Albion Enterprise VCT PLC: Half-yearly Financial Report
Albion Enterprise VCT PLC
LEI Code 213800OVSRDHRJBMO720
As required by the UK Listing Authority's
Disclosure Guidance and Transparency Rule 4.2, Albion Enterprise
VCT PLC today makes public its information relating to the
Half-yearly Financial Report (which is unaudited) for the six
months to 30 September 2022. This announcement was approved by the
Board of Directors on 7 December 2022.
The full Half-yearly Financial Report (which is
unaudited) for the period to 30 September 2022, will shortly be
sent to shareholders. Copies of the full Half-yearly Financial
Report will be shown via the Albion Capital Group LLP website by
clicking www.albion.capital/funds/AAEV/30Sep22.pdf.
Investment policy
Albion Enterprise VCT PLC (the “Company”) is a
Venture Capital Trust and the investment objective of the Company
is to provide investors with a regular source of income, combined
with the prospect of longer term capital growth.
The Company will invest in a broad portfolio of
higher growth businesses across a variety of sectors of the UK
economy including higher risk technology companies. 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 both in terms of sector and stage of
maturity of company.
VCT qualifying and non-VCT qualifying
investments
Application of the investment policy is designed
to ensure that the Company continues to qualify and is approved as
a VCT by HM Revenue and Customs (“VCT regulations”). The maximum
amount invested in any one company is limited to relevant HMRC
annual investment limits. It is intended that normally at least 80
per cent. of the Company’s funds will be invested in VCT qualifying
investments. The VCT regulations also have an impact on the type of
investments and qualifying sectors in which the Company can make
investment.
Funds held prior to investing in VCT qualifying
assets or for liquidity purposes will be held as cash on deposit,
invested in floating rate notes or similar instruments with banks
or other financial institutions with high credit ratings or
invested in liquid open-ended equity funds providing income and
capital equity exposure (where it is considered economic to do so).
Investment in such open-ended equity funds will not exceed 10 per
cent. of the Company’s assets at the time of investment.
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 company is 15 per cent.
of the Company’s assets at cost, thus ensuring a spread of
investment risk. The value of an individual investment may increase
over time as a result of trading progress and it is possible that
it may grow in value to a point where it represents a significantly
higher proportion of total assets prior to a realisation
opportunity being available.
Gearing
The Company’s maximum exposure in relation to
gearing is restricted to 10 per cent. of its adjusted share capital
and reserves.
Financial calendar
Record date for second
dividend |
3 February 2023 |
|
|
Payment date for second
dividend |
28 February 2023 |
|
|
Financial year end |
31 March |
Financial summary
|
Unaudited six months ended 30 September
2022 |
Unaudited six months ended 30 September 2021 |
Auditedyear ended 31 March 2022 |
|
(pence per
share) |
(pence per share) |
(pence per share) |
|
|
|
|
Opening net asset value |
132.28 |
114.60 |
114.60 |
Capital (loss)/return |
(2.13) |
18.04 |
23.78 |
Revenue return/(loss) |
0.15 |
(0.94) |
0.19 |
|
|
|
|
Total (loss)/return |
(1.98) |
17.10 |
23.97 |
Dividends paid |
(3.31) |
(2.87) |
(6.09) |
Impact from share capital movements |
0.01 |
0.02 |
(0.20) |
|
|
|
|
Net asset value |
127.00 |
128.85 |
132.28 |
|
Pence per share |
Total dividends paid to 30 September 2022 |
65.69 |
Net asset
value on 30 September 2022 |
127.00 |
Total shareholder value to 30 September 2022 |
192.69 |
A more detailed breakdown of the dividends paid
per year can be found at www.albion.capital/funds/AAEV under the
‘Dividend History’ section.
In addition to the dividends summarised
above, the Board has declared a second dividend for the year
ending 31 March 2023, of 3.18
pence per share to be paid on 28 February 2023 to shareholders on
the register on 3 February 2023.
Interim management report
Introduction
In the six months to 30 September 2022, the
Company generated a total loss of 1.98 pence per share,
representing a 1.5% decrease on the opening net asset value. After
12 months of growth last financial year (20.7% shareholder return
for the year ended 31 March 2022), this relatively small decrease
reflects the multiple headwinds which all enterprises currently
face. Following the payment of the first interim dividend of 3.31
pence per share paid to shareholders on 31 August 2022, the net
asset value (“NAV”) at 30 September 2022 was 127.00 pence per share
(31 March 2022: 132.28 pence per share). Despite the ongoing
uncertainty resulting from rising interest rates, high levels of
inflation and the war in Ukraine, our portfolio companies continue
to show resilience through the underlying quality of their business
offering.
