TIDMAAVC
Albion Venture Capital Trust PLC
LEI Code: 213800JKELS32V2OK421
As required by the UK Listing Authority's Disclosure Guidance
and Transparency Rule 4.2, Albion Venture Capital Trust PLC today
makes public its information relating to the Half-yearly Financial
Report (which is unaudited) for the six months to 30 September
2023. This announcement was approved by the Board of Directors on
14 December 2023.
The full Half-yearly Financial Report (which is unaudited) for
the period to 30 September 2023 will shortly be sent to
shareholders and will be available on the Albion Capital Group LLP
website by clicking
https://www.globenewswire.com/Tracker?data=1fGVVEsAHMNkbT0IdYfyE4W_1i4414UHO9GSMtSgvItIKbT2XoH4ubEGi02jqCImpRd-HKsWyLwX9livi0Ldh2lbXrD879uKB8w3kjqWx-Q_LPCMQ5yqIlZa1-Z6K7Fjld2OFl81Ag9uINRj5pCvPNo1xNfBVHy8NuGrdBY5TxA=
www.albion.capital/funds/AAVC/30Sep2023.pdf.
Investment objective and policy
The Company is a Venture Capital Trust and the investment policy
is intended to produce a regular and predictable dividend stream
with an appreciation in capital value.
Investment policy
The Company will invest in a broad portfolio of smaller,
unquoted growth businesses across a variety of sectors including
higher risk technology companies. Investments may take the form of
equity or a mixture of equity and loans.
Allocation of funds 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. Funds held pending investment or
for liquidity purposes will be held as cash on deposit.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses
within venture capital trust qualifying industry sectors. The
maximum amount which the Company will invest in a single portfolio
company is 15% 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% of the adjusted share capital and reserves.
Financial calendar
5 January 2024 Record date for second dividend
31 January 2024 Payment date of second dividend
31 March Financial year end
Financial summary
Audited year ended
Unaudited six months ended 30 September 2023 (pence Unaudited six months ended 30 September 2022 (pence 31 March 2023
per share) per share) (pence per share)
Opening net asset
value 50.88 53.38 53.38
Capital
(loss)/return (2.41) 0.60 (0.34)
Revenue return 0.26 0.24 0.44
--------------------------------------------------- --------------------------------------------------- -----------------
Total
(loss)/return (2.15) 0.84 0.10
Dividends paid (1.27) (1.33) (2.65)
Impact from share
capital
movements 0.01 0.01 0.05
------------------ --------------------------------------------------- --------------------------------------------------- -------------------
Net asset value 47.47 52.90 50.88
------------------ --------------------------------------------------- --------------------------------------------------- -------------------
Ordinary shares
Total shareholder value (pence per share)
---------------------------------------------
Net asset value as at 30 September 2023 47.47
Total dividends paid to 30 September 2023 193.26
--------------------------------------------- ------------------
Total shareholder value to 30 September 2023 240.73
--------------------------------------------- ------------------
A more detailed breakdown of the dividends paid per year can be
found at
https://www.globenewswire.com/Tracker?data=1fGVVEsAHMNkbT0IdYfyE4W_1i4414UHO9GSMtSgvIsdv754tJM7QhAiwhSPZg2FddpOnsItL-r9hkGzvvFQp-jkcMShoyVQZv8fWOi-OU6hCR0fqOfAeUiAKJPm881J
www.albion.capital/funds/AAVC under the 'Dividend History'
section.
The financial summary above is for the Company, Albion Venture
Capital Trust PLC Ordinary shares only. Details of the financial
performance of the C shares and Albion Prime VCT PLC, which have
been merged into the Company, can be found on the Company's webpage
at
https://www.globenewswire.com/Tracker?data=1fGVVEsAHMNkbT0IdYfyE4W_1i4414UHO9GSMtSgvIsgJB9UGjo3fAtAv9clA2r0ElQMOJb0DZDAelfc_Zqae1QeZxQ4eAXU-ADDqoUTK6EEEFXYN6z2iBTbI83eQi2A
www.albion.capital/funds/AAVC under the 'Financial summary for
previous funds' section.
The Directors have declared a second dividend of 1.19 pence per
share for the year ending 31 March 2024, which will be paid on 31
January 2024 to shareholders on the register on 5 January 2024.
