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29 Apr 2008 09:32
UNICORN AIM VCT PLC
HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2008
Investment Objective
The objective of the Company is to provide Shareholders with anattractive return from a diversified portfolio of investments, predominantlyin the shares of AIM quoted companies, by maximising the stream of dividenddistributions to Shareholders from the income and capital gains generated bythe portfolio.
It is also the objective that the Company should continue to qualify as a Venture Capital Trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 70% of the Company's total assets are to be invested in qualifying investments of which 30% by value must be in ordinary shares carrying no preferential rights to dividends or return of capital and no rights to redemption.
Investment Policy
In order to achieve the Company's Investment Objective, the Board has agreed an Investment Policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM, that displays a majority of the following characteristics:
- experienced and well-motivated management;
- products and services supplying growing markets;
- sound operational and financial controls; and
- good cash generation to finance development allied with a
progressive dividend policy.
Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. Specific conditions for HMRC approval of VCTs include the requirement that no single holding may represent more than 15% (by value) of the Company's investments, at the date of that investment.
The Investment Manager is responsible for managing sector and stockspecific risk and the Board does not impose formal limits in respect of suchexposures. However, in order to maintain compliance with HMRC rules and toensure that an appropriate spread of investment risk is achieved, the Boardreceives and reviews comprehensive reports from the Investment Manager and theAdministrator on a regular basis. When the Investment Manager proposes to makean investment in an unquoted company the prior approval of the Board isrequired.
Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or in excess of the 70% VCT qualification threshold, it may be invested in collective investment funds or in non-qualifying shares and securities in smaller listed UK companies.
To date the Company has operated without recourse to borrowing. The Board may however consider the possibility of introducing modest levels of gearing up to a maximum of 20% of net assets, should circumstances suggest that such action is in the interests of shareholders.
Chairman's Statement
I am pleased to present to Shareholders the Half-Yearly Report of the Company for the six months ended 31 March 2008.
Review of performance
In the period under review equity markets have been particularlyweak as a result of liquidity concerns following the sub-prime financingcrisis in the United States. These uncertainties have adversely affected theperformance of the Ordinary Share Fund and the Series 2 ("S2") Share Fund. TheSeries 3 ("S3") Share Fund is still in the early stages of investment and as aconsequence has withstood the recent market turmoil relatively well.Set out below is a summary of performance for each fund over the 6 monthsended 31 March 2008:- Ordinary Fund S2 Fund S3 FundLaunch date November 2001 February 2004 April 2007Net asset value (pence pershare at 31March 67.7 86.6 86.5Change in net asset value persharesince 30 September 2007 (24.4)% (23.9)% (6.3)%Cumulative dividends paid todate(pence per share) 39.0 16.75 -Total net asset value returnsincelaunch (pence per share) 106.7 103.35 86.5Return against net assetvalue atlaunch of 94.5 pence pershare 12.9% 9.4% (8.5)%Return against net assetvalue atlaunch of 94.5 pence pershare (afterapplicable income taxrelief*) 33.3%** 72.3% 23.6%
* Up to 20% for Ordinary Fund Shareholders, 40% for S2 Fund Shareholders and 30% for S3 Fund Shareholders.
** Ordinary Fund shareholders who also deferred capital gains tax will have enjoyed even higher returns.
Ordinary Share Fund
Over the six months there was a net loss on investments of ‚£6.37million (‚£3.98 million net gain for the six months ended 31 March 2007) andthe total loss on ordinary activities after taxation was ‚£6.66 million, theequivalent of 21.94 pence per share. During the period 219,370 Ordinary Shareswere bought back for cancellation at an average price of 70.3 pence per shareand at an average discount of 10.2% to the NAV per share.
The deficit on the revenue account for the Ordinary Share Fund was ‚£84,000 (‚£95,000 deficit for the six months ended 31 March 2007).
Series 2 Share Fund
Over the six months there was a net loss on investments of ‚£3.14million (‚£2.07 million net gain for the six months ended 31 March 2007) andthe total loss on ordinary activities after taxation was ‚£3.28 million, theequivalent of 22.34 pence per share. During the period 199,827 S2 Shares werebought back for cancellation at an average price of 86.5 pence per share andat an average discount of 14.5% to the NAV per share.
The deficit on the revenue account for the S2 Share Fund was ‚£43,000 (‚£36,000 deficit for the six months ended 31 March 2007).
Series 3 Share Fund
Over the six months there was a net loss on investments of ‚£290,000 (31 March 2007: N/A) and the total loss on ordinary activities after taxation was ‚£288,000, the equivalent of 5.79 pence per share.
The return on the revenue account for the S3 Share Fund was ‚£22,000.
Dividends
The Board's policy remains to maximise the stream of dividend distributions to Shareholders from the income and capital gains generated by the portfolio.
However, in view of continuing weakness in equity markets and the consequent decline in respective NAVs, the Board will not be proposing dividends for any of the three Funds for the period under review.
Qualifying Investments
From September 2007 onwards, investors in UK equity markets, unsettled by the emergence of a serious banking crisis, swiftly abandoned small, illiquid, AIM quoted companies. In the absence of buyers the FTSE AIM All Share Index fell by over 14% in the six months to 31 March 2008.
