Half-yearly report
Chrysalis VCT plc
Interim Statement for the six months ended 30 April 2007
Recent Performance Summary
30 April 31 Oct 30 April
2007 2006 2006
pence pence pence
Ordinary shares
Net asset value per share 88.70 84.70 77.80
Cumulative dividends paid per ordinary 13.45 10.45 10.45
share
Total return 102.15 95.15 88.25
'D' share
Net asset value per share 104.30 96.50 94.50
Cumulative dividends paid per ordinary 1.25 - -
share
Total return 105.55 96.50 94.50
'E' share
Net asset value per share 95.00 95.40 94.50
Cumulative dividends paid per ordinary 1.25 - -
share
Total return 96.25 95.40 94.50
CHAIRMAN'S STATEMENT
Introduction
Once again, it is very pleasing to report that Chrysalis VCT has
continued to perform well throughout the period under review. During
the six months to 30 April 2007, a number of further profitable exits
were achieved, while other portfolio companies made good progress and
a significant number of new investments were made.
Net Asset Value
Ordinary Shares
At 30 April 2007, the Net Asset Value per Ordinary Share ("NAV") had
risen to 88.7p, an increase of 7.0p (8.6%) since the previous year
end of 31 October 2006 (after adjusting for the 3p per Ordinary Share
dividend paid in the period).
Total Return to original Ordinary Shareholders (NAV plus cumulative
dividends paid since launch) now stands at 102.15p per share,
compared to an original net of income tax cost of 80p per share.
'D' shares
The NAV of the 'D' Shares has risen to 104.3p over the period, being
an increase of 9.05p or 9.4% since 31 October 2006 (after adding back
the 'D' share dividend of 1.25p paid in the period).
'E' shares
The NAV of the 'E' Shares stood at 95.0p at 30 April 2007, an
increase of 0.85p or 0.9% since 31 October 2006 (after adding back
the 'E' share dividend of 1.25p paid in the period).
Venture Capital Investments
During the period, the Company made six new investments and five
follow on investments at a total cost of �3.7 million. These
investments were allocated as follows between the individual share
pools:
Number of Investments
�'000
Ordinary Share pool 9 3,377
'D' Share pool 5 248
'E' Share pool 2 100
3,725
At the period end, the 'D' Share pool held eight investments valued
at �448,000 and the 'E' Share pool held two investments valued at
�100,000. As mentioned in earlier reports, although the 'E' share
pool is no longer limiting the scope of its investments to the art
and antiques sector, it is seeking to select potentially less risky
investments than would be accepted by the 'D' share and Ordinary
share pools. As a result of this approach, the rate of investment
for the 'E' share pool has been slower than the other pools.
During the period, the Company achieved a series of successful
disposals within the Ordinary share pool, generating �6.7 million of
proceeds and realising gains against the previous carrying values of
�1.2 million and profit over cost of �4.4 million. The most notable
disposals were Ma Potters and ProTx Group, which produced profits
against cost of �1.3 million and �1.8 million respectively.
At the period end, the Board has reviewed the valuations of the
unquoted investments and made some adjustments to the carrying
values. Although there were a small number of reductions, a greater
number of investments justified increases. The most notable has been
to the investment in ILG Digital Limited (formerly i-Level), a
digital advertising agency held by the Ordinary share pool, where
trading has been particularly strong, supporting an increase of
�660,000 to �2.1 million.
Overall (including the AIM-quoted stocks) the Ordinary share
portfolio gave rise to �1.2 million (3.6p per share) of unrealised
gains and the 'D' Share portfolio, unrealised gains of �45,000 (8.4p
per share). Both of the 'E' Share portfolio's investments continue
to be held at cost.
Results and dividend
The return after taxation for the Company for the period amounted to
a gain of �2,305,000 comprising a revenue return of �213,000 and a
capital surplus of �2,092,000.
Share buybacks
The Company continues to operate a share buyback policy in order to
provide liquidity in the market for its shares. Any Shareholders
wishing to sell their holding should consult their financial adviser
to ensure they understand the potential tax implications of such a
disposal. Shares cannot be sold directly to the Company but must be
sold via the Stock Market through a stockbroker.
During the period, the Company repurchased 834,725 Ordinary shares,
at an average price of 73.8p per share for cancellation.
