Albion Development VCT PLC: Half-yearly Financial Report
Albion Development VCT PLC
LEI Code
213800FDDMBD9QLHLB38
As required by the UK Listing Authority's
Disclosure Guidance and Transparency Rule 4.2, Albion Development
VCT PLC today makes public its information relating to the
Half-yearly Financial Report (which is unaudited) for the six
months to 30 June 2021. This announcement was approved by the Board
of Directors on 8 September 2021.
The full Half-yearly Financial Report (which is
unaudited) for the period to 30 June 2021 will shortly be sent to
shareholders and will be available on the Albion Capital Group LLP
website by clicking
www.albion.capital/funds/AADV/30Jun2021.pdf.
Investment policy
The Company will invest in a broad portfolio of
higher growth businesses with a stronger focus on technology
companies across a variety of sectors of the UK economy. Allocation
of assets will be determined by the investment opportunities which
become available but efforts will be made to ensure that the
portfolio is diversified in terms of sector and stage of maturity
of company.
Funds held pending investment or for liquidity
purposes will be held as cash on deposit or up to 8 per cent. of
its assets, at the time of investment, in liquid open-ended equity
funds providing income and capital equity exposure (where it is
considered economic to do so).
Risk diversification and maximum
exposures
Risk is spread by investing in a number of
different businesses within Venture Capital Trust qualifying
industry sectors using a mixture of securities. The maximum amount
which the Company will invest in a single portfolio company is 15
per cent. of the Company's assets at cost thus ensuring a spread of
investment risk. The value of an individual investment may increase
over time as a result of trading progress and it is possible that
it may grow in value to a point where it represents a significantly
higher proportion of total assets prior to a realisation
opportunity being available.
The Company's maximum exposure in relation to
gearing is restricted to 10 per cent. of the adjusted share capital
and reserves.
Background to the
Company
The Company is a Venture Capital Trust which
raised a total of £33.3 million through the issue of shares between
1999 and 2004. The C shares merged with the Ordinary shares in
2007. A further £6.3 million was raised through an issue of new D
shares in 2010. The D shares converted to Ordinary shares in
2015.
An additional £55.0 million has been raised for
the Ordinary shares through the Albion VCTs Top Up Offers since
January 2011.
Financial calendar
Record date
for second dividend for the year |
10
September 2021 |
|
|
Payment date
for second dividend for the year |
30
September 2021 |
|
|
Financial
year end |
31
December |
Financial
highlights
Ordinary shares |
Unaudited six months ended 30 June
2021 (pence per share) |
Unaudited six months ended 30 June 2020 (pence per share) |
Audited year ended 31 December 2020 (pence per share) |
Opening net asset value |
82.42 |
83.47 |
83.47 |
Capital return/(loss) |
12.93 |
(2.03) |
3.15 |
Revenue (loss)/return |
(0.46) |
0.08 |
0.02 |
Total return/(loss) |
12.47 |
(1.95) |
3.17 |
Dividends paid |
(2.06) |
(2.25) |
(4.24) |
Impact from share capital movements |
(0.42) |
0.03 |
0.02 |
Net asset value |
92.41 |
79.30 |
82.42 |
Total dividends paid to 30 June 2021 |
106.55 |
Net asset value as at 30 June 2021 |
92.41 |
Total shareholder value to 30 June 2021 |
198.96 |
The total shareholder value table above is for
the Company, Albion Development VCT PLC Ordinary shares only.
Details of the financial performance of the C shares and D shares,
which have been merged into the Ordinary shares, can be found at
www.albion.capital/funds/AADV under the ‘Financial summary for
previous funds’ section.
A more detailed breakdown of the dividends paid
per year can be found at www.albion.capital/funds/AADV under the
‘Dividend History’ section.
In addition to the dividends summarised
above, the Board has declared a second dividend for the year ending
31 December 2021, of 2.31 pence per Ordinary share to be paid on 30
September 2021 to shareholders on the register on 10 September
2021.
Interim management
report
Introduction
The Company has had a strong six months to 30
June 2021, with a total return of 12.47 pence per share, and the
net asset value (“NAV”) increasing to 92.41 pence per share,
representing a 14.6% return on opening NAV (after adjusting for the
dividend paid). Our portfolio companies are demonstrating the value
they provide to their customers as the economy emerges from the
pandemic.
Valuations and results
There is a £12.5 million total return for the
six months to 30 June 2021 compared to a total loss of £1.8 million
for the same period in the previous year. The successful series D
fundraise in Quantexa and series C fundraise in Oviva have been the
major contributors to the positive return. However, we have also
seen many of our other portfolio companies performing well. For
example, one of our portfolio companies, Arecor Therapeutics,
listed onto the AIM stock exchange during the period which led to
an increase in value of £0.3 million. Our top 10 portfolio
companies, which now account for 50.2% of net asset value,
increased in value by £13 million.
There have also been write-downs in our
portfolio, the largest being Mirada (£0.5 million) and Abcodia
(£0.3 million), both of which operate in the healthcare sector.
Mirada’s ability to sell its software to hospitals has been
hampered by Covid-19 and Abcodia was impacted by disappointing
clinical trial results.
The period saw disposals with proceeds totalling
£2.9 million, which has led to realised gains of £1.7 million. The
principal exit was the sale of OmPrompt Holdings in March which
resulted in a return of 2.3 times cost, and generated proceeds of
£2.3 million. SBD Automotive was also sold generating 2.1 times
cost. Further details on these disposals can be found in the table
below.
Further details of the portfolio of investments
can be found below.
Dividends and results
In line with our variable dividend policy
targeting around 5% of NAV per annum, the Company paid a dividend
totalling 2.06 pence per share during the period to 30 June 2021
(30 June 2020: 2.25 pence per share). The Company will pay a second
dividend for the financial year ending 31 December 2021 of 2.31
pence per share on 30 September 2021 to shareholders on the
register on 10 September 2021, being 2.5% of the latest reported
NAV.
This will bring the total dividends paid for the
year ending 31 December 2021 to 4.37 pence per share, which equates
to a 5.3% yield on the opening NAV of 82.42 pence per
share.
