TIDMSVC2
SPARK VCT 2 PLC
HALF YEARLY FINANCIAL REPORT
FINANCIAL HIGHLIGHTS
Per ordinary share(pence) 30.06.10 31.12.09 30.06.09
Net asset value 30.0 31.0 33.4
Dividends
Dividend paid (1) - - -
Cumulative dividend (2) 6.9 6.9 6.9
Total return per share (3)
SPARK VCT 2 plc 36.9 37.9 40.3
Return including tax benefits (5) 56.9 57.9 60.3
Total return per 100p invested (4)
SPARK VCT 3 plc 47.3 48.8 52.3
Return including tax benefits (5) 67.3 68.8 72.3
(1) Dividend paid in the financial year ended on the date stated.
(2) Cumulative dividends paid by SPARK VCT 2 plc.
(3) Net asset value plus cumulative dividend per share to ordinary shareholders in
SPARK VCT 2 plc since the launch of the Company (then called Quester VCT 4 plc) in
November 2000.
(4) Total return to former shareholders in SPARK VCT 3 plc, launched inDecember 2001
(under the name Quester VCT 5 plc), which was merged with SPARK VCT 2 plc in November
2008. The share exchange ratio for former shareholders in SPARK VCT 3 plc was 1.4613.
The total return stated is applicable only to subscribers of shares in Quester VCT 5
plc at the time of launch of the Companyin 2001-2. It does not represent the return
to subsequent subscribers or purchasers of shares.
(5) Return after 20% income tax relief but excluding capital gains deferral.
The Directors propose an interim dividend of 1.0 pence per share for the year ending
31 December 2010.
The Interim management report comprises the Chairman's statement, the Investment
manager's report, the Fund summary and note 8 to the condensed financial statements.
CHAIRMAN'S STATEMENT
In the last annual report we indicated that for 2010 the Company's primary
objective would be to ensure that the portfolio remains stable, but that there
would now be a greater emphasis on positioning some of the more developed
companies for an exit and, provided conditions develop favourably, making a
start on turning some of the more significant assets into cash.
We can now report useful progress in this direction.
Realisations have been achieved of two of the more significant investments
within the portfolio, Portrait Software plc and Secerno Limited, together
producing net proceeds of GBP1,651,000 (including amounts retained in escrow) and
a profit of GBP687,000 over the equivalent carrying value at 31 December 2010.
With the inclusion of certain other investment sales and cash recoveries,
realisations in the half year have produced total proceeds of GBP1,927,000
(including amounts retained in escrow) and a profit of GBP748,000 over the
previous carrying value. This has enabled the Board to declare an interim
dividend of 1.0p per share.
Recent trading results of the more mature companies within the portfolio have
been generally encouraging. A number of these companies are now reaching the
stage at which they can appropriately be considered as acquisition candidates
by major corporates looking for new sources of growth for their own
businesses. Members of the management team are alive to these opportunities
and are working with the companies concerned to make the best of the
opportunities.
Results for the six months ended 30 June 2010
The movement in net assets and net assets per share in the six months to 30
June 2010 is summarised in the table below.
Venture Net
Capital Current Pence
Investments Assets Total per
GBP'000 GBP'000 GBP'000 Share
Net asset value at 31 December 2009 17,743 6,286 24,029 31.0
Income - 26 26 -
Operating expenses - (424) (424) (0.5)
Net gain on disposal 734 14 748 1.0
Net loss on valuation of investments (1,166) - (1,166) (1.5)
Net investment (1,335) 1,335 - -
Net assets before dividends and share buybacks 15,976 7,237 23,213 30.0
Dividends paid - - - -
Share buybacks - (30) (30) -
Net asset value at 30 June 2010 15,976 7,207 23,183 30.0
The net gain of GBP748,000 on realisation of investments during the half year
(1.0p per share) is offset by net operating expenses (income less operating
expenses) of GBP398,000 (0.5p per share) and a downward movement in valuation of
remaining investments of GBP1,166,000 (1.5p per share), the latter reflecting the
stringent approach that has been taken to the further funding of certain early
stage investments within the portfolio.
Overall, the net result for the half year is a fall in net assets per share of
3%, from 31.0p at 31 December 2009 to 30.0p at 30 June 2010.
The total return to shareholders from the launch of the Company in November
2000 to 30 June 2010, inclusive of all dividends paid, now amounts to 36.9p per
share before taking account of tax reliefs.