Performance of the Ordinary Share Fund and the S2 Share Fund wasalso impacted by a small number of company specific setbacks. Profit warningsissued by Avingtrans, Huveaux, Maxima Holdings and Supporta each resulted inshare prices declines of between 53% and 70%. In the Ordinary Share Fund thefalls produced by these four companies accounted for almost 65% of the totaldecline generated by the qualifying portfolio overall. The Investment Manageris confident that most, if not all, of the companies which suffered recentsetbacks have the potential to recover substantially in due course.In the period under review, the Investment Manager continued tomake new investments in VCT qualifying companies albeit on a highly selectivebasis. Five new qualifying investments were made for the S3 Share Fund, whilstthe Ordinary Share Fund and the S2 Share Fund made two and three newinvestments respectively. In aggregate these investments had recorded a gainon book cost by the end of the period which bodes well for their prospectswhen investor sentiment improves.
Partial disposals were made in a small number of holdings in both the Ordinary and the S2 Share Funds, whilst the Ordinary Share Fund also completed the disposal of its holding in Assetco and generated cash proceeds in excess of ‚£640,000 from the successful acquisition of Tellings Golden Miller Plc by Arriva Plc.
The Ordinary Share Fund portfolio now comprises thirty-nine qualifying investments, whilst the S2 and the S3 Funds hold thirty-four and five qualifying stocks respectively.
At the end of March 2008, the value of the portfolios (for the Ordinary and S2 Share Funds only) which was invested in VCT qualifying investments represented approximately 88% of the total assets of the Company. All other HM Revenue & Customs tests have also been complied with and your Board has been advised that the Company has maintained its venture capital trust status.
A full list of all of the qualifying investments held in all Funds at the period end is included below.
Summary
In the past six months the FTSE AIM All Share Index has suffered asignificant decline. Investor confidence remains at a low ebb and the fall-outfrom the collapse of the sub-prime mortgage market continues. There aregrowing concerns about the prospects of economic recession in both the UnitedStates and in the UK.As the current crisis deepened following the collapse of NorthernRock, prudent managers of conventional funds might well have been expected toreposition their portfolios toward investment in larger and more liquidstocks, whilst also carrying higher than usual levels of cash. The technicalrequirements of AIM based VCTs are such that the flexibility to implement suchchanges is severely constrained. In these circumstances, AIM-based VCTs acrossthe board have suffered disproportionately large falls as investors continueto sell shares of smaller, less liquid companies.
On a positive note, significant value is starting to emerge in many of the smaller quoted companies held in the portfolios. However, until the wider equity market stabilises and the economic picture improves it is unlikely that this value will be reflected in share prices.
The Investment Manager will continue to manage the Funds prudently with a view to preserving capital in these uncertain times. The Board believes that this approach offers good prospects of delivering healthy returns over the medium to long term.
Extraordinary General Meeting
The Companies Act 2006 sets out directors' general duties andlargely codifies the existing law but with some changes. Under the Act, from 1October 2008 a director must avoid a situation where he has, or can have, adirect or indirect interest that conflicts, or possibly may conflict, with theCompany's interests. The requirement is very broad and could apply, forexample, if a director becomes a director of another company or a trustee ofanother organisation. The Companies Act 2006 allows directors of publiccompanies to authorise conflicts and potential conflicts where appropriate,where the articles of association contain a provision to this effect. TheCompanies Act 2006 also allows the articles to contain other provisions fordealing with directors' conflicts of interest to avoid a breach of duty. It isproposed to amend the Company's articles of association give the Directorsauthority to approve such situations and to include other provisions to allowconflicts of interest to be dealt with in a similar way to the currentposition.There are safeguards that will apply when Directors decide whetherto authorise a conflict or potential conflict. First, only Directors who haveno interest in the matter being considered will be able to take the relevantdecision, and secondly, in taking the decision the Directors must act in a waythey consider, in good faith, will be most likely to promote the Company'ssuccess. The Directors will be able to impose limits or conditions when givingauthorisation if they think this is appropriate.The proposed alteration to the Company's articles of associationcontain provisions relating to confidential information, attendance at boardmeetings and availability of board papers to protect a director being inbreach of duty if a conflict of interest or potential conflict of interestarises. These provisions will only apply where the position giving rise to thepotential conflict has previously been authorised by the directors.
It is the Board's intention to report annually on the Company's procedures for ensuring that the Board's powers of authorisation of conflicts are operated effectively and that the procedures have been followed.
This resolution is proposed as a special resolution and will require the approval of 75% of the votes cast at the meeting.
Peter Dicks,ChairmanRelated Party Transactions
Details of related party transactions in accordance with Disclosure and Transparency Rule 4.2.8 can be found in Note 7 to the Accounts below.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements have been prepared inaccordance with under UK Generally Accepted Accounting Practice (UK GAAP) andthe 2003 Statement of Recommended Practice "Financial Statements of InvestmentTrust Companies", revised December 2005, and give a true and fair view of theassets, liabilities, financial position and profit or loss of the Company, asrequired by Disclosure & Transparency Rule 4.2.4; and
(b) the interim management report includes a fair review of the information required by Disclosure & Transparency Rule 4.2.7 - 8 in accordance with Disclosure & Transparency Rule 4.2.10.
