Half-yearly Report
UNICORN AIM VCT PLC
HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2008
Investment Objective
The objective of the Company 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.
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 displays 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 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
investments, at the date of that investment.
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 regular basis. When the Investment Manager proposes to make
an investment in an unquoted company the prior approval of the Board is
required.
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.
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 20% of net assets, should circumstances suggest
that such action is in the interests of shareholders.
Chairman's Statement
I am pleased to present to Shareholders the Half-Yearly Report of the Company
for the six months ended 31 March 2008.
Review of performance
In the period under review equity markets have been particularly
weak as a result of liquidity concerns following the sub-prime financing
crisis in the United States. These uncertainties have adversely affected the
performance of the Ordinary Share Fund and the Series 2 ("S2") Share Fund. The
Series 3 ("S3") Share Fund is still in the early stages of investment and as a
consequence has withstood the recent market turmoil relatively well.
Set out below is a summary of performance for each fund over the 6 months
ended 31 March 2008:-
Ordinary Fund S2 Fund S3 Fund
Launch date November 2001 February 2004 April 2007
Net asset value (pence per
share at 31
March 67.7 86.6 86.5
Change in net asset value per
share
since 30 September 2007 (24.4)% (23.9)% (6.3)%
Cumulative dividends paid to
date
(pence per share) 39.0 16.75 -
Total net asset value return
since
launch (pence per share) 106.7 103.35 86.5
Return against net asset
value at
launch of 94.5 pence per
share 12.9% 9.4% (8.5)%
Return against net asset
value at
launch of 94.5 pence per
share (after
applicable income tax
relief*) 33.3%** 72.3% 23.6%
* Up to 20% for Ordinary Fund Shareholders, 40% for S2 Fund Shareholders and
30% for S3 Fund Shareholders.
** Ordinary Fund shareholders who also deferred capital gains tax will have
enjoyed even higher returns.
Ordinary Share Fund
Over the six months there was a net loss on investments of £6.37
million (£3.98 million net gain for the six months ended 31 March 2007) and
the total loss on ordinary activities after taxation was £6.66 million, the
equivalent of 21.94 pence per share. During the period 219,370 Ordinary Shares
were bought back for cancellation at an average price of 70.3 pence per share
and at an average discount of 10.2% to the NAV per share.
The deficit on the revenue account for the Ordinary Share Fund was
£84,000 (£95,000 deficit for the six months ended 31 March 2007).
Series 2 Share Fund
Over the six months there was a net loss on investments of £3.14
million (£2.07 million net gain for the six months ended 31 March 2007) and
the total loss on ordinary activities after taxation was £3.28 million, the
equivalent of 22.34 pence per share. During the period 199,827 S2 Shares were
bought back for cancellation at an average price of 86.5 pence per share and
at an average discount of 14.5% to the NAV per share.
The deficit on the revenue account for the S2 Share Fund was
£43,000 (£36,000 deficit for the six months ended 31 March 2007).
Series 3 Share Fund
Over the six months there was a net loss on investments of £290,000
(31 March 2007: N/A) and the total loss on ordinary activities after taxation
was £288,000, the equivalent of 5.79 pence per share.
The return on the revenue account for the S3 Share Fund was
£22,000.
Dividends
The Board's policy remains to maximise the stream of dividend
distributions to Shareholders from the income and capital gains generated by
the portfolio.
However, in view of continuing weakness in equity markets and the
consequent decline in respective NAVs, the Board will not be proposing
dividends for any of the three Funds for the period under review.
Qualifying Investments
From September 2007 onwards, investors in UK equity markets,
unsettled by the emergence of a serious banking crisis, swiftly abandoned
small, illiquid, AIM quoted companies. In the absence of buyers the FTSE AIM
All Share Index fell by over 14% in the six months to 31 March 2008.
Performance of the Ordinary Share Fund and the S2 Share Fund was
also impacted by a small number of company specific setbacks. Profit warnings
issued by Avingtrans, Huveaux, Maxima Holdings and Supporta each resulted in
share prices declines of between 53% and 70%. In the Ordinary Share Fund the
falls produced by these four companies accounted for almost 65% of the total
decline generated by the qualifying portfolio overall. The Investment Manager
is confident that most, if not all, of the companies which suffered recent
setbacks have the potential to recover substantially in due course.
In the period under review, the Investment Manager continued to
make new investments in VCT qualifying companies albeit on a highly selective
basis. Five new qualifying investments were made for the S3 Share Fund, whilst
the Ordinary Share Fund and the S2 Share Fund made two and three new
investments respectively. In aggregate these investments had recorded a gain
on book cost by the end of the period which bodes well for their prospects
when investor sentiment improves.
Partial disposals were made in a small number of holdings in both
the Ordinary and the S2 Share Funds, whilst the Ordinary Share Fund also
completed the disposal of its holding in Assetco and generated cash proceeds
in excess of £640,000 from the successful acquisition of Tellings Golden
Miller Plc by Arriva Plc.
The Ordinary Share Fund portfolio now comprises thirty-nine
qualifying investments, whilst the S2 and the S3 Funds hold thirty-four and
five qualifying stocks respectively.
At the end of March 2008, the value of the portfolios (for the
Ordinary and S2 Share Funds only) which was invested in VCT qualifying
investments represented approximately 88% of the total assets of the Company.
All other HM Revenue & Customs tests have also been complied with and your
Board has been advised that the Company has maintained its venture capital
trust status.
A full list of all of the qualifying investments held in all Funds
at the period end is included below.
