quest for growth...quest for growth quarterly financial report july - september 2010 valuation quest...
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QUEST FOR GROWTHQuarterly Financial Report July - September 2010
VALUATION QUEST FOR GROWTH
Share price Net asset value/share 30/09/2010 30/09/2010 30/06/2010 31/12/2009
4.42 EUR 8.37 EUR 7.37 EUR 7.25 EUR
Number of shares 11.789.255 11.789.255 11.789.255
Discount of the share price versus Net Asset Value: 47.18 %Source: Estimate by Quest Management NV
DISCOUNT QUEST FOR GROWTH
0%
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Average discount of Belgian investment companies (Source: KBC Securities)
Discount Quest for Growth
Discount of Quest for Growth and Belgian investment companies
EVOLUTION OF THE NET ASSET VALUE OF QUEST FOR GROWTH
AND THE MARKET INDICES UNTIL 30 SEPTEMBER 2010
13,52%
15,47%
0,97%
10,18%
3,41%
6,72%
0%
5%
10%
15%
20%
Since June 30th 2010 Since December 31st 2009
QfG Net Asset Value
Nasdaq (in Euro)
New Markets 50
INTERIM REPORTThe third quarter of the current fiscal year has provideda positive contribution to the provisional annual result of€ 11.8 million or € 1 per share, to compare with a profitof € 5.1 million (€ 0.43 per share) for the correspondingperiod of the last fiscal year. The cumulative result after9 months amounts to € 13 million (€ 1.12 per share).The comparable figure for the previous fiscal year was€ 10.5 million (€ 0.89 per share).
With this result, Quest for Growth has performed re-markably better than the two reference indices, bothon a quarterly basis as for the provisional annual re-sult (see graph).
Just like with the semi-annual result, this growth ofthe net asset value did not translate into a correspon-ding increase of the share price. The share price on 30September 2010 amounted to € 4.42 which repre-sents a decrease with respect to the closing rate of € 4.65 on 31 December 2009. The discount, i.e. thedifference between the net asset value and the shareprice, ran up to 47.18 % at the end of the quarter.
On 20 September 2010 Laxey Partners Ltd, up tillthen the biggest shareholder of Quest for Growthwith a previously reported participation of 11.99 %,reported having lowered their participation with251,431 shares to 9.86 %.
The biggest profit contribution in the current fiscalyear comes from Movetis of which the book value inthe portfolio increased by € 4.5 million between 1January 2009 en 30 September 2010. Movetis de-scends from the unquoted portfolio of the privak andhas been subject to a lock-up agreement for a periodof 12 months since the IPO in December 2009. In Au-gust this year Shire plc made a public take-over bidon Movetis at € 19/share, which represents a consid-erable premium on the share price valid at the time.In the meantime Quest for Growth has accepted thisoffer and has received the corresponding price incash. After CoreOptics, which was taken over in thesecond quarter with a profit for Quest for Growth of€ 2.5 million, Movetis is the second big success storyof the unquoted portfolio this year.
The quoted portfolio and the investments in venturecapital funds also benefited from the improved eco-nomic context during the past quarter. The quotedshares booked a provisional annual result of almost15 % while the investments via Carlyle Europe Tech-nology Partners showed substantial added values.Some co-investments, which Quest for Growth madetogether with this venture capital fund in certain un-derlying companies, have also contributed to theseresults.
1
PRESS RELEASE Leuven / 28 October 2010 / 5.40 PMRegulated information. This press release contains information subject to the transparency require-
ments imposed on listed companies.
