Annual report and financial statements - NVM Private Equity Ltd.

Business Review
Table 1: Movement in net assets and net asset value per share
Pence
£000 per share
Net asset value at 31 October 2006 13,250 57.6
Net revenue (investment income less revenue expenses and tax) 69 0.3
Capital surplus/(deficit) arising on investments:
Realised gains on disposals 380 1.7
Unrealised revaluation movements 1,393 6.2
Management expenses allocated to capital account (net of tax relief) (236) (1.1)
Total return for the year as shown in income statement 1,606 7.1
Proceeds of issue of new shares (net of expenses) 26 –
Shares re-purchased for cancellation (722) 0.4
Expenses charged to capital reserve (18) (0.1)
Net movement for the year before dividends 892 7.4
Net asset value at 31 October 2007 before dividends recognised 14,142 65.0
Dividends recognised in the financial statements for the year (228) (1.0)
Net asset value at 31 October 2007 13,914 64.0
Overview of the year
During the year under review Northern
AIM VCT reported a total return of
7.1p per share, equivalent to 12.3% of
the opening net asset value (NAV) per
share of 57.6p. The FTSE AIM Allshare
index showed a net rise of
14.8% over the same period.
The movement in total net assets
and NAV per share is summarised
in Table 1.
Table 2: Venture capital portfolio cash flow
New Disposal Net inflow/
investment proceeds (outflow)
Year ended £000 £000 £000
31 October 2003 1,926 2,872 946
31 October 2004 2,559 4,531 1,972
31 October 2005 2,627 1,918 (709)
31 October 2006 1,839 998 (841)
31 October 2007 544 2,237 1,693
Total 9,495 12,556 3,061
New investment activity has slowed
further, as the portfolio has been
relatively fully invested. The investment
rate is likely to remain at relatively low
levels and will be dependent on the
timing and quantum of realisations.
Portfolio cash flow over the past five
years is summarised in Table 2.
Dividends
In recognition of the improvement
in performance during the year the
directors are pleased to propose a
final dividend of 3.0p per share (last
year 1.0p), of which 0.3p represents
income distribution and 2.7p is
derived from realised capital gains.
Investment portfolio
One new AIM investment was
completed during the year: we
invested £248,000 in Shieldtech,
which manufactures and distributes
body armour systems used by the
UK police, the UK armed forces and
various export markets. A number of
full or partial exits were achieved, the
resulting inflow of cash enabling the
company to fund a higher level of
share buybacks and increase year-end
cash balances to £837,000 compared
with £232,000 at the end of the
preceding year. Given the recent
uncertainty in the financial markets we
will be highly selective in re-investing
this cash.
AIM portfolio review
The AIM holdings in the portfolio,
which are not representative of the
AIM market index as a whole because
of their restricted size and lack of
exposure to the resource sector, were
up by 3% overall during the year. The
performance of individual holdings has
been extremely variable, which is typical
of a portfolio of smaller companies but
has been even more marked than usual
this year, probably because of the
extremely volatile state of the market.
Many of our companies have
produced good results during the year
but this has not always been reflected
in the share price. Aero Inventory
is a world leader in the provision
of customised procurement and
inventory management solutions to
the aerospace industry worldwide.
In October 2006 the company won
a very substantial contract with
Qantas and the implementation was
completed in July 2007. In November
2007 the company signed a contract
worth US$1.2 billion over 10 years
with Montreal-based ACTS Aero
Technical Support & Services,
involving supply and management
of a wide range of consumable and
expendable aircraft parts. These
contracts are excellent reference sites
for Aero Inventory and should help
it achieve its goal of becoming the
world’s leading aircraft consumable
parts service supplier. Aero now has
a market capitalisation of over £300
million, which makes it one of the
top 100 companies on AIM by size.
Jelf Group is a consultancy focusing
on insurance, healthcare, employee
benefits and wealth management.
The company has generated growth
organically but its major driver has
been a string of over 20 acquisitions
since 2001, the most recent being the
Bristol-based insurance broker Lampier.
8 Northern AIM VCT PLC Annual Report and Accounts 2007