Interim / Quarterly Report • Jun 30, 2018
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Half-yearly Financial Report (unaudited) for the six months to 30 June 2018
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
| Company number | 03654040 |
|---|---|
| Directors | G O Vero FCA, Chairman L M Goleby MA (Cantab) B Larkin LLB P H Reeve MA ACA |
| Country of incorporation | United Kingdom |
| Legal form | Public Limited Company |
| Manager, company secretary, AIFM and registered office |
Albion Capital Group LLP 1 King's Arms Yard London, EC2R 7AF |
| Registrar | Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol, BS99 6ZZ |
| Auditor | BDO LLP 55 Baker Street London, W1U 7EU |
| Taxation adviser | Philip Hare & Associates LLP 4 Staple Inn London, WC1V 7QH |
| Legal adviser | Bird & Bird LLP 12 New Fetter Lane London, EC4A 1JP |
| Albion Development VCT PLC is a member of The Association of Investment Companies (www.theaic.co.uk). | |
| Shareholder information | For help relating to dividend payments, shareholdings and share |
| certificates please contact Computershare Investor Services PLC: Tel: 0370 873 5853 (UK national rate call, lines are open 8.30am – 5.30pm; Mon – Fri; calls may be recorded) Website: www.investorcentre.co.uk |
|
|---|---|
| Shareholders can access holdings and valuation information regarding any of their shares held by Computershare by registering on Computershare's website. |
|
| Financial adviser enquiries | For enquiries relating to the performance of the Company and information for financial advisers please contact Albion Capital Group LLP: Tel: 020 7601 1850 (lines are open 9.00am – 5.30pm; Mon – Fri; calls may be recorded) Email: [email protected] Website: www.albion.capital |
| Please note that these contacts are unable to provide financial or taxation advice. |
The Company will invest in a broad portfolio of higher growth businesses with a stronger focus on technology companies across a variety of sectors of the UK economy. Allocation of assets will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified in terms of sector and stage of maturity of company.
Funds held pending investment or for liquidity purposes will be held as cash on deposit or up to 8 per cent. of its assets, at the time of investment, in liquid open-ended equity funds providing income and capital equity exposure (where it is considered economic to do so).
Risk is spread by investing in a number of different businesses within venture capital trust qualifying industry sectors using a mixture of securities. The maximum amount which the Company will invest in a single portfolio company is 15 per cent. of the Company's assets at cost thus ensuring a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is possible that it may grow in value to a point where it represents a significantly higher proportion of total assets prior to a realisation opportunity being available.
The Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves.
The Company is a venture capital trust which raised a total of £33.3 million through the issue of shares between 1999 and 2004. The C shares merged with the Ordinary shares in 2007.
A further £6.3 million was raised through an issue of new D shares in 2009/2010. The D shares converted to Ordinary shares on 31 March 2015. D shareholders received 1.4975 Ordinary shares for each D share they owned.
An additional £29.7 million has been raised for the Ordinary shares through the Albion VCTs Top Up Offers since 2011.
Record date for second dividend for the year 14 September 2018 Payment date for second dividend for the year 28 September 2018 Financial year end 31 December
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| Ordinary Shares | (pence per share) | (pence per share) | (pence per share) |
| Dividends paid | 2.0 | 2.0 | 4.0 |
| Total return | 9.3 | 2.7 | 7.2 |
| Net asset value | 80.9 | 71.3 | 73.8 |
| Ordinary shares | C shares | D shares | |
| (pence per | (pence per | (pence per | |
| Total shareholder return to 30 June 2018 | share) (ii) | share) (ii)(iv) | share) (ii)(v) |
| Total dividends paid during the period ended: | |||
| 31 December 1999(i) | 1.0 | – | – |
| 31 December 2000 | 2.9 | – | – |
| 31 December 2001 | 4.0 | – | – |
| 31 December 2002 | 4.2 | – | – |
| 31 December 2003(iii) | 4.5 | 0.7 | – |
| 31 December 2004 | 4.0 | 2.0 | – |
| 31 December 2005 | 5.2 | 5.9 | – |
| 31 December 2006 | 3.0 | 4.5 | – |
| 31 December 2007 | 5.0 | 5.3 | – |
| 31 December 2008 | 12.0 | 12.8 | – |
| 31 December 2009 | 4.0 | 4.3 | – |
| 31 December 2010 | 8.0 | 8.6 | 1.0 |
| 31 December 2011 | 5.0 | 5.4 | 2.5 |
| 31 December 2012 | 5.0 | 5.4 | 3.5 |
| 31 December 2013 | 5.0 | 5.4 | 5.0 |
| 31 December 2014 | 5.0 | 5.4 | 5.0 |
| 31 December 2015 | 5.0 | 5.4 | 7.5 |
| 31 December 2016 | 5.0 | 5.4 | 7.5 |
| 31 December 2017 | 4.0 | 4.3 | 6.0 |
| 30 June 2018 | 2.0 | 2.1 | 3.0 |
| Total dividends paid to 30 June 2018 | 93.8 | 82.9 | 41.0 |
| Net asset value as at 30 June 2018 | 80.9 | 86.7 | 121.1 |
| Total shareholder return to 30 June 2018 | 174.7 | 169.6 | 162.1 |
The Directors have declared a second dividend for the year ending 31 December 2018 of 2.0 pence per Ordinary share payable on 28 September 2018 to shareholders on the register on 14 September 2018.