Interim management report
Introduction
In the six months to 30 September 2023, the Company generated a
total loss of 2.15 pence per share, representing a 4.2% decrease on
the opening net asset value ("NAV"). Despite the disappointing loss
for the period, which reflects the challenging macroeconomic and
geopolitical backdrop, the Board is encouraged by the resilience
and revenue growth from a number of our portfolio companies.
Results and dividends
The total loss for the six months to 30 September 2023 was
GBP3.0 million (30 September 2022: gain of GBP1.0 million; year
ended 31 March 2023: gain of GBP0.1 million). The Company paid a
first dividend of 1.27 pence per share during the period to 30
September 2023 (30 September 2022: 1.33 pence per share). As a
result, the NAV has decreased to 47.47 pence per share on 30
September 2023 (31 March 2023: 50.88 pence per share).
In line with our variable dividend policy targeting a dividend
around 5% of NAV per annum, the Company will pay a second dividend
for the financial year ending 31 March 2024 of 1.19 pence per share
on 31 January 2024 to shareholders on the register on 5 January
2024, being 2.5% of the 30 September 2023 NAV.
This will bring the total dividends paid for the year ending 31
March 2024 to 2.46 pence per share, which equates to a 4.8% yield
on the opening NAV of 50.88 pence per share.
Investment performance and progress
The loss on our portfolio of investments for the six months to
30 September 2023 was GBP2.9 million (30 September 2022: gain of
GBP1.2 million; year ended 31 March 2023: gain of GBP0.6 million).
The key upward movements in the period include: Ophelos, an
investment that was held for only one year, which was sold after
the period end for 2 times cost, with an uplift of GBP0.4 million
recognised during the period; and Accelex, a GBP0.3 million
valuation uplift, after an externally led Series A funding round.
Loan stock interest and dividend income, predominantly from the
renewable energy investments, accounted for GBP0.5 million of the
GBP0.8 million of income generated by the Company during the
period.
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 have been: Threadneedle Software Holdings (T/A Solidatus)
(loss of GBP0.6 million); Healios (loss of GBP0.5 million); Brytlyt
(loss of GBP0.5 million); and The Evewell Group (loss of GBP0.5
million).
The Company's renewable energy generation investments have seen
an aggregate valuation reduction of GBP0.6 million. This reduction
reflects the impact of higher interest rates, and the expectation
of falling electricity prices and inflation, in addition to a
reduction in the remaining life of the assets.
Our top 3 portfolio companies now account for 14.7% of the
Company's NAV (30 September 2022: 16.2%; 31 March 2023: 14.4%).
Given the economic uncertainty of high inflation and rising
interest rates, the period to 30 September 2023 has been more
subdued in terms of new investment activity. During the period, the
Company has invested GBP0.5 million into two new portfolio
companies (Phasecraft and Kennek Solutions) and GBP1.4 million into
existing portfolio companies to help support them as they continue
to grow, including GBP0.7 million into Gravitee Topco (T/A
Gravitee.io) and GBP0.6 million into uMedeor (T/A uMed).
Investment activity has seen a recovery after the period end,
with GBP1.8 million invested into new and follow on investments
since 30 September 2023.
Further details of the portfolio of investments and investment
realisations can be found below.
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 at 30 September 2023.
Change of Auditor
As announced on 30 October 2023, following a formal and rigorous
audit tender process, the Company was pleased to announce the
appointment of Johnston Carmichael LLP ("Johnston Carmichael") as
the Company's Auditor with immediate effect. Johnston Carmichael
will conduct the audit of the Annual Report and Financial
Statements for the year ended 31 March 2024.
The Company and the Manager would like to express their
appreciation and gratitude to BDO for their diligent service over
the last 16 years.
Share buy-backs
It remains the Board's primary objective to maintain sufficient
resources for investment in new and existing portfolio companies
and for the continued payment of dividends to shareholders. The
Board's policy is to buy-back shares in the market, subject to the
overall constraint that such purchases are in the Company's
interest. It is the Board's intention for such buy-backs to be in
the region of a 5% discount to net asset value, so far as market
conditions and liquidity permit. The Board continues to review the
use of buy-backs and is satisfied that it is an important means of
providing market liquidity for shareholders.
Risks and uncertainties
The Company faces a number of significant risks including high
interest rates, high levels of inflation, the ongoing impact of
geopolitical tensions, and an expected period of low economic
growth in the UK. The Company's focus on technology investments may
result in greater valuation volatility in the current economic
climate. Overall investment risk is mitigated in a number of ways.
