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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Albion Enterprise Vct Plc | LSE:AAEV | London | Ordinary Share | GB00B1G3LR35 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 119.50 | 118.00 | 121.00 | 119.50 | 119.50 | 119.50 | 7,781 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | 5.74M | 2.77M | 0.0274 | 43.61 | 120.55M |
Hot Features
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TIDMAAEV
Albion Enterprise VCT PLC
LEI Code 213800OVSRDHRJBMO720
As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Enterprise VCT PLC today makes public its information
relating to the Half-yearly Financial Report (which is unaudited) for
the six months to 30 September 2018. This announcement was approved by
the Board of Directors on 4 December 2018.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 2018, will shortly be sent to shareholders.
Copies of the full Half-yearly Financial Report will be shown via the
Albion Capital Group LLP website by clicking
https://www.globenewswire.com/Tracker?data=I7AX5O6AepdDCYrBg8X9lchV-QgHjKRcROeUqeoI26-KwQdK7SLdp4mG324D8JNiFpJIIaXWBTFd8B7stY0s3Na0VCGVOxFMetQIKvV0dMslUduYkOfSWkwoRfr23uzt
www.albion.capital/funds/AAEV/30Sep18.pdf.
Investment policy
Albion Enterprise VCT PLC (the "Company") is a Venture Capital Trust and
the investment objective of the Company is to provide investors with a
regular and predictable source of income, combined with the prospect of
longer term capital growth.
Investment policy
The Company will invest in a broad portfolio of higher growth businesses
across a variety of sectors of the UK economy including higher risk
technology companies. Allocation of assets will be determined by the
investment opportunities which become available but efforts will be made
to ensure that the portfolio is diversified both in terms of sector and
stage of maturity of company.
VCT qualifying and non-VCT qualifying investments
Application of the investment policy is designed to ensure that the
Company continues to qualify and is approved as a VCT by HM Revenue and
Customs ("VCT regulations"). The maximum amount invested in any one
company is limited to any HMRC annual investment limits. It is intended
that normally at least 80 per cent. of the Company's funds will be
invested in VCT qualifying investments. The VCT regulations also have an
impact on the type of investments and qualifying sectors in which the
Company can make investment.
Funds held prior to investing in VCT qualifying assets or for liquidity
purposes will be held as cash on deposit, invested in floating rate
notes or similar instruments with banks or other financial institutions
with high credit ratings or invested in liquid open-ended equity funds
providing income and capital equity exposure (where it is considered
economic to do so). Investment in such open-ended equity funds will not
exceed 10 per cent. of the Company's assets at the time of investment.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within
venture capital trust qualifying industry sectors using a mixture of
securities. The maximum amount which the Company will invest in a single
company is 15 per cent. of the Company's assets at cost, thus ensuring a
spread of investment risk. The value of an individual investment may
increase over time as a result of trading progress and it is possible
that it may grow in value to a point where is represents a significantly
higher proportion of total assets prior to a realisation opportunity
being available.
Gearing
The Company's maximum exposure in relation to gearing is restricted to
10 per cent. of its adjusted share capital and reserves.
Financial calendar
Record date for second 8 February 2019
dividend
Payment date for second 28 February 2019
dividend
Financial year end 31 March
Financial highlights
Unaudited six Unaudited six Audited
months ended months ended year ended
30 September 30 September 31 March
2018 2017 2018
(pence per (pence per
share) (pence per share) share)
Dividends paid 3.00 2.50 5.00
Revenue return (0.02) - (0.39)
Capital return 5.77 2.34 13.79
------------- ----------------- -----------
Total return 5.75 2.34 13.40
Net asset value 112.12 101.62 109.46
---------------- ------------- ----------------- -----------
Total shareholder return to 30 September
2018: (Pence per share)
Dividends paid during the year ended:
31 March 2008 0.70
31 March 2009 1.65
31 March 2010 2.00
31 March 2011 3.00
31 March 2012 3.00
31 March 2013 3.50
31 March 2014 5.00
31 March 2015 5.00
31 March 2016 5.00
31 March 2017 5.00
31 March 2018 5.00
Dividends paid in the six months to
30 September 2018 3.00
-----------------
Total dividends paid to 30 September
2018 41.85
Net asset value as at 30 September
2018 112.12
-----------------
Total shareholder return to 30 September
2018 153.97
-----------------
In addition to the dividends summarised above, the Board has declared a
second dividend for the year ending 31 March 2019, of 3.00 pence per
share to be paid on 28 February 2019 to shareholders on the register on
8 February 2019.
Notes
-- The dividend of 0.70 pence per share paid during the period ended 31
March 2008 and first dividend of 0.40 pence per share paid during the
year ended 31 March 2009 were paid to shareholders who subscribed in the
2006/2007 offer only.
-- 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 accessed via a link on the Company's webpage at
http://www.albion.capital/funds/AAEV www.albion.capital/funds/AAEV under
'Trust Information'.
-- Investors are reminded that it is common for shares in VCTs to trade at a
discount to their net asset value as tax reliefs are only obtainable on
new subscription.