(i) Assuming subscription for Ordinary shares by the First Closing on 26 January 1999.
(ii) Excludes tax benefits upon subscription.
(iii) Those subscribing for C shares after 30 June 2003 were not entitled to the interim dividend.
(iv) The C shares were converted into Ordinary shares on 31 March 2007, with a conversion ratio of 1.0715 Ordinary shares for each C share. The net asset value per share and all dividends paid subsequent to the conversion of the C shares to the Ordinary shares are multiplied by the conversion factor of 1.0715 in respect of the C shares return, in order to give an accurate picture of the shareholder value since launch relating to the C shares. (v) The D shares were converted into Ordinary shares on 31 March 2015, with a conversion ratio of 1.4975 Ordinary shares for each D share. The net asset value per share and all dividends paid subsequent to the conversion of the D shares to the Ordinary shares are multiplied by the conversion factor of 1.4975 in respect of the D shares return, in order to give an accurate picture of the shareholder value since launch relating to the D shares.
Notes
I am delighted to present the results for Albion Development VCT PLC for the six months to 30 June 2018, which show a positive total return of 9.3 pence per share (12.6% on opening net asset value) compared to 2.7 pence per share for the same period in the previous year.
As at 30 June 2018, the net asset value per Ordinary share was 80.9 pence (30 June 2017: 71.3 pence; 31 December 2017: 73.8 pence). The uplift in net asset value is a result of gains on investments of £7.5 million during the period. Details of the changes in value of investments can be found in the portfolio of investments section on pages 8 to 10.
The results for the six months to 30 June 2018 showed a particularly strong return. This was principally due to the sale of our investment in Grapeshot, at a total return of around ten times cost, and to a sharp write-up of our investment in Quantexa, following a new funding round in July, led by a third party investor, in which the Company participated.
£2.8 million was invested into new and existing portfolio companies, with new investments comprising £272,000 into Koru Kids (an online marketplace connecting parents and nannies), £200,000 into uMotif (which delivers mobile patient data solutions, primarily used in medical research and development) and £100,000 into Healios (provider of an online platform delivering family centric psychological care primarily to children and adolescents). Amongst existing portfolio companies, we contributed a further £899,000 to Sandcroft Avenue (PayasUGym.com), £309,000 to Panaseer, £239,000 to Black Swan Data, £180,000 to InCrowd Sports and £175,000 to Convertr Media.
The Board is pleased to announce that the total return for the former D shares is currently exceeding the targets set and accordingly a performance incentive fee of £256,000 has been accrued. The final amount of the fee will be dependent on year end results.
Comparatives for 31 December 2017 are shown in brackets Source: Albion Capital Group LLP
A first dividend of 2.0 pence per share was paid on 31 May 2018. The Directors have declared a second dividend of 2.0 pence per share payable on 28 September 2018, to shareholders on the register on 14 September 2018. This is line with current annual dividend target of 4.0 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.
The uncertainty over the process and implications of the withdrawal of the UK from the European Union remains a risk, added to which is muted economic growth and rising interest rates. However, the Manager is clear in focusing efforts to allocate resources to those sectors and opportunities where growth can be both resilient and sustainable.
Other principal risks and uncertainties remain unchanged and are as detailed on pages 15 and 16 of the Annual Report and Financial Statements for the year ended 31 December 2017.
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.
It is the Board's intention for 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.
