TIDMBRWV
RNS Number : 7980U
Bedford Row VCT PLC
30 June 2009
?
FOR IMMEDIATE RELEASE 30 June 2009
Bedford Row VCT plc
Audited Results Announcement
For the year ended 29 February 2009 and Notice of AGM
The directors of Bedford Row VCT plc are pleased to announce their audited
results for the year ended 28 February 2009.
Copies of the full Report and Accounts and the Notice of AGM have been
dispatched to the Shareholders.
Chairman's Statement
Overview
The year under review has been a turbulent one for the Company.
The disappointing response to the C Issue, which raised only GBP266,905, had a
dramatic impact on the Company and led to the resignation of the Investment
Manager, Arc Fund Management Limited ('AFM'), with effect from 15th July 2008.
The rapid deterioration of all stock markets saw a serious downward spiral in
the valuation of listed stocks, particularly on AIM and PLUS. The impact of the
worldwide financial crisis which was behind this had similar negative effects on
the general economy and unquoted investments were not immune to this.
As I reported in my Interim Statement, the Company suffered its first investment
failures, four of which were reflected in the provisions made in the interim
Accounts to 31 August 2008 Unfortunately, this trend continued during the second
half of the year under, with both Laser Broadcasting Limited and Sarah Arnett
Limited appointing Administrative Receivers. Accordingly, we have made full
provisions against both of these investments. We have also taken 50% provisions
against two other investments reflecting the much more cautious approach of our
new manager.
The outcome of these actions, together with sharp share price deterioration of
the AIM-Listed holdings, has been a reduction in the Company's NAV to 51.55p per
share, excluding the 7p per share dividend for the year ended 28 February 2007
which has now been paid in full.
The Company has continued to be more than 70%-invested in qualifying stocks and
met the other qualifying tests set by HMRC.
We have also implemented the cost savings outlined in my Interim Report with
effect from 1st December 2008. On 19th November 2009, both Mr Lowe and Mr
Urquhart resigned as directors of the Company. I thank them for their
contributions to the Company.
Following the General Meeting of the Company held on 12 February 2009,
Elderstreet Investments Limited were appointed as Investment Manager of the
Company and the name of the Company was changed to Bedford Row VCT plc.
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is required to report
on principal risks and uncertainties facing the Company for the forthcoming
financial year.
The Board has concluded that the key risks facing the Company during the current
financial period are as follows:
* investment risk associated with investing in small and immature businesses;
ii. investment risk arising from extremely volatile stock market conditions
and their potential effect on
investment valuation; and
iii. failure to maintain approval as a VCT.
In the case of (i) the Board is satisfied with the Company's approach. It
follows a rigorous process in vetting and careful structuring of new investments
and, after an investment is made, close monitoring of the business. In
respect of (ii), the Company seeks to hold a diversified portfolio. However, the
Company's ability to manage the risk is quite limited, primarily due to the
restrictions arising from the VCT regulations.
The Company's compliance with the VCT regulations is continually monitored by
the Company Secretary, who reports regularly to the Board on the current
position. The Company also retains James Cowper LLP, Chartered Accountants, to
provide regular reviews and advice in this area. The Board considers that this
approach reduces the risk of a breach of the VCT regulations to a minimal level.
Outlook
Although there has been some improvement of late, the turbulence and fragility
in world markets continues, making the future extremely unpredictable. The
managers are diligently monitoring the remaining investments but realise that
external forces can take matters outside their control. Thus, whilst the Board
believes that the current portfolio valuation is realistic, it cannot rule out
further provisions in the next audited accounts. However, it remains hopeful
that certain well-performing investments may lead to upward revaluations in the
near future.
The Board will continue to review all costs incurred by the Company and keep
these to the absolute minimum but there are fixed costs relating to a company
listed on the London Stock Exchange that cannot be reduced.
Since its appointment, Elderstreet has conducted a thorough review of the
investment portfolio and has recently made its recommendations to the Board
regarding its future investment strategy.
Despite being in the middle of one of the deepest recessions of modern times,
your Board is determined to find the best solution for shareholders and is very
pleased with its new manager. There are some very promising companies remaining
in the portfolio and we shall work closely with the manager to realise value
from these in due course
R L Hargreaves
Chairman
29 June 2009
Investment Manager's Report for the year ended 28 February 2009
Introduction
Elderstreet Investments Limited is pleased to present the Investment Manager's
Report for the year ended 29 February 2009 for Bedford Row VCT plc.
Activity
Elderstreet was appointed as the Investment Manager in December 2008. Since
taking over the mandate we have reviewed the portfolio and focused on
identifying the companies with upside potential, meeting the management and,
where possible, visiting the individual companies. A review of each company with
a carrying value can be found later in this report.
