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AADV Albion Development Vct Plc

87.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Albion Development Vct Plc LSE:AADV London Ordinary Share GB0004832472 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 87.00 85.50 88.50 87.00 87.00 87.00 1,336 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Investors, Nec 558k -2.25M -0.0166 -52.41 117.98M

Albion Dev VCT Albion Development Vct Plc: Half-yearly Report

31/08/2017 2:23pm

UK Regulatory


 
TIDMAADV 
 
 
   Albion Development VCT PLC 
 
   LEI Code 213800FDDMBD9QLHLB38 
 
   As required by the UK Listing Authority's Disclosure and Transparency 
Rule 4.2, Albion Development VCT PLC today makes public its information 
relating to the Half-yearly Financial Report (which is unaudited) for 
the six months to 30 June 2017. This announcement was approved by the 
Board of Directors on 31 August 2017. 
 
   The full Half-yearly Financial Report (which is unaudited) for the 
period to 30 June 2017 will shortly be sent to shareholders. Copies of 
the full Half-yearly Financial Report will be shown via the Albion 
Capital Group LLP website by clicking 
www.albion.capital/funds/AADV/30Jun2017.pdf. 
 
   Investment objective and policy 
 
   Albion Development VCT PLC's (the "Company's") investment policy is 
intended to provide investors with a regular and predictable source of 
dividend income combined with the prospects of long term capital growth. 
This is achieved by establishing a diversified portfolio of holdings in 
smaller, unquoted companies.  It is intended that this will be achieved 
as follows: 
 
 
   -- Through investment in a number of higher risk companies with greater 
      growth prospects in sectors such as software and computer services, and 
      medical technology. Against this is a balanced portfolio of more stable 
      investments that provide a strong income stream. 
 
 
   -- In neither category do portfolio companies normally have any external 
      borrowings with a prior charge ranking ahead of the Company. 
 
 
   -- Up to two-thirds of qualifying investments by cost comprise loan stock 
      secured with a first charge on the portfolio company's assets. 
 
 
   In this way, risk is spread by investing in a number of different 
businesses within venture capital trust qualifying industry sectors 
using a mixture of securities. The maximum amount which the Company will 
invest in a single company is 15 per cent. of the Company's assets at 
cost, thus ensuring a spread of investment risk. The value of an 
individual investment may increase over time as a result of trading 
progress and it is possible that it may grow in value to a point where 
it represents a significantly higher proportion of total assets prior to 
a realisation opportunity being available. 
 
   Under its Articles of Association, the Company's maximum exposure in 
relation to gearing is restricted to 10 per cent. of its adjusted share 
capital and reserves. 
 
   Background to the Company 
 
   The Company is a venture capital trust which raised a total of GBP33.3 
million through the issue of shares between 1999 and 2004. The C shares 
merged with the Ordinary shares in 2007. 
 
   A further GBP6.3 million was raised through an issue of new D shares in 
2009/2010. The D shares converted to Ordinary shares on 31 March 2015 on 
the basis of their respective audited net asset value per share at 31 
December 2014, in line with the original prospectus. Accordingly, D 
shareholders received 1.4975 Ordinary shares for each D share they 
owned. 
 
   An additional GBP23.8 million has been raised for the Ordinary shares 
through the Albion VCTs Top Up Offers since 2011. The funds raised will 
be invested in accordance with the Company's existing investment policy. 
 
   Financial calendar 
 
 
 
 
Record date for second dividend for the year     8 September 2017 
 
Payment date for second dividend for the year   29 September 2017 
 
Financial year end                                    31 December 
 
 
   Financial highlights 
 
 
 
 
            Unaudited six months ended  Unaudited six months ended   Audited year ended 
Ordinary           30 June 2017                30 June 2016           31 December 2016 
shares           (pence per share)           (pence per share)        (pence per share) 
Dividends 
 paid                              2.0                         2.5                  5.0 
Total 
 return                            2.7                         0.7                  4.7 
Net asset 
 value                            71.3                        69.3                 70.7 
 
 
 
 
                                                  Ordinary          C shares           D shares 
                                                shares (pence       (pence per        (pence per 
                                               per share) (ii)   share) (ii) (iv)   share) (ii) (v) 
Total shareholder return to 30 June 2017 
Total dividends paid during the period 
ended: 
 31 December 1999(i)                                       1.0                  -                 - 
 31 December 2000                                          2.9                  -                 - 
 31 December 2001                                          3.9                  -                 - 
 31 December 2002                                          4.2                  -                 - 
 31 December 2003(iii)                                     4.5                0.7                 - 
 31 December 2004                                          4.0                2.0                 - 
 31 December 2005                                          5.2                5.9                 - 
 31 December 2006                                          3.0                4.5                 - 
 31 December 2007                                          5.0                5.3                 - 
 31 December 2008                                         12.0               12.8                 - 
 31 December 2009                                          4.0                4.3                 - 
 31 December 2010                                          8.0                8.6               1.0 
 31 December 2011                                          5.0                5.4               2.5 
 31 December 2012                                          5.0                5.4               3.5 
 31 December 2013                                          5.0                5.4               5.0 
 31 December 2014                                          5.0                5.4               5.0 
 31 December 2015                                          5.0                5.4               7.5 
 31 December 2016                                          5.0                5.4               7.5 
 30 June 2017                                              2.0                2.1               3.0 
Total dividends paid to 30 June 2017                      89.8               78.6              35.0 
Net asset value as at 30 June 2017                        71.3               76.4             106.8 
 
  Total shareholder return to 30 June 2017               161.1              155.0             141.8 
 
 
   The Directors have declared a second dividend of 2.0 pence per Ordinary 
share payable on 29 September 2017 to shareholders on the register on 8 
September 2017. 
 
   Notes 
 
   (i) Assuming subscription for Ordinary shares by the First Closing on 26 
January 1999. 
 
   (ii) Excludes tax benefits upon subscription. 
 
   (iii) Those subscribing for C shares after 30 June 2003 were not 
entitled to the interim dividend. 
 