In particular, the Manager is continually assessing the exposure to
these risks for each portfolio company and mitigating actions,
where possible, are being implemented.
In accordance with the Disclosure Guidance and Trasnparency
Rules ("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 2023. The Board considers that the
present processes for mitigating those risks remain
appropriate.
The principal risks faced by the Company are:
-- Investment, performance, technology and valuation risk;
-- VCT approval and regulatory change risk;
-- Regulatory and compliance risk;
-- Operational and internal control risk;
-- Cyber and data security risk;
-- Economic and political risk;
-- Environmental, social and governance ("ESG") risk; and
-- Liquidity 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 2023 on pages 23 to 25, copies of which are
available on the Company's webpage on the Manager's website at
https://www.globenewswire.com/Tracker?data=1fGVVEsAHMNkbT0IdYfyE4W_1i4414UHO9GSMtSgvItsdIDKQDfet1A1hvCz-__icQdCjXRPpH3SHZN6C3yNTy3RdmIG5cyNtUJ1jwry8QnQuxRvXRBEpNeX8VJfjyMm
www.albion.capital/funds/AAVC under the 'Financial Reports and
Circulars' section.
Transactions with the Manager
Details of the transactions that took place with the Manager
during the period can be found in note 5. Details of related party
transactions can be found in note 11.
Move to electronic communications
The Board wishes to minimise the environmental impact of how the
Company communicates with its shareholders. With this in mind,
those shareholders that continue to receive physical copies of the
Annual Report and other documentation, will receive a letter
alongside this Half-yearly Financial Report explaining the
forthcoming move to electronic communications.
Outlook and prospects
The Company still faces many uncertainties, with high levels of
inflation, elevated interest rates and geopolitical tensions, but
the portfolio remains relatively resilient during these challenging
times. The portfolio is well diversified, with companies at
different stages of maturity and targeted at sectors such as
healthcare, data analytics and FinTech. Whilst we are disappointed
with the loss for the period, we believe these sectors of focus can
provide opportunities for growth, and to yield positive results for
the Company and its shareholders over the longer-term.
Richard Glover
Chairman
14 December 2023
Portfolio of investments
Fixed asset % voting Change in value for the period**
investments rights As at 30 September 2023 GBP'000
------------------- -------- --------------------------------
Cumulative
movement
Cost* in value Value
GBP'000 GBP'000 GBP'000
------------------- -------- -------- ---------- -------- --------------------------------
Chonais River Hydro 9.2 3,074 1,148 4,222 (306)
------------------- -------- -------- ---------- -------- --------------------------------
Radnor House School
(TopCo) 6.9 1,259 1,607 2,866 58
------------------- -------- -------- ---------- -------- --------------------------------
Cantab Research
(T/A
Speechmatics) 2.6 2,234 392 2,626 -
------------------- -------- -------- ---------- -------- --------------------------------
Gravitee TopCo (T/A
Gravitee.io) 3.9 2,189 390 2,579 -
------------------- -------- -------- ---------- -------- --------------------------------
Seldon Technologies 7.4 2,539 - 2,539 (323)
------------------- -------- -------- ---------- -------- --------------------------------
The Evewell Group 5.2 1,272 992 2,264 (492)
------------------- -------- -------- ---------- -------- --------------------------------
Runa Network 2.0 1,429 520 1,949 94
------------------- -------- -------- ---------- -------- --------------------------------
Elliptic
Enterprises 1.4 1,913 - 1,913 -
------------------- -------- -------- ---------- -------- --------------------------------
Gharagain River
Hydro 11.5 1,363 512 1,875 (138)
------------------- -------- -------- ---------- -------- --------------------------------
Threadneedle
Software Holdings
(T/A Solidatus) 2.1 1,262 145 1,407 (607)
------------------- -------- -------- ---------- -------- --------------------------------
Healios 2.4 1,517 (208) 1,309 (547)
------------------- -------- -------- ---------- -------- --------------------------------
TransFICC 2.1 1,025 271 1,296 -
------------------- -------- -------- ---------- -------- --------------------------------
uMedeor (T/A uMed) 4.1 1,061 167 1,228 -
------------------- -------- -------- ---------- -------- --------------------------------
Peppy Health 1.3 1,207 - 1,207 -
------------------- -------- -------- ---------- -------- --------------------------------
The Street by
Street Solar
Programme 6.5 676 472 1,148 (56)