Interim management report
Introduction
I am pleased to report a total return of 5.8 pence per share for the six
months to 30 September 2018 (30 September 2017: 2.3 pence per share).
These results demonstrate continued positive developments within our
investment portfolio after excellent results over the past two years (31
March 2018: 13.4 pence per share; 31 March 2017: 10.9 pence per share).
The Manager, Albion Capital, has recently won two awards: Investor
Allstars Venture Capital Trust of the Year 2018 and Growth Investor of
the Year 2018. I am pleased to see its strong performance recognised by
fellow industry peers.
Investment performance and progress
During the period our holding in Grapeshot was sold to Oracle
Corporation, realising GBP9.6 million and resulting in a 10 times return
on original investment.
Particularly good progress was achieved by Quantexa, with an uplift of
GBP2.1 million following a third party led funding round. In addition,
the annual professional third party valuation of Radnor House School
(Holdings) increased due to the strong performance of both the
Twickenham school, which is close to its student capacity, and the
Sevenoaks school, which now has a student roll of 430 children against
223 on acquisition in 2015 and with significant further capacity to
grow. G.Network Communications also had an uplift in valuation during
the period as a result of a further fundraising round which completed in
October 2018. This will further expand their fibre optic broadband
network in central London.
During the period, some GBP4.0 million was invested in new and existing
companies. Investments in new companies included:
-- GBP474,000 in Phrasee, which provides an AI platform that generates
language to optimise marketing campaigns;
-- GBP320,000 in Koru Kids, which provides an online marketplace connecting
parents and nannies;
-- GBP232,000 in Arecor, to fund the development of biopharmaceuticals,
specialising in diabetes treatment;
-- GBP210,000 in uMotif, which provides a patient engagement and data
platform for use in medical observational research;
-- GBP190,000 in Forward Clinical, a secure mobile communications and
collaboration platform in healthcare; and
-- GBP160,000 in ePatient Network (trading as Raremark), which provides an
online community connecting people affected by rare diseases with
up-to-date scientific information, community insights and medical
research.
Significant follow on investments included: GBP961,000 in Sandcroft
Avenue (PayAsUGym.com), a provider of flexible access to health and
fitness clubs; and GBP400,000 in Locum's Nest, which provides a
technology solution for the management of locum doctors for the NHS.
Results and dividends
On 30 September 2018, the net asset value was GBP64.3 million or 112.12
pence per share compared to GBP61.9 million or 109.46 pence per share on
31 March 2018. The total return before taxation was GBP3.3 million
compared to GBP1.2 million for the six months to 30 September 2017.
As described in the Annual Report and Financial Statements for the year
ended 31 March 2018, in light of the strong performance in recent years,
the Directors increased the annual dividend target for the Company to 6
pence per share (previously 5 pence per share). A first dividend of 3
pence per share was paid to shareholders on 31 August 2018 to
shareholders on the register on 3 August 2018.
In line with the new annual dividend target of 6 pence per share, the
Directors declare a second dividend for the year of 3 pence per share
payable on 28 February 2019 to shareholders on the register on 8
February 2019.
Risks & uncertainties
The outlook for the UK economy continues to be a key risk affecting your
Company, in particular, the effect of the withdrawal of Britain from the
European Union is difficult to quantify at this time.
The Company's investment risk is mitigated through a variety of
processes, including investing in a diversified portfolio in terms of
sector and stage of maturity and focusing on opportunities where it is
believed growth can be resilient and sustainable.
Other principal risks and uncertainties remain unchanged and are
detailed in note 13 below.
Share buy-backs
It remains the Board's policy to buy back shares in the market, subject
to the overall constraint that such purchases are in the Company's
interest, including the maintenance of sufficient resources for
investment in new and existing portfolio companies and the continued
payment of dividends to shareholders. It is the Board's intention for
such buy-backs to be in the region of a 5 per cent. discount to net
asset value so far as market conditions and liquidity permit.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5.
Albion Capital agreed to reduce a proportion of its management fee
relating to the investments made by the Company in the SVS Albion OLIM
UK Equity Income Fund ("OUEIF") by 0.75 per cent., which represents the
management fee charged by OLIM. This avoids double counting of fees and
resulted in a reduction of the management fee of GBP7,400. Further
details of related party transactions can be found in note 11.
Albion VCTs Prospectus Top Up Offers 2018/19
The Company announced on 6 November 2018 that, subject to obtaining the
requisite regulatory approval, it is the Company's intention to launch a
prospectus top up offer to raise up to GBP6 million before issue costs,
with a further over-allotment facility of GBP2 million, of new Ordinary
shares for subscription in the 2018/19 and 2019/20 tax years. Full
details of the offer will be contained in a prospectus that is expected
to be published in early January 2019.
Outlook
We are encouraged by these interim results. We as a Board see the
portfolio as being well balanced across a variety of growth sectors and
with a number of businesses having the capability of significant further
increase in value. We look forward to the full year results with
confidence.
