TIDMAAEV
Albion Enterprise VCT PLC
LEI Code 213800OVSRDHRJBMO720
As required by the UK Listing Authority's Disclosure Guidance and
Transparency Rule 4.2, Albion Enterprise VCT PLC today makes public its
information relating to the Half-yearly Financial Report (which is
unaudited) for the six months to 30 September 2019. This announcement
was approved by the Board of Directors on 4 December 2019.
The full Half-yearly Financial Report (which is unaudited) for the
period to 30 September 2019, will shortly be sent to shareholders.
Copies of the full Half-yearly Financial Report will be shown via the
Albion Capital Group LLP website by clicking
https://www.globenewswire.com/Tracker?data=4VaBVjzLKnFj_Sh4YIxF-74gTheNTLltruhv1HBmyHXMBpTw03mYlZEIZ7LoBHvR3VmvglQd6G2gOc_aXAdOcninoe6HmZXNAgcRNbzlVIv51k-5bBL-lMaBB-yFJ9-oEJr4IxMvx1QCH2XNApBTQYXY8lytjosL9LKJ0xPsXj4=
www.albion.capital/funds/AAEV/30Sep19.pdf.
Albion Enterprise VCT PLC (the "Company") is a Venture Capital Trust and
the investment objective of the Company is to provide investors with a
regular and predictable source of income, combined with the prospect of
longer term capital growth.
Investment policy
The Company will invest in a broad portfolio of higher growth businesses
across a variety of sectors of the UK economy including higher risk
technology companies. 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 both in terms of sector and
stage of maturity of company.
VCT qualifying and non-VCT qualifying investments
Application of the investment policy is designed to ensure that the
Company continues to qualify and is approved as a VCT by HM Revenue and
Customs ("VCT regulations"). The maximum amount invested in any one
company is limited to any HMRC annual investment limits. It is intended
that normally at least 80 per cent. of the Company's funds will be
invested in VCT qualifying investments. The VCT regulations also have an
impact on the type of investments and qualifying sectors in which the
Company can make investment.
Funds held prior to investing in VCT qualifying assets or for liquidity
purposes will be held as cash on deposit, invested in floating rate
notes or similar instruments with banks or other financial institutions
with high credit ratings or invested in liquid open-ended equity funds
providing income and capital equity exposure (where it is considered
economic to do so). Investment in such open-ended equity funds will not
exceed 10 per cent. of the Company's assets at the time of investment.
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
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 is represents a significantly
higher proportion of total assets prior to a realisation opportunity
being available.
Gearing
The Company's maximum exposure in relation to gearing is restricted to
10 per cent. of its adjusted share capital and reserves.
Financial calendar
Record date for second dividend 7 February 2020
Payment date for second dividend 28 February 2020
Financial year end 31 March
Financial highlights
Unaudited six months ended Unaudited six months ended Audited year ended
30 September 2019 30 September 2018 31 March 2019
(pence per share) (pence per share) (pence per share)
------------ -------------------------- -------------------------- ------------------
Opening net
asset
value 117.76 109.46 109.46
Capital
return 4.52 5.77 14.35
Revenue
return 0.31 (0.02) (0.01)
-------------------------- -------------------------- ------------------
Total return 4.83 5.75 14.34
Dividends
paid (3.00) (3.00) (6.00)
Impact of
Fundraising (0.17) (0.09) (0.04)
-------------------------- -------------------------- ------------------
Net asset
value 119.42 112.12 117.76
------------ -------------------------- -------------------------- ------------------
Total shareholder return to 30 September 2019: (Pence per share)
Dividends paid during the year ended:
31 March 2008 0.70
31 March 2009 1.65
31 March 2010 2.00
31 March 2011 3.00
31 March 2012 3.00
31 March 2013 3.50
31 March 2014 5.00
31 March 2015 5.00
31 March 2016 5.00
31 March 2017 5.00
31 March 2018 5.00
31 March 2019 6.00
Dividends paid in the six months to 30 September 2019 3.00
-----------------
Total dividends paid to 30 September 2019 47.85
Net asset value as at 30 September 2019 119.42
-----------------
Total shareholder return to 30 September 2019 167.27
------------------------------------------------------ -----------------
In addition to the dividends summarised above, the Board has declared a
second dividend for the year ending 31 March 2020, of 3.00 pence per
share to be paid on 28 February 2020 to shareholders on the register on
7 February 2020.
Notes
--The dividend of 0.70 pence per share paid during the period ended 31
March 2008 and first dividend of 0.40 pence per share paid during the
year ended 31 March 2009 were paid to shareholders who subscribed in the
2006/2007 offer only.
Interim management report
Introduction
I am pleased to report a total return of 4.83 pence per share for the
six months to 30 September 2019 (30 September 2018: 5.75 pence per
share). These results demonstrate continued growth within our investment
portfolio after excellent results over the past two years (31 March
2019: 14.34 pence per share; 31 March 2018: 13.40 pence per share).
