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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Albion Enterprise Vct Plc | LSE:AAEV | London | Ordinary Share | GB00B1G3LR35 | 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% | 119.50 | 118.00 | 121.00 | 119.50 | 119.50 | 119.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | 5.74M | 2.77M | 0.0274 | 43.61 | 120.55M |
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As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Enterprise VCT PLC today makes public its information
relating to the Half-yearly Financial Report (which is unaudited) for
the six months to 30 September 2016. This announcement was approved by
the Board of Directors on 25 November 2016.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 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/AAEV.
Investment objective and policy
The investment objective of Albion Enterprise VCT PLC ("the Company") is
to provide investors with a regular and predictable source of income,
combined with the prospect of longer term capital growth.
The Company achieves this by investing up to 50 per cent. of the net
funds raised in an asset-based portfolio of more stable businesses (the
"Asset-based Portfolio"). The balance of the net funds raised, other
than funds retained for liquidity purposes, are invested in a portfolio
of higher growth businesses across a variety of sectors of the UK
economy. These range from more stable, income producing businesses to
higher risk technology companies (the "Growth Portfolio"). In neither
category do portfolio companies normally have any external borrowing
with a 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. Funds awaiting investment in
Qualifying Investments or retained for liquidity purposes are held on
deposit with banks or other financial institutions with high credit
ratings assigned by international credit ratings agencies.
The Company's investment portfolio is structured to provide a balance
between income and capital growth for the longer term. The Asset-based
Portfolio is designed to provide stability and income whilst still
maintaining the potential for capital growth. The Growth Portfolio is
intended to provide diversified exposure through its portfolio of
investments in unquoted UK companies. Stock specific risk will be
reduced by the Company's policy of holding a diversified portfolio of
Qualifying Investments.
Financial calendar
Record date for second dividend 10 February 2017
Payment date for second dividend 28 February 2017
Financial year end 31 March
Financial highlights
Unaudited six Unaudited six Audited
months ended months ended year ended
30 September 2016 30 September 2015 31 March 2016
(pence per share) (pence per share) (pence per share)
Dividends paid 2.50 2.50 5.00
Revenue return 0.53 0.94 1.85
Capital return 2.90 3.16 3.48
Net asset value 97.39 97.68 96.41
Total shareholder return to 30 September 2016: (pence per share)
Dividends paid during the year ended:
31 March 2008 0.70
31 March 2009 1.65
31 March 2010 2.00
31 March 2011 3.00
31 March 2012 3.00
31 March 2013 3.50
31 March 2014 5.00
31 March 2015 5.00
31 March 2016 5.00
Dividends paid in the six months to 30 September 2016 2.50
Total dividends paid to 30 September 2016 31.35
Net asset value as at 30 September 2016 97.39
Total shareholder return to 30 September 2016 128.74
In addition to the dividends summarised above, the Directors have
declared a second dividend of 2.50 pence per share, payable on 28
February 2017 to shareholders on the register as at 10 February 2017.
Notes
-- The dividend of 0.70 pence per share paid during the period ended 31
March 2008 and first dividend of 0.40 pence per share paid during the
year ended 31 March 2009 were paid to shareholders who subscribed in the
2006/2007 offer only.
-- All dividends paid by the Company are free of income tax. It is an H. M.
Revenue & Customs requirement that dividend vouchers indicate the tax
element should dividends have been subject to income tax. Investors
should ignore this figure on the dividend voucher and need not disclose
any income they receive from a VCT on their tax return.
-- The net asset value of the Company is not its share price as quoted on
the official list of the London Stock Exchange. The share price of the
Company can be found in the Investment Companies - VCTs section of the
Financial Times on a daily basis.
-- Investors are reminded that it is common for shares in VCTs to trade at a
discount to their net asset value as tax reliefs are only obtainable on
initial subscription.
Interim management report
Introduction
I am pleased to report a total return of 3.4 pence per share for the six
months to 30 September 2016 (30 September 2015: 4.1 pence per share).
These results illustrate a continuing number of positive developments
within our portfolio companies.
