Final Results

Final Results

Hargreave Hale AIM 1

Hargreave Hale AIM VCT1 plc

Preliminary Announcement of Final Results for the year ending 30 September 2012.

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 30 September):   2012   2011
 
Net asset value per share 61.35p 61.14p
Cumulative distributions paid per share since launch 26.5p 23.0p
Total return 87.85p 84.14p
 
Discount to Net Asset Value (based on bid-market price at balance sheet date) 7.1% 13.3%
 
Annual Returns per share:
Revenue return (0.30)p (0.25)p
Capital return 3.94p 2.31p
Combined Return 3.64p 2.06p
 
Dividends per share:
Interim paid 1.5p 2.0p
Final proposed 1.75p 2.0p
Total dividend for year 3.25p 4.0p
 
Performance Benchmark:
Total Return 92.5% 88.6%
FTSE AIM All-share Index 73.2% 72.7%
(results rebased to 100 at 29 October 2004)

CHAIRMAN’S STATEMENT

Introduction

At 30 September 2012 the NAV was 61.35 pence which after adding back the dividends paid gives a total return since inception of 87.85 pence. The gain per ordinary share for the year was 3.64 pence per share (comprising revenue loss of 0.30 pence and capital gains of 3.94 pence).

Investments

The Investment Manager, Hargreave Hale Limited, invested a further £1.93 million in 9 qualifying companies during the year. The Fair Value of qualifying investments at 30 September 2012 was £12.65 million invested in 38 AIM companies and 4 unquoted companies. £2.83 million was held in a mix of cash, fixed income and other non-qualifying equities.

Dividend

An interim dividend of 1.5 pence was paid on 4 July 2012 (Interim 2011 – 2 pence).

A final dividend of 1.75 pence is proposed (2011 – 2 pence) which, subject to shareholder approval at the AGM will be paid on 25 January 2013, to ordinary shareholders on the register on 4 January 2013.

The directors have maintained a dividend policy of at least 5 per cent. of the year end NAV. Subject to market conditions they expect that this will continue.

Buybacks

We were pleased that we were able to maintain our policy of offering our shareholders an efficient exit route through the buyback scheme. In total, 1,292,345 Shares were purchased during the year at an average price of 56.4 pence per share. In addition to this 8,326,006 shares were repurchased through the Enhanced Share Buy Back.

Offer for Subscription of Ordinary Shares

On the 29 February 2012 the Directors of Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc announced the launch of a new offer for subscription of new shares in both VCT’s. The companies also launched Enhanced Share Buy Backs for existing shareholders who have held their shares for at least 5 years.

Both the offers for subscription and the Enhanced Share Buy Back were approved by shareholders of the Company at a General Meeting on 26 March 2012.

The Enhanced Share Buy Back for the 2011/12 tax year resulted in 8,326,006 Ordinary shares being purchased by the Company for cancellation and 8,068,056 new Ordinary shares being issued by the Company raising gross proceeds of £5.16 million under the terms of the Enhanced Share Buy Back. A maximum of 9,000,000 Ordinary Shares could be repurchased by the Company and so all applications have been accepted in full.

On the 5 April 2012 the Company announced that as the minimum subscription condition required for the C Share Offer to proceed had not been satisfied by 12pm on 5 April 2012 in accordance with the terms of the C Share Offer set out in the prospectus issued by the Company dated 29 February 2012 (the "Prospectus"), the C Share Offer would not proceed. All subscription monies received by the Company for C Shares were returned to investors in accordance with the terms of the Prospectus.

VCT Status

To maintain its VCT qualifying status we must invest at least 70% of the net funds raised in any one accounting period in qualifying investments within three years. At the yearend we have achieved 93.85% per cent. and have satisfied all the relevant tests.

Outlook

In spite of the dire financial position of many countries in the EU the stock market has been remarkably resilient over the last 12 months. The FTSE 100 rose by 11.96% however the AIM index only rose by 0.77% which may be an indication that in turbulent times investors flee to the perceived quality of larger companies.