Investment Portfolio Summary - Ordinary Share Fundas at 31 March 2008 % of net Book cost Valuation assets by value ‚£'000 ‚£'000Qualifying investmentsAIM quoted investments:Glisten plc 582 2,476 12.1%Maxima Holdings plc 1,200 1,362 6.7%Mattioli Woods plc 449 1,004 4.9%Abcam plc 467 942 4.6%Zetar plc 406 897 4.4%Supporta plc 1,432 735 3.6%Mears Group plc (formerly Careforce 804 677 3.3%Group plc)Xpertise Group plc 400 600 2.9%Avingtrans plc 708 590 2.9%Prologic plc 589 589 2.9%Shieldtech plc 650 442 2.2%Clerkenwell Ventures plc 600 400 2.0%Fountains plc 365 397 1.9%Huveaux plc 1,000 350 1.7%Kiotech International plc 351 322 1.6%SnackTime plc 360 320 1.6%Hexagon Human Capital plc 429 312 1.5%Hasgrove plc 300 300 1.5%Pilat Media Global plc 480 297 1.5%Lees Foods plc 260 271 1.3%Printing.com plc 212 261 1.3%Datong Electronics plc 333 255 1.2%Sanderson Group plc 385 254 1.2%
Synarbor plc (formerly Public Recruitment
Group plc) 1,000 162 0.8%Tracsis plc 120 156 0.8%Dillistone Group plc 106 135 0.7%Augean plc 349 128 0.6%Access Intelligence plc 490 110 0.5%Cantono plc 300 105 0.5%Belgravium Technologies plc 117 71 0.3%Greatfleet plc 310 58 0.3%Finsaga plc (formerly Brightview plc) 730 56 0.3%Strategic Retail plc 426 53 0.3%Assetco plc 1 1 0.0%Centurion Electronics plc 575 - 0.0% ---- ---- ---- 17,286 15,088 73.9%Fully listed investments:Microgen plc 180 126 0.6% ---- ---- ---- 180 126 0.6%Unlisted investments:Amber Taverns Limited 500 502 2.5%Sanastro plc 500 250 1.2%Aludel Limited 750 0 0.0% ---- ---- ---- 1,750 752 3.7% ---- ---- ----Total qualifying investments 19,216 15,966 78.2% === === ===Non-qualifying investmentsMoney market funds 1 3,075 3,075 15.0%AIM quoted investments 361 673 3.3%Unicorn Free Spirit Fund (OEIC) 332 642 3.1%Listed UK equities 187 434 2.1% ---- ---- ----Total non-qualifying investments 3,955 4,824 23.5% === === === ---- ---- ----Total investments 23,171 20,790 101.7% === === ===Other assets 325 1.6%Current liabilities (661) (3.3%) ---- ----Net assets 20,454 100.0% === ===
1 Disclosed within 'current investments' under current assets in the Balance
SheetInvestment Portfolio Summary - S2 Share Fundas at 31 March 2008 % of net Book cost Valuation assets by value ‚£'000 ‚£'000Qualifying investmentsAIM quoted investments:Mattioli Woods plc 396 885 7.0%Maxima Holdings plc 800 835 6.6%Zetar plc 366 810 6.4%Cohort plc 507 701 5.5%Abcam plc 334 674 5.3%Melorio plc 360 385 3.0%Driver Group plc 325 320 2.5%Hasgrove plc 300 300 2.4%Mears Group plc (formerly Careforce 345 290 2.3%Group plc) Clerkenwell Ventures plc 398 265 2.1%SnackTime plc 288 256 2.0%Datong Electronics plc 333 255 2.0%Sanderson Group plc 385 254 2.0%Invocas Group plc 344 248 2.0%Avingtrans plc 288 240 1.9%ShieldTech plc 350 238 1.9%Prologic plc 218 218 1.7%Hexagon Human Capital plc 253 184 1.5%Kiotech International plc 195 179 1.4%Tracsis plc 120 156 1.2%Maelor plc 154 154 1.2%Fountains plc 135 147 1.2%Printing.com plc 108 133 1.1%Debts.co.uk plc 400 76 0.6%Belgravium Technologies plc 117 71 0.6%Cantono plc 200 70 0.6%Augean plc 150 55 0.4%Access Intelligence plc 210 47 0.4%EG Solutions plc 250 30 0.2%Strategic Retail plc 174 22 0.2%Finsaga plc (formerly Brightview plc) 270 20
0.2%
The Debt Advisor Group (formerly 1,000 - 0.0%Compass Finance Group plc) ---- ---- ---- 10,073 8,518 67.4%Unlisted investments:Amber Taverns Limited 500 502 4.0%Sanastro plc 500 250 2.0% ---- ---- ---- 1,000 752 6.0% ---- ---- ----Total qualifying investments 11,073 9,270 73.4% === === ===Non-qualifying investmentsUnicorn Free Spirit Fund (OEIC) 1,083 1,591
12.6%
Unicorn UK Smaller Companies Fund (OEIC) 1,213 1,410 11.2%Money market funds 1 378 378 3.0%AIM quoted investments 28 16 0.1% ---- ---- ----Total non-qualifying investments 2,702 3,395 26.9% === === === ---- ---- ----Total investments 13,775 12,665 100.3% === === ===Other assets 244 1.9%Current liabilities (278) (2.2)% ---- ----Net assets 12,631 100.0% === ===
1 Disclosed within 'current investments' under current assets in the Balance
Sheet
Investment Portfolio Summary - S3 Share Fundas at 31 March 2008 % of net Book cost Valuation assets by value ‚£'000 ‚£'000Qualifying investmentsAIM quoted investments:Animalcare Group plc 200 200 4.7%Melorio plc 187 200 4.7%SnackTime plc 216 192 4.5%Tracsis plc 120 156 3.6%Maelor plc 154 154 3.6% ---- ---- ---- 877 902 21.1% ---- ---- ----Total qualifying investments 877 902
21.1%
=== ===
===
Non-qualifying investmentsMoney market funds 1 1,516 1,516
35.4%
