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Unicorn AIM VCT PLC   -  UAV   

Half-year Report

Released 10:18 14-Jun-2019

RNS Number : 3303C
Unicorn AIM VCT PLC
14 June 2019
 

 

Unicorn AIM VCT plc ("The Company")

Half-Yearly Report Announcement for the six months ended 31 March 2019

Investment Objective

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 maintaining a steady flow of dividend distributions to Shareholders from the income as well as 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% (80% for accounting periods commencing after 5 April 2019) of the Company's total assets are to be invested in qualifying investments of which 70% by VCT value (30% in respect of investments made before 6 April 2018 from funds raised before 6 April 2011) must be in 'eligible shares' which carry no preferential rights (save as permitted under VCT rules) to dividends or return of capital and no rights to redemption.

Venture Capital Trust Status

The Company has satisfied the requirements for approval as a Venture Capital Trust (VCT) under section 274 of the Income Tax Act 2007 (ITA). It is the Directors' intention to continue to conduct the business of the Company so as to maintain compliance with that section.

 

Financial Highlights

For the six months ended 31 March 2019

 

-        £5.0 million of qualifying investments (£2.0 million new, £3.0 million follow-on investments).

 

-        Offer for Subscription raised £10.4 million (after costs) by the period end.

 

-        Interim dividend of 3.0p declared for the 6 months ended 31 March 2019.

 

Fund Performance

Ordinary shares

Shareholders'

Funds*

 

(£million)

Net asset value per share (NAV)

 

(p)

Cumulative dividends paid per share**

 

 (p)

NAV total return to Shareholders since merger per share**

 (p)

Share price

 

 

(p)

31 March 2019

178.3

144.4

51.5

195.9

129.0

30 September 2018

201.4

171.8

48.0

219.8

144.0

31 March 2018

185.5

156.4

45.0

201.4

133.0

30 September 2017

175.5

163.1

41.5

204.6

141.5

 

* Shareholders' funds/net assets as shown in the Statement of Financial Position below.

 

** Since the merger of the Company with Unicorn AIM VCT II plc on 9 March 2010 and merger of all former share classes.

 

Portfolio Summary

Allocation of qualifying investments by market sector

 

 

 

 

As at 31 March 2019  

%

As at 30 September 2018

                                      %

Pharmaceutical & biotechnology

22.9

26.3

Software & computer services

21.0

19.6

Media

9.3

9.2

Healthcare equipment & services

8.0

6.5

Financial services

7.8

7.3

Industrial engineering

5.7

4.7

Travel & leisure

5.5

5.0

Support services

4.6

6.0

Chemicals

3.5

3.1

Aerospace & defence

3.2

3.0

Electronic & electrical equipment

2.4

2.9

Technology hardware & equipment

2.1

2.3

Real estate investment & services

1.9

1.8

Automobiles & parts

1.8

1.6

Industrial transportation

0.2

0.5

Oil equipment & services

0.1

0.1

Food & drug retailers

-

0.1

Total

100.0

100.0

       

 

Chairman's Statement

I am pleased to present the unaudited Half-Yearly Report (the "Report") of the Company for the six-month period ended 31 March 2019.

 

As at 31 March 2019, the Net Asset Value ("NAV") of the Company was 144.4 pence per share, which represents a decrease of 12.0 pence per share when compared with the end of the same period last year and is 27.4 pence per share lower than at the start of the current financial year on 1 October 2018. This decline in net asset value reflects the difficult equity market conditions experienced during the period under review, which were most pronounced during the final quarter of 2018. Encouragingly, since the start of 2019, UK equity markets have experienced a recovery, and this has been reflected in an improvement in the NAV to 155.7 pence per share at 31 May 2019.

 

Investor sentiment deteriorated markedly from the start of October 2018 as political divisions deepened over how best to implement Britain's exit from the European Union. In times of heightened volatility it is normal to see levels of risk aversion increase. This more cautious approach has been highlighted in recently published research by TIME Investments, a specialist in estate planning, in which it found that 23% of wealth managers and IFAs had been asked by their clients to de-risk their investment portfolios. A further 26% said that they are currently nervous of investing in equities. Of those advisers that participated in the survey, 75% cited concerns over the outcome of Brexit negotiations as being the main driver behind client nervousness.

 

Smaller quoted companies are particularly vulnerable during periods of political and economic uncertainty, often suffering more extreme price movements than larger more liquid companies. This performance differential was starkly illustrated in the period under review, with the Alternative Investment Market falling significantly further and faster than the main UK equity market. In the six months ended 31 March 2019, the FTSE AIM All-Share Index registered a total return of -16.0%, while the FTSE 100 Index delivered a total return of -1.1%, having recovered almost all the declines it experienced during the final quarter of 2018.

 

Given this backdrop, it is unsurprising that the performance of the Company was also adversely affected during the six-month period under review. Unaudited NAV per share decreased from 171.8 pence to 144.4 pence. After adding back the final dividend of 3.5 pence per share for the financial year ended 30 September 2018, which was paid in February 2019, this represents a total return for the period of -13.9%. In relative terms however, the absolute total return of the Company outperformed that of the FTSE AIM All-Share Index by 2.1%.

 

Although conditions have been challenging, it is nonetheless reassuring to note that the falls in value experienced by portfolio holdings have been predominantly market related rather than as a result of poor operational or financial delivery by underlying investments.

 

As noted previously, the introduction of more restrictive rules for Venture Capital Trusts, mean that new investment must be targeted at earlier stage businesses. The operational and financial performance of these newer, and less mature, VCT qualifying investments has resulted in portfolio performance being rather more volatile than previously. It is therefore important to remind all Shareholders of the risks associated with venture capital investing and to again emphasise that any investment in the Company should be regarded as being relatively high risk and long term in nature.

 

It is also important however, to highlight some of the key strengths of your Company. Over many years, the Investment Manager has constructed a portfolio of investments operating across a diverse range of sectors that, at an individual level, have generally proven their ability to achieve and maintain growth in revenues and profits over extended periods. These companies, although diverse in the type of products and services they offer, tend to be cash generative, conservatively managed and often have an established history of making dividend payments. The income received from these more mature investments is making an important contribution to the sustainability of your Company's regular and attractive tax free dividends.

 

Therefore, while total returns may potentially become more volatile over shorter time periods, your Investment Manager nonetheless remains confident in delivering healthy capital returns over the longer term, while also being able to generate sufficient distributable reserves to enable the Board to declare a regular and reasonably predictable level of dividend payments to Shareholders.

