Half-yearly report
Albion Technology & General VCT PLC
As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2,
Albion Technology & General VCT PLC today makes public its information relating
to the Half-yearly Financial Report (which is unaudited) for the six months to
30 June 2011. This announcement was approved by the Board of Directors on 22
August 2011.
The full Half-yearly Financial Report (which is unaudited) for the period to 30
June 2011, will shortly be sent to shareholders. Copies of the full Half-yearly
Financial Report will be shown via the Albion Ventures LLP website www.albion-
ventures.co.uk under the "Our Funds" section by clicking Albion Technology &
General VCT PLC.
Investment objectives
Albion Technology & General VCT PLC ("the Company") is a Venture Capital Trust
which raised £14.3 million in December 2000 and 2002, and £35.0 million during
2006 through the launch of a C share issue. The Company raised a further £1.67m
in early 2011 under the Albion VCTs Linked Top Up Offer.
The Company offers investors the opportunity to participate in a balanced
portfolio of technology and non-technology businesses. The Company's investment
portfolio is intended to be split approximately as follows:
* 40 per cent. in unquoted UK technology-related companies; and
* 60 per cent. in unquoted UK non-technology companies.
The Investment Manager pursues a longer term investment approach, with a view to
providing shareholders with a strong, predictable dividend flow combined with
the prospects of capital growth. This is achieved in two ways. Â First,
controlling the VCT's exposure to technology risk by ensuring that many of the
companies in the non-technology portfolio have property as their major asset,
with no external borrowings. Second, by balancing the investment portfolio by
sector, so that those areas such as leisure and business services, which are
susceptible to changes in consumer sentiment, are complemented by sectors with
more predictable long term characteristics, such as healthcare and the
environment.
Financial calendar
Record date for second dividend 30 September 2011
Payment date for second dividend 28 October 2011
Financial year end 31 December 2011
Financial highlights (unaudited)
+----------------+--------------------------------------+----------------------+
|Â | Ordinary shares | C shares |
+----------------+------------+------------+----------+-+-----------+----------+
| | | | | | Unaudited| |
| | Unaudited| | Â Audited| | six| Â Audited|
| | six| Unaudited| year| | months| year|
| | months| six| ended 31| | ended| ended 31|
| | ended 30|months ended| December| | 30 June| December|
| | June 2011|30 June 2010| 2010 | | 2010| 2010|
| | (pence per| (pence per| (pence| | (pence per|(pence per|
|Â | share)| share)|per share)|Â | share)| share)|
+----------------+------------+------------+----------+-+-----------+----------+
|Net asset value | 87.9| 92.0| 87.6|Â | 70.6| 68.1|
+----------------+------------+------------+----------+-+-----------+----------+
|Revenue return | 0.7| 0.9| 1.6|Â | 0.5| 1.1|
+----------------+------------+------------+----------+-+-----------+----------+
|Capital | | | | | | |
|return/(loss) | 2.0| 2.4| 1.0|Â | (1.4)| (3.0)|
+----------------+------------+------------+----------+-+-----------+----------+
 Ordinary shares
(pence per share) C shares (pence
(i) per share) (i)(ii)
Total shareholder net asset value return
to 30 June 2011
Total dividends paid
during the period
ended: 31 December 2001 1.0 -
 31 December 2002 2.0 -
 31 December 2003 1.5 -
 31 December 2004 7.5 -
 31 December 2005 9.0 -
 31 December 2006 8.0 0.5
 31 December 2007 8.0 2.5
31 December 2008
 (iii) 16.0 4.5
31 December 2009
 (iii) - 1.0
 31 December 2010 8.0 3.0
 30 June 2011 2.5 1.9
---------------------------------------
Total dividends paid to 30 June 2011 63.5 13.4
Net asset value as at 30 June 2011 87.9 68.4
---------------------------------------
Total shareholder net asset value return
to 30 June 2011 151.4 81.8
---------------------------------------
The Directors have declared a dividend of 2.5 pence per Ordinary share, payable
on 28 October 2011 to shareholders on the register as at 30 September 2011.
Notes
(i) Excludes tax benefits upon subscription
(ii) The C shares were converted into Ordinary shares on 31 March 2011, with a
conversion of 0.7779 Ordinary shares for each C share. The net asset value
per share and all dividends paid subsequent to the conversion of the C
shares to the Ordinary shares are multiplied by the conversion factor of
0.7779 in respect of the C shares' return, in order to give an accurate
picture of the shareholder value since launch relating to the C shares.
(iii) The Ordinary shares' dividend of 8.0 pence per share for 2009 was paid in
advance on 30 December 2008. The C shares' first dividend for 2009 of
1.5 pence per share was also paid in advance on 30 December 2008.
Interim management report
Introduction
The results for Albion Technology & General VCT PLC for the six months to 30
June 2011 show further progress from the low point of the UK recession.
Following the merger of the Ordinary shares and the C share portfolio, the
Company recorded a positive total return of 2.7 pence per share.
Investment Performance and Progress
During the period, the VCT benefitted particularly from the realisation of its
investment in Dexela, the medical imaging business. The company was sold to
Perkin Elmer of the US in June, and investors expect to make up to three times
return on their investment. The sale resulted in an uplift in valuation of £1
million. Elsewhere within the portfolio, strong performances by sparesFinder,
Rostima and Process Systems Enterprise were counterbalanced by a weaker
performance than expected by Xceleron.
During the period, a total of £1m was invested in three new investee companies
and five existing investee companies. Of these eight businesses, three were in
the environmental and renewable sector and four were in the healthcare sector.
Split of investment portfolio by valuation
Set out at the bottom of this announcement is the sector diversification of the
portfolio of our investments at 30 June 2011.
Source: Albion Ventures LLP
Risks, uncertainties and prospects
We remain cautious over the short and medium term prospects of the UK and global
economies in view of the currency and debt constraints which are increasingly
becoming apparent. Nevertheless, we believe that many of the sectors in which
we operate, and the investee companies which we support, will be able to grow
despite these broader uncertainties. In addition, it remains our general policy
that investee companies have no external bank borrowings. The investment
portfolio continues to mature and the prospects overall continue to look
positive.
Other risks and uncertainties remain unchanged since the Annual Report and
Financial Statements to 31 December 2010 and are as detailed in note 13.
Related party transactions
Details of material related party transactions for the reporting period can be
found in note 11 of this Half-yearly Financial Report.
Results and dividend
As at 30 June 2011 the net asset value per ordinary share was 87.9 pence (30
June 2010: 92.0 pence; 31 December 2010: 87.6 pence). The equivalent net asset
value for the C Shares, after allowing for the conversion at 0.7779 new Ordinary
Shares for each C Share held, would have been 68.4 pence at 30 June 2011,
compared to 70.6 pence as at 30 June 2010 and 68.1 pence at 31 December 2010.
The total return before tax for the six months to 30 June 2011 was £1.056m
compared to the combined ordinary and C share return for six months to 30 June
2010 of £156,000. A second dividend of 2.5 pence per share will be paid on 28
October 2011 to those shareholders on the register on 30 September 2011.
Dr N E Cross
Chairman
22 August 2011
Responsibility statement
The Directors, Dr Neil Cross, Lt Gen Sir Edmund Burton, Michael Hart and Patrick
Reeve are responsible for preparing the Half-yearly Financial Report. The
Directors have chosen to prepare this Half-yearly Financial Report for the
Company in accordance with United Kingdom Generally Accepted Accounting Practice
("UK GAAP").
