Interim / Quarterly Report • Sep 30, 2012
Interim / Quarterly Report
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Half-yearly Financial Report (unaudited) for the six months to 30 September 2012
| Company number | 3142609 |
|---|---|
| Directors | D Watkins MBA (Harvard), Chairman (US citizen) J M B L Kerr ACMA J Warren ACCA E Dinesen R (Danish) FSR |
| Manager, company secretary and registered office |
Albion Ventures LLP 1 King's Arms Yard London, EC2R 7AF |
| Registrar | Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol, BS99 6ZZ |
| Auditor | PKF (UK) LLP Farringdon Place 20 Farringdon Road London, EC1M 3AP |
| Taxation adviser | PricewaterhouseCoopers LLP 1 Embankment Place London, WC2N 6RH |
| Legal adviser | Bird & Bird LLP 15 Fetter Lane London, EC4A 1JP |
| Albion Venture Capital Trust PLC is a member of The Association of Investment Companies. | |
| Shareholder information | For help relating to dividend payments, shareholdings and share certificates please contact Computershare Investor Services PLC: Tel: 0870 873 5849 (UK National Rate call, lines are open 8.30am – 5.30pm; Mon – Fri) Website: www.computershare.co.uk |
| Shareholders can access holdings and valuation information regarding any of their shares held by Computershare by registering on Computershare's website. |
|
| IFA information | For enquiries relating to the performance of the Fund and for IFA information please contact Albion Ventures LLP: Tel: 020 7601 1850 (calls may be recorded; lines are open 9.00am – 5.30pm; Mon – Fri) Email: [email protected] Website: www.albion-ventures.co.uk |
| Please note that these contacts are unable to provide financial or taxation advice. |
Albion Venture Capital Trust PLC (the "Company") is a venture capital trust which raised a total of £39.7 million through an issue of Ordinary shares in the spring of 1996 and through an issue of C shares in the following year. The Company raised a further £3.2 million under the Albion VCTs Linked Top Up Offers in 2011 and 2012. The C Shares merged with the Ordinary shares in 2001. The Company merged with Albion Prime VCT PLC on 25 September 2012 (see below).
The Company's investment strategy is to reduce the risk normally associated with investments in smaller unquoted companies. This is achieved as follows:
The Company offers tax-paying investors substantial tax benefits at the time of investment, on payment of dividends and on the ultimate disposal of the investment.
On 25 September 2012, the Company acquired the assets and liabilities of Albion Prime VCT PLC ("Prime") in exchange for new shares in the Company ("the Merger"). On the same day Prime was placed into members' voluntary liquidation pursuant to a scheme of reconstruction under Section 110 of the Insolvency Act 1986.
All of the assets and liabilities of Prime totalling £14,338,000 were transferred to the Company in exchange for the issue of 19,307,001 new Ordinary shares of nominal value 50 pence each in the capital of the Company at a deemed issue price of 74.2638 pence per share. Each Prime shareholder received 0.8801 shares in the Company for each Prime share that they held at the date of the Merger. The total number of shares receivable by each shareholder was rounded down to the nearest whole number of shares.
New share certificates in the Company were sent to all Albion Prime VCT PLC shareholders during October 2012.
Record date for second dividend 7 December 2012 Payment date for second dividend 31 December 2012 Financial year end 31 March 2013
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| (pence per share) | (pence per share) | (pence per share) | |
| Net asset value | 76.00 | 79.50 | 78.00 |
| Revenue return | 1.00 | 1.10 | 2.10 |
| Capital return | 0.60 | 0.20 | – |
| Total shareholder net asset value return to 30 September 2012 Total dividends paid during the year ended: 31 March 1997 2.00 31 March 1998 5.20 31 March 1999 11.05 31 March 2000 3.00 31 March 2001 8.55 31 March 2002 7.60 31 March 2003 7.70 31 March 2004 8.20 31 March 2005 9.75 31 March 2006 11.75 31 March 2007 10.00 31 March 2008 10.00 |
C shares (pence per share) |
|---|---|
| – | |
| 2.00 | |
| 8.75 | |
| 2.70 | |
| 4.80 | |
| 7.60 | |
| 7.70 | |
| 8.20 | |
| 9.75 | |
| 11.75 | |
| 10.00 | |
| 10.00 | |
| 31 March 2009 10.00 |
10.00 |
| 31 March 2010 5.00 |
5.00 |
| 31 March 2011 5.00 |
5.00 |
| 31 March 2012 5.00 |
5.00 |
| Total dividends paid in the six months to 30 September 2012 2.50 –––––––– |
2.50 –––––––– |
| Total dividends paid to 30 September 2012 122.30 |
110.75 |
| Net asset value as at 30 September 2012 76.00 |
76.00 |
| –––––––– Total shareholder net asset value return to 30 September 2012 198.30 –––––––– |
–––––––– 186.75 –––––––– |
The financial summary above is for the Company, Albion Venture Capital Trust PLC only. Details of the financial performance of Albion Prime VCT PLC, which has been merged into the Company, can be found on page 21.