 

Offer for Subscription

The recent Offer for Subscription was launched on 29 January 2019. The Offer was strongly supported and closed, fully subscribed, on 5 April 2019. The total raised, net of all costs, was £24.3 million and resulted in the issuance of 16,707,794 new shares. On behalf of the Board, I would like to welcome all new Shareholders and to thank existing Shareholders for their continued support.

 

Share Buybacks

Between 1 October 2018 and 31 March 2019, the Company bought back 809,023 of its own Ordinary Shares for cancellation, at an average price of 129.3 pence per share including costs. At 31 March 2019, there were 123,461,320 Ordinary Shares in issue.

 

Dividends

In accordance with the policy adopted in the 2017/18 financial year, the Board has declared an interim dividend of 3.0 pence per share, for the half year ended 31 March 2019. This interim dividend will be paid on 9 August 2019, to Shareholders on the register on 19 July 2019. The shares will be quoted ex-dividend on 18 July 2019. As in previous years, dividend decisions remain subject to a number of factors including; market conditions, satisfactory performance, availability of cash and distributable reserves.

 

Dividend Investment Scheme

The Company has previously sought the views of Shareholders on offering a scheme whereby dividends can be reinvested into new shares in the Company rather than being paid out in cash. We will provide details to Shareholders of this option when we distribute the dividend in August 2019 with a view to implementing the scheme for the payment of the final dividend in early 2020.

 

Investment Performance

A review of the most meaningful contributions to performance in absolute terms (both positive and negative) follows, with share price change during period shown in brackets:-

 

Abcam (-20.7%) is a life sciences company providing highly specialised antibodies and other products to research laboratories and clinical communities worldwide. In March 2019, Abcam announced interim results for its financial half-year ended 31 December 2018, which reported total revenue growth in the period of 10.8% to £124.7 million and an increase of 5.2% in adjusted diluted earnings per share to 16.3 pence. Gross profit margins remained steady at 70.2%, but the group's operating margin declined from 29.1% to 26.8% as costs increased following a period of investment in the business to support future growth. Growth over the short-term is now expected to be slightly weaker than previously forecast, partly due to continued softness in the Japanese market. In addition, achieving sustained growth in Abcam's custom products & licensing business is taking longer than anticipated. The company has arranged a £200 million revolving credit facility, signalling that it may seek to make further acquisitions, alongside its organic growth strategy. The group's cash generation remains strong, with £83.2 million of net cash on the Balance Sheet at the period end. Abcam's share price declined sharply in the broad market sell-off that occurred in the final quarter of 2018, but encouragingly, has recovered in value by approximately 30% from its low point reached on 20 December 2018.

 

AB Dynamics (+29.1%) supplies advanced testing systems to the global automotive manufacturing industry, designed to assist research and development and improve production quality control. In its results for the financial year ended 31 August 2018, AB Dynamics reported strong growth in revenues of 51% to £37.1 million, while basic earnings per share increased by 74% to 36.3p. Continued strong cash generation resulted in a net cash position of £15.9 million at the financial year end and the Board have therefore proposed a 10% increase in the final dividend to 2.2 pence per share. AB Dynamics continues to experience good order growth and the new Chief Executive is planning increased investment in new product development and operational capability in order to meet anticipated future demand. AB's recent trading update confirmed further growth in revenues and profits in the first six months of its current financial year, driven by demand for a market leading testing product that supports the development of Advanced Driver Assistance Systems (ADAS).

 

Anpario (-31.3%) is an international producer and distributor of high performance natural feed additives for animal health, hygiene and nutrition. In March 2019, Anpario released financial results for the year ended 31 December 2018, which recorded strong growth in profits of 34% to £4.0 million. Growth in profits was achieved despite group sales declining modestly to £28.3 million. Product sales were impacted by challenging economic conditions in Latin America, where revenues declined by 21%, and in China, where, due to the outbreak of African Swine Flu, revenues fell by 11% compared to the prior year. Costs were carefully controlled however, and the business remained cash generative, despite investing in additional inventory and materials to reduce potential Brexit related risks. The proposed final dividend was increased by 11% to 5.0 pence per share.

 

Augean (+81.1%) is one of the UK's leading specialist waste management businesses. In its financial results for the year ended 31 December 2018, Augean reported a significant recovery in profitability, with adjusted pre-tax profits increasing by 69% to £11.4 million. The improved financial results were a result of strong underlying trading, successful implementation of cost savings and the disposal of an unprofitable business division. This resulted in a significant improvement in free cash flow generation and a net cash position at the financial year end of £8.2 million, compared to net debt of £10.8 million in the prior year. For the past 18 months, Augean has been legally challenging a series of HMRC assessments related to the alleged historic under-payment of landfill tax. The sums involved are significant. In total, HMRC has issued final assessments amounting to £26.7 million (excluding interest) and, while Augean continues to pursue all available legal channels to challenge these assessments, a negative outcome will obviously have serious implications for the business. In the meantime, Augean has reported a strong start to its current financial year with further growth expected in its key energy from waste and oil rig decommissioning markets.

 

Avacta Group (+42.0%) is an early-stage technology company involved in the pre-clinical biotech sector that has developed a disruptive platform called Affirmer. The technology platform behind Affirmer supports the manufacture of reagents and therapeutics that are designed to be a low cost and more effective alternative to the use of antibodies in immunotherapy treatments for cancer patients. Affirmer's range of non-antibody binding proteins has also been engineered for a wide range of applications where the use of antibodies has limitations. In December 2018, Avacta announced that it had signed an agreement with LG Chem Life Sciences, to develop Affimer therapeutics for oncology and the treatment of inflammatory diseases. The agreement provides for upfront and near-term milestone payments, plus longer-term clinical development milestones with a potential value of $180 million. Avacta has now commenced the early stage optimisation of various drug candidates, whose development may benefit from the deployment of Affirmer technology. The recently announced development partnership with LG is a strong validation of the potential of the Affimer platform.

 

Communisis (+35.0%) is an integrated business services company which provides marketing and corporate customer communication strategies. In October, Communisis announced that it had reached agreement on the terms of an offer to be acquired by OSG Group Holdings. Shareholders received 71 pence per share, representing a c.40% premium to the last closing share price on the date prior to the announcement of the offer. The offer valued Communisis at approximately £154 million and crystallised a meaningful capital gain on original investment cost.