Maxwell Packe
Chairman
4 December 2018
Responsibility statement
The Directors, Maxwell Packe, Lord St John of Bletso, Lady Balfour of
Burleigh, Christopher Burrows and Patrick Reeve, are responsible for
preparing the Half-yearly Financial Report. In preparing these condensed
Financial Statements for the period to 30 September 2018 we, the
Directors of the Company, confirm that to the best of our knowledge:
1. 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;
2. 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
3. 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.
For and on behalf of the Board
Maxwell Packe
Chairman
4 December 2018
Portfolio of investments
The following is a summary of investments as at 30 September 2018:
Change
in
Cumulative value
movement for the
% voting Cost in value Value period(*)
Fixed asset investments rights GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- ---------- --------- ----------
Radnor House School
(Holdings) Limited 9.8 3,079 4,273 7,352 780
Egress Software Technologies
Limited 10.9 2,052 2,588 4,640 -
Quantexa Limited 2.8 699 2,197 2,896 2,074
Bravo Inns II Limited 13.1 2,150 630 2,780 68
Mirada Medical Limited 15.1 1,054 1,418 2,473 (10)
Regenerco Renewable
Energy Limited 12.5 1,261 713 1,974 62
Proveca Limited 9.4 905 996 1,901 (27)
G.Network Communications
Limited 4.7 850 946 1,796 436
Earnside Energy Limited 8.7 1,394 326 1,720 47
Alto Prodotto Wind
Limited 11.1 966 684 1,650 20
The Street by Street
Solar Programme Limited 8.6 891 666 1,557 50
Greenenerco Limited 28.6 907 607 1,514 (1)
Process Systems Enterprise
Limited 4.0 406 1,040 1,446 178
DySIS Medical Limited 7.5 2,742 (1,344) 1,398 181
Sandcroft Avenue Limited
(PayAsUGym.com) 7.1 1,274 50 1,324 -
Zift Channel Solutions
Inc. 2.0 1,053 128 1,181 21
Convertr Media Limited 6.3 875 128 1,003 250
MPP Global Solutions
Limited 3.2 950 - 950 -
The Evewell (Harley
Street) Limited 7.3 917 - 917 -
MyMeds&Me Limited 7.6 720 113 833 (118)
Beddlestead Limited 8.1 800 (1) 799 (1)
Black Swan Data Limited 1.6 749 - 749 -
Oviva AG 3.7 642 6 648 (155)
Cisiv Limited 9.7 663 (32) 631 289
OmPrompt Holdings Limited 9.5 864 (280) 584 (133)
Panaseer Limited 2.3 405 156 561 -
memsstar Limited 8.8 314 238 551 (96)
Locum's Nest Limited 5.1 500 30 530 30
Phrasee Limited 2.3 474 - 474 -
Bravo Inns Limited 8.4 755 (298) 457 9
Aridhia Informatics
Limited 6.6 1,160 (741) 419 1
Secured by Design Limited 1.9 280 104 384 103
Oxsensis Limited 3.3 625 (253) 372 114
Abcodia Limited 5.6 953 (616) 337 (166)
Koru Kids Limited 2.6 320 - 320 -
AVESI Limited 5.5 179 83 262 10
InCrowd Sports Limited 2.7 231 22 253 -
Mi-Pay Group plc 6.3 1,504 (1,254) 250 13
Arecor Limited 1.4 232 - 232 -
uMotif Limited 1.3 210 - 210 -
Forward Clinical Limited 1.8 190 - 190 -
ePatient Network Limited
(T/A Raremark) 1.8 160 - 160 -
Innovation Broking
Group Limited 8.4 84 43 127 (1)
Healios Limited 1.0 100 - 100 -
MHS 1 Limited 1.2 83 (1) 82 -
Total fixed asset investments 37,622 13,365 50,987 4,028
----------------------------- -------- -------- ---------- --------- ----------
*As adjusted for additions and disposals during the period.
Total change in value of investments for
the period 4,028
Movement in loan stock
accrued interest 10
-----
Unrealised gains on
fixed asset investments 4,038
Realised gains on
fixed asset investments 194
Unrealised gains on
current asset investments 33
Total gains on investments
as per Income statement 4,265
------------------------------------------- -----
Change
in
Cumulative value
movement for the
Cost in value Value period(*)
Current asset investments GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ---------- --------- ----------
SVS Albion OLIM UK Equity
Income Fund 2,600 (40) 2,560 33
------------------------------- -------- --------- ----------
Total current asset investments 2,600 (40) 2,560 33
------------------------------- -------- --------- ----------
*As adjusted for additions during the period.
