TIDMAADV
(Albion Development VCT PLC)
LEI Code 213800FDDMBD9QLHLB38
As required by the UK Listing Authority's Disclosure Guidance
and Transparency Rule 4.2, Albion Development VCT PLC today makes
public its information relating to the Half-yearly Financial Report
(which is unaudited) for the six months to 30 June 2023. This
announcement was approved by the Board of Directors on 19 September
2023.
The full Half-yearly Financial Report (which is unaudited) for
the period to 30 June 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=xxDqXwgVWFMVrM-eJ1XEtdibHA1XxbY6_FnGlYia8EV5Q28Fsuy4brIPt7SV3A00vY4Ilm3rZ0wRrxj_9fDg3DMAxpNyUB5SkY4np9pyRAL_31ntSxS2PLUmnptNwROchRkmkebiVTKMv-rwSBejdsyW6jViwNcCVGEIWon-2Nk=
www.albion.capital/funds/AADV/30Jun2023.pdf.
Investment policy
The Company will invest in a broad portfolio of higher growth
businesses with a stronger focus on technology companies across a
variety of sectors of the UK economy. Allocation of assets will be
determined by the investment opportunities which become available
but efforts will be made to ensure that the portfolio is
diversified in terms of sector and stage of maturity of
company.
Funds held pending investment or for liquidity purposes will be
held as cash on deposit or up to 8% of its assets, at the time of
investment, in liquid open-ended equity funds providing income and
capital equity exposure (where it is considered economic to do
so).
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses
within venture capital trust qualifying industry sectors using a
mixture of securities. The maximum amount which the Company will
invest in a single portfolio company is 15% of the Company's assets
at cost thus ensuring a spread of investment risk. The value of an
individual investment may increase over time as a result of trading
progress and it is possible that it may grow in value to a point
where it represents a significantly higher proportion of total
assets prior to a realisation opportunity being available.
The Company's maximum exposure in relation to gearing is
restricted to 10% of the adjusted share capital and reserves.
Financial calendar
8 September 2023 Record date for second dividend
29 September 2023 Payment of second dividend
31 December Financial year end
Financial summary
Unaudited six months ended Unaudited six months ended Audited year ended
Ordinary 30 June 2023 30 June 2022 31 December 2022
shares (pence per share) (pence per share) (pence per share)
-------------- -------------------------- -------------------------- -------------------
Opening net
asset value 88.65 94.98 94.98
Capital
return/(loss) 4.89 0.69 (2.36)
Revenue return 0.26 0.26 0.49
-------------------------- -------------------------- -------------------
Total
return/(loss) 5.15 0.95 (1.87)
Dividends paid (2.22) (2.37) (4.71)
Impact of
share capital
movements 0.17 (0.01) 0.25
-------------------------- -------------------------- -------------------
Net asset
value 91.75 93.55 88.65
-------------- -------------------------- -------------------------- -------------------
Total dividends paid to 30 June 2023 115.79
Net asset value as at 30 June 2023 91.75
------
Total shareholder value to 30 June 2023 207.54
---------------------------------------- ------
The financial summary above is for the Company, Albion
Development VCT PLC Ordinary shares only. Details of the financial
performance of the C shares and D shares, which have been merged
into the Ordinary shares, can be found at
https://www.globenewswire.com/Tracker?data=xxDqXwgVWFMVrM-eJ1XEtdibHA1XxbY6_FnGlYia8EXXTVbHAsFtXefBCCLZJl88L4McMChNQaGiVcAwibmdIsybTAMiO2mD7L1wsWzF4bD7GCEpeYbVN0eqnFg7whad
www.albion.capital/funds/AADV under the 'Financial summary for
previous funds' section.