In addition to the above dividends paid, the Directors have declared a second dividend of 2.50 pence per share, payable on 31 December 2012 to shareholders on the register as at 7 December 2012.
The results for Albion Venture Capital Trust PLC for the six months to 30 September 2012 show a positive return of 1.60 pence per share (revenue and capital), which takes the net asset value to 76.00 pence per share (31 March 2012: 78.00 pence per share) after the payment of the first dividend for the year of 2.50 pence per share and following the merger with Albion Prime VCT PLC on 25 September 2012. A more detailed explanation of the impact of the merger on the total return per share calculation is shown in note 10. The total return comprised a 1 penny revenue return for the period and a 0.6 pence capital return, although it should be noted that independent third party valuations of the underlying investments are not generally carried out until the spring.
During the period, the principal event was the acquisition of the investments formerly held by Albion Prime VCT PLC, valued at just over £14.3 million. With one minor exception, these were all in companies in which the Company already had a holding. In addition, the Company invested £218,000 in two existing portfolio companies and one new company, while loan stock repayments totalling £291,000 were received from four portfolio companies.
The additional investments comprised £100,000 in Bravo Inns II, as part of a £1 million fundraising to enable it to take advantage of further financially attractive pub acquisitions in the north west of England; an initial £70,000 in Dragon Hydro, which is developing a hydroelectric facility in Wales; and a £48,000 scheduled investment in Nelson House Hospital, which opened in April 2012.
The principal loan stock repayments were £84,000 from The Charnwood Pub Company, following the sale of one of its pubs, with £47,000 from Tower Bridge Health Clubs and £159,000 from Kew Green VCT (Stansted), both from surplus cash generated from trading. However, the Holiday Inn Express hotel at Stansted Airport, owned by Kew Green VCT (Stansted) and The Stanwell Hotel near Heathrow, both experienced disappointing trading during the Olympics, coupled with further competition at Stansted and slower than hoped for growth at The Stanwell. The carrying values of these investments have been reduced accordingly. The Crown Hotel in Harrogate and the Bear Hotel in Hungerford have been more resilient.
In the remainder of the portfolio, Radnor House School has successfully embarked on its second school year and now has 240 pupils; the cinemas are continuing to trade well, all recently setting new weekly revenue records; and Oakland Care Centre's Bayfield Court care home in Chingford is now full. All of these investments have seen an uplift in holding value. Occupancy is continuing to grow at Orchard Portman's psychiatric unit near Taunton and the three health and fitness clubs have all seen the number of members rise over the period.
Meanwhile good progress has been made by the Company's renewable energy investments with solar panels now installed on nearly 1,200 homes by Regenerco Renewable Energy and The Street by Street Solar Programme. In addition, a second wind turbine has recently been erected by Alto Prodotto Wind in Wales and the TEG Biogas (Perth)'s anaerobic digestion plant in Scotland, which creates energy from food waste, is exceeding expectations.
Two of the five houses being built by G&K Smart Development VCT have been sold off-plan and the Wickenhall Mill site inherited from Albion Prime VCT PLC has been sold subsequent to the period end.
Source: Albion Ventures LLP
Following approval by shareholders at the General Meeting on 17 September 2012, the Company completed the acquisition of the assets and liabilities of Prime on 25 September 2012. The Merger created a larger Company, adding net assets of just over £14.3 million from Prime. The Merger is expected to result in material cost savings of approximately £168,000 per annum going forwards. The ratio used
for the conversion of Prime shares to shares in the Company was 0.8801. All Prime shareholders were issued new share certificates during October 2012. Further details regarding the Merger are shown in note 10 to the Half-yearly Financial Report.
Budgeted merger costs were £230,000, of which the Company's share, which has been provided for in these accounts, was £150,000.
On 25 September 2012, as part of the Merger arrangements, Jonathan Rounce stepped down from the Board. The Board wishes to express its thanks to Jonathan for his contribution during his time as a Director.
The Board is pleased to welcome Ebbe Dinesen, who was a director of Albion Prime VCT PLC and who was appointed a Director of the Company on 26 September 2012.
We remain cautious over the short and medium term prospects for the UK economy, particularly given the continuing uncertainty in the eurozone. Importantly however your Company remains conservatively financed with no bank borrowings having a prior charge at either corporate or portfolio company level. This is in addition to the policy of ensuring that the Company has a first charge over portfolio companies' assets.
Other risks and uncertainties remain unchanged and are as detailed on pages 17 to 19 of the Annual Report and Financial Statements for the year ended 31 March 2012.
Details of material related party transactions for the reporting period can be found in note 13 to this Halfyearly Financial Report.
It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. Thereafter, it is still the Board's policy to buy back shares in the market, subject to the overall constraint that such purchases are in the Company's interest. The Company will limit the sum available for share buy-backs for the six month period to 31 March 2013 to £500,000. Subject to the constraints referred to above, and subject to first purchasing shares held by the marketmakers, the Board will target such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit.
It is expected that the reduction of capital referred to in the circular to shareholders dated 27 July 2012 will take place in December 2012.
