TIDMAAVC
Albion Venture Capital Trust PLC
As required by the UK Listing Authority's Disclosure and Transparency
Rule 4.2, Albion Venture Capital Trust PLC today makes public its
information relating to the Half-yearly Financial Report (which is
unaudited) for the six months to 30 September 2014. This announcement
was approved by the Board of Directors on 27 November 2014.
The full Half-yearly Financial Report, (which is unaudited) for the
period to 30 September 2014 will shortly be sent to shareholders. Copies
of the full Half-yearly Financial Report will be shown via the Albion
Ventures LLP website by clicking
www.albion-ventures.co.uk/ourfunds/aavc.htm.
Investment objectives and policy
The investment strategy of Albion Venture Capital Trust PLC (the
"Company") is to manage the risk normally associated with investments in
smaller unquoted companies whilst maintaining an attractive yield,
through allowing investors the opportunity to participate in a balanced
portfolio of asset-backed businesses. The Company's investment portfolio
will thus be structured to provide a balance between income and capital
growth for the longer term.
This is achieved as follows:
-- qualifying unquoted investments are predominantly in specially-formed
companies which provide a high level of asset backing for the capital
value of the investment;
-- the Company invests alongside selected partners with proven experience in
the sectors concerned;
-- investments are normally structured as a mixture of equity and loan
stock. The loan stock represents the majority of the finance provided and
is secured on the assets of the portfolio company. Funds managed or
advised by Albion Ventures LLP typically own 50 per cent. of the equity
of the portfolio company;
-- other than the loan stock issued to funds managed or advised by Albion
Ventures LLP, portfolio companies do not normally have external
borrowings.
The Company offers tax-paying investors substantial tax benefits at the
time of investment, on payment of dividends and on the ultimate disposal
of the investment.
Background to the Company
The Company is a venture capital trust which raised a total of GBP39.7
million through an issue of Ordinary shares in the spring of 1996 and
through an issue of C shares in the following year. The C shares merged
with the Ordinary shares in 2001. The Company has raised a further
GBP9.7 million under the Albion VCTs Top Up Offers since 2011.
On 25 September 2012, the Company acquired the assets and liabilities of
Albion Prime VCT PLC ("Prime") in exchange for new shares in the
Company. Each Prime shareholder received 0.8801 shares in the Company
for each Prime share that they held at the date of the Merger.
Financial calendar
Record date for second dividend 5 December 2014
Payment date for second dividend 31 December 2014
Financial year end 31 March 2015
Financial highlights
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 2014 30 September 2013 31 March 2014
(pence per share) (pence per share) (pence per share)
Opening
net asset
value 71.30 74.20 74.20
Dividends
paid (2.50) (2.50) (5.00)
Revenue
return 0.92 0.80 1.70
Capital
return 0.18 0.40 0.30
Net asset
value
uplift
from
buy-backs 0.02 0.10 0.10
Closing
net asset
value 69.92 73.00 71.30
Total shareholder net asset value return to 30 September Ordinary shares
2014 (pence per share)
Total dividends paid during the year ended : 31 March
1997 2.00
31 March 1998 5.20
31 March 1999 11.05
31 March 2000 3.00
31 March 2001 8.55
31 March 2002 7.60
31 March 2003 7.70
31 March 2004 8.20
31 March 2005 9.75
31 March 2006 11.75
31 March 2007 10.00
31 March 2008 10.00
31 March 2009 10.00
31 March 2010 5.00
31 March 2011 5.00
31 March 2012 5.00
31 March 2013 5.00
31 March 2014 5.00
Total dividends paid in the six months to 30 September
2014 2.50
Total dividends paid to 30 September 2014 132.30
Net asset value as at 30 September 2014 69.92
Total shareholder net asset value return to 30 September
2014 202.22
The financial summary above is for the Company, Albion Venture Capital
Trust PLC Ordinary shares only. Details of the financial performance of
the C shares and Albion Prime VCT PLC, which have been merged into the
Company, can be found at the end of this announcement.
In addition to the dividends summarised above, the Directors have
declared a second dividend for the year to 31 March 2015 of 2.50 pence
per share, to be paid on 31 December 2014 to shareholders on the
register as at 5 December 2014.
Notes
-- Dividends paid before 5 April 1999 were paid to qualifying shareholders
inclusive of the associated tax credit. The dividends for the year to 31
March 1999 were maximised in order to take advantage of this tax credit.
-- All dividends paid by the Company are free of income tax. It is an H.M.
Revenue & Customs requirement that dividend vouchers indicate the tax
element should dividends have been subject to income tax. Investors
should ignore this figure on their dividend voucher and need not disclose
any income they receive from a VCT on their tax return.
-- The net asset value of the Company is not its share price as quoted on
the official list of the London Stock Exchange. The share price of the
Company can be found in the Investment Companies - VCTs section of the
Financial Times on a daily basis. Investors are reminded that it is
common for shares in VCTs to trade at a discount to their net asset
value.
Interim management report
Introduction
The results for Albion Venture Capital Trust PLC (the "Company") for the
six months to 30 September 2014 show a positive total return of 1.10
pence per share, which, after the payment of the first dividend for the
year of 2.50 pence per share, takes the net asset value to 69.92 pence
per share (31 March 2014: 71.30 pence per share). The total return
comprised a 0.92 pence per share revenue return for the period (2013:
0.80 pence per share) and a 0.18 pence per share capital return (2013:
0.40 pence per share).
During the period, the Company raised an additional GBP2.9 million
pursuant to the Albion VCTs Top Up Offers 2013/2014 and Albion VCTs
Prospectus Top Up Offers 2013/2014, taking the total raised to GBP4.3
million. The Albion VCTs Prospectus Top Up Offers 2014/2015 have
recently been launched.
