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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hargreave Hale Aim Vct Plc | LSE:HHV | London | Ordinary Share | GB00B02WHS05 | 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% | 40.80 | 40.00 | 41.60 | 40.80 | 40.80 | 40.80 | 617 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -25.84M | -29.73M | -0.0866 | -4.71 | 140.1M |
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TIDMHHV
Preliminary Announcement of Final Results for the year ended 30
September 2018
FINANCIAL HIGHLIGHTS
Ordinary Shares (as at 30 September): 2018 2017
Net asset value per share 87.59p 80.82p
Cumulative distributions paid per
share since launch 50.00p 46.00p
Total return per share 137.59p 126.82p
Annual Returns per share (basic and
diluted):
Revenue return (0.19)p (0.13)p
Capital return 11.81p 8.99p
Combined return 11.62p 8.86p
Dividends per share:
Interim paid 1.75p 1.75p
Special dividend 1.00p -
Final proposed/paid 2.65p 2.25p
Total dividend for year 5.40p 4.00p
Ongoing Expense Ratio* 1.87% 2.13%
* Calculated using the AIC's "Ongoing Charges" methodology.
CHAIRMAN'S STATEMENT
INTRODUCTION
I should like to start by welcoming any new shareholders who have joined
us through the acquisition of Hargreave Hale AIM VCT 2 plc which
completed on 23 March 2018, or through this year's fundraising
activities.
PERFORMANCE
At 30 September 2018, the Net Asset Value (NAV) was 87.59 pence which
after adjusting for the dividends paid gives a Total Return since
inception of 137.59 pence. The earnings per share combined return for
the year was 11.62 pence (comprising a revenue loss of 0.19 pence and
capital gains of 11.81 pence). We are pleased to report that the NAV
Total Return (NAV plus dividends paid) for the period was a gain of
13.3% compared to a gain of 10.8% in the FTSE AIM All-share Total Return
Index in the year to 30 September 2018.
INVESTMENTS
The investment manager, Hargreave Hale Limited, invested GBP10.1 million
in 18 Qualifying Companies during the year (a further GBP2.6 million was
invested by Hargreave Hale AIM VCT 2 plc into Qualifying Companies
between 1 October 2017 and the acquisition date). The fair value of
Qualifying Investments at 30 September 2018 was GBP87.6 million invested
in 75 AIM companies and 7 unquoted companies. GBP67.3 million was held
in a mix of cash and non-qualifying equities; more detail can be found
in the investment manager's report.
DIVID
An interim dividend of 1.75 pence was paid on 31 July 2018 (Interim
2017: 1.75 pence).
Following a period of strong NAV growth and, in particular, the
realisation of gains through the partial disposal of our investment in
Zoo Digital, the Board was pleased to announce a special dividend of 1
penny per ordinary share on 19 September 2018. The dividend payment was
made on 24 October 2018 to shareholders on the register on 28 September
2018.
A final dividend of 2.65 pence is proposed (2017: 2.25 pence) which,
subject to shareholder approval at the Annual General Meeting, will be
paid on 8 February 2019 to ordinary shareholders on the register on 18
January 2019.
The Directors continue to maintain their policy of targeting a tax free
dividend yield equivalent to 5% of the year end NAV. The ability to pay
dividends is also dependent on the Company's available reserves and cash
resources, the Companies Act and the Listing Rules. The policy is non
binding and at the discretion of the Board. Dividend payments may vary
from year to year in both quantum and timing. Dividends will vary with
investment performance; in good years, the Directors may consider a
higher dividend payment; in poor years, the Directors may reduce or even
pay no dividend.
BUYBACKS
In total, 2,959,394 shares were purchased during the year at an average
price of 80.67 pence per share. A further 1,410,686 shares have been
purchased since the year end at an average price of 75.90 pence per
share.
The Board continues to target a share price discount of 5% to the NAV
per share (as measured against the mid-price) for market purchases. It
should be emphasised that this target is non-binding and depends upon a
range of factors, including the Company's liquidity, it's shareholder
permissions and market conditions.
The Company has a 5 year average share price discount on buybacks of
5.55%.
ACQUISITION OF HARGREAVE HALE AIM VCT 2 PLC AND OFFER FOR SUBSCRIPTION
The offer for subscription announced on 12 February 2018 was closed on 4
July 2018, GBP25 million was raised and 29.3 million new ordinary shares
were issued.
On 23 March 2018, the Company announced the approval to acquire the
above named company. The assets and liabilities of Hargreave Hale AIM
VCT 2 were acquired by Hargreave Hale AIM VCT 1 in consideration for the
issue of 68,680,227 ordinary shares of 1 pence each in the capital of
the Company to Hargreave Hale AIM VCT 2 shareholders. The scheme shares
were issued at a ratio of 1.458754 scheme shares for each Hargreave Hale
AIM VCT 2 share held.
The acquisition was implemented on a relative unaudited NAV basis,
adjusted for the anticipated costs of the scheme. The merger and
roll-over values were based on the latest unaudited valuations of the
companies' investments. The effect of the scheme was that Hargreave Hale
AIM VCT 2 shareholders received Hargreave Hale AIM VCT 1 shares with the
same total market value as at the scheme calculation date as their
Hargreave Hale AIM VCT 2 shares. The total cost of undertaking the
acquisition was GBP0.40 million of which GBP0.16 million was met by
Hargreave Hale Limited.
COMPANY NAME CHANGE
With the acquisition now complete, the Board felt it appropriate to
revise the name of your company to Hargreave Hale AIM VCT plc. The new
name came into effect on 6 September 2018. There is no change to the
company EPIC (stock market code), nor is there any need to make any
change to your share certificates.
CURRENT OFFER FOR SUBSCRIPTION
The Directors of the Company announced on 19 September 2018 the launch
of a new offer for subscription for shares to raise up to GBP20 million,
together with an over-allotment facility of up to a further GBP10
million. The offer was approved by shareholders of the Company at a
general meeting on 19 October 2018 and is open to both new and existing
shareholders. On 28 November 2018, the Company announced it had received
valid applications in excess of GBP20 million and accordingly, the
Directors confirmed they were releasing GBP5 million of the available
GBP10 million over-allotment facility. Since its launch, the offer has
resulted in gross funds being received of GBP22.0 million and the issue
of 27.3 million new shares in the Company to the date of this report.
COST EFFICIENCY
Your Board reviews costs incurred by the Company on a regular basis and
are focused on maintaining a competitively low ongoing expense ratio. I
am pleased to report that the year end ongoing expense ratio was 1.87%
when calculated in accordance with the AIC's "Ongoing Charges"
methodology. The methodology includes indirect costs including those
incurred by underlying investment funds such as the Marlborough Special
Situation Fund which we calculate to be equivalent to 0.09%. These fees
are included to provide shareholders with a more accurate measure of the
costs within the VCT. As the investment manager to the Company and the
investment advisor to the Marlborough Special Situation Fund Hargreave
Hale Limited makes a pro-rata adjustment to its investment management
fee to ensure the VCT is not charged twice for their services. In the
year to 30 September 2018 a reduction of GBP37,800 was made to the
annual management fee with regards to this.
Total costs as measured under the EU rules and published in the
Company's Key Information Document are also monitored by the Board. This
measure is calculated using a different methodology and includes
transaction costs therefore showing a higher figure than the published
ongoing charge ratio.
CANCELLATION OF SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE
At the general meeting of the Company held on 16 March 2018, a special
resolution was passed approving the cancellation of the Company's share
premium account and capital redemption reserve in order to create a pool
of distributable reserves.
I am pleased to inform you that the cancellation of the share premium
account and capital redemption reserve of the Company was confirmed by
the High Court of Justice in England and Wales and accordingly, the
amounts standing to the credit of the share premium account (GBP117.6m)
and capital redemption reserve (GBP0.1m) of the Company as at 25
September 2018 have been cancelled.
HARGREAVE HALE LIMITED TAKEOVER AND TRADING NAME
In July 2017, it was announced that Canaccord Genuity Group Inc. through
its UK and Europe based wealth management business Canaccord Genuity
Wealth Management agreed to acquire Hargreave Hale Limited. The
transaction was completed in September 2017. The fund management
division of Hargreave Hale Limited is now known as 'Canaccord Genuity
Fund Management' which is a trading name of Hargreave Hale Limited.
INVESTMENT MANAGEMENT FEE
As previously announced the Company and Hargreave Hale Limited, have
agreed to increase the investment management fee payable from an amount
equal to 1.5% of the Company's net assets to an amount equal to 1.7% of
the Company's net assets. This increase has been made to obtain
additional resource for the dedicated fund management team to support
the adopted strategy of increasing our exposure to unquoted companies
and will take effect from 1 April 2019.
VCT REGULATORY UPDATE
Through the budget delivered on 22 November 2017, the government
announced substantial changes to the legislation governing the
management of Venture Capital Trusts. Broadly speaking, the proposed
changes are designed to bring greater focus to the scheme and encourage
more investment into small British companies. These changes will come
into effect in stages and some of these changes have now started to
apply to your Company.
Some of these changes will have little or no impact on the management of
your Company. The most significant of the changes will be the increase
in the investment test with the minimum percentage of the Company that
must be invested into Qualifying Companies increasing from 70% to 80%
for accounting periods beginning on or after 6 April 2019. This becomes
applicable for Hargreave Hale AIM VCT plc from 1 October 2019. To assist
with this change, the period of disregard for the disposal of Qualifying
Investments will be increased from 6 months to 12 months.
As described above, Venture Capital Trusts have up to three years to
invest new funds into Qualifying Companies before those new funds are
included within the investment test. The legislation includes an
additional condition to encourage early investment into Qualifying
Companies. The new condition requires 30% of the new funds to be
invested into Qualifying Companies within 12 months of the end of the
accounting period in which the VCT issues the new shares. This applies
to all new funds raised by the Company on or after 1 October 2018.
VCT STATUS
For now, to maintain its status as a Venture Capital Trust, the Company
is required to invest at least 70% of the net funds raised in any one
accounting period, into Qualifying Companies by the start of the
accounting period containing the third anniversary of the date on which
the funds were raised, often referred to as the 'investment test'. I am
pleased to report that we continue to perform well against this test and,
at the period end, the investment test was 93.20% when measured using
HMRC's methodology. The Company satisfied all other tests relevant to
its status as a Venture Capital Trust.
