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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Albion Venture Capital Trust Plc | LSE:AAVC | London | Ordinary Share | GB0002039625 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 43.20 | 42.20 | 44.20 | 43.20 | 43.20 | 43.20 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 1.78M | 125k | 0.0009 | 480.00 | 60.25M |
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TIDMAAVC
Albion Venture Capital Trust PLC
LEI Code: 213800JKELS32V2OK421
As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Venture Capital Trust PLC today makes public its
information relating to the Half-yearly Financial Report (which is
unaudited) for the six months to 30 September 2018. This announcement
was approved by the Board of Directors on 7 December 2018.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 2018 will shortly be sent to shareholders and
will be available on the Albion Capital Group LLP website by clicking
www.albion.capital/funds/AAVC/30Sept18.pdf.
Investment policy
The Company will invest in a broad portfolio of smaller, unquoted growth
businesses across a variety of sectors including higher risk technology
companies. Investments may take the form of equity or a mixture of
equity and loans.
Allocation of funds is 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.
Funds held pending investment or for liquidity purposes will be held as
cash on deposit.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within
venture capital trust qualifying industry sectors. The maximum amount
which the Company will invest in a single portfolio 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 it 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 the adjusted share capital and reserves.
Background to the Company
The Company is a venture capital trust which raised a total of GBP39.7
million through an issue of Ordinary shares in the spring of 1996 and
through an issue of C shares in the following year. The C shares merged
with the Ordinary shares in 2001. The Company has raised a further
GBP26.9 million under the Albion VCTs Top Up Offers since 2011.
On 25 September 2012, the Company acquired the assets and liabilities of
Albion Prime VCT PLC ("Prime") in exchange for new shares in the Company,
resulting in a further GBP14.3 million of net assets.
Financial calendar
Record date for second 11 January 2019
dividend 31 January 2019
Payment date for second 31 March
dividend
Financial year end
Financial highlights
Unaudited six months Unaudited six months
ended ended Audited year ended
30 September 2018 30 September 2017 31 March 2018
(pence per share) (pence per share) (pence per share)
Dividends
paid 2.5 2.5 5.0
Revenue
return 1.0 0.8 1.8
Capital
return 3.5 0.4 3.7
-------------------- -------------------- -------------------
Total return 4.5 1.2 5.5
Net asset
value 78.1 74.1 76.0
Total shareholder return to 30 (Pence per
September 2018 share)
------------------------------------- ----------
Total dividends paid during the
year ended :
------------------------------------- ----------
31 March 1997 2.00
------------------------------------- ----------
31 March 1998 5.20
------------------------------------- ----------
31 March 1999 11.05
------------------------------------- ----------
31 March 2000 3.00
------------------------------------- ----------
31 March 2001 8.55
------------------------------------- ----------
31 March 2002 7.60
------------------------------------- ----------
31 March 2003 7.70
------------------------------------- ----------
31 March 2004 8.20
------------------------------------- ----------
31 March 2005 9.75
------------------------------------- ----------
31 March 2006 11.75
------------------------------------- ----------
31 March 2007 10.00
------------------------------------- ----------
31 March 2008 10.00
------------------------------------- ----------
31 March 2009 10.00
------------------------------------- ----------
31 March 2010 5.00
------------------------------------- ----------
31 March 2011 5.00
------------------------------------- ----------
31 March 2012 5.00
------------------------------------- ----------
31 March 2013 5.00
------------------------------------- ----------
31 March 2014 5.00
------------------------------------- ----------
31 March 2015 5.00
------------------------------------- ----------
31 March 2016 5.00
------------------------------------- ----------
31 March 2017 5.00
------------------------------------- ----------
31 March 2018 5.00
------------------------------------- ----------
Dividends paid in the six months
to 30 September 2018 2.50
------------------------------------- ----------
Total dividends paid to 30 September
2018 152.30
------------------------------------- ----------
Net asset value as at 30 September
2018 78.10
------------------------------------- ----------
Total shareholder return to 30
September 2018 230.40
------------------------------------- ----------
The financial summary above is for the Company, Albion Venture Capital
Trust PLC Ordinary shares only. Details of the financial performance of
the C shares and Albion Prime VCT PLC, which have been merged into the
Company, can be found at the end of this announcement.
In addition to the dividends summarised above, the Directors have
declared a second dividend for the year ending 31 March 2019 of 2.5
pence per share, to be paid on 31 January 2019 to shareholders on the
register on 11 January 2019.
