Final Results
Hargreave Hale AIM 1
Hargreave Hale AIM VCT1 plc
Preliminary Announcement of Final Results for the year ending 30 September 2014.
INVESTMENT MANAGER AND INVESTMENT OBJECTIVES
The Company is managed by Hargreave Hale Limited, a fund manager with approximately £3.9 billion under management. Hargreave Hale has been managing investments in UK Small and Micro Cap companies for 16 years and VCTs for 10 years.
The Company's investment objectives are:
FINANCIAL HIGHLIGHTS
Ordinary Shares (as at 30 September): | Â | 2014 | Â | 2013 | |
 | |||||
Net asset value per share | 80.31p | 71.87p | |||
Cumulative distributions paid per share since launch | 33.75p | 29.75p | |||
Total return | 114.06p | 101.62p | |||
 | |||||
Annual Returns per share: | |||||
Revenue return | (0.41)p | (0.24)p | |||
Capital return | 10.91p | 14.05p | |||
Combined Return | 10.50p | 13.81p | |||
 | |||||
Dividends per share: | |||||
Interim paid | 1.75p | 1.5p | |||
Final proposed | 2.50p | 2.25p | |||
Total dividend for year | 4.25p | 3.75p | |||
 | |||||
Performance Benchmark: | |||||
Total Return | 120% | 107% | |||
FTSE AIM All-share Index | 78% | 82.3% | |||
(results rebased to 100 at 29 October 2004) |
CHAIRMAN’S STATEMENT
Introduction
At 30 September 2014 the NAV was 80.31 pence which after adding back the dividends paid gives a total return since inception of 114.06 pence. The gain per ordinary share for the year was 10.50 pence per share (comprising revenue loss of 0.41 pence and capital gains of 10.91 pence).
Investments
The Investment Manager, Hargreave Hale Limited, invested a further £5.00 million in 24 qualifying companies during the year. The Fair Value of qualifying investments at 30 September 2014 was £23.27 million invested in 54 AIM companies and 7 unquoted companies. £6.18 million was held in a mix of cash, fixed income and other non-qualifying equities.
Dividend
An interim dividend of 1.75 pence was paid on 4 July 2014 (Interim 2013 – 1.50 pence).
A final dividend of 2.50 pence is proposed (2013 – 2.25 pence) which, subject to shareholder approval at the AGM will be paid on 28 January 2015, to ordinary shareholders on the register on 30 December 2014.
The directors have maintained a dividend policy of at least 5% 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, 530,852 shares were purchased during the year at an average price of 77.08 pence per share.
Issue of Equity
The joint offer for subscription (together with Hargreave Hale AIM VCT 2) closed on 25 September 2014 and resulted in funds being received for Hargreave Hale AIM VCT 1 of £7.58 million and the issue of 9.27 million shares.
New Joint Offer for Subscription of Ordinary Shares
After our success this year, on the 3 October 2014 the Directors of Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc announced the launch of a new joint offer for subscription of new shares in both VCT’s to raise up to £10 million into each company.
The offer for subscription was approved by shareholders of the Company at a General Meeting on 7 November 2014 and is open to both new and existing shareholders. Since its launch the offer has resulted at 17 December 2014 in funds being received of £2.37 million and the issue of 3.02 million shares.
Cancellation of Share Premium and Capital Redemption Reserve
At the Annual General Meeting of the Company held on 22 January 2014, a special resolution was passed approving the cancellation of an amount standing to the credit of the Company's share premium account and capital redemption reserve. The Court approved the cancellation on 9 April 2014.
The Company is pleased to announce that, following the approval of the Court and the subsequent registration of the Court order with the Registrar of Companies, the cancellation has now become effective. £15,363,291 and £912,025, previously held in the share premium account and capital redemption reserve respectively, has been transferred to the Company's special reserve account.
Treasury Stock
The Company also cancelled 2,711,134 treasury shares on 27 January 2014 in accordance with the provisions of section 729 of the Companies Act 2006.
VCT Status
To maintain its VCT qualifying status we must invest at least 70% of the net funds raised in any one accounting period in qualifying investments within three years. At the year end we have achieved 95.80% per cent and have satisfied all the relevant tests.
