REG-TVC Holdings PLC TVC Holdings PLC Year End Res - Part 1Released: 10/06/2009
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RNS Number : 6412T
TVC Holdings PLC
10 June 2009
TVC Holdings plc
Audited Financial Results for the year ended 31 March 2009
TVC Holdings plc ("TVC" or the "Company"), the investment holding company, today
(Wednesday, 10 June 2009) announces its Audited Financial Results for the year
ended 31 March 2009.
Key Performance Highlights:
* Equity value per share as at 31 March 2009 of E0.68 (Shareholders' equity of
E68.6 million and 101.1 million shares in issue). Adjusting the valuation of the
quoted investments (Norkom and UTV), for the closing bid price as at 9 June
2009, increases the equity value per share to E0.77c. This represents a discount
of 32% when compared to TVC's closing bid price on 9 June 2009 of E0.52 and a
discount of 53%, excluding cash and liquid investments.
* Net assets at 31 March 2009 of E75.6million mainly comprised of cash at bank
and other liquid investments of E31.0 million (41%), quoted equity investments
of E25.0 million (33%) and unquoted equity investments of E18.3 million (24%).
TVC has no debt.
* In the year ended31 March 2009, the Company reduced the value of its
investment portfolio, reflecting the steep decline in asset prices and current
difficult market conditions, by E66.6 million, which is comprised of an
unrealised mark down of E35.2 million on its quoted investments and an
unrealised mark down on its unquoted portfolio of E31.4 million.
* Disposed of investment in ChangingWorldsas part of its acquisition by a
wholly-owned subsidiary of Amdocs Limited (NYSE:DOX).The total consideration
payable to TVC, including an escrow and a performance-based earnout, is US$20.5
million (US$16.8 million net of minority interests). This represented a 1.3
times return on the valuation placed on its investment at 30 September 2008,
realising a gain of E2.0 milion,and areturn of 3.7 times the original cost.
* Invested E27.3 million to acquire an 18% shareholding in UTV Media plc, a
leading radio and TV business. TVC is now the largest shareholder in UTV and
Shane Reihill has joined the Board of the Company.
* Invested E4.3 million across unquoted portfolio.
Commenting on the Audited Financial Results, TVC Holdings' Executive Chairman,
Shane Reihill, said:
"We have continued to work actively with our core portfolio investments to
maximise their value and identify new opportunities for investment despite
challenging market conditions. This is shown by the successful sale of
ChangingWorlds and our strategic investment in UTV Media plc.
"TVC's cash plus two quoted investments, Norkom and UTV, represents 74% of our
balance sheet value at 31 March 2009. Four unquoted investments, which we
believe are prudently valued, represent most of the remaining 26% of our balance
sheet value at 31 March 2009.
"With cash and liquid investments in excess of E31.0 million and no debt in the
Company, we believe that TVC is in a strong position to take advantage of the
anticipated opportunities to make further long term investments at what we
expect to be attractive valuations, adding real value to our investment
portfolio. We also believe that, given this significant cash balance, the
Company is in a very strong position to deliver its strategy and maximise value
for all our shareholders".
For further information please contact:
TVC Holdings plc
Shane Reihill, Executive Chairman
John Tracey, Chief Executive Officer
Tel: +353-1-2057700
Murray ConsultantsPauline McAlester
Tel: +353-1-4980300
Davy Corporate Finance
John Frain
Tel: +353-1-6796363
Executive Chairman's Statement
Overview of investment portfolio
Following the changes in our investment portfolio during the year, we have
reclassified our portfolio at 31 March 2009. This reflects TVC's continuing
progress towards a core portfolio of circa four platform companies and the
realisation, over time, of significant value from the other companies in the
portfolio. Accordingly, we classified our 13 investments at 31 March 2009 into
two categories - Quoted Investments (Norkom and UTV) and Unquoted Investments.
The two quoted investments were valued based on their closing bid price on 31
March 2009. The unquoted investments were valued in accordance with the European
Venture Capital Association valuation guidelines and the Group's accounting
policies. Given the sharp decline in global equity markets during the year, we
have materially reduced the valuation of the unquoted portfolio companies, none
of which are valued above cost. We believe the valuations at 31 March 2009 are
appropriate and that we will continue, in the future, to sell unquoted
investments at a premium to their carrying value.
