Final Results
09 Juli 2003 - 6:24PM
UK Regulatory
RNS Number:3696N
3PC Investment Trust PLC
09 July 2003
To: RNS
From: 3PC Investment Trust plc
Date: 9 July 2003
Results for the year to 31 May 2003
* Since launch, 3PC Investment Trust's net asset value has fallen by 23.5
per cent. while the FTSE AiM Index declined 49.5 per cent. over the same
period
* At 31 May 2002, 81.3 per cent of money raised has been invested in target
growth companies
* #5.7m held in UK Government securities which is available to fund further
investment
Introduction Although this report covers the year to 31 May 2003, the vote by
shareholders on 8th July to merge the Company with The AIM Trust plc has
slightly overshadowed the more routine nature of the annual results.
Background The past twelve months have been very turbulent for global stock
markets, and over the period The FTSE Small Cap Index fell by 20.2% and The FTSE
AiM Index fell 26.4%.
Over this period we witnessed a major reduction in the appetite from investors
for new issues and as such the number of companies seeking primary capital was
much lower than in the previous year.
Results for the year to 31 May 2003 Against this background of falling equity
markets, the Company's portfolio has been robust. Over the year, net asset value
per share (NAV) fell from 80.2 pence to 75.2 pence. This fall in NAV represents
a decline of 6.2% which although disappointing in absolute terms was very good
relative to the 26.4% fall in the FTSE AiM Index and 20.2% fall in the FTSE
Small Cap Index.
Since launch, the company's NAV has outperformed The FTSE AiM Index by over 26%
and The FTSE Small Cap Index by 10%.
Revenue is derived from fixed interest securities, deposit income and dividends
from investments. Revenue for the year amounted to #919,000 and after deduction
of expenses and taxation of #737,000 the revenue return amounted to #182,000
(2002 : #896,000). The fall in revenue return was principally due to the lower
level of fixed interest securities held on average during the year.
As last year, the Company will not be paying a dividend. The unlisted nature of
the founder shares in the company means that, section 264 of the companies Act
1985 precludes the payment of a dividend as long as net assets are less then
called up share capital and undistributable shares. Despite the Company's assets
outperforming stock market indices, the Capital Reserves are however still in
deficit.
Merger with The AIM Trust plc On the 8 July 2003 shareholders of both 3PC and
The AIM Trust voted in separate meetings to approve the merger of two companies
by way of a section 425 Scheme of Arrangement. Subject to the relevant Court
approval of the scheme, the merger will become effective on 29 July 2003.
As described in the documentation for the shareholder meetings, the merger is
being conducted on an asset value per share basis with some adjustments to
reflect the costs of the deal, debt repayment charges etc. Based on the
illustrative figures, the transaction will broadly double the size of 3PC and in
addition introduce gearing of a further #30 million. This will create an
enlarged vehicle with total assets of some #93 million.
The unique capital structure enjoyed by 3PC will be maintained as 3PC is the
successor vehicle. Subject to sufficient growth in the asset value per share the
Board intends to return to shareholders 155 pence per share in cash in May 2007,
as outlined in the prospectus at the launch of the Company.
Once this return has been achieved the investment managers can share in 20% of
any excess. Not only does this structure provide a strong incentive to the
managers to grow the assets of the Company but also provides shareholders with a
more certain liquidity opportunity than available under traditional structures.
The small company sector of the stock market has changed substantially over the
past two years. This is demonstrated by the polarisation of the market whereby
the bottom 75% of quoted companies, by number, represent only around 3% by
value.
In consequence, there are a large number of companies with very low
capitalisations that the advisory community is becoming increasingly less
interested in. As fewer advisors are participating in the smaller companies
sector, corporates are increasingly seeking ideas for development from other
sources such as their shareholders. The Board perceives this as an opportunity
for 3PC and the investment managers will be seeking to encouraging growth in the
value of these businesses.
To reflect this more active investment approach the name of 3PC will change to
Active Capital plc upon merger.
The investment objective will be amended to seek capital growth from companies
that can increase their values by delivering on a growth business plan or from
structural, corporate or shareholder change. This is an evolution from the focus
we had on primary capital but reflects the changes to opportunities in the
market over the past two years.
Upon completion of the merger the Board will change with us welcoming Jon
Pither, Lord Gordon and Jock Green-Armytage to the Board. Brian Holford will
step aside as Chairman for Jon Pither who currently chairs The AIM Trust and
Graham Eves will step down from the Board. The Board would like to express to
Graham our thanks for his contribution and counsel over the past two years.
Outlook The Company is in the process of changing through this merger which
should provide many benefits to shareholders including; scale of a large
vehicle, gearing at an opportune point in the cycle and change to investment
policy to reflect market conditions. As a result, the Company is well positioned
to take advantage of the opportunities that arise over the coming years.
