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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Crown Place Vct Plc | LSE:CRWN | London | Ordinary Share | GB0002577434 | 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% | 28.90 | 28.40 | 29.40 | 28.90 | 28.90 | 28.90 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Finance Services | 4.78M | 2.82M | 0.0100 | 28.90 | 81.13M |
TIDMCRWN Crown Place VCT PLC As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2, Crown Place VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 31 December 2016. This announcement was approved by the Board of Directors on 28 February 2017. The full Half-yearly Financial Report (which is unaudited) for the period to 31 December 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/CRWN. Investment objective The investment objective and policy of the Company* is to achieve long term capital and income growth principally through investment in smaller unquoted companies in the United Kingdom. In pursuing this policy, the Manager aims to build a portfolio which concentrates on two complementary investment areas. The first are more mature or asset-based investments that can provide a strong income stream combined with a degree of capital protection. These will be balanced by a lesser proportion of the portfolio being invested in higher risk companies with greater growth prospects. *The "Company" is Crown Place VCT PLC. The "Group" is the Company together with its subsidiaries CP1 VCT PLC and CP2 VCT PLC. Financial calendar Record date for second dividend 10 March 2017 Payment of second dividend 31 March 2017 Financial year end 30 June Financial highlights Six months ended Six months ended Year ended 31 December 2016 31 December 2015 30 June 2016 (pence per share) (pence per share) (pence per share) Opening net asset value 28.94 30.97 30.97 Revenue return 0.26 0.29 0.59 Capital return/(loss) 2.59 0.25 (0.18) Total return 2.85 0.54 0.41 Dividends paid (1.00) (1.25) (2.50) Impact from buy-backs and issue of share capital 0.05 - 0.06 Closing net asset value 30.84 30.26 28.94 Shareholder return and shareholder value Crown Place VCT PLC* (pence per share) Shareholder return from launch to April 2005 (date that Albion Ventures was appointed investment manager): Total dividends paid to 6 April 2005 (i) 24.93 Decrease in net asset value (56.60) Total shareholder return to 6 April 2005 (31.67) Shareholder return from April 2005 to 31 December 2016: Total dividends paid 27.80 Decrease in net asset value (12.56) Total shareholder return from April 2005 to 31 December 2016 15.24 Shareholder value since launch: Total dividends paid to 31 December 2016 (i) 52.73 Net asset value as at 31 December 2016 30.84 Total shareholder value as at 31 December 2016 83.57 Current dividend objective: Pence per share (per annum) 2.00 Dividend yield on net asset value as at 31 December 2016 6.5% Notes (i) Prior to 6 April 1999, venture capital trusts were able to add 20 per cent. to dividends and figures for the period up until 6 April 1999 are included at the gross equivalent rate actually paid to shareholders. * Formerly Murray VCT 3 PLC The above financial summary is for the Company, Crown Place VCT PLC only. Details of the financial performance of CP1 VCT PLC (previously Murray VCT PLC) and CP2 VCT PLC (previously Murray VCT 2 PLC) which have been merged into the Company, can be found at the end of the announcement. Total shareholder value since launch: 31 December 2016 (pence per share) Total dividends paid during the period from launch to 6 April 2005 (prior to change of manager) 24.93 Total dividends paid during: the year ended 28 February 2006 1.00 the period ended 30 June 2007 3.30 the year ended 30 June 2008 2.50 the year ended 30 June 2009 2.50 the year ended 30 June 2010 2.50 the year ended 30 June 2011 2.50 the year ended 30 June 2012 2.50 the year ended 30 June 2013 2.50 the year ended 30 June 2014 2.50 the year ended 30 June 2015 2.50 the year ended 30 June 2016 2.50 the six months ended 31 December 2016 1.00 Total dividends paid to 31 December 2016 52.73 Net asset value as at 31 December 2016 30.84 Total shareholder value as at 31 December 2016 83.57 In addition to the dividends paid above, the Board has declared a second dividend for the year ending 30 June 2017 of 1 penny per Crown Place VCT PLC share, to be paid on 31 March 2017 to shareholders on the register on 10 March 2017. Interim management report Results In the six month period to 31 December 2016, the Company achieved an encouraging total return of 2.85 pence per share (31 December 2015: 0.54 pence per share) equivalent to a return of 9.8% on opening net assets (31 December 2015: 1.8%). Following payment of the first dividend for the year of 1 penny per share on 30 November 2016, the net asset value as at 31 December 2016 was 30.84 pence per share (30 June 2016: 28.94 pence per share). The total return for the period was GBP3,670,000, compared to GBP576,000 at 31 December 2015, of which the revenue profit was GBP333,000 and the capital profit was GBP3,337,000. Total expenses including investment management fees resulted in an ongoing charges ratio of 2.5% (31 December 2015: 2.6%). Portfolio review During the six month period, the Company deployed a total of GBP1,553,000 into qualifying investments (31 December 2015: GBP1,964,000). Of this amount, GBP728,000 related to three new investments and GBP825,000 in several existing portfolio companies to support their continuing growth. The new investments are Secured by Design (GBP220,000), an international automotive consultancy; Oviva (GBP108,000), a nutritional therapy company; and Convertr Media (GBP400,000), a company that specialises in digital lead generation software. Further investments in existing portfolio companies included a total of GBP420,000 to fund the continued construction of three care homes, Active Lives Care, Ryefield Court Care and Shinfield Lodge Care. Proveca (GBP240,000), Dysis (GBP87,000), Abcodia (GBP50,000) and Mirada (GBP28,000) were the remaining companies to receive further investment during the period. Investments realised during the period totalled GBP1,162,000 of which GBP820,000 related to the sale of the Company's investment in Exco, achieving a return, including interest, of 3 times cost. The remaining GBP342,000 was mainly made up of loan stock repayments and deferred consideration, and more details can be found in the realisations table below. The portfolio remains well diversified and benefits from a high proportion of asset-based investments (61% at the period end). Radnor House School (Holdings) continues to grow profitably, with particular progress at its recently acquired Sevenoaks school, and saw a further increase in valuation in the period. The three care home investments based in Hillingdon, Reading and Oxford are all now open and trading according to