Investment activity
During the period the Company has invested £4.7
million into new and existing portfolio companies, with new
investments comprising:
- £1.2 million into Threadneedle Software Holdings (trading as
Solidatus) a provider of data lineage software to enterprise
customers in regulated sectors, which allows them to rapidly
discover, visualise, catalogue and understand how data flows
through their systems;
- £0.5 million into Gravitee TopCo (trading as Gravitee.io) an
API management platform;
- £0.4 million into NuvoAir a provider of digital therapeutics
and decentralised clinical trials for respiratory conditions;
- £0.3 million into Brytlyt which uses patented software and AI,
combined with the superior computation power of graphics processing
units (GPUs), to derive insights 1,000s of times faster than legacy
systems; and
- £0.2 million into Accelex Technologies (trading as Accelex) a
data extraction and analytics technology for private capital
markets.
A further £2.0 million was invested in existing
portfolio companies, including £0.6 million into Black Swan to
support the restructure of its business to focus primarily on
predictive analytics for consumer brands, and £0.6 million into
Healios to continue providing psychological care to children and
adolescents using a family centric approach.
The pie chart at the end of this announcement
illustrates the composition of the portfolio by industry sector as
at 30 June 2021.
Share buy-backs
It remains the Board’s policy to buy-back shares
in the market, subject to the overall constraint that such
purchases are in the Company’s interest. This includes the
maintenance of sufficient cash resources for investment in new and
existing portfolio companies and the continued payment of dividends
to shareholders.
It is the Board’s intention that such buy-backs
should be at around a 5% discount to net asset value, in so far as
market conditions and liquidity permit.
Transactions with the
Manager
Details of transactions with the Manager for the
reporting period can be found in note 5. Details of related party
transactions can be found in note 11.
Risks and uncertainties
The longer term implications of the Covid-19
crisis is the key risk facing the Company, including its impact on
the UK and Global economies. The risk of potential implications of
the UK’s departure from the European Union adversely affecting our
underlying portfolio companies appears to be reducing. The Manager
is continually assessing the exposure to such risks for each
portfolio company, and where possible appropriate mitigating
actions are being taken.
The increasing maturity and success of some of
our portfolio companies has resulted in a high concentration in our
top 10, which may result in further volatility in the
future.
Other principal risks and uncertainties remain
unchanged and are as detailed in note 13.
Albion VCTs Top Up Offers
As announced in the Annual Report and Financial
Statements for the year ended 31 December 2020, the Board was
pleased to close the 2020/21 Offer, fully subscribed, having raised
£10 million.
The proceeds are being used to provide support
to our existing portfolio companies and to enable us to take
advantage of new and exciting investment opportunities as they
arise, five of which are detailed above. Details on the share
allotments during the period can be found in note 8.
Shareholder seminar
The Board is pleased to report that the current
intention of the Manager, Albion Capital, is to host a physical
rather than virtual shareholder seminar this year on 12 November
2021, in central London with the venue to be confirmed. This will
be dependent on government guidelines and any changes thereof, and
we will keep shareholders informed as the date approaches. The
Board and Manager are keen to interact with shareholders and look
forward to sharing with you further portfolio updates, as well as
answering any questions.
More details will shortly be available on the
Albion Capital website: www.albion.capital.
Prospects
The Board is encouraged by the performance of
the portfolio as a whole and the prospects for the companies within
it. The availability of new investments is strong, demonstrated by
the five new investments in the past six months, and the Company
continues to invest into exciting new companies with a focus on B2B
software and healthcare. We therefore believe that the Company’s
portfolio continues to have the potential to deliver attractive
returns to shareholders over the long term.
Ben Larkin
Chairman
8 September 2021
Responsibility
statement
The Directors, Ben Larkin, Lyn Goleby, Lord O’
Shaughnessy and Patrick Reeve, are responsible for the preparation
of the Half-yearly Financial Report. In preparing these condensed
Financial Statements for the period to 30 June 2021 we, the
Directors of the Company, confirm that to the best of our
knowledge:
(a) the condensed set of Financial Statements,
which has been prepared in accordance with Financial Reporting
Standard 104 “Interim Financial Reporting”, give a true and fair
view of the assets, liabilities, financial position and profit and
loss of the Company as required by DTR 4.2.4R;
(b) the Interim management report includes a
fair review of the information required by DTR 4.2.7R (indication
of important events during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
(c) the Interim management report includes a
fair review of the information required by DTR 4.2.8R (disclosure
of related parties’ transactions and changes therein).
This Half-yearly Financial Report has not been
audited or reviewed by the Auditor.
For and on behalf of the Board
Ben Larkin
Chairman
8 September 2021
Portfolio of investments
|
|
As at 30 June 2021 |
|
Fixed asset investments |
% voting rights |
Cost £’000 |
Cumulative movement in value
£’000 |
Value £’000 |
Change in value for the period*
£’000 |
Quantexa Limited |
2.3 |
2,101 |
12,768 |
14,869 |
7,844 |
Egress Software Technologies Limited |
6.9 |
2,332 |
5,780 |
8,112 |
519 |