Valuations and results
The total loss on investments for the six months
to 30 September 2022 was £0.9 million (30 September 2021: gain of
£15.8 million). The key upward movements in the period resulting
from strong trading include: a £1.2 million increase in the
valuation of Threadneedle Software Holdings (T/A Solidatus) and a
£0.9 million increase in the valuation of Convertr Media.
The challenging economic environment has
resulted in falling valuations in some technology and healthcare
companies which has consequently led to some write-downs in our
portfolio. The largest of these has been Black Swan Data (loss of
£0.9 million), and Egress Software Technologies (loss of £0.7
million). Although Egress has been written down in line with falls
in market multiples, we are encouraged that it continues to grow
and has the potential to recover value in time.
Our top 3 portfolio companies now account for
29.3% of the Company’s NAV (30 September 2021: 34.0%; 31 March
2022: 28.8%).
Further details of the portfolio of investments
and investment realisations can be found below.
Dividends
In line with our dividend policy targeting a
dividend around 5% of NAV per annum the Company paid a first
interim dividend of 3.31 pence per share during the period to 30
September 2022 (30 September 2021: 2.87 pence per share). The
Company will pay a second interim dividend for the financial year
ending 31 March 2023 of 3.18 pence per share on 28 February 2023 to
shareholders on the register on 3 February 2023, being 2.5% of the
30 September 2022 NAV.
This will bring the total dividends paid for the
year ending 31 March 2023 to 6.49 pence per share, which equates to
a 4.9% yield on the opening NAV of 132.28 pence per share.
Dividend Reinvestment Scheme
(“DRIS”)
The Company continues to offer a DRIS whereby
shareholders can elect to receive dividends in the form of new
shares. Shareholders not currently in the DRIS have the option to
elect to have their dividends reinvested into new shares through
the DRIS by logging into their account at www.investorcentre.co.uk.
Please note that shareholders who hold their shares in CREST will
need to contact their CREST service provider.
The terms and conditions for the DRIS can be
found on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/AAEV under the ‘Fund reports’ section.
Investment activity
During the period the Company has invested £4.7
million into new portfolio companies, comprising:
- £1.3 million
into Toqio FinTech Holdings, a provider of embedded FinTech
solutions;
- £0.9 million
into PeakData, a provider of insights and analytics to
pharmaceutical companies about therapeutic areas;
- £0.8 million
into GX Molecular (T/A CS Genetics), a developer of single-cell
sequencing solutions;
- £0.6 million
into OutThink, a SaaS platform to measure and manage human risk for
enterprises;
- £0.6 million
into Neurofenix, a neurorehabilitation platform; and
- £0.5 million
into Ophelos, an autonomous and ethical debt resolution
platform.
A further £2.1 million was invested in
supporting our existing portfolio companies to help them as they
continue to grow, including £0.8 million into The Voucher Market
(T/A WeGift), and £0.7 million into Gravitee TopCo (T/A
Gravitee.io).
Investment portfolio by
sector
The pie chart at the end of this announcement
shows the different sectors in which the Company’s assets, at
carrying value, were invested on 30 September 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
The UK is experiencing its highest level of
inflation in decades, rising interest rates, and uncertainty over
the future course, and global impact, of Russia's invasion of
Ukraine, in addition to the risks around Covid-19. Our investment
portfolio, while concentrated principally in the technology and
healthcare sectors, remains diversified in terms of both sub-sector
and stage of maturity.
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 March 2022. The
current high levels of inflation and the war in Ukraine have
created heightened uncertainty but have 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;
• 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 March 2022 on pages 16 to 18,
copies of which are available on the Company’s webpage on the
Manager’s website at www.albion.capital/funds/AAEV under the
‘Financial Reports and Circulars’ section.
Albion VCTs Top Up Offers
Your Board, in conjunction with the boards of
the other five VCTs managed by Albion Capital Group LLP, launched a
prospectus top up offer of new Ordinary shares for subscription in
the 2022/23 and 2023/24 tax years on 10 October 2022. The
prospectus is available online at
www.albion.capital/vct-hub/current-offers.
