TIDMAATG
Albion Technology & General VCT PLC
LEI number: 213800TKJUY376H3KN16
As required by the UK Listing Authority's Disclosure Guidance
and Transparency Rule 4.2, Albion Technology & General VCT PLC
today makes public its information relating to the Half-yearly
Financial Report (which is unaudited) for the six months to 30 June
2023. This announcement was approved by the Board of Directors on
21 September 2023.
The full Half-yearly Financial Report (which is unaudited) for
the period to 30 June 2023, 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/AATG/30Jun23.pdf.
Investment objective and policy
The Company's investment objective is to provide investors with
a regular and predictable source of dividend income, combined with
the prospect of long-term capital growth, through a balanced
portfolio of predominantly unquoted growth and technology
businesses in a qualifying Venture Capital Trust ("VCT").
Investment policy
The Company will invest in a broad portfolio of unquoted growth
and technology businesses. Allocation of assets will be determined
by the investment opportunities which become available, but efforts
will be made to ensure that the portfolio is diversified in terms
of sectors and stages of maturity of portfolio companies.
VCT qualifying and non-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 HMRC annual investment
limits. It is intended that normally at least 80% 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 an investment.
Funds held either 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 7.5% of the Company's
assets at the time of investment.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses
within VCT qualifying industry sectors using a mixture of
securities. The maximum the Company will invest in a single company
is 15% of the Company's assets at cost at the time of investment.
The value of an individual investment is expected to increase over
time as a result of trading progress and a continuous assessment is
made of investments' suitability for sale. It is possible that
individual holdings may grow in value to a point where they
represent a significantly higher proportion of total assets prior
to a realisation opportunity being available.
Borrowing powers
The Company's maximum exposure in relation to gearing is
restricted to 10% of the adjusted share capital and reserves. The
Directors do not have any intention of utilising long-term
gearing.
Financial calendar
Record date for second dividend for the year 8 December 2023
Payment date for second dividend for the year 29 December 2023
Financial year end 31 December
Financial summary
Unaudited Unaudited Audited
six months ended 30 six months ended year ended
June 2023 30 June 2022 31 December 2022
(pence per share) (pence per share) (pence per share)
Opening net
asset value 72.92 80.65 80.65
Capital
return/(loss) 4.59 (0.10) (4.51)
Revenue return 0.15 0.11 0.46
-------------------- ------------------ ------------------
Total
return/(loss) 4.74 0.01 (4.05)
Dividends paid (1.82) (2.02) (3.99)
Impact of share
capital
movements 0.18 0.05 0.31
-------------------- ------------------ ------------------
Net asset value 76.02 78.69 72.92
Ordinary shares
Total shareholder value (pence per share)
---------------------------------------- -------------------
Total dividends paid since inception 125.44
Net asset value as at 30 June 2023 76.02
------------------
Total shareholder value to 30 June 2023 201.46
------------------
In addition to the dividends paid above, the Board declared a
second dividend for the year ending 31 December 2023 of 1.90 pence
per Ordinary share to be paid on 29 December 2023 to shareholders
on the register on 8 December 2023.
Further details regarding the total shareholder value for the
historic C Shares, Albion Income and Growth VCT PLC and Ordinary
shares, as well as the dividend record from inception of the
Company in 2000, can be found at www.albion.capital/funds/AATG
under the 'Financial Summary for Previous Funds' section.
Interim management report
Introduction
I am pleased to report a strong positive total return for the
six months ended 30 June 2023 of 4.74 pence per share which
represents a 6.5% return on opening net asset value. We continue to
see resilience and revenue growth from many of our portfolio
companies despite the difficult macroeconomic and geopolitical
backdrop, including continuing high inflation, rising interest
rates and volatility of quoted technology company valuations.
Results and dividends
The net asset value per Ordinary share as at 30 June 2023 has
increased by 4.3% to 76.02 pence over the six months (30 June 2022:
78.69 pence; 31 December 2022: 72.92 pence) mainly due to the
valuation uplift in Quantexa, discussed below.
In line with our dividend policy, targeting around 5% of NAV per
annum, the Company paid a dividend of 1.82 pence per share during
the period to 30 June 2023 (30 June 2022: 2.02 pence per share).
The Company will pay a second dividend for the financial year
ending 31 December 2023 of 1.90 pence per share on 29 December 2023
to shareholders on the register on 8 December 2023, being 2.5% of
the latest reported NAV at 30 June 2023.
This will bring the total dividends paid for the year ending 31
December 2023 to 3.72 pence per share, which equates to a 5.1%
yield on the opening NAV of 72.92 pence per share at 31 December
2022.