Results and dividends
On 30 September 2019, the net asset value was GBP76.2 million or 119.42
pence per share compared to GBP67.4 million or 117.76 pence per share on
31 March 2019. The total return before taxation was GBP3.1 million
compared to GBP3.3 million for the six months to 30 September 2018.
A first dividend of 3.00 pence per share was paid on 30 August 2019. The
Directors have declared a second dividend of 3.00 pence per share
payable on 28 February 2020, to shareholders on the register on 7
February 2020. This is in line with the current annual dividend target
of 6.00 pence per share. The Company continues to offer a Dividend
Reinvestment Scheme whereby shareholders can elect to receive dividends
in the form of new shares.
Investment performance and progress
The Company had four significant investment disposals during and after
the period end.
Shortly after the period end, our holding in Process Systems Enterprise
was sold to Siemens, realising GBP4.1 million (an uplift of GBP2.5
million in the period) and resulting in a 10 times return on the
original investment. Following the successful sale of Grapeshot in 2018
this is the second time in just over a year that the Company has sold a
technology investment for a ten times multiple.
As part of a restructuring of Radnor House, one of our school
investments, we exited Radnor House Twickenham in November 2019
realising GBP4.4 million. This exit resulted in an average Internal Rate
of Return of 19.6% per annum over the past nine years. The Company has
retained its stake in Radnor House Sevenoaks, which has further capacity
to grow.
Our investments in the pub sector, Bravo Inns and Bravo Inns II, were
also sold after the period end generating combined proceeds of GBP3.9
million. Over the life of our investment, including interest received,
we generated a blended return of 1.7 times cost.
The sale of Earnside Energy completed during the period realising GBP1.7
million. Including interest received during the time this investment was
held, the sale resulted in a total return of 1.4 times original cost.
The Company's unrealised and realised gains totalled GBP3.9 million for
the six months to 30 September 2019. The key movements in the period,
apart from the disposals detailed above, included: uplifts in Oviva AG
and Koru Kids of GBP341,000 and GBP301,000 respectively after the
agreement of new external funding rounds; and reductions in value of
Zift Channel Solutions of GBP321,000 due to slow trading growth, and
Aridhia Informatics of GBP294,000.
During the period, some GBP2.7 million was invested in new and existing
companies. Investments in new companies included:
-- GBP792,000 in Elliptic Enterprises, which provides Anti Money Laundering
services to digital asset institutions;
-- GBP320,000 in Limitless Technology, a customer service platform powered
by crowd and machine learning technology;
-- GBP256,000 in Clear Review, which provides talent management software to
mid market enterprises;
-- GBP121,000 in Imandra, which provides automated software testing and an
enhanced learning experience for artificial neural networks; and
-- GBP47,000 in Symetrica, a designer and manufacturer of radiation
detection equipment.
Significant follow on investments included GBP606,000 in Proveca, for
the reformulation of paediatric medicines and GBP221,000 in Koru Kids,
which provides an online marketplace connecting parents and nannies.
Investment portfolio by sector
The pie chart at the end of this announcement outlines the different
sectors in which the Company's assets, at carrying value, are currently
held.
New management arrangements and reduction in total expenses cap
The Board has reviewed the management arrangements in place with Albion
Capital Group LLP, the Manager, with a view to provide further benefit
to shareholders.
Shareholders who invested on 5 April 2007, the Company's first allotment,
and reinvested their dividends will have seen a return (including tax
relief) of three times their initial net investment. This excellent
investment performance has resulted in the payment of higher management
and performance fees to the Manager than were originally anticipated.
The Board feels these have been well deserved. However, whilst these
management arrangements were in line with market levels at the time of
launch in 2007, the VCT market has developed since then. The Board and
Manager therefore feel there is now a need for an amendment to the fee
level and the performance incentive structure.
After a comprehensive exercise reviewing the management arrangements,
the Board and the Manager have today agreed that the following changes
be made:
1. A reduction in the management fee from 2.5% to 2.0% of net asset value;
2. Implementation of an administration fee of 0.2% of net asset value;
3. Increasing the hurdle, before which any performance incentive fee is
payable, to the higher of (i) Retail Price Index plus 2% and (ii) the
existing arrangement of Base Rate plus 2%; and
4. Reducing the total expenses cap from 3.0% to 2.5% of ongoing charges
(before any incentive fee).
This was a collaborative exercise with the Manager, who has voluntarily
agreed to a change in the contractual terms of the Investment Management
Agreement set out above, for which the Board is appreciative. These
changes, which are beneficial to shareholders, will take effect from 1
October 2019.
Risks & uncertainties
The outlook for the UK economy continues to be a key risk affecting the
Company. The forthcoming General Election and the effect of the
withdrawal of Britain from the European Union are considered the biggest
risks for the Company. They continue to be difficult to quantify.
The Company's investment risk is mitigated through a variety of
processes, including investing in a diversified portfolio in terms of
sector and stage of maturity and focusing on opportunities where it is
believed growth can be resilient and sustainable.
