Half-yearly Report
UNICORN AIM VCT PLC ("the Company")
HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2009
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 the Half-Yearly Report of the Company for the six
months ended 31 March 2009.
Review of performance
The period under review saw a continuation of extraordinarily difficult
investment conditions, especially at the smaller end of the quoted market. The
severe economic and financial crisis currently being experienced has led to an
acceleration in the rate of job losses, home repossessions and insolvencies.
Scarcity of capital has created major problems for businesses seeking to
re-finance, which in turn has had a substantially negative impact on equity
valuations. As the economic outlook deteriorated, investors became increasingly
risk averse and trading activity in the shares of small, illiquid quoted
companies slowed dramatically which, in turn, dragged share prices even lower.
For the time being, with the continued absence of any obvious catalysts to
support a sustained recovery, it is likely that equity markets will remain
volatile. In the six month period to the end of March 2009, the FTSE AIM
All-Share Index fell by 33.1% on a total returns basis, whilst the FTSE
SmallCap Index fared somewhat better registering a total return of -30.1%.
The Funds have performed well relative to the wider market. However, it is
nonetheless disappointing to have to report substantial declines in Net Asset
Values for the period. It is probably worth reminding investors that, partly
because of the rules governing AIM based VCTs, your Investment Manager has
limited flexibility to reposition portfolios.
Set out below is a summary of performance for each Fund over the six months
ended 31 March 2009:-
Ordinary Fund S2 Fund S3 Fund
Launch date November 2001 February 2004 April 2007
Net asset value ("NAV") at 31 43.1 57.7 70.0
March 2009 (pence per share)
Change in NAV per Share since 30 (25.4)% (20.7)% (8.5)%
September 2008 after adding back
dividends paid in the period
Cumulative dividends paid to 42.0 18.75 1.0
date (pence per share)
Total net asset value return 85.1 76.5 71.0
since launch (pence per share)
Return against NAV at launch of (9.9%) (19.0)% (24.8)%
94.5 pence per share
Ordinary Share Fund
Over the six months there was a net loss on investments of £4.86 million (£6.37
million net loss for the six months ended 31 March 2008) and the total loss on
ordinary activities after taxation was £4.95 million, the equivalent of 16.02
pence per share (£6.66 million loss or 21.94 pence per share for the six months
ended 31 March 2008). The surplus on the revenue account for the Ordinary Share
Fund was £28,000 (£84,000 deficit for the six months ended 31 March 2008).
During the period 422,100 Ordinary Shares were bought back for cancellation at
an average price of 26.3 pence per share (before expenses) and at an average
discount of 44% to the net asset value per share.
S2 Share Fund
Over the six months there was a net loss on investments of £2.21 million (£3.14
million net loss for the six months ended 31 March 2008) and the total loss on
ordinary activities after taxation was £2.30 million, the equivalent of 15.58
pence per share (£3.28 million loss or 22.34 pence per share for the six months
ended 31 March 2008). The deficit on the revenue account for the S2 Share Fund
was £26,000 (£43,000 deficit for the six months ended 31 March 2008).
No S2 Shares were bought back during the period.
S3 Share Fund
Over the six months there was a net loss on investments of £335,000 (£290,000
net loss for the six months ended 31 March 2008) and the total loss on ordinary
activities after taxation was £329,000, the equivalent of 6.64 pence per share
(£288,000 loss or 5.80 pence per share for the six months ended 31 March 2008).
The surplus on the revenue account for the S3 Share Fund was £22,000 (£22,000
surplus for the six months ended 31 March 2008).
No S3 Shares were bought back during the period.
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, the continuing weakness of equity markets and consequent decline in
asset values has resulted in a much reduced level of capital gains. In
addition, revenue returns are lower than anticipated due to a reduced level of
dividend income and lower interest earned on cash balances. As a consequence,
the Board will not be declaring dividends for any of the three Funds for the
period under review.
The Board will re-consider the payment of dividends when reviewing the Annual
Report and Accounts after the end of the current financial year.
Qualifying Investments
In recent months, the Alternative Investment Market has experienced a rising
number of profit warnings issued by companies which are struggling to adapt to
an increasingly challenging trading environment. Many businesses have required
re-financing in order to ensure their survival and some have been forced to
accept very expensive terms to secure new capital investment. The steady flow
of negative news combined with occasional forced selling has placed further
pressure on the valuations of smaller quoted companies. Performance across all
three Funds has been affected by these pressures to varying degrees.
