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| 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 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | 558k | -2.25M | -0.0166 | -52.41 | 117.98M |
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Albion Development VCT PLC
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 2016. This announcement was approved by the
Board of Directors on 31 August 2016.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 June 2016 will shortly be sent to shareholders. Copies of
the full Half-yearly Financial Report will be shown via the Albion
Ventures LLP website by clicking www.albion-ventures.co.uk/funds/AADV.
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 whilst at the same time selecting and
structuring investments in such a way as to reduce the risks normally
associated with investment in such 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.
-- This is balanced by investment in more stable, often asset-backed
investments that provide a strong income stream. These include
asset-based businesses in the leisure, healthcare, education and
renewable energy sectors, as well as stable and profitable businesses in
other sectors. Such investments will constitute the majority of
investments by cost.
-- In neither category do portfolio companies normally have any external
borrowings with a prior charge ranking ahead of the VCT.
-- Up to two-thirds of qualifying investments by cost comprise loan stock
secured with a first charge on the portfolio company's assets.
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.
An additional GBP20.0 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 9 September 2016
Payment date for second dividend for the year 30 September 2016
Financial year end 31 December
Financial highlights
Unaudited six months Unaudited six months
ended ended Audited year ended
Ordinary 30 June 2016 30 June 2015 31 December 2015
shares (pence per share) (pence per share) (pence per share)
Dividends paid 2.5 2.5 5.0
Revenue return 0.6 0.8 1.5
Capital return 0.1 2.6 1.6
Net asset
value 69.3 73.7 71.1
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
2016
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
30 June 2016 2.5 2.7 3.7
Total dividends paid
to 30 June 2016 85.3 73.8 28.2
Net asset value as at
30 June 2016 69.3 74.3 103.8
Total shareholder
return to 30 June
2016 154.6 148.1 132.0
The Directors have declared a second dividend of 2.5 pence per Ordinary
share payable on 30 September 2016 to shareholders on the register as at
9 September 2016.
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
2016 showed a total return of 0.7 pence per share. Net asset value at
30 June 2016 was 69.3 pence per share, compared to 71.1 pence per share
at 31 December 2015, reflecting the 2.5 pence per share dividend paid
for the year to date.
Performance
These muted results were driven principally by a harsher post-Brexit
construction environment for Hilson Moran, slower commercial traction
than hoped for at our cancer-screening business Abcodia and provisions
against deferred consideration due on investments sold last year.
Elsewhere within the portfolio, however, there has been positive
performance, with Exco Intouch (remote medical monitoring) moving
strongly into profit, while Proveca (paediatric drugs) has now gained
regulatory approval for its first medicine. Investments in two new
companies have been made during the period, both of which should result
in further investment as the companies prove themselves and grow. These
are Black Swan Data, which provides corporate risk analysis and InCrowd
Sports, which provides inter-active services for sporting events, where
we are also backing the management behind our previous successful
investment in Opta Sports Data.
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 2016.
Risks, uncertainties and prospects
The prospective exit of the UK from the EU has had 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 many 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 remain unchanged and are as
detailed in note 13.
Discount management and 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 23 March 2016 that it had reached
its GBP6m limit under the Albion VCTs Prospectus Top Up Offers 2015/2016
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.
Transactions with the Manager
Details of the transactions that took place with the Manager in the
period can be found in note 5.
Results, dividend and prospects
As at 30 June 2016, the net asset value per Ordinary share was 69.3
pence (30 June 2015: 73.7 pence; 31 December 2015: 71.1 pence).
Dividends are paid twice yearly, the next payment being 2.5 pence per
share on 30 September 2016, to those shareholders on the register at 9
September 2016.
Overall, despite these unexciting interim results, the strength of many
of our businesses, and their ability to exploit sectors which continue
to show growth even in a tougher broader environment, gives us cause for
optimism over the medium term.