Performance and portfolio update
The total gain on investments for the period ended 30 June 2023
was GBP9.4 million (six months ended 30 June 2022: gain of GBP1.6
million; year ended 31 December 2022: loss of GBP4.5 million). The
key movement in the period was an GBP11.4 million valuation uplift
to the Quantexa holding following an externally led $129 million
Series E fundraising which completed in April 2023. The latest
funding round made the company the first UK "Unicorn" of 2023 (a
private company valuation over $1 billion) and the Board remain
excited about its prospects. Other gains in the period, which were
driven by revenue growth, included unrealised gains in Radnor House
School of GBP0.8 million and Ophelos of GBP0.4 million.
These gains were offset by write downs in Black Swan Data which
decreased by GBP2.2 million, Locum's Nest by GBP0.4 million and
Speechmatics by GBP0.4 million.
The Company realised disposal proceeds of GBP1.0 million, the
largest disposals being Zift (GBP0.5 million) and a part disposal
of our shareholding in our quoted investment, Arecor Therapeutics
PLC (GBP0.2 million). Further details of other realisations during
the period can be found in the realisations table below.
During the period, a total of GBP0.4 million was deployed as
follow-on investments into the existing portfolio, including GBP0.3
million into Proveca and GBP0.1 million into Seldon Technologies.
The economic uncertainty, high inflation rates and rising interest
rates have resulted in a quiet period of investment in the first
half of 2023. However, there is a growing pipeline of new
investments, and investment activity has started to increase after
the period end, with GBP1.8 million invested at the date of this
report into new and follow-on investments since 30 June 2023.
Our top 3 portfolio companies now account for 29.2% of the
Company's NAV (30 June 2022: 21.6%; 31 December 2022: 22.2%).
Further details of the portfolio of investments can be found
below.
Current portfolio sector allocation
Set out at the bottom of this announcement is the sector
diversification of the portfolio of investments as at 30 June
2023.
Board composition and succession planning
During the period Robin Archibald retired after nine years on
the Board, including two as Chairman and seven as Audit Committee
Chairman. On behalf of the Board and the Manager, I would like to
thank and note my appreciation to Robin for his invaluable
contribution and wise guidance and leadership throughout his time
as a Director. As announced on 18 May 2023, Mary Anne Cordeiro,
having served a similar period, also retired during the period. The
Board and the Manager would like to thank her for her strong
contribution. In particular, her support and advice has been hugely
appreciated. We wish both Robin and Mary Anne well in their future
endeavours.
As part of the Board's succession planning, we were pleased to
welcome David Benda as a Director with effect from 26 June 2023,
and Peter Moorhouse from 1 September 2023. David has extensive
corporate banking experience working with investment companies
providing advice on fundraising, reorganisations and
restructurings. Peter brings a depth of corporate finance knowledge
particularly with companies in the healthcare and technology
sectors, advising primarily on equity financing, mergers and
acquisitions.
The Nomination Committee continually monitors and reviews the
membership of the Board based on the spread of skills and
contributions of its members, as well as looking at succession
planning requirements of the Company. The Company has made several
changes to the Board in recent years and continues to review
actively Board succession.
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 NAV, in so far as market conditions and
liquidity permit. The Company purchased 2,117,126 Ordinary shares
for treasury during the period at a total cost of GBP1.6 million
(30 June 2022: GBP1.2 million; 31 December 2022: GBP2.5 million).
The Company continues to conduct active buy-backs to help provide
good secondary market liquidity for those who want to dispose of
all or part of their shareholdings.
Risks and uncertainties
The Company faces a number of significant risks including rising
interest rates, high levels of inflation, the ongoing impact of
geopolitical tensions, and an expected period of economic
stagnation in the UK and other markets. The concentration risk to
the technology sector is noted as technology company valuations
have become more uncertain in the current economic climate. The
Manager continually assesses the exposure to these risks for each
portfolio company and appropriate actions, where possible, are
implemented.
In accordance with Disclosure Guidance and Transparency rules
("DTR"), the Board confirms that the principal risks and
uncertainties facing the Company have not changed materially from
those identified in the Annual Report and Financial Statements for
the year ended 31 December 2022. There is heightened uncertainty,
but this has not changed the nature of the principal risks. The
Board considers that the present processes for mitigating those
risks remain appropriate.
The principal risks faced by the Company are:
-- Investment, performance and valuation risk;
-- VCT approval risk;
-- Cyber and data security risk;
-- Reliance on key agents and personnel risk;
-- Economic, political and social risk; and
-- Discount risk.
A detailed analysis of the principal risks and uncertainties
facing the business can be found in the Annual Report and Financial
Statements for the year ended 31 December 2022 on pages 24 to 26,
copies of which are available on the Company's webpage on the
Manager's website at www.albion.capital/funds/AATG under the
'Financial Reports and Circulars' section.
Albion VCTs Prospectus Top Up Offers
The 2022/23 Offers were fully subscribed and closed having
raised GBP15.5 million for the Company. The Board was pleased to
see the high level of demand for the Company's shares from existing
and new shareholders.
The proceeds of the Offers are being used to provide support to
our existing portfolio companies and to enable us to take advantage
of new investment opportunities as they arise. Details of the share
allotments during the period can be found in note 8.
