TIDMUAV
RNS Number : 0923B
Unicorn AIM VCT PLC
31 May 2023
Unicorn AIM VCT plc ("The Company")
Half-Yearly Report Announcement for the six months ended 31
March 2023
Financial Highlights
For the six months ended 31 March 2023
-- Net Asset Value ("NAV") total return per share for the six
months ended 31 March 2023, after adding the back the dividends
paid in the period, was -4.3%.
-- GBP2.1 million of qualifying investments (GBP2.0 million new,
GBP0.1 million follow-on) made in the period.
-- Interim dividend of 3.0p per share declared for the six months ended 31 March 2023.
-- The Offer for Subscription, launched on 24 January 2023, was
oversubscribed by 6 February 2023, and raised GBP14.6 million
(after costs of GBP0.4 million).
Fund Performance
Shareholders'
Net asset
value plus
Cumulative cumulative
Net asset dividends dividends
value per paid per paid per
Funds* share (NAV) share** share** Share price
Ordinary Shares (GBPmillion) (p) (p) (p) (p)
31 March 2023 218.4 125.5 102.5 228.0 103.5
30 September
2022 221.1 134.8 99.0 233.8 126.5
31 March 2022 315.3 195.7 64.0 259.7 167.0
30 September
2021 370.8 248.6 53.5 302.1 219.0
* Shareholders' funds/net assets as shown in the Condensed
Statement of Financial Position below.
** Total dividends (including special dividends) paid since 30
September 2013.
Percentage of Assets Held as at 31 March 2023
Description Total Qualifying Non- qualifying
% % %
AIM Traded 70.6 69.1 1.5
Unquoted 12.3 12.3 -
Other funds 8.1 - 8.1
Fully Listed 3.2 - 3.2
Cash and other assets 5.8 - 5.8
Valuation based on fair value
Chair's Statement
I am pleased to present the unaudited Half-Yearly Report of the
Company for the six-month period ended 31 March 2023.
As at 31 March 2023, the net assets of the Company were GBP218.4
million. This figure is GBP2.7 million lower than at the start of
the current financial year. After accounting for the additional
shares in issue following a successful Offer for Subscription and
after adding back dividends paid in the period, the total return in
the six-month period under review was -4.3%.
The decline in net asset value recorded in the first half of the
Company's financial year is both disappointing and represents a
period of relative underperformance. The FTSE AIM All-Share Index
recorded a small positive total return of 1.1%.
Investor appetite for equity risk continued to wane throughout
the first half of the financial year and this resulted in a
significant derating of smaller, less liquid AIM stocks and a
widening divergence of returns across the market capitalisation
range. On average during the period, there were twenty-two
companies listed on the AIM Index with a market capitalisation in
excess of GBP1 billion. The value of these companies, represented
26% of the total value of the AIM Index and they posted an average
total return of +20.4% over the six-month period under review. By
contrast, there were 653 companies valued at a market
capitalisation of GBP150m or less, in aggregate accounting for only
23% of AIM Index value.
These smaller businesses posted an average total return of -9.8%
over the same period. Such statistics illustrate the divergence in
performance between smaller, earlier stage growth companies, where
the majority of our investments must be directed, and the larger,
more established businesses listed on the AIM Index.
Higher interest rates have weighed particularly heavily on
early-stage growth companies, where valuations are typically more
dependent on longer term expectations of profitability. This
dynamic has placed significant pressure on the share prices of many
AIM-listed companies. Larger, more established businesses,
especially those listed on the FTSE 100 Index, again significantly
outperformed companies at the lower end of the market
capitalisation range.
Inevitably, there were also a small number of discouraging
trading updates in the six months under review. Nonetheless, the
period can best be characterised by the resilience and adaptability
shown by most investee companies despite the extremely challenging
operating conditions environment. The most notable exception was
The British Honey Company ("British Honey"), a UK based producer of
spirits, honey, and jams. A weak balance sheet, combined with poor
operational management, exacerbated the mounting challenges posed
by order delays, a difficult consumer environment and severe cost
inflation. At the end of March, the Board of British Honey
announced its intention to place the business into administration
in order to avoid trading insolvently. Although British Honey has
been an extremely disappointing investment, the impact on
performance in the period was minimal due to declines in British
Honey's carrying value in previous periods. It is now highly
unlikely that any meaningful recovery in value will be
achieved.
Your Investment Manager continues to manage the portfolio in a
prudent fashion with the aim of developing a diverse portfolio of
high-quality companies capable of generating significant
Shareholder returns over the long term. The team at Unicorn has
extensive experience of investing in AIM listed businesses across
the full spectrum of market conditions and they are well placed to
successfully navigate the current challenging environment.
Investment Performance
A review of the ten most meaningful contributions to performance
in absolute terms (both positive and negative) follows.
Hasgrove (11.1% of net assets, +GBP5.4 million) is an unquoted
company, whose sole operating subsidiary, Interact, is a
fast-growing Software as a Service (SaaS) provider of corporate
intranet solutions. Hasgrove reported strong results for its
financial year ended 31 December 2022, during which revenues grew
by 28% to GBP29.4 million and adjusted EBITDA increased by 22% to
GBP10.1 million. Management also reported a strong start to trading
in the current financial year, underpinned by high levels of
recurring revenue from its core Interact software product. As a
result, further growth is anticipated in the current financial year
ended 31 December 2023, and the Fair Value of the Company's holding
in Hasgrove has therefore been adjusted upwards to GBP24.3 million.
This uplift represents an increase of GBP5.4 million compared to
the assessed Fair Value as at the VCT's previous financial year
ended 30 September 2022.
Aurrigo International (3.7% of net assets, +GBP4.8 million) is a
leading international provider of transport technology solutions
and is highly regarded as a specialist in autonomous and
semiautonomous solutions. Aurrigo International has delivered
strong operational and financial performance following its IPO on
AIM in September 2022. Since its IPO, Aurrigo has invested in the
further development of its Autonomous and Aviation division and
signed an agreement with Singapore's Changi Airport Group for the
next development phase of its 'Auto-Dolly' baggage transportation
solution.