Proveca Limited |
11.8 |
1,829 |
5,674 |
7,503 |
1,053 |
Oviva AG |
3.3 |
1,151 |
2,479 |
3,630 |
2,154 |
Radnor House School (TopCo) Limited |
8.5 |
1,560 |
1,152 |
2,712 |
87 |
Black Swan Data Limited |
6.9 |
2,213 |
259 |
2,472 |
892 |
Chonais River Hydro Limited |
4.6 |
1,705 |
600 |
2,305 |
(5) |
The Street by Street Solar Programme Limited |
12.4 |
1,291 |
973 |
2,264 |
(174) |
The Evewell Group Limited |
5.4 |
1,073 |
1,007 |
2,080 |
736 |
Regenerco Renewable Energy Limited |
11.9 |
1,204 |
713 |
1,917 |
(135) |
Phrasee Limited |
3.1 |
712 |
1,141 |
1,853 |
894 |
Panaseer Limited |
3.1 |
1,122 |
534 |
1,656 |
(30) |
Healios Limited |
3.3 |
847 |
522 |
1,369 |
(67) |
MyMeds&Me Limited |
9.9 |
940 |
276 |
1,216 |
322 |
Threadneedle Software Holdings Limited (T/A Solidatus) |
2.0 |
1,209 |
- |
1,209 |
- |
Alto Prodotto Wind Limited |
9.4 |
696 |
439 |
1,135 |
(55) |
Aridhia Informatics Limited |
5.8 |
1,129 |
(101) |
1,028 |
201 |
Convertr Media Limited |
6.2 |
992 |
36 |
1,028 |
5 |
Cantab Research Limited (T/A Speechmatics) |
1.7 |
685 |
338 |
1,023 |
338 |
Albion Investment Properties Limited |
68.2 |
929 |
74 |
1,003 |
26 |
MPP Global Solutions Limited |
3.0 |
1,000 |
- |
1,000 |
- |
uMotif Limited |
3.2 |
941 |
58 |
999 |
- |
Beddlestead Limited |
8.6 |
1,026 |
(253) |
773 |
93 |
InCrowd Sports Limited |
4.3 |
545 |
195 |
740 |
206 |
Arecor Therapeutics PLC (previously Arecor Limited) |
1.1 |
387 |
339 |
726 |
339 |
Limitless Technology Limited |
2.4 |
648 |
65 |
713 |
- |
Cisiv Limited |
7.6 |
686 |
(27) |
659 |
217 |
Elliptic Enterprises Limited |
0.8 |
639 |
12 |
651 |
12 |
Innovation Broking Group Limited |
8.4 |
84 |
519 |
603 |
346 |
Locum's Nest Limited |
5.6 |
550 |
33 |
583 |
67 |
Concirrus Limited |
1.1 |
575 |
- |
575 |
- |
Imandra Inc. |
1.7 |
166 |
344 |
510 |
344 |
Koru Kids Limited |
2.1 |
460 |
48 |
508 |
- |
Gravitee TopCo Limited (T/A Gravitee.io) |
2.3 |
492 |
- |
492 |
- |
The Voucher Market Limited (T/A WeGift) |
1.2 |
492 |
- |
492 |
- |
AVESI Limited |
10.5 |
340 |
110 |
450 |
(43) |
NuvoAir AB |
1.4 |
448 |
- |
448 |
- |
The Q Garden Company Limited |
16.6 |
466 |
(75) |
391 |
(26) |
Oxsensis Limited |
1.6 |
386 |
(4) |
382 |
- |
Seldon Technologies Limited |
1.8 |
356 |
- |
356 |
- |
Credit Kudos Limited |
1.6 |
344 |
- |
344 |
- |
Dragon Hydro Limited |
5.5 |
207 |
133 |
340 |
(4) |
Brytlyt Limited |
2.0 |
330 |
- |
330 |
- |
DySIS Medical Limited |
1.4 |
1,038 |
(749) |
289 |
6 |
Zift Channel Solutions Inc. |
1.7 |
885 |
(636) |
249 |
85 |
Xperiome Limited (previously Raremark) |
2.9 |
378 |
(142) |
236 |
(206) |
TransFICC Limited |
1.4 |
207 |
- |
207 |
- |
MHS 1 Limited |
3.3 |
231 |
(37) |
194 |
(13) |
Greenenerco Limited |
1.0 |
113 |
74 |
187 |
(8) |
Accelex Technology Limited (T/A Accelex) |
2.0 |
185 |
- |
185 |
- |
Avora Limited |
2.2 |
400 |
(249) |
151 |
(249) |
uMedeor Limited (T/A uMed) |
1.2 |
128 |
- |
128 |
- |
Premier Leisure (Suffolk) Limited |
6.2 |
109 |
(7) |
102 |
(7) |
Erin Solar Limited |
4.3 |
120 |
(23) |
97 |
(7) |
Sandcroft Avenue Limited (T/A Hussle) |
6.4 |
1,281 |
(1,208) |
73 |
(100) |
Symetrica Limited |
0.3 |
89 |
(18) |
71 |
- |
memsstar Limited |
2.8 |
62 |
(3) |
59 |
(72) |
Abcodia Limited |
4.7 |
838 |
(832) |
6 |
(309) |
Forward Clinical Limited (T/A Pando) |
1.8 |
219 |
(213) |
6 |
(54) |
Elements Software Limited |
0.6 |
3 |
(3) |
- |
- |
Mirada Medical Limited |
7.7 |
909 |
(909) |
- |
(513) |
Total fixed asset investments |
44,483 |
31,206 |
75,689 |
14,709 |
* As adjusted for additions and
disposals during the year; including realised gains/(losses).
Investment realisations in the period to 30 June
2021 |
Cost £’000 |
Opening value £’000 |
Disposal proceeds £’000 |
Total realised gain £’000 |
Gain/(loss) on opening value
£’000 |
Disposals: |
|
|
|
|
|
OmPrompt Holdings Limited |
994 |
2,202 |
2,276 |
1,282 |
74 |
SBD Automotive Limited |
220 |
459 |
458 |
238 |
(1) |
Mi-Pay Group PLC |
22 |
22 |
25 |
3 |
3 |
|
|
|
|
|
|
Loan stock repayments and other: |
|
|
|
|
|
Alto Prodotto Wind Limited |
23 |
34 |
34 |
11 |
- |
Greenenerco Limited |
4 |
6 |
6 |
2 |
- |
Escrow adjustments* |
- |
- |
144 |
144 |
144 |
Total |
1,263 |
2,723 |
2,943 |
1,680 |
220 |
* These comprise fair value movements on
deferred consideration on previously disposed investments, release
of the G.Network Communications discount which is treated as a
financing transaction, and expenses which are incidental to the
purchase or disposal of an investment
Total change in value of investments for the year |
|
|
14,709 |
Movement in accrued loan stock interest |
|
|
(1) |
Unrealised gains on fixed asset investments
sub-total |
|
|
14,708 |
Realised gains in the current period |
|
|
220 |
Total gains on investments as per Income
statement |
|
|
14,928 |
Condensed income
statement
|
|
Unaudited six months ended
30 June 2021 |
Unaudited six months ended 30 June 2020 |
Audited year ended 31 December 2020 |
|
Note |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on investments |
3 |
- |
14,928 |
14,928 |
- |
(1,295) |
(1,295) |
- |
4,073 |
4,073 |
Investment income |
4 |
370 |
- |
370 |
403 |
- |
403 |
692 |
- |
692 |
Investment management fee |
5 |
(230) |
(692) |
(922) |
(186) |
(558) |
(744) |
(382) |
(1,146) |
(1,528) |
Performance incentive fee |
5 |
(441) |
(1,322) |
(1,763) |
- |
- |
- |
(11) |
(31) |
(42) |
Other expenses |
|
(159) |
- |
(159) |
(141) |
- |
(141) |
(282) |
- |
(282) |
(Loss)/profit on ordinary activities before
tax |
|
(460) |
12,914 |
12,454 |
76 |
(1,853) |
(1,777) |
17 |
2,896 |
2,913 |
Tax (charge)/credit on ordinary activities |
|
- |
- |
- |
(2) |
2 |
- |
- |
- |
- |
(Loss)/profit and total comprehensive income attributable
to shareholders |
|
(460) |
12,914 |
12,454 |
74 |
(1,851) |
(1,777) |
17 |
2,896 |
2,913 |
Basic and diluted (loss)/return per share
(pence)* |
7 |
(0.46) |
12.93 |
12.47 |
0.08 |
(2.03) |
(1.95) |
0.02 |
3.15 |
3.17 |
* adjusted for treasury shares
The accompanying notes below form an integral
part of this Half-yearly Financial Report.
