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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Albion Technology & General Vct Plc | LSE:AATG | London | Ordinary Share | GB0005581672 | 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% | 69.00 | 67.50 | 70.50 | 69.00 | 69.00 | 69.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -2.85M | -6.3M | -0.0354 | -19.49 | 122.68M |
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Albion Technology & General VCT PLC
As required by the UK Listing Authority's Disclosure and Transparency
Rules 4.1 and 6.3, Albion Technology & General VCT PLC today makes
public its information relating to the Annual Report and Financial
Statements for the year ended 31 December 2016.
This announcement was approved for release by the Board of Directors on
23 March 2017.
This announcement has not been audited.
You will shortly be able to view the Annual Report and Financial
Statements for the year to 31 December 2016 (which have been audited)
at: www.albion-ventures.co.uk/funds/AATG.The Annual Report and Financial
Statements for the year to 31 December 2016 will be available as a PDF
document via a link in the 'Financial Reports and Circulars' section.
The information contained in the Annual Report and Financial Statements
will include information as required by the Disclosure and Transparency
Rules, including Rule 4.1.
Investment objective and policy
Albion Technology & General VCT PLC's investment strategy is to provide
investors with a regular and predictable source of dividend income
combined with the prospect of longer term capital growth.
This is achieved in two ways. Firstly, by controlling the VCT's
exposure to technology risk through ensuring that many of the companies
in the non-technology portfolio have property as their major asset, with
no external borrowings. Secondly, by balancing the investment portfolio
by sector, so that those areas such as leisure and business services,
which are susceptible to changes in consumer sentiment, are complemented
by sectors with more predictable long term characteristics, such as
healthcare and the environment.
The Company offers investors the opportunity to participate in a
balanced portfolio of technology and non-technology businesses. The
Company's investment portfolio is intended to be split approximately as
follows:
-- 40 per cent. in unquoted UK technology-related companies; and
-- 60 per cent. in unquoted UK non-technology companies.
This split is subject to the availability of good quality new
investments arising within the UK technology and non-technology sectors.
The Company's maximum exposure in relation to gearing is restricted to
10 per cent. of the adjusted share capital and reserves. The Directors
do not currently have any intention to utilise long term gearing.
Subject to shareholder approval, prior to investing in VCT qualifying
assets, the Company can invest cash in deposits, in floating rate notes
or similar instruments with banks or other financial institutions with
high credit ratings or up to 7.5 per cent. of its assets, at the time of
investment, in liquid open-ended equity funds providing income and
capital equity exposure (where it is considered economic to do so).
Background to the Company
The Company is a venture capital trust which raised GBP14.3 million in
December 2000 and 2002, and raised a further GBP35.0 million during 2006
through the launch of a C share issue. The Company has raised a further
GBP24.2m under the Albion VCTs Top Up Offers since January 2011.
On 15 November 2013, the Company acquired the assets and liabilities of
Albion Income & Growth VCT PLC ("Income & Growth") in exchange for new
shares in the Company ("the Merger") resulting in a further GBP28.1
million of net assets. Each Income & Growth shareholder received 0.7813
shares in the Company for each Income & Growth share that they held at
the date of the Merger.
Financial calendar
Record date for first dividend 13 January 2017
Payment of first dividend 31 January 2017
Record date for second dividend 2 June 2017
Annual General Meeting 11.00 am on 7 June 2017
Payment of second dividend 30 June 2017
Announcement of half-yearly results for the six months September 2017
ended 30 June 2017
Payment of third dividend (subject to Board approval) 29 December 2017
Financial summary
162.6p Total shareholder return per Ordinary share since
launch.
2.5p Total return per share for the year ended 31 December
2016.
4.0p Target tax free dividend per Ordinary share for the
year ahead (5.0p per Ordinary share during the year
ended 31 December 2016).
71.6p Net asset value per Ordinary share as at 31 December
2016.
31 December 2016 31 December 2015
(pence per share) (pence per share)
Dividends paid 5.0 5.0
Revenue return 0.8 1.6
Capital return/(loss) 1.7 (5.6)
Net asset value 71.6 73.9
Total
shareholder
return to 31
December
2016:
Ordinary share C share Income & Growth
(pence per share) (i) (pence per share) (i)(ii) (pence per share) (i)(iii)
Total
dividends
paid during
the year
ended:
31 December
2001 1.0 - -
31 December
2002 2.0 - -
31 December
2003 1.5 - -
31 December
2004 7.5 - -
31 December
2005 9.0 - 0.6
31 December
2006 8.0 0.5 2.6
31 December
2007 8.0 2.5 3.5
31 December
2008 16.0 4.5 3.5
31 December
2009 - 1.0 3.0
31 December
2010 8.0 3.0 3.0
31 December
2011 5.0 3.8 3.5
31 December
2012 5.0 3.9 3.5
31 December
2013 5.0 3.9 3.5
31 December
2014 5.0 3.9 3.9
31 December
2015 5.0 3.9 3.9
31 December
2016 5.0 3.9 3.9
Total
dividends
paid to 31
December
2016 91.0 34.8 38.4
Net asset
value as at
31 December
2016 71.6 55.7 55.9
Total
shareholder
return to
31 December
2016 162.6 90.5 94.3
In line with the new annual dividend target of 4.0 pence per share, the
Board declared a first dividend for the year ending 31 December 2017 of
1 penny per Ordinary share paid on 31 January 2017 to shareholders on
the register on 13 January 2017. The Board has declared a second
dividend for the year ending 31 December 2017 of 1 penny per Ordinary
share to be paid on 30 June 2017 to shareholders on the register on 2
June 2017. The Board anticipates a third dividend to be paid in December
2017 of 2.0 pence per share.
Notes
(i) Excludes tax benefits upon subscription.
(ii) The C shares were converted into Ordinary shares on 31 March 2011.
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 0.7779 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.
(iii) Albion Income & Growth VCT PLC was merged with Albion Technology &
General VCT PLC on 15 November 2013. The net asset value per share and
all dividends paid subsequent to the merger of the Income & Growth
shares to the Ordinary shares are multiplied by the issue ratio of
0.7813 in respect of the Income & Growth shares' return, in order to
give an accurate picture of the shareholder value since launch relating
to the Income & Growth shares. Prior to the merger, Albion Income &
Growth VCT PLC had a financial year end of 30 September and as such, the
above dividends per share relate to the relevant period.
Chairman's statement
Introduction
The results for Albion Technology & General VCT for the year to 31
December 2016 show a recovery from the poor results of the previous
year. Although the total return of 2.5 pence per share is still
relatively modest, the Board is now more confident that the recovery
plan is bearing fruit.
Investment portfolio
The results for the year showed net gains on investments of just over
GBP2.4 million, against losses of GBP3.7 million for the previous year.
The key elements within this included the successful sale of Exco
InTouch, the digital health business, which was sold for around three
times original cost. Following the year end, we also sold AMS Sciences
and exchanged contracts for the sale of Blackbay, both at valuations
above the opening value and also our holding in Masters Pharmaceuticals.