A more detailed breakdown of the dividends paid per year can be
found at
https://www.globenewswire.com/Tracker?data=xxDqXwgVWFMVrM-eJ1XEtdibHA1XxbY6_FnGlYia8EXT82Zzg7QA6epLHt6X-Sb9bG9zxU7BwQFodk5pKw4gQjLzvCYRfyv6_COB31kGNi8lett4DtNp_sc3wbVKHD7h
www.albion.capital/funds/AADV under the 'Dividend History'
section.
In addition to the dividends summarised above, the Board has
declared a second dividend for the year ending 31 December 2023, of
2.29 pence per Ordinary share to be paid on 29 September 2023 to
shareholders on the register on 8 September 2023.
Interim management report
Introduction
In the six months to 30 June 2023, the Company generated a
positive total return of 5.15 pence per share, representing a 5.8%
return on opening net asset value ("NAV"). During the period, the
Company continued to face a difficult macroeconomic and
geopolitical backdrop, including persistent high levels of
inflation, rising interest rates and volatility of quoted
technology companies. Despite this, the Board is encouraged by the
positive total return generated by the Company and optimistic that
many of the portfolio companies will continue to grow.
Valuations and results
The total gain on investments for the period to 30 June 2023 was
GBP7.7 million (30 June 2022: GBP1.9 million; 31 December 2022:
loss of GBP0.6 million). The key movement to the total gain was
Quantexa increasing its value by GBP10.0 million following an
externally led $129 million Series E fundraising, which completed
in April 2023. The latest funding round made it the first "Unicorn"
of 2023 (a private company valuation over $1 billion) and the Board
are excited about its future prospects.
Other gains in the period included Radnor House School and
Ophelos, which resulted in a combined uplift of GBP0.9 million.
These gains were partially offset by write downs with the most
significant being in Black Swan Data which decreased by GBP1.7
million.
The NAV per share has increased to 91.75 pence per share (30
June 2022: 93.55 pence per share; 31 December 2022: 88.65 pence per
share).
Our top 3 portfolio companies now account for 33.8% of the
Company's NAV (30 June 2022: 26.6%; 31 December 2022: 27.6%).
Further details of the portfolio of investments can be found
below.
Dividends
In line with our variable dividend policy targeting 5% of NAV
per annum, the Company paid a dividend of 2.22 pence per share
during the period to 30 June 2023 (30 June 2022: 2.37 pence per
share). The Company will pay a second dividend for the financial
year ending 31 December 2023 of 2.29 pence per share on 29
September 2023 to shareholders on the register on 8 September 2023,
being 2.5% of this 30 June 2023 NAV.
This will bring the total dividends paid for the year ending 31
December 2023 to 4.51 pence per share, which equates to a 5.1%
yield on the opening NAV of 88.65 pence per share.
Investment activity
Given the economic uncertainty of high inflation and rising
interest rates, in addition to the 15 new investments the Company
made in 2022, the first half of 2023 has been more subdued in terms
of new investment activity. During the period the Company has
invested GBP0.6 million into existing portfolio companies to help
support them as they continue to grow, including GBP0.4 million
into Proveca and GBP0.1 million into Seldon Technologies.
Investment activity has started to increase after the period
end, with GBP1.6 million invested into new and follow on
investments since 30 June 2023.
The chart at the end of this announcement illustrates the
composition of the portfolio by industry sector as at 30 June
2023.
Share buy-backs
It remains the Board's primary objective to maintain sufficient
resources for investment in existing and new 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, as far as market
conditions and liquidity permit.
Risks and uncertainties
The Company faces a number of significant risks including rising
interest rates, high levels of inflation, the ongoing impact of
geopolitical tensions, and an expected period of economic
stagnation, or even recession in the UK. The concentration risk to
the technology sector, is noted as technology company valuations
have become more volatile in the current economic climate. Overall
investment risk is mitigated through a variety of processes. The
Manager is continually assessing the exposure to these risks for
each portfolio company and appropriate actions, where possible, are
being implemented.