Outlook
The last 18 months have been kind to the fund which has grown substantially on the back of a rising stock market and with input of successful fund raising. The market has risen on the back of an improving economy and the prospect of improving company results. During the last few months we have seen this growth stutter and fall back a little. Whether this is simply the market taking a “breather†whilst it waits for the results to catch up with expectations or a more permanent adjustment is hard to tell.
There are plenty of circumstances that could unsettle the economy. These include the General Election in less than six months with no clear favourite; the position of the UK in the EU; and the fact that we are still running a multi-billion pound budget deficit.
However there are plenty of good things such as lower oil prices that should be good for the economy. Giles and his team have selected many well run companies which have significantly outperformed their peers and which are well placed to weather any storm and should continue to give the fund better than average performance.
Sir Aubrey Brocklebank
Chairman
Date: 17 December 2014
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.
DIRECTORS’ REMUNERATION
The Directors’ Remuneration Report was approved by the Board of Directors on 17 December 2014 and will be further subject to a binding vote at the AGM being held on the 22 January 2015 and every year thereafter.
INCOME STATEMENT
For the year ended 30 September 2014
Note | Â | |||||||
Revenue | Â | Capital | Â | Total | ||||
£000 | £000 | £000 | ||||||
Net gain on investments held at fair value through profit or loss | - | 3,953 | 3,953 | |||||
Income | 230 | - | 230 | |||||
-------- | -------- | -------- | ||||||
230 | 3,953 | 4,183 | ||||||
-------- | -------- | -------- | ||||||
Management fee | (101) | (302) | (403) | |||||
Other expenses | (266) | - | (266) | |||||
-------- | -------- | -------- | ||||||
(367) | (302) | (669) | ||||||
-------- | -------- | -------- | ||||||
(Loss)/Profit on ordinary activities before taxation | (137) | 3,651 | 3,514 | |||||
Taxation | - | - | - | |||||
-------- | -------- | -------- | ||||||
(Loss)/Profit after taxation | (137) | 3,651 | 3,514 | |||||
-------- | -------- | -------- | ||||||
(Loss)/Profit per share (pence) | 2 | (0.41) | 10.91 | 10.50 | ||||
 |
-------- | -------- | -------- |
INCOME STATEMENT
For the year ended 30 September 2013
Note | Â | |||||||
Revenue | Â | Capital | Â | Total | ||||
£000 | £000 | £000 | ||||||
Net gain on investments held at fair value through profit or loss | - | 3,910 | 3,910 | |||||
Income | 213 | - | 213 | |||||
-------- | -------- | -------- | ||||||
213 | 3,910 | 4,123 | ||||||
-------- | -------- | -------- | ||||||
Management fee | (65) | (194) | (259) | |||||
Other expenses | (212) | - | (212) | |||||
-------- | -------- | -------- | ||||||
(277) | (194) | (471) | ||||||
-------- | -------- | -------- | ||||||
(Loss)/Profit on ordinary activities before taxation | (64) | 3,716 | 3,652 | |||||
Taxation | - | - | - | |||||
-------- | -------- | -------- | ||||||
(Loss)/Profit after taxation | (64) | 3,716 | 3,652 | |||||
-------- | -------- | -------- | ||||||
(Loss)/Profit per share (pence) | 2 | (0.24) | 14.05 | 13.81 | ||||
-------- | -------- | -------- |
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.
