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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Unicorn Aim Vct Plc | LSE:UAV | London | Ordinary Share | GB00B1RTFN43 | 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% | 91.50 | 88.00 | 95.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -5.67M | -10.59M | -0.0612 | -14.95 | 158.18M |
From Apr 2019 to Apr 2024
TIDMUAV
RNS Number : 6212G
Unicorn AIM VCT PLC
31 May 2017
Unicorn AIM VCT plc ("The Company")
Half-Yearly Report Announcement for the six months ended 31 March 2017
Investment Objective
The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady flow of dividend distributions to Shareholders from the income as well as capital gains generated by the portfolio.
It is also the objective that the Company should continue to qualify as a Venture Capital Trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 70% of the Company's total assets are to be invested in qualifying investments of which 30% by VCT value (70% for funds raised after 6 April 2011) must be in ordinary shares carrying no preferential rights (save as permitted under VCT rules) to dividends or return of capital and no rights to redemption.
Venture Capital Trust Status
The Company has satisfied the requirements for approval as a Venture Capital Trust (VCT) under section 274 of the Income Tax Act 2007 (ITA). It is the Directors' intention to continue to conduct the business of the Company so as to maintain compliance with that section.
Financial Highlights
For the six months ended 31 March 2017
- GBP15 million Offer for Subscription fully subscribed. - Total return of 8.08 pence per share. - GBP12.6 million of investments made in the period.
Fund Performance
Hot Features
Premium
Ordinary Shareholders' Net asset Cumulative NAV total Share price
shares value per dividends return
share (NAV) paid per to Shareholders
share since
merger
* per
share
(p)
funds (p) (p) *
(GBPmillion) (p)
31 March
2017 163.3 162.4 38.50 200.94 137.0
30 September
2016 147.7 160.5 32.25 192.75 139.0
31 March
2016 139.5 150.9 32.25 183.15 130.5
30 September
2015 124.6 155.6 26.00 181.60 137.0
* Since the merger of the Company with Unicorn AIM VCT II plc on 9 March 2010 and merger of all former share classes.
Portfolio Summary
Allocation of qualifying
investments by market sector
As at 31 March As at 30 September
2017 2016
% %
Pharmaceutical
& biotechnology 26.5 21.9
Software & computer
services 21.5 23.8
Financial services 9.0 9.3
Healthcare equipment
& services 7.1 6.0
Travel & leisure 5.5 6.5
Industrial engineering 5.2 5.6
Media 4.9 4.3
Aerospace & defence 4.7 3.6
Chemicals 4.4 5.8
Support services 2.9 2.7
Real estate investment
& services 2.5 3.0
Technology hardware
& equipment 1.7 1.4
Automobiles & parts 1.5 2.3
Food & drug retailers 1.3 2.2
Industrial transportation 0.8 0.6
Electronic & electrical
equipment 0.2 0.2
Oil equipment &
services 0.2 0.2
Household goods
& home construction 0.1 0.3
Retail - 0.3
Total 100.0 100.0
============== ==================
Chairman's Statement
I am pleased to present the unaudited Half-Yearly Report (the "Report") of the Company for the six months ended 31 March 2017.
As at 31 March 2017, the net assets of the Company were GBP163.3 million, which represents an increase of GBP23.8 million compared with the end of the same period last year, and an increase of GBP15.6 million since the start of the current financial year. This growth in total net assets has arisen mainly as a result of a fully subscribed GBP15 million Offer for Subscription, which closed in February 2017.
During the period under review, the Company's unaudited Net Asset Value (NAV) per share increased from 160.5 to 162.4 pence. This represents a total return for the period of 5%, after taking into account the dividend of 6.25 pence per share for the financial year ended 30 September 2016 which was paid on 3 February 2017. This dividend equated to a yield of 3.8% based on the period end NAV of 162.4 pence per share and is tax free to qualifying Shareholders.
The Company's performance compares to total returns of +14.3% from the FTSE AIM All-Share Index and +8.1% from the FTSE All-Share Index. Each of these indices contain meaningful exposure to the Oil & Gas and Mining Sectors, which performed very strongly in the period under review, and to which the Company has no exposure.
Offer for Subscription
The GBP15 million Offer for Subscription which was opened on 19 January 2017 attracted significant support and swiftly became over-subscribed leading to closure to new investment on 3 February 2017.
On behalf of the Board, I would like to welcome all new Shareholders and thank existing Shareholders for their continued support.
Dividends
As announced in last year's Annual Financial Report, the Board has decided to move to twice yearly dividend payments and has therefore declared an interim dividend payment of 3.0 pence per share in relation to the six-month period ended 31 March 2017. The dividend will be paid on 11 August 2017, to Shareholders on the register as at 21 July 2017. The shares will be quoted ex-dividend on 20 July 2017.
As ever, future decisions regarding dividends remain subject to a number of factors including; market conditions, investment performance, and availability of cash and distributable reserves.
Qualifying Investments
A review of the ten most meaningful contributions to performance in absolute terms (both positive and negative) follows:-
Animalcare Group (+55.3%) is a leading supplier of generic veterinary medicines and animal identification products to companion animal veterinary markets. Animalcare delivered excellent interim results for the six-month period ended 31 December 2016. Revenues grew strongly in both the Licensed Veterinary Medicines division (+17.2% to GBP5.37m) and the Animal Welfare Products division (+13.3% to GBP1.51m), while overall, pre-tax profits increased by 20.8% to GBP1.85 million. As a consequence, the company's financial position continued to strengthen. Despite significantly increased investment in product development, the Group's net cash balance grew by 14.7% to GBP7.0 million (2015: GBP6.1 million). The interim dividend was increased by 11.1% to 2.0 pence per share (2015: 1.8 pence per share).
Anpario (+24.0%) is a specialist producer of natural feed additives that promote animal health, hygiene and good nutrition. For the financial year ended 31 December 2016, Anpario recorded a 10% rise in net profit to GBP3.4m (2015: GBP3.1m). This increase in profitability, was driven by a 4% increase in sales to GBP24.3 million (2015: GBP23.3 million) together with an improvement in gross margins. As a consequence, the proposed final dividend was increased by 10% to 5.5p per share (2015: 5.0p). At the calendar year end the company's net cash position had improved to GBP11.1 million (2015: GBP9.3 million)
Crawshaw Group (-37.3%) is a retailer of fresh meat and food-to-go. In April 2017, management released final results for the financial year ended 31 January 2017, which confirmed that trading performance had begun to improve following decisive action taken by management at the end of the first half of the year to address the price and range initiatives that were not resonating with customers. It is encouraging to note the sharp recovery in both sales and customer numbers throughout the second half of the year. Perhaps more importantly for the longer term success of the business, Crawshaw Group has recently entered into a potentially transformational partnership with the owners of 2 Sisters Food Group, one of Europe's largest meat and food processors. Subject to Crawshaw shareholder and Takeover Panel approvals, Ranjit Boparan, founder and owner of 2 Sisters has invested approximately GBP5.1m for a 29.9% stake in Crawshaw, together with warrants to acquire a further 20.1% of the Group. This transaction gives Crawshaw immediate access to increased volumes of fresh poultry and meats at attractive prices, while also providing surety of supply. In turn, this should result in Crawshaw customers benefitting from an expanded range of products at what are expected to be highly competitive prices. It is
therefore anticipated that this transaction will drive significant value creation over the next few years.
Cohort (+38.9%) is the parent company of four businesses based in the UK and Portugal, providing a wide range of services and products for customers in the defence sector and related markets. Interim results for the six months ended 31 October 2016 saw operating profits increase by 11% to GBP3.9 million (2015: GBP3.5 million), on revenues that were essentially flat at GBP50.0 million (2015: GBP49.7 million). Order intake was healthy at GBP63.6 million, although this figure did include an acquired order book of GBP23.1 million (2015: GBP55.7 million). As a result, the closing order book at the half year end stood at GBP129.6 million (30 April 2016: GBP116.0 million). The interim dividend was increased by 16% to 2.20 pence per share (2015: 1.90 pence per share).
Directa Plus (-23.4%) is a producer and supplier of graphene-based materials for use in consumer and industrial markets. Apart from a number of announcements concerning new and existing customers the company has released no material newsflow in the period under review.
Instem (-42.5%) is a leading supplier of IT solutions and technology-enabled outsourced services to the global life sciences market. In its financial year ended 31 December 2016, Instem increased revenues by 12% to GBP18.3 million (2015: GBP16.3 million). Importantly, recurring revenues also increased strongly by 21% to GBP12.1 million (2015: GBP10.0 million). Adjusted profit before tax was lower than in the previous financial year at GBP0.7 million (2015: GBP1.7 million) due to a disappointing performance from Instem Clinical, one of the divisions within the Group. Actions have been taken to address the issues within this division, which principally revolve around a change in operational management. The net cash position on the balance sheet as at 31 December 2016 improved to GBP5 million (2015: GBP2.2 million), after a successful placing of new shares in February 2016.
MaxCyte (+217.6%) is a manufacturer of equipment designed to assist researchers in the rapidly emerging cell and gene therapy sector. The Company invested GBP1.5 million in MaxCyte as part of an initial public offering on the Alternative Investment Market in March 2016. In its maiden financial results as a listed company, MaxCyte recorded a 32% increase in revenues to $12.3 million ($9.3 million in 2015). Gross margins were stable at 89%, while planned investment in people and product development increased significantly resulting in an anticipated net loss of $3.3 million. As a consequence of the successful listing, total assets increased to $16.1 million at the end of 2016, compared to $6.4 million at the end of 2015. Following the period end, the Company has made a further GBP1.65 million VCT qualifying investment in MaxCyte as the business seeks to rapidly accelerate its product development activities in order to better meet market demand.
NCC Group (-62.1%) is an independent global cyber security and risk mitigation expert. Following two unexpected and disappointing profit warnings, the newly appointed Board of NCC undertook a strategic review. The review has highlighted significant issues that have negatively impacted on the performance of the Group's Assurance division. As a result, the Board has concluded that the Group's full year adjusted EBITDA will be approximately 20% below the GBP45.5m to GBP47.5m range, which it published in a trading update announcement released on 13 December 2016. In view of the deterioration in trading in the Assurance Division, the NCC Board is also conducting a comprehensive review of the Group's operating strategy. The Board expects to update the market no later than the Preliminary Results, due to be announced in July 2017. Despite this disappointing performance, the holding in NCC has been retained, since the Manager continues to believe that considerable value can, and should, be recovered in due course.
Tracsis (-18.2%) is a leading provider of software and technology led products and services for the traffic data and transportation industry. In interim results for the six months ended 31 January 2017, management reported revenue growth of 20% to GBP15.6 million (2016: GBP13.1 million), while adjusted pre-tax profits increased by 11% to GBP3.1million (2016: GBP2.8 million). The net cash balance at 31 January 2017 also improved to GBP12.7 million (31 January 2016: GBP8.0 million), while the proposed interim dividend was increased by 20% to 0.6p per share (2016: 0.5p). Despite these strong interim results the share price fell markedly in the period, principally because earnings were not as strong as had been originally forecast by the company's broker. This decline in expected profitability was due to additional investment needed to achieve significant operational improvements and future cost reductions in Tracsis' Traffic & Data division.
ULS Technology (+47.4%) is a provider of online 'business to business' platforms for the UK conveyancing and financial intermediary markets. For the six-month period ended 30 September 2016, ULS further increased its market share, resulting in increased revenue, profits and dividend payments. Revenues increased only slightly to GBP9.78 million (H1 2016: GBP9.76 million), while adjusted earnings per share improved by 5% to 2.40p (H1 2016: 2.28p). The business is inherently cash generative and as a result, net cash on the balance sheet increased significantly to GBP3.7 million (FY 2016: GBP2.7 million). The proposed interim dividend of 1.1p per share, represents an increase of 5% on the same period last year.
Non-Qualifying Investments
The performance of the non-qualifying investments was strong. In absolute terms, the net unrealised gain from the non-qualifying investments amounted to GBP1.6 million in the period under review. In share price terms, the most notable contributions to performance came from IQE (+100.0%), Communisis (+49.7%), Renold (+42.9%) and CareTech (+35.8%). The only disappointments were Hayward Tyler (-42.4%) and WYG (-17.6%). Both of these businesses issued profit warnings during the period that were related to delays in securing expected contracts. The holdings have been retained in anticipation of share price recovery in due course.
Investment Activity
The Investment Manager's cautious approach to investing in new VCT qualifying companies has been maintained. During the period under review, one new VCT qualifying investment was made:-
ECSC (+70.6%) is a provider of cyber security services. ECSC was established in 2000 and has been trading profitably ever since. The market need for cyber security services continues to grow rapidly and the founders, who are staying with the business, believe that now is the appropriate moment to seek to capture a significant market share. The net proceeds from the recent fundraising and AIM listing will therefore be deployed in a rapid expansion of the existing sales force. Clearly, it is too soon to judge the success of this strategy, but it is nonetheless pleasing to see the share price respond positively since the business listed on AIM in December 2016. The Company committed GBP2.55 million to this investment, which represents a 17.6% ownership stake in ECSC.
Totally (-6.6%) is a provider of a range of out-of-hospital services to the healthcare sector in the UK. A secondary, VCT qualifying, investment amounting to GBP0.5 million was made in Totally during the period, in order to help facilitate the next phase of the management team's acquisition strategy.
In aggregate, a total of GBP12.6 million was allocated to new investments during the period. Over GBP9 million of this was allocated to a small number of non-qualifying, short-term investments in large companies on the main list of the London Stock Exchange.
Material Transactions
Other than the Offer for Subscription and the purchase and sale of stocks described above, there were no material transactions in the six-month period ended 31 March 2017.
Outlook
The UK economy seems to be on a continuing, albeit modest, growth trend. Despite gloomy predictions as to the immediate negative consequences of the BREXIT vote, the impact appears to have been limited thus far. Indeed, it can be argued that the sharp decline in the value of Sterling in the immediate aftermath of the referendum has provided an unexpected fillip for many companies. Given the increasingly global reach of so many UK businesses, Sterling's fall has improved their competitiveness, while also providing a potentially significant boost to future earnings, once currency translation effects are taken into account.
Of course, Sterling's devaluation has also resulted in a sharp rise in the cost of imported goods, the effects of which are now being seen in a rapid rise in the rate of inflation, albeit from a low base. It is generally expected that this sharp increase in inflation will be one-off in nature, which is presumably why the Bank of England's Monetary Policy Committee appears content to keep interest rates unchanged for the foreseeable future.
Despite the new and more restrictive rules that now govern State Aided investments, I am pleased to note that our Investment Manager continues to find sufficient suitable and potentially rewarding VCT qualifying companies to invest in.
At the half year end, the Company comfortably met one of the key tests required for it to retain VCT status, whereby 70% of total assets must be held in VCT qualifying companies. At the period end, approximately 76% of total assets, valued in accordance with VCT rules, were invested in such companies.
The monies raised through the recent offer enable the Investment Manager to continue the long established and successful strategy of selectively developing the existing portfolio of investments, by providing much needed capital to emerging businesses. This in turn should create further employment opportunities and consequentially, additional tax revenues for HM Treasury.
The portfolio itself contains a diverse range of reasonably valued, well managed and, for the most part, profitable and cash generative businesses with strong leadership positions in specialist, growing markets.
Conclusion
Having delivered a total return of 5% for the six-month period ended 31 March 2017, the outlook for the second half of the financial year remains difficult to predict. The uncertainty surrounding Brexit negotiations and the turbulent economic and political environment; both domestically and internationally, suggest that equity markets could become increasingly volatile over the summer period. The majority of investee companies continue to trade well however, and they are generally in excellent operational and financial health, which bodes well for continued value creation over the longer term.
Peter Dicks
30 May 2017
Investment Policy
In order to achieve the Company's Investment Objective, the Board has agreed an Investment Policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM that display a majority of the following characteristics:
experienced and well-motivated management;
products and services supplying growing markets;
sound operational and financial controls; and
good cash generation to finance ongoing development allied with a progressive dividend policy.
Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. No single holding may represent more than 15% (by value) of the Company's total investments and cash, at the date of investment.
There are a number of VCT conditions which need to be met by the Company which may change from time to time. The Investment Manager will seek to make qualifying investments in accordance with such requirements.
Asset mix
Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or is in excess of the 70% VCT qualification threshold, it may be invested in cash or invested in money market funds, collective investment vehicles or non-qualifying shares and securities of fully listed companies registered in the UK.
Borrowing
To date the Company has operated without recourse to borrowing. The Board may however consider the possibility of introducing modest levels of gearing up to a maximum of 10% of the adjusted capital and reserves, should circumstances suggest that such action is in the interests of Shareholders.
Management of the Company
The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Risk is spread by investing in a number of different businesses across different industry sectors. The Investment Manager is responsible for managing sector and stock specific risk and the Board does not impose formal limits in respect of such exposures. However, in order to maintain compliance with HMRC rules and to ensure that an appropriate spread of investment risk is achieved, the Board receives and reviews comprehensive reports from the Investment Manager and the Administrator on a monthly basis. When the Investment Manager proposes to make any investment in an unquoted company, the prior approval of the Board is required. The Board continues to take the need for transparency and independence seriously. When a conflict arises involving a relationship between any Director and an investee or proposed investee company that Director abstains from any discussion or consideration on any such investment by the Company.
The Administrator, ISCA Administration Services Limited, provides Company Secretarial and Accountancy services to the Company.
Unaudited Investment Portfolio Summary
as at 31 March 2017
Qualifying investments Book cost Valuation % of net
GBP'000 GBP'000 assets
by value
*
AIM quoted investments:
Abcam 1,539 12,795 7.8
Mattioli Woods 1,680 7,852 4.8
Animalcare Group 2,401 6,876 4.2
Tracsis 1,500 6,847 4.2
Anpario 1,585 6,407 3.9
MaxCyte Inc. 1,500 5,679 3.5
Cohort 1,414 5,633 3.4
IDOX 1,241 4,498 2.8
ECSC Group 2,550 4,275 2.6
Avingtrans 996 3,818 2.3
Directa Plus 3,000 3,800 2.3
ULS Technology 1,500 3,638 2.2
Tristel 878 3,320 2.0
Totally 3,107 3,283 2.0
Stride Gaming 1,400 2,355 1.4
Keywords Studio 369 1,938 1.2
Surface Transforms 1,500 1,828 1.1
Sanderson Group 1,359 1,827 1.1
Belvoir Lettings 1,883 1,594 1.0
AB Dynamics 801 1,541 1.0
Quixant 648 1,520 0.9
Crawshaw Group 1,538 1,492 0.9
HML Holdings 431 1,358 0.8
Castleton Technology 464 1,247 0.8
Access Intelligence 1,667 1,193 0.7
Instem 985 1,041 0.6
European Wealth
Group 1,759 989 0.6
Gama Aviation 760 961 0.6
Omega Diagnostics
Group 500 958 0.6
Surgical Innovations
Group 436 919 0.6
Pressure Technologies 1,140 878 0.5
Plastics Capital 655 849 0.5
Dods Group 1,176 760 0.5
eg solutions 706 672 0.4
Osirium Technologies 1,000 641 0.4
Hardide 1,000 625 0.4
Vianet 725 575 0.4
Redcentric 393 555 0.4
Dillistone Group 356 435 0.3
Driver Group 552 432 0.3
20 investments,
each valued at
less than 0.3%
of net assets 9,073 2,586 1.6
--------------------------- ---------------------- ------------- -------------
58,167 110,490 67.6
Fully listed shares:
NCC Group 400 1,235 0.8
Braemar Shipping
Services 63 32 0.0
--------------------------- ---------------------- ------------- -------------
463 1,267 0.8
Unlisted investments:
The City Pub Company
(East) 1,125 1,438 0.9
The City Pub Company
(West) 1,125 1,438 0.9
Hasgrove 1,329 1,417 0.9
Heartstone Inns 1,113 1,113 0.7
Access Intelligence
plc - loan stock 1,050 1,050 0.6
Interactive Investor 1,250 1,015 0.6
Syndicate Rooms 1,000 1,000 0.6
2 investments,
each valued at
less than 0.1%
of net assets 2,076 87 0.1
--------------------------- ---------------------- ------------- -------------
10,068 8,558 5.3
--------------------------- ---------------------- ------------- -------------
Total qualifying
investments 68,698 120,315 73.7
--------------------------- ---------------------- ------------- -------------
Non-qualifying
investments
Fully listed UK
equities 13,785 16,019 9.8
AIM quoted investments 10,119 11,016 6.7
Unicorn UK Growth
Fund (OEIC) 828 2,544 1.6
Unicorn UK Smaller
Companies Fund
(OEIC) 839 2,405 1.5
Interactive Investor
- unlisted 2,197 2,070 1.3
The City Pub Company
(East) plc - preference
shares 1,000 1,000 0.6
The City Pub Company
(West) plc - preference
shares 1,000 1,000 0.6
Unicorn Mastertrust
Fund (OEIC) 351 653 0.4
Unicorn Ethical
Fund (OEIC) Accumulation 518 546 0.3
Unicorn Ethical
Fund (OEIC) Income 500 526 0.3
Lloyds Banking
Group - 9.25% preference
shares 267 292 0.2
3 other unlisted
investments each
valued at less
than 0.1% of net
assets 618 125 0.1
Total non- qualifying
investments 32,022 38,196 23.4
---------------------- ------------- -------------
Total investments 100,720 158,511 97.1
Other assets 5,235 3.2
Current liabilities (420) (0.3)
---------------------- ------------- -------------
Net assets 163,326 100.0
---------------------- ------------- -------------
*based on fair value not VCT carrying value
Responsibility Statement
Directors' Statement of Principal risks and uncertainties
The important events that have occurred during the period under review and the key factors influencing the financial statements are set out in the Chairman's Statement above.
In accordance with DTR 4.2.7, the Directors consider that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the year ended 30 September 2016.
The principal risks faced by the Company include, but are not limited to:
-- investment and strategic -- regulatory and tax -- operational -- fraud and dishonesty -- financial instruments -- economic
A more detailed explanation of these risks and the way in which they are managed can be found in the Strategic Report on page 10 and in the Notes to the Financial Statements on pages 58 to 60 of the 2016 Annual Report and Accounts - copies can be found via the Company's website, www.unicornaimvct.co.uk.
Directors' Statement of Responsibilities in Respect of the Financial Statements
In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Peter Dicks (Chairman), Charlotta Ginman, Jeremy Hamer (Chairman of the Audit Committee) and Jocelin Harris (Senior Independent Director), the Directors, confirm that to the best of their knowledge:
-- the condensed set of financial statements, which have been prepared in accordance with FRS 104 "Interim Financial Reporting" give a true and fair view of the assets, liabilities, financial position and profit of the Company for the period ended 31 March 2017, as required by DTR 4.2.4;
-- this Half-Yearly Report includes a fair review of the information required as follows;
-- the interim management report included within the Chairman's Statement and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7 being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties facing the Company for the remaining six months of the year; and
-- there were no other related party transactions in the first six months of the current financial year that are required to be disclosed in accordance with DTR 4.2.8.
Cautionary Statement
This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.
This Half-Yearly Report was approved by the Board of Directors on 30 May 2017 and the above responsibility statement was signed on its behalf by:
Peter Dicks
Chairman
30 May 2017
Unaudited Income Statement
for the six months ended 31 March 2017
Six months Six months Year ended
ended 31 March ended 31 March 30 September
2017 (unaudited) 2016 (unaudited) 2016 (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ---------- ---------- -------- -------- ---------- -------- ---------- ----------
Unrealised
gains on
investments 7 - 7,815 7,815 - 1,553 1,553 - 9,365 9,365
Realised
gains/
(losses)
on
investments 7 - 117 117 - (200) (200) - 819 819
Income 4 1,388 - 1,388 911 - 911 2,360 - 2,360
Investment
management
fees 2 (348) (1,044) (1,392) (298) (895) (1,193) (651) (1,953) (2,604)
Other expenses (307) - (307) (329) - (329) (631) - (631)
-------- ---------- ---------- -------- -------- ---------- -------- ---------- ----------
Profit on
ordinary
activities
before
taxation 733 6,888 7,621 284 458 742 1,078 8,231 9,309
Tax on profit
on ordinary 3 - - - - - - - - -
activities
-------- ---------- ---------- -------- -------- ---------- -------- ---------- ----------
Profit and
total
comprehensive
income after
taxation 733 6,888 7,621 284 458 742 1,078 8,231 9,309
-------- -------- ----------
Basic and
diluted
earnings
per share:
Ordinary
Shares 5 0.78p 7.30p 8.08p 0.34p 0.54p 0.88p 1.22p 9.34p 10.56p
-------- ---------- ---------- -------- -------- ---------- -------- ---------- ----------
All revenue and capital items in the above statement derive from continuing operations of the Company.
The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice issued in November 2014 by the Association of Investment Companies ("AIC SORP").
Other than revaluation movements arising on investments held at fair value through Profit and Loss Account, there were no differences between the profit/(loss) as stated above and at historical cost.
Unaudited Statement of Financial Position
as at 31 March 2017
Notes As at 31 As at 31 As at 30 September
March 2017 March 2016 2016
(audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
----------------------- ------ ------------- ------------- -------------------
Non-current
assets
Investments 1e
at fair value & 7 158,511 135,312 144,282
Current assets
Debtors and
prepayments 236 276 422
Cash at bank 4,999 6,868 3,298
----------------------- ------ ------------- ------------- -------------------
5,235 7,144 3,720
Creditors;
amounts falling
due within
one year (420) (2,940) (259)
----------------------- ------ ------------- ------------- -------------------
Net current
assets 4,815 4,204 3,461
----------------------- ------ ------------- ------------- -------------------
Net assets 163,326 139,516 147,743
----------------------- ------ ------------- ------------- -------------------
Share capital
and reserves
Called up share
capital 1,005 925 921
Capital redemption
reserve 60 45 53
Share premium
account 72,923 57,785 58,394
Revaluation
reserve 62,850 51,053 58,323
Special distributable
reserve 19,740 24,949 21,756
Profit and
loss account 6,748 4,759 8,296
------------- ------------- -------------------
Equity Shareholders'
funds 163,326 139,516 147,743
------------- ------------- -------------------
Basic and diluted
net asset value
per share of
1p each
Ordinary Shares 8 162.44p 150.87p 160.46p
The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 has not been audited.