Unicorn Outstanding British Companies Fund 497 462 10.8%(OEIC)Unicorn Mastertrust Fund (OEIC) 498 408
9.5%
Unicorn Free Spirit Fund (OEIC) 496 408
9.5%
Unicorn UK Smaller Companies Fund (OEIC) 496 384 9.0%Unicorn UK Income Fund (OEIC) 480 374 8.7% ---- ---- ----Total non-qualifying investments 3,983 3,552 82.9% === === === ---- ---- ----Total investments 4,860 4,454 104.0% === === ===Other assets 35 0.8%Current liabilities (201) (4.8)% ---- ----Net assets 4,288 100.0% === ===
1 Disclosed within 'current investments' under current assets in the Balance
SheetQualifying InvestmentsAIM quoted investments:Abcam plc
Online distributor of antibodies for research purposes.
Access Intelligence plc
Subscription based sales and marketing support.
Animalcare Group plc
Manufacturer & supplier worldwide of livestock, healthcare & management products.
Assetco plc
Provision of ladders and ancillary equipment for the emergency services.
Augean plc
Operation of hazardous waste landfill sites.
Avingtrans plc
Provision of precision engineering services.
Belgravium Technologies plc
Development and supply of rugged, hand-held, battery powered, real time data capture devices.
Cantono plcManaged IT services.Centurion Electronics plc
Design and distribution of in-car audio-visual entertainment systems.
Clerkenwell Ventures plc
Restaurant acquisition vehicle.
Cohort plc
Provision of a wide range of technical services to clients in the defence and security sectors.
Datong Electronics plc
Development of a range of advanced covert tracking and location systems.
Debts.co.uk plc
Specialists in personal debt solution management.
Dillistone Group plc
Provider of software services to the executive recruitment industry.
Driver Group plc
Provision of specialist commercial, project planning and dispute resolution services to the construction industry.
EG Solutions plc
Provisions of proprietary workflow management tools designed to improve operational efficiencies.
Finsaga plc (formerly Brightview plc)
Marketing company focused on operating telephone response based promotions.
Fountains plc
Environmental services and grounds maintenance to utility companies and local authorities.
Glisten plc
Manufacturer of chocolate confectionery, sugar based sweets and edible decorations.
Greatfleet plc
Recruitment consultant specialising in legal and financial search and selection.
Hasgrove plc
Pan-European marketing and communications services.
Hexagon Human Capital plc
Specialist recruitment consultants.
Huveaux plc
Broadly based media group focusing upon political publishing, education and training.
Invocas Group plc
Provision of personal and corporate debt solutions based in Scotland
Kiotech International plc
Manufacturer of animal feed supplements.
Lees Foods plc
Confectionery manufacturer.
Maelor plc
Specialist hospital medicines group.
Mattioli Woods plc
Consultants in the provision of pension and wealth management services.
Maxima Holdings plc
Implementation and support of enterprise software solutions.
Mears Group plc
Social housing and domiciliary care.
Melorio plc
NVQ training targeted at the Construction Industry.
Pilat Media Global plc
Development and support of scheduling software for digital TV.
Printing.com plc
Franchised high street printing.
Prologic plc
Development and maintenance of software to meet the operational, reporting and business intelligence needs of fashion businesses.
Sanderson Group plc
Implementation and support of proprietary enterprise software solutions.
Shieldtech plc
Design, manufacture and supply of body armour.
SnackTime plc
Operator of vending machines.
Strategic Retail plc
Operation of retail outlets specialising in home dĩcor and furnishings market.
Supporta plc
Provision of back office support and domiciliary care to the public and private sectors.
Synarbor plc (formerly Public Recruitment Group plc)
Public sector recruitment and services group specialising in the education, healthcare and social work sectors.
The Debt Advisor Group plc
Consumer financial solutions through mortgages, secured and unsecured loans.
Tracsis plc
Provider of resource optimisation software to transport companies.
Xpertise Group plc
Provision of accredited technical IT training courses.
Zetar plcNiche manufacturer of chocolate confectionery.
Fully Listed Investments:
Microgen plc
IT consultancy and managed services provider.
Unlisted investments:Aludel LimitedLadies only fitness clubs.Amber Taverns LimitedPub operator.Sanastro plc
Specialist financial publisher.