In accordance with the Disclosure Guidance and Transparency
Rules ("DTR"), the Board confirms that the principal risks and
uncertainties facing the Company have not materially changed from
those identified in the Annual Report and Financial Statements for
the year ended 31 December 2022. There is heightened uncertainty,
but this has not changed the nature of the principal risks. The
Board considers that the present processes for mitigating those
risks remain appropriate.
The principal risks faced by the Company are:
-- Investment, performance, technology and valuation risk;
-- VCT approval risk;
-- Regulatory and compliance risk;
-- Operation and internal control risk;
-- Cyber and data security risk;
-- Economic, political and social risk;
-- Liquidity risk; and
-- Environmental, social and governance ("ESG") risk.
A detailed analysis of the principal risks and uncertainties
facing the business can be found in the Annual Report and Financial
Statements for the year ended 31 December 2022 on pages 23 to 25,
copies of which are available on the Company's webpage on the
Manager's website at www.albion.capital/funds/AADV under the
'Financial Reports and Circulars' section.
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.
Albion VCTs Top Up Offers
The 2022/23 Offers were fully subscribed and closed having
raised GBP13 million for the Company. The Board was pleased to see
the high level of demand for the Company's shares from existing and
new shareholders.
The proceeds are being used to provide support to our existing
portfolio companies and to enable us to take advantage of new
investment opportunities as they arise. Details on the share
allotments during the period can be found in note 8.
Shareholder seminar
The Board is pleased to report that the Manager, Albion Capital,
is to host a physical shareholder seminar this year on 15 November
2023, at the Royal College of Surgeons, Lincoln's Inn Fields,
London. The Board considers this an important interactive event and
invites shareholders to attend. To reserve a place, please email
https://www.globenewswire.com/Tracker?data=ltpelyvt5bzG98-_ZymFmtkrZv7r4FCKBvK6d840DrJFyP7i-FBANa4QCDTvcsjaDRWkPzNJ8J7zFbnrn6EdmDDdZkqmkPCvcPPClMq7tTg=
info@albion.capital.
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.
Prospects
Although there remains many uncertainties facing the Company,
with the high levels of inflation, elevated interest rates and
geopolitical tensions, the results for the period demonstrate the
resilience of our portfolio during these challenging times. The
portfolio remains well diversified, with companies at different
stages of maturity and across a variety of different sectors, many
of which have minimal exposure to consumer expenditure. We remain
confident that the Company will continue to provide positive
results to its shareholders over the long-term.
Ben Larkin
Chairman
19 September 2023
Portfolio of investments
As at 30 June 2023
Fixed asset % voting Cost Cumulative movement in value Value Change in value for the period*
investments rights GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- -------------------------------
Quantexa 2.1 2,101 22,857 24,958 10,046
Egress Software
Technologies 6.9 2,332 6,517 8,849 (174)
Proveca 11.8 2,244 5,957 8,201 165
Oviva 2.8 2,601 1,179 3,780 (375)
Radnor House School
(TopCo) 8.5 1,560 1,943 3,503 484
The Evewell Group 5.8 1,407 1,454 2,861 21
Healios 3.3 1,977 522 2,499 -
Chonais River Hydro 4.6 1,705 714 2,419 86
The Street by
Street Solar
Programme 12.4 1,291 952 2,243 (132)
Convertr Media 6.2 992 913 1,905 (35)
Regenerco Renewable
Energy 11.9 1,204 606 1,810 (176)
Threadneedle
Software Holdings
(T/A Solidatus) 2.0 1,209 488 1,697 (248)
Panaseer 3.1 1,122 532 1,654 (283)
Cantab Research
(T/A
Speechmatics) 1.6 1,337 235 1,572 (188)
Runa Network 1.9 1,259 285 1,544 -
Peppy Health 1.6 1,424 - 1,424 -
Toqio FinTech
Holdings 1.9 1,369 - 1,369 -
Aridhia Informatics 5.8 1,129 88 1,217 (183)
Gravitee TopCo 2.2 923 236 1,159 -
TransFICC 1.8 891 196 1,087 -
InCrowd Sports 4.1 642 433 1,075 165
Alto Prodotto Wind 9.4 590 425 1,015 46
Seldon Technologies 2.9 1,002 - 1,002 -
