Half-yearly Results
UNICORN AIM VCT plc ("the Company")
Half-Yearly Report for the six months ended 31 March 2012
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 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 display 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 ongoing 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 total
investments and cash, at the date of investment.
The Investment Manager is responsible for managing sector and stock specific
risk and the Board does not impose formal limits in respect of such exposures.
However, in order to maintain compliance with HMRC rules and to ensure that an
appropriate spread of investment risk is achieved, the Board receives and
reviews comprehensive reports from the Investment Manager and the
Administrator on a monthly basis. When the Investment Manager proposes to make
an investment in an unquoted company, the prior approval of the Board is
required.
Where capital is available for investment while awaiting suitable VCT
qualifying opportunities, or in excess of the 70% VCT qualification threshold,
it may be invested in collective investment funds or in non-qualifying shares
and securities in smaller listed UK companies.
To date the Company has operated without recourse to borrowing. The Board may
however consider the possibility of introducing modest levels of gearing up to
a maximum of 10% of the adjusted capital and reserves, should circumstances
suggest that such action is in the interests of shareholders.
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.
KEY DATA
As at 31 March 2012
As at 31 March 2012 Net assets Net asset Cumulative NAV total Share price
value per dividends return to (p)
(£ million) share (NAV) paid per shareholders
(p) share (p) since launch
per share (p)
Ordinary Shares
31st March 2012 56.6 97.4 10.0 107.4 70.0
30th September 2011 60.4 103.3 5.0 108.3 86.3
31st March 2011 64.6 109.5 5.0 114.5 97.5
30th September 2010 62.3 104.2 1.0 105.2 85.5
31st March 2010 58.0 94.6 1.0 95.6 73.0
Most shareholders in the Company originally invested in one of the five former
share classes of either the Company and/or Unicorn AIM VCT II plc. As a result
of the merger of all five former share classes in March 2010, all shareholders
now only hold Ordinary shares, These were formerly called S3 shares. To enable
such shareholders in each former share class to monitor the performance of
their original investment, the table below shows the NAV total return at 31
March 2012 for a shareholder that invested £10,000 at £1 per share at the date
of launch of a particular fundraising, excluding any initial income tax relief
received:
Unicorn AIM VCT plc Funds
Share class and year of No. of NAV at 31 Dividends Dividends NAV total
fundraising shares March paid paid return
held post 2012 pre-merger post-merger
merger (£) (£) (£)
(£)
Ordinary Shares (raised in 2011, 8,620 8,397 n/a 431 8,828
issued at average price of 116p)
Ordinary Shares (formerly S3 10,000 9,742 100 900 10,742
Shares raised in 2006/07)
Original Ordinary Shares (raised 6,078 5,921 4,550 547 11,018
in 2001)
Original Ordinary Shares 2007/08 8,442 8,224 903 759 9,886
top-up (13,890 shares issued for
£10,000 investment at 72p per
share)
Series 2 Shares (raised in 2004) 7,750 7,550 2,125 697 10,372
Series 2 Shares 2007/08 top-up 8,424 8,206 489 758 9,453
(10,870 shares issued for £10,000
investment at 92p per share)
Former Unicorn AIM VCT II plc Funds
Share class and year of No. NAV at 31 Dividends Dividends NAV total
fundraising shares March paid paid return (£)
held post 2012 pre-merger post-merger
merger (£) (£)
(£)
Ordinary Shares (raised in 2005) 8,283 8,069 1,300 745 10,114
Ordinary Shares 2007/08 top-up 8,452 8,234 1,225 760 10,219
(10,205 shares issued for £10,000
investment at 98p per share)
C Shares (raised in 2006) 7,267 7,079 245 654 7,978
C Shares 2007/08 top-up (11,235 8,165 7,954 169 734 8,857
shares issued for £10,000
investment at 89p per share)
Initial income tax relief of up to 20% was available for shareholders that
invested in tax years 2001/2002 or 2003/2004, 40% for shareholders that
invested in 2004/2005 and 2005/2006 and 30% for shareholders that invested in
tax years since 2006/2007. Additional capital gains tax deferral relief was
also available for shareholders that invested in 2001/2002 and 2003/2004.
Dividend history
Graph can be found in the Half- Yearly Report.
Unicorn
Ordinary Original VCT II
(formerly S3) Ordinary Ordinary Unicorn VCT
Calendar year paid Shares Shares S2 Shares Shares II C Shares
pence pence pence pence pence
2012* 5.00 3.04* 3.88* 4.14* 3.63*
2011* 4.00 2.43* 3.10* 3.31* 2.91*
2010 - 3.50 2.50 6.00 0.45
2009 1.00 3.00 2.00 1.00 -
2008 - - 5.00 5.00 1.00
2007 - 12.55 10.00 0.50 1.00
2006 - 10.00 1.00 0.50 -
2005 - 5.00 0.75 - -
2004 - 10.45 - - -
2003 - 1.00 - - -
10.00 50.97 28.23 20.45 8.99
* the dividends from 2011 onwards on the Ordinary (formerly S3) shares, are
also shown for each of the former share classes, which have been calculated in
proportion to the merger conversion ratios.
CHAIRMAN'S STATEMENT
I am pleased to present the Half-Yearly Report of the Company for the six
month period ended 31 March 2012.