In preparing these summarised financial statements for the period to 30 June
2011, we the Directors of the Company, confirm that to the best of our
knowledge:
(a) the summarised set of financial statements has been prepared in accordance
with the pronouncement on interim reporting issued by the Accounting Standards
Board;
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year);
(c) the summarised set of financial statements give a true and fair view in
accordance with UK GAAP of the assets, liabilities, financial position and
profit and loss of the Company for the six months ended 30 June 2011 and comply
with UK GAAP and Companies Act 1985 and 2006;Â and
(d) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and changes
therein).
The accounting policies applied to the Half-yearly Financial Report have been
consistently applied in current and prior periods and are those applied in the
Annual Report and Financial Statements for the year ended 31 December 2010.
This Half-yearly Financial Report has not been audited or reviewed by the
Auditor.
By order of the Board
Dr N E Cross
Chairman
22 August 2011
Portfolio of investments
The following is a summary of the qualifying technology fixed asset investments
as at 30 June 2011:
+----------------------------------+--------+---------+------+----------+------+
| | | % voting| | | |
| | |rights of| |Cumulative| |
| | | AVL*| | movement| Total|
| |% voting| managed| Cost| in value| value|
|Investee company | rights|companies| £'000| £'000| £'000|
+----------------------------------+--------+---------+------+----------+------+
|Â | Â | Â | Â | Â | Â |
+----------------------------------+--------+---------+------+----------+------+
|Mi-Pay Limited | 17.0| 43.1| 1,962| (300)| 1,662|
+----------------------------------+--------+---------+------+----------+------+
|Helveta Limited | 8.8| 21.0| 1,370| (123)| 1,247|
+----------------------------------+--------+---------+------+----------+------+
|Blackbay Limited | 8.5| 34.9| 951| 271| 1,222|
+----------------------------------+--------+---------+------+----------+------+
|Xceleron Limited | 16.2| 45.1| 1,853| (714)| 1,139|
+----------------------------------+--------+---------+------+----------+------+
|memsstar Limited (formerly Point | | | | | |
|35 Microstructures Limited) | 10.7| 28.1| 741| 111| 852|
+----------------------------------+--------+---------+------+----------+------+
|Process Systems Enterprise Limited| 6.0| 16.0| 570| 137| 707|
+----------------------------------+--------+---------+------+----------+------+
|Mirada Medical Limited | 12.6| 45.0| 357| 318| 675|
+----------------------------------+--------+---------+------+----------+------+
|Opta Sports Data Limited | 5.9| 14.2| 735| (74)| 661|
+----------------------------------+--------+---------+------+----------+------+
|Oxsensis Limited | 8.2| 20.7| 1,099| (474)| 625|
+----------------------------------+--------+---------+------+----------+------+
|DySIS Medical Limited (formerly | | | | | |
|Forth Photonics Limited) | 5.1| 18.4| 700| (135)| 565|
+----------------------------------+--------+---------+------+----------+------+
|Rostima Holdings Limited | 15.5| 39.3| 305| 173| 478|
+----------------------------------+--------+---------+------+----------+------+
|sparesFinder Limited | 10.5| 14.3| 613| (175)| 438|
+----------------------------------+--------+---------+------+----------+------+
|Peakdale Molecular Limited | 6.0| 14.9| 427| (58)| 369|
+----------------------------------+--------+---------+------+----------+------+
|Dexela Limited** | n/a| n/a| -| 299| 299|
+----------------------------------+--------+---------+------+----------+------+
|Lowcosttravelgroup Limited | 4.0| 26.0| 680| (417)| 263|
+----------------------------------+--------+---------+------+----------+------+
|Abcodia Limited | 2.1| 21.4| 75| -| 75|
+----------------------------------+--------+---------+------+----------+------+
|Palm Tree Technology Limited | 0.1| 0.7| 37| (14)| 23|
+----------------------------------+--------+---------+------+----------+------+
|Red-M Wireless Limited | 4.2| 42.1| 30| (23)| 7|
+----------------------------------+--------+---------+------+----------+------+
|Â | Â | Â | Â | Â | Â |
+----------------------------------+--------+---------+------+----------+------+
|Total technology investments | Â | Â |12,505| (1,198)|11,307|
+----------------------------------+--------+---------+------+----------+------+
*AVL is Albion Ventures LLP
** The residual investment in Dexela Limited represents the risk-adjusted value
of the expected deferred consideration arising from the disposal in June 2011 of
the Company's equity holdings in Dexela.
The following is a summary of the qualifying non-technology fixed asset
investments as at 30 June 2011:
+------------------------------------+------+---------+------+----------+------+
| | | % voting| | | |
| | |rights of| |Cumulative| |
| | %| AVL*| | movement| Total|
| |voting| managed| Cost| in value| value|
|Investee company |rights|companies| £'000| £'000| £'000|
+------------------------------------+------+---------+------+----------+------+
|Â | Â | Â | Â | Â | Â |
+------------------------------------+------+---------+------+----------+------+
|Kensington Health Clubs Limited | 14.8| 50.0| 3,494| (1,100)| 2,394|
+------------------------------------+------+---------+------+----------+------+
|Radnor House School (Holdings) | | | | | |
|Limited | 11.1| 50.0| 1,930| 57| 1,987|
+------------------------------------+------+---------+------+----------+------+
|The Charnwood Pub Company Limited | 12.2| 50.0| 2,794| (982)| 1,812|
+------------------------------------+------+---------+------+----------+------+
|Bravo Inns II Limited | 10.8| 50.0| 1,415| (96)| 1,319|
+------------------------------------+------+---------+------+----------+------+
|The Weybridge Club Limited | 6.7| 50.0| 1,314| (193)| 1,121|
+------------------------------------+------+---------+------+----------+------+
|Orchard Portman Hospital Limited | 16.2| 50.0| 1,018| 2| 1,020|
+------------------------------------+------+---------+------+----------+------+
|Taunton Hospital Limited | 15.8| 50.0| 1,000| 3| 1,003|
+------------------------------------+------+---------+------+----------+------+
|The Q Garden Company Limited | 33.4| 50.0| 2,401| (1,404)| 997|
+------------------------------------+------+---------+------+----------+------+
|Bravo Inns Limited | 16.1| 50.0| 1,430| (560)| 870|
+------------------------------------+------+---------+------+----------+------+
|Prime Care Holdings Limited | 15.6| 49.9| 930| (100)| 830|
+------------------------------------+------+---------+------+----------+------+
|Masters Pharmaceuticals Limited | 3.7| 16.9| 727| (9)| 718|
+------------------------------------+------+---------+------+----------+------+
|TEG Biogas (Perth) Limited | 9.4| 50.0| 544| 4| 548|
+------------------------------------+------+---------+------+----------+------+
|Consolidated PR Limited | 11.8| 23.6| 570| (84)| 486|
+------------------------------------+------+---------+------+----------+------+
|Chichester Holdings Limited | 15.2| 50.0| 2,000| (1,579)| 421|
+------------------------------------+------+---------+------+----------+------+
|Peakdale Molecular Limited** | n/a| n/a| 289| (11)| 278|
+------------------------------------+------+---------+------+----------+------+
|The Street by Street Solar Programme| | | | | |
|Limited | 6.8| 50.0| 271| -| 271|
+------------------------------------+------+---------+------+----------+------+
|Premier Leisure (Suffolk) Limited | 13.6| 50.0| 1,000| (759)| 241|