Notes
-- Dividends paid before 5 April 1999 were paid to qualifying
shareholders inclusive of the associated tax credit. The dividends for
the year to 31 March 1999 were maximised in order to take advantage of
this tax credit.
-- 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
www.albion.capital/funds/AAVC 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 30 per cent. income tax relief
is only obtainable on subscription for new shares.
Interim management report
Introduction
The results for Albion Venture Capital Trust PLC (the "Company") for the
six months to 30 September 2018 show a total return of 4.5 pence per
share (5.9% on opening net asset value). After an interim dividend of
2.5 pence per share paid on 31 July 2018, the net asset value at 30
September 2018 was 78.1 pence per share, compared to 76.0 pence per
share at 31 March 2018. Total shareholders' funds at 30 Setpember 2018
were GBP67.2 million compared to GBP65.8 million at 31 March 2018. The
Manager, Albion Capital, has won two awards: Investor Allstars Venture
Capital Trust of the Year 2018 and Growth Investor of the Year 2018. It
is pleasing to see its strong performance recognised by fellow industry
peers.
During the period David Watkins retired after 22 years as Chairman of
the Company. I would like to put on record the thanks he is owed by all
of us for his stewardship, professionalism and commitment throughout his
chairmanship.
Change of investment policy
A material change to the Company's investment policy was voted on by
shareholders at the recent Annual General Meeting held on 13 August
2018. The change in investment policy was approved by shareholders with
an encouraging 99.5% of shares voted for the resolution. The Company's
new investment policy can be found above.
The Company's investment portfolio will transition over time from an
asset-based one to a portfolio with a greater focus on young growth
companies. As at 30 September 2018, the new growth and technology
investments accounted for 1% of the Company's net assets. Further
details of recent investments made under the new investment policy can
be found below.
Investment performance and progress
During the period, GBP0.9 million was invested in six early stage growth
and technology companies, in accordance with the Company's new
investment policy, while GBP4.7 million was returned from the
refinancing of Kew Green VCT (Stansted), as referred to in the
Chairman's statement in the Annual Report.
The new investments made during the period, all of which are likely to
require further investment as the companies prove themselves and grow,
are:
-- Phrasee, which uses artificial intelligence to generate language for
optimised marketing campaigns;
-- Arecor, a biopharmaceutical formulation company focusing on treatments
for diabetes;
-- Forward Clinical, a provider of secure mobile messaging services for
doctors and care workers;
-- uMotif, which has developed patient engagement and data capture software
for use in clinical trials and patient support programmes;
-- ePatient Network (trading as Raremark), a patient engagement and data
business focused on rare diseases; and
-- Healios, which delivers online mental health therapy services.
In the existing portfolio, two of our three care homes, the 66 bedroom
Shinfield View care home near Reading (owned by Shinfield Lodge Care),
and the 60 bedroom Ryefield Court in Hillingdon (owned by Ryefield Court
Care) are trading at or near mature levels of occupancy, while the
larger 75 bedroom Cumnor Hill House on the outskirts of Oxford (owned by
Active Lives Care) has been continuing to grow occupancy. This has led
to further uplifts in valuations in two of the three homes.
We are also pleased to report that The Evewell, a gynaecological clinic
in Harley Street, has recently opened.
In the hotel and leisure sector, shortly before the period end The
Stanwell Hotel received an offer for the business, leading to the
significant uplift in its valuation, and it is hoped that the sale will
complete early in the Company's new financial year. The Holiday Inn
Express at Stansted Airport, owned by Kew Green VCT (Stansted), has been
continuing to trade satisfactorily while refurbishing its bedrooms to
the latest brand standards and the development of the wedding venue at
Syrencot House in Wiltshire, owned by Beddlestead, is making good
progress. The Bravo Inns and Bravo Inns II pub portfolio in the North
West has been trading well and now comprises 43 pubs.
In the education sector, Radnor House Twickenham continues to perform
strongly at near capacity, with over 410 pupils, and Radnor House
Sevenoaks now has 430 pupils, with considerable scope to grow further,
leading to further uplifts in the third party valuations. Meanwhile
Mount House School in North London has grown encouragingly to 190
pupils.
In the renewable energy sector, our hydro, wind and solar assets
continued to perform well. Subsequent to the period end we sold our
non-qualifying investment in Infinite Ventures (Goathill) for 1.6 times
cost (including interest received) and entered into a contract, subject
to satisfaction of some conditions precedent, for the sale of Earnside
Energy, our Scottish anaerobic digestion business, which is expected to
generate a return of c. 1.2 times cost (including interest received).
