Half-yearly Report

UNICORN AIM VCT PLC ("the Company") HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2009 Investment Objective The objective of the Company 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. 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 displays a majority of the following characteristics: - experienced and well-motivated management; - products and services supplying growing markets; - sound operational and financial controls; and - good cash generation to finance development allied with a progressive dividend policy. 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 investments, at the date of that 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 regular 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 20% of net assets, should circumstances suggest that such action is in the interests of shareholders. Chairman's Statement I am pleased to present the Half-Yearly Report of the Company for the six months ended 31 March 2009. Review of performance The period under review saw a continuation of extraordinarily difficult investment conditions, especially at the smaller end of the quoted market. The severe economic and financial crisis currently being experienced has led to an acceleration in the rate of job losses, home repossessions and insolvencies. Scarcity of capital has created major problems for businesses seeking to re-finance, which in turn has had a substantially negative impact on equity valuations. As the economic outlook deteriorated, investors became increasingly risk averse and trading activity in the shares of small, illiquid quoted companies slowed dramatically which, in turn, dragged share prices even lower. For the time being, with the continued absence of any obvious catalysts to support a sustained recovery, it is likely that equity markets will remain volatile. In the six month period to the end of March 2009, the FTSE AIM All-Share Index fell by 33.1% on a total returns basis, whilst the FTSE SmallCap Index fared somewhat better registering a total return of -30.1%. The Funds have performed well relative to the wider market. However, it is nonetheless disappointing to have to report substantial declines in Net Asset Values for the period. It is probably worth reminding investors that, partly because of the rules governing AIM based VCTs, your Investment Manager has limited flexibility to reposition portfolios. Set out below is a summary of performance for each Fund over the six months ended 31 March 2009:- Ordinary Fund S2 Fund S3 Fund Launch date November 2001 February 2004 April 2007 Net asset value ("NAV") at 31 43.1 57.7 70.0 March 2009 (pence per share) Change in NAV per Share since 30 (25.4)% (20.7)% (8.5)% September 2008 after adding back dividends paid in the period Cumulative dividends paid to 42.0 18.75 1.0 date (pence per share) Total net asset value return 85.1 76.5 71.0 since launch (pence per share) Return against NAV at launch of (9.9%) (19.0)% (24.8)% 94.5 pence per share Ordinary Share Fund Over the six months there was a net loss on investments of Â£4.86 million (Â£6.37 million net loss for the six months ended 31 March 2008) and the total loss on ordinary activities after taxation was Â£4.95 million, the equivalent of 16.02 pence per share (Â£6.66 million loss or 21.94 pence per share for the six months ended 31 March 2008). The surplus on the revenue account for the Ordinary Share Fund was Â£28,000 (Â£84,000 deficit for the six months ended 31 March 2008). During the period 422,100 Ordinary Shares were bought back for cancellation at an average price of 26.3 pence per share (before expenses) and at an average discount of 44% to the net asset value per share. S2 Share Fund Over the six months there was a net loss on investments of Â£2.21 million (Â£3.14 million net loss for the six months ended 31 March 2008) and the total loss on ordinary activities after taxation was Â£2.30 million, the equivalent of 15.58 pence per share (Â£3.28 million loss or 22.34 pence per share for the six months ended 31 March 2008). The deficit on the revenue account for the S2 Share Fund was Â£26,000 (Â£43,000 deficit for the six months ended 31 March 2008). No S2 Shares were bought back during the period. S3 Share Fund Over the six months there was a net loss on investments of Â£335,000 (Â£290,000 net loss for the six months ended 31 March 2008) and the total loss on ordinary activities after taxation was Â£329,000, the equivalent of 6.64 pence per share (Â£288,000 loss or 5.80 pence per share for the six months ended 31 March 2008). The surplus on the revenue account for the S3 Share Fund was Â£22,000 (Â£22,000 surplus for the six months ended 31 March 2008). No S3 Shares were bought back during the period. Dividends The Board's policy remains to maximise the stream of dividend distributions to Shareholders from the income and capital gains generated by the portfolio. However, the continuing weakness of equity markets and consequent decline in asset values has resulted in a much reduced level of capital gains. In addition, revenue returns are lower than anticipated due to a reduced level of dividend income and lower interest earned on cash balances. As a consequence, the Board will not be declaring dividends for any of the three Funds for the period under review. The Board will