Transactions with the Manager
Details of the transactions that took place with the Manager in
the period can be found in note 5. Details of related party
transactions can be found in note 12.
Shareholder seminar
The Board is pleased to report that the Manager, Albion Capital,
will host a shareholder seminar this year on 15 November 2023 at
the Royal College of Surgeons. The Board considers this an
important part of shareholder communication as it provides an
opportunity for shareholders to interact with the Board and the
Manager; shareholders are encouraged to attend. Places are limited
and to reserve a place please email info@albion.capital
https://www.globenewswire.com/Tracker?data=8satWCQf6CWkneK66Khu8gIDkO-2IOeoCTnE9SAbZ9cnWfekXapMlWftN8zE1bLdELFXskhsqSLFRElMn3KigU0oUv3o_3y9YI9LXD6OtqI=
with subject heading "Shareholder Seminar" and include your full
name. You will receive an email confirmation of your place, subject
to availability.
Move to electronic communications
The Board wishes to minimise the environmental impact of how the
Company communicates with its shareholders. With this in mind,
those shareholders that continue to receive physical copies of the
Annual Report and other documentation, will receive a letter
alongside this Half-yearly Financial Report explaining the
forthcoming move to electronic communications.
Outlook
Although there remain many uncertainties facing the Company,
with the high levels of inflation, elevated interest rates and
geopolitical tensions, the results for the period demonstrate the
resilience of our portfolio during these challenging times. Our
strategy is to focus on dynamic sectors with long term growth
prospects such as technology and healthcare within which we
maintain a diversified portfolio in terms of companies at different
stages of maturity and across a variety of sub sectors. We remain
confident that the Company will continue to provide positive
results to its shareholders over the long-term.
Clive Richardson
Chairman
21 September 2023
Portfolio of investments
As at 30 June 2023
Cumulative
movement in
% voting Cost value Value Change in value for the period*
Portfolio company rights GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- -------------------------------
Quantexa 2.4 2,740 25,601 28,341 11,408
Radnor House School
(TopCo) 14.8 2,710 3,375 6,085 840
Proveca 7.2 1,438 3,648 5,086 103
Chonais River Hydro 15.7 2,169 2,161 4,330 296
Oviva 2.9 2,694 1,220 3,914 (388)
Cantab Research
(T/A
Speechmatics) 3.4 2,901 510 3,411 (407)
The Evewell Group 6.4 1,547 1,613 3,160 23
Egress Software
Technologies 2.2 765 2,136 2,901 (57)
Runa Network 3.3 2,101 591 2,692 -
Gharagain River
Hydro 18.5 1,526 1,003 2,529 214
Elliptic
Enterprises 1.6 2,156 - 2,156 -
Convertr Media 6.9 1,105 1,017 2,122 (39)
Healios 2.5 1,500 416 1,916 -
MHS 1 22.5 1,565 93 1,658 -
Panaseer 3.1 1,122 532 1,654 (283)
TransFICC 2.7 1,275 377 1,652 -
Peppy Health 1.6 1,481 - 1,481 -
The Street by
Street Solar
Programme 8.1 895 563 1,458 (86)
Threadneedle
Software Holdings
(T/A Solidatus) 1.7 1,014 408 1,422 (208)
Toqio FinTech
Holdings 2.0 1,400 - 1,400 -
InCrowd Sports 4.8 749 506 1,255 192
Regenerco Renewable
Energy 7.9 822 382 1,204 (117)
Gravitee Topco (T/A
Gravitee.io) 2.2 920 235 1,155 -
Beddlestead 9.8 1,200 (127) 1,073 (43)
Aridhia Informatics 4.9 950 73 1,023 (153)
PeakData 2.1 943 56 999 (15)
The Q Garden
Company 33.4 934 65 999 -
Ophelos 1.9 492 412 904 411
GX Molecular (T/A
CS Genetics) 2.9 846 - 846 -
Seldon Technologies 2.3 796 - 796 -
NuvoAir Holdings 1.4 564 231 795 (41)
Locum's Nest 6.9 813 (70) 743 (439)
Alto Prodotto Wind 6.9 509 232 741 34
Cisiv 5.3 695 29 724 311
OutThink 2.7 687 - 687 -
PerchPeek 2.0 635 - 635 -
Diffblue 2.5 585 - 585 -
Premier Leisure
(Suffolk) - 454 90 544 -
Accelex Technology 2.0 353 191 544 191
PetsApp 2.6 487 - 487 -
Erin Solar 15.7 440 12 452 -
DySIS Medical 2.6 2,589 (2,167) 422 30
5Mins AI 2.2 390 - 390 -
Imandra 1.6 215 101 316 (15)
AVESI 8.0 259 55 314 (33)
Brytlyt 1.9 406 (96) 310 (95)
Koru Kids 1.3 430 (121) 309 (52)
Ramp Software 1.9 277 - 277 -
Arecor Therapeutics
PLC 0.4 149 124 273 (9)
Neurofenix 2.9 590 (334) 256 (334)
Tem-Energy 1.9 241 - 241 -
Harvest AD - 210 23 233 -
uMedeor (T/A uMed) 0.9 150 53 203 51
Mirada Medical 4.6 1,321 (1,125) 196 -
Regulatory Genome
Development 0.8 118 40 158 40
Greenenerco 3.1 77 59 136 7
Infact Systems (T/A
Infact) 1.9 96 - 96 -
Symetrica 0.2 91 (6) 85 11
Black Swan Data 8.3 4,714 (4,648) 66 (2,195)
uMotif 3.6 1,121 (1,120) 1 (119)
Limitless
Technology 2.1 560 (560) - (282)
Elements Software - 19 (19) - -
Total fixed asset
investments 63,001 37,840 100,841 8,752
------------------- -------- -------- --------------- -------- -------------------------------
T/A -- trading as
* As adjusted for additions and disposals during the period.
