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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Albion Venture Capital Trust Plc | LSE:AAVC | London | Ordinary Share | GB0002039625 | 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% | 43.20 | 42.20 | 44.20 | 43.20 | 43.20 | 43.20 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 1.78M | 125k | 0.0009 | 480.00 | 60.25M |
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Albion Venture Capital Trust PLC
As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Venture Capital Trust PLC today makes public its
information relating to the Half-yearly Financial Report (which is
unaudited) for the six months to 30 September 2016. This announcement
was approved by the Board of Directors on 21 November 2016.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 2016, will shortly be sent to shareholders.
Copies of the full Half-yearly Financial Report will be shown via the
Albion Ventures LLP website by clicking
www.albion-ventures.co.uk/funds/AAVC.
Investment objective and policy
The investment strategy of Albion Venture Capital Trust PLC (the
"Company") is to manage the risk normally associated with investments in
smaller unquoted companies whilst maintaining an attractive yield,
through allowing investors the opportunity to participate in a balanced
portfolio of asset-backed businesses. The Company's investment portfolio
will thus be structured to provide a balance between income and capital
growth for the longer term.
This is achieved as follows:
-- qualifying unquoted investments are predominantly in specially-formed
companies which provide a high level of asset backing for the capital
value of the investment;
-- the Company invests alongside selected partners with proven experience in
the sectors concerned;
-- investments are normally structured as a mixture of equity and loan
stock. The loan stock represents the majority of the finance provided and
is secured on the assets of the portfolio company. Funds managed or
advised by Albion Ventures LLP typically own 50 per cent. of the equity
of the portfolio company;
-- other than the loan stock issued to funds managed or advised by Albion
Ventures LLP, portfolio companies do not normally have external
borrowings.
The Company offers tax-paying investors substantial tax benefits at the
time of investment, on payment of dividends and on the ultimate disposal
of the investment.
Background to the Company
The Company is a venture capital trust which raised a total of GBP39.7
million through an issue of Ordinary shares in the spring of 1996 and
through an issue of C shares in the following year. The C shares merged
with the Ordinary shares in 2001. The Company has raised a further
GBP21.1 million under the Albion VCTs Top Up Offers since 2011.
On 25 September 2012, the Company acquired the assets and liabilities of
Albion Prime VCT PLC ("Prime") in exchange for new shares in the
Company. Each Prime shareholder received 0.8801 shares in the Company
for each Prime share that they held at the date of the Merger.
Financial calendar
Record date for second dividend 9 December 2016
Payment date for second dividend 30 December 2016
Financial year end 31 March
Financial highlights
Unaudited six Unaudited six Audited year
months ended months ended 30 ended
30 September 2016 September 2015 31 March 2016
(pence per share) (pence per share) (pence per share)
Dividends paid 2.5 2.5 5.0
Revenue return 1.0 1.0 2.0
Capital return 2.4 2.7 3.6
Net asset value 72.9 72.7 72.0
Ordinary shares
Total shareholder return to 30 September 2016 (pence per share)
Total dividends paid during the year ended : 31 March
1997 2.00
31 March 1998 5.20
31 March 1999 11.05
31 March 2000 3.00
31 March 2001 8.55
31 March 2002 7.60
31 March 2003 7.70
31 March 2004 8.20
31 March 2005 9.75
31 March 2006 11.75
31 March 2007 10.00
31 March 2008 10.00
31 March 2009 10.00
31 March 2010 5.00
31 March 2011 5.00
31 March 2012 5.00
31 March 2013 5.00
31 March 2014 5.00
31 March 2015 5.00
31 March 2016 5.00
Total dividends paid in the six months to 30 September
2016 2.50
Total dividends paid to 30 September 2016 142.30
Net asset value as at 30 September 2016 72.90
Total shareholder return to 30 September 2016 215.20
The financial summary above is for the Company, Albion Venture Capital
Trust PLC Ordinary shares only. Details of the financial performance of
the C shares and Albion Prime VCT PLC, which have been merged into the
Company, can be found at the end of this announcement.
In addition to the dividends summarised above, the Directors have
declared a second dividend for the year to 31 March 2017 of 2.5 pence
per share, to be paid on 30 December 2016 to shareholders on the
register as at 9 December 2016.
Notes
-- Dividends paid before 5 April 1999 were paid to qualifying
shareholders inclusive of the associated tax credit. The dividends for
the
year to 31 March 1999 were maximised in order to take advantage of this
tax credit.
-- All dividends paid by the Company are free of income tax. It is an
H.M. Revenue & Customs requirement that dividend vouchers indicate the
tax element should dividends have been subject to income tax. Investors
should ignore this figure on their dividend voucher and need not
disclose any income they receive from a VCT on their tax return.
-- The net asset value of the Company is not its share price as quoted
on the official list of the London Stock Exchange. The share price of
the Company can be found in the Investment Companies - VCTs section of
the Financial Times on a daily basis. Investors are reminded that it is
common for shares in VCTs to trade at a discount to their net asset
value.