The probability of one or more EU countries defaulting on its loans seems to be highly likely. The resulting fall-out from this is difficult to predict. Such upheaval will inevitably have an impact on our portfolio valuations but one would hope that it will be short lived. However the more financially secure countries appear to be committed to ensuring that any one country’s financial crash will be contained. This seems to be the main driver of confidence. Whether this confidence is misplaced will become apparent in due course.

It seems likely that the UK economy is set for a period of low or no growth for several years to come. This itself is not a reason for gloom, most companies in which your fund is invested have sound business models and good management which are not solely dependent on general economic growth for their prosperity.

Sir Aubrey Brocklebank

Chairman

Date: 19 December 2012

The Directors each confirm to the best of their knowledge that:

a) the financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b) the Annual Report, to be published shortly, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

INCOME STATEMENT

For the year ended 30 September 2012

   
Revenue   Capital   Total
£000 £000 £000
Net gain on investments held at fair value through profit or loss - 1,184 1,184
Income 217 - 217
-------- -------- --------
217 1,184 1,401
-------- -------- --------
Management fee (58) (174) (232)
Other expenses (236) - (236)
-------- -------- --------
(294) (174) (468)
-------- -------- --------
(Loss)/Profit on ordinary activities before taxation (77) 1,010 933
Taxation - - -
-------- -------- --------
(Loss)/Profit after taxation (77) 1,010 933
-------- -------- --------
(Loss)/Profit per share (pence) (0.30) 3.94 3.64

 

-------- -------- --------

INCOME STATEMENT

For the year ended 30 September 2011

 
Revenue   Capital   Total
£000 £000 £000
Net gain on investments held at fair value through profit or loss - 809 809
Income 279 - 279
-------- -------- --------
279 809 1,088
-------- -------- --------
Management fee (65) (196) (261)
Other expenses (280) - (280)
-------- -------- --------
(345) (196) (541)
-------- -------- --------
(Loss)/Profit on ordinary activities before taxation (66) 613 547
Taxation - - -
-------- -------- --------
(Loss)/Profit after taxation (66) 613 547
-------- -------- --------
(Loss)/Profit per share (pence) (0.25) 2.31 2.06
-------- -------- --------

The total column of these statements is the income statement of the Company. All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than the profit for the year.

BALANCE SHEET

Company registration number: 5206425

As at 30 September 2012 (in England and Wales)

  2012

 

2011

 
£000 £000
 
Fixed assets
Investments at fair value through profit or loss 14,621 15,141
-------- --------
 
Current assets
Debtors 28 52
Cash at bank 863 1,202
-------- --------
891 1,254
 
Creditors: amounts falling due within one year (173) (161)
-------- --------
Net current assets 718 1,093
-------- --------
Net assets 15,339 16,234
-------- --------
 
Capital and Reserves
Called up share capital 277 292
Special reserve 11,808 18,632
Capital reserve – realised (5,786) (4,882)
Capital reserve – unrealised 1,460 (454)
Revenue reserve 42 119
Share Premium 6,667 1,752
Capital redemption reserve 871 775
-------- --------
Equity shareholders’ funds 15,339 16,234
-------- --------
 
Net asset value per share 61.35p 61.14p

These financial statements were approved and authorised for issue by the Board of Directors on 19 December 2012 and signed on its behalf by

Sir Aubrey Brocklebank Bt

Chairman

CASH FLOW STATEMENT

For the year ending 30 September 2012

  2012

 

2011

 
  £000 £000
Net cash (outflow) from operating activities (215) (219)
Net financial investment 1,704 1,198
Dividends paid (906) (1,063)
--------- ---------
Cash inflow/(outflow) before management of liquid resources 583 (84)
Financing (922) 198
--------- ---------
(Decrease)/Increase in cash (339) 114
--------- ---------
 
Opening Cash 1,202 1,088
Closing Cash 863 1,202

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS

For the year ending 30 September 2012

 

 

Share Capital

  Capital Redemption Reserve   Capital Reserve Realised   Capital Reserve Unrealised  

Special Reserve

 

Share Premium

 

Revenue Reserve

 