The total return to original shareholders in SPARK VCT 3 plc from its launch in
December 2001 (under the name Quester VCT 5 plc) to 30 June 2010, inclusive of
all dividends paid, amounts to 47.3p per share before taking account of tax
reliefs.
Dividend
In the last Chairman's statement we set out the results of the Board's review
of the future strategy of the Company, originally announced in January. In
relation to dividend policy, it was decided that in future priority should be
given to the payment of dividends as and when realisations are achieved. In
particular, subject to any tax or regulatory constraints, 50% of the proceeds
from any realisations from within the existing venture capital portfolio would
be regarded as available for distribution.
The realisations achieved in the half year have enabled the Board to declare an
interim dividend of 1.0p per share (a total of GBP773,000). The dividend will be
payable on 24 September 2010 to shareholders on the register on 27 August 2010.
Net proceeds of realisation of GBP1,154,000 will be retained. It remains the
Company's policy to continue to support those of the existing investee
companies that are considered to have strong growth prospects, to enable them
to develop long enough to allow an optimal realisation.
Outlook
The Board believes that the present portfolio of venture capital investments
offers the prospect of significant capital growth from present levels, provided
the investee companies can maintain stability and there is no major
deterioration in business and financial conditions.
It is encouraging that the realisations achieved in this first half of the year
have shown useful gains over the previous carrying values. There is now clear
evidence of an improving M&A market and an appetite among major corporates for
strategic acquisition opportunities among venture-backed companies.
We are hopeful that it may be possible to announce further progress in
realisations by the date of release of the annual report. Any final dividend
will be dependent on actual achievement in this respect.
As regards the longer-term future of the Company, the conclusion of the Board's
strategy review was that the Company should continue as a Venture Capital Trust
and that, within the parameters of its existing investment policy, there should
in future be a focus on investments selected with a view to yield as well as
capital stability. Accordingly, as and when funds are available for new
investment, the SPARK management team will seek investments in companies which
are already revenue generating with a stable business base, and are able to
deliver a flow of dividends or be capable of exit within a 3-year period. The
start of this process will, however, depend on the timing of more substantial
realisation proceeds from within the existing portfolio.
Robert Wright
Chairman
12 August 2010
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm to the best of their knowledge that:
* the condensed financial statements contained within the Half-Yearly Financial
Report have been prepared in accordance with the Accounting Standards Board's
Statement 'Half-Yearly Financial Reports'; and
* the interim management report includes a fair review of the information
required by Disclosure and Transparency Rule 4.2.7R of important events that
have occurred during the first six months of the financial year and their
impact on the condensed financial statements, and a description of the
principal risks and uncertainties for the remainder of the financial year; and
* the condensed financial statements (note 8) include a fair review of the
information concerning related parties transactions as required by Disclosure
and Transparency Rule 4.2.8R.
The Half-Yearly Financial Report was approved by the Board on 12 August 2010 and the
above responsibility statement was signed on its behalf by the Chairman.
INVESTMENT MANAGER'S REPORT
Over the half year to 30 June 2010 the activity of the Investment Manager has
been conducted against the background of the strategy agreed with the Board at
the beginning of the year and summarised in the Chairman's statement in the
last annual report.
The strategy review undertaken at that time took into account that most of
SPARK VCT 2's existing investments had been held in the portfolio for a long
time, with successful realisations of investments having been few in number and
dividend payments to shareholders having been very limited. At the time of the
annual report we said it was too soon to predict the timing of any exits but
that the shape of possible exits from a number of companies was starting to
become clearer. In line with the new strategy described in the Chairman's
statement, the intention would be to give priority to the payment of dividends
as and when realisations were achieved.
Under the new strategy, the key points in relation to investment management
are:
It will be the policy to continue to support those of the existing investee
companies that are considered to have strong growth prospects, to enable them
to develop long enough to allow an optimal realisation;
As and when funds are available for new investment, the SPARK management team
will seek to take advantage of opportunities available at this current stage of
the economic cycle, particularly opportunities to participate in later-stage
financing rounds of venture-backed companies within the existing sector focus.
The aim will be to seek investments in companies which are already revenue
generating with a stable business base, and are able to deliver a flow of
dividends or be capable of exit within a 3-year period.