Interim management report
Introduction
The results for Albion Venture Capital Trust PLC (the "Company") for the
six months to 30 September 2016 showed a total return of 3.4 pence per
share, compared to 3.7 pence per share for the same period last year.
This positive return was helped by uplifts in the third party
professional valuations of our care homes and the two Radnor House
schools. After an interim dividend of 2.5 pence per share paid on 29
July 2016, the net asset value for the half year was 72.9 pence per
share compared to 72.0 pence per share at 31 March 2016.
Investment performance, progress and prospects
During the period, over GBP4.3 million was invested in qualifying
investments, including GBP3.3m in the three new care homes (Shinfield
View, near Reading; Cumnor Hill House, near Oxford; and Ryefield Court
in Hillingdon) which all opened during the period, and GBP1.0 million in
Earnside Energy to facilitate the expansion of its biogas from waste
food operations. Meanwhile, loan stock repayments of GBP0.3 million were
received back from our Kew Green VCT (Stansted) and Radnor House School
investments during the period.
In terms of trading progress, the early indications from the Company's
care homes are encouraging, with the 66 bedroom Shinfield View care home,
which opened in April, already more than half full, and the 75 bedroom
Cumnor Hill House, which opened in June, already approximately a third
full. The 60 bedroom Ryefield Court, which opened in July, is
approaching 20 per cent. occupancy.
Radnor House Twickenham has started the new school year with 400 pupils
while Radnor House Sevenoaks now has 275 pupils, up from 233 at the end
of the summer term.
During the period, profits at the Crown Hotel in Harrogate increased
over the corresponding prior year period, but profits at both the
Holiday Inn Express at Stansted Airport and The Stanwell Hotel near
Heathrow Terminal 5 were lower.
Our renewable energy portfolio experienced lighter than forecast wind
and solar performance over the 6 month period, while hydro in general
was better than forecast, though negatively affected by the introduction
in Scotland of business rates. Meanwhile, Earnside Energy's AD plant
continued to perform well and it is intended to expand significantly in
2017.
In the pub sector, the Bravo Inns and Bravo Inns II portfolio is
continuing to expand and now comprises 39 pubs in the North West.
Meanwhile the Charnwood Pub Company completed the disposal of its
portfolio. The Weybridge health and fitness club experienced a small
decline in membership over the period.
In general, we are positive on the prospects for the portfolio and, in
particular, are pleased by the strong progress made by our new care
homes.
Split of portfolio by valuation as at 30 September 2016
Set out at the bottom of this announcement is the sector diversification
of the investment portfolio as at 30 September 2016. At that date
healthcare and renewable energy investments accounted for approximately
32 per cent. and 20 per cent. of the Company's portfolio including cash.
Risks and uncertainties
The uncertain implications surrounding the exit of the UK from the EU
may have a longer term negative impact on consumer and business
confidence and it would therefore be wise to prepare for a renewed
economic slowdown in the UK. Overall investment risk, however, is
mitigated through a variety of processes, including the Company's policy
that its portfolio companies should not normally have external
borrowings and for the Company to have a first charge over portfolio
companies' assets; the Board and Manager see this as an important factor
in the control of investment risk. However, on an exceptional basis,
certain portfolio companies may take on external borrowings, where the
Board considers this will offer a significant benefit to the Company.
The Board and the Manager have also been seeking to mitigate risks to
the Company by increasing its investment in sectors that are less
exposed to business and consumer cycles.
Other principal risks and uncertainties remain unchanged and are as
detailed in note 13.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5.
There are no related party transactions or balances that require
disclosure.
Share buy-backs
It remains the Board's primary objective to maintain sufficient
resources for investment in existing and new portfolio companies and for
the continued payment of dividends to shareholders. Thereafter, it is
still the Board's policy to buy back shares in the market, subject to
the overall criterion that such purchases are in the Company's interest.
The total value bought in for the period to 30 September 2016 was
GBP290,000. Subject to first purchasing shares held by the market makers,
the Board will target such buy-backs to be in the region of a 5 per
cent. discount to the most recently announced net asset value, so far as
market conditions and liquidity permit.
Results and dividends
As at 30 September 2016, the net asset value of the Company was GBP57.9
million or 72.9 pence per share compared to GBP57.0 million or 72.0
pence per share at 31 March 2016. The revenue return before taxation was
GBP934,000, compared to GBP836,000 for the six months to 30 September
2015. The Company will pay a second dividend of 2.5 pence per share on
30 December 2016 to shareholders on the register as at 9 December 2016,
making 5.0 pence per share in total for the full year, in line with your
Company's current dividend target.
Albion VCTs Prospectus Top Up Offers 2016/17
Your Board, in conjunction with the boards of other VCTs managed by
Albion Ventures LLP, is intending to launch shortly a top up offer of
new Ordinary shares, aiming to raise circa GBP4 million out of a target
of GBP24 million in aggregate that the Albion VCTs are seeking to raise.