Comparative figures have been extracted from the
unaudited Half-yearly Financial Report for the six months ended 30
June 2020 and the audited statutory accounts for the year ended 31
December 2020.
The total column of this Condensed income
statement represents the profit and loss account of the Company.
The supplementary revenue and capital columns have been prepared in
accordance with The Association of Investment Companies’ Statement
of Recommended Practice.
Condensed balance
sheet
|
Note |
Unaudited 30 June 2021
£’000 |
Unaudited 30 June 2020 £’000 |
Audited 31 December 2020 £’000 |
|
|
|
|
|
Fixed asset investments |
|
75,689 |
52,585 |
58,998 |
|
|
|
|
|
Current assets |
|
|
|
|
Current asset investments |
|
- |
4,057 |
- |
Trade and other receivables |
|
1,827 |
177 |
1,757 |
Cash and cash equivalents |
|
20,400 |
17,074 |
15,645 |
|
|
22,227 |
21,308 |
17,402 |
|
|
|
|
|
Total assets |
|
97,916 |
73,893 |
76,400 |
|
|
|
|
|
Payables: amounts falling due within one year |
|
|
|
|
Trade and other payables |
|
(2,576) |
(446) |
(541) |
Total assets less current liabilities |
|
95,340 |
73,447 |
75,859 |
|
|
|
|
|
Equity attributable to equity holders |
|
|
|
|
Called-up share capital |
8 |
1,163 |
1,036 |
1,040 |
Share premium |
|
54,961 |
44,687 |
44,978 |
Capital redemption reserve |
|
12 |
12 |
12 |
Unrealised capital reserve |
|
31,267 |
13,383 |
18,020 |
Realised capital reserve |
|
10,432 |
14,619 |
12,886 |
Other distributable reserve |
|
(2,495) |
(290) |
(1,077) |
Total equity shareholders’ funds |
|
95,340 |
73,447 |
75,859 |
|
|
|
|
|
Basic and diluted net asset value per share
(pence)* |
|
92.41 |
79.30 |
82.42 |
*excluding treasury shares
The accompanying notes below form an integral
part of this Half-yearly Financial Report.
Comparative figures have been extracted from the
unaudited Half-yearly Financial Report for the six months ended 30
June 2020 and the audited statutory accounts for the year ended 31
December 2020.
These Financial Statements were approved by the
Board of Directors and authorised for issue on 8 September 2021,
and were signed on its behalf by
Ben Larkin
Chairman
Company number: 03654040
Condensed statement of changes in
equity
|
Called-up share capital |
Share premium |
Capital redemption reserve |
Unrealised capital reserve |
Realised capital reserve* |
Other distributable reserve* |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
As at 1 January 2021 |
1,040 |
44,978 |
12 |
18,020 |
12,886 |
(1,077) |
75,859 |
Profit/(loss) and total comprehensive income for the period |
- |
- |
- |
14,708 |
(1,794) |
(460) |
12,454 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(1,461) |
1,461 |
- |
- |
Purchase of shares for treasury |
- |
- |
- |
- |
- |
(958) |
(958) |
Issue of equity |
123 |
10,229 |
- |
- |
- |
- |
10,352 |
Cost of issue of equity |
- |
(246) |
- |
- |
- |
- |
(246) |
Dividends paid |
- |
- |
- |
- |
(2,121) |
- |
(2,121) |
As at 30 June 2021 |
1,163 |
54,961 |
12 |
31,267 |
10,432 |
(2,495) |
95,340 |
As at 1 January 2020 |
938 |
36,712 |
12 |
14,702 |
15,151 |
2,168 |
69,683 |
(Loss)/profit and total comprehensive income for the period |
- |
- |
- |
(1,338) |
(513) |
74 |
(1,777) |
Transfer of previously unrealised losses on disposal of
investments |
- |
- |
- |
19 |
(19) |
- |
- |
Purchase of shares for treasury |
- |
- |
- |
- |
- |
(455) |
(455) |
Issue of equity |
98 |
8,172 |
- |
- |
- |
- |
8,270 |
Cost of issue of equity |
- |
(197) |
- |
- |
- |
- |
(197) |
Dividends paid |
- |
- |
- |
- |
- |
(2,077) |
(2,077) |
As at 30 June 2020 |
1,036 |
44,687 |
12 |
13,383 |
14,619 |
(290) |
73,447 |
As at 1 January 2020 |
938 |
36,712 |
12 |
14,702 |
15,151 |
2,168 |
69,683 |
Profit/(loss) and total comprehensive income for the year |
- |
- |
- |
4,595 |
(1,699) |
17 |
2,913 |
Transfer of previously unrealised gains on disposal of
investments |
- |
- |
- |
(1,277) |
1,277 |
- |
- |
Purchase of shares for treasury |
- |
- |
- |
- |
- |
(1,189) |
(1,189) |
Issue of equity |
102 |
8,478 |
- |
- |
- |
- |
8,580 |
Cost of issue of equity |
- |
(212) |
- |
- |
- |
- |
(212) |
Dividends paid |
- |
- |
- |
- |
(1,843) |
(2,073) |
(3,916) |
As at 31 December 2020 |
1,040 |
44,978 |
12 |
18,020 |
12,886 |
(1,077) |
75,859 |
*These reserves amount to £7,937,000 (30 June
2020: £14,329,000; 31 December 2020: £11,809,000) which is
considered distributable.