The net assets of the Company as at 31 March 2012 were £56.62m, which, after
adding back dividends paid, share buybacks and share issues in the period, is
1% lower than the audited net asset figure of £60.4m as at 30 September 2011.
During this six month period, a total of £2.92m was paid to shareholders by
way of dividends, whilst a further £252,000 was applied to funding normal
share buybacks. Net asset value was 97.4 pence per share at period end
compared to 103.3 pence per share at the start of the period, a fall of 5.7%.
However, a dividend of 5 pence per share was paid in the period, so total net
asset value return per share to shareholders fell by 0.9%.
An Enhanced Buyback Facility and Top Up Offer was also introduced and completed
during the period. Over four million shares were tendered under the Enhanced
Buyback Facility and the maximum permitted number of shares were bought back at
93.95 pence per share with the net proceeds of £3,866,249 immediately being
applied to the allotment and issue of 3,984,260 new shares to participating
shareholders. A further £106,222 (including reinvested commission) was subscribed
for 105,767 new ordinary shares, which were issued to investors applying for
shares directly under the Top Up Offer.
The introduction of an Enhanced Buyback Facility was swiftly and enthusiastically
supported by existing shareholders resulting in the Top Up Offer being
significantly oversubscribed. In light of this successful uptake, the Board
intends to implement such schemes in the future, subject to prevailing legislation
and circumstances permitting. In the meantime, I would like to take this opportunity
to welcome all new shareholders and to thank existing shareholders for their
continued support.
In relative performance terms, the period under review has been a challenging
one for the Company's investment portfolio. Net Asset Value per share (after
adjusting for the dividend of 5 pence per share paid in the period) remained
broadly static over the six month period, whilst the FTSE All-Share and the
FTSE AIM All-Share Indices delivered total returns of 15.0% and 13.9%
respectively. Encouragingly, net asset value (after adding back dividends
paid) increased by 5.5% in the final three months of the period, almost fully
recovering the negative total return delivered in the three months to the end
of December 2011.
Economic fragility, concern over the debt levels of Eurozone Member States and
mounting fears that Greece will be forced to exit the Euro entirely, remain
dominant and recurring themes. Unsurprisingly, investor confidence remains at
a low ebb and this nervousness is being reflected in the continued volatility
of UK equity markets as a whole. An apparent improvement in the outlook for
economic growth and agreement on the terms of a financial bailout package for
Greece triggered a sustained market rally between the middle of December 2011
and the end of March 2012. The performance of the FTSE AIM All-Share Index was
particularly strong during this period, rising by over 15%. However, since the
end of the period under review, there has been a rapid worsening in sentiment
as Eurozone fears resurfaced and equity markets have fallen sharply as a
result.
The performance of the Company's investment portfolio reflected the wider
market volatility, but was also further held back by disappointing share price
declines from a small number of VCT qualifying holdings. A review of the main
contributors to performance follows (bracketed figures represent the
percentage share price movement over the half-year period on a bid price
basis):-
Qualifying Investments
Abcam (-3.3%) is a global leader in the supply of therapeutic
antibodies and protein research tools. By value, Abcam remains the largest
single holding in the portfolio. During the period under review, Abcam's share
price fell slightly resulting in significant underperformance relative to the
wider market. This underperformance occurred despite the release of yet
another strong set of financial results. In the six month period ended 31
December 2011, Abcam's revenues grew by 13.5% to £44.7m, whilst profit before
tax, increased 15.9% to £17.6m. Abcam remains a highly cash generative
business and net cash balances as at the period end increased by £9.1m to
£56m.
Access Intelligence (+41%) comprises a group of Software as a Service (Saas)
businesses that deliver compliance solutions to the public and private
sectors. This company's strategy has been to acquire growth businesses in
targeted sectors and then build value through driving organic growth and
increasing cross-selling opportunities. Following a disappointing performance
from an acquired compliance training business, significant management changes
were implemented and the Group's prospects appear to have stabilised. In the
year ended 30 November 2011, turnover was flat at £7.2m, whilst losses after
tax on continuing operations were £92,000; a figure much improved from the
loss before tax of £1.6m recorded in the previous financial year. Following
completion of the disposal of a subsidiary, the Group entered the new
financial year with net cash balances of almost £3m. Access Intelligence
retains a loyal and sizeable customer base from which it derives predictable
recurring revenues, which currently represent 66% of annual turnover. In
addition, the group has returned to the dividend list, reflecting management's
increased confidence in its prospects.
Accumuli (+31%) is a provider of advanced IT security services. In
a pre-close period statement issued in April 2012, the Board reported that the
business had achieved a strong set of results for the financial year ended 31
March 2012. Group revenues are expected to be in excess of £12.5m, whilst
earnings before interest, tax, depreciation and amortisation are reported to
be around £2m. The business remains highly cash generative and cash balances
at the financial year end were expected to be around £2m, despite a cash
payment of £2.7m to the vendors of an acquired business.
Avingtrans (+24%) designs, manufactures and supplies critical components to the
medical, energy, industrial and global aerospace sectors. In February, Avingtrans
announced interim results for the six months to 30 November 2011, which revealed
revenue growth of 20% to £20.2m and fully diluted earnings up by 67% to 3p per share.