In addition, the Board may elect to allot up to a further GBP2 million
if there is sufficient demand and the Board deems it prudent to do so.
The proceeds will be used to provide further resources at a time when a
number of attractive investment opportunities are being seen. A
Securities Note, which will form part of the Prospectus, will be emailed
or posted to shareholders shortly.
David Watkins
Chairman
21 November 2016
Responsibility statement
The Directors, David Watkins, John Kerr, Jeff Warren and Ebbe Dinesen,
are responsible for preparing the Half-yearly Financial Report. In
preparing these condensed Financial Statements for the period to 30
September 2016 we, the Directors of the Company, confirm that to the
best of our knowledge:
(a) the condensed set of Financial Statements, which has been prepared
in accordance with Financial Reporting Standard 104 "Interim Financial
Reporting", give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company as required by DTR
4.2.4R;
(b) the Interim management report, includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the Interim management report, includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
This Half-yearly Financial Report has not been audited or reviewed by
the Auditor.
By order of the Board
David Watkins
Chairman
21 November 2016
Portfolio of investments
The following is a summary of investments as at 30 September 2016:
As at 30 September 2016
Cumulative Change in
movement value for the
% voting rights held by Albion Venture Capital Trust Accounting cost * in value Value period(**)
Portfolio company PLC GBP'000 GBP'000 GBP'000 GBP'000
Healthcare
Shinfield Lodge
Care Limited 35.3 6,285 1,588 7,873 259
Active Lives Care
Limited 22.2 4,530 1,362 5,892 1,164
Ryefield Court Care
Limited 23.6 3,540 1,375 4,915 1,252
Total investment in
the healthcare
sector 14,355 4,325 18,680 2,675
Hotels
Kew Green VCT
(Stansted)
Limited 45.2 6,072 1,356 7,428 (248)
The Crown Hotel
Harrogate Limited 24.1 4,245 (1,222) 3,023 66
The Stanwell Hotel
Limited 39.2 5,069 (2,640) 2,429 (101)
Total investment in
the hotel sector 15,386 (2,506) 12,880 (283)
Renewable energy
Chonais River Hydro
Limited 9.2 3,074 547 3,621 (94)
Earnside Energy
Limited 9.5 1,531 95 1,626 59
Gharagain River
Hydro Limited 11.5 1,363 170 1,533 (317)
Alto Prodotto Wind
Limited 7.4 670 362 1,032 8
The Street by
Street Solar
Programme Limited 6.5 676 324 1,000 45
Regenerco Renewable
Energy Limited 4.5 451 154 605 28
Infinite Ventures
(Goathill)
Limited 11.5 480 113 593 6
Erin Solar Limited 18.6 520 (11) 509 -
Dragon Hydro
Limited 7.3 311 156 467 1
AVESI Limited 7.4 242 71 313 17
Harvest AD Limited - 307 - 307 -
Greenenerco Limited 3.9 135 76 211 -
Total investment in
the renewable
energy sector 9,760 2,057 11,817 (247)
Education
Radnor House School
(Holdings)
Limited 7.1 2,451 1,903 4,354 585
Total investment in
the education
sector 2,451 1,903 4,354 585
Pubs
Bravo Inns II
Limited 6.4 1,085 71 1,156 20
Bravo Inns Limited 7.6 751 (161) 590 -
Total investment in
the pub sector 1,836 (90) 1,746 20
Other
The Charnwood Pub
Company Limited 14.8 1,196 (168) 1,028 (11)
The Weybridge Club
Limited 14.3 2,246 (1,484) 762 (139)
G&K Smart
Developments VCT
Limited 42.9 276 (41) 235 (1)
Premier Leisure
(Suffolk) Limited 9.9 175 (5) 170 1
Total other
investments 3,893 (1,698) 2,195 (150)
Total fixed asset
investments 47,681 3,991 51,672 2,600
Total change in value of investments for the period 2,600
Movement in loan
stock accrued
interest (341)
Unrealised gains
sub-total 2,259
Realised gain in
current period 4
Total gains on investments as per Income statement 2,263
Opening
Accounting carrying Disposal Total realized Gain on
Fixed asset investment realisations during the cost* value proceeds gain opening value
period to 30 September 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Kew Green VCT (Stansted) Limited (loan stock