Summary
In the past six months the FTSE AIM All Share Index has suffered a
significant decline. Investor confidence remains at a low ebb and the fall-out
from the collapse of the sub-prime mortgage market continues. There are
growing concerns about the prospects of economic recession in both the United
States and in the UK.
As the current crisis deepened following the collapse of Northern
Rock, prudent managers of conventional funds might well have been expected to
reposition their portfolios toward investment in larger and more liquid
stocks, whilst also carrying higher than usual levels of cash. The technical
requirements of AIM based VCTs are such that the flexibility to implement such
changes is severely constrained. In these circumstances, AIM-based VCTs across
the board have suffered disproportionately large falls as investors continue
to sell shares of smaller, less liquid companies.
On a positive note, significant value is starting to emerge in many
of the smaller quoted companies held in the portfolios. However, until the
wider equity market stabilises and the economic picture improves it is
unlikely that this value will be reflected in share prices.
The Investment Manager will continue to manage the Funds prudently
with a view to preserving capital in these uncertain times. The Board believes
that this approach offers good prospects of delivering healthy returns over
the medium to long term.
Extraordinary General Meeting
The Companies Act 2006 sets out directors' general duties and
largely codifies the existing law but with some changes. Under the Act, from 1
October 2008 a director must avoid a situation where he has, or can have, a
direct or indirect interest that conflicts, or possibly may conflict, with the
Company's interests. The requirement is very broad and could apply, for
example, if a director becomes a director of another company or a trustee of
another organisation. The Companies Act 2006 allows directors of public
companies to authorise conflicts and potential conflicts where appropriate,
where the articles of association contain a provision to this effect. The
Companies Act 2006 also allows the articles to contain other provisions for
dealing with directors' conflicts of interest to avoid a breach of duty. It is
proposed to amend the Company's articles of association give the Directors
authority to approve such situations and to include other provisions to allow
conflicts of interest to be dealt with in a similar way to the current
position.
There are safeguards that will apply when Directors decide whether
to authorise a conflict or potential conflict. First, only Directors who have
no interest in the matter being considered will be able to take the relevant
decision, and secondly, in taking the decision the Directors must act in a way
they consider, in good faith, will be most likely to promote the Company's
success. The Directors will be able to impose limits or conditions when giving
authorisation if they think this is appropriate.
The proposed alteration to the Company's articles of association
contain provisions relating to confidential information, attendance at board
meetings and availability of board papers to protect a director being in
breach of duty if a conflict of interest or potential conflict of interest
arises. These provisions will only apply where the position giving rise to the
potential conflict has previously been authorised by the directors.
It is the Board's intention to report annually on the Company's
procedures for ensuring that the Board's powers of authorisation of conflicts
are operated effectively and that the procedures have been followed.
This resolution is proposed as a special resolution and will
require the approval of 75% of the votes cast at the meeting.
Peter Dicks,
Chairman
Related Party Transactions
Details of related party transactions in accordance with Disclosure and
Transparency Rule 4.2.8 can be found in Note 7 to the Accounts below.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements have been prepared in
accordance with under UK Generally Accepted Accounting Practice (UK GAAP) and
the 2003 Statement of Recommended Practice "Financial Statements of Investment
Trust Companies", revised December 2005, and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company, as
required by Disclosure & Transparency Rule 4.2.4; and
(b) the interim management report includes a fair review of the
information required by Disclosure & Transparency Rule 4.2.7 - 8 in accordance
with Disclosure & Transparency Rule 4.2.10.
Investment Portfolio Summary - Ordinary Share Fund
as at 31 March 2008
% of net
Book cost Valuation assets by value
£'000 £'000
Qualifying investments
AIM quoted investments:
Glisten plc 582 2,476 12.1%
Maxima Holdings plc 1,200 1,362 6.7%
Mattioli Woods plc 449 1,004 4.9%
Abcam plc 467 942 4.6%
Zetar plc 406 897 4.4%
Supporta plc 1,432 735 3.6%
Mears Group plc (formerly Careforce 804 677 3.3%
Group plc)
Xpertise Group plc 400 600 2.9%
Avingtrans plc 708 590 2.9%
Prologic plc 589 589 2.9%
Shieldtech plc 650 442 2.2%
Clerkenwell Ventures plc 600 400 2.0%
Fountains plc 365 397 1.9%
Huveaux plc 1,000 350 1.7%
Kiotech International plc 351 322 1.6%
SnackTime plc 360 320 1.6%
Hexagon Human Capital plc 429 312 1.5%
Hasgrove plc 300 300 1.5%