As at 31 March 2009, TVC had a portfolio of 13 investments, which were
categorised as follows:
Value % %
E'000 Investments Inv + Cash
Norkom Group plc 13,852 32% 19%
UTV Media plc 11,113 26% 15%
Unquoted Investments 18,303 42% 24%
43,268 100% 58%
Total Investments
31,082 42%
Cash & Liquid Investments
74,350 100%
Total Investments + Cash
Divestments
In December 2008, the Group disposed of its interest in ChangingWorlds Limited
as part of the sale of ChangingWorlds to a wholly-owned subsidiary of Amdocs
Limited (NYSE:DOX). Under the terms of the deal, the Group will receive a total
cash consideration of up to US$20.5 million (US$16.8 million net of minority
interests), US$14.7 million (US$12.0 million net) of which was paid on or
shortly after completion. An additional sum is payable to the Group of up to
US$5.9 million (US$4.8 million net), part of which is subject to escrow and the
remainder of which is subject to performance criteria over the next two years.
The total consideration payable to TVC, including escrow and earn out,
represented a 1.3 times return on the valuation it placed on its investment at
30 September 2008 and 3.7 times original cost. The disposal of this investment
realised a gain of E2.0 million in the year ended 31 March 2009 excluding the
performance-related earn out. The proceeds generated by this deal will be used
to pursue TVC's strategy in its existing portfolio of companies and fund new
investment opportunities across a range of business sectors.
In March 2009, following APT's disposal of its hardware division, TVC received
repayment of £1.36 million (E1.43 million) from APT, representing the full
amount of capital originally invested by TVC in the company. TVC continues to
retain its equity shareholding in APT's remaining licensing business.
New investments
In July 2008, TVC acquired a 15% shareholding in UTV Media plc ("UTV"), a
leading radio and TV business, for an aggregate consideration of £19.5 million
(E24.6 million). In November 2008, TVC invested a further amount of £2.2
million (E2.7 million) in UTV bringing its shareholding to 18%. TVC is currently
the largest single shareholder in UTV. Shane Reihill, TVC's Executive Chairman,
was appointed to the UTV Board in September 2008. UTV's business includes
radio, television and new media assets in the UK and Ireland. Its multimedia
assets include one of the three largest radio groups in Ireland; talkSPORT, the
national radio sports station in the UK; 15 local radio stations in the UK and
UTV Limited, the regional Channel 3 licence holder for Northern Ireland. UTV is
listed on the Official List of both the London Stock Exchange and the Irish
Stock Exchange. In July 2008, UTV completed a £49.9 million rights issue as part
of an overall refinancing to reduce the Group's gearing, strengthen the balance
sheet and enable the continuation of its strategy of developing a diversified
multimedia business.
Follow-on investments
During the year ended 31 March 2009, TVC made a number of follow-on investments,
totalling E4.3 million, in its unquoted portfolio companies.
Equity value per share
The equity value per share as at 31 March 2009 was E0.68 (shareholders' equity
of E68.6m and 101.1 million shares in issue) compared to the equity value at 31
March 2008 of E1.24. The decrease in the equity value per share during the year
ended 31 March 2009 primarily reflects the following:
* Reduction in value of the Group's quoted investments (net of minority
interests)of E31.7 millionas a result of the downward movement in the share
price of Norkom Group plc duringthe year from E1.36 to E0.573 and the downward
movement in the share price of UTV Media plc over the period since acquisition
from £1.26 (average acquisition price) to £0.60,including an unrealised foreign
exchange loss of E2.0 milliondue to the appreciation of the Euro against
Sterling;
* Net realised gains on unquoted investments (net of minority interests)of E1.5
million; and
* Reduction in value of the unquoted portfolio (net of minority interests)of
E27.4 million.
As at the balance sheet date, TVC had cash and liquid investments of E31.0
million and no bank debt.
Business strategy and outlook
TVC's strategy is, in the medium term, to have a core portfolio of circa four
platform investments across a number of business sectors and to realise
significant value from the other companies in its portfolio. As shown by the
sale of ChangingWorlds, we continue to successfully realise that strategy. TVC's
cash plus two quoted investments represented 74% of our balance sheet value at
31 March 2009. Four unquoted investments, which we believe are prudently valued,
represent most of the remaining 26% of our balance sheet value at 31 March 2009.
