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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