Investment
realisations Gain/(loss)
in the period Opening carrying Total realised on opening
to 30 June Cost value Disposal proceeds gain/(loss) value
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------- ---------------- ----------------- -------------- -----------
Disposals:
Zift Channel
Solutions 881 326 464 (417) 138
Arecor
Therapeutics
PLC 82 154 160 78 6
Oxsensis 3,484 95 109 (3,375) 14
Forward
Clinical
(T/A Pando) 196 - - (196) -
Loan stock
repayments
and other:
Alto Prodotto
Wind 20 31 31 11 -
Greenenerco 4 5 5 1 -
Escrow
adjustments
and other* - - 209 209 209
Total 4,667 611 978 (3,689) 367
------------- -------- ---------------- ----------------- -------------- -----------
* These comprise fair value movements on deferred consideration
on previously disposed investments and expenses which are
incidental to the purchase or disposal of an investment
GBP'000
Total change in value of investments for the year 8,752
Movement in loan stock accrued interest 35
-------
Unrealised gains on fixed asset investments sub-total 8,787
Realised gains on fixed asset investments 367
Finance income from the unwinding of discount on deferred
consideration 208
-------
Total gains on investments as per Income statement 9,362
----------------------------------------------------------- -------
Responsibility statement
The Directors, Clive Richardson, Margaret Payn, David Benda,
Peter Moorhouse and Patrick Reeve, are responsible for preparing
the Half-yearly Financial Report. In preparing these condensed
Financial Statements for the period to 30 June 2023 we, the
Directors of the Company, confirm that, to the best of our
knowledge:
(a) the condensed set of Financial Statements, which has been
prepared in accordance with Financial Reporting Standard 104
"Interim Financial Reporting", gives 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
Clive Richardson
Chairman
21 September 2023
Condensed income statement
Unaudited six months ended 30 Audited year ended 31
Unaudited six months ended 30 June 2023 June 2022 December 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on investments 3 - 9,362 9,362 - 1,579 1,579 - (4,480) (4,480)
Investment income 4 713 - 713 619 - 619 1,631 - 1,631
Investment Manager's fees* 5 (138) (1,457) (1,595) (129) (1,725) (1,854) (253) (2,541) (2,794)
Other expenses (321) - (321) (327) - (327) (658) - (658)
---- ----------- ----------- ----------------- -------- -------- --------- --------- -------- --------
Profit/(loss) on ordinary activities before tax 254 7,905 8,159 163 (146) 17 720 (7,021) (6,301)
Tax charge on ordinary activities - - - - - - - - -
---- ----------- ----------- ----------------- -------- -------- --------- --------- -------- --------
Profit/(loss) and total comprehensive income attributable
to shareholders 254 7,905 8,159 163 (146) 17 720 (7,021) (6,301)
---- ----------- ----------- ----------------- -------- -------- --------- --------- -------- --------
Basic and diluted return/(loss) per share (pence)** 7 0.15 4.59 4.74 0.11 (0.10) 0.01 0.46 (4.51) (4.05)
---------------------------------------------------------- ---- ----------- ----------- ----------------- -------- -------- --------- --------- -------- --------
* For more information on the allocation between revenue and
capital please see the accounting policies below
** adjusted for treasury shares
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2022
and the audited statutory accounts for the year ended 31 December
2022.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
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
Audited
Unaudited Unaudited 31 December
30 June 2023 30 June 2022 2022
Note GBP'000 GBP'000 GBP'000
----------------------------------------------- ---- ------------- ------------- ------------
Fixed asset investments 100,841 89,519 92,301
Current assets
Trade and other receivables 3,419 3,221 3,456
Cash in bank and at hand 32,906 35,518 26,594
------------- ------------- ------------
36,325 38,739 30,050
Payables: amounts falling due within one year
Trade and other payables (1,751) (1,145) (832)
------------- ------------- ------------
Net current assets 34,574 37,594 29,218
------------- ------------- ------------
Total assets less current liabilities 135,415 127,113 121,519
Provisions falling due after one year (248) (562) (272)
------------- ------------- ------------
Net assets 135,167 126,551 121,247
------------- ------------- ------------
Equity attributable to equity holders
Called-up share capital 8 2,041 1,833 1,905
Share premium 15,958 76,358 5,534
Capital redemption reserve - 48 -
Unrealised capital reserve 37,671 28,229 24,828
Realised capital reserve 14,941 23,353 19,879
Other distributable reserve 64,556 (3,270) 69,101
------------- ------------- ------------
Total equity shareholders' funds 135,167 126,551 121,247
------------- ------------- ------------
Basic and diluted net asset value per share
(pence)* 76.02 78.69 72.92
----------------------------------------------- ---- ------------- ------------- ------------
* excluding treasury shares
Comparative figures have been extracted from the unaudited
Half-yearly Financial Report for the six months ended 30 June 2022
and the audited statutory accounts for the year ended 31 December
2022.
