Annual Financial Report
Unicorn AIM VCT plc (the "Company" or the "VCT")
Annual Results Announcement for the year ended 30 September 2013
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.
FINANCIAL HIGHLIGHTS
(for the year ended 30 September 2013)
- Net asset value total return for the year ended 30 September 2013 was 31.8%
- Dividend of 6p proposed, an increase of 20% over last year
- Offer for subscription to raise £20 million launched
Ordinary Shares Total Net asset Cumulative* Net asset Share price
assets value per dividends value plus (p)
(£ million) share (NAV) paid per cumulative
(p) share (p)** dividends paid
per share
(p)**
30th September 2013 73.7 129.8 14.0 143.8 111.0
31st March 2013 61.9 108.5 14.0 122.5 89.3
30th September 2012 59.0 102.3 9.0 111.3 86.0
31st March 2012 56.6 97.4 9.0 106.4 70.0
* The Board has recommended a dividend of 6.0p per share for the year ended 30
September 2013. If approved by shareholders, this payment will bring total
dividends paid since the merger of the Company with Unicorn AIM VCT II plc on
9 March 2010 to 20p.
**Since the merger of the Company with Unicorn AIM VCT II plc on 9 March 2010.
CHAIRMAN'S STATEMENT
I am pleased to present the twelfth Annual Report of the Company
for the financial year ended 30 September 2013.
Investment Performance Review
The Company has made significant progress over the past twelve
months, resulting in a NAV total return for the year of 31.8%. The performance
of the investment portfolio has been robust, reflecting increasing share
prices from a substantial proportion of the investee companies. In the final
quarter of the period under review, there has also been a marked improvement
in the performance of the FTSE AIM All-Share Index. The improvement in index
performance appears to have been triggered by helpful legislative changes
specific to AIM listed companies, combined with a gradual improvement in
investor sentiment as the UK economy began to grow again.
Having endured a prolonged period of recession, during which it has
been particularly difficult for smaller companies to achieve growth, it is
pleasing to see statistical evidence that the UK economy is now recovering.
The IMF now expects the UK economy to grow next year by 1.9%, up from July's
projection of 1.5%. The IMF's upgrade to its outlook on the UK is larger than
those made for any other country in World Economic Outlook - its twice-yearly
assessment of the global economy. Higher consumer spending and increased
business confidence were cited as being the key reasons behind the recent
improvement.
The majority of the portfolio's investee companies have continued
to demonstrate commendable resilience. In the low growth environment of the
past five years, the businesses that have prospered have been those where
management teams focused primarily on maintaining balance sheet strength
through tight cost control and strict management of working capital
requirements. The Company holds a portfolio of investments that follow this
policy.
As economic conditions improve it is to be hoped that the portfolio
of investee companies can start to accelerate revenue growth, which should in
turn have a more than proportionately beneficial impact on earnings and cash
flow given the operational leverage inherent in lean and efficiently managed
businesses.
Portfolio Activity
The past twelve months have seen an improvement in the number of
successful Initial Public Offerings on AIM. Despite this increase in deal
flow, the Investment Manager has maintained a highly selective approach to new
investment. As in previous years, the Company has remained comfortably above
the threshold required to retain VCT qualifying status and this has allowed
the Investment Manager to maintain a disciplined and cautious approach to
making new investments.
During the year under review, one new VCT qualifying investment was
made and there were two follow-on subscriptions in existing portfolio
companies in which a stake was already held. Existing positions were increased
in four non-qualifying investee companies during the year through secondary
market purchases.
Merger and acquisition activity resulted in three qualifying
investments being sold. In addition, fourteen non-qualifying investments were
sold outright, while partial disposals were made in a number of both
qualifying and non-qualifying investments.
A detailed report on the performance of both the qualifying and the
non-qualifying investments is contained in the Investment Manager's Review
below.
I refer you to the Board's first Strategic Report which has been
introduced by the Companies Act 2006 (Strategic Report and Directors' Report)
Regulations 2013. This new Report contains some of the information that I had
historically commented on and is designed to assist shareholders in assessing
the extent to which the Directors have performed their legal duty to promote
the success of the Company in accordance with section 172 of the Companies Act
2006.
Outlook
If the rate of economic recovery in the UK continues to rise, it is
anticipated that business and consumer confidence will also continue to
improve. The fact that the investment portfolio has successfully weathered the
extremely tough trading conditions experienced since the start of the
financial crisis in 2008 is reassuring. As economic conditions now appear to
be on an improving trend, it is reasonable to expect healthy revenue and
earnings growth from the investee companies held within the portfolio. This
should translate into a further improvement in the Net Asset Value of the
Company, and in turn be accompanied by a positive movement in the share price.
I am therefore optimistic that the portfolio can deliver further
capital growth, while continuing to have the capacity to maintain an
attractive and sustainable flow of tax-free dividends to shareholders.
I would like to thank shareholders for their continued support of
the Company and welcome you to attend the Company's AGM on 10 January 2014.
Peter Dicks
Chairman
2 December 2013
STRATEGIC REPORT
The purpose of this Strategic Report is to inform shareholders on
several key matters and assist them in assessing the extent to which the
directors have performed their legal duty to promote the success of the
Company in accordance with section 172 of the Companies Act 2006. This Report
summarises:
- the Company's business model and objective;
- the Board's strategy to achieve those objectives;
- performance during the year
- key performance indicators;
- key events during the year;
- the principal risks and uncertainties faced by the Company;
- the regulatory environment within which it operates; and
- the Company's prospects.
The Investment Manager's Review below also includes a balanced and
comprehensive analysis of the development of the business during the financial
year and the position on the Company's business at the end of the year.
The Company's independent auditor is required to report by
exception on whether the information given in the Strategic Report is
consistent with the financial statements. The Auditor's Report is set out in
the Annual Report.
The Company and its business model
The Company is registered in England and Wales as a Public Limited
Company (registration number 04266437) and is approved as a Venture Capital
Trust (VCT) under section 274 of the Income Tax Act 2007 (the "ITA"). In
common with many other VCTs, the Company revoked its status as an investment
company as defined in section 266 of the Companies Act 1985 on 17 August 2004
to facilitate the ability to pay dividends from capital.
The Company is an externally managed fund with a Board comprising
non-executive Directors. Investment management and operational support are
outsourced to external service providers, with the strategic and operational
framework and key policies set and monitored by the Board as described in the
diagram on page 4 of the Annual Report. Further information on each of the
service providers is outlined in the Corporate Governance Statement on page 34
of the Annual Report.
