Final Results
Unicorn AIM VCT plc
22 November 2006
Preliminary results for the year ended 30 September 2006
Chairman's Statement
The Board is pleased with the continued progress of both Funds and is confident
that your Investment Manager's strategy can continue to deliver attractive
returns for Shareholders, given reasonable market conditions.
The Company has continued to make sound progress over the past twelve months
despite a recent, relatively poor performance from the Alternative Investment
Market (AIM). The Net Asset Values (NAV) at bid prices of the Ordinary Share
Fund and the Series 2 (S2) Share Fund as at 30 September 2006 were 99.2 pence
per share and 120.3 pence per share respectively.
The Board aims to maximise the stream of dividend distributions to
Shareholders, although as both Funds mature this policy becomes increasingly
dependent on the level of capital gains generated by each portfolio. The timing
and size of capital realisations remains unpredictable. In addition, the goal
remains to return realised gains to Shareholders whilst maintaining the NAVs at
around 100 pence per share. Mindful of this goal, the Board does not intend to
propose a final dividend for Ordinary Shareholders for the year ended 30
September 2006, meaning that dividends for the year recognised in the accounts
total 10 pence per Ordinary Share (5 pence per share in 2005). Total dividends
recognised in the accounts for the S2 Share Fund are 1 penny per S2 Share (0.75
pence per share in 2005). An increased final dividend of 5 pence per share is
proposed for S2 Shareholders (1 penny (0.65 pence from capital, 0.35 pence from
income) per share in 2005) for the year ended 30 September 2006 which will be
paid from capital on 31 January 2007 to S2 Shareholders on the register on 5
January 2007.
All of the VCT legislative tests relating to the running of the Company were
met throughout the period under review. The most visible of these tests is that
more than 70% of each portfolio had to be invested in qualifying investments by
the end of the third accounting period from when new share capital was
subscribed. The Ordinary Share Fund is now five years old and remains
comfortably above the 70% target, closing the financial year at approximately
83% invested in qualifying investments. The S2 Share Fund achieved the 70%
target prior to the 30 September 2006 deadline.
In the year to 30 September 2006 the Ordinary Share Fund made four new
qualifying investments at a total cost of £1.4m out of total purchases of £
3.7m. The S2 Share Fund participated alongside the Ordinary Share Fund in three
of these investments and also made a further six qualifying investments in its
own right. The total cost of new investments for the S2 Share Fund was £4.3m.
The Ordinary Share Fund ended the year with a portfolio of thirty-four
qualifying investments. The total number of holdings has been reduced by two
following the disposal of six holdings. The S2 Fund now holds twenty-seven
qualifying investments having made nine new investments and two disposals
during the year.
Both Funds continue to hold cash reserves in order to allow for further
qualifying investments and to finance the Company's regular share buy-back
programme. During the period 1,502,062 Ordinary Shares and 77,790 S2 Fund
Shares were bought back for cancellation at an average price of 89.3 pence per
share and 110.6 pence per share respectively.
As shareholders will be aware, the Chancellor's Budget statement in March 2006
introduced a number of changes to VCT regulations. The changes primarily relate
to capital raised by VCTs after 6 April 2006 and as such do not directly affect
the operation of Unicorn's existing VCTs. However, given the significant amount
of capital raised for new VCTs, in advance of these changes, it was inevitable
that competition for investment in suitable new issues would increase. When
taken in combination with the current slowdown in the new issue market this may
mean that some VCT managers struggle to meet the 70% qualifying target within
the prescribed period. The Board is therefore particularly pleased that the S2
Fund has now reached the minimum 70% level without the Investment Manager
having to deviate from its chosen approach to making new investments.
The AIM has had a disappointing 12 months in performance terms. Despite strong
gains in the first half of the financial year, this Index came under pressure
in early May and ended the period 8% lower as investors became increasingly
risk averse. The AIM is inherently more volatile than the main market and is
prone to large swings in performance. The Investment Manager's continued focus
on identifying profitable, cash generative companies in which to invest
substantially mitigates this risk and the Board is confident that this remains
the optimum approach to securing strong and sustainable capital growth over the
longer term, thereby maximising the potential for future dividend distributions
to shareholders. A more detailed report on the performance of both Funds is
contained in the Investment Manager's Review below.