------------------- -------- -------- ---------- -------- --------------------------------
Kew Green VCT
(Stansted) 45.2 1,234 (91) 1,143 27
------------------- -------- -------- ---------- -------- --------------------------------
MHS 1 14.8 1,026 72 1,098 12
------------------- -------- -------- ---------- -------- --------------------------------
Accelex Technology 3.6 788 305 1,093 305
------------------- -------- -------- ---------- -------- --------------------------------
Beddlestead 9.1 1,142 (65) 1,077 49
------------------- -------- -------- ---------- -------- --------------------------------
NuvoAir Holdings 2.3 943 124 1,067 (301)
------------------- -------- -------- ---------- -------- --------------------------------
Ophelos 1.7 433 423 856 422
------------------- -------- -------- ---------- -------- --------------------------------
Toqio FinTech
Holdings 1.2 838 - 838 -
------------------- -------- -------- ---------- -------- --------------------------------
Alto Prodotto Wind 7.4 436 289 725 (57)
------------------- -------- -------- ---------- -------- --------------------------------
Regenerco Renewable
Energy 4.5 451 223 674 (6)
------------------- -------- -------- ---------- -------- --------------------------------
Erin Solar 18.6 520 21 541 6
------------------- -------- -------- ---------- -------- --------------------------------
GX Molecular (T/A
CS Genetics) 1.7 496 - 496 -
------------------- -------- -------- ---------- -------- --------------------------------
PerchPeek 1.9 567 (140) 427 (141)
------------------- -------- -------- ---------- -------- --------------------------------
OutThink 1.6 410 - 410 -
------------------- -------- -------- ---------- -------- --------------------------------
Dragon Hydro 7.3 234 171 405 (14)
------------------- -------- -------- ---------- -------- --------------------------------
PeakData 1.3 564 (216) 348 (253)
------------------- -------- -------- ---------- -------- --------------------------------
Diffblue 1.5 343 - 343 -
------------------- -------- -------- ---------- -------- --------------------------------
Harvest AD 0.0 307 36 343 3
------------------- -------- -------- ---------- -------- --------------------------------
Phasecraft 0.6 321 - 321 -
------------------- -------- -------- ---------- -------- --------------------------------
AVESI 7.4 242 51 293 (3)
------------------- -------- -------- ---------- -------- --------------------------------
PetsApp 1.6 286 - 286 -
------------------- -------- -------- ---------- -------- --------------------------------
Imandra 1.3 175 90 265 3
------------------- -------- -------- ---------- -------- --------------------------------
5Mins AI 1.3 229 - 229 -
------------------- -------- -------- ---------- -------- --------------------------------
Ramp Software 1.5 227 - 227 -
------------------- -------- -------- ---------- -------- --------------------------------
Regulatory Genome
Development 1.0 161 55 216 55
------------------- -------- -------- ---------- -------- --------------------------------
Brytlyt 3.4 727 (512) 215 (511)
------------------- -------- -------- ---------- -------- --------------------------------
Premier Leisure
(Suffolk) 9.9 175 37 212 3
------------------- -------- -------- ---------- -------- --------------------------------
Arecor Therapeutics
PLC 0.3 90 74 164 (20)
------------------- -------- -------- ---------- -------- --------------------------------
Tem Energy 1.2 154 - 154 -
------------------- -------- -------- ---------- -------- --------------------------------
Greenenerco 3.9 90 63 153 (11)
------------------- -------- -------- ---------- -------- --------------------------------
Kennek Solutions 0.4 131 - 131 -
------------------- -------- -------- ---------- -------- --------------------------------
Neurofenix 11.7 351 (247) 104 (142)
------------------- -------- -------- ---------- -------- --------------------------------
Symetrica 0.3 95 (6) 89 (1)
------------------- -------- -------- ---------- -------- --------------------------------
InFact Systems (T/A
InFact) 1.5 80 - 80 -
------------------- -------- -------- ---------- -------- --------------------------------
Limitless
Technology 1.8 471 (471) - (113)
------------------- -------- -------- ---------- -------- --------------------------------
Total fixed asset
investments 38,757 6,694 45,451 (3,005)
------------------- -------- -------- ---------- -------- --------------------------------
*The cost includes the original cost from Albion Venture Capital
Trust PLC and the carried over value on merger from Albion Prime
VCT PLC as at 25 September 2012.
** As adjusted for additions and disposals during the
period.