Schedule for publication: :
28 October 2010: 5.40 PM Press release available at www.questforgrowth.com
29 October 2010: 11.00 AM Press & Analyst meeting, Quest Management SA, Lei 19, 3000 Leuven
1. BALANCE SHEET AT SEPTEMBER 30TH 2010
ASSETS2010
30 September 2009
31 December LIABILITIES2010
30 September 2009
31 DecemberFixed Assets 92,615,545 79,850,099 Capital and Reserves 98,658,647 85,441,572Formation expenses 0 0 Issued capital 109,748,742 109,748,742Financial assets 92,615,545 79,850,099 Reserves 2,251,148 2,251,148
Shares 91,649,036 78,033,562 Reserves not available fordistribution
1,146,128 1,205,768
Amounts receivable 966,509 1,816,537 Reserves available for distribution 1,105,020 1,045,380
Current Assets 5,972,483 5,713,801 Profit carried forward 0 0
Amounts receivable aftermore than one year
867,367 0 Loss carried forward (26,558,319) (26,558,319)
Amounts receivable withinone year
161,658 399,726 Result for the period 13,217,075 0
Trade receivables 0 237,256 Amounts payable 257,662 122,328Other receivables 161,658 162,470 Amounts payable within
one year63,368 69,648
Short term investments 4,943,457 3,455,768 Financial debts 0 0Own shares 1,146,128 1,205,768 Trade debts 0 42Term deposits 0 2,250,000 Taxes 72 72
Cash at Bank and in hand 3,797,329 1,797,803 Other amounts payable 63,368 69,534
Deferred charges and accrued income
328,282 60,504 Accrued charges and deferred income
194,221 52,679
TOTAL ASSETS 98,916,308 85,563,899 TOTAL LIABILITIES 98,916,308 85,563,899
2. STATEMENT OF INCOME FOR THE PERIOD UNTIL SEPTEMBER 30TH 2010
Operating income and charges1 January 2010
30 September 20101 July 2010
30 September 20101 January 2009
30 September 2009
1 July 200930 September 2009
Gross operating income 14,212,052 12,387,077 11,211,055 5,493,803Realised gains/losses on shares 5,067,357 2,077,074 (8,783,056) (2,831,798)
Unrealised gains/losses on shares 8,893,296 9,261,996 19,960,702 8,102,326
Result from option transactions 254,920 0 56,578 (44,999)
Realised results from Forward currency rate agreements (235,428) 943,245 (259,688) 274,276
Unrealised results from Forward currency rate agreements 231,907 104,762 236,519 (6,002)
Depreciation and other amounts written off 0 0 0 0Other operating charges (1,510,966) (470,302) (1,734,102) (588,931)
Management fee (1,232,877) (378,082) (1,458,493) (491,507)
Custodian fee (32,182) (11,503) (20,680) (7,895)
Statutory Auditors fee (7,494) (2,526) (9,055) (3,355)
Printing and publication costs (56,096) (18,765) (93,493) (31,507)
Annual tax on Collective Investment schemes (50,534) (16,638) (40,308) (13,583)
Directors fees (52,356) (17,644) (39,903) (13,447)
Advisory fees (22,438) (7,561) (11,219) (3,781)
Accountancy 0 0 0 0
Others (56,989) (17,583) (60,950) (23,855)
Operating Profit / Loss 12,701,086 11,916,775 9,476,953 (4,904,872)Financial income 1,043,522 170,002 906,084 123,794
Financial charges (527,533) (334,435) 103,975 88,467
Amounts written off own shares (59,640) 44,082 272,270 116,687
Capital increase cost 0 0 0 0
Others (467,893) (378,517) (168,295) (28,220)