In summary, the Board is pleased with the continued progress of both Funds,
remains confident in the potential for further capital growth and looks forward
to continuing the payment of dividends to shareholders in the future.
Peter Dicks
Chairman
Investment Manager's Review
Investment policy
It is the aim of the Investment Manager to identify and invest in a diversified
portfolio of companies 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.
Performance
Both Funds have performed well over the past 12 months despite the difficult
market conditions endured by AIM quoted companies in the second half of the
financial year.
As at 30 September 2006 the NAV of the Ordinary Share Fund on a bid price basis
was 99.2 pence per share. This represents an increase in the total return for
the year of 3.5% after adding back dividends paid. Since launch, the initial
NAV has increased by 33.0% on a total return basis.
The NAV of the S2 Share Fund on a bid price basis was 120.3 pence per share,
which represents an increase in total return for the year of 11.0%, after
adding back dividends paid. The total return on initial NAV is 29.2%.
Investment strategy
The continuing policy of investing in companies with established track records
of profitability and positive cash generation continues to serve Shareholders
well. Both funds now contain a diverse portfolio of predominantly high growth
businesses from a wide range of sectors. The new investments made during the
past twelve months have performed well, and despite the increased weight of
money chasing VCT qualifying investment opportunities access to deal-flow has
improved and meaningful allocations have been secured. The Investment Manager
will continue with a highly selective approach to new investments.
AIM review
The AIM is inherently volatile and investment in AIM quoted companies carries
with it a higher than average degree of risk. We remain concerned at the level
of exposure to oil and gas and mining companies, which now account for 38% of
the AIM Index by value, and by the rapid growth in international companies
seeking floatation on AIM (source: London Stock Exchange - 30 August 2006).
However, with over 1,500 companies representing a total market value of over £
70bn (source: London Sock Exchange - 30 August 2006) there is no doubt that the
AIM is an increasingly viable and attractive option for many entrepreneurs
seeking to list their businesses for the first time. Overall there has been a
healthy flow of VCT qualifying IPOs on AIM this year, although there has been a
decline in new issues in recent months.
Qualifying investments
The Ordinary Share Fund has now completed its fifth year and as such is
relatively mature. The Fund made four new investments during the course of the
year which in aggregate generated a positive contribution to performance of
over £500,000.
Mattioli Woods is one of the UK's leading growing pension and wealth management
consultancies. Founded in 1991, the company has built long term relationships
with its customers and now acts for around 1,500 pension fund clients. Revenue
generation is predominantly fee-based and the business is enjoying strong
growth, partly driven by new government legislation relating to pension
simplification.
Abcam has successfully exploited web based technology to build a business
specialising in the distribution of therapeutic antibodies to the worldwide
life science research market. The company has grown rapidly from humble
beginnings in 1998 and now generates annual sales of £20m from an online
catalogue of over 23,000 products. The business is inherently high margin and
cash generative and prospects for continued growth remain excellent.
Dillistone Group is a small company specialising in the provision of software
and ancillary services to the executive recruitment industry. The company has
focused on a specific niche market and has developed a reputation for `must
have' solutions combined with high quality customer service. As a consequence,
approximately 45% of all new business is generated via referrals from existing
satisfied clients. Dillistone was admitted to trading on AIM in June 2006.
Turnover, profits and cashflow continue to grow strongly.
Clarity Commerce Solutions is a leading supplier of management software
solutions to the entertainment, leisure and retail sectors. In addition Clarity
has developed a range of support service offerings and as a result has become
increasingly successful in winning large contracts from global players such as
Sodhexo. Having recently reported on a fifth successive year of profitability
and growth, the company is well positioned to exploit further growth
opportunities and to deliver accelerated financial performance.
As previously discussed, corporate activity continues to be an ongoing feature
of the portfolios. Profitable, fast growing companies remain attractive to
trade and private equity buyers alike. During the course of the year under
review four investments held in the Ordinary Share Fund were taken over.