Investment progress and prospects
During the period GBP1.5 million was invested in existing and new
companies including GBP190,000 into Black Swan, a company which provides
predictive analytics platforms to provide market research for consumer
brands; GBP159,000 into Oviva AG, a Zurich based company which provides
a dietetics platform and associated services; GBP280,000 into Secured by
Design, a company focused on providing research and consulting for the
global automotive sector; follow on investments were made into Proveca
of GBP99,000, following the recent approval of its first pediatric drug;
and GBP397,000 into DySIS.
Following the period end, a further new investment of GBP583,000 was
made into Convertr, a company which provides digital sales lead
generation software.
In general, the portfolio continues to perform well, and saw an uplift
following the third party valuation for Radnor House Sevenoaks, the
second school within the Radnor House group. In addition, Proveca was
revalued sharply following the approval of its first drug and the Exco
Intouch valuation increased as profitability rises. Our two medical
analytics companies, Abcodia and DySIS valuations were reduced, as a
result of slower than hoped for progress. Notwithstanding this, we are
confident that the portfolio as a whole will continue to provide good
returns for shareholders.
Risks & uncertainties
The outlook for the UK and global economies continues to be the key risk
affecting the Company, despite continued growth in the UK. Investment
risk is mitigated in a number of ways, including our policy that the
portfolio should be balanced across sectors and it should include a
significant level of asset backing.
Other risks and uncertainties remain unchanged and are as detailed in
note 12.
Share buy-backs
It remains 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, including the maintenance of sufficient resources for
investment in new and existing portfolio companies and the continued
payment of dividends to shareholders. 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.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5.
There are no related party transactions or balances that require
disclosure.
Albion VCTs Prospectus Top Up Offers 2016/17
Your Board, in conjunction with the boards of other VCTs managed by
Albion Ventures LLP, is intending to launch shortly a top up offer of
new Ordinary shares, aiming to raise circa GBP4 million out of a target
of GBP24 million in aggregate that the Albion VCTs are seeking to raise.
In addition, the Board may elect to allot up to a further GBP2 million
if there is sufficient demand and the Board deems it prudent to do so.
The proceeds will be used to provide further resources at a time when a
number of attractive investment opportunities are being seen. A
Securities Note, which will form part of the Prospectus, will be emailed
or posted to shareholders shortly.
Results and dividends
On 30 September 2016, the net asset value was GBP44.9 million or 97.4
pence per share compared to GBP44.5 million or 96.4 pence per share on
31 March 2016. The revenue return before taxation was GBP305,000
compared to GBP451,000 for the six months to 30 September 2015. In line
with the annual dividend target of 5 pence per share, the Directors
declare a second dividend for the year of 2.5 pence per share payable on
28 February 2017 to shareholders on the register as at 10 February 2017.
M G Packe
Chairman
25 November 2016
Responsibility statement
The Directors, Maxwell Packe, Lady Balfour of Burleigh, Lord St John of
Bletso and Patrick Reeve, are responsible for preparing the Half-yearly
Financial Report. In preparing these condensed Financial Statements for
the period to 30 September 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", 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
M G Packe
Chairman
25 November 2016
Portfolio of investments
The following is a summary of investments as at 30 September 2016:
% voting Cumulative movement Change in
rights Cost in value Value value for the period(*)