Investment performance and progress
During the period, the Company invested GBP3.5 million in two new
portfolio companies and four existing portfolio companies, while loan
stock repayments totaling GBP0.3 million were received from four
portfolio companies.
The new investments comprise an initial GBP1.0 million invested, with a
further GBP2.2 million investment expected, in Ryefield Court Care,
which is developing a care home in Hillingdon, Greater London; and
GBP0.5 million invested, together with a further GBP0.2 million
subsequent to the period end, in Infinite Ventures (Goathill), which is
constructing a wind turbine in Scotland.
The investments in existing portfolio companies comprised a GBP0.4
million scheduled investment, with a further GBP1.0 million subsequent
to the period end, in Chonais Holdings; a GBP0.7 million scheduled
investment, with a further GBP0.2 million subsequent to the period end,
in Green Highland Renewables (Ledgowan), both of whose hydro-electricity
projects in north-west Scotland are expected to be commissioned within
the next two months; GBP0.5 million in Oakland Care Centre, to buy out
one of its shareholders; and GBP0.4 million in Taunton Hospital, to
enlarge its psychiatric hospital near Taunton.
Since the period end, the Company has sold its investment in Tower
Bridge Health Clubs for approximately GBP0.8 million, realising an
overall return against cost, including interest received over the course
of the investment, of approximately 2.8 times the original investment.
Interim independent third party valuations were carried out on most of
the Company's assets as at 30 September 2014. These resulted in an
overall increase in valuations. Our Kensington health and fitness club,
the Crown Hotel in Harrogate, Radnor House School and Oakland Care
Centre's Bayfield Court care home all saw increases in valuations. These
were, however, partially offset by lower valuations for the Holiday Inn
Express hotel at Stansted Airport and the Weybridge health and fitness
club, which led to the total return for the period being lower than we
would have hoped. In general, though, our investments are performing as
planned. It is also encouraging that the income generated by them has
increased by 13 per cent. over the same period last year.
Split of portfolio by valuation as at 30 September 2014:
Set out at the bottom of this announcement is the sector diversification
of the portfolio of our investments as at 30 September 2014.
Risks and uncertainties
The outlook for the UK economy continues to be the key risk affecting
your Company. Importantly, however, your Company remains conservatively
financed with no bank borrowings. The Company's policy remains that its
portfolio companies should not normally have external borrowings, and
for the Company to have a first charge over portfolio companies' assets;
the Board and Manager see this as an important factor in the control of
investment risk. However, on an exceptional basis, certain portfolio
companies may take on external borrowings, where the Board considers
this will offer a significant benefit to the Company.
Other risks and uncertainties remain unchanged and are as detailed in
note 15.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5.
There are no related party transactions or balances that require
disclosure.
Discount management and share buy-backs
It remains the Board's primary objective to maintain sufficient
resources for investment in existing and new portfolio companies and for
the continued payment of dividends to shareholders. Thereafter, it is
still the Board's policy to buy back shares in the market, subject to
the overall criterion that such purchases are in the Company's interest.
The Company will limit the sum available for share buy-backs for the six
month period to 31 March 2015 to GBP750,000. This compares to a total
value bought in for the period to 30 September 2014 of GBP363,000.
Subject to the constraints referred to above, and subject to first
purchasing shares held by the market makers, the Board will target such
buy-backs to be in the region of a 5 per cent. discount to net asset
value, so far as market conditions and liquidity permit.
Results and dividends
As at 30 September 2014, the net asset value of the Company was GBP44.5
million or 69.92 pence per share compared to GBP42.7 million or 71.30
pence per share at 31 March 2014. The revenue return before taxation
was GBP699,000, compared to GBP608,000 for the six months to 30
September 2013. The Company will pay a second dividend of 2.50 pence per
share on 31 December 2014 to shareholders on the register as at 5
December 2014, making 5.00 pence per share in total for the full year,
in line with your Company's current dividend target.
Albion VCTs Prospectus Top Up Offers 2014/2015
Your Board, in conjunction with the boards of other VCTs managed by
Albion Ventures LLP, has recently launched a top up offer of new
Ordinary shares. The Company is aiming to raise circa GBP4.25 million
out of a target of GBP25.5 million in aggregate that the Albion VCTs are
seeking to raise. In addition, the Board may elect to allot up to a
further GBP1.75 million if there is sufficient demand and the Board
deems it prudent to do so. The proceeds will be used to provide further
resources at a time when a number of attractive investment opportunities
are being seen. A Securities Note, which forms part of the Prospectus,
has been sent to shareholders.
Outlook and prospects
The performance of the UK economy has improved in 2014. The economy is
likely to continue to grow in 2015, albeit at a lower rate, which should
benefit the Company's investment portfolio. Despite the risks within the
broader economy, we are positive on the prospects, and are seeing strong
opportunities in the healthcare sector, and a recovery in the
performance of our hotels.
David Watkins
Chairman
27 November 2014
Responsibility statement
The Directors, David Watkins, Jeff Warren, John Kerr and Ebbe Dinesen ,
are responsible for preparing the Half-yearly Financial Report. The
Directors have chosen to prepare this Half-yearly Financial Report for
the Company in accordance with United Kingdom Generally Accepted
Accounting Practice ("UK GAAP").
In preparing these summarised Financial Statements for the period to 30
September 2014 we, the Directors of the Company, confirm that to the
best of our knowledge:
(a) the summarised set of Financial Statements has been prepared in
accordance with the pronouncement on interim reporting issued by the
Accounting Standards Board;
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year);
(c) the summarised set of Financial Statements give a true and fair view
in accordance with UK GAAP of the assets, liabilities, financial
position and profit and loss of the Company for the six months ended 30
September 2014 and comply with UK GAAP and Companies Act 2006; and
(d) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The accounting policies applied to the Half-yearly Financial Report have
been consistently applied in current and prior periods and are those
applied in the Annual Report and Financial Statements for the year ended
31 March 2014.
This Half-yearly Financial Report has not been audited or reviewed by
the Auditor.