Regrettably this review has led to a number of investments being written down as
the market valuations and trading in these early stage companies have been
severely affected by the economic downturn. On a more positive note we have
identified six investments in the portfolio with good potential. Four of these
companies, M2FX plc, Rainbow Rewards Holdings Limited, Snacktime plc and
Dateline Holdings plc are making progress, although all would benefit from
further capital. Of the remaining two companies, Aquario plc is in advanced
negotiations to raise a further substantial round of capital without which the
company would be severely impaired, and Click Now Holdings plc is currently
being managed for cash ahead of the expected increase in market activity.
We have had meetings with four portfolio companies, M2FX, Rainbow Rewards,
Dateline and Snacktime. In February we negotiated a new qualifying investment
for the C share into Snacktime an AIM listed established profitable company.
Other funds managed by Elderstreet have a 23% shareholding and Elderstreet also
have two board seats.
During this period, the Company partially disposed of holdings Vicorp Group
plc. Unfortunately Sarah Arnett Limited, Global e-Networks Holdings plc, Laser
Broadcasting Limited, and Consolidated Vending plc all appointed Administrative
Receivers as the global "credit crunch" took hold.
Brief descriptions of the current investments with value follow. Please note
that the investment and valuation amounts reflect the collective Ordinary and C
share totals.
M2FX plc Cost
GBP258,295Valuation GBP272,619
Miniflex designs and manufactures patented plastic tubing that protects optical
fibre from damage. Its core product is the Optical Fibre Protection Tube
("OFPT") which is sold to the telecoms, aerospace and automotive industries.
Unlike normal smooth plastic tubing, OFPT has a higher resistance to kinking
when bent. The focus of sales is to America where a number of contracts have
been signed with telco distributors. For the year ended December 2008 the
company reported sales of GBP937,278 up 53% on the previous year, and a reduced
loss of GBP556,035.
Rainbow Rewards Holdings Limited Cost GBP166,447 Valuation
GBP203,827
Rainbow Rewards Holdings Limited is a provider of cash rewards to credit card
holders for loyalty to merchants who are members of the system. The key to the
reward system is that once a credit card is registered discounts will
automatically be credited to the user. A portion of the discount which the
merchant gives goes into local advertising and promotion of Rainbow Rewards
merchants and the user receives his discounts by way of cash transfers directly
into their bank account. The current focus of operations is in America, however
the product is applicable globally. The key to success is the signing of blocks
of cards from credit and debit card issuers.
While credit union cards have proved the model worked in Colorado, bank issued
cards are the key to growth and profitability. Bank issued cards have double the
volumes, activations and transaction values, and produce eight times the revenue
of credit union cards. The business is forecasting sales of USD$1.7 million, an
increase of 30% year on year, and reduced losses of USD$6 million a 52%
improvement on the previous year.
Aquario plc Cost GBP175,000
Valuation GBP175,000
Aquario was founded to develop and deliver a range of solutions to provide
innovative approaches for water reuse and recycling. The existing technology can
address problems as diverse as alternatives to desalination in drought zones,
through to pollution and environmental challenges in agricultural, commercial
and industrial projects. The Company was floated on the PLUS Market as SPDG
Technologies plc and has achieved limited revenue to date. However the Board are
currently in advanced negotiations with a third party to invest in the company.
The Company's name was changed to Aquario plc at the AGM in October 2008.
Snacktime plc Cost GBP175,020
Valuation GBP112,172
Snacktime plc is one of the UK's largest operators of snack and chilled drink
vending machines. The Group has many thousands of sites located throughout UK
mainland and both Northern and the Republic of Ireland, which are serviced by
its five main depots located in Cumbernauld (near Glasgow), Manchester,
Alcester, Wokingham, and Belfast. Each main depot is responsible through a team
of area managers, merchandisers and engineers for installing, maintaining and
restocking all of the Group's vending machines. The company floated on AIM in
December 2008 at GBP1.44p per share. The brokers forecast sales of GBP6.3
million and a profit before tax of GBP350,000 for the year ending March 2009.
Dateline Holdings plc Cost GBP150,900
Valuation GBP75,450
Dateline is one of the UK's longest established dating brands operating under
different ownership for 40 years. It has a database of more than 1 million
people and was the first computerised matching service in the UK. The Company
offers an internet online service, a telephone based offline service, and a
premium service. The company generates revenue from their three services with
various rates for the different levels of match making offered. The websites
will also generates money through advertising banners so as the database grows
the website should generate more money through advertising. The company reported
sales of GBP534,003 and a loss of GBP225,230 for the year ending December 2008.
The growth of the business and the move to profitability is dependent on
marketing spend and the company are trying to raise further working capital.
ClickNow Holdings plc Cost GBP150,000
Valuation GBP75,000
ClickNow has a partnership with ASK, a key internet search engine provider to
offer a search engine service that donates 50% of gross profits to charities.
ClickNow has relationships with over 200 charities and has a scaleable web based
platform. The company had received an offer of further funding in 2008 to expand
the business. However due to the economic downturn this investment was not
forthcoming and the Board have focused the company on a reduced expansion
strategy which will conserve cash in the business until the economy improves.
Since this change in strategy the business has been profitable on a monthly
basis.
