Hargreave Hale AIM VCT 1 plc : Final Results

Hargreave Hale AIM VCT1 plc Preliminary Announcement of Final Results for the year ending 30 September 2011. FINANCIAL HIGHLIGHTS Ordinary Shares (as at 30 September): 2011 2010 Net asset value per share 61.14p 62.67p Cumulative distributions paid per share since launch 23.0p 19.00p Total return 84.14p 81.67p Discount to Net Asset Value (based on bid-market price at balance 13.3% 15.0% sheet date) Annual Returns per share: Revenue return (0.25)p 0.07p Capital return 2.31p 0.21p Combined Return 2.06p 0.28p Dividends per share: Interim paid 2.0p 2.0p Final proposed 2.0p 2.0p Total dividend for year 4.0p 4.0p Performance Benchmark: Total Return 88.6% 86.0% FTSE AIM All-share Index 72.7% 81.2% (results rebased to 100 at 29 October 2004) CHAIRMAN'S STATEMENT Introduction At 30 September 2011 the NAV was 61.14 pence which after adding back the dividends paid gives a total return since inception of 84.14 pence. The gain per ordinary share for the year was 2.06 pence per share (comprising revenue loss of (0.25) pence and capital gains of 2.31 pence). Investments The Investment Manager, Hargreave Hale Limited, invested a further £2.15 million in 12 qualifying companies during the year and 1 company went into administration realising a net loss of £0.3 million. The Fair Value of qualifying investments at 30 September 2011 was £11.3 million invested in 40 AIM companies and 3 unquoted companies. £5.05 million was held in a mix of cash, fixed income and other non-qualifying equities; more detail can be found in the Investment Manager's Report. Dividend An interim dividend of 2 pence was paid on 14 July 2011 (2010 - 2 pence). A final dividend of 2 pence is proposed (2010 - 2 pence) which, subject to shareholder approval at the AGM will be paid on 23 January 2012, to ordinary shareholders on the register on 30 December 2011. The directors have maintained a dividend policy of at least 5 per cent. of the year end NAV. Subject to market conditions they expect that this will continue. Buybacks We were pleased that we were able to maintain our policy of offering our shareholders an efficient exit route through the buyback scheme. In total, 1,256,460 Shares were purchased during the year at an average price of 60.19 pence per share. Continuation Vote At the forthcoming General Meeting a vote will be put to shareholders to decide whether or not to continue as a VCT. As referred to above we have been able to honour our intention at the outset to buy back shares from shareholders at a 10 per cent. discount. I believe all shareholders who so wished have been able to exit. If we wound up the fund it is unlikely that after all of the costs involved we would achieve a better result than this. Furthermore, in the current market the shares in our portfolio companies are significantly depressed and in most cases very illiquid. Therefore your board recommends that you vote in favour of the Continuation as they will be doing with their own shares (114,163 representing 0.43 per cent. of the Company) New Joint Offer for Subscription of Ordinary Shares On the 9 March 2011 a new joint offer for subscription of Ordinary Shares was opened to raise up to approximately £2.65 million, in aggregate, in New Ordinary Shares for Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc. The Offer has resulted in funds being received of £0.37 million and 0.54 million shares have been issued in respect of Hargreave Hale AIM VCT 1 plc. The offer closed on the 29 July 2011. VCT Status To maintain its VCT qualifying status we must invest at least 70 per cent. of the net funds raised in any one accounting period in qualifying investments within three years. At the yearend we have achieved 86.34 per cent. and have satisfied all the relevant tests. Outlook The major contributor to the recession of the 1930's was the collapse of banks which had a domino effect on other banks and the reduced supply of money massively slowed up the economy. If a major bank in Europe which are today considerably larger and have a much greater market share were allowed to default the knock on effect around the globe is too awful to contemplate. It is clear in that certain countries, of which Greece is the prime example, are insolvent. Whilst strenuous efforts are being made to stop Greece defaulting there are good reasons to believe that at least in the medium term this will not succeed.  