recognised gains
and losses has been prepared.
These Financial Statements are unaudited and are not the Company's statutory
financial statements.
The notes form part of these Financial Statements.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (unaudited)
for the six months ended 30 September 2014
Six months ended Share Capital
30 September 2014 Share premium redemption Special Capital Revenue
(unaudited) capital account reserve reserve* reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2014 3,270 5,995 2,061 2,698 33,864 (7,952) 39,936
Net return after taxation for the
financial period - - - - (1,620) (480) (2,100)
Tender offer expenses - - - - (7) - (7)
At 30 September 2014 3,270 5,995 2,061 2,698 32,237 (8,432) 37,829
Year ended Share Capital
31 March 2014 Share premium redemption Special Capital Revenue
(audited) capital account reserve reserve* reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2013 4,359 5,995 972 2,698 50,159 (6,931) 57,252
Net return after taxation
for the year - - - - (3,216) (1,021) (4,237)
Tender offer and expenses (1,089) - 1,089 - (13,079) - (13,079)
At 31 March 2014 3,270 5,995 2,061 2,698 33,864 (7,952) 39,936
Six months ended Share Capital
30 September 2013 Share premium redemption Special Capital Revenue
(unaudited) capital account reserve reserve* reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2013 4,359 5,995 972 2,698 50,159 (6,931) 57,252
Net return after taxation for
the financial period - - - - (2,411) (627) (3,038)
At 30 September 2013 4,359 5,995 972 2,698 47,748 (7,558) 54,214
* The special reserve was created in September 1998, following a transfer from
the share premium account, to enable the Company to purchase its own shares.
The notes form part of these Financial Statements.
BALANCE SHEET (unaudited)
as at 30 September 2014
As at As at As at
30 September 31 March 30 September
2014 2014 2013
(unaudited) (audited) (unaudited)
£'000 £'000 £'000
Fixed assets
Investments at fair value through
profit or loss - - 47,024
Current assets
Investments at fair value through
profit or loss 35,447 37,735 -
Debtors 632 559 670
Cash at bank 2,549 2,395 7,171
38,628 40,689 7,841
Creditors - amounts falling due within
one year
Creditors and accruals (187) (222) (170)
Net current assets 38,441 40,467 7,671
Provision for liabilities and charges
Provision for bad debt* (612) (531) (481)
Total net assets 37,829 39,936 54,214
Share capital and reserves
Called–up share capital (see note 7) 3,270 3,270 4,359
Share premium account 5,995 5,995 5,995
Capital redemption reserve 2,061 2,061 972
Special reserve 2,698 2,698 2,698
Capital reserve 32,237 33,864 47,748
Revenue reserve (8,432) (7,952) (7,558)
Equity shareholders' funds 37,829 39,936 54,214
Net asset value - pence per Ordinary
share including current period revenue
(see note 3) 289.25p 305.35p 310.90p
* A provision has been made for 100% of the interest owing on the Company's
investment in PetroHunter 8.5% convertible debenture, on the grounds of
uncertainty that the payment will be received (six months ended 30 September
2013: 100%; year ended 31 March 2014: 100%).
The notes form part of these Financial Statements.
STATEMENT OF CASH FLOWS(unaudited)
for the six months ended 30 September 2014
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Investment income received - 1 145
Deposit interest received 5 8 16
Investment management fees paid (321) (487) (817)
Secretarial and administration fees
paid (44) (42) (92)
Other cash payments (135) (300) (428)
Net cash outflow from operating
activities (see note 10) (495) (820) (1,176)
Capital expenditure and financial
investment
Purchases of investments - (1,371) (14,528)
Sales of investments 646 5,338 27,273
Net cash inflow from capital
expenditure and financial investment 646 3,967 12,745
Net cash inflow before financing 151 3,147 11,569
Financing
Tender offer (19) - (13,063)
Net cash outflow from financing (19) - (13,063)
Increase/(decrease) in cash
(see note 11) 132 3,147 (1,494)
The notes form part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 30 September 2014
1. Basis of preparation
The Financial Statements are prepared under the historical cost convention, as
modified by the revaluation of fixed asset investments, and in accordance with
the Accounting Standard Board's Statement on Half Yearly Financial Reports,
applicable accounting standards in the United Kingdom, the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" issued by the AIC in January 2009, and the accounting
policies set out in the statutory financial statements for the year ended
31 March 2014. All of the Company's activities are continuing. The Financial
Statements are not prepared on a going concern basis. This accounting treatment
has no material impact on the Financial Statements.
2. Return per Ordinary share
The calculations of return per Ordinary share are based on 13,078,541 Ordinary
shares, being the weighted average number of shares in issue during the six
months ended at 30 September 2014 (six months ended 30 September 2013:
17,437,979; year ended 31 March 2014: 17,258,824).
3. Net asset value per Ordinary share
The calculations of net asset value per Ordinary share are based on 13,078,541
Ordinary shares being in issue at 30 September 2014 (30 September 2013:
17,437,979 Ordinary shares; 31 March 2014: 13,078,541 Ordinary shares).