For further information contact:
Bill Brown Investment Managers 020 7506 1100
Brona Thomson Company Secretary 0131 465 1000
Unaudited Statement of Total Return (incorporating the revenue account) of the
Company
Year to 31 May 2003
Revenue Capital Total
#'000 #'000 #'000
Losses on investments - (2,325) (2,325)
Exchange differences - (5) (5)
Income 919 - 919
Investment management fee (446) - (446)
Other expenses (283) - (283)
Return on ordinary activities
before taxation 190 (2,330) (2,140)
Taxation on ordinary activities (8) - (8)
Return attributable to
equity shareholders 182 (2,330) (2,148)
Dividends in respect of equity shares - - -
Transfer to reserves 182 (2,330) (2,148)
Return per ordinary share: 0.42p (5.41)p (4.99)p
Audited Statement of Total Return (incorporating the revenue account) of the
Company
Period from 19 March 2001 to
31 May 2002
Revenue Capital Total
#'000 #'000 #'000
Losses on investments - (8,698) (8,698)
Exchange differences - (3) (3)
Income 2,122 - 2,122
Investment management fee (608) - (608)
Other expenses (247) - (247)
Return on ordinary activities
before taxation 1,267 (8,701) (7,434)
Taxation on ordinary activities (371) - (371)
Return attributable to
equity shareholders 896 (8,701) (7,805)
Dividends in respect of equity shares - - -
Transfer to reserves 896 (8,701) (7,805)
Return per ordinary share: 2.08p (20.23)p (18.15)p
Unaudited Balance Sheet
As at As at
31 May 31 May
2003 2002
#'000 #'000
Fixed Assets
Listed investments 4,424 3,149
Quoted on the Alternative Investment Market 14,429 13,455
Quoted on OFEX 447 459
Unquoted corporate bonds 5,710 1,848
Unquoted investments 1,300 1,274
UK government securities 5,720 13,445
________ ________
32,030 33,630
Net current assets 315 863
_______ _______
Net assets 32,345 34,493
________ ________
Financed by:
Shareholders' funds 32,345 34,493
________ ________
Net asset value per ordinary share: 75.20p 80.20p
Ordinary shares in issue 43,000,000 43,000,000
Summarised Unaudited Statement of Cash Flows
Period from
Year to 19 March 2001 to
31 May 2003 31 May
2002
#'000 #'000
Net cash inflow from operating activities 479 879
Capital expenditure and financial investment (1,489) (41,939)
Net cash outflow before financing (1,010) (41,060)
Financing 42,298
(Decrease)/increase in cash (1,010) 1,238
Reconciliation of net cash flow to movement in net cash
(Decrease)/increase in cash (1,010) 1,238
Net cash at 1 June 2002 1,238 -
Net cash at 31 May 2003 228 1,238
Reconciliation of operating profit to net cash flow from activities
Net return before taxation 190 1,267
Decrease/(increase) in debtors 310 (585)
(Decrease)/increase in creditors (21) 197
Net cash flow from operating activities 479 879
Notes
1. The unaudited results which cover the year to 31 May 2003 have been drawn up
in accordance with the applicable accounting standards and adopting the
Statement of Recommended Practice for Financial Statements of Investment
Trust Companies.
2. The Company was launched on 11 May 2001 at which date 43,000,000 ordinary
shares and 6,000,000 founder shares were issued.
3. Earnings for the year to 31 May 2003 are based on a weighted average of
43,000,000 ordinary shares in issue (2002: same).
4. Income for the year to 31 May 2003 is derived from:
Period from 19 March
Year to 31 May 2003 to 31 May 2002
#'000
Equity investment 150 10
Fixed interest investment 713 1,896
Deposit interest 38 205
Underwriting commission 18 11
_____ _____
919 2,122
5. No dividend will be paid in respect of the year to 31 May 2003 (2002:nil).
6. The NAV per ordinary share is calculated on ordinary shareholders funds of
#32,345,000 (2002: #34,493,000) and 43m (2002:43m) ordinary shares. Founder
shareholders funds represent #8,000 (2002: #8,000).
7. These are not full accounts in terms of Section 240 of the Companies Act
1985. The annual report for the year to 31 May 2003 will be sent to
shareholders shortly and will then be available for inspection at 100 Wood
Street, London EC2V 7AN, the registered office of the Company.
8. Listed investments and those quoted on the AiM market or OFEX are valued at
middle market prices. Unquoted investments are valued in accordance with
Directors valuation which follow the guidelines of the BVCA.
9. The Annual General Meeting will be held on 15 September 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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