re-consider the payment of dividends when reviewing the Annual Report and Accounts after the end of the current financial year. Qualifying Investments In recent months, the Alternative Investment Market has experienced a rising number of profit warnings issued by companies which are struggling to adapt to an increasingly challenging trading environment. Many businesses have required re-financing in order to ensure their survival and some have been forced to accept very expensive terms to secure new capital investment. The steady flow of negative news combined with occasional forced selling has placed further pressure on the valuations of smaller quoted companies. Performance across all three Funds has been affected by these pressures to varying degrees. In both the Ordinary Share Fund and the S2 Share Fund, a considerable number of investee companies saw their share prices fall by 50% or more during the period. Many of these declines were triggered either by the release of weaker than anticipated financial results or by often misplaced concerns over balance sheet strength and survivability. Profit warnings issued by Glisten, the manufacturer of confectionery and healthy snacks and by Maxima Holdings, an IT managed services business accounted for almost half of the total decline generated by the Ordinary Share Fund's qualifying portfolio. In common with many of the companies within the portfolios, both these businesses are in relatively good health and should survive the current economic downturn. Glisten and Maxima remain profitable and both are capable of generating sustainable levels of free cashflow. The management teams of each of these businesses are now firmly focused on debt reduction. Unfortunately, the shares of both Shieldtech, a specialist manufacturer of body armour, and Strategic Retail, a DIY retailer, were suspended during the period. The Board of Shieldtech remains in negotiations regarding a possible refinancing, whilst Strategic Retail has been declared insolvent. Although trading conditions generally remain extremely difficult, your Investment Manager is confident that most of the companies which have suffered recent setbacks should survive and have the potential to recover in due course. In addition, it is worth noting that many of the companies in which the Funds have invested continue to trade profitably and in some cases are still delivering significant earnings and share price growth. Abcam, a specialist manufacturer and distributor of therapeutic antibodies and Animalcare, a leading supplier of veterinary products, are worthy of particular note, having seen their share prices increase by 27% and 37% respectively in the six months to 31 March 2009. Abcam is held in the Ordinary and S2 Share Funds, whilst Animalcare is held in the S3 Share Fund. The S3 Share Fund remains in the earlier stages of investment, being 29.9% invested in equities, and as a consequence it continued to perform relatively well during the period. In December 2008 the Investment Manager made one further VCT qualifying investment which took the form of 8% Convertible Loan Stock in Snacktime, one of the UK's leading confectionery vending businesses. Each of the three Funds participated in this investment. There were no outright disposals made during the period, although the Ordinary and the S2 Share Funds each received a substantial cash return from their investment in Clerkenwell Ventures, a cash shell, following a change in strategy. The Ordinary and S2 Share Funds effected a sale of their holding in Optare, a bus manufacturer, via an exchange of stock. The Ordinary Share Fund made a partial disposal of its holding in Printing.com, a specialist printing retailer. In aggregate, the Funds remain well above the VCT qualifying threshold required by HM Revenue & Customs, with approximately 79% of the Company's assets being invested in VCT qualifying companies. All other HM Revenue & Customs tests have been complied with and your Board has been advised that the Company has maintained its venture capital trust status. A full list of all the qualifying investments held in all Funds at the period end is included below. Outlook Prospects for the Alternative Investment Market are currently uncertain. A significant proportion of the Index remains concentrated in non-producing, cash-consuming, mining and resource companies which may well find it difficult, if not impossible, to secure the funding required to ensure their survival. At the same time, there are also very many businesses, spread across a broad spectrum of other sectors, which remain profitable and cash generative and which carry little or no debt on their balance sheets. A high percentage of these companies are currently valued by the market as though they are destined to fail. In reality, however, we believe the vast majority will survive the current malaise and emerge as stronger and more efficiently managed businesses. The portfolios are well diversified with a high proportion of each Fund's assets invested in just such businesses. The Board remains optimistic that the Funds have the potential for substantial recovery of value in due course. In the meantime, given the Company's cash position your Investment Manager will, on a selective basis, be seeking to capitalise on the significant valuation anomalies which seem to have emerged at the smaller end of the quoted equity market. Peter Dicks Chairman 29 April 2009 Principal risks and uncertainties 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 2008. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 Income Tax Act 2007. Other risks relate to investment & strategic risk, operational risk and financial instruments risk. A more detailed explanation of these can be found in the Directors' Report on page 22 of the 2008 Annual Report and Accounts - copies are available on the Investment Manager's website, www.unicornam.com. Related Party Transactions Details of related party transactions in accordance with Disclosure and Transparency Rule 4.2.8 can be found in Note 8 to the Accounts below. Responsibility Statement The Directors confirm that to the best of their knowledge: a. the condensed set of financial statements has been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) and the 2003 Statement of Recommended Practice "Financial Statements of Investment Trust Companies", revised December 2005, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, as required by Disclosure & Transparency Rule 4.2.4; and b. the interim management report includes a fair review of the information required by Disclosure & Transparency Rules 4.2.7 - 8 in accordance with Disclosure & Transparency Rule 4.2.10. For and on behalf of the Board: For Matrix-Securities Limited, Secretary 29 April 2009 Investment Portfolio Summary - Ordinary Share Fund As at 31 March 2009 Book cost Valuation % of net assets by value Â£'000 Â£'000 Qualifying investments AIM quoted investments: Abcam plc 466 1,677 12.7% Mattioli Woods plc 449 783 6.0% Supporta plc 1,432 525 4.0% Glisten plc 582 495 3.8% Maxima Holdings plc 1,200 403 3.1% Avingtrans plc 708 354 2.7% SnackTime plc 520 335 2.5% Prologic plc 589 251 1.9% Pilat Media Global plc 480 214 1.6% Zetar plc 406 193 1.5% Huveaux plc 1,000 180 1.4% Kiotech International plc 351 176 1.3% Hasgrove plc 300 163 1.2% Tracsis plc 120 150 1.1% Lees Foods plc 260 124 0.9% Dillistone Group plc 106 119 0.9% Fountains plc 365 117 0.9% Praesepe plc 253 115 0.9% Hexagon Human Capital plc 429 99 0.8% Access Intelligence plc 490 98 0.7% Printing.com plc 123 90 0.7% Sanderson Group plc 385 77 0.6% Augean plc 350 55 0.4% Datong Electronics plc 333 47 0.4% Essentially plc 152 27 0.2% Belgravium Technologies plc 117 15 0.1% Cantono plc 300 3 0.0% Assetco plc 0 0 0.0% -------- -------- -------- 12,266 6,885 52.3% Fully listed investments: Mears Group Plc 970 987 7.5% Microgen plc 181 123 0.9% -------- -------- -------- 1,151 1,110 8.4% Unlisted investments: Amber Taverns Limited 500 518 3.9% Sanastro plc 500 125 1.0% Synarbor plc (formerly Public Recruitment 1,000 - 0.0% Group plc) Shieldtech plc 650 - 0.0% Centurion Electronics plc 575 - 0.0% Strategic Retail plc 426 - 0.0% Greatfleet plc (in administration) 310 - 0.0% -------- -------- -------- 3,961 643 4.9% -------- -------- -------- Total qualifying investments 17,378 8,638 65.6% ===== ===== ===== Non-qualifying investments Money market funds 1 3,519 3,519 26.7% Unicorn Free Spirit Fund (OEIC) 332 426 3.3% AIM quoted investments 434 292 2.2% Listed UK equities 188 191 1.5% -------- -------- -------- Total non-qualifying investments 4,473 4,428 33.7% ===== ===== ===== -------- -------- -------- Total investments 21,851 13,066 99.3% ===== ===== ===== Other assets 281 2.1% Current liabilities (191) (1.4)% -------- -------- Net assets 13,156 100.0% ===== ===== 1 Disclosed within 'current investments' under current assets in the Balance Sheet Investment Portfolio Summary - S2 Share Fund As at 31 March 2009 Book cost Valuation % of net assets by value Â£'000 Â£'000 Qualifying investments AIM quoted investments: Abcam plc 334 1,200 14.1% Mattioli Woods plc 396 690 8.1% Cohort plc 507 656 7.7% Melorio plc 360 338 4.0% Driver Group plc 325 338 4.0% Maxima Holdings plc 800 248 2.9% SnackTime plc 388 240 2.8% Zetar plc 366 174 2.0% Hasgrove plc 300 163 1.9% Tracsis plc 120 150 1.8% Avingtrans plc 288 144 1.7% IS Pharma plc (formerly Maelor plc) 154 126 1.5% Relax Group plc (formerly Debts.co.uk 400 124 1.5% plc) Invocas Group plc 344 118 1.4% Kiotech International plc 195 98 1.1% Prologic plc 218 93 1.1% Keycom plc 120 90 1.1% Printing.com plc 108 79 0.9% Sanderson Group plc 385 77 0.9% Praesepe plc 150 68 0.8% Hexagon Human Capital plc 253 58 0.7% Datong Electronics plc 333 47 0.6% Fountains plc 135 43 0.5% Access Intelligence plc 210 42 0.5% eg solutions plc 250 35 0.4% Essentially plc 152 27 0.3% Augean plc 150 24 0.3% Belgravium Technologies plc 117 15 0.2% Cantono plc 200 2 0.0% -------- -------- -------- 8,058 5,507 64.8% Fully listed investments: Mears Group plc 345 236 2.8% Unlisted investments: Amber Taverns Limited 500 518 6.0% Sanastro plc 500 125 1.5% The Debt Advisor Group plc (formerly 1,000 - 0.0% Compass Finance Group plc) (in administration) Shieldtech plc 350 - 0.0% Strategic Retail plc 174 - 0.0% -------- -------- -------- 2,524 643 7.5% Total qualifying investments 10,927 6,386 75.1% ===== ===== ===== Non-qualifying investments Unicorn UK Smaller Companies Fund (OEIC) 1,213 940 11.0% Unicorn Free Spirit Fund (OEIC) 729 680 8.0% Money market funds 1 532 532 6.1% AIM quoted investments 105 58 0.7% -------- -------- -------- Total non-qualifying