Oxford Technology 2 VCT PLC 06 May 2005 Preliminary Announcement for Oxford Technology 2 Venture Capital Trust plc for the year ended 28 February 2005 Chairman's Statement Investment Portfolio Oxford Technology 2 VCT (OT2VCT) investee companies have generally made encouraging progress with some successfully raising capital at higher share prices and one company floating on AIM (although this happened just after the February 2005 year end and so has not been reflected in these accounts). However, the successes of these investee companies have been counter-balanced in the Net Asset Value by others which have had difficulty in raising capital during the year. The net asset value as at 28 February 2005 was 77p per share compared to 78p per share at 29 February 2004. Insense, which develops novel wound dressings, has raised capital at an increased price of £1.33 per share (which compares to the £1 per share at which the investment was originally held). The value of OT2VCT's holding in Insense has therefore increased from £266,110 to £353,926. Astron Clinica, which develops software and hardware systems for the detection of skin cancer and other skin disorders raised £3.5m at a shareprice which values OT2VCT's holding at approximately £325,000. However, this happened just after the year end, so this increased value is not reflected in the balance sheet of these accounts. However, other companies have had funding difficulties. Armstrong Healthcare in particular has had problems in raising capital and the value of this holding has decreased. This has been caused by the fact that Armstrong has experienced delays with the development programme of Pathfinder, its instrument for image guided brain surgery, and because it missed its sales targets for EndoAssist, its camera holding robot for endoscopic surgery. This meant that Armstrong needed to raise additional capital, and that it was necessary to raise this by a rights issue at £1.50 per share which compared to £4 per share at which capital had been raised in 2004. However, at the time of writing, Armstrong has received its first commercial order for Pathfinder and the sales prospects for EndoAssist are looking better, especially in the US, than at any previous time. So the hope and expectation is that the value of OT2VCT holding in Armstrong will again increase. There have been encouraging developments since the year end at 28 February 2005, which will increase the Net Asset Value, but which are not reflected in these accounts. In particular, on 4 April 2005, Hardide Ltd floated on AIM, and OT2VCT sold its shares at the time of the float for £712,500. The original cost of this investment was £250,000, but for the purposes of these accounts, OT2VCTs holding was valued at £500,000 (being the number of shares held multiplied by the most recent share price at which investors had subscribed). Results for the year Interest on bank deposits and investee loans together with dividend income produced gross revenue of £47,000 (2004: £39,000) in the year. Net revenue after taxation and management expenses was a loss of £119,000 (2004: loss of £159,000) and revenue return for the period was a loss of1.98p (2004: loss of 2.65p) per share. Capital return was a profit of 1.20p (2004: loss of 3.55p) per share. AGM Shareholders should note that the AGM for Oxford Technology 2 VCT will be held on Friday 10th June 2005, at the Magdalen Centre, Oxford Science Park, starting at 12.00 pm and will include presentations by some of the companies in which the Oxford Technology VCTs have invested. A formal Notice of AGM has been included at the back of these Accounts together with a Form of Proxy for those not attending. Fuller information on each of the investee companies is given in the April 2005 newsletter. John Jackson Chairman 6 May 2005 Statement of total return (incorporating the revenue account)* for the year ended 28 February 2005 2005 2004 Audited Audited Revenue £000 Capital Total Revenue Capital Total £000 £000 £000 £000 £000 Loss on investments - 72 72 - (213) (213) Income 47 - 47 39 - 39 Investment management fee (108) - (108) (133) - (133) Other expenses (58) - (58) (65) - (65) _____ _____ _____ _____ _____ _____ Net loss on ordinary activities (119) 72 (47) (159) (213) (372) before taxation Tax on ordinary activities - - - - - - _____ _____ _____ _____ _____ _____ Loss attributable to equity (119) 72 (47) (159) (213) (372) shareholders and transfers from reserves ====== ====== ====== ====== ====== ====== Loss per ordinary share (1.98p) 1.20p (0.78)p (2.65)p (3.55)p (6.20)p ====== ====== ====== ====== ====== ====== * The revenue column of this statement is the profit and loss account of the company. All revenue and capital items in the above statement derive from continuing operations. There were no recognised gains or losses for the year other than those shown above. Balance sheet at 28 February 2005 28 February 2005 29 February 2004 Audited Audited £000 £000 £000 £000 Fixed assets Investments 4,434 4,402 Current assets Debtors 67 38 Cash at bank 142 251 _____ _____ 209 289 Creditors: amounts falling due (4) (5) within one year _____ _____ Net current assets 205 284 _____ _____ Net assets 4,639 4,686 ===== ===== Capital and reserves Called up share capital 600 600 Share premium account 5,221 5,221 Other reserves: Capital reserve - realised (593) (583) Capital reserve - unrealised (149) (231) Revenue reserve (440) (321) _____ _____ Shareholders' funds 4,639 4,686 ===== ===== Net asset value per share 77p 78p ===== ===== Cash flow statement for the year ended 28 February 2005 2005 2004 Audited Audited £000 £000 Net cash outflow from operating (149) (170) activities Capital expenditure and financial investment Purchase of investments - (156) Disposal / redemption of investments 40 3 ______ ______ Net cash outflow from capital 40 (153) expenditure and financial investment ______ ______ Decrease in cash (109) (323) ====== ====== Notes: 1. Basis of preparation The preliminary announcement has been prepared in accordance with applicable accounting standards up to and including FRS 19 and with the Statement of Recommended Practice 'Financial statements of investment trust companies' issued in January 2003. The principal accounting policies have remained unchanged from those set out in the company's 2003 financial statements. 2. Return per Ordinary Share The calculation of revenue return per share is based on the net deficit for the financial period of £119,000 (2004: £159,000) divided by the weighted average number of ordinary shares of 6,000,000 (2004: 6,000,000) in issue during the period. The calculation of capital return per share is based on the net capital loss for the financial period of £72,000 (2004: loss of £213,000) divided by the weighted average number of ordinary shares of 6,000,000 (2004: 6,000,000) in issue during the period. 3. General The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The balance sheet at 28 February 2005 and the statement of total return, cash flow statement and associated notes for the year then ended have been extracted from the company's 2005 statutory financial statements on which the auditors' opinion is unqualified and does not include any statement under section 237 of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange