TIDMAADV
Albion Development VCT PLC
LEI Code 213800FDDMBD9QLHLB38
As required by the UK Listing Authority's Disclosure Guidance
and Transparency Rule 4.2, Albion Development VCT PLC today makes
public its information relating to the Half-yearly Financial Report
(which is unaudited) for the six months to 30 June 2022. This
announcement was approved by the Board of Directors on 7 September
2022.
The full Half-yearly Financial Report (which is unaudited) for
the period to 30 June 2022 will shortly be sent to shareholders and
will be available on the Albion Capital Group LLP website by
clicking www.albion.capital/funds/AADV/30Jun2022.pdf.
Investment policy
The Company will invest in a broad portfolio of higher growth
businesses with a stronger focus on technology companies across a
variety of sectors of the UK economy. Allocation of assets will be
determined by the investment opportunities which become available
but efforts will be made to ensure that the portfolio is
diversified in terms of sector and stage of maturity of
company.
Funds held pending investment or for liquidity purposes will be
held as cash on deposit or up to 8 per cent. of its assets, at the
time of investment, in liquid open-ended equity funds providing
income and capital equity exposure (where it is considered economic
to do so).
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses
within Venture Capital Trust qualifying industry sectors using a
mixture of securities. The maximum amount which the Company will
invest in a single portfolio company is 15 per cent. of the
Company's assets at cost thus ensuring a spread of investment risk.
The value of an individual investment may increase over time as a
result of trading progress and it is possible that it may grow in
value to a point where it represents a significantly higher
proportion of total assets prior to a realisation opportunity being
available.
The Company's maximum exposure in relation to gearing is
restricted to 10 per cent. of the adjusted share capital and
reserves.
Background to the Company
The Company is a Venture Capital Trust which raised a total of
GBP33.3 million through the issue of shares between 1999 and 2004.
The C shares merged with the Ordinary shares in 2007. A further
GBP6.3 million was raised through an issue of new D shares in 2010.
The D shares converted to Ordinary shares in 2015.
An additional GBP74.1 million has been raised for the Ordinary
shares through the Albion VCTs Top Up Offers since January
2011.
Financial calendar
Record date for second dividend for the year 9 September 2022
Payment date for second dividend for the year 30 September 2022
Financial year end 31 December
Financial highlights
Unaudited six months ended Unaudited six months ended Audited year ended
Ordinary 30 June 2022 30 June 2021 31 December 2021
shares (pence per share) (pence per share) (pence per share)
---------- -------------------------- -------------------------- -------------------
Opening
net asset
value 94.98 82.42 82.42
Capital
return 0.69 12.93 16.74
Revenue
return/
(loss) 0.26 (0.46) 0.46
-------------------------- -------------------------- -------------------
Total
return 0.95 12.47 17.20
Dividends
paid (2.37) (2.06) (4.37)
Impact
from
share
capital
movements (0.01) (0.42) (0.27)
-------------------------- -------------------------- -------------------
Net asset
value 93.55 92.41 94.98
---------- -------------------------- -------------------------- -------------------
Total dividends paid to 30 June 2022 111.23
Net asset value as at 30 June 2022 93.55
------
Total shareholder value to 30 June 2022 204.78
---------------------------------------- ------
The total shareholder value table above is for the Company,
Albion Development VCT PLC Ordinary shares only. Details of the
financial performance of the C shares and D shares, which have been
merged into the Ordinary shares, can be found at
www.albion.capital/funds/AADV under the 'Financial summary for
previous funds' section.
A more detailed breakdown of the dividends paid per year can be
found at www.albion.capital/funds/AADV under the 'Dividend History'
section.
In addition to the dividends summarised above, the Board has
declared a second dividend for the year ending 31 December 2022, of
2.34 pence per Ordinary share to be paid on 30 September 2022 to
shareholders on the register on 9 September 2022.
Interim management report
Introduction
As the world emerges from the Covid-19 pandemic, we are now
encountering new geopolitical and macroeconomic challenges
including rising interest rates, double digit inflation and the
impact of the ongoing war in Ukraine.
Despite these ongoing challenges, the Company has proved
resilient generating a modest increase in total shareholder value
of 0.94 pence per share for the six months to 30 June 2022. This
represents a 1% return on opening net asset value ("NAV").
Valuations and results
The GBP1.1 million total return for the six months to 30 June
2022 compared to a total return of GBP12.5 million for the same
period in the previous year. The NAV per share has decreased to
93.55 pence per share (31 December 2021: 94.98 pence per share) as
a result of the 2.37 pence per share dividend paid on 31 May 2022
not being covered by the 0.94 pence per share increase in total
shareholder value.
The key contributors to the return for the period were the three
successful exits of:
-- MyMeds&Me sold for proceeds of GBP3.2 million and a return on cost of 3.4
times;
-- Phrasee sold for proceeds of GBP2.1 million and a return on cost of 3.5
times; and
-- Credit Kudos sold for proceeds of GBP1.8 million and a return on cost of
5.2 times.
Further details on these disposals can be found below.
The challenging economic environment has resulted in falling
valuations of quoted technology and healthcare companies which has
consequently led to some write-downs in our portfolio, the largest
being Egress (GBP0.8 million) which is an encrypted email and file
transfer service provider and Proveca (GBP0.3 million) which
focuses on reformulation of medicines for children. Although these
investments have been written down in line with falls in market
multiples, we are encouraged by the prospects of these investments
which continue to grow and have the potential to recover value in
time.
It is pleasing, despite a challenging valuation environment, to
see a number of our investments being written up during the period,
following successful third party funding rounds at higher
valuations. These include Speechmatics (GBP0.5 million) and Locum's
Nest (GBP0.4 million).
Our top 3 portfolio companies now account for 26.6% of the
Company's NAV (30 June 2021: 32.0%; 31 December 2021: 32.7%).
Further details of the portfolio of investments can be found
below.
Dividends
In line with our variable dividend policy targeting 5% of NAV
per annum, the Company paid a dividend of 2.37 pence per share
during the period to 30 June 2022 (30 June 2021: 2.06 pence per
share). The Company will pay a second dividend for the financial
year ending 31 December 2022 of 2.34 pence per share on 30
September 2022 to shareholders on the register on 9 September 2022,
being 2.5% of the latest reported NAV.
This will bring the total dividends paid for the year ending 31
December 2022 to 4.71 pence per share, which equates to a 5.0%
yield on the opening NAV of 94.98 pence per share.
Investment activity
During the period the Company has invested GBP5.8 million into
new and existing portfolio companies, with new investments
comprising:
-- GBP0.9 million into PeakData, a provider of insights and analytics into
pharmaceutical companies about therapeutic areas;
-- GBP0.5 million into Ophelos, an autonomous and ethical debt resolution
platform;
-- GBP0.5 million into Perchpeek, a digital relocation platform; and
-- GBP0.1 million into Regulatory Genome Development, a provider of machine
readable structured regulatory content.
A further GBP3.8 million was invested in existing portfolio
companies to help support them as they continue to grow, including
GBP0.7 million into Black Swan Data, GBP0.7 million into TransFICC,
GBP0.7 million into Speechmatics, and GBP0.5 million into Seldon
Technologies.
The chart at the end of this announcement illustrates the
composition of the portfolio by industry sector as at 30 June
2022.
Share buy-backs
It remains the Board's policy to buy-back shares in the market,
subject to the overall constraint that such purchases are in the
Company's interest. This includes the maintenance of sufficient
cash resources for investment in new and existing portfolio
companies and the continued payment of dividends to
shareholders.
It is the Board's intention that such buy-backs should be at
around a 5% discount to net asset value, in so far as market
conditions and liquidity permit.
Transactions with the Manager
Details of transactions with the Manager for the reporting
period can be found in note 5. Details of related party
transactions can be found in note 11.
Risks and uncertainties
In addition to the risks around Covid-19, which have been a
major factor for the past two years, the UK is experiencing its
highest level of inflation in decades, as well as the uncertainty
over the future course and global impact of Russia's invasion of
Ukraine. Our investment portfolio, while concentrated mainly in the
technology and healthcare sectors, remains diversified in terms of
both sub-sector and stage of maturity and, importantly, we believe
to be appropriately valued.
In accordance with DTR 4.2.7, the Board confirms that the
principal risks and uncertainties facing the Company have not
materially changed from those identified in the Annual Report and
Financial Statements for the year ended 31 December 2021. The
current high levels of inflation and the war in Ukraine have
created heightened uncertainty, but has not changed the nature of
the principal risks. The Board considers that the present processes
for mitigating those risks remain appropriate.
The principal risks faced by the Company are:
-- Investment, performance and valuation risk;
-- VCT approval and regulatory change risk;
-- Regulatory and compliance risk;
-- Operational and internal control risk (including cyber and data security);
-- Economic and political risk;
-- Emerging risks;
-- Liquidity risk; and
-- Environmental, social and governance ("ESG") risk.
A detailed explanation of the principal risks facing the Company
can be found in the Annual Report and Financial Statements for the
year ended 31 December 2021 on pages 15 to 17, copies of which are
available on the Company's webpage on the Manager's website at
www.albion.capital/funds/AADVcapital/funds/AADV under the
'Financial Reports and Circulars' section.
Sunset Clause
In 2015 a VCT "sunset clause" was introduced as a requirement of
an EU state aid notification. This provides that income tax relief
will no longer be given to subscriptions made on or after 6 April
2025, unless the legislation is amended to make the scheme
permanent or the "sunset clause" is extended. Our Manager, Albion
Capital, is working, alongside the VCT industry, to demonstrate to
the Government the importance of VCTs as a source of early stage
capital to support entrepreneurs creating innovative growth
businesses employing thousands of people throughout the UK. Given
its importance, the Board expects that the VCT scheme will continue
to attract Government support.
Albion VCTs Top Up Offers
As announced in the Annual Report and Financial Statements for
the year ended 31 December 2021, the Board was pleased to close the
2021/22 Offer, fully subscribed, having raised GBP21 million.
The proceeds are being used to provide support to our existing
portfolio companies and to enable us to take advantage of new and
exciting investment opportunities as they arise, four of which are
detailed above. Details on the share allotments during the period
can be found in note 8.
Shareholder seminar
The Board is pleased to report that the Manager, Albion Capital,
is to host a physical shareholder seminar this year on 23 November
2022, at the Royal College of Surgeons, Lincoln's Inn Fields,
London. The Board considers this an important interactive event and
invites shareholders to attend. To reserve a place, please email
info@albion.capital.
Prospects
The Board is mindful of the considerable uncertainty over the
Global economy in the short to medium term against a backdrop of
multiple macroeconomic and geopolitical uncertainties. However, we
are of the view that the Company is well placed to navigate these
challenges, and many of the companies within the portfolio continue
to grow, and they provide products and services that are considered
innovative and essential to their customers. Our focus on
technology and healthcare, whilst minimising exposure to
discretionary consumer expenditure, is designed to help the Company
weather uncertain times. The Board is encouraged by the strong
pipeline of new investment opportunities being progressed by the
Manager on attractive terms. Importantly, the Company has the cash
resources to capitalise on these opportunities, to support the
existing portfolio and has the potential to deliver long term value
to our shareholders.
Ben Larkin
Chairman
7 September 2022
Responsibility statement
The Directors, Ben Larkin, Lyn Goleby, Lord O' Shaughnessy and
Patrick Reeve, are responsible for the preparation of the
Half-yearly Financial Report. In preparing these condensed
Financial Statements for the period to 30 June 2022 we, the
Directors of the Company, confirm that to the best of our
knowledge:
(a) the condensed set of Financial Statements, which has been
prepared in accordance with Financial Reporting Standard 104
"Interim Financial Reporting", give a true and fair view of the
assets, liabilities, financial position and profit and loss of the
Company as required by DTR 4.2.4R;
(b) the Interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the Interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
This Half-yearly Financial Report has not been audited or
reviewed by the Auditor.
For and on behalf of the Board
Ben Larkin
Chairman
7 September 2022
Portfolio of investments
As at 30 June 2022
Value
Fixed asset % voting Cost Cumulative movement in value # Change in value for the period*
investments rights GBP'000 GBP'000 GBP'000 GBP'000
Quantexa Limited 2.6 2,101 12,810 14,911 -
Egress Software
Technologies
Limited 6.9 2,332 6,070 8,402 (822)
Proveca Limited 11.8 1,829 5,630 7,459 (314)
Oviva AG 2.8 2,601 2,311 4,912 (297)
Radnor House School
(TopCo) Limited 8.5 1,560 1,508 3,068 (219)
Black Swan Data
Limited 5.9 2,934 (25) 2,909 (8)
The Evewell Group
Limited 5.8 1,407 1,390 2,797 17
Chonais River Hydro
Limited 4.6 1,705 679 2,384 121
The Street by
Street Solar
Programme Limited 12.4 1,291 1,030 2,321 25
Cantab Research
Limited (T/A
Speechmatics) 1.6 1,337 793 2,130 454
Regenerco Renewable
Energy Limited 11.9 1,204 764 1,968 22
Panaseer Limited 3.1 1,122 534 1,656 -
Aridhia Informatics
Limited 5.8 1,129 247 1,376 (98)
Healios Limited 3.3 847 522 1,369 -
Elliptic
Enterprises
Limited 0.7 984 366 1,350 -
Threadneedle
Software Holdings
Limited (T/A
Solidatus) 2.0 1,209 - 1,209 -
Gravitee TopCo
Limited (T/A
Gravitee.io) 2.2 923 236 1,159 236
Beddlestead Limited 8.6 1,026 123 1,149 102
Locum's Nest
Limited 5.6 663 460 1,123 427
Alto Prodotto Wind
Limited 9.4 647 445 1,092 73
TransFICC Limited 2.4 891 196 1,087 -
Convertr Media
Limited 6.2 992 45 1,037 5
Arecor Therapeutics
PLC 1.1 387 626 1,013 (178)
Cisiv Limited 7.4 686 305 991 (22)
PeakData AG 2.1 922 33 955 33
Seldon Technologies
Limited 1.8 873 - 873 -
NuvoAir Holdings
Inc. 1.4 570 270 840 81
Koru Kids Limited 2.1 573 256 829 -
uMotif Limited 3.1 941 (157) 784 (76)
The Voucher Market
Limited (T/A
WeGift) 1.1 492 285 777 285
InCrowd Sports
Limited 4.3 545 228 773 40
Ophelos Limited 2.0 527 - 527 -
Perchpeek Limited 1.6 517 - 517 -
AVESI Limited 10.5 340 108 448 -
The Q Garden
Company Limited 16.6 466 (75) 391 -
Limitless
Technology
Limited 2.4 648 (276) 372 (276)
Imandra Inc. 1.8 236 126 362 (231)
Accelex Technology
Limited 2.0 361 - 361 -
Brytlyt Limited 2.0 330 - 330 -
Dragon Hydro
Limited 5.5 197 121 318 7
Zift Channel
Solutions Inc. 1.7 885 (586) 299 (51)
Oxsensis Limited 1.6 439 (199) 240 (199)
DySIS Medical
Limited 1.4 1,038 (814) 224 (46)
MHS 1 Limited 3.3 231 (38) 193 -
Greenenerco Limited 4.0 106 75 181 10
uMedeor Limited
(T/A uMed) 1.2 128 - 128 -
Regulatory Genome
Development
Limited 0.7 112 - 112 -