In both the Ordinary Share Fund and the S2 Share Fund, a considerable number of
investee companies saw their share prices fall by 50% or more during the
period. Many of these declines were triggered either by the release of weaker
than anticipated financial results or by often misplaced concerns over balance
sheet strength and survivability. Profit warnings issued by Glisten, the
manufacturer of confectionery and healthy snacks and by Maxima Holdings, an IT
managed services business accounted for almost half of the total decline
generated by the Ordinary Share Fund's qualifying portfolio. In common with
many of the companies within the portfolios, both these businesses are in
relatively good health and should survive the current economic downturn.
Glisten and Maxima remain profitable and both are capable of generating
sustainable levels of free cashflow. The management teams of each of these
businesses are now firmly focused on debt reduction. Unfortunately, the shares
of both Shieldtech, a specialist manufacturer of body armour, and Strategic
Retail, a DIY retailer, were suspended during the period. The Board of
Shieldtech remains in negotiations regarding a possible refinancing, whilst
Strategic Retail has been declared insolvent.
Although trading conditions generally remain extremely difficult, your
Investment Manager is confident that most of the companies which have suffered
recent setbacks should survive and have the potential to recover in due course.
In addition, it is worth noting that many of the companies in which the Funds
have invested continue to trade profitably and in some cases are still
delivering significant earnings and share price growth. Abcam, a specialist
manufacturer and distributor of therapeutic antibodies and Animalcare, a
leading supplier of veterinary products, are worthy of particular note, having
seen their share prices increase by 27% and 37% respectively in the six months
to 31 March 2009. Abcam is held in the Ordinary and S2 Share Funds, whilst
Animalcare is held in the S3 Share Fund.
The S3 Share Fund remains in the earlier stages of investment, being 29.9%
invested in equities, and as a consequence it continued to perform relatively
well during the period.
In December 2008 the Investment Manager made one further VCT qualifying
investment which took the form of 8% Convertible Loan Stock in Snacktime, one
of the UK's leading confectionery vending businesses. Each of the three Funds
participated in this investment.
There were no outright disposals made during the period, although the Ordinary
and the S2 Share Funds each received a substantial cash return from their
investment in Clerkenwell Ventures, a cash shell, following a change in
strategy. The Ordinary and S2 Share Funds effected a sale of their holding in
Optare, a bus manufacturer, via an exchange of stock. The Ordinary Share Fund
made a partial disposal of its holding in Printing.com, a specialist printing
retailer.
In aggregate, the Funds remain well above the VCT qualifying threshold required
by HM Revenue & Customs, with approximately 79% of the Company's assets being
invested in VCT qualifying companies. All other HM Revenue & Customs tests have
been complied with and your Board has been advised that the Company has
maintained its venture capital trust status.
A full list of all the qualifying investments held in all Funds at the period
end is included below.
Outlook
Prospects for the Alternative Investment Market are currently uncertain. A
significant proportion of the Index remains concentrated in non-producing,
cash-consuming, mining and resource companies which may well find it difficult,
if not impossible, to secure the funding required to ensure their survival. At
the same time, there are also very many businesses, spread across a broad
spectrum of other sectors, which remain profitable and cash generative and
which carry little or no debt on their balance sheets. A high percentage of
these companies are currently valued by the market as though they are destined
to fail. In reality, however, we believe the vast majority will survive the
current malaise and emerge as stronger and more efficiently managed businesses.
The portfolios are well diversified with a high proportion of each Fund's
assets invested in just such businesses.
The Board remains optimistic that the Funds have the potential for substantial
recovery of value in due course. In the meantime, given the Company's cash
position your Investment Manager will, on a selective basis, be seeking to
capitalise on the significant valuation anomalies which seem to have emerged at
the smaller end of the quoted equity market.
Peter Dicks
Chairman
29 April 2009
Principal risks and uncertainties
In accordance with DTR 4.2.7, the Board confirms that the principal risks and
uncertainties facing the Company have not materially changed since the
publication of the Annual Report and Accounts for the year ended 30 September
2008. The Board acknowledges that there is regulatory risk and continues to
manage the Company's affairs in such a manner as to comply with section 274
Income Tax Act 2007. Other risks relate to investment & strategic risk,
operational risk and financial instruments risk. A more detailed explanation of
these can be found in the Directors' Report on page 22 of the 2008 Annual
Report and Accounts - copies are available on the Investment Manager's website,
www.unicornam.com.
Related Party Transactions
Details of related party transactions in accordance with Disclosure and
Transparency Rule 4.2.8 can be found in Note 8 to the Accounts below.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
a. the condensed set of financial statements has been prepared in accordance
with 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 Rules 4.2.7 - 8 in accordance with
Disclosure & Transparency Rule 4.2.10.