Portfolio company held by the Company GBP'000 GBP'000 GBP'000 GBP'000
Asset-based
investments
Radnor House School
(Holdings) Limited 9.8 3,225 2,753 5,978 805
Bravo Inns II Limited 13.1 2,150 166 2,316 43
Regenerco Renewable
Energy Limited 12.5 1,261 435 1,696 79
Earnside Energy
Limited 8.7 1,394 283 1,677 130
Greenenerco Limited 28.6 985 554 1,539 -
Alto Prodotto Wind
Limited 11.1 999 540 1,539 12
The Street by Street
Solar Programme
Limited 8.6 892 431 1,323 60
Bravo Inns Limited 8.4 755 (270) 485 -
AVESI Limited 5.5 179 52 231 13
The Charnwood Pub
Company Limited 1.2 83 (1) 82 (1)
Total asset-based
investments 11,923 4,943 16,866 1,141
Growth investments
Exco Intouch Limited 6.0 1,015 1,738 2,753 835
Mirada Medical
Limited 15.1 885 906 1,791 (27)
Egress Software
Technologies
Limited 8.8 880 674 1,554 173
Proveca Limited 10.5 660 607 1,267 593
Process Systems
Enterprise Limited 4.1 407 746 1,153 57
Relayware Limited 3.5 1,065 1 1,066 (5)
DySIS Medical Limited 7.8 2,121 (1,058) 1,063 (429)
Grapeshot Limited 5.0 859 123 982 -
Masters
Pharmaceuticals
Limited 7.3 553 339 892 (216)
Hilson Moran Holdings
Limited 6.9 201 682 883 116
Aridhia Informatics
Limited 6.6 1,060 (279) 781 11
OmPrompt Holdings
Limited 5.1 650 23 673 8
Cisiv Limited 8.6 663 (3) 660 (133)
Mi-Pay Group plc 6.3 1,504 (873) 631 26
MyMeds&Me Limited 5.4 418 165 583 (68)
memmstar Limited 8.8 383 129 512 (13)
Abcodia Limited 6.1 555 (264) 291 (336)
Secured by Design
Limited 1.9 280 1 281 1
Oxsensis Limited 3.8 588 (329) 259 -
Black Swan Data
Limited 0.6 190 - 190 -
Sandcroft Avenue
Limited
(payasUgym.com) 1.8 160 - 160 (15)
Oviva AG 2.1 159 - 159 -
Dickson Financial
Services Limited
(Innovation
Broking) 8.4 84 39 123 39
Panaseer Limited 1.6 80 - 80 -
InCrowd Sports
Limited 1.5 66 - 66 -
Total growth
investments 15,486 3,367 18,853 617
Total fixed asset
investments 27,409 8,310 35,719 1,758
*As adjusted for additions and disposals during the period.
Total change in value of investments for the period 1,758
Movement in loan stock accrued interest (56)
Unrealised gains sub-total 1,702
Realised losses in current period (5)
Total gains on investments as per Income statement 1,697
Opening Total Loss on
carrying Disposal realised opening
Cost value proceeds gain/(loss) value
Fixed asset realisations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Relayware Limited (loan stock repayment & part equity
disposal) 304 304 304 - -
Radnor House School (Holdings) Limited (loan stock
repayment) 98 98 98 - -
Hilson Moran Holdings Limited (loan stock & redemption
premium repayment) 36 48 48 12 -
Greenenerco Limited (loan stock repayment) 12 17 17 5 -
The Street by Street Programme Limited (loan stock
repayment) 3 4 4 1 -
Regenerco Limited (loan stock repayment) 2 3 3 1 -
AVESI Limited (loan stock repayment) 1 2 2 1 -
Alto Prodotto Wind Limited (loan stock repayment) 1 2 2 1 -
Escrow adjustments - - (5) (5) (5)
Total realisations 457 478 473 16 (5)
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
Revenue Capital Revenue Capital Revenue Capital
Note GBP'000 GBP'000 Total GBP'000 GBP'000 GBP'000 Total GBP'000 GBP'000 GBP'000 Total GBP'000
Gains on investments 3 - 1,697 1,697 - 1,529 1,529 - 2,003 2,003
Investment income 4 560 - 560 678 - 678 1,367 - 1,367
Investment
management fees 5 (139) (419) (558) (116) (347) (463) (247) (741) (988)
Other expenses (116) - (116) (111) - (111) (209) - (209)
Return on ordinary activities before taxation 305 1,278 1,583 451 1,182 1,633 911 1,262 2,173
Tax (charge)/credit on ordinary activities (59) 59 - (80) 69 (11) (159) 148 (11)
Return and total comprehensive income attributable
to shareholders 246 1,337 1,583 371 1,251 1,622 752 1,410 2,162
Basic and diluted return per share (pence)* 7 0.53 2.90 3.43 0.94 3.16 4.10 1.85 3.48 5.33
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2015 and the
audited statutory accounts for the year ended 31 March 2016.
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 on ordinary activities before
tax and the historical profit is due to the fair value movements on
investments.