KEY INFORMATION DOCUMENT
The EU's PRIIPs regulation came into effect in January of last year, the
purpose of which is to increase customer protection by improving the
functioning of financial markets. The regulation requires the Company to
publish a Key Information Document (KID). Retail investors must now be
directed to this before buying shares in the Company. The KID is
published on the Company website at
www.hargreaveaimvcts.co.uk/document-library.
The document has been prepared using the methodology prescribed in the
PRIIPS regulation. Concerns have been expressed within the industry
that;
1. the risk score may be understating the level of risk; and
2. investment performance scenarios may indicate future returns for
shareholders that are too optimistic.
It is hoped that these issues will be resolved in the future.
GENERAL DATA PROTECTION REGULATION
I am sure most of you are all too familiar with the new legislation
concerning the protection of personal data that came into effect on 25
May 2018. We wrote to shareholders at the time and included copies of
our privacy policy. A copy can be found on the Company website at
www.hargreaveaimvcts.co.uk/document-library.
Through an enclosed form, we asked you to notify us of the details of
any third parties such as your financial adviser that you would like us
to share your data with. Thank you to those shareholders who have
responded.
If you have not yet responded but would like your financial adviser to
have access to information relating to your investment in the Company
(number of shares held, value, dividend history, date of allotment etc),
then please get in contact with us via email at aimvct@canaccord.com
https://www.globenewswire.com/Tracker?data=AQ0TEi9yFaK3KpQpicBKnf7lDc8k9HH4KYoGLwqam_m4HYH0VPHnBwRa7EK4lacyTeroIFTwBc2fhVr3QU0Mi223NNLvVVPRmXTG_nkwG-E=
or by phone on 01253 754755 and request another form. We cannot share
your shareholder information with your adviser without your active
consent.
BOARD COMPOSITION
Your Directors review the composition and effectiveness of the Board at
regular intervals to ensure that it continues to comply with the
applicable regulations, is consistent with best practice and remains
effective.
The new Corporate Governance Code came into effective on 1 January 2019
and for your Company will become effective on 1 October 2019. The AIC's
Code of Corporate Governance is currently being drafted. Your Board will
review its composition again once the code has been finalised.
As previously announced, I am delighted to welcome Ashton Bradbury to
the board as a non-executive director appointed on 14 May 2018. Ashton
was previously Head of Equities at Old Mutual Global Investors (now
called Merian Global Investors) and is an experienced fund manager. His
skills and experience are complementary to the existing non-executive
team and I am grateful for his input which offers us a different
perspective.
With the changing landscape of VCT regulations, your Board will continue
to regularly review its structure and consider appropriate adjustments.
POST PERIOD UPDATE
The well documented decline in global stock markets made for a difficult
first quarter within the current financial year with the NAV declining
from 87.59 pence to 73.05 pence in the 3 months to 31 December 2018,
equivalent to a fall of 15.5% after adjusting for the 1 pence special
dividend paid on 24 October 2018. A number of the Top 10 holdings have
suffered steep falls in the share prices.
The investment manager has continued to deploy capital into qualifying
companies in line with the budget, despite the challenges within the
public markets. GBP2.9m has been invested into new qualifying
investments. GBP0.4m was invested into a qualifying company held in the
portfolio, with GBP2.5m invested into 3 new qualifying companies,
including one IPO. All 4 investments were into public companies.
As of 4 January 2019, the share price of 69.50 pence represented a
discount of 4.9% to the last published net asset value per share.
OUTLOOK
We certainly live in "interesting times". It is difficult to get away
from the "Brexit" subject. It is impossible to know what the outcome of
the various negotiations will be, which will result in uncertainty. Alas
this has and will unsettle the stock markets. We can expect a turbulent
ride in terms of our NAV until some clarity becomes evident. That said
the outlook for most of our investments remains positive as mostly they
are good, well run companies which will adapt to any new regulations to
which they are exposed.
We adopted a strategy of increasing our exposure to unquoted companies
and to that end your board agreed a very small increase in the
management fee provided that the number of staff was increased. I am
pleased to report that this has happened and we are seeing some very
exciting opportunities. We expect to see a number of new unlisted
investments in the forthcoming months. Whilst the current uncertainty
may reduce the number of AIM IPOs in the short term, we expect further
opportunities to arise from our existing portfolio.
Looking at Brexit it is easy to be a prophet of doom and gloom.
Personally, I think the economy has held up very well given general
uncertainty with employment at record levels and company profits
reaching all-time highs. This should mean that careful stock selection
in the area of the market in which we operate will be well rewarded,
although it may take a little time to see the benefits.
SIR AUBREY BROCKLEBANK
Chairman
Date: 8 January 2019
STRATEGIC REPORT
The purpose of the strategic report is to inform shareholders on key
matters and help them to assess how the Directors have performed in
their duty to promote the success of the Company. The report has been
prepared by the Directors in accordance with the requirements of Section
414A of the Companies Act 2006. The Company's independent auditor is
required by law to report on whether the information given within the
strategic report is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements.
THE COMPANY AND ITS BUSINESS MODEL
The Company was incorporated and registered in England and Wales on 16
August 2004 under the Companies Act 1985, registered number 05206425.
The Company has been approved as a Venture Capital Trust by HMRC under
Section 259 of the Income Taxes Act 2007. The shares of the Company were
first admitted to the Official List of the UK Listing Authority and
trading on the London Stock Exchange on 29 October 2004 and can be found
under the TIDM code "HHV". The Company is premium listed.
In common with many other VCTs, the Company revoked its status as an
investment company as defined in Section 266 of the Companies Act 1985
on 23 May 2006 to facilitate the payment of dividends out of capital
profits.
The Company's principal activity is to invest in a diversified portfolio
of qualifying small UK based companies, primarily trading on AIM, with a
view to maximising tax free dividend distributions to shareholders.
The Company is an externally managed fund with a Board comprising of
four non-executive directors, three of whom are independent. Hargreave
Hale Limited acts as investment manager, administrator and custodian and
provides the company secretary.
The Board has overall responsibility for the Company's affairs including
the determination of its investment policy, however, the Board may
exercise these responsibilities through delegation to Hargreave Hale as
it considers appropriate.
The Directors have managed and continue to manage the Company's affairs
in such a manner as to comply with Section 259 of the Income Taxes Act
2007.
INVESTMENT OBJECTIVES
The Company's investment objectives are:
-- to invest in a diversified portfolio of small UK based companies on a
high risk, medium term capital growth basis, primarily being companies
which are traded on AIM and which have the opportunity for significant
value appreciation;
-- to invest in smaller companies which may not be readily accessible to
private individuals and which also tend to be more risky;
-- to maximise distributions to shareholders from capital gains and income
generated from the Company's funds;
-- targeted investment in equities which are non-qualifying investments on
an opportunistic basis; and
-- to maintain the Company's exposure to small companies through an initial
investment of new capital into the Marlborough Special Situations Fund
pending investment into qualifying companies.
ASSET ALLOCATION
The Company will have a range of investments in four distinct asset
classes:
-- equity investments in qualifying companies, referred to as "Qualifying
Investments". Qualifying Investments will:
-- comprise qualifying holdings for a VCT as defined in Chapter 4
Part 6 of the Income Tax Act 2007;
-- primarily be made in AIM companies, but the Company's investment
manager will also consider NEX-quoted companies (formally ISDX)
and private companies that meet the investment criteria summarised
below; and
-- vary in size typically from GBP250,000 to GBP3 million by cost;
-- fixed income securities;
-- bank deposits that are readily realisable; and
-- non-qualifying equity exposure in the form of equity exposure to UK and
international equities through targeted investments made on an
opportunistic basis or through an investment into the Marlborough Special
Situations Fund.
INVESTMENT MANAGER
The Company is managed by Hargreave Hale Limited which have been
managing investments in UK Small and Micro Cap companies for 20 years
and VCTs for 14 years. Hargreave Hale has a long-established reputation
as a substantial investor in and a supporter of small British companies
through the main market of the London Stock Exchange and AIM. As well as
the Venture Capital Trust, the fund management team manages 6 unit
trusts including the Marlborough Special Situations Fund, the
Marlborough UK Micro-Cap Growth Fund and the Marlborough Multi-Cap
Income Fund. The investments of the Company are co-managed by Giles
Hargreave and Oliver Bedford with support from the rest of the Hargreave
Hale fund management team. The breadth of the fund management team, the
scale of investment into small companies and the investment manager's
track record help attract deal flow.
In accordance with the investment policy, the Company has made
investments in the Marlborough Special Situations Fund, which has
returned 3,205% (equivalent to an average 19.1% per annum to 30
September 2018) since Giles Hargreave took responsibility for it in July
1998.
INVESTMENT STRATEGY
QUALIFYING INVESTMENTS
The investment manager will maintain a diversified and fully invested
portfolio of Qualifying Investments. The primary purpose of the
investment strategy is to ensure the Company maintains its status as a
VCT. To achieve this, the Company must have 70% (80% for accounting
periods beginning on or after 6 April 2019) of all funds raised from the
issue of shares invested in Qualifying Investments throughout accounting
periods of the VCT beginning no later than three years after the date on
which those shares are issued.
Although VCTs are required to invest and maintain a minimum of 70% (80%
for accounting periods beginning on or after 6 April 2019) of their
funds invested in Qualifying Investments as measured by the VCT rules,
it is likely that the investment manager will target a higher threshold
of approximately 80% (85% for accounting periods beginning on or after 6
April 2019) in order to provide some element of protection against an
inadvertent breach of the VCT rules. The Company's maximum exposure to a
single Qualifying Investment is limited to 15% of net assets at cost.
The key selection criteria used in deciding which Qualifying Investments
to make include, inter alia:
-- the strength and credibility of the management team;
-- the business plan;
-- the risk/reward profile of the investment opportunity;
-- the quality of the finance function and budgetary process;
-- the strength of the balance sheet relative to anticipated cash flow from
operations; and
-- the existing balance of investments within the portfolio of Qualifying
Investments.