As at 30 September 2012, following the merger with Albion Prime VCT PLC on 25 September 2012, the net asset value of the Company was £42.7 million or 76.00 pence per share compared to £28.4 million or 78.00 pence per share at 31 March 2012. The revenue return before taxation was £413,000 compared to £529,000 for the six months to 30 September 2011. The Company will pay a second dividend of 2.50 pence per share on 31 December 2012 to shareholders on the register as at 7 December 2012, making 5.00 pence per share in total for the full year, in line with your Company's current dividend target.
Your Board, in conjunction with the boards of other VCTs managed by Albion Ventures LLP, has recently launched a top up offer of new Ordinary shares. Albion Venture Capital Trust PLC will be aiming to raise up to £2.5 million, out of up to £15 million in aggregate that the Albion VCTs are seeking to raise. The proceeds will be used to provide further resources at a time when a number of attractive investment opportunities are being seen. An Investor Guide and Offers Document will be sent to shareholders in December.
As already mentioned, the outlook for the UK economy remains uncertain. Nevertheless we believe that the majority of our companies are well positioned to withstand future economic upheaval. Our strategy for new investments continues to be focused on sectors that are likely to be resilient, particularly healthcare and environmental projects.
Chairman 28 November 2012
The Directors, as listed on page 2 of this Report, are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Company in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP").
In preparing these summarised financial statements for the period to 30 September 2012, we the Directors of the Company, confirm that to the best of our knowledge:
(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 31 March 2012.
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
By order of the Board
Chairman 28 November 2012
The following is a summary of investments as at 30 September 2012:
| As at 30 September 2012 | |||||
|---|---|---|---|---|---|
| Qualifying investments | % voting rights |
Accounting cost* £'000 |
Cumulative movement in value £'000 |
Total value** £'000 |
Change in value for the period*** £'000 |
| Hotels Kew Green VCT (Stansted) Limited The Crown Hotel Harrogate Limited The Stanwell Hotel Limited The Bear Hungerford Limited |
45.2 24.1 39.2 40.8 |
6,723 4,245 4,520 2,827 |
1,456 (973) (2,162) (757) |
8,179 3,272 2,358 2,070 |
(417) 17 (417) 9 |
| Total investment in the hotel sector | 18,315 | (2,436) | 15,879 | (808) | |
| Cinemas and other leisure City Screen (Cambridge) Limited CS (Greenwich) Limited CS (Brixton) Limited City Screen (Liverpool) Limited CS (Exeter) Limited Premier Leisure (Suffolk) Limited CS (Norwich) Limited |
50.0 25.8 9.4 40.9 9.6 10.5 4.4 |
485 1,451 498 452 152 468 75 |
2,026 440 353 120 50 (295) 27 |
2,511 1,891 851 572 202 173 102 |
296 174 145 162 65 – 14 |
| Total investment in the cinema and other leisure sector |
3,581 | 2,721 | 6,302 | 856 | |
| Health and fitness clubs The Weybridge Club Limited Kensington Health Clubs Limited Tower Bridge Health Clubs Limited |
14.3 9.8 8.4 |
2,136 1,889 454 |
(229) (378) 105 |
1,907 1,511 559 |
– (19) 29 |
| Total investment in the health and fitness club sector |
4,479 | (502) | 3,977 | 10 | |
| Healthcare sector Oakland Care Centre Limited Nelson House Hospital Limited Taunton Hospital Limited Orchard Portman Hospital Limited |
31.6 7.0 7.6 4.4 |
2,998 698 478 297 |
662 10 (35) (15) |
3,660 708 443 282 |
204 8 (36) (15) |
| Total investment in the healthcare sector | 4,471 | 622 | 5,093 | 161 | |
| Education sector Radnor House School (Holdings) Limited |
7.1 | 1,381 | 378 | 1,759 | 136 |
| Total investment in the education sector | 1,381 | 378 | 1,759 | 136 | |
| Renewable energy sector Alto Prodotto Wind Limited The Street by Street Solar Programme Limited Regenerco Renewable Energy Limited TEG Biogas (Perth) Limited AVESI Limited Greenenerco Limited Dragon Hydro Limited |
7.4 6.5 6.1 4.9 7.4 3.9 7.3 |
670 650 427 306 230 135 104 |
3 3 2 19 – – – |
673 653 429 325 230 135 104 |
3 (2) 1 17 – – – |
| Total investment in the renewable energy sector | 2,522 | 27 | 2,549 | 19 | |
| Pubs The Charnwood Pub Company Limited Bravo Inns II Limited Bravo Inns Limited The Dunedin Pub Company VCT Limited GB Pub Company VCT Limited |
14.8 6.3 7.6 8.3 8.8 |
3,532 935 596 84 220 |
(1,734) (1) (165) (2) (203) |
1,798 934 431 82 17 |
– 1 1 – (15) |
| Total investment in the pub sector | 5,367 | (2,105) | 3,262 | (13) | |
| Residential property development G&K Smart Developments VCT Limited Wickenhall Mill VCT Limited |
42.9 27.3 |
1,620 60 |
(1,144) – |
476 60 |
– – |
| Total investment in the residential property development sector |
1,680 | (1,144) | 536 | – | |
| Total qualifying investments | 41,796 | (2,439) | 39,357 | 361 | |
| Movement in loan stock accrued interest | 19 | ||||
| Total gains on investments as per income statement | 380 |
* Amounts shown as accounting cost represent the acquisition cost in the case of investments originally made by the Company and/or the valuation attributed to the investments acquired from Albion Prime VCT PLC at the Merger on 25 September 2012, plus any subsequent acquisition costs, as reduced in certain cases by amounts written off as representing an impairment in value.