By order of the Board
David Watkins
Chairman
27 November 2014
Portfolio of investments
The following is a summary of investments as at 30 September 2014:
% voting
rights held
by Albion Cumulative Change in
Venture Accounting movement value for the
Capital cost * in value Value period(**)
Portfolio company Trust PLC GBP'000 GBP'000 GBP'000 GBP'000
Hotels
Kew Green VCT (Stansted) Limited 45.2 6,723 183 6,906 (473)
The Crown Hotel Harrogate Limited 24.1 4,245 (1,155) 3,090 174
The Stanwell Hotel Limited 39.2 4,677 (2,277) 2,400 62
Total investment in the hotel sector 15,645 (3,249) 12,396 (237)
Healthcare
Oakland Care Centre Limited 31.6 3,535 1,754 5,289 143
Active Lives Care Ltd 14.6 1,800 24 1,824 24
Taunton Hospital Limited 7.2 1,314 325 1,639 64
Ryefield Court Care Limited 10.7 992 14 1,006 14
Total investment in the healthcare sector 7,641 2,117 9,758 245
Renewable energy
Chonais Holdings Limited 16.1 1,998 - 1,998 (5)
Green Highland Renewables (Ledgowan) Limited 20.8 1,074 - 1,074 -
Alto Prodotto Wind Limited 7.4 670 228 898 (3)
The Street by Street Solar Programme Limited 6.5 676 214 890 50
Erin Solar Limited 18.6 520 - 520 (3)
Infinite Ventures (Goathill) Ltd 9.0 480 - 480 -
Regenerco Renewable Energy Limited 4.5 427 52 479 16
Dragon Hydro Limited 7.3 311 66 377 5
TEG Biogas (Perth) Limited 4.9 306 24 330 2
Harvest AD Limited - 307 - 307 -
AVESI Limited 7.4 230 23 253 6
Greenenerco Limited 3.9 135 46 181 (2)
Total investment in the renewable energy sector 7,134 653 7,787 66
Health and fitness clubs
Kensington Health Clubs Limited 9.8 1,889 (606) 1,283 194
The Weybridge Club Limited 14.3 2,136 (871) 1,265 (221)
Tower Bridge Health Clubs Limited 8.4 313 462 775 141
Total investment in the health and fitness club sector 4,338 (1,015) 3,323 114
Pubs
The Charnwood Pub Company Limited 14.8 3,384 (1,906) 1,478 (17)
Bravo Inns II Limited 6.4 1,085 31 1,116 (6)
Bravo Inns Limited 7.6 589 (158) 431 (2)
Total investment in the pub sector 5,058 (2,033) 3,025 (25)
Education
Radnor House School (Holdings) Limited 7.1 1,339 974 2,313 159
Total investment in the education sector 1,339 974 2,313 159
Residential property development
G&K Smart Developments VCT Limited 42.9 276 (40) 236 -
Total investment in the residential property development
sector 276 (40) 236 -
Other leisure
Premier Leisure (Suffolk) Limited 9.9 468 (304) 164 (6)
Total investment in the other leisure sector 468 (304) 164 (6)
Total fixed asset investments 41,899 (2,897) 39,002 316
Movement in loan stock accrued interest 36
Realised gain in current period 6
Total gains on investments as per income statement 358
Opening Total
carrying Disposal realised Gain on
Fixed asset investment realisations during the period Accounting cost* value proceeds gain/(loss) opening value
to 30 September 2014 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
The Charnwood Pub Company Limited (loan stock repaid) 148 148 148 - -
Radnor House School (Holdings) Limited (loan stock
repaid) 42 77 83 41 6
The Dunedin Pub Company VCT Limited (disposal
proceeds) 75 74 74 (1) -
Tower Bridge Health Clubs Limited (loan stock repaid) 34 34 34 - -
Total 299 333 339 40 6
*Amounts shown as accounting cost represent the acquisition cost in the
case of investments originally made by the Company and/or the fair value
attributed to the investments acquired from Albion Prime VCT PLC on the
Merger on 25 September 2012, as adjusted for changes in value since
acquisition.
** As adjusted for additions and disposals during the period.
Summary income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on
investments 3 - 358 358 - 443 443 - 626 626
Investment
income 4 941 - 941 833 - 833 1,718 - 1,718
Investment
management
fees 5 (103) (310) (413) (99) (298) (397) (201) (601) (802)
Other expenses (139) - (139) (126) - (126) (398) - (398)
Return on
ordinary
activities
before tax 699 48 747 608 145 753 1,119 25 1,144
Tax
(charge)/credit
on ordinary
activities (127) 66 (61) (112) 71 (41) (120) 140 20
Return
attributable to
shareholders 572 114 686 496 216 712 999 165 1,164
Basic and
diluted return
per share
(pence)* 7 0.92 0.18 1.10 0.80 0.40 1.20 1.70 0.30 2.00
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2013 and the
audited statutory accounts for the year ended 31 March 2014.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
The total column of this Summary income statement represents the profit
and loss account of the Company. The supplementary revenue and capital
columns have been prepared in accordance with The Association of
Investment Companies' Statement of Recommended Practice.
All revenue and capital items in the above statement derive from
continuing operations.
There are no recognised gains or losses other than the results for the
periods disclosed above. Accordingly a Statement of total recognised
gains and losses is not required. The difference between the reported
return on ordinary activities before tax and the historical profit is
due to the fair value movements on investments. As a result a note on
historical cost profit and losses has not been prepared.