Profit / Loss on ordinary activities before taxes 13,217,075 11,752,342 10,487,012 5,117,133Income taxes 0 0 0 0
Profit / Loss for the period 13,217,075 11,752,342 10,487,012 5,117,133Profit / Loss for the period, per share 1,12 1,00 0,89 0,43
CONDENSED INTERIM FINANCIAL STATEMENTS
2
3.OFF BALANCE POSITIONS AT SEPTEMBER 30TH 2010
Commitments Currency Commitments in ¤Capricorn Cleantech Fund 1,250,000 ¤ 1,250,000
Carlyle Europe Technology Partners I 322,119 ¤ 322,119
Carlyle Europe Technology Partners II 2,613,288 ¤ 2,613,288
Clear2Pay 211,324 ¤ 211,324
Life Sciences Partners III 274,366 ¤ 274,366
Life Sciences Partners IV 1,717,779 ¤ 1,717,779
Schroder Ventures International Life Sciences Fund II 71,953 $ 52,721
Ventech Capital 2 305,571 ¤ 305,571
Vertex III 480,000 $ 351,700
TOTAL 7,098,867
3.2 Forward currency rate agreements
Value date Counterparty Quest for Growth buys Quest for Growth sells29/10/2010 Dexia Bank ¤ 2,631,117,35 £ 2,250,000 29/10/2010 Dexia Bank ¤ 3,776,798,61 $ 5,100,00029/10/2010 KBC Bank ¤ 2,485,721,90 £ 2,100,000 29/10/2010 KBC Bank ¤ 3,997,823,41 $ 5,400,000
PORTFOLIO COMPOSITION AND MARKET CAPITALISATION AT SEPTEMBER 30TH 2010
€ 0
€ 10.000.000
€ 20.000.000
€ 30.000.000
€ 40.000.000
€ 50.000.000
€ 60.000.000
€ 70.000.000
€ 80.000.000
€ 90.000.000
€ 100.000.000
Cash + Other
net assets
Quoted
portfolio
Unquoted
portfolio
Venture funds Market
capitalisation
3
3.1. Commitments
4
4. NOTES TO THE FINANCIAL STATEMENTS – FINANCIAL ASSETS BREAKDOWN AT SEPTEMBER 30TH 2010
4.1 Shares quoted companies
Company Sector / MarketNumber of
shares
Changesince
30/06/2010 CurrencyShareprice
Valuationin ¤
in % ofNet Asset
ValueSoftware & Services
ECONOCOM Euronext Brussels 71,170 0 ¤ 11.0000 782,870 0.79%INIT INNOVATION Deutsche Börse 95,000 0 ¤ 14.4500 1,372,750 1.39%NEMETSCHEK Deutsche Börse 135,000 0 ¤ 24.1900 3,265,650 3.31%TRANSICS Euronext Brussels 250,000 0 ¤ 5.3000 1,325,000 1.34%UNIT 4 AGRESSO Euronext Amsterdam 200,330 5,000 ¤ 20.0000 4,006,600 4.06%WIRECARD Deutsche Börse 125,000 -125,000 ¤ 9.9900 1,248,750 1.27%
Technology Hardware CORNING NYSE 105,000 105,000 $ 18.2800 1,406,360 1.43%EVS BROADCAST EQUIPM. Euronext Brussels 62,500 7,500 ¤ 45.0000 2,812,500 2.85%HEWLETT PACKARD NYSE 50,000 50,000 $ 42.0700 1,541,251 1.56%LEM Holding SWX Swiss Exchange 8,994 1,000 CHF 367.7500 2,489,308 2.52%TKH GROUP Euronext Amsterdam 87,794 -5,816 ¤ 16.2500 1,426,653 1.45%
Pharma & Biotech ABLYNX Euronext Brussels 135,000 20,000 ¤ 7.9500 1,073,250 1.09%MOVETIS (1) Euronext Brussels 523,601 0 ¤ 18.9900 9,943,183 10.08%ROCHE HOLDINGS SWX Swiss Exchange 20,000 0 CHF 134.2000 2,020,020 2.05%TEVA PHARMACEUTICAL Nasdaq 60,000 15,000 $ 52.7500 2,319,021 2.35%
Healthcare Equipement & Services STRATEC BIOMEDICAL Deutsche Börse 35,000 35,000 ¤ 30.2000 1,057,000 1.07%UNITED DRUG Dublin 1,026,286 7,658 ¤ 2.4990 2,564,689 2.60%
Electrical & Engineering ANDRITZ AG Vienna 60,000 -10,000 ¤ 51.5100 3,090,600 3.13%ARCADIS Euronext Amsterdam 240,000 0 ¤ 16.4350 3,944,400 4.00%FAIVELEY Euronext Paris 25,000 0 ¤ 63.8600 1,596,500 1.62%IMTECH Euronext Amsterdam 113,055 5,000 ¤ 23.2850 2,632,486 2.67%PFEIFFER VACUUM TECHNOLOGY Deutsche Börse 27,500 -12,500 ¤ 69.4000 1,908,500 1.93%PHOENIX SOLAR Deutsche Börse 35,000 10,000 ¤ 26.2800 919,800 0.93%SMA SOLAR Deutsche Börse 25,000 10,000 ¤ 81.0300 2,025,750 2.05%VESTAS WIND SYSTEMS Copenhagen 30,000 0 DKK 206.0000 829,319 0.84%