UNAUDITED NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY SHARE, S2 SHARE AND S3 SHARE FUNDS
Profit and Loss Accounts for the six months ended 31 March 2008
Ordinary Share S2 Share fund fund Notes Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Unrealised losses oninvestments - (6,411) (6,411) - (3,051) (3,051)Gains/(losses) onrealisations ofinvestments - 39 39 - (85) (85)Income 129 - 129 74 - 74Investmentmanagement fees 2 (68) (204) (272) (34) (103) (137)Other expenses (145) - (145) (83) - (83) ---- ---- ---- ---- ---- ----(Loss)/profit onordinary activitiesbefore taxation (84) (6,576) (6,660) (43) (3,239) (3,282)Tax on ordinaryactivities - - - - - - ---- ---- ---- ---- ---- ----(Loss)/profitattributable to equityshareholders (84) (6,576) (6,660) (43) (3,239) (3,282) === === === === === === Basic and dilutedearnings per 1p share 3 (0.28)p (21.66)p (21.94)p (0.29)p (22.05)p (22.34)p Total of all three Funds (per Statutory Profit S3 Share fund and Loss account) Notes Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Unrealised losses oninvestments - (290) (290) - (9,752) (9,752)Gains/(losses) onrealisations ofinvestments - - - - (46) (46)Income 65 - 65 268 - 268Investmentmanagement fees 2 (7) (20) (27) (109) (327) (436)Other expenses (36) - (36) (264) - (264) ---- ---- ---- ---- ---- ----(Loss)/profit onordinary activitiesbefore taxation 22 (310) (288) (105) (10,125) (10,230)Tax on ordinaryactivities - - - - - - ---- ---- ---- ---- ---- ----(Loss)/profitattributable to equityshareholders 22 (310) (288) (105) (10,125) (10,230) === === === === === === Basic and dilutedearnings per 1p share 3 0.44 p (6.24)p (5.79)p
Balance sheets as at 31 March 2008
Ordinary Share fund S2 Share fund Notes ‚£'000 ‚£'000 ‚£'000 ‚£'000Non current assetsInvestments 17,715 12,287 Current AssetsDebtors and prepayments 103 9Current investments 3,075 378Cash at bank 222 235 ----- ----- 3,400 622Creditors: amounts falling due within one year (661) (278) ----- ----- ----- -----Net current assets 2,739 344 ----- -----Net assets 20,454 12,631 === === Share capital andreservesCalled up share capital 302 146Capital redemptionreserve 48 12Share premiumaccount - 10Revaluation reserve (539) (10)Special distributablereserve 18,021 11,469Profit and Loss account 2,622 1,004 ----- -----Equity shareholders'funds 20,454 12,631 === === No. of Shares inIssue: 30,233,787 14,578,973 Net Asset Value per1p share: 5 67.7p 86.6p Total of all Adjustments three Funds (see note (per Statutory S3 Share fund below) Balance Sheet) Notes ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Non current assetsInvestments 2,938 32,940 Current AssetsDebtors andprepayments 22 (51) 83Current investments 1,516 4,969Cash at bank 13 470 ----- ----- ----- 1,551 (51) 5,522Creditors: amountsfalling due within oneyear (201) 51 (1,089) ----- ----- ----- ----- -----Net current assets 1,350 4,433 ----- -----Net assets 4,288 - 37,373 === === === Share capital andreservesCalled up share capital 50 498Capital redemptionreserve - 60Share premiumaccount 4,642 4,652Revaluation reserve (406) (955)Special distributablereserve - 29,490Profit and Lossaccount 2 3,628 ----- -----Equity shareholders'funds 4,288 37,373 === === No. of Shares inIssue: 4,958,036 Net Asset Value per1p share: 5 86.5p
Note: The adjustment above nets off the inter-fund debtor and creditor balances, so that the "Total of all three Funds" balance sheet agrees to the Statutory Balance Sheet below.
UNAUDITED PROFIT AND LOSS ACCOUNTfor the six months ended 31 March 2008 Six months ended 31 March 2008 Six months ended 31 March 2007 Notes Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Unrealised(losses)/gains oninvestments - (9,752) (9,752) - 4,943 4,943(Losses)/gains onrealisations ofinvestments - (46) (46) - 1,111 1,111Income 268 - 268 254 - 254Investmentmanagement fees 2 (109) (327) (436) (128) (384) (512)Other expenses (264) - (264) (258) - (258) ----- ----- ----- ----- ----- -----(Loss)/profit onordinary activitiesbefore income tax (105) (10,125) (10,230) (132) 5,670 5,538Tax on ordinaryactivities - - - - - - ----- ----- ----- ----- ----- -----(Loss)/profit onordinary activitiesafter taxation forthe financialperiod (105) (10,125) (10,230) (132) 5,670 5,538 === === === === === ===Basic and dilutedearnings per share:Ordinary Shares 3 (21.94)p 11.48pS2 Shares 3 (22.34)p 12.22pS3 Shares 3 (5.79)p - Year ended 30 September 2007 (audited) Notes Revenue Capital Total ‚£'000 ‚£'000 ‚£'000Unrealised(losses)/gainsoninvestments - 748 748(Losses)/gainsonrealisations ofinvestments - 1,358 1,358Income 746 - 746Investmentmanagement fees 2 (263) (788) (1,051)Other expenses (516) - (516) ----- ----- -----(Loss)/profit onordinaryactivitiesbefore incometax (33) 1,318 1,285Tax on ordinaryactivities - - - ----- ----- -----(Loss)/profit onordinaryactivitiesafter taxationfor thefinancial period (33) 1,318 1,285 === === ===Basic anddilutedearnings pershare:Ordinary Shares 3 2.85pS2 Shares 3 3.32pS3 Shares 3 (3.00)p
The total column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. There were no other recognised gains or losses in the period.
