TIDMAAIG
Albion Income & Growth VCT PLC
As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Income & Growth VCT PLC today makes public its
information relating to the Half-yearly Financial Report (which is
unaudited) for the six months to 31 March 2013. This announcement was
approved by the Board of Directors on 20 May 2013.
The full Half-yearly Financial Report (which is unaudited) for the
period to 31 March 2013, will shortly be sent to shareholders. Copies of
the full Half-yearly Financial Report will be shown via the Albion
Ventures LLP website by clicking
www.albion-ventures.co.uk/ourfunds/AAIG.htm.
Investment objectives
Albion Income & Growth VCT PLC (the "Company") is a Venture Capital
Trust which raised GBP45 million under the Offer for Subscription which
closed in March 2005. The Company has raised a further GBP4.8m under
the Albion VCTs Top Up Offers since January 2011.
The Company aims to provide investors with a regular and predictable
source of income combined with the prospect of long term capital growth.
The Company allows investors the opportunity to participate in a
balanced portfolio of high growth businesses and lower risk, asset-based
companies. It is intended that the Company's investment portfolio will
be split approximately as follows:
-- 45 per cent. to be invested in unquoted higher growth businesses,
including early stage technology;
-- 45 per cent. to be invested in unquoted asset-based businesses in the
leisure sector; and
-- 10 per cent. to be held in floating rate securities, cash deposits
and gilts.
Financial calendar
Record date for second dividend 7 June 2013
Payment date for second dividend 28 June 2013
Financial year end 30 September 2013
Financial highlights (unaudited)
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
(pence per share) (pence per share) (pence per share)
Net asset value per
share 66.60 66.00 66.00
Dividends paid per
share 1.75 1.75 3.50
Revenue return per
share 0.60 0.70 1.30
Capital return per
share 1.60 2.70 3.80
Gain from buy-backs
in the period 0.15 0.15 0.20
Total shareholder net asset value return to 31 March
2013
(pence per share)
Total dividends paid during the period ended 30 September
2005 (i) 0.65
Total dividends paid during the year
ended : 30 September 2006 2.60
30 September 2007 3.45
30 September 2008 3.50
30 September 2009 3.00
30 September 2010 3.00
30 September 2011 3.50
30 September 2012 3.50
Total dividends paid during the six months ended 31
March 2013 1.75
Total dividends paid to 31 March 2013 24.95
Net asset value as at 31 March 2013 66.60
Total shareholder net asset value return to 31 March
2013 91.55
In addition to the dividends summarised above, the Board has declared a
second dividend for the year to 30 September 2013 of 1.75 pence per
share to be paid on 28 June 2013 to shareholders on the register as at 7
June 2013.
Notes
1. Investors subscribing by 31 December 2004 and remaining on the register
on 1 July 2005 were entitled to a dividend of 0.65 pence per share.
Investors subscribing thereafter were not entitled to the first interim
dividend.
1. These figures exclude tax benefits upon subscription of 40 per cent.
income tax relief.
1. All dividends paid by the Company are free of income tax. It is an HM
Revenue & Customs requirement that dividend vouchers indicate the tax
element should dividends have been subject to income tax. Investors
should ignore this figure on their dividend voucher and need not disclose
any income they receive from a VCT on their tax return.
1. The net asset value of the Company is not its share price as quoted on
the official list of the London Stock Exchange. The share price of the
Company can be found in the Investment Companies - VCTs section of the
Financial Times on a daily basis. Investors are reminded that it is
common for shares in VCTs to trade at a discount to their net asset value
partly as a result of the initial tax reliefs which are non-transferable.
Interim management report
Overview
The six months to 31 March 2013 showed a positive total return of 2.20
pence per share, which builds on the growth shown in the previous
financial year.
Investment performance and progress
The period to 31 March 2013 was a relatively quiet one in terms of
investment activity with GBP440,000 being invested in unquoted
companies. Of this, GBP110,000 was invested in a new investee company,
MyMeds&Me, with a similar sum reserved to fund future growth; the
company provides software for large pharmaceutical companies to record
and manage adverse events within their portfolio of drugs.
The Nelson House psychiatric hospital in Gosport was sold during the
period for total proceeds of GBP327,000 (including interest), realising
a return equal to 1.4 times the original investment. In addition growth
was seen by Lowcosttravel Group, with particularly strong performance in
its European businesses; Process Systems Enterprise, whose international
reach, particularly in the oil and gas sector, continues to expand; and
Opta Sports Data, which won an important contract to collect and
distribute sporting and performance data generated by the UK football
leagues. Against this, there was a further provision against Helveta,
following a reduction in funding by developed nations for international
aid projects.
Set out at the bottom of this announcement is the sector diversification
of the portfolio of our investments as at 31 March 2013.