Consolidated Asset Management plc Cost GBP74,260 Valuation
GBP12,694
The original investment was made into Arc Fund Management an Aim quoted
financial services company specialising in sourcing and developing structured
products, and investing in pre-IPO businesses. The company had more recently
moved into the wealth management sector with the acquisition of several IFAs.
The company reported sales of GBP2.3 million for the year ending December 2008
however the trading loss increased from GBP0.4 million to GBP1.4 million. This
background necessitated drastic and rapid action and the resultant strategic
review culminated in the disposal of the Group fund management businesses in a
management buy out to the former Finance Director. The Board subsequently
changed the Company's name to Consolidated Asset Management (Holdings) plc, with
a strategy to focus on the wealth management sector. In November 2008 the
company announced that it had entered into a subscription agreement with Mayfair
Limited, a company controlled by Lord Ashcroft, to raise approximately GBP0.7
million and in February 2009 an additional investment of GBP1.75 million.
Mayfair now holds a 59% stake in the company.
Vicorp Group plc Cost GBP26,445 Valuation GBP2,496
Vicorp has developed software tools that enable large organisations to create
and manage interactive voice services for consumers. In January 2009 the
directors released a profits warning announcing that it expected to make a loss
for the full year ending 31 December 2008. Trading has been affected by delays
in certain contracts being signed leading to reduced sales. Consequently, the
final results are expected to fall materially below current market expectations
which indicated sales and losses before tax for the full year of GBP2.65m and
GBP0.5m respectively (Edison September 2008). These expectations will not be met
and the company has also announced its intention to delist from AIM. After this
announcement we sold circa 50% of the holding in the market however could not
sell the remainder as we were limited by illiquidity.
Outlook
Given the limited investment capital in the company we are reserving funds to
back the potential winners in the portfolio. The current economic environment
remains difficult and we do not expect to achieve significant asset value growth
this year. The performance of the portfolio has suffered heavily over the last
year and this is reflected in an NAV of 51.55p.Given the continuing difficulties
in the wider economy we have taken a prudent policy of writing down investments
where necessary.
William Horlick
Elderstreet Investments Limited
29 June 2009
Statement of Directors' Responsibilities
Statement of Directors' Responsibilities in respect of the Annual Report and the
Financial Statements
Company law in the United Kingdom requires the Directors to prepare financial
statements for each financial year which give a true and fair view of the state
of affairs of the Company and of the profit or loss for that period. In
preparing those financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements.
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a directors' report, directors' remuneration report and corporate
governance statement that comply with that law and those regulations.
Responsibility statement of the Directors in respect of the annual financial
report
We confirm that to the best of our knowledge:
* the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
* the Directors' Report includes a fair review of the development and performance
of the business and position of the issuer together with a description of the
principal risks and uncertainties they face.
Approved by the Board on 29 June 2009
and signed on behalf of the Board by
Graham K Urquhart
Company Secretary
Bedford Row VCT plc
(formerly Arc Growth Company VCT plc)
Investment Portfolio as at 28 February 2009
+---------------------------+------------+-----------+------------+------------+---------+
| | | Valuation at | | % of |
+---------------------------+------------+------------------------+------------+---------+
| | Cost | 28 February 2009 | Net assets |
+---------------------------+------------+------------------------+----------------------+
| | GBP | | GBP | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Qualifying investments | 1,800,060 | | 712,737 | | 67.97 |
+---------------------------+------------+-----------+------------+------------+---------+
| Non-qualifying | 418,447 | | 345,961 | | 32.99 |
| investments | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Net Current assets | (10,022) | | (10,022) | | (0.96) |
+---------------------------+------------+-----------+------------+------------+---------+
| | 2,208,485 | | 1,048,676 | | 100.00 |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| | | Valuation at 28 February 2009 | % of |
+---------------------------+------------+-------------------------------------+---------+
| Security | Cost | Ord | C | Total | Net |
| | | Shares | Shares | | assets |
+---------------------------+------------+-----------+------------+------------+---------+
| | GBP | GBP | GBP | GBP | |
+---------------------------+------------+-----------+------------+------------+---------+
| AIM/PLUS Listed | | | | | |
| Investments | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Arc Fund Management | 74,260 | 12,694 | - | 12,694 | 1.21 |
| Holdings plc | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Consolidated Vending plc | 164,400 | - | - | - | - |
+---------------------------+------------+-----------+------------+------------+---------+
| Snacktime plc | 175,020 | 88,542 | 23,630 | 112,172 | 10.70 |
+---------------------------+------------+-----------+------------+------------+---------+
| Vicorp Group plc | 26,445 | 2,496 | - | 2,496 | 0.24 |
+---------------------------+------------+-----------+------------+------------+---------+
| | 440,125 | 103,732 | 23,630 | 127,362 | 12.15 |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Unquoted Investments | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Aquario plc | 175,000 | 150,000 | 25,000 | 175,000 | 16.69 |
+---------------------------+------------+-----------+------------+------------+---------+
| B Fresh Limited Loan | 54,000 | - | - | - | - |
| Stock | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Clicknow Holdings Ltd | 150,000 | 75,000 | - | 75,000 | 7.15 |
+---------------------------+------------+-----------+------------+------------+---------+
