Albion Enterprise VCT PLC: Half-yearly Financial Report
Albion Enterprise VCT PLC
LEI Code 213800OVSRDHRJBMO720
As required by the UK Listing Authority's
Disclosure Guidance and Transparency Rule 4.2, Albion Enterprise
VCT PLC today makes public its information relating to the
Half-yearly Financial Report (which is unaudited) for the six
months to 30 September 2021. This announcement was approved by the
Board of Directors on 30 November 2021.
The full Half-yearly Financial Report (which is
unaudited) for the period to 30 September 2021, will shortly be
sent to shareholders. Copies of the full Half-yearly Financial
Report will be shown via the Albion Capital Group LLP website by
clicking www.albion.capital/funds/AAEV/30Sep21.pdf .
Investment policy
Albion Enterprise VCT PLC (the “Company”) is a
Venture Capital Trust and the investment objective of the Company
is to provide investors with a regular source of income, combined
with the prospect of longer term capital growth.
Investment policy
The Company will invest in a broad portfolio of
higher growth businesses across a variety of sectors of the UK
economy including higher risk technology companies. Allocation of
assets will be determined by the investment opportunities which
become available but efforts will be made to ensure that the
portfolio is diversified both in terms of sector and stage of
maturity of company.
VCT qualifying and non-VCT qualifying
investments
Application of the investment policy is designed
to ensure that the Company continues to qualify and is approved as
a VCT by HM Revenue and Customs (“VCT regulations”). The maximum
amount invested in any one company is limited to any HMRC annual
investment limits. It is intended that normally at least 80 per
cent. of the Company’s funds will be invested in VCT qualifying
investments. The VCT regulations also have an impact on the type of
investments and qualifying sectors in which the Company can make
investment.
Funds held prior to investing in VCT qualifying
assets or for liquidity purposes will be held as cash on deposit,
invested in floating rate notes or similar instruments with banks
or other financial institutions with high credit ratings or
invested in liquid open-ended equity funds providing income and
capital equity exposure (where it is considered economic to do so).
Investment in such open-ended equity funds will not exceed 10 per
cent. of the Company’s assets at the time of investment.
Risk diversification and maximum
exposuresRisk is spread by investing in a number of
different businesses within Venture Capital Trust qualifying
industry sectors using a mixture of securities. The maximum amount
which the Company will invest in a single company is 15 per cent.
of the Company’s assets at cost, thus ensuring a spread of
investment risk. The value of an individual investment may increase
over time as a result of trading progress and it is possible that
it may grow in value to a point where it represents a significantly
higher proportion of total assets prior to a realisation
opportunity being available.
GearingThe Company’s maximum
exposure in relation to gearing is restricted to 10 per cent. of
its adjusted share capital and reserves.
Financial calendar
Record date for second
dividend |
4 February 2022 |
|
|
Date of General Meeting |
Noon on 21 February 2022 |
|
|
Payment date for second
dividend |
28 February 2022 |
|
|
Financial year end |
31 March |
Financial highlights
|
Unaudited six months ended 30 September
2021 |
Unaudited six months ended 30 September 2020 |
Auditedyear ended 31 March 2021 |
|
(pence per
share) |
(pence per share) |
(pence per share) |
|
|
|
|
Opening net asset value |
114.60 |
106.54 |
106.54 |
Capital return |
18.04 |
5.85 |
13.96 |
Revenue loss |
(0.94) |
(0.20) |
(0.51) |
|
|
|
|
Total return |
17.10 |
5.65 |
13.45 |
Dividends paid |
(2.87) |
(2.70) |
(5.44) |
Impact from share capital movements |
0.02 |
0.06 |
0.05 |
|
|
|
|
Net asset value |
128.85 |
109.55 |
114.60 |
Total dividends paid to 30
September 2021 |
59.16 |
Net asset
value on 30 September 2021 |
128.85 |
Total shareholder value to 30
September 2021 |
188.01 |
A more detailed breakdown of the dividends paid
per year can be found at www.albion.capital/funds/AAEV under the
‘Dividend History’ section.
In addition to the dividends summarised
above, the Board has declared a second dividend for the year
ending 31 March
2022,
of 3.22 pence per share
to be paid on 28 February
2022 to shareholders on the
register on 4 February
2022.
Interim management report
Introduction
Albion Enterprise VCT PLC (the “Company”) has
had a strong six months to 30 September 2021, with a total return
of 17.10 pence per share, and the net asset value (“NAV”)
increasing to 128.85 pence per share, representing a 14.9% return
on opening NAV (after adjusting for the dividend paid). Our
portfolio companies continue to show resilience and are
demonstrating the value they provide to their customers.
Valuations and results
The gain on investments for the six months to 30
September 2021 was £15.8 million compared to a gain of £4.5 million
for the same period in the previous year. The successful series D
fundraise in Quantexa and series C fundraise in Oviva have been the
major contributors to the positive return, alongside continuing
growth from Egress Technologies. We have also seen many of our
other portfolio companies performing well. For example, portfolio
company Arecor Therapeutics, listed onto the AIM stock exchange
during the period which led to an increase in value of £0.8
million. Our top 10 portfolio companies, which now account for 54%
of NAV, increased in value by £12.7 million. These excellent
results for the six months have resulted in a performance incentive
fee accrual of £2.1 million, however any performance incentive fee
is calculated on year end results.
There have also been some write-downs in our
portfolio, the largest being Abcodia (£0.4 million) which was
impacted by disappointing clinical trial results during the
period.
Further details of the portfolio of investments
can be found below.
