Interim Report for the half-year to 30 September 1996
This is the first interim report of Advent VCT, which covers the period from the incorporation of the Company until 30 September 1996, including the six months from the closing of the offer for subscription at £31.5 million at the beginning of April.
Highlights
The rate and quality of deal flow received since the launch of Advent VCT has been most encouraging. To the date of this announcement, Advent VCT has completed or entered into contracts for four investments in Qualifying Companies at a cost of £2.7 million (of which two investments had been completed before 30 September 1996 at a cost of £1.1 million). These investments, which are described below, include one company quoted on the Alternative Investment Market ("AIM"), two other development capital financings and one early stage financing. In all but one of these investments, Advent VCT is committed to invest further funds in due course, subject to satisfactory performance by the companies concerned, making an aggregate commitment to the four companies of £4.6 million.
A number of additional investment opportunities are currently in legal negotiations or are the subject of detailed review by the Manager.
As indicated in the prospectus, at the outset the net proceeds of the issue were invested in a portfolio of gilts and other sterling-denominated fixed interest investments. Over the first three years of the life of Advent VCT, the bulk of this quoted portfolio will be progressively redeemed to fund investments in Qualifying Companies.
Dividend
The Board has declared an interim dividend of 1.6p per share for the period to 30 September 1996, on which tax of 0.4p per share will be reclaimed by the Company on behalf of all shareholders entitled to the gross payment.
The interim dividend, together with the cash amount of the tax credit for all shareholders entitled to the gross payment, will be paid in one sum on 16 December 1996 to shareholders on the register at the close of business on 10 December 1996. This gross payment will be equivalent to 2.0p per share.
CREST
Notice is being issued to shareholders concerning the planned entry in due course of Advent VCT into CREST, the new computerised system for settling sales and purchases of shares.
Outlook
The ongoing deal flow being received by Advent Fund Managers remains strong. The Board is confident that Advent VCT will continue to find attractive opportunities for investment in Qualifying Companies.
It is expected that Advent VCT's income in the second half of the year to 31 March 1997 will be somewhat reduced compared with the period to 30 September 1996, as further investments are made in Qualifying Companies. However, the Board expects that, if current short-term interest rates prevail, the recommended final dividend for the year ending 31 March 1997 will be not less than 1.6p per share (equivalent to a gross payment of 2.0p per share), making a total gross payment for the year of 4.0p per share.
Graham Ross Russell
Chairman
Investments made to date
Advent VCT has completed or entered into contracts for four investments in the period to date at a cost of £2.7 million (of which two had been completed before 30 September 1996 at a cost of £1.1 million); they are:
Dencare Management Group plc - a £500,000 investment in a development capital financing. Dencare, which is based in Tunbridge Wells, plans to establish a network of quality dental practices controlled by a professional management team. The company currently operates three practices in the south and west of England. The investment by Advent VCT will enable Dencare to expand this network, mainly by acquisition. In addition to the initial £500,000, Advent VCT has committed a further £500,000 for investment in 1997 subject to satisfactory performance. The transaction was arranged by Advent Fund Managers.
Shalibane plc - a £600,000 investment as part of a £3.0 million development capital financing in the form of a placing upon the admission of Shalibane to the Alternative Investment Market ("AIM"). Shalibane, which is based in Camberley, is a manufacturer of specialised engineering products for the European automobile industry. The financing will provide funds for capital expenditure and new product development as well as additional working capital. The placing was sponsored by Brown Shipley & Co. Limited and Advent VCT invested alongside Northern Venture Trust, Quester VCT and other institutional and private investors.
Ozone Industries Limited - a £1 million investment in an early stage financing. Ozone Industries, which is based in Farnborough, manufactures and markets a range of ozone generators for domestic and commercial use. The financing will enable the company to expand its marketing operations and fund the development of a wider range of products. The total transaction size was £1.5 million and Advent VCT is committed to invest a further £1 million in 1998 subject to satisfactory performance. The transaction was led by Advent Fund Managers and Advent VCT invested alongside clients of Oakes Fitzwilliams & Co.
Meridian Health & Fitness Clubs (Aphronis Limited) - a £600,000 investment in a development capital financing to support the expansion of the group of health and fitness clubs planned by Meridian. The total transaction size is approximately £800,000 and the financing will enable Meridian to expand its existing Amersham club and develop the clubs planned at Maidenhead and other locations. Advent VCT is committed to invest a further £400,000 in 1997 subject to satisfactory performance. The transaction was arranged by Advent Fund Managers.
Contacts for further information:
| Sir David Cooksey | Advent VCT plc | |
| Allan Speirs | (0171) 630-9811 | |
| Julian Polhill | Polhill Communications | |
| Matthew Locke | (0171) 369-9333 |