With cash and liquid investments in excess of E31.0 million and no debt in the
Company, we believe that TVC is in a very strong position to deliver its
strategy and maximise value for our shareholders. We believe we are also in a
strong position to make further long term investments at what we expect to be
attractive valuations given our significant cash balance.
Board, management and staff
I would like to thank the Board and all of TVC's management and staff for their
commitment and contribution during the year.
Shane ReihillExecutive Chairman
9 June 2009
Consolidated balance sheet
as at 31 March 2009
2009 2008
Notes E'000 E'000
Non-current assets
Investments -designated as FVTPL *
Quoted equity investments 24,965 32,878
Unquoted equity investments 17,803 39,374
Loans and receivables 500 19,639
Total investment portfolio 2 43,268 91,891
Available-for-sale investments 3 10,236 9,954
Property, plant and equipment 42 69
Deferred consideration receivable 2,571 -
Total non-current assets 56,117 101,914
Current assets
Other current assets 861 3,738
Current taxation recoverable - 80
Cash and cash equivalents 20,846 37,774
Total current assets 21,707 41,592
Total assets 77,824 143,506
Current liabilities
Bank overdraft (58) -
Trade and other payables (2,004) (2,076)
Current taxation payable (188) -
Total liabilities (2,250) (2,076)
Net assets 75,574 141,430
Equity
Shareholders' capital 1,011 1,011
Share premium 133,943 133,146
Share option reserve 1,003 430
Other reserves 2,186 1,753
Retained earnings (69,492) (10,580)
Shareholders' equity 68,651 125,760
Minority interests 6,923 15,670
Total equity 75,574 141,430
* Fair Value Through Profit or Loss
Consolidated income statement
for the year ended 31 March 2009
Year ended 15 months ended
31 March 31 March
2009 2008
Notes E'000 E'000 E'000 E'000
Net realised profits over opening value on the disposal
of investments 1,875 10,203
Net unrealised losses on the revaluation
of investments (66,558) (22,795)
(64,683) (12,592)
Portfolio income 603 -
Dividends
Fees receivable 154 423
Income from loans and receivables 187 113
Gross portfolio return (63,739) (12,056)
Operating expenses (including share-based payment expenses (3,805) (7,121)
of E0.724m(2008: E2.196m))
Net portfolio return (67,544) (19,177)
Finance income 1,075 1,614
Finance expense (44) (67)
Exchange movements 335 (448)
Loss before tax (66,178) (18,078)
Income tax (293) (364)
Loss after tax for the financial year/period (66,471) (18,442)
Attributable to:
Equity holders (58,912) (20,651)
Partners (Pre 11 July 2007) - 6,499
Minority interests (7,559) (7,559) (4,290) 2,209
(66,471) (18,442)
Loss per share
Basic EPS (cent) 5 (58) (32)
Diluted EPS (cent) 5 (58) (32)
Consolidated cash flow statement
for the year ended 31 March 2009
Year ended 15 months ended
31 March 31 March
2009 2008
E'000 E'000
Cash flow from operating activities
Loss for year/period before tax (66,178) (18,078)
Adjusted for:
Depreciation 54 64
Unrealised losses on the revaluation of investments 66,558 22,795
Realised profits over opening value on the disposal (1,875) (10,203)
of investments
Exchange movements (335) 448
Share-based payment expenses 724 2,196
Costs related to admission to IEX and AIM - 140
Income from loans and receivables (187) (113)
Finance income (1,075) (1,614)
Finance expense 44 67
Purchase of investments (31,589) (22,179)
Proceeds from disposal of investments 16,418 19,694
(Increase)/decrease in other current assets (101) 1,275
Increase in trade and other payables 699 515
Tax paid (25) (333)
Net cash outflow from operating activities (16,868) (5,326)
Cash flow from investing activities
Purchase of available-for-sale investments - (10,275)
Interest received 1,141 1,498
Purchase of property, plant and equipment (27) (84)
Net cash inflow/(outflow) from investing activities 1,114 (8,861)
Cash flow from financing activities
Net proceeds from issue of share capital - 46,820
Dividends (paid by subsidiary pre 5 July 2007) - (239)
Interest paid (44) (67)
Partners' contributions (pre 11 July 2007) - 785
Distributions to partners (pre 11 July 2007) - (3,483)
Contributions from minority interests 1,294 2,277
Distributions to minority interests (2,482) (2,745)
Net cash (outflow)/inflow from financing activities (1,232) 43,348
(Decrease)/increase in cash and cash equivalents (16,986) 29,161
Opening cash and cash equivalents 37,774 8,613
Closing cash and cash equivalents 20,788 37,774
Closing cash and cash equivalents is comprised of:
Cash at bank and short-term deposits 20,846 37,774
Bank overdraft (58) -