The Board has overall responsibility for the Company's affairs
including the determination of its investment policy. Risk is spread by
investing in a number of different businesses across different industry
sectors. 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
any investment in an unquoted company, the prior approval of the Board is
required. Mobeus Equity Partners LLP provides Company Secretarial and
Accountancy services to the VCT.
The Board's Strategy
Investment objective and policy
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.
To achieve this objective, the Company's strategy is to invest in
companies which meet the criteria referred to in the investment policy, which
requires the Investment Manager to identify and invest in a diversified
portfolio, predominantly of VCT qualifying companies quoted on AIM. Further
details can be found below.
Performance during the year
As at 30 September 2013, the audited Net Asset Value of the Company
was 129.8 pence per share, having risen by 27.5p from 102.3 pence per share at
the start of the financial year under review. After adding dividends of 5
pence per share paid in the year, this is a total return to shareholders of
32.5p per share for the year or 31.8% upon opening Net Asset Value for the year. In
comparison, the total return from the FTSE AIM All-Share Index over the same
period was 13.3%. The audited net assets of the Company were £73.7 million at
the financial year end.
At the financial year end, there were 39 active quoted VCT
qualifying companies held in the portfolio. Of these, over 60% have no net
debt on their balance sheets, while a further 30% are operating with net
gearing of less than 25%. Encouragingly, 80% of these companies were cash flow
positive in their last reported financial year, while profit growth is
anticipated from 62% of them in their current financial year. Another key
indicator of the financial and operating health of a business can be found in
its ability to pay dividends. It is therefore particularly encouraging to note
that 62% of these companies held in the portfolio have paid a dividend within
the past twelve months.
In the year to 30 September 2013, a total of £9.6 million was
realised through the sale of investments, of which £4.0 million was deployed
in new investments and approximately £2.9 million spent on the dividend to
shareholders, with the balance used to fund share buybacks and to meet the
operating costs of the Company.
Over the 12 months to 30 September 2013 there was a net gain on
investments of £18.4 million and the total profit on ordinary activities was
£18.0 million, equivalent to earnings of 31.48 pence per share. The profit on
the revenue account was £440,000. At the financial year end, the portfolio
consisted of 39 qualifying and 14 non-qualifying quoted investments in active
businesses.
The longer term performance of the Company remains robust. Since
the merger with Unicorn AIM VCT II plc, which was successfully completed in
March 2010, the total return to shareholders has been 56.7%, including the
payment of 14 pence per share in tax free dividends.
Key Performance Indicators
The Board uses the following key indicators to measure the
Investment Manager's performance, thereby allowing shareholders to assess how
the Company is performing against its objective:
- Net asset value ("NAV") per share, cumulative dividends paid &
cumulative total shareholder return
- Earnings per share
- Running costs
Further details can be found on pages 5 and 6 of the Annual Report.
Key Events during the Year
Enhanced Buyback & Top-Up Offer
In January 2013, the Board announced the launch of an Enhanced
Buyback Facility together with a separate Top-Up Offer for subscription. The
enhanced buyback was well supported. Participating shareholders in the
Enhanced Buyback were able to tender their existing shares for repurchase by
the Company with the net proceeds from the buyback being immediately
re-invested in new shares. Earlier in the year, HMRC announced a review of
such schemes and it seems likely that, following a period of consultation,
restrictions on enhanced buybacks will be introduced. Accordingly, the Board
is not planning any further Enhanced Buybacks until the outcome of the HMRC
review is known.
A total of £1.4 million in new capital was raised via subscriptions
under the Top-Up Offer.
Offer for Subscription
The Board recently launched a new £20m Offer for Subscription.
The Investment Manager is seeing attractive investment
opportunities in companies seeking finance in a broad spectrum of sectors
offering good growth and income prospects. In order to take advantage of these
opportunities the Board is therefore seeking to raise further funds through
the Offer.
The Offer opened on 20 September 2013 and will close at 12.00 noon
on 30 June 2014 (unless fully subscribed by an earlier date or otherwise
extended or closed at the Directors' discretion). Shareholders who wish to
apply under the Offer for the 2013/2014 tax year should note that the deadline
for such applications is 12.00 noon on 4 April 2014.
A prospectus relating to this Offer has been issued and
subsequently mailed to all existing shareholders.
Key Policies
The Board sets the Company's policies and objectives and ensures
that its obligations to the shareholders are met. Besides the Investment
policy already referred to, the other key policies set by the Board are
outlined below.
- Dividend policy
The Board remains committed to a policy of maintaining a steady
flow of dividend distributions to shareholders from the income and capital
gains generated by the portfolio. Dividend payments paid to shareholders
during the period amounted to £2.9 million, being 5 pence per share. Since the
original launch of Unicorn AIM VCT in 2001, qualifying shareholders have, in
aggregate, received approximately £30 million in tax free dividend
distributions.
The Board has considered the payment of a final dividend for the
financial year ended 30 September 2013 and, to reflect the Company's robust
performance during the year, is recommending a final dividend of 6 pence per
share (income: 0.75p; capital: 5.25p) to shareholders, payable on 31 January
2014 to shareholders on the register on 27 December 2013.
The ability to pay dividends and the amount of such dividends are
influenced by the performance of the Company's investments, available reserves
and cash, as well as the need to retain funds for further investment and
ongoing expenses.
- Share buybacks and discount policy
The Board believes that it is in the best interests of the Company
and its shareholders to make market purchases of its shares, given the limited
secondary market for VCT shares generally, and to seek both to enhance NAV and
to reduce to a degree any prevailing discount to NAV in the current market
price that might otherwise prevail. The Board agrees the discount to NAV at
which shares will be bought back and keeps this under regular review. The
Board seeks to maintain a balance between the interests of those wishing to
sell their shares and continuing shareholders.
The Company has continued to buy back shares for cancellation at
various points throughout the financial year. A total of 1,917,671 shares were
purchased for cancellation during the course of the year at an average price
of 92 pence per share and at an average discount to net assets of 17%. At the
financial year end, the Company's shares were trading at a price of 111 pence
representing a discount to net asset value per share of 14.5%.
The Board intends to continue with the above buyback policy. Any
such future repurchases will be made in accordance with guidelines established
by the Board from time to time and will be subject to the Company having the
appropriate authorities from shareholders and sufficient funds available for
this purpose. Share buybacks will also be subject to the Listing Rules and any
applicable law at the relevant time. Shares bought back in the market are
normally cancelled.