Mirada Medical
Limited 2.7 909 (805) 104 104
Premier Leisure
(Suffolk) Limited 6.2 109 (6) 103 -
Erin Solar Limited 4.3 120 (23) 97 -
Symetrica Limited 0.3 89 (18) 71 -
memsstar Limited 2.8 62 (19) 43 (11)
Concirrus Limited 1.2 632 (610) 22 (179)
Abcodia Limited 4.7 838 (835) 3 -
Forward Clinical
Limited (T/A
Pando) 1.8 219 (216) 3 (3)
Avora Limited 2.2 400 (400) - (9)
Elements Software
Limited 0.6 3 (3) - -
Total fixed asset investments 46,665 33,487 80,152 (997)
----------------------------- -------- ---------------------------- -------- -------------------------------
* As adjusted for additions and disposals during the year;
including realised gains/(losses).
Investment
realisations
in the period
to 30 June Cost Opening value Disposal proceeds Total realised gain/(loss) Gain/(loss) on opening value
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------- ------------- ----------------- -------------------------- ----------------------------
Disposals:
-------------
MyMeds & Me
Limited 940 1,422 3,152 2,212 1,730
Phrasee
Limited 712 2,112 2,495 1,783 383
Credit Kudos
Limited 344 1,424 1,776 1,432 352
Loan stock
repayments
and other:
-------------
Oxsensis
Limited 147 166 166 19 -
Alto Prodotto
Wind
Limited 25 37 37 12 -
Greenenerco
Limited 4 6 6 2 -
Escrow
adjustments* - - 171 171 171
Sandcroft
Avenue
Limited** 1,281 15 - (1,281) (15)
Total 3,453 5,182 7,803 4,350 2,621
------------- -------- ------------- ----------------- -------------------------- ----------------------------
* These comprise fair value movements on deferred consideration
on previously disposed investments
** In administration
Total change in value of investments for the year (997)
Movement in accrued loan stock interest 112
-----
Unrealised losses on fixed asset investments sub-total (885)
Realised gains in the current period 2,621
Unwind of discount on deferred consideration 144
-----
Total gains on investments as per Income statement 1,880
--------------------------------------------------------- -----
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
---------------------------------------------------------- ---- ---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gains on investments 3 - 1,880 1,880 - 14,928 14,928 - 20,592 20,592
Investment income 4 591 - 591 370 - 370 988 - 988
Investment Manager's fees* 5 (120) (1,079) (1,199) (671) (2,014) (2,685) (196) (3,604) (3,800)
Other expenses (168) - (168) (159) - (159) (326) - (326)
---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) on ordinary activities before tax 303 801 1,104 (460) 12,914 12,454 466 16,988 17,454
Tax charge on ordinary activities - - - - - - - - -
---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) and total comprehensive income attributable
to shareholders 303 801 1,104 (460) 12,914 12,454 466 16,988 17,454
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and diluted return/(loss) per share (pence)** 7 0.26 0.69 0.95 (0.46) 12.93 12.47 0.46 16.74 17.20
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
*For more information on the allocation between revenue and
capital please see the accounting policies below
** adjusted for treasury shares
The accompanying notes below form an integral part of this
Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2021
and the audited statutory accounts for the year ended 31 December
2021.
The total column of this Condensed income statement represents
the profit and loss account of the Company. The supplementary
revenue and capital columns have been prepared in accordance with
The Association of Investment Companies' Statement of Recommended
Practice.
Condensed balance sheet
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Note GBP'000 GBP'000 GBP'000
----------------------- ---- ------------- ------------- -----------------
Fixed asset investments 80,152 75,689 80,500
Current assets
Trade and other
receivables 2,604 1,827 2,566
Cash and cash
equivalents 33,776 20,400 17,032
------------- ------------- -----------------
36,380 22,227 19,598
Total assets 116,532 97,916 100,098
Payables: amounts
falling due within one
year
Trade and other
payables (933) (2,576) (2,459)
------------- ------------- -----------------
Total assets less
current liabilities 115,599 95,340 97,639
------------- ------------- -----------------
Equity attributable to
equity holders
Called-up share capital 8 1,388 1,163 1,167
Share premium 20,772 54,961 -
Capital redemption
reserve - 12 -
Unrealised capital
reserve 33,434 31,267 36,048
Realised capital
reserve 10,759 10,432 7,344
Other distributable
reserve 49,246 (2,495) 53,080
------------- ------------- -----------------
Total equity
shareholders' funds 115,599 95,340 97,639
------------- ------------- -----------------
Basic and diluted net
asset value per share
(pence)* 93.55 92.41 94.98
----------------------- ---- ------------- ------------- -----------------
*excluding treasury shares
The accompanying notes below form an integral part of this
Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2021
and the audited statutory accounts for the year ended 31 December
2021.