BALANCE SHEET Company registration number: 5206425
As at 30 September 2014 (in England and Wales)
2014 | 2013 | ||||
Note | Â | Â | |||
£000 | £000 | ||||
 | |||||
Fixed assets | |||||
Investments at fair value through profit or loss | 26,248 | 18,000 | |||
-------- | -------- | ||||
 | |||||
Current assets | |||||
Debtors | 35 | 32 | |||
Cash at bank | 3,203 | 2,077 | |||
-------- | -------- | ||||
3,238 | 2,109 | ||||
 | |||||
Creditors: amounts falling due within one year | (193) | (179) | |||
-------- | -------- | ||||
Net current assets | 3,045 | 1,930 | |||
-------- | -------- | ||||
Net assets | 29,293 | 19,930 | |||
-------- | -------- | ||||
 | |||||
Capital and Reserves | |||||
Called up share capital | 365 | 304 | |||
Share Premium | 1,308 | 9,186 | |||
Special reserve | 24,734 | 10,188 | |||
Capital reserve – realised | (4,917) | (5,606) | |||
Capital reserve – unrealised | 7,958 | 4,996 | |||
Revenue reserve | (159) | (22) | |||
Capital redemption reserve | 4 | 884 | |||
-------- | -------- | ||||
Equity shareholders’ funds | 29,293 | 19,930 | |||
-------- | -------- | ||||
 | |||||
Net asset value per share | 3 | 80.31p | 71.87p |
These financial statements were approved and authorised for issue by the Board of Directors on 17 December 2014 and signed on its behalf by
Sir Aubrey Brocklebank Bt
Chairman
CASH FLOW STATEMENT
For the year ending 30 September 2014
 | 2014 | 2013 | |||
 | |||||
 | £000 |  | £000 | ||
Net cash (outflow) from operating activities | (428) | (256) | |||
Net cash (outflow)/inflow from investment activities | (4,295) | 531 | |||
Dividends paid | (1,320) | (853) | |||
--------- | --------- | ||||
(6,043) | (578) | ||||
 | |||||
Net cash inflow from financing activities | 7,169 | 1,792 | |||
--------- | --------- | ||||
Increase in cash | 1,126 | 1,214 | |||
--------- | --------- |
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS
For the year ending 30 September 2014
 |
 |
Share |
 |
Share |
 |
Capital |
 |
Capital |
 |
Capital |
 |
Special |
 |
Revenue |
 |
Total |
|
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | ||||||||||
At 1 October 2013 | 304 | 9,186 | 884 | (5,606) | 4,996 | 10,188 | (22) | 19,930 | |||||||||
 | |||||||||||||||||
Share buybacks | (32) | 32 | (409) | (409) | |||||||||||||
Subscriptions | 93 | 7,485 | 7,578 | ||||||||||||||
Capital Reduction | (15,363) | (912) | 16,275 | - | |||||||||||||
Equity dividends paid | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (1,320) | Â | Â | Â | (1,320) | |
Realised gains on investments | 991 | 991 | |||||||||||||||
Unrealised gains on investments | 2,962 | 2,962 | |||||||||||||||
Management fee charged to capital | (302) | (302) | |||||||||||||||
Revenue loss after taxation for the year | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (137) | Â | (137) | |
Total profit after taxation | 689 | 2,962 | (137) | 3,514 | |||||||||||||
 | |||||||||||||||||
------ | --------- | ------ | --------- | --------- | --------- | ------ | --------- | ||||||||||
At 30 September 2014 | 365 | 1,308 | 4 | (4,917) | 7,958 | 24,734 | (159) | 29,293 | |||||||||
------ | --------- | ------ | --------- | --------- | --------- | ------ | --------- |
Reserves available for distribution are capital reserve realised, special reserve and revenue reserve.
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS
For the year ending 30 September 2013
 |
 |
Share |
 |
Share |
 |
Capital |
 |
Capital |
 |
Capital |
 |
Special |
 |
Revenue |
 |
Total |
|
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | ||||||||||
At 1 October 2012 | 277 | 6,667 | 871 | (5,786) | 1,460 | 11,808 | 42 | 15,339 | |||||||||
 | |||||||||||||||||
Share buybacks | (13) | - | 13 | - | - | (767) | - | (767) | |||||||||
Subscriptions | 40 | 2,519 | - | - | - | - | - | 2,559 | |||||||||
Equity dividends paid | Â | - | Â | - | Â | - | Â | - | Â | - | Â | (853) | Â | - | Â | (853) | |
Realised gains on investments | - | - | - | 374 | - | - | - | 374 | |||||||||
Unrealised gains on investments | - | - | - | - | 3,536 | - | - | 3,536 | |||||||||
Management fee charged to capital | - | - | - | (194) | - | - | - | (194) | |||||||||
Revenue loss after taxation for the year | Â | - | Â | - | Â | - | Â | - | Â | - | Â | - | Â | (64) | Â | (64) | |
Total profit after taxation | - | - | - | 180 | 3,536 | - | (64) | 3,652 | |||||||||
 | |||||||||||||||||
------ | --------- | ------ | --------- | --------- | --------- | ------ | --------- | ||||||||||
At 30 September 2013 | 304 | 9,186 | 884 | (5,606) | 4,996 | 10,188 | (22) | 19,930 | |||||||||
------ | --------- | ------ | --------- | --------- | --------- | ------ | --------- |
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 2014 or 30 September 2013. Statutory accounts for the year ended 30 September 2013 have been filed with the Registrar of Companies and those of the year ended 30 September 2014 will be delivered to the Registrar in due course; both have been reported on by the Independent Auditors. The independent auditor’s reports on the Statutory accounts for the years ended 30 September 2013 and 30 September 2014 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 2014. The full statutory annual accounts will be published in December 2014. 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 22 January 2015 at 14.00pm.