Risks and uncertainties
The outlook for the UK and international economies continues to be the
key risk affecting our Company. Low growth in the UK and recession in
the Eurozone continued to impact a number of markets in which our
portfolio companies operate. Nevertheless, the VCT's emphasis on a
balanced portfolio across asset based and high growth sectors is
designed to provide protection against the vicissitudes of the global
economy.
Investment risk is further mediated by our policy of insuring that
portfolio companies do not normally have external bank borrowings.
Other risks and uncertainties remain unchanged and are as detailed in
note 15.
Share buy-backs and share price discount
It remains the Company'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 resources for
investment in new and existing portfolio companies, and for the
continued payment of dividends to shareholders. It is the Board's
intention for such buy-backs to be in the region of a 5 per cent.
discount to net asset value, so far as market conditions and liquidity
permit.
Albion VCTs Top Up Offers 2012/2013
The third of the top up offers across six of the VCTs managed by Albion
Ventures LLP have so far raised a total of GBP11.2 million, of which
Albion Income & Growth VCT PLC's net share was GBP1.6 million. The
proceeds will be used to provide further resources for both existing
portfolio and for new growth opportunities. The offer for Albion Income
& Growth VCT PLC remains open until 12 June 2013 and a copy of the
Investor Guide and Offers Document can be found at
www.albion-ventures.co.uk/OurFunds/Top_Up.html.
Results and dividends
As at 31 March 2013, the net asset value of the Company was GBP27.7
million compared to GBP27.2 million (after adjusting for the first
dividend paid on 31 January 2013) at 30 September 2012. The revenue
return before taxation was GBP326,000 compared to GBP387,000 for the six
months to 31 March 2012. The Company will pay a second dividend for the
financial year to 30 September 2013 of 1.75 pence per share on 28 June
2013 to shareholders on the register as at 7 June 2013.
Transactions with Manager
Details of the transactions that took place with the Manager in the
period can be found in note 5.
Outlook
It is encouraging to see some further proof of the recovery in the
investment portfolio. Much of this is driven by the fact that a number
of businesses in which the Company has invested operate in sectors where
the market dynamics are showing strong growth despite the broader
background of a low growth global environment. We therefore continue to
remain positive over the Company's prospects for the medium term.
Friedrich Ternofsky
Chairman
20 May 2013
Responsibility statement
The Directors, Friedrich Ternofsky, Robin Archibald, Mary Anne Cordeiro
and Patrick Reeve, are responsible for preparing the Half-yearly
Financial Report. The Directors have chosen to prepare this Half-yearly
Financial Report for the Company in accordance with United Kingdom
Generally Accepted Accounting Practice ("UK GAAP").
In preparing these summarised Financial Statements for the period to 31
March 2013, we the Directors of the Company, confirm that to the best of
our knowledge:
(a) the summarised set of Financial Statements has been prepared in
accordance with the pronouncement on interim reporting issued by the
Accounting Standards Board;
(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);
(c) the summarised set of Financial Statements gives a true and fair
view in accordance with UK GAAP of the assets, liabilities, financial
position and profit and loss of the Company for the six months ended 31
March 2013 and comply with UK GAAP and Companies Act 2006 and;
(d) 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).
The accounting policies applied to the Half-yearly Financial Report have
been consistently applied in current and prior periods and are those
applied in the Annual Report and Financial Statements for the year ended
30 September 2012.
This Half-yearly Financial Report has not been audited or reviewed by
the Auditor.
