Interim Results

UNICORN AIM VCT PLC PRELIMINARY RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2006 Chairman's Statement I am pleased to present the preliminary results for the six months ended 31 March 2006 for Unicorn AIM VCT plc. Qualifying Investments In the six months to 31 March 2006 the Ordinary Share Fund made two new qualifying investments at a total cost of £950,000. The investment phase for the Ordinary Share Fund is now essentially complete with a portfolio of thirty-four qualifying investments. Overall, the total number of holdings has reduced following the sale of four investments. The Fund continues to hold cash reserves in order to allow for further qualifying investments and to finance an active share buyback programme. The Series 2 ("S2") Share Fund was more active during the period, increasing the number of qualifying investments to twenty-six and the total invested in qualifying investments to £9.5 million. At the current date, the S2 Share Fund is approximately 67% invested in qualifying holdings. The Ordinary Share Fund continues to meet the requirement of retaining at least 70% of its investments in qualifying investments set by HM Revenue & Customs, whilst active participation in the new issue market over the period under review has enabled the S2 Share Fund to make substantial progress toward exceeding the 70% target by September 2006. Results Ordinary Share Fund Following a net gain on investments of £1,966,000 (£2,945,000 for the six months ended 31 March 2005) the total return on ordinary activities after taxation was £1,532,000, the equivalent of 4.6 pence per share. The deficit on the revenue account was £141,000 (£7,000 deficit for the six months ended 31 March 2005), reflecting a continued reduction in interest received from cash on deposit as funds have been invested in qualifying investments. Dividend payments from the Ordinary Share Fund will, as before, be substantially dependent upon capital profits generated from investment realisations. During the period 800,000 Ordinary Shares were bought back for cancellation at an average price of 90 pence per share. S2 Share Fund Following a net gain on investments of £2,379,000 (£1,734,000 for the period ended 31 March 2005) the total return on ordinary activities after taxation was £2,250,000, the equivalent of 14.3 pence per share. The deficit on the revenue account was £43,000 (£53,000 surplus for the period ended 31 March 2005), again reflecting a decrease in cash on deposit as the rate of investment in new opportunities continued. 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. On 30 January 2006, Ordinary Fund Shareholders received a final dividend of 5 pence per share in respect of the year ended 30 September 2005. An interim dividend of 5 pence per share on 1 March 2006, bringing total dividends paid since the launch of the Fund to 26.45p. Of the dividends totalling 10 pence per share paid during the period, 9.5 pence per share was paid out of capital profits realised on the sale of investments and 0.5 pence was paid from revenue. On 30 January 2006, S2 Fund Shareholders received a final dividend of 1 penny per share in respect of the year ended 30 September 2005 comprising 0.35 pence per share from revenue and 0.65 pence per share from capital. Total distributions of 1.75 pence per share have been paid to S2 Fund Shareholders since launch. Net Asset Value As at 31 March 2006, the net asset value (NAV) at bid prices for the Ordinary Share Fund was 99.7 pence per share. Since the launch of the Ordinary Share Fund in November 2001, the total return to shareholders (including dividends) has been 33.5%. Since the launch of the S2 Share Fund in February 2004, the total return to shareholders (including dividends) has been 31.27%. Board of Directors Robert Holt was recently appointed as Chairman of Unicorn Asset Management Limited, the Investment Manager. In accordance with best practice and to avoid any potential conflict of interest, Robert has resigned from the Board of your Company with effect from 25 April 2006. I would like to take this opportunity, on behalf of the Board, to thank him for the substantial contribution he has made to the Company's success during his period of office. Jocelin Harris was appointed to the Board on 25 April 2006. Jocelin has over 30 years experience in M&A and venture capital investing and I have pleasure in welcoming him to the Board of Directors. Outlook Prospects for the AIM are encouraging. The AIM Index continues to perform well and many companies remain sensibly valued in the sectors in which Unicorn operates. In relative terms the AIM had a poor year in 2005 caused mainly by a huge number of new issues. A record number of companies were floated on the AIM last year raising significant funds with the result that the weight of money absorbed by new issues held back overall performance. Since the start of 2006, investor interest in AIM quoted