For and on behalf of the Board:
For Matrix-Securities Limited,
Secretary
29 April 2009
Investment Portfolio Summary - Ordinary Share Fund
As at 31 March 2009
Book cost Valuation % of net
assets by
value
£'000 £'000
Qualifying investments
AIM quoted investments:
Abcam plc 466 1,677 12.7%
Mattioli Woods plc 449 783 6.0%
Supporta plc 1,432 525 4.0%
Glisten plc 582 495 3.8%
Maxima Holdings plc 1,200 403 3.1%
Avingtrans plc 708 354 2.7%
SnackTime plc 520 335 2.5%
Prologic plc 589 251 1.9%
Pilat Media Global plc 480 214 1.6%
Zetar plc 406 193 1.5%
Huveaux plc 1,000 180 1.4%
Kiotech International plc 351 176 1.3%
Hasgrove plc 300 163 1.2%
Tracsis plc 120 150 1.1%
Lees Foods plc 260 124 0.9%
Dillistone Group plc 106 119 0.9%
Fountains plc 365 117 0.9%
Praesepe plc 253 115 0.9%
Hexagon Human Capital plc 429 99 0.8%
Access Intelligence plc 490 98 0.7%
Printing.com plc 123 90 0.7%
Sanderson Group plc 385 77 0.6%
Augean plc 350 55 0.4%
Datong Electronics plc 333 47 0.4%
Essentially plc 152 27 0.2%
Belgravium Technologies plc 117 15 0.1%
Cantono plc 300 3 0.0%
Assetco plc 0 0 0.0%
-------- -------- --------
12,266 6,885 52.3%
Fully listed investments:
Mears Group Plc 970 987 7.5%
Microgen plc 181 123 0.9%
-------- -------- --------
1,151 1,110 8.4%
Unlisted investments:
Amber Taverns Limited 500 518 3.9%
Sanastro plc 500 125 1.0%
Synarbor plc (formerly Public Recruitment 1,000 - 0.0%
Group plc)
Shieldtech plc 650 - 0.0%
Centurion Electronics plc 575 - 0.0%
Strategic Retail plc 426 - 0.0%
Greatfleet plc (in administration) 310 - 0.0%
-------- -------- --------
3,961 643 4.9%
-------- -------- --------
Total qualifying investments 17,378 8,638 65.6%
===== ===== =====
Non-qualifying investments
Money market funds 1 3,519 3,519 26.7%
Unicorn Free Spirit Fund (OEIC) 332 426 3.3%
AIM quoted investments 434 292 2.2%
Listed UK equities 188 191 1.5%
-------- -------- --------
Total non-qualifying investments 4,473 4,428 33.7%
===== ===== =====
-------- -------- --------
Total investments 21,851 13,066 99.3%
===== ===== =====
Other assets 281 2.1%
Current liabilities (191) (1.4)%
-------- --------
Net assets 13,156 100.0%
===== =====
1 Disclosed within 'current investments' under current assets in the
Balance Sheet
Investment Portfolio Summary - S2 Share Fund
As at 31 March 2009
Book cost Valuation % of net
assets by
value
£'000 £'000
Qualifying investments
AIM quoted investments:
Abcam plc 334 1,200 14.1%
Mattioli Woods plc 396 690 8.1%
Cohort plc 507 656 7.7%
Melorio plc 360 338 4.0%
Driver Group plc 325 338 4.0%
Maxima Holdings plc 800 248 2.9%
SnackTime plc 388 240 2.8%
Zetar plc 366 174 2.0%
Hasgrove plc 300 163 1.9%
Tracsis plc 120 150 1.8%
Avingtrans plc 288 144 1.7%
IS Pharma plc (formerly Maelor plc) 154 126 1.5%
Relax Group plc (formerly Debts.co.uk 400 124 1.5%
plc)
Invocas Group plc 344 118 1.4%
Kiotech International plc 195 98 1.1%
Prologic plc 218 93 1.1%
Keycom plc 120 90 1.1%
Printing.com plc 108 79 0.9%
Sanderson Group plc 385 77 0.9%
Praesepe plc 150 68 0.8%
Hexagon Human Capital plc 253 58 0.7%
Datong Electronics plc 333 47 0.6%
Fountains plc 135 43 0.5%
Access Intelligence plc 210 42 0.5%
eg solutions plc 250 35 0.4%
Essentially plc 152 27 0.3%
Augean plc 150 24 0.3%
Belgravium Technologies plc 117 15 0.2%
Cantono plc 200 2 0.0%
-------- -------- --------
8,058 5,507 64.8%
Fully listed investments:
Mears Group plc 345 236 2.8%
Unlisted investments:
Amber Taverns Limited 500 518 6.0%
Sanastro plc 500 125 1.5%
The Debt Advisor Group plc (formerly 1,000 - 0.0%
Compass Finance Group plc) (in
administration)
Shieldtech plc 350 - 0.0%
Strategic Retail plc 174 - 0.0%
-------- -------- --------
2,524 643 7.5%
Total qualifying investments 10,927 6,386 75.1%
===== ===== =====
Non-qualifying investments
Unicorn UK Smaller Companies Fund (OEIC) 1,213 940 11.0%
Unicorn Free Spirit Fund (OEIC) 729 680 8.0%