By order of the Board
Friedrich Ternofsky
Chairman
20 May 2013
Portfolio of investments
The following is a summary of fixed asset investments as at 31 March
2013:
Qualifying Cumulative movement
asset-based % voting rights held by Albion Income & Growth VCT Cost in value Value Change in value for the period*
investments PLC GBP'000 GBP'000 GBP'000 GBP'000
The
Weybridge
Club
Limited 18.5 3,000 (579) 2,421 28
Kensington
Health
Clubs
Limited 12.9 3,044 (1,187) 1,857 (216)
Bravo Inns
II Limited 7.6 1,207 (34) 1,173 7
Tower Bridge
Health
Clubs
Limited 17.2 735 431 1,166 137
The
Charnwood
Pub Company
Limited 10.3 2,546 (1,405) 1,141 (114)
Radnor House
School
(Holdings)
Limited 4.2 734 334 1,068 28
Bravo Inns
Limited 12.7 1,130 (397) 733 17
Orchard
Portman
Hospital
Limited 7.9 520 31 551 62
The Street
by Street
Solar
Programme
Limited 3.6 357 52 409 50
Alto
Prodotto
Wind
Limited 3.0 269 75 344 73
Regenerco
Renewable
Energy
Limited 3.3 312 18 330 16
Hilson Moran
Holdings
Limited 3.5 238 40 278 42
Premier
Leisure
(Suffolk)
Limited 13.6 1,000 (786) 214 (10)
TEG Biogas
(Perth)
Limited 3.0 182 20 202 2
The Dunedin
Pub Company
VCT
Limited 15.4 151 (7) 144 -
AVESI
Limited 3.6 113 - 113 -
Greenenerco
Limited 1.7 60 - 60 -
Total
qualifying
asset-based
investments 15,598 (3,394) 12,204 122
Cumulative movement
Qualifying high % voting rights held by Albion Income & Growth VCT Cost in value Value Change in value for the period*
growth investments PLC GBP'000 GBP'000 GBP'000 GBP'000
Lowcosttravelgroup
Limited 12.0 1,560 964 2,524 448
Blackbay Limited 15.0 1,616 715 2,331 106
Process Systems
Enterprise
Limited 5.3 545 767 1,312 355
Mi-Pay Limited 11.9 1,701 (493) 1,208 (16)
Opta Sports Data
Limited 2.7 341 447 788 340
AMS Sciences
Limited** 23.9 713 (50) 663 (54)
memsstar Limited 8.2 572 67 639 (23)
Rostima Holdings
Limited 13.7 288 256 544 (22)
Helveta Limited 10.3 1,724 (1,229) 495 (569)
Oxsensis Limited 5.7 839 (462) 377 3
Chichester Holdings
Limited 15.2 1,699 (1,417) 282 (173)
Palm Tree
Technology
Limited 0.4 235 47 282 -
DySIS Medical
Limited 1.4 222 28 250 144
Mirada Medical
Limited 3.7 85 156 241 65
Masters
Pharmaceuticals
Limited 1.0 202 15 217 20
MyMeds&Me Limited 2.2 110 1 111 1
Prime Care Holdings
Limited 3.8 228 (131) 97 (24)
Proveca Limited 1.8 67 1 68 1
Abcodia Limited 1.0 35 - 35 -
Total qualifying
high growth
investments 12,782 (318) 12,464 602
Total qualifying
investments 28,380 (3,712) 24,668 724
Cumulative movement
Non-qualifying % voting rights held by Albion Income & Growth VCT Cost in value Value Change in value for the period*
investments PLC GBP'000 GBP'000 GBP'000 GBP'000
AMS Sciences
Limited** n/a 385 145 530 36
Rostima
Holdings
Limited n/a 223 - 223 -
Evolutions
Group Limited 30.3 12 (5) 7 (4)
Total
non-qualifying
investments 620 140 760 32
* as adjusted for additions and disposals during the period
** the total cost for AMS Sciences Limited (AMS) does not include the
realised losses of GBP2,275,000 incurred through the restructuring of
Xceleron Limited to create AMS which was reported in the Annual Report
and Financial Statements for the year ended 30 September 2012.
Summary income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on
investments 3 - 865 865 - 1,323 1,323 - 1,994 1,994
Investment
income 4 515 - 515 596 - 596 1,052 - 1,052
Investment
management
fees 5 (87) (261) (348) (85) (255) (340) (171) (515) (686)
Other expenses (102) - (102) (124) - (124) (249) - (249)
Return on
ordinary
activities
before tax 326 604 930 387 1,068 1,455 632 1,479 2,111
Tax
(charge)/credit
on ordinary
activities (74) 61 (13) (95) 69 (26) (107) 124 17
Return
attributable to
shareholders 252 665 917 292 1,137 1,429 525 1,603 2,128
Basic and
diluted return
per share
(pence)* 7 0.60 1.60 2.20 0.70 2.70 3.40 1.30 3.80 5.10
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 March 2012 and the audited
statutory accounts for the year ended 30 September 2012.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
The total column of this Summary 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.
All revenue and capital items in the above statement derive from
continuing operations.
There are no recognised gains or losses other than the results for the
periods disclosed above. Accordingly a Statement of total recognised
gains and losses is not required. The difference between the reported
return on ordinary activities before tax and the historical
profit/(loss) is due to the fair value movements on investments. As a
result a note on historical cost profit and losses has not been
prepared.