4. Income
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Income from US investments:
Convertible debenture stocks -
unlisted 81 38 88
UK Government securities - listed - - 144
Common stock - listed - 1 1
Prior year income written–off - Plures
Technologies - (6) (6)
81 33 227
Other income:
Bank interest receivable 5 10 16
86 43 243
5. Other expenses
Six months to Six months to Year to
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Secretarial and administration
services 44 43 86
Auditor's remuneration 3 19 38
Directors' remuneration 55 59 117
Other expenses 60 161 258
162 282 499
Total fees paid to the Auditor for the period/year, all of which were charged
to revenue, comprised:
Audit services - statutory audit - current year - 16 33
Tax services 3 3 5
3 19 38
6. Investment management fee
The investment management fee is charged 100% to revenue. Investment management
fees of £323,000 (six months ended 30 September 2013: £350,000; year ended
31 March 2014: £677,000) have been charged to the Income Statement. At
30 September 2014, £56,000 (six months ended 30 September 2013: £56,000; year
ended 31 March 2014: £54,000) was due for payment to the Investment Manager in
respect of investment management fees.
Following shareholder approval at the General Meeting on 17 April 2013, the
terms of the Investment Management Agreement between the Company and the
Investment Manager were amended in order to reflect the modification of the
Company's investment objective and policy to better align the interests of the
shareholders and the Investment Manager during the managed wind-down period.
The Investment Manager is now paid a fixed monthly fee of $90,000.
A performance fee may also become payable at the end of each year and this is
charged 100% to capital. Under the revised terms, the hurdle for the
achievement of any performance fee will be a cash amount which must be returned
to shareholders before a performance fee can be earned (the "Cash Hurdle"). The
Cash Hurdle will be the audited NAV as at 31 March 2013 plus a notional accrual
(the "Accrual"), which will reflect the time value of money between 17 April
2013 and actual returns of cash in excess of the Cash Hurdle. The Investment
Manager will be entitled to 10% of any amounts returned to shareholders in
excess of the Cash Hurdle (including the Accrual). The Company and the
Investment Manager have agreed that the opening Cash Hurdle will be the audited
NAV as at 31 March 2013, in Sterling terms, and the Accrual will be 8% per
annum (compound) calculated on the opening Cash Hurdle. The total performance
fee payable will be capped at an amount equivalent to 10% of the NAV as at
31 March 2013. No performance fee has been accrued for the six months ended
30 September 2014 (six months ended 30 September 2013: £nil; year ended 31 March
2014: £nil).
In the event that the Company's portfolio is not fully realised by 31 March
2015, the monthly fees payable to the Investment Manager will be renegotiated
between the liquidators and the Investment Manager, taking into account the
Investment Manager's workload and the continuing alignment of interests at that
time, and it is anticipated that thereafter, continuation of a monthly fee will
be assessed and be terminable on a monthly basis. The Investment Manager's
current performance fee arrangements will endure throughout the members'
voluntary liquidation and are aligned with shareholders' interests in trying to
maximise the value of the remaining investments and to achieve this as quickly
as possible.
7. Called–up share capital
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Allotted, called–up and fully paid:
13,078,541 (30 September 2013:
17,437,979; 31 March 2014:
13,078,541) Ordinary shares of 25p
each 3,270 4,359 3,270
8. Share buybacks
During the period, no Ordinary shares were repurchased by the Company for
cancellation (six months ended 30 September 2013: nil Ordinary shares; year
ended 31 March 2014: 4,359,438 Ordinary shares). No Ordinary shares were
repurchased to be held in Treasury for the six months ended 30 September 2014
(six months ended 30 September 2013: nil Ordinary shares; year ended 31 March
2014: nil Ordinary shares).
9. Taxation
The Company is subject to corporation tax at 21% (six months ended 30 September
2013: 23%; year ended 31 March 2014: 23%). However, the available tax
deductible expenses (including substantial brought forward amounts) exceed the
taxable income of the Company and, as a result, there is no UK tax charge (six
months ended 30 September 2013: £nil; year ended 31 March 2014: £nil), other
than withholding tax suffered on foreign dividends of £nil (30 September 2013:
£nil; year ended 31 March 2014: £nil).
Due to the Company's status as an investment trust and the intention to
continue meeting the conditions required to obtain approval to retain that
status until such time as the Company enters voluntary liquidation, the Company
has not provided deferred tax on any capital gains or losses arising on the
revaluation or disposal of investments.