In March, TRL Electronics, one of the larger holdings in the Ordinary Share
Fund, received a bid approach from an American trade buyer. The offer was
declared unconditional in June, crystallising an almost three fold gain on
original book cost. Interest bearing loan notes redeemable in March 2007 were
accepted in lieu of cash thus allowing time for the Investment Manager to
replace this holding with new qualifying investments in a managed fashion.
Lloyds British Testing, Nectar Taverns and Urban Dining were the other holdings
that were subject to takeover bids during the year.
The S2 Share Fund has been active in making new investments this year and ended
the period above the 70% level required to maintain VCT qualifying status. Nine
new companies were added to the S2 portfolio, three of which were also invested
in by the Ordinary Share Fund. The Investment Manager has been encouraged by
the overall performance of these new investments to date and their success
further endorses the strategy of investing in established, profitable and cash
generative businesses.
Cohort was established to acquire leading independent suppliers of specialist
technical services to the defence and security sectors. On admission to AIM the
company acquired Systems Consultants Services and in July of this year Cohort
announced the acquisition of Mass Consultants. Both these businesses have
profitable and successful track records whilst providing highly specialised
services to different areas of the Armed Forces in the UK and abroad. These two
initial acquisitions have created the platform from which Cohort can bid for
larger contracts and have enhanced the group's ability to cross-sell its
services into different areas of the defence industry.
Compass Finance Group is an arranger and packager of secured loans to the
consumer market. The business is in the process of being transitioned away from
its direct mail marketing roots into affinity partnerships with leading high
street lenders. The company also recently acquired an insolvency practice to
service the rapidly growing market for Individual Voluntary Arrangements (IVAs)
which are providing an acceptable debt solution to the alarming number of
seemingly irretrievably indebted consumers. Management are working hard to
maximise these new opportunities whilst minimising the impact from the rapidly
declining market within their original consumer loans division.
Debts.co.uk provides personally tailored advice and solutions to over indebted
individuals. The company currently processes around 1,200 IVAs per annum as
well as providing debt management programmes and secured loans. The market for
such services is growing rapidly as many consumers find themselves trapped in a
spiral of debt following a decade long consumer boom fuelled by the easy
availability of credit. The recent rise in interest rates is likely to create
further difficulties to the many individuals who are already struggling to
service their debts.
Driver Group is a specialist provider of dispute resolution services to the
construction industry. The company has a reputation for delivering high quality
work with a verifiable track record of achievement to an established and
growing client base. Management have ambitious development plans and have made
substantial investments in people in recent times to prepare the business for
the next phase of growth in both the UK and the Middle East.
Invocas Group is Scotland's leading personal and corporate debt solutions
company. The company specialises in the processing and management of Protected
Trust Deeds, the Scottish equivalent of IVAs. All the indications are that the
number of indebted consumers struggling to meet their financial commitments is
growing. Invocas is perhaps uniquely placed to take advantage of the strong,
growing demand for both personal and corporate debt services since in order to
run an insolvency practice in Scotland a company must employ Scottish based
Licensed Insolvency Practitioners, thereby creating a natural barrier to entry
in this market.
Ovum is one of Europe's leading providers of research, market analysis and
advisory services to the global Information, Communication and Technology
sectors. We invested in this business at the time of its admission to AIM in
March 2006 at a price of 190 pence per share. Since the year end, the company
has announced a recommended 300 pence per share cash offer for the business
from Datamonitor which will result in a 58% return on our investment in just
over six months.
There have inevitably been some disappointments over the past year with
Centurion, Invox, Public Recruitment Group, Strategic Retail, and Xpertise
Group failing to reach expectations. However, the continued strong growth of
many of the qualifying investments made in previous years has been very
pleasing and has more than compensated for those investments that have not
performed. There have been several companies held in both Funds which have
performed particularly well.