The proceeds will be used to provide support to
our existing portfolio companies and to enable us to take advantage
of new investment opportunities, six of which are detailed
above.
To ensure efficient Shareholder
communication the Board is actively encouraging Shareholders
who are currently receiving hard copy information to change their
preferences to electronic communications. There are many reasons
why we think this is the right thing to do including being
more environmentally friendly, and the immediacy of getting
information to you regarding the Company and new
Offers.
Shareholders can sign up for e-Comms by going to:
www.investorcentre.co.uk/ecomms.
Prospects
Whilst disappointed with the small loss for the
period, the Board remains encouraged by the prospects for our
portfolio companies against a backdrop of multiple macroeconomic
and geopolitical uncertainties and challenges. Our focus on
technology and healthcare, thus minimising exposure to
discretionary consumer expenditure, is designed to help the Company
weather uncertain times. Importantly the Company has the cash
resources to capitalise on exciting new investment opportunities
being seen by the Manager and to support the existing
portfolio.
Maxwell PackeChairman7 December
2022
Responsibility statement
The Directors, Maxwell Packe, Christopher
Burrows, Rhodri Whitlock, Pippa Latham and Patrick Reeve, are
responsible for preparing the Half-yearly Financial Report. In
preparing these condensed Financial Statements for the period to 30
September 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
Maxwell Packe
Chairman7 December 2022
Portfolio of investments
|
|
On 30 September
2022 |
|
|
Fixed asset investments |
% voting
rights |
Cost£’000 |
Cumulative movementin
value£’000 |
Value£’000 |
|
Change in value for the
period*£’000 |
Quantexa |
2.5 |
2,108 |
12,422 |
14,530 |
|
- |
Egress Software Technologies |
9.9 |
3,365 |
9,197 |
12,562 |
|
(745) |
Proveca |
9.6 |
1,512 |
4,799 |
6,311 |
|
79 |
Oviva |
2.8 |
2,601 |
2,716 |
5,317 |
|
(40) |
Radnor House School (TopCo) |
9.4 |
1,729 |
1,640 |
3,369 |
|
(47) |
The Evewell Group |
6.1 |
1,477 |
1,405 |
2,882 |
|
15 |
Threadneedle Software Holdings (T/A Solidatus) |
2.2 |
1,360 |
1,158 |
2,518 |
|
1,158 |
Cantab Research (T/A Speechmatics) |
1.6 |
1,359 |
806 |
2,165 |
|
182 |
Regenerco Renewable Energy |
12.5 |
1,261 |
807 |
2,068 |
|
22 |
Convertr Media |
6.2 |
992 |
911 |
1,903 |
|
869 |
Gravitee TopCo (T/A Gravitee.io) |
3.5 |
1,431 |
366 |
1,797 |
|
157 |
The Voucher Market (T/A WeGift) |
2.2 |
1,396 |
327 |
1,723 |
|
327 |
Healios |
4.0 |
1,134 |
522 |
1,656 |
|
- |
The Street by Street Solar Programme |
8.6 |
891 |
699 |
1,590 |
|
(30) |
Aridhia Informatics |
6.4 |
1,244 |
240 |
1,484 |
|
(41) |
Panaseer |
2.3 |
816 |
592 |
1,408 |
|
204 |