** These valuations are based on third party calculations performed for the Annual Report and Financial Statements for the year ended 31 March 2012, excluding Radnor House School (Holdings) Limited and Oakland Care Centre Limited which were performed at the period end of 30 September 2012. Third party valuations will be re-performed for the year ended 31 March 2013.
*** As adjusted for additions and disposals during the period.
| Unaudited six months ended 30 September 2012 |
Unaudited six months ended 30 September 2011 |
Audited year ended 31 March 2012 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Note | Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Gains on investments |
3 | – | 380 | 380 | – | 232 | 232 | – | 310 | 310 |
| Investment income |
4 | 617 | – | 617 | 711 | – | 711 | 1,314 | – | 1,314 |
| Investment management fees |
(71) | (213) | (284) | (73) | (218) | (291) | (143) | (428) | (571) | |
| Other expenses |
(133) ––––– |
– ––––– |
(133) ––––– |
(109) ––––– |
– ––––– |
(109) ––––– |
(238) ––––– |
– ––––– |
(238) ––––– |
|
| Return/(loss) on ordinary activities before tax |
413 | 167 | 580 | 529 | 14 | 543 | 933 | (118) | 815 | |
| Tax (charge)/ credit on ordinary activities |
(37) | 53 | 16 | (134) | 60 | (74) | (188) | 118 | (70) | |
| Return attributable to shareholders |
––––– 376 ––––– |
––––– 220 ––––– |
––––– 596 ––––– |
––––– 395 ––––– |
––––– 74 ––––– |
––––– 469 ––––– |
––––– 745 ––––– |
––––– – ––––– |
––––– 745 ––––– |
|
| Basic and diluted return per share (pence)* |
6 | 1.00 | 0.60 | 1.60 | 1.10 | 0.20 | 1.30 | 2.10 | – | 2.10 |
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 September 2011 and the audited statutory accounts for the year ended 31 March 2012 of Albion Venture Capital Trust PLC.
All revenue and capital items in the above statement derive from the continuing operations of the Company up to 25 September 2012 and thereafter includes the return on the assets and activities of Albion Prime VCT PLC after they were acquired by the Company on 25 September 2012.
The accompanying notes on pages 13 to 20 form an integral part of this Half-yearly Financial Report.
The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.
All revenue and capital items in the above statement derive from continuing operations.
There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly a Statement of total recognised gains and losses is not required. The difference between the reported return on ordinary activities before tax and the historical profit is due to the fair value movements on investments. As a result a note on historical cost profit and losses has not been prepared.
| Note | Unaudited 30 September 2012 £'000 |
Unaudited 30 September 2011 £'000 |
Audited 31 March 2012 £'000 |
|
|---|---|---|---|---|
| Fixed asset investments | 39,357 | 24,918 | 25,945 | |
| Current assets | ||||
| Trade and other debtors | 32 | 19 | 10 | |
| Cash at bank and in hand | 9 | 4,129 –––––––– |
3,923 –––––––– |
2,956 –––––––– |
| 4,161 | 3,942 | 2,966 | ||
| Creditors: amounts falling due within one year |
(838) –––––––– |
(400) –––––––– |
(525) –––––––– |
|
| Net current assets | 3,323 –––––––– |
3,542 –––––––– |
2,411 –––––––– |
|
| Net assets Capital and reserves |
42,680 –––––––– |
28,460 –––––––– |
28,386 –––––––– |
|
| Called up share capital | 7 | 29,868 | 19,197 | 19,733 |
| Share premium | 5,828 | 706 | 1,005 | |
| Capital redemption reserve | 1,914 | 1,914 | 1,914 | |
| Unrealised capital reserve | (2,618) | (3,791) | (3,067) | |
| Realised capital reserve | 9,858 | 10,885 | 10,087 | |
| Other distributable reserve | (2,170) –––––––– |
(451) –––––––– |
(1,286) –––––––– |
|
| Total equity shareholders' funds | 42,680 –––––––– |
28,460 –––––––– |
28,386 –––––––– |
|
| Basic and diluted net asset value per share (pence)* |
76.00 –––––––– |
79.50 –––––––– |
78.00 –––––––– |
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 September 2011 and the audited statutory accounts for the year ended 31 March 2012 of Albion Venture Capital Trust PLC.
The Balance sheet as at 30 September 2012 reflects the acquisition of the assets and liabilities of Albion Prime VCT PLC on 25 September 2012.