| Dateline Holdings plc | 150,900 | 75,450 | - | 75,450 | 7.19 |
+---------------------------+------------+-----------+------------+------------+---------+
| Famous Retail Ltd | 100,000 | - | - | - | - |
+---------------------------+------------+-----------+------------+------------+---------+
| Global E Networks plc | 100,000 | - | - | - | - |
+---------------------------+------------+-----------+------------+------------+---------+
| Laser Broadcasting | 150,000 | - | - | - | - |
+---------------------------+------------+-----------+------------+------------+---------+
| M2FX plc | 258,295 | 272,619 | - | 272,619 | 26.00 |
+---------------------------+------------+-----------+------------+------------+---------+
| Rainbow Rewards Holdings | 166,447 | 203,827 | - | 203,827 | 19.44 |
| Ltd | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Sarah Arnett Limited | 200,000 | - | - | - | - |
+---------------------------+------------+-----------+------------+------------+---------+
| Smart Implants Holdings | 150,000 | - | - | - | - |
| plc | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| | 1,654,642 | 776,896 | 25,000 | 801,896 | 76.47 |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Gilts | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| 4.75% Treasury Stock | 123,740 | - | 129,440 | 129,440 | 12.34 |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
| Total Investments | 2,218,507 | 880,628 | 178,070 | 1,058,698 | 100.96 |
+---------------------------+------------+-----------+------------+------------+---------+
| Net Current Assets | | | | (10,022) | (0.96) |
+---------------------------+------------+-----------+------------+------------+---------+
| Shareholders Funds | | | | 1,048,676 | 100.00 |
+---------------------------+------------+-----------+------------+------------+---------+
| | | | | | |
+---------------------------+------------+-----------+------------+------------+---------+
Profit & Loss Account for the year ended 28 February 2009
+-----------------------------------+------+----------+---------+----------+------+----------+
| | | 2009 | | 2008 |
+-----------------------------------+------+-------------------------------+------+----------+
| |Note | Ordinary | "C" | Total | | Total |
| | | Shares | Shares | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 |
+-----------------------------------+------+----------+---------+----------+------+----------+
| (Loss) / profit on investments | 8 | (13) | 1 | (12) | | 197 |
| held at fair value | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Unrealised (loss) / gain on fair | 8 | (738) | 5 | (733) | | (520) |
| value of investments | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Other income | 2 | (2) | 8 | 6 | | 35 |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Investment Manager fees | 3 | 13 | 2 | 15 | | 28 |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Other expenses | 4 | (148) | (22) | (170) | | (106) |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Loss on ordinary activities | | (888) | (6) | (894) | | (366) |
| before tax | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Tax charge on ordinary activities | 6 | - | - | - | | - |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Loss on ordinary activities after | | (888) | (6) | (894) | | (366) |
| tax | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Return per share | | (50.28p) | (2.59p) | (44.32p) | | (20.69p) |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Historic Profit / (Loss) Note | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Loss for the year | | (888) | (6) | (894) | | (366) |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Unrealised loss / (gain) on fair | | 738 | (5) | 733 | | 520 |
| value of investments | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Realisation of prior year's net | | (9) | (1) | (10) | | 305 |
| loss | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Historical cost loss before tax | | (159) | (12) | (171) | | 459 |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Tax charge on ordinary activities | | - | - | - | | - |
+-----------------------------------+------+----------+---------+----------+------+----------+
| Historical cost loss after tax | | (159) | (12) | (171) | | 459 |
+-----------------------------------+------+----------+---------+----------+------+----------+
| | | | | | | |
+-----------------------------------+------+----------+---------+----------+------+----------+
There were no other recognised gains or losses other than the results for the
year as disclosed above. Accordingly a statement of total recognised gains and
losses is not required.
The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market funds.
Reconciliation of movements in shareholders' funds for the year ended 28
February 2009
+-----------------------------------+---------+---------+---------+------+---------+
| | 2009 | | 2008 |
+-----------------------------------+-----------------------------+------+---------+
| | Ord. | "C" | | | Ord. |
+-----------------------------------+---------+---------+---------+------+---------+
| | Shares | Shares | Total | | Shares |
+-----------------------------------+---------+---------+---------+------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 |
+-----------------------------------+---------+---------+---------+------+---------+
| | | | | | |
+-----------------------------------+---------+---------+---------+------+---------+
| Shareholders' funds at 1 March | 1,810 | - | 1,810 | | 2,183 |
| 2008 | | | | | |
+-----------------------------------+---------+---------+---------+------+---------+
| Total gains and losses recognised | (888) | (6) | (894) | | (366) |
| in period | | | | | |
+-----------------------------------+---------+---------+---------+------+---------+
| Net proceeds of share issue | - | 250 | 250 | | - |
+-----------------------------------+---------+---------+---------+------+---------+
| Dividends paid | (117) | - | (117) | | (7) |
+-----------------------------------+---------+---------+---------+------+---------+
| Shareholders' funds at 28 | 805 | 244 | 1,049 | | 1,810 |
| February 2009 | | | | | |
+-----------------------------------+---------+---------+---------+------+---------+
| | | | | | |
+-----------------------------------+---------+---------+---------+------+---------+
The accompanying notes are an integral part of the financial statements.