Summary balance sheet
Unaudited Unaudited Audited
30 September 2014 30 September 2013 31 March 2014
Note GBP'000 GBP'000 GBP'000
Fixed asset
investments 39,002 32,313 35,580
Current assets
Trade and other
debtors 652 24 48
Cash at bank and
in hand 10 5,551 11,061 7,505
6,203 11,085 7,553
Creditors:
amounts falling
due within one
year (744) (791) (475)
Net current
assets 5,459 10,294 7,078
Net assets 44,461 42,607 42,658
Capital and
reserves
Called up share
capital 8 688 631 645
Share premium 6,538 2,028 3,525
Capital
redemption
reserve 7 - 7
Unrealised
capital
reserve (3,025) (4,598) (3,343)
Realised capital
reserve 10,323 11,833 10,527
Other
distributable
reserve 29,930 32,713 31,297
Total equity
shareholders'
funds 44,461 42,607 42,658
Basic and
diluted net
asset value per
share (pence)* 69.92 73.00 71.30
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2013 and the
audited statutory accounts for the year ended 31 March 2014.
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 27 November 2014, and were signed on its behalf
by
David Watkins
Chairman
Company number: 03142609
Summary reconciliation of movements in shareholders' funds
Unrealised Realised Other
Called-up share Share Capital redemption capital capital distributable
capital premium reserve reserve* reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April
2014 645 3,525 7 (3,343) 10,527 31,297 42,658
Return/(loss)
for the
period - - - 352 (238) 572 686
Transfer of
previously
unrealised
gains - - - (34) 34 - -
Purchase of
treasury
shares - - - - - (363) (363)
Issue of equity
(net of
costs) 43 3,013 - - - - 3,056
Net dividends
paid - - - - - (1,576) (1,576)
As at 30
September
2014 688 6,538 7 (3,025) 10,323 29,930 44,461
As at 1 April
2013 603 8 - (4,890) 11,909 34,051 41,681
Return/(loss)
for the
period - - - 395 (179) 496 712
Transfer of
previously
unrealised
gains - - - (103) 103 - -
Purchase of
treasury
shares - - - - - (364) (364)
Issue of equity
(net of
costs) 28 2,020 - - - - 2,048
Net dividends
paid - - - - - (1,470) (1,470)
As at 30
September
2013 631 2,028 - (4,598) 11,833 32,713 42,607
As at 1 April
2013 603 8 - (4,890) 11,909 34,051 41,681
Return/(loss)
for the year - - - 576 (411) 999 1,164
Transfer of
previously
unrealised
gains - - - 971 (971) - -
Purchase of
shares for
cancellation (7) - 7 - - (487) (487)
Purchase of
treasury
shares - - - - - (364) (364)
Issue of equity
(net of
costs) 49 3,517 - - - - 3,566
Net dividends
paid - - - - - (2,902) (2,902)
As at 31 March
2014 645 3,525 7 (3,343) 10,527 31,297 42,658
* Included within these reserves is an amount of GBP37,228,000 (30
September 2013: GBP39,948,000; 31 March 2014: GBP38,481,000) which is
considered distributable.
Summary cash flow statement
Unaudited Unaudited
six months six months
ended ended Audited
30 September 30 September year ended
2014 2013 31 March 2014
Note GBP'000 GBP'000 GBP'000
Operating activities
Loan stock income received 898 824 1,534
Deposit interest received 39 79 131
Dividend income received 29 6 22
Investment management fees paid (405) (412) (817)
Other cash payments (167) (150) (289)
Net cash flow from operating activities 9 394 347 581
Taxation
UK corporation tax recovered/(paid) 91 12 (99)
Capital expenditure and financial investments
Purchase of fixed asset investments (3,515) (1,931) (5,182)
Disposal of fixed asset investments 561 523 550
Net cash flow from investing activities (2,954) (1,408) (4,632)
Equity dividends paid
Dividends paid (net of cost of shares issued under
the Dividend Reinvestment Scheme and unclaimed dividends) (1,436) (1,366) (2,719)
Net cash flow before financing (3,905) (2,415) (6,869)
Financing
Issue of share capital (net of costs) 2,314 1,946 3,359
Purchase of own shares (including costs) (363) (363) (876)
Cost of Merger (paid on behalf of the Company and
Albion Prime VCT PLC) - (3) (5)
Net cash flow from financing 1,951 1,580 2,478
Cash flow in the period 10 (1,954) (835) (4,391)
Notes to the unaudited summarised Financial Statements
1. Accounting convention
The Financial Statements have been prepared in accordance with the
historical cost convention, modified to include the revaluation of
investments, in accordance with applicable United Kingdom law and
accounting standards and with the Statement of Recommended Practice
"Financial Statements of Investment Trust Companies and Venture Capital
Trusts" ("SORP") issued by The Association of Investment Companies
("AIC") in January 2009. Accounting policies have been applied
consistently in current and prior periods.
2. Accounting policies
Investments
Unquoted equity investments, debt issued at a discount and convertible
bonds
In accordance with FRS 26 "Financial Instruments Recognition and
Measurement", unquoted equity, debt issued at a discount and convertible
bonds are designated as fair value through profit or loss ("FVTPL").
Fair value is determined by the Directors in accordance with the
International Private Equity and Venture Capital Valuation Guidelines
(IPEVCV guidelines).
Fair value movements and gains and losses arising on the disposal of
investments are reflected in the capital column of the Income statement
in accordance with the AIC SORP. Realised gains or losses on the sale of
investments will be reflected in the realised capital reserve, and
unrealised gains or losses arising from the revaluation of investments
will be reflected in the unrealised capital reserve.