Condensed balance sheet
Unaudited Unaudited Audited
30 September 30 September 31 March
2016 2015 2016
Note GBP'000 GBP'000 GBP'000
Fixed asset investments 35,719 31,697 32,971
Current assets
Trade and other receivables
less than one year 855 670 2,880
Cash and cash equivalents 8,629 7,481 8,980
9,484 8,151 11,860
Total assets 45,203 39,848 44,831
Creditors: amounts falling due
within one year
Trade and other payables less
than one year (341) (372) (361)
Total assets less current
liabilities 44,862 39,476 44,470
Equity attributable to
equityholders
Called up share capital 8 521 457 518
Share premium 17,564 11,455 17,285
Capital redemption reserve 104 104 104
Unrealised capital reserve 8,070 5,588 6,389
Realised capital reserve (320) 666 24
Other distributable reserve 18,923 21,206 20,150
Total equity shareholders'
funds 44,862 39,476 44,470
Basic and diluted net asset
value per share (pence)* 97.39 97.68 96.41
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2015 and the
audited statutory accounts for the year ended 31 March 2016.
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 25 November 2016 and were signed on its behalf
by
M G Packe
Chairman
Company number: 05990732
Condensed statement of changes in equity
Other distributable
Called up share capital Share premium Capital redemption reserve Unrealised capital reserve Realised capital reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2016 518 17,285 104 6,389 24 20,150 44,470
Return/(loss) and total comprehensive income for the
period - - - 1,702 (365) 246 1,583
Transfer of previously unrealised gains on disposals
of investments - - - (21) 21 - -
Purchase of shares for treasury - - - - - (317) (317)
Issue of equity 3 283 - - - - 286
Cost of issue of equity - (4) - - - - (4)
Equity dividends paid - - - - - (1,156) (1,156)
As at 30 September 2016 521 17,564 104 8,070 (320) 18,923 44,862
As at 1 April 2015 409 6,969 104 4,189 814 22,177 34,662
Return/(loss) and total comprehensive income for the
period - - - 1,522 (271) 371 1,622
Transfer of previously unrealised gains on disposal
of investments - - - (123) 123 - -
Purchase of shares for treasury - - - - - (343) (343)
Issue of equity 48 4,624 - - - - 4,672
Cost of issue of equity - (138) - - - - (138)
Equity dividends paid - - - - - (999) (999)
As at 30 September 2015 457 11,455 104 5,588 666 21,206 39,476
As at 1 April 2015 409 6,969 104 4,189 814 22,177 34,662
Return/(loss) and total comprehensive income for the
year - - - 2,047 (637) 752 2,162
Transfer of previously unrealised losses on disposal
of investments - - - 153 (153) - -
Purchase of shares for treasury - - - - - (692) (692)
Issue of equity 109 10,610 - - - - 10,719
Cost of issue of equity - (294) - - - - (294)
Equity dividends paid - - - - - (2,087) (2,087)
As at 31 March 2016 518 17,285 104 6,389 24 20,150 44,470
* Included within the aggregate of these reserves is an amount of
GBP18,603,000 (30 September 2015: GBP21,872,000; 31 March 2016:
GBP20,174,000) which is considered distributable.
Condensed statement of cash flows
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Loan stock income received 442 572 1,098
Dividend income received 10 50 117
Deposit interest received 50 42 84
Investment management fees
paid (556) (433) (927)
Other cash payments (128) (122) (208)
Corporation tax refund - 35 8
Net cash flow from operating
activities (182) 144 172
Cash flow from investing
activities
Purchase of fixed asset
investments (2,135) (1,594) (2,941)
Disposal of fixed asset
investments 526 739 1,114
Net cash flow from investing
activities (1,609) (855) (1,827)
Cash flow from financing
activities
Issue of ordinary share
capital 2,743 3,748 7,499
Cost of issue of equity (5) (2) (7)
Dividends paid (981) (861) (1,786)
Purchase of own shares
(including costs) (317) (314) (692)
Net cash flow from financing
activities 1,440 2,571 5,014
(Decrease)/increase in cash
and cash equivalents (351) 1,860 3,359
Cash and cash equivalents at
start of period 8,980 5,621 5,621
Cash and cash equivalents at
end of period 8,629 7,481 8,980
Cash and cash equivalents
comprise
Cash at bank and in hand 8,629 7,481 8,980
Cash equivalents - - -
Total cash and cash
equivalents 8,629 7,481 8,980
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, those 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
classified 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 from investments is included in revenue in the period in
which the dividend is paid or approved by the portfolio company.
