Interim Results
29 November 2007 - 5:50PM
UK Regulatory
RNS Number:8220I
Limelight VCT plc
29 November 2007
FOR IMMEDIATE RELEASE 29 November 2007
Limelight VCT plc
("Limelight VCT" or the "Company")
Condensed Consolidated Half-Yearly Financial Information (unaudited)
for the period 1 April 2007 to 30 September 2007
Investment Progress and Key Events
Limelight VCT was listed on the London Stock Exchange in April 2006 in order to
invest in film production companies. The investment strategy adopted takes into
account the benefits receivable by these companies from the film tax credit
scheme announced by the Chancellor in July 2005.
As reported in our Annual Report to March 2007 there were a number of delays in
the enactment of this legislation and other changes announced by Government,
such as the restriction of sideways loss relief by UK GAAP schemes, which have
caused disruption and reduced confidence in the UK film industry and resulted in
the lowest levels of film production for many years.
Confidence and certainty are now slowly returning to the sector, helped by the
fact that the new tax credit has now been seen to be operating well for several
months.
This growing confidence has been reflected in an increasing number of film
production companies being identified as suitable investment targets over the
summer months and we are delighted to report that the first investment was made
in September, with a further two deals completing since the balance sheet date.
Details of these investments are shown on page 10.
Financial Position & Performance Summary
The lack of suitable film investments has resulted in disappointing results for
the first half of the year with a loss of #13,000 reported in our income
statement. The net asset value per share at 30 September 2007 was 92.31 pence.
No dividend is proposed. A dividend that relates to the period to 31st March
2007 and amounts to #33,720 was paid in the period.
Whilst the financial results have been disappointing, we have made good progress
in establishing the Limelight brand in the marketplace. The Limelight deal is
now better known and understood by British producers and, crucially, it is
recognised by the lawyers and accountants who advise them on their film finance
plans. It is perceived as being highly competitive for films in the #1m - #2m
budget range and we now have a good number of projects at the negotiation stage.
Post Balance Sheet Events
A second film company investment was completed in October and a third in
November. Details of these investments are shown on page 10. Negotiations
continue with a number of other producers which we anticipate will result in
further investments before the end of the financial year.
Cash that is held for future investment has now been invested in gilts to
maximize returns in the short term whilst complying with VCT regulations.
As at 1st October 2007 we have entered into an arrangement with BMS Finance Ltd,
a company with extensive experience in arranging bespoke financing, to provide
certain support services which have significantly enhanced our ability to put
together film finance transactions. BMS have employed a full time film financier
with widespread contacts in the UK film industry who is now working alongside
our Board to access potential investments. BMS are also now providing us with
in-house financial modeling and film production accounting expertise. Stuart
Stradling, Chairman of Limelight VCT plc, is also a director of BMS Finance Ltd.
Principal Risks
The Board believes that the principal risks facing the Company are:
A lack of sufficient suitable investment opportunities
Despite some increase in confidence since the enactment of the legislation, the
number of films being produced in the UK film industry continues to be lower
than anticipated. Also, the Company is not the only source of funds for film
production and it is restricted in the amount it can invest in any one company.
We are aware that we face stiff competition from one other fund in particular
which, although less competitive for tax credit based funding, can supply a
further 30 - 40% of the riskier gap financing which makes it highly attractive
to producers and is currently dominating the market for the higher budget films.
Our arrangement with BMS is helping to mitigate this risk as we are working with
them to find other forms of finance to sit alongside the Limelight offering.
This will enable us to be able to offer a better overall package to producers at
higher budget levels.
Timing of return on each transaction
The investment period on each transaction may be longer than expected due to the
operational circumstances of each film production or due to delays in the UK tax
authorities paying the tax credit back to film producers. The Company has
arrangements in place to monitor the progress of each investment and requires
each investee company to retain an experienced and reputable tax advisor to
submit all appropriate documentation within an agreed timescale. Reports from
these advisors indicate that tax credits are being repaid promptly.
Loss of VCT status
Loss of VCT status may occur if the Company breaches any of the requirements set
out in S 274 Income Tax Act 2007. Breaches include an inability to invest in
sufficient appropriate investments within the required timescale. Although
deployment of funds thus far has been slower than forecast, the current pipeline
of deals coupled with the additional expertise provided by BMS Finance provides
the Board with comfort that remaining funds can be deployed in the timescales
required to maintain the Company as a compliant VCT.
