Oxford Technology VCT plc : Half-yearly report

19 oktober 2016

Oxford Technology Venture Capital Trust Plc

Unaudited Half-Yearly Report

For the period

1 March 2016 to 31 August 2016

Financial Headlines

	6 Months Ended 31 August 2016	Year Ended 29 February 2016
Net Assets at Period End	£3.24m	£3.33m
Net Asset Value per Share	59.7p	61.2p
Cumulative Dividend per Share	54.0p	52.7p
Total NAV Return per Share	113.7p	113.9p
Share Price	38.0p	40.5p
Earnings per Share	(0.2)p	(3.8)p

Statement on behalf of the Board

I am pleased to present the unaudited results for the six month period ended 31 August 2016.

Results and dividends
The Company's net asset value (NAV) per share has reduced from 61.2p at 29 February 2016 by 1.5p to 59.7p at 31 August 2016.  This 1.5p per share movement in NAV is the sum of a reduction in underlying NAV per share of 0.2p and the payment of a 1.3p per share final revenue dividend on 20 July 2016.

Portfolio review
The Directors have reviewed the valuations of each investee company in the unquoted portfolio but have made only minor changes.  The largest holding in the portfolio, that of Select Technology, increased modestly due to continued profitable growth.  Our very small holding in DHA was exited at around book value for cash. 

The Company did not participate in the Scancell placing and open AIM offer due to restrictions imposed by VCT rules.  The Scancell share price remained broadly stable through the period and ended the half year period flat at 17.5p per share. 

Shareholders should remain aware that the portfolio is very concentrated with just two holdings - Scancell and Select Technology - representing over 85% of NAV. The value of the portfolio is thus very sensitive to changes in valuations of these holdings.

The Directors continue to take an active interest in the investee companies and look forward to continuing to work with OTM to maximise shareholder value and to secure profitable exits from these investee companies at the appropriate time and to enable further dividends to be paid.

Liquidity
At period end we had net current assets of just over £143,000. 

VCT qualifying status
The Board has procedures in place to ensure that the Company continues to comply with the conditions laid down by HMRC for maintaining approval as a VCT.

Presentation of half-yearly report
In order to reduce the length of this report, we have omitted details of the Company's objectives and investment strategy, its Advisers and Registrars and how to buy and sell shares in the Company. These details are all included in the Annual Reports, which, together with previous half-yearly reports, are available for viewing on the Oxford Technology website.

Outlook
The last six months has seen a number of changes to qualification conditions for VCTs. However, as we are not looking to invest in new companies we do not believe that these changes will give rise to any issues for our Company. Likewise any uncertainties surrounding the departure from the EU are unlikely to affect us directly. We were pleased to welcome a large number of shareholders to our AGM in July. John Chiplin, the new chairman of one of our investee companies, Scancell, gave a presentation that is available for download from the Oxford Technology website.

The Directors' view remains that the portfolio - though concentrated - is well positioned for growth and continued cash generation.  We continue to work to maximise value for shareholders and will, as per our stated strategy, continue to seek to crystallise this value and distribute to shareholders via dividend payments when valuation and liquidity allow.

Finally I would like to take this opportunity to thank shareholders for their continued support.

Alex Starling
Chairman
19 October 2016
Investment Portfolio as at 31 August 2016

Company	Description	Net Cost of investment £'000	Carrying value at 31/8/16 £'000	Change in value for the 6 month period £'000	% Equity held OT1	% Equity held All OT	% of fund investment value
Select Technology	Photocopier interfaces	488	1,567	30	30.0	58.5	50.6
Scancell (bid price 17.5p)	Antibody based cancer therapeutics	344	1,205	-	2.6	4.4	38.8
Getmapping	Aerial photography	518	224	-	3.9	3.9	7.2
Biocote	Bactericidal powder coating	85	106	-	6.6	6.6	3.4
Total Investments		1,435	3,102	30			100%
Other Net Assets			143
Net Assets			3,245

Responsibility Statement of the Directors in respect of the half-yearly report

We confirm that to the best of our knowledge:

• the half-yearly financial statements have been prepared in accordance with the statement "Interim Financial Reporting" issued by the Financial Reporting Council;

• the half-yearly report includes a fair review of the information required by the Financial Services Authority 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.
   
• a description of the principal risks and uncertainties for the remaining six months of the year.
   
• a description of related party transactions that have taken place in the first six months of the current financial year that may have materially affected the financial position or performance of the Company during that period and any changes in the related party transactions described in the last annual report that could do so.

On behalf of the Board:

Alex Starling
Chairman
19 October 2016

Income Statement

	Six months to 31 Aug 2016			Six months to 31 Aug 2015			Year to 29 February 2016
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gain/(Loss) on disposal of fixed asset investments	-	-	-	-	-	-	-	-	-
Gain/(Loss) on valuation of fixed asset investments	-	30	30	-	193	193	-	(265)	(265)
Other income	-	-	-	-	-	-	154	-	154
Investment management fees	(4)	(13)	(17)	(4)	(13)	(17)	(9)	(26)	(35)
Other expenses	(24)	-	(24)	(28)	-	(28)	(60)	-	(60)
Return on ordinary activities before tax	(28)	17	(11)	(32)	180	148	85	(291)	(206)
Taxation on ordinary activities	-	-	-	-	-	-	-	-	-
Return on ordinary activities after tax	(28)	17	(11)	(32)	180	148	85	(291)	(206)
Earnings per share - basic and diluted	(0.5)p	0.3p	(0.2p)	(0.6)p	3.4p	2.8p	1.5p	(5.3)p	(3.8p)

• 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 accompanying notes are an integral part of the half-yearly report.