plan, resulting in strong upwards valuations. In the growth portfolio, Proveca, Hilson Moran and Egress have continued to grow strongly resulting in an increase in their valuations and are well positioned to deliver further value. Against this, the valuations in Dysis, Abcodia and Cisiv were reduced in the period as a result of their current trading levels. The investment portfolio sector chart at the end of the announcement illustrates the composition of the portfolio by industry sector. The majority of the investments in the hotels, pubs, health and fitness clubs, education and environmental segments, plus the larger healthcare investments, are backed by freehold or long leasehold assets with no external gearing. Dividends At the time of the announcement of the 2015/16 full year's results in September, we said that we would be recalibrating the Company's dividend policy, and reducing the target pay out from 2.50 pence per share to 2.00 pence per share. Consequently, the first dividend for the current financial year of 1 penny per share was paid on 30 November 2016. A second dividend of 1 penny per share will be paid on 31 March 2017 to shareholders on the register on 10 March 2017. The Board aims to maintain this level of annualised dividend distribution going forward, subject to the availability of cash resources and distributable
reserves. Based on the net asset value as at 31 December 2016, this equates to a 6.5% yield (31 December 2015: 8.3%). Dividends are paid free of tax to shareholders. Qualifying shareholders who elect to participate in the Dividend Reinvestment Scheme will be able, in respect of further dividends, to receive their dividends in the form of new shares rather than cash, which will entitle them to income tax relief at the rate of 30% (new shares will need to be held for at least five years to retain the tax relief). Further details of the Dividend Reinvestment Scheme can be found on the Manager's website www.albion-ventures.co.uk/funds/CRWN. Risks and uncertainties Whilst recent higher than forecasted economic growth projections for the UK have confounded the bearish predictions made following the EU referendum, there is still considerable uncertainty as to the long-term impact of the UK's withdrawal from the EU. In addition, rising inflation brings the risk of increased interest rates, which may have a negative effect on consumer and business confidence. Overall investment risk, however, is mitigated through a variety of processes, including our policies of ensuring that the Company has a first charge over portfolio companies' assets wherever possible, and secondly by aiming to achieve balance in the portfolio through the inclusion of sectors that are less exposed to the business and consumer cycles. Other risks and uncertainties remain unchanged and are as detailed in note 12. 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, and it is the Board's intention for such buy-backs to be in the region of a 5% discount to net asset value, so far as market conditions and liquidity permit. During the period, the Company bought back and held in treasury 1,738,000 shares at a total cost of GBP455,000, in-line with the share buy-back policy. Transactions with the Manager Details of the transactions that took place with the Manager in the period can be found in note 4. Going concern 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, the Board has assessed the Company's operation as a going concern. The Company has significant cash and liquid resources, its portfolio of investments is well diversified in terms of sector, and the major cash outflows of the Company (namely investments, buy-backs and dividends) are within the Company's control. Accordingly, after making diligent enquiries the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing the accounts. The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks remain as detailed on pages 57 to 60 of the Annual Report and Financial Statements for the year ended 30 June 2016. Albion VCTs Prospectus Top Up Offers 2016/2017 Your Board, in conjunction with the boards of other VCTs managed by Albion Ventures LLP, launched a prospectus top up offer of new Ordinary shares on 29 November 2016. Your Board has elected to exercise the over-allotment facility referred to in the prospectus and accordingly, the maximum amount that may be raised by the Company is GBP6 million. The Board is pleased to announce that it reached its GBP6 million limit, which as of 22 February 2017 was fully subscribed and closed. The proceeds will be used to provide further resources at a time when a number of attractive investment opportunities are being seen. Details of the first allotment on 31 January 2017 are shown in note 10. Outlook Despite the uncertain broader global environment and the potential disruption resulting from the departure of the UK from the EU, your Company's investment portfolio gives grounds for optimism. It is well balanced, both across sectors and risk classes, and has the potential for further good growth in the healthcare, education and technology sectors. Deal flow, meanwhile, is strong, and the current top up offer will help to fund further investments in promising growth areas. Richard Huntingford Chairman 28 February 2017 Responsibility statement The Directors, Richard Huntingford, James Agnew, Karen Brade and Penny Freer, are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Group in accordance with International Financial Reporting Standards ("EU IFRS") as adopted by the European Union. In preparing the condensed set of Financial Statements for the period to 31 December 2016 we, the Directors, confirm that to the best of our knowledge: (a) the condensed set of Financial Statements has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" issued by the International Accounting Standards Board; (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); (c) the condensed set of Financial Statements give a true and fair view in accordance with EU IFRS of the assets, liabilities, financial position and of the profit and loss of the Group for the six months ended 31 December 2016 as required by DTR 4.2.4R, and comply with EU IFRS and Companies Act 2006; and (d) 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 of Directors Richard Huntingford Chairman 28 February 2017 Portfolio of investments The following is a summary of non-current asset investments with a value as at 31 December 2016: As at 31 December 2016 As at 30 June 2016 (unaudited) (audited) % voting rights Change in % of AVL* value for the Investment Nature of Voting managed Cost Value Cost Value period** name business rights companies GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Unquoted asset-based investments Radnor House School (Holdings) Independent schools Limited for children aged 5-18 9.0 50.0 2,881 5,631 2,971 4,933 787 Shinfield Owner and