Summary balance sheet
Unaudited Unaudited Audited
31 March 2013 31 March 2012 30 September 2012
Note GBP'000 GBP'000 GBP'000
Fixed asset
investments
Qualifying 24,668 26,011 26,412
Non-qualifying 760 238 554
Total fixed asset
investments 25,428 26,249 26,966
Current assets
Trade and other
debtors 14 121 25
Current asset
investments 41 179 25
Cash at bank and in
hand 10 2,560 1,379 1,216
2,615 1,679 1,266
Creditors: amounts
falling due within
one year (301) (365) (267)
Net current assets 2,314 1,314 999
Net assets 27,742 27,563 27,965
Capital and reserves
Called up share
capital 8 462 463 470
Share premium 1,439 402 1,139
Capital redemption
reserve 22 5 10
Unrealised capital
reserve (3,917) (7,352) (4,209)
Realised capital
reserve (916) (1,414) (1,288)
Other distributable
reserve 30,652 35,459 31,843
Total equity
shareholders'
funds 27,742 27,563 27,965
Net asset value per
share (pence)* 66.60 66.00 66.00
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 March 2012 and the audited
statutory accounts for the year ended 30 September 2012.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
These financial statements were approved by the Board of Directors, and
authorised for issue on 20 May 2013 and were signed on its behalf by
Friedrich Ternofsky
Chairman
Company number: 5132495
Summary reconciliation of movements in shareholders' funds
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 October 2012 (Audited) 470 1,139 10 (4,209) (1,288) 31,843 27,965
Return/(loss) for the period - - - 766 (101) 252 917
Transfer of previously unrealised gains on disposal
of investments - - - (474) 474 - -
Dividends paid - - - - - (740) (740)
Purchase of own shares for cancellation (12) - 12 - - (705) (705)
Issue of equity (net of costs) 5 300 - - - - 305
As at 31 March 2013 (Unaudited) 462 1,439 22 (3,917) (916) 30,652 27,742
As at 1 October 2011 (Audited) 23,108 455 963 (8,476) (1,427) 12,097 26,720
Return/(loss) for the period - - - 1,276 (139) 292 1,429
Transfer of previously unrealised gains on disposal
of investments - - - (152) 152 - -
Reduction in share capital** (22,604) - - - - 22,604 -
Cancellation of capital redemption and share premium
reserves** - (539) (1,344) - - 1,883 -
Dividends paid - - - - - (729) (729)
Purchase of own shares for cancellation (373) - 373 - - (688) (688)
Cancellation of treasury shares (13) - 13 - - - -
Issue of equity (net of costs) 345 486 - - - - 831
As at 31 March 2012 (Unaudited) 463 402 5 (7,352) (1,414) 35,459 27,563
As at 1 October 2011 (Audited) 23,108 455 963 (8,476) (1,427) 12,097 26,720
Return/(loss) for the period - - - 2,560 (957) 525 2,128
Transfer of previously unrealised losses on disposal
of investments - - - 1,707 (1,707) - -
Reduction in share capital** (22,604) - - - - 22,604 -
Cancellation of capital redemption and share premium
reserves** - (539) (1,344) - - 1,883 -
Dividends paid - - - - - (1,473) (1,473)
Purchase of own shares for cancellation (381) - 381 - - (990) (990)
Cancellation of treasury shares (10) - 10 - - - -
Transfer from other distributable reserve to realised
capital reserve - - - - 2,803 (2,803) -
Issue of equity (net of costs) 357 1,223 - - - - 1,580
As at 30 September 2012 (Audited) 470 1,139 10 (4,209) (1,288) 31,843 27,965
*Included within these reserves is an amount of GBP25,819,000 (31 March
2012: GBP26,693,000; 30 September 2012: GBP26,346,000) which is
considered distributable.
** The reduction in the nominal value of shares from 50 pence to 1 penny,
the cancellation of the capital redemption and share premium reserves
(as approved by shareholders at the Annual General Meeting held on 6
February 2012 and by order of the Court dated 22 February 2012) have
increased the value of the other distributable reserve.
The special reserve, treasury share reserve and the revenue reserve have
been combined in the balance sheet to form a single reserve named other
distributable reserve for both the current and prior periods. The
Directors consider the presentation of a single reserve to enhance the
clarity of financial reporting. More details regarding treasury shares
can be found in note 8.
Summary cash flow statement
Unaudited
six months ended Unaudited Audited
31 March 2013 six months ended 31 March 2012 year ended 30 September 2012
Note GBP'000 GBP'000 GBP'000
Operating activities
Loan stock income received 497 531 1,182
Deposit interest received 9 13 22
Investment management fees paid (350) (347) (679)
Other cash payments (107) (109) (249)
Net cash flow from operating activities 9 49 88 276
Taxation
UK corporation tax received/(paid) 34 11 (19)
Capital expenditure and financial investments
Purchase of fixed asset investments (458) (2,794) (3,298)
Disposal of fixed asset investments 2,839 2,431 2,475
Disposal of current asset investments - - 506
Net cash flow from investing activities 2,381 (363) (317)
Equity dividends paid
Dividends paid (net of cost of shares issued under
the dividend reinvestment scheme) (694) (683) (1,371)
Net cash flow before financing 1,770 (947) (1,431)
Financing
Issue of share capital (net of issue costs) 260 787 1,486
Purchase of shares for cancellation (686) (637) (1,015)
Net cash flow from financing (426) 150 471
Cash flow in the period 10 1,344 (797) (960)
Notes to the unaudited summarised Financial Statements
1. Accounting convention
The Financial Statements have been prepared in accordance with the
historical cost convention, modified to include the revaluation of
investments, in accordance with applicable United Kingdom law and
accounting standards 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") in January 2009. Accounting policies have been applied
consistently in current and prior periods, however to enhance clarity of
financial reporting, the special reserve, treasury share reserve and
revenue reserve have been presented as a single reserve named other
distributable reserve. This has also been applied to prior periods.