Unaudited Statement of Changes in Equity
for the six months ended 31 March 2017
Called
up Capital Share Special Profit
share redemption premium Capital distributable and
capital reserve account reserve reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000
GBP'000
--------- ------------- ---------- ---------- ---------------- ---------- ----------
Six months ended 31
March 2017
As at 1
October
2016 921 53 58,394 58,323 21,756 8,296 147,743
Shares repurchased
for cancellation (7) 7 - - (920) - (920)
Shares issued
under Offer
for Subscription 91 - 14,905 - - - 14,996
Expenses
of shares
issued under
Offer for
Subscription - - (376) - - - (376)
Transfer
to special
reserve - - - - (1,096) 1,096 -
Realisation
of previously
unrealised
valuation
movements - - - (3,288) - 3,288 -
Gains on
disposal
of investments
(net of
transaction
costs) - - - - - 117 117
Net increase
in unrealised
valuations
in the period - - - 7,815 - - 7,815
Dividend
paid in
the period - - - - - (5,738) (5,738)
Investment
management
fee charged
to capital - - - - - (1,044) (1,044)
Profit and
total comprehensive
income after
taxation - - - - - 733 733
--------- ------------- ---------- ---------- ---------------- ---------- ----------
At 31 March
2017 1,005 60 72,923 62,850 19,740 6,748 163,326
---------- ---------------- ----------
Called
up Capital Share Special Profit
share redemption premium Capital distributable and
capital reserve account reserve reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000
GBP'000
--------- ------------- ---------- ---------- ---------------- ---------- ----------
Six months ended 31
March 2016
As at 1
October
2015 801 37 37,206 49,322 27,927 9,323 124,616
Shares repurchased
for cancellation (8) 8 - - (1,122) - (1,122)
Shares issued
under Offer
for Subscription 61 - 9,314 - - - 9,375
Expenses
of shares
issued under
Offer for
Subscription - - (170) - - - (170)
Shares issued
as part
of Rensburg
merger 71 - 11,435 - - - 11,506
Transfer
to special
reserve - - - - (1,856) 1,856 -
Realisation
of previously
unrealised
valuation
movements - - - 178 - (178) -
Losses on
disposal
of investments
(net of
transaction
costs) - - - - - (200) (200)
Net increase
in unrealised
valuations
in the period - - - 1,553 - - 1,553
Dividend
paid in
the period - - - - - (5,431) (5,431)
Investment
management
fee charged
to capital - - - - - (895) (895)
Profit and
total comprehensive
income after
taxation - - - - - 284 284
--------- ------------- ---------- ---------- ---------------- ---------- ----------
At 31 March
2016 925 45 57,785 51,053 24,949 4,759 139,516
---------- ---------------- ----------
Called
up Capital Share Special Profit
share redemption premium Capital distributable and
capital reserve account reserve reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000
GBP'000
--------- ------------- ---------- ---------- ---------------- ---------- ----------
Year ended 30 September
2016
As at 1
October
2015 801 37 37,206 49,322 27,927 9,323 124,616
Shares repurchased
for cancellation (16) 16 - - (2,206) - (2,206)
Shares issued
under Offer
for Subscription 65 - 9,934 - - - 9,999
Expenses
of shares
issued under
Offer for
Subscription - - (181) - - - (181)
Shares issued
as part
of Rensburg
merger 71 - 11,435 - - - 11,506
Unclaimed
dividends
released
by Rensburg - - - - - 131 131
Transfer
to special
reserve - - - - (3,965) 3,965 -
Realisation
of previously
unrealised
valuation
movements - - - (364) - 364 -
Gains on
disposal
of investments
(net of
transaction
costs) - - - - - 819 819
Net increase
in unrealised
valuations
in the period - - - 9,365 - - 9,365
Dividend
paid in
the period - - - - - (5,431) (5,431)
Investment
management
fee charged
to capital - - - - - (1,953) (1,953)
Profit and
total comprehensive
income after
taxation - - - - - 1,078 1,078
--------- ------------- ---------- ---------- ---------------- ---------- ----------
At 30 September
2016 921 53 58,394 58,323 21,756 8,296 147,743
The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 has not been audited.
Unaudited Statement of Cash Flows
for the six months ended 31 March 2017
Notes Six months Six months Year ended
ended 31 ended 31
March 2017 March 2016
(unaudited) (unaudited) 30 September
2016
GBP'000 GBP'000 (audited)
GBP'000
------------- ------------- --------------
Operating activities
Investment
income received 1,555 938 2,226
Investment
management
fees paid (1,392) (1,193) (2,604)
Other cash
payments (408) (294) (686)
------------- ------------- --------------
Net cash outflow
from operating
activities (245) (549) (1,064)
Investing activities
Rensburg unclaimed
dividends and
other income - - 147
Purchase of
investments 7 (12,596) (3,226) (13,370)
Sale of investments 7 6,364 5,875 13,450
Decrease in
current investments - 1 1
------------- ------------- --------------
Net cash (outflow)/inflow
from investing
activities (6,232) 2,650 228
------------- ------------- --------------
Net cash (outflow)/inflow
before financing (6,477) 2,101 (836)
Financing
Dividends paid 6 (5,738) (5,431) (5,431)
Monies received
on Rensburg
merger - 28 -
Shares issued
as part of
Offer for Subscription
(net of transaction
costs paid
in the period) 14,836 9,339 9,818
Shares repurchased
for cancellation (920) (1,122) (2,206)
------------- ------------- --------------
Net cash inflow
from financing 8,178 2,814 2,181
Net increase
in cash and
cash equivalents 1,701 4,915 1,345
Cash and cash
equivalents
at start of
period 3,298 1,953 1,953
------------- ------------- --------------
Cash and cash
equivalents
at end of period 4,999 6,868 3,298
------------- ------------- --------------
Reconciliation
of operating
profit to net
cash outflow
from operating
activities
Profit for
the period 7,621 742 9,309
Net unrealised
gains on investments (7,815) (1,553) (9,365)
Net (gains)/losses
on realisations
of investments (117) 200 (819)
Transaction
costs (54) (11) (22)
Reconciling
items (11) (69) (76)
Decrease/(increase)
in debtors
and prepayments 180 91 (49)
(Decrease)/increase
in creditors
and accruals (49) 51 (42)
------------- ------------- --------------
Net cash outflow
from operating
activities (245) (549) (1,064)
------------- ------------- --------------
The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 has not been audited.
