Albion Development VCT PLC: Half-yearly Financi...
Albion Development VCT PLC
LEI Code 213800FDDMBD9QLHLB38
As required by the UK Listing Authority's Disclosure Guidance and Transparency Rule 4.2, Albion Development VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 30 June 2019. This announcement was approved by the Board of Directors on 16 September 2019.
The full Half-yearly Financial Report (which is unaudited) for the period to 30 June 2019 will shortly be sent to shareholders and will be available on the Albion Capital Group LLP website by clicking www.albion.capital/funds/AADV/30Jun19.pdf.
Investment policy
The Company will invest in a broad portfolio of higher growth businesses with a stronger focus on technology companies across a variety of sectors of the UK economy. Allocation of assets will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified in terms of sector and stage of maturity of company.
Funds held pending investment or for liquidity purposes will be held as cash on deposit or up to 8 per cent. of its assets, at the time of investment, in liquid open-ended equity funds providing income and capital equity exposure (where it is considered economic to do so).
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within venture capital trust qualifying industry sectors using a mixture of securities. The maximum amount which the Company will invest in a single portfolio company is 15 per cent. of the Company's assets at cost thus ensuring a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is possible that it may grow in value to a point where it represents a significantly higher proportion of total assets prior to a realisation opportunity being available.
The Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves.
Background to the Company
The Company is a venture capital trust which raised a total of £33.3 million through the issue of shares between 1999 and 2004. The C shares merged with the Ordinary shares in 2007.
A further £6.3 million was raised through an issue of new D shares in 2009/2010. The D shares converted to Ordinary shares on 31 March 2015. D shareholders received 1.4975 Ordinary shares for each D share they owned.
An additional £37.5 million has been raised for the Ordinary shares through the Albion VCTs Top Up Offers since 2011.
Financial calendar
| Record date for second dividend for the year | 13 September 2019 |
| Payment date for second dividend for the year | 30 September 2019 |
| Financial year end | 31 December |
Financial highlights
| Ordinary shares | Unaudited six months ended 30 June 2019 (pence per share) | Unaudited six months ended 30 June 2018 (pence per share) | Audited year ended 31 December 2018 (pence per share) |
| Opening net asset value | 84.70 | 73.80 | 73.80 |
| Revenue return | 0.28 | 0.10 | 0.20 |
| Capital return | 2.64 | 9.20 | 14.80 |
| Total return | 2.92 | 9.30 | 15.00 |
| Impact of Fundraising | (0.09) | (0.20) | (0.10) |
| Dividends paid | (2.25) | (2.00) | (4.00) |
| Net asset value | 85.28 | 80.90 | 84.70 |
| Total shareholder return to 30 June 2019 | Ordinary shares (pence per share) (ii) | C shares (pence per share) (ii) (iv) | D shares (pence per share) (ii) (v) | |
| Total dividends paid during the period ended: | ||||
| 31 December 1999(i) | 1.00 | - | - | |
| 31 December 2000 | 2.90 | - | - | |
| 31 December 2001 | 3.95 | - | - | |
| 31 December 2002 | 4.20 | - | - | |
| 31 December 2003(iii) | 4.50 | 0.75 | - | |
| 31 December 2004 | 4.00 | 2.00 | - | |
| 31 December 2005 | 5.20 | 5.90 | - | |
| 31 December 2006 | 3.00 | 4.50 | - | |
| 31 December 2007 | 5.00 | 5.36 | - | |
| 31 December 2008 | 12.00 | 12.86 | - | |
| 31 December 2009 | 4.00 | 4.29 | - | |
| 31 December 2010 | 8.00 | 8.57 | 1.00 | |
| 31 December 2011 | 5.00 | 5.36 | 2.50 | |
| 31 December 2012 | 5.00 | 5.36 | 3.50 | |
| 31 December 2013 | 5.00 | 5.36 | 5.00 | |
| 31 December 2014 | 5.00 | 5.36 | 5.00 | |
| 31 December 2015 | 5.00 | 5.36 | 7.49 | |
| 31 December 2016 | 5.00 | 5.36 | 7.49 | |
| 31 December 2017 | 4.00 | 4.29 | 5.99 | |
| 31 December 2018 | 4.00 | 4.29 | 5.99 | |
| 30 June 2019 | 2.25 | 2.41 | 3.37 | |
| Total dividends paid to 30 June 2019 | 98.00 | 87.35 | 47.32 | |
| Net asset value as at 30 June 2019 | 85.28 | 91.38 | 127.71 | |
| Total shareholder return to 30 June 2019 | 183.28 | 178.73 | 175.03 | |
The Directors have declared a second dividend for the year ending 31 December 2019 of 2.25 pence per Ordinary share payable on 30 September 2019 to shareholders on the register on 13 September 2019.
Notes
(i) Assuming subscription for Ordinary shares by the First Closing on 26 January 1999.
(ii) Excludes tax benefits upon subscription.
(iii) Those subscribing for C shares after 30 June 2003 were not entitled to the interim dividend.
(iv) The C shares were converted into Ordinary shares on 31 March 2007, with a conversion ratio of 1.0715 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 1.0715 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.
(v) The D shares were converted into Ordinary shares on 31 March 2015, with a conversion ratio of 1.4975 Ordinary shares for each D share. The net asset value per share and all dividends paid subsequent to the conversion of the D shares to the Ordinary shares are multiplied by the conversion factor of 1.4975 in respect of the D shares return, in order to give an accurate picture of the shareholder value since launch relating to the D shares.