The Company was pleased to announce on 26 February 2018 that it had reached its £6 million limit under the Albion VCTs Prospectus Top Up Offers 2017/18 which was fully subscribed and closed.
The proceeds of the Offer are being deployed into new investments as mentioned above, and supporting further funding of existing portfolio companies to support growth.
Details of the transactions that took place with the Manager in the period can be found in note 5. Details of related party transactions can be found in note 11.
The Board remains highly encouraged by the performance of a number of companies within the investment portfolio and by the quality of the new investments being made. The Board will continue to keep the level of dividend under review, and in particular whether any increase would be sustainable for the longer term.
Geoffrey Vero Chairman 4 September 2018
The Directors, Geoffrey Vero, Lyn Goleby, Ben Larkin and Patrick Reeve, are responsible for the preparation of the Half-yearly Financial Report. In preparing these condensed Financial Statements for the period to 30 June 2018 we, the Directors of the Company, confirm that to the best of our knowledge:
(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
For and on behalf of the Board
Geoffrey Vero Chairman 4 September 2018
The following is a summary of fixed asset investments as at 30 June 2018:
| Fixed asset investments | % voting rights |
Cost £'000 |
Cumulative movement in value £'000 |
Value £'000 |
Change in value for the period* £'000 |
|---|---|---|---|---|---|
| Unquoted investments | |||||
| Radnor House School (Holdings) Limited | 8.8 | 2,728 | 3,209 | 5,937 | 31 |
| Egress Software Technologies Limited | 7.6 | 1,422 | 1,794 | 3,216 | – |
| Quantexa Limited | 2.8 | 315 | 2,284 | 2,599 | 2,284 |
| Chonais River Hydro Limited | 4.6 | 1,705 | 667 | 2,372 | 262 |
| Proveca Limited | 11.4 | 1,084 | 1,223 | 2,307 | (108) |
| The Street by Street Solar Programme Limited | 12.4 | 1,291 | 866 | 2,157 | 92 |
| Regenerco Renewable Energy Limited | 11.9 | 1,204 | 641 | 1,845 | 31 |
| Alto Prodotto Wind Limited | 9.4 | 820 | 585 | 1,405 | 120 |
| Bravo Inns II Limited | 6.7 | 1,080 | 322 | 1,402 | 80 |
| G.Network Communications Limited | 9.1 | 850 | 532 | 1,382 | 532 |
| Mirada Medical Limited | 7.8 | 659 | 706 | 1,365 | 113 |
| Earnside Energy Limited | 6.8 | 1,089 | 182 | 1,271 | 6 |
| Sandcroft Avenue Limited | 6.6 | 1,191 | 47 | 1,238 | 33 |
| Convertr Media Limited | 6.3 | 875 | 260 | 1,135 | 309 |
| MyMeds&Me Limited | 9.9 | 939 | 148 | 1,087 | (5) |
| Zift Channel Solutions Inc. | 1.7 | 885 | 158 | 1,043 | 158 |
| MPP Global Solutions Limited | 3.4 | 1,000 | – | 1,000 | – |
| Women's Health (London West One) Limited | 7.5 | 933 | – | 933 | – |
| Albion Investment Properties Limited | 68.2 | 929 | (77) | 852 | 22 |
| Beddlestead Limited | 8.6 | 850 | (1) | 849 | (1) |
| Black Swan Data Limited | 1.8 | 848 | – | 848 | – |
| Oviva AG | 3.7 | 642 | 160 | 802 | – |
| Panaseer Limited | 3.2 | 557 | 214 | 771 | 66 |
| OmPrompt Holdings Limited | 9.5 | 864 | (197) | 667 | (7) |
| DySIS Medical Limited | 3.8 | 1,006 | (511) | 495 | 70 |
| TWCL Limited | 9.4 | 518 | (27) | 491 | (12) |
| AVESI Limited | 10.5 | 340 | 145 | 485 | (2) |
| The Q Garden Company Limited | 16.6 | 466 | – | 466 | – |
| Secured by Design Limited | 2.2 | 330 | 103 | 433 | 103 |
| Process Systems Enterprise Limited | 1.3 | 131 | 295 | 426 | 4 |
| Aridhia Informatics Limited | 6.0 | 1,053 | (673) | 380 | (144) |
| Dragon Hydro Limited | 5.5 | 233 | 143 | 376 | 27 |
| Cisiv Limited | 7.3 | 566 | (273) | 293 | 1 |
| Abcodia Limited | 4.7 | 809 | (523) | 286 | (140) |
| InCrowd Sports Limited | 2.9 | 252 | 24 | 276 | 24 |
| Koru Kids Limited | 2.2 | 272 | – | 272 | – |
| MHS 1 Limited | 3.3 | 231 | – | 231 | – |
| Greenenerco Limited | 4.0 | 134 | 91 | 225 | 22 |
| uMotif Limited | 1.2 | 200 | – | 200 | – |
| memsstar Limited | 2.8 | 103 | 89 | 192 | (33) |