+------------------------------------+------+---------+------+----------+------+
|CS (Brixton) Limited | 3.9| 50.0| 165| 74| 239|
+------------------------------------+------+---------+------+----------+------+
|CS (Norwich) Limited | 12.5| 50.0| 200| 10| 210|
+------------------------------------+------+---------+------+----------+------+
|Nelson House Hospital Limited | 6.0| 50.0| 205| -| 205|
+------------------------------------+------+---------+------+----------+------+
|Tower Bridge Health Clubs Limited | 2.9| 50.0| 179| 24| 203|
+------------------------------------+------+---------+------+----------+------+
|CS (Greenwich) Limited | 2.0| 50.0| 107| 16| 123|
+------------------------------------+------+---------+------+----------+------+
|Evolutions Television Limited | 11.1| 49.9| 855| (746)| 109|
+------------------------------------+------+---------+------+----------+------+
|The Dunedin Pub Company VCT Limited | 10.4| 50.0| 112| (3)| 109|
+------------------------------------+------+---------+------+----------+------+
|Regenerco Renewable Energy Limited | 2.7| 50.0| 67| -| 67|
+------------------------------------+------+---------+------+----------+------+
|AVESI Limited | 6.8| 50.0| 54| -| 54|
+------------------------------------+------+---------+------+----------+------+
|Green Energy Property Services Group| | | | | |
|Limited | 8.6| 23.4| 103| (52)| 51|
+------------------------------------+------+---------+------+----------+------+
|CS (Exeter) Limited | 4.0| 50.0| 65| (18)| 47|
+------------------------------------+------+---------+------+----------+------+
|GB Pub Company VCT Limited | 3.9| 50.0| 160| (117)| 43|
+------------------------------------+------+---------+------+----------+------+
|City Screen (Liverpool) Limited | 4.5| 50.0| 56| (15)| 41|
+------------------------------------+------+---------+------+----------+------+
|Â | Â | Â | Â | Â | Â |
+------------------------------------+------+---------+------+----------+------+
|Total non-technology investments | Â | Â |25,455| (7,638)|17,817|
+------------------------------------+------+---------+------+----------+------+
|Total qualifying investments | Â | Â |37,960| (8,836)|29,124|
+------------------------------------+------+---------+------+----------+------+
* AVL is Albion Ventures LLP
** This part of the Peakdale investment is in loan stock secured against debtors
and property and is classified as a non-technology holding.
The following is a summary of the non-qualifying fixed asset investments as at
30 June 2011:
+--------------------------------+--------+---------+-----+----------+-----+
| | | % voting| | | |
| | |rights of| |Cumulative| |
| | | AVL*| | movement|Total|
| |% voting| managed| Cost| in value|value|
|Investee company | rights|companies|£'000| £'000|£'000|
+--------------------------------+--------+---------+-----+----------+-----+
|Â | Â | Â | Â | Â | Â |
+--------------------------------+--------+---------+-----+----------+-----+
|Evolutions Group Limited | 22.3| 100.0|1,481| (345)|1,136|
+--------------------------------+--------+---------+-----+----------+-----+
|Albion Investment Properties | | | | | |
|Limited (formerly Smiles Pub | | | | | |
|Company Limited) | 22.6| 100.0| 434| (53)| 381|
+--------------------------------+--------+---------+-----+----------+-----+
|Consolidated PR Limited | 2.1| 23.6| 33| 23| 56|
+--------------------------------+--------+---------+-----+----------+-----+
|Â | Â | Â | Â | Â | Â |
+--------------------------------+--------+---------+-----+----------+-----+
|Total non-qualifying investments| Â | Â |1,948| (375)|1,573|
+--------------------------------+--------+---------+-----+----------+-----+
*AVL is Albion Ventures LLP
The following is a summary of current asset investments as at 30 June 2011:
+---------------------------------+-------+------------+-------+
| | | Cumulative | |
| | | movement | Total |
| | Cost | in value | value |
| Current asset investment | £'000 | £'000 | £'000 |
+---------------------------------+-------+------------+-------+
| Royal Skandia Collective Bond | 1,000 | - | 1,000 |
+---------------------------------+-------+------------+-------+
| Â | Â | Â | Â |
+---------------------------------+-------+------------+-------+
| Total current asset investments | 1,000 | - | 1,000 |
+---------------------------------+-------+------------+-------+
Summary income statement
+---------------+----+---------------------+---------------------+---------------------+
|Â | | |Combined Ordinary and|Combined Ordinary and|
| | | Ordinary shares | C shares | C shares |
| | | Unaudited | Unaudited | Audited |
| | | six months ended | six months ended | year ended |
| | Â | 30 June 2011 | 30 June 2010 | 31 December 2010 |
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
| | |Revenue|Capital|Total|Revenue|Capital|Total|Revenue|Capital|Total|
| |Note| £'000| £'000|£'000| £'000| £'000|£'000| £'000| £'000|£'000|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Gains/(losses) | | | | | | | | | | |
|on | | | | | | | | | | |
|investments | 3| -| 1,022|1,022| -| 88| 88| -| (391)|(391)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Investment | | | | | | | | | | |
|income | 4| 584| -| 584| 629| -| 629| 1,197| -|1,197|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Investment | | | | | | | | | | |
|management | | | | | | | | | | |
|fees | Â | (109)| (330)|(439)| (115)| (344)|(459)| (225)| (673)|(898)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Other | | | | | | | | | | |
|expenses | Â | (111)| -|(111)| (102)| -|(102)| (194)| -|(194)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Return/(loss) | | | | | | | | | | |
|on ordinary | | | | | | | | | | |
|activities | | | | | | | | | | |
|before tax | Â | 364| 692|1,056| 412| (256)| 156| 778|(1,064)|(286)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Tax | | | | | | | | | | |
|(charge)/credit| | | | | | | | | | |
|on ordinary | | | | | | | | | | |
|activities | Â | (76)| 85| 9| (117)| 82| (35)| (198)| 183| (15)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Return/(loss) | | | | | | | | | | |
|attributable to| | | | | | | | | | |
|shareholders | Â | 288| 777|1,065| 295| (174)| 121| 580| (881)|(301)|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
|Basic and | | | | | | | | | | |
|diluted return | | | | | | | | | | |
|per share | | | | | | | | | | |
|(pence)* | 6| 0.7| 2.0| 2.7| Â | Â | Â | Â | Â | Â |
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial
Report for the six months ended 30 June 2010 and the audited statutory accounts
for the year ended 31 December 2010.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
The total column of this Summary income statement represents the profit and loss
account of the Company. The supplementary revenue and capital columns have been
prepared in accordance with the Association of Investment Companies' Statement
of Recommended Practice.
All revenue and capital items in the above statement derive from continuing
operations.
There are no recognised gains or losses other than the results for the periods
disclosed above. Accordingly a Statement of total recognised gains and losses is
not required. The difference between the reported loss on ordinary activities
before tax and the historical profit is due to the fair value movements on
investments. As a result a note on historical cost profit and losses has not
been prepared.
The Income Statement for the period to 30 June 2011 is in respect of only
Ordinary shares since C shares were converted into Ordinary shares on 31 March
2011.