Principal risks and uncertainties
The Directors also review the principal risks faced by the Company
as part of the internal controls process, as outlined below.
Risk Possible consequence How the Board guards
against risk
Investment and Unsuitable investment Regular review of
strategic risk strategy or stock selection investment strategy by
could lead to poor returns the Board.
to shareholders.
Careful
consideration of the
performance of the
investment portfolio
on a regular basis.
Regulatory and tax The Company is required to Regulatory and
risk comply with the Companies legislative
Act 2006, ITA, UKLA Rules developments are kept
and UK Accounting under review by the
Standards. Breaching these Board.
rules may result in a
public censure, suspension The Company's VCT
from the Official List qualifying status is
and/or financial penalties. continually reviewed
There is a risk that the by the Investment
Company may lose its VCT Manager.
status under the ITA.
Should this occur,
shareholders may lose any PricewaterhouseCoopers
upfront income tax relief LLP has been retained
they received and be taxed by the Board to
on any future dividends undertake an
paid and capital gains independent VCT status
received if they dispose of monitoring role.
their shares.
Operational risk The Company has no Internal control
employees and is therefore reports are provided
reliant on third party by service providers
service providers. Failure on a regular basis.
of the systems at third
party service providers The Board considers
could lead to inaccurate the performance of the
reporting or monitoring. service providers
Inadequate controls could annually.
lead to the
misappropriation of assets.
Fraud and Fraud may occur involving Internal control
dishonesty risks company assets perpetrated reports are provided
by a third party, the by service providers
Investment Manager or other on a regular basis.
service provider.
Financial The main risks arising from The Board regularly
Instrument risks the Company's financial reviews and agrees
instruments are due to policies for managing
fluctuations in their these risks.
market prices, interest
rates, credit risk and
liquidity risk.
Economic risk Events such as recession, Investment in a
inflation or deflation and diversified portfolio
movements in interest rates of companies, whilst
could affect trading maintaining adequate
conditions for smaller liquidity.
companies and consequently
the value of the Company's
investments.
The Regulatory Environment
The Board and Investment Manager are required to consider the
regulatory environment when setting the Company's strategy and making
investment decisions. A summary of the key considerations are outlined below.
- Human rights
The Board seeks to conduct the Company's affairs responsibly and
expects the Investment Manager to consider the human rights implications of
its decisions, as far as possible, particularly with regard to investment
decisions.
- Diversity
The Directors are aware of the need to have a Board which, as a
whole, comprises an appropriate balance of skills, experience and diversity.
The Board currently comprises four male non-executive directors and the Board
has confirmed that it is content with its current composition. The Board will,
however, consider gender diversity in making future appointments.
- Anti-bribery policy
The Company has adopted a zero tolerance approach to bribery and
will not tolerate bribery under any circumstances in any transaction in which
it is involved. The Company values its reputation for ethical behaviour and
for financial probity and reliability and the Directors are committed to
working to the highest ethical standards.
The Company expects and requires each of its service providers to
work to the same standard and has obtained confirmation from them that this is
the case.
- Environmental and social responsibility
The Board seeks to conduct the Company's affairs responsibly and
expects the Investment Manager to consider relevant social and environmental
matters when appropriate, particularly with regard to investment decisions.
The Company has offered electronic communications where possible, to reduce
the volume of paper it uses in sending communications to shareholders. In
addition, Board and Committee meetings are held by conference call where it is
possible and appropriate to do so. The Company's Annual and Half-Yearly
reports are printed on paper sourced from forests certified by the Forestry
Stewardship Council that meet its environmental, social and economic
standards.
Prospects
The Company will continue to pursue its investment objective in
line with its investment policy, which has allowed the payment of regular
dividends to shareholders. The portfolio is composed of a diverse range of
businesses operating across a number of different sectors. In many cases the
investee companies sell specialised products or services into niche and
growing markets. The majority of these companies are sustainably profitable,
soundly financed and well managed and should be well placed to prosper as
economic conditions improve. The Board remains optimistic that the recent
improvement in market sentiment will continue.
By order of the Board
Peter Dicks
Chairman
2 December 2013
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.
VCT regulation
The investment policy is designed to ensure that the Company
continues to qualify and is approved as a VCT by HM Revenue & Customs
("HMRC").
Amongst other conditions, the Company may not invest more than 15%
at the time of its investments in a single company and throughout the period
must have at least 70% by value of its investments in shares or securities in
VCT qualifying holdings, of which a minimum overall of 30% by value (70% for
funds raised after 6 April 2011) must be in ordinary shares which carry no
preferential rights (save as may be permitted under VCT rules). In addition,
the Company must have at least 10% by value of its investment in each VCT
qualifying company in ordinary shares which carry no preferential rights (save
as may be permitted under VCT rules).
The £1 million limit on the amount of investment a VCT may make
into a particular company within a tax year has been abolished, except where
that company trades in partnership or has a joint venture. A new rule requires
that an investee company should not receive more than £5 million from State
Aid sources, including VCTs, within any twelve month rolling period ending on
the date of the VCT's investment.
Asset mix
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. Cash and
liquid resources are held in low risk bank accounts and money-market funds.
Borrowing
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.
INVESTMENT MANAGER'S REVIEW
Performance
The audited net assets of the Company as at 30 September 2013
totalled £73.7 million, equivalent to 129.8 pence per share. This compares
with an audited net asset value per share of 102.3 pence as at 30 September
2012. After adding back the dividend paid of 5 pence per share in the period,
the total return of 32.5 pence for the year amounted to 31.8% upon the opening
net asset value of 102.3 pence.
Alternative Investment Market (AIM) review
In the 12 month period ended 30 September 2013, the FTSE AIM
All-Share Index delivered a total return of 13.3%, compared to a total return
of 31.8% delivered by the Company. The total return of 18.9% from the FTSE
All-Share Index over the same period was also better than that produced by the
FTSE AIM All- Share Index.
Having traded within a 10% range for much of the year under review,
the AIM Index rallied strongly over the summer period. In the 3 months to 30
September 2013, the Index rose by over 100 points, equivalent to a total
return, over this traditionally quiet time for equities, of 15%. The catalyst
for a resurgence of interest in AIM quoted companies was undoubtedly linked to
a change in legislation, whereby the Government removed the restriction
preventing private investors from holding AIM listed companies in their ISAs.