The following is a summary of the fixed asset realisations for the
period ended 30 September 2018:
Gain/(loss)
Opening Total on
carrying Disposal realised opening
Fixed asset Cost value proceeds gain value
realisations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- --------- --------- --------- -----------
Disposals:
----------------------
Grapeshot Limited 1,026 9,451 9,639 8,613 188
Loan stock repayments
and other:
----------------------
DySIS Medical Limited 545 618 630 85 12
MyMeds&Me Limited 306 420 412 106 (8)
Alto Prodotto Wind
Limited 17 25 25 8 -
Greenenerco Limited 15 21 21 6 -
memsstar Limited 15 15 15 - -
Escrow adjustments - - 2 2 2
Total fixed asset
realisations 1,924 10,550 10,744 8,820 194
---------------------- -------- --------- --------- --------- -----------
Condensed income statement
Unaudited Unaudited
six months ended six months ended Audited
30 September 30 September year ended
2018 2017 31 March 2018
----------------------- ---- ---------------------------- ---------------------------- ----------------------------
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 - 4,265 4,265 - 1,794 1,794 - 9,205 9,205
Investment
income 4 434 - 434 316 - 316 651 - 651
Investment
management
fee 5 (195) (586) (781) (164) (492) (656) (342) (1,027) (1,369)
Performance
incentive
fee 5 (125) (375) (500) (31) (93) (124) (275) (825) (1,100)
Other expenses (128) - (128) (120) - (120) (241) - (241)
-------- -------- -------- -------- -------- -------- -------- --------
Return/(loss)
on
ordinary
activities
before taxation (14) 3,304 3,290 1 1,209 1,210 (207) 7,353 7,146
Tax (charge)/credit
on ordinary
activities - - - - - - - - -
-------- -------- -------- -------- -------- -------- -------- --------
Return/(loss)
and total
comprehensive
income attributable
to shareholders (14) 3,304 3,290 1 1,209 1,210 (207) 7,353 7,146
-------- -------- -------- -------- -------- -------- -------- --------
Basic and
diluted return/(loss)
per share
(pence)* 7 (0.02) 5.77 5.75 - 2.34 2.34 (0.39) 13.79 13.40
----------------------- ---- -------- -------- -------- -------- -------- -------- -------- --------
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2017 and the
audited statutory accounts for the year ended 31 March 2018.
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.
Condensed balance sheet
Unaudited Unaudited Audited
30 September 30 September 31 March
2018 2017 2018
Note GBP'000 GBP'000 GBP'000
---------------------------- ------ ------------- ------------- ---------
Fixed asset investments 50,987 42,035 52,436
Current assets
Current asset investments 2,560 - 1,127
Trade and other receivables
less than one year 1,256 1,673 105
Cash and cash equivalents 10,401 9,385 9,760
------------- ------------- ---------
14,217 11,058 10,992
Total assets 65,204 53,093 63,428
Payables: amounts
falling due within
one year
Trade and other payables
less than one year (945) (545) (1,557)
------------- ------------- ---------
Total assets less
current liabilities 64,259 52,548 61,871
------------- ------------- ---------
Equity attributable
to equity holders
Called up share capital 8 648 585 638
Share premium 29,996 23,706 28,945
Capital redemption
reserve 104 104 104
Unrealised capital
reserve 13,101 10,351 17,657
Realised capital
reserve 8,750 2,052 890
Other distributable
reserve 11,660 15,750 13,637
------------- ------------- ---------
Total equity shareholders'
funds 64,259 52,548 61,871
------------- ------------- ---------
Basic and diluted
net asset value per
share (pence)* 112.12 101.62 109.46
---------------------------- ------ ------------- ------------- ---------
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2017 and the
audited statutory accounts for the year ended 31 March 2018.
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 4 December 2018 and were signed on its behalf by
Maxwell Packe
Chairman
Company number: 05990732
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
2018 638 28,945 104 17,657 890 13,637 61,871
Return/(loss)
and total
comprehensive
income for
the period - - - 4,071 (767) (14) 3,290
Transfer
of previously
unrealised
gains on
disposal
of investments - - - (8,627) 8,627 - -
Issue of
equity 10 1,072 - - - - 1,082
Cost of issue
of equity - (21) - - - - (21)
Purchase
of own shares
for treasury - - - - - (247) (247)
Dividends
paid - - - - - (1,716) (1,716)
-------- -------- ------------ ---------- --------- -------------- --------
As at 30
September
2018 648 29,996 104 13,101 8,750 11,660 64,259
---------------- -------- -------- ------------ ---------- --------- -------------- --------
As at 1 April
2017 580 23,225 104 9,910 1,284 17,355 52,458
Return/(loss)
and total
comprehensive
income for
the period - - - 1,535 (326) 1 1,210
Transfer
of previously
unrealised
gains on
disposal
of investments - - - (1,094) 1,094 - -
Issue of
equity 5 491 - - - - 496
Cost of issue
of equity - (10) - - - - (10)
Purchase
of own shares
for treasury - - - - - (312) (312)
Dividends
paid - - - - - (1,294) (1,294)
------------ ---------- --------- -------------- --------
As at 30
September
2017 585 23,706 104 10,351 2,052 15,750 52,548
---------------- -------- -------- ------------ ---------- --------- -------------- --------
As at 1 April
2017 580 23,225 104 9,910 1,284 17,355 52,458
Return/(loss)
and total
comprehensive
income for
the year - - - 8,852 (1,499) (207) 7,146
Transfer
of previously
unrealised
gains on
disposal
of investments - - - (1,105) 1,105 - -
Issue of
equity 58 5,845 - - - - 5,903
Cost of issue
of equity - (125) - - - - (125)
Purchase
of own shares
for treasury - - - - - (800) (800)
Dividends
paid - - - - - (2,711) (2,711)
------------ ---------- --------- -------------- --------
As at 31
March 2018 638 28,945 104 17,657 890 13,637 61,871
---------------- -------- -------- ------------ ---------- --------- -------------- --------
* These reserves amount to GBP20,410,000 (30 September 2017:
GBP17,802,000; 31 March 2018: GBP14,527,000) which is considered
distributable.