Summary balance sheet
+-------------------------+----+---------------+--------------+----------------+
|Â | | | Combined | Combined |
| | | |Ordinary and C| Ordinary and C |
| | |Ordinary shares| shares | shares |
| | | Unaudited | Unaudited | Audited |
| | | 30 June 2011 | 30 June 2010 |31 December 2010|
| |Note| £'000 | £'000 | £'000 |
+-------------------------+----+---------------+--------------+----------------+
|Fixed asset investments | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Qualifying | Â | 29,124| 28,309| 28,018|
+-------------------------+----+---------------+--------------+----------------+
|Non-qualifying | Â | 1,573| 552| 1,369|
+-------------------------+----+---------------+--------------+----------------+
|Total fixed asset | | | | |
|investments | Â | 30,697| 28,861| 29,387|
+-------------------------+----+---------------+--------------+----------------+
|Â | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Current assets | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Trade and other debtors | Â | 68| 182| 304|
+-------------------------+----+---------------+--------------+----------------+
|Current asset investments| Â | 1,000| 1,011| 1,005|
+-------------------------+----+---------------+--------------+----------------+
|Cash at bank and in hand | 9| 3,729| 6,195| 3,895|
+-------------------------+----+---------------+--------------+----------------+
|Â | Â | 4,797| 7,388| 5,204|
+-------------------------+----+---------------+--------------+----------------+
|Â | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Creditors: amounts | | | | |
|falling due | | | | |
|within one year | Â | (349)| (365)| (500)|
+-------------------------+----+---------------+--------------+----------------+
|Net current assets | Â | 4,448| 7,023| 4,704|
+-------------------------+----+---------------+--------------+----------------+
|Net assets | Â | 35,145| 35,884| 34,091|
+-------------------------+----+---------------+--------------+----------------+
|Â | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Capital and reserves | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Called up share capital | 7| 21,809| 24,725| 24,772|
+-------------------------+----+---------------+--------------+----------------+
|Share premium | Â | 929| 273| 294|
+-------------------------+----+---------------+--------------+----------------+
|Capital redemption | | | | |
|reserve | Â | 400| 400| 400|
+-------------------------+----+---------------+--------------+----------------+
|Redenomination reserve | Â | 4,073| -| -|
+-------------------------+----+---------------+--------------+----------------+
|Unrealised capital | | | | |
|reserve | Â | (9,355)| (10,009)| (9,312)|
+-------------------------+----+---------------+--------------+----------------+
|Special reserve | Â | 9,525| 21,327| 14,914|
+-------------------------+----+---------------+--------------+----------------+
|Treasury shares reserve | Â | (2,927)| (1,746)| (2,166)|
+-------------------------+----+---------------+--------------+----------------+
|Realised capital reserve | Â | 9,489| 167| 4,278|
+-------------------------+----+---------------+--------------+----------------+
|Revenue reserve | Â | 1,202| 747| 911|
+-------------------------+----+---------------+--------------+----------------+
|Total equity | | | | |
|shareholders' | | | | |
|funds | Â | 35,145| 35,884| 34,091|
+-------------------------+----+---------------+--------------+----------------+
|Â | Â | Â | Â | Â |
+-------------------------+----+---------------+--------------+----------------+
|Basic and diluted net | | | | |
|asset | | | | |
|value per share (pence)* | Â | 87.9| Â | Â |
+-------------------------+----+---------------+--------------+----------------+
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial
Report for the six months ended 30 June 2010 and the audited statutory accounts
for the year ended 31 December 2010.
The Balance Sheets as at 30 June 2010 and 31 December 2010 represent the
aggregate Balance Sheets of the Ordinary shares and C shares. The Balance Sheet
as at 30 June 2011 represents Ordinary shares which include C shares converted
into Ordinary shares on 31 March 2011.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 22 August 2011, and were signed on its behalf by
Dr N E Cross
Chairman
Company number: 4114310
Summary reconciliation of movements in shareholders' funds
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
| |Called-| | | | | | | | | |
| | up | | Capital | |Unrealised| |Treasury|Realised| | |
| | share | Share |redemption|Redenomination| capital |Special | shares |capital |Revenue | |
|Â |capital|premium| reserve | Reserve | reserve* |reserve*|reserve*|reserve*|reserve*|Total |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |£'000 |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|1 January 2011| | | | | | | | | | |
|(audited) | 24,772| 294| 400| -| (9,312)| 14,914| (2,166)| 4,278| 911|34,091|
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Realised gains| -| -| -| -| -| -| -| 1,248| -|1,248 |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Unrealised | | | | | | | | | | |
|losses | -| -| -| -| (226)| -| -| -| -|(226) |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Transfer of | | | | | | | | | | |
|previously | | | | | | | | | | |
|unrealised | | | | | | | | | | |
|losses to | | | | | | | | | | |
|realised | | | | | | | | | | |
|losses | -| -| -| -| 183| -| -| (183)| -|- |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Creation of | | | | | | | | | | |
|Redenomination| | | | | | | | | | |
|reserve on | | | | | | | | | | |
|conversion of | | | | | | | | | | |
|C Shares |(4,073)| -| -| 4,073| -| -| -| -| -|- |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Capitalised | | | | | | | | | | |
|investment | | | | | | | | | | |
|management | | | | | | | | | | |
|fees | -| -| -| -| -| -| -| (330)| -|(330) |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Tax relief on | | | | | | | | | | |
|costs charged | | | | | | | | | | |
|to capital | -| -| -| -| -| -| -| 85| -|85 |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Purchase of | | | | | | | | | | |
|own treasury | | | | | | | | | | |
|shares | -| -| -| -| -| -| (761)| -| -|(761) |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Issue of | | | | | | | | | | |
|equity (net of| | | | | | | | | | |
|costs) | 1,110| 635| -| -| -| -| -| -| -|1,745 |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Revenue return| | | | | | | | | | |
|attributable | | | | | | | | | | |
|to | | | | | | | | | | |
|shareholders | -| -| -| -| -| -| -| -| 288|288 |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Transfer from | | | | | | | | | | |
|special | | | | | | | | | | |
|reserve to | | | | | | | | | | |
|realised | | | | | | | | | | |
|capital and | | | | | | | | | | |
|revenue | | | | | | | | | | |
|reserves** | -| -| -| -| -| (5,389)| -| 4,391| 998|- |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|Dividends paid| -| -| -| -| -| -| -| -| (995)|(995) |
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
|As at 30 June | | | | | | | | | | |
|2011 | | | | | | | | | | |
|(unaudited) | 21,809| 929| 400| 4,073| (9,355)| 9,525| (2,927)| 9,489| 1,202|35,145|
+--------------+-------+-------+----------+--------------+----------+--------+--------+--------+--------+------+
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
| |Called-| | | | | | | | |
| | up| | Capital|Unrealised| |Treasury|Realised| | |
| | share| Share|redemption| capital| Special| shares| capital| Revenue| |
|Â |capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
| | £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 1 | | | | | | | | | |
|January 2010| | | | | | | | | |
|(audited) | 24,680| 259| 400| (10,083)| 21,327| (1,372)| 845| 1,056| 37,112|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Realised | | | | | | | | | |
|gains | -| -| -| -| -| -| 130| -| 130|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Unrealised | | | | | | | | | |
|losses | -| -| -| (42)| -| -| -| -| (42)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Transfer of | | | | | | | | | |
|previously | | | | | | | | | |
|unrealised | | | | | | | | | |
|losses to | | | | | | | | | |
|realised | | | | | | | | | |
|losses | -| -| -| 116| -| -| (116)| -| -|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Capitalised | | | | | | | | | |
|investment | | | | | | | | | |
|management | | | | | | | | | |
|fees | -| -| -| -| -| -| (344)| -| (344)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Tax relief | | | | | | | | | |
|on costs | | | | | | | | | |
|charged to | | | | | | | | | |
|capital | -| -| -| -| -| -| 82| -| 82|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Purchase of | | | | | | | | | |