This widely anticipated relaxation of the AIM holding rules was a welcome
change, which led to a significant increase in trading volumes on the AIM
indices from early August onwards as private investors began to include AIM
investments in their ISAs. Although the significant initial spike in trading
volumes is likely to be a temporary phenomenon, the recent increased awareness
and interest in AIM quoted companies should prove beneficial over the longer
term.
Negative investor sentiment toward AIM stocks developed
significantly in the wake of the financial crisis - the FTSE AIM All-Share
Index lost more than two thirds of its value during 2008 and, nearly five
years on, the Index remains considerably below its pre-crash peak. It is
understandable therefore that many investors view AIM stocks as being
inherently high risk. While it is true that the share price performance of
individual AIM stocks can be extremely volatile, it is by no means the case
that a portfolio of carefully chosen AIM investments is necessarily going to
be any more risky or volatile than that of a FTSE 100 equity portfolio. To
illustrate this, the annualised share price volatility of Unicorn AIM VCT in
the three year period to 30 September 2013 was 13.8%, while the volatility of
the FTSE 100 Index over the same period was 15.2% (Source: Financial Express).
AIM remains a vibrant and evolving market. Following a long and
protracted period of underperformance there are now clear signs of renewed
investor interest at the smaller end of the UK equity market.
It is particularly pleasing to note that companies are once again
choosing to list on AIM. The number of companies successfully listing on AIM
has risen significantly over the past twelve months. The fact that many of
these companies have subsequently performed strongly, and seen their share
prices rise as a result, should continue to help rebuild investor confidence
in AIM.
Performance Review
The financial year ended 30 September 2013, was one of consistent
and solid progress for Unicorn's AIM focused VCT. The reported Net Asset Value
(NAV) of the Company rose in eleven out of the twelve months under review
(after taking into account the dividend paid to shareholders in February
2013). Encouragingly, the growth in net assets accelerated in the final
quarter of the period and the NAV closed the year at a high point of 129.8
pence per share. This steady progress is, to a large extent, a consequence of
careful and conservative portfolio construction. The investment portfolio is
diversified both by number of holdings and by sector exposure. At the
financial year end, the Company held shares in 39 quoted, active VCT
qualifying companies together with 14 non-qualifying investments. These
investments spanned a total of 14 different sectors. Although diverse by
business activity, the common theme linking the majority of our investee
companies is that they are established, profitable and cash generative
businesses selling specialist products and services into predominantly growing
markets. As a result, the portfolio has performed solidly in spite of the
extremely tough trading conditions experienced since the financial crisis
began in 2008, which in turn has meant that the Company has been able to
maintain a consistent, attractive level of dividend payments to shareholders
each year.
The recent return of economic growth is potentially a turning point
in the prospects for capital growth from AIM focused VCTs. It is pleasing to
see that, as evidence of UK economic stability and recovery has grown over the
past year, investor sentiment has strengthened. This more benign environment
has noticeably started to feed through into improvements in the financial,
operational and share price performance of many of our investee companies.
Stock specific risk has again been managed closely throughout the
period under review. Capital profits (proceeds less original cost) in excess
of £1.8m have been realised during the year through a series of part-disposals
of continuing portfolio companies.
The stock specific risk that arises as a consequence of having made
particularly successful investments is managed by a practice of not allowing
an individual investment to account for more than 15% of total assets at any
time.
The primary example is Abcam, the single largest holding by value
within the portfolio, which has continued to perform well with its share price
rising by a further 26% in the past 12 months. In order to manage the risk
exposure arising from this highly successful investment, we have made a series
of share sales in the secondary market. A total of £1.3m in capital profits
was realised from the sale of Abcam shares during the period. The value of the
retained holding in Abcam at the end of the period under review amounted to
12.1% of total assets.
The consequence of this approach is that stock specific risk has
been reduced, capital reserves have been topped up and, perhaps most
important, we remain in a position to 'run the winners' in the portfolio by
maintaining meaningful core holdings over the longer term. It is our belief
that this method of managing risk is beneficial for all shareholders since it
strikes an appropriate balance between risk and reward - the `upside'
potential from continued investment remains meaningful while the potential
damage to overall net asset value, should an unforeseen stock specific problem
arise, remains limited. In our view, this balance is especially important when
managing a portfolio of relatively early stage investments.
Other larger individual holdings have also been subject to prudent
profit-taking as appropriate.
A review of the main positive and negative contributors to
performance in the portfolio follows:-
Qualifying investments (bracketed figures represent the share price movement
for the year under review on a mid price basis where quoted):-
Abcam (+26%) is a global leader in the manufacture and supply of
therapeutic antibodies and protein research tools to the worldwide life
sciences research market. Despite pressures on research funding, Abcam
continues to make excellent progress, reporting significant increases in
sales, profits and dividends in its financial year to 30 June 2013. This
period was transformational for Abcam and included a first full year of profit
contribution from the acquisitions of Epitomics and Ascent Scientific. Abcam
remains committed to its goal of becoming the world's leading supplier of life
science research tools.
Accumuli (+39%) is a provider of advanced IT security services.
Having acquired a number of businesses in the recent past, the management team
at Accumuli is now focusing investment on expanding the range of services
offered while simultaneously growing the sales and marketing resource. In
addition, the recent acquisition of Signify Solutions is reported to have been
successfully integrated, giving Accumuli an expanded customer base, while
adding further strong technical skills and product offerings together with
improved revenue visibility. Accumuli remains a highly cash generative
business and declared a maiden dividend in its financial results for the
period ended 31 March 2013.
Animalcare (+35%) is a leading supplier of veterinary medicines
focused on three main product groups: licensed veterinary medicines, companion
animal identification and animal welfare products. Following a difficult
period, the business has returned to growth and current trends in trading
appear encouraging. Animalcare successfully launched three new products in its
financial year ended 30 June 2013 and also completed a move to a new
manufacturing facility, which provides increased capacity. Revenue increased
by 11.6% to £12.1m during this period, while strong cash generation led to
growth of 17.8% in the total dividend for the year.
Anpario (+91%) is an international supplier of natural, high
performance feed additives to enhance health, growth and sustainability in
agriculture and aquaculture. In the past twelve months the management team has
introduced a number of key operational initiatives to support the strategy of
achieving growth in both the product range and geographic reach of the
business. These initiatives include the formation of a wholly owned Chinese
subsidiary, the re-structuring of the UK Agriculture Division and the
acquisition of Meriden Animal Health in 2012.
