The AIM Distribution Trust plc
Half Yearly Financial Report
for the six months ended 30 September 2007
SHAREHOLDER INFORMATION
Recent performance summary
|
|
30 Sept
2007
pence |
|
31 Mar
2007
pence |
|
30 Sept
2006
pence |
|
|
|
|
|
|
|
|
65.3 |
|
64.1 |
|
65.1 | |
|
Cumulative distributions per share |
53.8 |
|
53.8 |
|
51.8 |
|
Total return per share |
119.1 |
|
117.9 |
|
116.9 |
CHAIRMAN'S STATEMENT
I present the Half Yearly Financial Statement of the Company for the period ended 30 September 2007.
Net Asset Value
At 30 September 2007, the Company's Net Asset Value per share ("NAV") stood at 65.3p, an increase of 1.2p or 1.9% compared to the NAV at 31 March 2007.
VCT Investment Portfolio
During the period your company invested £175,000 in one new investment and £226,000 in follow-on investments, details of which are shown below.
The Investment Manager took the opportunity to realise some profits in the portfolio and raise funds for the purchase of new investments. The net profit against cost realised in the period was £292,000. Full details of the disposals made during the period are shown below.
Despite significant fluctuations in the stock market indices during the period, the Company's portfolio has fared comparatively well, benefiting from good performances from Connaught and Aero Inventory, and also from a takeover bid for Revenue Assurance Services by Spice plc, which completed after the period end. These three investments rose in value by £542,000.
On a negative note, the share price in Huveaux was affected by a profits warning resulting in a fall in value of the investment by £182,000.
The net unrealised gain over the period on the portfolio was £223,000.
Fixed interest securities and other investments
At the period end the Company's one remaining fixed interest security was valued at £626,000 and showed a small loss over the period of £35,000.
In order to improve the diversity of the non-VCT qualifying portfolio, the Board has decided to allocate a small proportion of the Company's funds for investment in a selection of low risk hedge funds. Investments in three hedge funds were made in the period at a cost of £1.1 million. At the period end these investments showed a small unrealised loss of £28,000.
Results and Dividend
The return on ordinary activities after taxation for the period was £154,000 comprising a revenue return of £9,000 and a capital profit of £145,000.
As the Company has made some further realised gains in the period, the Board has decided to pay an interim dividend of 2.0p per share. This will be paid on 28 March 2008 to Shareholders on the register at 29 February 2008.
Repurchase of shares
The Company operates a policy, subject to certain restrictions, of buying shares that become available in the market. During the period the Company repurchased 201,581 Ordinary shares at an average price of 59.5p per share, being approximately a 10% discount to the latest published NAV at the time of purchase. These shares were subsequently cancelled.
Risk and uncertainties
The Board has reviewed the principal risks and uncertainties facing the Company over the remainder of the financial period and concluded that the key risks are:
investment risk associated with investing in small and immature businesses; and
failure to maintain approval as a VCT.
In both cases the Board is satisfied with the Company's approach to these risks. The Board takes into consideration information regarding the potential investment companies, the board of directors and the related sector before taking the decision to invest.
The Company also continually monitors its compliance with the VCT regulations and retains PricewaterhouseCoopers to provide regular reviews and advice in this area.
Outlook
Until such time as the extent of the exposure to the US sub-prime lending crisis becomes clear, markets are expected to remain nervous. However, the Company's investment portfolio remains well-diversified and includes a number of investments with good growth prospects. This puts the Company in a good position to weather more testing conditions should they arise.