The investment manager follows a stock specific, rather than sector
specific, investment approach and is more likely to provide growth and
development capital than seed capital.
The investment manager will primarily focus on investments in companies
with a quotation on AIM. The investment manager will also invest in
private companies or those planning to trade on AIM. The investment
manager prefers to participate in secondary issues of companies with an
established track record that can be more readily assessed and greater
disclosure of financial performance. Secondary issues are often priced
at an attractive discount to the market price.
NON-QUALIFYING INVESTMENTS
The Company will have non-qualifying direct equity exposure to UK and
international equities through targeted investments made on an
opportunistic basis. This will vary in accordance with the investment
manager's view of the equity markets and may fluctuate between nil and
30% (by market value) of the net assets of the Company. The investment
manager will also invest in fixed income securities and cash.
The investment manager will invest up to 75% of the net proceeds of any
issue of new shares into the Marlborough Special Situations Fund subject
to a maximum of 20% (8.9% as at 30 September 2018) of the gross assets
of the Company. This will enable the Company to maintain its exposure to
small companies indirectly, whilst the investment manager identifies
opportunities to invest directly into small UK companies through a
suitable number of Qualifying Investments.
The allocation between asset classes in the non-qualifying portfolio
will vary depending upon opportunities that arise with a maximum
exposure of 100% of the non-qualifying portfolio to any individual asset
class.
To the extent that any future changes to the Company's investment policy
are considered material, shareholder consent to such changes will be
sought.
BUSINESS REVIEW
The chairman's statement and investment manager's report contain a
balanced and comprehensive analysis of the business during the financial
year and the position of the investments at the year end. The financial
position of the Company at 30 September 2018 was strong with no debt or
gearing.
KEY PERFORMANCE INDICATORS
At each board meeting, the Directors consider the following Key
Performance Indicators (KPIs) to assess whether the Company is achieving
its strategic objectives. The Directors believe these measures help
shareholders assess how effectively the Company is applying its
investment policy and are satisfied the results give a good indication
the Company is achieving its investment objectives and policy. The KPIs
are established industry measures.
Further commentary on the performance of these KPIs has been discussed
in the chairman's statement and investment manager's report. In addition,
the Board considers peer group comparative performance. Performance is
also measured against the Company's closest benchmark the FTSE Aim
All-share Total Return. The Director's consider this to be the most
appropriate benchmark from a shareholder's perspective, however, due to
the investment restrictions placed on a VCT it is not wholly comparable.
1. NET ASSET VALUE AND TOTAL RETURN
In the financial year under review, net assets increased from GBP66.0m
to GBP154.8m. This increase was made up of GBP56.6m net assets acquired
through the acquisition of Hargreave Hale AIM VCT 2 plc, GBP24.5m new
shares issued through the offer for subscription, profit for the year of
GBP15.0m, less buybacks of GBP2.4m and dividends paid of GBP4.9m. The
net asset value per share increased from 80.82p to 87.59p resulting in a
gain to ordinary shareholders of 10.77 pence per share (13.3%) after
adjusting for dividends paid in the year. The total return increased by
8.5%. These results are in line with the Company's long-term objective
to achieve capital growth and the Board is pleased with this
performance.
2. ONGOING CHARGES RATIO
The ongoing charges of the Company for the financial year under review
represented 1.87% (2017: 2.13%) of average net assets, which remains
competitive when compared with other VCTs. This ratio is calculated
using the AIC's "Ongoing Charges" methodology. Cost control and
efficiency continues to be a key focus for your Board and they are
satisfied with the result for the year.
1. EARNINGS PER SHARE (BASIC AND DILUTED)
The Company's earnings per share for the year ended 30 September 2018
was 11.62 pence per share (2017: 8.86 pence per share).
1. DIVIDS PER SHARE
The Board's policy is to target a tax free dividend yield equivalent to
5% of the year end NAV. The Board remains committed to maintaining a
steady flow of dividend distributions to shareholders; however,
dividends will vary with investment performance. The ability to pay
dividends is dependent on the Company's available reserves and cash
resources, the Companies Act and the Listing Rules. The policy is
non-binding and at the discretion of the Board. Dividend payments may
vary from year to year in both quantum and timing.
Total dividends of 4.00 pence per share were paid during the year
including an interim dividend of 1.75 pence which was paid on 31 July
2018. A special dividend of 1.00 pence per share was announced on 19
September 2018 and payment was made on 24 October 2018.
A final dividend of 2.65p will be proposed at the Annual General
Meeting.
1. PERCENTAGE INVESTED IN QUALIFYING COMPANIES
The investment test has increased from 88.59% to 93.20% in the year. The
Company made 18 Qualifying Investments at a cost of GBP10.1m, 7 of which
were investments into new Qualifying Companies. The fair value of the
qualifying portfolio increased from GBP38.0m to GBP87.6m as a result of
the above additions, the investments acquired through the acquisition of
Hargreave Hale AIM VCT 2 and unrealised gains for the period. The Board
is pleased with this result. The quantity and quality of qualifying
investment dealflow can vary, however, the Board believes that the
investment manager will invest a sufficient amount of capital into
Qualifying Companies to meet the HMRC defined investment test on an
ongoing basis.
For further details please refer to the investment managers report.
BORROWINGS
It is not the Company's present intention to have any borrowings. The
Company does, however, have the ability to borrow a maximum amount up to
15% of the "Adjusted Capital and Reserves" amount (as such term is
defined in the Articles of Association of the Company), which is
effectively the aggregate of the nominal capital of the Company issued
and paid up and the amount standing to the credit of the consolidated
reserves of the Company, less specified adjustments, exclusions and
deductions.
BUYBACKS
Share buybacks remain an important practice to improve liquidity in the
Company's shares. In total, 2,959,394 shares were purchased during the
year at an average price of 80.67 pence per share.
PRINCIPAL RISKS AND UNCERTAINTIES
The Directors acknowledge that they are responsible for the
effectiveness of the Company's risk management and internal controls and
periodically review the principal risks faced by the Company at the
quarterly board meetings. The Board may exercise these responsibilities
through delegation to Hargreave Hale Limited as it considers
appropriate. The principal risks facing the Company relate to the
Company's investment activities and include risks stated below:
Risk Consequence How the Board mitigates risk
Venture Capital Trust approval risk -- the Company Loss of VCT approval could lead to the Company losing To reduce this risk, the Board has appointed the investment
operates in a complex regulatory environment and faces its exemption from corporation tax on capital gains, manager, who has significant experience in venture
a number of related risks. A breach of Section 259 shareholders losing their tax reliefs, and, in certain capital trust management and reports to the Board
of the Income Taxes Act 2007 or the Finance Act could circumstances being required to repay the initial regularly throughout the year. In addition, to provide
result in the disqualification of the Company as a tax relief on their investment. further formal assurance, the Board has appointed
VCT. Philip Hare & Associates LLP to monitor compliance
with regulations and provide half yearly compliance
reports to the Board.
Investment risk -- Many of the Company's investments Investment in poor quality companies could reduce The investment manager maintains a broad portfolio
are held in small, high risk companies which are either the capital and income return to shareholders. Events of investments and holds regular company meetings
listed on AIM or privately held. such as economic recession and movements in interest to monitor investments and identify potential risk.
rates could adversely impact smaller company valuations. Regular board meetings and dialogue with the Directors
Investments in small companies are often illiquid supports strong governance. Whilst tax legislation
and may be difficult to realise. limits the Company's maximum exposure to a single
Qualifying Investment to 15% of net assets (at cost),
the investment manager's preference for portfolio
diversification means that Qualifying Investments
rarely exceed 5% of net assets. The funds liquidity
is monitored on a monthly basis.
Compliance risk -- The Company is required to comply Failure to comply with these regulations could result Board members have considerable experience of operating
with the rules of the UK Listing Authority, the Companies in a delisting of the Company's shares, financial at senior levels within quoted businesses. They receive
Act, Accounting Standards, the General Data Protection penalties, a qualified audit report or loss of shareholder regular updates on new regulation from their auditors,
Regulation and other legislation. The Company is also trust. lawyers and other professional bodies. Requirements
a small registered Alternative Investment Fund Manager are continually reviewed, and the Board seeks legal
("AIFM") and has to comply with the requirements of advice when appropriate.
the AIFM Directive.
Operational risk and outsourcing -- Failure in the Failures could put the assets of the Company at risk The Board reviews the system of internal controls,
investment manager/administrator or other appointed or result in reduced or inaccurate information being both financial and non-financial, operated by the
third party systems and controls or disruption to passed to the Board or shareholders. Company and Hargreave Hale Limited. Hargreave Hale
its business. Quality standards may be reduced through lack of understanding Limited has controls in place to ensure that the Company's
or loss of control. assets are safeguarded. It also has in place its own
risk management system which is reviewed regularly
to ensure controls remain effective. Documented internal
policies and procedures manuals are reviewed by senior
management. A documented business continuity plan
and a regularly tested disaster recovery plan are
in place to mitigate risk. Where tasks are outsourced
to other third parties, reputable firms are used and
performance is reviewed periodically.
Reputational risk -- Inadequate or failed controls. Realisation of this risk might result in breaches The investment manager operates a robust risk management
of regulations or loss of shareholder trust. system which is reviewed regularly to ensure controls
remain effective in mitigating risks to the Company.
Additional risks and further details of the above risks and how they are
managed are explained in the financial statements. Trends affecting
future developments are discussed in the chairman's statement and the
investment manager's report.
LONG TERM VIABILITY STATEMENT
In accordance with provision C.2.2 of the UK Corporate Governance Code,
the Directors have carried out a robust assessment of the principal
risks relating to the Company. This assessment has been carried out over
a longer period than the 12 months required by the 'Going Concern'
provision. The Board conducted this review for a period of five years,
which was selected because it:
-- falls in line with the Company continuation vote and investors minimum
holding period to retain tax relief; and
-- covers a sufficient period for all funds raised to comply with HMRC
investment test rules.