Avingtrans (+56%) designs, manufactures and supplies critical
components to the medical, energy and aerospace sectors. The financial year
ended 31 May 2013 saw the business transformed with the disposal of one major
subsidiary followed by the acquisition of Aerotech and PFW in Farnborough,
which helped create a focused, specialist aerospace engineering division. The
group continues to make strong financial progress, with revenue increasing by
over 40% and adjusted PBT growing by nearly 90% in most recently released
financial year end results. The outlook also appears to be encouraging, with
management reporting that the business had entered its new financial year with
a record order book.
Cohort (+45%) is a technology consultancy group focused on
providing specialist technical products or services, primarily to the defence
market. Despite difficult conditions in some parts of the defence market,
Cohort continues to make good progress, reporting a record trading profit and
a 21% dividend increase in relation to its financial year ended 30 April 2013.
Crawshaw (+220%) is a chain of value-orientated retail butchers.
The business has begun to recover from extremely challenging trading
conditions in recent years and has delivered a significant improvement in
profitability after also managing to maintain a tight control over costs. The
Board declared a maiden final dividend in April 2013, followed by a further
interim dividend in September 2013, highlighting the management team's
confidence in the prospects for the group.
Driver Group (+77%) is a global, construction related consultancy
group. The business continues to benefit from strong trading conditions being
encountered across a wide range of geographic markets. This healthy backdrop
has allowed management to deliver results in excess of market forecasts over
the past 12 months. Growth in revenues, improved gross margins and better
utilisation rates have all resulted in increased profitability and strong cash
generation. This improved operational performance has meant the business is
free from debt with net cash of £90k held on the balance sheet as at 31 March
2013.
Hasgrove (+86%) is a digital and communications services group. In
May 2013, the management team decided that the business was of insufficient
scale to support the costs of a listing on AIM and subsequently announced a
tender offer and proposed a de-listing of the shares. Unicorn AIM VCT did not
participate in this offer and instead, the Investment Manager has chosen to
retain the stake in Hasgrove as an investment in a privately owned, unquoted
business. Operationally, Hasgrove has delivered a good recovery in performance
in the past 12 months and continues to generate a steady stream of new
business wins.
HML Holdings (+41%) is a property management services group based
predominantly in London and the South-East. The business has continued to make
strong progress during its most recent financial period. Highlights for its
financial year ended 31 March 2013 included revenue growth of 21% and an
increase in EPS of over 63% to 1.8 pence per share. The business also reached
a milestone of having 40,000 property units under management. The aim of
achieving geographic expansion was also met following the acquisition of a
Cheshire based property management partnership. The maximum total
consideration for this deal will be £0.8m and is to be funded entirely from
existing working capital resources.
Instem (+37%) is a software developer focused on the life sciences
and biotechnology markets. The group has developed world leading software
enabling pharmaceutical companies to collect, analyse and report large volumes
of complex scientific data in an accurate and efficient manner. Instem has
enjoyed a return to growth in the period under review by successfully
broadening its range of products, extending its geographical reach and signing
up a number of new clients. The acquisition of Logos Technologies in May 2013
enhanced the group's capability in early phase clinical studies and is already
proving to be a successful addition to Instem's established range of software
solutions. In the six month period to 31 March 2013, Instem reported turnover
growth of 13% with recurring revenues accounting for 76% of total sales.
Operating profits grew by 133% to £700k. The strict regulatory environment in
the pharmaceutical sector continues to work in Instem's favour and the
business is now experiencing strong demand across the suite of products
offered.
Mattioli Woods (+71%) is a specialist pension consultancy and
wealth management business. The business has made solid progress during a
period of significant change for the financial services sector. In the
financial year to 31 May 2013, Mattioli Woods' assets under management,
administration and advice, increased by over 20% to £3.6bn. Other financial
highlights included an increase in turnover of 14.3%, EPS growth of 12.2% and
a 26.1% rise in the total dividend.
Pressure Technologies (+116%) is a designer and manufacturer of
high pressure stainless steel cylinders, which are used in a variety of
specialised applications. The group continues to follow a strategy of
diversification, from which it is now beginning to see a growing financial
return. Opportunities across the group's diverse markets appear robust and a
programme of investment in new products and services are further broadening
the customer base. The Group's financial position remains strong with a
reported £2.7m of net cash on the balance sheet at its financial year end.
Sanderson (+49%) is a software and IT services business
specialising in delivering leading technology solutions to the retail and
manufacturing sectors. Despite the challenging conditions in the UK retail
market in particular, the business continues to grow. The strongly cash
generative nature of the business has allowed the management team to invest
heavily in product development while simultaneously strengthening service and
sales and marketing resource. Sanderson recently announced that it was seeking
to expand its presence in the fast growing e-commerce sector through the
acquisition of `One Iota Limited' for a maximum consideration of £5.4m.
Tracsis (+47%) is a provider of operational planning software and
consultancy services to the transport industry. During the year, Tracsis
acquired an AIM quoted transport surveying competitor called `Sky High' in a
deal that expands the customer base into related transport markets and
provides a foothold in new geographic regions. The deal was funded out of
Tracsis' substantial cash resources and was immediately earnings enhancing.
Tracsis also reported further substantial organic growth during the period
under review, winning several new contracts both in the UK and abroad.
Zetar (+32%), a manufacturer of confectionery and savoury snacks
was acquired during the period by a German competitor at a price of 297p per
share, thereby realising a capital gain of £374k on original book cost.
A small number of qualifying companies continued to encounter
operational or trading difficulties during the year:-
Green Compliance (-85%) provides compliance services across the
water hygiene, pest prevention and fire protection segments to a wide range of
clients in both the UK public and private sectors. The period under review
proved to be a challenging one, with the business requiring two rounds of
additional fundraising (in both of which the Company participated). A new CEO
has been appointed and there is evidence that the business is starting to
stabilise.
Surgical Innovations (-19%) is a designer and manufacturer of
innovative medical devices for use in minimally invasive surgery. Delays to
orders at the end of 2012 had led to results being slightly below market
expectations for the year. Encouragingly, trading conditions now appear to be
improving with significant opportunities for the company emerging,
particularly in the lucrative US market. The share price performed poorly
between February and August 2013, although it recovered in the final few weeks
of the period under review as confidence in prospects for the business began
to improve.