20,788 37,774
Consolidated statement of changes in shareholders' equity
for the year ended 31 March 2009
No. of Ordinary Share Share Other Retained Shareholders' equity
shares shares premium option reserve reserves E'000 earnings E'000
E'000 E'000 E'000 E'000
Balance at 1 January 2007 10,276 1 - - - 10,310 10,311
(Loss)/profit for the period - - - - - (20,651) (20,651)
Fair value movements on available-for-sale investments - - - - (60) - (60)
Total recognised income and expense - - - - (60) (20,651) (20,711)
Issue of share capital 89,798,835 898 137,133 - - - 138,031
Costs of share issue - - (3,875) - - - (3,875)
Fair value of shares issued to acquire legal subsidiary 15,123,469 151 22,534 - - - 22,685
Redemption of share capital (3,809,214) (38) 38 - - - -
Reverse acquisition accounting adjustment (10,787) (1) (22,684) - - - (22,685)
Partners' contributions (Pre 11 July 2007) - - - - - - -
Distributions to partners (Pre 11 July 2007) - - - - - - -
Net distributions to minority interests - - - - - - -
Transfer of partners' accounts to minority interests - - - - - - -
Share-based payments - - - 430 1,813 - 2,243
Dividends paid by subsidiary pre 5 July 2007 - - - - - (239) (239)
Balance at 31 March 2008 101,112,579 1,011 133,146 430 1,753 (10,580) 125,760
Loss for the year - - - - - (58,912) (58,912)
Fair value movements on available-for-sale investments - - - - 282 - 282
Total recognised income and expense - - - - 282 (58,912) (58,630)
Reversal of costs previously recognised in share premium - - 797 - - - 797
Net distributions to minority interests - - - - - - -
Share-based payments - - - 573 151 - 724
Balance at 31 March 2009 101,112,579 1,011 133,943 1,003 2,186 (69,492) 68,651
The legal form of the acquisition of Trinity Venture Capital Limited by TVC
Holdings plc resulted in the issue of 15,123,469 ordinary shares by TVC Holdings
plc with a fair value of E22,685,202 including a share premium of E22,533,968.
From an accounting perspective, this is treated as a reverse acquisition by
Trinity Venture Capital Limited resulting in the issue of shares with a nominal
value of E38,092 and the recognition of a reverse acquisition deficit of
E22,685,202. After the share capital and share premium of the legal subsidiary
has been transferred to the reverse acquisition reserve the balance remaining on
the reserve is a deficit of E22,683,833. For presentation purposes, an
equivalent amount of the share premium of the legal parent has been transferred
to the reverse acquisition reserve leaving a balance of E133,145,728 on the
disclosed share premium in the consolidated financial statements.
The adjustment to share premium in the current year relates to the reversal of
certain costs included in the total costs of share issue at the time of the
Company's Initial Public Offering.
Consolidated statement of changes in shareholders' equity (continued)
for the year ended 31 March 2009
Partners' Partners'
capital E'000 retained Minority Total
earnings E'000 interests E'000 E'000
Balance at 1 April 2007 96,790 8,634 - 115,735
(Loss)/profit for the period - 6,499 (4,290) (18,442)
Fair value movements on available-for-sale investments - - - (60)
Total recognised income and expense - 6,499 (4,290) (18,502)
Issue of share capital (75,408) (12,584) - 50,039
Costs of share issue - - - (3,875)
Fair value of shares issued to acquire legal subsidiary - - - 22,685
Redemption of share capital - - - -
Reverse acquisition accounting adjustment - - - (22,685)
Partners' contributions (Pre 11 July 2007) 785 - - 785
Distributions to partners (Pre 11 July 2007) (4,288) - - (4,288)
Net distributions to minority interests - - (468) (468)
Transfer of partners' accounts to minority interests (17,879) (2,549) 20,428 -
Share-based payments - - - 2,243
Dividends paid by subsidiary pre 5 July 2007 - - - (239)
Balance at 31 March 2008 - - 15,670 141,430
Loss for the year - - (7,559) (66,471)
Fair value movements on available-for-sale investments - - - 282
Total recognised income and expense - - (7,559) (66,189)
Reversal of costs previously recognised in share premium - - - 797
Net distributions to minority interests - - (1,188) (1,188)
Share-based payments - - - 724
Balance at 31 March 2009 - - 6,923 75,574
Notes to the preliminary consolidated financial information
1 Basis of preparation
The consolidated financial information presented in this preliminary
announcement has been extracted from the audited financial statements of TVC
Holdings plc which have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU.