Dividends
In line with our variable dividend policy
targeting a dividend around 5% of NAV per annum, the Company paid a
dividend totalling 2.87 pence per share during the period to 30
September 2021 (30 September 2020: 2.70 pence per share). The
Company will pay a second dividend for the financial year ending 31
March 2022 of 3.22 pence per share on 28 February 2022 to
shareholders on the register on 4 February 2022, being 2.5% of the
latest reported NAV.
This will bring the total dividends paid for the
year ending 31 March 2022 to 6.09 pence per share, which equates to
a 5.3% yield on the opening NAV of 114.60 pence per share.
Investment activity
During the period the Company has invested £5.2
million into new and existing portfolio companies, with new
investments comprising:
- £0.8 million
into Gravitee TopCo (trading as Gravitee.io), an application
programming interface (API) management platform;
- £0.6 million
into NuvoAir, a provider of digital therapeutics and decentralised
clinical trials for respiratory conditions;
- £0.3 million
into Brytlyt, which uses patented software and AI, combined with
the superior computation power of graphics processing units (GPUs),
to derive insights thousands of times faster than legacy systems;
and
- £0.3 million
into Accelex Technologies, a data extraction and analytics
technology for private capital markets.
A further £3.2 million was invested in
supporting our existing portfolio companies, including £1.4 million
into Oviva, as part of the Series C fundraise, and £0.5 million
into uMotif, to support the business as it continues to develop its
electronic patient report platform for clinical trials.
Investment portfolio by
sector
The pie chart at the end of this announcement
shows the different sectors in which the Company’s assets, at
carrying value, were invested on 30 September 2021.
Cancellation of share premium and
capital redemption reserve
Given the current level of distributable
reserves and the Board’s dividend policy, by way of a General
Meeting, the Board is proposing a special resolution to increase
the Company’s distributable reserves through a reduction of the
Company’s share premium account and capital redemption reserve,
subject to shareholder approval and confirmation by the Court. This
procedure is relatively common amongst investment companies, and
the proposed resolution would create additional distributable
reserves of approximately £54 million.
It is the Board’s policy to pay regular
dividends to shareholders as the Directors believe that this is a
key source of shareholder value. The Company also has a policy of
buying back its own shares for cancellation or for holding as
treasury shares, when such purposes are considered to be to the
advantage of the Company and shareholders as a whole. The
additional distributable reserves will facilitate those
objectives.
The General Meeting will be held at noon on 21
February 2022 at the Company’s registered office, 1 Benjamin
Street, London, EC1M 5QL. The General Meeting will be live streamed
for shareholders and registration details will be available at
www.albion.capital/funds/AAEV prior to the Meeting.
The Board has carefully considered the business
to be approved at the General Meeting and recommends shareholders
to vote in favour of the resolution which will be proposed.
Shareholders can submit their questions to the Board in advance of
the General Meeting up until noon on 17 February 2022 by emailing
AAEVchair@albion.capital.
Further details of the General Meeting can be
found in the Circular accompanying this Half-yearly Financial
Report.
Board
composition
The Dowager Lady Balfour of Burleigh retired
from the board on 11 August 2021. The Board thanks her for her wise
counsel and will miss her invaluable mix of skills over many years.
It was a pleasure to have worked with her. On 1 September 2021,
Pippa Latham joined the Board. Pippa brings extensive experience
across the financial sector as well as Board membership of a
variety of successful technology and other commercial
organisations. She is a Cambridge graduate, holds an MBA from
INSEAD and is both a qualified accountant and a member of the
Institute of Chartered Secretaries and Administrators. The Board
believes that Pippa will add considerable value during her
tenure.
Share buy-backs
It remains the Board’s policy to buy-back shares
in the market, subject to the overall constraint that such
purchases are in the Company’s interest. This includes the
maintenance of sufficient cash resources for investment in new and
existing portfolio companies and the continued payment of dividends
to shareholders.
It is the Board’s intention that such buy-backs
should be at around a 5% discount to net asset value, in so far as
market conditions and liquidity permit.
Transactions with the
Manager
Details of transactions with the Manager for the
reporting period can be found in note 5. Details of related party
transactions can be found in note 11.
Principal risks and
uncertainties
The longer term implications of the Covid-19
crisis is the key risk facing the Company, including its impact on
the UK and Global economies. The increasing maturity and success of
some of our portfolio companies has resulted in a high
concentration in our top 10, which may result in further volatility
in the future.
In accordance with DTR 4.2.7, the Board confirms
that the principal risks and uncertainties facing the Company have
not materially changed from those identified in the Annual Report
and Financial Statements for the year ended 31 March 2021.The
occurrence of the Covid-19 pandemic has created heightened
uncertainty, but has not changed the nature of the principal risks.
The Board considers that the present processes for mitigating those
risks remain appropriate.
The principal risks faced by the Company
are:
• Investment,
performance and valuation risk;
• VCT approval
risk;
• Regulatory and
compliance risk;
• Operational and
internal control risk;
• Economic,
political and social risk;
• Emerging
risks;
• Market value of
Ordinary shares; and
• Reputational
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 2021 on pages 18 to 20,
copies of which are available on the Company’s webpage on the
Manager’s website at www.albion.capital/funds/AAEV under the
‘Financial Reports and Circulars’ section.
Albion VCTs Top Up Offers
Your Board, in conjunction with the boards of
the other five VCTs managed by Albion Capital Group LLP, have
announced to the market the intention of the VCTs to launch
prospectus top up offers of new ordinary shares for subscription in
the 2021/2022 and 2022/2023 tax years. The prospectus is expected
to be published in early January 2022, with more information
available at www.albion.capital.