| Bravo Inns Limited | 2.6 | 267 | (92) | 175 | (13) |
| Locum's Nest Limited | 2.4 | 110 | 33 | 143 | 33 |
| Oxsensis Limited | 1.3 | 238 | (96) | 142 | – |
| Fixed asset investments | % voting rights |
Cost £'000 |
Cumulative movement in value £'000 |
Value £'000 |
Change in value for the period* £'000 |
|---|---|---|---|---|---|
| Innovation Broking Group Limited | 8.4 | 84 | 45 | 129 | 2 |
| Premier Leisure (Suffolk) Limited | 6.2 | 109 | 13 | 122 | (3) |
| Erin Solar Limited | 4.3 | 120 | (5) | 115 | – |
| Healios Limited | 1.0 | 100 | – | 100 | – |
| Infinite Ventures (Goathill) Limited | 0.8 | 32 | 14 | 46 | 4 |
| CSS Group Limited | 2.7 | 34 | (27) | 7 | (35) |
| Elements Software Limited | 0.6 | 3 | (3) | – | – |
| Total unquoted investments | 32,501 | 12,488 | 44,989 | 3,926 | |
| Quoted investments | |||||
| Mi-Pay Group PLC | 823 | (683) | 140 | (37) | |
| ComOps Limited | 11 | (2) | 9 | 4 | |
| Total quoted investments | 834 | (685) | 149 | (33) | |
| Total fixed asset investments | 33,335 | 11,803 | 45,138 | 3,893 |
* as adjusted for additions and disposals during the period; including realised gains/(losses).
| Total change in value of investments for the period Movement in loan stock accrued interest |
3,893 49 _ |
|---|---|
| Unrealised gains on fixed asset investments sub-total | 3,942 |
| Unrealised losses on current asset investments Realised gains in the current period |
_ (1) 3,587 _ |
| Total gains on investments as per Income statement | 7,528 |
| Current asset investments | Cost £'000 |
Cumulative movement in value £'000 |
Value £'000 |
Change in value for the period £'000 |
|---|---|---|---|---|
| SVS Albion OLIM UK Equity Income Fund | 200 | (1) | 199 | (1) |
| Total current asset investments | 200 | (1) | 199 | (1) |
| Investment realisations in the period to 30 June 2018 | Cost £'000 |
Opening value £'000 |
Disposal proceeds £'000 |
Total realised gain £'000 |
Gain on opening value £'000 |
|---|---|---|---|---|---|
| Disposals: | |||||
| Grapeshot Limited | 806 | 3,823 | 7,398 | 6,592 | 3,575 |
| Loan stock repayments/restructurings: | |||||
| MyMeds&Me Limited | 400 | 540 | 540 | 140 | – |
| OmPrompt (Holdings) Limited | 182 | 182 | 182 | – | – |
| Beddlestead Limited | 176 | 176 | 176 | – | – |
| Radnor House School (Holdings) Limited | 44 | 44 | 44 | – | – |
| Alto Prodotto Wind Limited | 9 | 14 | 14 | 5 | – |
| memsstar Limited | 5 | 5 | 5 | – | – |
| Greenenerco Limited | 3 | 4 | 4 | 1 | – |
| Escrow adjustments and other: | |||||
| Escrow adjustments | – | – | 12 | 12 | 12 |
| Total | 1,625 | 4,788 | 8,375 | 6,750 | 3,587 |
| Unaudited six months ended 30 June 2018 |
Unaudited six months ended 30 June 2017 |
Audited year ended 31 December 2017 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Note | Revenue Capital £'000 |
£'000 | £'000 | Total Revenue £'000 |
Capital £'000 |
£'000 | Total Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Gains on investments | 3 | – | 7,528 | 7,528 | – | 2,101 | 2,101 | – | 5,514 | 5,514 |
| Investment income | 4 | 375 | – | 375 | 344 | – | 344 | 689 | – | 689 |
| Investment management fee |
5 | (160) | (482) | (642) | (130) | (390) | (520) | (273) | (818) | (1,091) |
| Performance incentive fee |
5 | (64) | (192) | (256) | – | – | – | – | – | – |
| Other expenses | (117) | – | (117) | (118) | – | (118) | (221) | – | (221) | |
| Profit on ordinary activities before tax |
34 | 6,854 | 6,888 | 96 | 1,711 | 1,807 | 195 | 4,696 | 4,891 | |
| Tax (charge)/credit on ordinary activities |
– | – | – | (8) | 8 | – | (24) | 24 | – | |
| Profit and total comprehensive income attributable to shareholders |
34 | 6,854 | 6,888 | 88 | 1,719 | 1,807 | 171 | 4,720 | 4,891 | |
| Basic and diluted return per share (pence)* 7 |
0.1 | 9.2 | 9.3 | 0.1 | 2.6 | 2.7 | 0.2 | 7.0 | 7.2 |
* excluding treasury shares
The accompanying notes on pages 15 to 20 form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2017 and the audited statutory accounts for the year ended 31 December 2017.