|own treasury| | | | | | | | | |
|shares | -| -| -| -| -| (374)| -| -| (374)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Issue of | | | | | | | | | |
|equity (net | | | | | | | | | |
|of costs) | 45| 14| -| -| -| -| -| -| 59|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Revenue | | | | | | | | | |
|return | | | | | | | | | |
|attributable| | | | | | | | | |
|to | | | | | | | | | |
|shareholders| -| -| -| -| -| -| -| 295| 295|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Dividends | | | | | | | | | |
|paid | -| -| -| -| -| -| (430)| (604)|(1,034)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 30 | | | | | | | | | |
|June 2010 | | | | | | | | | |
|(unaudited) | 24,725| 273| 400| (10,009)| 21,327| (1,746)| 167| 747| 35,884|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
| | Called| | | | | | | | |
| | -up| | Capital|Unrealised| |Treasury|Realised| | |
| | share| Share|redemption| capital| Special| shares| capital| Revenue| |
|Â |capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
| | £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 1 | | | | | | | | | |
|January | | | | | | | | | |
|2010 | | | | | | | | | |
|(audited) | 24,680| 259| 400| (10,083)| 21,327| (1,372)| 845| 1,056| 37,112|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Realised | | | | | | | | | |
|losses | -| -| -| -| -| -| (161)| -| (161)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Unrealised | | | | | | | | | |
|losses | -| -| -| (230)| -| -| -| -| (230)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Transfer of | | | | | | | | | |
|previously | | | | | | | | | |
|unrealised | | | | | | | | | |
|losses to | | | | | | | | | |
|realised | | | | | | | | | |
|losses | -| -| -| 1,001| -| -| (1,001)| -| -|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Capitalised | | | | | | | | | |
|investment | | | | | | | | | |
|management | | | | | | | | | |
|fees | -| -| -| -| -| -| (673)| -| (673)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Tax relief | | | | | | | | | |
|on costs | | | | | | | | | |
|charged to | | | | | | | | | |
|capital | -| -| -| -| -| -| 183| -| 183|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Purchase of | | | | | | | | | |
|own treasury| | | | | | | | | |
|shares | -| -| -| -| -| (794)| -| -| (794)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Issue of | | | | | | | | | |
|equity (net | | | | | | | | | |
|of costs) | 92| 35| -| -| -| -| -| -| 127|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Transfer | | | | | | | | | |
|from Special| | | | | | | | | |
|reserve to | | | | | | | | | |
|Realised | | | | | | | | | |
|capital | | | | | | | | | |
|reserve** | -| -| -| -| (5,152)| -| 5,152| -| -|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Revenue | | | | | | | | | |
|return | | | | | | | | | |
|attributable| | | | | | | | | |
|to | | | | | | | | | |
|shareholders| -| -| -| -| -| -| -| 580| 580|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|Dividends | | | | | | | | | |
|paid | -| -| -| -| (1,261)| -| (67)| (725)|(2,053)|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 31 | | | | | | | | | |
|December | | | | | | | | | |
|2010 | | | | | | | | | |
|(audited) | 24,772| 294| 400| (9,312)| 14,914| (2,166)| 4,278| 911| 34,091|
+------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+
*Included within these reserves is an amount of £7,934,000 (30 June 2010:
£10,486,000; 31 December 2010: £8,625,000) which is considered distributable.
The Special reserve has been treated as distributable in determining the amounts
available for distribution.
** The Special reserve allows the Company, amongst other things, to facilitate
the payment of dividends earlier than would otherwise have been possible as
transfers can be made from this reserve to the Realised capital reserve to
offset gross losses on disposal of investments. Accordingly, a transfer from
the Special reserve to the Realised capital reserve of £2,807,000 in respect of
the Ordinary shares and £2,345,000 in respect of the C shares, representing
gross realised losses on disposal of investments from launch to 31 December
2010, was made in the year ended 31 December 2010. Further transfers from the
Special reserve to the Realised capital reserve of £4,391,000, representing
historical capital dividends paid, and to the Revenue reserve of £998,000,
representing the dividend paid on 28 April 2011, were made in the period to 30
June 2011.
Summary cash flow statement
+----------------------+----+----------------+----------------+----------------+
| | | | Combined | |
| | | | Ordinary and | Combined |
| | | | C | Ordinary |
| | |Ordinary shares | shares | and C shares |
| | | Unaudited | Unaudited | Audited |
| | |six months ended|six months ended| year ended |
| | | 30 June 2011 | 30 June 2010 |31 December 2010|
| |Note| £'000 | £'000 | £'000 |
+----------------------+----+----------------+----------------+----------------+
|Operating activities | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Investment income | | | | |
|received | Â | 531| 513| 1,095|
+----------------------+----+----------------+----------------+----------------+
|Deposit interest | | | | |
|received | Â | 20| 76| 105|
+----------------------+----+----------------+----------------+----------------+
|Dividend income | | | | |
|received | Â | -| -| 4|
+----------------------+----+----------------+----------------+----------------+
|Investment management | | | | |
|fees paid | Â | (428)| (453)| (904)|
+----------------------+----+----------------+----------------+----------------+
|Other cash payments | Â | (134)| (125)| (193)|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow from | | | | |
|operating activities | 8| (11)| 11| 107|
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Taxation | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|UK corporation tax | | | | |
|recovered | Â | 162| 132| 131|
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Capital expenditure | | | | |
|and financial | | | | |
|investments | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Purchase of fixed | | | | |
|asset investments | Â | (3,131)| (2,262)| (5,148)|
+----------------------+----+----------------+----------------+----------------+
|Disposal of fixed | | | | |
|asset investments | Â | 2,824| 860| 2,776|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow from | | | | |
|investing activities | Â | (307)| (1,402)| (2,372)|
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Management of liquid | | | | |
|resources | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Purchase of current | | | | |
|asset investment | Â | (1,000)| -| -|
+----------------------+----+----------------+----------------+----------------+
|Disposal of current | | | | |
|asset investment | Â | 1,000| -| -|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow from | | | | |
|liquid resources | Â | -| -| -|
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Equity dividends paid | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Dividends paid (net of| | | | |
|cost of issuing shares| | | | |
|under the Dividend | | | | |
|Reinvestment Scheme) | Â | (914)| (962)| (1,911)|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow before | | | | |
|financing | Â | (1,070)| (2,221)| (4,045)|
+----------------------+----+----------------+----------------+----------------+
|Â | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Financing | Â | Â | Â | Â |
+----------------------+----+----------------+----------------+----------------+
|Issue of share capital| Â | 1,672| -| -|
+----------------------+----+----------------+----------------+----------------+
|Purchase of own shares| Â | (761)| (321)| (794)|
+----------------------+----+----------------+----------------+----------------+
|Costs of issue of | | | | |
|share capital | Â | (7)| (12)| (15)|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow from | | | | |
|financing | Â | 904| (333)| (809)|
+----------------------+----+----------------+----------------+----------------+
|Net cash flow in the | | | | |
|period | 9| (166)| (2,554)| (4,854)|
+----------------------+----+----------------+----------------+----------------+
Notes to the unaudited summarised Financial Statements for the six months to 30
June 2011
1. Accounting convention
The Financial Statements have been prepared in accordance with the historical
cost convention, modified to include the revaluation of investments, in
accordance with applicable United Kingdom law and accounting standards and with
the Statement of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" ("SORP") issued by the Association of
Investment Companies ("AIC") in January 2009. Accounting policies have been
applied consistently in current and prior periods.