Realisations
During the half year significant steps have been taken in the implementation of
this strategy, in particular towards the realisation of existing portfolio
investments. We are pleased to report two significant and profitable
realisations:
Portrait Software plc: this company, specialising in customer interaction
optimisation software, was acquired by Pitney Bowes in an agreed takeover offer
at 31p per share announced on 10 June 2010 - the sale of SPARK VCT2's shares
under the offer and in earlier market transactions produced proceeds of GBP
1,160,000 against a carrying value at 31 December 2009 of GBP736,000, resulting
in a profit of GBP424,000 in the half year to 30 June 2010;
Secerno Limited: this Oxford-based data security business was sold to Oracle
Corporation in a private transaction completed in June- this produced net
proceeds of GBP492,000 (including a proportion retained in escrow), against a
carrying value at 31 December 2009 of GBP229,000, resulting in a profit in the
half year to 30 June 2010 of GBP263,000.
The opportunity has also been taken to realise cash from certain other quoted
venture capital investments, with the sale of the entire holding in Quadnetics
Group plc and part of the holding in Celldex Therapeutics, Inc. Overall,
proceeds generated from these transactions, together with certain other cash
recoveries, have totalled GBP1,927,000 in the half year to 30 June 2010.
These realisations have enabled the Board to declare an interim dividend of
1.0p per share.
Progress of investments
In the Business review in the last annual report we described SPARK VCT 2's
venture capital investments as falling into four categories: quoted venture
capital investments and three categories of unquoted investments, namely
"maturing" venture capital investments, "developing" venture capital
investments and "early stage" investments. Following the realisations referred
to above, the proportions that investments in each category represent in the
venture capital portfolio by valuation at 30 June 2010 are as follows:
Percent. of
venture capital
portfolio by
valuation
Quoted and "maturing" venture capital investments:
- companies whose shares are traded on AIM, NASDAQ or
Frankfurt Stock Exchange
- unquoted companies with stable and growing revenue
streams, achieving profitable trading or very close to it,
and with stable cash positions
examples: Elateral Holdings Limited, Imagesound plc, Sift
Group Limited, UniServity Limited, Workshare Limited, Xtera
Communications, Inc., and quoted companies Allergy
Therapeutics plc (AIM), Celldex Therapeutics, Inc.(NASDAQ) 60.5%
and MediGene AG (Frankfurt)
"Developing" venture capital investments:
- unquoted companies with developed business models and
growing revenue streams, though still facing uncertainties,
and breaking through into cash-flow positive trading
examples: Antenova Limited, Cluster Seven Limited, Level 12.6%
Four Software Limited
"Early stage" investments
- unquoted companies still establishing their business
model or, in the case of businesses in the life sciences
sector, still at the product development stage
examples: Academia Networks Limited, Celona Technologies
Limited, Celoxica Holdings plc, Haemostatix Limited, Isango!
Limited, Oxford Immunotec Limited, Perpetuum Limited,
Vivacta Limited, We7 Limited, Xention Limited
26.9%
The percentage of the venture capital portfolio now represented by quoted and
"maturing" venture capital investments provides a reasonably stable base to the
portfolio and, taking into account the current business progress of the most
significant of the early stage investments, means that the net asset value of
SPARK VCT 2 is less exposed than previously to the risks associated with early
stage investment.
Significant recent business developments within the portfolio are summarised
below:
* Workshare Limited continues to enjoy very high market penetration in the
legal IT market for its document comparison software. New management has
undertaken some significant restructuring, with a particular focus on the sales
model and distribution network, reducing the overall level of operating cost
and improving profitability, while the company maintains a robust cash
position.
* Xtera Communications, Inc: this privately-held US company, into which SPARK
VCT 2's investment in Azea Networks was merged in 2007, is making successful
commercial progress based in part on the technology acquired with Azea. It has
recently announced a new contract to upgrade part of Global Crossing's Atlantic
crossing network, linking New York and the UK, to meet growing customer demand
for broadband services. It has also acquired an additional company in the UK,
to reinforce its position in providing high capacity solutions for submarine
and terrestrial fibre cable systems.
* UniServity Limited:following management changes towards the end of last year
and a dramatic reduction in the cost base, financial performance has
significantly improved. Sales have remained ahead of budget despite
uncertainty about policy changes and public procurement following the change of
Government, and profitability is now strong and consistent. After a successful
launch of the 'parent portal' product, resources are now being concentrated on
completing the build of a new technology platform ready for launch at the
beginning of the new year.