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.
| Note | Unaudited 30 June 2018 £'000 |
Unaudited 30 June 2017 £'000 |
Audited 31 December 2017 £'000 |
|---|---|---|---|
| Fixed asset investments | 45,138 | 36,195 | 42,291 |
| Current assets | |||
| Current asset investments | 199 | – | – |
| Trade and other receivables less than one year | 979 | 304 | 477 |
| Cash and cash equivalents | 15,220 | 12,247 | 10,955 |
| 16,398 | 12,551 | 11,432 | |
| Total assets | 61,536 | 48,746 | 53,723 |
| Payables: amounts falling due within one year |
|||
| Trade and other payables less than one year | (733) | (440) | (377) |
| Total assets less current liabilities | 60,803 | 48,306 | 53,346 |
| Equity attributable to equityholders | |||
| Called up share capital 8 |
835 | 748 | 801 |
| Share premium | 28,161 | 21,923 | 25,704 |
| Capital redemption reserve | 12 | 12 | 12 |
| Unrealised capital reserve | 11,669 | 9,042 | 10,892 |
| Realised capital reserve | 11,921 | 4,693 | 5,844 |
| Other distributable reserve | 8,205 | 11,888 | 10,093 |
| Total equity shareholders' funds | 60,803 | 48,306 | 53,346 |
| Basic and diluted net asset value per share (pence)* |
80.9 | 71.3 | 73.8 |
*excluding treasury shares
The accompanying notes on pages 15 to 20 form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2017 and the audited statutory accounts for the year ended 31 December 2017.
These Financial Statements were approved by the Board of Directors and authorised for issue on 4 September 2018, and were signed on its behalf by
Geoffrey Vero Chairman Company number: 03654040
| Called up share capital £'000 |
premium £'000 |
Capital Share redemption reserve £'000 |
Unrealised capital reserve £'000 |
Realised capital reserve* £'000 |
Other distributable reserve* £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|
| As at 1 January 2018 | 801 | 25,704 | 12 | 10,892 | 5,844 | 10,093 53,346 | |
| Profit and total comprehensive | |||||||
| income for the period | – | – | – | 3,941 | 2,913 | 34 | 6,888 |
| Transfer of previously unrealised | |||||||
| gains on disposal of investments | – | – | – | (3,164) | 3,164 | – | – |
| Purchase of shares for treasury | – | – | – | – | – | (417) | (417) |
| Issue of equity | 34 | 2,515 | – | – | – | – | 2,549 |
| Cost of issue of equity | – | (58) | – | – | – | – | (58) |
| Dividends paid | – | – | – | – | – | (1,505) (1,505) | |
| As at 30 June 2018 | 835 | 28,161 | 12 | 11,669 | 11,921 | 8,205 60,803 | |
| As at 1 January 2017 | 689 | 17,886 | 12 | 7,253 | 4,763 | 13,482 | 44,085 |
| Profit/(loss) and total comprehensive | |||||||
| income for the period | – | – | – | 1,977 | (258) | 88 | 1,807 |
| Transfer of previously unrealised | |||||||
| gains on disposal of investments | – | – | – | (188) | 188 | – | – |
| Purchase of shares for treasury | – | – | – | – | – | (325) | (325) |
| Issue of equity | 59 | 4,147 | – | – | – | – | 4,206 |
| Cost of issue of equity | – | (110) | – | – | – | – | (110) |
| Dividends paid | – | – | – | – | – | (1,357) | (1,357) |
| As at 30 June 2017 | 748 | 21,923 | 12 | 9,042 | 4,693 | 11,888 | 48,306 |
| As at 1 January 2017 | 689 | 17,886 | 12 | 7,253 | 4,763 | 13,482 | 44,085 |
| Profit and total comprehensive | |||||||
| income for the period | – | – | – | 4,691 | 29 | 171 | 4,891 |
| Transfer of previously unrealised | |||||||
| gains on disposal or write off of investments | – | – | – | (1,052) | 1,052 | – | – |
| Purchase of shares for treasury | – | – | – | – | – | (855) | (855) |
| Issue of equity | 112 | 8,005 | – | – | – | – | 8,117 |
| Cost of issue of equity | – | (187) | – | – | – | – | (187) |
| Dividends paid | – | – | – | – | – | (2,705) | (2,705) |
| As at 31 December 2017 | 801 | 25,704 | 12 | 10,892 | 5,844 | 10,093 | 53,346 |
*These reserves amount to £20,126,000 (30 June 2017: £16,581,000; 31 December 2017: £15,937,000) which is considered distributable.