Talarius, which has quickly established the UKs largest high street chain of
coin operated gaming centres, is a notable example of the type of company we
like to invest in for long term returns. The business model is simple and
scalable; the market is fragmented, the operations are profitable and highly
cash generative and the management team who have many years experience in the
leisure industry own a meaningful stake in the company. In the past year the
value of our investment in Talarius has risen by 84% and we are showing a 140%
return on initial investment. In our view there remains further significant
growth potential within Talarius' chosen market and we are confident that
management can continue to deliver significant value for Shareholders. Since
the financial year end, management has announced that they have received an
approach from a third party which may or may not lead to an offer being made
for the company.
Other investments worthy of mention include Glisten, Zetar andPilat Media which
between them generated over £1.3m of positive contribution across the two
funds.
Non-qualifying portfolio
The contribution to performance from the non-qualifying portfolios in both
Funds has once again been very satisfying. The investment in Robert Walters
held in the Ordinary Share Fund delivered a 90% return over the past twelve
months, whilst in the S2 Fund the holdings in Unicorn UK Smaller Companies Fund
and Unicorn Mastertrust Fund gained in value by 18% and 12% respectively. In
order to fund the growing number of investments in VCT qualifying companies,
the overall proportion of assets held in non-qualifying stocks has continued to
reduce. The Investment Manager has been able to realise substantial profits on
the sale of all non-qualifying investments to date and the cash raised has been
recycled into new and exciting growth opportunities in VCT qualifying
companies. This process will continue and it is to be expected that the
contribution from the non-qualifying holdings in both funds will be a smaller
component of total returns in future.
Prospects
It has been a solid year for both Funds and the Investment Manager remains
satisfied with progress. The portfolios now contain a diverse range of
predominantly profitable businesses with good long term growth potential. The
established and selective approach to new investment will be retained and the
Investment Manager is confident that this successful strategy can continue to
deliver attractive returns for Shareholders over time.
Non-Statutory analysis between the Ordinary Share and S2 Share Funds
1. Income Statement for the year ended 30 September 2006
Ordinary Share Fund S2 Share Fund
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Net unrealised - (38,713) (38,713) - 1,868,085 1,868,085
(losses)/gains on
investments
Net gains on - 1,980,710 1,980,710 - 350,002 350,002
realisation of
investments
Costs of - (10,811) (10,811) - (1,203) (1,203)
investment
transactions
Income 386,602 - 386,602 115,609 - 115,609
Investment (181,816) (545,449) (727,265) (63,181) (189,543) (252,724)
management fees
Other expenses (317,000) - (317,000) (161,714) - (161,714)
------------- ---------------- ---------------- ------------- -------------- ----------------
(Loss)/profit on (112,214) 1,385,737 1,273,523 (109,286) 2,027,341 1,918,055
ordinary
activities before
taxation
Tax on ordinary - - - - - -
activities
------------- ---------------- ---------------- ------------- ------------- ----------------
(Loss)/profit (112,214) 1,385,737 1,273,523 (109,286) 2,027,341 1,918,055
attributable to
equity
shareholders
------------- ---------------- ---------------- ------------- -------------- ----------------
(Loss)/profit per (0.34)p 4.25p 3.91p (0.70)p 12.90p 12.20p
ordinary share
Average number of 32,643,425 15,715,395
shares in issue
Total of both Funds
(per Statutory Income Statement)
Revenue Capital Total
£ £ £
Net unrealised - 1,829,372 1,829,372
(losses)/gains on
investments
Net gains on - 2,330,712 2,330,712
realisation of
investments
Costs of investment (12,014) (12,014)
transactions
Income 502,211 - 502,211