2. Accounting policies
Investments
Unquoted equity investments, debts issued at a discount and convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement",
unquoted equity investments, debts issued at a discount and convertible bonds
are designated as fair value through profit or loss ("FVTPL"). Fair value is
determined by the Directors in accordance with the September 2009 International
Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).
Fair value movements on equity investments and gains and losses arising on the
disposal of investments are reflected in the capital column of the Income
statement in accordance with the AIC SORP and realised gains or losses on the
sale of investments are reflected in the realised capital reserve, and
unrealised gains or losses arising from the revaluation of investments are
reflected in the unrealised capital reserve.
Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if their
exercise or contractual conversion terms would allow them to be exercised as at
the balance sheet date, and if there is additional value to the Company in
exercising as at the balance sheet date. Otherwise these instruments are held at
nil value. The valuation techniques used are those used for the underlying
equity investment.
Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a discount)
is classified as loans and receivables in accordance with FRS 26 and carried at
amortised cost using the Effective Interest Rate method less impairment.
Movements in respect of capital provisions are reflected in the capital column
of the Income statement and are reflected in the realised capital reserve
following sale, or in the unrealised capital reserve on revaluation.
For all unquoted loan stock, fully performing, renegotiated, past due and
impaired, the Board considers that the fair value is equal to or greater than
the security value of these assets. For unquoted loan stock, the amount of the
impairment is the difference between the asset's cost and the present value of
estimated future cash flows, discounted at the effective interest rate. The
future cash flows are estimated based on the fair value of the security held
less estimated selling costs.
Bonds and floating rate notes
In accordance with FRS 26, bonds and floating rate notes are designated as fair
value through profit or loss and are valued at market bid price at the balance
sheet date. Bonds and floating rate notes are classified as current asset
investments as they are investments held for the short term.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of an
investment.
Dividend income is not recognised as part of the fair value movement of an
investment, but is recognised separately as investment income through the
revenue reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part of the
carrying value of the loans and receivables at the end of each reporting period.
It is not the Company's policy to exercise control or significant influence over
investee companies. Therefore in accordance with the exemptions under FRS 9
"Associates and joint ventures", those undertakings in which the Company holds
more than 20 per cent. of the equity are not regarded as associated
undertakings.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-
dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on a time
apportionment basis using the effective interest rate over the life of the
financial instrument. Income which is not capable of being received within a
reasonable period of time is reflected in the capital value of the investment.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest
agreed with the bank.
Investment management fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged
through the revenue account except the following which are charged through the
realised capital reserve:
* 75 per cent. of management fees are allocated to the capital account to the
extent that these relate to an enhancement in the value of the investments
and in line with the Board's expectation that over the long term 75 per
cent. of the Company's investment returns will be in the form of capital
gains; and
* expenses which are incidental to the purchase or disposal of an investment
are charged through the realised capital reserve.
Total expenses including management fees and excluding performance fees will not
exceed 3.5 per cent. of net asset value at the year end.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be
allocated between revenue and realised capital reserves based upon the
proportion to which the calculation of the fee is attributable to revenue and
capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current tax".
Taxation associated with capital expenses is applied in accordance with the
SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in
full on timing differences that result in an obligation at the balance sheet
date to pay more tax or a right to pay less tax, at a future date, at rates
expected to apply when they crystallise based on current tax rates and law.
Timing differences arise from the inclusion of items of income and expenditure
in taxation computations in periods different from those in which they are
included in the financial statements. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be recovered.
The specific nature of taxation of venture capital trusts means that it is
unlikely that any deferred tax will arise. The Directors have considered the
requirements of FRS 19 and do not believe that any provision should be made.
Reserves
Share premium
This reserve accounts for the difference between the price paid for shares and
the nominal value of the shares, less issue costs and transfers to the special
reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end
against cost are included in this reserve.
Redenomination Reserve
This reserve accounts for the difference between the nominal value of the total
C shares in issue on 31 March 2011 and the nominal value of the Ordinary shares
into which those C shares converted on the same date. The reserve is non-
distributable.
Special reserve
The cancellation of the share premium account has created a special reserve that
can be used to fund market purchases and subsequent cancellation of own shares,
to cover gross realised losses, and for other distributable purposes.
Treasury shares reserve
This reserve accounts for amounts by which the distributable reserves of the
Company are diminished through the repurchase of the Company's own shares for
treasury.
Realised capital reserve
The following are disclosed in this reserve:
* gains and losses compared to cost on the realisation of investments;
* expenses, together with the related taxation effect, charged in accordance
with the above policies; and
* dividends paid to equity holders.
Dividends
In accordance with FRS 21 "Events after the balance sheet date", dividends
declared by the Company are accounted for in the period in which the dividend
has been paid or approved by shareholders in an Annual General Meeting.
3. Gains/(losses) on investments
Combined
Combined Ordinary Ordinary
Ordinary shares and C shares and C shares
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2011 30 June 2010 31 December 2010
 £'000 £'000 £'000
--------------------------------------------------------------------------------
Unrealised (losses)/gains on
fixed asset investments held
at fair value through profit
or loss account (327) 158 113
Unrealised
gains/(impairments) on fixed
asset investments held at
amortised cost 101 (197) (333)
----------------------------------------------------
Unrealised (losses) on fixed
asset investments (226) (39) (220)
Unrealised losses on current
asset investments held at
fair value through profit or
loss account - (3) (10)
----------------------------------------------------
Unrealised (losses) sub-
total (226) (42) (230)
Realised gains/(losses) on
investments held at fair
value through profit or loss
account 712 208 (56)
Realised gains/(losses) on
investments held at
amortised cost 541 (78) (105)
Realised losses on current
asset investments held at
fair value through profit or
loss account (5) - -
----------------------------------------------------
Realised gains/(losses)
subtotal 1,248 130 (161)
----------------------------------------------------
Total 1,022 88 (391)
----------------------------------------------------
Investments valued on an amortised cost basis are unquoted loan stock
instruments as described in note 2.
4. Investment income
 Combined Ordinary Combined Ordinary
Ordinary shares and C shares and C shares
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2011 30 June 2010 31 December 2010
£'000 £'000 £'000
--------------------------------------------------------------------------------
Income recognised on
investments held at fair
value through profit or
loss account
UK dividend income - - 4
Floating rate note interest 10 13 27
Income from convertible
bonds and discounted debt 22 29 53
Other income 2 4 2
-----------------------------------------------------
 34 46 86
Income recognised on
investments held at
amortised cost
Return on loan stock
investments 531 518 1,017
Bank deposit interest 19 65 94
-----------------------------------------------------
 550 583 1,111
-----------------------------------------------------
 584 629 1,197
-----------------------------------------------------
All of the Company's income is derived from operations based in the United
Kingdom.