Pilat Media Global plc 480 297 1.5%
Lees Foods plc 260 271 1.3%
Printing.com plc 212 261 1.3%
Datong Electronics plc 333 255 1.2%
Sanderson Group plc 385 254 1.2%
Synarbor plc (formerly Public Recruitment
Group plc) 1,000 162 0.8%
Tracsis plc 120 156 0.8%
Dillistone Group plc 106 135 0.7%
Augean plc 349 128 0.6%
Access Intelligence plc 490 110 0.5%
Cantono plc 300 105 0.5%
Belgravium Technologies plc 117 71 0.3%
Greatfleet plc 310 58 0.3%
Finsaga plc (formerly Brightview plc) 730 56 0.3%
Strategic Retail plc 426 53 0.3%
Assetco plc 1 1 0.0%
Centurion Electronics plc 575 - 0.0%
---- ---- ----
17,286 15,088 73.9%
Fully listed investments:
Microgen plc 180 126 0.6%
---- ---- ----
180 126 0.6%
Unlisted investments:
Amber Taverns Limited 500 502 2.5%
Sanastro plc 500 250 1.2%
Aludel Limited 750 0 0.0%
---- ---- ----
1,750 752 3.7%
---- ---- ----
Total qualifying investments 19,216 15,966 78.2%
=== === ===
Non-qualifying investments
Money market funds 1 3,075 3,075 15.0%
AIM quoted investments 361 673 3.3%
Unicorn Free Spirit Fund (OEIC) 332 642 3.1%
Listed UK equities 187 434 2.1%
---- ---- ----
Total non-qualifying investments 3,955 4,824 23.5%
=== === ===
---- ---- ----
Total investments 23,171 20,790 101.7%
=== === ===
Other assets 325 1.6%
Current liabilities (661) (3.3%)
---- ----
Net assets 20,454 100.0%
=== ===
1 Disclosed within 'current investments' under current assets in the Balance
Sheet
Investment Portfolio Summary - S2 Share Fund
as at 31 March 2008
% of net
Book cost Valuation assets by value
£'000 £'000
Qualifying investments
AIM quoted investments:
Mattioli Woods plc 396 885 7.0%
Maxima Holdings plc 800 835 6.6%
Zetar plc 366 810 6.4%
Cohort plc 507 701 5.5%
Abcam plc 334 674 5.3%
Melorio plc 360 385 3.0%
Driver Group plc 325 320 2.5%
Hasgrove plc 300 300 2.4%
Mears Group plc (formerly Careforce 345 290 2.3%
Group plc)
Clerkenwell Ventures plc 398 265 2.1%
SnackTime plc 288 256 2.0%
Datong Electronics plc 333 255 2.0%
Sanderson Group plc 385 254 2.0%
Invocas Group plc 344 248 2.0%
Avingtrans plc 288 240 1.9%
ShieldTech plc 350 238 1.9%
Prologic plc 218 218 1.7%
Hexagon Human Capital plc 253 184 1.5%
Kiotech International plc 195 179 1.4%
Tracsis plc 120 156 1.2%
Maelor plc 154 154 1.2%
Fountains plc 135 147 1.2%
Printing.com plc 108 133 1.1%
Debts.co.uk plc 400 76 0.6%
Belgravium Technologies plc 117 71 0.6%
Cantono plc 200 70 0.6%
Augean plc 150 55 0.4%
Access Intelligence plc 210 47 0.4%
EG Solutions plc 250 30 0.2%
Strategic Retail plc 174 22 0.2%
Finsaga plc (formerly Brightview plc) 270 20 0.2%
The Debt Advisor Group (formerly 1,000 - 0.0%
Compass Finance Group plc)
---- ---- ----
10,073 8,518 67.4%
Unlisted investments:
Amber Taverns Limited 500 502 4.0%
Sanastro plc 500 250 2.0%
---- ---- ----
1,000 752 6.0%
---- ---- ----
Total qualifying investments 11,073 9,270 73.4%
=== === ===
Non-qualifying investments
Unicorn Free Spirit Fund (OEIC) 1,083 1,591 12.6%
Unicorn UK Smaller Companies Fund (OEIC) 1,213 1,410 11.2%
Money market funds 1 378 378 3.0%
AIM quoted investments 28 16 0.1%
---- ---- ----
Total non-qualifying investments 2,702 3,395 26.9%
=== === ===
---- ---- ----
Total investments 13,775 12,665 100.3%
=== === ===
Other assets 244 1.9%
Current liabilities (278) (2.2)%
---- ----
Net assets 12,631 100.0%
=== ===
1 Disclosed within 'current investments' under current assets in the Balance
Sheet
Investment Portfolio Summary - S3 Share Fund
as at 31 March 2008
% of net
Book cost Valuation assets by value
£'000 £'000
Qualifying investments
AIM quoted investments:
Animalcare Group plc 200 200 4.7%
Melorio plc 187 200 4.7%
SnackTime plc 216 192 4.5%
Tracsis plc 120 156 3.6%
Maelor plc 154 154 3.6%
---- ---- ----
877 902 21.1%
---- ---- ----
Total qualifying investments 877 902 21.1%
=== === ===
Non-qualifying investments
Money market funds 1 1,516 1,516 35.4%
Unicorn Outstanding British Companies Fund 497 462 10.8%
(OEIC)
Unicorn Mastertrust Fund (OEIC) 498 408 9.5%
Unicorn Free Spirit Fund (OEIC) 496 408 9.5%
Unicorn UK Smaller Companies Fund (OEIC) 496 384 9.0%
Unicorn UK Income Fund (OEIC) 480 374 8.7%
---- ---- ----
Total non-qualifying investments 3,983 3,552 82.9%
=== === ===
---- ---- ----
Total investments 4,860 4,454 104.0%
=== === ===
Other assets 35 0.8%
Current liabilities (201) (4.8)%
---- ----
Net assets 4,288 100.0%
=== ===
1 Disclosed within 'current investments' under current assets in the Balance
Sheet
Qualifying Investments
AIM quoted investments:
Abcam plc
Online distributor of antibodies for research purposes.
Access Intelligence plc
Subscription based sales and marketing support.
Animalcare Group plc
Manufacturer & supplier worldwide of livestock, healthcare & management
products.
Assetco plc
Provision of ladders and ancillary equipment for the emergency services.
Augean plc
Operation of hazardous waste landfill sites.
Avingtrans plc
Provision of precision engineering services.
Belgravium Technologies plc
Development and supply of rugged, hand-held, battery powered, real time data
capture devices.
Cantono plc
Managed IT services.
Centurion Electronics plc
Design and distribution of in-car audio-visual entertainment systems.
Clerkenwell Ventures plc
Restaurant acquisition vehicle.
Cohort plc
Provision of a wide range of technical services to clients in the defence and
security sectors.