companies has improved and the Funds have made strong gains. Your Investment Manager is confident that the quality of the underlying holdings in both portfolios continues to improve. The Board remains optimistic that both Funds are well placed to achieve further capital growth thereby generating a strong, tax efficient, dividend flow. Peter Dicks Chairman For further information please contact: Unicorn Asset Management Limited, Tel: 020 7253 0889 UNAUDITED NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY SHARE AND THE S2 SHARE FUNDS Income Statement for the six months ended 31 March 2006 Ordinary S2 Share Share Fund Fund Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised gains - 1,546,436 1,546,436 - 2,294,615 2,294,615 on investments Gains on - 419,981 419,981 - 84,692 84,692 realisations of investments Costs of - (3,778) (3,778) - (5) (5) investment transactions Income 125,618 - 125,618 54,266 - 54,266 Investment (96,416) (289,249) (385,665) (28,441) (85,324) (113,765) management fees Other expenses (170,157) - (170,157) (69,311) - (69,311) -------- -------- -------- -------- -------- -------- (Loss)/return on (140,955) 1,673,390 1,532,435 (43,486) 2,293,978 2,250,492 ordinary activities before taxation -------- -------- -------- -------- -------- -------- Tax on ordinary - - - - - - activities (Loss)/return (140,955) 1,673,390 1,532,435 (43,486) 2,293,978 2,250,492 attributable to equity shareholders ======== ======== ======== ======== ======== ======== (Loss)/return (0.43)p 5.05p 4.62p (0.28)p 14.57p 14.29p per 1p share Average number 33,121,844 15,743,314 of shares in issue Total of both Funds (per Statutory Profit and Loss Account) Revenue Capital Total £ £ £ Unrealised gains - 3,841,051 3,841,051 on investments Gains on - 504,673 504,673 realisations of investments Costs of - (3,783) (3,783) investment transactions Income 179,884 - 179,884 Investment (124,857) (374,573) (499,430) management fees Other expenses (239,468) - (239,468) -------- -------- -------- (Loss)/return on (184,441) 3,967,368 3,782,927 ordinary activities before taxation Tax on ordinary - - - activities -------- -------- -------- (Loss)/return (184,441) 3,967,368 3,782,927 attributable to equity shareholders -------- -------- -------- Balance sheets as at 31 March 2006 Ordinary Share S2 Share Fund Fund £ £ Non current assets Investments 29,866,764 19,445,088 Current assets Debtors and prepayments 148,310 3,901 Current investments 2,832,243 294,313 Cash at bank 29,273 70,361 -------- -------- 3,009,826 368,575 Creditors: amounts falling (432,544) (554,354) due within one year -------- -------- Net current assets/ 2,577,282 (185,779) (liabilities) ======== ======== Net assets 32,444,046 19,259,309 ======== ======== Share capital and reserves Called up share capital 325,442 157,433 Share premium account - 10,148 Revaluation reserve 8,581,045 4,469,017 Capital redemption reserve 24,555 302 Special reserve 22,075,076 14,373,218 Profit and Loss Account 1,437,928 249,191 ======== ======== Equity shareholders' funds 32,444,046 19,259,309 ======== ======== Number of shares in issue 32,544,234 15,743,314 Net asset value per 1p 99.7p 122.3p Share Adjustments Total of both funds (see note below) (per Statutory Balance Sheet) £ £ £ Non current assets Investments - 49,311,852 Current assets Debtors and prepayments (125,944) 26,267 Current investments - 3,126,556 Cash at bank - 99,634 -------- -------- (125,944) 3,252,457 Creditors: amounts falling 125,944 (860,954) due within one year -------- -------- Net current assets - 2,391,503 ======== ======== Net assets - 51,703,355 ======== ======== Share capital and reserves Called up share capital 482,875 Share premium account 10,148 Revaluation reserve 13,050,062 Capital redemption reserve 24,857 Special reserve 36,448,294 Profit and Loss Account 1,687,119 ======== Equity shareholders' funds 51,703,355 ======== Note: the adjustment above nets off the inter-fund debtor and creditor balances, so that the "Total of both funds" Balance Sheet agrees to the Statutory Balance Sheet below. UNAUDITED PROFIT AND LOSS ACCOUNT for the six months ended 31 March 2006 Six Six months months to 31 to 31 March March 2005 2006 (restated) Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised - 3,841,051 3,841,051 - 3,968,695 3,968,695 gains on investments Gains on - 504,673 504,673 - 710,628 710,628 realisations of investments Cost of - (3,783) (3,783) - - - investment transactions Income 179,884 - 179,884 430,625 - 430,625 Investment (124,857) (374,573) (499,430) (125,633) (376,896) (502,529) management fees Other expenses (239,468) - (239,468) (258,964) - (258,964) -------- -------- -------- -------- -------- -------- (Loss)/profit (184,441) 3,967,368 3,782,927 46,028 4,302,427 4,348,455 on ordinary activities before income taxation Tax on - - - - - - ordinary activities -------- -------- -------- -------- -------- -------- (Loss)/profit (184,441) 3,967,368 3,782,927 