TIDMBRWV
RNS Number : 9546Q
Bedford Row VCT PLC
27 October 2011
For Immediate Release
26 October 2011
Bedford Row VCT plc
("The Company" or "Bedford Row")
Half Yearly Financial Report
Chairman's Statement - Interim management report
Overview
The company's position has steadied as I reported in my last
review but we are still faced with some serious issues.
The company has seven remaining investments of which three
represent 146.5 % of the Company's NAV and the best upside
potential:-
1. Snacktime plc, is quoted on AIM and has benefited from the
acquisition of its largest competitor. The acquisition of Vendia
has doubled the size of the company and it continues to make strong
progress. Unfortunately, its share price is languishing due to its
small capitalisation.
2. M2FX plc has continued to raise substantial funds from its
large investor and is starting to see fast growth now that cash is
not a constraining factor. The price of new money is less per share
than our previous holding value but the plan is to build a big and
valuable company. The company will achieve revenue for 2011 which
is more than 50% higher than ever before and hopes to double the
2011 number in 2012.
3. Rainbow Rewards Holdings Ltd has continued to raise
significant sums albeit at a somewhat lower price than our previous
holding value. The company previously announced its intention to
seek a stock market listing in 2011 however market turmoil has put
this on hold for the time being.
I am pleased to remind you that none of these three companies
has any connection with our former manager.
The outcome of all these changes has been a reduction in the
Company's NAV to 12.7p per share, excluding the 7p per share
dividend for the six months to 31 August 2011.
The Company continues to be more than 92 % invested in
qualifying stocks and has met the other qualifying tests set by
HMRC.
We continue to implement the cost savings we announced two years
ago. Investment management, directors' and administrator's fees are
being accrued to preserve the limited cash in the company. However
the company has used up its cash resources and may have to resort
to selling quoted portfolio company shares to raise capital which
would be regrettable unless prices rise significantly in the short
term.
Risk and uncertainties
Under the Disclosure and Transparency Directive, the Board is
now required in the Company's half year results, to report on
principal risks and uncertainties facing the Company over the
remainder of the financial year.
The Board has concluded that the key risks facing the Company
over the remainder of the financial period are as follows:
i. investment risk associated with investing in small and immature businesses;
ii. investment risk arising from volatile stockmarket 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, 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
The Company's future remains a cause for serious concern. Its
performance depends on three investments, each of which has great
promise but no immediate prospect of exit and changes in their
valuation are outside the control of the Manager and the Board.
The Board plans to continue to keep costs to the absolute
minimum but there are fixed costs relating to our listing on the
London Stock Exchange that cannot be reduced. These are audit, our
broker, the FSA and the UKLA, none of whom will allow fees to
accrue. We could cease to be listed and avoid these fees were it
not for the small amount of money raised from shareholders between
3 March and 16 July 2008 which will not have passed the minimum
period for complying with VCT rules until five years after the
allotment dates.
There is a significant risk we cannot reach that date unless we
can sell some of the shares we hold at unattractive valuations or
Rainbow Rewards does achieve its plan for a stock market listing.
There is no easy solution to this problem and we may have no option
but to de-list.
Despite all these difficulties your Board is determined to find
the best solution for shareholders. There are some promising
companies remaining in the portfolio and the Board will work
closely with the Manager to realise value from these in due
course.
Richard Hargreaves, Chairman
25 October 2011
Investment Portfolio at 31 August 2011
Security Cost Valuation % of
GBP GBP Net assets
Quoted investments 181,761 112,783 33.97
Unquoted investments 649,902 376,759 113.45
831,663 489,542 147.42
Net Current liabilities (157,485) (157,485) (47.42)
674,178 332,057 100.00
========== ========== ===========
AIM/PLUS Listed Investments
Snacktime plc 175,236 112,257 33.81
Vicorp Group plc 1,445 18 0.01
Weather Lottery plc 5,080 508 0.15
181,761 112,783 33.97
========== ========== ===========
Unquoted Investments
SUSD Asset Management (Holdings)
plc 74,260 2,539 0.76
Dateline Holdings plc 150,900 - -
M2FX plc 258,295 194,728 58.64
Rainbow Rewards Holdings Limited 166,447 179,492 54.05
649,902 376,759 113.45
========== ========== ===========
Income Statement for the 6 months ended 31 August 2011
6 months ended Year ended 6 months ended
31-Aug-11 28-Feb-11 31-Aug-10
GBP'000 GBP'000 GBP'000
Realised losses on fair value
of investments - (71) (1)
Unrealised losses on fair
value of investments (34) (79) (82)
Other income - 1 1
Investment Manager fees (23) (45) (23)
Other expenses (31) (68) (36)
Loss on ordinary activities
before tax (88) (262) (141)
Tax charge on ordinary activities - - -
Loss on ordinary activities
after tax (88) (262) (141)
--------------- ----------- ---------------
Return per share (3.35p) (10.03p) (5.39p)
--------------- ----------- ---------------
Historic Profit / (Loss)
Note
Loss for the year (88) (262) (141)
Unrealised loss / (gain)
on fair value of investments 34 79 82
Realisation of prior year's
unrealised (losses) / gains (25) (700) -
