Strategic Review and Special Dividend

Amati AIM VCT PLC

09 May 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICITON WHERE TO DO SO WOULD COSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THE JURISDICITON.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATON FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release

9 May 2024

Amati AIM VCT plc

Strategic Review and Special Dividend

In March, the Board announced that it was considering the Company's strategic options in the light of the ongoing challenges in the Alternative Investment Market ("AIM") and the resultant impact on the Company's performance. As part of this review, the Board has been working with the Company's investment manager, Amati Global Investors Limited (the "Investment Manager") on a proposal to widen the Company's investment strategy to facilitate investments in a broader range of securities while continuing to comply with the rules applicable to venture capital trusts ("VCTs"). While this opportunity has not concluded, the Board is continuing to review the strategic direction of the Company, with a view to evaluating whether there are any alternative options which may be available to the Company and in the best interests of shareholders.

As part of the review work undertaken to date, the Board has considered what (if any) action the Company may take to benefit shareholders in the near term. Following a review of the Company's current high cash levels, limited new investment opportunities on AIM and ongoing realisations from the portfolio, the Board has decided that it is appropriate to return excess cash to shareholders and so today to declare a special dividend of 10p per share, a yield of 10.9 per cent. on the Company's net asset value ("NAV") of 92.16p per share as at 30 April 2024, expected to be paid on 10 June 2024 (the "Special Dividend"). Further information on the reasons for, and the timing of, the Special Dividend are given below.

Background

The Company invests primarily in AIM traded companies.  Throughout 2023 and continuing into 2024, the Company undoubtedly faced one of the most hostile markets for junior AIM companies since the financial crisis of 2008. There has been much comment in the financial press in the past few weeks about the difficulties being experienced in the UK stock markets with no end yet in sight. This feels particularly acute in an election year where paralysis of decision making appears to have set in. Both major parties have signalled their ambitions to address the problems of delisting and their intention to create a better environment to maximise the potential for young and growing UK companies to thrive once again in public markets. There is also an apparent desire to encourage more direct investment from pension funds into the smaller growth segment of the UK market. Any such new policies will inevitably take time to work their way through to the AIM sector. At the same time and somewhat contrarily, both the major parties have made reference to the tax advantageous status of AIM regarding inheritance tax and their desire to tackle or even abolish it. This is continuing to have an unsettling effect on the future of the AIM market itself.

While the Board is hopeful that clarity and progress on such matters will emerge during the course of the election year, the outlook remains cautious. With this in mind, the Board is continuing to consider the Company's strategy from a number of points of view and it is important that such matters are given due time and consideration.  Therefore, the strategic review remains ongoing.

Special Dividend

The Board aims to pay annual dividends of around 5% of the Company's Net Asset Value at its immediately preceding financial year end, subject to the Company's distributable reserves and cash resources, and with the authority to increase or decrease this level at the Directors' discretion. As at 31 January 2024, the NAV was 94.7p. The Company paid an interim dividend of 2.5p per share in November and a second interim dividend of 2.5p per share in January, making a total for the year of 5.0p per share, which was 5.3% of year end NAV.

In the period since the Company's year end, the level of cash and current asset investments held by the Company has remained high and, as at 30 April 2024, was sitting at £42.8m. Cash and current asset investments are held mainly in a combination of interest bearing overnight bank deposits and money market funds. While such holdings have the benefit of liquidity, they do not generate exposure to the investment opportunities shareholders have entrusted the Company to find.

With the combination of the Company's cash levels remaining high, ongoing realisations in the portfolio and quality AIM investment opportunities remaining scarce, the Board has considered  how best to utilise the Company's current cash levels. Following discussion with the Investment Manager and the Company's advisers, the Board has today decided to make a distribution to shareholders by way of the Special Dividend of 10p per share representing a yield of 10.9 per cent on the NAV of 92.16p per share as at 30 April 2024.

The Special Dividend will be paid on 10 June 2024 to shareholders on the Company's register of members at close of business on 17 May 2024. The Company's shares will go ex-dividend on 16 May 2024.

Dividend Re-Investment Scheme ("DRIS")

There will be no DRIS available with the Special Dividend.

Annual General Meeting ("AGM")

The AGM this year will be held at Barber-Surgeons' Hall, Monkwell Square, Wood Street, London EC2Y 5BL starting at 2pm on Thursday 13 June 2024. This will be followed by presentations from the Investment Manager and investee companies. Further details, together with the Notice of AGM, are contained in the Company's Annual Report.

The Board recognises that the Company's AGM represents an important forum for shareholders to put questions to the Directors, to express their views on governance and to become fully informed about matters relating to the AGM resolutions. We understand that attending in person may not be possible for all shareholders who wish to attend. Therefore, the Company intends to also make available a live stream facility to allow shareholders to watch and listen to the AGM and the presentations which follow. If shareholders wish to use this facility, please register your interest by emailing [e-mail] and shortly ahead of the event the Investment Manager will post a link and instructions on how to join the event on its homepage at www.amatiglobal.com. Shareholders watching the AGM will not be counted towards the quorum of the meeting and will not be able to participate in the formal business of the meeting, including asking questions and voting on the day. The Board encourages shareholders to engage with the Board and the Investment Manager. In addition to asking questions at the AGM, shareholders can email any questions they may have on the business of the AGM to [e-mail] by 7 June 2024. The Investment Manager will publish questions together with answers on the page dedicated to the AGM on the Investment Manager's website prior to the AGM being held. The Investment Manager will reply to any individual shareholder questions submitted by the deadline of 7 June 2024, before the AGM.

Contact us

The Board is always keen to hear from shareholders. You can contact the Chair at: [e-mail].

You can also find regularly updated information on the Company, including a factsheet and performance data on the Company's website: www.amatiglobal.com.

Enquiries:

Fiona Wollocombe, Chair

Amati AIM VCT plc

Email: [e-mail]

Important Information

This announcement is released by the Company and the information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Article 7 of the UK version of the EU Market Abuse Regulation (Regulation (EU) No.596/2014) which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a Regulatory Information Service, such information is now considered to be in the public domain.

Legal Entity Identifier (LEI): 213800HAEDBBK9RWCD25

 

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