RNS Number:0290O
Electra Kingsway VCT 3 Plc
15 December 2006
Electra Kingsway VCT 3 Plc
Unaudited Preliminary Results for the Period Ended 30 September 2006
Financial Highlights
2006
Net assets at 30 September 2006 #34.8m
Net asset value per ordinary share at 30 September 2006 99.23p
Dividend per ordinary share
Revenue -
Cumulative return to shareholders since launch
Dividends per share -
Net asset value plus dividends per share 99.23p
A copy of the Chairman's Statement, Investment Manager's Report and Unaudited
Preliminary Announcement is attached.
This unaudited preliminary announcement for the period ended 30 September 2006
does not constitute the statutory financial statements of the Company for the
period ended 30 September 2006 within the meaning of Section 240 of the
Companies Act 1985. Those financial statements have not yet been delivered to
the Registrar, nor have they been reported upon yet by the auditors.
The Report and Accounts will be sent to shareholders in January 2007 and will
thereafter be available from the Company's registered office at Paternoster
House, 65 St Paul's Churchyard, London EC4M 8AB. The Annual General Meeting
will be held on 14 February 2007 at 1.00pm at The Mermaid Conference and Events
Centre, Puddle Dock, Blackfriars, London EC4V 3DB.
For further information:
Nick Ross Electra Kingsway VCT 3 Plc
020 7214 4200
Chairman's Statement
I am pleased to be able to welcome all shareholders to the Company and to be
able to present my first Chairman's Statement. The 2005/2006 tax year was a
significant year for the VCT industry with over #750m funds raised and I am
particularly pleased to report that your Fund closed its offer on 5 April 2006,
having raised #35m, which is a good result and provides an ideal sized fund to
take advantage of the investment opportunities in the market.
Results
Although it is extremely early days, it is pleasing to note that the Fund has
got off to a very good start with the net asset value per share rising from the
94.5p starting point to 99.23p. This is a promising start and bodes well for the
future.
The investment policy of the Fund is to invest the majority of the funds in
unquoted and AIM qualifying investments, which offer the opportunity for capital
appreciation. As these investments mature and are sold, the majority of the
capital profits will be returned to shareholders in the form of tax free
dividends. Therefore, the flow of dividends will tend to be lower in the first
few years of operation as the Fund becomes invested.
VCT Qualifying Status
VCTs have to comply with a number of industry tests, in particular at the end of
the third year of operation, and thereafter the Fund has to ensure that 70% of
its assets are invested in qualifying companies. It is anticipated that at the
end of year three, the investment portfolio will comprise over 25 unquoted and
AIM qualifying investments, which will represent approximately 80% of the total
assets with the remaining 20% of the assets invested in two investment funds:
Electra Private Equity and Electra Active Management. This should ensure that
the portfolio is well balanced and diversified.
Your Board monitors the Company's VCT qualification status and I am pleased to
report that all of the required tests in the period were met.
Qualifying Investments: Valuation Methodology
This period's accounts have been prepared using a valuation policy drawn
substantially from the latest International Private Equity and Venture Capital
Valuation Guidelines in respect of unquoted investments.
Share Buybacks and Dividend Reinvestment
The Company operates a share buyback scheme that offers shareholders the
opportunity to sell their shares back to the Company at a 10% discount to the
last published Net Asset Value. Shareholders wishing to take advantage of the
share buyback programme should contact the investor helpline, maintained by
Downing Corporate Finance, on 020 7411 4700.
Owing to changes in the VCT legislation contained in the 2006/2007 Budget, the
Board has withdrawn the Company's Dividend Reinvestment Scheme.
Both the Board and the Investment Manager are keen to maintain high standards in
shareholder communication through the use of regular newsletters and deal
updates. Further information is available on the Investment Manager's website -
www.electraquoted.com.
Shareholder Communication
Should shareholders have any general queries, a helpline is operated by the
Fund's Corporate Adviser, Downing Corporate Finance. Any queries in respect of
lost certificates or changes of address of a shareholder should in the first
case be directed in writing to the Company's Registrar.
Outlook
The outlook for the Fund is encouraging, as the economic investment environment
remains buoyant and the Fund is able to take advantage of the strong deal flow
that the Investment Manager has established. It is important to appreciate that
the investment strategy of this Fund entails co-investing, when appropriate,
with the two other Electra Kingsway VCTs that the Investment Manager manages in
order to ensure access to larger unquoted transactions which in turn provide
better risk adjusted returns.
As the majority of the funding was received halfway through the accounting
period, the Board is not recommending the payment of a final dividend in respect
of this first financial reporting period.
I would like to thank you for your investment in the Company and I look forward
to reporting good progress to you in due course.
S Stradling, Chairman
Investment Manager's Review
The Fund closed its initial offer on 5 April 2006, having raised #35m in a
particularly buoyant funding market, which resulted from the proposed VCT tax
changes for 2006/7 announced by the Government, which entailed a reduction in
the income tax relief from 40% to 30%. Overall, we are particularly pleased
with the funding outcome and consider the size of the Fund to be an ideal
platform from which to build a well diversified investment portfolio.