MaxCyte (4.3% of net assets, -GBP4.5 million) is a US-based life
sciences company that provides cell engineering and gene editing
technologies to support drug discovery and cell therapy
applications. During the period, MaxCyte released results for its
financial year ended 31 December 2022, which highlighted a 31%
growth in revenues to $44.3 million. The aggregate potential value
of all milestone payments is now reported to have increased to over
$1.55 billion from eighteen strategic platform licence (SPL)
agreements. The management team expects further revenue growth of
between 21% to 26% in its current financial year. MaxCyte remains
well-funded with total cash and cash equivalents of circa $227
million as at 31 December 2022. However, sentiment towards biotech
companies has deteriorated markedly in the past two years and
MaxCyte has certainly not been immune from this process, despite
encouraging operational and financial performance.
Anpario (1.7% of net assets, -GBP4.0 million) is an
international manufacturer and distributor of natural animal feed
additives for animal health and nutrition, with a focus on
sustainable and eco-friendly solutions. Anpario reported a weaker
operational and financial performance in recent months, announcing
a 25% decline in its gross profits due to supply chain disruption
and significant inflation in the cost of raw materials. Sales
growth across Asia, Middle East & Africa, and the Americas has
been offset by a decrease in European revenues. Despite this recent
setback, the business, remains profitable, maintains a strong
balance sheet, offers a broad range of products and is
geographically diverse. Your Investment Manager believes that the
share price is likely to recover strongly once the current
headwinds abate.
Abcam (5.8% of net assets, -GBP3.0 million) is a UK-based life
sciences company that produces and distributes research-grade
antibodies and other biological reagents for use in scientific
research and diagnostics. In December 2022, Abcam delisted from the
AIM Index, and we consequently exchanged our UK listed shares for
an equivalent value of American Depository Shares. Abcam had been
dual listed on AIM and NASDAQ since October 2020. In March 2023,
Abcam released results for its financial year ended 31 December
2022, which highlighted that profit growth had been constrained by
two main factors; the implementation of a new ERP system, which
disrupted sales in September and October, and sales performance in
China that was disrupted by the regime's zero-COVID policy.
Saietta (0.5% of net assets, -GBP1.9 million) is a designer and
manufacturer of axial flux motors for electric vehicles.
Unfortunately, Saietta was forced to issue a profit warning in
March 2023, due to significantly weaker than expected sales in its
Comet (heavy-duty) and Propel (Marine) divisions. Meanwhile, orders
for Saietta's light-duty integrated eDrive product have been
expanding at pace, requiring significantly increased investment to
ensure a successful transition to volume manufacturing. The Board
of Saietta has confirmed its confidence that the business is in a
position to fully finance the current financial year (2023/24),
without recourse to further external fundraising. Saietta's cash
balance as at 28 February 2023 was GBP11 million.
Surface Transforms (2.4% of net assets, -GBP1.8 million) designs
and manufactures high-performance carbon ceramic brake discs for
use in the automotive and aerospace industries. In January 2023,
Surface Transforms reported on technical problems, which included
an issue with one of its key furnaces. These problems have
adversely affected output over the past six months, which was
already under pressure due to industry-wide supply chain
constraints. These issues negatively affected turnover, have
increased production costs, and have consequently resulted in a
larger than expected operating loss for the company's financial
year ended 31 December 2022. The management team has taken various
steps to improve the manufacturing process, including the use of
more readily available raw materials. These changes have been
successfully implemented, and production issues therefore now
appear to have been resolved.
Engage XR (0.3% of net assets, -GBP1.6 million) is a technology
business focused on Virtual Reality. In December 2022, Engage XR
issued a weaker than expected trading update, which reported on
slow conversion of the group's sales pipeline. Engage XR had
previously increased its cost base by expanding its sales,
marketing, and support teams, which led to sharply higher losses in
its financial year ended 31 December 2022. Management is now taking
action to reduce the cost base in light of the more challenging
trading environment.
Animalcare (1.2% of net assets, -GBP1.5 million) is an
international animal health business. In March 2023, Animalcare
announced results for its financial year ended 31 December 2022,
which highlighted a modest decline in annual sales, primarily as a
result of reduced antibiotic use in Spain. Animalcare has, however,
made good progress in increasing its gross margins through sales of
higher margin products and its Board expects to report on a return
to revenue growth in the current financial year.
Angle (0.3% of net assets, -GBP1.3 million) is a world-leading
liquid biopsy company. Angle has not been immune from the wider
economic and market headwinds and the management team has therefore
taken swift action to control the cost base, which has included the
closure of its Canadian operations. These measures are expected to
deliver cost savings of GBP2.6 million in 2023 and GBP4.0 million
per annum thereafter but have also resulted in one-off costs of
circa GBP2 million. Angle ended 2022 with net cash of circa GBP32
million.
In aggregate, the eight largest detractors from performance
delivered an unrealised capital loss of GBP19.6 million, while the
two largest contributors to performance contributed GBP10.2 million
to positive performance.
Investment Activity
Investment activity is deliberately tightly controlled when the
outlook for equity markets looks unsettled. Consequently, there has
been limited investment activity during the period under
review.
One new VCT qualifying investment into Oxford Biodynamics was
completed in the six-month period to the end of March,2023 at an
investment cost of GBP2.0 million. In addition to this new
investment, one secondary investment was made in SulNOx at a cost
of GBP0.1 million.
The Investment Manager continues to engage with the management
teams of our investee companies on a regular basis, in order to
monitor their performance and ensure that they are navigating the
currently tough economic conditions as effectively as possible.
It is also important to note that new opportunities to create
long term value are not being overlooked and, although the IPO
market is currently subdued, the near-term investment pipeline
remains encouraging.
