Source - GNW

Oxford Technology 3 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

 
£5.92m £6.89m
Net Asset Value per Share

 
87.3p 101.6p
Cumulative Dividend per Share

 
32.0p 17.0p
Total NAV Return per Share

 
119.3p 118.6p
Share Price

 
57.5p 62.5p
Earnings per Share 0.7p 13.0p

                                                                                                           

Company Number: 4351474
Registered Address: The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA

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 per share has reduced from 101.6p at 29 February 2016 by 14.3p to 87.3p at 31 August 2016. The underlying NAV per share rose by 0.7p but was offset by the payment of a 15.0p interim dividend per share on 13 May 2016. Further dividends are likely to require a profitable investee company exit.

Portfolio review
The new VCT rules have not prevented us from investing £709k to support our existing portfolio companies. We exercised our warrants in Ixaris for £425k along with the major shareholder in advance of their expiry date at an attractive discount, thereby not only preventing dilution but also slightly increasing our equity percentage. The valuation of our share of Ixaris has been increased by £529k. We invested £200k in Plasma Antennas to position them for a further funding round. £50k was invested in ImmBio at attractive terms at the end of their successful trials. Finally we invested £34k in Scancell's placing and open AIM offer, the maximum we could make under VCT rules.

The Directors have reviewed the valuations of each investee company in the unquoted portfolio but have made only minor changes. In the AIM portfolio the Scancell price remained flat and the Abzena price declined from 49p to 41p per share. Based on the revised NAV at 31 August 2016, the performance fee accrual at 29 February 2016 of £23k has been reversed as the revised escalating performance fee threshold has now just increased above the current NAV.

Shareholders should remain aware that the portfolio is very concentrated with just three holdings representing about 65% of NAV. The value of the portfolio is thus very sensitive to changes in valuations of these three holdings: Ixaris, Glide and Scancell. 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 £1.03m. Post period end we have committed to invest in Arecor, Orthogem and Glide.

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. Three of our investee companies made presentations: Scancell, Ixaris and Plasma Antennas. These presentations are on the Oxford Technology website. The directors' view remains that the portfolio still holds significant potential over the medium term but is not without risk.  Finally I would like to take this opportunity to thank shareholders for their continued support.

Robin Goodfellow - Chairman
19 October 2016
Investment Portfolio as at 31 August 2016

CompanyDescriptionNet Cost of investment £'000Carrying value at 31/8/16
£'000
Change in value for the 6 month period £'000% Equity held
OT3
% Equity held
All OT
%
of fund investment value
Ixaris

 
Internet payments 643 2,202 529 7.6 7.6 44.8
Glide Technologies Needle free injector 225 814 - 3.3 9.0 16.5
               
Scancell
(bid price 17.5p)
Antibody based cancer therapeutics 359 810 35 1.8 4.4 16.5
Plasma Antennas

 
Directional antennas 308 277 200 12.3 45.1 5.6
ImmBio

 
Novel vaccines 400 237 50 4.4 13.9 4.8
Select Technology Photocopier interfaces 47 147 3 2.8 58.5 3.0
Allinea Software Parallel computing

 
15 146 (16) 1.9 1.9 3.0
Abzena
(bid price 41p)
Protein & peptide based drugs 69 82 (16) 0.2 0.3 1.7
Arecor

 
Protein stabilisation 24 56 9 0.7 7.3 1.1
Insense Wound healing 333 44 - 4.1 12.1 0.9

 
Orthogem

 
Bone graft material 134 42 - 4.0 14.6 0.9
Inaplex Data transformation software 58 22 - 13.3 34.8 0.5
Invro

 
Low power electronics 40 20 - 33.1 33.1 0.4
Metal Nanopowders Production of metal powders 153 13 - 20.0 36.7 0.3
Superhard Materials Production of hard materials 11 5 - 21.8 40.0 0.1
Total Investments 2,9184,917794  100%
               
Other Net Assets     1,005        
               
Net Assets  5,922        
            

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:
Robin Goodfellow - Chairman
19 October 2016
Income Statement

 Six months to 31 Aug 2016Six months to 31 Aug 2015Year to 29 February 2016
 RevenueCapitalTotalRevenueCapitalTotalRevenueCapitalTotal
  £'000£'000£'000£'000£'000£'000£'000£'000£'000
                   
Gain on disposal of fixed asset investments --- - 3 3 - 1,333 1,333
                 
Gain/(Loss) on valuation of fixed asset investments -8585 - 659 659 - (414) (414)
                 