In addition, strong trading at Radnor House (Sevenoaks) led to a
material revaluation of that holding, while Proveca, which develops
paediatric drugs, gained its first regulatory approval. Process Systems Enterprise was also written up following continued strong growth. Against this, the share price of the AIM-quoted Mi-Pay fell during the period, while slower than hoped for progress at DySIS (diagnostics) and the Weybridge Healthclub also resulted in write-downs. Nevertheless, we believe that the investment portfolio is in better shape than it was 12 months ago, with considerable progress made in repositioning the portfolio, notwithstanding that some of these disposals have resulted in an overall lower level of investment income receivable. Following the disposal of AMS Sciences, Blackbay and the assets held by The Charnwood Pub Company and Q Gardens, the pre 2009 portfolio will only account for 27 per cent. of the Company's net assets. This is in line with the target set by the Board at the start of the portfolio repositioning process in 2015. Meanwhile, GBP1.5 million was invested in five new portfolio companies, including Black Swan Data (predictive analytics services), Secured by Design (an international automative consultancy) and Convertr (digital marketing software). A further GBP2.3 million was invested in existing portfolio companies, including GBP890,000 in Earnside Energy to double the capacity of its biogas plant and GBP431,000 into Proveca to bring its newly approved drug, Sialanar, to market. Overall, 73 per cent. of the portfolio by value is now profitable, measured by earnings before interest, depreciation and tax, with a number of our investments showing strong growth in fast-developing international markets. Risks and uncertainties Other than investment performance through stock selection, the key risks facing the Company are from the broader economy. Despite some continued growth in the UK, the outlook for the domestic economy following the decision to leave the EU and an uncertain global situation, continue to be the key risks affecting your Company. The Manager has a clear focus to allocate resources to those sectors and opportunities where growth can be both resilient and sustainable. Importantly, investment risk is mitigated through a variety of processes, including our policy of ensuring that the Company has a first charge over portfolio companies' assets wherever possible. We can never guarantee that future investments will avoid the failings of some of the previous investments but the rebalancing of the portfolio has resulted in a spread of investments that is more proportionately balanced between stability and growth. A detailed analysis of the other risks and uncertainties facing the business is shown in the Strategic report below. Share buy-backs It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. The Board's policy is to buy back shares in the market, subject to the overall constraint that such purchases are in the Company's interest. In order to ensure that these conditions are satisfied, the Company will limit the sum available for buy-backs for the 6 month period to 30 June 2017 to GBP1 million. 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 transactions that took place with the Manager during the year can be found in note 5 and principally relate to the investment management fee. As a result of the lowering of the expenses cap last year to 2.75 per cent. of net assets, the investment management fee was reduced by GBP94,000 in the year (2015: GBP76,000). Results and dividends As at 31 December 2016, the net asset value was 71.6 pence per share compared to 73.9 pence per share at 31 December 2015. The total return after tax was GBP2.23 million compared to loss of GBP3.33 million in the year to 31 December 2015. It was announced on 22 November 2016 that the Company's dividend target was changing from 5.0 pence per share to 4.0 pence per share and that it would move from paying quarterly dividends to semi-annual dividends. The Company paid dividends totalling 5.0 pence per share during the financial year, in line with the Company's policy, which it has maintained for the last six years. For most of this period, however, the dividend has not been fully covered by total returns, resulting in a gradual decline in NAV per share over the years. In an economic environment of persistently low interest rates, the Board considers a recalibration of the annual dividend target to 4.0 pence per share to be more appropriate, representing a dividend yield on current NAV of 5.6 per cent.. This target will apply from the commencement of 2017. A first dividend of 1 penny per share was paid on 31 January 2017, with a second dividend of 1 penny per share due to be paid on 30 June 2017 to shareholders on the register on 2 June 2017. Subject to Board approval, a further dividend for the year ended 31 December 2017 will be paid in December 2017. Thereafter, two dividends of 2 pence per share each will be paid per annum in June and December. Albion VCTs Prospectus Top Up Offers 2016/2017 In November 2016, the Company announced the launch of the Albion VCTs Prospectus Top Up Offers 2016/2017. In aggregate, the Albion VCTs raised GBP34 million across six of the VCTs managed by Albion Ventures LLP, with the Company raising GBP6 million. The Offers have now closed. The funds raised by each Company pursuant to its Offer have been added to the liquid resources available for investment putting each Company into a position to take advantage of investment opportunities over the next two to three years. The proceeds of the Offers are being applied in accordance with the respective Companies' investment policies. The Company continues to participate in the Top Up Offers and also benefits from receipts from dividend reinvestment, the net proceeds of which are invested in new investment opportunities and to provide additional working capital in the Company. It is important that the Company continues to have cash available for future investments and the top up offers and dividend reinvestments are important sources of that capital. Modification to investment policy As described more fully in the Strategic report, the Manager and Board are recommending the restoration of the Company's capacity, under its investment policy, to invest cash with a level of exposure to quoted equities, pending deployment in suitable private equity opportunities. The recent acquisition by Albion of OLIM Investment Managers provides an opportunity to invest in an open-ended equity fund, delivering income and capital growth, with good liquidity and with a good performance record, without any double charging of management fees. This will be subject to shareholder approval but both Board and Manager believe that it is a positive development for the Company, particularly in a low interest rate environment. The revision to policy will contain restrictions as to the amount that can be invested in non-qualifying investments and how the investments will be made, as more fully described in the Strategic report below. Continuation as a venture capital trust At the 2017 Annual General Meeting members have the opportunity to confirm that they wish the Company to continue as a venture capital trust. Otherwise the Board is required to make proposals for the reorganisation, reconstruction or the orderly liquidation and winding up of the Company and present these to the members at a general meeting. Those shareholders who have been using their investment in the VCT to defer a capital gain should note that, on a return of capital, that gain would become chargeable at the prevailing rate of capital gains tax. Your Board believes that the Albion VCTs have the potential to be highly effective long-term investment vehicles, with strong tax-free dividend streams. Therefore, the Board recommends that shareholders should vote in favour of the Company continuing as a venture capital trust, as they intend to vote in respect of their own shares. Further details regarding the resolution can be found in the Directors' report on pages 24 and 25 of the full Annual Reports and Financial Statements. Outlook and prospects The portfolio repositioning is well under way and should allow the Company's performance to match more closely the performance seen generally amongst the other Albion VCTs. The combination of steady cash generation seen in the asset-based sectors of renewable energy, leisure and education, combined with measured and incremental investment in the growth sectors that the Manager knows well, such as medical technology and specific areas within IT such as cyber security, gives us confidence in the direction of the Company and of a recovery in returns to shareholders. Dr. N E Cross Chairman 23 March 2017 Strategic report Investment objective The Company's investment objective is to provide investors with a regular and predictable source of dividend income combined with the prospect of long term capital growth through allowing investors the opportunity to participate in a balanced portfolio of unquoted technology and non-technology businesses. Investment policy It is intended that the Company's investment portfolio will be split approximately as follows: -- 40 per cent. in unquoted UK technology related companies; and -- 60 per cent. in unquoted UK non-technology companies. This split is subject to the availability of good quality new investments arising within the UK technology and non-technology sectors. In neither categories listed above would portfolio companies normally have any external borrowing with a charge ranking ahead of the Company.
Up to two thirds of investments (by cost) will comprise loan stock
secured with a first charge on the portfolio company's assets.
The Company pursues a longer term investment approach, with a view to
providing shareholders with a strong, predictable dividend flow,
combined with the prospects of capital growth. This is achieved in two
ways. First, by controlling the Company's exposure to technology risk
through ensuring that many of the companies in the non-technology
portfolio have property as their major asset, with no external
borrowings. Second, by balancing the investment portfolio by sector, so
that those areas such as leisure and business services, which are
susceptible to changes in consumer sentiment, are complemented by
sectors with more predictable long term characteristics, such as
healthcare and the environment. In addition to the above, HMRC rules
govern the Company's investment allocation and risk diversification
policies. These rules result in a spread of investment risk through
disallowing holdings of more than 15 per cent. by VCT value in any
portfolio company.
The Company's maximum exposure in relation to gearing is restricted to
10 per cent. of the adjusted share capital and reserves. The Directors
do not currently have any intention to utilise long term gearing.
Subject to shareholder approval at the forthcoming Annual General
Meeting, the Company can, prior to investing in VCT qualifying assets,
invest cash in deposits, in floating rate notes or similar instruments
with banks or other financial institutions with high credit ratings or
up to 7.5 per cent. of its assets, at the time of investment, in liquid
open-ended equity funds providing income and capital equity exposure
(where it is considered economic to do so). This is explained further
below.
Management of liquid resources
From the Company's launch in 2001 up until 2007 its investment policy
was to hold 15 per cent. of its assets in a portfolio of non-qualifying
quoted international technology stocks. As recommended by the Board,
shareholders voted in 2007 to end this policy. This was following a
change in emphasis by the Company's technology adviser (which was a
fellow subsidiary of the Manager's then owner, Close Brothers Group Plc),
away from offering direct technology investment capabilities. Since then,
non-qualifying investments have been held in floating rate notes and
bank deposits, with the latter category now accounting for all of the
Company's funds awaiting investment.
In November 2016, Albion Ventures acquired OLIM Investment Managers
("OLIM"), a specialist fund manager of UK quoted equities. It is now
proposed that, in view of the very low interest rates earned on the
Company's bank deposits, that the current policy should be updated to
allow cash awaiting investment to be invested in liquid open-ended
equity funds including the OLIM UK Equity Income Fund ("OUEIF"). This is
an authorised UK unit trust which has the objective of achieving a
return based on a combination of income and capital over the long term,
and invests in a diversified portfolio of FTSE-100 and FTSE-250 UK
companies. It has shown a total return, comprising income and capital,
since launch in 2002 of 212 per cent., and ranks 18 out of 55 of UK
equity income funds in its performance over 10 years. Its historic
dividend yield is 4 per cent..
Any investment in OUEIF will be made as part of the Company's management
of surplus liquid funds, and will be limited to an amount of not more
than 7.5 per cent. of the company's net assets, from time to time,
though depending on market conditions, it may be much lower than this.
The holding will be capable of realisation within 7 days and, in order
to avoid double charging, Albion agrees to reduce that proportion of its
management fee relating to the investment in the OUEIF by 0.75 per
cent., which represents the OUEIF management fee charged by OLIM.
This change in investment policy, which is recommended by the Board,
together with other clarifications of the investment policy, is subject
to the approval of shareholders. Accordingly resolution 11 at the
forthcoming Annual General Meeting, which is set out on page 25 of the
full Annual Reports and Financial Statements, will allow shareholders to
vote on the issue.
Current portfolio sector allocation
The pie chart at the end of this announcement shows the split of the
portfolio valuation by industrial or commercial sector as at 31 December
2016. Details of the principal investments made by the Company are shown
in the Portfolio of Investments on pages 17 to 19 of the full Annual
Report and Financial Statements.
Direction of portfolio
The Board has agreed a policy with the Manager to undertake a programme
to reduce the proportion of those investments which were made at the
high point in the market, before 2009 and this programme, which
commenced in 2015, is now well underway. At 31 December 2016, these
investments made pre-2009 amounted to GBP21.4 million, or 33 per cent.
of the Company's assets. Sales completed or exchanged after the year end
on two further investments, which bring the level of pre-2009
investments down to 27 per cent. of net assets, in line with the
Company's target.