The accompanying notes on pages 13 to 20 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 28 November 2012, and were signed on its behalf by
David Watkins Chairman Company number: 3142609
| Called-up share capital £'000 |
Share premium £'000 |
Capital redemption reserve £'000 |
Unrealised capital reserve* £'000 |
Realised capital reserve* £'000 |
Other distributable reserve* £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|
| As at 1 April 2012 | 19,733 | 1,005 | 1,914 | (3,067) | 10,087 | (1,286) | 28,386 |
| Return/(loss) for the period | – | – | – | 380 | (160) | 376 | 596 |
| Transfer of previously unrealised losses |
– | – | – | 69 | (69) | – | – |
| Purchase of treasury shares | – | – | – | – | – | (333) | (333) |
| Issue of equity (net of costs) | 481 | 269 | – | – | – | – | 750 |
| Shares issued to acquire net assets of Albion Prime VCT |
|||||||
| PLC (net of merger costs) ** | 9,654 | 4,554 | – | – | – | – | 14,208 |
| Net dividends paid (note 5) | – ––––– |
– ––––– |
– ––––– |
– ––––– |
– ––––– |
(927) ––––– |
(927) ––––– |
| As at 30 September 2012 | 29,868 ––––– |
5,828 ––––– |
1,914 ––––– |
(2,618) ––––– |
9,858 ––––– |
(2,170) ––––– |
42,680 ––––– |
| As at 1 April 2011 | 18,886 | 538 | 1,914 | (3,871) | 10,891 | 403 | 28,761 |
| (Loss)/return for the period | – | – | – | (82) | 156 | 395 | 469 |
| Transfer of previously | |||||||
| unrealised losses Purchase of treasury shares |
– – |
– – |
– – |
162 – |
(162) – |
– (351) |
– (351) |
| Issue of equity (net of costs) | 311 | 168 | – | – | – | – | 479 |
| Net dividends paid (note 5) | – | – | – | – | – | (898) | (898) |
| As at 30 September 2011 | ––––– 19,197 ––––– |
––––– 706 ––––– |
––––– 1,914 ––––– |
––––– (3,791) ––––– |
––––– 10,885 ––––– |
––––– (451) ––––– |
––––– 28,460 ––––– |
| As at 1 April 2011 | 18,886 | 538 | 1,914 | (3,871) | 10,891 | 403 | 28,761 |
| (Loss)/return for the year | – | – | – | (13) | 13 | 745 | 745 |
| Transfer of previously | |||||||
| unrealised losses Purchase of treasury shares |
– – |
– – |
– – |
817 – |
(817) – |
– (663) |
– (663) |
| Issue of equity (net of costs) | 847 | 467 | – | – | – | – | 1,314 |
| Net dividends paid (note 5) | – ––––– |
– ––––– |
– ––––– |
– ––––– |
– ––––– |
(1,771) ––––– |
(1,771) ––––– |
| As at 31 March 2012 | 19,733 | 1,005 | 1,914 | (3,067) | 10,087 | (1,286) | 28,386 |
* Included within these reserves is an amount of £5,070,000 (30 September 2011: £6,643,000; 31 March 2012: £5,734,000) which is considered distributable.
** The assets and liabilities transferred through the acquisition of Albion Prime VCT PLC are shown in note 10. In addition, £130,000 of the £150,000 merger costs attributable to Albion Venture Capital Trust PLC have been accounted for in the share premium account.
The treasury share reserve and revenue reserve have been combined to form a single reserve named other distributable reserve for both current and prior year. The Directors consider the presentation of a single reserve enhances clarity of financial reporting. More details regarding treasury shares can be found in note 7.
| Note | Unaudited six months ended 30 September 2012 £'000 |
Unaudited six months ended 30 September 2011 £'000 |
Audited year ended 31 March 2012 £'000 |
|
|---|---|---|---|---|
| Operating activities Investment income received Deposit interest received Investment management fees paid Other cash payments |
633 19 (284) (166) –––––––– |
669 18 (308) (156) –––––––– |
1,244 37 (571) (261) –––––––– |
|
| Net cash flow from operating activities |
8 | 202 | 223 | 449 |
| Taxation UK corporation tax (paid)/recovered |
(59) | 205 | 205 | |
| Capital expenditure and financial investments Purchase of fixed asset investments Disposal of fixed asset investments |
(204) 275 –––––––– |
(1,094) 2,357 –––––––– |
(2,618) 3,000 –––––––– |
|
| Net cash flow from investing activities |
71 | 1,263 | 382 | |
| Equity dividends paid Dividends paid (net of cost of shares issued under the dividend reinvestment scheme) |
(867) | (848) | (1,635) | |
| Net cash flow before financing | –––––––– (652) |
–––––––– 843 |
–––––––– (599) |
|
| Financing Cash acquired from Albion Prime VCT PLC Cost of Merger (paid on behalf |
10 | –––––––– 1,450 |
–––––––– – |
–––––––– – |
| of the Company and Albion Prime VCT PLC) Issue of share capital Purchase of own shares |
(90) 698 (233) |
– 461 (352) |
– 1,247 (663) |
|
| Net cash flow from financing | –––––––– 1,825 |
–––––––– 109 |
–––––––– 584 |
|
| Cash flow in the period | 9 | –––––––– 1,173 –––––––– |
–––––––– 952 –––––––– |
–––––––– (15) –––––––– |
The Financial Statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by the Association of Investment Companies ("AIC") in January 2009. Accounting policies have been applied consistently in current and prior periods.