Money market funds 1 532 532 6.1%
AIM quoted investments 105 58 0.7%
-------- -------- --------
Total non-qualifying investments 2,579 2,210 25.8%
===== ===== =====
-------- -------- --------
Total investments 13,506 8,596 100.9%
===== ===== =====
Other assets 50 0.5%
Current liabilities (121) (1.4)%
-------- --------
Net assets 8,525 100.0%
===== =====
1 Disclosed within 'current investments' under current assets in the
Balance Sheet
Investment Portfolio Summary - S3 Share Fund
As at 31 March 2009
Book cost Valuation % of net
assets by
value
£'000 £'000
Qualifying investments
AIM quoted investments:
Animalcare Group plc 200 247 7.1%
Tracsis plc 220 244 7.0%
Melorio plc 187 176 5.1%
SnackTime plc 266 155 4.5%
IS Pharma plc (formerly Maelor plc) 154 126 3.6%
Keycom plc 120 90 2.6%
-------- -------- --------
Total qualifying investments 1,147 1,038 29.9%
===== ===== =====
Non-qualifying investments
Money market funds 1 1,075 1,075 31.0%
Unicorn Outstanding British Companies 503 364 10.5%
Fund (OEIC)
Unicorn Free Spirit Fund (OEIC) 496 271 7.8%
Unicorn Mastertrust Fund (OEIC) 498 259 7.5%
Unicorn UK Smaller Companies Fund (OEIC) 496 256 7.4%
Unicorn UK Income Fund (OEIC) 480 238 6.9%
-------- -------- --------
Total non-qualifying investments 3,548 2,463 71.1%
===== ===== =====
-------- -------- --------
Total investments 4,695 3,501 101.0%
===== ===== =====
Other assets 25 0.7%
Current liabilities (56) (1.7)%
-------- --------
Net assets 3,470 100.0%
===== =====
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.
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.
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
Provision of proprietary workflow management tools designed to improve
operational efficiencies.
Essentially plc
Sports marketing and media services.
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.
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.
IS Pharma plc (formerly Maelor plc)
Pharmaceuticals company.
Keycom plc
Designers and developers of communications strategies.
Kiotech International plc
Manufacturer of animal feed supplements.
Lees Foods plc
Confectionery manufacturer.
Mattioli Woods plc
Consultants in the provision of pension and wealth management services.
Maxima Holdings plc
Implementation and support of enterprise software solutions.
Melorio plc
NVQ training targeted at the Construction Industry.
Pilat Media Global plc
Development and support of scheduling software for digital TV.
Praesepe plc
Adult gaming centres.
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.
Relax Group plc (formerly Debts.co.uk plc)
Specialist advisors for personal debt solution management.
Sanderson Group plc
Implementation and support of proprietary enterprise software solutions.
SnackTime plc
Operator of vending machines.
Supporta plc
Provision of back office support and domiciliary care to the public and private
sectors.
Tracsis plc
Provider of resource optimisation software to transport companies.
Zetar plc
Niche manufacturer of chocolate confectionery.
Fully Listed investments:
Mears Group plc
Social housing and domiciliary care.
Microgen plc
IT consultancy and managed services provider.
Unlisted investments:
Amber Taverns Limited
Pub operator.
Centurion Electronics plc
Design and distribution of in-car audio-visual entertainment systems.
Greatfleet plc (in administration)
Recruitment consultant specialising in legal and financial search and
selection.
Sanastro plc
Specialist financial publisher.
Shieldtech plc
Design, manufacture and supply of body armour.
Strategic Retail plc
Operation of retail outlets specialising in home décor and furnishings market.
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 (formerly Compass Finance Group plc) (in
administration)
Consumer financial solutions through mortgages, secured and unsecured loans.