However a great number of banks have massive exposure to sovereign debt and will need to be supported by their governments, always assuming they are able to raise money. In the face of this prospect almost all banks are trying to reduce their levels of gearing either by raising more money which few are able to achieve or by reducing the size of their loan books. The effect of this is a slowing of economic growth. The longer the European Union takes to make strong and effective action the closer Europe moves towards financial meltdown. Stock Markets reflect investor confidence which is affected by many influences. At the present time there are some huge uncertainties about sovereign and bank debt in Europe and the effect that that this will have on the Euro and this is causing a lack of investor confidence and a flight to perceived quality which hits the AIM market hardest. Despite the extreme negative economic outlook, we believe that we have a well balanced mature portfolio of well funded companies which are well positioned to weather any further economic disruption. The Company maintains 25 per cent of its NAV in cash or fixed income which may be used to exploit interesting investment opportunities which may arise out of economic adversity. Sir Aubrey Brocklebank Chairman Date: 21 November 2011 The Directors each confirm to the best of their knowledge that: a)  the financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and b) the Annual Report, to be published shortly, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. INCOME STATEMENT For the year ended 30 September 2011 Revenue Capital Total £000 £000 £000 Net gain on investments held at fair value - 809 809 through profit or loss Income 279 - 279 -------- -------- -------- 279 809 1,088 -------- -------- -------- Management fee (65) (196) (261) Other expenses (280) - (280) -------- -------- -------- (345) (196) (541) -------- -------- -------- (Loss)/Profit on ordinary activities before (66) 613 547 taxation Taxation - - - -------- -------- -------- (Loss)/Profit after (66) 613 547 taxation -------- -------- -------- (Loss)/Profit per share (0.25) 2.31 2.06 (pence)   --------              -------- -------- INCOME STATEMENT For the year ended 30 September 2010 Revenue Capital Total £000 £000 £000 Net gain on investments held at fair value through - 165 165 profit or loss Income 296 - 296 -------- -------- -------- 296 165 461 -------- -------- -------- Management fee (36) (110) (146) Other expenses (242) - (242) -------- -------- ------- (278) (110) (388) -------- -------- ------- (Loss)/Profit on ordinary activities before taxation 18 55 73 Taxation - - - -------- -------- -------- (Loss)/Profit after taxation 18 55 73 -------- -------- -------- (Loss)/Profit per share (pence) 0.07 0.21 0.28 The total column of these statements is the income statement of the Company. All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than the profit for the year. The accompanying notes are an integral part of these financial statements. BALANCE SHEET Company registration number: 5206425 As at 30 September 2011          (in England and Wales)   2011 2010     £000   £000 Fixed assets Investments at fair value through profit or loss 15,141 15,530 -------- -------- Current assets Debtors 52 94 Cash at bank 1,202 1,088 -------- -------- 1,254 1,182 Creditors: amounts falling due within one year (161) (160) -------- -------- Net current assets 1,093 1,022 -------- -------- Net assets 16,234 16,552 -------- -------- Capital and Reserves Called up share capital 292 291 Special reserve 18,632 21,263 Capital reserve - realised (4,882) (3,637) Capital reserve - unrealised (454) (2,312) Revenue reserve 119 185 Share Premium 1,752 - Capital redemption