The 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 21 September 2023 and were
signed on its behalf by
Clive Richardson
Chairman
Company number: 04114310
Condensed statement of changes in equity
Called up
share Share Capital redemption Unrealised Realised capital Other distributable
capital premium reserve capital reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 1 January 2023 1,905 5,534 - 24,828 19,879 69,101 121,247
Profit/(loss) and total comprehensive income for the
period - - - 8,787 (882) 254 8,159
Transfer of previously unrealised losses on disposal
of investments - - - 4,056 (4,056) - -
Purchase of own shares for treasury - - - - - (1,561) (1,561)
Issue of equity 136 10,700 - - - - 10,836
Cost of issue of equity - (276) - - - - (276)
Dividends paid - - - - - (3,238) (3,238)
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 30 June 2023 2,041 15,958 - 37,671 14,941 64,556 135,167
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 1 January 2022 1,536 52,687 48 33,469 18,259 995 106,994
Profit/(loss) and total comprehensive income for the
period - - - (838) 692 163 17
Transfer of previously unrealised gains on disposal
of investments - - - (4,402) 4,402 - -
Purchase of own shares for treasury - - - - - (1,188) (1,188)
Issue of equity 297 24,273 - - - - 24,570
Cost of issue of equity - (602) - - - - (602)
Dividends paid - - - - - (3,240) (3,240)
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 30 June 2022 1,833 76,358 48 28,229 23,353 (3,270) 126,551
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 1 January 2022 1,536 52,687 48 33,469 18,259 995 106,994
(Loss)/profit and total comprehensive income for the
year - - - (6,498) (523) 720 (6,301)
Transfer of previously unrealised gains on disposal
of investments - - - (2,143) 2,143 - -
Purchase of shares for treasury - - - - - (2,512) (2,512)
Issue of equity 369 29,943 - - - - 30,312
Cost of issue of equity - (739) - - - - (739)
Cancellation of share premium and capital redemption
reserve - (76,357) (48) - - 76,405 -
Dividends paid - - - - - (6,507) (6,507)
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
As at 31 December 2022 1,905 5,534 - 24,828 19,879 69,101 121,247
----------------------------------------------------- --------- -------- ------------------ ---------------- ---------------- ------------------- -------
*Included within these reserves are amounts of GBP28,406,000 (30
June 2022: GBP17,686,000; 31 December 2022: GBP31,907,000) which
are considered distributable at 30 June 2023. Over the next three
years an additional GBP41,966,000 will become distributable. This
is due to the HMRC requirement that the Company cannot use capital
raised in the past three years to make a payment or distribution to
shareholders.
Condensed statement of cash flows
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------- -------------- -------------- ------------
Cash flow from operating
activities
Loan stock income received 484 767 1,199
Dividend income received - 80 132
Income from fixed term funds
received 95 9 59
Deposit interest received 147 9 50
Investment management fee paid (1,204) (1,196) (2,586)
Other cash payments (376) (302) (591)
Corporation tax paid - - -
-------------- ------------
Net cash flow generated from
operating activities (854) (633) (1,737)
Cash flow from investing
activities
Purchase of fixed asset
investments (435) (6,308) (16,108)
Proceeds from disposals of fixed
asset investments 1,257 8,337 9,530
Net cash flow generated from
investing activities 822 2,029 (6,578)
Cash flow from financing
activities
Issue of share capital 10,054 23,413 28,484
Cost of issue of equity - (18) (36)
Dividends paid* (2,723) (2,671) (5,387)
Purchase of own shares
(including costs) (987) (963) (2,513)
Net cash flow generated from
financing activities 6,344 19,761 20,548
Increase in cash in bank and at
hand 6,312 21,157 12,233
Cash in bank and at hand at
start of period 26,594 14,361 14,361
-------------- -------------- ------------
Cash in bank and at hand at end
of period 32,906 35,518 26,594
-------------- -------------- ------------
*The dividends paid shown in the cash flow are different to the
dividends disclosed in note 6 as a result of the non-cash effect of
the Dividend Reinvestment Scheme.