repaid) 243 243 243 - -
Radnor House School (Holdings) Limited (loan stock
repaid) 71 71 71 - -
Kensington Health Clubs Limited - - 4 4 4
Total 314 314 318 4 4
*The cost includes the original cost from Albion Ventures Capital Trust
PLC and the carried over value on merger from Albion Prime VCT PLC as at
25 September 2012.
** As adjusted for additions and disposals during the period.
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on
investments 3 - 2,263 2,263 - 2,222 2,222 - 3,203 3,203
Investment income 4 1,219 - 1,219 1,097 - 1,097 2,236 - 2,236
Investment
management fees 5 (136) (409) (545) (117) (351) (468) (246) (739) (985)
Other expenses (149) - (149) (144) - (144) (287) - (287)
Return on ordinary
activities before
tax 934 1,854 2,788 836 1,871 2,707 1,703 2,464 4,167
Tax (charge)/ credit
on ordinary activities (185) 81 (104) (160) 70 (90) (300) 148 (152)
Return and total
comprehensive income
attributable to
shareholders 749 1,935 2,684 676 1,941 2,617 1,403 2,612 4,015
Basic and diluted
return per share
(pence)* 7 1.0 2.4 3.4 1.0 2.7 3.7 2.0 3.6 5.6
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2015 and the
audited statutory accounts for the year ended 31 March 2016.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
The total column of this Condensed income statement represents the
profit and loss account of the Company. The supplementary revenue and
capital columns have been prepared in accordance with The Association of
Investment Companies' Statement of Recommended Practice.
There are no recognised gains or losses other than the results for the
periods disclosed above. Accordingly a Statement of total comprehensive
income is not required.
The difference between the reported return on ordinary activities before
tax and the historical profit is due to the fair value movements on
investments.
Condensed balance sheet
Unaudited Unaudited Audited
30 September 2016 30 September 2015 31 March 2016
Note GBP'000 GBP'000 GBP'000
Fixed asset investments 51,672 41,958 45,015
Current assets
Trade and other receivables less
than one year 111 128 2,139
Cash and cash equivalents 6,706 10,285 10,330
6,817 10,413 12,469
Total assets 58,489 52,371 57,484
Creditors: amounts falling due
within one year
Trade and other payables less than
one year (613) (593) (529)
Total assets less current liabilities 57,876 51,778 56,955
Equity attributable to equityholders
Called up share capital 8 868 778 861
Share premium 18,881 12,645 18,374
Capital redemption reserve 7 7 7
Unrealised capital reserve 3,387 (55) 1,128
Realised capital reserve 10,414 11,249 10,737
Other distributable reserve 24,319 27,154 25,848
Total equity shareholders' funds 57,876 51,778 56,955
Basic and diluted net asset value per
share (pence)* 72.9 72.7 72.0
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2015 and the
audited statutory accounts for the year ended 31 March 2016.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 21 November 2016, and were signed on its behalf
by
David Watkins
Chairman
Company number: 03142609
Condensed statement of changes in equity
Called
up Capital Unrealised Realised Other
share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2016 861 18,374 7 1,128 10,737 25,848 56,955
Return/(loss) and total
comprehensive
income for the period - - - 2,259 (323) 749 2,684
Purchase of treasury
shares - - - - - (290) (290)
Issue of equity 7 515 - - - - 522
Cost of issue of equity - (8) - - - - (8)
Equity dividends paid - - - - - (1,987) (1,987)
As at 30 September
2016 868 18,881 7 3,387 10,414 24,319 57,876
As at 1 April 2015 714 8,228 7 (2,269) 11,522 28,726 46,928
Return/(loss) and total
comprehensive
income for the period - - - 2,214 (273) 676 2,617
Purchase of treasury
shares - - - - - (459) (459)
Issue of equity 64 4,551 - - - - 4,615
Cost of issue of equity - (134) - - - - (134)
Equity dividends paid - - - - - (1,789) (1,789)
As at 30 September
2015 778 12,645 7 (55) 11,249 27,154 51,778
As at 1 April 2015 714 8,228 7 (2,269) 11,522 28,726 46,928
Return and total
comprehensive
income for the year - - - 2,343 269 1,403 4,015
Transfer of previously
unrealized
gains/(losses) on
realisations of
investments - - - 1,054 (1,054) - -
Purchase of treasury
shares - - - - - (733) (733)
Issue of equity 147 10,423 - - - - 10,570
Cost of issue of equity - (277) - - - - (277)
Equity dividends paid - - - - - (3,549) (3,549)
As at 31 March 2016 861 18,374 7 1,128 10,737 25,848 56,955
* Included within the aggregate of these reserves is an amount of
GBP34,733,000 (30 September 2015: GBP38,348,000; 31 March 2016:
GBP36,585,000) which is considered distributable.
Condensed statement of cash flows
Unaudited Unaudited
six months ended six months ended Audited
30 September 30 September year ended
2016 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Operating activities
Loan stock income
received 824 882 2,028
Deposit interest
received 51 58 115
Dividend income
received - 36 81
Investment management
fees paid (541) (446) (938)
Other cash payments (175) (158) (273)
Corporation tax
refund/(paid) 24 71 (99)
Net cash flow from
operating activities 183 443 915
Cash flow from
investing activities
Purchase of fixed asset
investments (4,373) (1,955) (6,430)
Disposal of fixed asset
investments 321 562 2,786
Net cash flow from
investing activities (4,052) (1,393) (3,644)
Cash flow from
financing activities
Issue of share capital 2,243 4,195 7,886
Cost of issue of equity (3) (3) (2)
Dividends paid (1,705) (1,527) (3,094)
Purchase of own shares
(including costs) (290) (432) (733)
Net cash flow from
financing activities 245 2,233 4,057
(Decrease)/increase in
cash and cash
equivalents (3,624) 1,283 1,328
Cash and cash
equivalents at start
of period 10,330 9,002 9,002
Cash and cash
equivalents at end of
period 6,706 10,285 10,330
Cash and cash
equivalents comprise
Cash at bank and in
hand 6,706 10,285 10,330
Cash equivalents - - -
Total cash and cash
equivalents 6,706 10,285 10,330
Notes to the condensed Financial Statements
1. Basis of preparation
The condensed Financial Statements have been prepared in accordance with
the historical cost convention, modified to include the revaluation of
investments, in accordance with applicable United Kingdom law and
accounting standards, including Financial Reporting Standard 102 ("FRS
102"), Financial Reporting Standard 104 - Interim Financial Reporting
("FRS 104"), and with the 2014 Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture Capital
Trusts" ("SORP") issued by The Association of Investment Companies
("AIC").