Balance Sheet as at 28 February 2009
+------------------------------+------+---------+---------+---------+--------+---------+
| | | 2009 | | 2008 |
+------------------------------+------+-----------------------------+--------+---------+
| | | Ord. | "C" | | | Ord. |
+------------------------------+------+---------+---------+---------+--------+---------+
| |Note | Shares | Shares | Total | | Shares |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Fixed asset investments | 8 | 881 | 179 | 1,060 | | 1,714 |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Current assets | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Debtors | 9 | 10 | 2 | 12 | | 89 |
+------------------------------+------+---------+---------+---------+--------+---------+
| Cash and cash equivalents | | (63) | 67 | 4 | | 165 |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | (53) | 69 | 16 | | 254 |
+------------------------------+------+---------+---------+---------+--------+---------+
| Current Liabilities | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Creditors | 10 | (23) | (4) | (27) | | (158) |
+------------------------------+------+---------+---------+---------+--------+---------+
| Net current assets | | (76) | 65 | (11) | | 96 |
+------------------------------+------+---------+---------+---------+--------+---------+
| Net assets | | 805 | 244 | 1,049 | | 1,810 |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Called up equity share | 11 | 177 | 133 | 310 | | 177 |
| capital | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Share premium | 12 | - | - | - | | 1,492 |
+------------------------------+------+---------+---------+---------+--------+---------+
| Special distributable | 12 | 1,375 | 117 | 1,492 | | - |
| reserve | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Revenue reserve | 12 | 418 | (11) | 407 | | (42) |
+------------------------------+------+---------+---------+---------+--------+---------+
| Capital reserve | 12 | | | | | 183 |
+------------------------------+------+---------+---------+---------+--------+---------+
| Revaluation reserve | 12 | (1,165) | 5 | (1,160) | | - |
+------------------------------+------+---------+---------+---------+--------+---------+
| Total equity shareholders' | | 805 | 244 | 1,049 | | 1,810 |
| funds | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| Net Assets per share | | 45.54p | 91.31p | 51.55p | | 102.42p |
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
| | | | | | | |
+------------------------------+------+---------+---------+---------+--------+---------+
The financial statements were approved by the Board and authorised for issue on
29 June 2009 and are signed on their behalf by:
Richard Hargreaves
Director
The accompanying notes are an integral part of the financial statements.
Bedford Row VCT plc
(formerly Arc Growth Company VCT plc)
Cash flow statement for the year ended 28 February 2009
+------------------------------------------------------------------------------------+
| 2009 2008 |
| Ord. "C" Ord. |
| Shares Shares Total Shares |
| GBP'000 GBP'000 GBP'000 GBP'000 |
| Net cash inflow from operating |
| activities |
| Return on ordinary activities (888) (6) (894) (366) |
| before tax |
| Adjusted for: |
| Realised gains on investment 13 (1) 12 (197) |
| disposals |
| Unrealised appreciation in 738 (5) 733 520 |
| investment values |
| Decrease (increase) in debtors 79 (2) 77 97 |
| (Decrease) / increase in (135) 4 (131) 145 |
| creditors |
| Net cash generated from operating (193) (10) (203) 199 |
| activities |
| Taxation |
| Corporation tax paid - - - (1) |
| Cash flows from investing |
| activities |
| Purchases of investments (14) (249) (263) (1,831) |
| Sales proceeds of investments 96 76 172 914 |
| Net cash generated from investing 82 (173) (91) (917) |
| activities |
| Equity Dividend (117) - (117) (7) |
| Cash flows from financing |
| activities |
| Issue of own shares - 265 265 - |
| Share issue expenses - (15) (15) - |
| Net cash generated from financing - 250 250 - |
| activities |
| Net (decrease) / increase in cash (228) 67 (161) (726) |
| and cash equivalents |
| Reconciliation of net cash flow to movements in cash and cash equivalents |
| Net increase in cash and cash (228) 67 (161) (726) |
| equivalents |
| Cash and cash equivalents at 1 165 - 165 891 |
| March 2008 |
| Cash and cash equivalents at 28 (63) 67 4 165 |
| February 2009 |
| |
+------------------------------------------------------------------------------------+
1. Principal accounting policies
Basis of accounting
During the year the Company revoked its status as an Investment Company under
the Companies Act 1985 and therefore the format of the financial statements has
been changed this year to reflect the Company's new status.
Investments
Investments are classified as at fair value through the profit and loss account.
Financial assets designated as at fair value through profit and loss account are
measured at subsequent reporting dates at fair value. Investments in AIM-listed
companies are stated at bid prices discounted where necessary to reflect lack of
liquidity.