Condensed statement of cash flows
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 September 30 September 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- -----------
Cash flow from operating
activities
Investment income
received 361 283 581
Dividend income received 47 28 39
Deposit interest
received 20 2 12
Investment management
fee paid (769) (655) (1,312)
Performance incentive
fee paid (1,100) (255) (255)
Other cash payments (158) (147) (236)
UK corporation tax
paid - - -
------------- ------------- -----------
Net cash flow from
operating
activities (1,599) (744) (1,171)
Cash flow from investing
activities
Purchase of current
asset investments (1,400) - (1,200)
Purchase of fixed
asset investments (4,016) (4,023) (7,143)
Disposal of fixed
asset investments 8,559 128 1,907
------------- ------------- -----------
Net cash flow from
investing
activities 3,143 (3,895) (6,436)
Cash flow from financing
activities
Issue of share capital 793 287 5,359
Cost of issue of
equity (2) (2) (3)
Dividends paid (1,447) (1,094) (2,289)
Purchase of own shares
(including costs) (247) (288) (821)
------------- ------------- -----------
Net cash flow from
financing activities (903) (1,097) 2,246
Increase/(decrease)
in cash and cash
equivalents 641 (5,736) (5,361)
Cash and cash equivalents
at start of the period 9,760 15,121 15,121
------------- ------------- -----------
Cash and cash equivalents
at end of the period 10,401 9,385 9,760
Cash and cash equivalents
comprise
Cash at bank 10,401 9,385 9,760
Cash equivalents - - -
-------------
Total cash and cash
equivalents 10,401 9,385 9,760
-------------------------- ------------- ------------- -----------
Notes to the condensed Financial Statements
1. Accounting convention
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 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 International
Private Equity and Venture Capital Valuation ("IPEVCV") Guidelines and
further detail on the valuation techniques used are outlined in note 2
below.
The Half-yearly Financial 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.
Company information can be found on page 2 of the Half-yearly Financial
Report.
2. Accounting policies
Fixed and current asset investments
The Company's business is investing in financial assets with a view to
profiting from their total return in the form of income and capital
growth. This portfolio of financial assets is managed and its
performance evaluated on a fair value basis, in accordance with a
documented investment policy, and information about the portfolio is
provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those undertakings in
which the Company holds more than 20 per cent. of the equity as part of
an investment portfolio are not accounted for using the equity method.
In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments,
including loan stock, are classified by the Company as FVTPL and are
included at their initial fair value, which is cost (excluding expenses
incidental to the acquisition which are written off to the Income
statement).
Subsequently, the investments are valued at 'fair value', which is
measured as follows:
-- Investments listed on recognised exchanges, including liquid open-ended
equity funds, are valued at their bid prices at the end of the accounting
period or otherwise at fair value based on published price quotations;
-- Unquoted investments, where there is not an active market, are valued
using an appropriate valuation technique in accordance with the IPEVCV
Guidelines. Indicators of fair value are derived using established
methodologies including earnings multiples, the level of third party
offers received, prices of recent investment rounds, net assets and
industry valuation benchmarks. Where the Company has an investment in an
early stage enterprise, the price of a recent investment round is often
the most appropriate approach to determining fair value. In situations
where a period of time has elapsed since the date of the most recent
transaction, consideration is given to the circumstances of the portfolio
company since that date in determining fair value. This includes
consideration of whether there is any evidence of deterioration or strong
definable evidence of an increase in value. In the absence of these
indicators, the investment in question is valued at the amount reported
at the previous reporting date. Examples of events or changes that could
indicate a diminution include:
-- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was
based;
-- a significant adverse change either in the portfolio company's
business or in the technological, market, economic, legal or
regulatory environment in which the business operates; or
-- market conditions have deteriorated, which may be indicated by a
fall in the share prices of quoted businesses operating in the
same or related sectors.
Investments are recognised as financial assets on legal completion of
the investment contract and are de-recognised on legal completion of the
sale of an investment.
Dividend income is not recognised as part of the fair value movement of
an investment, but is recognised separately as investment income through
the other distributable reserve when a share becomes ex-dividend.
Receivables and payables and cash are carried at amortised cost, in
accordance with FRS 102. There are no financial liabilities other than
payables.
Investment income
Equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised
when the Company's right to receive payment and expected settlement is
established. Where interest is rolled up and/or payable at redemption
then it is recognised as income unless there is reasonable doubt as to
its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate of
interest agreed with the bank.