Encouragingly, the order book was reported as being close to record levels.
Driver Group (+77%) is a global construction consultancy, which has
undergone significant restructuring over the past 18 months in an effort to
counter a prolonged decline in its traditional construction markets. The
benefits of this restructuring are reported as being better than management
had originally anticipated. Given the continued strength of trading and
secured workload, the Board of Driver Group now believes that results for the
current financial year will exceed management's previous expectations.
Green Compliance (-64%) provides compliance services across the
water hygiene, pest control and fire protection segments to a wide range of
clients in both the UK public and private sectors. Following the release of a
disappointing half yearly report in December, this company's share price
suffered a significant decline. The Group has clearly not been immune from the
difficulties encountered in the wider UK economy, but encouragingly it has
recently been successful in winning new contracts at acceptable margins. The
bid pipeline is also reported as being robust with a number of further
significant opportunities currently at advanced stages of negotiation. Green
Compliance recently announced that it expects to report a solid trading
outcome for the year ended 31 March 2012 in line with management expectations.
HML Holdings (+84%) is a property management services group. In October, HML
announced interim results for the six months to 30 September 2011, which confirmed
another period of solid growth with revenues up 6% and operating profit ahead by 20%.
In November 2011, HML completed a placing of new VCT qualifying shares in order to
help fund the acquisition of a complementary, privately owned, property management
business based in West London. Unicorn AIM VCT originally invested in HML in July
2007 and a further £83,000 of capital was committed in this secondary fundraising round.
Idox (+36%) is a leading independent supplier of software and
services to the UK public sector and other markets. In the financial year
ended 31 October 2011, Idox reported revenues up 23% to £38.6m, whilst
adjusted pre-tax profit rose by 36% to £10.9m. A series of successfully
integrated acquisitions has enabled the Group to extend their core technology
skills into a number of new and highly regulated, asset intensive industries.
In particular, Idox is now positioned as a key vendor in the engineering
document management market, with a global presence and the capability to offer
both enterprise wide and Software as a Service (SaaS) to a growing customer
base. This strategy of diversifying revenue streams both operationally and
geographically ought to enhance the Group's growth prospects whilst offering
further resilience in the currently challenging economic environment.
Instem Life Science Systems (-25%) is a software company focused on
the life sciences and biotechnology markets. Following a mildly negative
trading update released in January 2012, Instem's share price fell by more
than 25%. Preliminary results for the year ended 31 December 2011 were
subsequently announced at the end of March 2012 and revealed that adjusted
operating profit had fallen by 13% to £2m on sales up 7.9% to £10.8m. Revenue
growth was lower than anticipated and this had a disproportionate impact on
profitability because it followed a period of significant investment in both
people and product development. Despite this temporary setback, Instem remains
a robust, profitable and cash generative business that has performed well in
difficult market conditions. Recurring revenues account for over 70% of total
turnover, which provides a high level of visibility, whilst management have
confirmed that they are also pursuing a strong pipeline of new business
opportunities in the current financial year.
Mattioli Woods (-25%) is a specialist pensions consultancy and
wealth management business. Interim results for the period ended 30 November
2011 showed revenues up by 17% to £8.7m, whilst adjusted profit before tax
fell by 17.4% to £2m. The contraction in margin occurred as a result of
increased investment in the business to secure continued growth. At the same
time, the Group experienced a slowdown in investment activity amongst its
client base, as uncertainty surrounding the Eurozone crisis persisted. The
Board remains confident that the Group can maintain its unbroken record of
revenue and profit growth for the full year and has increased the dividend at
the interim stage by 12.1% to reflect this positive outlook.
Snacktime (-25%) is the third largest vending company in the UK. As
it entered the final quarter of 2011, Snacktime reported a promising sales
outlook. Unfortunately, it subsequently proved difficult to convert expected
orders into firm contracts. As a result, machine sales and coinage revenue for
the year ended 31 March 2012 were below market expectations. The impact of
these factors, combined with some unplanned rises in costs, will mean results
for the year ended 31 March 2012 are likely to be materially below market
expectations. The Board remains confident that the financial year to 31 March
2013 will show an improvement in performance and profitability, despite the
current economic climate. Snacktime remains within its banking covenants and
is reported to have in excess of £2m of unused facilities.
Non-Qualifying Investments
The non-qualifying portfolio continued to perform satisfactorily. Among the
more notable share price gains recorded in the period were:-
Brady (+25%), a leading global provider of trading, risk management and
settlement solutions to the energy, metals and soft commodities sectors. In
the financial year ended 31 December 2011, Brady increased turnover by 72% to
over £19m, whilst operating profit increased by 56% to £2.3m. During the
period, operational highlights included the successful integration of an
energy related risk management business, 14 significant new licence contracts
and successful completion of 25 new installations and customer upgrades. Brady
continues to enjoy high visibility with over 50% of annual revenues being
generated on a recurring basis.
Portmeirion Group (+17%) is a major force in the `homewares' industry and one
of the last remaining manufacturers of fine china and porcelain in the UK.