Geoffrey Vero
Chairman
31 August 2016
Responsibility statement
The Directors, Geoffrey Vero, Andy Phillipps, 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 2016 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", gives 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 2016
Portfolio of investments
The following is a summary of investments as at 30 June 2016:
Cumulative Change in
% movement value for the
Asset-backed voting Cost in value Value period*
investments rights GBP'000 GBP'000 GBP'000 GBP'000
Radnor House School
(Holdings) Limited 8.8 2,948 1,804 4,752 (7)
Chonais River Hydro
Limited 4.6 1,705 367 2,072 9
The Street by Street
Solar Programme
Limited 12.4 1,281 581 1,862 31
Regenerco Renewable
Energy Limited 11.9 1,204 337 1,541 (23)
Alto Prodotto Wind
Limited 9.4 842 454 1,296 56
Earnside Energy
Limited 6.8 1,089 173 1,262 55
Bravo Inns II Limited 6.7 1,080 71 1,151 43
Albion Investment
Properties Limited 48.4 929 (105) 824 14
The Weybridge Club
Limited 9.4 1,601 (1,004) 597 (23)
The Q Garden Company
Limited 16.6 713 (213) 500 25
AVESI Limited 10.5 340 77 417 (15)
Dragon Hydro Limited 5.5 233 114 347 4
The Charnwood Pub
Company Limited 3.3 305 (74) 231 (4)
Greenenerco Limited 4.0 140 80 220 6
Bravo Inns Limited 2.6 267 (86) 181 (2)
Erin Solar Limited 4.3 120 (3) 117 -
Premier Leisure
(Suffolk) Limited 6.2 109 (4) 105 -
Infinite Ventures
(Goathill) Limited 0.8 32 2 34 2
Total asset-backed
investments 14,938 2,571 17,509 171
Cumulative Change in
% movement value for the
voting Cost in value Value period*
Growth investments rights GBP'000 GBP'000 GBP'000 GBP'000
Exco Intouch Limited 6.0 1,015 1,290 2,305 734
Proveca Limited 11.5 739 524 1,263 352
Mirada Medical
Limited 7.8 553 468 1,021 (12)
Egress Software
Technologies
Limited 6.1 610 396 1,006 112
Blackbay Limited 7.4 836 156 992 (106)
Relayware Limited 3.0 895 (18) 877 (31)
Hilson Moran Holdings
Limited 8.0 265 597 862 (177)
MyMeds&Me Limited 7.0 546 239 785 (65)
Grapeshot Limited 3.8 676 87 763 -
Aridhia Informatics
Limited 6.0 963 (259) 704 9
OmPrompt Holdings
Limited 5.1 650 19 669 4
Masters
Pharmaceuticals
Limited 4.2 316 308 624 (8)
Cisiv Limited 7.3 566 (2) 564 (114)
Abcodia Limited 5.1 471 (49) 422 (158)
DySIS Medical Limited 3.6 716 (315) 401 (78)
Process Systems
Enterprise Limited 1.3 131 241 372 27
Black Swan Data
Limited 0.7 215 - 215 -
Sandcroft Avenue
Limited 1.7 150 14 164 -
memsstar Limited 2.8 124 39 163 (6)
Panaseer Limited 2.2 110 - 110 -
Oxsensis Limited 1.4 224 (125) 99 -
AMS Sciences Limited 4.2 222 (130) 92 (23)
Dickson Financial
Services Limited 8.4 84 - 84 -
InCrowd Sports
Limited 1.6 72 - 72 -
CSS Group Limited 2.7 34 (2) 32 5
Elements Software
Limited 0.6 3 (3) - (3)
Total growth
investments 11,186 3,475 14,661 462
Total unquoted fixed
asset investments 26,124 6,046 32,170 633
Cumulative Change in
% movement value for the
voting Cost in value Value period*
Quoted investments rights GBP'000 GBP'000 GBP'000 GBP'000
Mi-Pay Group PLC 3.5 823 (499) 324 (59)
ComOps Limited 0.2 11 4 15 4
Total quoted
investments 834 (495) 339 (55)
Total fixed asset
investments 26,958 5,551 32,509 578
Total change in value of investments 578
Movement in accrued loan stock interest (85)
Unrealised gains sub-total 493
Realised losses in the current period (169)
Total gains on investments as per Income
statement 324
* as adjusted for additions and disposals during the period
Total Loss on
Opening Disposal realized opening
Cost value proceeds (loss)/gain value
Investment realisations in the period to 30 June 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Silent Herdsman Holdings Limited 389 350 348 (41) (2)
Relayware Limited (loan stock repayment & equity part
disposal) 256 256 256 - -
Hilson Moran Holdings Limited (loan stock repayment) 27 37 37 10 -
The Street by Street Solar Programme Limited
(loan stock repayment) 10 15 15 5 -
AVESI Limited
(loan stock repayment) 1 1 1 - -
Alto Prodotto Wind Limited
(loan stock repayment) 1 1 1 - -
Escrow adjustments - - (167) (167) (167)
Total 684 660 491 (193) (169)
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2016 30 June 2015 31 December 2015
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 - 324 324 - 1,550 1,550 - 1,367 1,367
Investment
income 4 655 - 655 690 - 690 1,335 - 1,335
Investment
management
fees 5 (116) (347) (463) (104) (313) (417) (215) (646) (861)
Other expenses (108) - (108) (100) - (100) (202) - (202)
Return/(loss) on
ordinary
activities
before tax 431 (23) 408 486 1,237 1,723 918 721 1,639
Tax
(charge)/credit
on ordinary
activities (77) 69 (8) (85) 62 (23) (149) 129 (20)
Return
attributable to
shareholders 354 46 400 401 1,299 1,700 769 850 1,619
Basic and
diluted return
per Ordinary
share (pence)* 7 0.6 0.1 0.7 0.8 2.6 3.4 1.5 1.6 3.1
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 June 2015 and the audited
statutory accounts for the year ended 31 December 2015.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
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.