operator of a Lodge Care residential care home Limited for the elderly in Berkshire 11.8 50.0 2,140 3,233 2,090 2,530 651 Chonais River Hydro Hydro power project in Limited Scotland 14.0 50.0 1,549 2,159 1,549 1,716 443 Owner and operator of a residential care Active Lives home for the elderly Care Limited in Oxford 7.5 50.0 1,530 1,969 1,350 1,421 368 The Crown Hotel Owner and operator Harrogate of the Crown Hotel, Limited Harrogate 15.0 50.0 2,976 1,906 2,976 1,855 51 Owner and operator Ryefield of a residential care home Court Care for the elderly in Limited Greater London 7.7 50.0 1,160 1,616 970 1,014 412 Gharagain River Hydro Hydro power project Limited in Scotland 15.0 50.0 1,116 1,335 1,116 1,245 90 Earnside Energy Limited Anaerobic digestion 7.0 50.0 1,123 1,241 1,123 1,232 9 Owner and operator of the 'Holiday Inn Kew Green VCT Express' at (Stansted) Limited Stansted Airport 2.0 50.0 805 900 865 776 184 The Street by Street Solar Programme Limited Photovoltaic installations 4.4 50.0 461 693 461 666 27 Bravo Inns II Owner and operator Limited of freehold pubs 3.6 50.0 595 662 595 631 31 Owner and operator The Stanwell Hotel of the Stanwell Hotel
Limited at Heathrow Airport 10.8 50.0 1,682 646 1,682 690 (44) Alto Prodotto Wind Limited Wind power generator 4.1 50.0 370 568 371 571 (1) The Charnwood Former owner and operator Pub Company Limited of freehold pubs 6.9 50.0 481 482 481 481 1 Regenerco Renewable Energy Limited Photovoltaic installations 3.4 50.0 344 475 344 441 34 Infinite Ventures (Goathill) Limited Wind power generator 6.1 31.0 256 328 256 317 11 Bravo Inns Owner and operator of Limited freehold pubs 2.6 50.0 306 225 306 221 4 Small scale anaerobic Harvest AD Limited digestion project - - 164 164 164 164 - AVESI Limited Photovoltaic installations 3.8 50.0 123 163 123 151 12 Erin Solar Limited Photovoltaic installations 5.7 50.0 160 157 160 157 - Premier Leisure (Suffolk) Former freehold Limited cinema owner 5.4 47.4 95 114 95 92 22 Greenenerco Limited Wind power generator 1.9 50.0 65 102 65 102 - The Weybridge Owner and operator Club of a freehold health and Limited fitness club in Surrey 1.2 50.0 230 59 230 75 (16) Total unquoted asset- based investments 20,612 24,828 20,343 21,481 3,076 As at As at 31 December 2016 30 June 2016 (unaudited) (audited) % voting Change rights of in value % AVL* for the Investment Nature of voting managed Cost Value Cost Value period** name business rights companies GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Unquoted growth investments Manufacturer ELE Advanced of precision Technologies engineering Limited components 41.9 41.9 1,050 1,890 1,050 1,910 (20) Repositioning Proveca of paediatric Limited medicines 6.7 54.1 586 1,197 346 591 366 Developer of medical Mirada Medical imaging Limited software 6.5 45.0 321 745 293 699 18 Provider of Blackbay mobile data Limited solutions 4.1 34.9 463 521 463 476 45 Provider of Process process Systems systems Enterprise modelling Limited solutions 1.4 20.7 138 435 138 392 43 Multi- disciplinary Hilson Moran Holdings engineering Limited consultancy 3.1 34.7 91 426 104 338 106 Convertr Digital lead Media generation Limited software 4.3 27.0 400 400 - - - Software for managing MyMeds pharmaceutical &Me adverse Limited events 3.3 29.9 255 377 255 367 10 Medical devices for the DySIS detection of Medical epithelial Limited cancers 2.9 20.7 802 362 716 401 (125) International Masters distribution of Pharmaceuticals specialist Limited pharmaceuticals 2.8 19.7 211 347 211 417 (70) Business collaboration and Relayware communication Limited solutions 1.1 11.6 324 323 324 318 5 Aridhia Healthcare Informatics informatics Limited and analysis 2.4 22.3 377 254 377 275 (21) Provider of Egress cloud-based Software email and file Technologies encryption Limited software 0.8 22.0 80 230 80 132 98 Provider and consultancy of Secured by automotive Design technology Limited research 1.5 10.0 220 221 - - 1 Provider of digital Grapeshot marketing Limited software 0.7 13.9 141 183 141 152 31 Refurbisher of semi- conductor Memsstar fabrication Limited equipment 3.0 44.7 130 170 130 168 2 Drug development services to the AMS life- Sciences science Limited industries 3.7 49.6 193 137 193 80 57 Black Analytical Swan platform for Data market Limited research 0.4 2.9 115 115 115 115 - Web-based solutions for healthcare data capture Cisiv and Limited management 2.8 28.9 216 111 216 215 (104) Provides medical nutritional Oviva AG counselling 1.4 9.1 108 108 - - - Business to OmPrompt business Holdings integration Limited software 0.8 19.7 100 104 100 103 1 Developer and producer of high Oxsensis temperature Limited sensors 1.4 20.6 224 99 224 99 - Services for validation and discovery of Abcodia serum Limited biomarkers 1.7 19.5 227 97 177 158 (111) Palm Tree Technology Limited Software company 0.2 0.7 102 62 102 62 - Provider of cyber security Panaseer threat Limited analysis 1.0 7.8 50 50 50 50 - Provides mobile InCrowd platform for for Sports brands to access fans Limited at live events 1.0 6.8 42 42 42 42 - Commercial insurance Dickson broker, Financial trading as Services Innovation Limited Broking 2.7 30.0 27 37 27 27 10 CSS Drinks distributor Group to the Limited travel sector 2.3 15.0 28 27 28 28 (1)
Provider of online gym passes, Sandcroft trading as Avenue Payas Limited Ugym.com 0.2 5.6 20 17 20 22 (5) Elements Provider of Software traceability Limited software solutions 0.7 4.5 4 - 4 - - Total unquoted growth investments 7,045 9,087 5,926 7,637 336 Total unquoted investments 27,657 33,915 26,269 29,118 3,412 As at 31 December 2016 As at 30 June 2016 (unaudited) (audited) % voting rights Change in % of AVL* the value for Investment Nature of voting managed Cost Value Cost Value the period** name business rights companies GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Quoted investments Mi-Pay Group PLC Provider of mobile payment services 3.3 34.7 713 273 713 301 (28) Augean PLC Waste management 0.4 0.4 593 193 593 162 31 Avanti Communications Group plc Supplier of satellite communications 0.1 0.1 136 14 136 37 (23) Provider of workforce management solutions ComOps Limited software 0.2 1.4 13 11 13 18 (7) Total quoted investments 1,455 491 1,455 518 (27) Total investments 29,112 34,406 27,724 29,636 3,385 Total change in value of investments 3,385 Movement in loan stock accrued interest (127) Unrealised gains sub-total 3,258 Realised gains in current period 333 Total gains on investments as per consolidated statement of comprehensive income 3,591 * AVL is Albion Ventures LLP ** As adjusted for additions and disposals between the two accounting periods The total comparative cost and valuations for 30 June 2016 do not agree to the Annual Report and Financial Statements for the year ended 30 June 2016 as the above list does not include brought forward investments that were fully disposed of in the period. Opening