2. Accounting policies
Fixed and current asset investments
Unquoted equity investments, debt issued at a discount and convertible
bonds
In accordance with FRS 26 "Financial Instruments Recognition and
Measurement", unquoted equity, debt issued at a discount and convertible
bonds are designated as fair value through profit or loss ("FVTPL").
Investments listed on recognised exchanges are valued at the closing bid
prices at the end of the accounting period. Unquoted investments' fair
value is determined by the Directors in accordance with the September
2009 International Private Equity and Venture Capital Valuation
Guidelines (IPEVCV guidelines).
Fair value movements on equity investments and gains and losses arising
on the disposal of investments are reflected in the capital column of
the Income statement in accordance with the AIC SORP. Realised gains or
losses on the sale of investments will be reflected in the realised
capital reserve, and unrealised gains or losses arising from the
revaluation of investments will be reflected in the unrealised capital
reserve.
Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if
their exercise or contractual conversion terms would allow them to be
exercised or converted as at the balance sheet date, and if there is
additional value to the Company in exercising or converting as at the
balance sheet date. Otherwise these instruments are held at nil value.
The valuation techniques used are those used for the underlying equity
investment.
Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a
discount) are classified as loans and receivables as permitted by FRS 26
and measured at amortised cost using the Effective Interest Rate method
less impairment. Movements in amortised cost relating to interest income
are reflected in the revenue column of the Income statement, and hence
are reflected in the revenue reserve, and movements in respect of
capital provisions are reflected in the capital column of the Income
statement and are reflected in the realised capital reserve following
sale, or in the unrealised capital reserve for impairments arising from
revaluations of the fair value of the security.
For all unquoted loan stock, whether fully performing, past due or
impaired, the Board considers that the fair value is equal to or greater
than the security value of these assets. For unquoted loan stock, the
amount of the impairment is the difference between the asset's cost and
the present value of estimated future cash flows, discounted at the
original effective interest rate. The future cash flows are estimated
based on the fair value of the security less the estimated selling
costs.
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.
In accordance with the exemptions under FRS 9 "Associates and joint
ventures", 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.
Current asset investments
Contractual future contingent receipts on disposal of fixed asset
investments are designated at fair value through profit or loss and are
subsequently measured at fair value.
Dividend income is not recognised as part of the fair value movement of
an investment, but is recognised separately as investment income through
the revenue reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part
of the carrying value of the loans and receivables at the end of each
reporting period.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on
a time apportionment basis using an effective interest rate over the
life of the financial instrument. Income which is not capable of being
received within a reasonable period of time is reflected in the capital
value of the investment.
Bank interest income
Interest income is recognised on an accruals basis using the rate of
interest agreed with the bank.
Investment management fees and expenses
All expenses have been accounted for on an accruals basis. Expenses are
charged through the revenue account except the following which are
charged through the realised capital reserve:
-- 75 per cent. of management fees are allocated to the capital account to
the extent that these relate to an enhancement in the value of the
investments. 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.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will
be allocated between revenue and realised capital reserves based upon
the proportion to which the calculation of the fee is attributable to
revenue and capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 16
"Current tax". Taxation associated with capital expenses is applied in
accordance with the SORP. In accordance with FRS 19 "Deferred tax",
deferred taxation is provided in full on timing differences that result
in an obligation at the balance sheet date to pay more tax or a right to
pay less tax, at a future date, at rates expected to apply when they
crystallise based on current tax rates and law. Timing differences arise
from the inclusion of items of income and expenditure in taxation
computations in periods different from those in which they are included
in the Financial Statements. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be
recovered. Deferred tax assets and liabilities are not discounted.
The Directors have considered the requirements of FRS 19 and do not
believe that any provision for deferred tax should be made.
Reserves
Share premium account
This reserve accounts for the difference between the prices 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 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;
-- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
-- dividends paid to equity holders.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve have
been combined as 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
In accordance with FRS 21 "Events after the balance sheet date",
dividends declared by the Company are accounted for in the period in
which the dividend has been paid or approved by shareholders in an
Annual General Meeting.