Unquoted equity investments, debt issued at a discount and convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement", unquoted equity, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).
Desk top reviews are carried out by independent RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices. Full valuations are prepared by similarly qualified surveyors, but in full compliance with the RICS Red Book.
Fair value movements and gains and losses arising on the disposal of investments are reflected in the capital column of the Income statement in accordance with the AIC SORP; realised gains or losses on the sale of investments will be reflected in the realised capital reserve; and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve.
Warrants and unquoted equity derived instruments are only valued if their exercise or contractual conversion terms would allow them to be exercised or converted as at the balance sheet date, and if there is additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment.
Unquoted loan stock (excluding convertible bonds and debt issued at a discount) is classified as loans and receivables as permitted by FRS 26 and measured at amortised cost using the effective interest rate method ("EIR") less impairment. Movements in respect of capital provisions are reflected in the capital column of the Income statement and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve on impairment from revaluations of the fair value of the security.
For all unquoted loan stock, fully performing, renegotiated, past due and impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security held less estimated selling costs.
Investments are recognised as financial assets on legal completion of the investment contract and are derecognised on legal completion of the sale of an investment.
Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the revenue reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period.
It is not the Company's policy to exercise control or significant influence over investee companies. Therefore, in accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holds more than 20 per cent. of the equity are not regarded as associated undertakings.
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using the effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment.
Interest income is recognised on an accrual basis using the rate of interest agreed with the bank.
All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue account except the following which are charged through the realised capital reserve:
In the event that a performance incentive fee crystallises, the fee will be allocated between revenue and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.
Taxation is applied on a current basis in accordance with FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.
The Directors have considered the requirements of FRS 19 and do not believe that any provision for deferred tax should be made.
This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs and transfers to the Special 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.
Increases and decreases in the valuation of investments held at the year end against cost are included in this reserve.
This reserve accounts for amounts by which the distributable reserves of the Company are diminished through the repurchase of the Company's own shares for treasury.
Realised capital reserve The following are disclosed in this reserve:
In accordance with FRS 21 "Events after the balance sheet date", dividends declared by the Company are accounted for in the period in which the dividend has been paid or approved by shareholders in an Annual General Meeting.
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| £'000 | £'000 | £'000 | |
| Unrealised gains/(losses) on fixed asset investments | |||
| held at fair value through profit or loss account Unrealised (impairments)/reversals of impairments on |
694 | (200) | 782 |
| fixed asset investments held at amortised cost | (314) –––––––– |
118 –––––––– |
(795) –––––––– |
| Unrealised gains/(losses) sub-total | 380 | (82) | (13) |
| Realised gains on investments held at fair value | |||
| through profit or loss account | – | 288 | 283 |
| Realised gains on investments held at amortised cost | – –––––––– |
26 –––––––– |
40 –––––––– |
| Realised gains sub-total | – –––––––– |
314 –––––––– |
323 –––––––– |
| 380 –––––––– |
232 –––––––– |
310 –––––––– |
|
Investments valued on an amortised cost basis are unquoted loan stock instruments as described in note 2.
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| £'000 | £'000 | £'000 | |
| Income recognised on investments held at | |||
| fair value through profit or loss account | |||
| Income from convertible bonds and discounted debt | 35 | – | 22 |
| Other income | – –––––––– |
3 –––––––– |
– –––––––– |
| 35 | 3 | 22 | |
| Income recognised on investments held at | |||
| amortised cost | |||
| Return on loan stock investments | 562 | 688 | 1,250 |
| Bank deposit interest | 20 –––––––– |
20 –––––––– |
42 –––––––– |
| 582 –––––––– |
708 –––––––– |
1,292 –––––––– |
|
| 617 | 711 | 1,314 | |
| –––––––– | –––––––– | –––––––– |
All of the Company's income is derived from operations based in the United Kingdom.