These Financial Statements were approved by the Board of
Directors and authorised for issue on 7 September 2022, and were
signed on its behalf by
Ben Larkin
Chairman
Company number: 03654040
Condensed statement of changes in equity
Capital Unrealised Realised Other
Called-up share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------------- -------- ---------- ---------- -------- ------------- -------
As at 1 January 2022 1,167 - - 36,048 7,344 53,080 97,639
Profit/(loss) and total comprehensive income for the
period - - - (885) 1,686 303 1,104
Transfer of previously unrealised gains on disposal
of investments - - - (1,729) 1,729 - -
Purchase of shares for treasury - - - - - (1,212) (1,212)
Issue of equity 221 21,297 - - - - 21,518
Cost of issue of equity - (525) - - - - (525)
Dividends paid - - - - - (2,925) (2,925)
As at 30 June 2022 1,388 20,772 - 33,434 10,759 49,246 115,599
----------------------------------------------------- --------------- -------- ---------- ---------- -------- ------------- -------
As at 1 January 2021 1,040 44,978 12 18,020 12,886 (1,077) 75,859
Profit/(loss) and total comprehensive income for the
period - - - 14,708 (1,794) (460) 12,454
Transfer of previously unrealised gains on disposal
of investments - - - (1,461) 1,461 - -
Purchase of shares for treasury - - - - - (958) (958)
Issue of equity 123 10,229 - - - - 10,352
Cost of issue of equity - (246) - - - - (246)
Dividends paid - - - - (2,121) - (2,121)
As at 30 June 2021 1,163 54,961 12 31,267 10,432 (2,495) 95,340
----------------------------------------------------- --------------- -------- ---------- ---------- -------- ------------- -------
As at 1 January 2021 1,040 44,978 12 18,020 12,886 (1,077) 75,859
Profit/(loss) and total comprehensive income for the
year - - - 19,786 (2,798) 466 17,454
Transfer of previously unrealised gains on disposal
of investments - - - (1,758) 1,758 - -
Purchase of shares for treasury - - - - - (1,661) (1,661)
Issue of equity 127 10,626 - - - - 10,753
Cost of issue of equity - (264) - - - - (264)
Reduction of share premium and capital redemption
reserve - (55,340) (12) - - 55,352 -
Dividends paid - - - - (4,502) - (4,502)
----------------------------------------------------- --------------- -------- ---------- ---------- -------- ------------- -------
As at 31 December 2021 1,167 - - 36,048 7,344 53,080 97,639
----------------------------------------------------- --------------- -------- ---------- ---------- -------- ------------- -------
*Included within these reserves is an amount of GBP31,131,000
(30 June 2021: GBP7,937,000; 31 December 2021: GBP28,992,000) which
is considered distributable. Over the next three years an
additional GBP26,933,000 will become distributable. This is due to
the HMRC requirement that the Company cannot use capital raised in
the past three years to make a payment or distribution to
shareholders.
Condensed statement of cash flows
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
--------------------- ----------------- ----------------- -----------------
Cash flow from
operating activities
Loan stock income
received 586 349 736
Deposit interest
received 18 1 1
Dividend income
received 78 18 24
Investment Manager's
fees paid (2,916) (869) (1,877)
Other cash payments (213) (195) (326)
Corporation tax paid - - -
----------------- ----------------- -----------------
Net cash flow from
operating
activities (2,447) (696) (1,442)
Cash flow from
investing activities
Purchase of fixed
asset investments (5,136) (4,705) (7,500)
Disposal of fixed
asset investments 7,265 2,882 6,003
Net cash flow from
investing
activities 2,129 (1,823) (1,497)
----------------- ----------------- -----------------
Cash flow from
financing activities
Issue of share
capital 20,491 9,767 9,767
Cost of issue of
shares - (17) (35)
Equity dividends
paid* (2,405) (1,766) (3,744)
Purchase of own
shares (including
costs) (1,024) (710) (1,662)
----------------- ----------------- -----------------
Net cash flow from
financing
activities 17,062 7,274 4,326
----------------- ----------------- -----------------
Increase in cash and
cash equivalents 16,744 4,755 1,387
Cash and cash
equivalents at start
of period 17,032 15,645 15,645
----------------- ----------------- -----------------
Cash and cash
equivalents at end
of period 33,776 20,400 17,032
--------------------- ----------------- ----------------- -----------------
*The dividends paid shown in the cash flow are different to the
dividends disclosed in note 6 as a result of the non-cash effect of
the Dividend Reinvestment Scheme.