   (iv) The C shares were converted into Ordinary shares on 31 March 2007, 
with a conversion ratio of 1.0715 Ordinary shares for each C share. The 
net asset value per share and all dividends paid subsequent to the 
conversion of the C shares to the Ordinary shares are multiplied by the 
conversion factor of 1.0715 in respect of the C shares return, in order 
to give an accurate picture of the shareholder value since launch 
relating to the C shares. 
 
   (v) The D shares were converted into Ordinary shares on 31 March 2015, 
with a conversion ratio of 1.4975 Ordinary shares for each D share. The 
net asset value per share and all dividends paid subsequent to the 
conversion of the D shares to the Ordinary shares are multiplied by the 
conversion factor of 1.4975 in respect of the D shares return, in order 
to give an accurate picture of the shareholder value since launch 
relating to the D shares. 
 
   Interim management report 
 
   Introduction 
 
   The results for Albion Development VCT PLC for the six months to 30 June 
2017 showed a total return of 2.7 pence per share compared to a total 
return of 0.7 pence per share for the same period in the previous year. 
Net asset value at 30 June 2017 was 71.3 pence per share. 
 
   Investment performance and progress 
 
   The results for the six months to 30 June 2017 were a sharp improvement 
on the interim period for 2016, mainly as a result of write-ups in 
Egress Software Technologies and Grapeshot. Both of these companies 
continue to show strong growth, with the latter now having moved into 
profitability. 
 
   GBP2.3 million was invested into new and existing portfolio companies, 
with new investments comprising GBP1 million into MPP Global Solutions 
(a cloud subscription platform), GBP315,000 into Quantexa (analytics for 
crime detection), GBP273,000 into G.Network Communications (fibre optic 
broadband services in central London), and GBP110,000 into Locum's Nest 
(digital access for NHS locum doctors). In addition, investment 
disposals included Masters Pharmaceuticals, AMS Sciences and Blackbay, 
while the business and assets of The Weybridge Club were also sold. 
 
   Investment portfolio by sector 
 
   Set out at the bottom of this announcement is the sector diversification 
of the portfolio of investments as at 30 June 2017. 
 
   Risks and uncertainties 
 
   The withdrawal of the UK from the European Union is having an uncertain 
effect on consumer and business confidence, and it would be wise to 
prepare for a renewed economic slowdown in the UK.  Meanwhile, global 
growth is muted and some countries are close to recession.  Overall 
investment risk, however, is mitigated through a variety of processes, 
including our policies of ensuring that the Company has a first charge 
over portfolio companies' assets wherever possible and second of aiming 
to achieve balance in the portfolio through the inclusion of sectors 
that are less exposed to the business and consumer cycles. 
 
   Other principal risks and uncertainties are detailed in note 13 below. 
 
   Share buy-backs 
 
   It remains the Board's primary objective to maintain sufficient 
resources for investment in existing and new portfolio companies and for 
the continued payment of dividends to shareholders. Thereafter, it is 
still the Board's policy to buy back shares in the market, subject to 
the overall constraint that such purchases are in the Company's 
interest. 
 
   It is the Board's intention for such buy-backs to be in the region of a 
5 per cent. discount to net asset value, so far as market conditions and 
liquidity permit. 
 
   Albion VCTs Top Up Offers 
 
   The Company was pleased to announce on 30 January 2017 that it had 
reached its GBP4m limit under the Albion VCTs Prospectus Top Up Offers 
2016/2017 which was fully subscribed and closed. 
 
   The proceeds of the Offer are being used to provide further resources to 
the Company at a time when a number of attractive new investment 
opportunities are being seen. 
 
   The Company announced on 14 June 2017 that, subject to regulatory 
approval, it intends to launch a prospectus top up offer of new ordinary 
shares for subscription. Full details of the Offer will be contained in 
a prospectus that is expected to be published in early September 2017 
and will be available on the Albion Capital website 
(www.albion.capital). 
 
   Transactions with the Manager 
 
   Details of the transactions that took place with the Manager in the 
period can be found in note 5. Details of related party transactions can 
be found in note 11. 
 
   Board composition 
 
   After 18 years on the Board, Jonathan Thornton will be retiring at the 
start of November. I would like to thank him hugely for his contribution 
and counsel over many years. The Board's policy on the recruitment of 
new Directors is to attract a range of backgrounds, skills and 
experience. We expect to announce his replacement shortly. 
 
   Results, dividend and prospects 
 
   As at 30 June 2017, the net asset value per Ordinary share was 71.3 
pence (30 June 2016: 69.3 pence; 31 December 2016: 70.7 pence).  In line 
with the revised dividend policy set out in the 31 December 2016 Annual 
Report and Financial Statements, the annual dividend target is now 4.0 
pence per share. A first dividend of 2.0 pence per share was paid on 31 
May 2017. The Directors have declared a second dividend of 2.0 pence per 
share payable on 29 September 2017, to shareholders on the register on 8 
September 2017. 
 
   The Board is encouraged by the new investments being made and by the 
prospects in a number of portfolio companies. We look forward to the 
full year results with confidence. 
 
   Geoffrey Vero 
 
   Chairman 
 
   31 August 2017 
 
   Responsibility statement 
 
   The Directors, Geoffrey Vero, Ben Larkin, Jonathan Thornton and Patrick 
Reeve, are responsible for the preparation of the Half-yearly Financial 
Report. In preparing these condensed Financial Statements for the period 
to 30 June 2017 we, the Directors of the Company, confirm that to the 
best of our knowledge: 
 
   (a) the condensed set of Financial Statements, which has been prepared 
in accordance with Financial Reporting Standard 104 "Interim Financial 
Reporting", give a true and fair view of the assets, liabilities, 
financial position and profit and loss of the Company as required by DTR 
4.2.4R; 
 
   (b) the interim management report includes a fair review of the 
information required by DTR 4.2.7R (indication of important events 
during the first six months and description of principal risks and 
uncertainties for the remaining six months of the year); and 
 
   (c) the interim management report includes a fair review of the 
information required by DTR 4.2.8R (disclosure of related parties' 
transactions and changes therein). 
 
   This Half-yearly Financial Report has not been audited or reviewed by 
the Auditor. 
 