G.Network Communications has continued to make good progress in rolling
out its fibre broadband network in central London and subsequent to the
period end secured substantial additional funding from a third party
investor to allow it to continue to expand, at a valuation which
represented a strong premium to its opening value.
Results and dividends
As at 30 September 2018, the net asset value of the Company was GBP67.2
million or 78.1 pence per share compared to GBP65.8 million or 76.0
pence per share at 31 March 2018. The revenue return before taxation
showed an increase to GBP1,078,000, compared to GBP875,000 for the six
months to 30 September 2017, as some portfolio companies resumed the
payment of interest following a period of deferred interest payments to
reinvest their profit for further growth. The Company will pay a second
dividend of 2.5 pence per share on 31 January 2019 to shareholders on
the register on 11 January 2019, making 5.0 pence per share in total for
the full year, in line with the Company's current annual dividend
target.
Split of portfolio by valuation as at 30 September 2018
Set out at the bottom of this announcement is the sector diversification
of the investment portfolio as at 30 September 2018. At that date
healthcare accounted for 41% of the Company's net assets and renewable
energy investments accounted for 19%.
Risks and uncertainties
The outlook for the UK economy continues to be the key risk affecting
your Company. The forthcoming withdrawal from the European Union may
have an effect on the Company and its investments, although the extent
of the effect is not quantifiable at this time.
Other principal risks and uncertainties remain unchanged and are as
detailed in note 13.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5.
There are no related party transactions or balances that require
disclosure.
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, through the
issue 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 January 2019.
Share buy-backs
It remains the Board's primary objective to maintain sufficient
resources for investment in existing and new portfolio companies and for
the continued payment of dividends to shareholders. Thereafter, it is
still the Board's policy to buy back shares in the market, subject to
the overall criterion that such purchases are in the Company's interest.
The total value bought in for the period to 30 September 2018 was
GBP650,000. In general, the Board targets such buy-backs to be in the
region of a 5 per cent. discount to the most recently announced net
asset value, so far as market conditions and liquidity permit.
Outlook
We are pleased with the performance of the Company's existing investment
portfolio during the period and believe that it is well positioned for
future growth. Meanwhile we are continuing to see a good pipeline of
earlier stage growth and technology companies which will lead to greater
diversification and the potential for growth in the portfolio over time.
Richard Glover
Chairman
7 December 2018
Responsibility statement
The Directors Richard Glover, John Kerr, Ann Berresford, Ebbe Dinesen
and Jeff Warren 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:
(a) the condensed set of Financial Statements, which has been prepared
in accordance with Financial Reporting Standard 104 "Interim Financial
Reporting", give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company as required by DTR
4.2.4R;
(b) the Interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the Interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
This Half-yearly Financial Report has not been audited or reviewed by
the Auditor.
By order of the Board
Richard Glover
Chairman
7 December 2018
Portfolio of investments
The following is a summary of investments as at 30 September 2018:
% voting
rights
held
by Albion Change
Venture Accounting Cumulative in value
Capital cost movement for the
Trust * in value Value period(**)
Portfolio company PLC GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---------- ---------- ---------- -------- ------------
Shinfield Lodge Care
Limited 35.3 6,425 5,806 12,231 780
----------------------------- ---------- ---------- ---------- --------
Active Lives Care
Limited 22.2 4,810 3,110 7,920 462
----------------------------- ---------- ---------- ---------- --------
Ryefield Court Care
Limited 23.6 3,880 2,625 6,505 (37)
----------------------------- ---------- ---------- ---------- --------