Offer for Subscription
The Company's latest Offer for Subscription was launched on 24
January 2023 and opened for applications on 6 February 2023. The
Offer reached full subscription of GBP15 million on 6 February 2023
and was closed shortly thereafter. On behalf of the Board, I would
like to welcome all new Shareholders and to thank existing
Shareholders for their continued support.
Dividends
The Board has declared an interim dividend of 3.0 pence per
share, for the six months ended 31 March 2023. This interim
dividend will be paid on 11 August 2023 to Shareholders on the
register on 14 July 2023. The shares will be quoted ex-dividend on
13 July 2023.
Dividend decisions are taken by the VCT Board and are always
subject to a number of factors including; market conditions,
satisfactory returns, and/or availability of cash and distributable
reserves.
Dividend Reinvestment Scheme ("DRIS")
On 14 February 2023, 560,504 Ordinary Shares were allotted at a
price of 129.7 pence per share, being the latest published net
asset value at 31 January 2023, to Shareholders who elected to
receive Ordinary Shares under the DRIS as an alternative to the
final cash dividend for the year ended 30 September 2022.
Share Buybacks
During the period from 1 October 2022 to 31 March 2023, the
Company bought back 1,587,397 of its own Ordinary Shares for
cancellation, at an average price of 114.8 pence per share
including costs.
As at 31 March 2023, there were 174,104,558 Ordinary Shares in
issue.
Material Transactions
Other than the Offer for Subscription, Share Buybacks and the
purchase of investments described above, there were no material
transactions in the six-month period ended 31 March 2023.
VCT Status
The Company comfortably exceeded the VCT qualifying threshold
required by HM Revenue & Customs, with approximately 99.4%
(excluding new capital) of total assets by VCT value being invested
in VCT qualifying companies at the end of the period under review.
The Company has complied with all other HM Revenue & Customs'
regulations, and your Board has been advised by PwC that the
Company has maintained its venture capital trust status.
Summary & Outlook
Small AIM-listed businesses continue to experience significant
pressures. Access to growth capital is difficult, debt funding
costs are high and input costs, such as wages and raw materials,
have spiralled upwards. Against this backdrop, it is unsurprising
that investor enthusiasm for early-stage, loss-making companies
remains fragile.
However, there are reasons to believe that the outlook is
improving. Inflation appears to have peaked, which should negate
the need for significant interest rate increases. Pressures on the
global supply chain have eased, which is enabling businesses to
fulfil vital orders. Despite the gloomy forecasts from most
economists, the UK economy has so far managed to avoid falling into
recession and, for the time being at least, stability also appears
to have been restored in Westminster. UK quoted companies generally
remain in good financial health and continue to demonstrate their
operational and financial resilience.
The FTSE AIM All-Share Index has suffered a significant
contraction in value over the past two years which, although
understandable, has been disproportionate to other equity markets.
Encouragingly, in the early weeks of the second half of the VCT's
financial year, equity market conditions have shown tentative signs
of recovery, perhaps in response to an increased level of interest
from prospective acquirers of UK listed businesses. Merger &
Acquisition and IPO activity has certainly picked up noticeably in
recent weeks.
The Board believes that the Company's investment portfolio is
well placed to deliver a strong recovery in performance as and when
these positive trends gather momentum.
Tim Woodcock
Chair
30 May 2023
Investment Objective
The Company's objective is to provide Shareholders with an
attractive return from a diversified portfolio of investments,
predominantly in the shares of AIM quoted companies, by maintaining
a steady flow of dividend distributions to Shareholders from the
income as well as capital gains generated by the portfolio.
It is also the objective that the Company should continue to
qualify as a Venture Capital Trust, so that Shareholders benefit
from the taxation advantages that this brings. To achieve this at
least 80% for accounting periods commencing after 6 April 2019
(previously 70%) of the Company's total assets are to be invested
in qualifying investments of which 70% by VCT value (30% in respect
of investments made before 6 April 2018 from funds raised before 6
April 2011) must be in ordinary shares which carry no preferential
rights (save as permitted under VCT rules) to dividends or return
of capital and no rights to redemption.
Investment Policy
In order to achieve the Company's investment objective, the
Board has agreed an investment policy which requires the Investment
Manager to identify and invest in a diversified portfolio,
predominantly of VCT qualifying companies quoted on AIM that
display a majority of the following characteristics:
experienced and well-motivated management;
products and services supplying growing markets;
sound operational and financial controls; and
potential for good cash generation in due course, to finance
ongoing development and support for a progressive dividend
policy.
Asset allocation and risk diversification policies, including
maximum exposures, are to an extent governed by prevailing VCT
legislation. No single holding may represent more than 15% (by VCT
value) of the Company's total investments and cash, at the date of
investment.
There are a number of VCT conditions which need to be met by the
Company which may change from time to time. The Investment Manager
will seek to make qualifying investments in accordance with such
requirements.
Asset Mix
Where capital is available for investment while awaiting
suitable VCT qualifying opportunities or is in excess of the 80%
VCT qualification threshold for accounting periods commencing after
6 April 2019, it may be held in cash or invested in money market
funds, collective investment vehicles or non-qualifying shares and
securities of fully listed companies registered in the UK.
Borrowing
To date the Company has operated without recourse to borrowing.
The Board may however consider the possibility of introducing
modest levels of gearing up to a maximum of 10% of the adjusted
capital and reserves, should circumstances suggest that such action
is in the interests of Shareholders.
Venture Capital Trust Status
The Company has satisfied the requirements for approval as a
Venture Capital Trust ("VCT") under section 274 of the Income Tax
Act 2007 (ITA). It is the Directors' intention to continue to
conduct the business of the Company so as to maintain compliance
with that section.