* Oxford Immunotec Limited has continued to show significant growth in sales,
both in the United States and Europe, with the establishment of the company's
own analytical laboratory in Massachusetts having proved to be a key step.
Details have been announced of the US$25 million Series D financing closed in
July 2009, backed by specialist US investors New Leaf Venture Partners and
Kaiser Permanente Ventures and bringing their substantial experience in
building successful and innovative high-value diagnostics companies, which has
put the company in a position of financial strength from which to invest for
the future.
* Elateral Holdings Limited had another very successful year to 31 March 2010
delivering 17% revenue growth and a substantial improvement in EBITDA margin.
New client wins for the year included NetApp and major customers Coca Cola and
SAP renewed their contracts, taking additional services and territorial
licences at the same time.
* Level Four Software Limited has seen sales growth of 35% in its year to 30
June 2010 and has reached profitability: it continues to show impressive growth
in the range of its customer contacts within the banking industry for its ATM
testing tools business, and potential for further expansion both geographically
and into other sectors.
Follow-on funding provided to existing portfolio companies in the half year has
been limited to a total of GBP532,000, including GBP261,000 advanced to Celona
Technologies Limited to provide additional working capital, GBP199,000 to Oxford
Immunotec Limited as the second tranche of the Series D financing referred to
above, GBP57,000 advanced to Sift Group Limited in a loan instrument with an
attractive coupon (alongside the company's management and SPARK's syndicate
partner) and GBP15,000 to Haemostatix Limited to support product development.
Against the background of the overall strategy for SPARK VCT 2 referred to
above, and with the growing maturity of some of the key investments, members of
the SPARK management team are increasingly focused on working with portfolio
company managements on positioning the companies as attractive acquisition
candidates for major corporates. A number of the companies are now reaching
the stage at which a transaction of this type can realistically be planned for
some time over the next two years, enabling the businesses concerned to be
taken forward to the next stage of growth under new ownership and achieving
cash realisations for SPARK VCT 2.
Subject to no deterioration in business and financial conditions, we expect to
be able to announce a number of positive developments in this respect by the
date of release of the annual report.
Valuation changes
Valuations of the unquoted investments have been determined under the
application of the International Private Equity and Venture Capital Valuation
Guidelines. The quoted venture capital investments (shares traded on AIM, the
Frankfurt stock exchange and NASDAQ) have been valued at their bid prices at 30
June 2010.
A downward revaluation of investments of GBP1,166,000 has been recorded for the
half year, including GBP948,000 in respect of the early stage investments and GBP
218,000 in respect of quoted venture capital investments.
Principal risks and uncertainties
As a Venture Capital Trust the Company invests in unquoted and AIM-traded UK
companies in accordance with its investment policy. In addition to its venture
capital porfolio, the Company maintains liquidity balances in the form of cash
held for follow-on financing and new venture capital investment and debtors and
creditors that arise directly from its operations. Its principal risks are
therefore market risk, credit risk and liquidity risk. Other risks faced by the
Company include economic, loss of approval as a VCT, investment and strategic,
regulatory, reputational, operational and financial risks. These risks, and the
ways in which they are managed, are described in more detail in the Company's
Annual Report and Accounts for the year ended 31 December 2009. The Company's
principal risks and uncertainties have not changed materially since the date of
that report.
Outlook
Earlier evidence of an improving M&A market is confirmed not only by the
transactions completed by SPARK VCT 2 in the year to date but also by
transactions seen elsewhere, with major corporates looking for growth now
clearly interested in strategic acquisition opportunities among venture-backed
companies.
As long as business and financial conditions remain stable, we believe that
opportunities should emerge during the remainder of the current year and over
2011 and 2012 for significant realisations and the extraction of value for
SPARK VCT 2 shareholders.
This will enable both the distribution of substantial amounts of cash by way of
dividend and a start to be made on a programme of investment in new qualifying
investments: in line with the new strategy, this will be focused on companies
more advanced in their development and representing relatively lower risk
opportunities.