The preparation of the Financial Statements requires management to make
judgements and estimates that affect the application of policies and
reported amounts of assets, liabilities, income and expenses. The most
critical estimates and judgements relate to the determination of
carrying value of investments at fair value through profit and loss
("FVTPL"). The Company values investments by following the IPEVCV
Guidelines and further detail on the valuation techniques used are
outlined below.
The Half-yearly report has not been audited, nor has it been reviewed by
the auditor pursuant to the FRC's guidance on Review of interim
financial information.
2. Accounting policies
Fixed asset investments
The Company's business is investing in financial assets with a view to
profiting from their total return in the form of income and capital
growth. This portfolio of financial assets is managed and its
performance evaluated on a fair value basis, in accordance with a
documented investment policy, and information about the portfolio is
provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those undertakings in
which the Company holds more than 20 per cent. of the equity as part of
an investment portfolio are not accounted for using the equity method.
In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments,
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:
-- Unquoted investments, where there is not an active market, are valued
using an appropriate valuation technique in accordance with the IPEVCV
Guidelines. Indicators of fair value are derived using established
methodologies including earnings multiples, the level of third party
offers received, prices of recent investment rounds, net assets and
industry valuation benchmarks. Where the Company has an investment in an
early stage enterprise, the price of a recent investment round is often
the most appropriate approach to determining fair value. In situations
where a period of time has elapsed since the date of the most recent
transaction, consideration is given to the circumstances of the portfolio
company since that date in determining fair value. This includes
consideration of whether there is any evidence of deterioration or strong
definable evidence of an increase in value. In the absence of these
indicators, the investment in question is valued at the amount reported
at the previous reporting date. Examples of events or changes that could
indicate a diminution include:
-- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was
based;
-- a significant adverse change either in the portfolio company's
business or in the technological, market, economic, legal or
regulatory environment in which the business operates; or
-- market conditions have deteriorated, which may be indicated by a
fall in the share prices of quoted businesses operating in the
same or related sectors.
Investments are recognised as financial assets on legal completion of
the investment contract and are de-recognised on legal completion of the
sale of an investment.
Dividend income is not recognised as part of the fair value movement of
an investment, but is recognised separately as investment income through
the other distributable reserve when a share becomes ex-dividend.
Debtors and creditors and cash are carried at amortised cost, in
accordance with FRS 102. There are no financial liabilities other than
creditors.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised
when the Company's right to receive payment and expect settlement is
established. Where interest is rolled up and/or payable at redemption
then it is recognised as income unless there is reasonable doubt as to
its receipt.
Bank interest income
Interest income is recognised on an accrual basis using the rate of
interest agreed with the bank.
Investment management fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are
charged through the other distributable reserve except the following
which are charged through the realised capital reserve:
-- 75 per cent. of management fees are allocated to realised capital
reserve. This is in line with the Board's expectation that over the long
term 75 per cent. of the Company's investment returns will be in the form
of capital gains; and
-- expenses which are incidental to the purchase or disposal of an
investment through the realised capital reserve.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will
be allocated between revenue and realised capital reserves based upon
the proportion to which the calculation of the fee is attributable to
revenue and capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 102.
Current tax is tax payable (refundable) in respect of the taxable profit
(tax loss) for the current period or past reporting periods using the
tax rates and laws that have been enacted or substantively enacted at
the financial reporting date. Taxation associated with capital expenses
is applied in accordance with the SORP.
Deferred tax is provided in full on all timing differences at the
reporting date. Timing differences are differences between taxable
profits and total comprehensive income as stated in the financial
statements that arise from the inclusion of income and expenses in tax
assessments in periods different from those in which they are recognised
in financial statements. As a VCT the Company has an exemption from tax
on capital gains. The Company intends to continue meeting the conditions
required to obtain approval as a VCT in the foreseeable future. The
Company therefore, should have no material deferred tax timing
differences arising in respect of the revaluation or disposal of
investments and the Company has not provided for any deferred tax.
Reserves
Share premium
This reserve accounts for the difference between the price paid for
shares and the nominal value of the shares, less issue costs and
transfers to the other distributable reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own
shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year
end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments;
-- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
-- dividends paid to equity holders.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were
combined in 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.