Notes to the condensed Financial Statements
1. Basis of accounting
The Financial Statements have been prepared in accordance with
applicable United Kingdom law and accounting standards, including
Financial Reporting Standard 102 ("FRS 102"), and with the
Statement of Recommended Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" ("SORP")
issued by The Association of Investment Companies ("AIC"). The
Financial Statements have been prepared on a going concern
basis.
The preparation of the Financial Statements requires management
to make judgements and estimates that affect the application of
policies and reported amounts of assets, liabilities, income and
expenses. The most critical estimates and judgements relate to the
determination of carrying value of investments at Fair Value
Through Profit and Loss ("FVTPL") in accordance with FRS 102
sections 11 and 12. The Company values investments by following the
International Private Equity and Venture Capital Valuation ("IPEV")
Guidelines as updated in 2018 and further detail on the valuation
techniques used are outlined in note 2 below.
Company information can be found on page 2 of the full
Half-yearly Financial Report.
2. Accounting policies
Fixed asset investments
The Company's business is investing in financial assets with a
view to profiting from their total return in the form of income and
capital growth. This portfolio of financial assets is managed and
its performance evaluated on a fair value basis, in accordance with
a documented investment policy, and information about the portfolio
is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those
undertakings in which the Company holds more than 20 per cent. of
the equity as part of an investment portfolio are not accounted for
using the equity method. In these circumstances the investment is
measured at FVTPL.
Upon initial recognition (using trade date accounting)
investments, including loan stock, are classified by the Company as
FVTPL and are included at their initial fair value, which is cost
(excluding expenses incidental to the acquisition which are written
off to the Income statement).
Subsequently, the investments are valued at 'fair value', which
is measured as follows:
-- Investments listed on recognised exchanges are valued at their bid prices
at the end of the accounting period or otherwise at fair value based on
published price quotations.
-- Unquoted investments, where there is not an active market, are valued
using an appropriate valuation technique in accordance with the IPEV
Guidelines. Indicators of fair value are derived using established
methodologies including earnings multiples, revenue multiples, the level
of third party offers received, cost or price of recent investment rounds,
net assets and industry valuation benchmarks. Where price of recent
investment is used as a starting point for estimating fair value at
subsequent measurement dates, this has been benchmarked using an
appropriate valuation technique permitted by the IPEV guidelines.
-- In situations where cost or price of recent investment is used,
consideration is given to the circumstances of the portfolio company
since that date in determining fair value. This includes consideration of
whether there is any evidence of deterioration or strong definable
evidence of an increase in value. In the absence of these indicators, the
investment in question is valued at the amount reported at the previous
reporting date. Examples of events or changes that could indicate a
diminution include:
-- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was based;
-- a significant adverse change either in the portfolio company's business
or in the technological, market, economic, legal or regulatory
environment in which the business operates; or
-- market conditions have deteriorated, which may be indicated by a fall in
the share prices of quoted businesses operating in the same or related
sectors.
Investments are recognised as financial assets on legal
completion of the investment contract and are de-recognised on
legal completion of the sale of an investment.
Dividend income is not recognised as part of the fair value
movement of an investment, but is recognised separately as
investment income through the other distributable reserve when a
share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more than one year),
payables and cash are carried at amortised cost, in accordance with
FRS 102. Debtors due after more than one year meet the definition
of a financing transaction held at amortised cost, and interest
will be recognised through capital over the credit period using the
effective interest method. There are no financial liabilities other
than payables.
Investment income
Equity income
Dividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock income
Fixed returns on non-equity shares and debt securities are
recognised when the Company's right to receive payment and expect
settlement is established. Where interest is rolled up and/or
payable at redemption then it is recognised as income unless there
is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the
rate of interest agreed with the bank.
Investment management fee, performance incentive fee and
expenses
All expenses have been accounted for on an accruals basis.
Expenses are charged through the other distributable reserve except
the following which are charged through the realised capital
reserve:
-- 90% of management fees and 100% of performance incentive fees, if any,
are allocated to the realised capital reserve. This has changed from 75%
for both management fees and performance incentive fees in the year ended
31 December 2021, to better align with the Board's expectation that over
the long term the majority of the Company's investment returns will be in
the form of capital gains.
-- expenses which are incidental to the purchase or disposal of an
investment are charged through the realised capital reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS
102. Current tax is tax payable/(refundable) in respect of the
taxable profit (tax loss) for the current period or past reporting
periods using the tax rates and laws that have been enacted or
substantively enacted at the financial reporting date. Taxation
associated with capital expenses is applied in accordance with the
SORP.
Deferred tax is provided in full on all timing differences at
the reporting date. Timing differences are differences between
taxable profits and total comprehensive income as stated in the
Financial Statements that arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in the Financial Statements. As a VCT the
Company has an exemption from tax on capital gains. The Company
intends to continue meeting the conditions required to obtain
approval as a VCT in the foreseeable future. The Company therefore,
should have no material deferred tax timing differences arising in
respect of the revaluation or disposal of investments and the
Company has not provided for any deferred tax.