The current portfolio is well balanced in terms of sectors, despite the
disposal programme referred to above, with education accounting for 15
per cent. renewable energy at 19 per cent. and pubs at 8 per cent. A
number of new asset-based areas are under review and it is anticipated
that the IT segment of the portfolio will increase.
Results and dividend policy
Ordinary shares
GBP'000
Net revenue return for the year ended 31 December
2016 751
Net capital gain for the year ended 31 December 2016 1,478
Total return for the year ended 31 December 2016 2,229
Dividend of 1.25 pence per share paid on 29 January
2016 (1,045)
Dividend of 1.25 pence per share paid on 29 April
2016 (1,146)
Dividend of 1.25 pence per share paid on 30 June 2016 (1,135)
Dividend of 1.25 pence per share paid on 31 October
2016 (1,132)
Transferred from reserves (2,229)
Net assets as at 31 December 2016 64,426
Net asset value per share as at 31 December 2016 71.6p
The Company paid dividends of 5.0 pence per share during the year ended
31 December 2016 (2015: 5.0 pence per share). The dividend objective of
the Board is to provide shareholders with a strong, predictable dividend
flow. As mentioned in the Chairman's statement, going forward the
Company will target an annual dividend of 4.0 pence per share. The Board
declared a first dividend for the year ending 31 December 2017 of 1
penny per share which was paid on 31 January 2017. The Board has
declared a second dividend for the year ending 31 December 2017, of 1
penny per share to be paid on 30 June 2017 to shareholders on the
register on 2 June 2017. Whilst in the past the Company has paid
quarterly dividends, it will now be moving to paying semi-annual
dividends, thereby reducing administration costs.
As shown in the Income statement, investment income has decreased to
GBP1,570,000 (2015: GBP2,165,000). This is in part due to the disposal
of income producing investments in the prior year as well as
capitalising interest on a number of companies in order to fund further
acquisitions. As a result, the revenue return to equity holders has
decreased to GBP751,000 (2015: GBP1,273,000).
The capital gain for the year was GBP1,478,000 (2015: capital loss of
GBP4,606,000). This is mainly attributable to the realised gain in the
year of GBP797,000 on the sale of Exco InTouch Limited and uplifts in
valuations for Radnor House School Holdings Limited (GBP1,251,000),
Process Systems Enterprise Limited (GBP728,000) and Proveca Limited
(GBP614,000). These were partly offset by unrealised losses on Mi-Pay
Group plc (GBP538,000) as well as DySIS Medical Limited (GBP499,000) and
The Weybridge Club Limited (GBP415,000). The total return for the period
was 2.5 pence per share (2015: loss of 4.0 pence per share).
The Balance sheet shows that the net asset value per share has decreased
over the last year to 71.6 pence per share (2015: 73.9 pence per share).
The decrease in net asset value can mainly be attributed to the payment
of 5.0 pence per share of dividends partly offset by the total return of
2.5 pence per share.
The cash outflow for the year reflected the GBP3.8 million of new
investments, dividends paid of GBP3.8 million and the buy-back of GBP1.6
million of shares. This was offset by the issue of new shares under the
Albion VCTs Top Up Offers which raised GBP5.9 million and GBP3.0 million
from the disposal of investments and receipt of deferred consideration.
Review of business and outlook
A detailed review of the Company's business during the year and future
prospects is contained in the Chairman's statement above and in this
Strategic report.
The Manager will continue with the policy of disposing of further
pre-2009 investments and re-aligning the portfolio with particular
emphasis on healthcare, capital efficient segments of IT, and other
areas where value looks to be supported by longer term demographic and
global trends. The Directors do not foresee any major changes in the
activity undertaken by the Company in the current year. The Company
continues with its objective to invest in unquoted companies throughout
the United Kingdom with a view to providing both capital growth and a
reliable dividend income to shareholders over the long term.
Details of significant events which have occurred since the end of the
financial year are listed in note 19. Details of transactions with the
Manager are shown in note 5.
VCT regulation
The investment policy is designed to ensure that the Company continues
to qualify and is approved as a VCT by HMRC. In order to maintain its
status under Venture Capital Trust legislation, a VCT must comply on a
continuing basis with the provisions of Section 274 of the Income Tax
Act 2007, details of which are provided in the Directors' report on page
23 of the full Annual Report and Financial Statements.
As part of the Government's wider review of the VCT regime, new rules
have been introduced under the Finance Act (No.2) 2015 and Finance Act
2016, which include:
-- Restrictions over the age of investments;
-- A prohibition on management buyouts or the purchase of existing
businesses;
-- An overall lifetime investment cap of GBP12 million from tax-advantaged
funds into any portfolio company; and
-- A VCT can only make qualifying investments or certain specified
non-qualifying investments such as money market securities and short term
deposits.
While these changes are significant, the Company has been advised that,
had they been in place previously, they would have affected only a
relatively small minority of the investments that have been made into
new portfolio companies over recent years. The Board's current view is
that there will be no material change in our investment policy and the
application of it as a result.
The relevant tests to measure compliance have been carried out and
independently reviewed for the year ended 31 December 2016. These showed
that the Company has complied with all tests and continues to do so.
Future prospects
The recovery in the results for the year, and the progress in portfolio
repositioning, give the Board a degree of confidence in the future
performance of the Company particularly as the bulk of the portfolio is
profitable with good prospects.
Board
Directors' fees, which had previously remained static since 2006, had
fallen materially behind those of similar companies and have not taken
account of the additional activities of the Board in recent years.
Accordingly these were increased in 2016 to a level nearer to market
norms. Further details are given on page 33 of the full Annual Report
and Financial Statements.
Key performance indicators
The Directors believe that the following key performance indicators,
which are typical for venture capital trusts, used in its own assessment
of the Company, will provide shareholders with sufficient information to
assess how effectively the Company is applying its investment policy to
meet its objectives. The Directors are satisfied that the results shown
in the following key performance indicators give a good indication that
the Company is achieving its investment objective and policy, although
the last few years have represented a setback on asset value
performance. This has been addressed but may take time to take effect
given the longer term nature of venture capital investment. These are:
1. Net asset value per share and total shareholder return
Please see the "Total shareholder return to 31 December 2016" table at
the start of this announcement or on page 5 in the Financial summary
section of the full Annual Report and Financial Statements which shows
the NAV per share as at 31 December 2016 and total shareholder return
split by Ordinary shares, C shares and Income & Growth shares.
Total shareholder return is net asset value plus cumulative dividends
paid since launch.
Total shareholder return increased by 1.7 per cent. to 162.6 pence per
Ordinary share for the year ended 31 December 2016.
The graph on page 4 of the full Annual Report and Financial Statements
reflects the relatively flat performance of the Company in recent years,
as discussed in the Chairman's statement above.
1. Dividend distributions
Dividends paid in respect of the year ended 31 December 2016 were 5.0
pence per share (2015: 5.0 pence per share), in line with the Boards
2016 dividend objective. Cumulative dividends paid since inception are
91.0 pence per share.
As mentioned in the Chairman's statement, the current annual dividend
target for the Company is now 4.0 pence per share.
1. Ongoing charges
As agreed with the Manager in 2015, the ongoing charges ratio for the
year to 31 December 2016 was capped at 2.75 per cent. (2015: 2.75 per
cent.) with any excess being a reduction in the Management fee. The
ongoing charges ratio has been calculated using The Association of
Investment Companies' (AIC) recommended methodology. This figure shows
shareholders the total recurring annual running expenses (including
investment management fees charged to capital reserve) as a percentage
of the average net assets attributable to shareholders. The Directors
expect the ongoing charges ratio for the year ahead to be 2.75 per cent.
(capped at 2.75 per cent.).
The reduction in Management fees payable to Albion Ventures LLP in the
year amounted to GBP94,000 (2015: GBP76,000).
Gearing
As defined by the Articles of Association, the Company's maximum
exposure in relation to gearing is restricted to 10 per cent. of the
adjusted share capital and reserves. The Directors do not currently have
any intention to utilise long term gearing and have not done so in the
past.
Operational arrangements
The Company has delegated the investment management of the portfolio to
Albion Ventures LLP, which is authorised and regulated by the Financial
Conduct Authority. Albion Ventures LLP also provides company secretarial
and other accounting and administrative support to the Company.
Management agreement
Under the Management agreement, the Manager provides investment
management, secretarial and administrative services to the Company. The
Management agreement can be terminated by either party on 12 months'
notice and is subject to earlier termination in the event of certain
breaches or on the insolvency of either party. The Manager is paid an
annual fee equal to 2.5 per cent. of the net asset value of the Company,
payable quarterly in arrears. The total annual running costs of the
Company, including fees payable to Albion, Directors' fees, professional
fees and the costs incurred by the Company in the ordinary course of
business (but excluding any exceptional items and performance fees
payable to Albion) are capped at an amount equal to 2.75 per cent. of
the Company's net assets, with any excess being met by Albion by way of
a reduction in management fees.