SnackTime (Ordinary Shares -23%) is an operator of vending
machines. The business has undergone a period of significant management change
and cost reduction to counteract the continuing reduction in revenues. The
Company participated in a further round of fundraising during the period,
contributing £300k to a £1m re-financing, through the issue of new convertible
loan notes.
Tangent Communications (-27%) is a digital marketing and printing
specialist with a blue chip corporate client base, a rapidly expanding online
print division and a growing reputation for service excellence. In the past
year, the business has increased investment in its online digital print
businesses; printed.com and goodprint (acquired in November 2012) are now
beginning to develop traction in a growing consumer market for printed
products. Tangent is a profitable business, as it has been since our original
investment in 2007, and it remains cash generative and debt free. Tangent has
struggled in share price terms over the past 12 months, despite continuing to
deliver to our expectations.
New Qualifying Investments
At the financial year end the Company held over 75% of total assets
in VCT qualifying businesses as calculated in accordance with HMRC tax
valuation rules. New VCT qualifying investments are only made if the companies
concerned meet our clearly defined investment criteria. During the period one
new VCT qualifying company was introduced to the portfolio.
Keywords Studio (-5% since investment) is a technical service
provider to the video game industry. The company floated on AIM in July 2013,
raising £28m at a price of 123p per share. Following a relatively quiet start
to life as a publicly quoted company, Keywords issued a slightly disappointing
trading statement in September 2013, highlighting delays in the launch of next
generation consoles from Sony and Microsoft. These delays will have a negative
impact on trading in the second half of Keywords' current financial year. The
longer term prospects for growth remain significant.
Non-Qualifying Investments (bracketed figures represent the share price
movement for the year under review on a mid price basis):-
The non-qualifying portfolio also performed well during the year under review,
although the total return was depressed by poor performance from two
investments:-
Office2Office (-67%) is a provider of office supplies and business
solutions. The business continues to experience challenging market conditions
and the office products market remains in long term decline. Management has
undertaken a number of initiatives to improve operational efficiency but it
will take some time before these changes are reflected in improved
profitability.
Stadium Group (-42%) is an electronic technologies group providing
manufacturing services, custom power supplies and control power assemblies.
This non-qualifying holding was sold in full in November 2012 following a poor
trading update.
The contribution to performance from the investment in sub-funds of
the Unicorn Investment Funds OEIC was particularly pleasing and more than
offset the disappointing performance of Office2Office and Stadium Group. The
three sub-funds generated total returns for the year of 47.9% from the Unicorn
UK Smaller Companies Fund, 36.8% from the Unicorn Free Spirit Fund and 29.6%
from the Unicorn Mastertrust Fund, which translates to an aggregate, albeit
largely unrealised, capital gain of approximately £3m.
It should be noted that investment management fees are based on the
net asset value of the Company excluding the value of the investments in the
OEIC Funds, as Unicorn Asset Management Limited earns fees from managing the
OEIC funds separately, thus ensuring there is no double counting of fees.
Other meaningful contributors to performance of the non-qualifying
portfolio included:-
Hayward Tyler Group (formerly Specialist Energy Group) (+264%) is a
specialist engineering group manufacturing a range of fluid filled electric
motors and pumps that are designed to operate in the harshest environments.
Following a prolonged period of challenging operational and trading
conditions, it is pleasing to see the business begin to benefit from the
painful but necessary restructuring implemented by the management team over
the past two years. The introduction of a `continuous improvement programme',
combined with material changes to the manufacturing process in operation at
their Luton factory have begun to deliver tangible benefits in the form of
improved margins and profitability. At the same time, it appears that market
demand for Hayward Tyler's specialist pumps is recovering.
Macfarlane (+57%) is a designer and distributor of a comprehensive
range of protective packaging products and labels. Macfarlane is focusing on
the internet retail market and we expect it to be a beneficiary of increased
e-commerce transactions as retail activity continues to move from the high
street to the web. Macfarlane has increased profits on flat sales,
demonstrating management's continued focus on managing cost.
Mears Group (+49%) is a leading social housing repairs and
maintenance service provider to Local Authorities and Registered Social
Landlords in the UK. Mears also operates in the UK Local Authorities'
outsourced care market, providing personal care services to people in their
own homes. The Group benefits from being a market leader in robust and
defensive markets. Mears continues to deliver healthy organic growth and has
successfully integrated both of its recent large acquisitions. The outlook for
continued growth remains positive.
Portmeirion (+40%) is a ceramic manufacturing business which
encompasses the Portmeirion, Spode, Royal Worcester and Pimpernel brands. The
business enjoys particularly strong demand in the UK and US markets. For the
six month period to 30 June 2013, management reported revenue growth of 4% and
an increase in the interim dividend of 11%.
Renold (+57%) is a manufacturer of industrial chain and torque
transmission products. Following a prolonged period of poor operational
performance, senior management changes have been made and a full strategic
review of the business has been undertaken by the new Chief Executive. A
programme to improve operational process and increase manufacturing efficiency
has been introduced and is continuing. A cost reduction plan is also being
implemented that will result in a significant reduction in overheads. Renold
also successfully refinanced its debt during the period.
Sagentia (+65%) is a science and technology consultancy services
and product development business focused on the consumer, energy, industrial
and medical markets. In the six month period to 30 June 2013, the business
delivered strong operating performance, with reported revenues up by 36% and
an increase in profits before tax of 49%. Sagentia also successfully completed
two acquisitions during the period, strengthening the firm's capabilities in
the energy sector.
Realisations
Realisations totalling £9.6m were made in the year to 30 September
2013. Merger and acquisition activity resulted in the disposal of four VCT
qualifying investments: Maxima Holdings, Datong, Zetar and Vindon Healthcare.
As stated above, Hasgrove was delisted from AIM following a tender
offer. We chose not to participate in this tender offer and instead the shares
have been retained as an unquoted, VCT qualifying investment.
In addition, 14 holdings in the non-qualifying portfolio were sold
in the open market, while partial disposals were made in a number of other
holdings.
Including partial disposals, the total net realised gain from the
sale of investments amounted to £1.2m.
At the financial year end, the Company held net cash balances and
investments in money market funds, with the combined value of £2.56m.
Prospects
The investment portfolio contains a diverse range of predominantly
profitable businesses that have successfully withstood difficult trading
conditions in recent years. The majority of these businesses have remained in
sound financial health and we are now receiving regular dividend income from
many of them.