 

Keywords Studios (-40.7%) is a provider of technical services to the global video games industry. During 2018, Keywords successfully completed and integrated eight acquisitions, in line with its established acquisitive growth strategy. Financial results for the year ended 31 December 2018, confirm that Keywords continues to achieve strong growth. Organic revenues grew by 10%, while total sales for the year were 66% higher at €250.8 million, which translated into an increase in adjusted pre-tax profit of 65% to €37.9 million. Earnings grew by 53% to €0.48 per share, while dividends were increased by 10% to 1.6 pence per share. Despite this impressive growth, shares in Keywords Studios fell sharply during the fourth quarter of 2018, as its value declined in line with many AIM listed growth and technology companies.

 

MaxCyte (-17.8%) is a cell-based medicines and life sciences company that has developed a patented, high-performance, cell-engineering platform, which is increasingly being used by biopharmaceutical companies engaged in drug discovery, particularly in the field of cell therapy, gene editing and immuno-oncology. MaxCyte issued a trading update in January 2019 covering the financial year ended 31 December 2018, which confirmed that revenues increased by 19% to $16.7 million, benefitting from an acceleration in growth during the second half of the year. MaxCyte remains focused on developing its high value CARMA platform, which is a unique and proprietary form of cell therapy. During the period, the first patient in Phase 1 of MaxCyte's clinical trial designed to treat solid cancer tumours was successfully dosed. In March, MaxCyte also announced that it had expanded its relationship with Kite Pharmaceuticals, a company owned by Gilead Sciences. Gilead Sciences is a US based biopharmaceutical business currently valued at around $80 billion. MaxCyte's agreement with Kite involves collaboration on multi-drug clinical research and represents a significant endorsement of MaxCyte's evolving technologies. In order to further progress its therapy pipeline and advancement of its CARMA pipeline, MaxCyte recently raised a further £10 million from investors. The Company maintained its equity stake in MaxCyte by participating in this most recent fund raise.

 

Tracsis (-10.7%) is a provider of software and services for the traffic data and transportation industry. In November, Tracsis released final results for its financial year ended 31 July 2018, which confirmed total revenue growth of 16% to £39.8 million and 9% growth in adjusted earnings per share to 25.5 pence. Growth was particularly strong in rail technology & services, with this division benefitting from the award of a large contract from a major train operating company. In January 2019, Tracsis announced that it had also secured a significant five-year agreement with another major train operating company for its TRACS Enterprise product. This agreement is expected to lead to significant recurring revenue growth in future years. Finally, in March 2019, Tracsis released a trading update confirming that trading over the six-month period to 31 January 2019 was in line with expectations and ahead of the prior year period. A new CEO, Chris Barnes, has been recruited to replace John McArthur who had previously announced his intention to step down, having spent the last fourteen years building the business.

 

ULS Technology (-40.4%) is a provider of an online "business to business" software platform for the UK conveyancing and financial intermediary markets. In December, ULS announced its interim results for the six months ended 30 September 2018, which recorded modest growth of 3% in revenues to £15.8 million and an increase of 7% in adjusted earnings per share. ULS's operating performance was encouraging in the face of a challenging UK housing market, with the company gaining market share in both transactional and re-mortgage instructions. ULS has recently completed the development of a new product called DigitalMove, a fully electronic software platform that enables home buyers to communicate with their conveyancer in an efficient, user friendly and secure environment. ULS's share price came under severe pressure in October, as the company warned that further weakness in UK house transactions was likely to impact on the Group's results in the second half-year period.

 

In absolute terms, the six largest detractors from performance, as highlighted above, delivered, in aggregate, an unrealised capital loss of £13.1 million. Of these six businesses, only ULS Technologies announced a significant profit warning in the period under review.

 

Given the difficult market conditions experienced during the period, positive contributions from investee companies were limited. The four best performing stocks, as reported on above, delivered unrealised capital gains amounting to £3.1 million in total.

 

Investment Activity

In view of the unusually volatile conditions experienced, investment activity has been subdued in the period under review. Two new VCT qualifying investments, Phynova and RenalytixAI, were completed in the six months to the end of March.

 

Phynova is a privately owned life sciences company that develops proprietary natural healthcare products from active compounds found in plants.

 

RenalytixAI is a business specialising in the development of artificial intelligence enabled clinical decision tools, designed to improve risk assessment and clinical care in kidney disease, which is currently one of the larger and more costly medical conditions globally.

 

In total, £2 million was allocated to these new VCT qualifying investments.

 

Follow-on investments were made in a number of existing investments, which remained eligible for further State Aided funding. In total, £3.0 million of new capital was allocated to these investee companies in order to help facilitate their expansion plans.

 

In aggregate, almost £4.3 million was raised from the partial disposal of a number of holdings during the period. The purpose of such disposals is threefold; to ensure stock specific risk is contained, to lock in capital profits for future distribution to shareholders via dividend payments and finally to help manage liquidity requirements. Two further investments; Communisis and Sinclair Pharma, were acquired by trade buyers during the period realising total proceeds of £2.3 million and a realised capital gain of £0.5 million. Non-qualifying holdings in Arbuthnot Banking Group, Mears Group and Science Group were also disposed of in full in the period under review, raising £2.9 million in aggregate and crystallising a total capital gain of £0.9 million.

 

Material Transactions

Other than the Offer for Subscription, Share Buybacks and the purchase and sale of investments described above, there were no material transactions in the six-month period ended 31 March 2019.

 

VCT Status

The Company remains above the VCT qualifying threshold required by HM Revenue & Customs, with approximately 79% of total assets by VCT value being invested in VCT qualifying companies. The Company has complied with all other HM Revenue & Customs regulations, and your Board has been advised by PWC that the Company has maintained its Venture Capital Trust status. As noted previously, the minimum percentage of total assets required to be held in VCT qualifying shares has increased from 70% to 80% for accounting periods starting after 5 April 2019.

 

Outlook

In overall terms, the rate of growth in the UK economy continues to slow, and although unemployment remains at multi-year lows, the outlook for British businesses and their employees is arguably deteriorating. The most recent economic data released by the Office for National Statistics ("ONS") was not particularly encouraging in that it highlighted short term stockpiling as being the key reason behind the modest 0.2% rate of growth recorded in the UK economy during February.

 

The failure of our elected politicians to secure any form of agreed implementation of the vote to leave the European Union has created a vacuum, which has currently resulted in any Brexit decision being deferred, possibly until the end of October 2019. Heightened and sustained levels of political and economic uncertainty rarely result in positive business sentiment or stock market performance, so the sooner the Brexit issue is resolved, the more likely that investor confidence will return. In the meantime, uncertainty is creating an environment that discourages both consumer spending and business investment, which is potentially damaging to the UK economy over the longer term.