SPARK Venture Management Limited
Manager
12 August 2010
Fund summary as at 30 June 2010
Accounting
Cost (1) Valuation Equity % of fund
Industry sector GBP'000 GBP'000 % held by value
Fifteen largest venture capital investments
Workshare Limited TMT 2,947 3,076 10.2% 13.3%
Xtera Communications, Inc. TMT 3,191 1,779 1.3% 7.7%
UniServity Limited TMT 1,692 1,692 28.7% 7.3%
Oxford Immunotec Limited Healthcare 2,729 1,545 6.2% 6.8%
Elateral Holdings Limited (2) TMT 479 1,161 13.3% 5.0%
Level Four Software Limited TMT 795 795 7.3% 3.4%
Cluster Seven Limited TMT 845 765 5.8% 3.3%
Vivacta Limited Healthcare 889 732 4.7% 3.2%
Sift Group Limited TMT 1,021 704 8.9% 3.0%
Imagesound plc TMT 489 489 0.5% 2.1%
Xention Limited Healthcare 2,438 451 6.9% 1.9%
Antenova Limited TMT 1,718 448 6.2% 1.9%
Celona Technologies Limited TMT 3,120 409 10.3% 1.8%
Haemostatix Limited Healthcare 328 328 7.7% 1.4%
MediGene AG Frankfurt Healthcare 797 325 0.4% 1.4%
23,478 14,699 63.5%
Other venture capital investments
Celldex Therapeutics, Inc. NASDAQ Healthcare 1,233 252 0.3% 1.1%
Allergy Therapeutics plc AIM Healthcare 795 195 0.6% 0.8%
Isango! Limited TMT 750 188 11.5% 0.8%
Perpetuum Limited TMT 479 146 4.4% 0.6%
Celoxica Holdings plc (2) TMT 208 121 3.7% 0.5%
Academia Networks Limited TMT 44 120 1.7% 0.5%
TeraView Limited Healthcare 1,064 100 4.8% 0.4%
Other investments: valuations less than GBP100,000 (5 investments) 1,049 155 0.7%
5,622 1,277 5.4%
Total venture capital investments 29,100 15,976 68.9%
Total unquoted venture capital investments 26,275 15,204 65.6%
Total quoted venture capital investments 2,825 772 3.3%
Total investments 29,100 15,976 68.9%
Cash and other net assets 7,207 7,207 31.1%
Net assets 36,307 23,183 100.0%
(1) Amounts shown as accounting cost represent acquisition cost in the case of
investments originally made by the Company and/or the valuation attributed to
investments acquired from SPARK VCT 3 plc at the date of the merger in 2008,
plus any subsequent acquisition cost, as reduced in certain cases (2) by
amounts written off as representing an impairment in value.
(2) Cost reduced by amounts written off as representing an impairment in value
(Celoxica Holdings plc reduction of GBP1,250,000 and Elateral Holdings Limited of
GBP676,000).
Income statement
Six months to 30 June Six months to 30 June Year to 31 December 2009
2010 (unaudited) 2009 (unaudited) 2009 (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on valuation of investments at
fair value through profit or loss 3 - (1,166) (1,166) - (2,022) (2,022) - (3,950) (3,950)
Gain on disposal of investments
at fair value through profit or loss 3 - 748 748 - 10 10 - 188 188
Income 26 - 26 61 - 61 114 - 114
Investment management fee (289) - (289) (329) - (329) (512) - (512)
Other expenses (135) - (135) (129) - (129) (260) - (260)
Loss on ordinary activities before
taxation (398) (418) (816) (397) (2,012) (2,409) (658) (3,762) (4,420)
Tax on loss on ordinary activities - - - - - - - - -
Loss on ordinary activities after
taxation (398) (418) (816) (397) (2,012) (2,409) (658) (3,762) (4,420)
Basic and fully diluted loss per
share 4 (0.5)p (0.5)p (1.0)p (0.5)p (2.6)p (3.1)p (0.9)p (4.8)p (5.7)p
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 under guidance published by the Association of Investment Companies.
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.
There are no gains and losses for the period other than those passing through
the income statement of the Company.
The accompanying notes are an integral part of this statement.
Balance sheet
30 June 2010 31 December 2009 30 June 2009
(unaudited) (audited) (unaudited)
Notes GBP'000 GBP'000 GBP'000
Fixed assets
Investments at fair value through profit or loss 5 15,976 17,743 19,045
Current assets
Debtors 1,250 282 903
Cash at bank 6,204 6,136 6,310
7,454 6,418 7,213
Creditors: amounts falling due within one year (247) (132) (158)
Net current assets 7,207 6,286 7,055
Net assets 23,183 24,029 26,100
Capital and reserves
Called-up equity share capital 773 775 780
Share premium account 339 339 339
Capital redemption reserve 91 89 84
Special reserve 19,717 20,056 20,305
Investment holding losses (13,124) (12,962) (11,154)
Merger reserve 12,615 12,615 12,615
Profit and loss account 2,772 3,117 3,131
Total equity shareholders' funds 23,183 24,029 26,100
Net asset value per share 6 30.0p 31.0p 33.4p
The accompanying notes are an integral part of this statement.