   By order of the Board 
 
   Geoffrey Vero 
 
   Chairman 
 
   31 August 2017 
 
   Portfolio of investments 
 
   The following is a summary of investments as at 30 June 2017: 
 
 
 
 
                                                      % voting    Cost    Cumulative movement in value   Value    Change in value for the period* 
Asset-based investments                                rights    GBP'000             GBP'000             GBP'000              GBP'000 
Radnor House School (Holdings) Limited                     8.8     2,772                         2,576     5,348                               43 
Chonais River Hydro Limited                                4.6     1,705                           360     2,065                                3 
 
The Street by Street Solar Programme Limited              12.4     1,291                           720     2,011                               90 
 
Regenerco Renewable Energy Limited                        11.9     1,204                           470     1,674                               14 
Alto Prodotto Wind Limited                                 9.4       831                           457     1,288                               12 
Earnside Energy Limited                                    6.8     1,089                           174     1,263                              (9) 
Bravo Inns II Limited                                      6.7     1,080                           179     1,259                               50 
Albion Investment Properties Limited                      68.2       929                          (75)       854                               16 
TWCL Limited (Previously The Weybridge Club Limited)       9.4       518                          (18)       500                               25 
The Q Garden Company Limited                              16.6       466                             2       468                                2 
AVESI Limited                                             10.5       340                           115       455                                3 
Dragon Hydro Limited                                       5.5       233                           114       347                              (5) 
G.Network Communications Limited                           6.1       273                             -       273                                - 
 
MHS 1 Limited (Previously The Charnwood Pub Company 
 Limited)                                                  3.3       231                             -       231                                - 
Greenenerco Limited                                        4.0       138                            70       208                              (8) 
Bravo Inns Limited                                         2.6       267                          (84)       183                              (2) 
Premier Leisure (Suffolk) Limited                          6.2       109                            15       124                              (6) 
Erin Solar Limited                                         4.3       120                           (5)       115                              (2) 
Infinite Ventures (Goathill) Limited                       0.8        32                             5        37                                2 
Beddlestead Farm Limited                                  10.0        10                             -        10                                - 
Total asset-based investments                                     13,638                         5,075    18,713                              228 
 
                                                      % voting      Cost  Cumulative movement in value     Value  Change in value for the period* 
Growth investments                                      rights   GBP'000                       GBP'000   GBP'000                          GBP'000 
Egress Software Technologies Limited                       6.1       610                         1,794     2,404                              648 
Proveca Limited                                           11.8     1,084                         1,252     2,336                               50 
Grapeshot Limited                                          3.9       806                           876     1,682                              637 
Mirada Medical Limited                                     7.8       659                           645     1,304                              146 
Hilson Moran Holdings Limited                              8.0       231                           996     1,227                              142 
MPP Global Solutions Limited                               3.4     1,000                             -     1,000                                - 
Relayware Limited                                          2.8       895                          (10)       885                              (7) 
MyMeds&Me Limited                                          4.5       546                           277       823                               17 
Aridhia Informatics Limited                                6.0       976                         (206)       770                              109 
Convertr Media Limited                                     6.3       583                             -       583                                - 
OmPrompt Holdings Limited                                  7.3       682                         (178)       504                            (205) 
DySIS Medical Limited                                      4.2       950                         (502)       448                             (62) 
Process Systems Enterprise Limited                         1.4       131                           301       432                               18 
Black Swan Data Limited                                    1.2       370                             -       370                                - 
Secured by Design Limited                                  2.2       330                             -       330                              (1) 
Quantexa Limited                                           2.8       315                             -       315                                - 
Panaseer Limited                                           2.8       248                            64       312                               65 
Cisiv Limited                                              7.3       566                         (275)       291                                1 
Abcodia Limited                                            4.7       604                         (345)       259                                - 
Memsstar Limited                                           2.8       122                           106       228                              120 
Oviva AG                                                   2.1       159                             -       159                              (1) 
Oxsensis Limited                                           1.4       224                          (72)       152                               54 
Sandcroft Avenue Limited                                   1.7       150                          (20)       130                                - 
Dickson Financial Services Limited                         8.4        84                            41       125                               10 
Locum's Nest Limited                                       2.4       110                             -       110                                - 
InCrowd Sports Limited                                     1.6        72                             -        72                                - 
CSS Group Limited                                          2.7        34                            12        46                               15 
Elements Software Limited                                  0.6         3                           (3)         -                                - 
Total growth investments                                          12,544                         4,753    17,297                            1,756 
Total unquoted fixed asset investments                            26,182                         9,828    36,010                            1,984 
 
                                                      % voting      Cost  Cumulative movement in value     Value  Change in value for the period* 
Quoted investments                                      rights   GBP'000                       GBP'000   GBP'000                          GBP'000 
Mi-Pay Group PLC                                           3.5       823                         (646)       177                            (118) 
ComOps Limited                                             0.2        11                           (3)         8                              (1) 
Total quoted investments                                             834                         (649)       185                            (119) 
 
Total fixed asset investments                                     27,016                         9,179    36,195                            1,865 
 
  * as adjusted for additions and disposals during the 
  period; including realised gains/(losses). 
 
Total change in value of investments for the period                                                                                         1,865 
Movement in loan stock accrued interest                                                                                                       112 
Unrealised gains sub-total                                                                                                                  1,977 
Realised gains in the current period                                                                                                          124 
Total gains on investments as per Income statement                                                                                          2,101 
 
 
 
 
 
 
 
Realisations and loan stock repayments in the period     Cost    Opening value  Disposal proceeds  Total realised gain/(loss)  Gain/(loss) on opening value 
 to 30 June 2017                                        GBP'000     GBP'000          GBP'000                 GBP'000                      GBP'000 
Disposals: 
Blackbay Limited                                            836          1,006              1,164                         328                           158 
Masters Pharmaceuticals Limited                             316            519                524                         208                             5 
AMS Sciences Limited                                        222            158                152                        (70)                           (6) 
 
Loan stock repayments: 
Radnor House School (Holdings) Limited                       88             88                 88                           -                             - 
Memsstar Limited                                              1             57                 30                          29                          (27) 
Alto Prodotto Wind Limited                                    9             14                 14                           5                             - 
Greenenerco Limited                                           1              2                  2                           1                             - 
 