3. Gains on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Unrealised gains on
fixed asset
investments 2,259 2,214 2,343
Realised gains on
fixed asset
investments 4 8 860
2,263 2,222 3,203
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Income recognised on
investments
Loan stock interest 1,165 1,001 2,039
Dividend income 7 36 81
Bank deposit interest 47 60 116
1,219 1,097 2,236
All of the Company's income is derived from operations based in the
United Kingdom.
5. Investment management fees
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Investment
management fee
charged to
revenue 136 117 246
Investment
management fee
charged to
capital 409 351 739
545 468 985
Further details of the Management agreement under which the investment
management fee is paid are given in the Strategic report on page 11 of
the Annual Report and Financial Statements for the year ended 31 March
2016.
During the period, services of a total value of GBP545,000 in management
fees and GBP24,000 in administration fees (30 September 2015: GBP468,000
in management fees and GBP24,000 in administration fees; 31 March 2016:
GBP985,000 in management fees and GBP48,000 in administration fees),
were purchased by the Company from Albion Ventures LLP. At the financial
period end, the amount due to Albion Ventures LLP in respect of these
services was GBP287,000 (30 September 2015: GBP258,000; 31 March 2016:
GBP282,000).
Albion Ventures LLP, the Manager, holds 2,534 Ordinary shares as a
result of fractional entitlements arising from the merger of Albion
Prime VCT PLC with Albion Venture Capital Trust PLC on 25 September
2012. In addition, Albion Ventures LLP holds a further 21,702 Ordinary
shares in the Company.
Albion Ventures LLP is, from time to time, eligible to receive
transaction fees and monitoring fees from portfolio companies. During
the period to 30 September 2016, fees of GBP63,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2015: GBP47,000; 31 March 2016: GBP116,000).
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
First dividend paid 31 July 2015 - 2.5 pence per
share - 1789 1,789
Second dividend paid 31 December 2015 - 2.5 pence
per share - - 1,782
First dividend paid 29 July 2016 - 2.5 pence per
share 1,987 - -
Unclaimed dividends - - (22)
1,987 1,789 3,549
The Directors have declared a dividend of 2.5 pence per share (total
approximately GBP1,986,000), payable on 30 December 2016 to shareholders
on the register as at 9 December 2016.
7. Basic and diluted return per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
Revenue Capital Revenue Capital Revenue Capital
Return
attributable to
Ordinary shares
(GBP'000) 749 1,935 676 1,941 1,403 2,612
Weighted average
shares in
issue 79,499,061 70,935,543 72,020,718
Return per
Ordinary share
(pence) 1.0 2.4 1.0 2.7 2.0 3.6
The weighted number of shares is calculated excluding treasury shares of
7,391,188 (30 September 2015: 6,544,440; 31 March 2016: 6,954,440).
There are no convertible instruments, derivatives or contingent share
agreements in issue, and therefore no dilution affecting the return per
share. The basic return per share is therefore the same as the diluted
return per share.
8. Called up share capital
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2016 30 September 2015 31 March 2016
GBP'000 GBP'000 GBP'000
Allotted, called up and fully paid
86,818,875 Ordinary shares of 1 penny each (30 September
2015: 77,815,553; 31 March 2016: 86,081,939) 868 778 861
Voting rights
79,427,687 Ordinary shares of 1 penny each (net of
treasury shares) (30 September 2015: 71,271,113; 31
March 2016: 79,127,499)
During the period to 30 September 2016 the Company purchased 436,748
Ordinary shares to be held in treasury (30 September 2015: 703,000; 31
March 2016: 1,113,000) at a cost of GBP290,000 (30 September 2015:
GBP459,000; 31 March 2016: GBP733,000) representing 0.5% of the shares
in issue as at 30 September 2016. The shares purchased for treasury were
funded from the Other distributable reserve.
The total number of Ordinary shares held in treasury as at 30 September
2016 was 7,391,188 (30 September 2015: 6,544,440; 31 March 2016:
6,954,440) representing 8.5% of the share capital as at 30 September
2016.
Under the terms of the Dividend Reinvestment Scheme Circular dated 10
July 2008, the following Ordinary shares of nominal value 1 penny per
share were allotted during the period:
Number of Aggregate nominal Issue price Net consideration Opening-market price
Date of shares value of shares (pence per received on allotment date
allotment allotted GBP'000 share) (GBP'000) (pence per share)
29 July
2016 374,773 4 69.5 259 66.5
Under the terms of the Albion VCTs Prospectus Top Up Offers 2015/2016,
the following Ordinary shares of nominal value 1 penny each were
allotted during the period to 30 September 2016:
Aggregate nominal Issue price Net consideration Opening market price
Date of Number of value of shares (pence per received on allotment date
allotment shares allotted GBP'000 share) (GBP'000) (pence per share)
6 April
2016 245,265 2 72.0 173 66.5
6 April
2016 9,897 - 72.4 7 66.5
6 April
2016 107,001 1 72.8 76 66.5
362,163 256
The offer was fully subscribed and closed on 17 March 2016 after
reaching its GBP6 million limit.