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 2009
Ordinary Share fund S2 Share fund
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised - (4,974) (4,974) - (2,285) (2,285)
losses on
investments
Gains on - 119 119 - 72 72
realisations
of
investments
Income 205 - 205 61 - 61
Investment 2 (42) (127) (169) (21) (62) (83)
management
fees
Other (135) - (135) (66) - (66)
expenses
---------- ---------- ---------- ---------- ---------- ----------
Profit/ 28 (4,982) (4,954) (26) (2,275) (2,301)
(loss) on
ordinary
activities
before
taxation
Tax on - - - - - -
ordinary
activities
---------- ---------- ---------- ---------- ---------- ----------
Profit/ 28 (4,982) (4,954) (26) (2,275) (2,301)
(loss)
attributable
to equity
shareholders
====== ====== ====== ====== ====== ======
Basic and 4 0.09 p (16.11)p (16.02)p (0.17)p (15.41)p (15.58)p
diluted
earnings per
1p share
S3 Share fund Total of all three funds
(per Statutory Profit and
Loss account)
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised - (335) (335) - (7,594) (7,594)
losses on
investments
Gains on - - - - 191 191
realisations of
investments
Income 31 - 31 297 - 297
Investment 2 (5) (16) (21) (68) (205) (273)
management fees
Other expenses (4) - (4) (205) - (205)
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) 22 (351) (329) 24 (7,608) (7,584)
on ordinary
activities
before taxation
Tax on ordinary - - - - - -
activities
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) 22 (351) (329) 24 (7,608) (7,584)
attributable to
equity
shareholders
====== ====== ====== ====== ====== ======
Basic and 4 0.44 p (7.08)p (6.64)p
diluted
earnings per 1p
share
Balance sheets
As at 31 March 2009
Ordinary Share fund S2 Share fund
Notes
£'000 £'000 £'000 £'000
Non current assets
Investments at fair 9,547 8,064
value
Current Assets
Debtors and 163 8
prepayments
Current investments 3,519 532
Cash at bank 118 42
--------- ---------
3,800 582
Creditors: amounts (191) (121)
falling due within one
year
--------- ---------
Net current assets 3,609 461
--------- ---------
Net assets 13,156 8,525
====== ======
Share capital and
reserves
Called up share 306 148
capital
Capital redemption 54 12
reserve
Share premium account 640 200
Revaluation reserve (6,695) (3,810)
Special distributable 15,214 11,000
reserve
Profit and Loss 3,637 975
account
--------- ---------
Equity shareholders' 13,156 8,525
funds
====== ======
No. of Shares in i 30,558,244 14,764,738
ssue:
Net Asset Value per 1p 6 43.1p 57.7p
share:
S3 Share fund Adjustments Total of all
(see note three funds (per
below) Statutory Balance
Sheet)
Notes £'000 £'000 £'000 £'000 £'000
Non current assets
Investments at 2,426 20,037
fair value
Current Assets
Debtors and 7 (138) 40
prepayments
Current 1,075 5,126
investments
Cash at bank 18 178
--------- --------- ---------
1,100 (138) 5,344
Creditors: amounts (56) 138 (230)
falling due within
one year
--------- --------- ---------
Net current assets 1,044 - 5,114
--------- --------- ---------
Net assets 3,470 - 25,151
====== ====== ======
Share capital and
reserves
Called up share 50 504
capital
Capital redemption - 66
reserve
Share premium - 840
account
Revaluation (1,194) (11,699)
reserve
Special 4,546 30,760
distributable
reserve
Profit and Loss 68 4,680
account
--------- ---------
Equity 3,470 25,151
shareholders'
funds
====== ======
No. of Shares in i 4,958,036
ssue:
Net Asset Value 6 70.0p
per 1p share:
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 2009
Six months ended 31 March 2009 Six months ended 31 March 2008
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Unrealised - (7,594) (7,594) - (9,752) (9,752)
losses on
investments
Gains/ - 191 191 - (46) (46)
(losses) on
realisations
of
investments
Income 297 - 297 268 - 268
Vat - - - - - -
recoverable
Investment 2 (68) (205) (273) (109) (327) (436)
management
fees
Other (205) - (205) (264) - (264)
expenses
----------- ----------- ----------- ----------- ----------- -----------
Profit/ 24 (7,608) (7,584) (105) (10,125) (10,230)
(loss) on
ordinary
activities
before
income tax
Tax on - - - - - -
profit/
(loss) on
ordinary
activities
----------- ----------- ----------- ----------- ----------- -----------
Profit/ 24 (7,608) (7,584) (105) (10,125) (10,230)
(loss) on
ordinary
activities
after
taxation for
the
financial
period
======= ======= ======= ======= ======= =======
Basic and
diluted
earnings per
share:
Ordinary 4 (16.02)p (21.94)p
Shares
S2 Shares 4 (15.58)p (22.34)p
S3 Shares 4 (6.64)p (5.80)p
Year ended 30 September 2008
(audited)
Notes Revenue Capital Total
£'000 £'000 £'000
Unrealised - (14,209) (14,209)
losses on
investments
Gains/(losses) - (182) (182)
on
realisations
of investments
Income 729 - 729
Vat 168 503 671
recoverable
Investment 2 (172) (514) (686)
management
fees
Other expenses (504) - (504)
----------- ----------- -----------
Profit/(loss) 221 (14,402) (14,181)
on ordinary
activities
before income
tax
Tax on profit/ 18 (18) -
(loss) on
ordinary
activities
----------- ----------- -----------
Profit/(loss) 239 (14,420) (14,181)
on ordinary
activities
after taxation
for the
financial
period
======= ======= =======
Basic and
diluted
earnings per
share:
Ordinary 4 (27.67)p
Shares
S2 Shares 4 (33.65)p
S3 Shares 4 (14.66)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.