Fixed asset investment realisations during the period Cost* Opening carrying value Disposal proceeds Total realised gain/(loss) Gain/(loss) on opening value
to 30 September 2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ -------- ---------------------- ----------------- -------------------------- ----------------------------
Disposals:
------------------------------------------------------
Arecor Therapeutics PLC 40 83 66 26 (17)
uMotif 1,078 70 1 (1,077) (69)
Loan stock repayments, conversions and other:
------------------------------------------------------
uMedeor (T/A uMed) 167 174 176 9 2
Alto Prodotto Wind 25 33 33 8 -
Dragon Hydro 15 15 15 - -
Greenenerco 5 6 6 1 -
Total realisations 1,330 381 297 (1,033) (84)
------------------------------------------------------ -------- ---------------------- ----------------- -------------------------- ----------------------------
*The cost includes the original cost from Albion Venture Capital
Trust PLC and the carried over value on merger from Albion Prime
VCT PLC as at 25 September 2012.
Total change in value of investments for the period (3,005)
Movement in loan stock accrued interest 36
-------
Unrealised losses sub-total (2,969)
Realised losses in current period (84)
Unwinding of discount on deferred consideration 147
--------------------------------------------------------- -------
Total losses on investments as per Income statement (2,906)
------------------------------------------------------- -------
Responsibility statement
The Directors, Richard Glover, Ann Berresford, Neeta Patel and
Richard Wilson, are responsible for preparing the Half-yearly
Financial Report. In preparing these condensed Financial Statements
for the period to 30 September 2023 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
Richard Glover
Chairman
14 December 2023
Condensed income statement
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 2023 30 September 2022 31 March 2023
---------------------------------------------------------- ---- ------------------------------ ------------------------------ ----------------------------
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
---------------------------------------------------------- ---- --------- --------- -------- --------- --------- -------- -------- -------- --------
Net (losses)/gains on investments 3 - (2,906) (2,906) - 1,207 1,207 - 577 577
Investment income 4 769 - 769 607 - 607 1,202 - 1,202
Investment Manager's fees 5 (63) (564) (627) (59) (528) (587) (122) (1,097) (1,219)
Other expenses (240) - (240) (217) - (217) (435) - (435)
--------- --------- -------- --------- --------- -------- -------- -------- --------
Profit/(loss) on ordinary activities before tax 466 (3,470) (3,004) 331 679 1,010 645 (520) 125
Tax (charge)/credit on ordinary activities (98) 98 - (46) 46 - (99) 99 -
--------- --------- -------- --------- --------- -------- -------- -------- --------
Profit/(loss) and total comprehensive income attributable
to shareholders 368 (3,372) (3,004) 285 725 1,010 546 (421) 125
---------------------------------------------------------- --------- --------- -------- --------- --------- -------- -------- -------- --------
Basic and diluted return/(loss) per share (pence)* 7 0.26 (2.41) (2.15) 0.24 0.60 0.84 0.44 (0.34) 0.10
---------------------------------------------------------- ---- --------- --------- -------- --------- --------- -------- -------- -------- --------
*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
2022 and the audited statutory accounts for the year ended 31 March
2023.
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 September 2023 30 September 2022 31 March 2023
Note GBP'000 GBP'000 GBP'000
---------------- ---- ------------------ ------------------ --------------
Fixed asset
investments 45,451 44,015 46,823
Current assets
Trade and other
receivables 2,640 2,219 1,960
Cash in bank and
at hand 18,791 17,901 22,886
------------------ ------------------ --------------
21,431 20,120 24,846
Payables:
amounts falling
due within one
year
Trade and other
payables (676) (508) (654)
------------------ ------------------ --------------
Net current
assets 20,755 19,612 24,192
Total assets
less current
liabilities 66,206 63,627 71,015
------------------ ------------------ --------------
Equity
attributable to
equity holders
Called-up share
capital 8 1,601 1,381 1,587
Share premium 22,193 11,121 21,531
Capital
redemption
reserve 31 31 31
Unrealised
capital
reserve 6,395 8,163 8,415
Realised capital
reserve 737 6,805 2,089
Other
distributable
reserve 35,249 36,126 37,362
Total equity
shareholders'
funds 66,206 63,627 71,015
---------------- ---- ------------------ ------------------ --------------
Basic and
diluted net
asset value per
share (pence)* 47.47 52.90 50.88
---------------- ---- ------------------ ------------------ --------------
*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
2022 and the audited statutory accounts for the year ended 31 March
2023.