There is no other comprehensive income other than the results for the
periods disclosed above. Accordingly a Statement of comprehensive
income is not required.
The difference between the reported return/(loss) on ordinary activities
before tax and the historical profit/(loss) is due to the fair value
movements on investments.
Condensed balance sheet
Unaudited Unaudited Audited
30 June 2016 30 June 2015 31 December 2015
Note GBP'000 GBP'000 GBP'000
Fixed assets
Investments 32,509 32,495 31,565
Current assets
Trade and other receivables less than one year 348 674 685
Cash and cash equivalents 10,954 6,916 6,972
11,302 7,590 7,657
Total assets 43,811 40,085 39,222
Creditors: amounts falling due within one year
Trade and other payables less than one year (404) (317) (322)
Net assets 43,407 39,768 38,900
Equity attributable to equityholders
Called up share capital 8 685 588 600
Share premium 17,634 10,815 11,652
Capital redemption reserve 12 12 12
Unrealised capital reserve 5,400 3,297 4,883
Realised capital reserve 4,349 4,456 4,820
Other distributable reserve 15,327 20,600 16,933
Total equity shareholders' funds 43,407 39,768 38,900
Basic and diluted net asset value per Ordinary share
(pence)* 69.3 73.7 71.1
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 June 2015 and the audited
statutory accounts for the year ended 31 December 2015.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 31 August 2016, and were signed on its behalf by
Geoffrey Vero
Chairman
Company number: 03654040
Condensed statement of changes in equity
Called up Capital Unrealised Realised Other
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 2016 600 11,652 12 4,883 4,820 16,933 38,900
Return/(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 2015 482 5,560 12 1,954 4,500 21,927 34,435
Return/(loss) and total comprehensive income for the
period - - - 1,495 (196) 401 1,700
Transfer of previously unrealised gains on disposal
of investments - - - (152) 152 - -
Purchase of shares for treasury - - - - - (360) (360)
Issue of equity 106 5,418 - - - (33) 5,491
Cost of issue of equity - (163) - - - - (163)
Dividends paid - - - - - (1,335) (1,335)
As at 30 June 2015 588 10,815 12 3,297 4,456 20,600 39,768
As at 1 January 2015 482 5,560 12 1,954 4,500 21,927 34,435
Return/(loss) and total comprehensive income for the
period - - - 1,971 (1,121) 769 1,619
Transfer of unrealised losses on disposal of
investments - - - 958 (958) - -
Purchase of shares for treasury - - - - - (649) (649)
Issue of equity 118 6,275 - - - (33) 6,360
Cost of issue of equity - (183) - - - - (183)
Transfer from other distributable reserve to realised
capital reserve - - - - 2,399 (2,399) -
Dividends paid - - - - - (2,682) (2,682)
As at 31 December 2015 600 11,652 12 4,883 4,820 16,933 38,900
*Included within these reserves is an amount of GBP19,676,000 (30 June
2015: GBP25,056,000; 31 December 2015: GBP21,753,000) which is
considered distributable.
Condensed statement of cash flows
Unaudited Audited
Unaudited six months year ended
six months ended ended 31 December
30 June 2016 30 June 2015 2015
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Loan stock income received 483 478 1,076
Deposit interest received 41 31 64
Dividend income received 45 61 82
Investment management fees
paid (438) (387) (835)
Other cash payments (109) (127) (213)
Corporation tax received 18 - -
Net cash flow from operating
activities 40 56 174
Cash flow from investing
activities
Purchase of fixed asset
investments (1,025) (2,371) (3,995)
Disposal of fixed asset
investments 813 1,521 3,302
Net cash flow from investing
activities (212) (850) (693)
Cash flow from financing
activities
Issue of share capital 5,820 4,578 5,807
Cost of issue of shares - (13) (17)
Equity dividends paid (1,320) (1,151) (2,295)
Purchase of own shares
(including costs) (346) (349) (649)
Net cash flow from financing
activities 4,154 3,065 2,846
Increase in cash and cash
equivalents 3,982 2,271 2,327
Cash and cash equivalents at
start of period 6,972 4,645 4,645
Cash and cash equivalents at
end of period 10,954 6,916 6,972
Cash and cash equivalents
comprise:
Cash at bank and in hand 10,954 6,916 6,972
Cash equivalents - - -
Total cash and cash
equivalents 10,954 6,916 6,972
Notes to the condensed Financial Statements
1. Basis of preparation
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
outlined 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.