There were no other recognised gains or losses in the period.
Other than revaluation movements arising on investments held at fair value
through Profit and Loss Account, there were no differences between the profit/
(loss) as stated above and at historical cost.
The notes below form part of these half-yearly financial statements.
Unaudited Balance Sheet
As at 31 March 2009
As at 31 As at 31 As at 30
March 2009 March 2008 September 2008
(audited)
Notes £'000 £'000 £'000
Non current assets
Investments at fair 1b 20,037 32,940 28,042
value
Current assets
Debtors and prepayments 40 83 2,068
Current investments 7 5,126 4,969 4,152
Cash at bank 178 470 48
------------ ------------ ------------
5,344 5,522 6,268
Creditors: amounts
falling due within one
year
Other creditors (142) (918) (15)
Accruals (88) (171) (172)
------------ ------------ ------------
(230) (1,089) (187)
------------ ------------ ------------
Net current assets 5,114 4,433 6,081
------------ ------------ ------------
Net assets 25,151 37,373 34,123
======= ======= =======
Share capital and
reserves
Share capital 504 498 508
Capital redemption 66 60 62
reserve
Share premium account 840 10 840
Revaluation reserve (11,699) (955) (4,603)
Special distributable 30,760 34,132 31,396
reserve
Profit and Loss account 4,680 3,628 5,920
------------ ------------ ------------
Equity shareholders' 25,151 37,373 34,123
funds
======= ======= =======
Net asset value per
share of 1p each
Ordinary Shares 6 43.1p 67.7p 61.8p
S2 Shares 6 57.7p 86.6p 75.3p
S3 Shares 6 70.0p 86.5p 77.6p
The financial information for the six months ended 31 March 2009 and the six
months ended 31 March 2008 has not been audited.
Unaudited Reconciliation of Movements in Shareholders' Funds
For the six months ended 31 March 2009
Six months Six months Year ended
ended ended
30 September 2008
31 March 2009 31 March 2008 (audited)
Notes £'000 £'000 £'000
Opening 34,123 48,670 48,670
shareholders'
funds
Net share capital (114) (328) (469)
bought back in
the period
Net share capital - - 842
subscribed in the
period
Loss for the (7,584) (10,230) (14,181)
period
Dividends paid in 5 (1,274) (739) (739)
period
----------- ----------- -----------
Closing 25,151 37,373 34,123
Shareholders'
funds
======= ======= =======
Unaudited Statement of Cash Flows
For the six months ended 31 March 2009
Six months Six months Year ended
ended 31 March ended 31 March 30 September
2009 2008 2008 (audited)
£'000 £'000 £'000
Operating activities
Investment income 320 334 713
received
VAT recovered/interest on 891 - -
VAT
Investment management (273) (435) (807)
fees paid
Other cash payments (167) (303) (600)
------------- ------------- -------------
Net cash inflow/(outflow) 771 (404) (694)
from operating activities
Investing activities
Purchase of investments (352) (1,732) (3,710)
Sale of investments 2,073 5,640 5,967
------------- ------------- -------------
Net cash inflow from 1,721 3,908 2,257
investing activities
Dividends
Dividends paid (1,274) (739) (739)
------------- ------------- -------------
Cash inflow before 1,218 2,765 824
financing and liquid
resource management
Financing
Share capital raised - - 842
Share capital (114) (373) (513)
re-purchased
------------- ------------- -------------
(114) (373) 329
Management of liquid
resources
Increase in monies held (974) (2,030) (1,213)
pending investment
------------- ------------- -------------
Increase/(decrease) in 130 362 (60)
cash
======== ======== ========
Reconciliation of net
cash flow to movement in
net funds
Increase/(decrease) in 130 362 (60)
cash for the period
Net funds at start of 48 108 108
period
------------- ------------- -------------
Net funds at end of 178 470 48
period
======== ======== ========
Reconciliation of
operating loss to net
cash inflow/(outflow)
from operating activities
Loss on ordinary (7,584) (10,230) (14,181)
activities before
taxation
Net (gains)/losses on (191) 46 182
realisations of
investments
Net unrealised losses on 7,594 9,752 14,209
investments
Decrease/(Increase) in 870 19 (920)
debtors
Increase in creditors 82 9 16
------------- ------------- -------------
Net cash inflow/(outflow) 771 (404) (694)
from operating activities
======== ======== ========
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Principal 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 2009 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 2008 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.