Materials CENTROTEC Deutsche Börse 87,500 -22,500 ¤ 14.2400 1,246,000 1.26%GEBERIT SWX Swiss Exchange 12,000 0 CHF 175.0000 1,580,492 1.60%UMICORE Euronext Brussels 110,000 10,000 ¤ 31.7100 3,488,100 3.54%
Other Sectors ACCELL GROUP Euronext Amsterdam 30,000 5,000 ¤ 33.5500 1,006,500 1.02%
64,923,301 65.81%
4.2 Shares unquoted companies
Company Sector / Market CurrencyValuation
in ¤In % of Net Asset
ValueACTIVE CIRCLE Software & Services ¤ 400,000 0.41%ANTERYON Technology Hardware ¤ 1,499,027 1.52%CLEAR2PAY Software & Services ¤ 5,359,013 5.43%IDEA AG Pharma & Biotech ¤ 164,417 0.17%KIADIS PHARMA Pharma & Biotech ¤ 2,299,952 2.33%MAGWEL Software & Services ¤ 430,000 0.44%NANTOFEN Pharma & Biotech $ 400 0.00%OXAGEN Ltd. Pharma & Biotech £ 4,859 0.00%PROSONIX Pharma & Biotech £ 1,259,763 1.28%SPHERE MEDICAL Healthcare Equipment & Services £ 1,693,182 1.72%SYNTAXIN Pharma & Biotech £ 2,090,651 2.12%TC LAND EXPRESSION Pharma & Biotech ¤ 1,499,995 1.52%
16,701,260 16.93%
4.3. Investments in venture funds
Company Currency Last ValuationValuation
in ¤In % of Net Asset Value
CAPRICORN CLEANTECH FUND ¤ 30-06-2010 950,936 0.96%CARLYLE EUROPE TECHNOLOGY PARTNERS I ¤ 30-06-2010 2,157,697 2.19%CARLYLE EUROPE TECHNOLOGY PARTNERS II ¤ 30-06-2010 1,036,071 1.05%CETP LP Co-investment ¤ 30-06-2010 1,778,831 1.80%KIWI I VENTURA SERVICOS ¤ 30-06-2010 150,636 0.15%LIFE SCIENCES PARTNERS III ¤ 30-06-2010 1,572,608 1.59%LIFE SCIENCES PARTNERS IV ¤ 30-06-2010 180,009 0.18%SCHRODER VENTURES LSF II $ 30-06-2010 301,685 0.31%VENTECH CAPITAL 2 ¤ 30-06-2010 913,278 0.93%VERTEX III $ 30-06-2010 982,724 1.00%
10,024,475 10.16%
Total Financial Assets - Shares ¤ 91,649,036 92.90
4.4. Amounts receivable companies
Total Financial Assets - Shares Face value in ¤ CurrencyValuation
in ¤In % of Net Asset Value
KIADIS PHARMA Convertible loan note 74,327 ¤ 74,327 0.08%
MAPPER Convertible loan note 605,000 ¤ 100,000 0.10%
NANTOFEN loan note 292,182 $ 292,182 0.30%
TCLAND Convertible loan note 500,000 ¤ 500,000 0.51%
Total Financial Assets – Amounts receivable ¤ 966,509 0.98%
Total Financial Assets ¤ 92,615,545 93.88%
Cash ¤ 3,797,329 3.85%
Other Net Assets ¤ 1,099,645 1.12%
Quest for Growth ordinary shares 259,305 ¤ 1,146,128 1.16%
Total Net Asset Value ¤ 98,658,647 100.00%
PORTFOLIO DISTRIBUTION BY SECTOR
Software & Services19.6%
Pharma & Biotech25.4%
Electrical & Engineering
18.3%
Technology Hardware
12.1%Funds &
Diversified Companies
10.8%
Materials6.8%
Health Care Equipment &
Services5.7%
Other sectors1.1%
Semiconductors0.1%
PORTFOLIO DISTRIBUTION BY COUNTRY
Belgium28.3%
Germany14.3%
Netherlands20.2%
United Kingdom10.8%
Switzerland6.6%
France5.3%
Austria3.3%
Israel3.6%
Denmark0.9%
Ireland2.8% Malta
0.3%
US3.5% Portugal
0.2%
PORTFOLIO DISTRIBUTION BY CURRENCY
EUR
80.06%
DKK
0.84%
CHF
6.17%
USD
7.80%
NOK
0.00%
GBP
5.12%