Interim management report
Introduction
The results for Albion Development VCT PLC for the six months to 30 June 2019 show a positive total return of 2.92 pence per share (3.45% on opening net asset value) compared to 9.30 pence per share for the same period in the previous year.
Board composition
As previously announced, the Company’s longest serving Director and Chairman, Geoffrey Vero, sadly passed away on 19 May 2019. Geoffrey’s good humour and wise counsel, over many years, will be sorely missed. Therefore, the composition of the Board has changed, and I became Chairman effective from 8 July 2019. The Chairman of the Audit Committee is Lyn Goleby, effective from 3 September 2019.
The Board was pleased to announce that Lord O’Shaughnessy was appointed to the Board with effect from 8 July 2019. Lord O’Shaughnessy brings with him diverse experience, including having operated at the highest levels across UK Government. He was a Parliamentary Under Secretary in the Department for Health & Social Care with key policy responsibilities including life sciences; medicines pricing and regulation; preparing the health and social care sectors for Brexit; and, data, digital and technology, including cyber security. He was created a life peer in 2015 taking the title Baron O’Shaughnessy of Maidenhead in the Royal County of Berkshire, and previously served as Director of Policy in No.10 Downing Street.
Results and dividends
As at 30 June 2019, the net asset value per Ordinary share was 85.28 pence (30 June 2018: 80.90 pence; 31 December 2018: 84.70 pence). The uplift in net asset value is a result of gains on investments of £2.68 million during the period. Details of the changes in value of investments can be found below.
A first dividend of 2.25 pence per share was paid on 31 May 2019. The Directors have declared a second dividend of 2.25 pence per share payable on 30 September 2019, to shareholders on the register on 13 September 2019. This is line with the current annual dividend target of 4.50 pence per share. The Company continues to offer a Dividend Reinvestment Scheme whereby shareholders can elect to receive dividends in the form of new shares.
Investment performance and progress
The results for the six months to 30 June 2019 showed a positive return. This was principally due to the write up of our investment in Proveca, following a new funding round in which the Company participated, and Process Systems Enterprise also benefitted from a write up, following the exchange of contracts for the sale of the portfolio company to Siemens for over 10 times total funds invested ?. The sale of Earnside Energy completed during the period with proceeds totalling £1.3 million. Including interest received during the time this investment was held, the sale resulted in a total return of 1.4 times original cost.
£2.8 million was invested into new and existing portfolio companies, with new investments comprising:
- £440,000 into Limitless Technology (a provider of a customer service platform powered by the crowd and machine learning technology);
- £409,000 into Clear Review (a provider of talent management software to mid market enterprises);
- £400,000 into Avora (a developer of software to improve decision making through augmented analytics and machine learning);
- £166,000 into Imandra (a provider of automated software testing and an enhanced learning experience for artificial neural networks); and
- £76,000 into Symetrica (a designer and manufacturer of radiation detection equipment).
Amongst existing portfolio companies, the largest follow on investments were £745,000 to Proveca, £176,000 to Beddlestead, and £130,000 to OmPrompt Holdings.
The Board is pleased to announce that the new total expenses ratio cap of 2.5 per cent. has resulted in a management fee reduction of £64,000. There has also been a further decrease in the management fee of £7,000 due to the OLIM fee reduction, which is discussed further in note 5. The total return is currently exceeding the targets set and accordingly a performance incentive fee of £126,000 has been accrued. The final value of any fee payable will be dependent on year end results.
Investment portfolio by sector
The pie chart at the end of this announcement outlines the different sectors in which the Company’s assets, at carrying value, are currently held.
Risks and uncertainties
Other than investment performance, the key risks facing the Company are from the broader economy, including changes to VCT rules. The uncertainty over the process and implications of the withdrawal of the UK from the European Union remains a risk, added to which is muted economic growth and other political uncertainty. However, the Manager is clear in focusing efforts to allocate resources to those sectors and opportunities where growth can be both resilient and sustainable.
Other principal risks and uncertainties remain unchanged and are detailed in note 13 below.
Share buy-backs
It remains the Board’s primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. Thereafter, it is still the Board’s policy to buy back shares in the market, subject to the overall constraint that such purchases are in the Company’s interest.
It is the Board’s intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit.
Albion VCTs Top Up Offers
The Company was pleased to announce on 3 April 2019 that it had reached its £8 million limit under the Albion VCTs Prospectus Top Up Offers 2018/19 which was fully subscribed and closed. Details of shares issued under the Offer can be found in note 8.
The proceeds of the Offer are being deployed into new investments as mentioned above, and supporting further funding of existing portfolio companies to support growth.
Transactions with the Manager
Details of the transactions that took place with the Manager in the period can be found in note 5. Details of related party transactions can be found in note 11.
Fraud warning
We note over recent months an increase in the number of shareholders being contacted in connection with increasingly sophisticated but fraudulent financial scams. This is often by a phone call or an email which normally originates from outside of the UK, often claiming or appearing to come from a corporate finance firm and typically offering to buy your VCT shares at an inflated price. If you are contacted, we recommend that you do not respond with any personal information and say you are not interested.
The Manager maintains a page on their website in relation to fraud advice at www.albion.capital/investor-centre/fraud-advice.
If you are in any doubt, we recommend that you seek financial advice before taking any action. You can also call Shareholder relations on 020 7601 1850, or email info@albion.capital, if you wish to check whether any claims made are genuine.
Prospects
We are pleased with the performance of the Company’s investment portfolio during the period. The Board remains encouraged by the performance of a number of companies within the investment portfolio and by the quality of the new investments being made. We believe the portfolio is well positioned to continue to grow over the coming years.
