Albion Ven Cap Trust Albion Venture Capital Trust Plc: Half-yearly Report
November 25 2015 - 9:40AM
UK Regulatory
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 2015. This announcement
was approved by the Board of Directors on 25 November 2015.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 2015, 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 objective 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
GBP15.2 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 11 December 2015
Payment date for second dividend 31 December 2015
Financial year end 31 March 2016
Financial highlights
Unaudited six Unaudited six Audited year
months ended months ended ended
30 September 2015 30 September 2014 31 March 2015
(pence per share) (pence per share) (pence per share)
Dividends paid 2.50 2.50 5.00
Revenue return 0.95 0.92 2.07
Capital return 2.74 0.18 3.26
Net asset value 72.65 69.92 71.62
Total shareholder return since launch to Ordinary shares
30 September 2015 (pence per share)
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
31 March 2015 5.00
Dividends paid in the six months to
30 September 2015 2.50
Total dividends paid since launch to
30 September 2015 137.30
Net asset value as at 30 September 2015 72.65
Total shareholder return since launch to
30 September 2015 per 100 pence invested 209.95
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 2016 of 2.50 pence
per share, to be paid on 31 December 2015 to shareholders on the
register as at 11 December 2015.
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 2015 showed a total return of 3.7 pence per
share, up from 1.1 pence per share for the same period last year. This
positive return was a result of uplifts in the third party professional
valuations of our hydroelectric schemes and of Radnor House School, as
well as an offer received for Kensington Health Clubs Limited. The net
asset value for the half year was 72.7 pence per share compared to 71.6
pence per share at 31 March 2015.
Investment performance, progress and prospects
During the period, just under GBP2 million was invested in qualifying
investments including GBP1.3m in two of the three new care homes that we
are currently building and GBP460,000 into Radnor House to help purchase
Combe Bank School in Sevenoaks, Kent. Further sums were invested after
the half year to fund the further construction of the care homes.
GBP550,000 was received back from our investee companies in the form of
loan stock repayments during the period.
Looking forwards, the main focus of our investment activity will be the
further construction costs of our three care home projects in Oxford,
Reading and Hillingdon (West London), all of which are proceeding
according to plan. They are due to open between March and June of next
year and we are currently optimistic for their prospects.
In terms of trading progress, the sentiment across the portfolio is
generally positive. The Stansted Holiday Inn Express is currently
trading at strong levels, while our renewable energy portfolio has been
boosted by the two new hydroelectric schemes in Scotland which are
trading above budget. Meanwhile, Radnor House, which recorded good GCSE
results, saw a continued increase in the number of pupils to 390, while
Combe Bank is trading in line with expectations.
Split of portfolio by valuation as at 30 September 2015
Set out at the bottom of this announcement is the sector diversification
of the investment portfolio as at 30 September 2015. At that date
healthcare and renewable energy investments accounted for approximately
14 per cent. and 21 per cent. of the Company's portfolio including cash.
Changes in VCT legislation
The July budget introduced a number of changes to VCT legislation,
including restrictions over the age of investments, a prohibition on
management buyouts or the purchase of existing businesses and an overall
lifetime investment cap of GBP12m from tax-advantaged funds into any
portfolio company. While these changes are significant, the Company has
been advised that had they been in place previously they would have
affected only a relatively small minority of the investments that we
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