Radnor House School
(Holdings) Limited 7.1 2,345 3,009 5,354 568
----------------------------- ---------- ---------- ---------- --------
Chonais River Hydro
Limited 9.2 3,074 1,319 4,393 3
----------------------------- ---------- ---------- ---------- --------
The Stanwell Hotel
Limited 39.2 5,069 (2,176) 2,893 1,013
----------------------------- ---------- ---------- ---------- --------
Kew Green VCT (Stansted)
Limited 45.2 1,234 1,217 2,451 154
----------------------------- ---------- ---------- ---------- --------
Gharagain River Hydro
Limited 11.5 1,363 428 1,791 -
----------------------------- ---------- ---------- ---------- --------
Earnside Energy Limited 9.5 1,531 138 1,669 50
----------------------------- ---------- ---------- ---------- --------
G. Network Communications
Limited 3.9 710 790 1,500 364
----------------------------- ---------- ---------- ---------- --------
Bravo Inns II Limited 6.4 1,085 312 1,397 50
----------------------------- ---------- ---------- ---------- --------
The Street by Street
Solar Programme Limited 6.5 676 500 1,176 38
----------------------------- ---------- ---------- ---------- --------
Alto Prodotto Wind
Limited 7.4 646 465 1,111 14
----------------------------- ---------- ---------- ---------- --------
MHS1 Limited 14.8 1,026 (3) 1,023 2
----------------------------- ---------- ---------- ---------- --------
Beddlestead Limited 9.1 956 1 957 1
----------------------------- ---------- ---------- ---------- --------
TWCL Limited 14.3 801 2 803 5
----------------------------- ---------- ---------- ---------- --------
The Evewell (Harley
Street) Limited (Previously
Women's Health (London
West One) Limited) 6.0 750 - 750 -
----------------------------- ---------- ---------- ---------- --------
Regenerco Renewable
Energy Limited 4.5 451 257 708 25
----------------------------- ---------- ---------- ---------- --------
Infinite Ventures
(Goathill) Limited 11.5 480 190 670 (42)
----------------------------- ---------- ---------- ---------- --------
Bravo Inns Limited 7.6 751 (159) 592 14
----------------------------- ---------- ---------- ---------- --------
Erin Solar Limited 18.6 520 (22) 498 -
----------------------------- ---------- ---------- ---------- --------
Dragon Hydro Limited 7.3 311 184 495 (3)
----------------------------- ---------- ---------- ---------- --------
AVESI Limited 7.4 242 112 354 13
----------------------------- ---------- ---------- ---------- --------
Harvest AD Limited - 307 23 330 19
----------------------------- ---------- ---------- ---------- --------
Phrasee Limited 1.5 310 - 310 -
----------------------------- ---------- ---------- ---------- --------
G&K Smart Developments
VCT Limited 50.0 276 (1) 275 10
----------------------------- ---------- ---------- ---------- --------
Greenenerco Limited 3.9 127 85 212 1
----------------------------- ---------- ---------- ---------- --------
Premier Leisure (Suffolk)
Limited 9.9 175 26 201 -
----------------------------- ---------- ---------- ---------- --------
Arecor Limited 0.9 144 - 144 -
----------------------------- ---------- ---------- ---------- --------
Forward Clinical Limited 1.2 130 - 130 -
----------------------------- ---------- ---------- ---------- --------
uMotif Limited 0.7 120 - 120 -
----------------------------- ---------- ---------- ---------- --------
ePatient Network Limited
(T/A Raremark) 1.2 110 - 110 -
----------------------------- ---------- ---------- ---------- --------
Healios Limited 0.7 65 - 65 -
----------------------------- ---------- ---------- ---------- --------
Total fixed asset
investments 40,900 18,238 59,138 3,504
----------------------------- ---------- ---------- ---------- --------
*The cost includes the original cost from Albion Venture Capital Trust
PLC and the carried over value on merger from Albion Prime VCT PLC as at
25 September 2012.
** As adjusted for additions and disposals during the period.
Total change in value of investments
for the period 3,504
Movement in loan stock
accrued interest (99)
Unrealised gains sub-total 3,405
Realised gain in current
period -
Total gains on investments as per Income
statement 3,405
Fixed asset investment Opening Total Gain on
realisations during Accounting carrying Disposal realised opening
the period to 30 September cost* value proceeds gain value
2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------- --------- --------- --------- --------
Kew Green VCT (Stansted)