Datong Electronics plc
Development of a range of advanced covert tracking and location systems.
Debts.co.uk plc
Specialists in personal debt solution management.
Dillistone Group plc
Provider of software services to the executive recruitment industry.
Driver Group plc
Provision of specialist commercial, project planning and dispute resolution
services to the construction industry.
EG Solutions plc
Provisions of proprietary workflow management tools designed to improve
operational efficiencies.
Finsaga plc (formerly Brightview plc)
Marketing company focused on operating telephone response based promotions.
Fountains plc
Environmental services and grounds maintenance to utility companies and local
authorities.
Glisten plc
Manufacturer of chocolate confectionery, sugar based sweets and edible
decorations.
Greatfleet plc
Recruitment consultant specialising in legal and financial search and
selection.
Hasgrove plc
Pan-European marketing and communications services.
Hexagon Human Capital plc
Specialist recruitment consultants.
Huveaux plc
Broadly based media group focusing upon political publishing, education and
training.
Invocas Group plc
Provision of personal and corporate debt solutions based in Scotland
Kiotech International plc
Manufacturer of animal feed supplements.
Lees Foods plc
Confectionery manufacturer.
Maelor plc
Specialist hospital medicines group.
Mattioli Woods plc
Consultants in the provision of pension and wealth management services.
Maxima Holdings plc
Implementation and support of enterprise software solutions.
Mears Group plc
Social housing and domiciliary care.
Melorio plc
NVQ training targeted at the Construction Industry.
Pilat Media Global plc
Development and support of scheduling software for digital TV.
Printing.com plc
Franchised high street printing.
Prologic plc
Development and maintenance of software to meet the operational, reporting and
business intelligence needs of fashion businesses.
Sanderson Group plc
Implementation and support of proprietary enterprise software solutions.
Shieldtech plc
Design, manufacture and supply of body armour.
SnackTime plc
Operator of vending machines.
Strategic Retail plc
Operation of retail outlets specialising in home décor and furnishings market.
Supporta plc
Provision of back office support and domiciliary care to the public and
private sectors.
Synarbor plc (formerly Public Recruitment Group plc)
Public sector recruitment and services group specialising in the education,
healthcare and social work sectors.
The Debt Advisor Group plc
Consumer financial solutions through mortgages, secured and unsecured loans.
Tracsis plc
Provider of resource optimisation software to transport companies.
Xpertise Group plc
Provision of accredited technical IT training courses.
Zetar plc
Niche manufacturer of chocolate confectionery.
Fully Listed Investments:
Microgen plc
IT consultancy and managed services provider.
Unlisted investments:
Aludel Limited
Ladies only fitness clubs.
Amber Taverns Limited
Pub operator.
Sanastro plc
Specialist financial publisher.
UNAUDITED NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY SHARE, S2 SHARE AND S3
SHARE FUNDS
Profit and Loss Accounts for the six months ended 31 March 2008
Ordinary
Share S2 Share
fund fund
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised losses on
investments - (6,411) (6,411) - (3,051) (3,051)
Gains/(losses) on
realisations of
investments - 39 39 - (85) (85)
Income 129 - 129 74 - 74
Investment
management fees 2 (68) (204) (272) (34) (103) (137)
Other expenses (145) - (145) (83) - (83)
---- ---- ---- ---- ---- ----
(Loss)/profit on
ordinary activities
before taxation (84) (6,576) (6,660) (43) (3,239) (3,282)
Tax on ordinary
activities - - - - - -
---- ---- ---- ---- ---- ----
(Loss)/profit
attributable to equity
shareholders (84) (6,576) (6,660) (43) (3,239) (3,282)
=== === === === === ===
Basic and diluted
earnings per 1p share 3 (0.28)p (21.66)p (21.94)p (0.29)p (22.05)p (22.34)p
Total of all three Funds
(per Statutory Profit
S3 Share fund and Loss account)
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised losses on
investments - (290) (290) - (9,752) (9,752)
Gains/(losses) on
realisations of
investments - - - - (46) (46)
Income 65 - 65 268 - 268
Investment
management fees 2 (7) (20) (27) (109) (327) (436)
Other expenses (36) - (36) (264) - (264)
---- ---- ---- ---- ---- ----
(Loss)/profit on
ordinary activities
before taxation 22 (310) (288) (105) (10,125) (10,230)
Tax on ordinary
activities - - - - - -
---- ---- ---- ---- ---- ----
(Loss)/profit
attributable to equity
shareholders 22 (310) (288) (105) (10,125) (10,230)
=== === === === === ===
Basic and diluted
earnings per 1p share 3 0.44 p (6.24)p (5.79)p
Balance sheets as at 31 March 2008
Ordinary Share fund S2 Share fund
Notes £'000 £'000 £'000 £'000
Non current assets
Investments 17,715 12,287
Current Assets
Debtors and prepayments 103 9
Current investments 3,075 378
Cash at bank 222 235
----- -----
3,400 622
Creditors: amounts falling
due within one year (661) (278)
----- ----- ----- -----
Net current assets 2,739 344
----- -----
Net assets 20,454 12,631
=== ===
Share capital and
reserves
Called up share capital 302 146
Capital redemption
reserve 48 12
Share premium
account - 10
Revaluation reserve (539) (10)
Special distributable
reserve 18,021 11,469
Profit and Loss account 2,622 1,004
----- -----
Equity shareholders'
funds 20,454 12,631
=== ===
No. of Shares in
Issue: 30,233,787 14,578,973
Net Asset Value per
1p share: 5 67.7p 86.6p
Total of all
Adjustments three Funds
(see note (per Statutory
S3 Share fund below) Balance Sheet)
Notes £'000 £'000 £'000 £'000 £'000
Non current assets
Investments 2,938 32,940
Current Assets
Debtors and
prepayments 22 (51) 83
Current investments 1,516 4,969
Cash at bank 13 470
----- ----- -----
1,551 (51) 5,522
Creditors: amounts
falling due within one
year (201) 51 (1,089)
----- ----- ----- ----- -----
Net current assets 1,350 4,433
----- -----
Net assets 4,288 - 37,373
=== === ===
Share capital and
reserves
Called up share capital 50 498
Capital redemption
reserve - 60
Share premium
account 4,642 4,652
Revaluation reserve (406) (955)
Special distributable
reserve - 29,490
Profit and Loss
account 2 3,628
----- -----
Equity shareholders'
funds 4,288 37,373
=== ===
No. of Shares in
Issue: 4,958,036
Net Asset Value per
1p share: 5 86.5p
Note: The adjustment above nets off the inter-fund debtor and creditor
balances, so that the "Total of all three Funds" balance sheet agrees to the
Statutory Balance Sheet below.