Elliptic
Enterprises 0.7 984 - 984 -
PeakData 2.1 922 54 976 (15)
Ophelos 2.0 527 441 968 441
Beddlestead 8.6 1,026 (121) 905 (38)
NuvoAir Holdings 1.4 570 234 804 (41)
GX Molecular (T/A
CS Genetics) 2.5 741 - 741 -
Cisiv 5.3 686 29 715 307
OutThink 2.4 610 - 610 -
Locum's Nest 5.6 663 (57) 606 (358)
Perchpeek 1.9 597 - 597 -
Accelex Technology 2.0 361 195 556 195
Diffblue 2.2 509 - 509 -
The Q Garden
Company 16.6 466 32 498 -
PetsApp 2.3 425 - 425 -
Koru Kids 1.8 573 (160) 413 (69)
AVESI 10.5 340 70 410 (44)
Imandra 1.8 236 112 348 (16)
Arecor Therapeutics
PLC 0.5 190 157 347 (12)
5Mins AI 1.9 340 - 340 -
Dragon Hydro 5.5 187 133 320 13
Brytlyt 2.0 416 (98) 318 (98)
Neurofenix 2.6 523 (296) 227 (296)
Ramp Software 1.8 267 - 267 -
uMedeor (T/A uMed) 1.2 192 68 260 66
MHS 1 3.3 231 14 245 -
Tem Energy 1.6 212 - 212 -
Greenenerco 4.0 96 75 171 9
DySIS Medical 1.0 1,038 (869) 169 12
Regulatory Genome
Development 0.8 125 42 167 42
Premier Leisure
(Suffolk) - 109 21 130 -
Erin Solar 4.3 120 3 123 -
Mirada Medical 2.7 909 (806) 103 -
Symetrica 0.3 102 (6) 96 12
Infact Systems 1.8 91 - 91 -
Black Swan Data 6.3 3,307 (3,257) 50 (1,660)
uMotif 3.1 941 (940) 1 (93)
Limitless
Technology 2.4 648 (648) - (326)
Elements Software 0.6 3 (3) - -
Total fixed asset investments 52,594 40,951 93,545 7,250
----------------------------- -------- ---------------------------- -------- -------------------------------
* As adjusted for additions and disposals during the year;
including realised gains/(losses).
Investment
realisations
in the period
to 30 June Cost Opening value Disposal proceeds Total realised gain/(loss) Gain/(loss) on opening value
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------- ------------- ----------------- -------------------------- ----------------------------
Disposals:
-------------
Zift Channel
Solutions 885 326 468 (417) 142
Arecor
Therapeutics
PLC 104 196 203 99 7
Oxsensis 439 10 11 (428) 1
Forward
Clinical
(T/A Pando) 219 - - (219) -
Loan stock
repayments
and other:
-------------
Alto Prodotto
Wind 28 42 42 14 -
Greenenerco 4 6 6 2 -
Escrow
adjustments* - - 74 74 74
Total 1,679 580 804 (875) 224
------------- -------- ------------- ----------------- -------------------------- ----------------------------
* These comprise fair value movements on deferred consideration
on previously disposed investments
GBP'000
Total change in value of investments for the year 7,250
Movement in accrued loan stock interest 33
-------
Unrealised gains on fixed asset investments sub-total 7,283
Realised gains in the current period 224
Unwind of discount on deferred consideration 168
-------
Total gains on investments as per Income statement 7,675
-------------------------------------------------------- -------
Responsibility statement
The Directors, Ben Larkin, Lyn Goleby, Lord O' Shaughnessy and
Patrick Reeve, are responsible for the preparation of the
Half-yearly Financial Report. In preparing these condensed
Financial Statements for the period to 30 June 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
Ben Larkin
Chairman
19 September 2023
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
---------------------------------------------------------- ---- ---------------------------- ---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Gains/(losses) on investments 3 - 7,675 7,675 - 1,880 1,880 - (636) (636)
Investment income 4 684 - 684 591 - 591 1,194 - 1,194
Investment Manager's fees 5 (133) (1,201) (1,334) (120) (1,079) (1,199) (245) (2,207) (2,452)
Other expenses (201) - (201) (168) - (168) (358) - (358)
---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) on ordinary activities before tax 350 6,474 6,824 303 801 1,104 591 (2,843) (2,252)
Tax charge on ordinary activities - - - - - - - - -
---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(loss) and total comprehensive income attributable
to shareholders 350 6,474 6,824 303 801 1,104 591 (2,843) (2,252)
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
Basic and diluted return/(loss) per share (pence)* 7 0.26 4.89 5.15 0.26 0.69 0.95 0.49 (2.36) (1.87)