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| £'000 | £'000 | £'000 | |
| First dividend paid 29 July 2011 – 2.50 pence per share Second dividend paid on 30 December 2011 – |
– | 897 | 897 |
| 2.50 pence per share | – | – | 888 |
| First dividend paid 31 July 2012 – 2.50 pence per share | 927 | – | – |
| Unclaimed dividends | – | – | (14) |
| –––––––– | –––––––– | –––––––– | |
| 927 | 897 | 1,771 | |
| –––––––– | –––––––– | –––––––– |
The Directors have declared a dividend of 2.50 pence per share (total approximately £1,400,000), payable on 31 December 2012 to shareholders on the register as at 7 December 2012.
| Unaudited six months ended 30 September 2012 |
Unaudited six months ended 30 September 2011 |
Audited year ended 31 March 2012 |
||||
|---|---|---|---|---|---|---|
| Revenue | Capital | Revenue | Capital | Revenue | Capital | |
| Return attributable to | ||||||
| Ordinary shares (£'000) | 376 | 220 | 395 | 74 | 745 | – |
| Weighted average shares in issue | 37,746,060 | 36,015,803 | 35,974,300 | |||
| Return per Ordinary share (pence) | 1.00 | 0.60 | 1.10 | 0.20 | 2.10 | – |
The weighted number of shares is calculated excluding treasury shares of 3,580,440 (30 September 2011: 2,610,773; 31 March 2012: 3,079,373).
There are no convertible instruments, derivatives or contingent share agreements in issue for Albion Venture Capital Trust PLC hence there are no dilution effects to the return per share. The basic return per share is therefore the same as the diluted return per share.
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| £'000 | £'000 | £'000 | |
| Allotted, called up and fully paid | |||
| 59,736,246 Ordinary shares of 50p each | |||
| (30 September 2011: 38,393,948; | |||
| 31 March 2012: 39,467,119 of 50p each) | 29,868 | 19,197 | 19,733 |
| –––––––– | –––––––– | –––––––– |
56,155,806 Ordinary shares of 50p each (net of treasury shares) (30 September 2011: 35,783,175; 31 March 2012: 36,387,746 of 50p each)
The company issued 19,307,001 Ordinary shares to former shareholders of Albion Prime VCT PLC, at an issue price of 74.2638p, as part of the merger explained in note 10.
Under the terms of the Dividend Reinvestment Scheme, the following Ordinary shares of nominal value 50 pence per share were allotted at a price of 75.50 pence per share:
| Number of shares |
Issue price (pence |
Net consideration received |
Mid-market price per share on allotment date |
|
|---|---|---|---|---|
| Date of allotment | allotted | per share) | (£'000) | (pence per share) |
| 31 July 2012 | 81,242 | 75.50 | 52 | 67.00 |
During the period from 1 April 2012 to 30 September 2012, the Company issued the following New shares of nominal value 50 pence under the Albion VCTs Linked Top Up Offers 2011/2012:
| Date of allotment | Number of shares allotted |
Issue price (pence per share) |
Net consideration received (£'000) |
Mid-market price per share on allotment date (pence per share) |
|---|---|---|---|---|
| 5 April 2012 31 May 2012 |
791,924 88,960 –––––––– 880,884 –––––––– |
83.80 83.80 |
627 71 –––––––– 698 –––––––– |
68.50 65.50 |
During the period to 30 September 2012 the Company purchased 501,067 Ordinary shares to be held in treasury at a cost of £332,660 representing 1.4% of the shares in issue as at 1 April 2012. The shares purchased for treasury were funded from the Other distributable reserves.
The total number of Ordinary shares held in treasury as at 30 September 2012 was 3,580,440 (30 September 2011: 2,610,773; 31 March 2012: 3,079,373) representing 6.0% of the share capital as at 30 September 2012.
| Unaudited six months ended 30 September 2012 £'000 |
Unaudited six months ended 30 September 2011 £'000 |
Audited year ended 31 March 2012 £'000 |
|
|---|---|---|---|
| Revenue return on ordinary activities before tax | 413 | 529 | 933 |
| Investment management fee charged to capital | (213) | (218) | (428) |
| Movement in accrued amortised loan stock interest | 19 | (20) | (38) |
| Increase in operating debtors | (19) | (10) | (1) |
| Increase/(decrease) in operating creditors | 2 –––––––– |
(58) –––––––– |
(17) –––––––– |
| Net cash flow from operating activities | 202 –––––––– |
223 –––––––– |
449 –––––––– |
| Analysis of change in cash during the period | |||
| Unaudited | Unaudited | Audited | |
| six months ended | six months ended | year ended | |
| 30 September 2012 | 30 September 2011 | 31 March 2012 | |
| £'000 | £'000 | £'000 | |
| Opening cash balances | 2,956 | 2,971 | 2,971 |
| Net cash flow | 1,173 –––––––– |
952 –––––––– |
(15) –––––––– |
| End of the period | 4,129 –––––––– |
3,923 –––––––– |
2,956 –––––––– |
On 25 September 2012, the following assets and liabilities of Albion Prime VCT PLC ("Prime") were transferred to the Company in exchange for the issue to Prime shareholders of 19,307,001 shares in the Company, at an issue price of 74.2638p pence per share:
| £'000 | |
|---|---|
| Fixed asset investments | 13,123 |
| Debtors | 16 |
| Cash at bank and in hand | 1,450 |
| Creditors | (162) |
| Merger costs | (89) –––––––– |
| 14,338 | |
| –––––––– |
Shareholders should note that under accounting standards, the calculation of the net asset value per share uses the total shares in issue as at 30 September 2012 (less treasury shares) of 56,155,806, whereas the calculation of the total return uses the weighted average shares in issue during the period to 30 September 2012 (less treasury shares) of 37,746,060. As a result, the return per share to 30 September 2012 is 0.9p higher than if the shares in issue as at 30 September 2012 (less treasury shares) of 56,155,806 had been applied to the movement in the Balance Sheet since merger. This difference in the number of shares for each respective calculation will converge over time.