Escrow adjustments and other: 
Escrow adjustments                                            -              -                (6)                         (6)                           (6) 
TWCL Limited                                                183              -                  -                       (183)                             - 
Total                                                     1,656          1,844              1,968                         312                           124 
 
 
   Condensed income statement 
 
 
 
 
                                                                    Unaudited                     Unaudited                      Audited 
                                                                 six months ended              six months ended                 year ended 
                                                                   30 June 2017                  30 June 2016                31 December 2016 
                                                           Revenue   Capital    Total    Revenue   Capital    Total    Revenue   Capital    Total 
                                                     Note   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
 
Gains on investments                                    3         -     2,101     2,101         -       324       324         -     2,911     2,911 
Investment income                                       4       344         -       344       655         -       655     1,114         -     1,114 
Investment management fees                              5     (130)     (390)     (520)     (116)     (347)     (463)     (239)     (717)     (956) 
Other expenses                                                (118)         -     (118)     (108)         -     (108)     (210)         -     (210) 
Profit/(loss) on ordinary activities before tax                  96     1,711     1,807       431      (23)       408       665     2,194     2,859 
Tax (charge)/credit on ordinary activities                      (8)         8         -      (77)        69       (8)     (116)       119         3 
Profit and total comprehensive income attributable 
 to shareholders                                                 88     1,719     1,807       354        46       400       549     2,313     2,862 
Basic and diluted return per share (pence)*             7       0.1       2.6       2.7       0.6       0.1       0.7       0.9       3.8       4.7 
 
 
   * excluding treasury shares 
 
   The accompanying notes form an integral part of this Half-yearly 
Financial Report. 
 
   Comparative figures have been extracted from the unaudited Half-yearly 
Financial Report for the six months ended 30 June 2016 and the audited 
statutory accounts for the year ended 31 December 2016. 
 
   The total column of this condensed income statement represents the 
profit and loss account of the Company. The supplementary revenue and 
capital columns have been prepared in accordance with The Association of 
Investment Companies' Statement of Recommended Practice. 
 
   Condensed balance sheet 
 
 
 
 
                                 Unaudited      Unaudited         Audited 
                                30 June 2017   30 June 2016   31 December 2016 
                         Note     GBP'000        GBP'000          GBP'000 
 
Fixed asset investments               36,195         32,509             33,798 
 
Current assets 
Trade and other 
 receivables less than 
 one year                                304            348                441 
Cash and cash 
 equivalents                          12,247         10,954             10,153 
                                      12,551         11,302             10,594 
 
Total assets                          48,746         43,811             44,392 
 
Creditors: amounts 
falling due within one 
year 
Trade and other 
 payables less than one 
 year                                  (440)          (404)              (307) 
Total assets less 
 current liabilities                  48,306         43,407             44,085 
 
Equity attributable to 
equityholders 
Called up share capital     8            748            685                689 
Share premium                         21,923         17,634             17,886 
Capital redemption 
 reserve                                  12             12                 12 
Unrealised capital 
 reserve                               9,042          5,400              7,253 
Realised capital 
 reserve                               4,693          4,349              4,763 
Other distributable 
 reserve                              11,888         15,327             13,482 
Total equity 
 shareholders' funds                  48,306         43,407             44,085 
 
Basic and diluted net 
 asset value per share 
 (pence)*                               71.3           69.3               70.7 
 
 
   *excluding treasury shares 
 
   The accompanying notes form an integral part of this Half-yearly 
Financial Report. 
 
   Comparative figures have been extracted from the unaudited Half-yearly 
Financial Report for the six months ended 30 June 2016 and the audited 
statutory accounts for the year ended 31 December 2016. 
 
   These Financial Statements were approved by the Board of Directors and 
authorised for issue on 31 August 2017, and were signed on its behalf by 
 
   Geoffrey Vero 
 
   Chairman 
 
   Company number: 03654040 
 
   Condensed statement of changes in equity 
 
 
 
 
                                                                                  Capital    Unrealised  Realised      Other 
                                                       Called up share   Share   redemption   capital    capital   distributable 
                                                           capital      premium   reserve     reserve    reserve*    reserve*      Total 
                                                           GBP'000      GBP'000   GBP'000     GBP'000    GBP'000      GBP'000     GBP'000 
As at 1 January 2017                                               689   17,886          12       7,253     4,763         13,482   44,085 
Profit/(loss) and total comprehensive income for the 
 period                                                              -        -           -       1,977     (258)             88    1,807 
Transfer of previously unrealised gains on disposal 
 of investments                                                      -        -           -       (188)       188              -        - 
Purchase of shares for treasury                                      -        -           -           -         -          (325)    (325) 
Issue of equity                                                     59    4,147           -           -         -              -    4,206 
Cost of issue of equity                                              -    (110)           -           -         -              -    (110) 
Dividends paid                                                       -        -           -           -         -        (1,357)  (1,357) 
As at 30 June 2017                                                 748   21,923          12       9,042     4,693         11,888   48,306 
As at 1 January 2016                                               600   11,652          12       4,883     4,820         16,933   38,900 
Profit/(loss) and total comprehensive income for the 
 period                                                              -        -           -         493     (447)            354      400 
Transfer of previously unrealised losses on disposal 
 of investments                                                      -        -           -          24      (24)              -        - 
Purchase of shares for treasury                                      -        -           -           -         -          (388)    (388) 
Issue of equity                                                     85    6,139           -           -         -              -    6,224 
Cost of issue of equity                                              -    (157)           -           -         -              -    (157) 
Dividends paid                                                       -        -           -           -         -        (1,572)  (1,572) 
As at 30 June 2016                                                 685   17,634          12       5,400     4,349         15,327   43,407 
As at 1 January 2016                                               600   11,652          12       4,883     4,820         16,933   38,900 
Profit and total comprehensive income for the period                 -        -           -       1,690       623            549    2,862 
Transfer of previously unrealised losses on disposal 
 or write off of investments                                         -        -           -         680     (680)              -        - 
Purchase of shares for treasury                                      -        -           -           -         -          (864)    (864) 
Issue of equity                                                     89    6,389           -           -         -              -    6,478 
Cost of issue of equity                                              -    (155)           -           -         -              -    (155) 
Dividends paid                                                       -        -           -           -         -        (3,136)  (3,136) 
As at 31 December 2016                                             689   17,886          12       7,253     4,763         13,482   44,085 
 
 
   *These reserves amount to GBP16,581,000 (30 June 2016: GBP19,676,000; 31 
December 2016: GBP18,245,000) which is considered distributable. 
 