Unlisted investments are fair valued by the Directors in accordance with the
International Private Equity and Venture Capital Valuation Guidelines. The
Directors' policy in valuing unlisted investments is as follows:
a) investments which have been made within the last twelve months are valued
at cost, except where a company's under performance against plan indicates a
diminution in the value of the investment a provision against cost is made as
appropriate in bands of 25%.
b) where a company is in the early stage of development, it will normally
continue to be held at cost on the basis described above.
c) where a company is well established and profitable the shares may be
valued by applying a suitable price earnings ratio to the company's historic
post tax earnings. The ratio used is based on a comparable listed company or
sector but discounted by 25-50% to reflect marketability.
d) where a value is indicated by a material arms length transaction by a
third party in the shares of a company.
Where securities are designated upon initial recognition as fair value through
profit and loss, gains and losses arising from changes in fair value are
included in net profit or loss for the period as a capital item. Transaction
costs on acquisition are included within the original recognition and the profit
or loss on disposal is calculated net of transaction costs of disposal.
Income
Investment income includes income tax withheld at source. Dividend income is
shown net of any related tax credit.
Dividends receivable are brought into account on the ex-dividend date. Fixed
returns on debt and money market securities are recognised on a time
apportionment basis so as to reflect the effective yield, provided there is no
reasonable doubt that payment will be received in due course.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged wholly
to revenue with the exception of:
a) expenses incidental to the acquisition or disposal of an investment, which
are included within the cost of the investment or deducted from the disposal
proceeds as appropriate, and;
b) the investment management fee, which has been charged 25% to the revenue
account and 75% to the realised capital reserve to reflect, in the Directors'
opinion, the expected long term split of returns in the form of income and
capital gains respectively from the investment portfolio.
Foreign currency transactions
Foreign currency transactions are translated into sterling at the rate ruling on
the date of the transaction. In the case of investment purchases these are
subsequently shown at fair value, which is calculated by converting the foreign
currency fair value to sterling at the exchange rate ruling on the balance sheet
date. The gain or loss is transferred to capital reserve as unrealised gain or
loss on investment unless the effect of the exchange rate movement is considered
material in which case it is shown as a separate item.
Taxation
Corporation tax payable is provided on taxable profits at the current rate. The
tax effect of different items of income/gain and expenditure/loss is allocated
between capital and revenue on the same basis as the particular item to which it
relates, using the Company's effective rate of tax for the accounting period.
Deferred tax is recognised, without discounting, in respect of all timing
differences between the treatment of certain items for taxation and accounting
purposes, which have arisen but not reversed by the balance sheet date, except
otherwise required by FRS 19. Due to the Company's status as a Venture Capital
Trust and the intention to continue meeting the conditions required to obtain
approval in the foreseeable future, the Company has not provided any deferred
tax on any capital gains arising on the revaluation of investments.
Revaluation reserve and Capital reserve
During the year the Company revoked its investment company status. As a result
items previously included in capital reserve are now included in the profit and
loss account and revaluation reserve.
The following items previously included in realised capital reserve are now
included in the profit and loss account:
a) gains and losses on the realisation of investments;
b) realised exchange differences of a capital nature;
c) expenses and finance costs, together with the related taxation effect,
charged to this reserve in accordance with
the above policies;
d) realised gains and losses on transactions undertaken to hedge an exposure
of a capital nature.
The following items previously included in unrealised capital reserve are now
included in revaluation reserve:
a) increases and decreases in the valuation of investments held at the year
end;
b) unrealised exchange differences of a capital nature;
c) unrealised gains and losses on transactions undertaken to hedge an exposure
of a capital nature.
2. Return per share
The return per share is based on the loss from ordinary activities after tax of
GBP894,000, being GBP888,000 in respect of ordinary shares and GBP6,000 in
respect of "C" shares (2008: GBP366,000 all in respect of ordinary shares ) and
on 1,767,557 ordinary shares and 252,610 "C" shares (2008: 1,767,557 ordinary
shares and nil "C" shares), being the weighted average number of shares in issue
during the period.
There are no potentially dilutive capital instruments in issue and, therefore,
no diluted return per share figures are relevant.
3. Net asset value per share
The calculation of net asset value per share as at 28 February 2009 is based on
net assets of 1,049.000, being GBP805,000 in respect of ordinary shares and
GBP244,000 in respect of "C" shares (2008: GBP1,810,000 all ordinary shares)
divided by the 1,767,557 ordinary share and 266,906 "C" shares (2008: 1,767,557
ordinary shares) in issue at that date.
4. Prinipal Financial Risks
The main risks the Company faces from its financial instruments are market price
risk, being the risk that the value of investment holdings will fluctuate as a
result of changes in market prices caused by factors other than interest rates;
interest rate risk; foreign currency risk and liquidity risk.
Market price risk
The Company's investment portfolio is exposed to market price fluctuations which
are monitored by the Investment Manager in pursuance of the investment
objective. Further information on the investment portfolio is set out in the
Investment Manager's report, which is not subject to audit.