SEK
0.00%
5
(1) Movetis is a quoted company, but is considered as an unquoted company for the privak investment restrictions according to article 41 of the Royal Decree of 18 April 1997
PROFILE, AIM
Quest for Growth focuses on European technol-ogy-based growth companies in sectors such aslife sciences, information technology, software,semiconductors, telecom, electronics, new mate-rials and special situations in other growth sectors.Funds under management amounted to € 99 mil-lion on September 30th 2010.
Quest for Growth has been listed on EuronextBrussels since September 23rd 1998.
The Privak, created by Royal Decree of April 18th1997, is an investment vehicle, specially tailored toprovide a suitable framework for investments inprivate equity and in growth companies.
The Privak is a closed-end Undertakings for Col-lective Investments in Transferrable Securities(UCITS) under the regulation of the Belgian Bank-ing Commission and subject to specific invest-ment and dividend pay out rules.
INVESTMENT POLICY
Quest for Growth invests in growth companieswith the objective of converting capital gains intotax-free income through the Privak structure. Thelargest part of the portfolio is invested in growthcompanies listed on European stock exchanges(Euronext, London Stock Exchange, DeutscheBörse etc.) and other regulated markets. UnderPrivak rules this part may not exceed 65 % of theassets.
Up to 15 % of the assets can be invested in ven-ture or private equity funds having an investmentpolicy compatible with that of Quest for Growth.
The balance will be invested in unquoted compa-nies intending to seek an exit within 36 months.Investments in start-ups or early stage companiesare allowed, but will be exceptional.
ADDED VALUE PER SECTOR (JULY - SEPTEMBER 2010)
7,20
7,30
7,40
7,50
7,60
7,70
7,80
7,90
8,00
8,10
8,20
8,30
8,40
NA
V30/0
6/2
010
Tech
nolo
gy
Hard
ware
Sem
iconduct
ors
Pharm
a &
Bio
tech
Health C
are
Equip
ment
&S
erv
ices
Funds
&D
ivers
ifie
dC
om
panie
s
Soft
ware
&S
erv
ices
Ele
ctri
cal &
Engin
eeri
ng
Mate
rials
Oth
er
sect
ors
Equity H
edgin
g
Curr
ency
hedgin
g
Financi
al pro
fit
& loss
es
Expense
s
NA
V30/0
9/2
010
NA
V /
Aandeel
6
Auxilium Keerbergen BVBA, represented by Mr. Frans L. Theeuwes, Director – Chairman of the AuditCommittee and Quest Management NV, represented by Mr. René Avonts, Managing Director certify,on behalf and for the account of the Board of Directors of Quest for Growth NV, that, to their knowledge,
a) the condensed interim financial statements which have been prepared in accordance with the ac-counting framework and standards applicable in Belgium give a true and fair view of the assets, lia-bilities, financial position and profit or loss of the company, under Article 13, § 4 of the Royal Decree of November 14, 2007 on the obligations of issuers of financial instruments admitted to trading ona regulated market.
b) the interim financial report includes a fair overview of the information required under Article 13, §§5 and 6 of the Royal Decree of November 14, 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market.