The preliminary consolidated financial information does not constitute full
statutory financial statements of the Group within the meaning of Regulation 40
of the European Communities (Companies: Group Accounts) Regulations, 1992 but is
derived from those financial statements. Statutory financial statements for the
period ended 31 March 2008 have been filed with the Companies Registration
Office. The auditor's report on those financial statements was unqualified. The
statutory financial statements for the year ended 31 March 2009 will be
delivered to the Companies Registration Office following the Company's annual
general meeting.
The consolidated financial information is presented in Euro, rounded to the
nearest thousand, which is the functional currency of the parent company and its
subsidiaries.
Full details of the Group's accounting policies will be included in the 2009
annual report. With the exception of the change in reporting segments outlined
in note 4, the financial information contained in this preliminary announcement
has been prepared on a consistent basis and using the same accounting policies
as those applied in the Group's consolidated financial statements for the 15
month period ended 31 March 2008 as no new IFRSs or interpretations that are
effective for the financial year ended 31 March 2009 had an impact on the
Group's reported income or net assets
2 Investment portfolio
Equity investments Loans and receivables
Total
E'000 E'000 E'000
Year to31 March 2009
At 1 April 2008 72,252 19,639 91,891
Additions 28,941 2,648 31,589
Transfers 556 (556) -
Disposals, repayments (12,019) (1,635) (13,654)
Revaluation (46,071) (19,643) (65,714)
Exchange movements (891) 47 (844)
At 31 March 2009 42,768 500 43,268
Quoted 24,965 - 24,965
Unquoted 17,803 500 18,303
15 month period to 31 March 2008
At 1 January 2007 93,175 9,355 102,530
Additions 6,966 15,213 22,179
Disposals, repayments (9,924) (99) (10,023)
Revaluation (16,661) (3,126) (19,787)
Exchange movements (1,304) (1,704) (3,008)
At 31 March 2008 72,252 19,639 91,891
Quoted 32,878 - 32,878
Unquoted 39,374 19,639 59,013
During the year, TVC acquired an 18% shareholding in UTV Media plc, a leading
radio and TV business, for an aggregate consideration of £21.7 million (E27.3
million). In December 2008, the Group disposed of its investment in
ChangingWorlds Limited realising a gain of E2.0 million.
The significant reduction in the valuation of the investment portfolio at 31
March 2009 reflects the current difficult market conditions, the steep decline
in asset prices and the trading performance and outlook for investee companies.
3 Available-for-sale investments
Year ended 15 months ended
31 March 31 March
2009 2008
E'000 E'000
At beginning of year/period 9,954 -
Additions - 10,014
Revaluation 282 (60)
At end of year/period 10,236 9,954
The available-for-sale investments represent investments in German Euro
government bonds with a maturity date in April 2010.
4 Segmental analysis
Segmental information is presented in respect of the Group's investment
portfolio based on whether the investee company is quoted or unquoted. Quoted
investments are further categorised as between Norkom Group plc and UTV Media
plc. This is a change in presentation from the segmental information disclosed
in the period ended 31 March 2008, which was based on the business sector of the
Group's investee companies. The reclassification of investments reflects the
changes in the Group's investment portfolio during the year. The figures for the
prior period have been restated so that they are comparable. The Group has only
one reportable geographical segment as its investments are all located in
Ireland. The segmental information presented is consistent with the Group's
internal analysis of its investment portfolio.
Norkom Group plc UTV Unquoted investments
Media plc Total
Year to 31 March 2009 E'000 E'000 E'000 E'000
Gross portfolio return
Net realised profits over opening value on the disposal of - - 1,875 1,875
investments
Net unrealised losses on the revaluation of investments (19,026) (16,166) (31,366) (66,558)
Portfolio income 90 478 376 944
(18,936) (15,688) (29,115) (63,739)
Net (investment)/divestment
Realisation proceeds (including - - 15,716 15,716
income from loan instruments)
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