Elliptic Enterprises |
0.9 |
1,219 |
175 |
1,394 |
|
(279) |
NuvoAir Holdings |
2.0 |
826 |
501 |
1,327 |
|
201 |
Toqio FinTech Holdings |
1.8 |
1,279 |
45 |
1,324 |
|
45 |
Alto Prodotto Wind |
11.1 |
753 |
457 |
1,210 |
|
(53) |
Black Swan Data |
4.2 |
1,967 |
(785) |
1,182 |
|
(925) |
TransFICC |
2.6 |
938 |
223 |
1,161 |
|
- |
Greenenerco |
28.6 |
675 |
445 |
1,120 |
|
(45) |
Locum's Nest |
5.1 |
602 |
348 |
950 |
|
(71) |
PeakData |
1.9 |
862 |
78 |
940 |
|
78 |
Seldon Technologies |
1.9 |
911 |
- |
911 |
|
- |
Beddlestead |
8.1 |
966 |
(87) |
879 |
|
(189) |
uMotif |
3.6 |
1,109 |
(268) |
841 |
|
(135) |
InCrowd Sports |
3.8 |
588 |
247 |
835 |
|
73 |
GX Molecular (T/A CS Genetics) |
2.7 |
786 |
- |
786 |
|
- |
Cisiv |
8.7 |
799 |
(86) |
713 |
|
(460) |
Arecor Therapeutics |
0.9 |
329 |
331 |
660 |
|
(340) |
Koru Kids |
2.5 |
674 |
(25) |
649 |
|
(327) |
OutThink |
2.6 |
644 |
- |
644 |
|
- |
DySIS Medical |
3.8 |
2,742 |
(2,150) |
592 |
|
- |
Neurofenix |
2.7 |
552 |
- |
552 |
|
- |
Ophelos |
2.0 |
526 |
- |
526 |
|
- |
Accelex Technology |
2.9 |
517 |
- |
517 |
|
- |
Perchpeek |
1.5 |
511 |
- |
511 |
|
- |
Oxsensis |
5.1 |
1,151 |
(768) |
383 |
|
(427) |
Zift Channel Solutions |
2.0 |
1,053 |
(698) |
355 |
|
3 |
Brytlyt |
1.8 |
341 |
- |
341 |
|
- |
Imandra |
1.3 |
173 |
110 |
283 |
|
(163) |
AVESI |
5.5 |
179 |
59 |
238 |
|
1 |
Limitless Technology |
1.8 |
471 |
(236) |
235 |
|
(120) |
Mirada Medical |
5.0 |
1,487 |
(1,279) |
208 |
|
21 |
uMedeor (T/A uMed) |
1.3 |
201 |
1 |
202 |
|
1 |
Memsstar |
8.9 |
192 |
(10) |
182 |
|
(34) |
Regulatory Genome Development |
0.7 |
114 |
- |
114 |
|
- |
MHS 1 |
1.2 |
83 |
4 |
87 |
|
18 |
Symetrica |
0.2 |
55 |
(11) |
44 |
|
- |
Forward Clinical (T/A Pando) |
1.8 |
218 |
(215) |
3 |
|
- |
Concirrus |
1.6 |
830 |
(830) |
- |
|
(247) |
Total fixed asset investments |
|
51,999 |
34,183 |
86,182 |
|
(1,264) |
* as adjusted for additions and disposals during the period;
including realised gains/(losses).
Investment realisations in the period to 30 September
2022 |
Cost£’000 |
Openingcarryingvalue£’000 |
Disposalproceeds£’000 |
Totalrealisedgain/(loss)£’000 |
Gain/(loss)
onopeningvalue£’000 |
Disposals: |
|
|
|
|
|
Arecor
Therapeutics |
72 |
218 |
170 |
98 |
(48) |
Abcodia |
987 |
4 |
5 |
(982) |
1 |
Avora |
430 |
10 |
- |
(430) |
(10) |
Sandcroft Avenue (T/A Hussle) |
1,370 |
- |
- |
(1,370) |
- |
|
|
|
|
|
|
Loan
stock repayments and other: |
|
|
|
|
|
Greenenerco |
32 |
46 |
46 |
14 |
- |
Alto Prodotto Wind |
30 |
45 |
45 |
15 |
- |
Escrow adjustments* |
- |
- |
386 |
386 |
386 |
Total fixed asset realisations |
2,921 |
323 |
652 |
(2,269) |
329 |
* These comprise fair value movements on
deferred consideration on previously disposed investments and
expenses which are incidental to the purchase or disposal of an
investment.