Limited (repayment
of loan stock and
share premium) 4,676 4,676 4,676 - -
Alto Prodotto Wind
Limited (loan stock
repaid) 13 16 16 3 -
Greenenerco Limited
(loan stock repaid) 2 3 3 1 -
Total 4,691 4,695 4,695 4 -
---------------------------- ---------- --------- --------- --------- --------
*The cost includes the original cost from Albion Venture Capital Trust
PLC and the carried over value on merger from Albion Prime VCT PLC as at
25 September 2012.
Condensed income statement
Unaudited Unaudited
six 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
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gains on
investments 3 - 3,405 3,405 - 688 688 - 3,930 3,930
Investment
income 4 1,420 - 1,420 1,187 - 1,187 2,520 - 2,520
Investment
management
fees 5 (158) (474) (632) (155) (464) (619) (310) (928) (1,238)
Other expenses (184) - (184) (157) - (157) (332) - (332)
Return on
ordinary
activities
before tax 1,078 2,931 4,009 875 224 1,099 1,878 3,002 4,880
Tax (charge)/
credit on
ordinary
activities (200) 90 (110) (162) 88 (74) (273) 176 (97)
Return and
total comprehensive
income attributable
to shareholders 878 3,021 3,899 713 312 1,025 1,605 3,178 4,783
---------------------
Basic and
diluted
return per
share (pence)* 7 1.0 3.5 4.5 0.8 0.4 1.2 1.8 3.7 5.5
--------------------- ----
* 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 59,138 57,329 59,451
Current assets
Trade and other
receivables less
than one year 26 79 136
Cash and cash
equivalents 8,663 8,009 6,762
8,689 8,088 6,898
Total assets 67,827 65,417 66,349
Payables: amounts
falling due within
one year
Trade and other
payables less
than one year (669) (763) (570)
Total assets less
current liabilities 67,158 64,654 65,779
------------- ------------- ---------
Equity attributable
to equityholders
Called up share
capital 8 966 958 962
Share premium 25,761 25,182 25,475
Capital redemption
reserve 7 7 7
Unrealised capital
reserve 17,190 10,301 13,789
Realised capital
reserve 6,375 7,377 6,755
Other distributable
reserve 16,859 20,829 18,791
Total equity shareholders'
funds 67,158 64,654 65,779
--------------------------- ----
Basic and diluted
net asset value
per share (pence)* 78.1 74.1 76.0
--------------------------- ----
*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 7 December 2018, and were signed on its behalf
by
Richard Glover
Chairman
Company number: 03142609
Condensed statement of changes in equity
Called Capital Unrealised Realised Other
up share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 1 April
2018 962 25,475 7 13,789 6,755 18,791 65,779
Return/(loss)
and total
comprehensive
income for
the period - - - 3,405 (384) 878 3,899
Transfer
of previously
unrealised
gains on
realisations
of investments - - - (4) 4 - -
Purchase
of treasury
shares - - - - - (650) (650)
Issue of
equity 4 287 - - - - 291
Cost of issue
of equity - (1) - - - - (1)
Net dividends
paid - - - - - (2,160) (2,160)
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 30
September
2018 966 25,761 7 17,190 6,375 16,859 67,158
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 1 April
2017 951 24,630 7 8,623 8,743 22,521 65,475
Return/(loss)
and total
comprehensive
income for
the period - - - 711 (399) 713 1,025
Transfer
of previously
unrealised
losses on
realisations
of investments - - - 967 (967) - -
Purchase
of treasury
shares - - - - - (226) (226)
Issue of
equity 7 561 - - - - 568
Cost of issue
of equity - (9) - - - - (9)
Net dividends
paid - - - - - (2,179) (2,179)
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 30
September
2017 958 25,182 7 10,301 7,377 20,829 64,654
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 1 April
2017 951 24,630 7 8,623 8,743 22,521 65,475
Return/(loss)
and total
comprehensive
income for
the year - - - 3,736 (558) 1,605 4,783
Transfer
of previously
unrealised
losses on
realisations
of investments - - - 1,430 (1,430) - -
Purchase
of treasury
shares - - - - - (1,019) (1,019)
Issue of
equity 12 856 - - - - 868
Cost of issue
of equity - (11) - - - - (11)
Net dividends
paid - - - - - (4,317) (4,317)
---------------- --------- -------- ----------- ---------- --------- -------------- -------
As at 31
March 2018 962 25,475 7 13,789 6,755 18,791 65,779
---------------- --------- -------- ----------- ---------- --------- -------------- -------
* These reserves amount to GBP23,234,000 (30 September 2017:
GBP28,206,000; 31 March 2018: GBP25,546,000) 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
Loan stock income received 1,284 1,100 2,124
Deposit interest received 12 2 7
Dividend income received 25 20 34
Investment management
fees paid (625) (622) (1,236)
Other cash payments (209) (176) (321)
Corporation tax refund/(paid) 77 35 (147)
Net cash flow from operating
activities 564 359 461
Cash flow from investing
activities
Purchase of fixed asset
investments (879) (1,084) (3,027)
Disposal of fixed asset
investments 4,696 5 3,410
Net cash flow from investing
activities 3,817 (1,079 383
Cash flow from financing
activities
Issue of share capital - 267 268
Cost of issue of equity (1) - (2)
Dividends paid (1,829) (1,877) (3,755)
Purchase of own shares
(including costs) (650) (157) (1,089)
Net cash flow from financing
activities (2,480) (1,767) (4,578)
Increase/(decrease)
in cash and cash equivalents 1,901 (2,487) (3,734)
Cash and cash equivalents
at start of period 6,762 10,496 10,496
Cash and cash equivalents
at end of period 8,663 8,009 6,762
Cash and cash equivalents
comprise
Cash at bank and in
hand 8,663 8,009 6,762
Cash equivalents - - -
Total cash and cash
equivalents 8,663 8,009 6,762
------------------------------
Notes to the condensed Financial Statements
1. Basis of preparation
The condensed Financial Statements have been prepared in accordance with
the historical cost convention, modified to include the revaluation of
investments, in accordance with applicable United Kingdom law and
accounting standards, including Financial Reporting Standard 102 ("FRS
102"), Financial Reporting Standard 104 -- Interim Financial Reporting
("FRS 104"), and with the 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 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.