Ben Larkin
Chairman
16 September 2019
Responsibility statement
The Directors, Ben Larkin, Lyn Goleby, Lord O’ Shaughnessy and Patrick Reeve, are responsible for the preparation of the Half-yearly Financial Report. In preparing these condensed Financial Statements for the period to 30 June 2019 we, the Directors of the Company, confirm that to the best of our knowledge:
(a) the condensed set of Financial Statements, which has been prepared in accordance with Financial Reporting Standard 104 “Interim Financial Reporting”, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as required by DTR 4.2.4R;
(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); and
(c) 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).
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
For and on behalf of the Board
Ben Larkin
Chairman
16 September 2019
Portfolio of investments
| As at 30 June 2019 | |||||
| Fixed asset investments | % voting rights | Cost £’000 | Cumulative movement in value £’000 | Value £’000 | Change in value for the period* £’000 |
| Unquoted investments | |||||
| Radnor House School (Holdings) Limited | 8.8 | 2,648 | 3,990 | 6,638 | 83 |
| Egress Software Technologies Limited | 6.9 | 2,332 | 4,115 | 6,447 | - |
| Proveca Limited | 11.8 | 1,829 | 2,594 | 4,423 | 1,041 |
| Quantexa Limited | 2.9 | 727 | 2,283 | 3,010 | - |
| Chonais River Hydro Limited | 4.6 | 1,705 | 654 | 2,359 | (17) |
| The Street by Street Solar Programme Limited | 12.4 | 1,291 | 980 | 2,271 | 38 |
| Mirada Medical Limited | 7.7 | 909 | 1,148 | 2,057 | (79) |
| Regenerco Renewable Energy Limited | 11.9 | 1,204 | 745 | 1,949 | 39 |
| G.Network Communications Limited | 3.7 | 850 | 1,010 | 1,860 | 42 |
| Bravo Inns II Limited | 6.7 | 1,080 | 519 | 1,599 | 170 |
| Alto Prodotto Wind Limited | 9.4 | 787 | 527 | 1,314 | (16) |
| Process Systems Enterprise Limited | 1.3 | 131 | 1,172 | 1,303 | 846 |
| Sandcroft Avenue Limited (T/A Hussle) | 6.6 | 1,191 | (63) | 1,128 | (110) |
| Beddlestead Limited | 8.6 | 1,026 | (4) | 1,022 | (2) |
| Zift Channel Solutions Inc. | 1.6 | 885 | 124 | 1,009 | 10 |
| MPP Global Solutions Limited | 3.4 | 1,000 | - | 1,000 | - |
| Convertr Media Limited | 6.3 | 968 | 18 | 986 | (367) |
| OmPrompt Holdings Limited | 10.7 | 994 | (32) | 962 | 246 |
| The Evewell (Harley Street) Limited | 7.5 | 933 | - | 933 | - |
| Albion Investment Properties Limited | 68.2 | 929 | (26) | 903 | 35 |
| MyMeds&Me Limited | 9.9 | 940 | (50) | 890 | - |
| Black Swan Data Limited | 1.8 | 848 | - | 848 | - |
| Panaseer Limited | 3.2 | 557 | 214 | 771 | - |
| Secured by Design Limited | 2.2 | 330 | 373 | 703 | 169 |
| Oviva AG | 3.7 | 642 | 20 | 662 | 14 |
| Cisiv Limited | 7.7 | 686 | (27) | 659 | - |
| Locum's Nest Limited | 6.2 | 550 | 33 | 583 | - |
| DySIS Medical Limited | 2.3 | 1,038 | (502) | 536 | 7 |
| Koru Kids Limited | 2.2 | 272 | 256 | 528 | 256 |
| AVESI Limited | 10.5 | 340 | 151 | 491 | (8) |
| TWCL Limited | 9.4 | 518 | (31) | 487 | (3) |
| The Q Garden Company Limited | 16.6 | 466 | (1) | 465 | - |
| Limitless Technology Limited | 2.8 | 440 | - | 440 | - |
| Phrasee Limited | 2.0 | 410 | - | 410 | - |
| Clear Review Limited | 3.2 | 409 | - | 409 | - |
| Avora Limited | 2.5 | 400 | - | 400 | - |
| Dragon Hydro Limited | 5.5 | 225 | 128 | 353 | (10) |
| Abcodia Limited | 4.7 | 809 | (523) | 286 | - |
| Arecor Limited | 1.5 | 280 | - | 280 | - |
| InCrowd Sports Limited | 2.9 | 252 | 24 | 276 | - |
| Aridhia Informatics Limited | 5.8 | 1,129 | (888) | 241 | (215) |
| MHS 1 Limited | 3.3 | 231 | - | 231 | - |
| Greenenerco Limited | 4.0 | 128 | 92 | 220 | 4 |
| Oxsensis Limited | 1.7 | 274 | (64) | 210 | 33 |
| Bravo Inns Limited | 2.6 | 267 | (65) | 202 | 21 |
| Forward Clinical Limited | 1.8 | 190 | - | 190 | - |
| Innovation Broking Group Limited | 8.4 | 84 | 100 | 184 | 38 |
| Imandra Inc. | 1.7 | 166 | - | 166 | - |
| memsstar Limited | 2.8 | 94 | 67 | 161 | 29 |
| uMotif Limited | 1.2 | 200 | (60) | 140 | (60) |
| Premier Leisure (Suffolk) Limited | 6.2 | 109 | 12 | 121 | (3) |
| Erin Solar Limited | 4.3 | 120 | (5) | 115 | - |
| Healios Limited | 1.0 | 100 | - | 100 | - |
| ePatient Network Limited (T/A Raremark) | 1.4 | 135 | (49) | 86 | (49) |
| Symetrica Limited | 0.3 | 76 | - | 76 | - |
| Elements Software Limited | 0.6 | 3 | (3) | - | - |
| Total unquoted investments | 37,137 | 18,956 | 56,093 | 2,182 | |
| Quoted Investments | |||||
| Mi-Pay Group PLC | 823 | (683) | 140 | 15 | |
| Total fixed asset investments | 37,960 | 18,273 | 56,233 | 2,197 | |
| As at 30 June 2019 | ||||
| Current asset investments | Cost £’000 | Cumulative movement in value £’000 | Value £’000 | Change in value for the period* £’000 |
| SVS Albion OLIM UK Equity Income Fund | 2,600 | 3 | 2,603 | 160 |
| Total current asset investments | 2,600 | 3 | 2,603 | 160 |
*as adjusted for additions and disposals during the period; including realised gains/ (losses).