9. Commitments and contingencies
As at 30 September 2016, the Company had the following financial
commitments totalling GBP140,000 (30 September 2015: GBP6,243,000; 31
March 2016: GBP2,343,000), which are expected to be invested during the
next 12 months:
-- GBP140,000 Shinfield Lodge Care Limited
There are no contingencies or guarantees of the Company as at 30
September 2016 (30 September 2015 and 31 March 2016: nil).
10. Post balance sheet events
Since 30 September 2016 the Company has had the following material post
balance sheet events:
-- Investment of GBP140,000 in Shinfield Lodge Care Limited
On 4 November 2016 the Company announced its intention to launch a
prospectus in relation to an offer for subscription for new Ordinary
shares subject to obtaining regulatory approval. The Company is aiming
to raise circa GBP4 million out of a target of GBP24 million in
aggregate that the Albion VCTs are seeking to raise. A Securities Note,
which forms part of the Prospectus, will be sent to shareholders
shortly.
11. Related party transactions
Other than transactions with the Manager as described in Note 5, there
are no other related party transactions.
12. Going concern
The Board's assessment of liquidity risk remains unchanged since the
last Annual Report and Financial Statements for the year ended 31 March
2016, and is detailed on pages 53 and 54 of those accounts.
The Company has adequate cash and liquid resources. The portfolio of
investments is diversified in terms of sector, and the major cash
outflows of the Company (namely investments, dividends and share
buy-backs) are within the Company's control. Accordingly, after making
diligent enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for
the foreseeable future. For this reason, the Directors have adopted the
going concern basis in preparing this Half-yearly Financial Report and
this is in accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by the
Financial Reporting Council in September 2014.
13. Risks and uncertainties
The Board considers that the Company faces the following principal risks
and uncertainties:
1. Economic risk
Changes in economic conditions, including, for example, interest rates,
rates of inflation, industry conditions, competition, political and
diplomatic events and other factors could substantially and adversely
affect the Company's prospects in a number of ways.
To reduce this risk, in addition to investing equity in portfolio
companies, the Company often invests in secured loan stock and has a
policy of not normally permitting any external bank borrowings within
portfolio companies. Additionally, the Manager has been rebalancing the
sector exposure of the portfolio with a view to reducing reliance on
consumer led sectors.
2. VCT approval risk
The Company's current approval as a venture capital trust allows
investors to take advantage of tax reliefs on initial investment and
ongoing tax free capital gains and dividend income. Failure to meet the
qualifying requirements could result in investors losing the tax relief
on initial investment and loss of tax relief on any tax-free income or
capital gains received. In addition, failure to meet the qualifying
requirements could result in a loss of listing of the shares.
To reduce this risk, the Board has appointed the Manager, who has a team
with significant experience in venture capital trust management, used to
operating within the requirements of the venture capital trust
legislation. In addition, to provide further formal reassurance, the
Board has appointed Philip Hare & Associates LLP as its taxation
advisor. Philip Hare & Associates LLP reports quarterly to the Board to
independently confirm compliance with the venture capital trust
legislation, to highlight areas of risk and to inform on changes in
legislation. Each investment in a new portfolio company is also
pre-cleared with H.M. Revenue and Customs.
3. Investment risk
This is the risk of investment in poor quality assets which reduces the
capital and income returns to shareholders and negatively impacts on the
Company's reputation. By nature, smaller unquoted businesses, such as
those that qualify for venture capital trust purposes are more fragile
than larger, long established businesses. The success of investments in
certain sectors is also subject to regulatory risk, such as those
affecting companies involved in UK renewable energy.
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and its strong track record for investing in
this segment of the market. In addition, the Manager operates a formal
and structured investment process, which includes an Investment
Committee, comprising investment professionals from the Manager and at
least one external investment professional. The Manager also invites and
takes account of comments from non-executive Directors of the Company on
investments discussed at the Investment Committee meetings. Investments
are actively and regularly monitored by the Manager (investment managers
normally sit on portfolio company boards) and the Board receives
detailed reports on each investment as part of the Manager's report at
quarterly board meetings.
4. Valuation risk
The Company's investment valuation methodology is reliant on the
accuracy and completeness of information that is issued by portfolio
companies. In particular, the Directors may not be aware of or take into
account certain events or circumstances which occur after the
information issued by such companies is reported.
As described in note 2 of the Financial Statements, investments held by
the Company are classified at fair value through profit or loss and
valued in accordance with the International Private Equity and Venture
Capital Valuation Guidelines. These guidelines set out recommendations,
intended to represent current best practice on the valuation of venture
capital investments. These investments are valued on the basis of
forward looking estimates and judgements about the business itself, its
market and the environment in which it operates, together with the state
of the mergers and acquisitions market, stock market conditions and
other factors. In making these judgements the valuation takes into
account all known material facts up to the date of approval of the
Financial Statements by the Board. The values of a number of investments
are also underpinned by independent third party professional valuations.