2. Revenue return per ordinary share based on a net revenue loss on ordinary activities after taxation of £136,659 (2013 - £63,935 loss) and on 33,452,489 (2013 – 26,446,613) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share based on a net capital profit of £3,650,579 (2013 – £3,715,983) for the year and on 33,452,489 (2013 – 26,446,613) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
3. The net asset value per ordinary share at 30 September 2014 of 80.31p (2013 – 71.87p) is based on net assets of £29,293,115 (2013 - £19,930,424) and on 36,473,134 (2013 – 27,730,188 not including 2,711,134 shares held as treasury) ordinary shares being the number of shares in issue at year end.
INVESTMENT PORTFOLIO SUMMARY
Ordinary Share Fund
As at 30 September 2014
 | Book Cost |  | Valuation |  | Valuation | ||
Qualifying investments | £000 | £000 | % | ||||
 | |||||||
Advanced Computer Software Group plc | 204 | 1,384 | 5.27 | ||||
Intercede Group plc | 247 | 1,298 | 4.94 | ||||
Cohort plc | 716 | 1,084 | 4.13 | ||||
Flowgroup plc | 577 | 1,084 | 4.13 | ||||
Audioboom Group plc | 173 | 998 | 3.80 | ||||
Pressure Technologies Corporation plc | 225 | 975 | 3.71 | ||||
Abcam plc | 67 | 804 | 3.06 | ||||
Mexican Grill Ltd (A Preference Shares) | 185 | 769 | 2.93 | ||||
Idox plc | 135 | 743 | 2.83 | ||||
K3 Business Technology Group plc | 270 | 687 | 2.62 | ||||
Hardide plc | 635 | 612 | 2.33 | ||||
Craneware plc | 150 | 598 | 2.28 | ||||
TLA Worldwide plc | 300 | 570 | 2.17 | ||||
Vertu Motors plc | 600 | 555 | 2.11 | ||||
AnimalCare Group plc | 220 | 548 | 2.09 | ||||
Quixant plc | 160 | 522 | 1.99 | ||||
Mycelx Technologies Corporation plc | 300 | 507 | 1.93 | ||||
Kalibrate Technologies plc | 323 | 469 | 1.79 | ||||
Microsaic Systems plc | 350 | 453 | 1.72 | ||||
EKF Diagnostic Holdings plc | 300 | 450 | 1.71 | ||||
TrakM8 Holdings plc | 133 | 448 | 1.71 | ||||
Mirada plc | 444 | 444 | 1.69 | ||||
Clearstar Inc | 449 | 433 | 1.65 | ||||
Premaitha Health plc | 263 | 407 | 1.55 | ||||
Science in Sport plc | 240 | 400 | 1.52 | ||||
Porta Communications plc | 505 | 391 | 1.49 | ||||
Tasty plc | 288 | 313 | 1.19 | ||||
Egdon Resources plc | 158 | 290 | 1.11 | ||||
APC Technology Group plc | 148 | 272 | 1.04 | ||||
ULS Technology plc | 221 | 271 | 1.03 | ||||
Fusionex International plc | 138 | 270 | 1.03 | ||||
Plastics Capital plc | 250 | 270 | 1.03 | ||||
Tangent Communications plc | 400 | 256 | 0.98 | ||||
Instem plc | 297 | 235 | 0.89 | ||||
MartinCo plc | 225 | 229 | 0.87 | ||||
Belvoir Lettings plc | 301 | 225 | 0.86 | ||||
Lidco Group plc | 220 | 220 | 0.84 | ||||
Reneuron Group plc | 368 | 218 | 0.83 | ||||
Getlenses plc | 205 | 205 | 0.78 | ||||
Everyman Media Group plc | 172 | 184 | 0.70 | ||||
Jelf Group plc | 148 | 176 | 0.67 | ||||
Ilika plc | 98 | 171 | 0.65 | ||||
Imaginatik plc | 250 | 170 | 0.65 | ||||
Universe Group plc | 210 | 165 | 0.63 | ||||
Nektan Ltd | 130 | 155 | 0.59 | ||||
WANdisco plc | 89 | 150 | 0.57 | ||||
