RNS Number:3637T
Leisure & Media VCT PLC
29 April 2008
LEISURE & MEDIA VCT PLC
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS
The Directors announce the statement of results for the year ended 31 December
2007 as follows:
CHAIRMAN'S STATEMENT
I am pleased to report to you the Company's progress during 2007, and the
Board's plans for the future.
One new investment was completed during the year, of #500,000 in The Creative
Experience Company Limited. A number of follow-on investments were made in
existing portfolio companies.
While no realisations were achieved during 2007, it is expected that one or two
investments will be sold in the near future.
At the end of 2007 there were 15 investments in the portfolio, including the
following ten in Leisure Sectors:
* three health & fitness companies;
* three pub groups;
* one tourist attraction;
* a children's nursery company;
* a children's play centre business; and
* a bingo operator;
and the following five in Media Sectors:
* two print publishers;
* a music catalogue business;
* a radio and TV production company; and
* a sports consultancy business.
At year-end the net asset value ("NAV") per share was 90.0 pence, compared with
93.7 pence at the end of 2006, with the decrease largely due to the write-down
of the investment in Echo Publishing Limited, and the fall in the AIM share
price of Top Ten Holdings plc.
Together with dividends of 19.8 pence paid since inception, the total return
through the end of 2007 was 109.8 pence, compared with the initial 95.0 pence
raised, net of issue costs, in 2001 (before shareholder income tax reliefs).
This places your Company fifth in performance of the twelve private equity VCTs
launched in 2001-2002.
Since inception, the Company has realised the following investments, producing a
combined Internal Rate of Return ("IRR") of 19.4%:
Initial
investment Date Net Gain/
date realised Cost proceeds (loss) IRR
# # #
Renowned Holiday Aug 2001 Mar 2004 333,000 403,000 70,000 7.6%
Villages Limited
Dolphin Nurseries Jan 2003 Dec 2004 700,000 1,436,000 736,000 46.2%
Limited
Odyssey Clubs Group Feb 2002 Dec 2004 739,000 401,000 (338,000) -
Limited (1)
XN Checkout Holdings plc Oct 2001 Oct 2004 - 803,000 1,863,000 1,060,000 38.9%
(1) Mar 2005
Lindley Catering Limited Jul 2001 Jul 2005 604,000 1,727,000 1,123,000 32.0%
Brodie & Knight Limited Sep 2002 Jul 2005 656,000 320,000 (336,000) -
(1)
Reformed Spirits Company Dec 2003 Jan 2006 755,000 1,344,000 589,000 35.9%
Limited (1)
Top Ten Holdings plc (2) Oct 2003 Feb 2006 32,000 42,000 10,000 24.3%
Interactive Media Feb 2006 Dec 2006 300,000 - (300,000) -
Developments Limited (3)
Total realised investments 4,922,000 7,536,000 2,614,000 19.4%
Note:
(1) Cost and proceeds include equity, loans and interest thereon.
(2) Partial realisation of AIM quoted shares.
(3) Written off as winding-up proceedings begun in early 2007.
During 2007 uplifts were recorded in the value of Audio Network plc, British
Country Inns plc, Cross Border Limited and Kidspace Adventures Limited. The
value of Balance Leisure Limited was reduced, and the AIM price of bingo
operator Top Ten Holdings plc recorded a significant decline following the
impact of the smoking ban and new gambling regulations on its results and the
market's perception of the sector. In addition, we wrote off the entire value of
Echo Publishing Limited following unsuccessful efforts to bring the business to
profitability or to sell it.
With the completion of the investment in The Creative Experience Company Limited
during 2007, the Company achieved the required 70% level of VCT-qualifying
investments in respect of the C share proceeds raised in 2005.
With no realisations during 2007, the Company completed a #500,000 bank loan
facility to manage its short-term investment and expense requirements; #300,000
was drawn at
year-end under this facility.
As new investments are no longer being sought, your Board has undertaken a
review of the Company's long-term position. Proceeds of realisations will not be
reinvested but will, after repayment of the Company's debt, be used for the
payment of capital dividends, and for appropriate repurchases of shares as they
become available.
During the last year the Company's share price has reflected a significant
discount to NAV, due to the absence of a secondary market and the low level of
free cash to permit share buybacks by the Company. At its March 2008 Board
meeting the Board approved up to #250,000 for the repurchase of shares from
future realisation proceeds, to help reduce this discount and allow shareholders
who wish to, an opportunity to sell shares to the Company.
In order to reduce the Company's operating expenses the Board has taken the
following steps:
* Reduced the size of the Board from four Directors to two, and
reduced the fees of the remaining two, resulting in annual savings of about
#33,000;
* Obtained a proposal for reduced management and other fees from
the Investment Manager, which is being finalised; and
* Reduced printing and other costs as far as possible.
As a result of these changes, Ted Tuppen and Nick Irens are stepping down from
the Board at the 2008 AGM. I would like to thank them for their invaluable
advice over the past seven years.
Your Board and Investment Manager are investigating the best route for the
ultimate winding-up of the Company and return of capital to shareholders. It is
expected that, unless agreement is reached to merge with another VCT (which is
at present considered unlikely) the Directors will recommend that the Company be
placed into voluntary liquidation at its 2009 AGM. This would lift all of the
VCT regulations applying to the Company, and permit a low-cost winding up, which
would need to be completed within three years of its commencement and which,
therefore, would maximise the amount returned to shareholders.