These Financial Statements were approved by the Board of
Directors and authorised for issue on 14 December 2023, and were
signed on its behalf by
Richard Glover
Chairman
Company number: 03142609
Condensed statement of changes in equity
Called-up share Share Capital redemption Unrealised capital Realised capital Other distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 1 April 2023 1,587 21,531 31 8,415 2,089 37,362 71,015
(Loss)/return and total comprehensive income for the
period - - - (2,969) (403) 368 (3,004)
Transfer of previously unrealised losses on realisations
of investments - - - 949 (949) - -
Purchase of shares for treasury - - - - - (698) (698)
Issue of equity 14 672 - - - - 686
Cost of issue of equity - (10) - - - - (10)
Net dividends paid (note 6) - - - - - (1,783) (1,783)
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 30 September 2023 1,601 22,193 31 6,395 737 35,249 66,206
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 1 April 2022 1,369 10,047 22 6,550 7,693 38,256 63,937
Return/(loss) and total comprehensive income for the
period - - - 980 (255) 285 1,010
Transfer of previously unrealised losses on realisations
of investments - - - 633 (633) - -
Purchase of shares for cancellation (9) - 9 - - (455) (455)
Purchase of shares for treasury - - - - - (346) (346)
Issue of equity 21 1,094 - - - - 1,115
Cost of issue of equity - (20) - - - - (20)
Net dividends paid (note 6) - - - - - (1,614) (1,614)
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 30 September 2022 1,381 11,121 31 8,163 6,805 36,126 63,627
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 1 April 2022 1,369 10,047 22 6,550 7,693 38,256 63,937
Return/(loss) and total comprehensive income for the
year - - - 492 (913) 546 125
Transfer of previously unrealised losses on realisations
of investments - - - 1,373 (1,373) - -
Purchase of shares for cancellation (9) - 9 - - (455) (455)
Purchase of treasury shares - - - - - (985) (985)
Issue of equity 227 11,754 - - - - 11,981
Cost of issue of equity - (270) - - - - (270)
Net dividends paid (note 6) - - - - (3,318) - (3,318)
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
At 31 March 2023 1,587 21,531 31 8,415 2,089 37,362 71,015
--------------------------------------------------------- --------------- ------- ------------------ ------------------ ---------------- ------------------- -------
*Included within these reserves is an amount of GBP29,965,000
(30 September 2022: GBP23,008,000; 31 March 2023: GBP20,254,000)
which is considered distributable. Over the next two years an
additional GBP3,583,000 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.
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
2022 and the audited statutory accounts for the year ended 31 March
2023.
Condensed statement of cash flows
Unaudited Unaudited
six months ended 30 September six months ended 30 September Audited
2023 2022 year ended 31 March 2023
GBP'000 GBP'000 GBP'000
------------------ ------------------------------ ------------------------------ -------------------------
Cash flow from
operating
activities
Loan stock income
received 477 411 851
Dividend income
received 74 91 121
Income from fixed
term funds
received 96 22 85
Deposit interest
received 159 12 55
Investment
management fee
paid (658) (431) (1,019)
Other cash
payments (277) (253) (431)
UK Corporation tax
refund/(paid) - - -
------------------------------ ------------------------------ -------------------------
Net cash flow
generated from
operating
activities (129) (148) (338)
Cash flow from
investing
activities
Purchase of fixed
asset
investments (2,480) (5,849) (9,425)
Disposal of fixed
asset
investments 236 423 834
------------------------------ ------------------------------ -------------------------
Net cash flow
generated from
investing
activities (2,244) (5,426) (8,591)
Cash flow from
financing
activities
Issue of share
capital 405 822 11,159
Cost of issue of
equity (2) (2) (6)
Dividends paid* (1,511) (1,336) (2,758)
Purchase of own
shares (including
costs) (614) (677) (1,248)
Net cash flow
generated from
financing
activities (1,722) (1,193) 7,147
Decrease in cash
in bank and at
hand (4,095) (6,767) (1,782)
Cash in bank and
at hand at start
of period 22,886 24,668 24,668
------------------------------ ------------------------------ -------------------------
Cash in bank and
at hand at end of
period 18,791 17,901 22,886
------------------ ------------------------------ ------------------------------ -------------------------
*The equity dividends paid in the cash flow is different to the
dividends disclosed in note 6 due to the non-cash effect of the
Dividend Reinvestment Scheme.