investments 2,579 2,210 25.8% ===== ===== ===== -------- -------- -------- Total investments 13,506 8,596 100.9% ===== ===== ===== Other assets 50 0.5% Current liabilities (121) (1.4)% -------- -------- Net assets 8,525 100.0% ===== ===== 1 Disclosed within 'current investments' under current assets in the Balance Sheet Investment Portfolio Summary - S3 Share Fund As at 31 March 2009 Book cost Valuation % of net assets by value Â£'000 Â£'000 Qualifying investments AIM quoted investments: Animalcare Group plc 200 247 7.1% Tracsis plc 220 244 7.0% Melorio plc 187 176 5.1% SnackTime plc 266 155 4.5% IS Pharma plc (formerly Maelor plc) 154 126 3.6% Keycom plc 120 90 2.6% -------- -------- -------- Total qualifying investments 1,147 1,038 29.9% ===== ===== ===== Non-qualifying investments Money market funds 1 1,075 1,075 31.0% Unicorn Outstanding British Companies 503 364 10.5% Fund (OEIC) Unicorn Free Spirit Fund (OEIC) 496 271 7.8% Unicorn Mastertrust Fund (OEIC) 498 259 7.5% Unicorn UK Smaller Companies Fund (OEIC) 496 256 7.4% Unicorn UK Income Fund (OEIC) 480 238 6.9% -------- -------- -------- Total non-qualifying investments 3,548 2,463 71.1% ===== ===== ===== -------- -------- -------- Total investments 4,695 3,501 101.0% ===== ===== ===== Other assets 25 0.7% Current liabilities (56) (1.7)% -------- -------- Net assets 3,470 100.0% ===== ===== 1 Disclosed within 'current investments' under current assets in the Balance Sheet Qualifying Investments AIM quoted investments: Abcam plc Online distributor of antibodies for research purposes. Access Intelligence plc Subscription based sales and marketing support. Animalcare Group plc Manufacturer & supplier worldwide of livestock, healthcare & management products. Assetco plc Provision of ladders and ancillary equipment for the emergency services. Augean plc Operation of hazardous waste landfill sites. Avingtrans plc Provision of precision engineering services. Belgravium Technologies plc Development and supply of rugged, hand-held, battery powered, real time data capture devices. Cantono plc Managed IT services. Cohort plc Provision of a wide range of technical services to clients in the defence and security sectors. Datong Electronics plc Development of a range of advanced covert tracking and location systems. Dillistone Group plc Provider of software services to the executive recruitment industry. Driver Group plc Provision of specialist commercial, project planning and dispute resolution services to the construction industry. EG Solutions plc Provision of proprietary workflow management tools designed to improve operational efficiencies. Essentially plc Sports marketing and media services. Fountains plc Environmental services and grounds maintenance to utility companies and local authorities. Glisten plc Manufacturer of chocolate confectionery, sugar based sweets and edible decorations. Hasgrove plc Pan-European marketing and communications services. Hexagon Human Capital plc Specialist recruitment consultants. Huveaux plc Broadly based media group focusing upon political publishing, education and training. Invocas Group plc Provision of personal and corporate debt solutions based in Scotland. IS Pharma plc (formerly Maelor plc) Pharmaceuticals company. Keycom plc Designers and developers of communications strategies. Kiotech International plc Manufacturer of animal feed supplements. Lees Foods plc Confectionery manufacturer. Mattioli Woods plc Consultants in the provision of pension and wealth management services. Maxima Holdings plc Implementation and support of enterprise software solutions. Melorio plc NVQ training targeted at the Construction Industry. Pilat Media Global plc Development and support of scheduling software for digital TV. Praesepe plc Adult gaming centres. Printing.com plc Franchised high street printing. Prologic plc Development and maintenance of software to meet the operational, reporting and business intelligence needs of fashion businesses. Relax Group plc (formerly Debts.co.uk plc) Specialist advisors for personal debt solution management. Sanderson Group plc Implementation and support of proprietary enterprise software solutions. SnackTime plc Operator of vending machines. Supporta plc Provision of back office support and domiciliary care to the public and private sectors. Tracsis plc Provider of resource optimisation software to transport companies. Zetar plc Niche manufacturer of chocolate confectionery. Fully Listed investments: Mears Group plc Social housing and domiciliary care. Microgen plc IT consultancy and managed services provider. Unlisted investments: Amber Taverns Limited Pub operator. Centurion Electronics plc Design and distribution of in-car audio-visual entertainment systems. Greatfleet plc (in administration) Recruitment consultant specialising in legal and financial search and selection. Sanastro plc Specialist financial publisher. Shieldtech plc Design, manufacture and supply of body armour. Strategic Retail plc Operation of retail outlets specialising in home dÃ©cor and furnishings market. Synarbor plc (formerly Public Recruitment Group plc) Public sector recruitment and services group specialising in the education, healthcare and social work sectors. The Debt Advisor Group plc (formerly Compass Finance Group plc) (in administration) Consumer