Interim Management Statement
Unicorn AIM VCT plc
Interim Management Statement
For the period from 1 October 2010 to 31 December 2010
Introduction
The Company has prepared this Interim Management Statement (IMS) in accordance
with the Disclosure and Transparency Rules of the UK Listing Authority. The IMS
covers the three month period ended 31 December 2010, together with relevant
information up to the date of publication.
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.
Performance
The final three months of 2010 delivered strong returns from UK equity indices.
The FTSE AIM AllShare Index produced a total return of almost 20% in the
period, whilst the FTSE SmallCap Index and the FTSE AllShare Index rose by 8.6%
and 7.3% respectively.
Despite very limited exposure to Mining and Oil & Gas sectors, which
contributed significantly to strong AIM Index performance, the Fund nonetheless
registered healthy gains over the same period, with Net Asset Value (NAV)
increasing by 8.5%. The NAV is calculated on a total return basis, after adding
back dividends paid. No dividends were paid in the period.
As at 31 December the unaudited NAV was 113.03 pence per share, compared to an
audited NAV of 104.15 pence per share as at 30 September 2010.
Material Transactions
There were a number of material transactions during the period under review.
Amber Taverns, an unquoted operator of public houses in the North West of
England was acquired for cash by a private equity firm. Total proceeds from the
disposal of Amber Taverns amounted to more than £5.3m and the monies were
received shortly after your Company's financial year end. The sale of this
investment generated a 2.7x return on book cost and a capital profit of £3.3m.
Mount Engineering,a specialist engineering group, was acquired for cash by
Cooper Controls in an all cash transaction. Proceeds on disposal amounted to £
351k, generating a capital profit of £51k.
Shieldtech, which specialised in the manufacture and supply of body armour
systems to police forces and the MOD failed to secure a number of significant
expected orders. As a result of these order delays and because the Group had
built a central overhead designed to accommodate a much larger entity, the
Company continued to absorb cash and suffer significant losses. Despite a
successful fundraising in May 2009, the company remained under-capitalised. In
addition, the hoped for orders failed to materialise and in October 2010, the
Board of Shieldtech announced that it had appointed administrators to the
Company. The remaining value of this investment has therefore been written down
to zero.
Five new VCT qualifying investments were made in the period:-
Accumuli,a holding company with a strategy focused on building through
acquisitions, a substantial Managed IT Security Services business
Hangar 8, one of Europe's largest operators of privately owned passenger jet
aircraft with a fleet of 21 aircraft currently under management
Instem Life Science Systems, a developer of software and solutions to the life
sciences research market, helping pharmaceutical companies to manage their
early stage research and development activities
Omega Diagnostics,a provider of diagnostic products to hospitals, laboratories
and clinics in over 100 countries - its operations revolve around food
intolerance tests and the diagnosis of infectious diseases.
Specialist Energy Group,a market leader in the manufacture of boiler
circulating pumps for use in the power generation and oil & gas sectors
It is pleasing to report that each of these new holdings has made a positive
initial contribution to performance. The total cost of new qualifying
investments in the period was £2.4m.
A further £962k of VCT qualifying capital was committed to secondary
fundraisings in four companies already held; Brady, Green Compliance, IDOX and
IS Pharma.
New non-qualifying investments were made in Stadium Group, a manufacturer of
electronics and power products andVP Group, a specialist equipment rental
group.
In the non-qualifying portfolio, the holdings in Tangent Communicationsand Xaar
were increased, whilst partial disposals were made in Hargreaves Services,
Mears, Parseq, Renew andRobert Walters.
The total cost of new investments made in the period was just under £4m, whilst
the proceeds from realisations and disposals amounted to £7.1m.
Top 10 Equity Holdings at 31 December 2010
Stock % of fund
Abcam 12.0%
Unicorn UK Smaller Companies Fund 7.0%
Mattioli Woods 4.6%
Green Compliance 3.9%
Mears 3.4%
Unicorn UK Income Fund 3.2%
Kiotech 3.0%
Animalcare Group 2.8%
Unicorn Mastertrust Fund 2.7%
SnackTime 2.5%
Total 45.1%
Material Events
In the three months to 31 December 2010, a total of 353,541 Unicorn AIM VCT
Ordinary Shares were purchased for cancellation at a price of 99 pence per
share.
After the period end, a further 885,227 shares were purchased for cancellation
at a price of 98 pence per share.
All resolutions proposed at the Annual General Meeting (AGM) held on 7 January
2011 were approved by Shareholders and a final dividend of 4 pence per share in
respect of the financial year ended 30 September 2010 was paid to shareholders
on 14 January 2011.
An Offer for Subscription to raise up to £15m by way of an issue of New Shares
opened on 14 December 2010 and will close on 30 June 2011, unless extended or
fully subscribed before this date. The resolutions proposing the Offer were
approved by Shareholders at the AGM held on 7 January 2011.
Further details relating to the Offer can be found on Unicorn Asset
Management's website; www.unicornam.com.
There were no other material events during the period from 1 October 2010 to 31
December 2010.