Other principal risks and uncertainties remain unchanged and are
detailed in note 13 below.
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, including the maintenance of sufficient resources for
investment in new and existing portfolio companies and the continued
payment of dividends to shareholders. It is the Board's intention for
such buy-backs to be in the region of a 5% discount to net asset value
so far as market conditions and liquidity permit.
Transactions with the Manager
Details of the transactions that took place with the Manager during the
period can be found in note 5. Details of related party transactions can
be found in note 11.
Albion VCTs Prospectus Top Up Offers
The Company was pleased to announce on 2 April 2019 that it had reached
its GBP8 million limit under the Albion VCTs Prospectus Top Up Offers
2018/19 which was fully subscribed and closed. Details of shares issued
under the Offer can be found in note 8.
The proceeds of the Offer are being deployed into new investments as
detailed above and further funding of existing portfolio companies to
support growth.
The Company announced on 22 October 2019 that it has launched a
Prospectus Top Up Offer to raise up to GBP6 million before issue costs,
with a further over-allotment facility of GBP2 million, of new Ordinary
shares for subscription in the 2019/20 and 2020/21 tax years. Full
details of the offer are contained in a Prospectus that was published on
the same date on the Manager's website at
www.albion.capital/investor-centre/current-offers.
Fraud warning
We note over recent months an increase in the number of shareholders
being contacted in connection with increasingly sophisticated but
fraudulent financial scams. This is often by a phone call or an email
which normally originates from outside of the UK, often claiming or
appearing to come from a corporate finance firm and typically offering
to buy your VCT shares at an inflated price. If you are contacted, we
recommend that you do not respond with any personal information and say
you are not interested.
The Manager maintains a page on their website in relation to fraud
advice at
https://www.globenewswire.com/Tracker?data=4VaBVjzLKnFj_Sh4YIxF--abqzjet5H8e2MhUytGcA0iZJUX0b3cBhbHu8WsTXa99QgSNIDSyM8mJBvCEPkgqaIkssjmTJquwvFFlGOsrRg5bOrWhdUsJjyG_6--tpS6H2M8d5m3ERIYFqd6wRnLCfGumy1WAi-yHO8iQbeOYi8=
www.albion.capital/investor-centre/fraud-advice.
If you are in any doubt, we recommend that you seek financial advice
before taking any action. You can also call Shareholder relations on 020
7601 1850, or email
https://www.globenewswire.com/Tracker?data=17LFq4ZnBrByOXZ-WQsGsYb2QCY13r7_OL6hWvWdjq-auaiYVC7qEfnvlXFxQEShfQC-tL0D2S5xYne_K7cgyw2-XVx-ficYES5IQ6Bsa-k=
info@albion.capital, if you wish to check whether any claims made are
genuine.
Outlook
We are encouraged by these interim results and the successful exit of
both technology and asset backed businesses during and after the period
end. We as a Board see the portfolio as being well balanced across a
variety of growth sectors. There is a strong pipeline of investments, as
well as a number of existing businesses having the potential to continue
to deliver positive returns for shareholders.
Maxwell Packe
Chairman
4 December 2019
Responsibility statement
The Directors, Maxwell Packe, Lord St John of Bletso, The Dowager Lady
Balfour of Burleigh, Christopher Burrows and Patrick Reeve, are
responsible for preparing the Half-yearly Financial Report. In preparing
these condensed Financial Statements for the period to 30 September 2019
we, the Directors of the Company, confirm that to the best of our
knowledge:
1. 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;
2. 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
3. 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
Maxwell Packe
Chairman
4 December 2019
Portfolio of investments
As at 30 September 2019
Cumulative movement Change in
Fixed asset % voting Cost in value Value value for the period(*)
investments rights GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- ------------------------
Egress Software
Technologies
Limited 9.9 3,365 5,936 9,301 -
Radnor House
School
(Holdings)
Limited 9.8 2,991 4,707 7,698 391
Process Systems
Enterprise
Limited 4.0 406 3,694 4,100 2,542
Mirada Medical
Limited 14.2 1,487 2,300 3,787 184
Proveca Limited 9.6 1,512 2,097 3,609 (14)
Bravo Inns II
Limited 13.1 2,150 1,032 3,182 276
Quantexa Limited 2.7 699 2,197 2,896 -
Regenerco
Renewable
Energy Limited 12.5 1,261 850 2,111 43
The Street by
Street Solar
Programme
Limited 8.6 891 736 1,627 59
Alto Prodotto
Wind Limited 11.1 918 596 1,514 (40)
G.Network
Communications
Limited 2.7 273 1,206 1,479 218
Greenenerco
Limited 28.6 849 592 1,441 (2)
DySIS Medical
Limited 6.0 2,742 (1,325) 1,417 19
Sandcroft Avenue
Limited (T/A
Hussle) 7.0 1,273 (184) 1,089 (118)
Convertr Media
Limited 6.3 992 20 1,012 5
Oviva AG 3.5 642 346 988 341
OmPrompt
Holdings
Limited 10.7 994 (32) 962 (8)
Beddlestead
Limited 8.1 966 (5) 961 (2)
The Evewell
(Harley Street)