The Manager is also entitled to an arrangement fee, payable by each
portfolio company, of approximately 2 per cent. of each investment made
and monitoring fees where the Investment Manager has a representative on
the portfolio company's board. Further details of the Manager's fee can
be found in note 5.
Management performance incentive
In order to provide the Manager with an incentive to maximise the return
to investors, the Manager is entitled to charge an incentive fee in the
event that the returns exceed minimum target levels per share.
Under the incentive arrangement, if the net asset value per share at the
end of a financial period, when added to the aggregate dividends per
share (both revenue and capital) paid to that date, exceeds GBP1 as
increased at the rate of RPI plus 2 per cent. per annum uncompounded
from the date of first admission to the Official List of the relevant
class of share, then the Manager will be entitled to an incentive fee
equal to 15 per cent. of such excess. In the event that the performance
of the Company falls short of the target in any period, such shortfall
must be made up in future periods before the Manager is entitled to any
incentive in respect of such future periods.
The fee if applicable, will be payable annually. No performance fee has
arisen during the year (2015: GBPnil). The performance threshold at 31
December 2016 was 188.1 pence for the Ordinary shares, 160.1 pence for
the former C shares and 166.1 pence for the former Income & Growth
shares which compare to total returns of 162.6 pence, 90.5 pence and
94.3 pence respectively, based on the latest NAV.
Investment and co-investment
The Company co-invests with other Albion Ventures LLP managed venture
capital trusts and funds. Allocation of investments is on the basis of
an allocation agreement which is based, inter alia, on the ratio of
funds available for investment.
In the event that the proposed changes to investment policy are approved
by shareholders at the Annual General Meeting, the Manager will be able
to invest in non-qualifying assets, including an equity fund managed by
OLIM Limited, part of the Manager's group. There will be no double
charging of fees on any such investments made.
Evaluation of the Manager
The Board has evaluated the performance of the Manager based on the
returns generated by the Company, the continuing achievement of the 70
per cent. investment requirement for venture capital trust status, the
long term prospects of the current portfolio of investments, a review of
the Management agreement and the services provided therein, and
benchmarking the performance of the Manager to other service providers
including the performance of other VCTs that the Manager is responsible
for managing. The Board believes that it is in the interests of
shareholders as a whole, and of the Company, to continue the appointment
of the Manager for the forthcoming year.
Alternative Investment Fund Managers Directive ("AIFMD")
The Board appointed Albion Ventures LLP as the Company's AIFM in June
2014 as required by the AIFMD.
Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of the Companies
Act 2006 (the "Act") to detail information about social and community
issues, employees and human rights; including any policies it has in
relation to these matters and effectiveness of these policies. As an
externally managed investment company with no employees, the Company has
no policies in these matters and as such these requirements do not
apply.
Further policies
The Company has adopted a number of further policies relating to:
-- Environment
-- Global greenhouse gas emissions
-- Anti-bribery
-- Diversity
and these are set out in the Directors' report on pages 23 and 24 of the
full Annual Report and Financial Statements.
Risk management
The Board carries out a regular review of the risk environment in which
the Company operates. The principal risks and uncertainties of the
Company as identified by the Board and how they are managed are as
follows:
Risk Possible consequence Risk management
Investment The risk of investment in poor quality assets, which To reduce this risk, the Board places reliance upon
and could reduce the capital and income returns to shareholders, the skills and expertise of the Manager and its track
performance and could negatively impact on the Company's current record over many years of making successful investments
risk and future valuations. in this segment of the market. In addition, the Manager
By nature, smaller unquoted businesses, such as those operates a formal and structured investment appraisal
that qualify for venture capital trust purposes, are and review process, which includes an Investment Committee,
more fragile than larger, long established businesses. comprising investment professionals from the Manager
and at least one external investment professional.
The Manager also invites and takes account of comments
from non-executive Directors of the Company on investments
discussed at the Investment Committee meetings. Investments
are actively and regularly monitored by the Manager
(investment managers normally sit on portfolio company
boards), including the level of diversification in
the portfolio, and the Board receives detailed reports
on each investment as part of the Manager's report
at quarterly board meetings.
VCT The Company must comply with section 274 of the Income To reduce this risk, the Board has appointed the Manager,
approval Tax Act 2007 which enables its investors to take advantage which has a team with significant experience in venture
risk of tax relief on their investment and on future returns. capital trust management, used to operating within
Breach of any of the rules enabling the Company to the requirements of the venture capital trust legislation.
hold VCT status could result in the loss of that status. In addition, to provide further formal reassurance,
the Board has appointed Philip Hare & Associates LLP
as its taxation adviser, who report quarterly to the
Board to independently confirm compliance with the
venture capital trust legislation, to highlight areas
of risk and to inform on changes in legislation. Each
investment in a new portfolio company is also pre-cleared
with H.M. Revenue & Customs.
Regulatory The Company is listed on The London Stock Exchange Board members and the Manager have experience of operating
and and is required to comply with the rules of the UK at senior levels within or advising quoted companies.
compliance Listing Authority, as well as with the Companies Act, In addition, the Board and the Manager receive regular
risk Accounting Standards and other legislation. Failure updates on new regulation from its auditor, lawyers
to comply with these regulations could result in a and other professional bodies. The Company is subject
delisting of the Company's shares, or other penalties to compliance checks through the Manager's Compliance
under the Companies Act or from financial reporting Officer. The Manager reports monthly to its Board
oversight bodies. on any issues arising from compliance or regulation.
These controls are also reviewed as part of the quarterly
Board meetings, and also as part of the review work
undertaken by the Manager's Compliance Officer. The
report on controls is also evaluated by the internal
auditors.
Operational The Company relies on a number of third parties, in The Company and its operations are subject to a series
and particular the Manager, for the provision of investment of rigorous internal controls and review procedures
internal management and administrative functions. Failures exercised throughout the year.
control in key systems and controls within the Manager's business The Audit Committee reviews the Internal Audit Reports
risk could put assets of the Company at risk or result prepared by the Manager's internal auditors, PKF Littlejohn
in reduced or inaccurate information being passed LLP. On an annual basis, the Audit Committee chairman
to the Board or to shareholders. meets with the internal audit Partner to provide an
opportunity to ask specific detailed questions in
order to satisfy itself that the Manager has strong
systems and controls in place including those in relation
to business continuity.
In addition, the Board regularly reviews the performance
of its key service providers, particularly the Manager,
to ensure they continue to have the necessary expertise
and resources to deliver the Company's investment
objective and policies. The Manager and other service
providers have also demonstrated to the Board that
there is no undue reliance placed upon any one individual
within Albion Ventures LLP.
Economic Changes in economic conditions, including, for example, The Company invests in a diversified portfolio of
and interest rates, rates of inflation, industry conditions, companies across a number of industry sectors and
political competition, political and diplomatic events and other in addition often invests a mixture of equity and
risk factors could substantially and adversely affect the secured loan stock in portfolio companies and has
Company's prospects in a number of ways. a policy of not normally permitting any external bank
borrowings within portfolio companies.
At any given time, the Company has sufficient cash
resources to meet its operating requirements, including
share buy back and follow on investments.
Market The market value of Ordinary shares can fluctuate. The Company operates a share buyback policy, which
value of The market value of an Ordinary share, as well as is designed to limit the discount at which the Ordinary
Ordinary being affected by its net asset value and prospective shares trade to around 5 per cent to net asset value,
shares net asset value, also takes into account its dividend by providing a purchaser through the Company in absence
yield and prevailing interest rates. As such, the of market purchasers. From time to time buyback cannot
market value of an Ordinary share may vary considerably be applied, for example when the Company is subject
from its underlying net asset value. The market prices to a close period, or if it were to exhaust its buyback
of shares in quoted investment companies can, therefore, authorities, which are renewed each year.
be at a discount or premium to the net asset value New Ordinary shares are issued at sufficient premium
at different times, depending on supply and demand, to net asset value to cover the costs of issue and
market conditions, general investor sentiment and to avoid asset value dilution to existing investors.
other factors. Accordingly the market price of the
Ordinary shares may not fully reflect their underlying
net asset value.
Viability statement
In accordance with the FRC UK Corporate Governance Code published in
September 2014 and principle 21 of the AIC Code of Corporate Governance,
the Directors have assessed the prospects of the Company over three
years to 31 December 2019. The Directors believe that three years is a
reasonable period in which they can assess the future of the Company to
continue to operate and meet its liabilities as they fall due and is
also the period used by the Board in the strategic planning process and
is considered reasonable for a business of our nature and size. The
three year period is considered the most appropriate given the forecasts
that the Board require from the Manager and the estimated timelines for
finding, assessing and completing investments.
The Directors have carried out a robust assessment of the principal
risks facing the Company as explained above, including those that could
threaten its business model, future performance, solvency or liquidity.
The Board also considered the risk management processes in place to
avoid or reduce the impact of the underlying risks. The Board focused on
the major factors which affect the economic, regulatory and political
environment. The Board deliberated over the importance of the Manager
and the processes that they have in place for dealing with the principal
risks.