Cash flow statement
Six months Six months
to Year to to
30.06.10 31.12.09 30.06.09
(unaudited) (audited) (unaudited)
Note GBP'000 GBP'000 GBP'000
Net cash (outflow)/inflow from operating activities 7 (1,251) 159 (175)
Financial investment
Purchase of venture capital investments (532) (1,335) (578)
Sale of venture capital investments 1,867 84 -
Amounts recovered from investments previously written off 14 235 10
Total net financial investment 1,349 (1,016) (568)
Equity dividends paid - - -
Financing
Buyback of ordinary shares (30) (146) (86)
Increase/(decrease) in cash for the period 68 (1,003) (829)
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash for the period 68 (1,003) (829)
Net funds at the start of the period 6,136 7,139 7,139
Net funds at the end of the period 6,204 6,136 6,310
The accompanying notes are an integral part of this statement.
Net funds comprise cash at bank and on short-term deposit.
Reconciliation of movements in shareholders' funds
Six months to 30 June 2010
Called-up Profit
equity Share Capital Investment and
share premium redemption Special holding Merger loss
capital account reserve reserve losses reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2010 775 339 89 20,056 (12,962) 12,615 3,117 24,029
Shares purchased for cancellation (2) - 2 (30) - - - (30)
Realisation of prior years' net unrealised
losses on investments - - - - 1,004 - (1,004) -
Transfer from special reserve to profit and
loss account - - - (309) - - 309 -
Investment holding losses on valuation of
investments - - - - (1,166) - 1,166 -
Loss on ordinary activities after taxation - - - - - - (816) (816)
Dividends - - - - - - - -
At 30 June 2010 773 339 91 19,717 (13,124) 12,615 2,772 23,183
Year to 31 December 2009
At 1 January 2009 785 339 79 21,196 (9,937) 12,615 3,518 28,595
Shares purchased for cancellation (10) - 10 (146) - - - (146)
Realisation of prior years' net
unrealised losses on investments - - - - 925 - (925) -
Transfer from special reserve to profit
and loss account - - - (994) - - 994 -
Investment holding losses on valuation
of investments - - - - (3,950) - 3,950 -
Loss on ordinary activities after taxation - - - - - - (4,420) (4,420)
Dividends - - - - - - - -
At 31 December 2009 775 339 89 20,056 (12,962) 12,615 3,117 24,029
Six months to 30 June 2009
At 1 January 2009 785 339 79 21,196 (9,937) 12,615 3,518 28,595
Shares purchased for cancellation (5) - 5 (86) - - - (86)
Realisation of prior years' net unrealised
losses on investments - - - - 805 - (805) -
Transfer from special reserve to income
statement - - - (805) - - 805 -
Investment holding losses on valuation of
investments - - - - (2,022) - 2,022 -
Loss on ordinary activities after taxation - - - - - - (2,409) (2,409)
Dividends - - - - - - - -
At 30 June 2009 780 339 84 20,305 (11,154) 12,615 3,131 26,100
Notes
1 The Financial Statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments, and in
accordance with applicable UK accounting standards and the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' issued by the Association of Investment Companies in
January 2009.
2 The total reserves available for distribution by way of a dividend is
GBP9,365,000 (31 December 2009: GBP10,211,000, 30 June 2009 GBP12,282,000), being made
up of the Special reserve and Profit and loss account less Investment holding losses.
3 The overall gain/(loss) on investments at fair value through profit or loss
disclosed in the profit and loss account is analysed as follows:
Six months to Six months to Year to
30.06.10 30.06.09 31.12.09
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Loss on valuation of investments
at fair value through profit or loss
Net loss on valuation of investments (1,166) (2,022) (3,950)
Write-off of investments - - -
(1,166) (2,022) (3,950)
Gain/(loss) on disposal of investments at fair value through profit or loss
Net gain/(loss) on disposal 734 - (47)
Recoveries made in respect of
investments previously written off 14 10 235
748 10 188
(418) (2,012) (3,762)
'Net gain/(loss) on disposal' represents the difference between proceeds
received and the carrying values of those investments sold during the period.