Total Gain on carrying Disposal realised opening Cost value proceeds gain value Non-current asset realisations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Exco Intouch Limited 290 659 820 530 161 Radnor House School (Holdings) Limited (loan stock repayment) 90 90 90 - - Kew Green VCT (Stansted) Limited (loan stock repayment) 60 60 60 - - UCTAL Limited 1 1 54 53 53 Hilson Moran Holdings Limited (loan stock repayment) 13 18 18 5 - Alto Prodotto Wind Limited (loan stock repayment) 1 1 1 - - Escrow adjustments - - 119 119 119 Total realisations 455 829 1,162 707 333 Condensed consolidated statement of comprehensive income Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Gains on investments 2 - 3,591 3,591 - 481 481 - 238 238 Investment income and deposit interest 3 566 - 566 530 - 530 1,114 - 1,114 Investment management fees 4 (85) (254) (339) (72) (219) (291) (149) (448) (597) Other expenses (148) - (148) (144) - (144) (289) - (289) Profit/(loss) before taxation 333 3,337 3,670 314 262 576 676 (210) 466 Taxation - - - - - - - - - Profit/(loss) and total comprehensive income/(loss) attributable to shareholders 333 3,337 3,670 314 262 576 676 (210) 466 Basic and diluted earnings/(loss) per Ordinary share (pence)* 6 0.26 2.59 2.85 0.29 0.25 0.54 0.59 (0.18) 0.41 * excluding treasury shares Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 31 December 2015 and the audited statutory accounts for the year ended 30 June 2016. The accompanying notes form an integral part of this Half-yearly Financial Report. The total column of this statement represents the Group's Statement of comprehensive income, prepared in accordance with International Financial Reporting Standards ('IFRS'). The supplementary revenue and capital reserve columns are prepared under guidance published by The Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations and are wholly attributable to the parent company. Condensed consolidated balance sheet Unaudited Audited 31 December 30 June 2016 2016 Notes GBP'000 GBP'000 Non-current assets Investments 7 34,406 30,296 Current assets Trade and other receivables less than one year 492 476 Cash and cash equivalents 4,855 6,896 5,347 7,372 Total assets 39,753 37,668 Current liabilities Trade and other payables less than one year (233) (283) Total assets less current liabilities 39,520 37,385 Equity attributable to equity holders Ordinary share capital 8 14,178 14,110 Share premium 14,006 13,872 Capital redemption reserve 1,415 1,415 Unrealised capital reserve 5,016 2,131 Realised capital reserve (448) (900) Other distributable reserve 5,353 6,757 Total equity shareholders' funds 39,520 37,385 Basic and diluted net asset value per share (pence)* 30.84 28.94 * excluding treasury shares Comparative figures have been extracted from the audited statutory
accounts for the year ended 30 June 2016. The accompanying notes form an integral part of this Half-yearly Financial Report. These Financial Statements were agreed by the Board of Directors, and authorised for issue on 28 February 2017 and were signed on its behalf by Richard Huntingford Chairman Company number 03495287 Condensed Company balance sheet Unaudited Audited 31 December 30 June 2016 2016 Notes GBP'000 GBP'000 Non-current assets Investments 7 34,406 30,296 Investment in subsidiary undertakings 6,613 6,823 41,019 37,119 Current assets Investment in subsidiary undertakings 8,230 8,230 Trade and other receivables less than one year 488 436 Cash and cash equivalents 4,839 6,880 13,557 15,546 Total assets 54,576 52,665 Creditors: amounts falling due within one year Trade and other payables less than one year (15,056) (15,280) Total assets less current liabilities 39,520 37,385 Equity attributable to equity holders Ordinary share capital 8 14,178 14,110 Share premium 14,006 13,872 Capital redemption reserve 1,415 1,415 Unrealised capital reserve 4,801 2,127 Realised capital reserve (657) (1,109) Other distributable reserve 5,777 6,970 Total equity shareholders' funds 39,520 37,385 Basic and diluted net asset value per share (pence)* 30.84 28.94 * excluding treasury shares Comparative figures have been extracted from the audited statutory accounts for the year ended 30 June 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 28 February 2017 and were signed on its behalf by Richard Huntingford Chairman Company number 03495287 Condensed consolidated statement of changes in equity Ordinary 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 July 2016 14,110 13,872 1,415 2,131 (900) 6,757 37,385 Profit and total comprehensive income - - - 3,258 79 333 3,670 Transfer of previously unrealised gains on sale or write off of investments - - - (373) 373 - - Dividends paid - - - - - (1,282) (1,282) Purchase of shares for treasury (including costs) - - - - - (455) (455) Issue of equity 68 135 - - - - 203 Cost of issue of equity - (1) - - - - (1) As at 31 December 2016 14,178 14,006 1,415 5,016 (448) 5,353 39,520 As at 1 July 2015 11,767 9,234 1,415 1,612 (171) 9,224 33,081 Profit/(loss) and total comprehensive income - - - 555 (293) 314 576 Transfer of previously unrealised gains on sale of investments - - - (369) 369 - - Dividends paid - - - - - (1,361) (1,361) Purchase of shares for treasury (including costs) - - - - - (215) (215) Issue of equity 279 605 - - - - 884 Cost of issue of equity - (22) - - - - (22) As at 31 December 2015 12,046 9,817 1,415 1,798 (95) 7,962 32,943 As at 1 July 2015 11,767 9,234 1,415 1,612 (171) 9,224 33,081 Profit/(loss) and total comprehensive income - - - 422 (632) 676 466 Transfer of previously unrealised losses on sale or write off of investments - - - 97 (97) - - Dividends paid - - - - - (2,837) (2,837) Purchase of shares for treasury (including costs) - - - - - (306) (306) Issue of equity 2,343 4,819 - - - - 7,162 Cost of issue of equity - (181) - - - - (181) As at 30 June 2016 14,110 13,872 1,415 2,131 (900) 6,757 37,385 Condensed Company statement of changes in equity Ordinary 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 July 2016 14,110 13,872 1,415 2,127 (1,109) 6,970 37,385 Profit and total comprehensive income - - - 3,258 79 544 3,881 Revaluation of investment in subsidiaries - - - (211) - - (211) Transfer of previously unrealised gains on sale of investments - - - (373) 373 - - Dividends paid - - - - - (1,282) (1,282) Purchase of shares for treasury (including costs) - - - - - (455) (455) Issue of equity 68 135 - - - - 203 Cost of issue of equity - (1) - - - - (1) As at 31 December 2016 14,178 14,006 1,415 4,801 (657) 5,777 39,520 As at 1 July 2015 11,767 9,234 1,415 1,647 (380) 9,398 33,081 Profit/(loss) and total comprehensive income - - - 555 (293) 556 818 Revaluation of investment in subsidiaries - - - (242) - - (242) Transfer of previously unrealised gains on sale of investments - - - (369) 369 - - Dividends paid - - - - - (1,361) (1,361) Purchase of shares for treasury (including costs) - - - - - (215) (215) Issue of equity 279 605 - - - - 884 Cost of issue of equity - (22) - - - - (22) As at 31 December 2015 12,046 9,817 1,415 1,591 (304) 8,378 32,943