Total

£000 £000 £000 £000 £000 £000 £000 £000
At 1 October 2011 292 775 (4,882) (454) 18,632 1,752 119 16,234
 
Share buybacks (96) 96 - - (5,918) - - (5,918)
Subscriptions 81 - - - - 4,915 - 4,996
Equity dividends paid   -   -   -   -   (906)   -   -   (906)
Realised losses on investments - - (730) - - - - (730)
Unrealised gains on investments - - - 1,914 - - - 1,914
Management fee charged to capital - - (174) - - - - (174)
Revenue loss after taxation for the year   -   -   -   -   -   -   (77)   (77)
Total profit after taxation - - (904) 1,914 - - (77) 933
 
------ ------ --------- --------- --------- --------- ------ ---------
At 30 September 2012 277 871 (5,786) 1,460 11,808 6,667 42 15,339
------ ------ --------- --------- --------- --------- ------ ---------

Reserves available for distribution are capital reserve realised, special reserve and revenue reserve.

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS

For the year ending 30 September 2011

 

Share Capital

Capital Redemption Reserve Capital Reserve Realised Capital Reserve Unrealised

Special Reserve

Share Premium

Revenue Reserve

Total

£000 £000 £000 £000 £000 £000 £000 £000
At 1 October 2010 291 762 (3,637) (2,312) 21,263 - 185 16,552
 
Transfer for Share Subscriptions** - - - - (812) 812 - -
Share buybacks (13) 13 - - (756) - - (756)
Subscriptions 14 - - - - 940 - 954
Equity dividends paid - - - - (1,063) - - (1,063)
Realised losses on investments - - (1,049) - - - - (1,049)
Unrealised gains on investments - - - 1,858 - - - 1,858
Management fee charged to capital - - (196) - - - - (196)
Revenue loss after taxation for the year - - - - - - (66) (66)
Total profit after taxation - - (1,245) 1,858 - - (66) 547
 
------ ------ --------- --------- --------- --------- ------ ---------
At 30 September 2011 292 775 (4,882) (454) 18,632 1,752 119 16,234
------ ------ --------- --------- --------- --------- ------ ---------

**The transfer represents the premium of subscriptions made in 2010 that were originally recorded in the special reserve.

Notes to the preliminary announcement

1. The financial information set out in this preliminary announcement does not constitute the Company’s statutory accounts for the years ended 30 September 2012 or 30 September 2011. Statutory accounts for the year ended 30 September 2011 have been filed with the Registrar of Companies and those of the year ended 30 September 2012 will be delivered to the Registrar in due course; both have been reported on by the Independent Auditors. The independent auditors’ reports on the Statutory accounts for the years ended 30 September 2011 and 30 September 2012 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The financial information in this preliminary announcement has been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with UK GAAP and with the Statement of Recommended Practice (SORP) for Financial Statements of Investment Trust Companies issued in January 2009. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the year ended 30 September 2012. The full statutory annual accounts will be published in December 2012. Copies may in due course be obtained during normal business hours from Hargreave Hale Limited, 9-11 Neptune Court, Hallam Way, Blackpool, FY4 5LZ.

The Annual general meeting of the company will be held at the Company’s registered office on 23 January 2013 at 11.00am.

2. Revenue return per ordinary share is based on a net revenue loss on ordinary activities after tax of £76,754 (2011 -£66,278 loss) and on 25,634,536 (2011 - 26,527,597) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on a net capital profit on ordinary activities after tax of £1,009,644 (2011 - £613,000) and on 25,634,536 (2011 - 26,527,597) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

3. The net asset value per ordinary share at 30 September 2012 of 61.35p (2011 – 61.14p) is based on net assets of £15,338,810 (2011 - £16,233,168) and on 25,001,623 shares, being the number of ordinary shares in issue as at 30 September 2012 (2011 - 26,551,918).