Sir Aubrey Brocklebank
Chairman
INCOME STATEMENT
for the six months ended 30 September 2007
|
|
Six months ended
30 September 2007 |
| ||||
|
|
Revenue |
|
Capital |
|
Total |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
Income |
110 |
|
- |
|
110 |
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on investments |
- |
|
196 |
|
196 |
|
|
|
|
|
|
|
|
|
|
|
110 |
|
196 |
|
306 |
|
|
|
|
|
|
|
|
|
|
Investment management fees |
(18) |
|
(51) |
|
(69) |
|
|
Other expenses |
(83) |
|
- |
|
(83) |
|
|
|
|
|
|
|
|
|
|
Return on ordinary activities before taxation |
9 |
|
145 |
|
154 |
|
|
|
|
|
|
|
|
|
|
Taxation |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
Return attributable to equity shareholders |
9 |
|
145 |
|
154 |
|
|
|
|
|
|
|
|
|
|
Return per share |
0.1p |
|
1.0p |
|
1.1p |
|
|
|
|
|
|
|
|
|
|
|
Six months ended
30 September 2006 |
Year ended 31 March 2007 | ||||
|
|
Revenue |
|
Capital |
|
Total |
Total |
|
|
£'000 |
|
£'000 |
|
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
Income |
94 |
|
- |
|
94 |
220 |
|
|
|
|
|
|
|
|
|
Gains/(losses) on investments |
- |
|
(772) |
|
(772) |
(686) |
|
|
|
|
|
|
|
|
|
|
94 |
|
(772) |
|
(678) |
(466) |
|
|
|
|
|
|
|
|
|
Investment management fees |
(21) |
|
(64) |
|
(85) |
(157) |
|
Other expenses |
(83) |
|
- |
|
(83) |
(163) |
|
|
|
|
|
|
|
|
|
Return on ordinary activities before taxation |
(10) |
|
(836) |
|
(846) |
(786) |
|
|
|
|
|
|
|
|
|
Taxation |
- |
|
- |
|
- |
- |
|
|
|
|
|
|
|
|
|
Return attributable to equity shareholders |
(10) |
|
(836) |
|
(846) |
(786) |
|
|
|
|
|
|
|
|
|
Return per share |
(0.1p) |
|
(5.2p) |
|
(5.3p) |
(5.2p) |
|
|
|
|
|
|
|
|
A Statement of Total Recognised Gains and Losses has not been prepared as all gains/losses are recognised in the Income Statement as noted above.
UNAUDITED SUMMARISED BALANCE SHEET
as at 30 September 2007
|
|
30 Sept
2007 |
|
30 Sept
2006 |
|
31 Mar
2007 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
Fixed assets |
|
|
|
|
|
|
Investments |
9,006 |
|
9,496 |
|
7,848 |
|
|
|
|
|
|
|
|
Net current assets |
135 |
|
71 |
|
1,260 |
|
|
|
|
|
|
|
|
Net assets |
9,141 |
|
9,567 |
|
9,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Called up share capital |
3,500 |
|
3,650 |
|
3,551 |
|
Capital redemption reserve |
911 |
|
761 |
|
860 |
|
Share premium |
348 |
|
348 |
|
348 |
|
Capital reserve - unrealised |
(1,676) |
|
(2,463) |
|
(1,730) |
|
Capital reserve - realised |
6,019 |
|
7,269 |
|
6,049 |
|
Revenue reserve |
39 |
|
2 |
|
30 |
|
|
|
|
|
|
|
|
Equity Shareholder's funds |
9,141 |
|
9,567 |
|
9,108 |
|
|
|
|
|
|
|
|
Net asset value per share |
65.3p |
|
65.5p |
|
64.1p |
|
|
|
|
|
|
|
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
|
|
30 Sept
2007 |
|
30 Sept
2006 |
|
31 Mar
2007 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
Opening shareholders' funds |
9,108 |
|
11,602 |
|
11,602 |
|
Repurchase of own shares |
(121) |
|
(1,189) |
|
(1,421) |
|
Total recognised gains/(losses)
for the period |
154 |
|
(846) |
|
(786) |
|
Distributions paid in period |
- |
|
- |
|
(287) |
|
|
|
|
|
|
|
|
Closing shareholders' funds |
9,141 |
|
9,567 |
|
9,108 |
UNAUDITED CASH FLOW STATEMENT
for the six months ended 30 September 2007
|
|
|
Six
months
ended
30 Sept 2007 |
|
Six
months
ended
30 Sept 2006 |
|
Year
ended 31 Mar 2007 |
|
|
Note |
£'000 |