5. Dividends
Unaudited Unaudited six months Audited year ended
 six months ended 30 June 2010 31 December 2010
ended
30 June 2011 Ordinary shares C shares Ordinary shares C shares
 £'000 £'000 £'000 £'000 £'000
--------------------------------------------------------------------------------
Dividend of 4.0p
per Ordinary
share paid on 21
May 2010 - 512 - 512 -
Dividend of 1.5p
per C share paid
on 21 May 2010 - - 521 - 521
Dividend of 4.0p
per Ordinary
share paid on 29
October 2010 - - - 510 -
Dividend of 1.5p
per C share paid
on 29 October
2010 - - - - 510
Dividend of 2.5p
per Ordinary
share paid on 28
April 2011 998 - - - -
---------------------------------------------------------------
 998 512 521 1,022 1,031
---------------------------------------------------------------
The Directors have declared a dividend of 2.5 pence per Ordinary share (total
approximately £990,000) payable on 28 October 2011 to shareholders on the
register as at 30 September 2011.
6. Basic and diluted return/(loss) per share
Ordinary shares Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2011 30 June 2010 2010
-------------------------------------------------------------------------------
 Revenue Capital Revenue Capital Revenue Capital
Return/(loss) attributable to
Ordinary shares (£'000) 288 777 113 303 208 132
Weighted average shares in
issue 39,783,152 12,841,483 12,800,207
Return/(loss)Â per Ordinary
share (pence) 0.7 2.0 0.9 2.4 1.6 1.0
C shares Unaudited Audited
six months ended year ended
 30 June 2010 31 December 2010
--------------------------------------------------------------------------------
   Revenue Capital Revenue Capital
Return/(loss) attributable to
C shares (£'000)   182 (477) 372 (1,013)
Weighted average shares in
issue  35,502,164 34,251,343
Return/(loss) per C share
(pence) (1.4) 1.1 (3.0)
  0.5
There are no convertible instruments, derivatives or contingent share agreements
in issue for Albion Technology & General VCT PLC hence there are no dilution
effects to the return per share. The basic return per share is therefore the
same as the diluted return per share.
7. Share capital
Ordinary shares Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2011 30 June 2010 31 December 2010
£'000 £'000 £'000
--------------------------------------------------------------------------------
Authorised
70,000,000 Ordinary shares of
50p each (30 June 2010 and
31 December 2010: 70,000,000) 35,000 35,000 35,000
---------------------------------------------------
Allotted, called up and fully
paid
43,618,301 Ordinary shares of
50p each (30 June
2010: 13,735,783; 31 December
2010: 13,770,233) 21,809 6,868 6,885
---------------------------------------------------
Voting rights
39,961,929 Ordinary shares of 50p each (net of treasury shares) (30 June
2010: 12,847,689; 31 December 2010: 12,644,363).
C shares Unaudited Audited
six months ended year ended
30 June 2010 31 December 2010
 £'000 £'000
--------------------------------------------------------------------------------
Authorised
30 June 2010 and 31 December
2010: 40,000,000 Â 20,000 20,000
----------------------------------
Allotted, called up and fully
paid
30 June 2010: 35,714,640; 31
December 2010: 35,774,708 Â 17,857 17,887
----------------------------------
Voting rights
34,115,722 C shares of 50p each (net of treasury shares) at 30 June 2010, and
33,788,441 C shares of 50p each at 31 December 2010
Conversion of C shares and Ordinary shares
In accordance with the Articles of Association, on 31 March 2011, the C shares
converted to Ordinary shares on the basis of the net assets attributable to the
Ordinary shares and the C shares as disclosed in the audited accounts for the
year ended 31 December 2010 and in accordance with the calculation as described
and approved by shareholders' resolution number 4 at the Extraordinary General
Meeting on 8 December 2005. C shareholders received 0.7779 Ordinary shares for
each C share they owned as at 31 March 2011. New certificates were sent to C
shareholders on or before 30 April 2011. Following receipt of the new Ordinary
share certificates, the existing C share certificates are now worthless and
should be destroyed.
Under the terms of the Dividend Reinvestment Scheme Circular dated 18 April
2008, the following Ordinary shares of nominal value 50 pence were allotted:
Mid-market price
per
Issue price Net consideration share on allotment
Date of Number of (pence per received date
allotment shares allotted share) (£'000) (pence per share)
--------------------------------------------------------------------------------
16 May 2011 96,099 85.1 82 78.0
During the period from 1 January to 30 June 2011, the Company issued the
following New Ordinary shares and C shares of nominal value 50 pence under the
Albion VCTs Linked Top Up Offer:
Ordinary shares
Mid-market price
per
share on
Issue price Net consideration allotment date
Date of Number of (pence per received (pence per
allotment shares allotted share) (£'000) share)
--------------------------------------------------------------------------------
7 January 2011 344,862 94.8 309 78.0
22 March 2011 360,737 90.1 307 78.0
5 April 2011 474,229 90.1 404 78.0
16 May 2011 39,825 91.1 34 78.0
----------------- -------------------
 1,219,653  1,054
C Shares*
Mid- market
price per
share on
Issue price Net consideration allotment date
Date of Number of (pence per received (pence per
allotment shares allotted share) (£'000) share)
--------------------------------------------------------------------------------
7 January 2011 440,166 74.3 309 61.0
22 March 2011 463,769 70.1 307 60.0
----------------- ---------------------
 903,935  616
*These C shares subsequently converted to Ordinary shares on 31 March 2011 at a
ratio of 0.7779 Ordinary shares for each C share.
During the period to 30 June 2011 the Company purchased 723,000 Ordinary shares
and 337,300 C shares to be held in treasury at a cost of £561,000 and £200,000
respectively, representing 5.7% of the Ordinary shares and 1.0% of the C shares
in issue (excluding treasury shares) as at 1 January 2011. The shares purchased
for treasury were funded from the Treasury shares reserve.
The total number of Ordinary shares held in treasury as at 30 June 2011 was
3,656,372 (30 June 2010: 888,094; 31 December 2010: 1,125,870) representing
8.4% of issued share capital as at 30 June 2011.
8. Reconciliation of revenue return on ordinary activities before taxation to
net cash inflow from operating activities
Combined
Combined Ordinary Ordinary and C
Ordinary shares and C shares shares
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2011 30 June 2010 31 December 2010
£'000 £'000 £'000
--------------------------------------------------------------------------------
Revenue return on ordinary
activities before tax 364 412 778
Investment management fee
charged to capital (330) (344) (673)
Movement in accrued
amortised loan stock
interest (39) (31) 14
(Increase)/decrease in
operating debtors (10) 11 18
Decrease/(increase) in
operating creditors 4 (37) (30)
----------------------------------------------------
Net cash flow from operating
activities (11) 11 107
----------------------------------------------------
9. Analysis of change in cash during the period
Combined Ordinary Combined
Ordinary shares and C shares Ordinary and C shares
Unaudited Unaudited Audited
six months ended six months ended year ended
30 June 2011 30 June 2010 31 December 2010
 £'000 £'000 £'000
------------------------------------------------------------------------------
Opening cash balances 3,895 8,749 8,749
Net cash (outflow) (166) (2,554) (4,854)
---------------------------------------------------------
End of the period 3,729 6,195 3,895
---------------------------------------------------------
10. Post balance sheet events
Since 30 June 2011, the Company has completed the following material
transactions:
- Investment in Orchard Portman Hospital Limited of £30,000 in July 2011;
- Investment in Helveta Limited of £151,000 in July 2011;
- Investment in Rostima Holdings Limited of £79,000 in July 2011;
- Receipt of £103,000 of deferred consideration in respect of the disposal of
Green Energy Property Services Group Limited in July 2011;
- Receipt of £54,000 of deferred consideration in respect of the disposal of
Dexela Limited in August 2011.