 

On a more positive note, the majority of companies held in the portfolio continue to trade well and management teams appear increasingly aware of the importance of prudently managing market expectations. The Investment Manager will retain focus on identifying reasonably valued and well managed businesses in which to invest that, wherever possible, offer value enhancing products and services to their customers in emerging and growing sectors of the economy.

 

Conclusion

Given the challenging market conditions experienced in the period under review, together with an increasingly uncertain economic and political outlook, it is heartening that our most recent Offer for Subscription was fully subscribed, attracting strong support from both existing Shareholders and new investors. The new monies raised will enable the Investment Manager to continue the established and successful strategy of selectively enhancing and developing the existing portfolio of investments, while providing much needed capital to emerging 'scale-up' businesses, which, in turn, should create further employment opportunities and, over time, generate meaningful additional tax revenues for HM Treasury.

 

The investment portfolio consists of a diverse range of companies operating across a broad spectrum of sectors. In the majority of cases, the trading performance of these businesses has remained resilient. Despite the continuing uncertainty surrounding Britain's exit from the European Union, many of the portfolio companies continue to generate growth in both sales and profits. As a consequence, balance sheets have generally been strengthening, which in many cases has allowed dividend distributions to increase. Encouragingly, most management teams also continue to express confidence about the longer term prospects for their businesses.

 

In share price terms, a larger than usual number of investee companies disappointed during the period under review. As previously noted however, it is reassuring that the overall performance of the Company in the half year to 31 March 2019 has been relatively resilient, especially when compared to that of the FTSE AIM All-Share Index.

 

Despite significant and growing economic and political uncertainties, UK equity markets have experienced a sustained recovery during the first five months of 2019. The FTSE All-Share Index generated a positive total return of 8.9% between the start of January and the end of May, while the FTSE AIM All-Share Index increased in value by 12.5% over the same period. Pleasingly, the Company also performed strongly over this time period, with Net Asset Value reaching 155.7 pence per share as at 31 May, which represents a total return of 12.4% since the start of the current calendar year. In the absence of a significant deterioration in equity market or economic conditions, the portfolio appears well placed to deliver positive returns during the second half of the current financial year.

 

As reported in my statement in the Annual Report to 30 September 2018 the Board was awaiting the publication of the AIC Code of Corporate Governance, which was subsequently published in February 2019. Following the AIC Code does not require the Company to make any immediate changes to its composition however, as part of its review on tenure and succession planning it was decided to make a new appointment to the Board.  On 10 June 2019 the Company was pleased to announce the appointment of Tim Woodcock as a new Non-Executive Director to the Board.  Furthermore, it is my intention to step down as Chairman of the Board in 12 months' time.

 

Peter Dicks

Chairman

14 June 2019

 

Investment Policy

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:

experienced and well-motivated management;

products and services supplying growing markets;

sound operational and financial controls; and

potential for good cash generation to finance ongoing development and support for a progressive dividend policy.

 

Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. No single holding may represent more than 15% (by VCT value) of the Company's total investments and cash, at the date of investment.

 

There are a number of VCT conditions which need to be met by the Company which may change from time to time. The Investment Manager will seek to make qualifying investments in accordance with such requirements.

Asset mix

Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or is in excess of the 70% VCT qualification threshold (80% from 6 April 2019), it may be invested in cash or invested in money market funds, collective investment vehicles or non-qualifying shares and securities of fully listed companies registered in the UK.

Borrowing
Management of the Company

The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Risk is spread by investing in a number of different businesses across different industry sectors. 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 on a monthly basis. When the Investment Manager proposes to make any investment in an unquoted company, the prior approval of the Board is required. The Board continues to take the need for transparency and independence seriously. When a conflict arises involving a relationship between any Director and an investee or proposed investee company that Director abstains from any discussion or consideration on any such investment by the Company.

The Administrator, ISCA Administration Services Limited, provides Company Secretarial and Accountancy services to the Company.

Unaudited Investment Portfolio Summary
as at 31 March 2019

 

 

 

 

Qualifying investments

Book cost

£'000

Valuation

£'000

% of net assets by value *

AIM quoted investments:

 

 

 

Abcam

1,241

14,150

7.9

Tracsis

1,500

10,395

5.8

Mattioli Woods

1,626

7,482

4.2

Anpario

1,516

6,400

3.6

MaxCyte

3,617

5,706

3.2

Tristel

878

4,415

2.5

City Pub Group

2,250

4,354

2.4

Cohort

1,278

4,320

2.4

AB Dynamics

801

3,967

2.2

Access Intelligence

3,232

3,759

2.1

Bonhill

3,160

3,335

1.9

Avingtrans

996

3,320

1.9

Keywords Studio

303

2,848

1.6

Directa Plus

3,400

2,736

1.5

ULS Technology

1,500

2,625

1.5

Surface Transforms

2,646

2,432

1.4

Idox

1,242

2,313

1.3

Sanderson Group

1,360

2,211

1.2

Animalcare Group

2,401

1,939

1.1

Instem

985

1,689

1.0

RenalytixAI

1,500

1,673

0.9

Belvoir Lettings

1,883

1,610

0.9

Osirium Technologies

2,000

1,568

0.9

Angle

1,385

1,523

0.9

Creo Medical

1,000

1,520

0.9

Trackwise Designs

1,750

1,500

0.8

VR Education

1,588

1,429

0.8

Avacta

1,000

1,400

0.8

Hardide

1,832

1,329

0.7

Stride Gaming

1,400

1,326

0.7

Lightwave RF

2,216

1,246

0.7

ECSC Group

2,420

1,232

0.7

Quixant

648

1,168

0.7

HML Holdings

431

1,036

0.6

Surgical Innovations Group

436

880

0.5

Immotion

1,500

871

0.5

Falanx Group

1,500

817

0.5

Microsaic Systems

1,500

750

0.4

Vianet

725

719

0.4

Totally

3,106

703

0.4

Synnovia

655

655

0.4

Wey Education

2,150

616

0.3

Driver Group

552

586

0.3

Omega Diagnostics Group

500

542

0.3

Escape Hunt

1,234

521

0.3

Pressure Technologies

1,140

482

0.3

Redcentric

393

477

0.3

25 investments, each valued at less than 0.3% of net assets

14,402

3,954

2.2

 