Investment management fee, performance incentive fee 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 and performance incentive fees are
allocated to the capital account to the extent that these relate to an
enhancement in the value of investments. This is in line with the Board's
expectation that over the long term 75 per cent. of the Company's
investment returns will be in the form of capital gains; and
-- expenses which are incidental to the purchase or disposal of an
investment are charged through the realised capital reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS 102.
Current tax is tax payable (refundable) in respect of the taxable profit
(tax loss) for the current period or past reporting periods using the
tax rates and laws that have been enacted or substantively enacted at
the financial reporting date. Taxation associated with capital expenses
is applied in accordance with the SORP.
Deferred tax is provided in full on all timing differences at the
reporting date. Timing differences are differences between taxable
profits and total comprehensive income as stated in the Financial
Statements that arise from the inclusion of income and expenses in tax
assessments in periods different from those in which they are recognised
in the Financial Statements. As a VCT the Company has an exemption from
tax on capital gains. The Company intends to continue meeting the
conditions required to obtain approval as a VCT in the foreseeable
future. The Company therefore, should have no material deferred tax
timing differences arising in respect of the revaluation or disposal of
investments and the Company has not provided for any deferred tax.
Reserves
Share premium
This reserve accounts for the difference between the price paid for
shares and the nominal value of the shares, less issue costs.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own
shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the
period end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
--gains and losses compared to cost on the realisation of investments,
or permanent diminutions in value;
--expenses, together with the related taxation effect, charged in
accordance with the above policies; and
--dividends paid to equity holders where paid out by capital.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were
combined in 2013 to form a single reserve named other distributable
reserve.
This reserve accounts for movements from the revenue column of the
Income statement, the payment of dividends, the buyback of shares and
other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the
dividend is paid or approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
operating segment of business, being investment in smaller companies
principally based in the UK.
3. Gains on investments
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 September 30 September 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Unrealised gains
on fixed asset investments 4,038 1,535 8,925
Unrealised gains/(losses)
on current asset
investments 33 - (73)
Realised gains on
fixed asset investments 194 259 353
4,265 1,794 9,205
1. Investment income
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 September 30 September 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Income recognised
on investments
Interest from loans
to portfolio companies 367 286 599
Dividends 47 28 39
Bank deposit interest 20 2 13
434 316 651
------------- ------------- -----------
All of the Company's income is derived from operations based in the
United Kingdom.
5. Investment management fee and performance incentive fee
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 September 30 September 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Investment management
fee charged to revenue 195 164 342
Investment management
fee charged to capital 586 492 1,027
Performance incentive
fee charged to revenue 125 31 275
Performance incentive
fee charged to capital 375 93 825
1,281 780 2,469
Further details of the Management agreement under which the investment
management fee and performance incentive fee are paid is given in the
Strategic report on pages 12 and 13 of the Annual Report and Financial
Statements for the year ended 31 March 2018.
During the period, services of a total value of GBP781,000 (30 September
2017: GBP656,000; 31 March 2018: GBP1,369,000) were purchased by the
Company from Albion Capital Group LLP. At the financial period end, the
amount due to Albion Capital Group LLP in respect of these services
disclosed within payables was GBP397,000 (30 September 2017: GBP328,000;
31 March 2018: GBP385,000). For the period to 30 September 2018, a
provisional performance incentive fee of GBP500,000 has been accrued,
however any performance incentive fee is calculated and only payable
based on year end results (30 September 2017: GBP124,000; 31 March 2018:
GBP1,100,000).
Patrick Reeve is the Managing Partner of the Manager, Albion Capital
Group LLP. During the period, the Company was charged GBP6,000 including
VAT by Albion Capital Group LLP in respect of Patrick Reeve's services
as a Director (30 September 2017: GBP12,000; 31 March 2018: GBP24,000).
At the financial period end, the amount due to Albion Capital Group LLP
in respect of these services disclosed as payables was GBPnil (30
September 2017: GBP6,000; 31 March 2018: GBP6,000). From 30 June 2018,
Patrick Reeve has agreed to waive his fees for his services as a
Director.
Albion Capital Group LLP, its partners and staff (including Patrick
Reeve) hold a total of 362,908 shares in the Company as at 30 September
2018.
Albion Capital Group LLP is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies. During
the period to 30 September 2018, fees of GBP112,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2017: GBP135,000; 31 March 2018: GBP232,000).
During the period, an amount of GBP1,400,000 (30 September 2017: GBPnil;
31 March 2018: GBP1,200,000) was invested in the SVS Albion OLIM UK
Equity Income Fund ("OUEIF") as part of the Company's management of
surplus liquid funds. The total amount invested in OUEIF as at 30
September 2018 was GBP2,600,000 (30 September 2017: GBPnil; 31 March
2018: GBP1,200,000). To avoid double charging, Albion Capital agreed to
reduce its management fee relating to the investment in the OUEIF by
0.75 per cent., which represents the OUEIF management fee charged by
OLIM. This resulted in a reduction of the management fee of GBP7,400 (30
September 2017: GBPnil; 31 March 2018: GBP2,000).