The Board considers the viability of the Company as part of its
continuing programme of monitoring risk. The Company has a detailed risk
control framework, documented procedures and forecasting model in place
to reduce the likelihood and impact of risk taking that exceeds the
agreed levels by the Board. These controls are reviewed by the Board and
Hargreave Hale on a quarterly basis.
The Board has considered severe but reasonable scenarios and the effect
of any mitigating actions, the potential impact of these risks on the
business model, future performance and liquidity of the Company.
The Directors consider the Company to be viable for a further five years
for the following reasons:
-- the Company maintains a broad portfolio of investments including
approximately GBP42.5 million invested in non-qualifying investments and
a further GBP24.9 million in cash at the year end. The Company therefore
has sufficient liquidity which is monitored monthly;
-- the Company is well invested against the HMRC investment test and ended
the year at 93.20% invested in qualifying companies. The Board anticipate
that there will continue to be suitable Qualifying Investments available
over the next five years;
-- the ongoing expense ratio of the Company for the year end was 1.87%,
which is competitive for the VCT sector;
-- the financial position of the Company at 30 September 2018 was strong
with no debt or gearing; and
-- the Company has sufficient procedures in place to identify, monitor and
control risk.
Based on this assessment, the Directors have a reasonable expectation
that the Company will be able to continue in operation and meet its
liabilities as they fall due over the next five years.
GER AND DIVERSITY
The Board comprises four male non-executive Directors with a diverse
range of experience, skills, length of service and backgrounds. The
Board confirms it will consider gender diversity when making future
appointments and will always appoint the best person for the job. It
will not discriminate on the grounds of gender, race, ethnicity,
religion, sexual orientation, age or physical ability.
ENVIRONMENTAL RESPONSIBILITY
The Board conducts the Company's affairs responsibly and expects the
investment manager to consider environmental matters when appropriate.
The Company offers electronic communications where acceptable to reduce
the volume of paper it uses.
EMPLOYEE, HUMAN RIGHTS, SOCIAL AND COMMUNITY ISSUES
The Board seeks to conduct the Company's affairs responsibly and expects
the investment manager to consider employee, human rights, social and
community issues when fulfilling their role. As an externally managed
investment company with no employees, the Company does not maintain any
specific policies in relation to these matters.
PROSPECTS
The prospects and future development of the Company are discussed in
detail in the outlook section of the chairman's statement.
By order of the Board of Directors.
STUART BROOKES
Company Secretary
Date: 8 January 2019
INVESTMENT MANAGER
Established in 1897, Hargreave Hale has evolved into a leading UK small
cap fund manager and provider of investment management and stockbroking
services to individuals, families, corporate entities, charities, trusts,
solicitors, accountants and intermediaries. Hargreave Hale has an
award-winning fund management team of 16 people.
On 18 September 2017, Hargreave Hale was acquired by Canaccord Genuity
Wealth Management, the UK & Europe based wealth management business of
Canaccord Genuity Group Inc.
The investment portfolio is co-managed by Giles Hargreave and Oliver
Bedford, with support from Hargreave Hale's fund management team of 16.
The fund management team manages approximately GBP6.0 billion, including
more than GBP4.5 billion invested in small companies (as at 30 September
2018). Along with the scale of the investment in small companies and
their track record, the breadth of the team and their reach into the
market help attract Qualifying Investment deal flow.
INVESTMENT MANAGER'S REPORT
INTRODUCTION
This report covers the 2017/18 financial year, 1 October 2017 to 30
September 2018. The investment manager's report contains references to
movements in the Net Asset Value (NAV) per share and Total Return per
share (NAV per share plus distributed earnings per share). Movements in
the NAV per share do not necessarily mirror the earnings per share (EPS)
reported in the accounts and elsewhere, which convey the profit after
tax of the Company within the reported period as a function of the
weighted average number of shares in issue for the period.
Investment performance measures contained in this report are calculated
on a pence per share basis and include realised and unrealised gains and
losses.
INVESTMENT REPORT
In contrast to the stability of last year, the year under review has
included more uncertainty. Although the current market correction did
not fully materialise until after the year end, elements of the UK
market have been in a sustained downturn since the summer. The political
landscape, at home and abroad, is contentious and increasingly
confrontational. More recently, commentators have started to question
the capacity for the US economy to continue to grow, with the US yield
curve hinting at a possible recession in late 2019 or 2020. US equities,
in particular the large US technology companies, have had a substantial
pullback, further damaging sentiment. In the UK, the economy has
continued along its path of sub-trend growth.
More than ever, we continue to grapple with the potential direction and
impact of Brexit on our portfolio. By and large, most companies continue
to trade perfectly well. However, the uncertainty is clearly beginning
to weigh on a small number of companies. With risks mounting, it seems
inevitable that over the coming months, we will hear of more companies
choosing to defer investment decisions, or of consumers taking a more
cautious approach to discretionary spending. We have not observed Brexit
related uncertainty influencing dealflow, although public market
volatility has led to some companies choosing to defer their plans to
float. It helps that we can now offer to meet their funding needs
through a private (off-market) funding round. It is difficult to
position the portfolio to meet an outlook which contains such a range of
wildly different scenarios, but broadly speaking we are sitting in a
more defensive posture with elevated cash balances and a focus on
qualifying companies with robust non-secular/structural growth
opportunities or, in the case of non-qualifying equities, higher quality
FTSE 350 companies with support from structural growth, income or
overseas earnings.
PERFORMANCE
In the twelve months to 30 September 2018, the NAV increased from 80.82p
to 87.59p. A total of 4 pence per share was paid in dividends, giving
investors a combined return of 10.77 pence per share, which translates
to a gain of 13.3%. During the same period, the FTSE AIM All-Share Total
Return gained 10.8%, whilst the FTSE 100 Total Return gained 6.1%.
The Qualifying Investments made a net contribution of 8.43 pence per
share. The adjusting balance was the net of non-qualifying portfolio
gains, running costs and investment income.
Learning Technologies Group was the top performing qualifying investment
(+210.8%, +3.81 pence per share) delivering strong interim results in
September 2018 and upgraded guidance which included the accelerated
release of PeopleFluent synergies and continued growth in recurring
revenues. Zoo Digital was the second largest contributor to positive
performance (+229.7%, +3.45 pence per share), with the market responding
positively to evidence of further traction in their new dubbing service.
Creo (+174.1%, +1.74 pence per share), Craneware (+153.8%, +1.5 pence
per share) and Ideagen (+98.8%, +1.16 pence per share) were also
significant contributors over the period.
The biggest loss within the period came from Faron Pharmaceuticals
(-87.5%, -1.32 pence per share) following the failure of the Phase III
Traumakine trial. The double blinded multi-centre study failed to
mirror the successful Phase II study with both arms of the study showing
a below average mortality rate, with no discernible clinical benefit for
those dosed with the active ingredient. Subsequent analysis has surfaced
a possible link to the widespread use of steroids as part of the
treatment regime, along with evidence that a patient's genetic profile
may influence the efficacy of the drug. Further data from a second
clinical trial is expected shortly. Other losses came from Laundrapp
(-73.5%, -0.79 pence per share) which we wrote down to the price of its
latest funding round, Animalcare (-48.0%, -0.69 pence per share), Portr
(-59.5%, -0.69 pence per share) which is subject to continuing
uncertainty and Eagle Eye (-45.5%, -0.63 pence per share).
We invested GBP10.1m into 18 Qualifying Companies over the period,
including 11 further investments into existing Qualifying Companies (3
private), 5 IPOs and 2 secondary placings into listed companies
Within the qualifying portfolio we reduced our investments in Zoo
Digital, Creo, Aquis and Learning Technologies. All 4 companies
experienced strong runs in the market. We completely exited TP Group
earlier in the year and have reduced our holdings in Genedrive and
Imaginatik following prolonged periods of poor performance.
PORTFOLIO STRUCTURE
The VCT is comfortably through the HMRC defined investment test and
ended the period at 93.2% invested as measured by the HMRC investment
test. By market value, the VCT had a 56.6% weighting to Qualifying
Investments.
The allocation to non-qualifying equity investments decreased from 19.6%
to 18.5%. We continued to make use of the Marlborough Special Situations
Fund as a temporary home for proceeds from fundraising; the allocation
decreased from 10.9% to 9.0%. The non-qualifying investments contributed
+3.13 pence per share to the overall gains. The period ended with no
fixed income investments and an increase in the cash weighting from
12.1% to 16.1%.
The HMRC investment tests are set out in Chapter 3 of Part 6 Income Tax
Act 2007, which should be read in conjunction with this section of the
annual report. Funds raised by VCTs are first included in the investment
tests from the start of the accounting period containing the third
anniversary of the date on which the funds were raised. Therefore, the
allocation of Qualifying Investments as defined by the legislation can
be different to the portfolio weighting as measured by market value
relative to the net assets of the VCT.
POST PERIOD UPDATE
The well documented decline in global stock markets made for a difficult
first quarter within the current financial year with the NAV declining
from 87.59 pence to 73.05 pence in the 3 months to 31 December 2018,
equivalent to a fall of 15.5% after adjusting for the 1 pence special
dividend paid on 24 October 2018. A number of the Top 10 holdings have
suffered steep falls in the share prices.
We have continued to deploy capital into qualifying companies in line
with the budget, despite the challenges within the public markets.
GBP2.9m has been invested into new qualifying investments. GBP0.4m was
invested into a qualifying company held in the portfolio, with GBP2.5m
invested into 3 new qualifying companies, including one IPO. All 4
investments were into public companies.
As of 4 January 2019, the share price of 69.50 pence represented a
discount of 4.9% to the last published net asset value per share.
For further information please contact:
STUART BROOKES
Company Secretary
Registered office:
Hargreave Hale AIM VCT plc,
41 Lothbury
London
EC2R 7AE
01253 754740
Date: 8 January 2019
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In respect of the financial statements
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
They are also responsible for ensuring that the annual report includes
information required by the Listing Rules of the Financial Conduct
Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors are required to
prepare the financial statements and have elected to prepare the company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice ("UK GAAP") (United Kingdom Accounting
Standards and applicable law). Under company law the Directors must not
approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and of
the profit or loss for the Company for that period.
In preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with UK GAAP; subject
to any material departures disclosed and explained in the financial
statements;
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and
-- prepare a directors' report, a strategic report and directors'
remuneration report which comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for ensuring that the annual report and
accounts, taken as a whole, are fair, balanced, and understandable and
provide the information necessary for shareholders to assess the
Company's position and performance, business model and strategy.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual report and the
financial statements are made available on a website. Financial
statements are published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the Company's
website is the responsibility of the Directors. The Directors'
responsibility also extends to the ongoing integrity of the financial
statements contained therein.
DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO DTR4
Sir Aubrey Brocklebank (Chairman), David Brock, Oliver Bedford and
Ashton Bradbury, the Directors confirm to the best of their knowledge
that:
-- The financial statements have been prepared in accordance with UK GAAP
and give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company; and
-- The annual report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that
it faces.
For and on behalf of the Board
SIR AUBREY BROCKLEBANK BT
Chairman
Date: 8 January 2019
INCOME STATEMENT
Year to 30 September 2018 Year to 30 September 2017
Revenue Capital Total Revenue Capital Total
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Net gain on investments held at fair value through
profit or loss - 16,519 16,519 - 7,349 7,349
Income 806 78 884 446 15 461
--------------------------------------------------- ------ --- ------ ------ ------ ------ ------
806 16,597 17,403 446 7,364 7,810
--------------------------------------------------- ------ --- ------ ------ ------ ------ ------
Management fee (416) (1,249) (1,665) (216) (648) (864)
Other expenses (633) (109) (742) (325) (49) (374)
(1,049) (1,358) (2,407) (541) (697) (1,238)
--------------------------------------------------- ------ ------ ------ ------ ------ ------
(Loss)/gain on ordinary activities before taxation (243) 15,239 14,996 (95) 6,667 6,572
Taxation - - - - - -
--------------------------------------------------- ------ --- ------ ------ ------ ------ ------
(Loss)/gain after taxation (243) 15,239 14,996 (95) 6,667 6,572
(Loss)/gain per share basic and diluted 2 (0.19 )p 11.81p 11.62p (0.13)p 8.99p 8.86p
--------------------------------------------------- ------ --- ------ ------ ------- ------- ---------
The total column of these statements is the income statement of the
Company. All revenue and capital items in the above statements derive
from continuing operations. There was no other comprehensive income
other than the gain/loss for the year.
The accompanying notes are an integral part of these financial
statements.
BALANCE SHEET
Company Registration Number 5206425 (In England and Wales)
As at 30 September 2018
2018 2017
Note GBP000 GBP000
Fixed assets
Investments at fair value through profit or loss 130,105 58,125
Current assets
Debtors 167 63
Cash at bank 24,860 8,007
25,027 8,070
Creditors: amounts falling due within one year (346) (206)
Net current assets 24,681 7,864
Total assets less current liabilities 154,786 65,989
Capital and Reserves
Called up share capital 1,767 816
Share premium - 37,515
Capital redemption reserve 5 37
Special reserve 125,919 15,522
Capital reserve -- realised (2,774) (4,644)
Capital reserve -- unrealised 30,606 17,237
Revenue reserve (737) (494)
Total shareholders' funds 154,786 65,989
Net asset value per share (basic and 3 87.59p 80.82p
diluted)
These financial statements were approved and authorised for issue by the
Board of Directors on 8 January 2019 and signed on its behalf by
SIR AUBREY BROCKLEBANK BT
Chairman
8 January 2019
The accompanying notes are an integral part of these financial
statements.
STATEMENT OF CHANGES IN EQUITY
For the year ending 30 September 2018
Non-distributable reserves Distributable reserves (1)
Capital Capital
Share Redemption Capital Special Reserve Revenue
Share Capital Premium Reserve Reserve Unrealised Reserve Realised Reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October
2017 816 37,515 37 17,237 15,522 (4,644) (494) 65,989
Share
buybacks (29) - 29 - (2,387) - - (2,387)
Share Issues 293 24,707 - - - - - 25,000
Issue Costs (499) (499)
Acquisition
of Hargreave
Hale AIM VCT
2 plc 687 55,919 - - - - - 56,606
Capital
Reduction - (117,642) (61) - 117,703 - - -
Equity
dividends
paid - - - - (4,919) - - (4,919)
------------- ------- --------------- -------- ------- --- ------------------- ------- -------- ------- --------- ------- ------
Realised
gains on
investments - - - - - 3,150 - 3,150
Unrealised
gains on
investments - - - 13,369 - - - 13,369
Management
fee charged
to capital - - - - - (1,249) - (1,249)
Income
allocated to
capital - - - - - 78 - 78
Due diligence
investments
costs - - - - - (109) - (109)
Revenue loss
after
taxation for
the year - - - - - - (243) (243)
------------- ------- --------------- -------- ------- --- ------------------- ------- --------- ------- --------- ------- ------
Total gain
after
taxation - - - 13,369 - 1,870 (243) 14,996
At 30
September
2018 1,767 - 5 30,606 125,919 (2,774) (737) 154,786
------------- ------- --------------- -------- ------- --- ------------------- ------- --------- ------- --------- ------- -------
Reserves available for distribution are capital reserve realised,
special reserve and revenue reserve. Total distributable reserves at 30
September 2018 were GBP122.4 million. The accompanying notes are an
integral part of these financial statements.
(1) The Income Taxes Act 2007 restricts distribution of capital from
reserves created by the conversion of the share premium account into a
special (distributable) reserve until the third anniversary of the share
allotment that led to the creation of that part of the share premium
account. As at 30 September 2018, GBP80.8 million of the special reserve
is subject to this restriction.
For the year ending 30 September 2017
Non-distributable reserves Distributable reserves (1)
Capital
Share Redemption Capital Special Capital Revenue
Share Capital Premium Reserve Reserve Unrealised Reserve Reserve Realised Reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2016 620 21,845 28 9,651 19,052 (3,725) (399) 47,072
Share buybacks (9) - 9 - (668) - - (668)
Share Issues 205 16,013 - - - - - 16,218
Issue Costs - (343) - - - - - (343)
Equity dividends
paid - - - - (2,862) - - (2,862)
----------------- ----------------- ---------- ---------- ------------------- --------- ------------------ ------------- ------
Realised losses
on investments - - - - - (237) - (237)
Unrealised gains
on investments - - - 7,586 - - - 7,586
Management fee
charged to
capital - - - - - (648) - (648)
Arrangement fee
income - - - - - 15 - 15
Due diligence
investments
costs - - - - - (49) - (49)
Revenue loss
after taxation
for the year - - - - - (95) (95)
----------------- ----------------- ---------- ---------- ------------------- ---------- ------------------ ------------ ------
Total gain after
taxation - - - 7,586 - (919) (95) 6,572
At 30 September
2017 816 37,515 37 17,237 15,522 (4,644) (494) 65,989
------------------- --------------- --------- ---------- ------------------- --------- ----------------- ------------ ------
Reserves available for distribution are capital reserve realised,
special reserve and revenue reserve. Total distributable reserves at 30
September 2017 were GBP10.4 million. The accompanying notes are an
integral part of these financial statements.
STATEMENT OF CASH FLOWS
2018 2017
GBP000 GBP000
Total profit on ordinary activities before taxation 14,996 6,572
Realised (gain)/loss on investments (3,150) 237
Unrealised (gain) on investments (13,369) (7,586)
(Increase) in debtors (104) (19)
Increase in creditors 140 15
---------------------------------------------------- ----------- --------
Net cash (outflow) from operating activities (1,487) (781)
------------------------------------------------------- --------- --------
Purchase of investments (18,487) (22,657)
Sale of investments 13,016 10,453
---------------------------------------------------- ----------- --------
Net cash used in investment activities (5,471) (12,204)
------------------------------------------------------- --------- --------
Share buybacks
Issue of share capital (2,387) (668)
Issue costs 25,000 15,875
Cash acquired on acquisition of Hargreave Hale AIM (499) -
VCT 2 plc 6,616 -
Dividends paid (4,919) (2,862)
---------------------------------------------------- ----------- --------
Net cash provided by financing activities 23,811 12,345
------------------------------------------------------- --------- --------
Net increase/(decreased) in cash 16,853 (640)
------------------------------------------------------- --------- --------
Opening cash 8,007 8,647
------------------------------------------------------- --------- --------
Closing cash 24,860 8,007
The accompanying notes are an integral part of these financial
statements.
1. Basis of Preparation
The financial information set out in this preliminary announcement does
not constitute the Company's statutory accounts for the years ended 30
September 2018 or 30 September 2017. Statutory accounts for the year
ended 30 September 2017 have been filed with the Registrar of Companies
and those of the year ended 30 September 2018 will be delivered to the
Registrar in due course; both have been reported on by the independent
auditors. The independent auditor's reports on the Statutory accounts
for the years ended 30 September 2017 and 30 September 2018 were
unqualified, did not draw attention to any matters by way of emphasis,
and did not contain a statement under 498(2) or 498(3) of the Companies
Act 2006.
The accounts of the Company are prepared in accordance with Accounting
Standards applicable in the United Kingdom. UK Generally Accepted
Accounting Practice ("GAAP"), including Financial Reporting Standard 102
("FRS 102") and with the Companies Act 2006 and the Statement of
Recommended Practice for "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" (AIC SORP) (2014), updated January
2017. The accounting policies used in preparing this preliminary
announcement are consistent with those used in the preparation of the
financial statements.
All investments are classified as fair value through profit or loss.
Investments are measured initially and subsequently at fair value which
is deemed to be bid market prices for listed investments and investments
traded on AIM. Unquoted investments are valued using the most
appropriate methodology recommended by the International Private Equity
Venture Capital ("IPEV") guidelines published in December 2015. The
Board will consider future updates in due course.
Where the classification of a financial instrument requires it to be
stated at fair value, this is determined by reference to the quoted bid
price in an active market wherever possible. Where no such active market
exists for the particular asset or liability, the Company holds the
investment at cost for a period or the price at the most recent funding
round where there is considered to be no change in fair value.
