Interim / Quarterly Report • Mar 31, 2012
Interim / Quarterly Report
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for the six months ended 31 March 2011 or tf he 3 for the six months ended 31 March 2012
The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maximising the stream of dividend distributions to Shareholders from the income and capital gains generated by the portfolio.
It is also the objective that the Company should continue to qualify as a Venture Capital Trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 70% of the Company's total assets are to be invested in qualifying investments of which 30% by value must be in ordinary shares carrying no preferential rights to dividends or return of capital and no rights to redemption.
In order to achieve the Company's Investment Objective, the Board has agreed an Investment Policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM that display a majority of the following characteristics:
Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. Specific conditions for HMRC approval of VCTs include the requirement that no single holding may represent more than 15% (by value) of the Company's total investments and cash, at the date of investment.
The Investment Manager is responsible for managing sector and stock specific risk and the Board does not impose formal limits in respect of such exposures. However, in order to maintain compliance with HMRC rules and to ensure that an appropriate spread of investment risk is achieved, the Board receives and reviews comprehensive reports from the Investment Manager and the Administrator on a monthly basis. When the Investment Manager proposes to make an investment in an unquoted company, the prior approval of the Board is required.
Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or in excess of the 70% VCT qualification threshold, it may be invested in collective investment funds or in non-qualifying shares and securities in smaller listed UK companies.
To date the Company has operated without recourse to borrowing. The Board may however consider the possibility of introducing modest levels of gearing up to a maximum of 10% of the adjusted capital and reserves, should circumstances suggest that such action is in the interests of shareholders.
As at 31 March 2012
| As at 31 March 2012 | Net assets (£ million) |
Net asset value per share (NAV) (p) |
Cumulative dividends paid per share (p) |
NAV total return to shareholders since launch per share (p) |
Share price (p) |
|---|---|---|---|---|---|
| Ordinary Shares | |||||
| 31st March 2012 | 56.6 | 97.4 | 10.0 | 107.4 | 70.0 |
| 30th September 2011 | 60.4 | 103.3 | 5.0 | 108.3 | 86.3 |
| 31st March 2011 | 64.6 | 109.5 | 5.0 | 114.5 | 97.5 |
| 30th September 2010 | 62.3 | 104.2 | 1.0 | 105.2 | 85.5 |
| 31st March 2010 | 58.0 | 94.6 | 1.0 | 95.6 | 73.0 |
Most shareholders in the Company originally invested in one of the five former share classes of either the Company and/or Unicorn AIM VCT II plc. As a result of the merger of all five former share classes in March 2010, all shareholders now only hold Ordinary shares, these were formerly called S3 shares. To enable such shareholders in each former share class to monitor the performance of their original investment, the table below shows the NAV total return at 31 March 2012 for a shareholder that invested £10,000 at £1 per share at the date of launch of a particular fundraising, excluding any initial income tax relief received:
| Share class and year of fundraising | No. of shares held post merger |
NAV at 31 March 2012 (£) |
Dividends paid pre-merger (£) |
Dividends paid post-merger (£) |
NAV total return (£) |
|---|---|---|---|---|---|
| Ordinary Shares | |||||
| (raised in 2011, issued at average price of 116p) | 8,620 | 8,397 | n/a | 431 | 8,828 |
| Ordinary Shares (formerly S3 Shares raised in 2006/07) | 10,000 | 9,742 | 100 | 900 | 10,742 |
| Original Ordinary Shares (raised in 2001) | 6,078 | 5,921 | 4,550 | 547 | 11,018 |
| Original Ordinary Shares 2007/08 top-up | |||||
| (13,890 shares issued for £10,000 investment at 72p per share) 8,442 | 8,224 | 903 | 759 | 9,886 | |
| Series 2 Shares (raised in 2004) | 7,750 | 7,550 | 2,125 | 697 | 10,372 |
| Series 2 Shares 2007/08 top-up (10,870 shares issued for £10,000 investment at 92p per share) 8,424 |
8,206 | 489 | 758 | 9,453 |
| Share class and year of fundraising | No. of shares held post merger |
NAV at 31 March 2012 (£) |
Dividends paid pre-merger (£) |
Dividends paid post-merger (£) |
NAV total return (£) |
|---|---|---|---|---|---|
| Ordinary Shares (raised in 2005) | 8,283 | 8,069 | 1,300 | 745 | 10,114 |
| Ordinary Shares 2007/08 top-up | |||||
| (10,205 shares issued for £10,000 investment at 98p per share) 8,452 | 8,234 | 1,225 | 760 | 10,219 | |
| C Shares (raised in 2006) | 7,267 | 7,079 | 245 | 654 | 7,978 |
| C Shares 2007/08 top-up | |||||
| (11,235 shares issued for £10,000 investment at 89p per share) | 8,165 | 7,954 | 169 | 734 | 8,857 |
Initial income tax relief of up to 20% was available for shareholders that invested in tax years 2001/2002 or 2003/2004, 40% for shareholders that invested in 2004/2005 and 2005/2006 and 30% for shareholders that invested in tax years since 2006/2007. Additional capital gains tax deferral relief was also available for shareholders that invested in 2001/2002 and 2003/2004.