The Board assessed the ability of the Company to raise finance and
deploy capital. As explained in the Chairman's statement above and in
this Strategic report the repositioning of the portfolio will help
secure the long term future for the Company. The portfolio is well
balanced after the process of reducing the proportion of the portfolios
holdings in investments made prior to the crash in 2008 and geared
towards long term growth delivering dividends and capital growth to
shareholders. In assessing the prospects of the Company, the Directors
have considered the cash flow by looking at the Company's income and
expenditure projections and funding pipeline over the assessment period
of three years and they appear realistic.
Taking into account the processes for mitigating risks, monitoring costs,
share price discount, the Manager's compliance with the investment
objective, policies and business model and the balance of the portfolio
the Directors have concluded that there is a reasonable expectation that
the Company will be able to continue in operation and meet its
liabilities as they fall due over the three year period to 31 December
2019.
This Strategic report of the Company for the year ended 31 December 2016
has been prepared in accordance with the requirements of section 414A of
the Act. The purpose of this report is to provide Shareholders with
sufficient information to enable them to assess the extent to which the
Directors have performed their duty to promote the success of the
Company in accordance with section 172 of the Act.
On behalf of the Board,
Dr. N E Cross
Chairman
23 March 2017
Responsibility Statement
In preparing these financial statements for the year to 31 December
2016, the Directors of the Company, being Dr Neil Cross, Robin Archibald,
Mary Anne Cordeiro, Modwenna Rees-Mogg and Patrick Reeve, confirm that
to the best of their knowledge:
- summary financial information contained in this announcement and the
full Annual Report and Financial Statements for the year ended 31
December 2016 for the Company has been prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (UK Accounting
Standards and applicable law) and give a true and fair view of the
assets, liabilities, financial position and profit and loss of the
Company for the year ended 31 December 2016 as required by DTR 4.1.12R;
-the Chairman's statement and Strategic report include a fair review of
the information required by DTR 4.2.7R (indication of important events
during the year ended 31 December 2016 and description of principal
risks and uncertainties that the Company faces); and
-the Chairman's statement and Strategic report include a fair review of
the information required by DTR 4.2.8R (disclosure of related parties
transactions and changes therein).
A detailed "Statement of Directors' responsibilities" is contained on
page 27 within the full audited Annual Report and Financial Statements.
By order of the Board
Dr N E Cross
Chairman
23 March 2017
Income statement
Year ended 31 December Year ended 31 December
2016 2015
Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on investments 3 - 2,419 2,419 - (3,684) (3,684)
Investment income 4 1,570 - 1,570 2,165 - 2,165
Investment management fees 5 (369) (1,108) (1,477) (386) (1,157) (1,543)
Other expenses 6 (284) - (284) (239) - (239)
Profit/(loss) on ordinary activities before tax 917 1,311 2,228 1,540 (4,841) (3,301)
Tax (charge)/credit on ordinary activities 8 (166) 167 1 (267) 235 (32)
Profit/(loss) and total comprehensive income attributable
to shareholders 751 1,478 2,229 1,273 (4,606) (3,333)
Basic and diluted return/(loss) per share (pence)* 10 0.8 1.7 2.5 1.6 (5.6) (4.0)
* excluding treasury shares
The accompanying notes form an integral part of these Financial
Statements.
The total column of this 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.
Balance sheet
31 December 2016 31 December 2015
Note GBP'000 GBP'000
Fixed asset investments 11 57,021 52,711
Current assets
Trade and other receivables less
than one year 13 1,096 1,982
Cash and cash equivalents 6,752 7,509
7,848 9,491
Total assets 64,869 62,202
Creditors: amounts falling due
within one year
Trade and other payables less than
one year 14 (443) (411)
Total assets less current
liabilities 64,426 61,791
Equity attributable to equity
holders
Called up share capital 15 1,007 919
Share premium 46,585 40,171
Capital redemption reserve 28 28
Unrealised capital reserve 4,625 (424)
Realised capital reserve 9,658 13,229
Other distributable reserve 2,523 7,868
Total equity shareholders' funds 64,426 61,791
Basic and diluted net asset value
per share (pence)* 16 71.6 73.9
* excluding treasury shares
The accompanying notes form an integral part of these Financial
Statements.
These Financial Statements were approved by the Board of Directors, and
were authorised for issue on 23 March 2017 and were signed on its behalf
by
Dr. N E Cross
Chairman
Company number: 04114310
Statement of changes in equity
Capital Unrealised Realised Other
Called up share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January 2016 919 40,171 28 (424) 13,229 7,868 61,791
Return/(loss) and total comprehensive income for the
year - - - 1,937 (459) 751 2,229
Transfer of previously unrealised losses on disposal
of investments - - - 3,112 (3,112) - -
Purchase of shares for treasury - - - - - (1,638) (1,638)
Issue of equity 88 6,574 - - - - 6,662
Cost of issue of equity - (160) - - - - (160)
Dividends paid - - - - - (4,458) (4,458)
As at 31 December 2016 1,007 46,585 28 4,625 9,658 2,523 64,426
As at 1 January 2015 840 33,917 28 (632) 11,515 19,218 64,886
(Loss)/return and total comprehensive income for the
year - - - (1,632) (2,974) 1,273 (3,333)
Transfer of previously unrealised losses on disposal
of investments - - - 1,840 (1,840) - -
Purchase of shares for treasury - - - - - (1,973) (1,973)
Issue of equity 79 6,429 - - - - 6,508
Cost of issue of equity - (175) - - - - (175)
Transfer from other distributable reserve to realised
capital reserve - - - - 6,528 (6,528) -
Dividends paid - - - - - (4,122) (4,122)
As at 31 December 2015 919 40,171 28 (424) 13,229 7,868 61,791
* These reserves amount to GBP12,181,000 (2015: GBP20,673,000) which is
considered distributable.
Statement of cash flows
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Cash flow from operating activities
Loan stock income received 1,185 1,949
Dividend income received 76 85
Deposit interest received 80 35
Investment management fees paid (1,413) (1,742)
Other cash payments (281) (261)
Corporation tax paid (32) -
Net cash flow from operating activities (385) 66
Cash flow from investing activities
Purchase of fixed asset investments (3,821) (7,622)
Disposal of fixed asset investments 3,044 13,381
Net cash flow from investing activities (777) 5,759
Cash flow from financing activities
Issue of ordinary share capital 5,869 5,832
Cost of issue of equity (8) (11)
Dividends paid (3,818) (3,613)
Purchase of own shares (including costs) (1,638) (1,973)
Net cash flow from financing activities 405 235
(Decrease)/increase in cash and cash
equivalents (757) 6,060
Cash and cash equivalents at start of
period 7,509 1,449
Cash and cash equivalents at end of
period 6,752 7,509
Cash and cash equivalents comprise
Cash at bank and in hand 6,752 7,509
Cash equivalents - -
Total cash and cash equivalents 6,752 7,509
Notes to the Financial Statements
1. Basis of preparation
The 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"), 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 in note 2 below.
Company information can be found on page 2 of the full Annual Report and
Financial Statements.
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,
including loan stock, 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 is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised
when the Company's right to receive payment and expect settlement is
established. Where interest is rolled up and/or payable at redemption
then it is recognised as income unless there is reasonable doubt as to
its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate of
interest agreed with the bank.
Investment management fees and expenses
All expenses have been accounted for on an accruals basis. Expenses are
charged through the other distributable reserve except the following
which are charged through the realised capital reserve:
-- 75 per cent. of management fees are allocated to the 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 shares, less issue costs.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own
shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year
end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments;
-- 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 movements from the revenue column of the
Income statement, the payment of dividends, the buy-back of shares and
other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the
dividend is paid or approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
operating segment of business, being investment in equity and debt. The
Company invests in smaller companies principally based in the UK.
3. Gains/(losses) on investments
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Unrealised gains/(losses) on fixed asset
investments 1,937 (1,632)
Realised gains/(losses) on fixed asset
investments 482 (2,052)
2,419 (3,684)
4. Investment income
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Income recognised on investments
Loan stock interest and other fixed
returns 1,417 2,042
UK dividend income 76 85
Bank deposit interest 77 38
1,570 2,165
Interest income earned on impaired investments at 31 December 2016
amounted to GBP154,000 (2015: GBP215,000).
5. Investment management fees
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Investment management fee charged to
revenue 369 386
Investment management fee charged to
capital 1,108 1,157
1,477 1,543
Further details of the Management agreement under which the investment
management fee is paid are given in the Strategic report.
During the year, services of a total value of GBP1,477,000 (2015:
GBP1,543,000) were purchased by the Company from Albion Ventures LLP in
respect of management fees. At the financial year end, the amount due to
Albion Ventures LLP in respect of these services disclosed as accruals
was GBP373,000 (2015: GBP310,000).
During the year, the Company was not charged by Albion Ventures LLP in
respect of Patrick Reeve's services as a Director (2015: GBPnil).
Albion Ventures LLP, the Manager, holds 22,795 Ordinary shares in the
Company.