Valuations of unquoted investments are reviewed on a quarterly basis and
more frequently if events occur that could have a material impact on the
investment. Where cost is no longer considered appropriate, the Company
will use a value indicated by a material arms-length transaction by an
independent third party in the shares of a company. Where no such
transaction exists, the Company will use the most appropriate valuation
technique including discounted cash flow analysis, earnings multiples,
net assets and industry valuation benchmarks. All inputs are market
observable with the exception of level 3 financial instruments.
Investments are recognised and derecognised at trade date where a
purchase or sale is under a contract whose terms require delivery within
the time frame established by the market concerned. Purchases and sales
of unlisted investments are recognised when the contract for acquisition
or sale becomes unconditional. Transaction costs are included in the
initial cost or deducted from the disposal proceeds as appropriate.
These investments will be managed and their performance evaluated on a
fair value basis in accordance with a documented investment strategy and
information about them is provided internally on that basis to the
Board.
Gains and losses arising from changes in fair value (realised and
unrealised) are included in the net profit or loss for the period as a
capital item in the income statement and are taken to the unrealised
capital reserve or realised capital reserve as appropriate.
If an investment has been impaired such that there is no realistic
expectation that there will be a full return from the investment, the
loss is treated as a permanent impairment and transferred to the capital
reserve realised.
Other financial assets and liabilities comprise receivables, payables
and cash which are measured at amortised cost. There are no financial
liabilities other than payables.
The accounting policies adopted in these preliminary results have been
consistently applied to all the years presented and are consistent with
the policies used in the preparation of the statutory accounts for the
years ended 30 September 2018 and 30 September 2017. The full statutory
annual accounts will be published in January 2019. Copies may in due
course be obtained during normal business hours from Hargreave Hale
Limited, Talisman House, Boardmans Way, Blackpool, FY4 5FY.
The Annual General Meeting of the Company will be held at the Company's
registered office on 5 February 2019 at 11.30am.
1. Earnings per share (basic and diluted)
Revenue return per ordinary share is based on a net revenue loss on
ordinary activities after taxation of GBP242,791 (2017 loss: GBP95,107)
and on 129,091,888 (2017: 74,161,478) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
Capital return per ordinary share is based on a net capital profit of
GBP15,239,153 (2017 profit: GBP6,667,203) for the year and on
129,091,888 (2017: 74,161,478) ordinary shares, being the weighted
average number of ordinary shares in issue during the year.
Total Return per ordinary share is based on a net profit of
GBP14,996,362 (2017 profit: GBP6,572,097) for the year and on
129,091,888 (2017: 74,161,478) ordinary shares, being the weighted
average number of ordinary shares in issue during the year.
1. Net asset value per ordinary share
The net asset value per ordinary share at 30 September 2018 of 87.59
pence (2017: 80.82 pence) is based on net assets of GBP154,786,376 at
the year end (2017: GBP65,988,872) and on 176,711,020 ordinary shares,
being the number of shares in issue at year end (2017: 81,653,218).
1. Principal Risks and Uncertainties
The principal risks facing the Company relate to the Company's
investment activities and include venture capital trust approval risk,
investment risk, operational risk and outsourcing, compliance risk and
reputational risk. Other risks faced by the Company include market risk,
currency risk, interest rate risk and credit risk. These risks and the
way in which they are managed are described in more detail in the
Strategic Report.
1. Related party transactions
Hargreave Hale Limited
Hargreave Hale Limited is considered to be a related party to the
Company. Oliver Bedford, a non-executive director of the Company and a
member of its key management personnel, is an employee of Hargreave Hale
Limited. In addition, Hargreave Hale Limited acts as investment manager,
administrator and custodian to the Company and it provides the company
secretary. All of the support functions performed by Hargreave Hale
Limited are segregated by department and location and are independent of
each other.
Hargreave Hale Limited, in its capacity as investment manager of the
fund, receives annual fees of 1.5% per annum of the net asset value of
the Company, calculated and payable quarterly in arrears. Fees for the
year are GBP1,665,754 (2017: GBP864,075). A further GBP494,733 was paid
to Hargreave Hale Limited under the terms of the offer agreement. In
relation to the other support functions described above, Hargreave Hale
Limited received fees of GBP151,737 (2017: GBP100,000). Of those
combined fees, GBP212,338 (2017: GBP99,095) was still owed at the year
end.
Hargreave Hale Limited has agreed to indemnify the Company against
annual running costs (such costs excluding VAT, any performance
incentive fee and any trail commissions payable by the Company)
exceeding 3.5% of its net assets. No fees were waived between 1 October
2017 and 30 September 2018 under the indemnity.
The Company and Hargreave Hale Limited, the Company's investment manager,
have agreed to increase the investment management fee payable to
Hargreave Hale from an amount equal to 1.5% of the Company's net assets
to an amount equal to 1.7% of the Company's net assets, with effect from
1 April 2019.
.
6. Shares Issued
During the year, the Company issued 29,336,969 ordinary shares (nominal
value GBP293,370) in an offer for subscription, representing 35.9% of
the opening share capital at prices ranging from 84.45p to 89.38p per
share. Gross funds of GBP25,000,000 were received of which GBP498,733
was paid to Hargreave Hale Limited to settle introductory commission due
of GBP4,000 and to cover the costs of the offer.
The Company issued a further 68,680,227 ordinary shares (nominal value
GBP686,802) in relation to the acquisition of Hargreave Hale AIM VCT 2
plc. The cash received from the acquisition was GBP6,615,786.
1. Capital Structure
Share Capital
Ordinary shares are classed as equity. The ordinary shares in issue have
a nominal value of one pence and carry one vote each. Substantial
holdings in the Company are disclosed in the directors' report.
Share Premium
This reserve represents the difference between the issue price of shares
and the nominal value of shares at the date of issue, net of related
issue costs.
Capital Redemption Reserve
This reserve is used for the cancellation of shares bought back under
the buyback facility.
Special Reserve
Distributable reserve used to pay dividends and re-purchase shares under
the buyback facility.
Capital Reserve Realised
Gains/losses on disposal of investments, due diligence costs and income
from private company investments, permanent impairment of financial
assets and 75% of the investment management fee are accounted for in the
capital reserve realised.
Capital Reserve Unrealised
Unrealised gains and losses on investments held at the year end arising
from movements in fair value are taken to the capital reserve
unrealised.
Revenue Reserve
Net revenue profits and losses of the Company.
INVESTMENT PORTFOLIO SUMMARY
ORDINARY SHARE FUND
AS AT 30 SEPTEMBER 2018
As at 30 September 2018 As at 30 September 2017 (3)
------------------ ------------- --------------------------------- ------------------------------------------------ --------- ------
Change in
Book Cumulative Book Cumulative Value for the
Net Assets % Cost Movement in Valuation Cost Movement in Valuation year GBP000
at 30/9/18 GBP000 value GBP000 GBP000 GBP000 value GBP000 GBP000 (4) Market COI(1)
------------------ ------------- ------- ------------- --------- ------- ------------- --------- ------------- --------- ------
Qualifying Investments
Learning
Technologies
Group plc 5.56 2,586 6,020 8,606 663 1,018 1,681 5,002 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Zoo Digital Group
plc 3.64 2,267 3,369 5,636 393 1,219 1,612 2,150 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Creo Medical Group
plc 3.30 2,333 2,773 5,106 659 42 701 2,731 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Ideagen plc 2.65 1,992 2,113 4,105 410 555 965 1,558 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
SCA Investments
Ltd (Gousto) 2.29 2,486 1,061 3,547 1,002 (2) 1,000 1,063 Unlisted Y
------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------
Craneware plc 2.09 125 3,109 3,234 125 1,149 1,274 1,960 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Quixant plc 1.67 1,209 1,378 2,587 160 1,370 1,530 8 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Beeks Financial
Cloud Group plc 1.54 1,039 1,340 2,379 - - - 1,340 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Abcam plc 1.53 55 2,308 2,363 55 1,625 1,680 683 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Infinity Reliance
Ltd (My 1st
Years) 1.45 2,504 (252) 2,252 501 (1) 500 (251) Unlisted Y
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------
Honest Brew Ltd 1.42 2,203 (3) 2,200 501 (1) 500 (2) Unlisted N
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------
Aquis Exchange Ltd 1.36 765 1,347 2,112 401 (1) 400 1,348 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------
Cohort plc 1.21 619 1,257 1,876 619 1,267 1,886 (10) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
Loopup Group plc 1.19 1,204 637 1,841 236 401 637 236 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Hardide plc 1.15 1,637 143 1,780 786 146 932 (3) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
Science in Sport
plc 1.12 1,480 251 1,731 778 203 981 48 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Zappar Ltd 1.03 1,602 (2) 1,600 902 (2) 900 - Unlisted N
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------
FairFX Group plc 0.98 751 760 1,511 295 70 365 690 AIM N
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
DP Poland plc 0.97 1,391 117 1,508 594 376 970 (259) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
Mexican Grill Ltd
(A Preference
Shares) 0.89 1,013 367 1,380 185 367 552 - Unlisted N
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Portr Ltd 0.80 1,790 (559) 1,231 873 125 998 (684) Unlisted N
------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------
Eagle Eye
Solutions Group
plc 0.77 1,643 (448) 1,195 967 234 1,201 (682) AIM Y
------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------
Forbidden
Technologies plc 0.76 852 321 1,173 - - - 321 AIM N
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Clearstar Inc 0.73 720 415 1,135 449 (134) 315 549 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------
ULS Technology plc 0.69 770 301 1,071 221 484 705 (183) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
AnimalCare Group
plc 0.68 720 339 1,059 220 1,180 1,400 (841) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
EKF Diagnostics
Holdings plc 0.68 565 488 1,053 300 160 460 328 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Maxcyte Inc Com
Stk USD 0.01
(DI) 0.67 668 374 1,042 173 417 590 (43) AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------
Angle plc 0.64 1,159 (161) 998 348 (161) 187 - AIM N
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------