Eagle Eye Solutions Group plc | 141 | 149 | 0.57 | ||||
Progressive Digital Media Group plc | 173 | 137 | 0.52 | ||||
Synairgen plc | 140 | 132 | 0.50 | ||||
Proxama plc | 105 | 128 | 0.49 | ||||
Sphere Medical Holdings plc | 300 | 92 | 0.35 | ||||
Mexican Grill Ltd (Ordinary shares) | 21 | 85 | 0.33 | ||||
Outsourcery Group Ltd | 650 | 80 | 0.31 | ||||
Corac Group plc | 185 | 73 | 0.28 | ||||
Synety Group plc | 109 | 72 | 0.27 | ||||
Verona Pharma plc | 127 | 69 | 0.26 | ||||
Redcentric plc | 214 | 65 | 0.25 | ||||
Corfe Energy Ltd | 50 | 50 | 0.19 | ||||
Brigantes Energy Ltd | 50 | 25 | 0.10 | ||||
Mopowered Group plc | 301 | 20 | 0.08 | ||||
Invocas Group plc | 169 | 12 | 0.05 | ||||
Infoserve Group plc** | 200 | 0 | 0.00 | ||||
-------- | --------- | ------- | |||||
Total qualifying investments | 15,422 | 23,267 | 88.64 | ||||
 | |||||||
Non-Qualifying investments | |||||||
 | |||||||
Marlborough Special Situations Fund | 276 | 285 | 1.09 | ||||
-------- | --------- | ------- | |||||
Total – Unit Trusts | 276 | 285 | 1.09 | ||||
 | |||||||
Scottish Amicable Finance 8.5% 2049 | 256 | 284 | 1.08 | ||||
Petrobras International Finance 6.25% 2026 | 247 | 258 | 0.98 | ||||
Nationwide Building Society 7.971% 2049 | 242 | 255 | 0.97 | ||||
-------- | --------- | ------- | |||||
Total – UK corporate bonds | 745 | 797 | 3.03 | ||||
 | |||||||
FC Fund Managers Ltd | 300 | 300 | 1.14 | ||||
Horizon Discovery Group plc | 219 | 188 | 0.72 | ||||
BooHoo.com plc | 179 | 171 | 0.65 | ||||
Quixant plc | 159 | 169 | 0.64 | ||||
FDM Group Holdings plc | 115 | 142 | 0.54 | ||||
Tarsus Group plc | 134 | 130 | 0.50 | ||||
Plethora Solutions Holdings plc | 149 | 124 | 0.47 | ||||
Restore plc | 73 | 124 | 0.47 | ||||
Reneuron Group plc | 104 | 118 | 0.45 | ||||
Mexican Grill Ltd (A Preference Shares) | 34 | 103 | 0.39 | ||||
Synairgen plc | 102 | 101 | 0.39 | ||||
Hydrodec Group plc | 100 | 89 | 0.34 | ||||
Amerisur Resources plc | 91 | 85 | 0.32 | ||||
Eagle Eye Solutions Group plc | 44 | 43 | 0.17 | ||||
Helius Energy plc | 40 | 10 | 0.04 | ||||
Hardide plc | 1 | 1 | 0.01 | ||||
TrakM8 Holdings plc | 1 | 1 | 0.00 | ||||
APC Technology Group plc** | 1 | 0 | 0.00 | ||||
WANdisco plc** | 1 | 0 | 0.00 | ||||
-------- | --------- | ------- | |||||
Total – non-qualifying equities | 1,847 | 1,899 | 7.24 | ||||
 | |||||||
-------- | --------- | ------- | |||||
Total – non-qualifying investments | 2,868 | 2,981 | 11.36 | ||||
 | |||||||
--------- | --------- | ------- | |||||
Total investments | 18,290 | 26,248 | 100.00 | ||||
--------- | --------- | ------- | |||||
 | |||||||
** These are actual holdings of less than £500. |
The majority of investments held within the portfolio are listed and/or headquartered in the UK with the exception of the following:
Quoted Investments
Unquoted Investments
Date: 18 December 2014
For further information please contact:
Stuart
Brookes
Company Secretary
Hargreave Hale AIM VCT1 plc
01253
754740