3. Gains on investments
Unaudited Unaudited
six months ended six months ended Audited
31 March 2013 31 March 2012 year ended 30 September 2012
GBP'000 GBP'000 GBP'000
Unrealised gains on fixed asset investments held at
fair value through profit or loss account 1,142 531 2,210
Unrealised (impairments)/reversals of impairments
on fixed asset investments held at amortised cost (392) 745 325
Unrealised gains on fixed asset investments sub-total 750 1,276 2,535
Unrealised gains on current assets held at fair value
through profit or loss account 16 - 25
Unrealised gains sub-total 766 1,276 2,560
Realised gains/(losses) on investments held at fair
value through profit or loss account 110 (4) (611)
Realised (losses)/gains on fixed asset investments
held at amortised cost (11) 51 9
Realised gains/(losses) on fixed asset investments
sub-total 99 47 (602)
Realised gains on current asset investments held at
fair value through profit or loss account - - 36
Realised gains/(losses) sub-total 99 47 (566)
865 1,323 1,994
Investments measured at amortised cost basis are unquoted loan stock
investments as described in note 2.
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
Income recognised on investments held at fair value
through profit or loss
Income from convertible bonds and discounted debt 57 41 53
57 41 53
Income recognised on investments held at amortised
cost
Return on loan stock investments 444 543 981
Bank deposit interest 14 12 18
458 555 999
515 596 1,052
All of the Company's income derives from operations based in the United
Kingdom.
5. Investment management fees
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
Investment
management fee
charged to revenue 87 85 171
Investment
management fee
charged to capital 261 255 515
348 340 686
The Manager, Albion Ventures LLP, is party to a management agreement
from the Company (details disclosed on page 20 of the Annual Report and
Financial Statements for the year ended 30 September 2012) and Patrick
Reeve, a Director of the Company, is also Managing Partner of Albion
Ventures LLP. During the period, services of a total value of GBP348,000
(31 March 2012: GBP340,000; 30 September 2012: GBP686,000) were
purchased by the Company from Albion Ventures LLP. At the financial
period end, the amount due to Albion Ventures LLP disclosed as accruals
was GBP167,000 (31 March 2012: GBP166,000; 30 September 2012:
GBP168,000).
During the period, the Company was charged GBP9,250 (excluding VAT) by
Albion Ventures LLP in respect of Patrick Reeve's services as a Director
(31 March 2012: GBP9,250; 30 September 2012: GBP18,500). At the
financial period end, the amount due to Albion Ventures LLP in respect
of these services disclosed as accruals and deferred income was GBP5,550
(31 March 2012: GBP5,550; 30 September 2012: GBP5,550).
During the period, the Company raised new funds through the Albion VCTs
Top Up Offers 2012/2013 as detailed in note 8. The total cost of the
issue of these shares on 19 December 2012 was 5.5% of the sums
subscribed. Of these costs, an amount of GBP663 (31 March 2012:
GBP6,740; 30 September 2012: GBP6,740) was paid to the Manager, Albion
Ventures LLP, in respect of receiving agent services. There were no sums
outstanding in respect of receiving agent services at the period end.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
First dividend paid on 31 January 2012 - 1.75 pence
per share - 729 729
Second dividend paid on 29 June 2012 - 1.75 pence
per share - - 744
First dividend paid on 31 January 2013 - 1.75 pence
per share 740 - -
740 729 1,473
In addition to the dividends paid above, the Board has declared a
dividend of 1.75 pence per share to be paid on 28 June 2013 to
shareholders on the register as at 7 June 2013. The total dividend to be
paid will be approximately GBP763,000.
7. Basic and diluted return per share
Return per share has been calculated on 42,199,141 Ordinary shares
excluding treasury shares (31 March 2012: 41,720,924; 30 September 2012:
42,403,935) being the weighted average number of shares in issue for the
period.
There are no convertible instruments, derivatives or contingent share
agreements in issue, and 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
Unaudited Unaudited Audited
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
Allotted, called up and fully paid
46,236,035 Ordinary shares of 1 penny each (31 March
2012: 46,316,700; 30 September 2012: 46,954,802) 462 463 470
Voting rights
41,685,168 Ordinary shares of 1 penny each (31 March
2012: 41,765,833; 30 September 2012: 42,403,935)
Under the terms of the Dividend Reinvestment Scheme Circular dated 22
December 2008, the following Ordinary shares were allotted during the
period:
Aggregate
Number nominal
of value of
Date of shares shares Issue price Net proceeds Opening market price per share on allotment date
allotment allotted (GBP'000) (pence per share) GBP'000 (pence per share)
31 January
2013 83,383 1 64.25 45 60.00
Under the terms of the Albion VCTs Top Up Offers 2012/2013, the
following shares were allotted during the period:
Aggregate
Number nominal
of value of
Date of shares shares Issue price Net proceeds Opening market price per share on allotment date
allotment allotted (GBP'000) (pence per share) GBP'000 (pence per share)
19
December
2012 393,850 4 69.90 260 56.50
During the period the Company purchased 1,196,000 Ordinary shares (31
March 2012: 1,198,500; 30 September 2012: 1,741,861) for cancellation at
a cost of GBP701,000, representing 2.5 per cent. of its issued share
capital as at 30 September 2012. The shares purchased for cancellation
were funded by the other distributable reserve.