UNAUDITED PROFIT AND LOSS ACCOUNT
for the six months ended 31 March 2008
Six months ended 31 March 2008 Six months ended 31 March 2007
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised
(losses)/gains on
investments - (9,752) (9,752) - 4,943 4,943
(Losses)/gains on
realisations of
investments - (46) (46) - 1,111 1,111
Income 268 - 268 254 - 254
Investment
management fees 2 (109) (327) (436) (128) (384) (512)
Other expenses (264) - (264) (258) - (258)
----- ----- ----- ----- ----- -----
(Loss)/profit on
ordinary activities
before income tax (105) (10,125) (10,230) (132) 5,670 5,538
Tax on ordinary
activities - - - - - -
----- ----- ----- ----- ----- -----
(Loss)/profit on
ordinary activities
after taxation for
the financial
period (105) (10,125) (10,230) (132) 5,670 5,538
=== === === === === ===
Basic and diluted
earnings per share:
Ordinary Shares 3 (21.94)p 11.48p
S2 Shares 3 (22.34)p 12.22p
S3 Shares 3 (5.79)p -
Year ended 30 September
2007
(audited)
Notes Revenue Capital Total
£'000 £'000 £'000
Unrealised
(losses)/gains
on
investments - 748 748
(Losses)/gains
on
realisations of
investments - 1,358 1,358
Income 746 - 746
Investment
management fees 2 (263) (788) (1,051)
Other expenses (516) - (516)
----- ----- -----
(Loss)/profit on
ordinary
activities
before income
tax (33) 1,318 1,285
Tax on ordinary
activities - - -
----- ----- -----
(Loss)/profit on
ordinary
activities
after taxation
for the
financial period (33) 1,318 1,285
=== === ===
Basic and
diluted
earnings per
share:
Ordinary Shares 3 2.85p
S2 Shares 3 3.32p
S3 Shares 3 (3.00)p
The total column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the
period. There were no other recognised gains or losses in the period.
UNAUDITED NOTE OF HISTORICAL COST PROFITS AND LOSSES
for the six months ended 31 March 2008
Year
Six months Six months ended 30
ended 31 ended 31 September
March 2008 March 2007 2007(audited)
Total Total Total
£'000 £'000 £'000
(Loss)/profit on ordinary
activities before taxation (10,230) 5,538 1,285
Less: unrealised
(losses)/gains on
investments 9,752 (4,943) (748)
Realisation of revaluation
gains of previous years 1,038 1,278 1,167
---- ---- ----
Historical cost profit on
ordinary activities before
taxation 560 1,873 1,704
---- ---- ----
Historical cost profit/(loss)
for the period after taxation
and dividends (179) (1,272) (3,735)
=== === ===
UNAUDITED BALANCE SHEET
as at 31 March 2008
As at As at As at
31 March 31 March 30 September
2008 2007 2007 (audited)
Notes £'000 £'000 £'000
Non current assets
Investments 1b 32,940 49,494 44,637
Current assets
Debtors and
prepayments 83 78 1,298
Current investments 6 4,969 2,732 2,939
Cash at bank 470 122 108
5,522 2,932 4,345
Creditors: amounts
falling due within one
year
Other creditors (918) (176) (97)
Accruals (171) (280) (215)
(1,089) (456) (312)
Net current assets 4,433 2,476 4,033
Net assets 37,373 51,970 48,670
Share capital and reserves
Share capital 498 466 502
Capital redemption
reserve 60 42 56
Share premium account 4,652 10 4,652
Revaluation reserve (955) 13,919 9,835
Special distributable
reserve 29,490 33,658 30,131
Profit and Loss account 3,628 3,875 3,494
Equity shareholders'
funds 37,373 51,970 48,670
Net asset value per share of 1p each
Ordinary Shares 5 67.7p 103.4p 89.6p
S2 Shares 5 86.6p 127.5p 113.8p
S3 Shares 5 86.5p - 92.3p
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 31 March 2008
Year ended
Six months ended Six months ended 30 September 2007
31 March 2008 31 March 2007 (audited)
Notes £'000 £'000 £'000
Opening shareholders' funds 48,670 50,422 50,422
Net share capital bought back in the period (328) (845) (2,290)
Net share capital subscribed in the period - - 4,692
(Loss)/profit for the period (10,230) 5,538 1,285
Dividends paid in period 4 (739) (3,145) (5,439)
-------- -------- --------
Closing Shareholders' funds 37,373 51,970 48,670
==== ==== ====
UNAUDITED STATEMENT OF CASH FLOWS
for the six months to 31 March 2008
Year ended 30
Six months ended Six months ended September
31 March 2008 31 March 2007 2007(audited)
£'000 £'000 £'000
Operating activities
Investment income
received 334 281 788
Investment management
fees paid (435) (512) (1,063)
Other cash payments (303) (183) (599)
---- ---- ----
Net cash outflow from
operating activities (404) (414) (874)
Investing activities
Purchase of investments (1,732) (1,830) (6,797)
Sale of investments 5,640 4,417 9,167
---- ---- ----
Net cash inflow from
investing activities 3,908 2,587 2,370
Dividends
Dividends paid (739) (3,145) (5,439)
---- ---- ----
Cash inflow/(outflow)
before financing and
liquid resource
management 2,765 (972) (3,943)
Financing
Share capital raised - - 4,692
Share capital re-purchased (373) (762) (2,290)
---- ---- ----
(373) (762) 2,402
Management of liquid
resources
(Increase)/decrease in
monies held pending
investment (2,030) 206 (1)
---- ---- ----
Increase/(decrease) in
cash 362 (1,528) (1,542)
=== === ===
Reconciliation of net cash
flow to movement in net
funds
Increase/(decrease) in cash
for the period 362 (1,528) (1,542)
Net funds at start of period 108 1,650 1,650
---- ---- ----
Net funds at end of period 470 122 108
=== === ===
Reconciliation of
operating (loss)/profit to
net cash outflow from
operating activities
(Loss)/profit on ordinary
activities before taxation (10,230) 5,538 1,285
Net gains/(losses) on
realisations of investments 46 (1,111) (1,379)