   Condensed statement of cash flows 
 
 
 
 
 
                           Unaudited          Unaudited           Audited 
                        six months ended   six months ended      year ended 
                          30 June 2017       30 June 2016     31 December 2016 
                            GBP'000            GBP'000            GBP'000 
Cash flow from 
operating 
activities 
Loan stock income 
 received                            364                483                767 
Deposit interest 
 received                              4                 41                 96 
Dividend income 
 received                             57                 45                 74 
Investment 
 management fees 
 paid                              (496)              (438)              (926) 
Other cash payments                (131)              (109)              (217) 
Corporation tax 
 received/(paid)                       3                 18               (20) 
Net cash flow from 
 operating 
 activities                        (199)                 40              (226) 
 
Cash flow from 
investing 
activities 
Purchase of fixed 
 asset investments               (2,344)            (1,025)            (2,715) 
Disposal of fixed 
 asset investments                 2,107                813              3,797 
Net cash flow from 
 investing 
 activities                        (237)              (212)              1,082 
 
Cash flow from 
financing 
activities 
Issue of share 
 capital                           3,882              5,820              5,820 
Cost of issue of 
 shares                              (2)                  -                  - 
Equity dividends 
 paid                            (1,142)            (1,320)            (2,631) 
Purchase of own 
 shares (including 
 costs)                            (208)              (346)              (864) 
Net cash flow from 
 financing 
 activities                        2,530              4,154              2,325 
 
Increase in cash and 
 cash equivalents                  2,094              3,982              3,181 
Cash and cash 
 equivalents at 
 start of period                  10,153              6,972              6,972 
Cash and cash 
 equivalents at end 
 of period                        12,247             10,954             10,153 
 
Cash and cash 
equivalents 
comprise: 
Cash at bank and in 
 hand                             12,247             10,954             10,153 
Cash equivalents                       -                  -                  - 
Total cash and cash 
 equivalents                      12,247             10,954             10,153 
 
 
   Notes to the condensed Financial Statements 
 
   1. Basis of accounting 
 
   The condensed Financial Statements have been prepared in accordance with 
the historical cost convention, modified to include the revaluation of 
investments, in accordance with applicable United Kingdom law and 
accounting standards, including Financial Reporting Standard 102 ("FRS 
102"), Financial Reporting Standard 104 - Interim Financial Reporting 
("FRS 104"), and with the 2014 Statement of Recommended Practice 
"Financial Statements of Investment Trust Companies and Venture Capital 
Trusts" ("SORP") issued by The Association of Investment Companies 
("AIC"). 
 
   The preparation of the Financial Statements requires management to make 
judgements and estimates that affect the application of policies and 
reported amounts of assets, liabilities, income and expenses. The most 
critical estimates and judgements relate to the determination of 
carrying value of investments at fair value through profit and loss 
("FVTPL"). The Company values investments by following the IPEVCV 
Guidelines and further detail on the valuation techniques used are in 
note 2 below. 
 
   The Half-Yearly report has not been audited, nor has it been reviewed by 
the auditor pursuant to the FRC's guidance on Review of interim 
financial information. 
 
   Company information can be found on page 2 of the Half-yearly Financial 
Report. 
 
   2. Accounting policies 
 
   Fixed asset investments 
 
   The Company's business is investing in financial assets with a view to 
profiting from their total return in the form of income and capital 
growth.  This portfolio of financial assets is managed and its 
performance evaluated on a fair value basis, in accordance with a 
documented investment policy, and information about the portfolio is 
provided internally on that basis to the Board. 
 
   In accordance with the requirements of FRS 102, the undertakings in 
which the Company holds more than 20 per cent. of the equity as part of 
an investment portfolio are not accounted for using the equity method. 
In these circumstances the investment is measured at FVTPL. 
 
   Upon initial recognition (using trade date accounting) investments are 
designated by the Company as FVTPL and are included at their initial 
fair value, which is cost (excluding expenses incidental to the 
acquisition which are written off to the income statement). 
 
   Subsequently, the investments are valued at fair value, which is 
measured as follows: 
 
 
   -- Investments listed on recognised exchanges are valued at their bid prices 
      at the end of the accounting period or otherwise at fair value based on 
      published price quotations; 
 
   -- Unquoted investments, where there is not an active market, are valued 
      using an appropriate valuation technique in accordance with the IPEVCV 
      Guidelines. Indicators of fair value are derived using established 
      methodologies including earnings multiples, the level of third party 
      offers received, prices of recent investment rounds, net assets and 
      industry valuation benchmarks. Where the Company has an investment in an 
      early stage enterprise, the price of a recent investment round is often 
      the most appropriate approach to determining fair value. In situations 
      where a period of time has elapsed since the date of the most recent 
      transaction, consideration is given to the circumstances of the portfolio 
      company since that date in determining fair value.  This includes 
      consideration of whether there is any evidence of deterioration or strong 
      definable evidence of an increase in value. In the absence of these 
      indicators, the investment in question is valued at the amount reported 
      at the previous reporting date. Examples of events or changes that could 
      indicate a diminution include: 
 
          -- the performance and/or prospects of the underlying business are 
             significantly below the expectations on which the investment was 
             based; 
 
          -- a significant adverse change either in the portfolio company's 
             business or in the technological, market, economic, legal or 
             regulatory environment in which the business operates; or 
 
          -- market conditions have deteriorated, which may be indicated by a 
             fall in the share prices of quoted businesses operating in the 
             same or related sectors. 
 
 
   Investments are recognised as financial assets on legal completion of 
the investment contract and are de-recognised on legal completion of the 
sale of an investment. 
 
   Dividend income is not recognised as part of the fair value movement of 
an investment, but is recognised separately as investment income through 
the other distributable reserve when a share becomes ex-dividend. 
 