| Unaudited six months ended 30 June 2018 £'000 |
Unaudited six months ended 30 June 2017 £'000 |
Audited year ended 31 December 2017 £'000 |
|
|---|---|---|---|
| Cash flow from operating activities | |||
| Loan stock income received | 357 | 364 | 647 |
| Deposit interest received | 15 | 4 | 7 |
| Dividend income received | 32 | 57 | 72 |
| Investment management fee paid | (600) | (496) | (1,039) |
| Other cash payments | (135) | (131) | (217) |
| Corporation tax received | – | 3 | 3 |
| Net cash flow from operating activities | (331) | (199) | (527) |
| Cash flow from investing activities | |||
| Purchase of current asset investments | (200) | – | – |
| Purchase of fixed asset investments | (2,825) | (2,344) | (6,787) |
| Disposal of fixed asset investments | 6,965 | 2,107 | 3,746 |
| Net cash flow from investing activities | 3,940 | (237) | (3,041) |
| Cash flow from financing activities | |||
| Issue of share capital | 2,244 | 3,882 | 7,503 |
| Cost of issue of shares | (1) | (2) | (3) |
| Equity dividends paid | (1,257) | (1,142) | (2,275) |
| Purchase of own shares (including costs) | (330) | (208) | (855) |
| Net cash flow from financing activities | 656 | 2,530 | 4,370 |
| Increase in cash and cash equivalents | 4,265 | 2,094 | 802 |
| Cash and cash equivalents at start of period | 10,955 | 10,153 | 10,153 |
| Cash and cash equivalents at end of period | 15,220 | 12,247 | 10,955 |
| Cash and cash equivalents comprise: | |||
| Cash at bank and in hand | 15,220 | 12,247 | 10,955 |
| Cash equivalents | – | – | – |
| Total cash and cash equivalents | 15,220 | 12,247 | 10,955 |
The condensed 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, 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 IPEVCV Guidelines and further detail on the valuation techniques used are in note 2 below.
The 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.
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, the 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 are designated 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 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.
Debtors, creditors and cash are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than creditors.
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 when the Company's right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.
Interest income is recognised on an accruals 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 other distributable reserve except the following which are charged through the realised capital reserve:
Taxation is applied on a current basis in accordance with FRS 102. Current tax is tax payable (refundable) in respect of the taxable profit (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.
This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs.
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 period end against cost, are included in this reserve.
The following are disclosed in this reserve:
The special reserve, treasury share reserve and the revenue reserve were combined in 2012 to form a single reserve named other distributable reserve.
This reserve accounts for the movements from the revenue column of the Income statement, the payment of dividends, the buy-back of shares and other, non-capital realised movements.
Dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.