Notes to the unaudited financial statements
for the six months ended 31 March 2017
a) Principal accounting policies a) Statement of compliance
The Company's Financial Statements for the six months to 31 March 2017 have been prepared under UK Generally Accepted Accounting Practice (UK GAAP) and the 2014 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Trust Companies.
The financial statements have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 30 September 2016.
b) Financial information
The financial information contained in this report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the period ended 31 March 2017 and 31 March 2016 have not been audited or reviewed by the Company's Auditor pursuant to the Auditing Practices Board guidance on such reviews. The information for the year to 30 September 2016 has been extracted from the latest published Annual Report and Financial Statements, which have been lodged with the Registrar of Companies, contained an unqualified auditors' report and did not contain a statement required under Section 498 (2) or (3) of the Companies Act 2006.
c) Going concern
After due consideration, the Directors believe that the Company has adequate resources for the foreseeable future and that it is appropriate to apply the going concern basis in preparing the financial statements. As at 31 March 2017, the Company held cash balances of GBP4,999,000. The majority of the Company's investment portfolio also remains principally invested in AIM and fully listed equities which may be realised, subject to the need for the Company to maintain its VCT status. Cash flow projections covering a period of twelve months from the date of approving the financial statements have been reviewed and show that the Company has sufficient funds to meet both contracted expenditure and any discretionary cash outflows from buybacks and dividends. The Company has no external loan finance in place and is therefore not exposed to any gearing covenants.
d) Presentation of the Income Statement
In order to better reflect the activities of a VCT and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. The revenue column of profit attributable to Shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
e) Investments
All investments held by the Company are classified as "fair value through profit and loss", in accordance with the International Private Equity and Venture Capital Valuation ("IPEVCV") guidelines, as updated in December 2015. This classification is followed as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income.
For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.
Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines and in accordance with FRS102.
All unquoted investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered:
(i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used.
(ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:-
a) an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Manager compared to the sector including, inter alia, a lack of marketability).
or:
b) where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Manager, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.
(iii) Redemption premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.
f) Short debtors and creditors
Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the Income Statement in other operating expenses.
2. Investment Management Fees
The Directors have charged 75% of the investment management fees to the capital reserve.
3. Taxation
Despite reporting a revenue profit, the total allowable expenses exceed income and there is no tax charge for the period.
4. Income
Six months Six months Year ended
ended ended
31 March 31 March 30 September
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Dividends 1,228 760 2,007
Unicorn managed
OEICs 40 32 127
Bank deposits - 2 3
Loan stock
interest 120 117 223
------------- ------------- --------------
1,388 911 2,360
------------- ------------- --------------
5. Basic and diluted earnings and return per share
` Six months Six months Year ended
ended ended
31 March 31 March 30 September
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Total earnings after
taxation 7,621 742 9,309
------------- ------------- --------------
Basic and diluted earnings
per share 8.08p 0.88p 10.56p
Net revenue from ordinary
activities after taxation 733 284 1,078
------------- ------------- --------------
Revenue earnings per
share 0.78p 0.34p 1.22p
------------- ------------- --------------
Total capital return 6,888 458 8,231
------------- ------------- --------------
Capital earnings per
share 7.30p 0.54p 9.34p
------------- ------------- --------------
Weighted average number
of shares in issue in
the period 94,356,858 83,913,551 88,133,530
6. Dividends
Six months Six months Year ended
ended ended
31 March 31 March 30 September
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Final capital dividend
of 5.25 pence per share
and final income dividend
of 1.00 pence per share
for the year ended 30
September 2015 paid on
19 February 2016 - 5,431 5,431
Final capital dividend
of 5.25 pence per share 5,738 - -
and final income dividend
of 1.00 pence per share
for the year ended 30
September 2016 paid on
3 February 2017
------------- ------------- --------------
5,738 5,431 5,431
------------- ------------- --------------
7. Investments at fair value
Traded Unlisted Unlisted Unicorn Total
Fully on AIM/NEX ordinary Loan OEIC GBP'000
Listed exchange and preference stock Funds
GBP'000 GBP'000 shares GBP'000 GBP'000
GBP'000
Book cost
at 30
September
2016 5,173 67,257 13,583 1,300 3,705 91,018
Unrealised
gains/(losses)
at 30
September
2015 4,188 51,778 (1,664) (125) 4,146 58,323
Permanent
impairment
in value
of investments - (5,059) - - - (5,059)
-------------- -------------- ------------------- -------------- ------------- ------------
Valuation
at 30
September
2016 9,361 113,976 11,919 1,175 7,851 144,282
Purchases
at cost 9,546 3,050 - - 11 12,607
Sale proceeds (348) (4,015) - - (2,001) (6,364)
Realised
(losses)/gains
in the
period (2) 28 - - 145 171
Unrealised
(losses)/gains
in the
period (979) 8,467 (341) - 668 7,815
-------------- -------------- ------------------- -------------- ------------- ------------
Closing
valuation
at 31
March
2017 17,578 121,506 11,578 1,175 6,674 158,511
-------------- -------------- ------------------- -------------- ------------- ------------
Book cost
at 31
March
2017 14,515 68,286 13,583 1,300 3,036 100,720
Unrealised
gains/(losses)
at 31
March
2017 3,063 58,279 (2,005) (125) 3,638 62,850
Permanent
impairment
in value
of investments - (5,059) - - - (5,059)
-------------- -------------- ------------------- -------------- ------------- ------------
Valuation
at 31
March
2017 17,578 121,506 11,578 1,175 6,674 158,511
-------------- -------------- ------------------- -------------- ------------- ------------
Transaction costs on the purchase and disposal of investments of GBP54,000 were incurred in the period. These are excluded from realised gains shown above of GBP171,000, but were included in arriving at losses on realisations of investments disclosed in the Income Statement of GBP117,000.