Information about the Company can be found on page 2 of the full
Half-yearly Financial Report.
2. Accounting policies
Fixed asset investments
The Company's business is investing in financial assets with a view to
profiting from their total return in the form of income and capital
growth. This portfolio of financial assets is managed and its
performance evaluated on a fair value basis, in accordance with a
documented investment policy, and information about the portfolio is
provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those undertakings in
which the Company holds more than 20 per cent. of the equity as part of
an investment portfolio are not accounted for using the equity method.
In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments,
including loan stock, are classified by the Company as FVTPL and are
included at their initial fair value, which is cost (excluding expenses
incidental to the acquisition which are written off to the income
statement).
Subsequently, the investments are valued at 'fair value', which is
measured as follows:
-- Investments listed on recognised exchanges are valued at their bid
prices at the end of the accounting period or otherwise at fair value
based on published price quotations;
-- Unquoted investments, where there is not an active market, are
valued using an appropriate valuation technique in accordance with the
IPEVCV Guidelines. Indicators of fair value are derived using
established methodologies including earnings multiples, the level of
third party offers received, prices of recent investment rounds, net
assets and industry valuation benchmarks. Where the Company has an
investment in an early stage enterprise, the price of a recent
investment round is often the most appropriate approach to determining
fair value. In situations where a period of time has elapsed since the
date of the most recent transaction, consideration is given to the
circumstances of the portfolio company since that date in determining
fair value. This includes consideration of whether there is any evidence
of deterioration or strong definable evidence of an increase in value.
In the absence of these indicators, the investment in question is valued
at the amount reported at the previous reporting date. Examples of
events or changes that could indicate a diminution include:
-- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was based;
-- a significant adverse change either in the portfolio company's
business or in the technological, market, economic, legal or regulatory
environment in which the business operates; or
-- market conditions have deteriorated, which may be indicated by a
fall in the share prices of quoted businesses operating in the same or
related sectors.
Investments are recognised as financial assets on legal completion of
the investment contract and are de-recognised on legal completion of the
sale of an investment.
Dividend income is not recognised as part of the fair value movement of
an investment, but is recognised separately as investment income through
the other distributable reserve when a share becomes ex-dividend.
Receivables and payables and cash are carried at amortised cost, in
accordance with FRS 102. There are no financial liabilities other than
creditors.
Investment income
Equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised
when the Company's right to receive payment and expect settlement is
established. Where interest is rolled up and/or payable at redemption
then it is recognised as income unless there is reasonable doubt as to
its receipt.
Bank interest income
Interest income is recognised on an accrual 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 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 the investments and 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;
-- 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 2012 to form a single reserve named other distributable
reserve.
This reserve accounts for movements from the revenue column of the
Income statement, the payment of dividends, the buy-back of shares and
other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the
dividend is paid or approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
operating segment of business, being investment in equity and debt. The
Company invests in smaller companies principally based in the UK.
3. Gains on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2018 30 September 2017 31 March 2018
GBP'000 GBP'000 GBP'000
---------------------- ------------------ ------------------ --------------
Unrealised gains on
fixed asset
investments 3,405 711 3,736
Realised
(losses)/gains on
fixed asset
investments - (23) 194
3,405 688 3,930
------------------ ------------------ --------------
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
Income recognised on 30 September 2018 30 September 2017 31 March 2018
investments GBP'000 GBP'000 GBP'000
------------------ ------------------ --------------
Loan stock interest 1,382 1,165 2,479
Dividend income 25 20 34
Bank deposit interest 13 2 7
1,420 1,187 2,520
------------------ ------------------ --------------
All of the Company's income is derived from operations based in the
United Kingdom.