Outlook
It is now three years since the current investment management team
and Board took over the running of the Company. Although the
performance in the initial years under the original management was
poor, the current management team have been able to emphatically
turn around the Company's fortunes and have now delivered strong
increases in NAV over each of the last six half-yearly reporting
periods. Over that time, the NAV per Ordinary share has risen from
60.7p to 88.7p with a further 8p of dividends being paid. This is
equivalent to a return on capital of 59.3% and is an excellent
performance for which the Board congratulates the investment
management team.
The investment exits achieved over the last year or so have not only
returned significant levels of cash to your Company, but have also
changed the profile of the Company's investment portfolio. With a
more immature portfolio than has been the case for some time, it is
in unrealistic in the short term to expect the rate of increase in
the Company's NAV and Total Return to continue at the levels seen in
recent periods. However, the Board remains confident that attractive
returns will be made over the medium term.
Over the remainder of the year, the management team's focus will
remain split between making new investments for the 'D' share, 'E'
share and Ordinary pools, while also working with the more mature
portfolio companies within the Ordinary share pool with a view to
achieving further profitable exits. The Board is confident that the
management team will continue to be effective in these roles.
Robert Drummond
Chairman
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 April 2007
As at 30 Apr 2007 As at As at
30 Apr 31 Oct
2006 2006
Ordinary 'D' 'E'
shares Shares Shares Total Total Total
�'000 �'000 �'000 �'000 �'000 �'000
Investments 23,789 448 100 24,337 23,900 24,776
Net current assets 5,856 111 471 6,438 4,280 5,348
Net assets 29,645 559 571 30,775 28,180 30,124
Capital and reserves
Called up share capital 335 5 6 346 360 354
Capital redemption 41 - - 41 27 33
reserve
Share premium - 502 562 1,064 1,064 1,064
Merger reserve 8,694 - - 8,694 8,694 8,694
Special reserve 8,007 - - 8,007 10,404 9,436
Capital reserve - 9,529 (5) (6) 9,518 3,657 5,782
realised
Capital reserve - 2,734 50 - 2,784 4,166 4,639
unrealised
Revenue reserve 305 7 9 321 (192) 122
Total equity 29,645 559 571 30,775 28,180 30,124
Net asset value per:
Ordinary share 88.7p 77.8p 84.7p
'D' share 104.3p 94.5p 96.5p
'E' share 95.0p 94.5p 95.4p
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the period ended 30 April 2007
30 Apr 2007 30 Apr 31 Oct
2006 2006
Ordinary 'D' 'E'
shares Shares Shares Total Total Total
�'000 �'000 �'000 �'000 �'000 �'000
Opening 29,033 517 574 30,124 27,401 27,401
shareholders' fund
Issue of shares - - - - 1,075 1,137
Purchase of own (619) - - (619) (1,153) (733)
shares
Total recognised
gains in the period 2,252 49 4 2,305 1,148 3,512
Distributions (1,021) (7) (7) (1,035) (711) (711)
29,645 559 571 30,775 28,180 30,124
UNAUDITED INCOME STATEMENT
for the six months ended 30 April 2007
Six months ended
Company Total 30 April 2007
Revenue Capital Total
�'000 �'000 �'000
Income 522 - 522
Gains on investments:
Realised - 1,207 1,207
Unrealised - 1,195 1,195
522 2,402 2,924
Investment management fees (62) (188) (250)
Performance incentive fees - (219) (219)
Other expenses (150) - (150)
Return on ordinary activities 310 1,995 2,305
Share issue costs - - -
Return on ordinary activities before 310 1,995 2,305
taxation
Taxation (97) 97 -
Return attributable to equity shareholders 213 2,092 2,305
Return per Ordinary share 0.6p 6.0p 6.6p
Return per 'D' share 1.1p 8.0p 9.1p
Return per 'E' share 1.3p (0.5p) 0.8p
Six months ended Year ended
Company Total 30 April 2006 31 October 2006
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Income 446 - 446 1,149