10. Reconciliation of net return before finance costs and taxation to net cash
outflow from operating activities
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net return before finance costs and
taxation (2,100) (3,038) (4,237)
Net capital return 1,620 2,411 3,216
Increase in provision for bad debt 81 38 88
Decrease in creditors and accruals (23) (193) (157)
Increase in prepayments and accrued
income (73) (38) (86)
Net cash outflow from operating
activities (495) (820) (1,176)
11. Reconciliation of net cashflow to net funds
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Increase/(decrease) in cash in period/
year 132 3,147 (1,494)
Effect of movement in exchange rates 22 (157) (292)
Movement in net funds 154 2,990 (1,786)
Net funds at beginning of period/year 2,395 4,181 4,181
Net funds at end of period/year 2,549 7,171 2,395
12. Related party transactions
Mr Russell Cleveland, President and CEO of RENN Capital Group, Inc., the
Company's Investment Manager, is considered a related party due to his
directorships of AnchorFree, Inc., Cover-All Technologies, Inc. and iSatori,
Inc. Mr Eric Stephens, Vice President of RENN Capital Group, Inc., was
considered a related party due to his directorship of Plures Technologies, Inc.
He ceased to be a director of Plures Technologies with effect from 4 April
2014.
RENN Capital Group, Inc. pays RP&C International an amount equal to 0.5% of the
net asset value of the Company each year and 5% of any incentive fee received
from the Company. The fees are compensation for management and advisory
services rendered to RENN Capital Group, Inc.
The amounts paid to the Investment Manager by the Company are disclosed in note 6.
13. Financial information
The financial information contained in this report does not constitute full
statutory accounts as defined in section 434 of the Companies Act 2006. The
financial information for the six months ended 30 September 2014 and
30 September 2013 has not been audited or reviewed by the Company's Auditor.
The information for the year ended 31 March 2014 has been extracted from the
latest published audited financial statements. Those financial statements have
been filed with the Registrar of Companies and include the report of the
Auditor which was unqualified and did not contain a statement under section 498(2)
or (3) of the Companies Act 2006.
INVESTMENT PORTFOLIO
as at 30 September 2014
Book % of net
Sector cost Fair value assets
US$'000 US$'000 £'000
Corporate investments
US unlisted convertible
debentures
PetroHunter Energy Oil and gas
exploration 2,100 73 45 0.1
Total US unlisted convertible
debentures 2,100 73 45 0.1
US unlisted convertible
preference shares
AnchorFree Wireless
communications 2,162 27,613 17,033 45.0
iSatori Personal
products 75 1 1 -
Total US unlisted convertible
preference shares 2,237 27,614 17,034 45.0
US unlisted warrants
PetroHunter Energy Oil and gas
exploration - - - -
Total US unlisted warrants - - - -
US listed Chinese equities
Tiger Media Advertising 2,422 270 167 0.5
Total US listed Chinese equities 2,422 270 167 0.5
US listed French equities
Flamel Technologies Pharmaceuticals 3,396 10,303 6,355 16.8
Total US listed French equities 3,396 10,303 6,355 16.8
US listed equities
Bovie Medical Healthcare services 3,767 6,384 3,938 10.4
Charles & Colvard Clothing and accessories 777 424 262 0.7
Cover-All Technologies Information technology 5,051 9,467 5,839 15.4
iSatori Personal products 9,562 2,924 1,804 4.8
PetroHunter Energy Oil and gas exploration 202 6 3 -
Total US listed equities 19,359 19,205 11,846 31.3
Total corporate investments 29,514 57,465 35,447 93.7
Net current assets 4,854 2,994 7.9
Provision for liabilities (992) (612) (1.6)
Net assets 61,327 37,829 100.0
COMPANY INFORMATION
Directors Custodian (UK)
Andrew Barker (Chairman) Bank of New York Mellon
Steven Bates One Canada Square
Alexandra Mackesy London E14 5AL
William Vanderfelt
Registered Office and Broker
Secretary
Winterflood Investment Trusts
Capita Sinclair Henderson The Atrium Building
Limited Cannon Bridge
Beaufort House 25 Dowgate Hill
51 New North Road London EC4R 2GA
Exeter EX4 4EP
Tel: 01392 412122
Investment Manager Auditor
RENN Capital Group, Inc. KPMG Audit Plc
Suite 210 LB59 Chartered Accountants
8080 North Central Expressway 15 Canada Square
Dallas, Texas 75206-1857 London E14 5GL
USA
Tel: 001 214 891 8294
Fax: 001 214 891 8291
www.rencapital.com
Corporate website Registrar
www.renaissanceusgrowth.co.uk Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Tel: 0871 664 0300 - calls cost 10 pence per
minute plus network extras (or 0044 208 639 3399 for
overseas enquires)
email: shareholderenquiries@capita.co.uk
www.capitaassetservices.com
Custodian (US)
Frost National Bank
8201 Preston Road
Suite 520
Dallas, Texas 75225
USA
Sources of further information
The Company's share price is listed in the Financial Times under "Investment
Companies". Copies of the Company's annual and half yearly reports, stock
exchange announcements and further information on corporate governance can be
obtained from the Company's corporate website, as detailed above.
Frequency of NAV publication
The Company's NAV is released to the London Stock Exchange on a weekly basis
and is published on the Company's website as detailed above.
25 November 2014
Neither the contents of the Company's website or the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
Copyright r 25 PR Newswire
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