|
£'000 |
|
£'000 |
|
Cash outflow from operating activities
and returns on investments |
1 |
(52) |
|
(99) |
|
(150) |
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
|
|
|
|
|
|
Purchase of investments |
|
(1,509) |
|
(80) |
|
(231) |
|
Proceeds on disposal of investments |
|
727 |
|
1,399 |
|
3,106 |
|
Net cash inflow/(outflow) from capital expenditure |
(782) |
|
(1,319) |
|
2,875 | |
|
|
|
|
|
|
|
|
|
Equity dividends paid |
|
- |
|
1 |
|
(287) |
|
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow before financing
|
|
(834) |
|
1,221 |
|
2,438 |
|
Financing |
|
|
|
|
|
|
|
Purchase of own shares |
|
(210) |
|
(1,176) |
|
(1,332) |
|
Net cash outflow from financing |
|
(210) |
|
(1,176) |
|
(1,332) |
|
(Decrease)/ increase/in cash |
2 |
(1,044) |
|
45 |
|
1,106 |
|
|
|
|
|
|
|
|
|
Notes to the cash flow statement:
|
|
|
|
|
|
|
|
1. Cash outflow from operating activities and
returns on investments |
|
|
|
|
|
|
|
Net revenue return/(loss) before taxation |
|
9 |
|
(9) |
|
18 |
|
Expenses charged to capital |
|
(51) |
|
(64) |
|
(118) |
|
(Increase)/decrease in other debtors |
|
8 |
|
(14) |
|
(45) |
|
(Decrease)/increase in other creditors |
|
(18) |
|
(12) |
|
(5) |
|
Net cash outflow from operating activities |
|
(52) |
|
(99) |
|
(150) |
|
|
|
|
|
|
|
|
|
2. Analysis of net funds |
|
|
|
|
|
|
|
Beginning of period |
|
1,153 |
|
47 |
|
47 |
|
Net cash (outflow)/inflow |
|
(1,044) |
|
45 |
|
1,106 |
|
End of period |
|
109 |
|
92 |
|
1,153 |
SUMMARY OF INVESTMENT PORTFOLIO
as at 30 September 2007
|
|
Cost |
|
Valuation |
Unrealised
gain/(loss)
in period |
% of
portfolio | ||
|
|
£'000 |
|
£'000 |
|
£'000 |
|
by value |
|
Twenty largest VCT investments (by value) |
|
|
|
|
|
|
|
|
Connaught plc * |
54 |
|
746 |
|
103 |
|
8.2% |
|
Revenue Assurance Services plc |
440 |
|
712 |
|
264 |
|
7.9% |
|
ANS Group plc ** |
251 |
|
526 |
|
90 |
|
5.7% |
|
Aero Inventory plc |
196 |
|
487 |
|
174 |
|
5.4% |
|
Printing.com plc |
184 |
|
365 |
|
(95) |
|
4.0% |
|
Hill Station plc |
484 |
|
353 |
|
36 |
|
3.9% |
|
Cadbury House Hotel & Country Club Ltd *** |
225 |
|
372 |
|
66 |
|
3.6% |
|
Supporta plc |
250 |
|
316 |
|
(33) |
|
3.5% |
|
Huveaux plc |
283 |
|
263 |
|
(181) |
|
2.9% |
|
Glisten plc |
155 |
|
241 |
|
(28) |
|
2.7% |
|
Keycom plc ** |
352 |
|
228 |
|
(1) |
|
2.5% |
|
Deltex Medical Group plc |
258 |
|
209 |
|
23 |
|
2.3% |
|
Neutrahealth plc |
173 |
|
197 |
|
49 |
|
2.2% |
|
Gourmet Holdings plc |
250 |
|
187 |
|
- |
|
2.1% |
|
Clerkenwell Ventures plc |
175 |
|
187 |
|
12 |
|
2.1% |
|
Atlantic Global plc |
310 |
|
186 |
|
12 |
|
2.0% |
|
Waterline plc |
244 |
|
183 |
|
(48) |
|
2.0% |
|
AT Communications plc |
178 |
|
174 |
|
30 |
|
1.9% |
|
Cardpoint plc |
105 |
|
168 |
|
5 |
|
1.9% |
|
Coffee Republic plc |
713 |
|
135 |
|
(24) |
|
1.5% |
|
|
5,280 |
|
6,235 |
|
454 |
|
68.3% |
|
|
|
|
|
|
|
|
|
|
Other VCT investments |
3,886 |
|
1,065 |
|
(245) |
|
11.7% |
|
|
|
|
|
|
|
|
|
|
Listed fixed income securities |
558 |
|
626 |
|
(35) |
|
6.9% |
|
Other investments |
1,108 |
|
1,080 |
|
(28) |
|
11.9% |
|
|
|
|
|
|
|
|
|
|
|
10,832 |
|
9,006 |
|
146 |
|
98.8% |
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand |
|
|
109 |
|
|
|
1.2% |
|
|
|
|
|
|
|
|
|
|
Total investments |
|
|
9,115 |
|
|
|
100.0% |
All VCT investments are quoted on AIM unless otherwise stated.