---------------------------------------------------------- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
* adjusted for treasury shares
The accompanying notes below form an integral part of this
Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2022
and the audited statutory accounts for the year ended 31 December
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
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Note GBP'000 GBP'000 GBP'000
----------------------- ---- ------------- ------------- -----------------
Fixed asset investments 93,545 80,152 86,286
Current assets
Trade and other
receivables 2,531 2,604 2,403
Cash in bank and at
hand 29,273 33,776 26,491
------------- ------------- -----------------
31,804 36,380 28,894
Payables: amounts
falling due within one
year
Trade and other
payables (958) (933) (722)
------------- ------------- -----------------
Net current assets 30,846 35,447 28,172
Total assets less
current liabilities 124,391 115,599 114,458
------------- ------------- -----------------
Equity attributable to
equity holders
Called-up share capital 8 1,536 1,388 1,456
Share premium 34,277 20,772 26,837
Unrealised capital
reserve 40,897 33,434 32,516
Realised capital
reserve 6,125 10,759 8,032
Other distributable
reserve 41,556 49,246 45,617
------------- ------------- -----------------
Total equity
shareholders' funds 124,391 115,599 114,458
------------- ------------- -----------------
Basic and diluted net
asset value per share
(pence)* 91.75 93.55 88.65
----------------------- ---- ------------- ------------- -----------------
*excluding treasury shares
The accompanying notes below form an integral part of this
Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2022
and the audited statutory accounts for the year ended 31 December
2022.
These Financial Statements were approved by the Board of
Directors and authorised for issue on 19 September 2023, and were
signed on its behalf by
Ben Larkin
Chairman
Company number: 03654040
Condensed statement of changes in equity
Capital Unrealised Realised Other
Called-up share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------------- ------- ---------- ---------- -------- ------------- -------
As at 1 January 2023 1,456 26,837 - 32,516 8,032 45,617 114,458
Profit/(loss) and total comprehensive income for the
period - - - 7,283 (809) 350 6,824
Transfer of previously unrealised losses on disposal
of investments - - - 1,098 (1,098) - -
Purchase of shares for treasury - - - - - (1,399) (1,399)
Issue of equity 80 7,639 - - - - 7,719
Cost of issue of equity - (199) - - - - (199)
Dividends paid - - - - - (3,012) (3,012)
As at 30 June 2023 1,536 34,277 - 40,897 6,125 41,556 124,391
----------------------------------------------------- --------------- ------- ---------- ---------- -------- ------------- -------
As at 1 January 2022 1,167 - - 36,048 7,344 53,080 97,639
Profit/(loss) and total comprehensive income for the
period - - - (885) 1,686 303 1,104
Transfer of previously unrealised gains on disposal
of investments - - - (1,729) 1,729 - -
Purchase of shares for treasury - - - - - (1,212) (1,212)
Issue of equity 221 21,297 - - - - 21,518
Cost of issue of equity - (525) - - - - (525)
Dividends paid - - - - - (2,925) (2,925)
As at 30 June 2022 1,388 20,772 - 33,434 10,759 49,246 115,599
----------------------------------------------------- --------------- ------- ---------- ---------- -------- ------------- -------
As at 1 January 2022 1,167 - - 36,048 7,344 53,080 97,639
Profit/(loss) and total comprehensive income for the
year - - - (3,258) 415 591 (2,252)
Transfer of previously unrealised gains on disposal
of investments - - - (273) 273 - -
Purchase of shares for treasury - - - - - (2,244) (2,244)
Issue of equity 288 27,509 - - - - 27,797
Cost of issue of equity - (672) - - - - (672)
Dividends paid - - - - - (5,810) (5,810)
----------------------------------------------------- --------------- ------- ---------- ---------- -------- ------------- -------
As at 31 December 2022 1,456 26,837 - 32,516 8,032 45,617 114,458
----------------------------------------------------- --------------- ------- ---------- ---------- -------- ------------- -------