Investment realisations in the period to 30 June 2019 | Cost £’000 | Opening value £’000 | Disposal proceeds £’000 | Total realised gain/ (loss) £’000 | Gain/ (loss) on opening value £’000 |
| Disposals: | |||||
| Earnside Energy Limited | 1,089 | 1,384 | 1,281 | 192 | (103) |
| Tambla Limited | 11 | 6 | 6 | (5) | - |
| Loan stock repayments,restructurings and other: | |||||
| Mirada Medical Limited | 472 | 598 | 637 | 165 | 39 |
| Radnor House School (Holdings) Limited | 79 | 79 | 79 | - | - |
| Alto Prodotto Wind Limited | 14 | 21 | 21 | 7 | - |
| memsstar Limited | 5 | 5 | 5 | - | - |
| Greenenerco Limited | 2 | 3 | 3 | 1 | - |
| Escrow adjustments** | - | - | 232 | 232 | 232 |
| Total | 1,672 | 2,096 | 2,264 | 592 | 168 |
** Fair value movements on deferred consideration from previously disposed investments.
| Total change in value of investments for the period | 2,197 | ||
| Movement in loan stock accrued interest | 153 | ||
| Unrealised gains on fixed asset investments sub-total | 2,350 | ||
| Unrealised gains on current asset investments | 160 | ||
| Realised gains in the current period | 168 | ||
| Total gains on investments as per Income statement | 2,678 |
Condensed income statement
| Unaudited six months ended 30 June 2019 | Unaudited six months ended 30 June 2018 | Audited year ended 31 December 2018 | ||||||||
| Note | Revenue £’000 | Capital £’000 | Total £’000 | Revenue £’000 | Capital £’000 | Total £’000 | Revenue £’000 | Capital £’000 | Total £’000 | |
| Gains on investments | 3 | - | 2,678 | 2,678 | - | 7,528 | 7,528 | - | 12,326 | 12,326 |
| Investment income | 4 | 593 | - | 593 | 375 | - | 375 | 881 | - | 881 |
| Investment management fee | 5 | (172) | (515) | (687) | (160) | (482) | (642) | (334) | (1,004) | (1,338) |
| Performance incentive fee | 5 | (32) | (94) | (126) | (64) | (192) | (256) | (105) | (315) | (420) |
| Other expenses | (143) | - | (143) | (117) | - | (117) | (231) | - | (231) | |
| Profit on ordinary activities before tax | 246 | 2,069 | 2,315 | 34 | 6,854 | 6,888 | 211 | 11,007 | 11,218 | |
| Tax (charge)/credit on ordinary activities | (21) | 21 | - | - | - | - | (30) | 30 | - | |
| Profit and total comprehensive income attributable to shareholders | 225 | 2,090 | 2,315 | 34 | 6,854 | 6,888 | 181 | 11,037 | 11,218 | |
| Basic and diluted return per share (pence)* | 7 | 0.28 | 2.64 | 2.92 | 0.10 | 9.20 | 9.30 | 0.20 | 14.80 | 15.00 |
* adjusted for treasury shares
The accompanying notes form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2018 and the audited statutory accounts for the year ended 31 December 2018.
The total column of this condensed 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.
Condensed balance sheet
| Note | Unaudited 30 June 2019 £’000 | Unaudited 30 June 2018 £’000 | Audited 31 December 2018 £’000 | |
| Fixed asset investments | 56,233 | 45,138 | 52,663 | |
| Current assets | ||||
| Current asset investments | 2,603 | 199 | 1,243 | |
| Trade and other receivables less than one year | 1,403 | 979 | 1,128 | |
| Cash and cash equivalents | 11,753 | 15,220 | 9,189 | |
| 15,759 | 16,398 | 11,560 | ||
| Total assets | 71,992 | 61,536 | 64,223 | |
| Payables: amounts falling due within one year | ||||
| Trade and other payables less than one year | (545) | (733) | (845) | |
| Total assets less current liabilities | 71,447 | 60,803 | 63,378 | |
| Equity attributable to equityholders | ||||
| Called up share capital | 8 | 934 | 835 | 839 |
| Share premium | 36,418 | 28,161 | 28,406 | |
| Capital redemption reserve | 12 | 12 | 12 | |
| Unrealised capital reserve | 18,320 | 11,669 | 16,234 | |
| Realised capital reserve | 11,543 | 11,921 | 11,539 | |
| Other distributable reserve | 4,220 | 8,205 | 6,348 | |
| Total equity shareholders’ funds | 71,447 | 60,803 | 63,378 | |
| Basic and diluted net asset value per share (pence)* | 85.28 | 80.90 | 84.70 |
*excluding treasury shares
The accompanying notes form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2018 and the audited statutory accounts for the year ended 31 December 2018.