Notes to the condensed Financial Statements
1. Basis of preparation
The condensed Financial Statements have been prepared in
accordance with applicable United Kingdom law and accounting
standards, including Financial Reporting Standard 102 ("FRS 102"),
and with the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies and Venture Capital
Trusts" ("SORP") issued by The Association of Investment Companies
("AIC"). The Financial Statements have been prepared on a going
concern basis.
The preparation of the Financial Statements requires management
to make judgements and estimates that affect the application of
policies and reported amounts of assets, liabilities, income and
expenses. The most critical estimates and judgements relate to the
determination of carrying value of investments at fair value
through profit and loss ("FVTPL") in accordance with FRS 102
sections 11 and 12. The Company values investments by following the
International Private Equity and Venture Capital Valuation ("IPEV")
Guidelines as updated in 2022 and further detail on the valuation
techniques used are outlined in note 2 below.
Company information can be found on page 4 of the Half-yearly
Financial Report.
2. Accounting policies
Fixed investments
The Company's business is investing in financial assets with a
view to profiting from their total return in the form of income and
capital growth. This portfolio of financial assets is managed, and
its performance evaluated on a fair value basis, in accordance with
a documented investment policy, and information about the portfolio
is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those
undertakings in which the Company holds more than 20% of the equity
as part of an investment portfolio are not accounted for using the
equity method. In these circumstances the investment is measured at
Fair Value Through Profit and Loss ("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 no 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 prices of recent investment
rounds, net assets and industry valuation benchmarks. Where the 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 the cost or price of recent investment is used,
consideration is given to the circumstances of the portfolio company
since that date in determining fair value. This includes consideration of
whether there is any evidence of deterioration or strong definable
evidence of an increase in value. In the absence of these indicators,
other valuation techniques are employed to conclude on the fair value as
of the measurement date. Examples of events or changes that could
indicate a diminution include:
-- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was
based; or
-- 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 and are 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.
Provisions
Provisions relate to the performance incentive fee payable to
the Manager. The provision requires management to make judgements
and estimates under the Basis of Preparation. The performance
incentive fee provision is the best estimate of the probable
amounts payable in respect of the five-year performance measurement
period for the performance incentive fee. The most significant
assumption when calculating this amount, is that of future
performance. This has been calculated by reference to the Company's
five year rolling historic returns and has been corroborated by a
portfolio return analysis using appropriate benchmarks.
Investment income
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 when the Company's right to receive payment and expected
settlement is established. Where interest is rolled up and/or
payable at redemption then it is recognised as income unless there
is reasonable doubt as to its receipt.
Fixed term funds income
Funds income is recognised on an accruals basis using the agreed
rate of interest.
Bank deposit income
Interest income is recognised on an accruals basis using the
rate of interest agreed with the bank.
Investment management fee, performance incentive fee and
expenses
All expenses have been accounted for on an accruals basis.
Expenses are charged through the other distributable reserve except
the following which are charged through the realised capital
reserve:
-- 90% of management fees and 100% of performance incentive fees, if any,
are allocated to the realised capital reserve.
-- expenses which are incidental to the purchase or disposal of an
investment are charged through the realised capital reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS
102. Current tax is tax payable or refundable in respect of the
taxable profit or 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 for the foreseeable future. The Company,
therefore, should have no material deferred tax timing differences
arising in respect of the revaluation or disposal of investments
and the Company has not provided for any deferred tax.
Share capital and reserves
Called-up share capital
This accounts for the nominal value of the shares.
Share premium
This accounts for the difference between the price paid for the
Company's shares and the nominal value of those shares, less issue
costs.
Capital redemption reserve
This reserve accounts for amounts by which the issued share
capital is diminished through the repurchase and cancellation of
the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at
the period end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments, or
permanent diminutions in value (including gains recognised on the
realisation of investments where consideration is deferred that are not
distributable as a matter of law);
-- finance income in respect of the unwinding of the discount on deferred
consideration that is not distributable as a matter of law;
-- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
-- dividends paid to equity holders where paid out by capital.
Other distributable reserve
The special reserve, treasury share reserve and the revenue
reserve were combined in 2012 to form a single reserve named "other
distributable reserve".
This reserve accounts for movements from the revenue column of
the Income statement, the payment of dividends, the buy-back of
shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in
which the liability to make the payment has been established or
approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single operating segment of business, being investment in smaller
early stage companies principally based in the UK.