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 expected 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 other 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
Any performance incentive fee will be allocated between Other
distributable 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 account
This reserve accounts for the difference between the price paid for
shares and the nominal value of the share, 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;
-- 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 2013 to form a single reserve named Other distributable
reserve.
This reserve accounts for movements from the revenue column of the
Income statement, the payment of dividends, the buyback 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
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Unrealised gains on
fixed asset
investments 1,702 1,522 2,047
Realised
(losses)/gains on
fixed asset
investments (5) 7 (44)
1,697 1,529 2,003
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Income recognised on
investments
Loan stock interest
and other fixed
returns 499 587 1,166
UK dividend income 10 50 117
Bank deposit interest 51 41 84
560 678 1,367
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 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Investment management
fee charged to
revenue 139 116 247
Investment management
fee charged to
capital 419 347 741
558 463 988
Further details of the Management agreement under which the investment
management fee is paid are given in the Strategic report on page 11 of
the Annual Report and Financial Statements for the year ended 31 March
2016.
During the period, services of a total value of GBP558,000 (30 September
2015: GBP463,000; 31 March 2016: GBP988,000) 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 disclosed
within creditors was GBP280,000 (30 September 2015: GBP247,000; 31 March
2016: GBP278,000).
Patrick Reeve is the Managing Partner of the Manager, Albion Ventures
LLP. During the period, the Company was charged GBP12,000 including VAT
(30 September 2015: GBP10,800; 31 March 2016: GBP21,600) by Albion
Ventures LLP in respect of Patrick Reeve's services as a Director. At
the financial period end, the amount due to Albion Ventures LLP in
respect of these services disclosed as creditors was GBP6,000 (30
September 2015: GBP5,400; 31 March 2016: GBP5,400).
Albion Ventures LLP is, from time to time, eligible to receive
transaction fees and Directors' fees from portfolio companies. During
the period to 30 September 2016, fees of GBP84,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2015: GBP82,000; 31 March 2016: GBP162,000).
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Dividend of
2.50p per share
paid on 28
August 2015 - 999 999
Dividend of
2.50p per share
paid on 29
February 2016 - - 1,088
Dividend of
2.50p per share
paid on 31
August 2016 1,156 - -
1,156 999 2,087
In addition to the dividends summarised above, the Board has declared a
second dividend for the year ending 31 March 2017 of 2.50 pence per
share which will be paid on 28 February 2017 to shareholders on the
register as at 10 February 2017. This is expected to amount to
approximately GBP1,152,000.
7. Basic and diluted return per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Return attributable to equity shares (GBP'000) 246 1,337 1,583 371 1,251 1,622 911 1,262 2,173
Weighted average shares in issue (excluding treasury
shares) 46,172,950 39,600,517 40,534,139
Return attributable per Ordinary share (pence) (basic
and diluted) 0.53 2.90 3.43 0.94 3.16 4.10 1.85 3.48 5.33
The weighted average number of shares is calculated excluding treasury
shares of 6,029,443 (30 September 2015: 5,288,000; 31 March 2016:
5,670,000).
There are no convertible instruments, derivatives or contingent share
agreements in issue for the Company, 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. Called up share capital
Unaudited Unaudited Audited
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Allotted, called up and fully paid
52,094,810 Ordinary shares of 1 penny each (30 September
2015: 45,702,613; 31 March 2016: 51,796,503) 521 457 518
Voting rights
46,065,367 shares of 1 penny each (net of treasury shares) (30 September
2015: 40,414,613; 31 March 2016: 46,126,503).
In the six months to 30 September 2016, the Company purchased 359,443
shares (30 September 2015: 381,000; 31 March 2016: 763,000) to be held
in treasury at a cost of GBP317,000 (30 September 2015: GBP343,000; 31
March 2016: GBP692,000), representing 0.7 per cent. of the shares in
issue (excluding treasury shares) as at 30 September 2016.