- 11% (2008:16%) by value of the Company's net assets comprises equity
securities quoted on AIM or PLUS. A 5% increase in the bid price of these
securities as at 29 February would have increased net assets and the total
return for the year by GBP6,300 (2008: GBP14,406); a corresponding fall would
have reduced net assets and the total return for the year by the same amount.
- 80% (2008:70%) by value of the company's net assets comprises investments
in unquoted companies held at fair value. The valuation methods used by the
company include the application of a price/earnings ratio derived from listed
companies with similar characteristics, and consequently the value of the
unquoted element of the portfolio can be indirectly affected by price movements
on the London Stock Exchange. A 5% overall increase in the valuation of the
unquoted investments at 28 February 2009 would have increased net assets and the
total return for the year by GBP47,617 (2008: GBP63,697); an equivalent change
in the opposite direction would have reduced net assets and the total return for
the year by the same amount.
Interest rate risk
The interest rate risk profile of financial assets at the balance sheet date was
as follows:
+------------------+----------+----------+----------+--------+----------+----------+----------+
| | 2009 | | 2008 |
+------------------+--------------------------------+--------+--------------------------------+
| | | | Non | | | | Non |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| | Fixed | Floating | interest | | Fixed | Floating | interest |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| | interest | rate | bearing | | interest | rate | bearing |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| Quoted on AIM / | - | - | 128 | | - | - | 901 |
| PLUS | | | | | | | |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| Unquoted | - | - | 801 | | 41 | - | 178 |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| Gilts | 130 | - | - | | - | - | - |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| Cash | - | 4 | - | | - | 891 | - |
+------------------+----------+----------+----------+--------+----------+----------+----------+
| | 130 | 4 | 929 | | 41 | 891 | 1,079 |
+------------------+----------+----------+----------+--------+----------+----------+----------+
The non-interest bearing assets represent the equity element of the portfolio.
The interest rate which determines the interest received on cash balances is
dependant on the base rate of the banks with which the deposits are held. The
gilts mature in 2010 and the interest rate is 4.75%.
Credit Risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation and commitment that it has entered into with the
company. The investment manager and the board carry out a regular review of
counterparty risk. The carrying values of financial assets represent the maximum
credit risk exposure at the balance sheet date.
Credit risk relating to listed fixed-interest investments is mitigated by
investing in a portfolio in investments of high credit quality, comprising
securities issued by the UK Government, European Union governments and major UK
and international companies and institutions. Credit risk relating to loans to
and preference shares in unquoted companies is considered to be part of market
risk.
The assets of the company which are traded on recognised stock exchanges are
held on the company's behalf by third party custodians (Smith and Williamson
Investment Management Limited in the case of listed fixed-interest investments
and Woodside Secretaries Limited in the case of quoted and unquoted equity
securities). Bankruptcy or insolvency of a custodian could cause the company's
rights with respect to securities held by the custodian to be delayed or
limited.
Credit risk arising on transactions with brokers relates to transactions in
quoted securities awaiting settlement. Risk relating to unsettled transactions
is considered to be low due to the short settlement period involved and the high
credit quality of the brokers used. The board further mitigates the risk by
monitoring the quality of service provided by the brokers.
The company's interest-bearing deposit accounts are maintained with major UK
clearing banks.
There were no significant concentrations of credit risk to counterparties at 28
February 2009. No individual investment exceeded 15% of the company's net assets
at 28 February 2009 (2007: nil).
Foreign currency risk
The Company's investment portfolio is exposed to foreign currency exchange rate
fluctuations which are monitored by the Investment Manager in pursuance of the
investment objective. Further information on the investment portfolio is set out
in the Investment Manager's report, which is not subject to audit. At the year
end GBP191,325 (2007: GBP59,210) of the investment portfolio is denominated in
US$. The balance of the portfolio is denominated in sterling.
Liquidity risk
Due to the nature, unquoted investments may not be readily realisable and
therefore a portfolio of quoted assets and cash is held to offset this liquidity
risk.
5. Related party transactions
Woodside Secretaries Limited ('WSL'), which is wholly-owned by Graham Urquhart,
and his wife, entered into an Administration Agreement dated 11 February 2005
with the Company, whereby WSL provides certain accounting, administration,
corporate secretarial and receiving agents' services to the Company for an
annual fee of GBP21,000 plus VAT. During the period under review, WSL has
received GBP22,819 (2008: GBP24,675) for such services. Woodside also received
GBP10,575 in respect of the services of Mr Urquhart as a director. The annual
fee was reduced by GBP6,000 per annum to GBP15,000 per annum with effect from
1st December 2008.