The proceeds will be used to provide support to
our existing portfolio companies and to enable us to take advantage
of new and exciting investment opportunities as they arise, four of
which are detailed above.
To ensure efficient Shareholder communication
the Board is actively encouraging Shareholders who are
currently receiving hard copy information to change their
preferences to electronic communications. There are many
reasons why we think this is the right thing to do including being
more environmentally friendly, less human contact, and speed
including the immediacy of getting information to you regarding the
Company and new Offers.
Shareholders can sign up for e-Comms by going
to: www.investorcentre.co.uk/ecomms.
Prospects
The Board is encouraged by the performance of
the portfolio as a whole, and the pipeline of new and follow on
investments continues to remain strong, demonstrated by the £5.2m
invested in 10 investments in the past six months. The Company has
seen £9.2 million of gains in its top three portfolio companies in
addition to £6.5 million of gains across the rest of the portfolio.
We therefore believe that the Company’s portfolio is suitably
balanced and continues to have the potential to deliver attractive
returns to shareholders over the long term.
Maxwell PackeChairman30
November 2021
Responsibility statement
The Directors, Maxwell Packe, Christopher
Burrows, Rhodri Whitlock, Pippa Latham and Patrick Reeve, are
responsible for preparing the Half-yearly Financial Report. In
preparing these condensed Financial Statements for the period to 30
September 2021 we, the Directors of the Company, confirm that to
the best of our knowledge:
(a) the
condensed set of Financial Statements, which has been prepared in
accordance with Financial Reporting Standard 104 “Interim Financial
Reporting”, give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company as required
by DTR
4.2.4R; (b) the
Interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the
first six months and description of principal risks and
uncertainties for the remaining six months of the year);
and (c) the
Interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties’ transactions
and changes therein). This Half-yearly Financial Report has not
been audited or reviewed by the Auditor.
For and on behalf of the Board
Maxwell Packe
Chairman30 November 2021
Portfolio of investments
|
|
On 30 September
2021 |
|
|
Fixed asset investments |
% voting
rights |
Cost£’000 |
Cumulative movementin
value£’000 |
Value£’000 |
|
Change in value for the
period*£’000 |
Quantexa Limited |
2.5 |
2,108 |
12,422 |
14,530 |
|
7,684 |
Egress Software Technologies Limited |
9.9 |
3,365 |
8,596 |
11,961 |
|
1,007 |
Proveca Limited |
9.6 |
1,512 |
4,648 |
6,160 |
|
546 |
Oviva AG |
2.8 |
2,601 |
2,618 |
5,219 |
|
2,320 |
Radnor House School (TopCo) Limited |
9.4 |
1,729 |
1,877 |
3,606 |
|
626 |
The Evewell Group Limited |
6.1 |
1,477 |
957 |
2,434 |
|
(25) |
Phrasee Limited |
3.6 |
822 |
1,320 |
2,142 |
|
- |
Regenerco Renewable Energy Limited |
12.5 |
1,261 |
776 |
2,037 |
|
4 |
Black Swan Data Limited |
5.0 |
1,445 |
346 |
1,791 |
|
488 |
Healios Limited |
4.0 |
1,134 |
522 |
1,656 |
|
- |
The Street by Street Solar Programme Limited |
8.6 |
891 |
685 |
1,576 |
|
16 |
Threadneedle Software Holdings Limited (T/A Solidatus) |
2.2 |
1,360 |
- |
1,360 |
|
- |
Arecor Therapeutics PLC (previously Arecor Limited) |
1.1 |
400 |
929 |
1,329 |
|
756 |
Alto Prodotto Wind Limited |
11.1 |
814 |
463 |
1,277 |
|
(32) |
MPP Global Solutions Limited |
2.9 |
950 |
311 |
1,261 |
|
311 |
Panaseer Limited |
2.3 |
816 |
388 |
1,204 |
|
1 |
Greenenerco Limited |
28.6 |
739 |
453 |
1,192 |
|
(28) |
Elliptic Enterprises Limited |
1.0 |
792 |
398 |
1,190 |
|
398 |
uMotif Limited |
3.8 |
1,109 |
60 |
1,169 |
|
- |
Credit Kudos Limited |
2.1 |
454 |
696 |
1,150 |
|
696 |
Aridhia Informatics Limited |
6.4 |
1,244 |
(109) |
1,135 |
|
223 |
Cantab Research Limited (T/A Speechmatics) |
1.7 |
696 |
344 |
1,040 |
|
344 |
Convertr Media Limited |
6.2 |
992 |
38 |
1,030 |
|
5 |
Oxsensis Limited |
4.3 |
1,011 |
(8) |
1,003 |
|
- |
MyMeds&Me Limited |
7.6 |
720 |
216 |
936 |
|
13 |
Beddlestead Limited |
8.1 |
966 |
(69) |
897 |
|
241 |
Innovation Broking Group Limited |
8.4 |
84 |
760 |
844 |
|
266 |
Koru Kids Limited |
2.5 |
541 |
302 |