As at 1 July 2015 11,767 9,234 1,415 1,647 (380) 9,398 33,081 Profit/(loss) and total comprehensive income - - - 422 (632) 715 505 Revaluation of investment in subsidiaries - - - (39) - - (39) Transfer of previously unrealised losses on disposal of investments - - - 97 (97) - - Dividends paid - - - - - (2,837) (2,837) Purchase of shares for treasury (including costs) - - - - - (306) (306) Issue of equity 2,343 4,819 - - - - 7,162 Cost of issue of equity - (181) - - - - (181) As at 30 June 2016 14,110 13,872 1,415 2,127 (1,109) 6,970 37,385 * These reserves amount to GBP5,120,000 (31 December 2015: GBP8,074,000; 30 June 2016: GBP5,861,000) which is considered distributable. Condensed consolidated statement of cash flows Unaudited six months Audited ended Unaudited year ended 31 December six months ended 30 June 2016 31 December 2015 2016 GBP'000 GBP'000 GBP'000 Cash flow from operating activities Investment income received 397 540 948 Deposit interest received 32 22 47 Dividend income received 15 6 38 Investment management fees paid (328) (290) (579) Other cash payments (191) (150) (283) Net cash flow from operating activities (75) 128 171 Cash flow from investing activities Purchase of non-current asset investments (1,553) (1,964) (4,566) Disposal of non-current asset investments 1,136 2,456 2,879 Net cash flow from investing activities (417) 492 (1,687) Cash flow from financing activities Issue of share capital - 1,271 7,164 Cost of issue of equity - - (2) Equity dividends paid (1,078) (1,166) (2,413) Purchase of shares for treasury (471) (228) (303) Transfer of CP2 VCT PLC cash to liquidator - - (40) Net cash flow from financing activities (1,549) (123) 4,406 (Decrease)/increase in cash and cash equivalents (2,041) 497 2,890 Cash and cash equivalents at the start of the period 6,896 4,006 4,006 Cash and cash equivalents at the end of the period 4,855 4,503 6,896 Condensed Company statement of cash flows Unaudited Audited six months ended Unaudited year ended 31 December six months ended 30 June 2016 31 December 2015 2016 GBP'000 GBP'000 GBP'000 Cash flow from operating activities Investment income received 397 540 948 Deposit interest received 32 22 47 Dividend income received 649 697 943 Investment management fees paid (328) (290) (579) Intercompany interest paid (634) (691) (905) Other cash payments (191) (150) (283) Net cash flow from operating activities (75) 128 171 Cash flow from investing activities Purchase of non-current asset investments (1,553) (1,964) (4,566) Disposal of non-current asset investments 1,136 2,456 2,879 Net cash flow from investing activities (417) 492 (1,687) Cash flow from financing activities Issue of share capital - 1,271 7,164 Cost of issue of equity - - (2) Equity dividends paid (1,078) (1,166) (2,413) Purchase of shares for treasury (including costs) (471) (228) (303) Net cash flow from financing activities (1,549) (123) 4,446 (Decrease)/increase in cash and cash equivalents (2,041) 497 2,930 Cash and cash equivalents at the start of the period 6,880 3,950 3,950 Cash and cash equivalents at the end of the period 4,839 4,446 6,880 Notes to the unaudited condensed Financial Statements 1. Accounting policies The following policies refer to the Group and the Company except where noted. References to International Financial Reporting Standards ('IFRS') relate to the Group Financial Statements and FRS 101 "Reduced Disclosure Framework" for the Company. Basis of accounting The Half-yearly Financial Report has been prepared in accordance with International Financial Reporting Standards ('EU IFRS') as adopted by the European Union (and therefore comply with Article 4 of the EU IAS regulation). This Half-yearly Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting' in the case of the Group, and in accordance with FRS 104 'Interim Financial Reporting' ("FRS 104") in the case of the Company. Both the Group and the Company Financial Statements also apply the Statement of Recommended Practice: "Financial Statements of Investment Companies and Venture Capital Trusts" ('SORP') issued by the Association of Investment Companies ("AIC") in 2014, in so far as this does not conflict with IFRS. The Financial Statements have been prepared in accordance with those parts of the Companies Act 2006 applicable to the companies reporting under IFRS and UK GAAP. The information in this document does not include all of the disclosures required by EU IFRS and the SORP in full annual Financial Statements, and it should be read in conjunction with the consolidated Financial Statements of the Group for the year ended 30 June 2016. This Half-yearly financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated Financial Statements for the year ended 30 June 2016. These Financial Statements are presented in Sterling to the nearest thousand.The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 30 June 2016. Basis of consolidation The Group consolidated Financial Statements incorporate the Financial Statements of the Company for the period ended 31 December 2016 and the entities controlled by the Company (its subsidiaries), for the same period. Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. The amount of the Company's profit before tax for the period dealt within the accounts of the Group is GBP3,881,000 (31 December 2015: GBP818,000; 30 June 2016: GBP505,000). Segmental reporting The Directors are of the opinion that the Group and the Company are engaged in a single operating segment of business, being investment in equity and debt. The Group and the Company report to the Board which acts as the chief decision maker. The Group invests in smaller companies principally based in the UK. Business combinations The acquisition of subsidiaries is accounted for using the purchase method in the Group Financial Statements. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the subsidiaries, plus any costs directly attributable to the business combination. The