Limited 7.3 953 - 953 -
MPP Global
Solutions
Limited 2.9 950 - 950 -
Zift Channel
Solutions Inc. 2.0 1,053 (193) 860 (321)
Koru Kids
Limited 2.5 541 301 842 301
Elliptic
Enterprises
Limited 1.0 792 - 792 -
Black Swan Data
Limited 1.6 749 - 749 -
MyMeds&Me
Limited 7.6 720 (39) 681 -
Cisiv Limited 9.0 799 (185) 614 (153)
Panaseer Limited 2.3 405 156 561 -
Oxsensis Limited 4.4 717 (163) 554 90
Secured by
Design Limited 1.9 280 257 537 (27)
Bravo Inns
Limited 8.4 755 (221) 534 60
Locum's Nest
Limited 4.8 500 (25) 475 (56)
Phrasee Limited 2.4 474 - 474 -
Avora Limited 2.4 430 - 430 -
memsstar Limited 8.8 282 108 390 14
Abcodia Limited 5.6 953 (616) 337 -
Limitless
Technology
Limited 2.1 320 - 320 -
Arecor Limited 1.5 290 - 290 -
AVESI Limited 5.5 179 87 266 4
Clear Review
Limited 2.0 256 - 256 -
InCrowd Sports
Limited 2.7 231 22 253 -
Aridhia
Informatics
Limited 6.4 1,244 (1,035) 209 (294)
Innovation
Broking Group
Limited 8.4 84 108 192 24
Mi-Pay Group PLC 5.8 1,504 (1,333) 171 (118)
ePatient Network
Limited (T/A
Raremark) 1.7 160 - 160 -
uMotif Limited 1.3 210 (63) 147 (63)
Imandra Inc. 1.3 121 - 121 -
Healios Limited 0.9 100 - 100 -
Forward Clinical
Limited 1.8 190 (95) 95 (95)
MHS 1 Limited 1.2 83 (1) 82 -
Symetrica
Limited 0.2 47 - 47 -
------------------------
Total fixed
asset
investments 40,783 21,833 62,616 3,260
---------------- -------- -------- ------------------- --------- ------------------------
As at 30 September 2019
Current Cumulative movement Change in
asset Cost in value Value value for the period(*)
investments GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------------------
SVS Albion
OLIM UK
Equity
Income
Fund 4,990 (42) 4,948 115
------------ -------- ------------------- --------- ------------------------
Total
current
asset
investments 4,990 (42) 4,948 115
------------ -------- ------------------- --------- ------------------------
* as adjusted for additions and disposals during the period; including
realised gains/(losses).
Opening Total Gain/(loss) on
carrying Disposal realised opening
Investment realisations in the period to 30 September Cost value proceeds gain value
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ -------- --------- --------- --------- --------------
Disposals:
------------------------------------------------------
Earnside Energy Limited 1,394 1,853 1,675 281 (178)
Loan stock repayments and other:
------------------------------------------------------
G.Network Communications Limited 577 577 577 - -
Greenenerco Limited 27 38 38 11 -
Alto Prodotto Wind Limited 23 34 34 11 -
memsstar Limited 16 16 16 - -
Escrow adjustments** - - 439 439 439
Total fixed asset realisations 2,037 2,518 2,779 742 261
------------------------------------------------------ -------- --------- --------- --------- --------------
** Fair value movements on deferred consideration from previously
disposed investments.
Total change in value of investments for the period 3,260
Movement in loan stock accrued interest 224
-----
Unrealised gains on fixed asset investments 3,484
Realised gains on fixed asset investments 261
Unrealised gains on current asset investments 115
Total gains on investments as per Income statement 3,860
----------------------------------------------------- -----
Condensed income statement
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
---------------------------------------------------------- ---- ------------------------------- ------------------------------- -------------------------------
Revenue Capital Revenue Capital Revenue Capital
Note GBP'000 GBP'000 Total GBP'000 GBP'000 GBP'000 Total GBP'000 GBP'000 GBP'000 Total GBP'000
---- ------- ------- ------------- ------- ------- ------------- ------- ------- -------------
Gains on
investments 3 - 3,860 3,860 - 4,265 4,265 - 10,408 10,408
Investment income 4 659 - 659 434 - 434 992 - 992
Investment
management fee 5 (220) (661) (881) (195) (586) (781) (398) (1,195) (1,593)
Performance incentive fee 5 (105) (314) (419) (125) (375) (500) (333) (999) (1,332)
Other expenses (138) - (138) (128) - (128) (263) - (263)
------- ------- ------------- ------- ------- ------------- ------- ------- -------------
Return/(loss) on
ordinary activities before taxation 196 2,885 3,081 (14) 3,304 3,290 (2) 8,214 8,212
Tax on ordinary activities - - - - - - - - -
------- ------- ------------- ------- ------- ------------- ------- ------- -------------
Return/(loss) and total comprehensive income attributable
to shareholders 196 2,885 3,081 (14) 3,304 3,290 (2) 8,214 8,212
------- ------- ------------- ------- ------- ------------- ------- ------- -------------
Basic and diluted return/(loss) per share (pence)* 7 0.31 4.52 4.83 (0.02) 5.77 5.75 (0.01) 14.35 14.34
---------------------------------------------------------- ---- ------- ------- ------------- ------- ------- ------------- ------- ------- -------------
* adjusting for treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2018 and the
audited statutory accounts for the year ended 31 March 2019.