As at 31 March 2012
| Ordinary (formerly S3) Shares (pence) |
Original Ordinary Shares (pence) |
S2 Shares (pence) |
Unicorn VCT II Ordinary Shares (pence) |
Unicorn VCT II C Shares (pence) |
|
|---|---|---|---|---|---|
| Calendar year paid | |||||
| 2012* | 5.00 | 3.04* | 3.88* | 4.14* | 3.63* |
| 2011* | 4.00 | 2.43* | 3.10* | 3.31* | 2.91* |
| 2010 | – | 3.50 | 2.50 | 6.00 | 0.45 |
| 2009 | 1.00 | 3.00 | 2.00 | 1.00 | – |
| 2008 | – | – | 5.00 | 5.00 | 1.00 |
| 2007 | – | 12.55 | 10.00 | 0.50 | 1.00 |
| 2006 | – | 10.00 | 1.00 | 0.50 | – |
| 2005 | – | 5.00 | 0.75 | – | – |
| 2004 | – | 10.45 | – | – | – |
| 2003 | – | 1.00 | – | – | – |
| 10.00 | 50.97 | 28.23 | 20.45 | 8.99 |
* the dividends from 2011 onwards on the Ordinary (formerly S3) shares, are also shown for each of the former share classes, which have been calculated in proportion to the merger conversion ratios.
I am pleased to present the Half-Yearly Report of the Company for the six month period ended 31 March 2012.
The net assets of the Company as at 31 March 2012 were £56.62m, which, after adding back dividends paid, share buybacks and share issues in the period, is 1% lower than the audited net asset figure of £60.4m as at 30 September 2011. During this six month period, a total of £2.92m was paid to shareholders by way of dividends, whilst a further £252,000 was applied to funding normal share buybacks. Net asset value was 97.4 pence per share at period end compared to 103.3 pence per share at the start of the period, a fall of 5.7%. However, a dividend of 5 pence per share was paid in the period, so total net asset value return per share to shareholders fell by 0.9%.
An Enhanced Buyback Facility and Top Up Offer was also introduced and completed during the period. Over four million shares were tendered under the Enhanced Buyback Facility and the maximum permitted number of shares were bought back at 93.95 pence per share with the net proceeds of £3,866,249 immediately being applied to the allotment and issue of 3,984,260 new shares to participating shareholders. A further £106,222 (including reinvested commission) was subscribed for 105,767 new ordinary shares, which were issued to investors applying for shares directly under the Top Up Offer.
The introduction of an Enhanced Buyback Facility was swiftly and enthusiastically supported by existing shareholders resulting in the Top Up Offer being significantly oversubscribed. In light of this successful uptake, the Board intends to implement such schemes in the future, subject to prevailing legislation and circumstances permitting. In the meantime, I would like to take this opportunity to welcome all new shareholders and to thank existing shareholders for their continued support.
In relative performance terms, the period under review has been a challenging one for the Company's investment portfolio. Net Asset Value per share (after adjusting for the dividend of 5 pence per share paid in the period) remained broadly static over the six month period, whilst the FTSE All-Share and the FTSE AIM All-Share Indices delivered total returns of 15.0% and 13.9% respectively. Encouragingly, net asset value (after adding back dividends paid) increased by 5.5% in the final three months of the period, almost fully recovering the negative total return delivered in the three months to the end of December 2011.
Economic fragility, concern over the debt levels of Eurozone Member States and mounting fears that Greece will be forced to exit the Euro entirely, remain dominant and recurring themes. Unsurprisingly, investor confidence remains at a low ebb and this nervousness is being reflected in the continued volatility of UK equity markets as a whole. An apparent improvement in the outlook for economic growth and agreement on the terms of a financial bailout package for Greece triggered a sustained market rally between the middle of December 2011 and the end of March 2012. The performance of the FTSE AIM All-Share Index was particularly strong during this period, rising by over 15%. However, since the end of the period under review, there has been a rapid worsening in sentiment as Eurozone fears resurfaced and equity markets have fallen sharply as a result.
The performance of the Company's investment portfolio reflected the wider market volatility, but was also further held back by disappointing share price declines from a small number of VCT qualifying holdings. A review of the main contributors to performance follows (bracketed figures represent the percentage share price movement over the half-year period on a bid price basis):-
Abcam (-3.3%) is a global leader in the supply of therapeutic antibodies and protein research tools. By value, Abcam remains the largest single holding in the portfolio. During the period under review, Abcam's share price fell slightly resulting in significant underperformance relative to the wider market. This underperformance occurred despite the release of yet another strong set of financial results. In the six month period ended 31 December 2011, Abcam's revenues grew by 13.5% to £44.7m, whilst profit before tax, increased 15.9% to £17.6m. Abcam remains a highly cash generative business and net cash balances as at the period end increased by £9.1m to £56m.
Access Intelligence (+41%) comprises a group of Software as a Service (Saas) businesses that deliver compliance solutions to the public and private sectors. This company's strategy has been to acquire growth businesses in targeted sectors and then build value through driving organic growth and increasing crossselling opportunities. Following a disappointing performance from an acquired compliance training business, significant management changes were implemented and the Group's prospects appear to have stabilised. In the year ended 30 November 2011, turnover was flat at £7.2m, whilst losses after tax on continuing operations were £92,000; a figure much improved from the loss before tax of £1.6m recorded in the previous financial year. Following completion of the disposal of a subsidiary, the Group entered the new financial year with net cash balances of almost £3m. Access Intelligence retains a loyal and sizeable customer base from which it derives predictable recurring revenues, which currently represent 66% of annual turnover. In addition, the Group has returned to the dividend list, reflecting management's increased confidence in its prospects.