Our investment strategy is primarily to invest in unquoted qualifying companies,
which we currently favour over AIM companies. The main reasons for this are the
generally lower entry multiples, downside protection, better information flow
and the ability to carry out considerably more due diligence. The majority of
the investments will be in profitable companies where we can add further value
either through strategic partnerships or the provision of expansion capital to
enable synergistic acquisitions.
Investment Overview
As at 30 September 2006, the net asset value per share was 99.23p, which
represents an increase of 5.0% from the starting net asset value per share of
the Fund. Four qualifying investments have been made, representing a total
investment of #3.3m. In addition, since the year end we invested #750,000 in
Zamano, a mobile telephone services company, #1m in Gyro International, an
advertising agency and #1.9m in Factory Media, a specialist extreme sports
publisher. The four investments made in the reporting period have all performed
well and further details on each are set out below.
New Investments in the Period
Jelf Group (www.jelfgroup.com) is an independent full service financial
consultancy, working primarily with businesses. It provides insurance healthcare
financial services and commercial financial solutions. In 2004 it floated on AIM
in order to achieve additional scale through acquisitions. In 2006, after
reporting good progress, the company sought to raise further funding to finance
the acquisition of a larger company. The Fund invested #250,160 alongside
Electra Kingsway VCT 2 for a combined stake of 3.8%. At the period end the share
price was up 70% since investment.
Find Portal owns and operates one of the UK's leading internet financial
services directory websites, www.find.co.uk, which has the most complete A to Z
listing of any UK directory website. The company was founded in 1996 and has
demonstrated a successful record of profits growth, the key to which has been
the rapid growth of online advertising and the attractiveness of the internet
for the marketing of financial products. In September 2006 the company completed
the bolt-on acquisition of Defaqto (www.defaqto.com), a company which provides
an online service to the IFA market. In total the Fund has invested #1.15m
alongside Electra Kingsway VCT 2. The carrying value of the investment was
increased by 91% to reflect the improvement in profitability and the high prices
being paid for other comparison websites.
Munro Global (www.munroglobal.net) specialises in providing market research
services in the UK, with offices in London and Newcastle. The transaction was a
management buy-in and the vendor was the retiring founder. The investment
provides both the opportunity for promoting new initiatives for organic growth
and also through further acquisitions as the market research industry is
generally very fragmented. For the year ended February 2006, Munro Global
Group's sales were in excess of #6 million. The Fund invested #875,000 alongside
Electra Kingsway VCT 2, which invested #875,000. Each fund holds a stake of
24.95% respectively.
Worthington Nicholls (www.worthington-nicholls.co.uk) installs and maintains air
conditioning units in the UK hotel and retail markets. The Company successfully
floated on AIM in June 2006, raising #7.5 million of new money to fund
acquisitions and #12.5 million of replacement capital to reduce the founding
family's holding. The shares were placed at 50p per share. Soon after its
flotation, the company announced the acquisition of Project Air, a specialist
installer of air conditioning systems to the retail sector. The estimated
turnover of the group is #25 million for the year ended September 2006. Given
the timing of its recent acquisition, its full impact will be seen in the year
ending September 2007. Due to the shortage of qualified air conditioning
providers, the company had already contracted an estimated 100% and 50%
respectively of its 2006 and 2007 turnover at flotation. The future of the
company is linked to European Union legislation enforcing air conditioning
standards and the age of the UK's hotel and retail estate. On flotation, the
Fund invested #1,000,000 with Electra Kingsway VCT 2 investing a further
#1,000,000. The two funds each hold 3% respectively of Worthington Nicholls. At
the period end the share price had risen by 39%.
Non-qualifying Investments
The Fund has also committed investments to two non-qualifying collective
investment funds. Of these, Electra Private Equity represents 15% of the net
asset value of the Fund and the holding increased in value by 3.5% in the
period. Electra Private Equity is a private equity fund specialising in unquoted
investments and is managed by Electra Partners LLP.
Outlook
The Fund has started well and is on track to meet its investment objectives.
Deal flow is currently particularly strong and we would anticipate completing a
number of further transactions over the next few months. The majority of the
transactions in the pipeline are unquoted investments, where we tend to be able
to invest at a significant discount to the quoted market.