Share capital and reserves
Called-up share capital
Called-up share capital accounts for the nominal value of the
Company's shares.
Share premium
This reserve accounts for the difference between the price paid
for the Company's shares and the nominal value of those shares,
less issue costs and transfers to the other distributable
reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share
capital is diminished through the repurchase and cancellation of
the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at
the year end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments, or
permanent diminutions in value;
-- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
-- dividends paid to equity holders where paid out by capital.
Other distributable reserve
The special reserve, treasury share reserve and the revenue
reserve were combined in 2012 to form a single reserve named other
distributable reserve.
This reserve accounts for movements from the revenue column of
the Income statement, the payment of dividends, the buy-back of
shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for when the liability to
make the payment (record date) has been established.
Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single operating segment of business, being investment in smaller
companies principally based in the UK.
3. Gains/(losses) on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
---------------------
Unrealised
(losses)/gains on
fixed asset
investments (885) 14,708 19,786
Realised gains on
fixed asset
investments 2,621 96 549
Unwinding of discount
on deferred
consideration 144 124 257
1,880 14,928 20,592
----------------- ----------------- -----------------
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
---------------------
Loan stock interest 474 351 964
Dividend income 100 18 23
Bank deposit interest 17 1 1
----------------- ----------------- -----------------
591 370 988
----------------- ----------------- -----------------
5. Investment Manager's fees
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
---------------------
Investment management
fee charged to
revenue 120 230 196
Investment management
fee charged to
capital 1,079 692 1,766
Performance incentive
fee charged to
revenue - 441 -
Performance incentive
fee charged to
capital - 1,322 1,838
1,199 2,685 3,800
----------------- ----------------- -----------------
Further details of the Management agreement under which the
investment management fee and performance incentive fee are paid
are given in the Strategic report on page 12 of the Annual Report
and Financial Statements for the year ended 31 December 2021.
During the period, services to a total value of GBP1,199,000 (30
June 2021: GBP922,000; 31 December 2021: GBP1,962,000) were
purchased by the Company from Albion Capital Group LLP (Albion
Capital). At the financial period end, the amount due to Albion
Capital in respect of these services was GBP650,000 (30 June 2021:
GBP495,000; 31 December 2021: GBP528,000). The total annual running
costs of the Company are capped at an amount equal to 2.5% of the
Company's net assets, with any excess being met by Albion Capital
by way of a reduction in management fees. As total costs remained
within the cap during the period, there was no requirement to
reduce the management fee (30 June 2021: GBP41,000; 31 December
2021: GBP86,000). For the period to 30 June 2022, no performance
incentive fee has been accrued in line with the Management
agreement (30 June 2021: GBP1,763,000; 31 December 2021:
GBP1,838,000).
During the period, the Company was not charged by Albion Capital
in respect of Patrick Reeve's services as a Director (30 June 2021:
GBPnil; 31 December 2021: GBPnil).
Albion Capital, its Partners and staff (including Patrick Reeve)
hold 989,580 Ordinary shares in the Company as at 30 June 2022.
The Manager is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies.
During the period ended 30 June 2022, fees of GBP108,000
attributable to the investments of the Company were paid pursuant
to these arrangements (30 June 2021: GBP136,000; 31 December 2021:
GBP187,000).
The Company entered into an offer agreement relating to the
Offers with the Company's investment manager Albion Capital,
pursuant to which Albion Capital would receive a fee of 2.5% of the
gross proceeds of the Offers and out of which Albion Capital would
pay the costs of the Offers, as detailed in the Prospectus.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
--------------------------------------------------------
First dividend of 2.37p per share paid on 31 May 2022
(28 May 2021: 2.06p per share) 2,925 2,126 2,126
Second dividend of 2.31p per share paid on 30 September
2021 - - 2,383
Unclaimed dividends - (5) (7)
2,925 2,121 4,502
----------------- ----------------- -----------------
In addition to the dividends summarised above, the Board has
declared a second dividend for the year ending 31 December 2022 of
2.34 pence per share (total approximately GBP2,891,000), payable on
30 September 2022 to shareholders on the register on 9 September
2022.
7. Basic and diluted return/(loss) per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2022 30 June 2021 31 December 2021
Revenue Capital Revenue Capital Revenue Capital
-------------- --------- -------- --------- -------- --------- --------
Return/(loss)
attributable
to Ordinary
shares
(GBP'000) 303 801 (460) 12,914 466 16,988
Weighted
average
shares in
issue 115,738,554 99,832,987 101,474,066
Return/(loss)
per Ordinary
share
(pence) 0.26 0.69 (0.46) 12.93 0.46 16.74
The weighted average number of shares is calculated after
adjusting for treasury shares of 15,282,637 (30 June 2021:
13,137,307; 31 December 2021: 13,946,475).
There are no convertible instruments, derivatives or contingent
share agreements in issue hence there are no dilution effects to
the return per share. The basic return per share is therefore the
same as the diluted return per share.