Accumuli (+31%) is a provider of advanced IT security services. In a pre-close period statement issued in April 2012, the Board reported that the business had achieved a strong set of results for the financial year ended 31 March 2012. Group revenues are expected to be in excess of £12.5m, whilst earnings before interest, tax, depreciation and amortisation are reported to be around £2m. The business remains highly cash generative and cash balances at the financial year end were expected to be around £2m, despite a cash payment of £2.7m to the vendors of an acquired business.
Avingtrans (+24%) designs, manufactures and supplies critical components to the medical, energy, industrial and global aerospace sectors. In February, Avingtrans announced interim results for the six months to 30 November 2011, which revealed revenue growth of 20% to £20.2m and fully diluted earnings up by 67% to 3p per share. Encouragingly, the order book was reported as being close to record levels.
Driver Group (+77%) is a global construction consultancy, which has undergone significant restructuring over the past 18 months in an effort to counter a prolonged decline in its traditional construction markets. The benefits of this restructuring are reported as being better than management had originally anticipated. Given the continued strength of trading and secured workload, the Board of Driver Group now believes that results for the current financial year will exceed management's previous expectations.
Green Compliance (-64%) provides compliance services across the water hygiene, pest control and fire protection segments to a wide range of clients in both the UK public and private sectors. Following the release of a disappointing half yearly report in December, this company's share price suffered a significant decline. The Group has clearly not been immune from the difficulties encountered in the wider UK economy, but encouragingly it has recently been successful in winning new contracts at acceptable margins. The bid pipeline is also reported as being robust with a number of further significant opportunities currently at advanced stages of negotiation. Green Compliance recently announced that it expects to report a solid trading outcome for the year ended 31 March 2012 in line with management expectations.
HML Holdings (+84%) is a property management services group. In October, HML announced interim results for the six months to 30 September 2011, which confirmed another period of solid growth with revenues up 6% and operating profit ahead by 20%. In November 2011, HML completed a placing of new VCT qualifying shares in order to help fund the acquisition of a complementary, privately owned, property management business based in West London. Unicorn AIM VCT originally invested in HML in July 2007 and a further £83,000 of capital was committed in this secondary fundraising round.
Idox (+36%) is a leading independent supplier of software and services to the UK public sector and other markets. In the financial year ended 31 October 2011, Idox reported revenues up 23% to £38.6m, whilst adjusted pre-tax profit rose by 36% to £10.9m. A series of successfully integrated acquisitions has enabled the Group to extend their core technology skills into a number of new and highly regulated, asset intensive industries. In particular, Idox is now positioned as a key vendor in the engineering document management market, with a global presence and the capability to offer both enterprise wide and Software as a Service (SaaS) to a growing customer base. This strategy of diversifying revenue streams both operationally and geographically ought to enhance the Group's growth prospects whilst offering further resilience in the currently challenging economic environment.
Instem Life Science Systems (-25%) is a software company focused on the life sciences and biotechnology markets. Following a mildly negative trading update released in January 2012, Instem's share price fell by more than 25%. Preliminary results for the year ended 31 December 2011 were subsequently announced at the end of March 2012 and revealed that adjusted operating profit had fallen by 13% to £2m on sales up 7.9% to £10.8m. Revenue growth was lower than anticipated and this had a disproportionate impact on profitability because it followed a period of significant investment in both people and product development. Despite this temporary setback, Instem remains a robust, profitable and cash generative business that has performed well in difficult market conditions. Recurring revenues account for over 70% of total turnover, which provides a high level of visibility, whilst management have confirmed that they are also pursuing a strong pipeline of new business opportunities in the current financial year.
Mattioli Woods (-25%) is a specialist pensions consultancy and wealth management business. Interim results for the period ended 30 November 2011 showed revenues up by 17% to £8.7m, whilst adjusted profit before tax fell by 17.4% to £2m. The contraction in margin occurred as a result of increased investment in the business to secure continued growth. At the same time, the Group experienced a slowdown in investment activity amongst its client base, as uncertainty surrounding the Eurozone crisis persisted. The Board remains confident that the Group can maintain its unbroken record of revenue and profit growth for the full year and has increased the dividend at the interim stage by 12.1% to reflect this positive outlook.
Snacktime (-25%) is the third largest vending company in the UK. As it entered the final quarter of 2011, Snacktime reported a promising sales outlook. Unfortunately, it subsequently proved difficult to convert expected orders into firm contracts. As a result, machine sales and coinage revenue for the year ended 31 March 2012 were below market expectations. The impact of these factors, combined with some unplanned rises in costs, will mean results for the year ended 31 March 2012 are likely to be materially below market expectations. The Board remains confident that the financial year to 31 March 2013 will show an improvement in performance and profitability, despite the current economic climate. Snacktime remains within its banking covenants and is reported to have in excess of £2m of unused facilities.
The non-qualifying portfolio continued to perform satisfactorily. Among the more notable share price gains recorded in the period were:-
Brady (+25%), a leading global provider of trading, risk management and settlement solutions to the energy, metals and soft commodities sectors. In the financial year ended 31 December 2011, Brady increased turnover by 72% to over £19m, whilst operating profit increased by 56% to £2.3m. During the period, operational highlights included the successful integration of an energy related risk management business, 14 significant new licence contracts and successful completion of 25 new installations and customer upgrades. Brady continues to enjoy high visibility with over 50% of annual revenues being generated on a recurring basis.