The accompanying notes form an integral part of this Half-yearly
Financial Report.
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
Audited
Unaudited Unaudited 31 March
30 September 2019 30 September 2018 2019
Note GBP'000 GBP'000 GBP'000
--------------------- ---- ------------------ ------------------ ---------
Fixed asset
investments 62,616 50,987 59,146
Current assets
Current asset
investments 4,948 2,560 3,642
Trade and other
receivables less
than one year 2,681 1,256 1,974
Cash and cash
equivalents 6,947 10,401 4,441
------------------ ------------------ ---------
14,576 14,217 10,057
Total assets 77,192 65,204 69,203
Payables: amounts
falling due within
one year
Trade and other
payables less than
one year (988) (945) (1,815)
------------------ ------------------ ---------
Total assets less
current liabilities 76,204 64,259 67,388
------------------ ------------------ ---------
Equity attributable
to equity holders
Called up share
capital 8 720 648 650
Share premium 38,285 29,996 30,255
Capital redemption
reserve 104 104 104
Unrealised capital
reserve 21,789 13,101 18,672
Realised capital
reserve 7,857 8,750 8,089
Other distributable
reserve 7,449 11,660 9,618
------------------ ------------------ ---------
Total equity
shareholders' funds 76,204 64,259 67,388
------------------ ------------------ ---------
Basic and diluted net
asset value per
share (pence)* 119.42 112.12 117.76
--------------------- ---- ------------------ ------------------ ---------
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 30 September 2018 and the
audited statutory accounts for the year ended 31 March 2019.
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 4 December 2019 and were signed on its behalf by
Maxwell Packe
Chairman
Company number: 05990732
Condensed statement of changes in equity
Called up Unrealised Realised
share Share capital capital Other distributable
capital premium Capital redemption reserve reserve reserve* reserve* Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
As at 1 April 2019 650 30,255 104 18,672 8,089 9,618 67,388
Return/(loss) and total comprehensive income for the
period - - - 3,599 (714) 196 3,081
Transfer of previously unrealised gains on disposal
of investments - - - (482) 482 - -
Issue of equity 70 8,229 - - - - 8,299
Cost of issue of equity - (199) - - - - (199)
Purchase of own shares for treasury - - - - - (454) (454)
Dividends paid - - - - - (1,911) (1,911)
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
As at 30 September 2019 720 38,285 104 21,789 7,857 7,449 76,204
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
As at 1 April 2018 638 28,945 104 17,657 890 13,637 61,871
Return/(loss) and total comprehensive income for the
period - - - 4,071 (767) (14) 3,290
Transfer of previously unrealised gains on disposal
of investments - - - (8,627) 8,627 - -
Issue of equity 10 1,072 - - - - 1,082
Cost of issue of equity - (21) - - - - (21)
Purchase of own shares for treasury - - - - - (247) (247)
Dividends paid - - - - - (1,716) (1,716)
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
As at 30 September 2018 648 29,996 104 13,101 8,750 11,660 64,259
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
As at 1 April 2018 638 28,945 104 17,657 890 13,637 61,871
Return/(loss) and total comprehensive income for the
year - - - 9,835 (1,621) (2) 8,212
Transfer of previously unrealised gains on disposal
of investments - - - (8,820) 8,820 - -
Issue of equity 12 1,333 - - - - 1,345
Cost of issue of equity - (23) - - - - (23)
Purchase of own shares for treasury - - - - - (585) (585)
Dividends paid - - - - - (3,432) (3,432)
As at 31 March 2019 650 30,255 104 18,672 8,089 9,618 67,388
----------------------------------------------------- --------- -------- ---------------------------- ---------- --------- ------------------- --------
* These reserves amount to GBP15,306,000 (30 September 2018:
GBP20,410,000; 31 March 2019: GBP17,707,000) which is considered
distributable.