Condensed statement of cash
flows
|
Unaudited six months ended
30 June 2021 £’000 |
Unaudited six months ended 30 June 2020 £’000 |
Audited year ended 31 December 2020 £’000 |
Cash flow from operating activities |
|
|
|
Loan stock income received |
349 |
301 |
583 |
Deposit interest received |
1 |
34 |
35 |
Dividend income received |
18 |
141 |
191 |
Investment management fee paid |
(827) |
(716) |
(1,475) |
Performance incentive fee paid |
(42) |
- |
- |
Other cash payments |
(195) |
(154) |
(283) |
Corporation tax paid |
- |
- |
- |
Net cash flow from operating activities |
(696) |
(394) |
(949) |
|
|
|
|
Cash flow from investing activities |
|
|
|
Purchase of current asset investments |
- |
(1,190) |
(1,190) |
Purchase of fixed asset investments |
(4,705) |
(1,614) |
(5,156) |
Disposal of current asset investments |
- |
- |
3,945 |
Disposal of fixed asset investments |
2,882 |
196 |
1,201 |
Net cash flow from investing activities |
(1,823) |
(2,608) |
(1,200) |
|
|
|
|
Cash flow from financing activities |
|
|
|
Issue of share capital |
9,767 |
7,738 |
7,737 |
Cost of issue of shares |
(17) |
(16) |
(33) |
Equity dividends paid* |
(1,766) |
(1,719) |
(3,251) |
Purchase of own shares (including costs) |
(710) |
(456) |
(1,188) |
Net cash flow from financing activities |
7,274 |
5,547 |
3,265 |
|
|
|
|
Increase in cash and cash equivalents |
4,755 |
2,545 |
1,116 |
Cash and cash equivalents at start of period |
15,645 |
14,529 |
14,529 |
Cash and cash equivalents at end of period |
20,400 |
17,074 |
15,645 |
*The dividends paid shown in the cash flow are
different to the dividends disclosed in note 6 as a result of the
non-cash effect of the Dividend Reinvestment Scheme.
Notes to the condensed Financial
Statements
1. Basis of accounting
The Financial Statements have been prepared in
accordance with applicable United Kingdom law and accounting
standards, including Financial Reporting Standard 102 (“FRS 102”),
and with the Statement of Recommended Practice “Financial
Statements of Investment Trust Companies and Venture Capital
Trusts” (“SORP”) issued by The Association of Investment Companies
(“AIC”). The Financial Statements have been prepared on a going
concern basis.
The preparation of the Financial Statements
requires management to make judgements and estimates that affect
the application of policies and reported amounts of assets,
liabilities, income and expenses. The most critical estimates and
judgements relate to the determination of carrying value of
investments at Fair Value Through Profit and Loss (“FVTPL”) in
accordance with FRS 102 sections 11 and 12. The Company values
investments by following the International Private Equity and
Venture Capital Valuation (“IPEV”) Guidelines as updated in 2018
and further detail on the valuation techniques used are outlined in
note 2 below.
Company information can be found on page 2 of
the full Half-yearly Financial Report.
2. Accounting policies
Fixed and current asset
investments
The Company’s business is investing in financial
assets with a view to profiting from their total return in the form
of income and capital growth. This portfolio of financial assets is
managed and its performance evaluated on a fair value basis, in
accordance with a documented investment policy, and information
about the portfolio is provided internally on that basis to the
Board.
In accordance with the requirements of FRS 102,
those undertakings in which the Company holds more than 20 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 measured at FVTPL.
Upon initial recognition (using trade date
accounting) investments, including loan stock, are classified by
the Company as FVTPL and are included at their initial fair value,
which is cost (excluding expenses incidental to the acquisition
which are written off to the Income statement).
Subsequently, the investments are valued at
‘fair value’, which is measured as follows:
- Investments listed on recognised exchanges are valued at their
bid prices at the end of the accounting period or otherwise at fair
value based on published price quotations.
- Unquoted investments, where there is not an active market, are
valued using an appropriate valuation technique in accordance with
the IPEV Guidelines. Indicators of fair value are derived using
established methodologies including earnings multiples, revenue
multiples, the level of third party offers received, cost or price
of recent investment rounds, net assets and industry valuation
benchmarks. Where price of recent investment is used as a starting
point for estimating fair value at subsequent measurement dates,
this has been benchmarked using an appropriate valuation technique
permitted by the IPEV guidelines.
- In situations where cost or price of recent investment is used,
consideration is given to the circumstances of the portfolio
company since that date in determining fair value. This includes
consideration of whether there is any evidence of deterioration or
strong definable evidence of an increase in value. In the absence
of these indicators, the investment in question is valued at the
amount reported at the previous reporting date. Examples of events
or changes that could indicate a diminution include:
- the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was
based;
- a significant adverse change either in the portfolio company’s
business or in the technological, market, economic, legal or
regulatory environment in which the business operates; or
- market conditions have deteriorated, which may be indicated by
a fall in the share prices of quoted businesses operating in the
same or related sectors.
Investments are recognised as financial assets
on legal completion of the investment contract and are
de-recognised on legal completion of the sale of an investment.
Dividend income is not recognised as part of the
fair value movement of an investment, but is recognised separately
as investment income through the other distributable reserve when a
share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more
than one year), payables and cash are carried at amortised cost, in
accordance with FRS 102. Debtors due after more than one year meet
the definition of a financing transaction held at amortised cost,
and interest will be recognised through capital over the credit
period using the effective interest method. There are no financial
liabilities other than payables.
Investment income
Equity income
Dividend income is included in revenue when the
investment is quoted ex-dividend.
Unquoted loan stock income
Fixed returns on non-equity shares and debt
securities are recognised when the Company’s right to receive
payment and expect settlement is established. Where interest is
rolled up and/or payable at redemption then it is recognised as
income unless there is reasonable doubt as to its
receipt.
Bank interest income
Interest income is recognised on an accruals
basis using the rate of interest agreed with the bank.
Investment management fee, performance
incentive fee and expenses
All expenses have been accounted for on an
accruals basis. Expenses are charged through the other
distributable reserve except the following which are charged
through the realised capital reserve:
- 75 per cent. of management fees and performance incentive fees,
if any, are allocated to the realised capital reserve. This is 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 are charged through the realised capital
reserve.