Gains on investments:
Realised - 87 87 1,119
Unrealised - 1,523 1,523 2,636
446 1,610 2,056 4,904
Investment management fees (58) (175) (233) (465)
Performance incentive fees
Other expenses (165) - (165) (333)
Return on ordinary 223 1,435 1,658 4,106
activities
Share issue costs (507) - (507) (520)
Return on ordinary (284) 1,435 1,151 3,586
activities before taxation
Taxation (36) 33 (3) (74)
Return attributable to (320) 1,468 1,148 3,512
equity shareholders
Return per Ordinary share (0.9p) 4.1p 3.2p 9.9p
Return per 'D' share - - - 1.9p
Return per 'E' share - - - 0.9p
Six months ended
Ordinary shares 30 April 2007
Revenue Capital Total
�'000 �'000 �'000
Income 496 - 496
Gains on investments:
Realised - 1,207 1,207
Unrealised - 1,150 1,150
496 2,357 2,853
Investment management fees (60) (180) (240)
Performance incentive fees - (219) (219)
Other expenses (144) - (144)
Return on ordinary activities 292 1,958 2,250
Share issue costs - - -
Return on ordinary activities before 292 1,958 2,250
taxation
Taxation (93) 95 2
Return attributable to equity shareholders 199 2,053 2,252
Six months ended Year ended
Ordinary shares 30 April 2006 31 October 2006
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Income 446 - 446 1,122
Gains on investments
Realised - 87 87 1,119
Unrealised - 1,523 1,523 2,631
446 1,610 2,056 4,782
Investment management fees (58) (175) (233) (456)
Performance incentive fees
Other expenses (165) - (165) (328)
Return on ordinary 223 1,435 1,658 4,088
activities
Share issue costs (507) - (507) (520)
Return on ordinary (284) 1,435 1,151 3,568
activities before taxation
Taxation (36) 33 (3) (72)
Return attributable to (320) 1,468 1,148 3,496
equity shareholders
Six months ended
'D' Shares 30 April 2007
Revenue Capital Total
�'000 �'000 �'000
Income 11 - 11
Gains on investments:
Realised - - -
Unrealised - 45 45
11 45 56
Investment management fees (1) (3) (4)
Other expenses (2) - (2)
Return on ordinary activities before 8 42 50
taxation
Taxation (2) 1 (1)
Return attributable to equity shareholders 6 43 49
Six months ended Year ended
'D' Shares 30 April 2006 31 October 2006
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Income - - - 13
Gains on investments
Realised - - - -
Unrealised - - - 5
- - - 18
Investment management fees - - - (5)
Other expenses - - - (2)
Return on ordinary - - - 11
activities before taxation
Taxation - - - (1)
Return attributable to - - - 10
equity shareholders
Six months ended
'E' Shares 30 April 2007
Revenue Capital Total
�'000 �'000 �'000
Income 15 - 15
Gains on investments Realised - - -
- - -
Unrealised
15 - 15
Investment management fees (1) (5) (6)
Other expenses (4) - (4)
Return on ordinary activities before 10 (5) 5
taxation
Taxation (2) 1 (1)
Return attributable to equity shareholders 8 (4) 4
Six months ended Year ended
'E' Shares 30 April 2006 31 October 2006
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Income - - - 14
Gains on investments:
Realised - - - -
Unrealised - - - -
- - - 14
Investment management fees - - - (4)
Other expenses - - - (3)
Return on ordinary - - - 7
activities before taxation
Taxation - - - (1)
Return attributable to - - - 6
equity shareholders
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 April 2007
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2007 2006 2006
Note �'000 �'000 �'000
Cash (outflow)/inflow from
operating activities and 1
returns on investments (1,639) 72 349
Capital expenditure
Purchase of investments (5,585) (885) (3,671)
Proceeds on disposal of 8,426 34 4,337
investments
Net cash (outflow)/inflow 2,841 (851) 666
from capital expenditure
Acquisitions
Purchase of subsidiary - 3 (18)
undertakings
- 3 (18)
Equity dividends paid (1,035) (711) (711)
Net cash (outflow)/inflow 167 (1,487) 286
before financing
Financing
Issue of shares - 1,137 1,137
Share issue costs (6) (431) (527)
Purchase of own shares (588) (681) (1,120)