financial solutions through mortgages, secured and unsecured loans. Unaudited Non-Statutory Analysis between the Ordinary Share, S2 Share and S3 Share Funds Profit and loss accounts For the six months ended 31 March 2009 Ordinary Share fund S2 Share fund Notes Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Unrealised - (4,974) (4,974) - (2,285) (2,285) losses on investments Gains on - 119 119 - 72 72 realisations of investments Income 205 - 205 61 - 61 Investment 2 (42) (127) (169) (21) (62) (83) management fees Other (135) - (135) (66) - (66) expenses ---------- ---------- ---------- ---------- ---------- ---------- Profit/ 28 (4,982) (4,954) (26) (2,275) (2,301) (loss) on ordinary activities before taxation Tax on - - - - - - ordinary activities ---------- ---------- ---------- ---------- ---------- ---------- Profit/ 28 (4,982) (4,954) (26) (2,275) (2,301) (loss) attributable to equity shareholders ====== ====== ====== ====== ====== ====== Basic and 4 0.09 p (16.11)p (16.02)p (0.17)p (15.41)p (15.58)p diluted earnings per 1p share S3 Share fund Total of all three funds (per Statutory Profit and Loss account) Notes Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Unrealised - (335) (335) - (7,594) (7,594) losses on investments Gains on - - - - 191 191 realisations of investments Income 31 - 31 297 - 297 Investment 2 (5) (16) (21) (68) (205) (273) management fees Other expenses (4) - (4) (205) - (205) ---------- ---------- ---------- ---------- ---------- ---------- Profit/(loss) 22 (351) (329) 24 (7,608) (7,584) on ordinary activities before taxation Tax on ordinary - - - - - - activities ---------- ---------- ---------- ---------- ---------- ---------- Profit/(loss) 22 (351) (329) 24 (7,608) (7,584) attributable to equity shareholders ====== ====== ====== ====== ====== ====== Basic and 4 0.44 p (7.08)p (6.64)p diluted earnings per 1p share Balance sheets As at 31 March 2009 Ordinary Share fund S2 Share fund Notes Â£'000 Â£'000 Â£'000 Â£'000 Non current assets Investments at fair 9,547 8,064 value Current Assets Debtors and 163 8 prepayments Current investments 3,519 532 Cash at bank 118 42 --------- --------- 3,800 582 Creditors: amounts (191) (121) falling due within one year --------- --------- Net current assets 3,609 461 --------- --------- Net assets 13,156 8,525 ====== ====== Share capital and reserves Called up share 306 148 capital Capital redemption 54 12 reserve Share premium account 640 200 Revaluation reserve (6,695) (3,810) Special distributable 15,214 11,000 reserve Profit and Loss 3,637 975 account --------- --------- Equity shareholders' 13,156 8,525 funds ====== ====== No. of Shares in i 30,558,244 14,764,738 ssue: Net Asset Value per 1p 6 43.1p 57.7p share: S3 Share fund Adjustments Total of all (see note three funds (per below) Statutory Balance Sheet) Notes Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Non current assets Investments at 2,426 20,037 fair value Current Assets Debtors and 7 (138) 40 prepayments Current 1,075 5,126 investments Cash at bank 18 178 --------- --------- --------- 1,100 (138) 5,344 Creditors: amounts (56) 138 (230) falling due within one year --------- --------- --------- Net current assets 1,044 - 5,114 --------- --------- --------- Net assets 3,470 - 25,151 ====== ====== ====== Share capital and reserves Called up share 50 504 capital Capital redemption - 66 reserve Share premium - 840 account Revaluation (1,194) (11,699) reserve Special 4,546 30,760 distributable reserve Profit and Loss 68 4,680 account --------- --------- Equity 3,470 25,151 shareholders' funds ====== ====== No. of Shares in i 4,958,036 ssue: Net Asset Value 6 70.0p per 1p share: Note: The adjustment above nets off the inter-fund debtor and creditor balances, so that the "Total of all three funds" Balance Sheet agrees to the Statutory balance sheet below. Unaudited Profit and Loss Account For the six months ended 31 March 2009 Six months ended 31 March 2009 Six months ended 31 March 2008 Notes Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Unrealised - (7,594) (7,594) - (9,752) (9,752) losses on investments Gains/ - 191 191 - (46) (46) (losses) on realisations of investments Income 297 - 297 268 - 268 Vat - - - - - - recoverable Investment 2 (68) (205) (273) (109) (327) (436) management fees Other (205) - (205) (264) - (264) expenses ----------- ----------- ----------- ----------- ----------- ----------- Profit/ 24 (7,608) (7,584) (105) (10,125) (10,230) (loss) on ordinary activities before income tax Tax on - - - - - - profit/ (loss) on ordinary activities ----------- ----------- ----------- ----------- ----------- ----------- Profit/ 24 (7,608) (7,584) (105) (10,125) (10,230) (loss) on ordinary activities after taxation for the financial period ======= ======= ======= ======= ======= ======= Basic and diluted earnings per share: Ordinary 4 (16.02)p (21.94)p Shares S2 Shares 4 (15.58)p (22.34)p S3 Shares 4 (6.64)p (5.80)p Year ended 30 September 2008 (audited) Notes Revenue Capital Total Â£'000 Â£'000 Â£'000 Unrealised - (14,209) (14,209) losses on investments Gains/(losses) - (182) (182) on realisations of investments Income 729 - 729 Vat 168 503 671 recoverable Investment 2 (172) (514) (686) management fees Other expenses (504) - (504) ----------- ----------- ----------- Profit/(loss) 221 (14,402) (14,181) on ordinary activities before income tax Tax on profit/ 18 (18) - (loss) on ordinary activities ----------- ----------- ----------- Profit/(loss) 239 (14,420) (14,181) on ordinary activities after taxation for the financial period ======= ======= ======= Basic and diluted earnings per share: Ordinary 4 (27.67)p Shares S2 Shares 4 (33.65)p S3 Shares 4 (14.66)p The total column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. There were no other recognised gains or losses in the period. 