86,778

122,529

68.8

Unlisted investments:

 

 

 

Hasgrove

1,329

6,400

3.6

nkoda Limited

2,500

2,500

1.4

Interactive Investor

1,250

2,042

1.1

Heartstone Inns

1,113

1,161

0.7

Syndicate Room

1,250

956

0.5

Phynova

500

800

0.4

Access Intelligence plc - loan stock

300

300

0.2

2 investments, each valued at less than 0.1% of net assets

4,102

-

-

 

12,344

14,159

7.9

Total qualifying investments

99,122

136,688

76.7

 

 

 

 

Non-qualifying investments

 

 

 

Fully listed UK equities

13,432

13,514

7.6

AIM quoted investments

9,816

10,695

6.0

Interactive Investor

2,197

4,161

2.3

Unicorn UK Growth Fund (OEIC)

416

933

0.5

Unicorn UK Smaller Companies Fund (OEIC)

272

849

0.5

Unicorn Ethical Fund (OEIC) Accumulation

568

610

0.3

Unicorn Ethical Fund (OEIC) Income

500

540

0.3

Lloyds Banking Group - 9.25% Preference Shares

267

284

0.2

Other unlisted investments each valued at less than 0.1% of net assets

368

-

-

Total non-qualifying investments

27,836

31,586

17.7

Total investments

126,958

168,274

94.4

Current assets

 

11,168

6.3

Current liabilities

 

(1,167)

(0.7)

Net assets

 

178,275

100.0 

 *Based on fair value not VCT carrying value

 
Responsibility Statement
Directors' Statement of Principal Risks and Uncertainties

The important events that have occurred during the period under review and the key factors influencing the financial statements are set out in the Chairman's Statement above.

In accordance with DTR 4.2.7, the Directors consider 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 2018.

The principal risks faced by the Company include, but are not limited to:

•    investment and strategic

•    regulatory and tax

•    operational

•    fraud and dishonesty

•    financial instruments

•    economic

A more detailed explanation of these risks and the way in which they are managed can be found in the Strategic Report on pages 9 and 10 and in the Notes to the Financial Statements on pages 60 to 62 of the 2018 Annual Report and Accounts - copies can be found via the Company's website, www.unicornaimvct.co.uk.

Directors' Statement of Responsibilities in Respect of the Financial Statements

In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Peter Dicks (Chairman), Tim Woodcock, Charlotta Ginman, Jeremy Hamer (Chairman of the Audit Committee) and Jocelin Harris (Senior Independent Director), the Directors, confirm that to the best of their knowledge:

● the condensed set of financial statements, which have been prepared in accordance with FRS 104 "Interim Financial Reporting" give a true and fair view of the assets, liabilities, financial position and loss of the Company for the period ended 31 March 2019, as required by DTR 4.2.4;

● this Half-Yearly Report includes a fair review of the information required as follows:

            the interim management report included within the Chairman's Statement and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7 being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties facing the Company for the remaining six months of the year; and

          there were no other related party transactions in the first six months of the current financial year that are required to be disclosed in accordance with DTR 4.2.8.

Cautionary Statement

This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast.

 

The Half-Yearly Report was approved by the Board of Directors on 14 June 2019 and the above responsibility statement was signed on its behalf by:

 

Peter Dicks

Chairman

14 June 2019

 

Unaudited Income Statement
for the six months ended 31 March 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended 31 March 2019 (unaudited)

Six months ended 31 March 2018 (unaudited)

Year ended 30 September 2018 (audited)

 

Notes

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Net unrealised

(losses)/gains on investments

 

7

(31,396)

(31,396)

 -

(3,242)

(3,242)

14,368 

14,368 

Net gains on realisation of investments

7

4,139 

4,139 

55 

55 

4,252 

4,252 

Income

4

867 

867 

1,340 

1,340 

3,004 

3,004 

Investment management fees

 

2

 

(413)

 

(1,241)

 

(1,654)

 

(459)

 

(1,378)

 

(1,837)

 

(908)

 

(2,724)

 

(3,632)

Other expenses

 

(350)

(350)

(345)

(345)

(691)

(691)

Profit/(loss) on ordinary activities before taxation

 

 

 

104 

 

 

(28,498) 

 

 

(28,394)

 

 

536 

 

(4,565)

 

(4,029)

 

 

1,405 

 

 

15,896 

 

17,301 

Tax on profit on ordinary activities

 

3

 

 

 

 

 

 

 

 

 

 

Profit/(loss) and total comprehensive income after taxation

 

 

 

104 

 

 

 

(28,498) 

 

 

(28,394)

 

 

536 

 

 

(4,565)

 

 

(4,029)

 

 

1,405 

 

 

15,896 

 

 

17,301 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share: Ordinary Shares

 

 

5

 

 

0.09p

 

 

(24.20)p

 

 

(24.11)p

 

 

0.46p

 

 

(3.91)p

 

 

(3.45)p

 

 

1.20p

 

 

13.56p

 

 

14.76p

 

All revenue and capital items in the above statement derive from continuing operations of the Company.

 

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice ("AIC SORP") issued in November 2014 and updated in February 2018 with consequential amendments by the Association of Investment Companies.

 

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.

 

Unaudited Statement of Financial Position
as at 31 March 2019

 

 

Notes

As at 31 March 2019

(unaudited)

£'000 

As at 31 March 2018

(unaudited)

£'000 

  As at 30 September

  2018

                (audited)

£'000 

Non-current assets

 

 

 

 

Investments at fair value

1e, 7

168,274 

174,126 

200,052 

 

 

 

 

 

Current assets

 

 

 

 

Debtors

 

126 

1,771 

387 

Cash at bank and in hand

 

11,042 

9,884 

1,279 

 

 

11,168 

11,655 

1,666 

Creditors; amounts falling due within one year

 

 

(1,167)

 

(281)

 

(290)

 

Net current assets

 

10,001 

 

11,374 

1,376 

 

 

 

 

 

Net assets

 

178,275 

185,500 

201,428 

 

 

 

 

 

Share capital and reserves

 

 

 

 

Called up share capital

 

1,235 

1,186 

1,172 

Capital redemption reserve

 

85 

99 

Share premium account

 

106,325 

106,325 

Capital reserve

 

48,756 

62,542 

80,152 

Special reserve

 

121,728 

10,477 

7,401 

Profit and loss account

 

6,556 

4,885 

6,279 

 

 

 

 

 

Equity Shareholders' funds

 

178,275 

185,500 

201,428 

 

 

 

 

 

Basic and diluted net asset value per share of 1p each

 

 

 

 

Ordinary Shares

8

144.40p

156.44p

171.83p

 

The financial information for the six months ended 31 March 2019 and the six months ended 31 March 2018 has not been audited.