*Included within these reserves is an amount of GBP26,789,000
(30 June 2022: GBP31,131,000; 31 December 2022: GBP24,619,000)
which is considered distributable. Over the next two years an
additional GBP18,627,000 will become distributable. This is due to
the HMRC requirement that the Company cannot use capital raised in
the past three years to make a payment or distribution to
shareholders.
Condensed statement of cash flows
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
--------------------- ----------------- ----------------- -----------------
Cash flow from
operating activities
Loan stock income
received 452 586 996
Dividend income
received 5 78 133
Income from fixed
term funds received 95 9 59
Deposit interest
received 131 9 47
Investment Manager's
fees paid (1,247) (2,916) (4,216)
Other cash payments (220) (213) (338)
Corporation tax paid - - -
----------------- ----------------- -----------------
Net cash flow
generated from
operating
activities (784) (2,447) (3,319)
Cash flow from
investing activities
Purchase of fixed
asset investments (589) (5,136) (14,235)
Disposal of fixed
asset investments 887 7,265 7,946
Net cash flow
generated from
investing
activities 298 2,129 (6,289)
----------------- ----------------- -----------------
Cash flow from
financing activities
Issue of share
capital 7,043 20,491 26,132
Cost of issue of
shares (19) - (36)
Equity dividends
paid* (2,508) (2,405) (4,785)
Purchase of own
shares (including
costs) (1,248) (1,024) (2,244)
----------------- ----------------- -----------------
Net cash flow
generated from
financing
activities 3,268 17,062 19,067
----------------- ----------------- -----------------
Increase in cash in
bank and at hand 2,782 16,744 9,459
Cash in bank and at
hand at start of
period 26,491 17,032 17,032
----------------- ----------------- -----------------
Cash in bank and at
hand at end of
period 29,273 33,776 26,491
--------------------- ----------------- ----------------- -----------------
*The equity 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 preparation
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 2022 and further detail on the valuation
techniques used are outlined in note 2 below.
Company information can be found on page 4 of the full
Half-yearly Financial Report.
2. Accounting policies
Fixed asset investments
The Company's business is investing in financial assets with a
view to profiting from their total return in the form of income and
capital growth. This portfolio of financial assets is managed and
its performance evaluated on a fair value basis, in accordance with
a documented investment policy, and information about the portfolio
is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those
undertakings in which the Company holds more than 20% 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,
other valuation techniques are employed to conclude on the fair value as
at the measurement 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. 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% of 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.
Reserves
Called-up share capital
This accounts for the nominal value of the Company's shares.
Share premium
This accounts for the difference between the price paid for
shares and the nominal value of those shares, less issue costs and
transfers to the other distributable reserves.
Capital redemption reserve
This reserve accounts for amounts by which the issued share
capital is diminished through the repurchase and cancellation of
the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at
the year end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments, or
permanent diminutions in value (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, transfers from the share premium and capital redemption
reserve, and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for when the liability to
make the payment (record date) has been established.
Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single operating segment of business, being investment in smaller
companies principally based in the UK.