Taxation
Taxation is applied on a current basis in
accordance with FRS 102. Current tax is tax payable/(refundable) in
respect of the taxable profit (tax loss) for the current period or
past reporting periods using the tax rates and laws that have been
enacted or substantively enacted at the financial reporting date.
Taxation associated with capital expenses is applied in accordance
with the SORP.
Deferred tax is provided in full on all timing
differences at the reporting date. Timing differences are
differences between taxable profits and total comprehensive income
as stated in the Financial Statements that arise from the inclusion
of income and expenses in tax assessments in periods different from
those in which they are recognised in the Financial Statements. As
a VCT the Company has an exemption from tax on capital gains. The
Company intends to continue meeting the conditions required to
obtain approval as a VCT in the foreseeable future. The Company
therefore, should have no material deferred tax timing differences
arising in respect of the revaluation or disposal of investments
and the Company has not provided for any deferred tax.
Share capital and reserves
Called-up share capital
Called-up share capital accounts for the nominal
value of the Company’s shares.
Share premium
This reserve accounts for the difference between
the price paid for the Company’s shares and the nominal value of
those 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, or permanent diminutions in value;
- expenses, together with the related taxation effect, charged in
accordance with the above policies; and
- dividends paid to equity holders where paid out by
capital.
Other distributable reserve
The special reserve, treasury share reserve and
the revenue reserve were combined in 2012 to form a single reserve
named other distributable reserve.
This reserve accounts for movements from the
revenue column of the Income statement, the payment of dividends,
the buy-back of shares and other non-capital realised
movements.
Dividends
Dividends by the Company are accounted for in
the period in which the dividend is paid or approved at the Annual
General Meeting.
Segmental reporting
The Directors are of the opinion that the
Company is engaged in a single operating segment of business, being
investment in smaller companies principally based in the
UK.
3. Gains/(losses)
on investments
|
Unaudited six months ended
30 June 2021 £’000 |
Unaudited six months ended 30 June 2020 £’000 |
Audited year ended 31 December 2020 £’000 |
Unrealised gains/(losses) on fixed asset investments |
14,708 |
(327) |
4,595 |
Unrealised
losses on current asset investments |
- |
(1,011) |
- |
Realised
gains on fixed asset investments |
220 |
43 |
601 |
Realised
losses on current asset investments |
- |
- |
(1,123) |
|
14,928 |
(1,295) |
4,073 |
4. Investment
income
|
Unaudited six months ended
30 June 2021 £’000 |
Unaudited six months ended 30 June 2020 £’000 |
Audited year ended 31 December 2020 £’000 |
Loan stock interest |
351 |
302 |
584 |
Dividend
income |
18 |
68 |
74 |
Bank
deposit interest |
1 |
33 |
34 |
|
370 |
403 |
692 |
5.
Investment
management fee and performance incentive fee
|
Unaudited six months ended
30 June 2021 £’000 |
Unaudited six months ended 30 June 2020 £’000 |
Audited year ended 31 December 2020 £’000 |
Investment management fee charged to revenue |
230 |
186 |
382 |
Investment
management fee charged to capital |
692 |
558 |
1,146 |
Performance
incentive fee charged to revenue |
441 |
- |
11 |
Performance
incentive fee charged to capital |
1,322 |
- |
31 |
|
2,685 |
744 |
1,570 |
|
|
|
|
Further details of the Management agreement
under which the investment management fee and performance incentive
fee are paid are given in the Strategic report on page 12 of the
Annual Report and Financial Statements for the year ended 31
December 2020.
During the period, services to a total value of
£922,000 (30 June 2020: £744,000; 31 December 2020: £1,528,000)
were purchased by the Company from Albion Capital Group LLP. At the
financial period end, the amount due to Albion Capital Group LLP in
respect of these services was £495,000 (30 June 2020: £375,000; 31
December 2020: £401,000). The total annual running costs of the
Company are capped at an amount equal to 2.5% of the Company’s net
assets, with any excess being met by Albion by way of a reduction
in management fees. During the period, the management fee was
reduced by £41,000 as a result of this cap (30 June 2020: £48,000;
31 December 2020: £97,000). For the period to 30 June 2021, a
performance incentive fee of £1,763,000 has been accrued, however
any performance incentive fee is calculated on year end
results and payable in line with the Management agreement (30
June 2020: £nil; 31 December 2020: £42,000).
During the period, the Company was not charged
by Albion Capital Group LLP in respect of Patrick Reeve’s services
as a Director (30 June 2020: £nil; 31 December 2020:
£nil).
Albion Capital Group LLP, its Partners and staff
(including Patrick Reeve) hold 791,411 Ordinary shares in the
Company as at 30 June 2021.
The Manager is, from time to time, eligible to
receive arrangement fees and monitoring fees from portfolio
companies. During the period ended 30 June 2021, fees of £136,000
attributable to the investments of the Company were paid pursuant
to these arrangements (30 June 2020: £77,000; 31 December 2020:
£168,000).
The Company entered into an offer agreement
relating to the Offers with the Company’s investment manager Albion
Capital Group LLP, pursuant to which Albion Capital would receive a
fee of 2.5% of the gross proceeds of the Offers and out of which
Albion Capital would pay the costs of the Offers, as detailed in
the Prospectus.
6. Dividends
|
Unaudited six months ended
30 June 2021 £’000 |
Unaudited six months ended 30 June 2020 £’000 |
Audited year ended 31 December 2020 £’000 |
Dividend of 1.99p per share paid on 30 September 2020 |
- |
- |
1,843 |
Dividend
of 2.06p per share paid on 28 May 2021 (29 May 2020: 2.25p per
share) |
2,126 |
2,077 |
2,077 |
Unclaimed
dividends |
(5) |
- |
(4) |
|
2,121 |
2,077 |
3,916 |
In addition to the dividends summarised above,
the Board has declared a second dividend for the year ending 31
December 2021 of 2.31 pence per share (total approximately
£2,383,000), payable on 30 September 2021 to shareholders on the
register on 10 September 2021.