UNAUDITED NOTE OF HISTORICAL COST PROFITS AND LOSSES for the six months ended 31 March 2008
Year Six months Six months ended 30 ended 31 ended 31 September March 2008 March 2007 2007(audited) Total Total Total ‚£'000 ‚£'000 ‚£'000(Loss)/profit on ordinaryactivities before taxation (10,230) 5,538 1,285Less: unrealised(losses)/gains oninvestments 9,752 (4,943) (748)Realisation of revaluationgains of previous years 1,038 1,278 1,167 ---- ---- ----Historical cost profit onordinary activities beforetaxation 560 1,873 1,704 ---- ---- ----Historical cost profit/(loss)for the period after taxationand dividends (179) (1,272) (3,735) === === ===UNAUDITED BALANCE SHEETas at 31 March 2008 As at As at As at 31 March 31 March 30 September 2008 2007 2007 (audited) Notes ‚£'000 ‚£'000 ‚£'000Non current assetsInvestments 1b 32,940 49,494 44,637Current assetsDebtors andprepayments 83 78 1,298Current investments 6 4,969 2,732 2,939Cash at bank 470 122 108 5,522 2,932 4,345Creditors: amountsfalling due within oneyearOther creditors (918) (176) (97)Accruals (171) (280) (215) (1,089) (456) (312) Net current assets 4,433 2,476 4,033 Net assets 37,373 51,970 48,670 Share capital and reservesShare capital 498 466 502Capital redemptionreserve 60 42 56Share premium account 4,652 10 4,652Revaluation reserve (955) 13,919 9,835Special distributablereserve 29,490 33,658 30,131Profit and Loss account 3,628 3,875 3,494 Equity shareholders'funds 37,373 51,970 48,670 Net asset value per share of 1p eachOrdinary Shares 5 67.7p 103.4p 89.6pS2 Shares 5 86.6p 127.5p 113.8pS3 Shares 5 86.5p - 92.3p
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 31 March 2008
Year ended Six months ended Six months ended 30 September 2007 31 March 2008 31 March 2007 (audited) Notes ‚£'000 ‚£'000 ‚£'000
Opening shareholders' funds 48,670 50,422 50,422Net share capital bought back in the period (328) (845) (2,290)Net share capital subscribed in the period -
- 4,692(Loss)/profit for the period (10,230) 5,538 1,285Dividends paid in period 4 (739) (3,145) (5,439) -------- -------- --------Closing Shareholders' funds 37,373 51,970 48,670 ==== ==== ====UNAUDITED STATEMENT OF CASH FLOWSfor the six months to 31 March 2008 Year ended 30 Six months ended Six months ended September 31 March 2008 31 March 2007 2007(audited) ‚£'000 ‚£'000 ‚£'000Operating activitiesInvestment incomereceived 334 281 788Investment managementfees paid (435) (512) (1,063)Other cash payments (303) (183) (599) ---- ---- ----Net cash outflow fromoperating activities (404) (414) (874) Investing activitiesPurchase of investments (1,732) (1,830) (6,797)Sale of investments 5,640 4,417 9,167 ---- ---- ----Net cash inflow frominvesting activities 3,908 2,587 2,370 DividendsDividends paid (739) (3,145) (5,439) ---- ---- ----Cash inflow/(outflow)before financing andliquid resourcemanagement 2,765 (972) (3,943) FinancingShare capital raised - - 4,692Share capital re-purchased (373) (762) (2,290) ---- ---- ---- (373) (762) 2,402Management of liquidresources(Increase)/decrease inmonies held pendinginvestment (2,030) 206 (1) ---- ---- ----Increase/(decrease) incash 362 (1,528) (1,542) === === ===Reconciliation of net cashflow to movement in netfundsIncrease/(decrease) in cashfor the period 362 (1,528) (1,542)Net funds at start of period 108 1,650 1,650 ---- ---- ----Net funds at end of period 470 122 108 === === ===Reconciliation ofoperating (loss)/profit tonet cash outflow fromoperating activities(Loss)/profit on ordinaryactivities before taxation (10,230) 5,538 1,285Net gains/(losses) onrealisations of investments 46 (1,111) (1,379)Net unrealised(losses)/gains oninvestments 9,752 (4,943) (748)Decrease/(Increase) indebtors 19 (3) (94)Increase in creditors 9 105 62 ---- ---- ----Net cash outflow fromoperating activities (404) (414) (874) === === ===
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Principle accounting policies
The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report.
a) Basis of accountingThe unaudited results cover the six months to 31 March 2008 and have beenprepared under UK Generally Accepted Accounting Practice (UK GAAP), consistentwith the accounting policies set out in the statutory accounts for the yearended 30 September 2007 and, to the extent that it does not conflict with theCompanies Act 1985, the 2003 Statement of Recommended Practice, `FinancialStatements of Investment Trust Companies', revised December 2005. There are nocomparatives for the S3 Fund for the 6 months ended 31 March 2007, as thisFund had not allotted any shares at that date.As a result of the Directors' decision to distribute capital profits by way ofa dividend, the Company revoked its investment company status as defined undersection 266 (3) of the Companies Act 1985, on 17 August 2004.