These Financial Statements were approved by the Board of Directors and authorised for issue on 16 September 2019, and were signed on its behalf by
Ben Larkin
Chairman
Company number: 03654040
Condensed statement of changes in equity
| Called up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve | Realised capital reserve* | Other distributable reserve* | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| As at 1 January 2019 | 839 | 28,406 | 12 | 16,234 | 11,539 | 6,348 | 63,378 |
| Profit and total comprehensive income for the period | - | - | - | 2,510 | (420) | 225 | 2,315 |
| Transfer of previously unrealised gains on disposal of investments | - | - | - | (424) | 424 | - | - |
| Purchase of shares for treasury | - | - | - | - | - | (473) | (473) |
| Issue of equity | 95 | 8,211 | - | - | - | - | 8,306 |
| Cost of issue of equity | - | (199) | - | - | - | - | (199) |
| Dividends paid | - | - | - | - | - | (1,880) | (1,880) |
| As at 30 June 2019 | 934 | 36,418 | 12 | 18,320 | 11,543 | 4,220 | 71,447 |
| As at 1 January 2018 | 801 | 25,704 | 12 | 10,892 | 5,844 | 10,093 | 53,346 |
| Profit and total comprehensive income for the period | - | - | - | 3,941 | 2,913 | 34 | 6,888 |
| Transfer of previously unrealised gains on disposal of investments | - | - | - | (3,164) | 3,164 | - | - |
| Purchase of shares for treasury | - | - | - | - | - | (417) | (417) |
| Issue of equity | 34 | 2,515 | - | - | - | - | 2,549 |
| Cost of issue of equity | - | (58) | - | - | - | - | (58) |
| Dividends paid | - | - | - | - | - | (1,505) | (1,505) |
| As at 30 June 2018 | 835 | 28,161 | 12 | 11,669 | 11,921 | 8,205 | 60,803 |
| As at 1 January 2018 | 801 | 25,704 | 12 | 10,892 | 5,844 | 10,093 | 53,346 |
| Profit and total comprehensive income for the period | - | - | - | 8,560 | 2,477 | 181 | 11,218 |
| Transfer of unrealised gains on disposal of investments | - | - | - | (3,218) | 3,218 | - | - |
| Purchase of shares for treasury | - | - | - | - | - | (921) | (921) |
| Issue of equity | 38 | 2,761 | - | - | - | - | 2,799 |
| Cost of issue of equity | - | (59) | - | - | - | - | (59) |
| Dividends paid | - | - | - | - | - | (3,005) | (3,005) |
| As at 31 December 2018 | 839 | 28,406 | 12 | 16,234 | 11,539 | 6,348 | 63,378 |
* These reserves amount to £15,763,000 (30 June 2018: £20,126,000; 31 December 2018: £17,887,000) which is considered distributable.
Condensed statement of cash flows
| Unaudited six months ended 30 June 2019 £’000 | Unaudited six months ended 30 June 2018 £’000 | Audited year ended 31 December 2018 £’000 | |
| Cash flow from operating activities | |||
| Loan stock income received | 588 | 357 | 809 |
| Deposit interest received | 24 | 15 | 38 |
| Dividend income received | 104 | 32 | 56 |
| Investment management fee paid | (708) | (600) | (1,284) |
| Performance incentive fee paid | (420) | - | - |
| Other cash payments | (145) | (135) | (227) |
| Corporation tax paid | - | - | - |
| Net cash flow from operating activities | (557) | (331) | (608) |
| Cash flow from investing activities | |||
| Purchase of current asset investments | (1,200) | (200) | (1,400) |
| Purchase of fixed asset investments | (2,832) | (2,825) | (5,722) |
| Disposal of fixed asset investments | 1,382 | 6,965 | 7,154 |
| Net cash flow from investing activities | (2,650) | 3,940 | 32 |
| Cash flow from financing activities | |||
| Issue of share capital | 7,807 | 2,244 | 2,244 |
| Cost of issue of shares | (2) | (1) | (3) |
| Equity dividends paid | (1,561) | (1,257) | (2,510) |
| Purchase of own shares (including costs) | (473) | (330) | (921) |
| Net cash flow from financing activities | 5,771 | 656 | (1,190) |
| Increase/(decrease) in cash and cash equivalents | 2,564 | 4,265 | (1,766) |
| Cash and cash equivalents at start of period | 9,189 | 10,955 | 10,955 |
| Cash and cash equivalents at end of period | 11,753 | 15,220 | 9,189 |
| Cash and cash equivalents comprise: | |||
| Cash at bank | 11,753 | 15,220 | 9,189 |
| Cash equivalents | - | - | - |
| Total cash and cash equivalents | 11,753 | 15,220 | 9,189 |
Notes to the condensed Financial Statements
1. Basis of accounting
The condensed 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, including Financial Reporting Standard 102 (“FRS 102”), Financial Reporting Standard 104 – Interim Financial Reporting (“FRS 104”), 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”).
The preparation of the Financial Statements requires management to make judgements and estimates that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The most critical estimates and judgements relate to the determination of carrying value of investments at fair value through profit and loss (“FVTPL”). The Company values investments by following the International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines and further detail on the valuation techniques used are in note 2 below.
The Half-yearly Financial Report has not been audited, nor has it been reviewed by the auditor pursuant to the FRC’s guidance on Review of interim financial information.
Company information can be found on page 2 of the Half-yearly Financial Report.