Condensed statement of cash flows
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
GBP'000 GBP'000 GBP'000
----------------------------- ------------------ ------------------ --------------
Cash flow from operating
activities
Investment income received 735 361 773
Dividend income received 106 47 170
Deposit interest received 27 20 38
Investment management fee
paid (832) (769) (1,568)
Performance incentive fee
paid (1,332) (1,100) (1,100)
Other cash payments (160) (158) (261)
UK corporation tax paid - - -
------------------ ------------------ --------------
Net cash flow from operating
activities (1,456) (1,599) (1,948)
Cash flow from investing
activities
Purchase of current asset
investments (1,190) (1,400) (2,600)
Purchase of fixed asset
investments (2,978) (4,016) (6,824)
Disposal of fixed asset
investments 2,340 8,559 8,748
Net cash flow from investing
activities (1,828) 3,143 (676)
Cash flow from financing
activities
Issue of share capital 7,807 793 793
Cost of issue of equity (2) (2) (3)
Dividends paid (1,603) (1,447) (2,900)
Purchase of own shares
(including costs) (412) (247) (585)
Net cash flow from financing
activities 5,790 (903) (2,695)
Increase/(decrease) in cash
and cash equivalents 2,506 641 (5,319)
Cash and cash equivalents at
start of the period 4,441 9,760 9,760
------------------ ------------------ --------------
Cash and cash equivalents at
end of the period 6,947 10,401 4,441
Cash and cash equivalents
comprise
Cash at bank 6,947 10,401 4,441
Cash equivalents - - -
Total cash and cash
equivalents 6,947 10,401 4,441
----------------------------- ------------------ ------------------ --------------
Notes to the condensed Financial Statements
1. Accounting convention
The condensed Financial Statements have been prepared in accordance with
applicable United Kingdom law and accounting standards, including
Financial Reporting Standard 102 ("FRS 102"), Financial Reporting
Standard 104 -- Interim Financial Reporting ("FRS 104"), 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 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"). The Company values investments by following the International
Private Equity and Venture Capital Valuation ("IPEV") Guidelines and
further detail on the valuation techniques used are outlined in note 2
below.
This Half-yearly Financial Report has not been audited, nor has it been
reviewed by the auditor pursuant to the FRC's guidance on Review of
interim financial information.
Company information can be found on page 2 of the 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, including liquid open-ended
equity funds, 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, the level of third party
offers received, cost or price of recent investment rounds, net assets
and industry valuation benchmarks. Where the Company has an investment in
an early stage enterprise, the price of a recent investment is often the
most appropriate approach to determining fair value.
-- 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.
Other current assets and payables
Receivables, payables and cash are carried at amortised cost, in
accordance with FRS 102. 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
Fixed returns on non-equity shares and debt securities are recognised
when the Company's right to receive payment and expected 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 other 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 are
allocated to the capital account to the extent that these relate to an
enhancement in the value of investments. 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.
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.
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
period 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 2013 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 buyback 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 equity and debt. The
Company invests in smaller companies principally based in the UK.
3. Gains on investments
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
GBP'000 GBP'000 GBP'000
----------------------
Unrealised gains on
fixed asset
investments 3,484 4,038 9,919
Unrealised
gains/(losses) on
current asset
investments 115 33 (84)
Realised gains on
fixed asset
investments 261 194 573
3,860 4,265 10,408
------------------ ------------------ --------------
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
GBP'000 GBP'000 GBP'000
----------------------
Interest from loans to
portfolio companies 526 367 785
Dividends 106 47 170
Bank deposit interest 27 20 37
659 434 992
------------------ ------------------ --------------
5. Investment management fee and performance incentive fee
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
GBP'000 GBP'000 GBP'000
----------------------
Investment management
fee charged to
revenue 220 195 398
Investment management
fee charged to
capital 661 586 1,195
Performance incentive
fee charged to
revenue 105 125 333
Performance incentive
fee charged to
capital 314 375 999
------------------ ------------------ --------------
1,300 1,281 2,925
------------------ ------------------ --------------
Further details of the Management agreement under which the investment
management fee and performance incentive fee are paid is given in the
Strategic report on pages 11 and 12 of the Annual Report and Financial
Statements for the year ended 31 March 2019.
During the period, services of a total value of GBP881,000 (30 September
2018: GBP781,000; 31 March 2019: GBP1,593,000) 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
disclosed within payables was GBP460,000 (30 September 2018: GBP397,000;
31 March 2019: GBP410,000). For the period to 30 September 2019, a
performance incentive fee of GBP419,000 has been accrued (30 September
2018: GBP500,000; 31 March 2019: GBP1,332,000).
The new management arrangements and reduction in total expenses cap
detailed in the Interim management report are with effect from 1 October
2019. As Albion is the investment manager of the Company, it is a
related party of the Company under the Listing Rules, and therefore this
variation to the investment management arrangements is a transaction to
which Listing Rule 11.1.10R applies.
Patrick Reeve is the Chairman of the Manager, Albion Capital Group LLP.
From 30 June 2018, Patrick Reeve agreed to waive his fees for his
services as a Director. During the period, the Company was not charged
in respect of Patrick Reeve's services as a Director (30 September 2018:
GBP6,000; 31 March 2019: GBP6,000). At the financial period end, the
amount due to Albion Capital Group LLP in respect of these services
disclosed as payables was GBPnil (30 September 2018: GBPnil; 31 March
2019: GBPnil).
Albion Capital Group LLP, its partners and staff (including Patrick
Reeve) hold a total of 391,087 shares in the Company as at 30 September
2019.