Albion Ventures LLP is, from time to time, eligible to receive
transaction fees and Directors' fees from portfolio companies. During
the year ended 31 December 2016, fees of GBP197,000 attributable to the
investments of the Company were received by Albion Ventures LLP pursuant
to these arrangements (2015: GBP273,000).
6. Other expenses
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Directors' fees (including NIC) 97 81
Other administrative expenses 144 117
Tax services 17 15
Auditor's remuneration for statutory audit services
(excluding VAT) 26 26
284 239
7. Directors' fees
The amounts paid to and on behalf of the Directors during the year are
as follows:
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Directors' fees 90 76
National insurance 7 5
97 81
The Company's key management personnel are the Directors. Further
information regarding Directors' remuneration can be found in the
Directors' remuneration report on pages 33 to 35 of the full Annual
Report and Financial Statements.
8. Tax on ordinary activities
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
UK corporation tax charge in respect of current year - 32
UK corporation tax credit in respect of prior years (1) -
(1) 32
Factors affecting the tax charge:
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Return/(loss) on ordinary activities before taxation 2,228 (3,301)
Tax charge/(credit) on profit at the companies rate
of 20 per cent. 446 (660)
Factors affecting the charge:
Non-taxable (gains)/losses (484) 737
Income not taxable (15) (17)
Excess management expenses carried forward/(utilised) 53 (28)
Adjustment in respect of prior years (1) -
(1) 32
The tax charge for the year shown in the Income statement is lower than
the companies rate of corporation tax in the UK of 20 per cent. (2015:
20 per cent.). The differences are explained above.
Consortium relief is recognised in the accounts in the period in which
the claim is submitted to HMRC and is shown as tax in respect of prior
year.
Notes
(i) Venture Capital Trusts are not subject to corporation tax on
capital gains.
(ii) Tax relief on expenses charged to capital has been
determined by allocating tax relief to expenses by reference to the
applicable corporation tax rate and allocating the relief between
revenue and capital in accordance with the SORP.
(iii) The Company has excess management expenses of GBP267,000
(2015: GBPnil) that are available for offset against future profits. A
deferred tax asset of GBP53,000 (2015: GBPnil) has not been recognised
in respect of these losses as they will be recoverable only to the
extent that the Company has sufficient future taxable profits.
9. Dividends
Year ended Year ended
31 December 2016 31 December 2015
GBP'000 GBP'000
Dividend of 1.25p per share paid on 9
February 2015 - 979
Dividend of 1.25p per share paid on 30
April 2015 - 1,050
Dividend of 1.25p per share paid on 30
June 2015 - 1,035
Dividend of 1.25p per share paid on 30
October 2015 - 1,058
Dividend of 1.25p per share paid on 29
January 2016 1,045 -
Dividend of 1.25p per share paid on 29
April 2016 1,146 -
Dividend of 1.25p per share paid on 30
June 2016 1,135 -
Dividend of 1.25p per share paid on 31
October 2016 1,132 -
4,458 4,122
In addition to the dividends summarised above, the Board declared a
first dividend for the year ending 31 December 2017 of 1 penny per
share. This dividend was paid on 31 January 2017 to shareholders on the
register on 13 January 2017. The total dividend was GBP900,000. The
Board has declared a second dividend for the year ending 31 December
2017 of 1 penny per share. The dividend will be paid on 30 June 2017 to
shareholders on the register on 2 June 2017. The total dividend will be
approximately GBP955,000.
10. Basic and diluted return/(loss) per share
Year ended 31 December
Year ended 31 December 2016 2015
Revenue Capital Total Revenue Capital Total
Profit/(loss) attributable to equity shares (GBP'000) 751 1,478 2,229 1,273 (4,606) (3,333)
Weighted average shares in issue (excluding treasury
shares) 89,594,274 82,538,109
Return/(loss) attributable per equity share (pence) 0.8 1.7 2.5 1.6 (5.6) (4.0)
The weighted average number of shares is calculated excluding treasury
shares of 10,705,070 (2015: 8,282,070).
There are no convertible instruments, derivatives or contingent share
agreements in issue, and therefore no dilution affecting the
return/(loss) per share. The basic return/(loss) per share is therefore
the same as the diluted return/(loss) per share.
11. Fixed asset investments
31 December 2016 31 December 2015
GBP'000 GBP'000
Investments held at fair value through
profit or loss
Unquoted equity and preference shares 23,887 20,014
Quoted equity 1,850 2,394
Unquoted loan stock 31,284 30,303
57,021 52,711
31 December 2016 31 December 2015
GBP'000 GBP'000
Opening valuation 52,711 63,520
Purchases at cost 3,821 7,765
Disposal proceeds (2,164) (14,983)
Realised gains/(losses) 482 (2,052)
Movement in loan stock accrued income 234 93
Unrealised gains/(losses) 1,937 (1,632)
Closing valuation 57,021 52,711
Movement in loan stock accrued income
Opening accumulated movement in loan stock accrued
income 187 94
Movement in loan stock accrued income 234 93
Closing accumulated movement in loan stock accrued
income 421 187
Movement in unrealised gains/(losses)
Opening accumulated unrealised losses (472) (680)
Transfer of previously unrealised losses to realised
reserve on disposal of investments 3,112 1,840
Movement in unrealised gains/(losses) 1,937 (1,632)
Closing accumulated unrealised gains/(losses) 4,577 (472)
Historic cost basis
Opening book cost 52,996 64,106
Purchases at cost 3,821 7,765
Sales at cost (4,795) (18,875)
Closing book cost 52,023 52,996
Purchases and disposals detailed above do not agree to the Statement of
cash flows due to restructuring of investments, conversion of
convertible loan stock and settlement debtors and creditors.
The Company does not hold any assets as the result of the enforcement of
security during the period, and believes that the carrying values for
both impaired and past due assets are covered by the value of security
held for these loan stock investments.
Unquoted fixed asset investments are valued at fair value in accordance
with the IPEVCV guidelines as follows:
31 December 2016 31 December 2015
Valuation methodology GBP'000 GBP'000
Valuation supported by third party or desktop
valuation 30,251 25,557
Cost and price of recent investment (reviewed for
impairment or uplift) 8,238 6,189
Revenue multiple 7,192 12,391
Earnings multiple 4,282 4,593
Offer price 5,208 1,587
55,171 50,317
Fair value investments had the following movements between valuation
methodologies between 31 December 2015 and 31 December 2016:
Change in valuation Value as at Explanatory note
methodology (2015 to 2016) 31 December 2016
GBP'000
Revenue multiple to offer 5,208 Third party offer received
price
Revenue multiple to price of 888 Recent external funding round
recent investment
Cost to valuation supported 495 Third party valuation has
by third party valuation recently taken place
Cost to revenue multiple 82 More recent information
available
The valuation will be the most appropriate valuation methodology for an
investment within its market, with regard to the financial health of the
investment and the IPEVCV Guidelines. The Directors believe that, within
these parameters, there are no other possible methods of valuation which
would be reasonable as at 31 December 2016.
FRS 102 and the SORP requires the Company to disclose the inputs to the
valuation methods applied to its investments measured at fair value
through profit or loss in a fair value hierarchy. The table below sets
out fair value hierarchy definitions using FRS102 s.11.27, which has
been adopted early.
Fair value hierarchy Definition
Level 1 Unadjusted quoted prices in an active market
Level 2 Inputs to valuations are from observable sources and
are directly or indirectly derived from prices
Level 3 Inputs to valuations not based on observable market
data
Quoted investments are valued according to Level 1 valuation methods.
Unquoted equity, preference shares and loan stock are all valued
according to Level 3 valuation methods.
Investments held at fair value through profit or loss (Level 3) had the
following movements in the year to 31 December 2016:
31 December 2016 31 December 2015
Unquoted Unquoted
Equity loan stock Total Equity loan stock Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 20,014 30,303 50,317 26,086 34,994 61,080
Additions 2,081 1,740 3,821 1,211 6,176 7,387
Disposals (1,473) (691) (2,164) (6,557) (8,344) (14,901)
Accrued loan
stock
interest - 234 234 - 93 93
Realised
gains/(losses) 531 (49) 482 (1,391) (742) (2,133)
Debt/equity
swap and
restructurings 1,500 (1,500) - 434 (434) -
Unrealised
gains 1,234 1,247 2,481 231 (1,440) (1,209)
Closing balance 23,887 31,284 55,171 20,014 30,303 50,317
FRS 102 requires the Directors to consider the impact of changing one or
more of the inputs used as part of the valuation process to reasonable
possible alternative assumptions. 64 per cent. of the portfolio of
investments is based on cost, recent investment price, agreed offer
price or is loan stock, and as such the Board considers that the
assumptions used for their valuations are the most reasonable. The
Directors believe that changes to reasonable possible alternative
assumptions (by adjusting the revenue and earnings multiples) for the
valuations of the remainder of the portfolio companies could result in
an increase in the valuation of investments by GBP1,996,000 or a
decrease in the valuation of investments by GBP1,943,000. For valuations
based on earnings and revenue multiples, the Board considers that the
most significant input is the price/earnings ratio; for valuations based
on third party valuations, the Board considers that the most significant
inputs are price/earnings ratio, discount factors and market values for
buildings; which have been adjusted to drive the above sensitivities.