2. Accounting policies
Fixed and current asset investments
The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment policy, and information about the portfolio is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, the undertakings in which the Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method. In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments are designated by the Company as FVTPL and are included at their initial fair value, which is cost (excluding expenses incidental to the acquisition which are written off to the income statement).
Subsequently, the investments are valued at fair value, which is measured as follows:
? Investments listed on recognised exchanges, including liquid open-ended equity funds, are valued at their bid prices at the end of the accounting period or otherwise at fair value based on published price quotations;
? Unquoted investments, where there is not an active market, are valued using an appropriate valuation technique in accordance with the IPEV Guidelines. Indicators of fair value are derived using established methodologies including earnings multiples, the level of third party offers received, cost or price of recent investment rounds, net assets and industry valuation benchmarks. Where price of recent investment is used as a starting point for estimating fair value at subsequent measurement dates, this has been benchmarked using an appropriate valuation technique permitted by the IPEV guidelines.
? In situations where cost or price of recent investment is used, consideration is given to the circumstances of the portfolio company since that date in determining fair value. This includes consideration of whether there is any evidence of deterioration or strong definable evidence of an increase in value. In the absence of these indicators, the investment in question is valued at the amount reported at the previous reporting date. Examples of events or changes that could indicate a diminution include:
? the performance and/or prospects of the underlying business are significantly below the expectations on which the investment was based;
? a significant adverse change either in the portfolio company’s business or in the technological, market, economic, legal or regulatory environment in which the business operates; or
? market conditions have deteriorated, which may be indicated by a fall in the share prices of quoted businesses operating in the same or related sectors.
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 other distributable reserve when a share becomes ex-dividend.
Other current assets and payables
Receivables, payables and cash are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than creditors.
Investment income
Equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.
Unquoted loan stock
Fixed returns on non-equity shares and debt securities are recognised when the Company’s right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.
Investment management fees, performance incentive fees and expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the other distributable reserve except the following which are charged through the realised capital reserve:
- 75 per cent. of management fees and performance incentive fees are allocated to the capital account to the extent that these relate to an enhancement in the value of the investments. This is 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.
Taxation
Taxation is applied on a current basis in accordance with FRS 102. Current tax is tax payable (refundable) in respect of the taxable profit (loss) for the current period or past reporting periods using the tax rates and laws that have been enacted or substantively enacted at the financial reporting date. Taxation associated with capital expenses is applied in accordance with the SORP.
Deferred tax is provided in full on all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. As a VCT the Company has an exemption from tax on capital gains. The Company intends to continue meeting the conditions required to obtain approval as a VCT in the foreseeable future. The Company therefore, should have no material deferred tax timing differences arising in respect of the revaluation or disposal of investments and the Company has not provided for any deferred tax.
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.
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 period end against cost, are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
- gains and losses compared to cost on the realisation of investments, or permanent diminutions in value;
- expenses, together with the related taxation effect, charged in accordance with the above policies; and
- dividends paid to equity holders where paid out by capital.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were combined in 2012 to form a single reserve named other distributable reserve.
This reserve accounts for the movements from the revenue column of the Income statement, the payment of dividends, the buy-back of shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single operating segment of business, being investment in equity and debt. The Company invests in smaller companies principally based in the UK.
3. Gains on investments
| Unaudited six months ended 30 June 2019 £’000 | Unaudited six months ended 30 June 2018 £’000 | Audited year ended 31 December 2018 £’000 | |
| Unrealised gains on fixed asset investments | 2,350 | 3,942 | 8,717 |
| Unrealised gains/(losses) on current asset investments | 160 | (1) | (157) |
| Realised gains on fixed asset investments | 168 | 3,587 | 3,766 |
| 2,678 | 7,528 | 12,326 |
4. Investment income
| Unaudited six months ended 30 June 2019 £’000 | Unaudited six months ended 30 June 2018 £’000 | Audited year ended 31 December 2018 £’000 | |
| Loan stock interest and other fixed returns | 435 | 328 | 787 |
| UK dividend income | 134 | 32 | 56 |
| Bank deposit interest | 24 | 15 | 38 |
| 593 | 375 | 881 |
5. Investment management fee and performance incentive fee
| Unaudited six months ended 30 June 2019 £’000 | Unaudited six months ended 30 June 2018 £’000 | Audited year ended 31 December 2018 £’000 | |
| Investment management fee charged to revenue | 172 | 160 | 334 |
| Investment management fee charged to capital | 515 | 482 | 1,004 |
| Performance incentive fee charged to revenue | 32 | 64 | 105 |
| Performance incentive fee charged to capital | 94 | 192 | 315 |
| 813 | 898 | 1,758 | |
Further details of the Management agreement under which the investment management fee and performance incentive fee are paid is given in the Strategic report on page 12 of the Annual Report and Financial Statements for the year ended 31 December 2018.
During the period, services to a total value of £687,000 (30 June 2018: £642,000; 31 December 2018: £1,338,000) were purchased by the Company from Albion Capital Group LLP. At the financial period end, the amount due to Albion Capital Group LLP in respect of these services was £333,000 (30 June 2018: £342,000; 31 December 2018: £355,000). The total annual running costs of the Company are capped at an amount equal to 2.5 per cent. of the Company’s net assets, with any excess being met by Albion by way of a reduction in management fees. During the period, the management fee was reduced by £64,000 as a result of this cap (30 June 2018: £nil; 31 December 2018: £nil). For the period to 30 June 2019, a provisional performance incentive fee of £126,000 has been accrued, however any performance incentive fee is only payable on year end results (30 June 2018: £256,000; 31 December 2018: £420,000).
During the period, the Company was not charged by Albion Capital Group LLP in respect of Patrick Reeve’s services as a Director (30 June 2018: £nil; 31 December 2018: £nil).