Escape Hunt plc 0.63 1,130 (152) 978 618 26 644 (178) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Everyman Media Group plc 0.60 600 324 924 171 184 355 140 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Osirium Technologies plc 0.55 859 (7) 852 301 (38) 263 31 AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------ Cloudcall Group plc 0.48 1,138 (389) 749 259 52 311 (441) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Surface Transforms plc 0.47 639 83 722 373 (15) 358 98 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ K3 Business Technology Group plc 0.47 270 450 720 270 198 468 252 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ KRM22 plc 0.43 621 48 669 - - - 48 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ CentralNic Group plc 0.41 588 50 638 293 183 476 (133) AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Idox plc 0.41 135 497 632 135 1,027 1,162 (530) AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Belvoir Lettings plc 0.41 762 (133) 629 513 (127) 386 (6) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ i-nexus Global plc 0.41 701 (72) 629 - - - (72) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ TrakM8 Holdings plc 0.40 486 139 625 106 277 383 (138) AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Premaitha Health plc 0.40 521 99 620 432 (179) 253 278 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Fulcrum Utility Services Ltd 0.40 580 40 620 - - - 40 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Gfinity plc 0.39 772 (172) 600 384 451 835 (623) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Tristel plc 0.37 543 27 570 - - - 27 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ WANDisco plc 0.33 347 165 512 89 311 400 (146) AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ PCI-PAL plc 0.32 811 (311) 500 - - - (311) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Plastics Capital plc 0.32 478 19 497 250 45 295 (26) AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Instem plc 0.32 297 196 493 297 (25) 272 221 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ The Property Franchise Group plc 0.31 377 95 472 225 63 288 32 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Laundrapp Ltd 0.30 1,238 (770) 468 802 82 884 (852) Unlisted N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Vertu Motors plc 0.28 600 (170) 430 600 (127) 473 (43) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ bigblu Broadband plc 0.27 347 73 420 154 104 258 (31) AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ MYCELX Technologies Corporation plc 0.25 361 25 386 300 (171) 129 196 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Globaldata plc 0.22 173 167 340 173 136 309 31 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Mirriad Advertising plc 0.21 610 (283) 327 - - - (283) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Faron Pharmaceuticals Oy 0.21 2,220 (1,897) 323 201 399 600 (2,296) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Sanderson Group plc 0.19 298 4 302 - - - 4 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Ilika plc 0.19 507 (210) 297 218 (111) 107 (99) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ APC Technology Group plc 0.19 634 (338) 296 498 (343) 155 5 AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------ Intercede Group plc 0.19 305 (18) 287 247 173 420 (191) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Fusion Antibodies plc 0.18 415 (129) 286 - - - (129) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Maxcyte Inc Com Stk USD0.01 (DI/REG S) 0.16 264 (18) 246 141 (18) 123 - AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------ Velocity Composites plc 0.14 624 (414) 210 332 (24) 308 (390) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Laundrapp Ltd
(Loan Notes) 0.13 200 - 200 - - - - Unlisted N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Verona Pharma plc 0.13 221 (23) 198 127 29 156 (52) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Lidco Group plc 0.11 307 (137) 170 220 (69) 151 (68) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Mexican Grill Ltd (Ordinary Shares) 0.10 113 40 153 21 40 61 - Unlisted N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Universe Group plc 0.09 210 (75) 135 210 30 240 (105) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ TLA Worldwide plc 0.09 135 - 135 300 (75) 225 75 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Pressure Technologies plc 0.08 170 (40) 130 170 (40) 130 - AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------ Omega Diagnostics Group plc 0.08 129 - 129 - - - - AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Reneuron Group plc 0.08 606 (487) 119 534 (368) 166 (119) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Medaphor Group plc 0.07 300 (189) 111 250 (172) 78 (17) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Porta Communications plc 0.07 106 - 106 505 (328) 177 328 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Egdon Resources plc 0.06 158 (62) 96 158 (42) 116 (20) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Paragon Entertainment Ltd 0.05 87 (9) 78 - - - (9) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Mirada plc 0.04 96 (27) 69 65 - 65 (27) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Genedrive plc 0.04 68 - 68 140 (80) 60 80 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Redcentric plc 0.03 42 5 47 42 - 42 5 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Tasty plc 0.03 40 - 40 288 (188) 100 188 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Microsaic Systems plc 0.02 26 4 30 10 - 10 4 AIM N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Midatech Pharma plc 0.02 53 (24) 29 37 - 37 (24) AIM Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Mporium Group plc 0.02 33 (8) 25 23 - 23 (8) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Flowgroup plc - 26 (26) - 25 - 25 (26) AIM N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Imaginatik plc (2) - - - - 323 (157) 166 157 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Fusionex International plc (2) - - - - 138 (80) 58 80 Unlisted N ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Infoserve Group plc (2) - - - - - - - - Unlisted N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Total - Qualifying Investments 56.61 62,525 25,123 87,648 24,784 13,139 37,923 11,984 ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Non qualifying investments ------------------ ------------- ------- ------------- --------- ------- ------------- --------- ------------- --------- ------ Marlborough Special Situations Fund 8.96 11,918 1,946 13,864 6,062 1,111 7,173 835 Unlisted Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Total unit trusts 8.96 11,918 1,946 13,864 6,062 1,111 7,173 835 ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Royal Dutch Shell plc 1.04 1,327 286 1,613 652 36 688 250 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ BP plc 0.99 1,203 329 1,532 600 21 621 308 Main N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ NMC Health plc 0.88 1,014 344 1,358 426 344 770 - Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Melrose Industries plc 0.84 1,455 (156) 1,299 926 (54) 872 (102) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Hilton Food Group plc 0.77 907 285 1,192 252 24 276 261 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Fulcrum Utility Services Ltd 0.74 408 739 1,147 125 563 688 176 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ JD Sports Fashion plc 0.72 855 265 1,120 463 31 494 234 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Anglo American plc 0.71 931 172 1,103 422 33 455 139 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
On the Beach Group plc 0.64 846 144 990 391 140 531 4 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Dechra Pharmaceuticals plc 0.63 951 28 979 461 191 652 (163) Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Vesuvius plc 0.63 897 71 968 - - - 71 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Sanne Group plc 0.62 1,019 (61) 958 511 86 597 (147) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Charter Court Financial Services Group plc 0.58 732 171 903 - - - 171 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Ascential plc 0.58 768 133 901 326 43 369 90 Main N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ XP Power Ltd 0.42 660 (9) 651 292 13 305 (22) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Future plc 0.41 564 69 633 - - - 69 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Oxford Biomedica plc 0.41 612 17 629 - - - 17 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Wizz Air Holdings plc 0.38 622 (34) 588 220 123 343 (157) Main N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Halma plc 0.37 472 106 578 - - - 106 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Micro Focus International plc 0.37 509 63 572 141 80 221 (17) Main N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Countryside Properties plc 0.36 585 (31) 554 - - - (31) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Prudential plc 0.34 561 (33) 528 - - - (33) Main N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ FDM Group (Holdings) plc 0.31 489 (4) 485 - - - (4) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Bakkavor Group plc 0.31 518 (35) 483 - - - (35) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Quixant plc 0.31 159 319 478 159 336 495 (17) Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- --- --------- ------ Lloyds Banking Group plc 0.31 549 (75) 474 285 (14) 271 (61) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ Horizon Discovery Group plc 0.30 374 94 468 261 84 345 10 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ GVC Holdings plc 0.30 459 - 459 - - - - Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ IntegraFin Holdings plc 0.29 279 173 452 - - - 173 Main N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ MYCELX Technologies Corporation plc 0.29 298 150 448 200 (80) 120 230 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- --- --------- ------- ---- --------- ------ Everyman Media Group plc 0.29 293 155 448 85 87 172 68 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Renishaw plc 0.28 415 12 427 276 10 286 2 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Ricardo plc 0.27 472 (51) 421 - - - (51) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Cohort plc 0.27 368 47 415 - - - 47 AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Just Eat plc 0.26 409 (7) 402 82 18 100 (25) Main N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Clipper Logistics plc 0.25 482 (96) 386 234 28 262 (124) Main N ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Fisher (James) & Sons plc 0.25 355 25 380 - - - 25 Main Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Zotefoams plc 0.21 323 (4) 319 - - - (4) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ GoCompare.com Group plc 0.16 324 (81) 243 - - - (81) Main Y ------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------ Mexican Grill Ltd (A Preference Shares) 0.10 135 13 148 128 13 141 - Unlisted N ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Regent Pacific Non UK Group Ltd 0.08 201 (85) 116 150 (72) 78 (13) Listed N ------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------ The Fulham Shore plc 0.05 69 6 75 38 6 44 - AIM Y ------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------ Amerisur Resources plc 0.05 212 (141) 71 167 (106) 61 (35) AIM Y
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------
Eagle Eye
Solutions Group
plc 0.04 87 (18) 69 44 19 63 (37) AIM Y
------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------
Egdon Resources
plc 0.03 47 6 53 - - - 6 AIM Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Reneuron Group plc 0.02 119 (84) 35 104 (44) 60 (40) AIM N
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- --- --------- ------
Midatech Pharma
plc 0.01 39 (17) 22 25 - 25 (17) AIM Y
------------------ --------- ------- ------- --- -------- ------- ------- ---- --------- ------- --- --------- ------
Mexican Grill Ltd
(Ordinary
Shares) 0.01 26 (7) 19 26 (7) 19 - Unlisted N
------------------ --------- ------- ------- --- -------- ------- ------- --- --------- ------- ---- --------- ------
Hargreave Hale AIM
VCT plc(2) - - 1 1 - - - 1 Main Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Genagro Ltd (2) - - - - - - - - Unlisted Y
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Total -
Non-qualifying
investments 18.48 25,399 3,194 28,593 8,472 1,952 10,424 1,242
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Total -
Non-qualifying
investments 27.44 37,317 5,140 42,457 14,534 3,063 17,597 2,077
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Total investments 84.05 99,842 30,263 130,105 39,318 16,202 55,520 14,061
------------------ --------- ------- ------- ---- -------- ------- ------- ---- --------- ------- ---- --------- ------
Cash at bank 16.06 24,860
------------------ --------- ------- ------------- -------- ------- ------------- --------- ------------- --------- ------
Prepayments &
accruals (0.11) (179)
------------------ --------- ------- ------------- -------- ------- ------------- --------- ------------- --------- ------
Net assets 100.00 154,786
------------------ --------- ------- ------------- -------- ------- ------------- --------- ------------- --------- ------
(1) COI -- Co investments with other funds managed by Hargreave Hale at
30 September 2018.
(2) These are actual holdings of less than GBP500.