 

Unaudited Statement of Changes in Equity
for the six months ended 31 March 2019

 

 

 

 

 

 

 

 

 

 

Called up share capital

£'000

 

Capital redemption reserve

£'000

 

Share premium account

£'000

 

 

Capital reserve

£'000

 

 

Special   reserve*

£'000

 

Profit and loss account*

£'000

 

 

 

Total

£'000

 

Six months ended 31 March 2019

 

 

 

 

 

As at 1 October 2018

1,172 

99 

106,325 

80,152 

7,401 

6,279 

201,428 

Shares repurchased for cancellation and cancelled

(8)

(1,046)

(1,046)

Shares issued under Offer for Subscription

71 

-

10,531 

 

10,602 

Expenses of shares issued under Offer for Subscription

(232)

(232)

Cancellation of Capital redemption reserve and Share premium account**

(107)

(116,624)

116,731 

-

Transfer to special reserve

(1,358)

1,358 

Gains on disposal of investments (net of transaction costs)

4,139 

4,139 

Net decrease in unrealised valuations in the period

(31,396)

 

(31,396)

Dividend paid

(4,083)

(4,083)

Investment management fee charged to capital

(1,241)

(1,241)

Revenue return for the period

 

 

 

 

 

104 

104 

At 31 March 2019

1,235

48,756 

121,728 

6,556 

178,275 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Called up share capital

£'000

 

Capital redemption reserve

£'000

 

Share premium account

£'000

 

 

Capital reserve

£'000

 

 

Special   reserve*

£'000

 

Profit and loss account*

£'000

 

 

 

Total

£'000

 

Six months ended 31 March 2018

 

 

 

 

 

As at 1 October 2017

1,076 

77

87,090 

65,784 

13,736 

7,743

175,506 

Shares repurchased for cancellation

(8)

8

(1,177)

(1,177)

Shares issued under Offer for Subscription

118 

-

19,714 

 

19,832 

Expenses of shares issued under Offer for Subscription

-

(479)

(479)

Unclaimed dividends received

Transfer to special reserve

-

(2,082)

2,082 

Gains on disposal of investments (net of transaction costs)

-

55 

55 

Net decrease in unrealised valuations in the period

-

(3,242)

 

(3,242)

Dividend paid

-

(4,161)

(4,161)

Investment management fee charged to capital

-

(1,378)

(1,378)

Revenue return for the period

 

 

-

 

 

 

536 

536 

At 31 March 2018

1,186 

85

106,325 

62,542

10,477

4,885 

185,500 

 

 

 

 

 

 

 

 

 

 

Called up share capital

£'000

 

Capital redemption reserve

£'000

 

Share premium account

£'000

 

 

Capital reserve

£'000

 

 

Special   reserve*

£'000

 

Profit and loss account*

£'000

 

 

 

Total

£'000

 

Year ended 30 September 2018

 

 

 

 

 

As at 1 October 2017

1,076

77

87,090 

65,784

13,736 

7,743 

175,506 

Shares repurchased for cancellation

(22)

22

-

(3,102)

(3,102)

Shares issued under Offer for Subscription

118 

-

19,714 

 

-

19,832 

Expenses of shares issued under Offer for Subscription

-

(479)

-

(479)

Transfer to special reserve

-

-

(3,233)

3,233 

Gains on disposal of investments (net of transaction costs)

-

-

4,252 

4,252 

Unclaimed dividends and other income released by Rensburg

-

-

-  

15 

15 

Net increases in unrealised valuations in the year

-

14,368

 

14,368 

Dividends paid

-

-

(7,645)

(7,645)

Investment management fee charged to capital

-

-

(2,724)

(2,724)

Revenue return for the year

 

 

-

 

 

-

 

1,405 

1,405 

At 30 September 2018

1,172 

99

106,325 

80,152

7,401 

6,279 

201,428 

 

 

 

 

 

 

 

 

                 

 

The financial information for the six months ended 31 March 2019 and the six months ended 31 March 2018 has not been audited.

 

The profit and loss account comprises the revenue reserve of £373,000 and the realised capital reserve of £6,183,000.

 

*The special reserve and profit and loss account are distributable to Shareholders. The special reserve is used to fund market purchases of the Company's own shares, to make distributions and to write-off existing and future losses.

 

**The cancellation of the capital redemption reserve and share premium account was approved by the court on 26 March 2019.

 

Unaudited Statement of Cash Flows
for the six months ended 31 March 2019

 

 

Notes

Year ended 30 September 2018

(audited)

£'000

Operating activities

 

 

 

 

Investment income received

 

1,114 

1,477 

3,011 

Investment management fees paid

 

 

(815)

 

(1,852)

 

(3,648)

Other cash payments

 

(787)

Net cash outflow from operating activities

 

 

(159)

 

(861)

 

(1,424)

 

 

 

 

 

Investing activities

 

 

 

 

Rensburg unclaimed dividends and other income

 

15 

Purchase of investments

7

(4,974)

(28,891)

(48,526)

Sale of investments

7

9,515 

7,644 

24,709 

Net cash inflow/(outflow) from investing activities

 

 

4,541 

 

(21,247)

 

(23,802) 

Net cash inflow/(outflow) before financing

 

4,382 

 

(22,108)

 

(25,226)

Financing

 

 

 

 

Dividends paid

6

(4,083)

(4,161)

(7,645)

Shares issued under Offer for Subscription (net of transaction costs paid in the period)

 

 

 

 

10,510 

 

 

19,237 

 

 

19,159 

Shares repurchased for cancellation

 

 

(3,102)

Net cash inflow from financing

 

 

8,412 

Net increase/(decrease) in cash and cash equivalents

 

 

9,763 

 

(8,209) 

 

(16,814) 

Cash and cash equivalents at start of period

 

 

18,093 

Cash and cash equivalents at end of period

 

 

1,279 

 

 

 

 

 

Reconciliation of operating (loss)/profit to net cash outflow from operating activities

 

 

 

 

 

 

 

 

(Loss)/profit for the period

 

(28,394)

(4,029)

17,301 

Net unrealised losses/(gains) on investments

 

 

31,396 

3,242 

(14,368)

Net gains on realisation of investments

 

(4,139)

(55)

(4,252)

Transaction costs

 

(7)

(81)

(119)

Decrease in debtors and prepayments

 

 

261 

 

138 

29 

Increase/(decrease) in creditors and accruals

 

737 

(76)

10 

Reconciling items

 

(13)

(25)

Net cash outflow from operating activities

 

 

(159)

 

(861)

 

(1,424)

 

 

The financial information for the six months ended 31 March 2019 and the six months ended 31 March 2018 has not been audited.