7. Basic and
diluted (loss)/return per share
|
Unaudited six months ended
30 June 2021 |
Unaudited
six months ended 30 June 2020 |
Audited
year ended 31 December 2020 |
|
Revenue |
Capital |
Revenue |
Capital |
Revenue |
Capital |
(Loss)/return attributable to Ordinary shares (£’000) |
(460) |
12,914 |
74 |
(1,851) |
17 |
2,896 |
Weighted
average shares in issue |
99,832,987 |
91,020,671 |
91,755,964 |
(Loss)/return per Ordinary share (pence) |
(0.46) |
12.93 |
0.08 |
(2.03) |
0.02 |
3.15 |
The weighted average number of shares is
calculated after adjusting for treasury shares of 13,137,307 (30
June 2020: 10,954,270; 31 December 2020: 11,938,106).
There are no convertible instruments,
derivatives or contingent share agreements in issue 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
Allotted, called-up and fully paid Ordinary shares of 1
penny each |
Unaudited 30 June 2021 |
Unaudited 30 June 2020 |
Audited 31 December 2020 |
Number of
shares |
116,303,264 |
103,573,410 |
103,974,504 |
Nominal
value of allotted shares (£’000) |
1,163 |
1,036 |
1,040 |
Voting
rights (number of shares net of treasury shares) |
103,165,957 |
92,619,140 |
92,036,398 |
During the period to 30 June 2021 the Company
purchased 1,199,201 Ordinary shares (nominal value £11,992) for
treasury at a cost of £958,000. The total number of Ordinary shares
held in treasury as at 30 June 2021 was 13,137,307 (30 June 2020:
10,954,270; 31 December 2020: 11,938,106) representing 11.3% of the
Ordinary shares in issue as at 30 June 2021.
Under the terms of the Dividend Reinvestment
Scheme Circular dated 27 August 2008, the following new Ordinary
shares, of nominal value 1 penny each, were allotted:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares (£’000) |
Issue price (pence per share) |
Net invested (£’000) |
Opening market price on allotment date (pence per
share) |
28 May 2021 |
434,384 |
4 |
82.01 |
339 |
78.00 |
Under the terms of the Albion VCTs Prospectus
Top Up Offers 2020/21, the following new Ordinary shares, of
nominal value 1 penny each, were allotted during the period to 30
June 2021:
Date of allotment |
Number of shares allotted |
Aggregate nominal value of shares (£’000) |
Issue price (pence per share) |
Net consideration received (£’000) |
Opening market price on allotment date (pence per
share) |
26 February
2021 |
1,932,052 |
19 |
83.30 |
1,585 |
78.00 |
26 February
2021 |
515,665 |
5 |
83.80 |
424 |
78.00 |
26 February
2021 |
8,866,225 |
89 |
84.20 |
7,279 |
78.00 |
9 April
2021 |
202,566 |
2 |
83.70 |
167 |
78.50 |
9 April
2021 |
32,777 |
- |
84.20 |
27 |
78.50 |
9 April
2021 |
345,091 |
3 |
84.60 |
285 |
78.50 |
|
11,894,376 |
|
|
9,767 |
|
9. Commitments
and contingencies
As at 30 June 2021, the Company had no financial
commitments in respect of investments (30 June 2020: £nil; 31
December 2020: £nil).
There were no contingencies or guarantees of the
Company as at 30 June 2021 (30 June 2020: £nil; 31 December 2020:
£nil).
10. Post
balance sheet events
The
following are the post balance sheet events since 30 June
2021:
• Investment of £1,450,000 in an existing
portfolio company, Oviva AG, a technology enabled service business
in medical nutritional therapy (MNT);
• Investment of £334,000 in an existing
portfolio company, The Evewell Group Limited, an operator and
developer of women’s health centres focusing on fertility; and
• Investment of £70,000 in an existing
portfolio company, Imandra Inc., a provider of automated software
testing and an enhanced learning experience for artificial neural
networks.
11.
Related
party transactions
Other than transactions with the Manager as
disclosed in note 5 and that disclosed above, there are no other
related party transactions or balances requiring disclosure.
12.
Going
concern
The Board has conducted a detailed assessment of
the Company’s ability to meet its liabilities as they fall due.
Cash flow forecasts are updated and discussed quarterly at Board
level and have been stress tested to allow for the forecasted
impact of Coronavirus (Covid-19). The Board have revisited and
updated their assessment of liquidity risk and concluded that it
remains unchanged since the last Annual Report and Financial
Statements. Further details can be found on page 65 of those
accounts.
The portfolio of investments is diversified in
terms of sector and the major cash outflows of the Company (namely
investments, dividends and share buy-backs) are within the
Company’s control. Accordingly, after making diligent enquiries,
the Directors have a reasonable expectation that the Company has
adequate cash and liquid resources to continue in operational
existence for the foreseeable future. For this reason, the
Directors have adopted the going concern basis in preparing this
Half-yearly Financial Report and this is in accordance with the
Guidance on Risk Management, Internal Control and Related Financial
and Business Reporting issued by the Financial Reporting Council in
September 2014, and the subsequent updated Going concern, risk and
viability guidance issued by the FRC due to Covid-19 in
2020.
13. Risks
and uncertainties
In addition to the risks and uncertainties
outlined in the Interim management report, the Board confirms that
the following major risks and uncertainties facing the Company have
not materially changed from those identified in the Annual Report
and Financial Statements for the year ended 31 December 2020. The
impact of the Coronavirus (Covid-19) pandemic has created
heightened uncertainty but has not changed the nature of these
risks. The Board considers that the processes for mitigating these
risks remain appropriate.
1. Investment, performance and valuation
risk
The risk of investment in poor quality
businesses, which could reduce the returns to shareholders and
could negatively impact on the Company’s current and future
valuations.
By nature, smaller unquoted businesses, such as
those that qualify for Venture Capital Trust purposes, are more
volatile than larger, long established businesses.
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.
To reduce this risk, the Board places reliance
upon the skills and expertise of the Manager and its track record
over many years of making successful investments in this segment of
the market. In addition, the Manager operates a formal and
structured investment appraisal and review process, which includes
an Investment Committee, comprising investment professionals from
the Manager for all investments, and at least one external
investment professional for investments greater than £1 million in
aggregate across all the Albion managed VCTs. The Manager also
invites and takes account of comments from non-executive Directors
of the Company on matters discussed at the Investment Committee
meetings. Investments are actively and regularly monitored by the
Manager (investment managers normally sit on portfolio company
boards), including the level of diversification in the portfolio,
and the Board receives detailed reports on each investment as part
of the Manager’s report at quarterly board meetings. The Board and
Manager regularly review the deployment of investments and cash
resources available to the Company in assessing liquidity required
for servicing the Company’s buy-backs, dividend payments and
operational expenses.