Portmeirion owns iconic brands such as Royal Worcester and Spode and controls
an extensive archive of designs stretching back over 250 years. In the
financial year ended 31 December 2011, Portmeirion delivered record revenues
of £53.6m, an increase of 5% on the previous year, whilst profit before
exceptional items and tax increased by 16% to £6.3m. The Group also continues
to generate attractive free cash flow with cash balances increasing up to
£6.8m at the period end. Total dividends for the year were increased by 12.6%
to a record 19.6 pence per share.
Renold (+32%) is a manufacturer of industrial chains and related power
transmission products. Its products are sold worldwide and are installed
across a wide variety of industrial applications. A trading update issued in
February 2012 highlighted that both the Torque Transmission and Chain
divisions are delivering sales growth and that in the third quarter of
Renold's financial year, operational gearing and the conversion of incremental
revenue into additional profitability was continuing the encouraging trend of
the first half.
Scapa Group (+44%) is a leading manufacturer of technical adhesive tapes. The
business was severely impacted by a steep decline in demand during the
recession, in particular from the automotive market, resulting in significant
losses and a growing level of net debt. Following a change in management
eighteen months ago, the business has stabilised and as a result there has
been continued improvement in financial performance. The positive momentum
achieved in the first half of the year has been maintained and the Board
remains confident of reporting on further profit progress for the financial
year ended 31 March 2012.
There were two investments in the non-qualifying portfolio which performed
particularly poorly:-
ATH Resources (-58%), is one of the UK's last remaining coal producers. Despite
coming out of a number of unattractive fixed-price, legacy coal supply contracts,
ATH continues to encounter significant challenges. In particular, demand remains
low following an unusually mild winter, whilst rapidly rising fuel costs and
falling coal prices are impacting negatively on margins.
Specialist Energy Group (-38%) is a niche manufacturer of boiler circulation
pumps for use primarily in the energy sector. Delays in manufacturing and
problems surrounding the quality of certain third-party supplied castings
impacted the half year numbers to 30 June 2011. Since this time, manufacturing
issues have been resolved, new order intake has improved and a £5m placing at
a significant premium to the underlying share price has been announced.
The Investment Manager has retained these holdings in the belief that they can
recover value in due course although progress on this front continues to be
closely monitored.
Investment Activity
During the period, no new investments were made.
Partial disposals of a number of holdings were made across both the qualifying
and non-qualifying portfolios in order to crystallise capital gains whilst
also raising sufficient cash to meet the dividend payment to shareholders made
in February 2012. In the non-qualifying portfolio, holdings in Advanced
Medical Solutions, Murgitroyd, Parseq, SSE and Unicorn UK Income Fund were
disposed of in their entirety, whilst weightings in Augean, HML Holdings and
Renold were increased to reflect their improving prospects.
VCT Status
In aggregate, the Company remains well above the VCT qualifying threshold
required by HM Revenue & Customs, with approximately 77.5% of total assets, as
calculated in accordance with VCT rules, being invested in VCT qualifying
companies. All other HM Revenue & Customs tests have been complied with and
your Board has been advised by PWC that the Company has maintained its venture
capital trust status.
Dividends
The Board is not proposing an interim dividend, but will consider the payment
of a final dividend when reviewing the results for the full year.
Outlook
Equity markets were generally buoyant in the first three months of 2012. Since
the period end however, this recovery has stalled as confidence in the future
of the Eurozone reached new lows and the UK officially returned to economic
recession. There will doubtless be further twists and turns on the slow and
painful road to recovery and it is therefore likely that volatility in equity
markets will remain a feature. However, the attractions of alternative asset
classes remain limited. The continuing low interest rate environment means
that inflation-adjusted returns from cash and bonds are still likely to be in
negative territory, whilst speculative investment in precious metals, such as
gold, appears to have run its course. In addition, UK equity indices remain
attractively valued, especially at the smaller end of the market. For example,
the FTSE SmallCap Index entered the new year trading on around 7.5x
prospective earnings for calendar 2012 (Source:- MSCI, Bloomberg).
Economic conditions in the UK continue to be difficult, but the Investment
Manager's focus on well managed, profitable and cash generative businesses
with strong leadership positions in niche, growing markets has served the
Company well through previous challenging periods. Smaller businesses also
often have surprisingly significant international exposure and can therefore
avoid being overly dependent on either domestic consumer or public sector
spending. The positive effects of reduced competition and precautionary cost
reduction measures are starting to be reflected in improved profitability
among many smaller quoted companies. There is also some evidence of increasing
appetite for specialist products and services that have the capability to
deliver a rapid return on investment. Finally, a number of favourable changes
to the types of qualifying companies in which a VCT can invest are also
expected to be introduced in the coming tax year, which should further
increase the attractions of VCT investment. If passed into law, these changes
will be helpful and are to be welcomed. In time, they may also act as a
significant catalyst for further renewed interest in the VCT market as a
whole. These changes, combined with attractive valuations for smaller
companies and an improvement in the economic climate, would all make an
attractive case for investing in an established AIM focused VCT.