4 The revenue loss per share of 0.5p (30 June 2009: loss 0.5p and 31 December
2009: loss 0.9p) is based on the revenue loss on ordinary activities after tax
of GBP398,000 (30 June 2009: loss GBP397,000 and 31 December 2009: loss GBP658,000)
and on the weighted average number of ordinary shares in issue during the
period of 77,501,217 (30 June 2009: 78,023,615 and 31 December 2009: 77,968,095).
The capital loss per share of 0.5p (30 June 2009: loss 2.6p and 31 December 2009:
loss 4.8p) is based on the capital loss on ordinary activities after tax of GBP418,000
(30 June 2009: loss GBP2,012,000 and 31 December 2009: loss GBP3,762,000) and on the
weighted average number of ordinary shares in issue during the period of 77,501,217
(30 June 2009: 78,023,615 and 31 December 2009: 77,968,095).
The total loss per share of 1.0p (30 June 2009: loss 3.1p and 31 December 2009:
loss 5.7p) is based on the loss on ordinary activities after tax of GBP816,000
(30 June 2009: loss GBP2,409,000 and 31 December 2009: loss GBP4,420,000) and on
the weighted average number of ordinary shares in issue during the period of
77,501,217 (30 June 2009: 78,023,615 and 31 December 2009: 77,968,095).
5 Movements in investments during the six months ended 30 June 2010 are as follows: Venture
capital
investments
GBP'000
Cost at 1 January 2010 30,705
Investment holding losses at 1 January 2010 (12,962)
Valuation at 1 January 2010 17,743
Movements in the period:
Purchases at cost 532
Disposals
- proceeds (1,867)
- net gains on disposal 734
Net loss on valuation of investments (1,166)
Valuation at 30 June 2010 15,976
Book cost at 30 June 2010 29,100
Investment holding losses at 30 June 2010 (13,124)
Valuation at 30 June 2010 15,976
Amounts shown as cost represent acquisition cost, less any reduction made on
account of impairment in value.
6 The net asset value per share as at 30 June 2010 of 30.0p (31 December 2009:
31.0p and 30 June 2009: 33.4p) is based on net assets of GBP23,183,000 (31 December
2009: GBP24,029,000 and 30 June 2009: GBP26,100,000) divided by the 77,309,035 ordinary
shares in issue as at that date (31 December 2009: 77,554,035 and 30 June 2009:
77,990,533). There is no dilution effect in respect of the period ended 30 June
2010 (31 December 2009: nil, 30 June 2009: nil).
7 Reconciliation of operating loss to net cash flow from operating activities
Six months Six months
to Year to to
30.06.10 31.12.09 30.06.09
(unaudited) (audited) (unaudited)
GBP'000 GBP'000 GBP'000
Loss on ordinary activities (816) (4,420) (2,409)
Loss on investments at fair value
through profit or loss 418 3,762 2,012
Increase)/decrease in debtors (968) 1,082 461
Increase/(decrease) in creditors 115 (265) (239)
Net cash (outflow)/inflow from
operating activities (1,251) 159 (175)
8 Spark Investors Limited (a fellow subsidiary of the Manager), of which JR Patel
is a director, may from time to time be eligible to receive transaction fees and/or
directors' fees from investee companies. During the period to 30 June 2010, fees of
GBP12,000 attributable to the investments of the Company were received pursuant to
these arrangements (30 June 2009: GBP12,000, 31 December 2009: GBP23,000).
During the six months to 30 June 2010 there were no transactions by Directors in
shares of companies in which the Company has invested (31 December 2009: none;
30 June 2009 none)
9 This Half Yearly Financial Report, has been neither audited nor reviewed by the
Company's auditors and does not constitute statutory accounts within the meaning
of Section 434 of the Companies Act 2006. The statutory accounts for the period
ended 31 December 2009 have been delivered to the Registrar of Companies and received
an audit report which was unqualified, did not include a reference to any matters
to which the auditors drew attention by way of emphasis without qualifying the
report and did not contain any statements under Section 498(2) and (3) of the Companies
Act 2006.
10 Interim management statements relating to the first and third quarters of the
financial year will be released via the Regulatory News Service on or shortly before
18 May and 18 November each year.
For further information, please contact:
Spark VCT plc www.sparkvct.com Tel: 0207 8517777
END
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