The Company did not purchase any shares for treasury during the period
to 31 March 2013 (31 March 2012: nil; 30 September 2012: nil), leaving a
balance of 4,550,867 Ordinary shares (31 March 2012: 4,550,867; 30
September 2012: 4,550,867) in treasury which represents 9.8 per cent. of
the issued share capital as at 31 March 2013.
9. Reconciliation of net revenue return on ordinary activities
before taxation to net cash flow from operating activities
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
Revenue return on
ordinary activities
before taxation 326 387 632
Investment
management fee
charged to capital (261) (254) (515)
Movement in accrued
amortised loan
stock interest (6) (34) 171
Increase in
operating debtors - 1 2
Decrease in
operating
creditors (10) (12) (14)
Net cash flow from
operating
activities 49 88 276
10. Analysis of change in cash during the period
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2013 31 March 2012 30 September 2012
GBP'000 GBP'000 GBP'000
Opening cash
balances 1,216 2,176 2,176
Net cash flow 1,344 (797) (960)
Closing cash
balances 2,560 1,379 1,216
11. Commitments and contingencies
As at 31 March 2013, the Company had the following financial commitments
in respect of investments:
-- Proveca Limited; GBP223,000
-- MyMeds&Me Limited; GBP110,000
-- Mi-Pay Limited; GBP46,000
-- DySIS Medical Limited; GBP9,000
There are no contingencies or guarantees of the Company as at 31 March
2013 (31 March 2012 and 30 September 2012: nil).
12. Post balance sheet events
Since 31 March 2013, the Company has completed the following material
transaction:
-- April 2013: Investment of GBP9,000 in DySIS Medical Limited;
The following shares were allotted under the terms of the Albion VCTs
Top Up Offers 2012/2013 since the period end:
Aggregate
nominal
Number of value of
Date of shares shares Issue price Net proceeds Opening market price per share on allotment date
allotment allotted (GBP'000) (pence per share) GBP'000 (pence per share)
5 April
2013 1,941,975 19 68.00 1,281 62.00
13. Related party transactions
During the year, the Company purchased 1,196,000 Ordinary shares at a
total cost of GBP701,000 using the services of Winterflood Securities
Limited a company of which Robin Archibald is head of corporate finance
and broking. These transactions were at arms length and in line with
market practices. At the period end, the amount due to Winterflood
Securities Limited in respect of share buy-backs and disclosed in other
creditors was GBP18,000 (31 March 2012: GBP76,000; 30 September 2012:
nil).
There are no other related party transactions or balances requiring
disclosure.
14. Going concern
The Board's assessment of liquidity risk remains unchanged and is
detailed on page 45 of the Annual Report & Financial Statements for the
year ended 30 September 2012. The Company has adequate cash and liquid
resources. The portfolio of investments is diversified in terms of
sector, and the major cash outflows of the Company (namely investments,
buy-backs and dividends) are within the Company's control. Accordingly,
after making diligent enquiries the Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason, the
Directors have adopted the going concern basis in preparing the accounts
in accordance with "Going Concern and Liquidity Risk: Guidance for
Directors of UK Companies 2009", published by the Financial Reporting
Council.
15. Risks and uncertainties
The Board considers that the Company faces the following major risks and
uncertainties:
1. Economic risk
Changes in economic conditions, including, for example, interest rates,
rates of inflation, industry conditions, competition, political and
diplomatic events and other factors could substantially and adversely
affect the Company's prospects in a number of ways.
To reduce this risk, in addition to investing equity in portfolio
companies, the Company often invests in secured loan stock and has a
policy of not normally permitting any external bank borrowings within
portfolio companies. Additionally, the Manager has been rebalancing the
sector exposure of the portfolio with a view to reducing reliance on
consumer led sectors.
2. Investment risk
This is the risk of investment in poor quality assets which reduces the
capital and income returns to shareholders, and negatively impacts on
the Company's reputation. By nature, smaller unquoted businesses, such
as those that qualify for venture capital trust purposes, are more
fragile than larger, long established businesses.
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and its strong track record for investing in
this segment of the market. In addition, the Manager operates a formal
and structured investment process, which includes an Investment
Committee, comprising investment professionals from the Manager and at
least one external investment professional. The Manager also invites,
and takes account of, comments from non-executive Directors of the
Company on investments discussed at the Investment Committee meetings.