Recent evidence suggests that UK economic recovery is gathering
momentum. Should this return to GDP growth be maintained, then it is
reasonable to hope that our investee companies will benefit through increased
sales opportunities. If revenue growth does become more pronounced, the impact
of this on well-managed and soundly financed businesses will be felt in the
form of increased levels of profitability. This, in turn, ought to translate
into positive share price development.
We are also now seeing an improved flow of attractive investment
opportunities and are therefore optimistic that we can successfully expand the
portfolio over the next twelve months. Despite this welcome improvement in
deal-flow, our established and selective approach to new investment will be
retained. It remains the Investment Manager's belief that this strategy offers
the best prospect of delivering consistently attractive returns for
shareholders over the longer term.
Finally, it is pleasing to report that the new financial year has
begun strongly with Net Asset Value per share rising by 5.2% in October 2013.
Chris Hutchinson
Unicorn Asset Management Limited
2 December 2013
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the annual report and
the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors are required and have
elected to prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law). Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or loss of the
Company for that period.
In preparing these financial statements the Directors are required
to:
- select suitable accounting policies and then apply them
consistently;
- make judgments and accounting estimates that are reasonable and
prudent;
- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's transactions, to
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for ensuring the Annual Report and
the financial statements are made available on a website. Financial statements
are published on the company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the company's website is the responsibility of
the directors. The directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
The Directors confirm, to the best of their knowledge:
(a) that the financial statements, which have been prepared in
accordance with UK Generally Accepted Accounting Practice and the 2009
Statement of Recommended Practice, `Financial Statements of Investment
Companies and Venture Capital Trusts' give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company; and
(b) that the management report, comprising the Chairman's
Statement, the Strategic Report, the Investment Manager's Review, the
Investment Portfolio Summary and the Directors' Report 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.
Having taken advice from the Audit Committee, the Board considers
the report and accounts, taken as a whole, as fair, balanced and
understandable and that it provides the information necessary for shareholders
to assess the Company's performance, business model and strategy.
Neither the Company nor the directors accept any liability to any
person in relation to the annual report except to the extent that such
liability could arise under English law. Accordingly, any liability to a
person who has demonstrated reliance on any untrue or misleading statement or
omission shall be determined in accordance with section 90A and schedule 10A
of the Financial Services and Markets Act 2000.
For and on behalf of the Board
Peter Dicks
Chairman
2 December 2013
PRIMARY FINANCIAL STATEMENTS
Income Statement
for the year ended 30 September 2013
Year ended Year ended
30 September 2013 30 September 2012
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Net unrealised gains on investments - 17,167 17,167 - 2,057 2,057
Net gains on realisation of investments - 1,191 1,191 - 364 364
Income 2 1,174 - 1,174 1,137 - 1,137
Investment management fees 3 (265) (795) (1,060) (249) (746) (995)
Other expenses (469) - (469) (501) - (501)
Profit on ordinary activities before taxation 440 17,563 18,003 387 1,675 2,062
Tax on profit on ordinary activities - - - - - -
Profit on ordinary activities after taxation
for the financial year 440 17,563 18,003 387 1,675 2,062
Basic and diluted earnings per share:
Ordinary Shares 5 0.77p 30.71p 31.48p 0.66p 2.88p 3.54p
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 year.
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 the Profit and
Loss Account, there were no differences between the profit as stated above and at historical cost.
The notes below form part of these financial statements.
Balance Sheet
as at 30 September 2013
30 September 2013 30 September 2012
Notes £'000 £'000 £'000 £'000
Non-current assets
Investments at fair value 70,596 57,806
Current assets
Debtors 836 183
Current investments 154 720
Cash at bank 2,406 532
3,396 1,435
Creditors: amounts falling
due within one year (319) (244)
Net current assets 3,077 1,191
Net assets 73,673 58,997
Capital
Called up share capital 568 576
Capital redemption reserve 4 332
Share premium account 18 32,331
Revaluation reserve 24,979 3,860
Special reserve 38,104 12,940
Profit and loss account 10,000 8,958
Equity shareholders' funds 73,673 58,997
Net asset value per
share of 1 pence each:
Ordinary Shares 6 129.78p 102.34p
The financial statements and authorised for issue by the Board of Directors on 2 December 2013 and
were signed on their behalf by:
Peter Dicks
Chairman
The notes below form part of these financial statements.
Reconciliation of Movements in Shareholders' Funds
For the year ended 30 September 2013
30 September 2013 30 September 2012
Notes £'000 £'000
Opening Shareholders' funds
at 1 October 2012 58,997 60,447
Share capital bought back
in the year - including
expenses (9,858) (4,487)
Share capital raised - net
of expenses 9,392 3,901
Profit for the year 18,003 2,062
Dividends paid 4 (2,861) (2,926)
Closing Shareholders'
funds at 30 September
2013 73,673 58,997
The noted below form part of these financial statements.
Cash Flow Statement
For the year ended 30 September 2013
30 September 2013 30 September 2012
Notes £'000 £'000 £'000 £'000
Operating activities
Investment income received 1,203 1,115
Investment management
fees paid (1,060) (994)
Other cash payments (502) (538)
Net cash outflow from
operating activities (359) (417)
Investing activities
Purchase of investments (3,491) (1,586)
Sale of investments 8,529 5,790
5,038 4,204
Equity dividends
Dividends paid 4 (2,861) (2,926)
Net cash inflow before
liquid resource
management and
financing 1,818 861
Management of liquid
resources
Decrease in current
investments 566 59
Financing
Shares issued as part of
Offer for Subscription 1,400 3,945
Shares issued as part of
Enhanced Buyback Facility 250 -
Shares bought back as
part of Enhanced Buyback
Facility (including expenses) (391) -
Shares bought back (1,769) (4,983)
(510) (1,038)
Net increase/(decrease)
in cash 1,874 (118)
The notes below form part of these financial statements.
NOTES TO THE ACCOUNTS
1 Basis of accounting
The accounts have been prepared under UK Generally Accepted
Accounting Practice (UK GAAP) and the Statement of Recommended Practice,
`Financial Statements of Investment Trust Companies and Venture Capital
Trusts' ("the SORP") issued by the Association of Investment 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.