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
2022 and the audited statutory accounts for the year ended 31 March
2023.
Notes to the condensed Financial Statements
1. Basis of preparation
The condensed Financial Statements have been prepared in
accordance with applicable United Kingdom law and accounting
standards, including Financial Reporting Standard 102 ("FRS 102"),
Financial Reporting Standard 104 -- Interim Financial Reporting
("FRS 104"), 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"). The Company values investments
by following the International Private Equity and Venture Capital
Valuation ("IPEV") Guidelines as updated in 2022 and further detail
on the valuation techniques used are outlined below.
Company information can be found on page 4 of the 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% 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, 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:
o the performance and/or prospects of the underlying business
are significantly below the expectations on which the investment
was based;
o 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
o 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 Income statement 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. Deferred consideration meets 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
Dividend income
Dividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock
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.
Fixed term funds income
Funds income is recognised on an accruals basis using the agreed
rate of interest.
Bank deposit 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 other
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% performance incentive fees, if any, are
allocated to the realised capital reserve; and
-- 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
This reserve accounts for the nominal value of the shares.
Share premium
This reserve accounts for the difference between the price paid
for shares and the nominal value of the 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 period 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 (including gains recognised on the
realisation of investment where consideration is deferred that are not
distributable as a matter of law);
-- finance income in respect of the unwinding of the discount on deferred
consideration that is not distributable as a matter of law;
-- 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 in the period in
which the dividend is paid or approved at the Annual General
Meeting.
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. (Losses)/gains on investments
Unaudited Unaudited
six months ended 30 September six months ended 30 September Audited
2023 2022 year ended 31 March 2023
GBP'000 GBP'000 GBP'000
Unrealised
(losses)/gains
on fixed asset
investments (2,969) 980 492
Realised
(losses)/gains
on fixed asset
investments (84) 102 (176)
Unwinding of
discount on
deferred
consideration 147 125 261
(2,906) 1,207 577
------------------------------ ------------------------------ -------------------------
4. Investment income
Unaudited Unaudited
six months ended 30 September six months ended 30 September Audited
2023 2022 year ended 31 March 2023
GBP'000 GBP'000 GBP'000
Loan
stock
interest 441 482 941
Bank
interest 158 12 55
Income
from
fixed
term
funds 96 22 85
Dividend
income 74 91 121
769 607 1,202
------------------------------ ------------------------------ -------------------------
5. Investment management fee
Unaudited Unaudited
six months ended 30 September six months ended 30 September Audited
2023 2022 year ended 31 March 2023
GBP'000 GBP'000 GBP'000
Investment
management
fee
charged to
capital 564 528 1,097
Investment
management
fee
charged to
revenue 63 59 122
627 587 1,219
------------------------------ ------------------------------ -------------------------
Further details of the Management agreement under which the
investment management fee and any performance incentive fee is paid
are given in the Strategic report on page 19 of the Annual Report
and Financial Statements for the year ended 31 March 2023.
During the period, services of a total value of GBP661,000 (30
September 2022: GBP617,000; 31 March 2023: GBP1,279,000), were
purchased by the Company from Albion Capital Group LLP; this
includes GBP627,000 (30 September 2022: GBP587,000; 31 March 2023:
GBP1,219,000) of investment management fee and GBP34,000 (30
September 2022: GBP30,000; 31 March 2023: GBP60,000) of secretarial
and administration fee. At the financial period end, the amount due
to Albion Capital Group LLP in respect of these services disclosed
within payables was GBP315,000 (30 September 2022: GBP301,000; 31
March 2023: GBP345,000).
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 2023, fees of
GBP51,000 attributable to the investments of the Company were
received pursuant to these arrangements (30 September 2022:
GBP104,000; 31 March 2023: GBP193,000).
Albion Capital Group LLP, its partners and staff held a total of
1,487,317 shares in the Company on 30 September 2023.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2023 30 September 2022 31 March 2023
GBP'000 GBP'000 GBP'000
First dividend of 1.27p per share paid on 31 July
2023 (29 July 2022: First dividend of 1.33p per share) 1,783 1,614 1,614
Second dividend of 1.32p per share paid on 31 January
2023 - - 1,716
Unclaimed dividends - - (12)
------------------ ------------------ --------------
1,783 1,614 3,318
------------------ ------------------ --------------
The Directors have declared a second dividend for the year
ending 31 March 2024 of 1.19 pence per share (total approximately
GBP1,660,000), payable on 31 January 2024 to shareholders on the
register on 5 January 2024.