Portmeirion Group (+17%) is a major force in the 'homewares' industry and one of the last remaining manufacturers of fine china and porcelain in the UK. Portmeirion owns iconic brands such as Royal Worcester and Spode and controls an extensive archive of designs stretching back over 250 years. In the financial year ended 31 December 2011, Portmeirion delivered record revenues of £53.6m, an increase of 5% on the previous year, whilst profit before exceptional items and tax increased by 16% to £6.3m. The Group also continues to generate attractive free cash flow with cash balances increasing up to £6.8m at the period end. Total dividends for the year were increased by 12.6% to a record 19.6 pence per share.
Renold (+32%) is a manufacturer of industrial chains and related power transmission products. Its products are sold worldwide and are installed across a wide variety of industrial applications. A trading update issued in February 2012 highlighted that both the Torque Transmission and Chain divisions are delivering sales growth and that in the third quarter of Renold's financial year, operational gearing and the conversion of incremental revenue into additional profitability was continuing the encouraging trend of the first half.
Scapa Group (+44%) is a leading manufacturer of technical adhesive tapes. The business was severely impacted by a steep decline in demand during the recession, in particular from the automotive market, resulting in significant losses and a growing level of net debt. Following a change in management eighteen months ago, the business has stabilised and as a result there has been continued improvement in financial performance. The positive momentum achieved in the first half of the year has been maintained and the Board remains confident of reporting on further profit progress for the financial year ended 31 March 2012.
There were two investments in the non-qualifying portfolio which performed particularly poorly:-
ATH Resources (-58%), is one of the UK's last remaining coal producers. Despite coming out of a number of unattractive fixedprice, legacy coal supply contracts, ATH continues to encounter significant challenges. In particular, demand remains low following an unusually mild winter, whilst rapidly rising fuel costs and falling coal prices are impacting negatively on margins.
Specialist Energy Group (-38%) is a niche manufacturer of boiler circulation pumps for use primarily in the energy sector. Delays in manufacturing and problems surrounding the quality of certain third-party supplied castings impacted the half year numbers to 30 June 2011. Since this time, manufacturing issues have been resolved, new order intake has improved and a £5m placing at a significant premium to the underlying share price has been announced.
The Investment Manager has retained these holdings in the belief that they can recover value in due course although progress on this front continues to be closely monitored.
During the period, no new investments were made.
Partial disposals of a number of holdings were made across both the qualifying and non-qualifying portfolios in order to crystallise capital gains whilst also raising sufficient cash to meet the dividend payment to shareholders made in February 2012. In the non-qualifying portfolio, holdings in Advanced Medical Solutions, Murgitroyd, Parseq, SSE and Unicorn UK Income Fund were disposed of in their entirety, whilst weightings in Augean, HML Holdings and Renold were increased to reflect their improving prospects.
In aggregate, the Company remains well above the VCT qualifying threshold required by HM Revenue & Customs, with approximately 77.5% of total assets, as calculated in accordance with VCT rules, being invested in VCT qualifying companies. All other HM Revenue & Customs tests have been complied with and your Board has been advised by PWC that the Company has maintained its venture capital trust status.
The Board is not proposing an interim dividend, but will consider the payment of a final dividend when reviewing the results for the full year.
Equity markets were generally buoyant in the first three months of 2012. Since the period end however, this recovery has stalled as confidence in the future of the Eurozone reached new lows and the UK officially returned to economic recession. There will doubtless be further twists and turns on the slow and painful
road to recovery and it is therefore likely that volatility in equity markets will remain a feature. However, the attractions of alternative asset classes remain limited. The continuing low interest rate environment means that inflation-adjusted returns from cash and bonds are still likely to be in negative territory, whilst speculative investment in precious metals, such as gold, appears to have run its course. In addition, UK equity indices remain attractively valued, especially at the smaller end of the market. For example, the FTSE SmallCap Index entered the new year trading on around 7.5x prospective earnings for calendar 2012 (Source:- MSCI, Bloomberg).
Economic conditions in the UK continue to be difficult, but the Investment Manager's focus on well managed, profitable and cash generative businesses with strong leadership positions in niche, growing markets has served the Company well through previous challenging periods. Smaller businesses also often have surprisingly significant international exposure and can therefore avoid being overly dependent on either domestic consumer or public sector spending. The positive effects of reduced competition and precautionary cost reduction measures are starting to be reflected in improved profitability among many smaller quoted companies. There is also some evidence of increasing appetite for specialist products and services that have the capability to deliver a rapid return on investment. Finally, a number of favourable changes to the types of qualifying companies in which a VCT can invest are also expected to be introduced in the coming tax year, which should further increase the attractions of VCT investment. If passed into law, these changes will be helpful and are to be welcomed. In time, they may also act as a significant catalyst for further renewed interest in the VCT market as a whole. These changes, combined with attractive valuations for smaller companies and an improvement in the economic climate, would all make an attractive case for investing in an established AIM focused VCT.
Unicorn AIM VCT remains the largest AIM focused VCT in the market with net assets of £56.6m at the period end. Although the six month period under review has been a challenging one in relative performance terms, the longer term track record is strong. The portfolio contains a diverse range of companies, the majority of which are profitable and debt free, trading conditions in certain sectors have begun to show signs of improvement, whilst the management teams of our investee companies are generally expressing cautious optimism regarding prospects. The recent inconclusive elections in Greece have, however, re-ignited fears of a disorderly exit from the Euro, which could in turn trigger a domino effect amongst weaker European Member States. This scenario would clearly be unhelpful for economic recovery and equity markets would almost certainly react negatively. It is therefore to be hoped that the political leaders in Europe can swiftly reach agreement on a controlled and workable solution. In this scenario, the Investment Manager would be confident of delivering growth in net assets in the second half of your Company's financial year. However, given the current and significant uncertainties, the main focus will remain on capital preservation. The Investment Manager will therefore maintain a conservative, selective and risk-averse approach when assessing new investment opportunities. In addition, the diversified nature of the existing portfolio should provide meaningful protection against both sector and stock specific risk. The longer term aim remains to continue building the capital and revenue reserves available for tax free distribution to shareholders.