   Debtors and creditors and cash are carried at amortised cost, in 
accordance with FRS 102. There are no financial liabilities other than 
creditors. 
 
   Investment income 
 
   Equity income 
 
   Dividend income is included in revenue when the investment is quoted 
ex-dividend. 
 
   Unquoted loan stock and other preferred income 
 
   Fixed returns on non-equity shares and debt securities are recognised 
when the Company's right to receive payment and expect settlement is 
established. Where interest is rolled up and/or payable at redemption 
then it is recognised as income unless there is reasonable doubt as to 
its receipt. 
 
   Bank interest income 
 
   Interest income is recognised on an accruals basis using the rate of 
interest agreed with the bank. 
 
   Investment management fees and expenses 
 
   All expenses have been accounted for on an accruals basis. Expenses are 
charged through the other distributable reserve except the following 
which are charged through the realised capital reserve: 
 
 
   -- 75 per cent. of management fees are allocated to the capital account to 
      the extent that these relate to an enhancement in the value of the 
      investments. This is in line with the Board's expectation that over the 
      long term 75 per cent. of the Company's investment returns will be in the 
      form of capital gains; and 
 
 
   -- expenses which are incidental to the purchase or disposal of an 
      investment are charged through the realised capital reserve. 
 
   Performance incentive fee 
 
   In the event that a performance incentive fee crystallises or is 
provided for, the fee will be allocated between other distibutable and 
realised capital reserves based upon the proportion to which the 
calculation of the fee is attributable to revenue and capital returns. 
 
   Taxation 
 
   Taxation is applied on a current basis in accordance with FRS 102. 
Current tax is tax payable (refundable) in respect of the taxable profit 
(loss) for the current period or past reporting periods using the tax 
rates and laws that have been enacted or substantively enacted at the 
financial reporting date. Taxation associated with capital expenses is 
applied in accordance with the SORP. 
 
   Deferred tax is provided in full on all timing differences at the 
reporting date. Timing differences are differences between taxable 
profits and total comprehensive income as stated in the financial 
statements that arise from the inclusion of income and expenses in tax 
assessments in periods different from those in which they are recognised 
in the financial statements. As a VCT the Company has an exemption from 
tax on capital gains. The Company intends to continue meeting the 
conditions required to obtain approval as a VCT in the foreseeable 
future. The Company therefore, should have no material deferred tax 
timing differences arising in respect of the revaluation or disposal of 
investments and the Company has not provided for any deferred tax. 
 
   Reserves 
 
   Share premium 
 
   This reserve accounts for the difference between the price paid for 
shares and the nominal value of the shares, less issue costs. 
 
   Capital redemption reserve 
 
   This reserve accounts for amounts by which the issued share capital is 
diminished through the repurchase and cancellation of the Company's own 
shares. 
 
   Unrealised capital reserve 
 
   Increases and decreases in the valuation of investments held at the year 
end against cost, are included in this reserve. 
 
   Realised capital reserve 
 
   The following are disclosed in this reserve: 
 
 
   -- gains and losses compared to cost on the realisation of investments, or 
      permanent diminutions in value; 
 
   -- expenses, together with the related taxation effect, charged in 
      accordance with the above policies; and 
 
   -- dividends paid to equity holders where paid out by capital. 
 
   Other distributable reserve 
 
   The special reserve, treasury share reserve and the revenue reserve were 
combined in 2012 to form a single reserve named other distributable 
reserve. 
 
   This reserve accounts for the movements from the revenue column of the 
Income statement, the payment of dividends, the buy-back of shares and 
other, non capital realised movements. 
 
   Dividends 
 
   Dividends by the Company are accounted for in the period in which the 
dividend is paid or approved at the Annual General Meeting. 
 
   Segmental reporting 
 
   The Directors are of the opinion that the Company is engaged in a single 
operating segment of business, being investment in equity and debt. The 
Company invests in smaller companies principally based in the UK. 
 
   3.             Gains on investments 
 
 
 
 
                           Unaudited          Unaudited           Audited 
                        six months ended   six months ended      year ended 
                          30 June 2017       30 June 2016     31 December 2016 
                            GBP'000            GBP'000            GBP'000 
Unrealised gains on 
 fixed asset 
 investments                       1,977                493              1,690 
Realised 
 gains/(losses) on 
 fixed asset 
 investments                         124              (169)              1,221 
                                   2,101                324              2,911 
 
 
   4.             Investment income 
 
 
 
 
 
 
                          Unaudited           Unaudited           Audited 
                       six months ended    six months ended      year ended 
                         30 June 2017        30 June 2016     31 December 2016 
                           GBP'000             GBP'000            GBP'000 
Income recognised on 
investments 
Loan stock interest 
 and other fixed 
 returns                            285                 564                949 
UK dividend income                   57                  45                 74 
Bank deposit 
 interest                             2                  46                 91 
                                    344                 655              1,114 
 
 
   All of the Company's income is derived from operations based in the 
United Kingdom. 
 
   5.             Investment management fees 
 
 
 
 
 
                          Unaudited           Unaudited           Audited 
                       six months ended    six months ended      year ended 
                         30 June 2017        30 June 2016     31 December 2016 
                           GBP'000             GBP'000            GBP'000 
Investment 
 management fee 
 charged to revenue                 130                 116                239 
Investment 
 management fee 
 charged to capital                 390                 347                717 
                                    520                 463                956 
 
 
 
   Further details of the Management agreement under which the investment 
management fee is paid are given in the Strategic report on page 10 of 
the Annual Report and Financial Statements for the year ended 31 
December 2016. 
 
   During the period, services to a total value of GBP520,000 (30 June 
2016: GBP463,000; 31 December 2016: GBP956,000) were purchased by the 
Company from Albion Capital Group LLP. At the financial period end, the 
amount due to Albion Capital Group LLP in respect of these services was 
GBP272,000 (30 June 2016: GBP244,000; 31 December 2016: GBP248,000). 
 
   During the period, the Company was not charged by Albion Capital Group 
LLP in respect of Patrick Reeve's services as a Director (30 June 2016: 
GBPnil; 31 December 2016: GBPnil). 
 