3. Gains/(losses) on investments
Unaudited Unaudited Audited
six months six months year ended
ended 30 June ended 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Unrealised gains/(losses) on
fixed asset investments 8,787 (838) (6,498)
Realised gains on fixed asset
investments 367 2,238 1,647
Unwinding of discount on
deferred consideration 208 179 371
9,362 1,579 (4,480)
-------------- -------------- ------------
4. Investment income
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
-----------------------------
Loan stock interest 448 505 978
Bank deposit interest 147 9 50
Income from fixed term funds 95 9 59
Dividend income 23 96 544
------------- ------------- ------------
713 619 1,631
------------- ------------- ------------
5. Investment Manager's fees
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
Investment management fee charged to revenue 138 129 253
Investment management fee charged to capital 1,240 1,163 2,269
------------- ------------- ------------
Total investment management fee 1,378 1,292 2,522
Movement in provision for performance incentive fee
charged to capital 217 562 272
------------- ------------- ------------
1,595 1,854 2,794
------------- ------------- ------------
Further details of the Management agreement under which the
investment management fee and performance incentive fee are paid
are given in the Strategic report on page 19 of the Annual Report
and Financial Statements for the year ended 31 December 2022.
During the period, services for a total value of GBP1,478,000
(30 June 2022: GBP1,392,000; 31 December 2022: GBP2,722,000) were
purchased by the Company from Albion Capital Group LLP ("Albion
Capital") comprising GBP1,378,000 of management fees (30 June 2022:
GBP1,292,000; 31 December 2022: GBP2,522,000) and GBP100,000 of
administration fees (30 June 2022: GBP100,000; 31 December 2022:
GBP200,000). At the financial period end, the amount due to Albion
Capital in respect of these services disclosed as accruals was
GBP822,000 (administration fee accrual GBP50,000, management fee
accrual GBP772,000) (30 June 2022: GBP807,000; 31 December 2022:
GBP647,000).
Currently a best estimate provision of GBP489,000 has been
calculated and included in relation to potential performance
incentive fees which arise from performance to 30 June 2023, which
would become payable over the periods to 31 December 2027. Within
this amount, GBP241,000 is included in payables falling due within
one year in relation to the first payment calculated on the
five-year period ending 31 December 2023, which is payable after
the adoption of the audited accounts at the 2024 AGM based on
actual year end performance. Further details can be found in note
9.
During the period, the Company was not charged by Albion Capital
in respect of Patrick Reeve's services as a Director (30 June 2022
and 31 December 2022: GBPnil).
Albion Capital, its partners and staff (including Patrick
Reeve), held 1,636,367 Ordinary shares in the Company as at 30 June
2023.
Albion Capital is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies.
During the period to 30 June 2023, fees of GBP81,000 attributable
to the investments of the Company were received by Albion Capital
pursuant to these arrangements (30 June 2022: GBP132,000; 31
December 2022: GBP345,000).
Unaudited Unaudited Audited year
six months six months ended
ended ended 31 December
30 June 2023 30 June 2022 2022
6. Dividends GBP'000 GBP'000 GBP'000
-------------------------------------------------------
First dividend of 1.82p per share paid on 30 June
2023 (30 June 2022: 2.02p per share) 3,238 3,240 3,240
Second dividend of 1.97p per share paid on 30 December
2022 - - 3,267
3,238 3,240 6,507
------------- ------------- ------------
The Directors have declared a dividend of 1.90 pence per
Ordinary share (total approximately GBP3,378,000) payable on 29
December 2023, to shareholders on the register on 8 December
2023.
7. Basic and diluted return/(loss) per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2023 30 June 2022 31 December 2022
Revenue Capital Revenue Capital Revenue Capital
-------------------------------------------------------- -------- --------- ------- ----------- ------- -----------
Profit/(loss) attributable to equity shares (GBP'000) 254 7,905 163 (146) 721 (7,022)
Weighted average shares in issue (adjusted for treasury
shares) 172,268,564 149,501,675 155,471,219
Return/(loss) attributable per equity share (pence) 0.15 4.59 0.11 (0.10) 0.46 (4.51)
The weighted average number of shares is calculated after
adjusting for treasury shares of 26,353,527 (30 June 2022:
22,449,076; 31 December 2022: 24,236,401).
There are no convertible instruments, derivatives or contingent
share agreements in issue, and therefore no dilution affecting the
return/(loss) per share. The basic return/(loss) per share is
therefore the same as the diluted return/(loss) per share.
8. Share capital
Audited
Allotted, called up and fully paid shares of 1 penny Unaudited Unaudited 31 December
each 30 June 2023 30 June 2022 2022
-----------------------------------------------------
Number of shares 204,149,764 183,280,301 190,510,554
Nominal value of allotted shares (GBP'000) 2,041 1,833 1,905
Voting rights (number of shares net of treasury
shares) 177,796,237 160,831,225 166,274,153
During the period to 30 June 2023 the Company purchased
2,117,126 Ordinary shares (nominal value GBP21,171) for treasury at
a cost of GBP1,561,000. The total number of Ordinary shares held in
treasury as at 30 June 2023 was 26,353,527 (30 June 2022:
22,449,076; 31 December 2022: 24,236,401) representing 12.9% of the
Ordinary shares in issue as at 30 June 2023.