1. Dividends
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 September 30 September 31 March
2018 2017 2018
GBP'000 GBP'000 GBP'000
Dividend of 2.50p
per share paid on
31 August 2017 - 1,294 1,294
Dividend of 2.50p
per share paid on
28 February 2018 - - 1,417
Dividend of 3.00p
per share paid on
31 August 2018 1,716 - -
1,716 1,294 2,711
------------------- ------------- ------------- -----------
In addition to the dividends summarised above, the Board has declared a
second dividend for the year ending 31 March 2019 of 3.00 pence per
share which will be paid on 28 February 2019 to shareholders on the
register on 8 February 2019. This is expected to amount to approximately
GBP1,719,000.
1. Basic and diluted return per share
Unaudited
six
Unaudited months
six months ended ended Audited
30 September 30 September year ended
2018 2017 31 March 2018
Revenue Capital Total Revenue Capital Total Revenue Capital Total
------- ------- -----
Return/(loss)
attributable
to equity
shares (GBP'000) (14) 3,304 3,290 1 1,209 1,210 (207) 7,353 7,146
Weighted
average shares
in issue
(excluding
treasury
shares) 57,255,901 51,809,944 53,333,261
Return/(loss)
attributable
per Ordinary
share (pence)
(basic and
diluted) (0.02) 5.77 5.75 - 2.34 2.34 (0.39) 13.79 13.40
The weighted average number of shares is calculated excluding treasury
shares of 7,509,443 (30 September 2017: 6,753,443; 31 March 2018:
7,270,443).
There are no convertible instruments, derivatives or contingent share
agreements in issue for the Company, therefore no dilution affecting the
return per share. The basic return per share is therefore the same as
the diluted return per share.
1. Called up share capital
Unaudited Unaudited Audited
30 September 30 September 31 March
Allotted, called 2018 2017 2018
up and fully paid GBP'000 GBP'000 GBP'000
64,821,000 Ordinary
shares of 1 penny
each (30 September
2017: 58,462,876;
31 March 2018: 63,794,152) 648 585 638
Voting rights
57,311,557 shares of 1 penny each (net of treasury shares) (30 September
2017: 51,709,433; 31 March 2018: 56,523,709).
In the six months to 30 September 2018, the Company purchased 239,000
shares (30 September 2017: 324,000; 31 March 2018: 841,000) to be held
in treasury at a nominal value of GBP2,390 and at a cost of GBP247,000
(30 September 2017: GBP312,000; 31 March 2018: GBP800,000), representing
0.4 per cent. of the shares in issue (excluding treasury shares) as at
30 September 2018.
The Company holds a total of 7,509,443 shares (30 September 2017:
6,753,443; 31 March 2018: 7,270,443) in treasury representing 11.6 per
cent. of the shares in issue as at 30 September 2018.
Under the terms of the Dividend Reinvestment Scheme Circular (dated 26
November 2009), the following new Ordinary shares of nominal value 1
penny each were allotted during the period to 30 September 2018:
Opening
market
Number Aggregate Issue price on
of nominal value price Net allotment
Date of shares of shares (pence invested date (pence
allotment allotted (GBP'000) per share) (GBP'000) per share)
31 August
2018 244,513 2 110.24 268 108.00
Under the terms of the Albion VCTs Prospectus Top Up Offers 2017/18, the
following new Ordinary shares of nominal value 1 penny each were
allotted during the period to 30 September 2018:
Opening market
Number Aggregate Issue Net price on
of nominal value price consideration allotment
Date of shares of shares (pence received date (pence
allotment allotted (GBP'000) per share) (GBP'000) per share)
5 April
2018 575,386 6 104.00 584 95.50
11 April
2018 77,861 1 103.00 79 94.00
11 April
2018 5,603 - 103.50 5 94.00
11 April
2018 123,485 1 104.00 125 94.00
782,335 8 793
--------- -------------- --------------
9. Commitments and contingencies
As at 30 September 2018, the Company had financial commitments totalling
GBP58,000 (30 September 2017: GBPnil; 31 March 2018: GBPnil), which are
expected to be invested during the next 12 months as follows:
-- GBP58,000 in Arecor Limited.
There are no contingencies or guarantees of the Company as at 30
September 2018 (30 September 2017: GBPnil; 31 March 2018: GBPnil).
10. Post balance sheet events
Since 30 September 2018, the Company has had the following post balance
sheet events:
--Investment of GBP400,000 in SVS Albion OLIM UK Equity Income Fund; and
--Investment of GBP136,000 in Cisiv Limited.
11. Related party transactions
During the period, a total of GBP1,400,000 (30 September 2017: GBPnil;
31 March 2018: GBP1,200,000) was invested into the SVS Albion OLIM UK
Equity Income Fund ("OUEIF"), a fund managed by OLIM Limited which is
part of the Albion Capital group. The total amount invested in OUEIF as
at 30 September 2018 was GBP2,600,000 (30 September 2017: GBPnil; 31
March 2018: GBP1,200,000).