7. Basic and diluted return/(loss) per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2023 30 September 2022 31 March 2023
Revenue Capital Revenue Capital Revenue Capital
--------------------------------------------------------
Return/(loss) attributable to equity shares (GBP'000) 368 (3,372) 285 725 546 (421)
Weighted average shares in issue (adjusted for treasury
shares) 140,099,618 120,975,277 123,938,910
Return/(loss) attributable per equity share (pence) 0.26 (2.41) 0.24 0.60 0.44 (0.34)
The weighted average number of shares is calculated after
adjusting for treasury shares of 20,615,500 (30 September 2022:
17,848,388; 31 March 2023: 19,137,781).
There are no convertible instruments, derivatives or contingent
share agreements in issue so basic and diluted return per share are
the same.
8. Called-up share capital
Allotted, called-up and fully paid shares of 1 penny Unaudited Unaudited Audited
each 30 September 2023 30 September 2022 31 March 2023
Number of shares 160,072,698 138,135,653 158,716,332
Nominal value of allotted shares (GBP'000) 1,601 1,381 1,587
Voting rights (number of shares net of treasury
shares) 139,457,198 120,287,265 139,578,551
----------------------------------------------------- ------------------ ------------------ --------------
During the period to 30 September 2023 the Company purchased
1,477,719 Ordinary shares (nominal value of GBP14,777) to be held
in treasury (30 September 2022: 914,702 shares for cancellation and
694,957 to be held in treasury; 31 March 2023: 914,702 shares for
cancellation and 1,984,350 to be held in treasury) at a total cost
of GBP698,000 (30 September 2022: GBP801,000; 31 March 2023:
GBP1,440,000) representing 0.9% of the shares in issue as at 30
September 2023.
The total number of Ordinary shares held in treasury as at 30
September 2023 was 20,615,500 (30 September 2022: 17,848,388; 31
March 2023: 19,137,781) representing 12.9% of the share capital as
at 30 September 2023.
Under the terms of the Dividend Reinvestment Scheme Circular
dated 10 July 2008, the following new Ordinary shares of nominal
value 1 penny per share were allotted during the period:
Number
of Opening-market price on allotment
Date of shares Aggregate nominal value of shares Issue price Net invested date
allotment allotted (GBP'000) (pence per share) (GBP'000) (pence per share)
31 July
2023 548,397 5 49.61 271 47.20
The following new Ordinary shares of nominal value 1 penny each
were allotted under the Albion VCTs Prospectus Top Up Offers
2022/23 during the period:
Number Net
of Issue price consideration Opening-market price on allotment
Date of shares Aggregate nominal value of shares (pence per received date
allotment allotted (GBP'000) share) (GBP'000) (pence per share)
14 April
2023 377,529 4 50.90 189 47.60
14 April
2023 48,922 - 51.10 25 47.60
14 April
2023 381,518 4 51.40 191 47.60
-------- -------------
807,969 405
-------- -------------
9. Commitments and contingencies
As at 30 September 2023, the Company had no financial
commitments (30 September 2022 and 31 March 2023: GBPnil).
There are no contingencies or guarantees of the Company as at 30
September 2023 (30 September 2022 and 31 March 2023: GBPnil).
10. Post balance sheet events
The following are the material post balance sheet events since
30 September 2023:
-- Disposal of Ophelos for proceeds of GBP0.9 million; and
-- Investments totalling GBP1.8 million in 1 new and 4 existing portfolio
companies.
As announced on 30 October 2023, following a formal tender
process, Johnston Carmichael LLP were appointed as the Company's
Auditor.
11. Related party transactions
Other than transactions with the Manager as described in note 5,
there are no other related party transactions.
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 the
current economic climate and increasingly volatile geopolitical
backdrop. The Board has 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 87 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 in 2021.
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 September 2023 and 30 September 2022 and is unaudited. The
information for the year ended 31 March 2023 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. BDO LLP, as Auditor of the 31 March 2023 accounts,
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/AAVC,
where the Report can be accessed as a PDF document in the
'Financial Reports and Circulars' section.
Attachment
-- Portfolio split by sector
https://ml-eu.globenewswire.com/Resource/Download/de41ee67-26c6-41d3-bc47-3649119573a8
(END) Dow Jones Newswires
December 14, 2023 12:16 ET (17:16 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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