843 |
|
245 |
Cisiv Limited |
8.8 |
799 |
(32) |
767 |
|
- |
DySIS Medical Limited |
3.8 |
2,742 |
(1,978) |
764 |
|
12 |
Gravitee TopCo Limited (T/A Gravitee.io) |
3.5 |
763 |
- |
763 |
|
- |
Concirrus Limited |
1.5 |
755 |
- |
755 |
|
- |
InCrowd Sports Limited |
3.9 |
499 |
184 |
683 |
|
13 |
NuvoAir Holdings Inc. |
2.1 |
649 |
- |
649 |
|
- |
The Voucher Market Ltd (T/A WeGift) |
1.4 |
564 |
- |
564 |
|
- |
Locum's Nest Limited |
4.8 |
500 |
30 |
530 |
|
61 |
Limitless Technology Limited |
1.8 |
471 |
47 |
518 |
|
- |
Imandra Inc. |
1.3 |
173 |
261 |
434 |
|
261 |
Zift Channel Solutions Inc. |
2.0 |
1,053 |
(628) |
425 |
|
181 |
Seldon Technologies Limited |
1.9 |
371 |
- |
371 |
|
- |
Brytlyt Limited |
1.8 |
310 |
- |
310 |
|
- |
Accelex Technology Limited |
2.9 |
265 |
- |
265 |
|
- |
AVESI Limited |
5.5 |
179 |
61 |
240 |
|
(1) |
TransFICC Limited |
1.6 |
234 |
- |
234 |
|
- |
memsstar Limited |
8.8 |
192 |
42 |
234 |
|
(135) |
Xperiome Limited (previously Raremark) |
3.4 |
448 |
(312) |
136 |
|
(227) |
uMedeor Limited (T/A uMed) |
1.3 |
134 |
- |
134 |
|
- |
MHS 1 Limited |
1.2 |
83 |
(15) |
68 |
|
(5) |
Symetrica Limited |
0.2 |
55 |
(11) |
44 |
|
- |
Sandcroft Avenue Limited (T/A Hussle) |
6.8 |
1,370 |
(1,354) |
16 |
|
(125) |
Avora Limited |
2.4 |
430 |
(420) |
10 |
|
(152) |
Forward Clinical Limited (T/A Pando) |
1.8 |
219 |
(212) |
7 |
|
(1) |
Abcodia Limited |
5.6 |
987 |
(983) |
4 |
|
(368) |
Mirada Medical Limited |
14.2 |
1,487 |
(1,487) |
- |
|
- |
Total fixed asset investments |
|
47,765 |
33,132 |
80,897 |
|
15,619 |
* as adjusted for additions and disposals during the period;
including realised gains/(losses).
Investment realisations in the period to 30 September
2021 |
Cost£’000 |
Openingcarrying value£’000 |
Disposalproceeds£’000 |
Totalrealised gain£’000 |
Gain
onopening value£’000 |
Loan
stock repayments and other: |
|
|
|
|
|
Greenenerco Limited |
29 |
42 |
42 |
13 |
- |
Alto
Prodotto Wind Limited |
27 |
41 |
41 |
14 |
- |
Escrow
adjustments* |
- |
- |
131 |
131 |
131 |
Total fixed asset realisations |
56 |
83 |
214 |
158 |
131 |
* These comprise fair value movements on
deferred consideration on previously disposed investments, release
of the G.Network Communications discount which is treated as a
financing transaction, and expenses which are incidental to the
purchase or disposal of an investment.
Total change in value of investments for the
period |
|
15,619 |
Movement
in loan stock accrued interest |
|
|
|
|
|
2 |
Unrealised gains on fixed asset investments |
|
|
|
|
|
15,621 |
Realised
gains on fixed asset investments |
|
|
|
|
|
131 |
Total gains on investments as per Income
statement |
|
|
|
|
15,752 |
Condensed income statement
|
|
Unaudited six months ended
30 September 2021 |
Unaudited six months ended 30 September 2020 |
Audited year ended 31 March 2021 |
|
Note |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
|
|
|
|
|
|
|
|
|
|
|
Gains on investments |
3 |
- |
15,752 |
15,752 |
- |
4,501 |
4,501 |
- |
10,892 |
10,892 |
|
|
|
|
|
|
|
|
|
|
|
Investment income |
4 |
297 |
- |
297 |
266 |
- |
266 |
543 |
- |
543 |
|
|
|
|
|
|
|
|
|
|
|
Investment Manager’s fees |
5 |
(755) |
(2,266) |
(3,021) |
(171) |
(513) |
(684) |
(438) |
(1,314) |
(1,752) |
|
|
|
|
|
|
|
|
|
|
|
Other expenses |
|
(250) |
- |
(250) |
(231) |
- |
(231) |
(454) |
- |
(454) |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/return on ordinary activities
before taxation |
|
(708) |
13,486 |
12,778 |
(136) |
3,988 |
3,852 |
(349) |
9,578 |
9,229 |
|
|
|
|
|
|
|
|
|
|
|
Tax on ordinary activities |
|
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/return and total comprehensive
income attributable to shareholders |
|
(708) |
13,486 |
12,778 |
(136) |
3,988 |
3,852 |
(349) |
9,578 |
9,229 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (loss)/return
per share (pence)* |
7 |
(0.94) |
18.04 |
17.10 |
(0.20) |
5.85 |
5.65 |
(0.51) |
13.96 |
13.45 |
* 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 2020 and the audited statutory accounts for the year
ended 31 March 2021.
The total column of this Condensed income
statement represents the profit and loss account of the Company.
The supplementary revenue and capital columns have been prepared in
accordance with The Association of Investment Companies’ Statement
of Recommended Practice.