Consequently, the financial statements have been drawn up to include a statutory profit and loss account and a statement of total recognised gains and losses in accordance with Schedule 4 of the Companies Act 1985 and Financial Reporting Standard 3 "Reporting Financial Performance" and the comparatives have been presented on a consistent basis. This has no effect on total returns or net assets per share.
b) Investments
All investments held by the Company are classified as "fair value through profit and loss". For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date.
Unquoted investments are valued by the Directors in accordance with the following rules, which are consistent with the International Private Equity Venture Capital Valuation (IPEVCV) guidelines:
(i) Investments which have been made in the last 12 months are at fair value which, unless another methodology gives a better indication of fair value, will be at cost;
(ii) Investments in companies at an early stage of their development are also valued at fair value which, unless another methodology gives a better indication of fair value, will be at cost;
(iii) Where investments have gone beyond the stage of their development in (ii) above, the shares may be valued by applying a suitable price-earnings ratio to that company's post-tax earnings (the ratio used being based on a comparable listed company or sector but discounted to reflect lack of marketability);
(iv) Where a value is indicated by a material arms-length transaction by a third party in the shares of a company, this value will be used.
Unlisted investments will not normally be re-valued upwards for a period of atleast twelve months from the date of acquisition for early stage investments.Where a company's underperformance against plan indicates a diminution in thevalue of the investment, provision against cost is made, as appropriate.
2. The Directors have charged 75% of the investment management fee to the capital reserve.
3. Basic and diluted earnings and return per share
Six months ended 31 March 2008 Six months ended 31 March 2007 Ordinary Ordinary Share S2 Share S3 Share Share S2 Share Fund Fund Fund Total Fund Fund Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Total earnings aftertaxation: (6,660) (3,282) (288) (10,230) 3,624 1,914 5,538Basic and dilutedearnings per share (21.94)p (22.34)p (5.79)p 11.48p 12.22p ----- ----- ----- ----- ----- ----- -----Net revenue fromordinary activitiesaftertaxation (84) (43) 22 (95) (36)Revenue return pershare (0.28)p (0.29)p 0.44p (0.30)p (0.23)p ----- ----- ----- ----- ----- ----- -----Net unrealised capital(losses)/gains (6,411) (3,051) (290) 451 660Net realised capitalgains/(losses) 39 (85) - 3,528 1,415Capital expenses (204) (103) (20) (260) (124) ----- ----- ----- ----- ----- ----- -----Total capital return (6,576) (3,239) (310) 3,719 1,950Capital return pershare (21.66)p (22.05)p (6.24)p 11.78p 12.45p ----- ----- ----- ----- ----- ----- -----Weighted averagenumber of shares inissue in the year 30,357,257 14,691,444 4,958,036 31,568,187 15,661,238 Year ended 30 September 2007 Ordinary Share S2 Share S3 Share Fund Fund Fund Total (audited) (audited) (audited) (audited) ‚£'000 ‚£'000 ‚£'000 ‚£'000Total earnings aftertaxation: 890 512 (117) 1,285Basic and dilutedearnings per share 2.85p 3.32p (3.00)p ----- ----- ----- -----Net revenue fromordinary activitiesaftertaxation (52) (20) 39Revenue return pershare (0.17)p (0.13)p 1.00p ----- ----- ----- -----Net unrealised capital(losses)/gains 124 740 (116)Net realised capitalgains/(losses) 1,330 40 (12)Capital expenses (512) (248) (28) ----- ----- ----- -----Total capital return 942 532 (156)Capital return pershare 3.02p 3.45p (4.02)p ----- ----- ----- -----Weighted averagenumber of shares inissue in the year 31,171,332 15,425,839 3,879,9704. Dividends Six months ended 31 March 2008 Six months ended 31 March 2007 Ordinary S3 Ordinary Share S2 Share Share Share S2 Share Fund Fund Fund Total Fund Fund Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000Ordinary Share Fund:Interim paid - - - - 2,362 - 2,362 S2 Share FundInterim paid - - - - - - -
Final paid re prior year - 739 - 739 - 783
783 ----- ----- ----- ----- ----- ----- ----- - 739 - 739 2,362 783 3,1455. Net asset value Six months ended Six months ended 31 March 2008 31 March 2007 Ordinary S2 Share S3 Share Ordinary S2 Share Share Fund Fund Fund Share Fund Fund ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Net assets 20,454 12,631 4,288 32,033 19,936 Number of shares in issue 30,233,787 14,578,973 4,958,036 30,977,172 15,635,524 ---- ---- ---- ---- ----Net asset value per share 67.7p 86.6p 86.5p 103.4p 127.5p Year ended 30 September 2007 Ordinary S2 Share S3 Share Share Fund Fund Fund (audited) (audited) (audited) ‚£'000 ‚£'000 ‚£'000 Net assets 27,270 16,824 4,575
Number of shares in issue 30,453,157 14,778,800 4,958,036
---- ---- ----Net asset value per share 89.6p 113.8p 92.3p6. Current investmentsThese comprise investments in two Dublin based OEIC money market funds,managed by Royal Bank of Scotland and Blackrock Investment Management (UK)Ltd. ‚£4,969,000 (31 March 2007: ‚£2,731,000 30 September 2007: ‚£2,939,000) ofthis sum is subject to same day access, while ‚£nil (31 March 2007: ‚£1,000September 2007: ‚£nil) is subject to two day access. These sums are regarded asmonies held pending investment.