Unaudited Investment Portfolio Summary
as at 31 March 2023
Qualifying investments % of net
assets
Book cost Valuation by value
GBP'000 GBP'000 *
AIM quoted investments:
Tracsis 1,500 14,520 6.7
Abcam 1,161 12,748 5.8
MaxCyte 2,926 9,445 4.3
Aurrigo International 3,000 8,125 3.7
Avingtrans 996 6,806 3.1
Keywords Studio 303 6,801 3.1
Cohort 1,278 5,520 2.5
Mattioli Woods 1,626 5,503 2.5
Tristel 878 5,233 2.4
Surface Transforms 3,164 5,164 2.4
Access Intelligence 3,159 5,152 2.4
Avacta Group 932 4,773 2.2
AB Dynamics 793 4,650 2.1
Directa Plus 4,610 4,522 2.1
Idox 1,242 4,010 1.8
Feedback 4,000 3,643 1.7
Anpario 1,422 3,637 1.7
Instem 985 3,462 1.6
Belvoir Group 1,883 3,381 1.5
Arecor Therapeutics 2,778 2,997 1.4
Animalcare Group 2,401 2,568 1.2
Futura Medical 2,300 2,556 1.2
City Pub Group 2,250 1,705 0.8
Oxford Biodynamics 2,000 1,355 0.6
Ilika 1,528 1,294 0.6
Lunglife AI 3,080 1,225 0.6
Verici DX 2,125 1,201 0.5
Smoove 1,500 1,181 0.5
Saietta Group 3,151 1,129 0.5
Destiny Pharma 2,500 1,121 0.5
47 investments, each valued at less
than 0.5% of net assets 58,493 15,565 7.1
----------------------------------------------- ------------------ -------------- ------------------
119,964 150,992 69.1
Qualifying investments
Unlisted investments:
Hasgrove 1,303 24,259 11.1
nkoda Limited 2,497 962 0.5
Heartstone Inns 1,112 687 0.3
Phynova Group 1,500 430 0.2
LightwaveRF 2,616 279 0.1
Osirium Technologies - Loan Stock 500 250 0.1
6 investments, each valued at less than
0.1% of net assets 4,904 - -
----------------------------------------------- ------------------ -------------- ------------------
14,432 26,867 12.3
----------------------------------------------- ------------------ -------------- ------------------
Total qualifying investments 134,396 177,859 81.4
----------------------------------------------- ------------------ -------------- ------------------
Non-qualifying investments
Royal London Short Term Money Market
Fund Y(OEIC) 7,002 7,013 3.2
Blackrock Cash Fund Class D (Unit Trust) 7,000 7,011 3.2
Fully listed UK equities 8,357 6,932 3.2
Unicorn Ethical Fund (OEIC) Income 4,483 3,645 1.7
AIM quoted investments 4,883 3,409 1.5
Other unlisted investments each valued
at less than 0.1% of net assets 556 - -
-----------------------------------------------
Total non-qualifying investments 32,281 28,010 12.8
----------------------------------------------- ------------------ -------------- ------------------
Total investments 166,677 205,869 94.2
Cash and cash equivalents 13,851 6.4
Current assets 174 0.1
Current liabilities (1,473) (0.7)
----------------------------------------------- ------------------ -------------- ------------------
Net assets 218,421 100.0
----------------------------------------------- ------------------ -------------- ------------------
* Based on fair value not VCT carrying value
Responsibility Statement
Directors' Statement of Principal Risks and Uncertainties
The important events that have occurred during the period under
review and the key factors influencing the financial statements are
set out in the Chair's Statement above.
In accordance with DTR 4.2.7, the Directors consider that with
the exception of those mentioned below, the principal risks and
uncertainties facing the Company have not materially changed since
the publication of the Annual Report and Accounts for the year
ended 30 September 2022.
The principal risks faced by the Company include, but are not
limited to:
-- investment and strategic
-- regulatory and tax
-- operational
-- fraud, dishonesty and cyber
-- financial instruments
-- economic and political
In addition, the Directors also assess the possibility of new
and emerging risks.
A more detailed explanation of these risks and the way in which
they are managed can be found in the Strategic Report on pages 31
and 32 and in the Notes to the Financial Statements on pages 79 to
81 of the 2022 Annual Report and Accounts - copies can be found via
the Company's website, www.unicornaimvct.co.uk .
Directors' Statement of Responsibilities in Respect of the
Financial Statements
In accordance with Disclosure and Transparency Rule (DTR)
4.2.10, Tim Woodcock (Chair), Charlotta Ginman (Senior Independent
Director), Jeremy Hamer (Chair of the Audit Committee) and Josie
Tubbs, the Directors, confirm that to the best of their
knowledge:
-- the condensed set of financial statements, which have been
prepared in accordance with FRS 104 "Interim Financial Reporting"
give a true and fair view of the assets, liabilities, financial
position and loss of the Company for the period ended 31 March
2023, as required by DTR 4.2.4;
-- this Half-Yearly Report includes a fair review of the
information required as follows:
the interim management report included within the Chair's
Statement and the Investment Portfolio Summary, includes a fair
review of the information required by DTR 4.2.7 being an indication
of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties facing the Company for the remaining six months of
the year; and
there were no other related party transactions in the first six
months of the current financial year that are required to be
disclosed in accordance with DTR 4.2.8.
Cautionary Statement
This report may contain forward looking statements with regards
to the financial condition and results of the Company, which are
made in the light of current economic and business circumstances.
Nothing in this report should be construed as a profit
forecast.
The Half-Yearly Report was approved by the Board of Directors on
30 May 2023 and the above responsibility statement was signed on
its behalf by:
Tim Woodcock
Chair
30 May 2023
Management of the Company
The Board has overall responsibility for the Company's affairs
including the determination of its investment policy. Risk is
spread by investing in a number of different businesses across
different industry sectors. The Investment Manager, Unicorn Asset
Management Limited, is responsible for managing sector and stock
specific risk and the Board does not impose formal limits in
respect of such exposures. However, in order to maintain compliance
with HMRC rules and to ensure that an appropriate spread of
investment risk is achieved, the Board receives and reviews
comprehensive reports from the Investment Manager on a monthly
basis. When the Investment Manager proposes to make any investment
in an unquoted company, the prior approval of the Board is
required. The Board continues to take the need for transparency and
independence seriously. When a conflict arises involving a
relationship between any Director and an investee or proposed
investee company, that Director abstains from any discussion or
consideration on any such investment by the Company.