7
Auxilium Keerbergen BVBA Quest Management NVDirector – Chairman of the Audit committee Managing Directorrepresented by represented by Frans L. Theeuwes René Avonts
-20.000.000
-10.000.000
-
10.000.000
20.000.000
30.000.000
40.000.000
2005 2006 2007 2008 2009 2010 (until
September
30th)
THE INTERIM FINANCIAL REPORT JULY – SEPTEMBER 2010 HAS NOT BEEN CONSOLIDATEDNOR SUBMITTED TO A CONDENSED REVIEW BY THE STATUTORY AUDITOR KLYNVELD PEATMARWICK GOERDELER BEDRIJFSREVISOREN.
STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONDENSED INTERIM FINANCIAL STATE-MENTS AND THE FAIR OVERVIEW OF THE INTERIM FINANCIAL REPORT
TOTAL SHAREHOLDERS RETURN
(SINCE 30/09/2009)
QUEST FOR GROWTH:
RESULTS FROM 1 JANUARY
2005 UNTIL 30 SEPTEMBER 2010
Managing Director Quest Management NV, Lei 19 Box 2, B-3000 LeuvenRepresented by Mr René Avonts
Auditors Klynveld Peat Marwick Goerdeler BedrijfsrevisorenBurg. CV, represented by Mr Pierre P. BergerPrins Boudewijnlaan 24D, 2550 B-Kontich
Depositary bank DEXIA BANK, Pachecolaan 44, B-1000 Brussels
Incorporation June 9th 1998
Official listing September 23rd 1998 on Euronext Brussels (Continuous Market)
Security number ISIN: BE0003730448
Stock Price Bloomberg: QFG BB EquityReuters: QUFG.BRTelekurs: 950524
Company reports Quarterly. The next report will be the annual report, tobe published in March 2011. The annual results will bepublished on 27 January 2011
Estimated Published every first Saturday of the month in “De Net Asset Value TIJD” and in “L’Echo”, in “Cash” and on the Quest for
Growth website.
GENERAL INFORMATION
QUEST FOR GROWTH NV
Privak, fixed capital investment company established under Belgian LawLei 19, box 3 - B-3000 Leuven - Phone: +32 (0)16 28 41 28 - Fax: +32 (0)16 28 41 [email protected]
BOARD OF DIRECTORS
Dr. Jos B. Peeters
Chairman
Quest Management NV
Managing Director, represented by Mr René AvontsManaging Director Quest Management NV
Bergendal & Co. BVBA
Vice Chairman, IndependentDirector, represented by Count Diego du Monceau deBergendal
Tacan BVBA
Vice Chairman, IndependentDirector, represented by Mr Johan Tack
Euro Invest Management NV
Director, represented by Prof. Philippe Haspeslagh
De Meiboom NV
Director, represented by Mr Edward Claeys
Mr Dirk Vanderschrick
Director
Auxilium Keerbergen BVBA
Independent Director,represented by Mr Frans L. Theeuwes
Gengest BVBA
Independent Director,represented by Mr Rudi Mariën
Prof. Koen Debackere
Independent Director
Pamica NV
Independent Director,represented by Mr Michel Akkermans
INVESTMENT COMMITTEE
Euro Invest Management NV
Chairman, represented by Prof Philippe Haspeslagh
Dr Jos B. Peeters
Pamica NV
represented by Mr Michel Akkermans
Gengest BVBA
represented by Mr Rudi Mariën
De Meiboom NV
represented by Mr Edward Claeys
Ms Goedele Ertveldt
Quest Management NV
represented by Mr René Avonts
AUDIT COMMITTEE
Auxilium Keerbergen BVBA
Chairman, represented byMr Frans L. Theeuwes
Tacan BVBA
represented by Mr Johan Tack
Bergendal & Co. BVBA
represented by Count Diego du Monceau deBergendal
8