Total change in value of investments for the
period |
|
(1,264) |
Movement
in loan stock accrued interest |
|
|
|
|
|
(87) |
Unrealised losses on
fixed asset investments sub-total |
|
|
|
|
|
(1,351) |
Realised
gains in the current period |
|
|
|
|
|
329 |
Finance
income from the unwinding of discount on deferred
consideration |
|
|
|
|
|
150 |
Total losses on
investments as per Income statement |
|
|
|
|
(872) |
Condensed income statement
|
|
Unaudited six months ended
30 September 2022 |
Unaudited six months ended 30 September 2021 |
Audited year ended 31 March 2022 |
|
Note |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on investments |
3 |
- |
(872) |
(872) |
- |
15,752 |
15,752 |
- |
21,636 |
21,636 |
|
|
|
|
|
|
|
|
|
|
|
Investment income |
4 |
553 |
- |
553 |
297 |
- |
297 |
886 |
- |
886 |
|
|
|
|
|
|
|
|
|
|
|
Investment Manager’s fees |
5 |
(116) |
(1,044) |
(1,160) |
(755) |
(2,266) |
(3,021) |
(196) |
(3,696) |
(3,892) |
|
|
|
|
|
|
|
|
|
|
|
Other expenses |
|
(301) |
- |
(301) |
(250) |
- |
(250) |
(549) |
- |
(549) |
|
|
|
|
|
|
|
|
|
|
|
Return/(loss)
on ordinary activities before
taxation |
|
136 |
(1,916) |
(1,780) |
(708) |
13,486 |
12,778 |
141 |
17,940 |
18,081 |
|
|
|
|
|
|
|
|
|
|
|
Tax on ordinary activities |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Return/(loss) and total comprehensive
income attributable to shareholders |
|
136 |
(1,916) |
(1,780) |
(708) |
13,486 |
12,778 |
141 |
17,940 |
18,081 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted return/(loss)
per share (pence)* |
7 |
0.15 |
(2.13) |
(1.98) |
(0.94) |
18.04 |
17.10 |
0.19 |
23.78 |
23.97 |
* 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
September 2021 and the audited statutory accounts for the year
ended 31 March 2022.
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
|
Note |
Unaudited 30 September
2022£’000 |
Unaudited 30 September 2021£’000 |
Audited 31 March 2022£’000 |
|
|
|
|
|
Fixed asset investments |
|
86,182 |
80,897 |
80,842 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
|
2,679 |
2,304 |
10,725 |
Cash and cash equivalents |
|
26,008 |
15,758 |
29,552 |
|
|
28,687 |
18,062 |
40,277 |
|
|
|
|
|
Total assets |
|
114,869 |
98,959 |
121,119 |
|
|
|
|
|
Payables |
|
|
|
|
Trade and other payables less than one year |
|
(828) |
(2,911) |
(2,704) |
Total assets less current
liabilities |
|
114,041 |
96,048 |
118,415 |
|
|
|
|
|
Equity attributable to equity holders |
|
|
|
|
Called-up share capital |
8 |
1,028 |
859 |
1,017 |
Share premium |
|
9,606 |
54,009 |
8,278 |
Capital redemption reserve |
|
- |
104 |
- |
Unrealised capital reserve |
|
34,037 |
33,133 |
32,790 |
Realised capital reserve |
|
14,253 |
12,619 |
17,416 |
Other distributable reserve |
|
55,117 |
(4,676) |
58,914 |
|
|
|
|
|
Total equity shareholders’ funds |
|
114,041 |
96,048 |
118,415 |
|
|
|
|
|
Basic and diluted net asset value per share
(pence)* |
|
127.00 |
128.85 |
132.28 |
* 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
September 2021 and the audited statutory accounts for the year
ended 31 March 2022.
These Financial Statements were approved by the
Board of Directors, and authorised for issue on 7 December 2022 and
were signed on its behalf by
Maxwell Packe
Chairman
Company number: 05990732
Condensed statement of changes in
equity
|
Called-upsharecapital£’000 |
Sharepremium£’000 |
Capital redemption
reserve£’000 |
Unrealisedcapitalreserve
£’000 |
Realisedcapitalreserve*£’000 |
Other
distributablereserve*£’000 |
Total£’000 |
As at 1 April
2022 |
1,017 |
8,278 |
- |
32,790 |
17,416 |
58,914 |
118,415 |
Return/(loss) and total comprehensive income for the period |
- |
- |
- |
(1,351) |
(565) |
136 |
(1,780) |
Transfer of previously unrealised losses on disposal of
investments |
- |
- |
- |
2,598 |
(2,598) |
- |
- |
Issue of equity |
11 |
1,366 |
- |
- |
- |
- |
1,377 |
Cost of issue of equity |
- |
(38) |
- |
- |
- |
- |
(38) |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(964) |
(964) |
Dividends paid |
- |
- |
- |
- |
- |
(2,969) |
(2,969) |
As at 30 September
2022 |
1,028 |
9,606 |
- |
34,037 |
14,253 |
55,117 |
114,041 |
|
|
|
|
|
|
|
|
As at 1 April
2021 |
852 |
53,258 |
104 |
17,538 |
14,728 |
(1,082) |
85,398 |
Return/(loss) and total comprehensive income for the period |