Peter Dicks Chairman 17 May 2012
In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the year ended 30 September 2011.
The principal risks faced by the Company are:
A more detailed explanation of these can be found in the Directors' Report on page 25 and 26 of the 2011 Annual Report and Accounts – copies can be found via the Company's website, www.unicornaimvct.com.
There were no related party transactions during the period under review.
The Directors confirm that to the best of their knowledge:
For and on behalf of the Board:
Peter Dicks Chairman 17 May 2012
as at 31 March 2012
| Qualifying investments | Book | Valuation | % of |
|---|---|---|---|
| cost £'000 |
£'000 | net assets by value |
|
| AIM/PLUS quoted investments: Abcam plc |
2,225 | 7,820 | 13.8% |
| Animalcare Group plc | 1,620 | 2,483 | 4.4% |
| Surgical Innovations plc | 331 | 2,114 | 3.7% |
| Anpario plc | 1,766 | 1,890 | 3.3% |
| Mattioli Woods plc | 1,680 | 1,832 | 3.2% |
| Idox plc | 500 | 1,500 | 2.6% |
| Tracsis plc | 838 | 1,312 | 2.3% |
| Cohort plc | 1,414 | 1,297 | 2.3% |
| Avingtrans plc | 996 | 996 | 1.8% |
| Instem plc | 985 | 933 | 1.6% |
| Access Intelligence plc | 1,467 | 802 | 1.4% |
| Pressure Technologies plc | 980 | 747 | 1.3% |
| Green Compliance plc | 2,100 | 742 | 1.3% |
| HML Holdings plc | 431 | 715 | 1.3% |
| Zetar plc | 772 | 703 | 1.2% |
| Accumuli plc | 400 | 677 | 1.2% |
| Sinclair Pharma plc (formerly IS Pharma) | 704 | 630 | 1.1% |
| SnackTime plc | 2,102 | 627 | 1.1% |
| Tristel plc | 878 | 572 | 1.0% |
| Sanderson Group plc | 770 | 539 | 1.0% |
| Vindon Healthcare plc | 475 | 523 | 0.9% |
| Vianet plc | 584 | 504 | 0.9% |
| Maxima Holdings plc | 2,251 | 491 | 0.9% |
| Omega Diagnostics plc | 500 | 417 | 0.7% |
| Hasgrove plc | 975 | 413 | 0.7% |
| Driver Group plc | 552 | 390 | 0.7% |
| eg solutions plc | 406 | 359 | 0.6% |
| Prologic plc | 806 | 344 | 0.6% |
| Lees Foods plc | 260 | 286 | 0.5% |
| Printing.com plc | 231 | 208 | 0.4% |
| Datong Electronics plc | 784 | 195 | 0.3% |
| Belgravium Technologies plc | 263 | 194 | 0.3% |
| Dillistone Group plc | 106 | 178 | 0.3% |
| Hangar 8 plc Tangent Communication plc |
250 163 |
175 173 |
0.3% 0.3% |
| Brady plc | 112 | 167 | 0.3% |
| PHSC plc | 153 | 144 | 0.3% |
| Twelve investments, each valued at less than 0.3% of net assets | 3,184 | 859 | 1.5% |
| 35,014 | 34,951 | 61.4% | |
| Unlisted investments: | |||
| Access Intelligence plc – loan stock | 750 | 750 | 1.3% |
| SnackTime plc – loan stock | 550 | 550 | 1.0% |
| Optimisa plc Five investments, each valued at less than 0.2% of net assets |
– 3,157 |
112 29 |
0.2% 0.1% |
| 4,457 | 1,441 | 2.6% | |
| Total qualifying investments | 39,471 | 36,392 | 64.0% |
| Non-qualifying investments | Book cost £'000 |
Valuation £'000 |
% of net assets by value |
|---|---|---|---|
| Listed UK equities AIM quoted investments Unicorn UK Smaller Companies Fund (OEIC) Unicorn Mastertrust Fund (OEIC) Unicorn Free Spirit Fund (OEIC) Money market funds1 Invu plc – loan stock Unlisted investments Total non-qualifying investments |