subsidiary's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 "Business Combinations" are recognised at their fair value at the acquisition date. Estimates The preparation of the Group and Company's Half-yearly Financial Report requires estimates, assumptions and judgements to be made, which affect the reported results and balances. Actual outcomes may differ from these estimates, with a consequential impact on the results of future periods. Those estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through profit or loss ('FVTPL'). The valuation of investments held at FVTPL or measured in assessing any impairment of loan stocks is determined by using valuation techniques. The Group and the Company use judgements to select a variety of methods and makes assumptions that are mainly based on market conditions at each balance sheet date. Investment in subsidiaries Investments in subsidiaries are revalued at the balance sheet date based on the underlying net assets of the subsidiary. Revaluation movements are recognised in the unrealised reserve. CP2 VCT PLC is a wholly-owned subsidiary of the Company. CP2 VCT PLC transferred its business to Crown Place VCT PLC and ceased trading with effect from the date of merger on 12 January 2006. Since then, CP2 VCT PLC has had no further business other than to hold cash and intercompany balances. CP2 VCT PLC had significant tax losses which have been utilised by the Company through group relief. As the tax losses were depleted, the Directors decided to place CP2 VCT PLC into Members' Voluntary Liquidation. BDO LLP, were appointed to undertake this task on 14 December 2015. The final meeting of CP2 VCT PLC was held on 8 December 2016 and will be struck from the Companies House register three months after this meeting. The above decision does not affect CP1 VCT PLC, which continues to be a wholly supported subsidiary company. Non-current asset investments Quoted and unquoted equity investments, debt issued at a discount and convertible bonds In accordance with IAS 39 'Financial Instruments: Recognition and Measurement', quoted and unquoted equity, debt issued at a discount and convertible bonds are designated as FVTPL. Investments listed on recognised exchanges are valued at the closing bid prices at the end of the accounting period. Unquoted investments' fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines). Fair value movements and gains and losses arising on the disposal of investments are reflected in the capital column of the Statement of comprehensive income in accordance with the AIC SORP. Realised gains or losses on the sale of investments will be reflected in the realised capital reserve, and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve. 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. Warrants and unquoted equity derived instruments Warrants and unquoted equity derived instruments are only valued if there is deemed to be additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment as a whole on a unit of account basis. Unquoted loan stock Unquoted loan stock (excluding debt issued at a discount and convertible bonds) is classified as loans and receivables as permitted by IAS 39 and measured at amortised cost using the effective interest rate method less impairment. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Statement of comprehensive income, and hence are reflected in the other distributable reserve, and movements in respect of capital provisions are reflected in the capital column of the Statement of comprehensive income and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve for impairments arising from revaluations of the fair value of the security. For all unquoted loan stock, fully performing, past due or impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security held less estimated selling costs. Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period. In accordance with the exemptions under IAS 28 "Investments in associates", undertakings in which the Group or Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method. Investment income Quoted and unquoted equity income Dividends receivable on quoted equity shares are recognised on the ex-dividend date. Income receivable on unquoted equity is recognised when the Company's right to receive payment and expected settlement is established. Unquoted loan stock income Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment. Bank interest income Interest income is recognised on an accruals basis using the rate of interest agreed with the bank. Investment management fees, performance incentive fees and other expenses All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of comprehensive income, except for management fees and performance incentive fees which are allocated in part to the capital column of the Statement of comprehensive income, to the extent that these relate to the maintenance or enhancement in the value of the investments and in line with the Board's expectation that over the long term 75 per cent. of the Group's investment returns will be in the form of capital gains. Issue costs Issue costs associated with the allotment of share capital have been deducted from the share premium account. Taxation Taxation is applied on a current basis in accordance with IAS 12 "Income taxes". Taxation associated with capital expenses is applied in accordance with the SORP. Deferred taxation is provided in full on timing differences, and temporary differences (in accordance with IAS 12) that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Temporary differences arise from differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for taxation purposes. Timing differences (IAS 12) arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which unused tax losses and credits can be utilised. Deferred tax assets and liabilities are not discounted. Dividends In accordance with IAS 10 "Events after the balance sheet date", dividends are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting. Reserves Share premium reserve This reserve accounts for the difference between the price paid for the Company's 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 This reserve accounts for movements from the revenue column of the Statement of comprehensive income, the payment of dividends, the buyback of shares and other non-capital realised movements. 2. Gains on investments Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 GBP'000 GBP'000 GBP'000 Unrealised gains on investments held at fair value through profit or loss 3,060 396 288
Unrealised reversal of impairments measured at amortised cost 198 159 133 Unrealised gains on investments 3,258 555 422 Realised gains/(losses) on investments held at fair value through profit or loss 333 (45) (152) Realised losses on investments measured at amortised cost - (29) (32) Realised gains/(losses) on investments 333 (74) (184) 3,591 481 238 Investments measured at amortised cost are unquoted loan stock investments. 