Other than transactions with the Manager as described in note 5 and that
disclosed above, 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
2018, and is detailed on pages 61 and 62 of those accounts. The Company
has adequate cash and liquid resources and has no borrowing. The
portfolio of investments is diversified in terms of sector, and the
major cash outflows of the Company (namely investments, share buy-backs
and dividends) are within the Company's control. Accordingly, after
making diligent enquiries, the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, the Directors
have adopted the going concern basis in preparing this Half-yearly
Financial Report and this is in accordance with the Guidance on Risk
Management, Internal Control and Related Financial and Business
Reporting issued by the Financial Reporting Council in September 2014.
13. Risks and uncertainties
In addition to the current economic risks outlined in the Interim
management report, the Board considers that the Company faces the
following principle risks and uncertainties:
1. Investment and performance risk
The risk of investment in poor quality assets, which could reduce the
capital and income returns to shareholders, and could negatively impact
on the Company's current and future valuations. By nature, smaller
unquoted businesses, such as those that qualify for venture capital
trust purposes, are more fragile than larger, long established
businesses. Investments in open-ended equity funds result in exposure to
market risk through movements in price per unit.
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and its track record over many years of making
successful investments in this segment of the market. In addition, the
Manager operates a formal and structured investment appraisal and review
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 matters discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards), including the level of diversification in the portfolio, and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings. The Board and Manager regularly reviews the deployment of cash resources into equity markets, the extent of exposure and performance of the exposure. 1. VCT approval risk The Company must comply with section 274 of the Income Tax Act 2007 which enables its investors to take advantage of tax relief on their investment and on future returns. Breach of any of the rules enabling the Company to hold VCT status could result in the loss of that status. 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 or our professional advisers. 1. Regulatory and 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 companies. In addition, the Board and the Manager receive regular updates on new regulation, including legislation on the management of the Company, from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks through 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 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. 1. Operational and internal control risk The Company relies on a number of third parties, in particular the Manager, for the provision of investment management and administrative functions. Failures in key systems and controls 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 Company and its operations are subject to a series of rigorous internal controls and review procedures exercised throughout the year, and receives reports from the Manager on internal controls and risk management, including on matters relating to cyber security. The Audit Committee reviews the Internal Audit Reports prepared by the Manager's internal auditors, PKF Littlejohn LLP and has access to the internal audit partner of PKF Littlejohn LLP to provide an opportunity to ask specific detailed questions in order to satisfy itself that the Manager has strong systems and controls in place including those in relation to business continuity and cyber security. In addition, the Board regularly reviews the performance of its key service providers, particularly the Manager, to ensure they continue to have the necessary expertise and resources to deliver the Company's investment objective and policies. The Manager and other service providers have also demonstrated to the Board that there is no undue reliance placed upon any one individual. 1. Economic and political 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. The Company invests in a diversified portfolio of companies across a number of industry sectors and in addition often invests a mixture of equity and loan stock in portfolio companies and has a policy of not normally permitting any external bank borrowings within portfolio companies. At any given time, the Company has sufficient cash resources to meet its operating requirements, including share buybacks and follow on investments. 1. Market value of Ordinary shares The market value of Ordinary shares can fluctuate. The market value of an Ordinary share, as well as being affected by its net asset value and prospective net asset value, also takes into account its dividend yield and prevailing interest rates. As such, the market value of an Ordinary share may vary considerably from its underlying net asset value. The market prices of shares in quoted investment companies can, therefore, be at a discount or premium to the net asset value at different times, depending on supply and demand, market conditions, general investor sentiment and other factors. Accordingly the market price of the Ordinary shares may not fully reflect their underlying net asset value. The Company operates a share buyback policy, which is designed to limit the discount at which the Ordinary shares trade to around 5 per cent to net asset value, by providing a purchaser through the Company in absence of market purchasers. From time to time buybacks cannot be applied, for example when the Company is subject to a close period, or if it were to exhaust any buyback authorities. New Ordinary shares are issued at sufficient premium to net asset value to cover the costs of issue and to avoid asset value dilution to existing investors. 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 2018 and 30 September 2017, and is unaudited. The information for the year ended 31 March 2018 does not constitute statutory accounts within the terms of section 435 of the Companies Act 2006 but is derived from the statutory accounts for the financial year, which have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain statements under s498 (2) or (3) of the Companies Act 2006. 15. Publication This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at https://www.globenewswire.com/Tracker?data=I7AX5O6AepdDCYrBg8X9lchV-QgHjKRcROeUqeoI26-qdQabO0cdmvAyEQbpzjHbhnjRIETNmivg9rtvlZW-f33FX3OXvOlS_xTojGpwkONWI3OMcjCDPGtJ1pUyA4LS www.albion.capital/funds/AAEV, where the Report can be accessed from the 'Financial Reports and Circulars' section.
(END) Dow Jones Newswires
December 04, 2018 10:00 ET (15:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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