The Administrator, ISCA Administration Services Limited,
provides Company Secretarial and Accountancy services to the
Company.
Unaudited Condensed Income Statement
for the six months ended 31 March 2023
Six months ended Six months ended Year ended 30 September
31 March 2023 (unaudited) 31 March 2022 (unaudited) 2022 (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net unrealised
losses on
investments 7 - (8,773) (8,773) - (61,056) (61,056) - (113,641) (113,641)
Net gains
on
realisation
of
investments 7 - 7 7 - 921 921 - 12,771 12,771
Income 4 751 - 751 578 - 578 1,753 - 1,753
Investment
management
fees 2 (523) (1,567) (2,090) (742) (2,229) (2,971) (1,322) (3,965) (5,287)
Other expenses (382) - (382) (356) - (356) (771) - (771)
-------------- --------------- --------------- -------------- --------------- --------------- -------------- ---------------- ----------------
Loss on
ordinary
activities
before
taxation (154) (10,333) (10,487) (520) (62,364) (62,884) (340) (104,835) (105,175)
-------------- --------------- --------------- -------------- --------------- --------------- -------------- ---------------- ----------------
Tax on loss
on ordinary 3 - - - - - - - - -
activities
-------------- --------------- --------------- -------------- --------------- --------------- -------------- ---------------- ----------------
Loss and
total
comprehensive
income after
taxation (154) (10,333) (10,487) (520) (62,364) (62,884) (340) (104,835) (105,175)
Basic and
diluted
earnings
per share:
Ordinary
Shares 5 (0.09)p (6.23)p (6.32)p (0.35)p (41.38)p (41.73)p (0.22)p (67.10)p (67.32)p
-------------- --------------- --------------- -------------- --------------- --------------- -------------- ---------------- ----------------
All revenue and capital items in the above statement derive from
continuing operations of the Company.
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with
Financial Reporting Standards ("FRS"). The supplementary revenue
return and capital return columns are prepared in accordance with
the Statement of Recommended Practice ("AIC SORP") issued in July
2022 by the Association of Investment Companies.
Other than revaluation movements arising on investments held at
fair value through Profit or Loss Account, there were no
differences between the (loss)/profit as stated above and at
historical cost.
The notes form part of these Half-Yearly financial
statements.
Unaudited Condensed Statement of Financial Position
as at 31 March 2023
As at As at As at
31 March 2023 31 March 2022 30 September
2022
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------ -------------------------------- -----------------------------------------
Non-current
assets
Investments at
fair 1e,
value 7 205,869 291,075 198,541
Current assets
Debtors 174 156 515
Cash and cash
equivalents 13,851 26,242 23,751
------------------------------ -------------------------------- -----------------------------------------
14,025 26,398 24,266
Creditors;
amounts
falling due
within
one year (1,473) (2,181) (1,681)
------------------------------ -------------------------------- -----------------------------------------
Net current
assets 12,552 24,217 22,585
------------------------------ -------------------------------- -----------------------------------------
Net assets 218,421 315,292 221,126
------------------------------ -------------------------------- -----------------------------------------
Share capital
and
reserves
Called up
share capital 1,741 1,611 1,640
Capital
redemption
reserve 129 102 113
Share premium
account 100,292 79,193 85,063
Capital
reserve 46,267 147,402 55,038
Special
reserve 59,207 66,176 68,338
Profit and
loss account 10,785 20,808 10,934
------------------------------ -------------------------------- -----------------------------------------
Equity
Shareholders'
funds 218,421 315,292 221,126
------------------------------ -------------------------------- -----------------------------------------
Basic and
diluted
net asset
value per
share of 1p
each
Ordinary
Shares 8 125.45p 195.74p 134.81p
The financial information for the six months ended 31 March 2023
and the six months ended 31 March 2022 have not been audited.
The notes form part of these Half-Yearly financial
statements.
Unaudited Condensed Statement of Changes in Equity
for the six months ended 31 March 2023
Called
up Capital Share Unrealised Profit
share redemption premium capital Special and loss
capital reserve account reserve reserve* account* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------------- ------------- ---------------- -------------- -------------- --------------
Six months ended 31 March
2023
As at 1
October
2022 1,640 113 85,063 55,038 68,338 10,934 221,126
Loss after
taxation - - - (8,771) - (1,716) (10,487)
Transfer to
special
reserve - - - - (1,567) 1,567 -
Shares issued
under Offer
for
Subscription,
net of costs 111 - 14,508 - - - 14,619
Net proceeds
from DRIS
share
issue 6 - 721 - - - 727
Shares
purchased
for
cancellation
and cancelled (16) 16 - - (1,823) - (1,823)
Dividends paid - - - - (5,741) - (5,741)
At 31 March
2023 1,741 129 100,292 46,267 59,207 10,785 218,421
------------ ---------------- ------------- ---------------- -------------- -------------- --------------
Six months ended 31 March
2022
As at 1
October
2021 1,491 88 53,602 222,185 87,659 5,773 370,798
(Loss)/profit
after
taxation - - - (74,783) - 11,899 (62,884)
Transfer to
special
reserve - - - - (3,136) 3,136 -
Shares issued
under Offer
for
Subscription,
net of costs 127 - 24,258 - - - 24,385
Net proceeds
from DRIS
share
issue 7 - 1,333 - - - 1,340
Shares
purchased
for
cancellation
and cancelled (14) 14 - - (2,747) - (2,747)
Dividends paid - - - - (15,600) - (15,600)
At 31 March
2022 1,611 102 79,193 147,402 66,176 20,808 315,292
------------ ---------------- ------------- ---------------- -------------- -------------- --------------
Year ended 30 September
2022
As at 1
October
2021 1,491 88 53,602 222,185 87,659 5,773 370,798
(Loss)/profit
after
taxation - - - (167,147) - 61,972 (105,175)
Transfer to
special
reserve - - - - (4,872) 4,872 -
Shares issued
under Offer
for
Subscription,
net of costs 127 - 24,281 - - - 24,408
Net proceeds
from DRIS
share
issues 47 - 7,180 - - - 7,227
Shares
purchased
for
cancellation
and cancelled (25) 25 - - (4,440) - (4,440)
Dividends paid - - - - (10,009) (61,683) (71,692)
------------ ---------------- ------------- ---------------- -------------- -------------- --------------
At 30
September
2022 1,640 113 85,063 55,038 68,338 10,934 221,126
The financial information for the six months ended 31 March 2023
and the six months ended 31 March 2022 have not been audited.