The company liaises closely with its professional advisors to assist in
complying with the VCT requirements.
Related Parties
Related party disclosures are given in note 7.
Outlook
We believe that the upturn in the industry combined with our enhanced profile
and the additional resources gained through our deal with BMS place us in a much
stronger position as we head into 2008.
Statement of Directors Responsibilities in Respect of the Half-yearly Financial
Report
We confirm that to the best of our knowledge:
* The condensed set of financial statements has been prepared in accordance
with IAS 34 "Interim Financial Reporting" as adopted by the EU;
* The interim management report includes a fair review of the information
required by:
1. *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
2. *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 have materially affected 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.
Signed on behalf of the Board
Stuart Stradling
Chairman
29 November 2007
UNAUDITED GROUP INCOME STATEMENT
For the period from 1 April 2007 to 30 September 2007
Half Year to 30 Sep 2007 Period 17 October 2005 to Period 17 October 2005 to
30 Sep 2006** 31st March 2007**
Note Revenue Capital Total* Revenue Capital Total* Revenue Capital Total*
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Investment and
other income 87 - 87 108 - 108 240 - 240
Administrative
expenses (100) - (100) (88) - (88) (173) - (173)
------ ----- ----- ------ ----- ----- ------ ----- -----
(Loss) Profit
before taxation (13) - (13) 20 - 20 67 - 67
Taxation - - - (4) - (4) (13) - (13)
------ ----- ----- ------ ----- ----- ------ ----- -----
Return
attributable
to equity
shareholders (13) - (13) 16 - 16 54 - 54
====== ===== ===== ====== ===== ===== ====== ===== =====
Return per
ordinary share
(basic and
diluted) 3 (0.23p) - (0.23p) 0.29p - 0.29p 0.96p - 0.96p
* The total column represents the Income Statement under IFRS
** The company was incorporated on 17th October 2005 and started trading in
April 2006
The notes on pages 9 to 10 form an integral part of this condensed consolidated
half-yearly financial information.
UNAUDITED GROUP BALANCE SHEET
As at 30 September 2007
Note 30 Sep 30 Sep 31 March
2007 2006 2007
#'000 #'000 #'000
Non Current Assets
Financial Investments Designated at Fair
value through profit or loss:
Film Company Investments 6 200 - -
-------- -------- ---------
200 - -
Current assets
Trade and other receivables 30 10 35
Cash and cash equivalents 4,997 5,187 5,241
-------- -------- ---------
5,027 5,197 5,276
Current liabilities
Trade and other payables (26) (2) (28)
Current tax liabilities (13) (4) (13)
-------- -------- ---------
(39) (6) (41)
-------- -------- ---------
Net current assets 4,988 5,191 5,235
-------- -------- ---------
Net assets 5,188 5,191 5,235
======== ======== =========
Shareholders' funds
Called up share capital 562 562 562
Share premium 4,619 4,613 4,619
Revenue reserve 7 16 54
-------- -------- ---------
Total equity 5,188 5,191 5,235
======== ======== =========
Net asset value per share
(pence) 4 92.31 92.37 93.15
======== ======== =========
The notes on pages 9 to 10 form an integral part of this condensed consolidated
half-yearly financial information.
UNAUDITED STATEMENT OF CHANGES IN GROUP EQUITY
Called up share Share Revenue
capital premium reserve Total
#'000 #'000 #'000 #'000
At 1 April 2007 562 4,619 54 5,235
Dividends relating to
March 2007 paid in
September 2007 - - (34) (34)
Loss for the period - - (13) (13)
------- ------ ------ ------
At 30 September 2007 562 4,619 7 5,188
======= ====== ====== ======
Called up share Share Revenue
capital premium reserve Total
#'000 #'000 #'000 #'000
At 17 October 2005 - - - -
Issue of share capital net of
expenses 575 4,613 - 5,188
Redemption of
share capital (13) - - (13)
Profit for the period - - 16 16
------ ------ ------ ------
At 30 September 2006 562 4,613 16 5,191
====== ====== ====== ======
Called up share Share Revenue
capital premium reserve Total
#'000 #'000 #'000 #'000
At 17 October 2005
Issue of share
capital net of
expenses 575 4,619 - 5,194
Redemption of
share capital (13) - - (13)
Profit for the
period - - 54 54
------ ------ ------ ------
At 31 March 2007 562 4,619 54 5,235
====== ====== ====== ======
UNAUDITED GROUP CASHFLOW STATEMENT
For the period from 1 April 2007 to 30 September 2007
6 months Period 17 Period 17
to 30 Sep 2007 October 2005 to October 2005 to
#'000 30 Sep 2006 31 March 2007
#'000 #'000
Cash flows from
operating activities
(Loss)/Profit
before Tax (13) 20 67
Increase in Other
Receivables 5 (10) (35)
(Decrease)/Increase
in Other Payables (2) 2 28
---------- ---------- ----------
Net Cash Inflow
from Operating
Activities (10) 12 60
Cash flows from
investing activities
Acquisition of
investments (200) - -
Cash flows from
financing activities
Dividend Paid (34) - -
Issue of equity net
of expenses - 5,175 5,181
---------- ---------- ----------
Increase in cash
and cash
equivalents (244) 5,187 5,241
Opening cash and
cash equivalents 5,241 - -
---------- ---------- ----------
Closing cash and
cash equivalents 4,997 5,187 5,241
========== ========== ==========
NOTES TO THE INTERIM ACCOUNTS
For the period from 1 April 2007 to 30 September 2007
1. General information
The company is a public limited company registered in England and Wales and
domiciled in the United Kingdom.