Unquoted equity derived instruments
Unquoted equity derived instruments are only valued if there is
additional value to the Company in exercising or converting as at the
balance sheet date. Otherwise these instruments are held at nil value.
The valuation techniques used are those used for the underlying equity
investment.
Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a
discount) are classified as loans and receivables as permitted by FRS 26
and measured at amortised cost using the Effective Interest Rate method
less impairment. Movements in the amortised cost relating to interest
income are reflected in the revenue column of the Income statement, and
hence are reflected in the other distributable reserve, and movements in
respect of capital provisions are reflected in the capital column of the
Income statement and are reflected in the realised capital reserve
following sale, or in the unrealised capital reserve on impairment from
revaluations of the fair value of the security.
For all unquoted loan stock, whether fully performing, past due or
impaired, the Board considers that the fair value is equal to or greater
than the security value of these assets. For unquoted loan stock, the
amount of the impairment is the difference between the asset's cost and
the present value of estimated future cash flows, discounted at the
original effective interest rate. The future cash flows are estimated
based on the fair value of the security held less estimated selling
costs.
Investments are recognised as financial assets on legal completion of
the investment contract and are de-recognised on legal completion of the
sale of an investment.
Dividend income is not recognised as part of the fair value movement of
an investment, but is recognised separately as investment income through
the revenue reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part
of the carrying value of the loans and receivables at the end of each
reporting period.
In accordance with the exemptions under FRS 9 "Associates and joint
ventures", those undertakings in which the Company holds more than 20
per cent. of the equity as part of an investment portfolio are not
accounted for using the equity method. In these circumstances the
investment is accounted for according to FRS 26 "Financial instruments
Recognition and Measurement" and measured at fair value through profit
or loss.
Current asset investments
Contractual future contingent receipts on disposal of fixed asset
investments are designated at fair value through profit or loss and are
subsequently measured at fair value.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on
a time apportionment basis using an effective interest rate over the
life of the financial instrument. Income which is not capable of being
received within a reasonable period of time is reflected in the capital
value of the investment.
Bank interest income
Interest income is recognised on an accrual basis using the rate of
interest agreed with the bank.
Investment management fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are
charged through the revenue account except the following which are
charged through the realised capital reserve:
-- 75 per cent. of management fees are allocated to the capital account to
the extent that these relate to an enhancement in the value of the
investments and in line with the Board's expectation that over the long
term 75 per cent. of the Company's investment returns will be in the form
of capital gains; and
-- expenses which are incidental to the purchase or disposal of an
investment.
Total recurring expenses including management fees and excluding
performance fees will not exceed 3 per cent. of the net asset value of
the Company at year end.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will
be allocated between other distributable and realised capital reserves
based upon the proportion to which the calculation of the fee is
attributable to revenue and capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 16
"Current tax". Taxation associated with capital expenses is applied in
accordance with the SORP. In accordance with FRS 19 "Deferred tax",
deferred taxation is provided in full on timing differences that result
in an obligation at the balance sheet date to pay more tax or a right to
pay less tax, at a future date, at rates expected to apply when they
crystallise based on current tax rates and law. Timing differences arise
from the inclusion of items of income and expenditure in taxation
computations in periods different from those in which they are included
in the Financial Statements. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be
recovered.
The Directors have considered the requirements of FRS 19 and do not
believe that any provision for deferred tax should be made.
Reserves
Share premium
This reserve accounts for the difference between the price paid for
shares and the nominal value of the shares, less issue costs and
transfers to the other distributable reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own
shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year
end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
-- gains and losses compared to cost on the realisation of investments;
-- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
-- dividends paid to equity holders.
Other distributable reserve
This reserve accounts for movements from the revenue column of the
Income statement, the payment of dividends, the buy-back of shares and
other non-capital realised movements.
Dividends
In accordance with FRS 21 "Events after the balance sheet date",
dividends by the Company are accounted for in the period in which the
dividend is declared.
3. Gains on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Unrealised gains on fixed asset investments held at
fair value through profit or loss 128 596 1,113
Unrealised reversals of impairments/ (impairments)
on fixed asset investments held at amortised cost 224 (201) (537)
Unrealised gains sub-total 352 395 576
Realised gains on investments held at fair value through
profit or loss - - 40
Realised gains on investments held at amortised cost 6 48 10
Realised gains sub-total 6 48 50
358 443 626
Investments valued on an amortised cost basis are unquoted loan stock
instruments as described in note 2.
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Income recognised on investments held at fair value
through profit or loss
Dividend income 24 6 27
Income from convertible bonds and discounted debt 204 84 203
228 90 230
Income recognised on investments held at amortised
cost
Return on loan stock investments 677 672 1,369
Bank deposit interest 36 71 119
713 743 1,488
941 833 1,718
All of the Company's income is derived from operations based in the
United Kingdom.
5. Investment management fees
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 30 September 31 March
2014 2013 2014
GBP'000 GBP'000 GBP'000
Investment management
fee charged to
revenue 103 99 201
Investment management
fee charged to
capital 310 298 601
413 397 802
The Manager, Albion Ventures LLP, is party to a Management agreement
from the Company (details disclosed on page 11 of the Annual Report and
Financial Statements for the year ended 31 March 2014). During the
period, services of a total value of GBP413,000 in management fees and
GBP24,000 in administration fees (30 September 2013: GBP397,000 in
management fees and GBP23,000 in administration fees; 31 March 2014:
GBP802,000 in management fees and GBP47,000 in administration fees),
were purchased by the Company from Albion Ventures LLP. At the financial
period end, the amount due to Albion Ventures LLP in respect of these
services included within creditors was GBP223,000 (30 September 2013:
GBP200,000; 31 March 2014: GBP214,000).