Condensed balance sheet
|
Note |
Unaudited 30 September
2021£’000 |
Unaudited 30 September 2020£’000 |
Audited 31 March 2021£’000 |
|
|
|
|
|
Fixed asset investments |
|
80,897 |
55,871 |
60,615 |
|
|
|
|
|
Current assets |
|
|
|
|
Current asset investments |
|
- |
3,602 |
- |
Trade and other receivables |
|
2,304 |
178 |
1,772 |
Cash and cash equivalents |
|
15,758 |
15,542 |
24,429 |
|
|
18,062 |
19,322 |
26,201 |
|
|
|
|
|
Total assets |
|
98,959 |
75,193 |
86,816 |
|
|
|
|
|
Payables |
|
|
|
|
Trade and other payables less than one year |
|
(2,911) |
(913) |
(1,418) |
Total assets less current
liabilities |
|
96,048 |
74,280 |
85,398 |
|
|
|
|
|
Equity attributable to equity holders |
|
|
|
|
Called-up share capital |
8 |
859 |
775 |
852 |
Share premium |
|
54,009 |
44,679 |
53,258 |
Capital redemption reserve |
|
104 |
104 |
104 |
Unrealised capital reserve |
|
33,133 |
13,075 |
17,538 |
Realised capital reserve |
|
12,619 |
13,601 |
14,728 |
Other distributable reserve |
|
(4,676) |
2,046 |
(1,082) |
|
|
|
|
|
Total equity shareholders’ funds |
|
96,048 |
74,280 |
85,398 |
|
|
|
|
|
Basic and diluted net asset value per share
(pence)* |
|
128.85 |
109.55 |
114.60 |
* 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 2020 and the audited statutory accounts for the year
ended 31 March 2021.
These Financial Statements were approved by the
Board of Directors, and authorised for issue on 30 November 2021
and were signed on its behalf by
Maxwell Packe
Chairman
Company number: 05990732
Condensed statement of changes in
equity
|
Called-upshare capital£’000 |
Sharepremium£’000 |
Capital redemption
reserve£’000 |
Unrealisedcapital reserve
£’000 |
Realisedcapital reserve*£’000 |
Other
distributablereserve*£’000 |
Total£’000 |
As at 1 April 2021 |
852 |
53,258 |
104 |
17,538 |
14,728 |
(1,082) |
85,398 |
Return/(loss) and total comprehensive income for the period |
- |
- |
- |
15,621 |
(2,135) |
(708) |
12,778 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(26) |
26 |
- |
- |
Issue of equity |
7 |
778 |
- |
- |
- |
- |
785 |
Cost of issue of equity |
- |
(27) |
- |
- |
- |
- |
(27) |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(747) |
(747) |
Dividends paid |
- |
- |
- |
- |
- |
(2,139) |
(2,139) |
As at 30 September 2021 |
859 |
54,009 |
104 |
33,133 |
12,619 |
(4,676) |
96,048 |
|
|
|
|
|
|
|
|
As at 1 April 2020 |
770 |
44,183 |
104 |
8,636 |
14,052 |
4,808 |
72,553 |
Return/(loss) and total comprehensive income for the period |
- |
- |
- |
4,464 |
(476) |
(136) |
3,852 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(25) |
25 |
- |
- |
Issue of equity |
5 |
502 |
- |
- |
- |
- |
507 |
Cost of issue of equity |
- |
(6) |
- |
- |
- |
- |
(6) |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(790) |
(790) |
Dividends paid |
- |
- |
- |
- |
- |
(1,836) |
(1,836) |
As at 30 September 2020 |
775 |
44,679 |
104 |
13,075 |
13,601 |
2,046 |
74,280 |
|
|
|
|
|
|
|
|
As at 1 April 2020 |
770 |
44,183 |
104 |
8,636 |
14,052 |
4,808 |
72,553 |
Return/(loss) and total comprehensive income for the year |
- |
- |
- |
8,836 |
742 |
(349) |
9,229 |
Transfer of previously unrealised losses on disposal of
investments |
- |
- |
- |
66 |
(66) |
- |
- |
Issue of equity |
82 |
9,277 |
- |
- |
- |
- |
9,359 |
Cost of issue of equity |
- |
(202) |
- |
- |
- |
- |
(202) |
Purchase of own shares for treasury |
- |
- |
- |
- |
- |
(1,853) |
(1,853) |
Dividends paid |
- |
- |
- |
- |
- |
(3,688) |
(3,688) |
As at 31 March 2021 |
852 |
53,258 |
104 |
17,538 |
14,728 |
(1,082) |
85,398 |
* These reserves amount to £7,943,000 (30
September 2020: £15,647,000; 31 March 2021: £13,646,000) which is
considered distributable.
Condensed statement of
cash flows
|
Unaudited six months ended
30 September
2021£’000 |
Unaudited six months ended 30 September 2020£’000 |
Audited year ended 31 March 2021£’000 |
Cash flow from operating activities |
|
|
|
Investment income received |
298 |
211 |
434 |
Dividend income received |
- |
42 |
94 |
Deposit interest received |
1 |
16 |
17 |
Investment Manager's fees paid |
(1,224) |
(710) |
(1,403) |
Other cash payments |
(271) |
(268) |
(465) |
Net cash flow from operating
activities |
(1,196) |
(709) |
(1,323) |
|
|
|
|
Cash flow from investing activities |
|
|
|
Disposal of current asset investments |
- |
- |
3,691 |
Purchase of fixed asset investments |
(5,173) |
(3,745) |
(7,324) |
Disposal of fixed asset investments |
112 |
139 |
3,683 |
Net cash flow from investing
activities |
(5,061) |
(3,606) |
50 |
|
|
|
|
Cash flow from financing activities |
|
|
|
Issue of share capital |
430 |
205 |
8,568 |
Cost of issue of equity |
(16) |
(17) |
(17) |
Dividends paid* |
(1,792) |
(1,535) |
(3,094) |
Purchase of own shares (including costs) |
(1,036) |
(306) |
(1,265) |
Net cash flow from financing activities |
(2,414) |
(1,653) |
4,192 |
|
|
|
|
(Decrease)/increase
in cash and cash equivalents |
(8,671) |
(5,968) |
2,919 |
Cash and cash equivalents at start of the period |
24,429 |
21,510 |
21,510 |
Cash and cash equivalents at end of the
period |
15,758 |
15,542 |
24,429 |
*The dividends paid shown in the cash flow are
different to the dividends disclosed in note 6 as a result of the
non-cash effect of the Dividend Reinvestment Scheme.Notes
to the condensed Financial Statements
1. Accounting
convention
The Financial Statements have been prepared in
accordance with applicable United Kingdom law and accounting
standards, including Financial Reporting Standard 102 (“FRS 102”),
and with the Statement of Recommended Practice “Financial
Statements of Investment Trust Companies and Venture Capital
Trusts” (“SORP”) issued by The Association of Investment Companies
(“AIC”). The Financial Statements have been prepared on a going
concern basis.