Performance fee credit -2323 - 70 70 - 72 72
                 
Other income --- 3 - 3 19 - 19
                 
Investment management fees (9)(26)(35) (8) (24) (32) (16) (49) (65)
 

Other expenses
(27)-(27) (28) - (28) (62) - (62)
                 
Return on ordinary activities before tax(36)8246 (33) 708 675 (59) 942 883
                 
Taxation on loss on ordinary activities --- - - - - - -
                 
                
Return on ordinary activities after tax(36)8246 (33) 708 675 (59) 942 883
                
Earnings per share - basic and diluted(0.5)p1.2p0.7p (0.5)p 10.4p 9.9p (0.9)p 13.9p 13.0p
  • 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 2016As at 31 Aug 2015As at 29 February 2016
 £'000£'000£'000£'000£'000£'000
            
Fixed asset investments *  4,917   7,077   4,123
Current assets:          
Debtors 17  118   2  
Creditors:           
Amounts falling due within one year (52)  (59)   (55)
Cash at Bank 1,064  119   2,894
Net current assets  1,029   178   2,841
           
Creditors:
Amounts falling due in more than one year
 (24)   (71)   (47)
Provision for performance fee  -   (24)   (23)
           
Net assets 5,922   7,160   6,894
            
Called up equity share capital  679   679   679
            
Share premium  719   719   719
            
Unrealised capital reserve  1,998   4,912   1,913
            
Profit and Loss account reserve  2,526   850   3,583
           
Total equity shareholders' funds 5,922   7,160   6,894
           
Net asset value per share 87.3p   105.5p   101.6p

 

 

 

* At fair value through profit and loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
          

Statement of Changes in Equity

 Share Capital  £'000Share Premium £'000Unrealised Capital Reserve
£'000
Profit & Loss
  Reserve
£'000
Total  
£'000
           
As at 1 March 20156797194,3157736,486
Revenue return on ordinary activities after tax - - - (33) (33)
Expenses credited to capital - - - 46 46
Current period gains on disposal - - - 3 3
Current period gains on fair value of investments - - 659 - 659
Prior years' unrealised gains now realised - - (62) 62 -
Balance as at 31 August 20156797194,9128507,160
      
As at 1 March 20156797194,3157736,486
Revenue return on ordinary activities after tax - - - (59) (59)
Expenses credited to capital - - - 23 23
Current period gains on disposal - - - 1,333 1,333
Current period losses on fair value of investments - - (414) - (414)
Prior years' unrealised gains now realised - - (1,913) 1,913 -
Dividends paid - - - (475) (475)
Movement in reserves - - (75) 75 -
Balance as at 29 February 20166797191,9133,5836,894
           
As at 1 March 20166797191,9133,5836,894
Revenue return on ordinary activities after tax - - - (36) (36)
Expenses charged to capital - - - (3) (3)
Current period gains on disposal - - - - -
Current period gains on fair value of investments - - 85 - 85
Dividends paid - - - (1,018) (1,018)
Balance as at 31 August 20166797191,9982,5265,922

Statement of Cash Flows

 Six months to 31 Aug 2016Six months to 31 Aug 2015Year to 29 February 2016
 £'000£'000£'000
Cash flows from operating activities     
Return on ordinary activities before tax 46 675 883
Adjustments for:      
Decrease/(increase) in debtors (15) (116) (1)
(Decrease)/increase in creditors (49) (91) (119)
Gain on disposal of fixed asset investments - (3) (1,333)
Loss/(gain) on valuation of fixed asset
Investments

 
(85) (659) 414
Net cash generated from operating activities(103) (194) (156)
      
Cash flows from investing activities     
Purchase of fixed asset investments (709) - (120)
Sale of fixed asset investments - 110 3,442
Total cash flows from investing activities(709) 110 3,322
      
Cash flows from financing activities     
Dividends paid(1,018) - (475)
Total cash flows from financing activities(1,018) - (475)
      
Increase/(decrease) in cash and cash equivalents(1,830) (84) 2,691
      
Opening cash and cash equivalents2,894 203 203
      
Closing cash and cash equivalents1,064 119 2,894

  

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 (6,785,233 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
OT3 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/vct3.

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

Investment Manager: OT3 Managers Ltd with services contracted to Oxford Technology Management Ltd

Website: www.oxfordtechnology.com/vct3




This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Oxford Technology 3 VCT plc via Globenewswire

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