Net cash inflow/(outflow) (594) 25 (510)
from financing
(Decrease)/increase in cash 2 (427) (1,462) (224)
Notes to the cash flow
statement:
1 Cash inflow from
operating activities and
returns on investments
Net revenue return on 310 223 700
ordinary activities
Expenses charged to capital (407) (175) (349)
Provision against bad debts - - 8
Costs relating to prior - - 21
year merger
(Increase)/decrease in (1,608) 3 (39)
other debtors
Increase/(decrease) in 66 21 8
other creditors
Net cash (outflow)/inflow (1,639) 72 349
from operating activities
2 Analysis of net funds
Beginning of period 5,418 5,642 5,642
Net cash (outflow)/inflow (427) (1,462) (224)
End of period 4,991 4,180 5,418
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 April 2007
Ordinary Share pool
Movement % of
in the portfolio
Cost Valuation period by value
�'000 �'000 �'000
Top twenty venture capital
investments
Babel Media Limited 1,555 2,786 - 9.9%
Precision Dental Laboratories 2,100 2,167 - 7.7%
Group plc
ILG Digital Limited 806 2,100 660 7.4%
Wessex Advanced Switching 699 1,292 116 4.6%
Products Limited
Centre Design Limited 1,350 1,205 - 4.3%
Glisten plc * 188 940 33 3.3%
Spice Inns Limited 850 850 - 3.0%
Triaster Limited 758 829 (92) 2.9%
British International 700 700 - 2.5%
Holdings Limited
Mentorion Limited 700 700 - 2.5%
Mentorion II Limited 700 700 - 2.5%
Advanced Media Information 615 695 - 2.5%
Limited
RFTRAQ Limited (formerly Core 325 680 68 2.4%
Control)
Ensign Communications Limited 500 624 124 2.2%
The Capital Pub Company 505 580 - 2.1%
Limited
YouGov plc * 44 318 79 1.1%
CPI Acquisition UK Limited 300 300 - 1.1%
Planet Sport (Holdings) 250 225 - 0.8%
Limited
Berkeley Scott Group plc * 320 218 158 0.8%
Forward Media Limited 440 204 (48) 0.7%
13,705 18,113 1,098 64.3%
Other venture capital 2,507 1,016 86 3.6%
investments
Listed fixed income 16.5%
securities 4,843 4,660 (34)
Subtotal 21,055 23,789 1,150 84.4%
Cash at bank and in hand 4,403 15.6%
Ordinary Share Pool - Total 28,192 100.0%
Movement % of
in the portfolio
Cost Valuation period by value
�'000 �'000 �'000
'D' Share pool
Brainjuicer plc * 48 80 32 14.4%
Hat Pin plc * 50 68 13 12.2%
British International 50 50 - 8.9%
Holdings Limited
CPI Acquisition UK 50 50 - 8.9%
Limited
Mentorion Limited 50 50 - 8.9%
Mentorion II Limited 50 50 - 8.9%
Rhino Sports and Leisure 50 50 - 8.9%
Limited
Spice Inns Limited 50 50 - 8.9%
398 448 45 80.0%
Cash at bank and in hand 112 20.0%
'D' Share pool - Total 560 100.0%
'E' Share pool
CPI Acquisition UK 50 50 - 8.7%
Limited
Spice Inns Limited 50 50 - 8.7%
100 100 - 17.4%
Cash at bank and in hand 476 82.6%
'E' Share pool - Total 576 100.0%
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies" revised December 2005 ("SORP"). Except as stated in
note 2, consistent accounting polices have been applied to both this
year and the prior years' accounts.
The financial statements are prepared under the historical cost
convention as modified by the revaluation of certain financial
instruments
Presentation of Income Statement
InvestmentsAll investments are designated as "fair value through
profit or loss" assets and are initially measured at cost, equivalent
to their fair value. Thereafter the investments are measured at
subsequent reporting dates at fair value.
Listed fixed income investments and investments quoted on AIM are
measured using bid prices with illiquidity discounts applied where
deemed appropriate.
In respect of unquoted instruments, fair value is established by
using International Private Equity and Venture Capital Valuation
Guidelines. Where no reliable fair value can be estimated for such
unquoted equity investments they are carried at cost, subject to any
provision for impairment. Where an investee company has gone into
receivership or liquidation the investment, although not physically
disposed of, is treated as being realised.