 

Notes to the unaudited financial statements
for the six months ended 31 March 2019

 

a)   Principal accounting policies

a)      Statement of compliance
The Company's Financial Statements for the six months to 31 March 2019 have been prepared under UK Generally Accepted Accounting Practice ("UK GAAP") and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued in November 2014 and updated in February 2018 with consequential amendments by the Association of Investment Companies.
The financial statements have been prepared in accordance with the accounting policies set out in the statutory accounts for the year ended 30 September 2018.
b)      Financial information
The financial information contained in this report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the period ended 31 March 2019 and 31 March 2018 has not been audited or reviewed by the Company's Auditor pursuant to the Auditing Practices Board guidance on such reviews. The information for the year to 30 September 2018 has been extracted from the latest published Annual Report and Financial Statements, which have been lodged with the Registrar of Companies, contained an unqualified auditors' report and did not contain a statement required under Section 498 (2) or (3) of the Companies Act 2006.
c)      Going concern
After due consideration, the Directors believe that the Company has adequate resources for the foreseeable future and that it is appropriate to apply the going concern basis in preparing the financial statements. As at 31 March 2019, the Company held cash balances of £11.0 million. The majority of the Company's investment portfolio also remains principally invested in AIM and fully listed equities which may be realised, subject to the need for the Company to maintain its VCT status. Cash flow projections covering a period of twelve months from the date of approving the financial statements have been reviewed and show that the Company has sufficient funds to meet both contracted expenditure and any discretionary cash outflows from buybacks and dividends. The Company has no external loan finance in place and is therefore not exposed to any gearing covenants.
d)      Presentation of the Income Statement

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 Statement of Comprehensive Income. The revenue column of profit attributable to 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.

 

e)      Investments

All investments held by the Company are classified as "fair value through profit and loss", in accordance with FRS102 and the International Private Equity and Venture Capital Valuation ("IPEV") guidelines. This classification is followed 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. In the preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the performance of the investee companies.

·       For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market.

·       Unquoted investments are regularly reviewed to ensure that the fair values are appropriately stated and are in accordance with current IPEV guidelines as updated in December 2018, which relies on subjective estimates. Fair value is established by assessing different methods of valuation, such as price of recent transaction, earnings multiples, discounted cash flows and net assets. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

·       Where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where it is considered the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Manager, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value.

·       Redemption premiums on loan stock investments are recognised at fair value when the Company receives the right to the premium and when considered recoverable.

 

f)       Capital reserves

(i) Realised (included within the Profit and Loss Account reserve)

The following are accounted for in this reserve:

• Gains and losses on realisation of investments;

• Permanent diminution in value of investments; and

• Transaction costs incurred in the acquisition of investments.

 

(ii) Unrealised capital reserve (Revaluation reserve)

Increases and decreases in the valuation of investments held at the period end are accounted for in this reserve, except to the extent that the diminution is deemed permanent.

 

In accordance with stating all investments at fair value through profit and loss, all such movements through both unrealised and realised capital reserves are shown within the Income Statement for the period.

 

(iii) Special reserve

The costs of share buybacks are charged to this reserve. In addition, any realised losses on the sale of investments, and 75% of the management fee expense, and the related tax effect, are transferred from the Profit and Loss Account reserve to this reserve.

 

g)       Short-term debtors and creditors 

Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the Income Statement in other operating expenses.
 

2.  Investment Management Fees

Unicorn Asset Management Limited ("UAML") receives an annual management fee, calculated and payable quarterly in arrears, of 2% of the net asset value of the Company, excluding the value of the investments in the OEICs which are also managed by UAML, up to net assets of £200 million and 1.5% of net assets in excess of £200 million. If the Company raises further funds during a quarter the net asset value for that quarter shall be reduced by an amount equal to the amount raised, net of costs, multiplied by the percentage of days in that quarter prior to the funds being raised.

The Directors have charged 75% (£1,241,000) of the investment management fees to the capital reserve and 25% (£413,000) to revenue.

 

At 31 March 2019 £839,000 payable to the Investment Manager is included in creditors due within one year.

 

3.  Taxation

Despite reporting a revenue profit, the total allowable expenses exceed income and there is no tax charge for the period.

 

4.  Income

 

Six months ended

31 March 2019

(unaudited)

£'000

Six months ended

31 March 2018

(unaudited)

£'000

Year ended

30 September 2018

(audited)

£'000

 

 

 

 

Dividends

822

1,205

2,739

Unicorn managed OEICs

24

65

164

Bank deposits

3

7

8

Loan stock interest

18

63

93

 

 

 

 

 

867

1,340

3,004

 

 

5.  Basic and diluted earnings and return per share

`

Six months ended

31 March 2019

(unaudited)

Six months ended

31 March 2018

(unaudited)

Year ended

30 September 2018

(audited)

 

 

 

 

Profit/(loss) and total comprehensive income after taxation (£'000)

(28,394)  

(4,029)  

17,301 

Basic and diluted earnings per share

(24.11)p

(3.45)p

14.76p

 

 

 

 

Net revenue from ordinary activities after taxation (£'000)

104 

536   

1,405 

Basic and diluted revenue earnings per share

0.09p 

0.46p 

1.20p

 

 

 

 

 

 

 

 

Capital return after taxation (£'000)

(28,498)

(4,565)  

15,896 

Basic and diluted capital earnings per share

(24.20)p

(3.91)p

13.56p

Weighted average number of shares in issue in the period

 

117,775,472 

 

116,703,864 

117,250,279 

 

There are no instruments in place that may increase the number of shares in issue in the future. Accordingly, the above figures represent both basic and diluted earnings per share.