12. Significant interests
The principal activity of the Company is to select and hold a portfolio
of investments. Although the Company, through the Manager, will, in some
cases, be represented on the Board of the portfolio company, it will not
take a controlling interest or become involved in the management. The
size and structure of the companies with unquoted securities may result
in certain holdings in the portfolio representing a participating
interest without there being any partnership, joint venture or
management consortium agreement. The investments listed below are held
as part of an investment portfolio and therefore, as permitted by FRS
102 section 9.9B, they are measured at FVTPL and not accounted for using
the equity method.
The Company has interests of greater than 20 per cent. of the nominal
value of any class of the allotted shares in the portfolio companies as
at 31 December 2016 as described below:
(Loss)/ % total
Country of profit before tax Net (liabilities)/ % class and voting
Company incorporation GBP'000 assets GBP'000 Result for year ended share type rights
Albion
Investment
Properties 31.8% A
Limited Great Britain n/a* (988) 31 December 2015 Ordinary 31.8%
AMS Sciences
Limited Great Britain n/a* 845 30 June 2015 41.7% Ordinary 41.7%
Blackbay 67.1% A
Limited Great Britain (820) (4,945) 31 December 2015 Ordinary 23.5%
Bravo Inns
Limited Great Britain n/a* (211) 31 March 2016 28.8% Ordinary 28.8%
Mi-Pay Group
PLC Great Britain (1,436) 1,077 31 December 2015 21.6% Ordinary 21.6%
memsstar 67.3% A
Limited Great Britain (282) 2,128 31 December 2015 Ordinary 30.1%
Premier
Leisure
(Suffolk)
Limited Great Britain n/a* 833 30 June 2015 25.8% Ordinary 25.8%
The
Charnwood
Pub Company
Limited Great Britain n/a* (3,774) 31 March 2016 22.5% Ordinary 22.5%
The Q Garden
Company 33.4% A
Limited Great Britain n/a* (6,255) 31 January 2016 Ordinary 33.4%
The
Weybridge
Club
Limited Great Britain (1,775) (7,867) 30 September 2015 25.2% Ordinary 25.2%
*The Company files abbreviated accounts which does not disclose this
information.
13. Current assets
Trade and other receivables less than one
year 31 December 2016 31 December 2015
GBP'000 GBP'000
Prepayments and accrued income 20 22
Other debtors 60 123
UK corporation tax receivable 1 -
Deferred consideration 1,015 1,837
1,096 1,982
The Directors consider that the carrying amount of debtors is not
materially different to their fair value.
14. Creditors: amounts falling due within one year
31 December 2016 31 December 2015
GBP'000 GBP'000
Trade creditors 8 19
Accruals and deferred income 435 360
UK corporation tax payable - 32
443 411
The Directors consider that the carrying amount of creditors is not
materially different to their fair value.
15. Called up share capital
Allotted, called up and fully paid GBP'000
91,872,004 Ordinary shares of 1 penny each at 31 December
2015 919
8,799,230 Ordinary shares of 1 penny each issued during
the year 88
100,671,234 Ordinary shares of 1 penny each at 31
December 2016 1,007
8,282,070 Ordinary shares of 1 penny each held in
treasury at 31 December 2015 (83)
2,423,000 Ordinary shares purchased during the year
to be held in treasury (24)
10,705,070 Ordinary shares of 1 penny each held in
treasury at 31 December 2016 (107)
89,966,164 Ordinary shares of 1 penny each in circulation*
at 31 December 2016 900
* Carrying one vote each
The Company purchased 2,423,000 Ordinary shares (2015: 2,617,000) to be
held in treasury at a cost of GBP1,638,000 including stamp duty (2015:
GBP1,973,000) during the period to 31 December 2016. Total share buy
backs in 2016 represents 2.4 per cent. (2015: 2.8 per cent.) of
called-up share capital.
Under the terms of the dividend reinvestment scheme, the following new
Ordinary shares of nominal value 1 penny each were allotted during the
year:
Number Aggregate nominal
of value Issue price Net
shares of shares (pence per invested Opening market price on allotment date
Date of allotment allotted (GBP'000) share) (GBP'000) (pence per share)
29 January 2016 186,693 2 75.86 140 73.25
29 April 2016 232,412 2 71.42 164 71.00
30 June 2016 238,967 2 69.58 165 67.00
31 October 2016 244,254 2 67.97 164 65.50
902,326 633
During the period to 31 December 2016, the Company issued the following
new Ordinary shares of nominal value 1 penny each under the Albion VCTs
Prospectus Top Up Offers 2015/2016:
Aggregate nominal
Number of value
shares of shares Issue price Net consideration received Opening market price on allotment date
Date of allotment allotted (GBP'000) (pence per share) (GBP'000) (pence per share)
29 January 2016 2,651,878 27 77.50 2,014 73.25
29 January 2016 1,207,352 12 77.90 917 73.25
31 March 2016 3,793,157 38 75.00 2,760 73.00
6 April 2016 184,763 2 74.20 134 73.00
6 April 2016 9,604 - 74.60 7 73.00
6 April 2016 50,150 - 75.00 37 73.00
7,896,904 79 5,869
16. Basic and diluted net asset value per share
31 December 2016 31 December 2015
(pence per share) (pence per share)
Basic and diluted net asset value per
Ordinary share 71.6 73.9
The basic and diluted net asset values per share at the year end are
calculated in accordance with the Articles of Association and are based
upon total shares in issue (less treasury shares) of 89,966,164 Ordinary
shares at 31 December 2016 (2015: 83,589,934 Ordinary shares).
17. Capital and financial instruments risk management
The Company's capital comprises Ordinary shares as described in note 15.
The Company is permitted to buy back its own shares for cancellation or
treasury purposes and this is described in more detail in the Chairman's
statement.
The Company's financial instruments comprise equity and loan stock
investments in quoted and unquoted companies, cash balances and debtors
and creditors which arise from its operations. The main purpose of these
financial instruments is to generate cash flow and revenue and capital
appreciation for the Company's operations. The Company has no gearing or
other financial liabilities apart from short term creditors. The Company
does not use any derivatives for the management of its Balance sheet.
The principal financial risks arising from the Company's operations are:
-- Investment (or market) risk (which comprises investment price and cash
flow interest rate risk);
-- credit risk; and
-- liquidity risk.
The Board regularly reviews and agrees policies for managing each of
these risks. There have been no changes in the nature of the risks that
the Company has faced during the past year, and apart from where noted
below, there have been no changes in the objectives, policies or
processes for managing risks during the past year. The key risks are
summarised below.
Investment risk
As a venture capital trust, it is the Company's specific nature to
evaluate and control the investment risk of its portfolio in quoted and
unquoted investments, details of which are shown on pages 17 to 19 of
the full Annual Report and Financial Statements. Investment risk is the
exposure of the Company to the revaluation and devaluation of
investments. The main driver of investment risk is the operational and
financial performance of the portfolio company and the dynamics of
market quoted comparators. The Manager receives management accounts from
portfolio companies, and members of the investment management team often
sit on the boards of unquoted portfolio companies; this enables the
close identification, monitoring and management of investment risk.
The Manager and the Board formally review investment risk (which
includes market price risk), both at the time of initial investment and
at quarterly Board meetings.
The Board monitors the prices at which sales of investments are made to
ensure that profits to the Company are maximised, and that valuations of
investments retained within the portfolio appear sufficiently prudent
and realistic compared to prices being achieved in the market for sales
of quoted and unquoted investments.
The maximum investment risk as at the Balance sheet date is the value of
the fixed asset investment portfolio which is GBP57,021,000 (2015:
GBP52,711,000). Fixed asset investments form 89 per cent. of the net
asset value as at 31 December 2016 (2015: 85 per cent.).
More details regarding the classification of fixed asset investments are
shown in notes 11 and 13.
Investment price risk
Investment price risk is the risk that the fair value of future
investment cash flows will fluctuate due to factors specific to an
investment instrument or to a market in similar instruments. To mitigate
the investment price risk for the Company as a whole, the strategy of
the Company is to invest in a broad spread of industries with up to
two-thirds of the unquoted investments comprising debt securities, which,
owing to the structure of their yield and the fact that they are usually
secured, have a lower level of price volatility than equity. Details of
the industries in which investments have been made are contained in the
Portfolio of investments section on pages 17 to 19 of the full Annual
Report and Financial Statement and in the Strategic report.
Valuations are based on the most appropriate valuation methodology for
an investment within its market, with regard to the financial health of
the investment and the IPEVCV Guidelines.
As required under FRS 102 section 34.29, the Board is required to
illustrate by way of a sensitivity analysis the degree of exposure to
market risk. The Board considers that the value of the fixed asset
investment portfolio is sensitive to a 10 per cent. change based on the
current economic climate. The impact of a 10 per cent. change has been
selected as this is considered reasonable given the current level of
volatility observed both on a historical basis and future expectations.
The sensitivity of a 10 per cent. increase or decrease in the valuation
of the fixed asset investments (keeping all other variables constant)
would increase or decrease the net asset value and return for the year
by GBP5,702,000 (2015: GBP5,271,000).