(3) Pre-acquisition of Hargreave Hale AIM VCT 2 plc.
(4) The change in fair value has been adjusted for additions and
disposals in the year and as such does not reconcile to the unrealised
total in Note 7 to the Annual Report and Financial Statements for the
year ended 30 September 2018. The difference is GBP692k which is the
total of ten full investment disposals in the year.
The comparative cost and valuations for 30 September 2017 do not agree
to the Annual Report and Financial Statements for the year ended 30
September 2017 as the above list does not include brought forward
investments that were fully disposed in the year.
TOP TEN INVESTMENTS
As at 30 September 2018 (by market value)
The top 10 equity investments are shown below; each is valued by
reference to the bid price, or in the case of unquoted companies, values
are either based on the last arm's length transaction or valuation
techniques, such as earnings multiples. Forecasts, where given, are
drawn from a combination of broker research and/or Bloomberg consensus
forecasts and exclude amortisation, share based payments and exceptional
items. Forecasts are in relation to a period end for which the company
results are yet to be released. Forecasts are not shown for private
companies. The net asset figures are drawn from audited accounts and net
cash values are from published accounts in most cases.
Learning Technologies Group plc 165.5p
Forecasts for the
Investment date November 2014 year to December 2018
Turnover
Equity Held 0.78% (GBP'000) 97,800
Profit/(loss)
before tax
Av Purchase Price 49.7p (GBP'000) 21,700
Net Cash
Cost (GBP'000) 2,586 (GBP'000) 1,048
Net Assets
December 2017
Valuation (GBP'000) 8,606 (GBP'000) 76,841
COMPANY DESCRIPTION
Learning Technologies Group provides a comprehensive
and integrated range of e-learning services and technologies
to corporate and government clients. The Group offers
end-to-end learning and talent solutions ranging from
strategic consultancy, through a range of content
and platform solutions to analytical insights that
enable corporate and government clients to meet their
performance objectives.
Zoo Digital Group plc 122.0p
Forecasts for the year
Investment date April 2017 to March 2019
Equity Held 6.21% Turnover ($'000) 33,700
Profit/(loss) before
Av Purchase Price 49.1p tax ($'000) 1,700
Cost (GBP'000) 2,267 Net Cash ($'000) (1,901)
Net Assets March 2018
Valuation (GBP'000) 5,636 ($'000) 2,655
COMPANY DESCRIPTION
Zoo Digital is a leading provider of cloud-based dubbing,
subtitling, localisation and distribution services
for the global entertainment industry. Zoo's clients
are some of the best-known brands in the world including
major Hollywood studios, global broadcasters and independent
distributors. Zoo's point of difference in the marketplace
is its development and use of innovative cloud technology
that ensures that content is localised in any language
and delivered to all the major online platforms such
as Amazon, iTunes, Google and Hulu with reduced time
to market, higher quality and lower costs.
Creo Medical Group plc 222.0p
Forecasts for the
Investment date December 2016 year to December 2018
Turnover
Equity Held 1.92% (GBP'000) -
Profit/(loss)
before tax
Av Purchase Price 101.4p (GBP'000) (11,042)
Net Cash
Cost (GBP'000) 2,333 (GBP'000) 5,917
Net Assets June
Valuation (GBP'000) 5,106 2017 (GBP'000) 14,653
COMPANY DESCRIPTION
Creo Medical is a medical device company focused on
the emerging field of surgical endoscopy, a recent
development in minimally invasive surgery. Creo Medical
was founded in 2003, initially to target the treatment
of cancers through use of high frequency microwave
energy and dynamic matching techniques.
Ideagen plc 159.0p
December Forecasts for
Investment date 2014 the year to April 2019
Turnover
Equity Held 1.18% (GBP'000) 42,800
Profit/(loss)
before tax
Av Purchase Price 77.2p (GBP'000) 11,400
Net Cash
Cost (GBP'000) 1,992 (GBP'000) 782
Net Assets
April 2018
Valuation (GBP'000) 4,105 (GBP'000) 50,484
COMPANY DESCRIPTION
Ideagen is a supplier of compliance-based information
management software with operations in the UK and
the United States. The company specialises in enterprise
governance, risk and compliance and healthcare solutions
for organisations operating within highly regulated
industries. Ideagen provides complete content lifecycle
solutions that enable organisations to meet their
regulatory and quality compliance standards, helping
them to reduce costs and improve efficiency.
SCA Investments Ltd (Gousto)
(unquoted) 5.299.0p
Results for the year
Investment date July 2017 to December 2017
Equity Held 2.24% Turnover (GBP'000) 23,204
Profit/(loss)
before tax
Av Purchase Price 3,714.1 (GBP'000) (13,426)
Cost (GBP'000) 2,486 Net Cash (GBP'000) 17,700
Net Assets
December 2017
Valuation (GBP'000) 3,547 (GBP'000) 18,781
Income recognised in
period (GBP) 0
COMPANY DESCRIPTION
Founded in February 2012, Gousto is an e-commerce
company offering recipe kit boxes which include fresh
ingredients for step-by-step chef designed recipes
to be made at home. Shoppers select meals from a variety
of options on Gousto's e-commerce platform. Gousto
then delivers the pre-proportioned ingredients to
the doorstep, along with instructions on how to prepare
the meal.
Craneware plc 3,300.0p
Forecasts for
Investment date September 2007 the year to June 2019
Equity Held 0.37% Turnover ($'000) 79,200
Profit/(loss)
before tax
Av Purchase Price 127.6p ($'000) 23,900
Cost (GBP'000) 125 Net Cash ($'000) 52,833
Net Assets June
Valuation (GBP'000) 3,234 2018 ($'000) 51,646
COMPANY DESCRIPTION
Craneware develops and sells billing software analysis
tools for the United States healthcare services sector.
The company's software automates the checking process,
aids in cash flow and revenue generation, and ensures
accurate submission of claims and management of compliance
risks.
Quixant plc 425.0p
Forecasts for the year
Investment date May 2013 to December 2018
Equity Held 1.09% Turnover ($'000) 123,000
Profit/(loss) before
Av Purchase Price 189.7p tax ($'000) 18,600
Cost (GBP'000) 1,368 Net Cash ($'000) 2,544
Net Assets December
Valuation (GBP'000) 3,065 2017 ($'000) 47,260
COMPANY DESCRIPTION
Quixant designs and manufactures complete advanced
hardware and software solutions for the pay-to-play
gaming industry. Quixant's specialised products provide
an all-in-one solution, based on PC technology but
with additional hardware features and operating software
developed specifically to address the requirements
of the gaming industry.
Beeks Financial Cloud Group plc 126.0p
Forecasts for
Investment date November 2017 the year to June 2019
Turnover
Equity Held 3.72% (GBP'000) 8,000
Profit/(loss)
before tax
Av Purchase Price 55.0p (GBP'000) 2,100
Net Cash
Cost (GBP'000) 1,039 (GBP'000) 2,090
Net Assets
June 2018
Valuation (GBP'000) 2,379 (GBP'000) 4,844
COMPANY DESCRIPTION
Beeks Financial Cloud Group PLC operates as a cloud
computing organisation. The Company focuses on providing
a cloud platform for trading applications to connect
to venues in financial cities and data centers. Beeks
Financial Cloud Group serves financial market worldwide.
Abcam plc 1,432.0p
Forecasts for the
Investment date October 2005 year to June 2019
Turnover
Equity Held 0.08% (GBP'000) 265,000
Profit/(loss)
before tax
Av Purchase Price 33.3p (GBP'000) 86,700
Net Cash
Cost (GBP'000) 55 (GBP'000) 90,200
Net Assets June
Valuation (GBP'000) 2,363 2018 (GBP'000) 351,700
COMPANY DESCRIPTION
Abcam is a global life sciences company providing
highly validated antibodies and other binders and
assays to the research and clinical communities to
help advance the understanding of biology and cause
of disease. The company's customers include universities,
research institutes, and pharmaceutical and biotechnology
companies in countries around the world.
Cohort plc 395.0p
Results for the
Investment date February 2006 year to April 2019
Turnover
Equity Held 1.42% (GBP'000) 125,000
Profit/(loss)
before tax
Av Purchase Price 170.2p (GBP'000) 16,100
Net Cash
Cost (GBP'000) 987 (GBP'000) 4,669
Net Assets April
Valuation (GBP'000) 2,291 2018 (GBP'000) 74,930
COMPANY DESCRIPTION
Cohort plc provides electronic and surveillance technology
solutions. The Company offers electronic warfare operational
support, secure communication systems and networks,
test systems, and data management. Cohort serves defense
and security, transport, offshore energy, and other
commercial markets.
Investments held within the portfolio are listed and headquartered in
the UK with the exception of the following:
Listed Headquartered Registered
Listed investments:
Clearstar Inc UK Cayman Islands Cayman Islands
Faron Pharmaceuticals Oy UK Finland Finland
Fulcrum Utility Services Ltd UK UK Cayman Islands
GVC Holdings plc UK Isle of Man UK
Maxcyte Inc Com Stk USD 0.01 (DI) UK USA USA
Maxcyte Inc Com Stk USD 0.01 UK USA USA
(DI/REG S)
MYCELX Technologies Corporation plc UK USA USA
Paragon Entertainment Ltd UK UK Cayman Islands
Regent Pacific Group Ltd Hong Kong Hong Kong Cayman Islands
Royal Dutch Shell plc UK Netherlands UK
Sanne Group plc UK Jersey Jersey
WANDisco plc UK UK and USA Jersey
Wizz Air Holdings plc UK Switzerland Jersey
XP Power Ltd UK Singapore Singapore
Unlisted private investments:
Fusionex International plc - UK Jersey
Genagro Ltd - Jersey Jersey
STUART BROOKES
Company Secretary
Registered office:
Hargreave Hale AIM VCT plc,
41 Lothbury
London
EC2R 7AE
Date: 8 January 2019
(END) Dow Jones Newswires
January 08, 2019 11:16 ET (16:16 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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