The company has a primary listing on the London Stock Exchange.
This condensed consolidated half-yearly financial information was approved for
issue on 22 November 2007.
These interim financial statements do not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 31 March 2007 were approved by the Board of Directors on 13 June 2007
and were delivered to the Registrar of Companies. The report of the auditors on
those accounts was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 237 of the Companies Act 1985.
2. Basis of preparation and accounting policies
This condensed consolidated half-yearly financial information for the half-year
ended September 30th 2007 has been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Services Authority and with
International Accounting Standard 34, "Interim Financial Reporting" as adopted
by the European Union.
The accounting policies are consistent with those of the annual financial
statements for the year ended 31 March 2007, as described in those financial
statements.
Accounting policies applicable for the first time during this financial period
are as follows:
Investments
Investments are designated at fair value through profit or loss. Unquoted
investments are stated at fair value in accordance with the International
Private Equity and Venture Capital Valuation Guidelines.
3. Return per share
The return per share is based on the net loss for the period of #13,000 and on
5,620,000 shares, being the weighted average number of shares in issue during
the period.
4. Net asset value per share
The net asset value per share is based on the net assets of the Group of
#5,188,000 and on 5,620,000 shares in issue as at 30 September 2007.
5. Dividend
A dividend that relates to the period to 31 March 2007 and amounts to #33,720
was paid in the period.
6. Investments
During the period an investment of #200,000 was made in the unquoted company
"Adulthood Ltd". The total investment comprises shares of #65,000 and loan notes
of #133,000 and associated transaction costs of #2,000. This represents a
holding of 30% of the ordinary share capital of Adulthood Ltd.
7. Related Party Transactions
Park Place Financial Strategy LLP, a limited liability partnership in which a
director of the company is a member, acts as promoter to the Company.
Thurloe and Lyndhurst LLP, a limited liability partnership in which a director
is a member, has been appointed to be a solicitor and legal advisor in respect
of film investments.
During the period the Company has carried out transactions with the above
parties in the normal course of business and on an arms length basis:
Half Year Period 17 Period 17
to October 2005 October 2005
30 September to 30 September to 31 March
2007 2006 2007
#'000's #'000's #'000's
Park Place Financial
Strategy LLP - 437 437
Share issue expenses
Promoters fees 9 18 18
Thurloe and Lyndhurst LLP
Legal Fees relating to investments 4 - -
8. Post Balance Sheet Events
Since the balance sheet date we have made two further investments.
* An investment of #180,000 has been made in the unquoted company Abrahams
Point Ltd. The total investment comprises shares of #60,000 and loan notes
of #118,000 and associated transaction costs of #2,000. This represents a
holding of 17% of the ordinary share capital of Abrahams Point.
* An investment of #227,000 has been made in the unquoted company Parallax
(IKYK) Limited. The total investment comprises shares of #75,000 and loan
notes of #150,000 and associated transaction costs of #2,000. This
represents a holding of 30% of the ordinary share capital of Parallax (IKYK)
Limited.
Enquiries:
Limelight VCT plc
Michael Henry 020 7898 9044
Beaumont Cornish Limited
Roland Cornish 020 7628 3396
This information is provided by RNS
The company news service from the London Stock Exchange
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