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
Unquoted 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 realised capital
reserve. 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 revenue 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
(tax 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 reserve
This reserve accounts for the difference between the price paid for
shares and the nominal value of the shares, less issue costs and
transfers to the Other distributable reserve.
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.
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.
3. Gains on investments
Audited
Unaudited Unaudited year ended
six months ended six months ended 31 December
30 June 2016 30 June 2015 2015
GBP'000 GBP'000 GBP'000
Unrealised gains on fixed
asset investments 493 1,495 1,971
Realised (losses)/gains on
fixed asset investments (169) 55 (604)
324 1,550 1,367
4. Investment income
Unaudited
six months Unaudited Audited
ended six months ended year ended
30 June 2016 30 June 2015 31 December 2015
GBP'000 GBP'000 GBP'000
Income recognised on
investments
Loan stock interest 564 596 1,186
UK dividend income 45 61 82
Bank deposit interest 46 33 67
655 690 1,335
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 2016 30 June 2015 31 December 2015
GBP'000 GBP'000 GBP'000
Investment
management fee
charged to revenue 116 104 215
Investment
management fee
charged to capital 347 313 646
463 417 861
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 2015.
During the period, services to a total value of GBP463,000 (30 June
2015: GBP417,000; 31 December 2015: GBP861,000) were purchased by the
Company from Albion Ventures LLP. At the financial period end, the
amount due to Albion Ventures LLP in respect of these services was
GBP244,000 (30 June 2015: GBP224,000; 31 December 2015: GBP219,000).
During the period, the Company was not charged by Albion Ventures LLP in
respect of Patrick Reeve's services as a Director (30 June 2015: GBPnil;
31 December 2015: GBPnil).
Albion Ventures LLP is, from time to time, eligible to receive
transaction fees and Directors' fees from portfolio companies. During
the period ended 30 June 2016, fees of GBP66,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 June 2015: GBP99,000; 31 December 2015: GBP179,000).
Albion Ventures LLP holds 23,624 Ordinary shares in the Company.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2016 30 June 2015 31 December 2015
GBP'000 GBP'000 GBP'000
Dividend of 2.5p per Ordinary share
paid on 29 May 2015 - 1,335 1,335
Dividend of 2.5p per Ordinary share
paid on 30 September 2015 - - 1,347
Dividend of 2.5p per Ordinary share paid on 31 May
2016 1,572 - -
1,572 1,335 2,682
The Directors have declared a dividend of 2.5 pence per Ordinary share
(total approximately GBP1,567,000), payable on 30 September 2016 to
shareholders on the register as at 9 September 2016.
7. Basic and diluted return per share
Unaudited Unaudited Audited
Ordinary six months ended six months ended year ended
shares 30 June 2016 30 June 2015 31 December 2015
Revenue Capital Revenue Capital Revenue Capital
Return
attributable
to Ordinary
shares
(GBP'000) 354 46 401 1,299 769 850
Weighted
average
shares in
issue 60,228,830 50,822,604 52,626,429
Return per
Ordinary
share
(pence) 0.6 0.1 0.8 2.6 1.5 1.6
The weighted average number of shares is calculated excluding treasury
shares of 5,834,700 (30 June 2015: 4,835,700; 31 December 2015:
5,257,700)
There are no convertible instruments, derivatives or contingent share
agreements in issue for Albion Development VCT PLC 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.
Unaudited Unaudited Audited
Ordinary share capital 30 June 2016 30 June 2015 31 December 2015
Allotted, called up and fully paid shares of 1 penny
each
Number of shares 68,502,563 58,773,551 59,965,643
Nominal value of allotted
shares (GBP'000) 685 588 600
Voting rights (number of
shares net of treasury
shares) 62,667,863 53,937,851 54,707,943
During the period to 30 June 2016 the Company purchased 577,000 Ordinary
shares for treasury at a cost of GBP388,000. The total number of
Ordinary shares held in treasury as at 30 June 2016 was 5,834,700 (30
June 2015: 4,835,700; 31 December 2015: 5,257,700) representing 8.5 per
cent. of the Ordinary shares in issue as at 30 June 2016.