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.
| Unaudited six months ended 30 June 2018 £'000 |
Unaudited six months ended 30 June 2017 £'000 |
Audited year ended 31 December 2017 £'000 |
|
|---|---|---|---|
| Unrealised gains on fixed asset investments | 3,942 | 1,977 | 4,691 |
| Unrealised losses on current asset investments | (1) | – | – |
| Realised gains on fixed asset investments | 3,587 ––––––––––––– |
124 ––––––––––––– |
823 ––––––––––––– |
| 7,528 ––––––––––––– |
2,101 ––––––––––––– |
5,514 ––––––––––––– |
|
| 4. Investment income |
|||
| Unaudited | Unaudited | Audited | |
| six months ended | six months ended | year ended | |
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| £'000 | £'000 | £'000 | |
| Loan stock interest and other fixed returns | 328 | 285 | 611 |
| UK dividend income | 32 | 57 | 72 |
| Bank deposit interest | 15 | 2 | 6 |
| ––––––––––––– 375 |
––––––––––––– 344 |
––––––––––––– 689 |
All of the Company's income is derived from operations based in the United Kingdom.
| Unaudited six months ended 30 June 2018 £'000 |
Unaudited six months ended 30 June 2017 £'000 |
Audited year ended 31 December 2017 £'000 |
|
|---|---|---|---|
| Investment management fee charged to revenue | 160 | 130 | 273 |
| Investment management fee charged to capital | 482 | 390 | 818 |
| Performance incentive fee charged to revenue | 64 | – | – |
| Performance incentive fee charged to capital | 192 | – | – |
| ––––––––––––– 898 ––––––––––––– |
––––––––––––– 520 ––––––––––––– |
––––––––––––– 1,091 ––––––––––––– |
––––––––––––– ––––––––––––– –––––––––––––
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 page 14 of the Annual Report and Financial Statements for the year ended 31 December 2017.
During the period, services to a total value of £642,000 (30 June 2017: £520,000; 31 December 2017: £1,091,000) were purchased by the Company from Albion Capital Group LLP. At the financial period end, the amount due to Albion Capital Group LLP in respect of these services was £342,000 (30 June 2017: £272,000; 31 December 2017: £300,000). For the period to 30 June 2018, a provisional performance incentive fee of £256,000 has been accrued, however any performance incentive fee is only payable on year end results (30 June 2017: £nil; 31 December 2017: £nil).
During the period, the Company was not charged by Albion Capital Group LLP in respect of Patrick Reeve's services as a Director (30 June 2017: £nil; 31 December 2017: £nil).
Albion Capital Group LLP is, from time to time, eligible to receive arrangement fees and monitoring fees from portfolio companies. During the period ended 30 June 2018, fees of £110,000 attributable to the investments of the Company were paid pursuant to these arrangements (30 June 2017: £101,000; 31 December 2017: £222,000).
Albion Capital Group LLP, its Partners and staff (including Patrick Reeve) hold 494,259 Ordinary shares in the Company.
Additionally, following approval at the 2018 Annual General Meeting of the investment policy which permitted investment of working capital in open-ended funds to obtain equity returns, an amount of £200,000 (30 June 2017: £nil; 31 December 2017: £nil) 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 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 will result in a reduction of the management fee during the remainder of the year.
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| six months ended | six months ended | year ended | |
| 30 June 2018 | 30 June 2017 | 31 December 2017 | |
| £'000 | £'000 | £'000 | |
| Dividend of 2.0p per Ordinary share paid on 31 May 2017 | – | 1,357 | 1,357 |
| Dividend of 2.0p per Ordinary share paid on 29 September 2017 | – | – | 1,355 |
| Dividend of 2.0p per Ordinary share paid on 31 May 2018 | 1,505 | – | – |
| Unclaimed dividends | – | – | (7) |
| ––––––––––––– | ––––––––––––– | ––––––––––––– | |
| 1,505 | 1,357 | 2,705 | |
| ––––––––––––– | ––––––––––––– | ––––––––––––– |
The Directors have declared a second dividend for the year ending 31 December 2018 of 2.0 pence per Ordinary share (total approximately £1,503,000), payable on 28 September 2018 to shareholders on the register on 14 September 2018.
| Unaudited six months ended 30 June 2018 |
Unaudited six months ended 30 June 2017 |
Audited year ended 31 December 2017 |
||||
|---|---|---|---|---|---|---|
| Ordinary shares | Revenue | Capital | Revenue | Capital | Revenue | Capital |
| Return attributable to Ordinary shares (£'000) | 34 | 6,854 | 88 | 1,719 | 171 | 4,720 |
| Weighted average shares in issue | 74,379,984 | 66,871,021 | 67,848,906 | |||
| Return per Ordinary share (pence) | 0.1 | 9.2 | 0.1 | 2.6 | 0.2 | 7.0 |
The weighted average number of shares is calculated excluding treasury shares of 8,409,700 (30 June 2017: 7,039,700; 31 December 2017: 7,818,700).