The unquoted investments 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 updated in 2018. These guidelines set
out recommendations, intended to represent current best practice on
the valuation of venture capital investments. The valuation takes
into account all known material facts up to the date of approval of
the Financial Statements by the Board.
2. VCT approval risk
The Company must comply with section 274 of the
Income Tax Act 2007 which enables its investors to take advantage
of tax relief on their investment and on future returns. Breach of
any of the rules enabling the Company to hold VCT status could
result in the loss of that status.
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 Philip Hare
& Associates LLP as its taxation adviser, who report 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 our professional advisers or H.M.
Revenue & Customs. The Company monitors closely the extent of
qualifying holdings and addresses this as required.
3. Regulatory and 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 companies. In
addition, the Board and the Manager receive regular updates on new
regulation from its auditor, lawyers and other professional bodies.
The Company is subject to compliance checks through the Manager’s
compliance officer, and any issues arising from compliance or
regulation are reported to its own board on a monthly basis. These
controls are also reviewed as part of the quarterly Board meetings,
and also as part of the review work undertaken by the Manager’s
compliance officer. The report on controls is also evaluated by the
internal auditors.
4. Operational and internal control risk
The Company relies on a number of third parties,
in particular the Manager, for the provision of investment
management and administrative functions. Failures in key systems
and controls 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 Company and its operations are subject to a
series of rigorous internal controls and review procedures
exercised throughout the year, and receives reports from the
Manager on its internal controls and risk management, including on
matters relating to cyber security.
The Audit Committee reviews the Internal Audit
Reports prepared by the Manager’s internal auditors, PKF Littlejohn
LLP and has access to the internal audit partner of PKF Littlejohn
LLP to provide an opportunity to ask specific detailed questions in
order to satisfy itself that the Manager has strong systems and
controls in place including those in relation to business
continuity and cyber security.
From 1 October 2018, Ocorian Depositary (UK)
Limited was appointed as Depositary to oversee the custody and cash
arrangements and provide other AIFMD duties. The Board reviews the
quarterly reports prepared by Ocorian Depositary (UK) Limited to
ensure that Albion Capital is adhering to its policies and
procedures as required by the AIFMD.
In addition, the Board regularly reviews the
performance of its key service providers, particularly the Manager,
to ensure they continue to have the necessary expertise and
resources to deliver the Company’s investment objective and policy.
The Manager and other service providers have also demonstrated to
the Board that there is no undue reliance placed upon any one
individual.
5. Economic, political and social risk
Changes in economic conditions, including, for
example, interest rates, rates of inflation, industry conditions,
competition, political and diplomatic events, such as the impact of
Brexit, and other factors could substantially and adversely affect
the Company’s prospects in a number of ways. This also includes
risks of social upheaval, including from infection and population
re-distribution, as well as economic risk challenges as a result of
healthcare pandemics/infection.
The current significant exogenous risk to the
Company, the wider population and economy, is the Covid-19
pandemic.
The Company invests in a diversified portfolio
of companies across a number of industry sectors and in addition
often invests in a mixture of instruments in portfolio companies
and has a policy of minimising any external bank borrowings within
portfolio companies.
At any given time, the Company has sufficient
cash resources to meet its operating requirements, including share
buy-backs and follow-on investments.
In common with most commercial operations,
exogenous risks over which the Company has no control are always a
risk and the Company does what it can to address these risks where
possible, not least as the nature of the investments the Company
makes are long term.
The Board and Manager are continuously assessing
the resilience of the portfolio, the Company and its operations and
the robustness of the Company’s external agents during the health
crisis, as well as considering longer term impacts on how the
Company might be positioned in how it invests and operates.
Ensuring liquidity in the portfolio to cope with exigent and
unexpected pressures on the finances of the portfolio and the
Company is an important part of the risk mitigation in these
uncertain times. The portfolio is structured as an all-weather
portfolio with c.60 companies which are diversified as discussed
above. Exposure is relatively small to at-risk sectors that include
leisure, hospitality, retail and travel.
6. Market value of Ordinary shares
The market value of Ordinary shares can
fluctuate. The market value of an Ordinary share, as well as being
affected by its net asset value and prospective net asset value,
also takes into account its dividend yield and prevailing interest
rates. As such, the market value of an Ordinary share may vary
considerably from its underlying net asset value. The market prices
of shares in quoted investment companies can, therefore, be at a
discount or premium to the net asset value at different times,
depending on supply and demand, market conditions, general investor
sentiment and other factors. Accordingly, the market price of the
Ordinary shares may not fully reflect their underlying net asset
value.
The Company operates a share buy-back policy,
which is designed to limit the discount at which the Ordinary
shares trade to around 5 per cent to net asset value, by providing
a purchaser through the Company in absence of market purchasers.
From time to time buy-backs cannot be applied, for example when the
Company is subject to a close period, or if it were to exhaust any
buy-back authorities.
New Ordinary shares are issued at sufficient
premium to net asset value to cover the costs of issue and to avoid
asset value dilution to existing investors.
7. Reputational risk
The Company relies on the judgement and
reputation of the Manager which is itself subject to the risk of
loss.
The Board regularly questions the Manager on its
ethics, procedures, safeguards and investment philosophy, which
should consequently result in the risk to reputational damage being
minimised.
14. Other
information
The information set out in this Half-yearly
Financial Report does not constitute the Company’s statutory
accounts within the terms of section 434 of the Companies Act 2006
for the periods ended 30 June 2021 and 30 June 2020 and is
unaudited. The information for the year ended 31 December 2020,
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 have been
delivered to the Registrar of Companies. The Auditor reported on
those accounts; their report was unqualified and did not contain a
statement under s498 (2) or (3) of the Companies Act 2006.
15. Publication
This Half-yearly Financial Report is being sent
to shareholders and copies will be made available to the public at
the registered office of the Company, Companies House, the National
Storage Mechanism and also electronically at
www.albion.capital/funds/AADV, where the Report can be accessed
from the ‘Financial Reports and Circulars’ section.
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