On 25 September 2012, Prime was placed into members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986.
The net asset values ("NAVs") per share of each fund used for the purposes of conversion at the calculation date of 24 September 2012 were 74.2638 pence per share and 65.3663 pence per share for the Company and Prime respectively. The conversion ratio for each Prime share was 0.8801 Albion Venture Capital Trust PLC share for each Prime share.
New share certificates were sent to all Prime shareholders during October 2012.
As at 30 September 2012, the Company was committed to making a further investment of £210,000 in Dragon Hydro Limited.
There are no contingencies or guarantees of the Company as at 30 September 2012 (30 September 2011 and 31 March 2012: nil).
Since 30 September 2012 the Company has had the following material post balance sheet events:
On 19 October 2012 the Company announced the launch of the Albion VCTs Top Up Offers 2012/2013. In aggregate, the Albion VCTs will be aiming to raise up to £15 million across six of the VCTs managed by Albion Ventures LLP, of which Albion Venture Capital Trust PLC will be aiming to raise approximately £2.5 million. The maximum amount raised by each of the Albion VCTs will be 10% of its issued share capital (over any one 12 month period, and including any shares issued under Dividend Reinvestment Schemes) or €5 million, being the amount that they may issue under the Prospectus Rules without the publication of a full prospectus.
The proceeds of the Offers will be used to provide further resources at a time when a number of attractive new investment opportunities are being seen. An Investor Guide and Offers document will be sent to shareholders in December 2012 and is currently available on the Company's web page at http://www.albion-ventures.co.uk/ourfunds/top_up.html.
On 15 November 2012 Wickenhall Mill was sold for £110,000 of which the Company's share was £60,000.
The Manager, Albion Ventures LLP, is considered to be a related party by virtue of the fact that it is party to a Management agreement from the Company (details disclosed on page 20 of the Annual Report and Financial Statements for the year ended 31 March 2012). During the period, services of a total value of £284,000 in management fees and £22,000 in administration fees (30 September 2011: £291,000 in management fees and £22,000 in administration fees; 31 March 2012: £571,000 in management fees and £44,000 in administration fees), were purchased by the Company from Albion Ventures LLP. At the financial period end, the amount due to Albion Ventures LLP in respect of these services disclosed within accruals and deferred income was £245,000 (30 September 2011: £173,000; 31 March 2012: £169,000).
During the period the Company raised new funds through the Albion VCTs Linked Top Up Offers 2011/2012 as detailed in note 7. The total cost of the issue of these shares was 5.5% of the sums subscribed. Of these costs, an amount of £6,740 (2011: £3,450) was paid to the Manager, Albion Ventures LLP in respect of receiving agent services. There were no sums outstanding in respect of receiving agent services at 30 September 2012.
There are no other related party transactions or balances requiring disclosure.
The Board's assessment of liquidity risk remains unchanged since the last Annual Report and Financial Statements for the year ended 31 March 2012, and is detailed on pages 44 and 45 of those accounts. The Company has adequate cash and liquid resources. The portfolio of investments is diversified in terms of sector, and the major cash outflows of the Company (namely investments, dividends and share buy-backs) are within the Company's control. Accordingly, after making diligent enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing this Half-yearly Financial Report and this is in accordance with 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009' published by the Financial Reporting Council.
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 2012 and 30 September 2011, and is unaudited. The information for the year ended 31 March 2012 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 but is derived from the audited statutory accounts for the financial year, which were unqualified and which have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.
This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion-ventures.co.uk under the 'Our Funds', 'Albion Venture Capital Trust' section.
| Proforma(i) Albion Prime VCT PLC |
||
|---|---|---|
| (pence per share) | ||
| Total shareholder net asset value return to 30 September 2012 | ||
| Total dividends paid during the period ended: | 31 March 1998 | 1.10 |
| 31 March 1999(ii) | 6.40 | |
| 31 March 2000 | 1.50 | |
| 31 March 2001 | 4.25 | |
| 31 March 2002 | 2.75 | |
| 31 March 2003 | 2.00 | |
| 31 March 2004 | 1.25 | |
| 31 March 2005 | 2.20 | |
| 31 March 2006 | 4.50 | |
| 31 March 2007 | 4.00 | |
| 31 March 2008 | 5.00 | |
| 31 March 2009 | 4.50 | |
| 31 March 2010 | 2.00 | |
| 31 March 2011 | 3.00 | |
| 31 March 2012 | 3.00 | |
| 30 September 2012 | 1.50 | |
| Total dividends paid to 30 September 2012 Proforma net asset value as at 30 September 2012 |
–––––––– 48.95 66.90 |
|
| Total proforma shareholder net asset value return to 30 September 2012 | –––––––– 115.85 –––––––– |
Notes
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