Under the terms of the Dividend Reinvestment Scheme, the
following new Ordinary shares of nominal value 1 penny each were
allotted during the period to 30 June 2023:
Aggregate Opening market
nominal value Issue price Net price on allotment
Date of Number of of shares (pence per invested date (pence
allotment shares allotted (GBP'000) share) (GBP'000) per share)
----------
30 June
2023 685,420 7 76.77 506 73.00
Under the terms of the Albion VCTs Prospectus Top Up Offers
2022/23, the following new Ordinary shares, of nominal value 1
penny each, were allotted during the period to 30 June 2023:
Aggregate Opening market
nominal value Issue price price on allotment
Date of Number of of shares (pence per Net consideration date (pence
allotment shares allotted (GBP'000) share) received (GBP'000) per share)
----------
31 March
2023 12,395,704 124 79.60 9,621 74.00
14 April
2023 95,387 1 78.80 74 74.00
14 April
2023 31,564 - 79.20 24 74.00
14 April
2023 431,135 4 79.60 335 74.00
--------------
12,953,790 129 10,054
---------------- -------------- -------------------
9. Provisions and significant estimates
In accordance with the AIC SORP and FRS102, a provision for a
performance incentive fee ("PIF") is required to be estimated and
accounted for in the financial statements. The PIF is calculated on
a five-year rolling average performance basis, with a 5% hurdle
applied to the opening net asset value each year, which is in line
with our current dividend target. The first five year performance
period will take into account the audited results of the five years
ending 31 December 2023.
Any PIF will only be paid on actual year end audited results,
and this provision is the Board's best estimate of the potential
obligation relating to the inclusion of realised performance from 1
January 2019 to 30 June 2023 in any future five-year rolling
periods.
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
Movement in provision GBP'000 GBP'000 GBP'000
-------------------------------
Opening provision 272 - -
Movement in provision 217 562 272
Closing provision 489 562 272
------------- ------------- ------------
Payable within one year: 241 - -
Payable in more than one year: 248 562 272
The most significant assumption when calculating this amount, is
that of future performance. Results for the period from 1 January
2019 to 30 June 2023 are included in the calculation; a forecast
has been used for current year performance and future years assume
performance is achieved in line with the five year historic rolling
average. The provision included in the financial statements has
been calculated on this basis and has been corroborated by a
portfolio return analysis using appropriate benchmarks. Performance
fees are only paid on final audited results for a five year
period.
The average return per annum over each rolling five year period
since the Company's inception in 2000 to the date of approval of
the new performance fee arrangements was 5.85%. This smooths the
performance through the various economic events and cycles seen
since inception. This has resulted in a provision of GBP489,000 at
30 June 2023.
10. Commitments and contingencies
As at 30 June 2023, the Company had no financial commitments in
respect of investments (30 June 2022 and 31 December 2022:
GBPnil).
There are no contingencies or guarantees of the Company as at 30
June 2023 (30 June 2022 and 31 December 2022: GBPnil).
11. Post balance sheet events
There have been no material post balance sheet events since 30
June 2023.
12. Related party transactions
Other than transactions with the Manager as disclosed in note 5,
there are no other related party transactions requiring
disclosure.
13. Going concern
The Board has conducted a detailed assessment of the Company's
ability to meet its liabilities as they fall due. Cash flow
forecasts are updated and discussed quarterly at Board meetings and
have been stress tested to allow for the forecast impact of the
current economic climate and increasingly volatile geopolitical
backdrop. The Board has revisited and updated its 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 91 of those accounts.
The portfolio of investments is diversified in terms of sector
and the major cash outflows of the Company (namely investments,
dividends and share buy-backs) are within the Company's control.
Accordingly, after making diligent enquiries, the Directors have a
reasonable expectation that the Company has adequate cash and
liquid resources to continue in operational existence for the
foreseeable future. For this reason, the Directors have adopted the
going concern basis in preparing this Half-yearly Financial Report
and this is in accordance with the Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting
issued by the Financial Reporting Council in September 2014, and
the subsequent updated Going concern, risk and viability guidance
issued by the FRC in 2021.
14. Other information
The information set out in this Half-yearly Financial Report
does not constitute the Company's statutory accounts within the
terms of section 434 of the Companies Act 2006 for the periods
ended 30 June 2023 and 30 June 2022 and is unaudited. The
information for the year ended 31 December 2022 does not constitute
statutory accounts within the terms of section 434 of the Companies
Act 2006 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.
15. Publication
This Half-yearly Financial Report is being sent to shareholders
and copies will be made available to the public at the registered
office of the Company, Companies House, the National Storage
Mechanism and also electronically at www.albion.capital/funds/AATG,
where the Report can be accessed from the 'Financial Reports and
Circulars' section.
Attachment
-- Current portfolio sector allocation
https://ml-eu.globenewswire.com/Resource/Download/4f998f63-632e-4ffa-92a2-6f2e35c2285f
(END) Dow Jones Newswires
September 21, 2023 08:44 ET (12:44 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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