The Company holds a total of 6,029,443 shares (30 September 2015:
5,288,000; 31 March 2016: 5,670,000) in treasury representing 11.6 per
cent. of the shares in issue as at 30 September 2016.
Under the terms of the Dividend Reinvestment Scheme Circular dated 26
November 2009, the following Ordinary shares of nominal value 1 penny
each were allotted during the period to 30 September 2016:
Aggregate Net
nominal value consideration
Date of Number of of shares Issue price received Opening market price on allotment date (pence per
allotment shares allotted (GBP'000) (pence per share) (GBP'000) share)
31 August
2016 184,698 2 94.66 173 88.50
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 September 2016:
Aggregate Net
nominal value consideration
Date of Number of of shares Issue price received Opening market price on allotment date (pence per
allotment shares allotted (GBP'000) (pence per share) (GBP'000) share)
6 April
2016 53,319 0.5 97.70 51 91.50
6 April
2016 7,296 - 98.20 7 91.50
6 April
2016 52,994 0.5 98.70 51 91.50
113,609 1 109
9. Commitments and contingencies
As at 30 September 2016, the Company had the following financial
commitments totalling GBP245,000 (30 September 2015: GBP285,000; 31
March 2016: GBP319,000), which are expected to be invested during the
next 12 months:
-- GBP245,000 Proveca Limited
There are no contingencies or guarantees of the Company as at 30
September 2016 (30 September 2015: GBPnil, 31 March 2016: GBPnil).
10. Post balance sheet events
Since 30 September 2016, the Company has had the following post balance
sheet events:
-- Investment of GBP583,000 in Convertr Limited
-- Investment of GBP157,000 in Abcodia Limited
On 4 November 2016 the Company announced its intention to launch a
prospectus in relation to an offer for subscription for new Ordinary
shares subject to obtaining regulatory approval. The Company is aiming
to raise circa GBP4 million out of a target of GBP24 million in
aggregate that the Albion VCTs are seeking to raise. A Securities Note,
which forms part of the Prospectus, will be sent to shareholders
shortly.
11. Related party transactions
Other than transactions with the Manager as described in Note 5, there
are no other related party transactions.
12. Risks and uncertainties
The Board considers that the Company faces the following principal 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. 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
on initial investment and loss of tax relief on any tax-free income or
capital gains 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 reports 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. 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.
4. 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 classified 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 judgements 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 judgements 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 supported by independent third party professional valuations
and the Board critically reviews key valuations on a quarterly basis.
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 also
evaluated by the internal auditors.
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. Patrick Reeve on behalf of the Board, 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 page 29 of
the Annual Report and Financial Statements for the year ended 31 March
2016.
Measures are in place to mitigate information risk in order to ensure
the integrity, availability and confidentiality of information used
within the business.
7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions.
There are provisions within the Management agreement for the change of
Manager under certain circumstances (for further detail, see the
Management agreement paragraph on page 11 of the Annual Report and
Financial Statements for the year ended 31 March 2016). In addition, the
Manager has demonstrated to the Board that there is no undue reliance
placed upon any one individual within Albion Ventures LLP.
8. 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 18 of the Annual Report and
Financial Statements for the year ended 31 March 2016.
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. 13. Going concern The Board's assessment of liquidity risk remains unchanged since the last Annual Report and Financial Statements for the year ended 31 March 2016, and is detailed on page 53 of those accounts. The Company has adequate cash and liquid resources and has no borrowing. The portfolio of investments is diversified in terms of sector, and the major cash outflows of the Company (namely investments, share buy-backs and dividends) 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. 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 September 2016 and 30 September 2015, and is unaudited. The information for the year ended 31 March 2016 does not constitute statutory accounts within the terms of section 435 of the Companies Act 2006 but is derived from the statutory accounts for the financial year, which were unqualified and have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain statements 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/AAEV. 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 Enterprise VCT PLC via Globenewswire http://www.closeventures.co.uk
(END) Dow Jones Newswires
November 25, 2016 10:27 ET (15:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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