Albion Ventures LLP, the Manager, holds 2,534 Ordinary shares as a
result of fractional entitlements arising from the merger of Albion
Prime VCT PLC with Albion Venture Capital Trust PLC on 25 September
2012. In addition, Albion Ventures LLP holds a further 5,020 Ordinary
shares in the Company.
Albion Ventures LLP is, from time to time, eligible to receive
transaction fees and Directors' fees from portfolio companies. During
the period to 30 September 2014, fees of GBP104,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2013: GBP35,000; 31 March 2014: GBP167,000).
During the period the Company raised new funds through the Albion VCTs
Top Up Offers as described in note 8. The total cost of the issue of
these shares was 3 per cent. of the sums subscribed. Of these costs, an
amount of GBP3,152 (30 September 2013: GBP3,486; 31 March 2014:
GBP5,450) was paid to the Manager.
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
First dividend paid 31 July 2013 - 2.50 pence per
share - 1,469 1,469
Second dividend paid 31 December 2013 - 2.50 pence
per share - - 1,460
First dividend paid 31 July 2014 - 2.50 pence per
share 1,576 - -
Unclaimed dividends - - (27)
1,576 1,469 2,902
The Directors have declared a dividend of 2.50 pence per share (total
approximately GBP1,590,000), payable on 31 December 2014 to shareholders
on the register as at 5 December 2014.
7. Basic and diluted return per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
Revenue Capital Revenue Capital Revenue Capital
Return
attributable to
Ordinary shares
(GBP'000) 572 114 496 216 999 165
Weighted average
shares in
issue 62,602,887 58,561,391 58,689,669
Return per
Ordinary share
(pence) 0.92 0.18 0.80 0.40 1.70 0.30
The weighted number of shares is calculated excluding treasury shares of
5,240,440 (30 September 2013: 4,695,440; 31 March 2014: 4,695,440).
There are no convertible instruments, derivatives or contingent share
agreements in issue for Albion Venture Capital Trust PLC hence there are
no dilution effects to the return per share. The basic return per share
is therefore the same as the diluted return per share.
8. Called up share capital
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Allotted, called up and fully paid
68,825,723 Ordinary shares of 1 penny each (30 September
2013: 63,066,034; 31 March 2014: 64,490,852) 688 631 645
Voting rights
63,585,283 Ordinary shares of 1 penny each (net of
treasury shares) (30 September 2013: 58,370,594; 31
March 2014: 59,795,412)
During the period to 30 September 2014 the Company purchased 545,000
Ordinary shares to be held in treasury (30 September 2013: 543,000; 31
March 2014: 543,000) at a cost of GBP363,000 (30 September 2013:
GBP364,000; 31 March 2014: GBP364,000) representing 0.79% of the shares
in issue as at 30 September 2014. The shares purchased for treasury were
funded from the Other distributable reserve.
During the period the Company did not purchase any Ordinary shares for
cancellation (30 September 2013: nil; 31 March 2014: 729,000 at a cost
of GBP487,000).
The total number of Ordinary shares held in treasury as at 30 September
2014 was 5,240,440 (30 September 2013: 4,695,440; 31 March 2014:
4,695,440) representing 7.6% of the share capital as at 30 September
2014.
Under the terms of the Dividend Reinvestment Scheme Circular dated 10
July 2008, the following Ordinary shares of nominal value 1 penny per
share were allotted during the period:
Aggregate Net
Number of nominal value Issue price consideration Opening market price
Date of shares of shares (pence per received on allotment date
allotment allotted GBP'000 share) (GBP'000) (pence per share)
31 July
2014 203,480 2 68.80 138 67.25
During the period from 1 April 2014 to 30 September 2014, the Company
issued the following new shares of nominal value 1 penny per share under
the Albion VCTs offers for subscription:
Aggregate
nominal Net Opening
Number of value of Issue price consideration market price
shares shares (pence per received allotment date
Date of allotment allotted GBP'000 share) (GBP'000) (pence per share)
5 April 2014
(Prospectus) 1,899,867 19 73.10 1,347 67.25
5 April 2014 748,273 8 73.10 531 67.25
5 April 2014 18,621 - 72.80 13 67.25
5 April 2014 17,201 - 72.40 12 67.25
4 July 2014
(Prospectus) 529,802 5 73.60 378 67.25
4 July 2014 30,507 - 73.60 22 67.25
4 July 2014 5,464 - 73.20 4 67.25
4 July 2014 10,187 - 72.80 7 67.25
30 September 2014
(Prospectus) 588,667 6 71.50 408 67.25
30 September 2014
(Non-Prospectus) 282,802 3 71.50 196 67.25
4,131,391 41 2,918
9. Reconciliation of revenue return on ordinary activities before
taxation to net cash flow from operating activities
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Revenue return on
ordinary activities
before tax 699 608 1,119
Investment management
fee charged to
capital (310) (298) (601)
Movement in accrued
amortised loan stock
interest 36 93 103
Increase in debtors (19) (1) (8)
Decrease in creditors (12) (55) (32)
Net cash flow from
operating activities 394 347 581
10. Analysis of change in cash during the period
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2014 30 September 2013 31 March 2014
GBP'000 GBP'000 GBP'000
Opening cash balances 7,505 11,896 11,896
Net cash flow (1,954) (835) (4,391)
Closing cash balances 5,551 11,061 7,505
11. Commitments and contingencies
As at 30 September 2014, the Company was committed to making further
investment of:
-- GBP2,208,000 in Ryefield Court Care Limited
-- GBP2,200,000 in Active Lives Care Ltd
-- GBP999,000 in Chonais Holdings Limited
-- GBP216,000 in Green Highland Renewables (Ledgowan) Limited
There are no contingencies or guarantees of the Company as at 30
September 2014 (30 September 2013 and 31 March 2014: nil).