- |
- |
- |
15,621 |
(2,135) |
(708) |
12,778 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(26) |
26 |
- |
- |
Issue of equity |
7 |
778 |
- |
- |
- |
- |
785 |
Cost of issue of equity |
- |
(27) |
- |
- |
- |
- |
(27) |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(747) |
(747) |
Dividends paid |
- |
- |
- |
- |
- |
(2,139) |
(2,139) |
As at 30 September
2021 |
859 |
54,009 |
104 |
33,133 |
12,619 |
(4,676) |
96,048 |
|
|
|
|
|
|
|
|
As at 1 April
2021 |
852 |
53,258 |
104 |
17,538 |
14,728 |
(1,082) |
85,398 |
Return and total comprehensive income for the year |
|
|
|
|
|
|
|
- |
- |
- |
17,239 |
701 |
141 |
18,081 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(1,987) |
1,987 |
- |
- |
Issue of equity |
165 |
21,638 |
- |
- |
- |
- |
21,803 |
Cost of issue of equity |
- |
(544) |
- |
- |
- |
- |
(544) |
Reduction of share premium and capital redemption reserve |
- |
(66,074) |
(104) |
- |
- |
66,178 |
- |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(1,795) |
(1,795) |
Dividends paid |
- |
- |
- |
- |
- |
(4,528) |
(4,528) |
As at 31 March
2022 |
1,017 |
8,278 |
- |
32,790 |
17,416 |
58,914 |
118,415 |
* Included within these reserves is an amount of
£30,514,000 (30 September 2021: £7,943,000; 31 March 2022:
£37,334,000) which is considered distributable. Over the next three
years an additional £35,819,000 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 six months ended
30 September 2022£’000 |
Unaudited six months ended 30 September 2021£’000 |
Audited year ended 31 March 2022£’000 |
Cash flow from operating activities |
|
|
|
Investment income received |
304 |
298 |
826 |
Dividend income received |
117 |
- |
- |
Deposit interest received |
45 |
1 |
3 |
Investment Manager’s fees paid |
(3,095) |
(1,224) |
(2,084) |
Other cash payments |
(362) |
(271) |
(503) |
Net cash flow from operating
activities |
(2,991) |
(1,196) |
(1,758) |
|
|
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
Purchase of fixed asset investments |
(7,377) |
(5,173) |
(8,519) |
Disposal of fixed asset investments |
964 |
112 |
9,379 |
Net cash flow from investing
activities |
(6,413) |
(5,061) |
860 |
|
|
|
|
Cash flow from financing activities |
|
|
|
Issue of share capital |
9,178 |
430 |
12,230 |
Cost of issue of equity |
(18) |
(16) |
(19) |
Dividends paid* |
(2,446) |
(1,792) |
(3,806) |
Purchase of own shares (including costs) |
(854) |
(1,036) |
(2,384) |
Net cash flow from financing activities |
5,860 |
(2,414) |
6,021 |
|
|
|
|
(Decrease)/increase
in cash and cash equivalents |
(3,544) |
(8,671) |
5,123 |
Cash and cash equivalents at start of the period |
29,552 |
24,429 |
24,429 |
Cash and cash equivalents at end of the
period |
26,008 |
15,758 |
29,552 |
*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
policiesFixed asset
investmentsThe 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 incomeEquity
incomeDividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock incomeFixed 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 incomeInterest income is
recognised on an accruals basis using the rate of interest agreed
with the bank.
Investment management fee, performance
incentive fee and expensesAll 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 period ended 30 September
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; and
- expenses which are incidental to
the purchase or disposal of an investment are charged through the
realised capital reserve.
TaxationTaxation 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
reservesCalled-up share capitalCalled-up share capital
accounts for the nominal value of the Company’s shares.
Share premiumThis 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 reserveThis 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 reserveIncreases and
decreases in the valuation of investments held at the year end
against cost are included in this reserve.
Realised capital reserveThe 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 reserveThe special reserve,
treasury share reserve and the revenue reserve were combined in
2013 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.
DividendsDividends by the
Company are accounted for when the liability to make the payment
(record date) has been established.
