Hargreave Hale AIM 1 Hargreave Hale Aim Vct 1 Plc : Interim Management Statement
March 30 2017 - 10:15AM
UK Regulatory
TIDMHHV
Interim Management Statement for the 3 months to 31 December 2016
This report covers the first quarter of the 2016/17 financial year, 1
October 2016 to 31 December 2016.
Investment Report
The period under review was dominated by the US election. Trump's plans
to cut taxes, boost infrastructure spending and reduce regulations were
seen as positive for developed market growth and inflation expectations,
sparking a rally in global equities. In the UK, fears over the
consequences of the UKs Brexit decision retreated as third quarter GDP
growth came in ahead of expectations and consumer spending remained
stronger than many had predicted.
Looking ahead we believe the UK trading environment continues to look
attractive with good evidence of strong and sustainable growth in the
economy this year, supported by high levels of employment and consumer
confidence. Although the medium-term outlook is difficult to forecast,
the UK continues to benefit from loose monetary policy and a Government
that has signalled its willingness to provide further support through
fiscal policy if the need arises. Aside certain sectors which have
struggled with the depreciation in sterling and higher import costs, our
corporates continue to report encouraging news flow.
Performance
In the three months to 31 December 2016, the NAV increased from 75.93p
to 76.38p. No dividends were paid, giving investors a total return of
0.45 pence per share, which translates to a gain of 0.6%. During the
same period the FTSE AIM All-Share Total Return gained 3.5%, whilst the
FTSE 100 Total Return gained 4.3%.
The qualifying investments made a net loss of -0.39 pence per share with
twenty-seven out of the seventy-nine making gains, seventeen unchanged
and thirty-five losing ground. The balance was the net of non-qualifying
portfolio gains, running costs and investment income.
Cohort was the top performing qualifying investment (+30.6%, +0.71 pence
per share). They completed the earnings enhancing acquisition of EID, an
experienced designer and manufacturer of advanced defence communications
systems. Quixant (+25.9%, +0.38 pence per share) announced a very strong
set of 2016 interims demonstrating strong organic sales growth, a better
than expected contribution from the Densitron acquisition and cash flows
ahead of expectations. Management remain confident on the full year
outlook and analysts upgraded. Ideagen (+29.2%, +0.29 pence per share)
also performed well after the earnings enhancing acquisition of IPI
Solutions. ULS Technology (+43.5%, +0.25 pence per share) and DP Poland
(+15.5%, +0.23 pence per share) also contributed meaningfully to the
NAV.
The biggest losses within the period came from TrakM8 (-48.7%, -0.72
pence per share) which saw its shares fall significantly after a poor
set of interims flagging worse than expected revenue growth and poor
cash generation. Other losses came from Instem Life (-31.0%, -0.27
pence per share), TLA (-26.8%, -0.26 pence per share) and Belvoir
(-30.7%, -0.24 pence per share).
We invested GBP3.2m into seven qualifying investments over the period,
including one further investment into an existing qualifying company,
three IPOs and three private investments.
Portfolio Structure
The VCT is comfortably through the HMRC defined investment test and
ended the period at 94.76% invested as measured by the HMRC investment
test. By market value, the VCT had a 64.6% weighting to qualifying
investments.
The allocation to non-qualifying equity investments increased marginally
from 15.4% to 16.1%. We continued to make use of the Marlborough
Special Situations Fund as a temporary home for proceeds from
fundraising; the allocation marginally decreased from 4.7% to 3.6%. The
non-qualifying investments contributed +1.05 pence per share to the
overall gains. Fixed income as a percentage of the fund decreased from
0.9% to 0.0% and cash decreased from to 18.4% to 15.8%.
The HMRC investment tests are set out in Chapter 3 of Part 6 Income Tax
Act 2007, which should be read in conjunction with this section of the
interim management statement. Funds raised by VCTs are first included in
the investment tests from the start of the accounting period containing
the third anniversary of the date on which the funds were raised.
Therefore, the allocation of qualifying investments as defined by the
legislation can be different to the portfolio weighting as measured by
market value relative to the net assets of the VCT.
Joint Offer for Subscription of Ordinary Shares
On 14 December 2016, the Directors of Hargreave Hale AIM VCT 1 plc and
Hargreave Hale AIM VCT 2 plc announced the launch of a new joint offer
for subscription of new shares in both VCT's to raise up to GBP10
million into Hargreave Hale AIM VCT 1 plc and GBP10 million into
Hargreave Hale AIM VCT 2 plc.
On the 9 March 2017 the Directors announced their intention to utilise
the GBP5m Over-Allotment Facility for Hargreave Hale AIM VCT 1 plc.
Since its launch and the date of this report the offer has resulted in
funds being received of GBP14.33 million by Hargreave Hale AIM VCT 1,
and the issue of 18.12 million shares. A further GBP0.67 million is
pending allotment in the 2017/18 tax year. The offer is now fully
subscribed.
Buybacks
No shares were purchased by the Company between 1 October 2016 and 31
December 2016. Since the period end 287,094 ordinary shares were
purchased at a total value of GBP212,889.
Dividends
There were no dividends paid out in the 3 months to 31 December 2016, a
final dividend of 2.25 pence per ordinary share was paid on 17 January
2017.
Post Period End Update
Performance has been strong since quarter end with the NAV gaining 4.83%
after adjusting for the 2.25 pence per share dividend paid on 17 January
2017.
Although we have only completed two follow up qualifying investments in
Faron Pharmaceuticals and Portr within the current quarter, we are
engaged with a substantial pipeline of investment opportunities. We
expect several of these to complete in the coming weeks.
For further information, please contact:
Stuart Brookes
Company Secretary
Hargreave Hale AIM VCT 1 plc
01253 754740
Date: 30 March 2017
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Hargreave Hale AIM VCT 1 plc via Globenewswire
https://hargreaveaimvcts.co.uk/
(END) Dow Jones Newswires
March 30, 2017 11:15 ET (15:15 GMT)
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