Investments are actively and regularly monitored by the Manager
(investment managers normally sit on portfolio company boards) and the
Board receives detailed reports on each investment as part of the
Manager's report at quarterly board meetings. It is the policy of the
Company for portfolio companies to not normally have external
borrowings.
3. Valuation risk
The Company's investment valuation method is reliant on the accuracy and
completeness of information that is issued by portfolio companies. In
particular, the Directors may not be aware of or take into account
certain events or circumstances which occur after the information issued
by such companies is reported.
As described in note 2 of the Financial Statements, the unquoted equity
investments, convertible loan stock and debt issued at a discount held
by the Company are valued at fair value through profit or loss in
accordance with the International Private Equity and Venture Capital
Valuation Guidelines. These guidelines set out recommendations, intended
to represent current best practice on the valuation of venture capital
investments. These investments are valued on the basis of forward
looking estimates and judgements about the business itself, its market
and the environment in which it operates, together with the state of the
mergers and acquisitions market, stock market conditions and other
factors. In making these judgements the valuation takes into account all
known material facts up to the date of approval of the Financial
Statements by the Board. All other unquoted loan stock is measured at
amortised cost.
4. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows
investors to take advantage of tax reliefs on initial investment and
ongoing tax free capital gains and dividend income. Failure to meet the
qualifying requirements could result in investors losing the tax relief
on initial investment and loss of tax relief on any tax-free income or
capital gains received. In addition, failure to meet the qualifying
requirements could result in a loss of listing of the shares.
To reduce this risk, the Board has appointed the Manager, who has a team
with significant experience in venture capital trust management, used to
operating within the requirements of the venture capital trust
legislation. In addition, to provide further formal reassurance, the
Board has appointed PricewaterhouseCoopers LLP as its taxation advisors.
PricewaterhouseCoopers LLP report quarterly to the Board to
independently confirm compliance with the venture capital trust
legislation, to highlight areas of risk and to inform on changes in
legislation.
5. Compliance risk
The Company is listed on The London Stock Exchange and is required to
comply with the rules of the UK Listing Authority, as well as with the
Companies Act, Accounting Standards and other legislation. Failure to
comply with these regulations could result in a delisting of the
Company's shares, or other penalties under the Companies Act or from
financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior
levels within quoted businesses. In addition, the Board and the Manager
receive regular updates on new regulation from its auditor, lawyers and
other professional bodies.
6. Internal control risk
Failures in key controls, within the Board or within the Manager's
business, could put assets of the Company at risk or result in reduced
or inaccurate information being passed to the Board or to shareholders.
The Audit Committee meets with the Manager's Internal Auditor,
Littlejohn LLP, when required, receiving a report regarding the last
formal internal audit performed on the Manager, and providing the
opportunity for the Audit Committee to ask specific and detailed
questions. During the year the Chairman of the Audit Committee met with
the internal audit Partner of Littlejohn LLP to discuss the most recent
Internal Audit Report on the Manager. The Manager has a comprehensive
business continuity plan in place in the event that operational
continuity is threatened. Further details regarding the Board's
management and review of the Company's internal controls through the
implementation of the Turnbull guidance are detailed on pages 25 and 26
of the full Annual Report and Financial Statements for the year ended 30
September 2012.
Measures are in place to mitigate information risk in order to ensure
the integrity, availability and confidentiality of information used
within the business.
7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions. There
are provisions within the management agreement for the change of Manager
under certain circumstances (for further detail, see the management
agreement paragraph on page 20 of the full Annual Report and Financial
Statements for the year ended 30 September 2012). In addition, the
Manager has demonstrated to the Board that there is no undue reliance
placed upon any one individual within Albion Ventures LLP.
8. Financial risks
By its nature, as a venture capital trust, the Company is exposed to
investment risk (which comprises investment price risk and cash flow
interest rate risk), credit risk and liquidity risk. The Company's
policies for managing these risks and its financial instruments are
outlined in full in note 19 of the full Annual Report and Financial
Statements for the year ended 30 September 2012.
All of the Company's income and expenditure is denominated in sterling
and hence the Company has no foreign currency risk. The Company is
financed through equity and does not have any borrowings. The Company
does not use derivative financial instruments for speculative purposes.
16. 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 31 March 2013 and 31
March 2012, and is unaudited. The information for the year ended 30
September 2012 does not constitute statutory accounts within the terms
of section 434 of the Companies Act 2006 and is derived from the
statutory accounts for that 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.
17. 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-ventures.co.uk/ourfunds/AAIG.html.
Sector split at 31 March 2013:
http://hugin.info/141810/R/1703145/562917.pdf
This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Albion Income & Growth VCT PLC via Thomson Reuters ONE
HUG#1703145
http://www.closeventures.co.uk/
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