   Albion Capital Group LLP is, from time to time, eligible to receive 
transaction fees and Directors' fees from portfolio companies. During 
the period ended 30 June 2017, fees of GBP101,000 attributable to the 
investments of the Company were paid pursuant to these arrangements (30 
June 2016: GBP66,000; 31 December 2016: GBP150,000). 
 
   Albion Capital Group LLP holds 43,360 Ordinary shares in the Company. 
 
   6.             Dividends 
 
 
 
 
                                                         Unaudited          Unaudited           Audited 
                                                      six months ended   six months ended      year ended 
                                                        30 June 2017       30 June 2016     31 December 2016 
                                                          GBP'000            GBP'000            GBP'000 
Dividend of 2.5p per Ordinary share 
 paid on 31 May 2016                                                 -              1,572              1,572 
Dividend of 2.5p per Ordinary share 
 paid on 30 September 2016                                           -                  -              1,564 
Dividend of 2.0p per Ordinary share paid on 31 May 
 2017                                                            1,357                  -                  - 
                                                                 1,357              1,572              3,136 
 
 
   The Directors have declared a dividend of 2.0 pence per Ordinary share 
(total approximately GBP1,355,000), payable on 29 September 2017 to 
shareholders on the register on 8 September 2017. 
 
   7.             Basic and diluted return per share 
 
 
 
 
                    Unaudited            Unaudited             Audited 
                 six months ended     six months ended        year ended 
                   30 June 2017         30 June 2016       31 December 2016 
Ordinary 
shares          Revenue   Capital    Revenue   Capital    Revenue   Capital 
Return 
 attributable 
 to Ordinary 
 shares 
 (GBP'000)            88     1,719        354     46           549     2,313 
Weighted 
 average 
 shares in 
 issue             66,871,021           60,228,830           61,380,295 
Return per 
 Ordinary 
 share 
 (pence)             0.1       2.6        0.6    0.1           0.9    3.8 
 
 
   The weighted average number of shares is calculated excluding treasury 
shares of 7,039,700 (30 June 2016: 5,834,700; 31 December 2016: 
6,556,700) 
 
   There are no convertible instruments, derivatives or contingent share 
agreements in issue hence there are no dilution effects to the return 
per share. The basic return per share is therefore the same as the 
diluted return per share. 
 
   8.             Ordinary share capital 
 
 
 
 
                                                                   Unaudited    Unaudited                                              Audited 
                                                                30 June 2017   30 June 2016                                   31 December 2016 
Allotted, called up and fully paid shares of 1 penny 
 each 
Number of shares                                                  74,804,925     68,502,563                                         68,883,574 
Nominal value of allotted shares (GBP'000)                               748            685                                                689 
Voting rights (number of shares net of treasury shares)           67,765,225     62,667,863                                         62,326,874 
 
  During the period to 30 June 2017 the Company purchased 
  483,000 Ordinary shares (nominal value of GBP4,830) 
  for treasury at a cost of GBP325,000. The total number 
  of Ordinary shares held in treasury as at 30 June 
  2017 was 7,039,700 (30 June 2016: 5,834,700; 31 December 
  2016: 6,556,700) representing 9.4 per cent. of the 
  Ordinary shares in issue as at 30 June 2017. 
  Under the terms of the Dividend Reinvestment Scheme 
  Circular dated 27 August 2008, the following new Ordinary 
  shares, of nominal value 1 penny each, were allotted: 
                                        Aggregate nominal        Issue price 
                     Number of shares    amount of shares         (pence per   Net invested  Opening market price on allotment date (pence per 
 Date of allotment             issued           (GBP'000)             share)      (GBP'000)                                             share) 
       31 May 2017            298,848                   3               72.0            214                                               68.5 
 
  Under the terms of the Albion VCTs Prospectus Top 
  Up Offers 2016/2017, the following new Ordinary shares, 
  of nominal value 1 penny each, were allotted during 
  the period to 30 June 2017: 
                                                                                        Net 
                                        Aggregate nominal        Issue price  consideration 
                     Number of shares    amount of shares         (pence per       received  Opening market price on allotment date (pence per 
 Date of allotment             issued           (GBP'000)             share)      (GBP'000)                                             share) 
   31 January 2017          1,203,858                  12               70.4            831                                               64.8 
   31 January 2017            621,281                   6               70.7            428                                               64.8 
   31 January 2017          3,549,732                  36               71.1          2,448                                               64.8 
      7 April 2017             20,981                   -               72.2             15                                               67.5 
      7 April 2017             26,227                   -               72.6             18                                               67.5 
      7 April 2017            200,424                   2               72.9            142                                               67.5 
                            5,622,503                  56                             3,882 
 
 
   9.             Commitments and contingencies 
 
   As at 30 June 2017, the Company had the following financial commitments 
in respect of investments: 
 
 
   -- Investment of GBP14,000 in Aridhia Informatics Limited. 
 
 
   There were no contingencies or guarantees of the Company as at 30 June 
2017 (30 June 2016: GBPnil; 31 December 2016: GBPnil). 
 
   10.          Post balance sheet events 
 
   Since 30 June 2017, the Company has completed the following 
transactions: 
 
 
   -- Investment of GBP812,000 in Egress Software Technologies Limited; 
 
   -- Investment of GBP273,000 in G.Network Communications Limited; 
 
   -- Investment of GBP239,000 in Black Swan Data Limited; 
 
   -- Investment of GBP45,000 in Abcodia Limited; 
 
   -- Investment of GBP14,000 in Aridhia Informatics Limited; and 
 
   -- Investment of GBP10,000 in Beddlestead Farm Limited. 
 
   11.          Related party transactions 
 
   Other than transactions with the Manager as disclosed in note 5, there 
are no other related party transactions or balances requiring 
disclosure. 
 
   12.          Going concern 
 
   The Board's assessment of liquidity risk remains unchanged since the 
last Annual Report and Financial Statements for the year ended 31 
December 2016 and is detailed on page 52 of those accounts. The Company 
has adequate cash and liquid resources. The portfolio of investments is 
diversified in terms of sector and the major cash outflows of the 
Company (namely investments, dividends and share buy-backs) are within 
the Company's control. Accordingly, after making diligent enquiries, the 
Directors have a reasonable expectation that the Company has adequate 
resources to continue in operational existence for the foreseeable 
future. For this reason, the Directors have adopted the going concern 
basis in preparing this Half-yearly Financial Report and this is in 
accordance with the Guidance on Risk Management, Internal Control and 
Related Financial and Business Reporting issued by the Financial 
Reporting Council in September 2014. 
 