Conclusion
Unicorn AIM VCT remains the largest AIM focused VCT in the market with net
assets of £56.6m at the period end. Although the six month period under review
has been a challenging one in relative performance terms, the longer term
track record is strong. The portfolio contains a diverse range of companies,
the majority of which are profitable and debt free, trading conditions in
certain sectors have begun to show signs of improvement, whilst the management
teams of our investee companies are generally expressing cautious optimism
regarding prospects. The recent inconclusive elections in Greece have,
however, re-ignited fears of a disorderly exit from the Euro, which could in
turn trigger a domino effect amongst weaker European Member States. This
scenario would clearly be unhelpful for economic recovery and equity markets
would almost certainly react negatively. It is therefore to be hoped that the
political leaders in Europe can swiftly reach agreement on a controlled and
workable solution. In this scenario, the Investment Manager would be confident
of delivering growth in net assets in the second half of your Company's
financial year. However, given the current and significant uncertainties, the
main focus will remain on capital preservation. The Investment Manager will
therefore maintain a conservative, selective and risk-averse approach when
assessing new investment opportunities. In addition, the diversified nature of
the existing portfolio should provide meaningful protection against both
sector and stock specific risk. The longer term aim remains to continue
building the capital and revenue reserves available for tax free distribution
to shareholders.
Peter Dicks
Chairman
17 May 2012
PRINCIPAL RISKS AND UNCERTAINITIES
In accordance with DTR 4.2.7, the Board confirms that the principal risks and
uncertainties facing the Company have not materially changed since the
publication of the Annual Report and Accounts for the year ended 30 September
2011.
The principal risks faced by the Company are:
- investment and strategic risk
- regulatory and tax risk
- operational risk
- fraud and dishonesty risks
- financial instruments risk
- economic risk
A more detailed explanation of these can be found in the Directors' Report on
page 25 and 26 of the 2011 Annual Report and Accounts - copies can be found
via the Company's website, www.unicornaimvct.com.
RELATED PARTY TRANSACTIONS
There were no related party transactions during the period under review.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements, which have been
prepared in accordance with the statement "Half-Yearly Reports" issued by the
Accounting Standards Board, give a true and fair view of the assets,
liabilities, financial position and profit of the Company as at 31 March 2012,
as required by DTR 4.2.4;
(b) 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;
(c) a description of the principal risks and uncertainties facing
the Company for the remaining six months is set out above, in accordance with
DTR 4.2.7; and
(d) the financial statements include a description of the related
party transactions in the first six months of the current financial year that
have materially affected the financial position or performance of the Company
during the period, and any material changes to the related party transactions
since the last Annual Report, in accordance with DTR 4.2.8.
For and on behalf of the Board:
Peter Dicks
Chairman
17 May 2012
INVESTMENT PORTFOLIO SUMMARY
As at 31 March 2012
Book cost Valuation % of net
assets by
value
£'000 £'000
Qualifying investments
AIM/PLUS quoted investments:
Abcam plc 2,225 7,820 13.8%
Animalcare Group plc 1,620 2,483 4.4%
Surgical Innovations plc 331 2,114 3.7%
Anpario plc 1,766 1,890 3.3%
Mattioli Woods plc 1,680 1,832 3.2%
Idox plc 500 1,500 2.6%
Tracsis plc 838 1,312 2.3%
Cohort plc 1,414 1,297 2.3%
Avingtrans plc 996 996 1.8%
Instem plc 985 933 1.6%
Access Intelligence plc 1,467 802 1.4%
Pressure Technologies plc 980 747 1.3%
Green Compliance plc 2,100 742 1.3%
HML Holdings plc 431 715 1.3%
Zetar plc 772 703 1.2%
Accumuli plc 400 677 1.2%
Sinclair Pharma plc (formerly IS 704 630 1.1%
Pharma)
SnackTime plc 2,102 627 1.1%
Tristel plc 878 572 1.0%
Sanderson Group plc 770 539 1.0%
Vindon Healthcare plc 475 523 0.9%
Vianet plc 584 504 0.9%
Maxima Holdings plc 2,251 491 0.9%
Omega Diagnostics plc 500 417 0.7%
Hasgrove plc 975 413 0.7%
Driver Group plc 552 390 0.7%
eg solutions plc 406 359 0.6%
Prologic plc 806 344 0.6%
Lees Foods plc 260 286 0.5%
Printing.com plc 231 208 0.4%
Datong Electronics plc 784 195 0.3%
Belgravium Technologies plc 263 194 0.3%
Dillistone Group plc 106 178 0.3%
Hangar 8 plc 250 175 0.3%
Tangent Communication plc 163 173 0.3%
Brady plc 112 167 0.3%
PHSC plc 153 144 0.3%
Twelve investments, each valued 3,184 859 1.5%
at less than 0.3% of net assets
35,014 34,951 61.4%
Unlisted investments
Access Intelligence plc - loan 1.3%
stock 750 750
SnackTime plc - loan stock 550 550 1.0%
Optimisa plc - 112 0.2%
Five investments, each valued at 0.1%
less than 0.2% of net assets 3,157 29
4,457 1,441 2.6%
Total qualifying investments 39,471 36,392 64.0%
Non-qualifying investments
Listed UK equities 6,433 6,260 11.2%
AIM quoted investments 5,644 5,621 9.9%
Unicorn UK Smaller Companies 3,430 4,879 8.6%
Fund (OEIC)
Unicorn Mastertrust Fund (OEIC) 1,228 1,800 3.2%
Unicorn Free Spirit Fund (OEIC) 827 1,328 2.3%
Money market funds 1 147 147 0.3%
Invu plc - loan stock 200 100 0.2%
Unlisted investments 5 - 0.0%
Total non-qualifying investments 17,914 20,135 35.7%
Total investments 57,385 56,527 99.7%
Other assets 809 1.5%
Current liabilities (721) (1.2%)
Net assets 56,615 100.0%