12. Post balance sheet events
Since 30 September 2014 the Company has had the following material post
balance sheet events:
-- Investment of GBP999,000 in Chonais Holdings Limited
-- Investment of GBP200,000 in Infinite Ventures (Goathill) Ltd
-- Investment of GBP156,000 in Green Highland Renewables (Ledgowan) Limited
-- Proceeds of GBP772,000 (not including deferred consideration) received
from the disposal of the investment in Tower Bridge Health Clubs Limited
On 17 November 2014 the Company announced the publication of a
prospectus in relation to an offer for subscription for new Ordinary
shares. The Company is aiming to raise circa GBP4.25 million out of a
target of GBP25.5 million in aggregate that the Albion VCTs are seeking
to raise. In addition, the Board may elect to allot up to a further
GBP1.75 million if there is sufficient demand and the Board deems it
prudent to do so. The proceeds will be used to provide further resources
at a time when a number of attractive investment opportunities are being
seen. A Securities Note, which forms part of the Prospectus, has been
sent to shareholders.
13. Related party transactions
There are no related party transactions or balances requiring
disclosure.
14. Going concern
The Board's assessment of liquidity risk remains unchanged since the
last Annual Report and Financial Statements for the year ended 31 March
2014, and is detailed on page 49 of those accounts. The Company has
adequate cash and liquid resources. The portfolio of investments is
diversified in terms of sector, and the major cash outflows of the
Company (namely investments, 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
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 'Going Concern and Liquidity Risk: Guidance for
Directors of UK Companies 2009' published by the Financial Reporting
Council.
15. Risks and uncertainties
The Board considers that the Company faces the following major risks and
uncertainties:
1. Economic risk
Changes in economic conditions, including, for example, interest rates,
rates of inflation, industry conditions, competition, political and
diplomatic events and other factors could substantially and adversely
affect the Company's prospects in a number of ways.
To reduce this risk, in addition to investing equity in portfolio
companies, the Company often invests in secured loan stock and has a
policy of not normally permitting any external bank borrowings within
portfolio companies. Additionally, the Manager has been rebalancing the
sector exposure of the portfolio with a view to reducing reliance on
consumer led sectors.
2. Investment risk
This is the risk of investment in poor quality assets which reduces the
capital and income returns to shareholders, and negatively impacts on
the Company's reputation. By nature, smaller unquoted businesses, such
as those that qualify for venture capital trust purposes, are more
fragile than larger, long established businesses.
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and its strong track record for investing in
this segment of the market. In addition, the Manager operates a formal
and structured investment process, which includes an Investment
Committee, comprising investment professionals from the Manager and at
least one external investment professional. The Manager also invites and
takes account of comments from non-executive Directors of the Company on
investments discussed at the Investment Committee meetings. Investments
are actively and regularly monitored by the Manager (investment managers
normally sit on portfolio company boards) and the Board receives
detailed reports on each investment as part of the Manager's report at
quarterly board meetings.
3. Valuation risk
The Company's investment valuation methodology is reliant on the
accuracy and completeness of information that is issued by portfolio
companies. In particular, the Directors may not be aware of or take into
account certain events or circumstances which occur after the
information issued by such companies is reported.
As described in note 2, the unquoted equity investments, convertible
loan stock and debt issued at a discount held by the Company are
designated at fair value through profit or loss and valued in accordance
with the International Private Equity and Venture Capital Valuation
Guidelines. These guidelines set out recommendations, intended to
represent current best practice on the valuation of venture capital
investments. These investments are valued on the basis of forward
looking estimates and judgments about the business itself, its market
and the environment in which it operates, together with the state of the
mergers and acquisitions market, stock market conditions and other
factors. In making these judgments the valuation takes into account all
known material facts up to the date of approval of the Financial
Statements by the Board. All other unquoted loan stock is measured at
amortised cost. The values of all of the investments are at cost
(reviewed for impairment) or underpinned by independent third party
professional valuations.
4. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows
investors to take advantage of tax reliefs on initial investment and
ongoing tax free capital gains and dividend income. Failure to meet the
qualifying requirements could result in investors losing the tax relief
on initial investment and loss of tax relief on any tax-free income or
capital gains received. In addition, failure to meet the qualifying
requirements could result in a loss of listing of the shares.
To reduce this risk, the Board has appointed the Manager, which has a
team with significant experience in venture capital trust management,
used to operating within the requirements of the venture capital trust
legislation. In addition, to provide further formal reassurance, the
Board has appointed PricewaterhouseCoopers LLP as its taxation adviser.
PricewaterhouseCoopers LLP reports quarterly to the Board to
independently confirm compliance with the venture capital trust
legislation, to highlight areas of risk and to inform on changes in
legislation. Each investment in a new portfolio company is also
pre-cleared with H.M. Revenue & Customs.
5. Compliance risk
The Company is listed on The London Stock Exchange and is required to
comply with the rules of the UK Listing Authority, as well as with the
Companies Act, Accounting Standards and other legislation. Failure to
comply with these regulations could result in a delisting of the
Company's shares, or other penalties under the Companies Act or from
financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior
levels within or advising quoted businesses. In addition, the Board and
the Manager receive regular updates on new regulation from its auditor,
lawyers and other professional bodies.
6. Internal control risk
Failures in key controls, within the Board or within the Manager's
business, could put assets of the Company at risk or result in reduced
or inaccurate information being passed to the Board or to shareholders.