3. Investment income and deposit interest Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 GBP'000 GBP'000 GBP'000 Income recognised on investments held at fair value through profit or loss UK dividend income 15 6 38 Interest on convertible bonds and debt issued at a discount 274 181 469 289 187 507 Income recognised on investments measured at amortised cost Return on loan stock investments 250 321 557 Bank deposit interest 27 22 50 277 343 607 566 530 1,114 4. Investment management fees Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 Revenue Capital Total Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Investment management fee 85 254 339 72 219 291 149 448 597 Further details of the management agreement under which the investment management fee is paid are given on pages 10 and 11 of the Strategic report in the Annual Report and Financial Statements for the year ended 30 June 2016. During the period, services of a total value of GBP364,000 (six months ended 31 December 2015: GBP316,000; year ended 30 June 2016: GBP647,000) were purchased by the Company from Albion Ventures LLP; comprising GBP339,000 management fee and GBP25,000 administration fee. At the financial period end, the amount due to Albion Ventures LLP disclosed as payables was GBP186,500 (administration fee accrual GBP12,500, management fee accrual GBP174,000) (31 December 2015: GBP157,500; 30 June 2016: GBP174,500). Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the period to 31 December 2016, fees of GBP72,100 attributable to the investments of the Company were received pursuant to these arrangements (31 December 2015: GBP69,700; 30 June 2016: GBP125,000). Albion Ventures LLP, the Manager, holds 56,152 Ordinary shares in the Company. 5. Dividends Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 GBP'000 GBP'000 GBP'000 First dividend paid on 30 November 2015 (1.25 pence per share) - 1,361 1,361 Second dividend paid on 31 March 2016 (1.25 pence per share) - - 1,476 First dividend paid on 30 November 2016 (1 penny per share) 1,282 - - 1,282 1,361 2,837 In addition, the Board has declared a second dividend of 1 penny per share for the year ending 30 June 2017. This will be paid on 31 March 2017 to shareholders on the register on 10 March 2017. This is expected to amount to approximately GBP1,406,000. 6. Basic and diluted return per share Unaudited Unaudited Audited six months ended six months ended year ended 31 December 2016 31 December 2015 30 June 2016 Revenue Capital Total Revenue Capital Total Revenue Capital Total Return/(loss) attributable to equity shares (GBP'000) 333 3,337 3,670 314 262 576 676 (210) 466 Weighted average shares in issue (excluding treasury shares) 128,752,216 107,785,226 114,998,634 Return/(loss) attributable per share (pence) (basic and diluted) 0.26 2.59 2.85 0.29 0.25 0.54 0.59 (0.18) 0.41 The return per share has been calculated excluding treasury shares of 13,653,410 (31 December 2015: 11,595,410; 30 June 2016: 11,915,410). 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. 7. Non-current asset investments Unaudited Audited 31 December 2016 30 June 2016 GBP'000 GBP'000 Investments held at fair value through profit or loss Unquoted equity and preference shares 16,150 11,542 Quoted equity 491 518 Discounted debt and convertible loan stock 8,354 8,903 24,995 20,963 Investments measured at amortised cost Unquoted loan stock 9,411 9,333 34,406 30,296 8. Ordinary share capital Unaudited Audited 31 December 2016 30 June 2016 GBP'000 GBP'000 Allotted, called up and fully paid 141,784,834 Ordinary shares of 10p each (30 June 2016: 141,097,990) 14,178 14,110 Voting rights 128,131,424 Ordinary shares of 10p each (30 June 2016: 129,182,580) The Company purchased 1,738,000 Ordinary shares for treasury during the period at a cost of GBP455,000 (year ended 30 June 2016: 1,063,000 shares at a cost of GBP306,000). The total number of shares held in treasury as at 31 December 2016 was 13,653,410 (30 June 2016: 11,915,410). Under the terms of the Dividend Reinvestment Scheme Circular dated 26 February 2009, the following new Ordinary shares of nominal value 10 pence per share were allotted during the period: Aggregate Opening Number of nominal value Net market price Allotment shares of shares Issue price invested on allotment date date allotted (GBP'000) (pence per share) (GBP'000) (pence per share) 30 November 2016 686,844 69 29.70 202 27.00 9. Contingencies and guarantees There are no external contingencies for or guarantees by the Group or Company as at 31 December 2016 (30 June 2016: nil). As at 31 December 2016 the Company had no financial commitments in respect of investments (30 June 2016: GBP529,000). Under the terms of the Transfer Agreement dated 16 January 2006, the Company has indemnified its subsidiaries, CP1 VCT PLC and CP2 VCT PLC in respect of all costs, claims and liabilities in exchange for the transfer of assets. 10. Post balance sheet events Since 31 December 2016, the Company has completed the following material transactions: -- Investment of GBP83,000 in Black Swan Data Limited; -- Proceeds of GBP121,000 from the sale of AMS Sciences Limited; -- Proceeds of GBP90,000 received from the repayment of loan stock by Radnor House School (Holdings) Limited. Albion VCTs Prospectus Top Up Offers 2016/2017 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. A copy of the prospectus may be obtained from www.albion-ventures.co.uk. The following new Ordinary shares of nominal value 10 pence per share were allotted under the Offers since the period end: Aggregate Opening Number of nominal value Issue price Net consideration market price Allotment shares of shares (pence per received on allotment date date allotted (GBP'000) share) (GBP'000) (pence per share) 31 January 2017 2,436,624 243 30.40 726 28.50 31 January 2017 987,718 99 30.50 294 28.50 31 January 2017 8,997,127 900 30.70 2,679 28.50 12,421,469 1,242 3,699 The Board is pleased to announce that it has reached its GBP6 million limit under its Offer, which as of 22 February 2017 was fully subscribed and has now closed. 11. Related party transactions Other than transactions with 100 per cent. owned Group companies and those with the Manager as disclosed in note 4, there are no other related party transactions. 12. Risks and uncertainties The Board considers that the Company faces the following principal risks and uncertainties: 1. Economic risk Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company's prospects in a number of ways. To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in fixed interest secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies. Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors. 2. Investment risk This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses. 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 in investing in this segment of the market. The Manager invests in a diversified portfolio of companies, across a number of sectors of the economy, thus spreading investment risk. 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. It is the policy of the Company for portfolio companies to not normally have external borrowings. The Board and the Manager closely monitor regulatory changes in the sectors in which the Company is invested. 