Segmental reportingThe
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. (Losses)/gains
on investments
|
|
|
|
|
Unaudited six months ended
30 September 2022£’000 |
Unaudited six months ended 30 September 2021£’000 |
Auditedyear ended 31 March 2022£’000 |
Unrealised (losses)/gains on fixed asset investments |
(1,351) |
15,621 |
17,239 |
Realised gains on fixed asset
investments |
329 |
2 |
4,129 |
Finance income from deferred
consideration |
150 |
129 |
268 |
|
(872) |
15,752 |
21,636 |
4. Investment
income
|
Unaudited six months ended
30 September 2022£’000 |
Unaudited six months ended 30 September 2021£’000 |
Auditedyear ended 31 March 2022£’000 |
Loan stock interest |
391 |
296 |
883 |
Dividend income |
117 |
- |
- |
Bank deposit interest |
45 |
1 |
3 |
|
553 |
297 |
886 |
5. Investment
Manager’s
fees
|
Unaudited six months ended
30 September
2022£’000 |
Unaudited six months ended 30 September 2021£’000 |
Auditedyear ended 31 March 2022£’000 |
Investment management fee charged
to revenue |
116 |
227 |
196 |
Investment management fee charged
to capital |
1,044 |
680 |
1,762 |
Performance incentive fee charged
to revenue |
- |
528 |
- |
Performance incentive fee charged
to capital |
- |
1,586 |
1,934 |
|
1,160 |
3,021 |
3,892 |
Further details of the Management agreement
under which the investment management fee and performance incentive
fee are paid is given in the Strategic report on page 13 of the
Annual Report and Financial Statements for the year ended 31 March
2022.
During the period, services of a total value of
£1,276,000 (30 September 2021: £998,000; 31 March 2022: £2,156,000)
were purchased by the Company from Albion Capital Group LLP; this
includes £1,160,000 (30 September 2021: £907,000; 31 March 2022:
£1,958,000) of management fee and £116,000 (30 September 2021:
£91,000; 31 March 2022: £198,000) of administration fee. At the
financial period end, the amount due to Albion Capital Group LLP in
respect of these services disclosed within payables was £625,000
(30 September 2021: £428,000; 31 March 2022: £628,000). For the
period to 30 September 2022, no performance incentive fee has been
accrued, in line with the Management agreement (30 September 2021:
£2,114,000; 31 March 2022: £1,934,000).
During the period, the Company was not charged
by Albion Capital Group LLP in respect of Patrick Reeve’s services
as a Director (30 September 2021: £nil; 31 March 2022: £nil).
Albion Capital Group LLP, its partners and staff
(including Patrick Reeve) held a total of 696,257 shares in the
Company on 30 September 2022.
Albion Capital Group LLP is, from time to time,
eligible to receive arrangement fees and monitoring fees from
portfolio companies. During the period to 30 September 2022, fees
of £139,000 attributable to the investments of the Company were
received pursuant to these arrangements (30 September 2021:
£108,000; 31 March 2022: £177,000).
6. Dividends
|
Unauditedsix months
ended30 September
2022£’000 |
Unauditedsix months ended30 September 2021£’000 |
Auditedyear ended31 March 2022£’000 |
First dividend of 3.31p per
share paid on 31 August 2022 (31 August 2021: 2.87p per share) |
2,969 |
2,139 |
2,139 |
Second dividend of 3.22p per
share paid on 28 February 2022 |
- |
- |
2,391 |
Unclaimed dividends |
- |
- |
(2) |
|
2,969 |
2,139 |
4,528 |
In addition to the dividends summarised above,
the Board has declared a second dividend for the year ending 31
March 2023 of 3.18 pence per share which will be paid on 28
February 2023 to shareholders on the register on 3 February 2023.
This is expected to amount to approximately £3,004,000.
7. Basic
and diluted
return/(loss) per
share
|
Unauditedsix months ended
30 September 2022 |
Unauditedsix months ended 30 September 2021 |
Auditedyear ended 31 March 2022 |
|
Revenue |
Capital |
Revenue |
Capital |
Revenue |
Capital |
Return/(loss) attributable to equity shares (£’000) |
136 |
(1,916) |
(708) |
13,486 |
141 |
17,940 |
Weighted average shares in issue |
89,944,537 |
74,745,677 |
75,440,864 |
Return/(loss) per Ordinary share (pence) |
0.15 |
(2.13) |
(0.94) |
18.04 |
0.19 |
23.78 |
The weighted average number of shares is
calculated after adjusting for treasury shares of 12,967,934 (30
September 2021: 11,346,766; 31 March 2022:
12,195,568).