The Audit Committee meets with the Manager's Internal Auditor, PKF
Littlejohn LLP, when required, receiving a report regarding the last
formal internal audit performed on the Manager, and providing the
opportunity for the Audit Committee to ask specific and detailed
questions. John Kerr, as Chairman of the Audit Committee, met with the
internal audit Partner of PKF Littlejohn LLP in January 2014 to discuss
the most recent Internal Audit Report on the Manager. The Manager has a
comprehensive business continuity plan in place in the event that
operational continuity is threatened. Further details regarding the
Board's management and review of the Company's internal controls through
the implementation of the Turnbull guidance are detailed on page 27 of
the Annual Report and Financial Statements for the year ended 31 March
2014.
Measures are in place to mitigate information risk in order to ensure
the integrity, availability and confidentiality of information used
within the business.
7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions.
There are provisions within the management agreement for the change of
Manager under certain circumstances (for further detail, see the
management agreement paragraph on page 11 of the Annual Report and
Financial Statements for the year ended 31 March 2014). In addition, the
Manager has demonstrated to the Board that there is no undue reliance
placed upon any one individual within Albion Ventures LLP.
8. Financial risk
By its nature, as a venture capital trust, the Company is exposed to
investment risk (which comprises investment price risk and cash flow
interest rate risk), credit risk and liquidity risk.
The Company's policies for managing these risks and its financial
instruments are outlined in full in note 20 of the Annual Report and
Financial Statements for the year ended 31 March 2014.
All of the Company's income and expenditure is denominated in sterling
and hence the Company has no foreign currency risk. The Company is
financed through equity and does not have any borrowings. The Company
does not use derivative financial instruments for speculative purposes.
16. Other information
The information set out in this Half-yearly Financial Report does not
constitute the Company's statutory accounts within the terms of section
434 of the Companies Act 2006 for the periods ended 30 September 2014
and 30 September 2013, and is unaudited. The information for the year
ended 31 March 2014 does not constitute statutory accounts within the
terms of section 434 of the Companies Act 2006 but is derived from the
audited statutory accounts for the financial year, which were
unqualified and which have been delivered to the Registrar of Companies.
The Auditor reported on those accounts; their report was unqualified and
did not contain a statement under s498 (2) or (3) of the Companies Act
2006.
17. Publication
This Half-yearly Financial Report is being sent to shareholders and
copies will be made available to the public at the registered office of
the Company, Companies House, the National Storage Mechanism and also
electronically at www.albion-ventures.co.uk/OurFunds/AAVC.htm.
Dividend history for Albion Venture Capital Trust PLC 'C Shares'
Total shareholder net asset value return to 30 September C shares
2014 (pence per share)
Total dividends paid during the year ended :
31 March 1998 2.00
31 March 1999 8.75
31 March 2000 2.70
31 March 2001 4.80
31 March 2002 7.60
31 March 2003 7.70
31 March 2004 8.20
31 March 2005 9.75
31 March 2006 11.75
31 March 2007 10.00
31 March 2008 10.00
31 March 2009 10.00
31 March 2010 5.00
31 March 2011 5.00
31 March 2012 5.00
31 March 2013 5.00
31 March 2014 5.00
Total dividends paid in the six months to 30 September
2014 2.50
Total dividends paid to 30 September 2014 120.75
Net asset value as at 30 September 2014 69.92
Total shareholder net asset value return to 30 September
2014 190.67
Notes
-- Dividends paid before 5 April 1999 were paid to qualifying shareholders
inclusive of the associated tax credit. The dividends for the year to 31
March 1999 were maximised in order to take advantage of this tax credit.
-- All dividends paid by the Company are free of income tax. It is an H.M.
Revenue & Customs requirement that dividend vouchers indicate the tax
element should dividends have been subject to income tax. Investors
should ignore this figure on their dividend voucher and need not disclose
any income they receive from a VCT on their tax return.
-- The Ordinary shares and the C shares merged on an equal basis
Dividend history for Albion Prime VCT PLC now merged with Albion Venture
Capital Trust PLC
Proforma(i)
Albion Prime VCT
Total shareholder net asset value return to 30 September PLC
2014 (pence per share)
Total dividends paid during the year
ended 31 March 1998 1.10
31 March 1999(ii) 6.40
31 March 2000 1.50
31 March 2001 4.25
31 March 2002 2.75
31 March 2003 2.00
31 March 2004 1.25
31 March 2005 2.20
31 March 2006 4.50
31 March 2007 4.00
31 March 2008 5.00
31 March 2009 4.50
31 March 2010 2.00
31 March 2011 3.00
31 March 2012 3.00
31 March 2013 3.70
31 March 2014 4.40
Total dividends paid in the six months
to 30 September 2014 2.20
Total dividends paid to 30 September 2014 57.75
Proforma net asset value as at 30 September 2014 61.54
Total proforma shareholder net asset value return
to 30 September 2014 119.29
Notes
1. The proforma shareholder returns presented above are based on the
dividends paid to shareholders before the merger and the pro-rata net
asset value per share and pro-rata dividends per share paid to 30
September 2014. Albion Prime VCT PLC was merged with Albion Venture
Capital Trust PLC on 25 September 2012. This pro-forma is based upon
0.8801 Albion Venture Capital Trust PLC shares for every Albion Prime VCT
PLC share.
2. Dividends paid before 5 April 1999 were paid to qualifying shareholders
inclusive of the associated tax credit. The dividends for the year to 31
March 1999 were maximised in order to take advantage of this tax credit.
3. The above table excludes the tax benefits investors received upon
subscription for shares in the Company.
Split of portfolio by valuation as at 30 September 2014:
http://hugin.info/141809/R/1874827/660618.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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: Albion Venture Capital Trust PLC via Globenewswire
HUG#1874827
http://www.closeventures.co.uk
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