Investment (244,997) (734,992) (979,989)
management fees
Other expenses (478,714) - (478,714)
--------------- ---------------- -----------------
(Loss)/profit on (221,500) 3,413,078 3,191,578
ordinary activities
before taxation
Tax on ordinary - - -
activities
(Loss)/profit (221,500) 3,413,078 3,191,578
attributable to
equity shareholders
--------------- ---------------- -----------------
2. Balance Sheets as at 30 September 2006
Ordinary Share S2 Share Fund Adjustments Total of both
Fund (see note Funds (per
below) Statutory Balance
Sheet)
£ £ £ £
Non-current
assets
Investments at 28,748,110 17,277,230 46,025,340
fair value
Current assets
Debtors and 92,633 12,368 (3,520) 101,481
prepayments
Current 2,936,032 1,914 2,937,946
investments
Cash at bank 20,726 1,629,216 1,649,942
--------------- --------------- --------------- ---------------
3,049,391 1,643,498 (3,520) 4,689,369
Creditors: (216,501) (79,855) 3,520 (292,836)
amounts
falling due
within one
year
--------------- --------------- --------------- ---------------
Net current 2,832,890 1,563, 643 - 4,396,533
assets
========= ========= ========= =========
Net assets 31,581,000 18,840,873 - 50,421,873
========= ========= ========= =========
Capital and
reserves
Called up 318,421 156,655 475,076
share capital
Capital 31,576 1,080 32,656
redemption
reserve
Share premium - 10,148 10,148
account
Revaluation 6,652,617 3,601,300 10,253,917
reserve
Special 21,038,547 14,100,953 35.139,500
distributable
reserve
Profit and 3,539,839 970,737 4,510,576
Loss account
========= ========= ========
Equity 31,581,000 18,840,873 50,421,873
shareholders'
funds
========= ========= ========
Number of 31,842,172 15,665,524
shares in
issue
Net asset 99.18p 120.27p
value per 1p
Share
Note: The adjustment above nets off the inter-fund debtor and creditor
balances, so that the "Total of both funds" balance sheet agrees to the
Statutory Balance Sheet below.
3. Reconciliation of movements in Shareholders' Funds for the year ended 30
September 2006
Ordinary Share S2 Share fund Total of both funds
fund (per Statutory Balance
Sheet)
£ £ £
At 30 September 34,500,528 17,196,346 51,696,874
2005 (as previously
reported)
Prior year
adjustment arising
from the
introduction of
FRS 21 1,667,212 157,433 1,824,645
Prior year
adjustment arising
from the
introduction of
FRS 25 and FRS 26 (1,198,299) (187,528) (1,385,827)
----------------- ------------------ ----------------------
As at 1 October 34,969,441 17,166,251 52,135,692
2005 (as restated)
Share capital (1,348,791) (86,000) (1,434,791)
bought back in the
year
Profit for the year 1,273,523 1,918,055 3,191,578
Dividends paid (3,313,173) (157,433) (3,470,606)
----------------- ------------------ -----------------------
Closing 31,581,000 18,840,873 50,421,873
shareholders' funds
at 30 September
2006
=========== =========== ==============
Income Statement
For the year ended 30 September 2006
30 September 2006 30 September 2005 (restated)
Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Net unrealised - 1,829,372 1,829,372 - 2,892,956 2,892,956
gains on
investments
Net gains on - 2,330,712 2,330,712 - 1,896,702 1,896,702
realisation of
investments
Costs of - (12,014) (12,014) - (16,015) (16,015)
investment
transactions
Income 502,211 - 502,211 931,791 858,103 1,789,894
Investment (244,997) (734,992) (979,989) (248,109) (744,327) (992,436)
management fees
Other expenses (478,714) - (478,714) (517,813) - (517,813)
------------- --------------- -------------- ------------- --------------- --------------
(Loss)/profit on (221,500) 3,413,078 3,191,578 165,869 4,887,419 5,053,288
ordinary
activities before
taxation
Tax on ordinary - - - (6,396) 6,396 -
activities
------------- -------------- ------------- ------------- -------------- -------------
(Loss)/profit on (221,500) 3,413,078 3,191,578 159,473 4,893,815 5,053,288
ordinary
activities after
taxation for the
financial year
------------- --------------- -------------- ------------- ------------- --------------
Earnings per share
Ordinary Shares 3.91p 7.98p
S2 Shares 12.20p 14.74p
All the items in the above statement derive from continuing operations.