The profit and loss account comprises the revenue reserve of
GBP(825,000) and the realised capital reserve of GBP11,610,000.
*The special reserve and profit and loss account are
distributable to Shareholders. The special reserve is used to fund
market purchases of the Company's own shares, to make distributions
and to write-off existing and future losses.
The notes form part of these Half-Yearly financial
statements.
Unaudited Condensed Statement of Cash Flows
for the six months ended 31 March 2023
Notes Six months Six months Year ended 30
ended 31 March ended 31 March September 2022
2023 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------- -------------------- --------------------
Operating activities
Investment income
received 1,119 878 1,609
Investment management
fees paid (2,133) (3,166) (5,831)
Other cash payments (440) (363) (778)
-------------------- -------------------- --------------------
Net cash outflow
from operating
activities (1,454) (2,651) (5,000)
Investing activities
Purchase of investments 7 (16,100) (6,535) (9,813)
Sale of investments 7 8 23,938 79,022
Net cash (outflow)/inflow
from investing
activities (16,092) 17,403 69,029
-------------------- -------------------- --------------------
Net cash (outflow)/inflow
before financing (17,546) 14,752 64,209
Financing
Dividends paid 6 (5,014) (14,244) (64,433)
Shares issued
under Offer for
Subscription (net
of transaction
costs paid in
the period) 14,881 24,855 24,407
Expenses of DRIS
share issues - (16) (32)
Shares repurchased
for cancellation (2,221) (2,747) (4,042)
-------------------- -------------------- --------------------
Net cash inflow/(outflow)
from financing 7,646 7,848 (44,100)
-------------------- -------------------- --------------------
Net (decrease)/increase
in cash and cash
equivalents (9,900) 22,600 20,109
Cash and cash
equivalents at
start of period 23,751 3,642 3,642
-------------------- -------------------- --------------------
Cash and cash
equivalents at
end of period 13,851 26,242 23,751
-------------------- -------------------- --------------------
Reconciliation
of operating loss
to net cash outflow
from operating
activities
Loss for the period (10,487) (62,884) (105,175)
Net unrealised
losses on investments 8,773 61,056 113,641
Net gains on realisation
of investments (7) (921) (12,771)
Transaction costs - (5) (5)
Decrease/(increase)
in debtors and
prepayments 341 298 (61)
Decrease in creditors
and accruals (72) (186) (613)
Reconciling items
- dividends reinvested (2) (9) (16)
Net cash outflow
from operating
activities (1,454) (2,651) (5,000)
-------------------- -------------------- --------------------
The financial information for the six months ended 31 March 2023
and the six months ended 31 March 2022 have not been audited.
The notes form part of these Half-Yearly financial
statements.
Notes to the unaudited financial statements
for the six months ended 31 March 2023
1. Principal accounting policies
a) Statement of compliance
The Company's Financial Statements for the six months to 31
March 2023 have been prepared under UK Generally Accepted
Accounting Practice ("UK GAAP") and the Statement of Recommended
Practice, 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' ('the SORP') issued in July 2022 by the
Association of Investment Companies.
The financial statements have been prepared in accordance with
the accounting policies set out in the statutory accounts for the
year ended 30 September 2022.
b) Financial information
The financial information contained in this report does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The financial information for the periods ended
31 March 2023 and 31 March 2022 have not been audited or reviewed
by the Company's Auditor pursuant to the Auditing Practices Board
guidance on such reviews. The information for the year to 30
September 2022 has been extracted from the latest published Annual
Report and Financial Statements, which have been lodged with the
Registrar of Companies, contained an unqualified auditors' report
and did not contain a statement required under Section 498 (2) or
(3) of the Companies Act 2006.
c) Going concern
After due consideration, the Directors believe that the Company
has adequate resources for the foreseeable future and that it is
appropriate to apply the going concern basis in preparing the
financial statements. As at 31 March 2023, the Company held cash
balances of GBP13.9 million and a further GBP17.7 million is held
in OEIC funds and a Unit Trust. A large proportion of the Company's
investment portfolio remains invested in AIM and fully listed
equities which may be realised, subject to the need for the Company
to maintain its VCT status. Cash flow projections covering a period
of twelve months from the date of approving the financial
statements have been reviewed and show that the Company has
sufficient funds to meet both contracted expenditure and any
discretionary cash outflows from buybacks and dividends. The
Company has no external loan finance in place and is therefore not
exposed to any gearing covenants.
d) Presentation of the Income Statement
In order to better reflect the activities of a VCT and in
accordance with the SORP, supplementary information which analyses
the Income Statement between items of a revenue and capital nature
has been presented alongside the Statement of Comprehensive Income.