The preparation of the Financial Statements
requires management to make judgements and estimates that affect
the application of policies and reported amounts of assets,
liabilities, income and expenses. The most critical estimates and
judgements relate to the determination of carrying value of
investments at Fair Value Through Profit and Loss (“FVTPL”) in
accordance with FRS 102 sections 11 and 12. The Company values
investments by following the International Private Equity and
Venture Capital Valuation (“IPEV”) Guidelines as updated in 2018
and further detail on the valuation techniques used are outlined in
note 2 below.
Company information can be found on page 2 of
the full Half-yearly Financial Report.
2. Accounting
policiesFixed and
current asset investmentsThe
Company’s business is investing in financial assets with a view to
profiting from their total return in the form of income and capital
growth. This portfolio of financial assets is managed and its
performance evaluated on a fair value basis, in accordance with a
documented investment policy, and information about the portfolio
is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102,
those undertakings in which the Company holds more than 20 per
cent. of the equity as part of an investment portfolio are not
accounted for using the equity method. In these circumstances the
investment is measured at FVTPL.
Upon initial recognition (using trade date
accounting) investments, including loan stock, are classified by
the Company as FVTPL and are included at their initial fair value,
which is cost (excluding expenses incidental to the acquisition
which are written off to the Income statement).
Subsequently, the investments are valued at
‘fair value’, which is measured as follows:
- Investments listed on recognised
exchanges are valued at their bid prices at the end of the
accounting period or otherwise at fair value based on published
price quotations.
- Unquoted investments, where there
is not an active market, are valued using an appropriate valuation
technique in accordance with the IPEV Guidelines. Indicators of
fair value are derived using established methodologies including
earnings multiples, revenue multiples, the level of third party
offers received, cost or price of recent investment rounds, net
assets and industry valuation benchmarks. Where price of recent
investment is used as a starting point for estimating fair value at
subsequent measurement dates, this has been benchmarked using an
appropriate valuation technique permitted by the IPEV
guidelines.
- In situations where cost or price
of recent investment is used, consideration is given to the
circumstances of the portfolio company since that date in
determining fair value. This includes consideration of whether
there is any evidence of deterioration or strong definable evidence
of an increase in value. In the absence of these indicators, the
investment in question is valued at the amount reported at the
previous reporting date. Examples of events or changes that could
indicate a diminution include:
- the performance and/or prospects of
the underlying business are significantly below the expectations on
which the investment was based;
- a significant adverse change either
in the portfolio company’s business or in the technological,
market, economic, legal or regulatory environment in which the
business operates; or
- market conditions have
deteriorated, which may be indicated by a fall in the share prices
of quoted businesses operating in the same or related sectors.
Investments are recognised as financial assets
on legal completion of the investment contract and are
de-recognised on legal completion of the sale of an investment.
Dividend income is not recognised as part of the
fair value movement of an investment, but is recognised separately
as investment income through the other distributable reserve when a
share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more than one year),
payables and cash are carried at amortised cost, in accordance with
FRS 102. Debtors due after more than one year meet the definition
of a financing transaction held at amortised cost, and interest
will be recognised through capital over the credit period using the
effective interest method. There are no financial liabilities other
than payables.
Investment incomeEquity
incomeDividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock incomeFixed returns on
non-equity shares and debt securities are recognised when the
Company’s right to receive payment and expect settlement is
established. Where interest is rolled up and/or payable at
redemption then it is recognised as income unless there is
reasonable doubt as to its receipt.
Bank interest incomeInterest income is
recognised on an accruals basis using the rate of interest agreed
with the bank.
Investment management fee, performance
incentive fee and expensesAll expenses have been accounted
for on an accruals basis. Expenses are charged through the other
distributable reserve except the following which are charged
through the realised capital reserve:
- 75 per cent. of management fees and
performance incentive fees, if any, are allocated to the realised
capital reserve. This is in line with the Board’s expectation that
over the long term 75 per cent. of the Company’s investment returns
will be in the form of capital gains; and
- expenses which are incidental to
the purchase or disposal of an investment are charged through the
realised capital reserve.
TaxationTaxation is applied on
a current basis in accordance with FRS 102. Current tax is tax
payable/(refundable) in respect of the taxable profit/(tax loss)
for the current period or past reporting periods using the tax
rates and laws that have been enacted or substantively enacted at
the financial reporting date. Taxation associated with capital
expenses is applied in accordance with the SORP.