Under the terms of the Dividend Reinvestment Scheme Circular dated 27
August 2008, the following Ordinary shares, of nominal value 1 penny
each, were allotted:
Opening
Aggregate market price
nominal Issue price Net consideration on allotment
Date of Number of amount of (pence per received date (pence
allotment shares issued shares (GBP'000) share) (GBP'000) per share)
31 May 2016 366,881 4 68.60 247 68.0
Under the terms of the Albion VCTs Prospectus Top Up Offers 2015/2016,
the following Ordinary shares of nominal value 1 penny each, were
allotted during the period to 30 June 2016:
Aggregate Opening
nominal market price
amount of Issue price Net consideration on allotment
Date of Number of shares (pence per received date (pence
allotment shares issued (GBP'000) share) (GBP'000) per share)
29 January
2016 2,807,295 28 72.8 2,003 68.3
29 January
2016 1,581,367 16 73.2 1,129 68.3
31 March
2016 3,604,114 36 73.3 2,562 68.0
6 April
2016 103,435 1 72.6 73 68.0
6 April
2016 12,554 - 73.0 9 68.0
6 April
2016 61,274 1 73.3 44 68.0
8,170,039 82 5,820
9. Commitments and contingencies
As at 30 June 2016, the Company had the following financial commitments
in respect of investments:
-- DySIS Medical Limited; GBP87,000 -- Proveca Limited; GBP48,000 There are no contingencies or guarantees of the Company as at 30 June 2016 (30 June 2015; GBPnil: 31 December 2015: GBPnil). 10. Post balance sheet events Since 30 June 2016, the Company has completed the following transactions: -- Investment of GBP330,000 in Secured by Design Limited; -- Investment of GBP159,000 in Oviva AG; -- Investment of GBP100,000 in Proveca Limited; and -- Investment of GBP87,000 in DySIS Medical Limited; 11. Related party transactions Other than transactions with the Manager as described in Note 5, there are no related party transactions. 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 2015 and is detailed on page 53 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 current economic risks outlined in the Interim management report, the Board considers that the Company faces the following major risks and uncertainties: 1. Economic 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. To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies. Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors. 2. Investment risk This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. 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 strong track record for investing in this segment of the market. In addition, the Manager operates a formal and structured investment 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) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings. 3. Valuation risk The Company's investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported. As described in note 2 of the Financial Statements, the investments held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and judgments about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgments the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. The values of a number of investments are also underpinned by independent third party professional valuations and the Board critically reviews key valuations on a quarterly basis. 4. VCT approval risk The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares. 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. Philip Hare & Associates LLP 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. 5. 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 businesses. 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 via 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 Manager Board meetings, and also as part of the review work undertaken by the Manager's Compliance Officer. The report on controls is evaluated by Internal Audit during its reports. 6. Internal control risk Failures in key controls, within the Board or within the Manager's business, could put assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or to shareholders. The Audit Committee meets with the Manager's Internal Auditor, PKF Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit Committee to ask specific and detailed questions. Jonathan Thornton, as Chairman of the Audit Committee, met with the internal audit Partner of PKF Littlejohn LLP in January 2016 to discuss the most recent Internal Audit Report on the Manager. The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened. Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting are detailed on pages 29 and 30 of the Annual Report and Financial Statements for the year ended 31 December 2015. Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business. 7. Financial risk By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk. The Company's policies for managing these risks and its financial instruments are outlined in full in note 19 of the Annual Report and Financial Statements for the year ended 31 December 2015. All of the Company's income and expenditure is denominated in sterling and hence the Company has no foreign currency risk. The Company is financed through equity and does not have any borrowings. The Company does not use derivative financial instruments for speculative purposes. 8. Reputational risk Arises from broader performance and ethical issues, including investment in businesses and sectors that are inconsistent with the values of the Board and the VCT or, the Boards of portfolio companies take actions which similarly are inconsistent with the values of the VCT. The Board clearly articulates to the Investment Manager its broader aims and standards including those sectors which are consistent with the values of the Board. The Board regularly reviews the performance and investment strategy of the Investment Manager. The Investment Manager periodically attends Board meetings of the VCT's portfolio companies and across the portfolio receives periodic management information and is alert to potential threats to reputation.
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 2016 and 30 June 2015 and is unaudited. The information for the year ended 31 December 2015, 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 were unqualified and 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-ventures.co.uk/funds/AADV, where the Report can be accessed as a PDF document in the 'Financial Reports and Circulars' section. Investment portfolio by sector: http://hugin.info/141803/R/2038389/759691.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, 2016 04:49 ET (08:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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