3. Valuation risk The Company's investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported. As described in note 1 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and 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 sensitivity of these assumptions are commented on further in notes 9 and 16 of the Annual Report and Financial Statements for the year ended 30 June 2016. All other unquoted loan stock is measured at amortised cost. The values of a number of investments are also underpinned by independent third party professional valuations. 4. VCT approval risk The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax-free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares. To reduce this risk, the Board has appointed the Manager, which has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed Philip Hare & Associates LLP as its taxation adviser 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. 5. VCT regulatory changes risk The Company is required to comply with regular changes to VCT specific regulations including the latest ones relating to European State Aid regulations which are enacted by the UK Government. Non-compliance could result in a loss of VCT status and/or demands for repayment of State Aid by a portfolio company or by VCT investors. The Board receives advice from Philip Hare & Associates LLP in respect of these requirements and conducts its affairs in order to comply with these requirements. The Manager engages regularly with policy makers on regulation. In addition, the Board places reliance upon the skills and expertise of the Manager in investing in this segment of the market. 6. Compliance risk The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies. Board members and the Manager have experience of operating at senior levels within or advising quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks via the Manager's Compliance Officer. The Manager reports monthly to its Board on any issues arising from compliance or regulation. These controls are also reviewed as part of the quarterly Manager Board meetings, and also as part of the review work undertaken by the Manager's Compliance Officer. The report on controls is evaluated by Internal Audit during its reports. 7. 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 and Risk 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 and Risk Committee to ask specific and detailed questions. Karen Brade as the Chairman of the Audit and Risk Committee has access to the internal audit partner of PKF Littlejohn LLP to discuss the 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 Risk Guidance report are detailed on page 31 of the Annual Report and Financial Statements for the year ended 30 June 2016. Measures are in place to mitigate information security risk in order to ensure the integrity, availability and confidentiality of information used within the business. 8. Reliance upon third parties risk The Group and the Company are reliant upon the services of Albion Ventures LLP and other third party service providers 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 pages 10 and 11 of the Annual Report and Financial Statements for the year ended 30 June 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. The Board monitors the performance of other third party service providers annually. 9. 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 16 of the Annual Report and Financial Statements for the year ended 30 June 2016. All of the Group's income and expenditure is denominated in sterling and hence the Group has no foreign currency risk. The Group is financed through equity and does not have any borrowings. The Group does not use derivative financial instruments for speculative purposes. 10. Reputational risk This arises from broader performance and ethical issues, including investment in businesses and sectors that are inconsistent with the values of Board and the VCT or, by the Boards of portfolio companies taking actions which similarly are inconsistent with the values of the VCT. The Board clearly articulates to the Investment Manager its broader aims and standards including those sectors which are consistent with the values of the Board. The Board regularly reviews the performance and investment strategy of the Investment Manager. The Investment Manager periodically attends Board meetings of the VCT's portfolio companies and across the portfolio receives periodic management information and is alert to potential threats to reputation. 13. Other information The information set out in the Half-yearly Financial Report does not constitute the Group's statutory accounts within the terms of section 434 of the Companies Act 2006 for the periods ended 31 December 2016 and 31 December 2015 and is unaudited. The financial information for the year ended 30 June 2016 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 and is derived from the statutory accounts for the financial year, which have been delivered to the Registrar of Companies. The Auditor's report on those accounts was unqualified and did not contain statements under s498 (2) or (3) of the Companies Act 2006. 14. 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/CRWN. Shareholder returns for CP1 VCT PLC (previously Murray VCT PLC) and CP2 VCT PLC (previously Murray VCT 2 PLC) (unaudited) Proforma (i) Murray VCT Proforma (i) Murray VCT 2 PLC PLC (pence per share) (pence per share) Shareholder return from launch to April 2005 (date that Albion Ventures was appointed investment manager): Total dividends paid to 6 April 2005 (ii) 30.36 30.91 Decrease in net asset value (69.90) (64.50) Total shareholder return to 6 April 2005 (39.54) (33.59) Shareholder return from April 2005 to 31 December 2016: Total dividends paid 20.07 23.81 Decrease in net asset value (8.15) (9.25) Total shareholder return from April 2005 to 31 December 2016 11.92 14.56 Shareholder value since launch: Total dividends paid to 31 December 2016 (ii) 50.43 54.72 Net asset value as at 31 December 2016 21.95 26.25 Total shareholder value as at 31 December 2016 72.38 80.97 Current dividend objective: Pence per share (per annum) 1.42 1.70 Dividend yield on net asset value as at 31 December 2016 6.5% 6.5% Notes (i) 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 31 December 2016 since the merger. This pro-forma is based upon the proportion of shares received by Murray VCT PLC (now renamed CP1 VCT PLC) and Murray VCT 2 PLC (now renamed CP2 VCT PLC) shareholders at the time of the merger with Crown Place VCT PLC on 13 January 2006. (ii) Prior to 6 April 1999, venture capital trusts were able to add 20 per cent. to dividends and figures for the period up until 6 April 1999 are included at the gross equivalent rate actually paid to shareholders. LEI Code 213800SYIQPA3L3T1Q68 Crown Place VCT PLC Split of investment portfolio by sector: http://hugin.info/141806/R/2082491/784717.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: Crown Place VCT PLC via Globenewswire http://www.closeventures.co.uk
(END) Dow Jones Newswires
February 28, 2017 10:15 ET (15:15 GMT)
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