Net unrealised
(losses)/gains on
investments 9,752 (4,943) (748)
Decrease/(Increase) in
debtors 19 (3) (94)
Increase in creditors 9 105 62
---- ---- ----
Net cash outflow from
operating activities (404) (414) (874)
=== === ===
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Principle accounting policies
The following accounting policies have been applied consistently throughout
the period. Full details of principal accounting policies will be disclosed in
the Annual Report.
a) Basis of accounting
The unaudited results cover the six months to 31 March 2008 and have been
prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent
with the accounting policies set out in the statutory accounts for the year
ended 30 September 2007 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. There are no
comparatives for the S3 Fund for the 6 months ended 31 March 2007, as this
Fund had not allotted any shares at that date.
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.
Consequently, the financial statements have been drawn up to include a
statutory profit and loss account and a statement of total recognised gains
and losses in accordance with Schedule 4 of the Companies Act 1985 and
Financial Reporting Standard 3 "Reporting Financial Performance" and the
comparatives have been presented on a consistent basis. This has no effect on
total returns or net assets per share.
b) Investments
All investments held by the Company are classified as "fair value through
profit and loss". For investments actively traded in organised financial
markets, fair value is generally determined by reference to Stock Exchange
market quoted bid prices at the close of business on the balance sheet date.
Unquoted investments are valued by the Directors in accordance with the
following rules, which are consistent with the International Private Equity
Venture Capital Valuation (IPEVCV) guidelines:
(i) Investments which have been made in the last 12 months are at fair value
which, unless another methodology gives a better indication of fair value,
will be at cost;
(ii) Investments in companies at an early stage of their development are also
valued at fair value which, unless another methodology gives a better
indication of fair value, will be at cost;
(iii) Where investments have gone beyond the stage of their development in
(ii) above, the shares may be valued by applying a suitable price-earnings
ratio to that company's post-tax earnings (the ratio used being based on a
comparable listed company or sector but discounted to reflect lack of
marketability);
(iv) Where a value is indicated by a material arms-length transaction by a
third party in the shares of a company, this value will be used.
Unlisted investments will not normally be re-valued upwards for a period of at
least twelve months from the date of acquisition for early stage investments.
Where a company's underperformance against plan indicates a diminution in the
value of the investment, provision against cost is made, as appropriate.
2. The Directors have charged 75% of the investment management fee to the
capital reserve.
3. Basic and diluted earnings and return per share
Six months ended 31 March 2008 Six months ended 31 March 2007
Ordinary Ordinary
Share S2 Share S3 Share Share S2 Share
Fund Fund Fund Total Fund Fund Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Total earnings after
taxation: (6,660) (3,282) (288) (10,230) 3,624 1,914 5,538
Basic and diluted
earnings per share (21.94)p (22.34)p (5.79)p 11.48p 12.22p
----- ----- ----- ----- ----- ----- -----
Net revenue from
ordinary activities
after
taxation (84) (43) 22 (95) (36)
Revenue return per
share (0.28)p (0.29)p 0.44p (0.30)p (0.23)p
----- ----- ----- ----- ----- ----- -----
Net unrealised capital
(losses)/gains (6,411) (3,051) (290) 451 660
Net realised capital
gains/(losses) 39 (85) - 3,528 1,415
Capital expenses (204) (103) (20) (260) (124)
----- ----- ----- ----- ----- ----- -----
Total capital return (6,576) (3,239) (310) 3,719 1,950
Capital return per
share (21.66)p (22.05)p (6.24)p 11.78p 12.45p
----- ----- ----- ----- ----- ----- -----
Weighted average
number of shares in
issue in the year 30,357,257 14,691,444 4,958,036 31,568,187 15,661,238
Year ended 30 September 2007
Ordinary
Share S2 Share S3 Share
Fund Fund Fund Total
(audited) (audited) (audited) (audited)
£'000 £'000 £'000 £'000
Total earnings after
taxation: 890 512 (117) 1,285
Basic and diluted
earnings per share 2.85p 3.32p (3.00)p
----- ----- ----- -----
Net revenue from
ordinary activities
after
taxation (52) (20) 39
Revenue return per
share (0.17)p (0.13)p 1.00p
----- ----- ----- -----
Net unrealised capital
(losses)/gains 124 740 (116)
Net realised capital
gains/(losses) 1,330 40 (12)
Capital expenses (512) (248) (28)
----- ----- ----- -----
Total capital return 942 532 (156)
Capital return per
share 3.02p 3.45p (4.02)p
----- ----- ----- -----
Weighted average
number of shares in
issue in the year 31,171,332 15,425,839 3,879,970
4. Dividends
Six months ended 31 March 2008 Six months ended 31 March 2007
Ordinary S3 Ordinary
Share S2 Share Share Share S2 Share
Fund Fund Fund Total Fund Fund Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Ordinary Share Fund:
Interim paid - - - - 2,362 - 2,362
S2 Share Fund
Interim paid - - - - - - -
Final paid re prior year - 739 - 739 - 783 783