• 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.

The Company has no recognised gains or losses other than the results for the period as set out above. Accordingly a Statement of Comprehensive Income is not required.

Balance Sheet

	As at 31 Aug 2016		As at 31 Aug 2015		As at 29 February 2016
	£'000	£'000	£'000	£'000	£'000	£'000
Fixed asset investments*		3,102		3,545		3,081
Current assets:
Debtors	18		17		2
Creditors:
Amounts falling due within one year	(6)		(4)		(9)
Cash at Bank	131		123		253
Net current assets		143		136		246
Net assets		3,245		3,681		3,327
Called up equity share capital		543		543		543
Share premium		176		176		176
Unrealised capital reserve		1,666		3,297		1,346
Profit and Loss account reserve		860		(335)		1,262
Total equity shareholders' funds		3,245		3,681		3,327
Net asset value per share		59.7p		67.8p		61.2p

* At fair value through profit and loss

Statement of Changes in Equity

	Share Capital £'000	Share Premium £'000	Unrealised Capital Reserve £'000	Profit & Loss   Reserve £'000	Total  £'000
As at 1 March 2015	543	176	3,104	(290)	3,533
Revenue return on ordinary activities after tax	-	-	-	(32)	(32)
Expenses charged to capital	-	-	-	(13)	(13)
Current period gain on fair value of investments	-	-	193	-	193
Balance as at 31 August 2015	543	176	3,297	(335)	3,681
As at 1 March 2015	543	176	3,104	(290)	3,533
Revenue return on ordinary activities after tax	-	-	-	85	85
Expenses charged to capital	-	-	-	(26)	(26)
Current period losses on fair value of investments	-	-	(265)	-	(265)
Movement in reserves	-	-	(1,493)	1,493	-
Balance as at 29 February 2016	543	176	1,346	1,262	3,327
As at 1 March 2016	543	176	1,346	1,262	3,327
Revenue return on ordinary activities after tax	-	-	-	(28)	(28)
Expenses charged to capital	-	-	-	(13)	(13)
Current period gains on fair value of investments	-	-	30	-	30
Prior years' losses now realised	-	-	290	(290)	-
Dividends paid	-	-	-	(71)	(71)
Balance as at 31 August 2016	543	176	1,666	860	3,245

Statement of Cash Flows

	Six months to 31 Aug 2016	Six months to 31 Aug 2015	Year to 29 February 2016
	£'000	£'000	£'000
Cash flows from operating activities
Return on ordinary activities before tax	(11)	148	(206)
Adjustments for:
(Increase)/decrease in debtors	(15)	(14)	-
Increase/(decrease) in creditors	(4)	(4)	1
Gain on disposal of fixed asset investments	-	-	-
Loss/(gain) on valuation of fixed asset investments	(30)	(193)	265
Net cash generated from operating activities	(60)	(63)	60
Cash flows from investing activities
Purchase of fixed asset investments	-	-	-
Sale of fixed asset investments	9	-	7
Total cash flows from investing activities	9	-	7
Cash flows from financing activities
Dividends paid	(71)	-	-
Total cash flows from financing activities	(71)	-	-
Increase/(decrease) in cash and cash equivalents	(122)	(63)	67
Opening cash and cash equivalents	253	186	186
Closing cash and cash equivalents	131	123	253

  

Notes to the Half-Yearly Report

1.         Basis of preparation
The unaudited half-yearly results which cover the six months to 31 August 2016 have been prepared in accordance with the Financial Reporting Council's (FRC) Financial Reporting Standard 104 Interim Financial Reporting ('FRS 104') and the Statement of Recommended Practice (SORP) for Investment Companies re-issued by the Association of Investment Companies in November 2014. Details of the accounting policies and valuation methodologies are included in the Annual Report.

2.         Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 31 August 2016 do not constitute statutory accounts within the meaning of Section 415 of the Companies Act 2006. The comparative figures for the year ended 29 February 2016 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The independent auditor's report on those financial statements, in accordance with chapter 3, part 16 of the Companies Act 2006, was unqualified. This half-yearly report has not been reviewed by the Company's auditor.

3.         Earnings per share
The calculation of earnings per share for the period is based on the return attributable to shareholders divided by the weighted average number of shares in issue during the period. There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant.

4.         Net asset value per share
The net asset value per share is based on the net assets at the period end divided by the number of shares in issue at that date (5,431,656 in each case).

5.         Principal risks and uncertainties
The Company's assets consist of equity and fixed interest investments, cash and liquid resources. 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 Venture Capital Trust, investment and strategic, regulatory, reputational, operational and financial risks. These risks, and the way in which they are managed, are described in more detail in the Company's Annual Report and Accounts for the year ended 29 February 2016. The Company's principal risks and uncertainties have not changed materially since the date of that report.

6.         Related party transactions
OT1 Managers Ltd, a wholly owned subsidiary, provides investment management services to the Company for a fee of 1% of net assets per annum.

7.          Copies of this statement are available from Oxford Technology Management, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA and on the Company's website - www.oxfordtechnology.com /vct1.

Board Directors : Alex Starling, Robin Goodfellow, Richard Roth and David Livesley

Investment Manager : OT1 Managers Ltd with services contracted to Oxford Technology Management Ltd

Website: www.oxfordtechnology.com/vct1

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