reserve 775 762 -------- -------- Equity shareholders' funds 16,234 16,552 -------- -------- Net asset value per share 61.14p 62.67p These financial statements were approved and authorised for issue by the Board of Directors on 21 November 2011 and signed on its behalf by Sir Aubrey Brocklebank Bt Chairman The accompanying notes are an integral part of these financial statements. CASH FLOW STATEMENT For the year ending 30 September 2011 2011   2010 £000   £000 Net cash (outflow)/inflow from operating activities (219) (60) Net financial investment 1,198 714 Dividends paid (1,063) (537) --------- --------- Cash (outflow)/inflow before management of liquid (84) 117 resources Financing 198 (88) --------- --------- Increase/(Decrease) in cash 114 29 --------- --------- RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS For the year ending 30 September 2011     Capital Capital Capital   Share Redemption Reserve Reserve Special Share Revenue Capital Reserve Realised Unrealised Reserve Premium Reserve Total   £000 £000 £000 £000 £000 £000 £000 £000 At 1 October 291 762 (3,637) (2,312) 21,263 - 185 16,552 2010 Transfer for - - - - (812) 812 - - Share Subscriptions** Share (13) 13 - - (756) - - (756) buybacks Subscriptions 14 - - - - 940 - 954 Equity - - - - (1,063) - - (1,063) dividends paid (Note 18) +---------------------------------------------------------------------------------------------+ |Realised losses - - (1,049) - - - - (1,049)| |on | |investments | | | |Unrealised - - - 1,858 - - - 1,858| |gains on | |investments | | | |Management fee - - (196) - - - - (196)| |charged to | |capital | | | |Revenue loss - - - - - - (66) (66)| |after | |taxation for | |the year | +---------------------------------------------------------------------------------------------+ Total profit - - (1,245) 1,858 - - (66) 547 after taxation ------ ------ --------- --------- --------- --------- ------ --------- At 30 September 292 775 (4,882) (454) 18,632 1,752 119 16,234 2011 ------ ------ --------- --------- --------- --------- ------ --------- Reserves available for distribution are capital reserve realised, special reserve and revenue reserve. **The transfer represents the premium of subscriptions made in 2010 that were originally recorded in the special reserve. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS For the year ending 30 September 2010     Capital Capital Capital   Share Redemption Reserve Reserve Special Revenue Capital Reserve Realised Unrealised Reserve Reserve Total   £000 £000 £000 £000 £000 £000 £000 At 1 October 294 746 (2,871) (3,133) 21,901 167 17,104 2009 Share (16) 16 - - (913) - (913) buybacks Subscriptions 13 - - - 812 - 825 Equity - - - - (537) - (537) dividends paid (Note 18) +--------------------------------------------------------------------------------+ |Realised - - (656) - - - (656)| |losses on | |investments | | | |Unrealised - - - 821 - - 821| |gains on | |investments | | | |Management - - (110) - - - (110)| |fee charged | |to capital | | | |Revenue gain - - - - - 18 18| |after | |taxation for | |the | |year | +--------------------------------------------------------------------------------+ Total profit - - (766) 821 - 18 73 after taxation   -------- -------- -------- -------- -------- -------- -------- At 30 291 762 (3,637) (2,312) 21,263 185 16,552 September 2010 -------- -------- -------- -------- -------- -------- -------- Notes to the preliminary announcement 1. The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 30 September 2011 or 30 September 2010. Statutory accounts for the year ended 30 September 2010 have been filed with the Registrar of Companies and those of the year ended 30 September 2011 will be delivered to the Registrar in due course; both have been reported on by the Independent Auditors. The independent auditors' reports on the Statutory accounts for the years ended 30 September 2010 and 30 September 2011 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.. The financial information in this preliminary announcement has been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with UK GAAP and with the Statement of Recommended Practice (SORP) for Financial Statements of Investment Trust Companies issued in January 2009. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the year ended 30 September 2011. The full statutory annual accounts will be published in November 2011. Copies may in due course be obtained during normal business hours from Hargreave Hale Limited, 9-11 Neptune Court, Hallam Way, Blackpool, FY4 5LZ. The Annual general meeting of the company will be held at the Company's registered office on 20 December 2011 at 11.00am. 2. Revenue return per ordinary share is based on a net revenue loss on ordinary activities after tax of £66,000 (2010 £18,000 gain) and on 26,527,597 (2010 26,416,692) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on a net capital profit on ordinary activities after tax of £613,000 (2010 £55,000) and on 26,527,597 (2010 26,416,692) ordinary shares, being the weighted average number of ordinary shares in issue during the year. 3. 4. The net asset value per ordinary share at 30 September 2011 of 61.14p (2010 62.67p) is based on net assets of £16,234,000 (2010 £16,552,000) and on 26,551,918 shares, being the number of ordinary shares in issue as at 30 September 2011 (2010 26,410,352). INVESTMENT PORTFOLIO SUMMARY Ordinary Share Fund As at 30 September 2011 Book Cost Valuation Valuation Qualifying investments £000 £000 % Abcam 100 1,088 7.18 Advanced Computer Software 400 953 6.29 Intercede 518 941 6.22 Animalcare Group plc 300 873 5.76 Craneware 150 692 4.57 Cohort 800 540 3.57 EKF 300 500 3.30 K3 270 480 3.17 Idox 150 440 2.91 Instem Life 297 374 2.47 Pressure Technologies 340 308 2.04 MyCelx 300 300 1.98 Brulines 387 292 1.93 Sinclair IS Pharma 350 288 1.90 In-Deed 234 246 1.62 Vertu 600 245 1.62 Microsaic 246 215 1.42 TMO 200 200 1.32 Egdon Resources 158 196 1.29 Mexican Grill A Prefs 185 185 1.22 Plastics Capital 250 175 1.16 Chime 220 167 1.10 Omega Diagnostics 150 156 1.03 Tasty 288 143 0.94 Richoux 365 139 0.92 Reneuron 298 119 0.79 Tangent Comms 300 115 0.76 Keycom 300 113 0.74 Jelf 174 107 0.71 Corac 150 100 0.66 Universe 385 82 0.55 Advanced Power 148 80 0.53 Feedback 201 67 0.44 Progressive Digital 173 62 0.41 BGlobal 258 61 0.40 IS E&P/IS NV 100 100 0.66 Autoclenz 131 40 0.26 Maxima 251 36 0.24 Mexican Grill Ordinary 20 21 0.14 Infrastrata 46 15 0.10 Hardide 396 14 0.10 Invocas 169 12 0.08 Expansys 331 12 0.08 Infoserve 200 1 0.01 -------- --------- ------- Total qualifying investments 11,589 11,293 74.59 INVESTMENT PORTFOLIO SUMMARY (continued) Book Cost Valuation Valuation Non-Qualifying investments £000 £000 % UK Treasury 2.25% 2014 978 1,038 6.86 UK Treasury 2.5% 2.16 504 593 3.91 -------- --------- ------- Total - UK gilts 1,482 1,631 10.77 Nationwide 3.75% 2011 1,018 1,004 6.63 Scot Amicable 8.5% 2049 256 248 1.64 Nationwide 7.971% 2049 242 234 1.55 -------- --------- ------- Total - UK corporate bonds 1,516 1,486 9.82 Brady 106 126 0.83 Prophotonix 110 118 0.78 Anglo Pacific 134 99 0.66 Skill P&L 100 59 0.39 Spectra System 58 54 0.36 Encore Oil 59 43 0.29 XP Power 60 42 0.28 OMG 61 37 0.25 In-Deed 34 35 0.23 Optare 103 34 0.22 OPG Power 51 32 0.21 Cap-XX 30 18 0.12 Acta Spa 94 12 0.08 Abcam 9 7 0.05 K3 4 3 0.02 Instem Life 2 2 0.01 Animalcare Group plc 2 2 0.01 Sinclair IS Pharma 2 1 0.01 Intercede 2 1 0.01 Idox 1 1 0.01 Egdon Resources 1 1 0.00 Microsaic 1 1 0.00 Corac 1 1 0.00 Tasty 2 1 0.00 Richoux 1 1 0.00 EKF** 0 0 0.00 -------- --------- ------- Total - non-qualifying equities 1,028 731 4.82 -------- --------- ------- Total - non-qualifying investments 4,026 3,848 25.41 --------- --------- ------- Total investments 15,615 15,141 100.00 --------- --------- ------- ** These are actual holdings of less than £500. Date 22 November 2011 For further information please contact: Stuart Brookes Company Secretary Hargreave Hale AIM VCT1 plc 0207 009 4900 This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Hargreave Hale AIM VCT 1 plc via Thomson Reuters ONE [HUG#1565725]

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