----- ----- ----- ----- ----- ----- -----
- 739 - 739 2,362 783 3,145
5. Net asset value
Six months ended Six months ended
31 March 2008 31 March 2007
Ordinary S2 Share S3 Share Ordinary S2 Share
Share Fund Fund Fund Share Fund Fund
£'000 £'000 £'000 £'000 £'000
Net assets 20,454 12,631 4,288 32,033 19,936
Number of shares in issue 30,233,787 14,578,973 4,958,036 30,977,172 15,635,524
---- ---- ---- ---- ----
Net asset value per share 67.7p 86.6p 86.5p 103.4p 127.5p
Year ended 30 September 2007
Ordinary S2 Share S3 Share
Share Fund Fund Fund
(audited) (audited) (audited)
£'000 £'000 £'000
Net assets 27,270 16,824 4,575
Number of shares in issue 30,453,157 14,778,800 4,958,036
---- ---- ----
Net asset value per share 89.6p 113.8p 92.3p
6. Current investments
These comprise investments in two Dublin based OEIC money market funds,
managed by Royal Bank of Scotland and Blackrock Investment Management (UK)
Ltd. £4,969,000 (31 March 2007: £2,731,000 30 September 2007: £2,939,000) of
this sum is subject to same day access, while £nil (31 March 2007: £1,000
September 2007: £nil) is subject to two day access. These sums are regarded as
monies held pending investment.
7. Related party transactions
Under the terms of an agreement dated 1 October 2001, the Company has
appointed Unicorn Asset Management Limited (of which Peter Webb is a director
and shareholder) to be the Investment Manager. The fees payable under these
arrangements were £436,000 (31 March 2007: £512,000; 30 September 2007:
£1,051,000).
8. The financial information for the six months ended 31 March 2008 and the
six months ended 31 March 2007 has not been audited.
The information for the year ended 30 September 2007 does not comprise full
financial statements within the meaning of Section 240 of the Companies Act
1985. The financial statements for the year ended 30 September 2007 have been
filed with the Registrar of Companies. The auditors have reported on these
financial statements and that report was unqualified and did not contain a
statement under Section 237(2) of the Companies Act 1985.
9. Copies of this statement are being sent to all shareholders.
Further copies are available free of charge from the Company's registered
office, One Jermyn Street, London SW1Y 4UH.
Shareholder communications
The Company's Ordinary Shares (Code: UAV), S2 Shares (UAVB) and S3
Shares (UAV3) are listed on the London Stock Exchange. Shareholders can visit
the London Stock Exchange website, www.londonstockexchange.com, for the latest
news and share prices of the Company. The share prices are also quoted in the
Financial Times.
Shareholder enquiries:
For general Shareholder enquiries, please contact Robert Brittain
of Matrix-Securities Limited (the Company Secretary) on 020 7925 3300 or by
e-mail on unicorn@matrixgroup.co.uk.
For enquiries concerning the performance of the Company, please
contact the Investment Manager, Unicorn Asset Management Limited, on 020 7253
0889 or by e-mail on info@unicornam.com.
Electronic copies of this report and other published information is
available on the Company Secretary's website, www.matrixgroup.co.uk and the
Investment Manager's website, www.unicornam.com.
To notify the Company of a change of address or to request a
dividend mandate form (should you wish to have future dividends paid directly
into your bank account) please contact the Company's Registrars, Capita
Registrars on 0871 664 0300, (calls cost 10p per minute including VAT plus
network costs) or by writing to them at Capita Registrars, Northern House,
Woodsome Park, Fennay Bridge, Huddersfield, West Yorkshire HD8 0LA.
Information rights for beneficial owners of shares
Please note that beneficial owners of shares who have been
nominated by the registered holder of those shares to receive information
rights under section 146 of the Companies Act 2006 are required to direct all
communications to the registered holder of their shares, rather than to the
Company's registrar, Capita Registrars, or to the Company directly.
NOTICE of the EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Unicorn AIM
VCT plc ("the Company") will be held at 2.00 pm on 23 July 2008 at Matrix
Group Limited, Sixth Floor, One Jermyn Street, London, SW1Y 4UH for the
purposes of considering and, if thought fit, passing the following as a
special resolution:
1. That the definition of "Act" in the articles of association be
amended to read:
"Act subject to paragraph 2.3 of this Article, the Companies Act
1985 and, where the context requires, every other statute from time to time in
force concerning companies, including any statutory modification or
re-enactment thereof for the time being in force and any provisions of the
Companies Act 2006 for the time being in force,"
2. That article 122 of the articles of association be amended to
article 122B with the first sentence amended to read:
"Subject to the provisions of the Act and Article 122A above and
further provided that Article 123 is complied with, a Director,
notwithstanding his office:"
And the following be inserted as article 122A:
"122A Conflicts of interest requiring Board authorisation
The Board may, provided the quorum and voting requirements set out
below are satisfied, authorise any matter that would otherwise involve a
Director breaching his duty under the Companies Act 2006 to avoid conflicts of
interest.