There are no convertible instruments,
derivatives or contingent share agreements in issue for the
Company, therefore no dilution affecting the return per share. The
basic return per share is therefore the same as the diluted return
per share.
8. Called-up
share capital
Allotted, called-up and
fully paid shares of 1 penny each |
Unaudited30 September
2022 |
Unaudited30 September 2021 |
Audited31 March 2022 |
Number of shares |
102,766,464 |
85,891,086 |
101,711,805 |
Nominal value of allotted
shares (£’000) |
1,028 |
859 |
1,017 |
Voting rights (number of
shares net of treasury shares) |
89,798,530 |
74,544,320 |
89,516,237 |
|
|
|
|
During the period to 30 September 2022, the
Company purchased 772,366 shares (30 September 2021: 633,346; 31
March 2022: 1,482,148) to be held in treasury at a nominal value of
£7,724 and at a cost of £964,000. The total number of shares held
in treasury on 30 September 2022 was 12,967,934 (30 September 2021:
11,346,766; 31 March 2022: 12,195,568) representing 12.6% of the
shares in issue on 30 September 2022.
Under the terms of the Dividend Reinvestment
Scheme Circular (dated 26 November 2009), the following new shares
of nominal value 1 penny each were allotted during the period to 30
September 2022:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares
£’000 |
Issue price (pence per
share) |
Net invested £’000 |
Opening market price on allotment date
(pence per share) |
31 August 2022 |
410,130 |
4 |
126.89 |
503 |
120.50 |
|
|
|
|
|
|
Under the terms of the Albion VCTs Prospectus
Top Up Offers 2021/22, the following new shares of nominal value 1
penny each were allotted during the period to 30 September
2022:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares
£’000 |
Issue price (pence per
share) |
Net consideration received
£’000 |
Opening market price on allotment date
(pence per share) |
11 April 2022 |
133,797 |
1 |
131.70 |
174 |
122.50 |
11 April 2022 |
17,745 |
- |
132.40 |
23 |
122.50 |
11 April 2022 |
492,987 |
5 |
133.00 |
639 |
122.50 |
|
644,529 |
|
|
836 |
|
9. Commitments and
contingenciesOn 30 September 2022, the Company had no
financial commitments in respect of investments (30 September 2021:
£nil; 31 March 2022: £nil).
There were no contingencies or guarantees of the
Company on 30 September 2022 (30 September 2021: £nil; 31 March
2022: £nil).
10. Post
balance sheet eventsThe following are the material post
balance sheet events since 30 September 2022:
- Investment of £1,372,000 in a new
portfolio company, an employee digital healthcare platform;
- Investment of £1,366,000 in an
existing company, a provider of an online platform delivering
family centric psychological care primarily to children and
adolescents;
- Investment of £541,000 in a new
portfolio company, an AI for code testing/writing platform;
- Investment of £450,000 in a new
portfolio company, a veterinary engagement and communications
platform;
- Investment of £360,000 in a new
portfolio company, a bite-sized workplace learning platform;
and
- Investment of £257,000 in a new
portfolio company, a software platform automating revenue and
customer forecasting.
The following new Ordinary shares of nominal
value 1 penny each were allotted under the Albion VCTs Prospectus
Top Up Offers 2022/23 after 30 September 2022:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares
£’000 |
Issue price (pence per
share) |
Net consideration received
£’000 |
Opening market price on allotment date
(pence per share) |
2 December 2022 |
1,144,527 |
11 |
129.00 |
1,454 |
120.50 |
2 December 2022 |
245,176 |
2 |
129.60 |
311 |
120.50 |
2 December 2022 |
3,289,782 |
33 |
130.30 |
4,180 |
120.50 |
|
4,679,485 |
|
|
5,945 |
|
11. Related
party transactionsOther than transactions with the Manager
as disclosed in note 5, there are no other related party
transactions or balances requiring disclosure.
12. Going concernThe 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 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 70
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
informationThe 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 September 2022 and 30 September 2021, and
is unaudited. The information for the year ended 31 March 2022 does
not constitute statutory accounts within the terms of section 434
of the Companies Act 2006 but is derived from the 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 statements under
s498 (2) or (3) of the Companies Act 2006.
14. PublicationThis
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/AAEV,
where the Report can be accessed from the ‘Financial Reports and
Circulars’ section.
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