Deferred tax is provided in full on all timing
differences at the reporting date. Timing differences are
differences between taxable profits and total comprehensive income
as stated in the Financial Statements that arise from the inclusion
of income and expenses in tax assessments in periods different from
those in which they are recognised in the Financial Statements. As
a VCT the Company has an exemption from tax on capital gains. The
Company intends to continue meeting the conditions required to
obtain approval as a VCT in the foreseeable future. The Company
therefore, should have no material deferred tax timing differences
arising in respect of the revaluation or disposal of investments
and the Company has not provided for any deferred tax.
Share capital and
reservesCalled-up share capitalCalled-up share capital
accounts for the nominal value of the Company’s shares.
Share premiumThis reserve accounts for the
difference between the price paid for the Company’s shares and the
nominal value of those shares, less issue costs and transfers to
the other distributable reserve.
Capital redemption reserveThis reserve accounts
for amounts by which the issued share capital is diminished through
the repurchase and cancellation of the Company’s own shares.
Unrealised capital reserveIncreases and
decreases in the valuation of investments held at the year end
against cost are included in this reserve.
Realised capital reserveThe following are
disclosed in this reserve:
- gains and losses compared to cost
on the realisation of investments, or permanent diminutions in
value;
- expenses, together with the related
taxation effect, charged in accordance with the above policies;
and
- dividends paid to equity holders
where paid out by capital.
Other distributable reserveThe special reserve,
treasury share reserve and the revenue reserve were combined in
2013 to form a single reserve named other distributable
reserve.
This reserve accounts for movements from the
revenue column of the Income statement, the payment of dividends,
the buy-back of shares and other non-capital realised
movements.
DividendsDividends by the
Company are accounted for in the period in which the dividend is
paid or approved at the Annual General Meeting.
Segmental reportingThe
Directors are of the opinion that the Company is engaged in a
single operating segment of business, being investment in smaller
companies principally based in the UK.
3. Gains
on investments
|
Unaudited six months ended
30 September
2021£’000 |
Unaudited six months ended 30 September 2020£’000 |
Auditedyear ended 31 March 2021£’000 |
Unrealised gains on fixed asset investments |
15,621 |
4,363 |
8,836 |
Unrealised gains on current asset
investments |
- |
101 |
- |
Realised gains on fixed asset
investments |
131 |
37 |
1,866 |
Realised gains on current
asset investments |
- |
- |
190 |
|
15,752 |
4,501 |
10,892 |
4. Investment
income
|
Unaudited six months ended
30 September
2021£’000 |
Unaudited six months ended 30 September 2020£’000 |
Auditedyear ended 31 March 2021£’000 |
Loan stock interest |
296 |
209 |
434 |
Dividend income |
- |
42 |
94 |
Bank deposit interest |
1 |
15 |
15 |
|
297 |
266 |
543 |
5. Investment
Manager’s
fees
|
Unaudited six months ended
30 September
2021£’000 |
Unaudited six months ended 30 September 2020£’000 |
Auditedyear ended 31 March 2021£’000 |
Investment management fee charged
to revenue |
227 |
171 |
366 |
Investment management fee charged
to capital |
680 |
513 |
1,098 |
Performance incentive fee charged
to revenue |
528 |
- |
72 |
Performance incentive fee charged
to capital |
1,586 |
- |
216 |
|
3,021 |
684 |
1,752 |
Further details of the Management agreement
under which the investment management fee and performance incentive
fee are paid is given in the Strategic report on page 14 of the
Annual Report and Financial Statements for the year ended 31 March
2021.
During the period, services of a total value of
£998,000 (30 September 2020: £757,000; 31 March 2021: £1,905,000)
were purchased by the Company from Albion Capital Group LLP; this
includes £907,000 (30 September 2020: £684,000; 31 March 2021:
£1,464,000) of management fee and £91,000 (30 September 2020:
£73,000; 31 March 2021: £153,000) of administration fee. At the
financial period end, the amount due to Albion Capital Group LLP in
respect of these services disclosed within payables was £428,000
(30 September 2020: £359,000; 31 March 2021: £453,000). For the
period to 30 September 2021, a performance incentive fee of
£2,114,000 has been accrued, however any performance incentive fee
is calculated on year end results and payable in line with the
Management agreement (30 September 2020: £nil; 31 March 2021:
£288,000).
During the period, the Company was not charged
by Albion Capital Group LLP in respect of Patrick Reeve’s services
as a Director (30 September 2020: £nil; 31 March 2021: £nil).
Albion Capital Group LLP, its partners and staff
(including Patrick Reeve) hold a total of 543,037 shares in the
Company on 30 September 2021.
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 2021, fees
of £108,000 attributable to the investments of the Company were
received pursuant to these arrangements (30 September 2020:
£89,000; 31 March 2021: £205,000).
6. Dividends
|
Unauditedsix months
ended30 September
2021£’000 |
Unauditedsix months ended30 September 2020£’000 |
Auditedyear ended31 March 2021£’000 |
First dividend of 2.87p per
share paid on 31 August 2021 (28 August 2020: 2.70p per share) |
2,139 |
1,836 |
1,836 |
Second dividend of 2.74p per
share paid on 26 February 2021 |
- |
- |
1,854 |
Unclaimed dividends |
- |
- |
(2) |
|
2,139 |
1,836 |
3,688 |
In addition to the dividends summarised above,
the Board has declared a second dividend for the year ending 31
March 2022 of 3.22 pence per share which will be paid on 28
February 2022 to shareholders on the register on 4 February 2022.
This is expected to amount to approximately £2,400,000.