   13.          Risks and uncertainties 
 
   In addition to the risks outlined in the Interim management report, the 
Board considers that the Company faces the following major risks and 
uncertainties: 
 
   1. Investment and performance risk 
 
   The risk of investment in poor quality assets, which could reduce the 
capital and income returns to shareholders, and could negatively impact 
on the Company's current and future valuations. By nature, smaller 
unquoted businesses, such as those that qualify for venture capital 
trust purposes, are more fragile than larger, long established 
businesses. 
 
   To reduce this risk, the Board places reliance upon the skills and 
expertise of the Manager and its track record over many years of making 
successful investments in this segment of the market. In addition, the 
Manager operates a formal and structured investment appraisal and review 
process, which includes an Investment Committee, comprising investment 
professionals from the Manager and at least one external investment 
professional. The Manager also invites and takes account of comments 
from non-executive Directors of the Company on investments discussed at 
the Investment Committee meetings. Investments are actively and 
regularly monitored by the Manager (investment managers normally sit on 
portfolio company boards), including the level of diversification in the 
portfolio, and the Board receives detailed reports on each investment as 
part of the Manager's report at quarterly board meetings. 
 
   2. VCT approval risk 
 
   The Company must comply with section 274 of the Income Tax Act 2007 
which enables its investors to take advantage of tax relief on their 
investment and on future returns. Breach of any of the rules enabling 
the Company to hold VCT status could result in the loss of that status. 
 
   To reduce this risk, the Board has appointed the Manager, which has a 
team with significant experience in venture capital trust management, 
used to operating within the requirements of the venture capital trust 
legislation. In addition, to provide further formal reassurance, the 
Board has appointed Philip Hare & Associates LLP as its taxation adviser, 
who report quarterly to the Board to independently confirm compliance 
with the venture capital trust legislation, to highlight areas of risk 
and to inform on changes in legislation. Each investment in a new 
portfolio company is also pre-cleared with H.M. Revenue & Customs. 
 
   3. Regulatory and compliance risk 
 
   The Company is listed on The London Stock Exchange and is required to 
comply with the rules of the UK Listing Authority, as well as with the 
Companies Act, Accounting Standards and other legislation. Failure to 
comply with these regulations could result in a delisting of the 
Company's shares, or other penalties under the Companies Act or from 
financial reporting oversight bodies. 
 
   Board members and the Manager have experience of operating at senior 
levels within or advising quoted companies. In addition, the Board and 
the Manager receive regular updates on new regulation from its auditor, 
lawyers and other professional bodies. The Company is subject to 
compliance checks through the Manager's Compliance Officer. The Manager 
reports monthly to its Board on any issues arising from compliance or 
regulation. These controls are also reviewed as part of the quarterly 
Board meetings, and also as part of the review work undertaken by the 
Manager's Compliance Officer. The report on controls is also evaluated 
by the internal auditors. 
 
   4. Economic and political risk 
 
   Changes in economic conditions, including, for example, interest rates, 
rates of inflation, industry conditions, competition, political and 
diplomatic events and other factors could substantially and adversely 
affect the Company's prospects in a number of ways. 
 
   The Company invests in a diversified portfolio of companies across a 
number of industry sectors and in addition often invests a mixture of 
equity and secured loan stock in portfolio companies and has a policy of 
not normally permitting any external bank borrowings within portfolio 
companies. At any given time, the Company has sufficient cash resources 
to meet its operating requirements, including share buy-backs and follow 
on investments. 
 
   5. Market value of Ordinary shares 
 
   The market value of Ordinary shares can fluctuate. The market value of 
an Ordinary share, as well as being affected by its net asset value and 
prospective net asset value, also takes into account its dividend yield 
and prevailing interest rates. As such, the market value of an Ordinary 
share may vary considerably from its underlying net asset value. The 
market prices of shares in quoted investment companies can, therefore, 
be at a discount or premium to the net asset value at different times, 
depending on supply and demand, market conditions, general investor 
sentiment and other factors. Accordingly the market price of the 
Ordinary shares may not fully reflect their underlying net asset value. 
 
   The Company operates a share buy-back policy, which is designed to limit 
the discount at which the Ordinary shares trade to around 5 per cent to 
net asset value, by providing a purchaser through the Company in absence 
of market purchasers.  From time to time buy-backs cannot be applied, 
for example when the Company is subject to a close period, or if it were 
to exhaust its buy-back authorities, which are renewed each year. New 
Ordinary shares are issued at sufficient premium to net asset value to 
cover the costs of issue and to avoid asset value dilution to existing 
investors. 
 
   14.          Other information 
 
   The information set out in this Half-yearly Financial Report does not 
constitute the Company's statutory accounts within the terms of section 
435 of the Companies Act 2006 for the periods ended 30 June 2017 and 30 
June 2016 and is unaudited. The information for the year ended 31 
December 2016, does not constitute statutory accounts within the terms 
of section 435 of the Companies Act 2006 but is derived from the audited 
statutory accounts for the financial year, which have been delivered to 
the Registrar of Companies. The Auditor reported on those accounts; 
their report was unqualified and did not contain a statement under s498 
(2) or (3) of the Companies Act 2006. 
 
   15.          Publication 
 
   This Half-yearly Financial Report is being sent to shareholders and 
copies will be made available to the public at the registered office of 
the Company, Companies House, the National Storage Mechanism and also 
electronically at www.albion.capital/funds/AADV, where the Report can be 
accessed from the 'Financial Reports and Circulars' section. 
 
   Investment portfolio by sector (PDF): 
http://hugin.info/141803/R/2130583/813980.pdf 
 
   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: Albion Development VCT PLC - Ordinary Shares via Globenewswire 
 
 
  http://www.closeventures.co.uk 
 

(END) Dow Jones Newswires

August 31, 2017 09:23 ET (13:23 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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