8. Called-up share capital
Allotted, called-up and fully paid Ordinary shares Unaudited Unaudited Audited
of 1 penny each 30 June 2022 30 June 2021 31 December 2021
---------------------------------------------------
Number of shares 138,850,411 116,303,264 116,747,394
Nominal value of allotted shares (GBP'000) 1,388 1,163 1,167
Voting rights (number of shares net of treasury
shares) 123,567,774 103,165,957 102,800,919
During the period to 30 June 2022 the Company purchased
1,336,162 Ordinary shares (nominal value GBP13,362) for treasury at
a cost of GBP1,212,000. The total number of Ordinary shares held in
treasury as at 30 June 2022 was 15,282,637 (30 June 2021:
13,137,307; 31 December 2021: 13,946,475) representing 11.0% of the
Ordinary shares in issue as at 30 June 2022.
Under the terms of the Dividend Reinvestment Scheme Circular
dated 27 August 2008, the following new Ordinary shares, of nominal
value 1 penny each, were allotted:
Aggregate
Number nominal
of value of Issue price Net
Date of shares shares (pence per invested Opening market price on allotment date (pence per
allotment allotted (GBP'000) share) (GBP'000) share)
31 May
2022 548,418 5 94.78 501 90.00
Under the terms of the Albion VCTs Prospectus Top Up Offers
2021/22, the following new Ordinary shares, of nominal value 1
penny each, were allotted during the period to 30 June 2022:
Aggregate
nominal Net
Number of value of Issue price consideration
Date of shares shares (pence per received Opening market price on allotment date (pence per
allotment allotted (GBP'000) share) (GBP'000) share)
25
February
2022 1,360,570 14 96.50 1,293 91.00
25
February
2022 462,648 5 97.00 440 91.00
25
February
2022 11,077,966 111 97.50 10,532 91.00
31 March
2022 7,756,832 78 97.50 7,374 91.00
11 April
2022 162,918 2 96.50 155 91.00
11 April
2022 24,223 - 97.00 23 91.00
11 April
2022 709,442 7 97.50 674 91.00
21,554,599 20,491
---------- -------------
9. Commitments and contingencies
As at 30 June 2022, the Company had no financial commitments in
respect of investments (30 June 2021: GBPnil; 31 December 2021:
GBPnil).
There were no contingencies or guarantees of the Company as at
30 June 2022 (30 June 2021: GBPnil; 31 December 2021: GBPnil).
10. Post balance sheet events
The following are the material post balance sheet events since
30 June 2022:
-- Investment of GBP1,369,000 into a new portfolio company, a
SaaS based global financial orchestration platform;
-- Investment of GBP610,000 into a new portfolio company, an
early stage cybersecurity training business; and
-- Investment of GBP523,000 into a new portfolio company, a
platform providing digital neurorehabilitation.
11. Related party transactions
Other than transactions with the Manager as disclosed in note 5,
there are no other related party transactions or balances requiring
disclosure.
12. Going concern
The Board has conducted a detailed assessment of the Company's
ability to meet its liabilities as they fall due. Cash flow
forecasts are updated and discussed quarterly at Board level and
have been stress tested to allow for the forecasted impact of of
the current economic climate and increasingly volatile geopolitical
backdrop. The Board have revisited and updated their assessment of
liquidity risk and concluded that it remains unchanged since the
last Annual Report and Financial Statements. Further details can be
found on page 69 of those accounts.
The portfolio of investments is diversified in terms of sector
and the major cash outflows of the Company (namely investments,
dividends and share buy-backs) are within the Company's control.
Accordingly, after making diligent enquiries, the Directors have a
reasonable expectation that the Company has adequate cash and
liquid resources to continue in operational existence for the
foreseeable future. For this reason, the Directors have adopted the
going concern basis in preparing this Half-yearly Financial Report
and this is in accordance with the Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting
issued by the Financial Reporting Council in September 2014, and
the subsequent updated Going concern, risk and viability guidance
issued by the FRC due to Covid-19 in 2020.
13. Other information
The information set out in this Half-yearly Financial Report
does not constitute the Company's statutory accounts within the
terms of section 434 of the Companies Act 2006 for the periods
ended 30 June 2022 and 30 June 2021 and is unaudited. The
information for the year ended 31 December 2021, does not
constitute statutory accounts within the terms of section 434 of
the Companies Act 2006 but is derived from the audited statutory
accounts for the financial year, which have been delivered to the
Registrar of Companies. The Auditor reported on those accounts;
their report was unqualified and did not contain a statement under
s498 (2) or (3) of the Companies Act 2006.
14. Publication
This Half-yearly Financial Report is being sent to shareholders
and copies will be made available to the public at the registered
office of the Company, Companies House, the National Storage
Mechanism and also electronically at www.albion.capital/funds/AADV,
where the Report can be accessed from the 'Financial Reports and
Circulars' section.
Attachment
-- AADV Pie chart 30 June 2022
https://ml-eu.globenewswire.com/Resource/Download/5b66d0c6-3eb3-426e-9d57-66aed1005365
(END) Dow Jones Newswires
September 07, 2022 12:12 ET (16:12 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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