The revenue column of loss attributable to Shareholders is the
measure the Directors believe appropriate in assessing the
Company's compliance with certain requirements set out in Section
274 Income Tax Act 2007.
e) Investments
All investments held by the Company are classified as "fair
value through profit or loss", in accordance with FRS102. This
classification is followed as the Company's business is to invest
in financial assets with a view profiting from their total return
in the form of capital growth and income and in accordance with the
Company's risk management and investment policy. In the preparation
of the valuation of assets, in accordance with current IPEV
guidelines, the Directors are required to make judgements and
estimates that are reasonable and incorporate their knowledge of
the performance of the investee companies.
-- For investments actively traded on organised financial
markets, fair value is generally determined by reference to Stock
Exchange market quoted bid prices at the close of business on the
balance sheet date. Purchases and sales of quoted investments are
recognised on the trade date where a contract of sale exists whose
terms require delivery within a time frame determined by the
relevant market.
-- Unquoted investments are reviewed at least quarterly to
ensure that the fair values are appropriately stated and are valued
in accordance with current IPEV guidelines as updated in December
2018, which relies on subjective estimates. Fair value is
established by assessing different methods of valuation, such as
price of recent transaction, sales multiples, earnings multiples,
discounted cash flows and net assets. Purchases and sales of
unlisted investments are recognised when the contract for
acquisition or sale becomes unconditional.
-- Where a company's underperformance against plan indicates a
diminution in the value of the investment, provision against cost
is made, as appropriate. Where it is considered the value of an
investment has fallen permanently below cost, the loss is treated
as a permanent impairment and as a realised loss, even though the
investment is still held. The Board assesses the portfolio for such
investments and, after agreement with the Investment Manager, will
agree the values that represent the extent to which an investment
loss has become realised. This is based upon an assessment of
objective evidence of that investment's future prospects, to
determine whether there is potential for the investment to recover
in value.
-- Redemption premiums on loan stock investments are recognised
at fair value when the Company receives the right to the premium
and when considered recoverable.
f) Capital reserves
(i) Realised (included within the Profit and Loss Account
reserve)
The following are accounted for in this reserve:
-- Gains and losses on realisation of investments;
-- Permanent diminution in value of investments; and
-- Transaction costs incurred in the acquisition of
investments.
(ii) Unrealised capital reserve (Revaluation reserve)
Increases and decreases in the valuation of investments held at
the period end are accounted for in this reserve, except to the
extent that the diminution is deemed permanent.
In accordance with stating all investments at fair value through
profit or loss, all such movements through both unrealised and
realised capital reserves are shown within the Income Statement for
the period.
(iii) Special reserve
The costs of share buybacks are charged to this reserve. In
addition, any realised losses on the sale of investments, and 75%
of the management fee expense, and the related tax effect, are
transferred from the Profit and Loss Account reserve to this
reserve. This reserve can also be used for distributions made by
the Company.
2. Investment Management Fees
Unicorn Asset Management Limited ("UAML") receives an annual
management fee, calculated and payable quarterly in arrears, of
2.0% of the net asset value of the Company, excluding the value of
the investments in the OEIC which is also managed by UAML, up to
net assets of GBP200 million, 1.5% of net assets in excess of
GBP200 million and 1.0% of net assets in excess of GBP450 million.
If the Company raises further funds during a quarter the net asset
value for that quarter shall be reduced by an amount equal to the
amount raised, net of costs, multiplied by the percentage of days
in that quarter prior to the funds being raised.
The Directors have charged GBP1,567,000, being 75% of the
investment management fees to the capital reserve and the balance
of 25% being GBP523,000 to revenue.
At 31 March 2023, GBP1,024,000 payable to the Investment Manager
is included in creditors due within one year.
3. Taxation
The total allowable expenses exceed income hence there is no tax
charge for the period.
4. Income
Six months Six months Year ended
ended ended 30 September
2022
31 March 31 March (audited)
2023 2022
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
Dividends 608 513 1,525
Unicorn managed OEICs (including
reinvested dividends) 65 74 201
Other OEICs 2 - -
Bank deposit interest 76 - 27
Loan stock interest - (9) -
----------------- ----------------- ------------------
751 578 1,753
----------------- ----------------- ------------------
5. Basic and diluted earnings and return per share
` Six months Six months Year ended
ended ended 30 September
31 March 31 March 2022
2023 2022
(unaudited) (unaudited) (audited)
Total earnings after taxation
(GBP'000) (10,487) (62,884) (105,175)
------------------ ------------------ ------------------
Basic and diluted earnings
per share (6.32)p (41.73)p (67.32)p
Net revenue from ordinary activities
after taxation (GBP'000) (154) (520) (340)
------------------ ------------------ ------------------
Basic and diluted revenue earnings
per share (0.09)p (0.35)p (0.22)p
------------------ ------------------ ------------------
Total capital return after taxation
(GBP'000) (10,333) (62,364) (104,835)
------------------ ------------------ ------------------
Basic and diluted capital earnings
per share (6.23)p (41.38)p (67.10)p
------------------ ------------------ ------------------
Weighted average number of
shares in issue in the period 165,899,485 150,691,628 156,227,923
There are no instruments in place that may increase the number
of shares in issue in the future. Accordingly, the above figures
represent both basic and diluted earnings per share.
6. Dividends
Six months Six months Year ended
ended ended
31 March 31 March 30 September
2023 2022 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Amounts recognised as distributions
to equity holders in the period:
Interim capital dividend of
nil pence (2022: 3.0 pence)
per share for the year ended
30 September 2022 paid on 11
August 2022 - - 4,809
Special interim capital dividend
of nil pence (2022: 32.0 pence)
per share for the year ended
30 September 2022 paid on 11
August 2022 - - 51,292
Final capital dividend of 3.5
pence (2022: 3.5 pence) per
share for the year ended 30
September 2022 paid on 14 February
2023 5,741 5,200 5,200
Special interim capital dividend
of nil pence (2022:7.0 pence
per share for the year ended
30 September 2022 paid on 10
February 2022 - 10,400 10,400
Total dividends paid in the
period* 5,741 15,600 71,701
Unclaimed dividends returned -- -- (9)
5,741 15,600 71,692
----------------- ----------------- ------------------
* The difference between total dividends paid and that shown in
the Condensed Cash Flow Statement is GBP727,000, which is the
amount of dividends reinvested under the Dividend Reinvestment
Scheme ("DRIS").