6,433 5,644 3,430 1,228 827 147 200 5 17,914 |
6,260 5,621 4,879 1,800 1,328 147 100 – 20,135 |
11.2% 9.9% 8.6% 3.2% 2.3% 0.3% 0.2% 0.0% 35.7% |
| Total investments | 57,385 | 56,527 | 99.7% |
| Other assets Current liabilities |
809 (721) |
1.5% (1.2)% |
|
| Net assets | 56,615 | 100.0% |
1 Disclosed within 'current investments' under Current assets in the Balance Sheet.
for the six months ended 31 March 2012
| Six months ended 31 March 2012 | (unaudited) | Six months ended 31 March 2011 | (unaudited) | ||||
|---|---|---|---|---|---|---|---|
| Notes | Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Unrealised (losses)/gains on investments | 6 | – | (583) | (583) | – | 5,116 | 5,116 |
| Realised gains on investments | 6 | – | 173 | 173 | – | 584 | 584 |
| Income | 528 | – | 528 | 465 | – | 465 | |
| Investment management fees | 2 | (125) | (376) | (501) | (137) | (410) | (547) |
| Other expenses | (283) | – | (283) | (274) | – | (274) | |
| Profit/(loss) on ordinary activities before taxation |
120 | (786) | (666) | 54 | 5,290 | 5,344 | |
| Tax on profit/(loss) on ordinary activities | 3 | – | – | – | – | – | – |
| Profit/(loss) on ordinary activities after taxation |
120 | (786) | (666) | 54 | 5,290 | 5,344 | |
| Basic and diluted earnings/(losses) per share: | |||||||
| Ordinary Shares | 4 | 0.21p | (1.35)p | (1.14)p | 0.09p | 8.92p | 9.01p |
All revenue and capital items in the above statement derive from continuing operations of the Company.
There were no other recognised gains or losses in the period.
The total column of this statement is the profit and loss account of the Company.
Other than revaluation movements arising on investments held at fair value through Profit and Loss Account, there were no differences between the profit/(loss) as stated above and at historical cost.
The notes on pages 15 to 18 form part of these half-yearly financial statements.
| Year ended 30 September 2011 | (audited) | |
|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
| – | 781 | 781 |
| – | 1,170 | 1,170 |
| 1,103 | – | 1,103 |
| (276) | (829) | (1,105) |
| (539) | – | (539) |
| 288 | 1,122 | 1,410 |
| – | – | – |
| 288 | 1,122 | 1,410 |
| 0.48p | 1.89p | 2.37p |
as at 31 March 2012
| As at 31 March 2012 |
As at 31 March 2011 |
As at 30 September |
||
|---|---|---|---|---|
| Notes | (unaudited) £'000 |
(unaudited) £'000 |
2011 (audited) £'000 |
|
| Non current assets | ||||
| Investments at fair value | 1c,6 | 56,380 | 62,578 | 59,563 |
| Current assets | ||||
| Debtors and prepayments | 159 | 718 | 177 | |
| Current investments | 7 | 147 | 448 | 779 |
| Cash at bank | 650 | 1,164 | 650 | |
| 956 | 2,330 | 1,606 | ||
| Creditors: amounts falling due within one year | (721) | (290) | (722) | |
| Net current assets | 235 | 2,040 | 884 | |
| Net assets | 56,615 | 64,618 | 60,447 | |
| Share capital and reserves | ||||
| Share capital | 8 | 581 | 590 | 585 |
| Capital redemption reserve | 8 | 328 | 263 | 283 |
| Share premium account | 8 | 32,330 | 26,748 | 28,422 |
| Revaluation reserve | 8 | 1,319 | 7,184 | 2,685 |
| Special distributable reserve | 8 | 14,250 | 21,605 | 18,838 |
| Profit and loss account | 8 | 7,807 | 8,228 | 9,634 |
| Equity shareholders' funds | 56,615 | 64,618 | 60,447 | |
| Net asset value per share of 1p each | ||||
| Ordinary Shares | 9 | 97.41p | 109.50p | 103.34p |
The notes on pages 15 to 18 form part of these half-yearly financial statements.
for the six months ended 31 March 2012
| Notes | Six months ended 31 March 2012 (unaudited) £'000 |
Six months ended 31 March 2011 (unaudited) £'000 |
Year ended 30 September 2011 (audited) £'000 |
|
|---|---|---|---|---|
| Opening Shareholders' funds | 60,447 | 62,279 | 62,279 | |
| Net share capital bought back in the period | 8 | (4,139) | (2,233) | (4,173) |
| Net share capital subscribed in the period | 8 | 3,898 | 1,620 | 3,309 |
| (Loss)/profit for the period | (666) | 5,344 | 1,410 | |
| Dividends paid in period | 5 | (2,925) | (2,392) | (2,378) |
| Closing Shareholders' funds | 56,615 | 64,618 | 60,447 |
The notes on pages 15 to 18 form part of these half-yearly financial statements.
for the six months ended 31 March 2012
| Six months ended 31 March 2012 (unaudited) £'000 |
Six months ended 31 March 2011 (unaudited) £'000 |
Year ended 30 September 2011 (audited) £'000 |
|
|---|---|---|---|
| Operating activities | |||
| Investment income received | 529 | 722 | 1,306 |
| Other income received | – | – | 50 |
| Investment management fees paid | (501) | (546) | (1,106) |
| Other cash payments | (181) | (545) | (781) |
| Net cash outflow from operating activities | (153) | (369) | (531) |
| Investing activities | |||
| Purchase of investments | (409) | (4,904) | (7,834) |
| Sale of investments | 3,547 | 9,599 | 11,817 |
| Net cash inflow from investing activities | 3,138 | 4,695 | 3,983 |
| Dividends | |||
| Equity dividends paid to Unicorn AIM VCT plc shareholders | (2,925) | (2,392) | (2,378) |
| Cash inflow before financing and liquid resource management | 60 | 1,934 | 1,074 |
| Financing | |||
| Share capital raised | 3,942 | 1,080 | 3,309 |
| Share capital bought back | (4,634) | (2,126) | (3,678) |
| (692) | (1,046) | (369) | |
| Management of liquid resources | |||
| Decrease/(increase) in monies held pending investment | 632 | (73) | (404) |
| No change/increase in cash | – | 815 | 301 |
| Reconciliation of net cash flow to movement in net funds | |||
| No change/increase in cash for the period | – | 815 | 301 |
| Net funds at start of period | 650 | 349 | 349 |
| Net funds at end of period | 650 | 1,164 | 650 |
| Reconciliation of operating (loss)/profit to net cash outflow from | |||
| operating activities | |||
| (Loss)/profit on ordinary activities before taxation | (666) | 5,344 | 1,410 |
| Net gains on realisations of investments | (173) | (584) | (1,170) |
| Net unrealised losses/(gains) on investments | 583 | (5,116) | (781) |
| Transaction costs | (10) | (141) | (167) |
| Decrease in debtors | 514 | 309 | 297 |
| Decrease in creditors | (401) | (181) | (120) |
| Net cash outflow from operating activities | (153) | (369) | (531) |
The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report.