5. Investment management fees
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2018 30 September 2017 31 March 2018
GBP'000 GBP'000 GBP'000
Investment management
fee charged to revenue 158 155 310
Investment management
fee charged to capital 474 464 928
632 619 1,238
Further details of the Management agreement under which the investment
management fee is paid are given in the Strategic report on page 13 of
the Annual Report and Financial Statements for the year ended 31 March
2018.
During the period, services of a total value of GBP632,000 in management
fees and GBP26,000 in administration fees (30 September 2017: GBP619,000
in management fees and GBP25,000 in administration fees; 31 March 2018:
GBP1,238,000 in management fees and GBP50,000 in administration fees),
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 was GBP332,000 (30 September 2017: GBP320,000;
31 March 2018: GBP325,000).
Albion Capital Group LLP, its partners and staff hold a total of 362,693
shares in the Company as at 30 September 2018.
Albion Capital Group LLP is, from time to time, eligible to receive
transaction fees and monitoring fees from portfolio companies. During
the period to 30 September 2018, fees of GBP55,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2017: GBP98,000; 31 March 2018: GBP169,000).
6. 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 2.5p per share
paid on 31 July 2017 - 2,179 2,179
Dividend of 2.5p per share paid on
31 January 2018 - - 2,178
Dividend of 2.5p per share
paid on 31 July 2018 2,160 - -
Unclaimed dividends - - (40)
2,160 2,179 4,317
The Directors have declared a second dividend for the year ending 31
March 2019 of 2.5 pence per share (total approximately GBP2,150,000),
payable on 31 January 2019 to shareholders on the register on 11 January
2019.
7. Basic and diluted return per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2018 30 September 2017 31 March 2018
Revenue Capital Revenue Capital Revenue Capital
Return attributable
to Ordinary shares
(GBP'000) 878 3,021 713 312 1,605 3,178
Weighted average
shares in issue 86,336,339 87,269,018 87,117,574
Return per Ordinary
share (pence) 1.0 3.5 0.8 0.4 1.8 3.7
The weighted average number of shares is calculated excluding treasury
shares of 10,630,188 (30 September 2017: 8,581,188; 31 March 2018:
9,730,188).
There are no convertible instruments, derivatives or contingent share
agreements in issue, and therefore no dilution affecting the return per
share. The basic return per share is therefore the same as the diluted
return per share.
8. Called up share capital
Allotted, called up and
fully paid shares of 1 Unaudited 30 Unaudited 30 Audited
penny each September 2018 September 2017 31 March 2018
Number of shares 96,639,535 95,825,075 96,243,201
Nominal value of allotted
shares (GBP'000) 966 958 962
Voting rights (number of
shares net of treasury
shares) 86,009,347 87,243,887 86,513,013
During the period to 30 September 2018 the Company purchased 900,000
Ordinary shares (nominal value of GBP9,000) to be held in treasury (30
September 2017: 318,000; 31 March 2018: 1,467,000) at a cost of
GBP650,000 (30 September 2017: GBP226,000; 31 March 2018: GBP1,019,000)
representing 0.9% of the shares in issue as at 30 September 2018.
The total number of Ordinary shares held in treasury as at 30 September
2018 was 10,630,188 (30 September 2017: 8,581,188; 31 March 2018:
9,730,188) representing 11.0% of the share capital as at 30 September
2018.
Under the terms of the Dividend Reinvestment Scheme Circular dated 10
July 2008, the following new Ordinary shares of nominal value 1 penny
per share were allotted during the period:
Opening-market
price on
Aggregate allotment
nominal value Issue price date
Date of Number of of shares (pence per Net invested (pence per
allotment shares allotted (GBP'000) share) (GBP'000) share)
31 July
2018 396,334 4 73.5 290 71.0
9. Commitments and contingencies
As at 30 September 2018, the Company had the following financial
commitments (30 September 2017 and 31 March 2018: nil):
-- Arecor Limited; GBP36,000
There are no contingencies or guarantees of the Company as at 30
September 2018 (30 September 2017 and 31 March 2018: nil).
10. Post balance sheet events
Since 30 September 2018 the Company has had the following post balance
sheet event:
-- Disposal of Infinite Ventures (Goathill) Limited for GBP687,000 of which
GBP17,000 is deferred and held in escrow.
11. Related party transactions
Other than transactions with the Manager as described in Note 5, there
are no other related party transactions.