I look forward to welcoming you to the Company's AGM, to be held on 30th May
2008 at 3:00 p.m., in the Board Room, Ground Floor, Ryder Court, 14 Ryder
Street, London, SW1Y 6QB
Andrew Wates
Chairman
25 April 2008
INCOME STATEMENT
for the year ended 31 December
2007 2006
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Losses on investments at fair - (97) (97) - (249) (249)
value
Dividends and interest 125 - 125 157 - 157
Investment management fees (49) (147) (196) (62) (186) (248)
Operating expenses (158) - (158) (160) - (160)
Deficit on ordinary (82) (244) (326) (65) (435) (500)
activities before finance
costs and taxation
Interest payable and similar (2) (6) (8) - - -
charges
Deficit on ordinary (84) (250) (334) (65) (435) (500)
activities before taxation
Taxation on ordinary - - - - - -
activities
Deficit per ordinary (84) (250) (334) (65) (435) (500)
activities after taxation
pence pence pence pence pence pence
Deficit per Ordinary Share (0.9) (2.8) (3.7) (0.7) (4.7) (5.4)
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital columns are prepared under
guidance published by the Association of Investment Companies ("AIC").
There are no gains and losses for the year other than those passing through the
profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing
operations.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December
Capital
Share Share Special redemption Capital Revenue
capital premium reserve reserve reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Year ended 31 December
2007
1 January 2007 91 960 6,044 9 1,764 (288) 8,580
Net deficit after taxation - - - - (250) (84) (334)
for the year
31 December 2007 91 960 6,044 9 1,514 (372) 8,246
Year ended 31 December
2006
1 January 2006 95 960 6,869 5 2,199 (223) 9,905
Share buy-backs in the (4) - (355) 4 - - (355)
year
Net deficit after taxation - - - - (435) (65) (500)
for the year
Capital dividend paid - - (470) - - - (470)
31 December 2006 91 960 6,044 9 1,764 (288) 8,580
BALANCE SHEET
as at 31 December
2007 2006
#'000 #'000
Fixed assets
Investments at fair value through profit or loss 8,592 8,448
Current assets
Debtors 61 35
Cash at bank 5 215
66 250
Creditors: amounts falling due within one year
Bank overdraft (9) -
Creditors (103) (118)
Bank loan (300) -
(412) (118)
Net current (liabilities)/assets (346) 132
Total assets less current liabilities 8,246 8,580
Capital and reserves
Called-up share capital 91 91
Share premium 960 960
Special reserve 6,044 6,044
Capital redemption reserve 9 9
Capital reserve - realised 1,515 1,668
- unrealised (1) 96
Revenue reserve (372) (288)
Equity shareholders' funds 8,246 8,580
pence pence
Net asset value per Ordinary Share 90.0 93.7
CASH FLOW STATEMENT
for the year ended 31 December
2007 2006
#'000 #'000
Operating activities
Investment income received 38 80
Deposit interest received 10 20
Investment management fees paid (197) (229)
Other expenses paid (157) (160)
Net cash outflow from operating activities (306) (289)
Servicing of finance
Interest paid and similar charges (5) -
Capital expenditure and financial investment
Purchases of fixed asset investments (1,332) (2,405)
Purchases of Treasury Bills (1,689) (6,595)
Proceeds from the sale of fixed asset investments - 1,309
Proceeds from repayment of short-term loan from investee company - 117
Proceeds from the sale of Treasury Bills 2,830 6,345
Net cash outflow from capital expenditure and financial investment (191) (1,229)
Dividends paid
Capital dividend paid - (470)
Net cash outflow before financing (502) (1,988)
Financing
Share buy-backs in year (17) (338)
Bank loan 300 -
Net cash inflow/(outflow) from financing 283 (338)
Decrease in cash and cash equivalents (219) (2,326)
Notes:
1) The above results have been prepared using the accounting standards and
policies adopted at the previous year-end.
2) Dividends and Interest
2007 2006
#'000 #'000
Income from investments
UK dividend income 6 8
Fixed interest securities income 59 29
Fixed interest securities income reinvested 50 100
115 137
Other income
Deposit interest 10 20
Total income 125 157
Total income comprises
Dividends 6 8
Interest 119 149
125 157
3) The Board does not recommend the payment of a final dividend for the year
ended 31 December 2007 (2006: none).
4) The revenue return per Ordinary Share is based on the net revenue deficit on
ordinary activities after taxation for the year of #84,000 (2006: #65,000) and
on 9,158,072 (2006: 9,300,777) Ordinary Shares, being the weighted average
number of Ordinary Shares in issue throughout the year.
The capital return per Ordinary Share is based on the net capital deficit for
the year of #250,000 (2006: #435,000) and on 9,158,072 (2006: 9,300,777)
Ordinary Shares, being the weighted average number of Ordinary Shares in issue
throughout the year.
The total return per Ordinary Share is based on the net deficit for the year of
#334,000 (2006: #500,000) and on 9,158,072 (2006: 9,300,777) Ordinary Shares,
being the weighted average number of Ordinary Shares in issue throughout the
year.
5) The net asset value per Ordinary Share is based on net assets at 31 December
2007 of #8,246,000 (2006: #8,580,000) and on 9,158,072 (2006: 9,158,072)
Ordinary Shares being the issued share capital at that date.
6) The financial information set out above does not constitute the Company's
statutory financial statements for the year ended 31 December 2007, but is
derived from and has been prepared on the same basis as those financial
statements.
The statutory accounts for the year ended 31 December 2007 will be delivered to
the Registrar of Companies following the Company's Annual General Meeting.
The Annual General Meeting will be held on Friday 30 May 2008 at 3:00pm in the
Board Room, Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. The
Annual Report will be posted to shareholders and those individuals on the
Company's mailing list on 29 April 2008 and will also be available on request
from the Company Secretary, J O Hambro Capital Management Limited, at Ground
Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB.
The above results for the year ended 31 December 2007 are an abridged version of
the statutory accounts for the year ended 31 December 2007. The auditors have
reported on the 31 December 2007 year-end accounts and their report was
unqualified and did not include references to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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