Statement of Total Recognised Gains and Losses
for the year ended 30 September 2006
30 September 30 September
2006 2005
£ £
Profit on ordinary activities after 3,191,578 5,053,288
taxation
---------------
Prior year adjustment arising from the (1,385,827)
introduction of FRS 25 and FRS 26
---------------
Total recognised gains since the last 1,805,751
annual report
---------------
Note of Historical Cost Profits and Losses
for the year ended 30 September 2006
30 September 2006 30 September 2005
(restated)
Profit on ordinary activities before 3,191,578 5,053,288
taxation
Less: unrealised gains on investments (1,829,372) (2,892,956)
Realisation of revaluation gains of 985,122 885,981
previous years
------------------ ------------------
Historical cost profit on ordinary 2,347,328 3,046,313
activities before taxation
------------------ ------------------
Historical cost (loss)/profit for the (1,123,278) 1,199,626
year after taxation and dividends
------------------ ------------------
Balance Sheet
as at 30 September 2006
30 September 30 September 2005
2006
(restated)
£ £
Non-current assets
Investments at fair value 46,025,340 45,338,731
Current assets
Debtors and prepayments 101,481 2,203,122
Current investments 2,937,946 5,764,584
Cash at bank 1,649,942 79,028
-------------- --------------
4,689,369 8,046,734
Creditors: amounts falling due within (292,836) (1,249,773)
one year
------------- --------------
Net current assets 4,396,533 6,796,961
=========== ============
Net assets 50,421,873 52,135,692
=========== ============
Capital and reserves
Called up share capital 475,076 490,875
Capital redemption reserve 32,656 16,857
Share premium account 10,148 10,148
Revaluation reserve 10,253,917 9,409,667
Special distributable reserve 35,139,500 38,373,323
Profit and loss account 4,510,576 3,834,822
=========== ============
Equity shareholders' funds 50,421,873 52,135,692
=========== ============
Net asset value per share of 1 pence
each
Ordinary Shares 99.18p 104.87p
S2 Shares 120.27p 109.04p
Reconciliation of Movements in Shareholders' Funds
For the year ended 30 September 2006
30 September 30 September
2006 2005
£ £
At 30 September 2005 (as previously 51,696,874 50,858,416
reported)
Prior year adjustment arising from the 1,824,645 118,148
introduction of FRS 21
Prior year adjustment arising from the (1,385,827) (661,657)
introduction of FRS 25 and FRS 26
-------------- ---------------
As at 1 October 2005 (as restated) 52,135,692 50,314,907
Net share capital bought back in the (1,434,791) (1,385,816)
year
Profit for the year 3,191,578 5,053,288
Dividends paid (3,470,606) (1,846,687)
-------------- ---------------
Closing shareholders' funds at 30 50,421,873 52,135,692
September 2006
-------------- ---------------
Cash Flow Statement
for the year ended 30 September 2006
30 September 30 September
2006 2005
Operating activities £ £
Dividends received 697,127 1,575,700
Deposit and similar interest 6,519 11,245
Investment management fees paid (979,989) (992,436)
Other cash payments (512,656) (487,778)
-------------- --------------
Net cash (outflow)/inflow from (788,999) 106,731
operating activities
Investing activities
Purchase of investments (6,915,409) (10,765,279)
Sale of investments 11,410,257 9,196,261
-------------- ---------------
4,494,848 (1,569,018)
Equity dividends
Payment of dividends (3,491,856) (1,846,687)
-------------- ---------------
Net cash inflow/(outflow) before 213,993 (3,308,974)
financing and liquid resource
management
Financing
Issue of S2 shares (net of expenses) - 10,250
Purchase of own shares (1,469,717) (1,325,875)
-------------- --------------
(1,469,717) (1,315,625)
Management of liquid resources
Decrease in current investments 2,826,638 1,842,325
=========== ============
Net increase/(decrease) in cash 1,570,914 (2,782,274)
=========== ============
Notes
1. The audited results for the year ended 30 September 2006 have been prepared
under UK Generally Accepted Accounting Practice (UK GAAP) and, to the
extent that it does not conflict with the Companies Act 1985, the 2003
Statement of Recommended Practice, `Financial Statements of Investment
Trust Companies', revised December 2005.