Historical cost (loss) /
profit before tax (79) (883) (59)
Tax charge on ordinary activities - - -
Historical cost (loss) /
profit after tax (79) (883) (59)
--------------- ----------- ---------------
Reconciliation of movements in shareholders' funds for the 6
months ended 31 August 2011
6 months ended Year ended 6 months ended
31-Aug-11 28-Feb-11 31-Aug-10
GBP'000 GBP'000 GBP'000
Shareholders' funds at 1
March 2011 420 682 682
Total losses recognised in
the period (88) (262) (141)
Shareholders' funds at 31
August 2011 332 420 541
--------------- ----------- ---------------
Balance Sheet as at 31 August 2011
31-Aug-11 28-Feb-11 31-Aug-10
GBP'000 GBP'000 GBP'000
Fixed asset investments 489 539 616
---------- ---------- ----------
Current assets
Debtors 6 1 10
Cash and cash equivalents 2 7 1
8 8 11
Current Liabilities
Creditors (165) (127) (86)
---------- ---------- ----------
Net current assets (157) (119) (75)
---------- ---------- ----------
Net assets 332 420 541
========== ========== ==========
Called up equity share capital 262 262 262
Capital redemption reserve 48 48 48
Special distributable reserve 1,492 1,492 1,492
Revaluation reserve (343) (334) (1,037)
Revenue reserve (1,127) (1,048) (224)
Total equity shareholders'
funds 332 420 541
========== ========== ==========
Net Assets per share 12.69p 16.04p 20.68p
========== ========== ==========
Bedford Row VCT plc
Cash Flow Statement for the 6 months ended 31 August 2011
6 months ended Year ended 6 months ended
31-Aug-11 28-Feb-11 31-Aug-10
GBP'000 GBP'000 GBP'000
Net cash inflow from operating
activities
Return on ordinary activities
before tax (88) (262) (141)
Adjusted for:
Realised gains on investment
disposals - 71 1
Unrealised losses on investments 34 79 82
Decrease (increase) in debtors (5) - (9)
(Decrease) / increase in
creditors 38 85 44
Net cash generated from operating
activities (21) (27) (23)
--------------- ----------- ---------------
Taxation
Corporation tax paid - - -
--------------- ----------- ---------------
Cash flows from investing
activities
Purchases of investments (16) (35) (35)
Sales proceeds of investments 32 66 56
Net cash generated from investing
activities 16 31 21
--------------- ----------- ---------------
Equity Dividend - - -
--------------- ----------- ---------------
Cash flows from financing
activities
Issue of own shares -
Share issue expenses -
Net cash generated from financing
activities - - -
--------------- ----------- ---------------
Net (decrease) / increase
in cash and cash equivalents (5) 4 (2)
=============== =========== ===============
Reconciliation of net cash flow to movements
in cash and cash equivalents
Net increase in cash and
cash equivalents (5) 4 (2)
Cash and cash equivalents
at 1 March 2011 7 3 3
Cash and cash equivalents
at 31 August 2011 2 7 1
=============== =========== ===============
Notes to the accounts for the six months ended 31 August
2011
1. The unaudited interim results cover the six months to 31
August 2011 and have been drawn up in accordance with the
Accounting Standard Board's (ASB) Statement on Half-yearly
Financial Reports (July 2007) and adopting the accounting policies
set out in the statutory accounts for the year ended 28 February
2011 which were prepared under UK GAAP and in accordance with the
Statement of Recommended Practice for investment companies issued
by the Association of Investment Trust Companies in 2009.
2. The financial information set out in this report has not been
audited and does not comprise full financial statements within the
meaning of Section 434 of the Companies Act 2006. Statutory
accounts for the year ended 28 February 2011, which were
unqualified, have been lodged with the Registrar of Companies. No
statutory accounts in respect of any period after 28 February 2011
have been reported on by the Company's auditors or delivered to the
Registrar of Companies.
3. Copies of the Interim Report to Shareholders have been sent
to shareholders and are available at the Company's Registered
Office: 4(th) Floor, 150-152 Fenchurch Street, London EC3M 6BB
4. During the period under review, the Company did not issue any
new Ordinary Shares of 10 pence each.
5 The revenue return per share is based on loss from ordinary
activities after tax of GBP87,560 and on 2,615,781 ordinary shares
of 10p each and being the weighted average number of shares in
issue during the period. The net assets per share is based on total
net assets of GBP332,057 and 2,615,781 ordinary shares of 10p each
in issue at the period end.
6. Related party transactions
There are no related party transactions that have materially
affected the financial position or performance of the company
during the period and there have not been any changes to the
related part transactions described in the statutory accounts to 28
February 2011 that could do so.
Responsibility statement of the Directors in respect of the
half-yearly financial report
We confirm to the best of our knowledge:
-- the condensed set of financial statements have been prepared
in accordance with the Statement Half-yearly financial reports
issued by the UK Accounting Standards Board;
-- the interim management report includes a fair review of the information required by:
o DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of the important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
o DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that may have materially
effected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
By Order of the Board
Graham Urquhart FCIS
Secretary
25 October 2011
Enquiries : Graham Urquhart, FCIS, Company Secretary Tel: 020 3216 2000
Roland Cornish, Beaumont Cornish Limited Tel: 020 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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