5. Compliance risk
The Company is listed on The London Stock Exchange and is required to
comply with the rules of the UK Listing Authority, as well as with the
Companies Act, Accounting Standards and other legislation. Failure to
comply with these regulations could result in a delisting of the
Company's shares, or other penalties under the Companies Act or from
financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior
levels within or advising quoted businesses. In addition, the Board and
the Manager receive regular updates on new regulation from its auditor,
lawyers and other professional bodies. The Company is subject to
compliance checks via the Manager's Compliance Officer. The Manager
reports monthly to its Board on any issues arising from compliance or
regulation. These controls are also reviewed as part of the quarterly
Manager Board meetings, and also as part of the review work undertaken
by the Manager's Compliance Officer. The report on controls is also
evaluated by the internal auditors.
6. Internal control risk
Failures in key controls, within the Board or within the Manager's
business, could put assets of the Company at risk or result in reduced
or inaccurate information being passed to the Board or to shareholders.
The Audit Committee meets with the Manager's Internal Auditor, PKF
Littlejohn LLP, when required, receiving a report regarding the last
formal internal audit performed on the Manager and providing the
opportunity for the Audit Committee to ask specific and detailed
questions. John Kerr, Chairman of the Audit Committee, met with the
internal audit Partner of PKF Littlejohn LLP in January 2016 to discuss
the most recent Internal Audit Report on the Manager.
The Manager has a comprehensive business continuity plan in place in the
event that operational continuity is threatened. Further details
regarding the Board's management and review of the Company's internal
controls through the implementation of the Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting are
detailed on page 29 of the Annual Report and Financial Statements for
the year ended 31 March 2016.
Measures are in place to mitigate information risk in order to ensure
the integrity, availability and confidentiality of information used
within the business.
7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions.
There are provisions within the management agreement for the change of
Manager under certain circumstances (for further detail, see the
Management agreement paragraph on page 11 of the Annual Report and
Financial Statements for the year ended 31 March 2016). In addition, the
Manager has demonstrated to the Board that there is no undue reliance
placed upon any one individual within Albion Ventures LLP.
8. Financial risk
By its nature, as a venture capital trust, the Company is exposed to
investment risk (which comprises investment price risk and cash flow
interest rate risk), credit risk and liquidity risk.
The Company's policies for managing these risks and its financial
instruments are outlined in full in note 18 of the Annual Report and
Financial Statements for the year ended 31 March 2016.
All of the Company's income and expenditure is denominated in sterling
and hence the Company has no foreign currency risk. The Company is
financed through equity and does not have any borrowings. The Company
does not use derivative financial instruments for speculative purposes.
14. Other information
The information set out in this Half-yearly Financial Report does not
constitute the Company's statutory accounts within the terms of section
435 of the Companies Act 2006 for the periods ended 30 September 2016
and 30 September 2015, and is unaudited. The information for the year
ended 31 March 2016 does not constitute statutory accounts within the
terms of section 435 of the Companies Act 2006 but is derived from the
audited statutory accounts for the financial year, which were
unqualified and which have been delivered to the Registrar of Companies.
The Auditor reported on those accounts; their report was unqualified and
did not contain a statement under s498 (2) or (3) of the Companies Act
2006.
15. Publication
This Half-yearly Financial Report is being sent to shareholders and
copies will be made available to the public at the registered office of
the Company, Companies House, the National Storage Mechanism and also
electronically at www.albion-ventures.co.uk/funds/AAVC, where the Report
can be accessed as a PDF document in the 'Financial Reports and
Circulars' section.
Dividend history for Albion Venture Capital Trust PLC 'C Shares' and
Albion Prime VCT PLC
C shares(i) Proforma(ii) Albion Prime VCT
(pence per PLC
Total shareholder return to 30 September 2016 share) (pence per share)
Total dividends paid to the year ended 31 March 2016 128.25 64.35
Total dividends paid in the six months to 30 September
2016 2.50 2.20
Total dividends paid to 30 September 2016 130.75 66.55
Proforma net asset value as at 30 September 2016 72.90 64.16
Total proforma shareholder return to 30 September
2016 203.65 130.71
Notes
1. The Ordinary Shares and the C Shares merged on an equal basis.
2. The proforma shareholder returns presented above are based on the
dividends paid to shareholders before the merger and the pro-rata net
asset value per share and pro-rata dividends per share paid to 30
September 2016. This pro-forma is based upon 0.8801 Albion Venture
Capital Trust PLC shares for every Albion Prime VCT PLC share which
merged with Albion Venture Capital Trust PLC on 25 September 2012.
Split of portfolio by sector:
http://hugin.info/141809/R/2058257/771371.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 Venture Capital Trust PLC via Globenewswire
http://www.closeventures.co.uk
(END) Dow Jones Newswires
November 21, 2016 09:20 ET (14:20 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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