12. Going concern
The Board's assessment of liquidity risk remains unchanged since the
last Annual Report and Financial Statements for the year ended 31 March
2018, and is detailed on page 62 of those accounts.
The Company has adequate cash and liquid resources. The portfolio of
investments is diversified in terms of sector, and the major cash
outflows of the Company (namely investments, dividends and share
buy-backs) are within the Company's control. Accordingly, after making
diligent enquiries, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for
the foreseeable future. For this reason, the Directors have adopted the
going concern basis in preparing this Half-yearly Financial Report and
this is in accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by the
Financial Reporting Council in September 2014.
13. Risks and uncertainties
The principal risks and uncertainties of the Company as identified by
the Board and how they are managed are as follows:
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.
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.
2. Valuation risk
The Company's investment valuation methodology is reliant on the
accuracy and completeness of information that is issued by portfolio
companies. In particular, the Directors may not be aware of or take into
account certain events or circumstances which occur after the
information issued by such companies is reported.
As described in note 2 of the Financial Statements, the investments held
by the Company are classified at fair value through profit or loss and
valued in accordance with the International Private Equity and Venture
Capital Valuation Guidelines. These guidelines set out recommendations,
intended to represent current best practice on the valuation of venture
capital investments. These investments are valued on the basis of
forward looking estimates and judgements about the business itself, its
market and the environment in which it operates, together with the state
of the mergers and acquisitions market, stock market conditions and
other factors. In making these judgements the valuation takes into
account all known material facts up to the date of approval of the
Financial Statements by the Board. The values of all investments are at
cost or price of recent investment (reviewed for impairment) or
supported by independent third party professional valuations.
3. 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 confirm independently 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.
4. 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 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.
5. 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.
The Audit Committee reviews the Internal Audit Reports prepared by the
Manager's internal auditors, PKF Littlejohn LLP. On an annual basis, the
Audit Committee Chairman meets with the internal audit partner to
provide an opportunity to ask specific detailed questions in order to
satisfy itself that the Manager has strong systems and controls in place
including those in relation to business continuity.
In addition, the Board regularly reviews the performance of its key
service providers, particularly the Manager, to ensure they continue to
have the necessary expertise and resources to deliver the Company's
investment objective and policies. The Manager and other service
providers have also demonstrated to the Board that there is no undue
reliance placed upon any one individual.
6. 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
instruments in portfolio companies. At any given time, the Company has
sufficient cash resources to meet its operating requirements, including
share buy-backs and follow on investments.
7. 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 buy-backs 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
audited 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 a statement
under s498 (2) or (3) of the Companies Act 2006.
15. Publication
This Half-yearly Financial Report is being sent to shareholders and
copies will be made available to the public at the registered office of
the Company, Companies House, the National Storage Mechanism and also
electronically at www.albion.capital/funds/AAVC, where the Report can be
accessed as a PDF document in the 'Financial Reports and Circulars'
section.
Dividend history for Albion Venture Capital Trust PLC 'C Shares' and
Albion Prime VCT PLC
Proforma(ii)
C shares(i) Albion Prime VCT PLC
Total shareholder return to 30 September 2018 (pence per share) (pence per share)
-------------------------------------------------------- ------------------- ----------------------
Total dividends paid to the year ended 31 March 2018 138.25 73.15
-------------------------------------------------------- ------------------- ----------------------
Total dividends paid in the six months to 30 September
2018 2.50 2.20
-------------------------------------------------------- ------------------- ----------------------
Total dividends paid to 30 September 2018 140.75 75.35
-------------------------------------------------------- ------------------- ----------------------
Proforma net asset value as at 30 September 2018 78.10 68.74
-------------------------------------------------------- ------------------- ----------------------
Total proforma shareholder return to 30 September
2018 218.85 144.09
-------------------------------------------------------- ------------------- ----------------------
Notes
1. The Ordinary Shares and the C Shares merged on an equal basis.
2. The proforma shareholder returns presented above are based on the
dividends paid to shareholders before the merger and the pro-rata net
asset value per share and pro-rata dividends per share paid to 30
September 2018. This pro-forma is based upon 0.8801 Albion Venture
Capital Trust PLC shares for every Albion Prime VCT PLC share which
merged with Albion Venture Capital Trust PLC on 25 September 2012.
Attachment
-- Split of portfolio by valuation
https://ml-eu.globenewswire.com/Resource/Download/cf8e3c05-3efb-449d-b680-fdeb902fbf12
(END) Dow Jones Newswires
December 07, 2018 04:14 ET (09:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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