Reconciliation of cash movements in investment transactions
The difference between the purchases in Note 7 and that shown in the Cash Flow Statement is GBP11,000. This is the result of the reinvestment of income in the Unicorn Ethical Fund amounting to GBP11,000. There is no difference between disposals per Note 7 above and that shown in the Cash Flow Statement.
Fair value hierarchy
Paragraph 34.22 of FRS102 (early adoption) regarding financial instruments that are measured in the balance sheet at fair value requires disclosure of fair value measurements by level of the following fair value hierarchy:
Level 1 - valued using quoted prices in active markets for identical assets.
Level 2 - valuation by reference to valuation techniques using directly observable inputs other than quoted prices included within Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.
The valuation techniques used by the Company are explained in the accounting policies in Note 1.
The majority of the Level 3 investments are held at cost or recent transaction price and the remaining Level 3 investments are insignificant therefore no assumptions are disclosed or sensitivity analysis provided.
The table below sets out the Company's fair value hierarchy investments as at 31 March 2017:
Level Level Level Total
1 2 3 GBP'000
GBP000 GBP'000 GBP'000
------------------------ -------- --------- --------- ---------
At 31 March 2017
Equity investments 138,792 - 9,578 148,370
Non-equity investments 292 - 2,000 2,292
Loan stock investments - - 1,175 1,175
Open ended investment
Companies 6,674 - - 6,674
Total 145,758 - 12,753 158,511
------------------------ -------- --------- --------- ---------
At 31 March 2016
Equity investments 113,008 - 11,527 124,535
Non-equity investments 275 - 2,000 2,275
Loan stock investments - - 1,175 1,175
Open ended investment
Companies 7,327 - - 7,327
120,610 - 14,702 135,312
------------------------ -------- --------- --------- ---------
At 30 September 2016
Equity investments 123,031 - 9,919 132,950
Non-equity investments 306 - 2,000 2,306
Loan stock investments - - 1,175 1,175
Open ended investment
Companies 7,851 - - 7,851
Total 131,188 - 13,094 144,282
------------------------ -------- --------- --------- ---------
There have been no transfers during the period between Levels 1 and 2.
A reconciliation of fair value measurements in Level 3 is set out below:
Non-equity Equity Loan stock
investments investments investments Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------- ------------- ------------- ----------
Opening balance at
1 October 2016 2,000 9,919 1,175 13,094
Purchases - - - -
Sales - - - -
Total gains/(losses)
included in gains
on investments in
the Income Statement -
- on assets sold - - - -
- on assets held at
the period end - (341) - (341)
Closing balance at
31 March 2017 2,000 9,578 1,175 12,753
----------------------- ------------- ------------- ------------- ----------
8. Net asset values
At 31 March At 31 March At 30 September
2017 2016 2015
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Net assets 163,326 139,516 147,743
Number of shares
in issue 100,544,111 92,474,500 92,075,311
------------- ------------- ----------------
Net asset value
per share 162.44p 150.87p 160.46p
------------- ------------- ----------------
9. Post Balance Sheet Events
On 7 April 2017 the Company purchased 170,000 shares for cancellation, representing approximately 0.17% of the issued share capital at a total cost of GBP237,000, representing 139.4 pence per share.
On 10 May 2017 the Company purchased 279,247 shares for cancellation, representing approximately 0.28% of the issued share capital at a total cost of GBP407,000, representing 145.7 pence per share.
10. Related party transactions
During the first six months of the financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.
11. Copies of this statement are being sent to Shareholders.
Further copies are available free of charge from the Company Secretary, ISCA Administration Services Limited on 01392 487056, email: unicornaimvct@iscaadmin.co.uk, or from the Company's website: www.unicornaimvct.co.uk.
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DBLFXDEFLBBQ
(END) Dow Jones Newswires
May 31, 2017 02:00 ET (06:00 GMT)
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