There are no convertible instruments, derivatives or contingent share agreements in issue hence there are no dilution effects to the return per share. The basic return per share is therefore the same as the diluted return per share.
| Unaudited 30 June 2018 |
Unaudited 30 June 2017 |
Audited 31 December 2017 |
|
|---|---|---|---|
| Allotted, called up and fully paid Ordinary shares of 1 penny each | |||
| Number of shares | 83,543,578 | 74,804,925 | 80,135,559 |
| Nominal value of allotted shares (£'000) | 835 | 748 | 801 |
| Voting rights (number of shares net of treasury shares) | 75,113,878 | 67,765,225 | 72,316,859 |
During the period to 30 June 2018 the Company purchased 591,000 Ordinary shares (nominal value £5,910) for treasury at a cost of £417,000. The total number of Ordinary shares held in treasury as at 30 June 2018 was 8,409,700 (30 June 2017: 7,039,700; 31 December 2017: 7,818,700) representing 10.1 per cent. of the Ordinary shares in issue as at 30 June 2018.
Under the terms of the Dividend Reinvestment Scheme Circular dated 27 August 2008, the following new Ordinary shares, of nominal value 1 penny each, were allotted:
| Date of allotment | Aggregate nominal value |
Issue price | Net | Opening market price on allotment |
|
|---|---|---|---|---|---|
| Number of shares allotted |
of shares (£'000) |
(pence per share) |
invested (£'000) |
date (pence per share) |
|
| 31 May 2018 | 324,995 | 3 | 76.2 | 246 | 72.5 |
Under the terms of the Albion VCTs Prospectus Top Up Offers 2017/18, the following new Ordinary shares, of nominal value 1 penny each, were allotted during the period to 30 June 2018:
| Number of shares allotted |
Aggregate nominal value of shares (£'000) |
Issue price (pence per share) |
Net consideration received (£'000) |
Opening market price on allotment date (pence per share) |
|---|---|---|---|---|
| 1,903,510 | 19 | 74.0 | 1,373 | 68.5 |
| 964,862 | 10 | 75.7 | 712 | 68.5 |
| 76,930 | 1 | 75.0 | 57 | 67.0 |
| 7,692 | – | 75.4 | 6 | 67.0 |
| 130,030 | 1 | 75.7 | 96 | 67.0 |
| 3,083,024 | 31 | 2,244 | ||
| ––––––––––– ––––––––––– |
––––––––––– ––––––––––– |
––––––––––– ––––––––––– |
As at 30 June 2018, the Company had no financial commitments in respect of investments (30 June 2017: £14,000; 31 December 2017 £nil).
There were no contingencies or guarantees of the Company as at 30 June 2018 (30 June 2017: £nil; 31 December 2017: £nil).
Since 30 June 2018, the Company has completed the following transactions:
In November 2016, Albion acquired OLIM Investment Managers ("OLIM"), a specialist fund manager of UK quoted equities. During the period, a total of £200,000 (30 June 2017: £nil; 31 December 2017: £nil) was invested into the SVS Albion OLIM UK Equity Income Fund ("OUEIF") following shareholder approval at the 2018 Annual General Meeting.
Albion agreed to reduce that proportion of 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 will result in a reduction of the management fee during the remainder of the year.
Other than transactions with the Manager as disclosed in note 5 and that disclosed above, there are no other related party transactions or balances requiring disclosure.
The Board's assessment of liquidity risk remains unchanged since the last Annual Report and Financial Statements for the year ended 31 December 2017 and is detailed on page 63 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 buybacks) 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.
The information set out in this Half-yearly Financial Report does not constitute the Company's statutory accounts within the terms of section 435 of the Companies Act 2006 for the periods ended 30 June 2018 and 30 June 2017 and is unaudited. The information for the year ended 31 December 2017, does not constitute statutory accounts within the terms of section 435 of the Companies Act 2006 but is derived from the audited statutory accounts for the financial year, which have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.
This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion.capital/funds/AADV, where the Report can be accessed from the 'Financial Reports and Circulars' section.
A member of The Association of Investment Companies
This report is printed on Amadeus offset a totally recycled paper produced using 100% recycled waste at a mill that has been awarded the ISO 14001 certificate for environmental management. The pulp is bleached using a totally chlorine free (TCF) process.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.