2. With effect from 1 October 2005, the Company has adopted the following
Financial Reporting Standards (FRS):
FRS 21 (Events after the Balance Sheet Date) - Dividends payable by the Company
are accounted for in the period in which they are paid or approved by
shareholders. Previously, the Company accrued dividends in the period in which
the net income, to which those dividends related, was accounted for.
FRS 25 (Financial Instruments: Disclosure and Presentation) and FRS 26
(Financial Instruments: Measurement) - The Company has designated its
investments as being measured at "fair value through profit and loss". The fair
value of quoted investments is deemed to be the bid value of these investments
at the close of business on the relevant date.
The corresponding amounts in these financial statements are restated in
accordance with these new policies.
3. These are not full accounts in terms of section 240 of the Companies Act
1985. The Annual Report for the year to 30 September 2006 will be sent to
shareholders shortly and will then be available for inspection at One
Jermyn Street, London SW1Y 4UH, the registered office of the Company.
Statutory accounts will be delivered to the Registrar of Companies after
the Annual General Meeting. The audited accounts for the year ended 30
September 2006 contain an unqualified audit report.
4. In accordance with the policy statement published under "Management, Fees
and Administration" in the Company's prospectus dated 2 October 2001, the
Directors have charged 75% of the investment management expenses to the
capital reserve.
5. Total earnings after taxation for the year were £3,191,578 (2005: £
5,053,288), comprising a profit on the Ordinary Shares Fund after taxation
of £1,273,523 (2005: £2,731,097 - restated), and a profit after taxation on
the S2 Shares Fund of £1,918,055 (2005: £2,322,191). The basic earnings per
Ordinary Share is based on the net profit from ordinary activities and on
32,643,425 (2005: 34,190,165) Ordinary Shares, being the weighted average
number of Ordinary Shares in issue during the year. The basic earnings per
S2 Share is based on the net profit from ordinary activities and on
15,715,395 (2005: 15,761,353) S2 Shares, being the weighted average number
of S2 Shares in issue during the year.
The revenue return per Ordinary Share is based on the net loss from ordinary
activities after taxation of £112,214 (2005: £96,838) and on 32,643,425 (2005:
34,190,165) Ordinary Shares, being the weighted average number of Ordinary
Shares in issue during the year. The revenue return per S2 Share is based on
the net loss from ordinary activities after taxation of £109,286 (2005: revenue
£62,635) and on 15,715,395 (2005: 15,761,353) S2 Shares, being the weighted
average number of S2 Shares in issue during the year.
The capital return per Ordinary Share is based on net realised capital gains of
£1,980,710 (2005: £1,787,190), on net unrealised capital losses of £38,713
(2005: gains £571,394 - restated), capital income of £nil (2005 £858,103)
capital expenses of £556,260 (2005: £582,428) and on 32,643,425 (2005:
34,190,165) Ordinary Shares, being the weighted average number of Ordinary
Shares in issue during the year. The capital return per S2 Share is based on
net realised capital gains of £350,002 (2005: £93,497), on net unrealised
capital gains of £1,868,085 (2005: £2,321,562 - restated), capital expenses of
£190,746 (2005: £155,503) and on 15,715,395 (2005: 15,761,353) S2 Shares, being
the weighted average number of S2 Shares in issue during the year.
6. The Ordinary Fund has paid two dividends of 5 pence per Ordinary Share each
during the year, totalling £3,313,173.
7. A final dividend for the year ended 30 September 2005 of 1 penny per S2
Share was paid to S2 Shareholders during the year, totalling £157,433. This
dividend comprised 0.35 pence dividend from income and 0.65 pence from
capital.
8. A final dividend for the year ended 30 September 2006 of 5 pence per S2
Share will be paid from capital to S2 Shareholders on 31 January 2007 to
Shareholders on the register on 5 January 2007.
9. The Annual General Meeting of the Company will be held at 11.00 am on 18
January 2007 at One Jermyn Street, London SW1Y 4UH.
For further information please contact:
Chris Hutchinson, Unicorn Asset Management Limited, Tel: 020 7253 0889
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