INVESTMENT PORTFOLIO SUMMARY

Ordinary Share Fund

As at 30 September 2012

  Cost   Valuation   Valuation
Qualifying investments £000 £000 %
 
Advanced Computer Software Group plc 340 1,202 8.22
Abcam plc 84 998 6.83
Intercede Group plc 452 890 6.09
Cohort plc 800 768 5.25
Animalcare Group plc 300 720 4.93
Idox plc 135 684 4.68
EKF Diagnostics Holdings plc 300 635 4.34
Craneware plc 150 481 3.29
K3 Business Technology Group plc 270 465 3.18
Energetix Group plc 399 459 3.14
Microsaic Systems plc 350 401 2.74
Pressure Technologies plc 340 351 2.40
Mycelx Technologies Corporation 299 350 2.39
Vertu Motors plc 600 350 2.39
TLA Worldwide plc 300 345 2.36
Sinclair IS Pharma plc 350 309 2.11
Mexican Grill Ltd (A Preference shares) 185 288 1.97
WANDisco plc 127 265 1.81
Sphere Medical Holdings plc 299 243 1.66
Hardide plc 535 217 1.49
Tangent Communications plc 300 208 1.42
Instem plc 298 204 1.39
Reneuron Group plc 398 172 1.18
Tasty plc 288 171 1.17
Plastics Capital plc 250 163 1.11
TMO Renewables Ltd 200 143 0.98
Porta Communications plc 225 124 0.85
Angel Biotechnology Holdings 240 120 0.82
Egdon Resource plc 158 116 0.79
Corac Group plc 150 107 0.74
Advanced Power Components plc 149 103 0.70
Jelf Group plc 174 100 0.68
Progressive Digital Media Group plc 172 92 0.63
Universe Group plc 210 90 0.62
Bglobal plc 259 59 0.41
Brigantes Energy Ltd 50 50 0.34
Corfe Energy Ltd 50 50 0.34
Feedback plc 194 48 0.33
Keycom plc 280 35 0.24
Maxima Holdings plc 251 33 0.23
Mexican Grill Ltd (Ordinary shares) 20 32 0.22
Invocas Group plc 169 12 0.08
Infoserve Group plc 200 1 0.01
 
-------- --------- -------
Total qualifying investments 11,300 12,654 86.55
  Cost   Valuation   Valuation
Non-Qualifying investments £000 £000 %
 
UK Treasury stock 2.5% 2016 492 600 4.10
 
-------- --------- -------
Total – UK gilts 492 600 4.10
 
Petrobras International Finance 6.25% 2026 247 276 1.89
Scottish Amicable Finance 8.5% 2049 256 263 1.79
Nationwide Building Society 7.971% 2049 242 257 1.75
-------- --------- -------
Total – UK corporate bonds 745 796 5.43
 
In-Deed Online plc 268 217 1.48
Prophotonix Ltd 110 102 0.70
Amerisur Resources plc 85 79 0.55
Entertainment One Ltd 66 74 0.51
Fastnet Oil & Gas plc 30 42 0.29
Mexican Grill Ltd (A Preference shares) 34 38 0.26
Cap-XX Ltd 30 18 0.12
Microsaic Systems plc 1 1 0.01
Energetix Group plc** 0 0 0.00
Reneuron Group plc Warrants *** 0 0 0.00
TMO Renewables Ltd Warrants *** 0 0 0.00
 
-------- --------- -------
Total – non-qualifying equities 624 571 3.92
 
-------- --------- -------
Total – non-qualifying investments 1,861 1,967 13.45
 
--------- --------- -------
Total investments 13,161 14,621 100.00
--------- --------- -------
 
** These are actual holdings of less than £500.
*** Warrants held not exercised

The majority of investments held within the portfolio are listed and/or headquartered in the UK with the exception of the following:

Cap-XX Ltd: UK listed but headquartered in Australia

Entertainment One Ltd: UK listed but headquartered in Canada

Fastnet Oil & Gas plc: UK listed but headquartered in Ireland

Mycelx Technologies Corporation: UK listed but headquartered in USA

Prophotonix Ltd: UK listed but headquartered in USA

Date: 19 December 2012

For further information please contact:

Stuart Brookes

Company Secretary

Hargreave Hale AIM VCT1 plc

0207 009 4900

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