46,028 4,302,427 4,348,455 on ordinary activities after taxation for the financial period ======== ======== ======== ======== ======== ======== Earnings per share Ordinary 4.62p 7.62p Shares S2 Shares 14.29p 10.83p Year to 30 September 2005 (audited and restated) Revenue Capital Total £ £ £ Unrealised gains - 3,617,126 3,617,126 on investments Gains on - 1,880,687 1,880,687 realisations of investments Cost of investment - - - transactions Income 931,791 858,103 1,789,894 Investment (248,109) (744,327) (992,436) management fees Other expenses (517,813) - (517,813) -------- -------- -------- Profit on ordinary 165,869 5,611,589 5,777,458 activities before income taxation Tax on ordinary (6,396) 6,396 - activities -------- -------- -------- Profit on ordinary 159,473 5,617,985 5,777,458 activities after taxation for the financial period ======== ======== ======== Earnings per share Ordinary Shares 9.62p S2 Shares 15.79p All the items in the above statement derive from continuing operations UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the six months ended 31 March 2006 Six months to 31 March 2006 £ Profit on ordinary 3,782,927 activities after taxation Effects of changes in (1,385,827) accounting policies from the introduction of FRS 25 and FRS 26 ======== Total recognised gains 2,397,100 during the period ======== UNAUDITED NOTE OF HISTORICAL COST PROFITS AND LOSSES for the six months ended 31 March 2006 Six months Six months Year to to to 30 September 31 March 31 March 2005 2006 2005 (restated) (audited and restated) £ £ £ Profit on ordinary 3,782,927 4,348,455 5,777,458 activities before taxation Less: unrealised gains on (3,841,051) (3,968,695) (3,617,126) investments Realisation of revaluation 200,656 (116,837) 885,981 gains/(losses) of previous years -------- -------- -------- Historical cost profit on 142,532 262,923 3,046,313 ordinary activities before taxation ======== ======== ======== Historical cost (loss)/ (3,349,325) (1,583,764) 1,199,626 profit for the year after taxation and dividends ======== ======== ======== UNAUDITED BALANCE SHEET as at 31 March 2006 As at As at As at 31 March 31 March 30 September 2006 2005 2005 (audited and restated) £ £ £ Non current assets Investments 49,311,852 47,595,991 46,724,558 Current assets Debtors and prepayments 26,267 911,019 2,203,122 Current investments 3,126,556 5,533,574 5,764,584 Cash at bank 99,634 451,658 79,028 -------- -------- -------- 3,252,457 6,896,251 8,046,734 Creditors: amounts falling due within one year Other creditors (556,497) (1,515,271) (1,025,008) Accruals (304,457) (159,951) (224,765) -------- -------- -------- (860,954) (1,675,222) (1,249,773) -------- -------- -------- Net current assets 2,391,503 5,221,029 6,796,961 ======== ======== ======== Net assets 51,703,355 52,817,020 53,521,519 ======== ======== ======== Share capital and reserves Share capital 482,875 498,625 490,875 Share premium account 10,148 10,148 10,148 Revaluation reserve 13,050,062 12,136,059 10,781,672 Capital redemption 24,857 9,107 16,857 reserve Special distributable 36,448,294 39,506,771 38,403,160 reserve Profit and loss account 1,687,119 656,310 3,818,807 ======== ======== ======== Total Shareholders' funds 51,703,355 52,817,020 53,521,519 ======== ======== ======== Net asset value per 1p share Ordinary Shares 99.7p 106.2p 108.5p S2 Shares 122.3p 105.3p 110.2p UNAUDITED STATEMENT OF CASH FLOWS for the six months to 31 March 2006 Six months to Six months to Year to 31 March 2006 31 March 2005 30 September (unaudited) (unaudited) 2005 (audited) £ £ £ Operating activities Investment income received 451,300 428,943 1,586,945 Investment management fees (499,430) (502,529) (992,436) paid Other cash payments (171,454) (340,578) (487,777) -------- -------- -------- Net cash (outflow)/inflow (219,584) (414,164) 106,732 from operating activities Investing activities Purchase of investments (5,085,850) (6,232,236) (10,765,279) Sale of investments 6,804,676 4,487,579 9,196,261 -------- -------- -------- Net cash inflow/(outflow) 1,718,826 (1,744,657) (1,569,018) from investing activities Dividends Dividends paid (3,491,857) (1,846,687) (1,846,688) -------- -------- -------- Cash outflow before (1,992,615) (4,005,508) (3,308,974) financing and liquid resource management Financing Share capital raised - 10,250 10,250 Share capital repurchased (624,807) (487,721) (1,325,875) -------- -------- -------- (624,807) (477,471) (1,315,625) Management of liquid resources Decrease in monies held 2,638,028 2,073,335 1,842,325 pending investment ======== ======== ======== Increase/(decrease) in cash 20,606 (2,409,644) (2,782,274) ======== ======== ======== UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 31 March 2006 As at As at As at 31 March 31 March 2005 30 September 2006 (restated) 2005 (restated) £ £ £ Opening shareholders' 53,521,519 50,976,564 50,976,564 funds - as restated for FRS 21 Restated for application (1,385,827) - - of new accounting policies -------- -------- -------- At 1 October 2005 52,135,692 50,976,564 50,976,564 (restated) Net share capital (bought (723,407) (661,312) (1,385,816) back) / subscribed for in the period Profit for the period 3,782,927 4,348,455 5,777,458 Dividends paid in period (3,491,857) (1,846,687) (1,846,687) ======== ======== ======== Closing Shareholders' 51,703,355 52,817,020 53,521,519 funds ======== ======== ======== Notes 1. The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments, and in accordance with applicable accounting standards 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 2005. 