Interest rate risk
The Company is exposed to fixed and floating rate interest rate risk on
its financial assets. On the basis of the Company's analysis, it is
estimated that a rise of one percentage point in all interest rates
would have increased total return before tax for the year by
approximately GBP77,000 (2015: GBP25,000). Furthermore, it is
considered that a fall of interest rates below current levels during the
year would have been very unlikely.
The weighted average effective interest rate applied to the Company's
unquoted loan stock during the year was approximately 4.7 per cent.
(2015: 5.4 per cent.). The weighted average period to maturity for the
unquoted loan stock is approximately 3.1 years (2015: 3.4 years).
The Company's financial assets and liabilities as at 31 December 2016,
all denominated in pounds sterling, consist of the following:
31 December 2016 31 December 2015
Floating rate Non-interest bearing Total Floating rate Non-interest bearing Total
Fixed rate GBP'000 GBP'000 GBP'000 GBP'000 Fixed rate GBP'000 GBP'000 GBP'000 GBP'000
Unquoted equity - - 23,887 23,887 - - 20,014 20,014
Quoted equity - - 1,850 1,850 - - 2,394 2,394
Unquoted loan
stock 28,440 - 2,844 31,284 26,283 - 4,020 30,303
Debtors* - - 1,076 1,076 - - 1,963 1,963
Current
liabilities* - - (443) (443) - - (379) (379)
Cash - 6,752 - 6,752 - 7,509 - 7,509
Total 28,440 6,752 29,214 64,406 26,283 7,509 28,012 61,804
*The debtors and current liabilities do not reconcile to the Balance
sheet as prepayments and tax refundable/(payable) are not included in
the above table.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has entered
into with the Company. The Company is exposed to credit risk through its
debtors, investment in unquoted loan stock, and through the holding of
cash on deposit with banks.
The Manager evaluates credit risk on loan stock prior to investment, and
as part of its ongoing monitoring of investments. In doing this, it
takes into account the extent and quality of any security held.
Typically loan stock instruments have a first fixed charge or a fixed
and floating charge over the assets of the portfolio company in order to
mitigate the gross credit risk. The Manager receives management accounts
from portfolio companies, and members of the investment management team
sit on the boards of unquoted portfolio companies; this enables the
close identification, monitoring and management of investment specific
credit risk.
The Manager and the Board formally review credit risk (including
debtors) and other risks, both at the time of initial investment and at
quarterly Board meetings.
The Company's total gross credit risk as at 31 December 2016 was limited
to GBP31,284,000 (2015: GBP30,303,000) of unquoted loan stock
instruments (all are secured on the assets of the portfolio company),
GBP6,752,000 (2015: GBP7,509,000) cash deposits with banks and
GBP1,076,000 (2015: GBP1,959,000) of other debtors.
As at the Balance sheet date, the cash held by the Company is held with
Lloyds Bank plc, Scottish Widows Bank plc (part of Lloyds Banking Group),
Barclays Bank plc and National Westminster Bank plc. Credit risk on cash
transactions is mitigated by transacting with counterparties that are
regulated entities subject to prudential supervision, with high credit
ratings assigned by international credit-rating agencies.
The Company has an informal policy of limiting counterparty banking and
floating rate note exposure to a maximum of 20 per cent. of net asset
value for any one counterparty.
The credit profile of unquoted loan stock is described under liquidity
risk below.
Liquidity risk
Liquid assets are held as cash on current account, on deposit, in bonds
or short term money market account. Under the terms of its Articles, the
Company has the ability to borrow up to 10 per cent. of its adjusted
capital and reserves of the latest published audited Balance sheet,
which amounts to GBP6,347,000 as at 31 December 2016 (2015:
GBP5,965,000).
The Company has no committed borrowing facilities as at 31 December 2016
(2015: GBPnil). The Company had cash balances of GBP6,752,000 (2015:
GBP7,509,000). The main cash outflows are for new investments, share
buy-backs and dividend payments, which are within the control of the
Company. The Manager formally reviews the cash requirements of the
Company on a monthly basis, and the Board on a quarterly basis as part
of its review of management accounts and forecasts. All the Company's
financial liabilities are short term in nature and total GBP443,000 as
at 31 December 2016 (2015: GBP411,000).
The carrying value of loan stock investments at 31 December 2016, as
analysed by expected maturity dates was as follows:
Fully performing Impaired Past due Total
Redemption date GBP'000 GBP'000 GBP'000 GBP'000
Less than one year 7,267 4,647 4,029 15,943
1-2 years 1,881 1,869 544 4,294
2-3 years 548 26 862 1,436
3-5 years 3,929 64 1,198 5,191
+5 years 3,085 413 922 4,420
Total 16,710 7,019 7,555 31,284
Loan stock can be past due as a result of interest or capital not being
paid in accordance with contractual terms.
The average annual interest yield on the total cost of past due loan
stock is 4.1 per cent. (2015: 3.0 per cent.).
Impaired loan stock has a cost of GBP9,300,000.
The carrying value of loan stock investments at 31 December 2015, as
analysed by expected maturity dates, was as follows:
Fully performing Impaired Past due Total
Redemption date GBP'000 GBP'000 GBP'000 GBP'000
Less than one year 9,420 4,846 144 14,410
1-2 years 1,906 1,769 - 3,675
2-3 years 793 - 1,037 1,830
3-5 years 5,413 103 1,049 6,565
+5 years 2,992 - 831 3,823
Total 20,524 6,718 3,061 30,303
In view of the factors identified above, the Board considers that the
Company is subject to low liquidity risk.
Fair values of financial assets and financial liabilities
All the Company's financial assets and liabilities as at 31 December
2016 are stated at fair value as determined by the Directors, with the
exception of debtors and creditors and cash which are carried at
amortised cost, in accordance with FRS 102. There are no financial
liabilities other than creditors. The Company's financial liabilities
are all non-interest bearing. It is the Directors' opinion that the book
value of the financial liabilities is not materially different to the
fair value and all are payable within one year.
18. Commitments and contingencies
The Company had no financial commitments in respect of investments at 31
December 2016.
19. Post balance sheet events
Since 31 December 2016 the Company has had the following post balance
sheet events:
-- Disposal of AMS Sciences Limited for GBP1,670,000 of which GBP297,000 is
deferred and held in escrow;
-- Disposal of Masters Pharmaceuticals Limited for GBP652,000;
-- Repayment of GBP153,000 from Radnor House School (Holdings) Limited;
-- Investment of GBP335,000 in Quantexa Limited;
-- Investment of GBP152,000 in Black Swan Data Limited;
-- Investment of GBP10,000 in Beddlestead Farm Limited.
On 29 November 2016 the Company announced the publication of a
prospectus in relation to an offer for subscription for new Ordinary
shares. A Securities Note, which forms part of the prospectus, has been
sent to shareholders.
The following new Ordinary shares of nominal value 1 penny each were
allotted under the Offers after 31 December 2016:
Aggregate
nominal Net Opening market
Number of value of Issue price consideration price on
Date of shares shares (pence per received allotment date
allotment allotted (GBP'000) share) (GBP'000) (pence per share)
31 January
2017 1,063,482 11 70.2 732 61.50
31 January
2017 377,120 4 70.6 260 61.50
31 January
2017 3,856,902 38 70.9 2,652 61.50
5,297,504 53 3,644
As a result of the strong demand for the Company's shares the Board was
able to announce on 22 February 2017 that subscription had reached its
GBP6 million limit under the prospectus offer and was closed.
Under the terms of the dividend reinvestment scheme, the following new
Ordinary shares of nominal value 1 penny each were allotted after 31
December 2016:
Aggregate
Number nominal
of value of Net
Date of shares shares invested Opening market price on allotment date (pence per
allotment allotted (GBP'000) Issue price (pence per share) (GBP'000) share)
31 January
2017 193,189 2 68.75 131 61.50
20. Related party transactions
Other than transactions with the Manager as disclosed in note 5, there
are no other related party transactions requiring disclosure.
21. Other Information
The information set out in this announcement does not constitute the
Company's statutory accounts within the terms of section 434 of the
Companies Act 2006 for the years ended 31 December 2016 and 31 December
2015, and is derived from the statutory accounts for those financial
years, which have been, or in the case of the accounts for the year
ended 31 December 2016, which will be, delivered to the Registrar of
Companies. The Auditor reported on those accounts; the reports were
unqualified and did not contain a statement under s498 (2) or (3) of the
Companies Act 2006.
The Company's Annual General Meeting will be held at The City of London
Club, 19 Old Broad Street, London, EC2N 1DS on 7 June 2017 at 11.00am.
22. Publication
The full audited Annual Report and Financial Statements are 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/AATG, where the Report can be accessed
as a PDF document via a link in the 'Financial Reports and Circulars'
section.
LEI number: 213800TKJUY376H3KN16
AATG Split of portfolio by sector:
http://hugin.info/141704/R/2090070/789168.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 Technology & General VCT PLC - Ordinary Shares via
Globenewswire
http://www.closeventures.co.uk
(END) Dow Jones Newswires
March 23, 2017 13:23 ET (17:23 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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