1 Disclosed within 'Current investments' under Current assets in the Balance Sheet
UNAUDITED INCOME STATEMENT
For the six months ended 31 March 2012
Six months ended 31 March 2012 Six months ended 31 March 2011
(unaudited) (unaudited)
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised
(losses)/
gains on
investments 6 - (583) (583) - 5,116 5,116
Realised
gains on
investments - 173 173 - 584 584
Income 528 - 528 465 - 465
Investment
management
fees 2 (125) (376) (501) (137) (410) (547)
Other
expenses (283) - (283) (274) - (274)
Profit/
(loss) on
ordinary
activities
before
taxation 120 (786) (666) 54 5,290 5,344
Tax on
profit/
(loss) on
ordinary
activities 3 - - - - - -
Profit/
(loss) on
ordinary
activities
after
taxation 120 (786) (666) 54 5,290 5,344
Basic and
diluted
earnings/
(loss) per
share:
Ordinary
shares 4 0.21p (1.35)p (1.14)p 0.09p 8.92p 9.01p
Year ended 30 September 2011
(audited)
Notes Revenue Capital Total
£'000 £'000 £'000
Unrealised (losses)/gains on
investments - 781 781
Realised gains on investments - 1,170 1,170
Income 1,103 - 1,103
Investment management fees 2 (276) (829) (1,105)
Other expenses (539) - (539)
Profit/(loss) on ordinary
activities before taxation 288 1,122 1,410
Tax on profit/(loss) on ordinary
activities 3 - - -
Profit/(loss) on ordinary
activities after taxation 288 1,122 1,410
Basic and diluted
earnings/(loss) per share:
Ordinary shares 4 0.48p 1.89p 2.37p
All revenue and capital items in the above statement derive from continuing
operations of the Company.
There were no other recognised gains or losses in the period.
The total column of this statement is the profit and loss account of the
Company.
Other than revaluation movements arising on investments held at fair value
through Profit and Loss Account, there were no differences between the profit/
(loss) as stated above and at historical cost.
UNAUDITED BALANCE SHEET
As at 31 March 2012
As at As at As at
31 March 2012 31 March 2011 30 September 2011
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Non current assets
Investments at fair value 1c,6 56,380 62,578 59,563
Current assets
Debtors and prepayments 159 718 177
Current investments 7 147 448 779
Cash at bank 650 1,164 650
956 2,330 1,606
Creditors: amounts falling due within one year (721) (290) (722)
Net current assets 235 2,040 884
Net assets 56,615 64,618 60,447
Share capital and reserves
Share capital 8 581 590 585
Capital redemption reserve 8 328 263 283
Share premium account 8 32,330 26,748 28,422
Revaluation reserve 8 1,319 7,184 2,685
Special distributable reserve 8 14,250 21,605 18,838
Profit and Loss account 8 7,807 8,228 9,634
Equity shareholders' funds 56,615 64,618 60,447
Net asset value per share of 1p each
Ordinary shares 9 97.41p 109.50p 103.34p
The financial information for the six months ended 31 March 2012 and the six
months ended 31 March 2011 has not been audited.
UNAUDITED RECONCILATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the six months ended 31 March 2012
Six months ended Six months ended Year ended
31 March 2012 31 March 2011 30 September 2011
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Opening
shareholders' funds 60,447 62,279 62,279
Net share capital
bought back in the
period 8 (4,139) (2,233) (4,173)
Net share capital
subscribed in the
period 8 3,898 1,620 3,309
(Loss)/profit for
the period (666) 5,344 1,410
Dividends paid in
period 5 (2,925) (2,392) (2,378)
Closing
Shareholders' funds 56,615 64,618 60,447
The financial information for the six months ended 31 March 2012 and the six
months ended 31 March 2011 has not been audited.
UNAUDITED STATEMENT OF CASH FLOWS
For the six months ended 31 March 2012
Six months ended Six months ended Year ended
31 March 2012 31 March 2011 30 September 2011
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Investment income received 529 722 1,306
Other income received - - 50
Investment management fees
paid (501) (546) (1,106)
Other cash payments (181) (545) (781)
Net cash outflow from
operating activities (153) (369) (531)
Investing activities
Purchase of investments (409) (4,904) (7,834)
Sale of investments 3,547 9,599 11,817
Net cash inflow from
investing activities 3,138 4,695 3,983
Dividends
Equity dividends paid to
Unicorn AIM VCT plc
shareholders (2,925) (2,392) (2,378)
Cash inflow before financing
and liquid resource
management 60 1,934 1,074
Financing
Share capital raised 3,942 1,080 3,309
Share capital bought back (4,634) (2,126) (3,678)
(692) (1,046) (369)
Management of liquid
resources
Decrease/(increase) in
monies held pending
investment 632 (73) (404)
No change/Increase in cash - 815 301
Reconciliation of net cash
flow to movement in net
funds
No change/increase in cash
for the period - 815 301
Net funds at start of period 650 349 349
Net funds at end of period 650 1,164 650
Reconciliation of operating
(loss)/profit to net cash
outflow from operating
activities
(Loss)/profit on ordinary
activities before taxation (666) 5,344 1,410
Net gains on realisations of
investments (173) (584) (1,170)
Net unrealised
losses/(gains) on
investments 583 (5,116) (781)
Transaction costs (10) (141) (167)
Decrease in debtors 514 309 297
Decrease in creditors (401) (181) (120)
Net cash outflow from
operating activities (153) (369) (531)
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 2012 and
have been prepared under UK Generally Accepted Accounting Practice (UK GAAP),
consistent with the accounting policies set out in the statutory accounts for
the year ended 30 September 2011 and the Statement of Recommended Practice,
'Financial Statements of Investment Trust Companies and Venture Capital
Trusts' ('the SORP') issued by the Association of Investment Trust Companies
in January 2009.