3. Gains/(losses) on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
---------------------
Unrealised
gains/(losses) on
fixed asset
investments 7,283 (885) (3,258)
Realised gains on
fixed asset
investments 224 2,621 2,322
Unwinding of discount
on deferred
consideration 168 144 300
7,675 1,880 (636)
----------------- ----------------- -----------------
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
---------------------
Loan stock interest 420 474 916
Dividend income 37 100 172
Income from fixed
term funds 95 9 59
Bank interest 132 8 47
----------------- ----------------- -----------------
684 591 1,194
----------------- ----------------- -----------------
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
5. Investment Manager's fees GBP'000 GBP'000 GBP'000
-----------------------------
Investment management fee
charged to revenue 133 120 245
Investment management fee
charged to capital 1,201 1,079 2,207
1,334 1,199 2,452
----------------- ----------------- -----------------
Further details of the Management agreement under which the
investment management fee and performance incentive fee are paid
are given in the Strategic report on page 18 of the Annual Report
and Financial Statements for the year ended 31 December 2022.
During the period, services to a total value of GBP1,344,000 (30
June 2022: GBP1,199,000; 31 December 2022: GBP2,452,000) were
purchased by the Company from Albion Capital Group LLP ("Albion").
At the financial period end, the amount due to Albion in respect of
these services was GBP690,000 (30 June 2022: GBP650,000; 31
December 2022: GBP618,000). The total annual running costs of the
Company are capped at an amount equal to 2.5% of the Company's net
assets, with any excess being met by Albion by way of a reduction
in management fees. During the period, the management fee was
reduced by GBP10,000 as a result of this cap (30 June 2022: GBPnil;
31 December 2022: GBP41,000).
During the period, the Company was not charged by Albion in
respect of Patrick Reeve's services as a Director (30 June 2022:
GBPnil; 31 December 2022: GBPnil).
Albion, its Partners and staff (including Patrick Reeve) hold
1,158,636 Ordinary shares in the Company as at 30 June 2023.
The Manager is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies.
During the period ended 30 June 2023, fees of GBP65,000
attributable to the investments of the Company were paid pursuant
to these arrangements (30 June 2022: GBP108,000; 31 December 2022:
GBP257,000).
The Company has entered into an offer agreement relating to the
Offers with the Company's investment manager Albion, pursuant to
which Albion will receive a fee of 2.5% of the gross proceeds of
the Offers and out of which Albion will pay the costs of the
Offers, as detailed in the Prospectus.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------------------
First dividend of 2.22p per share paid on 31 May 2023
(31 May 2022: 2.37p per share) 3,012 2,925 2,925
Second dividend of 2.34p per share paid on 30 September
2022 - - 2,892
Unclaimed dividends - - (7)
3,012 2,925 5,810
----------------- ----------------- -----------------
In addition to the dividends summarised above, the Board has
declared a second dividend for the year ending 31 December 2023 of
2.29 pence per share (total approximately GBP3,105,000), payable on
29 September 2023 to shareholders on the register on 8 September
2023.
7. Basic and diluted return/(loss) per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
Revenue Capital Revenue Capital Revenue Capital
-------------- --------- -------- --------- -------- --------- --------
Return/(loss)
attributable
to Ordinary
shares
(GBP'000) 350 6,474 303 801 591 (2,843)
Weighted
average
shares in
issue 132,550,358 115,738,554 120,150,815
Return/(loss)
per Ordinary
share
(pence) 0.26 4.89 0.26 0.69 0.49 (2.36)
The weighted average number of shares is calculated after
adjusting for treasury shares of 18,036,957 (30 June 2022:
15,282,637; 31 December 2022: 16,468,548).