Albion Capital Group LLP is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies. During
the period to 30 September 2019, fees of GBP103,000 attributable to the
investments of the Company were received pursuant to these arrangements
(30 September 2018: GBP112,000; 31 March 2019: GBP201,000).
The Company entered into an offer agreement relating to the Offers which
were open in the period with the Company's investment manager Albion
Capital Group LLP, pursuant to which Albion Capital receives a fee of
2.5 per cent. of the gross proceeds of the Offers, and out of which
Albion Capital will pay the costs of the Offers. Details of the current
Offer are in the Prospectus.
During the period, an amount of GBP1,190,000 (30 September 2018:
GBP1,400,000; 31 March 2019: GBP2,600,000) was invested in the SVS
Albion OLIM UK Equity Income Fund ("OUEIF") as part of the Company's
management of surplus liquid funds. To avoid double charging, Albion
Capital agreed to reduce its management fee relating to the investment
in the OUEIF by 0.75 per cent., which represents the OUEIF management
fee charged by OLIM. This resulted in a reduction of the management fee
of GBP16,100 (30 September 2018: GBP7,400; 31 March 2019: GBP18,000).
6. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
GBP'000 GBP'000 GBP'000
----------------------
Dividend of 3.00p per
share paid on 31
August 2018 - 1,716 1,716
Dividend of 3.00p per
share paid on 28
February 2019 - - 1,716
Dividend of 3.00p per
share paid on 30
August 2019 1,911 - -
1,911 1,716 3,432
------------------ ------------------ --------------
In addition to the dividends summarised above, the Board has declared a
second dividend for the year ending 31 March 2020 of 3.00 pence per
share which will be paid on 28 February 2020 to shareholders on the
register on 7 February 2020. This is expected to amount to approximately
GBP1,914,000.
7. Basic and diluted return per share
Unaudited Unaudited Audited
six months ended six months ended year ended
30 September 2019 30 September 2018 31 March 2019
Revenue Capital Total Revenue Capital Total Revenue Capital Total
------- ------- ----- ------- ------- ------- ------- ------- -----
Return/(loss) attributable to equity shares (GBP'000) 196 2,885 3,081 (14) 3,304 3,290 (2) 8,214 8,212
Weighted average shares in issue (adjusting for treasury
shares) 63,802,980 57,255,901 57,257,089
Return/(loss) attributable per Ordinary share (pence)
(basic and diluted) 0.31 4.52 4.83 (0.02) 5.77 5.75 (0.01) 14.35 14.34
The weighted average number of shares is calculated after adjusting for
treasury shares of 8,231,443 (30 September 2018: 7,509,443; 31 March
2019: 7,821,443).
There are no convertible instruments, derivatives or contingent share
agreements in issue for the Company, therefore no dilution affecting 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 shares of 1 penny Unaudited 30 Unaudited 30 Audited
each September 2019 September 2018 31 March 2019
------------------------------------------------------
Number of shares 72,041,984 64,821,000 65,047,503
Nominal value of allotted shares (GBP'000) 720 648 650
Voting rights (number of shares net of treasury
shares) 63,810,541 57,311,557 57,226,060
In the six months to 30 September 2019, the Company purchased 410,000
shares (30 September 2018: 239,000; 31 March 2019: 551,000) to be held
in treasury at a nominal value of GBP4,100 and at a cost of GBP454,000
(30 September 2018: GBP247,000; 31 March 2019: GBP585,000), representing
0.6 per cent. of the shares in issue (excluding treasury shares) as at
30 September 2019.
The Company holds a total of 8,231,443 shares (30 September 2018:
7,509,443; 31 March 2019: 7,821,443) in treasury representing 11.4 per
cent. of the shares in issue as at 30 September 2019.
Under the terms of the Dividend Reinvestment Scheme Circular (dated 26
November 2009), the following new Ordinary shares of nominal value 1
penny each were allotted during the period to 30 September 2019:
Aggregate
nominal value Net
Date of Number of of shares Issue price invested Opening market price on allotment date (pence per
allotment shares allotted (GBP'000) (pence per share) (GBP'000) share)
30 August
2019 265,920 3 115.42 292 109.00
Under the terms of the Albion VCTs Prospectus Top Up Offers 2018/19, the
following new Ordinary shares of nominal value 1 penny each were
allotted during the period to 30 September 2019:
Aggregate Net
nominal value consideration
Date of Number of of shares Issue price received Opening market price on allotment date (pence per
allotment shares allotted (GBP'000) (pence per share) (GBP'000) share)
1 April
2019 4,839,369 48 119.00 5,615 110.00
1 April
2019 1,028,359 10 117.80 1,193 110.00
1 April
2019 218,561 2 118.40 254 110.00
5 April
2019 214,463 2 119.00 249 110.00
12 April
2019 281,572 3 119.00 327 110.00
12 April
2019 143,535 1 117.80 166 110.00
12 April
2019 2,702 - 118.40 3 110.00
6,728,561 67 7,807
---------------- -------------- --------------
9. Commitments and contingencies
As at 30 September 2019, the Company had no financial commitments in
respect of investments (30 September 2018: GBP58,000; 31 March 2019:
GBPnil).
