Hargreave Hale AIM VCT 1 plc : Interim Manageme...

HARGREAVE HALE AIM VCT 1 PLC

Interim Management Statement

This statement covers the period from 1 April 2012 to the date of the release of the statement on 9 August 2012.

As at close of business on 3 August 2012, the unaudited Net Asset Value (NAV) for Hargreave Hale AIM VCT 1 plc was as follows:

NAV per Ordinary share of 1p 59.06 pence.

Trading Statement (Quarter to 30 June 2012)

The NAV fell by 1.92p (-3.1%) from 62.01p to 60.09p in the third quarter of this financial year. As at 30 June 2012, the total return for investors in the 2004/5 Ordinary Share issue stood at 85.09p (from 87.01p), whilst for those who invested through the 2005/6 C Share issue, the total return was 91.31p (from 93.68p). In the same period, FTSE AIM All-Share has fallen 15.09% and FTSE All-Share has slipped 3.71%.  

We made two qualifying investments in the period: the first was a follow-on investment in Microsaic, an early stage manufacturer of mass spectrometers that we backed at IPO in 2011; the second was in Wandisco, an infrastructure software company that floated on 1 June 2012.  Offsetting that, we made two disposals (Infrastrata and Omega Diagnostics) and top sliced three holdings (Abcam, Advanced Computer Software and Idox). The VCT remains comfortably through the HMRC defined investment test and ended the period at 96% invested according to the HMRC investment test through 44 qualifying investments.

The qualifying portfolio saw a net loss of 1.33 pence per share. Performance was mixed with 14 out of the 44 investments increasing in value, 22 losing ground and 8 remaining flat.  Idox made the biggest contribution to the NAV within the period, gaining 35% (0.81 pence per share) after well received results added to the momentum that has been building in the stock since November 2011.  Despite the good run, the shares trade on an undemanding 14x prospective earnings with good future prospects in the public and private sectors and a mixture of organic and acquisition led growth.  Having paid 7.5p for the shares, we thought it prudent to trim the position at 39.8p, book some profit and improve the cash position within the fund. Abcam was the second largest contributor to NAV, adding 0.78 pence to the NAV through a 20% increase in the share price over the quarter.  Abcam's longer term growth trajectory has been the subject of some debate as a result of the company's significant position within its core market and geographical exposure to the US, where sequestration threatens an 8% cut to healthcare spending from 2013. Strong interims and the $155m acquisition of US company Epitomics has put to rest those issues and clearly maps out the strategic plan that management intend to follow in bolstering their product range within their existing markets whilst also gaining entry into adjacent markets such as the $8bn IVD market.  We used the run up in the share price as an opportunity to reduce our holding on account of its significant weighting within the fund and to improve the cash position within the fund.

We have been relatively quiet within the non-qualifying equity strategy on account of the uncertain market environment and our wish to maintain a strong position in cash and bonds.  The allocation to non-qualifying equities increased marginally from 3.6% to 3.8%, whilst cash increased from 1.4% to 5.0% and fixed income decreased from 15% to 8.9% after we sold the UK Treasury 2.25% 2014 to help fund the interim dividend payment.

We have continued the process of rationalising the portfolio since the quarter end with a further partial disposal of Abcam and a full exit from Vianet.  Non-qualifying equities are down to just 2.8% of NAV whilst cash has increased to 5.8% despite the payment of the dividend, worth 2.5% of NAV.  Fixed income has remained static at c.9% of NAV.

Purchase of Ordinary Shares

April

8,621,626 ordinary shares were bought back for cancellation during April at a cost of £5,363,171 (Including 8,326,006 shares bought back and re-issued under the terms of the Tender Offer dated 29 February 2012).

May

42,255 ordinary shares were bought back for cancellation during May at a cost of £25,049.

June

94,097 ordinary shares were bought back for cancellation during June at a cost of £52,733.

Issue of Equity

8,068,006 shares were issued during April under the terms of the Tender Offer dated 29 February 2012, resulting in funds being received of £4,996,279.

As at 30 June 2012, there were 25,163,907 ordinary shares of 1p in issue (excluding shares held as treasury shares).

For further information please contact:

Stuart Brookes

Company Secretary

Hargreave Hale AIM VCT1 plc

01253 754740

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Source: Hargreave Hale AIM VCT 1 plc via Thomson Reuters ONE

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