11. Related party transactions
The Manager, Albion Ventures LLP, is considered to be a related party by virtue
of the fact that Patrick Reeve, a Director of the Company, is also the Managing
Partner of the Manager. The Manager is party to a management agreement with the
Company. During the period, services of a total value of £439,000 (30 June
2010: £459,000; 31 December 2010: £898,000) were purchased by the Company from
Albion Ventures LLP. At the financial period end, the amount due to Albion
Ventures LLP in respect of these services was £227,000 (30 June 2010: £225,000;
31 December 2010: £229,000).
Patrick Reeve is the Managing Partner of the Manager, Albion Ventures LLP.
During the year, the Company was charged £11,000 (including VAT) by Albion
Ventures LLP in respect of his services as a Director (30 June 2010: £10,000;
31 December 2010: £21,000). At the period end, the amount due to Albion
Ventures LLP in respect of these services was £5,000 (30 June 2010: £5,000; 31
December 2010: £5,000).
Albion Ventures LLP holds 1,012 fractional entitlement shares of the Company as
a result of the conversion of C shares to Ordinary shares on 31 March 2011.
There are no other related party transactions or balances requiring disclosure.
12. Â Going concern
The Board's assessment of liquidity risk remains unchanged since the last Annual
Report and Financial Statements for the year ended 31 December 2010, and is
detailed on page 33 of those accounts. The Company has adequate cash and liquid
resources. The portfolio of investments is diversified in terms of sector, and
the major cash outflows of the Company (namely investments, dividends and share
buy-backs) are within the Company's control. Accordingly, after making diligent
enquiries, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable
future. For this reason, the Directors have adopted the going concern basis in
preparing this Half-yearly Financial Report and this is in accordance with
'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009'
published by the Financial Reporting Council.
13. Risks and uncertainties
The Board considers that the Company faces the following major risks and
uncertainties:
1. Investment risk
This is the risk of investment in poor quality assets which reduces the capital
and income returns to shareholders, and negatively impacts on the Company's
reputation. By nature, smaller unquoted businesses, such as those that qualify
for venture capital trust purposes, are more fragile than larger, long
established businesses. To reduce this risk, the Board places reliance upon the
skills and expertise of the Manager and its strong track record for investing in
this segment of the market. In addition, the Manager operates a formal and
structured investment process, which includes an Investment Committee,
comprising investment professionals from the Manager and at least one external
investment professional. The Manager also invites comments from non-executive
Directors of the Company on investments discussed at the Investment Committee
meetings. Investments are actively and regularly monitored by the Manager
(investment managers normally sit on investee company boards) and the Board
receives detailed reports on each investment as part of the Manager's report at
quarterly board meetings.
2. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows investors to
take advantage of tax reliefs on initial investment and ongoing tax free capital
gains and dividend income. Failure to meet the qualifying requirements could
result in investors losing the tax relief on initial investment and loss of tax
relief on any tax-free income or capital gains received. In addition, failure to
meet the qualifying requirements could result in a loss of listing of the
shares. To reduce this risk, the Board has appointed the Manager, who has a team
with significant experience in venture capital trust management, used to
operating within the requirements of the venture capital trust legislation. In
addition, to provide further formal reassurance, the Board has appointed
PricewaterhouseCoopers LLP as its taxation advisors. PricewaterhouseCoopers LLP
report quarterly to the Board to independently confirm compliance with the
venture capital trust legislation, to highlight areas of risk and to inform on
changes in legislation.
3. Compliance risk
The Company is listed on The London Stock Exchange and is required to comply
with the rules of the UK Listing Authority, as well as with the Companies Act,
Accounting Standards and other legislation. Failure to comply with these
regulations could result in a delisting of the Company's shares, or other
penalties under the Companies Act or from financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior levels
within quoted businesses. In addition, the Board and the Manager receive regular
updates on new regulation from its auditors, lawyers and other professional
bodies.
4. Internal control risk
Failures in key controls, within the Board or within the Manager's business,
could put assets of the Company at risk or result in reduced or inaccurate
information being passed to the Board or to shareholders. The Audit Committee
meets with the Manager's internal auditors Littlejohn LLP at least once a year,
receiving a report regarding the last formal internal audit performed on the
Manager, and providing the opportunity for the Audit Committee to ask specific
and detailed questions. During the year the Board met with the internal audit
Partner of Littlejohn LLP to discuss the most recent Internal Audit Report on
the Manager. The Manager has a comprehensive business continuity plan in place
in the event that operational continuity is threatened. Further details
regarding the Board's management and review of the Company's internal controls
through the implementation of the Turnbull guidance are detailed on pages 32 and
33 of the Financial Statements for the year ended 31 December 2010. Measures
are in place to mitigate information risk in order to ensure the integrity,
availability and confidentiality of information used within the business.
5. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions. There are
provisions within the management agreement for the change of Manager under
certain circumstances (for further detail, see the management agreement
paragraph on page 26 of the Financial Statements for the year ended 31 December
2010). In addition, the Manager has demonstrated to the Board that there is no
undue reliance placed upon any one individual within Albion Ventures LLP.
6. Financial risks
By its nature, as a venture capital trust, the Company is exposed to investment
risk (which comprises investment price risk and cash flow interest rate risk),
credit risk and liquidity risk. The Company's policies for managing these risks
and its financial instruments are outlined in full in note 19 to the Financial
Statements for the year ended 31 December 2010. All of the Company's income and
expenditure is denominated in sterling and hence the Company has no foreign
currency risk. The Company is financed through equity and does not have any
borrowings. The Company does not use derivative financial instruments.
14. Other information
The information set out in this Half-yearly Financial Report does not constitute
the Company's statutory accounts within the terms of section 434 of the
Companies Act 2006 for the periods ended 30 June 2011 and 30 June 2010, and is
unaudited. The information for the year ended 31 December 2010 does not
constitute statutory accounts within the terms of section 434 of the Companies
Act 2006 but is derived from the audited statutory accounts for the financial
year, which were unqualified and which have been delivered to the Registrar of
Companies. The Auditors reported on those accounts; their report was unqualified
and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.
15. Publication
This Half-yearly Financial Report is being sent to shareholders and copies will
be made available to the public at the registered office of the Company,
Companies House, the National Storage Mechanism and also electronically at
www.albion-ventures.co.uk under the 'Our Funds' section by clicking Albion
Technology & General VCT PLC, and looking in the Financial Reports and Circulars
section for the Half-yearly Financial Report to 30 June 2011.
Pie chart:
http://hugin.info/141704/R/1540123/470808.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Albion Technology & General VCT PLC - Ordinary Shares via Thomson Reuters ONE
[HUG#1540123]
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