The unaudited results cover the six months to 31 March 2012 and have been prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent with the accounting policies set out in the statutory accounts for the year ended 30 September 2011 and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Trust Companies in January 2009.
As a result of the Directors' decision to distribute capital profits by way of a dividend, the Company revoked its investment company status as defined under section 266 (3) of the Companies Act 1985, on 17 August 2004.
The half-yearly report has not been audited nor has it been reviewed by the auditor pursuant to the Auditing Practices Board (APB) guidance on Review of Interim Financial Information.
In order to better reflect the activities of a VCT and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007.
Investments are accounted for on a trade date basis.
All investments held by the Company are classified as "fair value through profit and loss" as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. For investments actively traded in organised financial markets, recognition and fair value is determined by reference to Stock Exchange market trading rules and quoted bid prices at the close of business on the balance sheet date.
Unquoted investments are valued by the Directors at 'fair value through profit and loss'. Accordingly, in the absence of a market price, the Directors have valued unquoted investments in accordance with International Private Equity Venture Capital Valuation (IPEVCV) guidelines as updated in September 2009.
All unquoted investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered:
There is no tax charge for the period, as the Company has incurred taxable losses in the period.
| Six months ended 31 March 2012 (unaudited) £'000 |
Six months ended 31 March 2011 (unaudited) £'000 |
Year ended 30 September 2011 (audited) £'000 |
|
|---|---|---|---|
| Total earnings after taxation: | (666) | 5,344 | 1,410 |
| Basic and diluted (loss)/earnings per share | (1.14)p | 9.01p | 2.37p |
| Net revenue from ordinary activities after taxation | 120 | 54 | 288 |
| Revenue return per share | 0.21p | 0.09p | 0.48p |
| Net unrealised capital (losses)/gains | (583) | 5,116 | 781 |
| Net realised capital gains | 173 | 584 | 1,170 |
| Capital expenses (net of taxation) | (376) | (410) | (829) |
| Total capital (loss)/return | (786) | 5,290 | 1,122 |
| Capital (loss)/return per share | (1.35)p | 8.92p | 1.89p |
| Weighted average number of shares in issue in the period | 58,445,366 | 59,317,309 | 59,414,982 |
| Six months ended 31 March 2012 (unaudited) £'000 |
Six months ended 31 March 2011 (unaudited) £'000 |
Year ended 30 September 2011 (audited) £'000 |
|
|---|---|---|---|
| Final capital dividend of 4p per share for the year ended 30 September 2010 paid on 14 January 2011 |
– | 2,392 | 2,378 |
| Final capital dividend of 4.25p and final income dividend of 0.75p per share for the year ended 30 September 2011 paid on 10 February 2012 |
2,925 | – | – |
| 2,925 | 2,392 | 2,378 |
| Fully Listed £'000 |
Traded on AIM/PLUS Market £'000 |
Unlisted ordinary shares £'000 |
Unlisted Loan stock £'000 |
Unicorn OEIC funds £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|
| Book cost at 30 September 2011 | 6,656 | 40,974 | 3,162 | 1,500 | 6,763 | 59,055 |
| Unrealised gains at 30 September 2011 | (217) | 1,427 | (896) | (100) | 2,471 | 2,685 |
| Permanent impairment in value of investments | – | (15) | (2,162) | – | – | (2,177) |
| Valuation at 30 September 2011 | 6,439 | 42,386 | 104 | 1,400 | 9,234 | 59,563 |
| Purchases at cost | 315 | 440 | – | – | 9 | 764 |
| Sale proceeds | (568) | (1,350) | – | – | (1,629) | (3,547) |
| Realised gains | 20 | 125 | – | – | 38 | 183 |
| Unrealised gains/(losses) in the period | 54 | (1,029) | 37 | – | 355 | (583) |
| Closing valuation at 31 March 2012 | 6,260 | 40,572 | 141 | 1,400 | 8,007 | 56,380 |
| Book cost at 31 March 2012 | 6,432 | 40,658 | 3,162 | 1,500 | 5,486 | 57,238 |
| Unrealised (losses)/gains at 31 March 2012 | (172) | (86) | (844) | (100) | 2,521 | 1,319 |
| Permanent impairment in value of investments | – | – | (2,177) | – | – | (2,177) |
| Valuation at 31 March 2012 | 6,260 | 40,572 | 141 | 1,400 | 8,007 | 56,380 |
Investment purchases above of £764,000 differs to that shown in the Cashflow Statement by £355,000. This difference is due to £8,000 of capitalised dividend from Unicorn Outstanding British Companies OEIC and a £347,000 addition in Augean plc which settled shortly after the period end. Realised gains above of £183,000 differ from net realised gains per the Income Statement of £173,000 due to transaction costs of £10,000.