The Half-Yearly Report has not been audited, nor has it been reviewed by the
auditors pursuant to the Auditing Practices Board (APB)'s guidance on Review of
Interim Financial Information.
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 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" as the Company's business is to invest in financial assets
with a view to profiting from their total return in the form of capital growth
and income. 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. Taxation
There is no tax charge for the period, as the Company has incurred taxable
losses in the period.
4. Basic and diluted earnings and return per share
Six months ended 31 March 2009
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund
£'000 £'000 £'000 £'000
Total earnings after (4,954) (2,301) (329) (7,584)
taxation:
Basic and diluted (16.02)p (15.58)p (6.64)p
earnings per share
Net revenue from 28 (26) 22
ordinary activities
after taxation
Revenue return per 0.09p (0.17)p 0.44p
share
Net unrealised capital (4,974) (2,285) (335)
(losses)/gains
Net realised capital 119 72 -
gains/(losses)
Capital element of VAT - - -
recoverable
Capital expenses (net (127) (62) (16)
of taxation)
Total capital return (4,982) (2,275) (351)
Capital return per (16.11)p (15.41)p (7.08)p
share
Weighted average 30,927,399 14,764,738 4,958,036
number of shares in
issue in the period
Six months ended 31 March 2008
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund
£'000 £'000 £'000 £'000
Total earnings after (6,660) (3,282) (288) (10,230)
taxation:
Basic and diluted (21.94)p (22.34)p (5.80)p
earnings per share
Net revenue from (84) (43) 22
ordinary activities
after taxation
Revenue return per (0.28)p (0.29)p 0.44p
share
Net unrealised capital (6,411) (3,051) (290)
(losses)/gains
Net realised capital 39 (85) -
gains/(losses)
Capital element of VAT - - -
recoverable
Capital expenses (net (204) (103) (20)
of taxation)
Total capital return (6,576) (3,239) (310)
Capital return per (21.66)p (22.05)p (6.24)p
share
Weighted average 30,357,257 14,691,444 4,958,036
number of shares in
issue in the period
Year ended 30 September 2008
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund (audited)
(audited) (audited) (audited)
£'000 £'000 £'000 £'000
Total earnings after (8,496) (4,958) (727) (14,181)
taxation:
Basic and diluted (27.67)p (33.65)p (14.66)p
earnings per share
Net revenue from 180 12 47
ordinary activities
after taxation
Revenue return per 0.59p 0.08p 0.95p
share
Net unrealised (8,751) (4,714) (744)
capital (losses)/
gains
Net realised capital 4 (186) -
gains/(losses)
Capital element of 411 89 3
VAT recoverable
Capital expenses (net (340) (159) (33)
of taxation)
Total capital return (8,676) (4,970) (774)
Capital return per (28.26)p (33.73)p (15.61)p
share
Weighted average 30,699,263 14,731,850 4,958,036
number of shares in
issue in the year
5. Dividends
Six months ended 31 March 2009
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund
£'000 £'000 £'000 £'000
Ordinary Share
Fund:
Interim paid - - - -
Final paid re 929 - - 929
prior year
S2 Share Fund
Interim paid - - - -
Final paid re - 295 - 295
prior year
S3 Share Fund
Interim paid - - - -
Final paid re - - 50 50
prior year
----------- ----------- ----------- -----------
929 295 50 1,274
======= ======= ======= =======
Six months ended 31 March 2008
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund
£'000 £'000 £'000 £'000
Ordinary Share
Fund:
Interim paid - - - -
Final paid re - - - -
prior year
S2 Share Fund
Interim paid - - - -
Final paid re - 739 - 739
prior year
S3 Share Fund
Interim paid - - - -
Final paid re - - - -
prior year
----------- ----------- ----------- -----------
- 739 - 739
======= ======= ======= =======
Year ended 30 September 2008
Ordinary S2 Share S3 Share Total
Share Fund Fund Fund (audited)
(audited) (audited) (audited)
£'000 £'000 £'000 £'000
Ordinary Share
Fund:
Interim paid - - - -
Final paid re prior - - - -
year
S2 Share Fund
Interim paid - - - -
Final paid re prior - 739 - 739
year
S3 Share Fund
Interim paid - - - -
Final paid re prior - - - -
year
----------- ----------- ----------- -----------
- 739 - 739
======= ======= ======= =======
6. Net asset value
Six months ended 31 March 2009 Six months ended 31 March 2008
Ordinary S2 Share S3 Share Ordinary S2 Share S3 Share