Albion Capital Group LLP, its Partners and staff (including Patrick Reeve) hold 515,412 Ordinary shares in the Company.
Albion Capital Group LLP is, from time to time, eligible to receive arrangement fees and monitoring fees from portfolio companies. During the period ended 30 June 2019, fees of £108,000 attributable to the investments of the Company were paid pursuant to these arrangements (30 June 2018: £110,000; 31 December 2018: £190,000).
The Company entered into an offer agreement relating to the Offers with the Company’s investment manager Albion Capital Group LLP, pursuant to which Albion Capital received a fee of 2.5 per cent. of the gross proceeds of the Offers and out of which Albion Capital paid the costs of the Offers, as detailed in the Prospectus. The Offers closed on 3 April 2019.
During the period, an amount of £1,200,000 (30 June 2018: £200,000; 31 December 2018: £1,400,000) was invested in the SVS Albion OLIM UK Equity Income Fund (“OUEIF”) as part of the Company’s management of surplus liquid funds. To avoid double charging, Albion agreed to reduce its management fee relating to the investment in the OUEIF by 0.75 per cent., which represents the OUEIF management fee charged by OLIM. This resulted in a further reduction of the management fee of £7,000 (30 June 2018: £nil; 31 December 2018: £3,000).
6. Dividends
| Unaudited six months ended 30 June 2019 £’000 | Unaudited six months ended 30 June 2018 £’000 | Audited year ended 31 December 2018 £’000 | |
| Dividend of 2.00p per Ordinary share paid on 31 May 2018 | - | 1,505 | 1,505 |
| Dividend of 2.00p per Ordinary share paid on 28 September 2018 | - | - | 1,503 |
| Dividend of 2.25p per Ordinary share paid on 31 May 2019 | 1,880 | - | - |
| Unclaimed dividends | - | - | (3) |
| 1,880 | 1,505 | 3,005 |
The Directors have declared a second dividend for the year ending 31 December 2019 of 2.25 pence per Ordinary share (total approximately £1,885,000), payable on 30 September 2019 to shareholders on the register on 13 September 2019.
7. Basic and diluted return per share
| Unaudited six months ended 30 June 2019 | Unaudited six months ended 30 June 2018 | Audited year ended 31 December 2018 | ||||||
| Revenue | Capital | Revenue | Capital | Revenue | Capital | |||
| Return attributable to Ordinary shares (£’000) | 225 | 2,090 | 34 | 6,854 | 181 | 11,037 | ||
| Weighted average shares in issue | 79,196,675 | 74,379,984 | 74,732,976 | |||||
| Return per Ordinary share (pence) | 0.28 | 2.64 | 0.10 | 9.20 | 0.20 | 14.80 | ||
The weighted average number of shares is calculated after adjusting for treasury shares of 9,668,156 (30 June 2018: 8,409,700; 31 December 2018: 9,072,156).
There are no convertible instruments, derivatives or contingent share agreements in issue 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.
8. Ordinary share capital
| Unaudited 30 June 2019 | Unaudited 30 June 2018 | Audited 31 December 2018 | |
| Allotted, called up and fully paid Ordinary shares of 1 penny each | |||
| Number of shares | 93,449,963 | 83,543,578 | 83,860,469 |
| Nominal value of allotted shares (£’000) | 934 | 835 | 839 |
| Voting rights (number of shares net of treasury shares) | 83,781,807 | 75,113,878 | 74,788,313 |
During the period to 30 June 2019 the Company purchased 596,000 Ordinary shares (nominal value £5,960) for treasury at a cost of £473,000. The total number of Ordinary shares held in treasury as at 30 June 2019 was 9,668,156 (30 June 2018: 8,409,700; 31 December 2018: 9,072,156) representing 10.4 per cent. of the Ordinary shares in issue as at 30 June 2019.
Under the terms of the Dividend Reinvestment Scheme Circular dated 27 August 2008, the following new Ordinary shares, of nominal value 1 penny each, were allotted:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares (£’000) | Issue price (pence per share) | Net invested (£’000) | Opening market price on allotment date (pence per share) |
| 31 May 2019 | 376,536 | 4 | 83.91 | 301 | 78.50 |
Under the terms of the Albion VCTs Prospectus Top Up Offers 2018/19, the following new Ordinary shares, of nominal value 1 penny each, were allotted during the period to 30 June 2019:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares (£’000) | Issue price (pence per share) | Net consideration received (£’000) | Opening market price on allotment date (pence per share) |
| 1 April 2019 | 1,483,587 | 15 | 86.00 | 1,257 | 79.50 |
| 1 April 2019 | 280,678 | 3 | 86.50 | 238 | 79.50 |
| 1 April 2019 | 6,249,810 | 62 | 86.90 | 5,296 | 79.50 |
| 5 April 2019 | 680,623 | 7 | 86.90 | 577 | 80.50 |
| 12 April 2019 | 165,805 | 2 | 86.00 | 140 | 80.50 |
| 12 April 2019 | 3,699 | - | 86.50 | 3 | 80.50 |
| 12 April 2019 | 348,756 | 3 | 86.90 | 296 | 80.50 |
| 9,212,958 | 92 | 7,807 | |||
9. Commitments and contingencies
As at 30 June 2019, the Company had no financial commitments in respect of investments (30 June 2018: £nil; 31 December 2018: £nil).
There were no contingencies or guarantees of the Company as at 30 June 2019 (30 June 2018: £nil; 31 December 2018: £nil).