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 below form part of these half-yearly financial statements. Unaudited Balance Sheet As at 31 March 2009 As at 31 As at 31 As at 30 March 2009 March 2008 September 2008 (audited) Notes Â£'000 Â£'000 Â£'000 Non current assets Investments at fair 1b 20,037 32,940 28,042 value Current assets Debtors and prepayments 40 83 2,068 Current investments 7 5,126 4,969 4,152 Cash at bank 178 470 48 ------------ ------------ ------------ 5,344 5,522 6,268 Creditors: amounts falling due within one year Other creditors (142) (918) (15) Accruals (88) (171) (172) ------------ ------------ ------------ (230) (1,089) (187) ------------ ------------ ------------ Net current assets 5,114 4,433 6,081 ------------ ------------ ------------ Net assets 25,151 37,373 34,123 ======= ======= ======= Share capital and reserves Share capital 504 498 508 Capital redemption 66 60 62 reserve Share premium account 840 10 840 Revaluation reserve (11,699) (955) (4,603) Special distributable 30,760 34,132 31,396 reserve Profit and Loss account 4,680 3,628 5,920 ------------ ------------ ------------ Equity shareholders' 25,151 37,373 34,123 funds ======= ======= ======= Net asset value per share of 1p each Ordinary Shares 6 43.1p 67.7p 61.8p S2 Shares 6 57.7p 86.6p 75.3p S3 Shares 6 70.0p 86.5p 77.6p The financial information for the six months ended 31 March 2009 and the six months ended 31 March 2008 has not been audited. Unaudited Reconciliation of Movements in Shareholders' Funds For the six months ended 31 March 2009 Six months Six months Year ended ended ended 30 September 2008 31 March 2009 31 March 2008 (audited) Notes Â£'000 Â£'000 Â£'000 Opening 34,123 48,670 48,670 shareholders' funds Net share capital (114) (328) (469) bought back in the period Net share capital - - 842 subscribed in the period Loss for the (7,584) (10,230) (14,181) period Dividends paid in 5 (1,274) (739) (739) period ----------- ----------- ----------- Closing 25,151 37,373 34,123 Shareholders' funds ======= ======= ======= Unaudited Statement of Cash Flows For the six months ended 31 March 2009 Six months Six months Year ended ended 31 March ended 31 March 30 September 2009 2008 2008 (audited) Â£'000 Â£'000 Â£'000 Operating activities Investment income 320 334 713 received VAT recovered/interest on 891 - - VAT Investment management (273) (435) (807) fees paid Other cash payments (167) (303) (600) ------------- ------------- ------------- Net cash inflow/(outflow) 771 (404) (694) from operating activities Investing activities Purchase of investments (352) (1,732) (3,710) Sale of investments 2,073 5,640 5,967 ------------- ------------- ------------- Net cash inflow from 1,721 3,908 2,257 investing activities Dividends Dividends paid (1,274) (739) (739) ------------- ------------- ------------- Cash inflow before 1,218 2,765 824 financing and liquid resource management Financing Share capital raised - - 842 Share capital (114) (373) (513) re-purchased ------------- ------------- ------------- (114) (373) 329 Management of liquid resources Increase in monies held (974) (2,030) (1,213) pending investment ------------- ------------- ------------- Increase/(decrease) in 130 362 (60) cash ======== ======== ======== Reconciliation of net cash flow to movement in net funds Increase/(decrease) in 130 362 (60) cash for the period Net funds at start of 48 108 108 period ------------- ------------- ------------- Net funds at end of 178 470 48 period ======== ======== ======== Reconciliation of operating loss to net cash inflow/(outflow) from operating activities Loss on ordinary (7,584) (10,230) (14,181) activities before taxation Net (gains)/losses on (191) 46 182 realisations of investments Net unrealised losses on 7,594 9,752 14,209 investments Decrease/(Increase) in 870 19 (920) debtors Increase in creditors 82 9 16 ------------- ------------- ------------- Net cash inflow/(outflow) 771 (404) (694) from operating activities ======== ======== ======== NOTES TO THE UNAUDITED FINANCIAL STATEMENTS 1. Principal accounting policies The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report. a. Basis of accounting The unaudited results cover the six months to 31 March 2009 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 2008 and, to the extent that it does not conflict with the Companies Act 1985, the 2003 Statement of Recommended Practice, `Financial Statements of Investment Trust Companies', revised December 2005. The Half-Yearly Report has not been audited, nor has it been reviewed by the auditors pursuant to the Auditing Practices Board (APB)'s guidance on Review of Interim Financial Information. 