Directors' and Officers' shareholdings as at 28 February 2009:
+---------------------------+----------------------------+-------------------------+
| Person | Registered Holder | No. of Shares |
+---------------------------+----------------------------+-------------------------+
| Richard Lawrence | Self | 51,500 |
| Hargreaves | | |
+---------------------------+----------------------------+-------------------------+
| Kevin Thomas Morley | Self | nil |
+---------------------------+----------------------------+-------------------------+
| Graham Kenneth Urquhart | Self | 137 |
+---------------------------+----------------------------+-------------------------+
| Robert Wilson | Self | nil |
+---------------------------+----------------------------+-------------------------+
There have been no changes in these interests since the year end.
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the fourth Annual General Meeting of Bedford Row VCT
PLC (the "Company") will be held at the offices of Elderstreet Investments
Limited, 32 Bedford Row, London WC1R 4HE, at 11.00 a.m. on Tuesday, 18th August
2009, at which the following resolutions will be proposed, in the case of
resolutions 1 to 5 as ordinary resolutions and in the case of resolutions 6 and
7 as special resolutions:
ORDINARY RESOLUTIONS
As Ordinary Business:-
1. To receive the report of the directors and the financial statements of the
Company for the year ended 28 February 2009.
2. To receive the directors' remuneration report;
3. To re-appoint James Cowper LLP as auditors of the Company to hold office until
the conclusion of the next general meeting at which accounts are laid before the
Company and that their remuneration be fixed by the directors.
4. To re-elect Kevin Thomas Morley who retires by rotation in accordance with the
Company's Articles of Association and who, being eligible, offers himself for
re-election.
As Special Business:-
ORDINARY RESOLUTION
5. THAT the Directors be and are hereby generally and unconditionally
authorised in accordance with section 80 of the Companies Act 1985 (and in
substitution for any existing general authority to allot relevant securities
granted by the Company) to allot relevant securities (within the meaning of
section 80(2) of that Act) of the Company up to an aggregate nominal amount
equal to GBP31,020, provided that this authority shall expire on the date of the
Annual General Meeting of the Company to be held in 2010 (unless and to the
extent that such authority is renewed or extended prior to such date) but so
that the Company may before the expiry of such period make an offer or agreement
which would or might require relevant securities to be allotted after the expiry
of such period and the Directors may allot relevant securities pursuant to such
an offer or agreement as if the authority conferred hereby had not expired.
SPECIAL RESOLUTIONS
6. THAT the Directors be and are hereby empowered pursuant to section 95 of
the Companies Act 1985 to allot equity securities (within the meaning of section
94 of that Act) of the Company for cash pursuant to the general authority
conferred on the Directors pursuant to resolution no. 5 above as if section
89(1) of that Act did not apply to any such allotment and to sell relevant
shares (within the meaning of section 94 of that Act) if, immediately before the
sale, such shares are held by the Company as treasury shares (as defined in
section 162A of that Act) ("treasury shares") for cash as if section 89(1) of
that Act did not apply to such sale, provided that this power shall be limited
to the allotment of equity securities and the sale of treasury shares:-
(a) in connection with or pursuant to an offer by way of rights to the
holders of Ordinary Shares and other persons entitled to participate therein in
proportion (as nearly as may be) to their respective holdings of Ordinary Shares
(or, as appropriate, the number of Ordinary Shares which such other persons are
for those purposes deemed to hold), subject only to such exclusions or other
arrangements as the Directors may consider necessary or expedient to deal with
fractional entitlements or legal or practical problems under the laws of any
territory or the regulations or requirements of any regulatory body or any stock
exchange in any territory;
(b) (other than pursuant to sub-paragraph 6(a) above) up to an aggregate
nominal amount of GBP31,020;
and such power shall expire on the date of the Annual General Meeting of the
Company to be held in 2010, but so that the Company may before such expiry make
an offer or agreement which would or might require equity securities to be
allotted or treasury shares to be sold (as the case may be) after such expiry
and the Directors may allot equity securities in pursuance of such offer or
agreement as if the power conferred hereby had not expired. This power shall be
in substitution for any previous general powers granted in this regard by the
Company.
Registered Office:
By Order of the Board
4th Floor
150-152 Fenchurch Street
London
EC3M 6BBGraham Urquhart FCIS
Secretary
Dated: . 29 June 2009
Accounts
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985 ("the Act"). The balance sheet as at 29 February 2009, income statement and
cash flow statement for the period then ended have been extracted from the
Company's 2009 statutory financial statements upon which the auditor's opinion
is unqualified and does not include any statement under section 327 of the Act.
The Annual Report & Accounts for the year ended 29 February 2009 will be filed
with the Registrar of Companies and has been posted to shareholders today.
Copies of the documents listed below have been submitted to the UK Listing
Authority and will be available for inspection in the UK Listing Authority's
Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade, Canary WharfLondon E14 5HS
Documents:
· Report and Accounts for the year ended 29 February 2009
· Chairman's Explanatory Letter and Notice of Annual General Meeting
· Annual General meeting Proxy Card
Enquiries : Graham Urquhart, FCIS, Company Secretary on 020 3216 2000
Roland Cornish and Felicity Geidt, Beaumont Cornish Limited
on 020 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKKKNBBKDKAN
Bedford Row (LSE:BRWV)
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