As a result of the Directors' decision to distribute capital
profits by way of a dividend, the Company revoked its investment company
status as defined under section 266 (3) of the Companies Act 1985, on 17
August 2004.
The half-yearly report has not been audited nor has it been
reviewed by the auditor pursuant to the Auditing Practices Board (APB)
guidance on Review of Interim Financial Information.
b) 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 Income Statement. The revenue column of profit attributable to
equity shareholders is the measure the Directors believe appropriate in
assessing the Company's compliance with certain requirements set out in
Section 274 Income Tax Act 2007.
c) Investments
Investments are accounted for on a trade date basis.
All investments held by the Company are classified as "fair value
through profit and loss" as the Company's business is to invest in financial
assets with a view to profiting from their total return in the form of capital
growth and income. For investments actively traded in organised financial
markets, recognition and fair value is determined by reference to Stock
Exchange market trading rules and quoted bid prices at the close of business
on the balance sheet date.
Unquoted investments are valued by the Directors at `fair value
through profit and loss'. Accordingly, in the absence of a market price, the
Directors have valued unquoted investments in accordance with International
Private Equity Venture Capital Valuation (IPEVCV) guidelines as updated in
September 2009.
All unquoted investments are held at the price of a recent
investment for an appropriate period where there is considered to have been no
change in fair value. Where such a basis is no longer considered appropriate,
the following factors will be considered:
(i) Where a value is indicated by a material arms-length
transaction by an independent third party in the shares of a company, this
value will be used.
(ii) In the absence of i), and depending upon both the subsequent
trading performance and investment structure of an investee company, the
valuation basis will usually move to either:-
a) an earnings multiple basis. The shares may be valued by applying
a suitable price-earnings ratio to that company's historic, current or
forecast post-tax earnings before interest and amortisation (the ratio used
being based on a comparable sector but the resulting value being adjusted to
reflect points of difference identified by the Investment Manager compared to
the sector including, inter alia, a lack of marketability).
or:-
b) where a company's underperformance against plan indicates a
diminution in the value of the investment, provision against cost is made, as
appropriate. Where 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.
(iii) Premiums on loan stock investments are accrued at fair value
when the Company receives the right to the premium and when considered
recoverable.
(iv) Where an earnings multiple or cost less impairment basis is
not appropriate and overriding factors apply, discounted cash flow or net
asset valuation bases may be applied.
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
Year ended
Six months Six months 30
ended 31 ended 31 September
March 2012 March 2011 2011
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Total earnings after taxation: (666) 5,344 1,410
Basic and diluted (loss)/earnings per share (1.14)p 9.01p 2.37p
Net revenue from ordinary activities after taxation 120 54 288
Revenue return per share 0.21p 0.09p 0.48p
Net unrealised capital (losses)/gains (583) 5,116 781
Net realised capital gains 173 584 1,170
Capital expenses (net of taxation) (376) (410) (829)
Total capital (loss)/return (786) 5,290 1,122
Capital (loss)/return per share (1.35)p 8.92p 1.89p
Weighted average number of shares in issue in the period 58,445,366 59,317,309 59,414,982
5. Dividends
Year
Six months Six months ended 30
ended 31 ended 31 September
March 2012 March 2011 2011
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Final capital dividend of 4p per
share for the year ended 30 September
2010 paid on 14 January 2011 - 2,392 2,378
Final capital dividend of 4.25p and
final income dividend of 0.75p per
share for the year ended 30 September
2011 paid on 10 February 2012 2,925 - -
2,925 2,392 2,378
6. Investments
Traded on Unlisted
Fully AIM/PLUS ordinary Unlisted Unicorn
Listed Market shares Loan stock OEIC funds Total
£'000 £'000 £'000 £'000 £'000 £'000s
Book cost at 30
September 2011 6,656 40,974 3,162 1,500 6,763 59,055
Unrealised gains
at 30 September
2011 (217) 1,427 (896) (100) 2,471 2,685
Permanent
impairment in
value of
investments - (15) (2,162) - - (2,177)
Valuation at 30
September 2011 6,439 42,386 104 1,400 9,234 59,563
Purchases at cost 315 440 - - 9 764
Sale proceeds (568) (1,350) - - (1,629) (3,547)
Realised gains 20 125 - - 38 183
Unrealised
gains/(losses) in
the period 54 (1,029) 37 - 355 (583)
Closing valuation
at 31 March 2012 6,260 40,572 141 1,400 8,007 56,380
- - - - - -
Book cost at 31
March 2012 6,432 40,658 3,162 1,500 5,486 57,238
Unrealised
(losses)/gains at
31 March 2012 (172) (86) (844) (100) 2,521 1,319
Permanent
impairment in
value of
investments - - (2,177) - - (2,177)
Valuation at 31
March 2012 6,260 40,572 141 1,400 8,007 56,380
Investment purchases above of £764,000 differs to that shown in the
Cashflow Statement by £355,000. This difference is due to £8,000 of
capitalised dividend from Unicorn Outstanding British Companies OEIC and a
£347,000 addition in Augean plc which settled shortly after the period end.