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. Consequently, the financial statements have been drawn up to include a statutory profit and loss account in accordance with Schedule 4 of the Companies Act 1985 and Financial Reporting Standard 3 "Reporting Financial Performance" and the comparatives have been presented on a consistent basis. This has no effect on total returns or net assets per share. b. Investments 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, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Unquoted investments are valued by the Directors in accordance with the following rules, which are consistent with the International Private Equity Venture Capital Valuation (IPEVCV) guidelines: i. Investments which have been made in the last 12 months are at fair value which, unless another methodology gives a better indication of fair value, will be at cost; ii. Investments in companies at an early stage of their development are also valued at fair value which, unless another methodology gives a better indication of fair value, will be at cost; iii. Where investments have gone beyond the stage of their development in (ii) above, the shares may be valued by applying a suitable price-earnings ratio to that company's post-tax earnings (the ratio used being based on a comparable listed company or sector but discounted to reflect lack of marketability); iv. Where a value is indicated by a material arms-length transaction by a third party in the shares of a company, this value will be used. Unlisted investments will not normally be re-valued upwards for a period of at least twelve months from the date of acquisition for early stage investments. Where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. 2. The Directors have charged 75% of the investment management fee to the capital reserve. 3. Taxation There is no tax charge for the period, as the Company has incurred taxable losses in the period. 4. Basic and diluted earnings and return per share Six months ended 31 March 2009 Ordinary S2 Share S3 Share Total Share Fund Fund Fund Â£'000 Â£'000 Â£'000 Â£'000 Total earnings after (4,954) (2,301) (329) (7,584) taxation: Basic and diluted (16.02)p (15.58)p (6.64)p earnings per share Net revenue from 28 (26) 22 ordinary activities after taxation Revenue return per 0.09p (0.17)p 0.44p share Net unrealised capital (4,974) (2,285) (335) (losses)/gains Net realised capital 119 72 - gains/(losses) Capital element of VAT - - - recoverable Capital expenses (net (127) (62) (16) of taxation) Total capital return (4,982) (2,275) (351) Capital return per (16.11)p (15.41)p (7.08)p share Weighted average 30,927,399 14,764,738 4,958,036 number of shares in issue in the period Six months ended 31 March 2008 Ordinary S2 Share S3 Share Total Share Fund Fund Fund Â£'000 Â£'000 Â£'000 Â£'000 Total earnings after (6,660) (3,282) (288) (10,230) taxation: Basic and diluted (21.94)p (22.34)p (5.80)p earnings per share Net revenue from (84) (43) 22 ordinary activities after taxation Revenue return per (0.28)p (0.29)p 0.44p share Net unrealised capital (6,411) (3,051) (290) (losses)/gains Net realised capital 39 (85) - gains/(losses) Capital element of VAT - - - recoverable Capital expenses (net (204) (103) (20) of taxation) Total capital return (6,576) (3,239) (310) Capital return per (21.66)p (22.05)p (6.24)p share Weighted average 30,357,257 14,691,444 4,958,036 number of shares in issue in the period Year ended 30 September 2008 Ordinary S2 Share S3 Share Total Share Fund Fund Fund (audited) (audited) (audited) (audited) Â£'000 Â£'000 Â£'000 Â£'000 Total earnings after (8,496) (4,958) (727) (14,181) taxation: Basic and diluted (27.67)p (33.65)p (14.66)p earnings per share Net revenue from 180 12 47 ordinary activities after taxation Revenue return per 0.59p 0.08p 0.95p share Net unrealised (8,751) (4,714) (744) capital (losses)/ gains Net realised capital 4 (186) - gains/(losses) Capital element of 411 89 3 VAT recoverable Capital expenses (net (340) (159) (33) of taxation) Total capital return (8,676) (4,970) (774) Capital return per (28.26)p (33.73)p (15.61)p share Weighted average 30,699,263 14,731,850 4,958,036 number of shares in issue in the year 5. Dividends Six months ended 31 March 2009 Ordinary S2 Share S3 Share Total Share Fund Fund Fund Â£'000 Â£'000 Â£'000 Â£'000 Ordinary Share Fund: Interim paid - - - - Final paid re 929 - - 929 prior year S2 Share Fund Interim paid - - - - Final paid re - 295 - 295 prior year S3 Share Fund Interim paid - - - - Final paid re - - 50 50 prior year ----------- ----------- ----------- ----------- 929 295 50 1,274 ======= ======= ======= ======= Six months ended 31 March 2008 Ordinary S2 Share S3 Share Total Share Fund Fund Fund Â£'000 Â£'000 Â£'000 Â£'000 Ordinary Share Fund: Interim paid - - - - Final paid re - - - - prior year S2 Share Fund Interim paid - - - - Final paid re - 739 - 739 prior year S3 Share Fund Interim paid - - - - Final paid re - - - - prior year ----------- ----------- ----------- ----------- - 739 - 739 ======= ======= ======= ======= Year ended 30 September 2008 Ordinary S2 Share S3 Share Total Share Fund Fund Fund (audited) (audited) (audited) (audited) Â£'000 Â£'000 Â£'000 Â£'000 Ordinary Share Fund: Interim paid - - - - Final paid re prior - - - - year S2 Share Fund Interim paid - - - - Final paid re prior - 739 - 739 year S3 Share Fund Interim paid - - - - Final paid re prior - - - - year ----------- ----------- ----------- ----------- - 739 - 739 ======= ======= ======= ======= 6. Net asset value Six months ended 31 March 2009 Six months ended 31 March 2008 Ordinary S2 Share S3 Share Ordinary S2 Share S3 Share Share Fund Fund Fund Share Fund Fund Fund Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Net assets 13,156 8,525 3,470 20,454 12,631 4,288 Number of 30,558,244 14,764,738 4,958,036 30,233,787 14,578,973 4,958,036 shares in issue ----------- ----------- ----------- ----------- ----------- ----------- Net asset 43.1p 57.7p 70.0p 67.7p 86.6p 86.5p value per share Year ended 30 September 2008 Ordinary S2 Share S3 Share Share Fund Fund Fund (audited) (audited) (audited) Â£'000 Â£'000 Â£'000 Net assets 19,154 11,121 3,848 Number of 30,980,344 14,764,738 4,958,036 shares in issue ----------- ----------- ----------- Net asset value 61.8p 75.3p 77.6p per share 7. Current investments These comprise investments in two Dublin based OEIC money market funds, managed by Royal Bank of Scotland and Blackrock Investment Management (UK) Ltd and one UK based money market fund managed by Prime Rate Capital Management LLP. Â£ 5,125,000 (31 March 2008: Â£4,969,000; 30 September 2008: Â£4,151,000) of this sum is subject to same day access, while Â£1,000 (31 March 2008: Â£nil; 30 September 2008: Â£1,000) is subject to two day access. These sums are regarded as monies held pending investment. 8. Related party transactions David Royds is a director and shareholder of Matrix Group Limited, which owns Matrix-Securities Limited and has significant interests in Prime Rate Capital Management LLP ("PRCM") and Matrix Corporate Capital LLP ("MCC"). David Royds is also a director of Matrix-Securities Limited, which acted as Promoter to the Company for a fee of Â£nil (31 March 2008: Â£nil, 30 September 2008: Â£nil) and provides administration services to the Company for a fee of Â£97,000 (31 March 2008: Â£96,000; 30 September 2008: Â£193,000). Â£49,000 (31 March 2008: Â£48,000; 30 September 2008: Â£nil) was due to Matrix at the end of the period. The Company has invested Â£1,000,000 in a liquidity fund managed by PRCM, and earned income of Â£11,000 from this fund in the period to 31 March 2009. MCC were appointed as the Company's brokers on 10 December 2008. No fees have been charged for the period. Two share buybacks were undertaken by MCC on the Company's instruction totalling Â£114,000. Â£80,000 was owed to MCC at the period-end. 9. The financial information for the six months ended 31 March 2009 and the six months ended 31 March 2008 has not been audited. The information for the year ended 30 September 2008 does not comprise full financial statements within the meaning of section 240 of the Companies Act 1985. The financial statements for the year ended 30 September 2008 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 section 237(2) of the Companies Act 1985. The accounting policies used by Unicorn AIM VCT plc in preparing the Half-Yearly Report are consistent with those used in preparing the statutory accounts for the year ended 30 September 2008. 10. 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.matrixgroup.co.uk/ asset_management/vct_services/unicorn_vcts. Shareholder Information The Company's Ordinary Shares (Code: UAV), S2 Shares (UAVB) and S3 Shares (UAV3) 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 prices are also quoted in the Financial Times. Shareholder enquiries: For general Shareholder enquiries, please contact Robert Brittain of Matrix-Securities Limited (the Company Secretary) on 020 3206 7000 or by e-mail on unicorn@matrixgroup.co.uk. 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 info@unicornam.com. Electronic copies of this report and other published information is available on the Company Secretary's website, www.matrixgroup.co.uk and the Investment Manager's website, www.unicornam.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, (calls cost 10p per minute plus network extras - if calling from overseas please dial +44 208 639 3399) or by writing to them at Capita Registrars, Northern House, Woodsome Park, Fennay Bridge, Huddersfield, West Yorkshire HD8 0LA. Should you prefer you may visit their website, www.capitaregistrars.com. Information rights for beneficial owners of shares 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. Corporate Information Directors Peter Dicks (Chairman) James Grossman Jocelin Harris David Royds All of whom are non-executive and of: One Vine Street London W1J 0AH Secretary & Administrator Matrix-Securities Limited One Vine Street London W1J 0AH Company Registration Number : 04266437 Investment Manager Auditors Registrar Unicorn Asset Management PKF (UK) LLP Capita Registrars Limited First Floor Office Farringdon Place Northern House Preacher's Court 20 Farringdon Road Woodsome Park The Charterhouse London Fennay Bridge Charterhouse Square EC1M 3AP Huddersfield London West Yorkshire EC1M 6AU HD8 0LA VCT Tax Adviser Custodian Solicitors PricewaterhouseCoopers LLP The Bank of New York Martineau 1 Embankment Place One Canada Square No 1 Colmore Square London London Birmingham WC2N 6RH E14 5AL B4 6AA Stockbroker Bankers Matrix Corporate Capital LLP National Westminster Bank plc One Vine Street City of London Office London PO Box 12264 W1J 0AH 1 Princes Street London EC2R 8PB

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