2. Changes in Accounting Policies With effect from 1 October 2005, the Company has adopted the following Financial Reporting Standards (FRS): FRS21 (Events after the Balance Sheet Date) - Dividends paid by the Company are accounted for in the period in which the Company is liable to pay them. Previously, the Company accrued dividends in the period in which the net revenue, to which those dividends related, was accounted for. FRS 25 (Financial Instruments: Disclosure and Presentation) and FRS 26 (Financial Instruments: Measurement) - The Company has designated its investment assets as being measured at "fair value through profit and loss". The fair value of quoted investments is deemed to be the bid value of these investments at the close of business on the relevant date. The corresponding amounts in these financial statements are, other than those covered by the exceptions permitted by FRS 25, restated in accordance with these new policies. FRS 25 permits the corresponding amounts not to be restated and the Company has adopted this approach. Non current investments which are not quoted are stated at Directors' best estimate of fair value, in accordance with British Venture Capital Association ("BVCA") guidelines published in July 2003. 3. In line with the expected long-term split of returns from the investment portfolios of the Company, the Directors have charged 75% of the investment management fee to the capital reserve. 4. Earnings and return per share Six months to 31 March 2006 Six months to 31 March 2005 (restated) Ordinary S2 Fund Total Ordinary S2 Fund Total Fund Fund £ £ £ £ £ £ Total earnings 1,532,435 2,250,492 3,782,927 2,640,326 1,708,129 4,348,455 after taxation Basic earnings 4.62 14.29 7.62 10.83 per share -------- -------- -------- -------- -------- -------- Net revenue from (140,955) (43,486) (6,652) 52,680 ordinary activities after taxation Revenue return (0.43) (0.28) (0.02) 0.33 per share -------- -------- -------- -------- -------- -------- Net realised 419,981 84,692 677,808 32,820 capital gains Net unrealised 1,546,436 2,294,615 2,267,447 1,701,248 capital gains Capital income - - - - Capital expenses (293,027) (85,329) (298,277) (78,619) -------- -------- -------- -------- -------- -------- Total capital 1,673,390 2,293,978 2,646,978 1,655,449 return Capital return 5.05 14.57 7.64 10.50 per share -------- -------- -------- -------- -------- -------- Weighted average 33,121,844 15,743,314 34,657,393 15,759,381 number of shares in issue in the year Year to 30 September 2005 (audited) Ordinary Fund S2 Fund Total £ £ £ Total earnings after taxation 3,288,597 2,488,861 5,777,458 Basic earnings per share 9.62 15.79 -------- -------- -------- Net revenue from ordinary 96,838 62,635 activities after taxation Revenue return per share 0.28 0.40 -------- -------- -------- Net realised capital gains 1,787,190 93,497 Net unrealised capital gains 1,128,894 2,488,232 Capital income 858,103 - Capital expenses (582,428) (155,503) -------- -------- -------- Total capital return 3,191,759 2,426,226 Capital return per share 9.34 15.39 -------- -------- -------- Weighted average number of 34,190,165 15,761,353 shares in issue in the year 5. Net asset value per Ordinary Fund Share is based on net assets at 31 March 2006 and on 32,544,234 (at 31 March 2005: 34,099,234; at 30 September 2005: 33,344,234) Ordinary Fund Shares, being the number of Ordinary Fund Shares in issue on that date. Net asset value per S2 Fund Share is based on net assets at 31 March 2006, and on 15,743,314 (at 31 March 2005: 15,763,314; at 30 September 2005: 15,743,314) S2 Fund Shares, being the number of S2 Fund Shares in issue on that date. 6. The financial information for the six months ended 31 March 2006 and the six months ended 31 March 2005 has not been audited. Other than the changes in accounting policies referred to in Note 2, the accounting policies used by Unicorn AIM VCT plc in preparing the Interim Report are consistent with those used in preparing the statutory accounts for the year ended 30 September 2005. The information for the year ended 30 September 2005 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 2005 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. 7. 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.

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