Realised gains above of £183,000 differ from net realised gains per the Income
Statement of £173,000 due to transaction costs of £10,000.
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 amount to £147,000 (31 March 2011: £448,000; 30 September 2011:
£779,000). All of this sum is subject to same day access. These sums are
regarded as monies held pending investment.
8. Reserves
Profit
Called up Capital Share Special and
share redemption premium Revaluation distributable loss
capital reserve account reserve reserve account Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 October
2011 585 283 28,422 2,685 18,838 9,634 60,447
Shares issued 41 - 4,066 - - - 4,107
Shares bought
back (45) 45 - - (4,139) - (4,139)
Expenses of
Enhanced
Buyback Scheme
and Top Up
Offer (see
note below) - - (158) - (51) - (209)
Transfer to
special
distributable
reserve - - - - (398) 398 -
Gains on
disposal of
investments
(net of
transaction
costs) - - - - - 173 173
Realisation of
previously
unrealised
gains - - - (783) - 783 -
Unrealised
losses in the
period - - - (583) - - (583)
Loss for the
period - - - - - (256) (256)
Dividends paid (2,925) (2,925)
At 31 March
2012 581 328 32,330 1,319 14,250 7,807 56,615
Note:
The expenses of the Enhanced Buyback ("EBB") Scheme and Top Up
Offer of £209,000 are firstly, the commission rebate of 3.5% upon the sum
subscribed by shareholders under the EBB Scheme of £135,000 and secondly,
third party costs of the Scheme and Top Up Offer of £74,000. All of these
costs were charged to the VCT but borne by those shareholders who participated
in the EBB scheme and the Top Up Offer. No fees were charged by the Manager.
The amount relating to shares issued (net of expenses) above, of £3,898,000,
differs from that shown in the cash flow statement of £3,942,000. The
difference of £44,000 relates to amounts payable to reimburse the Manager for
Offer costs funded by the Manager, which, as explained above, were wholly
borne by those shareholders who participated in the EBB scheme.
9. Net asset value
At 31 March 2012 At 31 March 2011 At 30 September 2011
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net assets 56,615 64,618 60,447
Number of shares in issue 58,117,481 59,014,330 58,492,674
Net asset value per share 97.41p 109.50p 103.34p
10. The financial information for the six months ended 31 March
2012 and the six months ended 31 March 2011 has not been audited.
The financial information contained in this half-yearly report does
not constitute statutory accounts as defined in Section 434 of the Companies
Act 2006. The financial statements for the year ended 30 September 2011 have
been filed with the Registrar of Companies. The auditors have reported on
these financial statements and that report was unqualified and did not contain
a statement under either section 498(2) or 498(3) of the Companies Act 2006.
Copies of this statement are being sent to all shareholders.
Further copies are available free of charge from the Company's registered
office, One Vine Street, London W1J 0AH, or from www.unicornam.com or
www.unicornaimvct.com
Shareholder Information
The Company's Ordinary Shares (Code: UAV) are listed on the London Stock
Exchange. Shareholders can visit the London Stock Exchange website,
www.londonstockexchange.com, for the latest news and share prices of the
Company. The share price is also quoted in the Financial Times.
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 can be found
via the Company's website, www.unicornaimvct.com.
To notify the Company of a change of address or to request a dividend mandate
form (should you wish to have future dividends paid directly into your bank
account) please contact the Company's Registrars, Capita Registrars on 0871
664 0300, (lines are open 8.30 am - 5.30 pm on Monday to Friday, calls cost
10p per minute plus network extras - if calling from overseas please ring +44
208 639 2157) or by writing to them at Capita Registrars, The Registry, 34
Beckenham Road, Beckenham, Kent, BR3 4TU. Alternatively you may visit their
website, www.capitaregistrars.com/shareholders.
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)
Malcolm Diamond
James Grossman
Jeremy Hamer
Jocelin Harris
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 Auditor Registrar
Unicorn Asset Management PKF (UK) LLP Capita Registrars
Limited
First Floor Office Farringdon Place The Registry
Preacher's Court 20 Farringdon Road 34 Beckenham Road
The Charterhouse London Beckenham
Charterhouse Square EC1M 3AP Kent
London BR3 4TU
EC1M 6AU
VCT Tax Adviser Custodian Solicitors
PricewaterhouseCoopers LLP BNY Mellon 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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