 

6.  Dividends

 

Six months ended

31 March 2019

(unaudited)

£'000

Six months ended

31 March 2018

(unaudited)

£'000

Year ended

30 September 2018

(audited)

£'000

Amounts recognised as distributions to equity holders in the period:

 

 

 

Final capital dividend of 2.50 pence per share and final income dividend of 1.00 pence per share for the year ended 30 September 2017 paid on 2 February 2018

 

-

 

4,161

 

4,161 

Interim capital dividend of 2.80 pence per share and interim income dividend of 0.20 pence per share for the year ended 30 September 2018 paid on 10 August 2018

 

-

 

-

 

3,528 

Final capital dividend of 2.50 pence per share and final income dividend of 1.00 pence per share for the year ended 30 September 2018 paid on 1 February 2019

 

4,083

 

-

 

-

 

Total dividends paid in the period

 

 

4,083

 

4,161

 

7,689 

 

Unclaimed dividends returned

-

-

(44)

 

 

 

 

 

4,083

4,161

7,645 

 

7.  Investments at fair value

 

 

Fully listed

£'000 

Traded on AIM

£'000 

Unlisted shares

£'000 

Unlisted loan stock

£'000 

Unicorn

OEIC

funds

£'000 

Total 

£'000 

Book cost at 30 September 2018

 

15,690

 

95,276 

 

13,859 

 

300 

 

2,215 

 

127,340 

Unrealised gains at 30 September 2018

 

2,842 

 

68,930 

 

5,737 

 

 

2,642 

 

80,151 

Permanent impairment in value of investments

(5,072)

(2,367)

(7,439)

Opening valuation at 30 September 2018

18,532 

159,134 

17,229 

300 

4,857 

200,052 

Purchases at cost

4,224 

750 

13 

4,987 

Sale proceeds

(2,569)

(5,450)

(1,496)

(9,515)

Net realised gains *

578 

2,544 

1,024 

4,146 

(Decrease)/increase) in unrealised gains

(2,743)

(27,228)

41 

(1,466)

(31,396)

Closing valuation at 31 March 2019

13,798 

133,224 

18,020 

300 

2,932 

168,274 

Book cost at 31 March 2019

 

13,699 

96,594 

14,609 

300 

1,756 

126,958

Unrealised gains at 31 March 2019

99 

41,702 

5,778 

1,176 

48,755 

Permanent impairment in value of investments

(5,072)

(2,367)

(7,439)

 

 

 

 

 

 

 

Closing valuation at 31 March 2019

13,798 

133,224 

18,020 

300 

2,932 

168,274 

 

*Transaction costs on the purchase and disposal of investments of £7,000 were incurred in the period. These are excluded from realised gains shown above of £4,146,000 but were included in arriving at gains on realisations of investments disclosed in the Income Statement of £4,139,000.

 

   Reconciliation of cash movements in investment transactions

There is no difference between the sales in Note 7 and that shown in the Cash Flow Statement. The difference between purchases per Note 7 above and that shown in the Cash Flow Statement is £13,000, which is the reinvested dividends on the Unicorn Ethical Fund.

Fair value hierarchy

The table below sets out fair value measurements using FRS 102 s11.27 fair value hierarchy. The Company has one class of assets, being at fair value through profit and loss.

 

 

Level 1

£000

Level 2

£'000

Level 3

£'000

Total

£'000

At 31 March 2019

 

 

 

 

Equity investments

146,738

-

18,020

164,758

Non-equity investments

284

-

-

284

Loan stock investments

-

-

300

300

Open ended Investment Companies

2,932

-

-

2,932

 

 

 

 

 

Total

149,954

-

18,320

168,274

 

 

 

 

 

At 31 March 2018

 

 

 

 

Equity investments

155,442

-

7,606

163,048

Non-equity investments

318

-

-

318

Loan stock investments

-

-

425

425

Open ended Investment Companies

10,335

-

-

10,335

 

 

 

 

 

Total

166,095

-

8,031

174,126

 

 

 

 

 

At 30 September 2018

 

 

 

 

Equity investments

177,373

-

17,229

194,602

Non-equity investments

293

-

293

Loan stock investments

-

-

300

300

Open ended Investment Companies

4,857

-

-

4,857

 

 

 

 

 

Total

182,523

-

17,529

200,052

There are currently no financial liabilities at fair value through profit and loss.

Categorisation within the hierarchy has been determined on the lowest level input that is significant to the fair value measurement of the relevant asset as follows:

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valuation by reference to valuation techniques using directly observable inputs other than quoted prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The valuation techniques used by the Company are explained in the accounting policies in Note 1.

The fair value of unquoted investments, categorised as Level 3, is established by assessing different methods of valuation, such as price of recent transaction, earnings multiples, discounted cash flows and net assets, therefore no assumptions are disclosed or sensitivity analysis provided.

There have been no transfers between levels during the period.

A reconciliation of fair value measurements in Level 3 is set out below:

 

Non-equity investments

£'000 

Equity investments

£'000 

Loan stock investments

£'000 

 

Total 

£'000 

Opening balance at 1 October 2018

17,229 

300 

17,529 

Purchases

750 

750 

Sales

Total gains included in (losses)/gains on investments in the Income Statement

 

 

 

 

- on assets sold

- on assets held at the period end

41 

41 

Closing balance at 31 March 2019

18,020 

300 

18,320 

 

Net asset values

 

 

At 31 March 2019

(unaudited)

At 31 March 2018

(unaudited)

At 30 September 2018

(audited)

Net assets

£178,275,000

£185,500,000

£201,428,000

Number of shares in issue

123,461,320

118,574,174

117,226,048

Net asset value per share

144.40p

156.44p

171.83p

 

8.  Post Balance Sheet Events

On 5 April 2019, the Company allotted and issued 9,663,499 Ordinary shares representing approximately 7.8% of the share capital at prices ranging from 146.6 pence per share to 148.3 pence per share, raising net funds of £13,953,000 from gross subscriptions of £14,290,000.

On 9 April 2019, the Company purchased 433,311 shares for cancellation, representing approximately 0.33% of the issued share capital at a total cost of £564,000 representing 130.2 pence per share.

On 14 May 2019, the Company purchased 200,000 shares for cancellation, representing approximately 0.15% of the issued share capital at a total cost of £271,000 representing 135.5 pence per share.

On 11 June 2019, the Company purchased 425,125 shares for cancellation, representing approximately 0.32% of the issued share capital at a total cost of £581,000 representing 136.7 pence per share.

 

9.    Related party transactions

During the first six months of the financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

 

10.  Copies of this statement are being sent to Shareholders.

Further copies are available free of charge from the Company Secretary, ISCA Administration Services Limited on 01392 487056, email: unicornaimvct@iscaadmin.co.uk, or from the Company's website: www.unicornaimvct.co.uk.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of this announcement

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half-year Report - RNS