Share Fund Fund Fund Share Fund Fund Fund
£'000 £'000 £'000 £'000 £'000 £'000
Net assets 13,156 8,525 3,470 20,454 12,631 4,288
Number of 30,558,244 14,764,738 4,958,036 30,233,787 14,578,973 4,958,036
shares in
issue
----------- ----------- ----------- ----------- ----------- -----------
Net asset 43.1p 57.7p 70.0p 67.7p 86.6p 86.5p
value per
share
Year ended 30 September 2008
Ordinary S2 Share S3 Share
Share Fund Fund Fund
(audited) (audited) (audited)
£'000 £'000 £'000
Net assets 19,154 11,121 3,848
Number of 30,980,344 14,764,738 4,958,036
shares in issue
----------- ----------- -----------
Net asset value 61.8p 75.3p 77.6p
per share
7. 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 and one
UK based money market fund managed by Prime Rate Capital Management LLP. £
5,125,000 (31 March 2008: £4,969,000; 30 September 2008: £4,151,000) of this
sum is subject to same day access, while £1,000 (31 March 2008: £nil; 30
September 2008: £1,000) is subject to two day access. These sums are regarded
as monies held pending investment.
8. Related party transactions
David Royds is a director and shareholder of Matrix Group Limited, which owns
Matrix-Securities Limited and has significant interests in Prime Rate Capital
Management LLP ("PRCM") and Matrix Corporate Capital LLP ("MCC"). David Royds
is also a director of Matrix-Securities Limited, which acted as Promoter to the
Company for a fee of £nil (31 March 2008: £nil, 30 September 2008: £nil) and
provides administration services to the Company for a fee of £97,000 (31 March
2008: £96,000; 30 September 2008: £193,000). £49,000 (31 March 2008: £48,000;
30 September 2008: £nil) was due to Matrix at the end of the period.
The Company has invested £1,000,000 in a liquidity fund managed by PRCM, and
earned income of £11,000 from this fund in the period to 31 March 2009. MCC
were appointed as the Company's brokers on 10 December 2008. No fees have been
charged for the period. Two share buybacks were undertaken by MCC on the
Company's instruction totalling £114,000. £80,000 was owed to MCC at the
period-end.
9. The financial information for the six months ended 31 March 2009 and the
six months ended 31 March 2008 has not been audited.
The information for the year ended 30 September 2008 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 2008 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. The accounting
policies used by Unicorn AIM VCT plc in preparing the Half-Yearly Report are
consistent with those used in preparing the statutory accounts for the year
ended 30 September 2008.
10. Copies of this statement are being sent to all shareholders. Further copies
are available free of charge from the Company's registered office, One Vine
Street, London W1J 0AH, or from www.unicornam.com or www.matrixgroup.co.uk/
asset_management/vct_services/unicorn_vcts.
Shareholder Information
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 3206 7000 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 plus network extras - if calling from overseas
please dial +44 208 639 3399) or by writing to them at Capita Registrars,
Northern House, Woodsome Park, Fennay Bridge, Huddersfield, West Yorkshire HD8
0LA. Should you prefer you may visit their website, www.capitaregistrars.com.
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.
Corporate Information
Directors
Peter Dicks (Chairman)
James Grossman
Jocelin Harris
David Royds
All of whom are non-executive and of:
One Vine Street
London W1J 0AH
Secretary & Administrator
Matrix-Securities Limited
One Vine Street
London
W1J 0AH
Company Registration Number : 04266437
Investment Manager Auditors Registrar
Unicorn Asset Management PKF (UK) LLP Capita Registrars
Limited
First Floor Office Farringdon Place Northern House
Preacher's Court 20 Farringdon Road Woodsome Park
The Charterhouse London Fennay Bridge
Charterhouse Square EC1M 3AP Huddersfield
London West Yorkshire
EC1M 6AU HD8 0LA
VCT Tax Adviser Custodian Solicitors
PricewaterhouseCoopers LLP The Bank of New York Martineau
1 Embankment Place One Canada Square No 1 Colmore
Square
London London Birmingham
WC2N 6RH E14 5AL B4 6AA
Stockbroker Bankers
Matrix Corporate Capital LLP National Westminster Bank
plc
One Vine Street City of London Office
London PO Box 12264
W1J 0AH 1 Princes Street
London
EC2R 8PB
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