These comprise investments in two Dublin based OEIC money market funds, managed by Royal Bank of Scotland and Blackrock Investment Management UK Ltd and amount to £147,000 (31 March 2011: £448,000; 30 September 2011: £779,000). All of this sum is subject to same day access. These sums are regarded as monies held pending investment.
| Called up share capital £'000 |
Capital redemption reserve £'000 |
Share premium account £'000 |
Revaluation reserve £'000 |
Special distributable reserve £'000 |
Profit and loss account £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|
| At 1 October 2011 | 585 | 283 | 28,422 | 2,685 | 18,838 | 9,634 | 60,447 |
| Shares issued | 41 | – | 4,066 | – | – | – | 4,107 |
| Shares bought back | (45) | 45 | – | – | (4,139) | – | (4,139) |
| Expenses of Enhanced Buyback Scheme and Top Up Offer (see note below) |
– | – | (158) | – | (51) | – | (209) |
| Transfer to special distributable reserve |
– | – | – | – | (398) | 398 | – |
| Gains on disposal of investments (net of transaction costs) |
– | – | – | – | – | 173 | 173 |
| Realisation of previously unrealised gains |
– | – | – | (783) | – | 783 | – |
| Unrealised losses in the period | – | – | – | (583) | – | – | (583) |
| Loss for the period | – | – | – | – | – | (256) | (256) |
| Dividends paid | – | – | – | – | – | (2,925) | (2,925) |
| At 31 March 2012 | 581 | 328 | 32,330 | 1,319 | 14,250 | 7,807 | 56,615 |
Note: The expenses of the Enhanced Buyback ("EBB") Scheme and Top Up Offer of £209,000 are firstly, the commission rebate of 3.5% upon the sum subscribed by shareholders under the EBB Scheme of £135,000 and secondly, third party costs of the Scheme and Top Up Offer of £74,000. All of these costs were charged to the VCT but borne by those shareholders who participated in the EBB scheme and the Top Up Offer. No fees were charged by the Manager. The amount relating to shares issued (net of expenses) above, of £3,898,000, differs from that shown in the cash flow statement of £3,942,000. The difference of £44,000 relates to amounts payable to reimburse the Manager for Offer costs funded by the Manager, which, as explained above, were wholly borne by those shareholders who participated in the EBB scheme.
| At 31 March 2012 (unaudited) £'000 |
At 31 March 2011 (unaudited) £'000 |
At 30 September 2011 (audited) £'000 |
|
|---|---|---|---|
| Net assets | 56,615 | 64,618 | 60,447 |
| Number of shares in issue | 58,117,481 | 59,014,330 | 58,492,674 |
| Net asset value per share | 97.41p | 109.50p | 103.34p |
The financial information contained in this half-yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 30 September 2011 have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, One Vine Street, London W1J 0AH, or from www.unicornam.com or www.unicornaimvct.com
The Company's Ordinary Shares (Code: UAV) are listed on the London Stock Exchange. Shareholders can visit the London Stock Exchange website, www.londonstockexchange.com, for the latest news and share prices of the Company. The share price is also quoted in the Financial Times.
For general Shareholder enquiries, please contact Robert Brittain of Matrix-Securities Limited (the Company Secretary) on 020 3206 7000 or by e-mail on [email protected].
For enquiries concerning the performance of the Company, please contact the Investment Manager, Unicorn Asset Management Limited, on 020 7253 0889 or by e-mail on [email protected].
Electronic copies of this report and other published information can be found via the Company's website, www.unicornaimvct.com.
To notify the Company of a change of address or to request a dividend mandate form (should you wish to have future dividends paid directly into your bank account) please contact the Company's Registrars, Capita Registrars on 0871 664 0300, (lines are open 8.30 am – 5.30 pm on Monday to Friday, calls cost 10p per minute plus network extras - if calling from overseas please ring +44 208 639 2157) or by writing to them at Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. Alternatively you may visit their website, www.capitaregistrars.com/shareholders.
Please note that beneficial owners of shares who have been nominated by the registered holder of those shares to receive information rights under section 146 of the Companies Act 2006 are required to direct all communications to the registered holder of their shares, rather than to the Company's registrar, Capita Registrars, or to the Company directly.
Peter Dicks (Chairman) Malcolm Diamond James Grossman Jeremy Hamer Jocelin Harris
All of whom are non-executive and of: One Vine Street London W1J 0AH
Matrix-Securities Limited One Vine Street London W1J 0AH
Company Registration Number : 04266437
Unicorn Asset Management Limited First Floor Office Preacher's Court The Charterhouse Charterhouse Square London EC1M 6AU
PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH
Matrix Corporate Capital LLP One Vine Street London W1J 0AH
Auditors PKF (UK) LLP Farringdon Place 20 Farringdon Road London EC1M 3AP
National Westminster Bank plc City of London Office PO Box 12264 1 Princes Street London EC2R 8PB
Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Martineau No 1 Colmore Square Birmingham B4 6AA
Unicorn Asset Management Limited First Floor Office, Preacher's Court, The Charterhouse Charterhouse Square, London EC1M 6AU 0207 253 0889 www.unicornam.com nicorU n Manag t OfirsF eacfice, Pr erhouse SqtChar uare, 6A eacher's Cour erhouse tt, Char e,
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