7. Basic
and diluted
(loss)/return per
share
|
Unauditedsix months ended
30 September 2021 |
Unauditedsix months ended 30 September 2020 |
Auditedyear ended 31 March 2021 |
|
Revenue |
Capital |
Revenue |
Capital |
Revenue |
Capital |
(Loss)/return attributable to equity shares (£’000) |
(708) |
13,486 |
(136) |
3,988 |
(349) |
9,578 |
Weighted average shares in issue |
74,745,677 |
68,156,133 |
68,620,876 |
(Loss)/return per Ordinary share (pence) |
(0.94) |
18.04 |
(0.20) |
5.85 |
(0.51) |
13.96 |
The weighted average number of shares is
calculated after adjusting for treasury shares of 11,346,766 (30
September 2020: 9,717,736; 31 March 2021:
10,713,420).
There are no convertible instruments,
derivatives or contingent share agreements in issue for the
Company, therefore no dilution affecting the return per share. The
basic return per share is therefore the same as the diluted return
per share.
8. Called-up
share capital
Allotted, called-up and
fully paid shares of 1 penny each |
Unaudited30 September
2021 |
Unaudited30 September 2020 |
Audited31 March 2021 |
Number of shares |
85,891,086 |
77,523,553 |
85,232,100 |
Nominal value of allotted
shares (£’000) |
859 |
775 |
852 |
Voting rights (number of
shares net of treasury shares) |
74,544,320 |
67,805,817 |
74,518,680 |
|
|
|
|
During the period to 30 September 2021, the
Company purchased 633,346 shares (30 September 2020: 772,422; 31
March 2021: 1,768,106) to be held in treasury at a nominal value of
£6,333 and at a cost of £747,000. The total number of shares held
in treasury on 30 September 2021 was 11,346,766 (30 September 2020:
9,717,736; 31 March 2021: 10,713,420) representing 13.2% of the
shares in issue on 30 September 2021.
Under the terms of the Dividend Reinvestment
Scheme Circular (dated 26 November 2009), the following new shares
of nominal value 1 penny each were allotted during the period to 30
September 2021:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares
£’000 |
Issue price (pence per
share) |
Net invested £’000 |
Opening market price on allotment date
(pence per share) |
31 August 2021 |
275,632 |
3 |
125.06 |
327 |
119.50 |
|
|
|
|
|
|
Under the terms of the Albion VCTs Prospectus
Top Up Offers 2020/21, the following new shares of nominal value 1
penny each were allotted during the period to 30 September
2021:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares
£’000 |
Issue price (pence per
share) |
Net consideration received
£’000 |
Opening market price on allotment date
(pence per share) |
9 April 2021 |
144,118 |
1 |
114.00 |
162 |
106.50 |
9 April 2021 |
9,249 |
- |
114.60 |
10 |
106.50 |
9 April 2021 |
229,987 |
2 |
115.20 |
258 |
106.50 |
|
383,354 |
|
|
430 |
|
9. Commitments and
contingenciesOn 30 September 2021, the Company had no
financial commitments in respect of investments (30 September 2020:
£nil; 31 March 2021: £nil).
There were no contingencies or guarantees of the
Company on 30 September 2021 (30 September 2020: £nil; 31 March
2021: £nil).
10. Post
balance sheet eventsThe following are the material post
balance sheet events since 30 September 2021:
- Proceeds of £1,261,000 received
from the sale of MPP Global Solutions Limited on a cost of
£950,000; and
- Investment of £426,000 in an
existing portfolio company, Elliptic Enterprises Limited, a
provider of Anti Money Laundering services to digital asset
institutions.
11. Related
party transactionsOther than transactions with the Manager
as disclosed in note 5, there are no other related party
transactions or balances requiring disclosure.
12. Going concernThe Board has
conducted a detailed assessment of the Company’s ability to meet
its liabilities as they fall due. Cash flow forecasts are updated
and discussed quarterly at Board level and have been stress tested
to allow for the forecasted impact of Coronavirus (Covid-19). 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 67 of those accounts.
The portfolio of investments is diversified in
terms of sector and the major cash outflows of the Company (namely
investments, dividends and share buy-backs) are within the
Company’s control. Accordingly, after making diligent enquiries,
the Directors have a reasonable expectation that the Company has
adequate cash and liquid resources to continue in operational
existence for the foreseeable future. For this reason, the
Directors have adopted the going concern basis in preparing this
Half-yearly Financial Report and this is in accordance with the
Guidance on Risk Management, Internal Control and Related Financial
and Business Reporting issued by the Financial Reporting Council in
September 2014, and the subsequent updated Going concern, risk and
viability guidance issued by the FRC due to Covid-19 in 2020.
13.
Other
informationThe information set out in this Half-yearly
Financial Report does not constitute the Company’s statutory
accounts within the terms of section 434 of the Companies Act 2006
for the periods ended 30 September 2021 and 30 September 2020, and
is unaudited. The information for the year ended 31 March 2021 does
not constitute statutory accounts within the terms of section 434
of the Companies Act 2006 but is derived from the statutory
accounts for the financial year, which have been delivered to the
Registrar of Companies. The Auditor reported on those accounts;
their report was unqualified and did not contain statements under
s498 (2) or (3) of the Companies Act 2006.
14. PublicationThis
Half-yearly Financial Report is being sent to shareholders and
copies will be made available to the public at the registered
office of the Company, Companies House, the National Storage
Mechanism and also electronically at www.albion.capital/funds/AAEV,
where the Report can be accessed from the ‘Financial Reports and
Circulars’ section.
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