Portfolio Summary
Qualifying Investments Cost at 30 Performance in Valuation at 30 % of Portfolio by
September 2006 period ended 30 September 2006 Value
September 2006
# # # %
Find Portal 1,150,000 1,041,900 2,191,900 20.52
Worthington Nicholls 1,000,000 390,000 1,390,000 13.01
Munro Global 875,000 - 875,000 8.19
Jelf Group 250,160 174,640 424,800 3.98
3,275,160 1,606,540 4,881,700 45.70
Non Qualifying Investments
Electra Private Equity Plc 5,150,708 181,792 5,332,500 49.91
Electra Active Management Plc 500,000 (30,891) 469,109 4.39
5,650,708 150,901 5,801,609 54.30
8,925,868 1,757,441 10,683,309 100.00
Other Assets 24,275,000
Liquidity funds 143,768
Cash 24,418,768
Total 35,102,077
Qualifying Investments*
Jelf Group Year ended September 2005
#m
Cost #250,160
Valuation #424,800 Sales 11.5
Basis of Valuation Bid market price (AIM) Profit before tax 1.0
Equity held 0.6% Retained profit 0.7
Business Regional IFA network Net assets 4.4
Worthington Nicholls Year ended September 2005
Cost #1,000,000
Valuation #1,390,000 Sales 10.1
Basis of Valuation Bid market price (AIM) Profit before tax -0.8
Equity held 3.08% Retained profit -0.7
Business Air conditioning contractor Net assets 0.8
Munro Global (FDS) Year ended February 2006
Cost #875,000
Valuation #875,000 Sales 6.1
Basis of Valuation Price of recent investment Profit before tax 0.2
Equity held 24.95% Retained profit 0.1
Business Market research company Net assets 0.7
Find Portal Period ended May 2006
Cost #1,150,000
Valuation #2,191,900 Sales 3.0
Basis of Valuation Fair value Profit before tax -0.9
Equity held 8.54% Retained profit -1.4
Business An internet financial Net assets -0.7
directory
* Information on the above investments is extracted from their latest audited
accounts
Unaudited Income Statement
For the period ended 30 September 2006
2006
Revenue Capital Total
# # #
Unrealised gains on investments - 1,757,441 1,757,441
Income 667,942 - 667,942
667,942 1,757,441 2,425,383
Investment management fees (114,459) (343,376) (457,835)
Other expenses (307,143) - (307,143)
(421,602) (343,376) (764,978)
Return on Ordinary Activities before
Taxation
246,340 1,414,065 1,660,405
Tax on ordinary activities - - -
Return on Ordinary Activities after
Taxation
246,340 1,414,065 1,660,405
Basic and diluted return to
Shareholders per Ordinary Share
1.38p 7.94p 9.32p
The amounts dealt with in the Income Statement are all derived from continuing
activities.
No operations were acquired or discontinued in the period.
There are no recognised gains and losses other than those included in the Income
Statement.
Unaudited Reconciliation of Total Shareholders' Funds
For the period ended 30 September 2006 2006
#
Total Return on ordinary activities after taxation 1,660,405
Share issue expenses charged to Share Premium account (1,929,875)
Ordinary shares issued 35,088,835
Preference shares issued 50,000
Repurchase of preference shares (50,000)
Movements in Total Shareholders' Funds 34,819,365
Total Shareholders' Funds at incorporation -
Total Shareholders' Funds 34,819,365
Unaudited Balance Sheet
As at 30 September 2006
2006
# #
Fixed Assets
Investments held at fair value 10,683,309
Current Assets
Debtors 101,583
Other investments 24,275,000
Cash at bank 143,768
24,520,351
Current Liabilities
Creditors: amounts falling due within one year 328,570
328,570
Net Current Assets 24,191,781
Total assets less current liabilities 34,875,090
Creditors: amounts falling due after more than
one year 55,725
Net Assets 34,819,365
Capital and Reserves
Called-up share capital 350,888
Share premium 32,808,072
Realised capital reserve (343,376)
Unrealised capital reserve 1,757,441
Revenue reserve 246,340
Total Equity Shareholders' Funds 34,819,365
Net Asset Value per Ordinary Share 99.23p
Number of Ordinary Shares in issue at end of
period 35,088,835
Unaudited Cash Flow Statement
For the period ended 30 September 2006
2006
# #
Operating Activities
Investment income received 512,677
Bank deposit interest received 53,680
Investment management fees paid (254,338)
Other cash payments (182,068)
Net Cash Inflow from Operating Activities 129,951
Investing Activities
Purchases of investments (8,925,868)
Net Cash Outflow from Investing Activities (8,925,868)
Cash Outflow before use of Liquid Resource
and Financing (8,795,917)
Management of Liquid Resources
Purchase of current asset investments (24,275,000)
Net Cash Outflow from Management of Liquid
Resources (24,275,000)
Financing
Issue of ordinary shares 35,088,835
Expenses of the issue of ordinary shares
(1,929,875)
Issue of loan notes 55,725
Net Cash Inflow from Financing 33,214,685
Increase in Cash for the Period 143,768
-------END------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKPKNQBDDCBD
Electra Kingsway Vct 3 (LSE:ELK)
過去 株価チャート
から 12 2024 まで 1 2025
Electra Kingsway Vct 3 (LSE:ELK)
過去 株価チャート
から 1 2024 まで 1 2025