7. Investments at fair value
Unlisted
Fully Traded Unlisted loan Other
listed on AIM shares stock Funds** Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Book cost at
30 September
2022 8,357 122,935 14,303 500 4,483 150,578
Unrealised
(losses)/
gains at 30
September 2022 (2,275) 47,514 11,392 (375) (1,218) 55,038
Permanent
impairment
in value of
investments - (2,442) (4,633) - - (7,075)
----------------- ------------------ ------------------- ------------------- ---------------- --------------
Opening
valuation
at 30
September
2022 6,082 168,007 21,062 125 3,265 198,541
----------------- ------------------ ------------------- ------------------- ---------------- --------------
Shares delisted - (188) 188 - - -
Purchases at
cost - 2,100 - - 14,002 16,102
Sale proceeds - - (8) - - (8)
Net realised
gains* - - 7 - - 7
Movement in
unrealised
gains 850 (15,518) 5,368 125 402 (8,773)
----------------- ------------------ ------------------- ------------------- ---------------- --------------
Closing
valuation
at 31 March
2023 6,932 154,401 26,617 250 17,669 205,869
----------------- ------------------ ------------------- ------------------- ---------------- --------------
Book cost at
31 March 2023 8,357 124,847 14,488 500 18,485 166,677
Unrealised
(losses)/gains
at 31 March
2023 (1,425) 31,996 16,762 (250) (816) 46,267
Permanent
impairment
in value of
investments - (2,442) (4,633) - - (7,075)
----------------- ------------------ ------------------- ------------------- ---------------- --------------
Closing
valuation
at 31 March
2023 6,932 154,401 26,617 250 17,669 205,869
----------------- ------------------ ------------------- ------------------- ---------------- --------------
*Transaction costs on the purchase and disposal of investments
of GBPnil were incurred in the period.
** Other funds include the Unicorn Ethical Fund and the Royal
London Short Term Money Market Fund which are both OEICs and the
BlackRock Cash Fund which is a Unit Trust.
Reconciliation of cash movements in investment transactions
The difference between the purchases in Note 7 above and that
shown in the Condensed Cash Flow Statement. is GBP2,000 which is
the reinvested dividends in the Royal London Short Term Money
Market Fund Y.
Fair value hierarchy
The table below sets out fair value measurements using FRS 102
s11.27 fair value hierarchy. The Company has one class of assets,
being at fair value through profit or loss.
Level 1 Level Level 3 Total
GBP000 2 GBP'000 GBP'000
GBP'000
------------ ------------- ------------- -------------
At 31 March 2023
Equity investments 161,333 - 26,617 187,950
Loan stock investments - - 250 250
Other funds* 17,669 - - 17,669
Total 179,002 - 26,867 205,869
------------ ------------- ------------- -------------
At 31 March 2022
Equity investments 210,076 51,856 24,702 286,634
Loan stock investments - - 350 350
Open ended investment companies 4,091 - - 4,091
Total 214,167 51,856 25,052 291,075
------------ ------------- ------------- -------------
At 30 September 2022
Equity investments 174,089 - 21,062 195,151
Loan stock investments - - 125 125
Open ended investment companies 3,265 - - 3,265
Total 177,354 - 21,187 198,541
------------ ------------- ------------- -------------
* Other funds include the Unicorn Ethical Fund and the Royal
London Short Term Money Market Fund which are both OEICs and the
BlackRock Cash Fund which is a Unit Trust.
There are currently no financial liabilities at fair value
through profit or loss.
Categorisation within the hierarchy has been determined on the
lowest level input that is significant to the fair value
measurement of the relevant asset as follows:
Level 1 - valued using quoted prices in active markets for
identical assets.
Level 2 - valuation by reference to valuation techniques using
directly observable inputs other than quoted prices included within
Level 1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
The valuation techniques used by the Company are explained in
the accounting policies in Note 1.
The fair value of unquoted investments, categorised as Level 3,
is established by assessing different methods of valuation, such as
price of recent transaction, sales multiples, earnings multiples,
discounted cash flows and net assets, therefore no assumptions are
disclosed, or sensitivity analysis provided.
A reconciliation of fair value measurements in Level 3 is set
out below:
Equity Loan stock
Investments Investments Total
GBP'000 GBP'000 GBP'000
----------------- ----------------- --------------
Opening balance at 1 October
2022 21,062 125 21,187
Shares delisted 188 - 188
Sales (8) - (8)
Total gains included in (losses)/gains
on investments in the Condensed
Income Statement
- on assets sold 7 - 7
- on assets held at the period
end 5,368 125 5,493
Closing balance at 31 March
2023 26,617 250 26,867
----------------- ----------------- --------------
8. Net asset values
At 31 March At 31 March At 30 September
2023 2022 2022
(unaudited) (unaudited) (audited)
Net assets GBP218,421,000 GBP315,292,000 GBP221,126,000
Number of shares in
issue 174,104,558 161,074,952 164,023,203
------------------- ------------------- --------------------
Net asset value per
share 125.45p 195.74p 134.81p
------------------- ------------------- --------------------
9. Post Balance Sheet Events
There are no post balance sheet events to report.
10. Related party transactions
During the first six months of the financial year, no
transactions with related parties have taken place which have
materially affected the financial position or the performance of
the Company.
11. Copies of the Half Yearly Report
Copies of the Half Yearly Report will be available for download
on the Company's website: www.unicornaimvct.co.uk.
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on this announcement (or
any other website) is incorporated into, or forms part of this
announcement.
A copy of the 2023 Half Yearly Report will be submitted shortly
to the National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
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END
IR FBLLXXELBBBV
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