There were no contingencies or guarantees of the Company as at 30
September 2019 (30 September 2018: GBPnil; 31 March 2019: GBPnil).
10. Post balance sheet events
The following are the post balance sheet events since 30 September 2019:
-- Following a restructuring of Radnor House School (Holdings) Limited,
Radnor House Twickenham was sold generating proceeds of GBP4.4 million;
-- Disposal of Process Systems Enterprise Limited for GBP4.1 million;
-- Disposal of Bravo Inns Limited and Bravo Inns II Limited generating
combined proceeds of GBP3.9 million;
-- Investment of GBP696,000 into Cantab Research Limited (trading as
Speechmatics);
-- Investment of GBP268,000 into InCrowd Sports Limited;
-- Investment of GBP170,000 into Healios Limited;
-- Investment of GBP107,000 into Oviva AG;
-- Investment of GBP105,000 into uMotif Limited; and
-- Investment of GBP96,000 into Sandcroft Avenue Limited (trading as
Hussle).
The Company announced on 22 October 2019 that it has launched a
Prospectus Top Up Offer to raise up to GBP6 million before issue costs,
with a further over-allotment facility of GBP2 million, of new Ordinary
shares for subscription in the 2019/20 and 2020/21 tax years. Full
details of the offer are contained in a Prospectus that was published on
the same date on the Manager's website at
https://www.globenewswire.com/Tracker?data=4VaBVjzLKnFj_Sh4YIxF--abqzjet5H8e2MhUytGcA3Lr3uT22KCjE-LXSLqAL3SOFvIe5A8xiNT5lZv3EswBpDU0WYkqcXiZyaEjLgBStxdjWL6TYrKJiYhE-QUMm5xQJXLUFU3bCxxrwkCIVTTZFpwCENu1cEdS4WUmV8W7GVYqHcOIYJ5IVhiOSzh1eRO
www.albion.capital/investor-centre/current-offers.
11. Related party transactions
Other than transactions with the Manager as described in note 5, there
are no other related party transactions.
12. 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
2019, and is detailed on pages 61 and 62 of those accounts. The Company
has adequate cash and liquid resources and has no borrowing. The
portfolio of investments is diversified in terms of sector, and the
major cash outflows of the Company (namely investments, share buy-backs
and dividends) 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 the Guidance on Risk
Management, Internal Control and Related Financial and Business
Reporting issued by the Financial Reporting Council in September 2014.
13. Risks and Uncertainties
In addition to the current economic risks outlined in the Interim
management report, the Board considers that the Company faces the
following principle risks and uncertainties:
1. Investment, performance and valuation risk
The risk of investment in poor quality assets, which could reduce
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. Investments in
open-ended equity funds result in exposure to market risk through
movements in price per unit. 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 and at least one external investment
professional. 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 reviews the deployment of cash resources into equity markets,
the extent of exposure and performance of the exposure. 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. 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 and
are 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.
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, including
legislation on the management of the Company, from its auditor, lawyers
and other professional bodies. The Company is subject to compliance
checks through the Manager's compliance officer. The Manager reports
monthly to its Board on any issues arising from compliance or
regulation. 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 place 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 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
(UK) Limited was appointed as Depository to oversee the custody and cash
arrangements and provide other AIFMD duties. The Board reviews the
quarterly reports prepared by Ocorian (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 policies. 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 and political 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.
The Company invests in a diversified portfolio of companies across a
number of industry sectors and in addition often invests a mixture of
instruments in portfolio companies and has a policy of not normally
permitting any external bank borrowings within portfolio companies. At
any given time, the Company has sufficient cash resources to meet its
operating requirements, including share buybacks and follow on
investments.
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 buyback 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 buybacks cannot be applied, for
example when the Company is subject to a close period, or if it were to
exhaust any buyback 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.
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 September 2019
and 30 September 2018, and is unaudited. The information for the year
ended 31 March 2019 does not constitute statutory accounts within the
terms of section 434 of the Companies Act 2006 but is derived from the
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 statements 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
https://www.globenewswire.com/Tracker?data=4VaBVjzLKnFj_Sh4YIxF-74gTheNTLltruhv1HBmyHXYDCctxNx3qX10ngJNabpYsTSug_2N9qny9yCzxCi1ojaa2jJvqOSfaObOOjGjbnBPUiwdizng2oEBQKtCvZLW
www.albion.capital/funds/AAEV, where the Report can be accessed from the
'Financial Reports and Circulars' section.
Attachment
-- AAEV Pie chart 30 September 2019
https://ml-eu.globenewswire.com/Resource/Download/2cc45fa1-e87e-4e3a-89c9-dd673de5e07e
(END) Dow Jones Newswires
December 04, 2019 09:04 ET (14:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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