Gains and losses arising from changes in fair value are included in
the income statement for the year as a capital item and transaction
costs on acquisition or disposal of the investment expensed.
It is not the Company's policy to exercise either significant or
controlling influence over investee companies. Therefore the results
of these companies are not incorporated into the revenue account
except to the extent of any income accrued.
Income
Dividend income from investments is recognised when the shareholders'
rights to receive payment has been established, normally the ex
dividend date.
Interest income is accrued on a timely basis, by reference to the
principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset's net carrying amount, and only where there is reasonable
certainty of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of
the analysis between revenue and capital items presented within the
income statement, all expenses have been presented as revenue items
except as follows:
Expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment.
Expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of the
investments held can be demonstrated. The Company has adopted the
policy of allocating investment managers fees, 75% to the capital
reserve and 25% to the revenue account as permitted by the SORP. The
allocation is in line with the Board's expectation of long term
returns from the Company's investments in the form of capital gains
and income respectively.
Performance incentive fees arising from the disposal of investments
are deducted from the capital account.
Issue costs
Issue costs have been deducted from the share premium account.
Deferred taxation
Deferred taxation is provided in full on timing differences that
result in an obligation at the balance sheet date to pay more tax, or
a right to pay less tax, at a future date, at rates expected to apply
when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and
expenditure in taxation computations in periods different from those
in which they are included in financial statements.
2. All revenue and capital items in the Income Statement derive from
continuing operations.
3. The Company has only one class of business and derives its income
from investments made in shares, securities and bank deposits.
4. The comparative figures were in respect of the period ended 30
April 2006 and the year ended 31 October 2006 respectively.
5. Net Asset Value per share calculations are based on the following:
Ordinary Shares 'D' Shares 'E' Shares
Net Assets (�'000) 29,645 559 571
Number of shares in issue 33,431,034 536,072 601,376
at period end
6. Return per share calculations are based on the following:
Ordinary Shares 'D' Shares 'E' Shares
Revenue return per share
based on:
Net revenue return after 199 6 8
taxation (�'000)
Weighted average number of 34,006,157 536,072 601,376
shares in issue
Capital return per share
based on:
Net capital gain/(loss) 2,053 43 (43)
after taxation (�'000)
Weighted average number of 34,006,157 536,072 601,376
shares in issue
7. Dividends
30 April 2007 31 Oct 2006
Revenue Capital Total Total
�'000 �'000 �'000 �'000
Paid in year
Ordinary shares 2006 interim - 1,021 1,021 -
(paid 02/03/2007)
'D' shares 2006 final (paid 7 - - -
27/03/2007)
'E' shares 2006 final (paid 7 - - -
27/03/2007)
Ordinary shares 2005 final - - - 711
(paid 04/04/2006)
14 1,021 1,035 711
Proposed
'D' shares 2006 final - - - 7
'E' shares 2006 final - - - 7
- - - 14
8. Reserves
Share Capital Merger Special Capital Capital Revenue
premium redemption reserve reserve reserve reserve reserve
reserve unrealised realised
�'000 �'000 �'000 �'000 �'000 �'000 �'000
At 1 November 1,064 33 8,694 9,436 4,639 5,782 122
2006
Shares - 8 - (619) - - -
repurchased
Expenses - - - - - (407) -
capitalised
Tax on - - - - - 97 -
capital
expenses
Realised - - - - - 1,207 -
gains
Unrealised - - - - 1,195 - -
gains
Transfer
between - - - (810) (3,050) 3,860 -
reserves
Retained net
revenue for - - - - - - 213
the year
Distributions
paid - - - - - (1,021) (14)
in year
At 30 April 1,064 41 8,694 8,007 2,784 9,518 321
2007
The above figures relate to the Company as a whole. The Special
Reserve, Capital Reserve - Realised and Revenue Reserve are all
distributable reserves.
9. The unaudited financial statements set out herein do not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985 and have not been delivered to the Registrar
of Companies. The figures for the year ended 31 October 2006 have
been extracted from the financial statements for that year, which
have been delivered to the Registrar of Companies; the auditors'
report on those financial statements was unqualified.
10. Copies of the unaudited interim results will be sent to
shareholders shortly. Further copies can be obtained from the
Company's Registered Office.
- ---END OF MESSAGE---
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