(a) Any Director (including the Director concerned) may propose
that the Director concerned be authorised in relation to any matter the
subject of such a conflict. Such proposal and any authority given by the Board
shall be effected in the same way that any other matter may be proposed to and
resolved upon by the Board under the provisions of these Articles, except that
the Director concerned and any other Director with a similar interest:
(b) shall not count towards the quorum at the meeting at which the
conflict is considered;
(c) may, if the other members of the Board so decide, be excluded
from any Board meeting while the conflict is under consideration; and
(d) shall not vote on any resolution authorising the conflict
except that, if he does vote, the resolution will still be valid if it would
have been agreed to if his vote had not been counted.
122A.1 Where the Board gives authority in relation to such a
conflict:
122A.1.1 the Board may (whether at the time of giving the authority
or at any time or times subsequently) impose such terms upon the Director
concerned and any other Director with a similar interest as it may determine,
including, without limitation, the exclusion of that Director and any other
Director with a similar interest from the receipt of information, or
participation in discussion (whether at meetings of the Board or otherwise)
related to the conflict;
122A.1.2 the Director concerned and any other Director with a
similar interest will be obliged to conduct himself in accordance with any
terms imposed by the Board from time to time in relation to the conflict;
122A.1.3 any authority given by the Board in relation to a conflict
may also provide that where the Director concerned and any other Director with
a similar interest obtains information that is confidential to a third party,
the Director will not be obliged to disclose that information to the Company,
or to use the information in relation to the Company's affairs, where to do so
would amount to a breach of that confidence;
122A.1.4 the terms of the authority shall be recorded in writing
(but the authority shall be effective whether or not the terms are so
recorded); and
122A.1.5 the Board may withdraw such authority at any time.
122A.2 A Director is entitled to accept a benefit from a third
party, even if the benefit was conferred by reason of his being a Director, if
the receipt of the benefit is disclosed to and approved by the Board within a
reasonable time of its receipt or the value or nature of the benefit or series
of benefits taken as a whole is such that it cannot reasonably be regarded
(including by reference to any scale or categorisation of benefits that the
Board may from time to time prescribe for the purpose) as likely to give rise
to a conflict of interest.
BY ORDER OF THE BOARD
Matrix-Securities Limited
Secretary
Registered Office
One Jermyn Street
London SW1Y 4UH
28 April 2008
NOTES:
(i) A person entitled to receive notice of, attend and vote at the above
meeting is entitled to appoint one or more proxies to attend and on a poll,
vote in his place. A proxy need not be a member of the Company. You may
appoint more than one proxy provided each proxy is appointed to exercise
rights attached to different shares. You may not appoint more than one proxy
to exercise rights attached to any one share. To appoint more than one proxy,
you may copy the proxy form, clearly stating on each copy the shares to which
the proxy relates, or alternatively contact the Company's registrars, Capita
Registrars, on 0871 664 0300 (calls cost 10p per minute including VAT plus
network costs) to request additional copies of the proxy form.
(ii) In accordance with section 325 of the Companies Act 2006 ("the
2006 Act"), the right to appoint proxies does not apply to persons nominated
to receive information rights under section 146 of the 2006 Act.
Persons nominated to receive information rights under section 146
of the 2006 Act who have been sent a copy of this notice of meeting are hereby
informed, in accordance with Section 149 (2) of the 2006 Act, that they may
have a right under an agreement with the registered member by whom they were
nominated to be appointed, or to have someone else appointed, as a proxy for
this meeting. If they have no such right, or do not wish to exercise it, they
may have a right under such an agreement to give instructions to the member as
to the exercise of voting rights. Nominated persons should contact the
registered member by whom they were nominated in respect of these.
(iii) To be valid the enclosed form of proxy for the Extraordinary General
Meeting, together with the power of attorney or other authority, if any, under
which it is signed or a notarially certified or office copy thereof must be
deposited no less than 48 hours (excluding weekends) prior to the time fixed
for the holding of the meeting or any adjournment of the said meeting at the
offices of the Company's registrars, Capita Registrars, Proxy department, PO
Box 25, Beckenham, Kent BR3 4BR.
(iv) Completion and return of the enclosed form of proxy will not
prevent you from attending and voting in person at the Extraordinary General
Meeting.
(v) Addresses (including electronic addresses) in this document are
included strictly for the purposes specified and not for any other purpose.
(vi) As at 28 April 2008, the Company's issued share capital
comprised 31,129,485 Ordinary Shares, 14,769,905 S2 Shares and 4,958,036 S3
Shares. Each share carries one vote at a general meeting of the Company and,
therefore, the total voting rights in the Company as at 24 April 2008 is
50,857,426.
(vii) The Company, pursuant to Regulation 41 of the Uncertified
Securities Regulations 2001, specifies that only those Shareholders registered
in the Register of Members of the Company as at midnight on 21 July 2008 or,
in the event that the meeting is adjourned, in the Register of Members 48
hours before the time of any adjourned meeting, shall be entitled to attend or
vote at the Extraordinary General Meeting in respect of the number of shares
registered in their name at the relevant time. Changes to entries in the
register of Members after midnight on 21 July 2008 or, in the event that the
meeting is adjourned, in the Register of Members less than 48 hours before the
time of any adjourned meeting, shall be disregarded in determining the rights
of any person to attend or vote at the meeting.
ENDS
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