* Listed on the Main Market of the London Stock Exchange
** Quoted on the PLUS Market
*** Unquoted
SUMMARY OF INVESTMENT MOVEMENTS
for the period ended 30 September 2007
Additions
|
|
£'000 |
|
Venture Capital investments |
|
|
Clerkenwell Ventures plc |
175 |
|
Hill Station plc |
148 |
|
Keycom plc |
75 |
|
Sundry investments |
3 |
|
|
401 |
|
|
|
|
Other investments |
|
|
Hedge Funds |
|
|
Barclays GAM Diversity Fund |
663 |
|
Close Allblue Fund Limited |
222 |
|
Goldman Sachs Dynamic Opportunities Ltd |
223 |
|
|
1,108 |
|
| |
|
|
1,509 |
Disposals
|
|
Cost |
Market
value at
1 March
2007 |
Disposal
proceeds |
Gain/(loss)
in period |
Total
realised
gain |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Part disposals |
|
|
|
|
|
|
Cardpoint plc |
22 |
47 |
47 |
25 |
- |
|
Connaught plc |
16 |
180 |
204 |
188 |
24 |
|
Glisten plc |
23 |
40 |
37 |
14 |
(3) |
|
Huveaux plc |
16 |
25 |
15 |
(1) |
(10) |
|
Media Square plc |
45 |
24 |
16 |
(29) |
(8) |
|
Printing.com plc |
15 |
44 |
33 |
18 |
(11) |
|
Revenue Assurance
Group plc |
53 |
82 |
130 |
77 |
48 |
|
|
190 |
442 |
482 |
292 |
40 |
|
Liquidations |
|
|
|
|
|
|
Collins & Hayes Group plc |
150 |
4 |
- |
(150) |
(4) |
|
|
|
|
|
|
|
|
|
340 |
446 |
482 |
142 |
36 |
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The unaudited half yearly financial results cover the six months to 30 September 2007 and have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 31 March 2007 which were prepared 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").
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 year ended 31 March 2007 and the period ended 30 September 2006 respectively.
5. Return per share for the period has been calculated on 14,159,415 shares, being the weighted average number of shares in issue during the period.
6. Net Asset Value per share for the period has been calculated on 14,002,294 shares, being the number of shares in issue at the period end.
7. Dividends
|
|
30 Sept
2007 |
|
31 Mar
2007 | ||||
|
|
Revenue |
|
Capital |
|
Total |
|
Total |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
Paid in period/year |
|
|
|
|
|
|
|
|
2007 interim |
- |
|
- |
|
- |
|
287 |
8. Reserves
|
|
Share
premium |
Special
reserve |
Capital
redemption
reserve |
Capital
reserve
- unrealised |
Capital
reserve
- realised |
Revenue
reserve |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
At 1 April 2007 |
348 |
- |
860 |
(1,730) |
6,049 |
30 |
|
Repurchase of shares |
- |
(121) |
51 |
- |
- |
- |
|
Expenses capitalised |
- |
- |
- |
- |
(51) |
- |
|
Gains on investments |
- |
- |
- |
160 |
36 |
- |
|
Transfer between
reserves |
- |
121 |
- |
(106) |
(15) |
- |
|
Retained net revenue |
- |
- |
- |
- |
- |
9 |
|
At 30 September 2007 |
348 |
- |
911 |
(1,676) |
6,019 |
39 |
The Special Reserve, Capital Reserve - realised and Revenue Reserve are all distributable reserves.
10. 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 March 2007 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.
11. The Directors confirm that, to the best of their knowledge, the half yearly financial statement has been prepared in accordance with the "Statement: Half Yearly Financial Reports" issued by the UK Accounting Standards Board and the half yearly financial report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of 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
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place during 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.
12. Copies of the unaudited half yearly financial reports for the period ended 30 September 2007 will be printed and posted to shareholders. Copies will also be available to the public at the registered office of the Company at Kings Scholars House, 230 Vauxhall Bridge Road, London SW1V 1AU and available for download from www.downing.co.uk.