10. Post balance sheet events
The following are the post balance sheet events since 30 June 2019:
·Investment of £639,000 in Elliptic Enterprises Limited;
·Investment of £400,000 in SVS Albion OLIM UK Equity Income Fund;
·Investment of £188,000 in Koru Kids Limited;
·Investment of £37,000 in The Evewell (Harley Street) Limited; and
·Investment of £23,000 in Convertr Media Limited.
11. Related party transactions
During the period, a total of £1,200,000 (30 June 2018: £200,000; 31 December 2018: £1,400,000) was invested into the SVS Albion OLIM UK Equity Income Fund (“OUEIF”), a fund managed by OLIM Limited which is part of the Albion Group.
Albion agreed to reduce that proportion of its management fee relating to the investment in the OUEIF by 0.75 per cent. per annum, which represents the OUEIF management fee charged by OLIM; this resulted in a reduction of the management fee of £7,000 (30 June 2018: £nil; 31 December 2018: £3,000).
Other than transactions with the Manager as disclosed in note 5 and that disclosed above, there are no other related party transactions or balances requiring disclosure.
12. 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 2018 and is detailed on page 62 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 the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council in September 2014.
13. Risks and uncertainties
In addition to the risks outline in the Interim management report, the Board considers that the Company faces the following major risks and uncertainties:
1. Investment performance and performance risk
The risk of investment in poor quality assets, which could reduce the capital and income returns to shareholders, and could negatively impact on the Company’s current and future valuations.
By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more volatile than larger, long established businesses.
The Company’s investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.
To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its track record over many years of making successful investments in this segment of the market. In addition, the Manager operates a formal and structured investment appraisal and review process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional. The Manager also invites and takes account of comments from non-executive Directors of the Company on matters discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards), including the level of diversification in the portfolio, and the Board receives detailed reports on each investment as part of the Manager’s report at quarterly board meetings.
The unquoted investments held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. The valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board.
2. VCT approval risk
The Company must comply with section 274 of the Income Tax Act 2007 which enables its investors to take advantage of tax relief on their investment and on future returns. Breach of any of the rules enabling the Company to hold VCT status could result in the loss of that status.
To reduce this risk, the Board has appointed the Manager, which 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 Philip Hare & Associates LLP as its taxation adviser, who 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. Each investment in a new portfolio company is also pre-cleared with our professional advisers or H.M. Revenue & Customs.
3. Regulatory and 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 or advising quoted companies. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks through the Manager’s compliance officer. The Manager reports monthly to its Board on any issues arising from compliance or regulation. These controls are also reviewed as part of the quarterly Board meetings, and also as part of the review work undertaken by the Manager’s compliance officer. The report on controls is also evaluated by the internal auditors.
4. Operational and internal control risk
The Company relies on a number of third parties, in particular the Manager, for the provision of investment management and administrative functions. Failures in key systems and controls 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 Company and its operations are subject to a series of rigorous internal controls and review procedures exercised throughout the year.
The Audit Committee reviews the Internal Audit Reports prepared by the Manager’s internal auditors, PKF Littlejohn LLP and has access to the internal audit partner of PKF Littlejohn LLP to provide an opportunity to ask specific detailed questions in order to satisfy itself that the Manager has strong systems and controls in place including those in relation to business continuity.
From 1 October 2018, Ocorian (UK) Limited were appointed as Depositary to oversee the custody and cash arrangements and provide other AIFMD duties. The Board reviews the quarterly reports prepared by Ocorian (UK) Limited to ensure that Albion Capital is adhering to its policies and procedures as required by the AIFMD.
In addition, the Board regularly reviews the performance of its key service providers, particularly the Manager, to ensure they continue to have the necessary expertise and resources to deliver the Company’s investment objective and policies. The Manager and other service providers have also demonstrated to the Board that there is no undue reliance placed upon any one individual.
5. Economic and political risk
Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company’s prospects in a number of ways.
The Company invests in a diversified portfolio of companies across a number of industry sectors and in addition often invests a mixture of instruments in portfolio companies and has a policy of not normally permitting any external bank borrowings within portfolio companies.
At any given time, the Company has sufficient cash resources to meet its operating requirements, including share buy-backs and follow on investments.
6. Market value of Ordinary shares
The market value of Ordinary shares can fluctuate. The market value of an Ordinary share, as well as being affected by its net asset value and prospective net asset value, also takes into account its dividend yield and prevailing interest rates. As such, the market value of an Ordinary share may vary considerably from its underlying net asset value. The market prices of shares in quoted investment companies can, therefore, be at a discount or premium to the net asset value at different times, depending on supply and demand, market conditions, general investor sentiment and other factors. Accordingly the market price of the Ordinary shares may not fully reflect their underlying net asset value.
The Company operates a share buy-back policy, which is designed to limit the discount at which the Ordinary shares trade to around 5 per cent to net asset value, by providing a purchaser through the Company in absence of market purchasers. From time to time buy-backs cannot be applied, for example when the Company is subject to a close period, or if it were to exhaust any buy-back authorities.
New Ordinary shares are issued at sufficient premium to net asset value to cover the costs of issue and to avoid asset value dilution to existing investors.
7. Reputational risk
The Company relies on the judgement and reputation of the Manager which is itself subject to the risk of loss.
The Board regularly questions the Manager on its ethics, procedures, safeguards and investment philosophy, which should consequently result in the risk to reputation being minimised.
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 2019 and 30 June 2018 and is unaudited. The information for the year ended 31 December 2018, 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 have been delivered to the Registrar of Companies. The Auditor 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.capital/funds/AADV, where the Report can be accessed from the ‘Financial Reports and Circulars’ section.
Attachment
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