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 Ordinary shares Unaudited Unaudited Audited
of 1 penny each 30 June 2023 30 June 2022 31 December 2022
---------------------------------------------------
Number of shares 153,611,717 138,850,411 145,582,300
Nominal value of allotted shares (GBP'000) 1,536 1,388 1,456
Voting rights (number of shares net of treasury
shares) 135,574,760 123,567,774 129,113,752
During the period to 30 June 2023 the Company purchased
1,568,409 Ordinary shares (nominal value GBP15,684) for treasury at
a cost of GBP1,399,000. The total number of Ordinary shares held in
treasury as at 30 June 2023 was 18,036,957 (30 June 2022:
15,282,637; 31 December 2022: 16,468,548) representing 11.7% of the
Ordinary shares in issue as at 30 June 2023.
Under the terms of the Dividend Reinvestment Scheme, the
following new Ordinary shares of nominal value 1 penny each, were
allotted during the period to 30 June 2023:
Aggregate
Number nominal
of value of Issue price Net
Date of shares shares (pence per invested Opening market price on allotment date (pence per
allotment allotted (GBP'000) share) (GBP'000) share)
31 May
2023 536,739 5 92.70 478 88.50
Under the terms of the Albion VCTs Prospectus Top Up Offers
2022/23, the following new Ordinary shares, of nominal value 1
penny each, were allotted during the period to 30 June 2023:
Aggregate
nominal Net
Number of value of Issue price consideration
Date of shares shares (pence per received Opening market price on allotment date (pence per
allotment allotted (GBP'000) share) (GBP'000) share)
31 March
2023 7,134,319 71 96.40 6,706 89.50
14 April
2023 98,702 - 95.40 93 89.50
14 April
2023 26,068 - 95.90 24 89.50
14 April
2023 233,589 2 96.40 220 89.50
7,492,678 7,043
--------- -------------
9. Commitments and contingencies
As at 30 June 2023, the Company had no financial commitments (30
June 2022: GBPnil; 31 December 2022: GBPnil).
There were no contingencies or guarantees of the Company as at
30 June 2023 (30 June 2022: GBPnil; 31 December 2022: GBPnil).
10. Post balance sheet events
There have been no material post balance sheet events since 30
June 2023.
11. Related party transactions
Other than transactions with the Manager as disclosed in note 5,
there are no other related party transactions or balances requiring
disclosure.
12. Going concern
The Board has conducted a detailed assessment of the Company's
ability to meet its liabilities as they fall due. Cash flow
forecasts are updated and discussed quarterly at Board level and
have been stress tested to allow for the forecasted impact of of
the current economic climate and increasingly volatile geopolitical
backdrop. The Board have revisited and updated their assessment of
liquidity risk and concluded that it remains unchanged since the
last Annual Report and Financial Statements. Further details can be
found on page 88 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 June 2023 and 30 June 2022 and is unaudited. The
information for the year ended 31 December 2022, does not
constitute statutory accounts within the terms of section 434 of
the Companies Act 2006 but is derived from the audited statutory
accounts for the financial year, which have been delivered to the
Registrar of Companies. The Auditor reported on those accounts;
their report was unqualified and did not contain a statement under
s498 (2) or (3) of the Companies Act 2006.
14. Publication
This Half-yearly Financial Report is being sent to shareholders
and copies will be made available to the public at the registered
office of the Company, Companies House, the National Storage
Mechanism and also electronically at
https://www.globenewswire.com/Tracker?data=xxDqXwgVWFMVrM-eJ1XEtdibHA1XxbY6_FnGlYia8EVvnzgLrTTqlwj4N_KQrFLYqPNti0oXVC1aEDwRBkMXw2-pW9IaiKIhOyG32RlrylkBZXgrLy8mqTSE-RAbDLqg
www.albion.capital/funds/AADV, where the Report can be accessed
from the 'Financial Reports and Circulars' section.
Attachment
-- AADV Pie Chart 30 June 2023
https://ml-eu.globenewswire.com/Resource/Download/912c9c4a-2670-49c5-9828-23c01fb5154d
(END) Dow Jones Newswires
September 19, 2023 06:00 ET (10:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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