2 Income
2013 2012
£'000 £'000
Interest receivable
- from equities 984 964
- from loan stocks 147 110
- from money-market funds and
Unicorn managed OEICs 43 63
Total income 1,174 1,137
Total income comprises
Dividends 1,027 1,027
Interest 147 110
1,174 1,137
Income from investments comprises
Listed UK securities 178 338
Listed Overseas securities 1 4
Unlisted UK securities 995 795
1,174 1,137
3 Investment Manager's fees
2013 2013 2013 2012 2012 2012
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unicorn Asset Management Limited 265 795 1,060 249 746 995
Unicorn Asset Management Limited ("UAML")
receives an annual management fee of 2% of the net asset value of the Company,
excluding the value of the investments in the OEICs, which are also managed by
UAML. The annual management fee charged to the Company is calculated and
payable quarterly in advance. In the year ended 30 September 2013, UAML also
earned fees of £115,000 (2012: £98,000), being OEIC management fees calculated
on the value of the VCT's holdings in each OEIC on a daily basis. This
management fee is 1.25% per annum of the OEIC value for each of Unicorn
Smaller Companies OEIC, Unicorn Free Spirit OEIC and Unicorn Mastertrust OEIC.
The management fee will be subject to repayment
to the extent that there is an excess of the annual costs of the Company
incurred in the ordinary course of business over 3.6% of the closing net
assets of the Company at the year end. Any amount repayable will be paid by
the Manager within 5 business days of the approval of the annual accounts for
the relevant year-end, or set off against the next quarterly fee instalment
payable to the Manager following such approval. There was no excess of
expenses for this year or the prior year.
Under an Amended Incentive Agreement with UAML dated 12 April 2010 (which replaces
all previous incentive agreements), the Investment Manager is entitled to a performance
incentive fee of 20% of any cash distributions (by dividend or otherwise) paid to
shareholders in excess of 6 pence per Ordinary Share paid in any accounting period -
"the target return" and subject to the maintenance of a net asset value (NAV) per
share of 125p or more, as calculated in the annual report and accounts for the year
relating to such payments. The target return applies for accounting periods
starting after 1 October 2010. In the event that the target return of 6 pence
per share is not paid in a particular accounting period, the shortfall of such
distributions will be carried forward to subsequent accounting periods and any
incentive fee will not be payable until this shortfall is met. No incentive
fee is payable for the year ended 30 September 2013 and none was paid for the
year ended 30 September 2012.
4 Dividends
2013 2012
£'000 £'000
Amounts recognised as distributions
to equity holders in the year:
Ordinary Shares
Final capital dividend of 4.5p (2012: 4.25p)per
share for the year ended 30 September 2012
paid on 8 February 2013 2,576 2,486
Final income dividend of 0.5p (2012: 0.75p)per
share for the year ended 30 September 2012
paid on 8 February 2013 285 440
2,861 2,926
Any proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
financial statements.
Set out below are the total income dividends payable in respect of the
financial year, which is the basis on which the requirements of Section 274 of
the Income Tax Act 2007 are considered.
2013 2012
£'000 £'000
Revenue available for distribution by way
of dividends for the year 440 387
Proposed final income dividend of 0.75p
(2012: 0.5p) for the year ended
30 September 2013 426 287
5 Basic and diluted earnings and return per share
2013 2012
£'000 £'000
Total earnings after taxation: 18,003 2,062
Basic and diluted earnings
per share (note a) 31.48p 3.54p
Net revenue from ordinary activities
after taxation 440 387
Revenue earnings per share (note b) 0.77p 0.66p
Net unrealised capital gains 17,167 2,057
Net realised capital gains 1,191 364
Capital expenses (795) (746)
Total capital return 17,563 1,675
Capital earnings per share (note c) 30.71p 2.88p
Weighted average number of
shares in issue in the year 57,190,640 58,206,100
Notes
a) Basic and diluted earnings per share is total earnings after
taxation divided by the weighted average number of shares in issue.
b) Revenue earnings per share is net revenue after taxation divided
by the weighted average number of shares in issue.
c) Capital earnings per share is total capital return divided by
the weighted average number of shares in issue.
There are no instruments in place that will increase the number of
shares in issue in future. Accordingly, the above figures currently represent
both basic and diluted returns.
6 Net asset values 2013 2012
£'000 £'000
Net Assets 73,673 58,997
Number of shares in issue 56,767,691 57,646,506
Net asset value per share 129.78p 102.34p
7 Dividends
The Directors have proposed a final dividend of 6 pence per share. The
dividend will be paid on 31 January 2014 to Shareholders on the Register on 27
December 2013. Shareholders who wish to have dividends paid directly into
their bank account rather than sent by cheque to their registered address can
complete a mandate for this purpose. Mandates can be obtained by telephoning
the Company's Registrars, Capita Asset Services on 0871 664 0324, (lines are
open 8.30 am - 5.30 pm Mon - Fri, 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 Asset Services, The Registry, 34 Beckenham Road, Beckenham,
Kent, BR3 4TU or emailing them at VCTS@capitaregistrars.com.
8 Post balance sheet events
On 9 October 2013, £500,000 was invested in each of The City Pub
Company (East) plc and The City Pub Company (West) plc, both of which are
unquoted investments.
On 6 November 2013, £1,750,000 was invested in Interactive Investor
plc, an unquoted investment.
On 8 November 2013, 575,416 Ordinary shares were
allotted at a price of 141.1 pence per share, raising net funds of £786,000.
9 Statutory information
These are not full accounts in terms of section 434 of the Companies Act 2006.
The Annual Report for the year to 30 September 2013 will be sent to
shareholders shortly and will then be available for inspection at 30
Haymarket, London SW1Y 4EX, the registered office of the Company. Copies of
the Annual Report will shortly be available on the Company Secretary's and the
Investment Manager's websites, details of which can be found at
www.unicornaimvct.co.uk. Statutory accounts will be delivered to the Registrar
of Companies after the Annual General Meeting. The audited accounts for the
year ended 30 September 2013 contain an unqualified audit report.
10 Annual General Meeting
The Annual General Meeting of the Company will be held at 11.00 am on Friday,
10 January 2014 at the offices of SGH Martineau LLP, One America Square,
Crosswall, London, EC3N 2SG.
Contact details for further enquiries:
Chris Hutchinson of Unicorn Asset Management Limited (the Investment Manager),
on 020 7253 0889.
Robert Brittain at Mobeus Equity Partners LLP (the Company Secretary)
on 020 7024 7600 or by e-mail on unicorn@mobeusequity.co.uk
DISCLAIMER
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.