7. Related party transactions
Under the terms of an agreement dated 1 October 2001, the Company has appointed Unicorn Asset Management Limited (of which Peter Webb is a director and shareholder) to be the Investment Manager. The fees payable under these arrangements were ‚£436,000 (31 March 2007: ‚£512,000; 30 September 2007: ‚£1,051,000).
8. The financial information for the six months ended 31 March 2008 and the six months ended 31 March 2007 has not been audited.
The information for the year ended 30 September 2007 does not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The financial statements for the year ended 30 September 2007 have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.
9. Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, One Jermyn Street, London SW1Y 4UH.
Shareholder communications
The Company's Ordinary Shares (Code: UAV), S2 Shares (UAVB) and S3Shares (UAV3) are listed on the London Stock Exchange. Shareholders can visitthe London Stock Exchange website, www.londonstockexchange.com, for the latestnews and share prices of the Company. The share prices are also quoted in theFinancial Times.Shareholder enquiries:
For general Shareholder enquiries, please contact Robert Brittain of Matrix-Securities Limited (the Company Secretary) on 020 7925 3300 or by e-mail on unicorn@matrixgroup.co.uk.
For enquiries concerning the performance of the Company, please contact the Investment Manager, Unicorn Asset Management Limited, on 020 7253 0889 or by e-mail on info@unicornam.com.
Electronic copies of this report and other published information is available on the Company Secretary's website, www.matrixgroup.co.uk and the Investment Manager's website, www.unicornam.com.
To notify the Company of a change of address or to request a dividend mandate form (should you wish to have future dividends paid directly into your bank account) please contact the Company's Registrars, Capita Registrars on 0871 664 0300, (calls cost 10p per minute including VAT plus network costs) or by writing to them at Capita Registrars, Northern House, Woodsome Park, Fennay Bridge, Huddersfield, West Yorkshire HD8 0LA.
Information rights for beneficial owners of shares
Please note that beneficial owners of shares who have been nominated by the registered holder of those shares to receive information rights under section 146 of the Companies Act 2006 are required to direct all communications to the registered holder of their shares, rather than to the Company's registrar, Capita Registrars, or to the Company directly.
NOTICE of the EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Unicorn AIM VCT plc ("the Company") will be held at 2.00 pm on 23 July 2008 at Matrix Group Limited, Sixth Floor, One Jermyn Street, London, SW1Y 4UH for the purposes of considering and, if thought fit, passing the following as a special resolution:
1. That the definition of "Act" in the articles of association be amended to read:
"Act subject to paragraph 2.3 of this Article, the Companies Act 1985 and, where the context requires, every other statute from time to time in force concerning companies, including any statutory modification or re-enactment thereof for the time being in force and any provisions of the Companies Act 2006 for the time being in force,"
2. That article 122 of the articles of association be amended to article 122B with the first sentence amended to read:
"Subject to the provisions of the Act and Article 122A above and further provided that Article 123 is complied with, a Director, notwithstanding his office:"
And the following be inserted as article 122A:
"122A Conflicts of interest requiring Board authorisation
The Board may, provided the quorum and voting requirements set out below are satisfied, authorise any matter that would otherwise involve a Director breaching his duty under the Companies Act 2006 to avoid conflicts of interest.
(a) Any Director (including the Director concerned) may proposethat the Director concerned be authorised in relation to any matter thesubject of such a conflict. Such proposal and any authority given by the Boardshall be effected in the same way that any other matter may be proposed to andresolved upon by the Board under the provisions of these Articles, except thatthe Director concerned and any other Director with a similar interest:
(b) shall not count towards the quorum at the meeting at which the conflict is considered;
(c) may, if the other members of the Board so decide, be excluded from any Board meeting while the conflict is under consideration; and
(d) shall not vote on any resolution authorising the conflict except that, if he does vote, the resolution will still be valid if it would have been agreed to if his vote had not been counted.
122A.1 Where the Board gives authority in relation to such a conflict:
122A.1.1 the Board may (whether at the time of giving the authority or at any time or times subsequently) impose such terms upon the Director concerned and any other Director with a similar interest as it may determine, including, without limitation, the exclusion of that Director and any other Director with a similar interest from the receipt of information, or participation in discussion (whether at meetings of the Board or otherwise) related to the conflict;
122A.1.2 the Director concerned and any other Director with a similar interest will be obliged to conduct himself in accordance with any terms imposed by the Board from time to time in relation to the conflict;
122A.1.3 any authority given by the Board in relation to a conflictmay also provide that where the Director concerned and any other Director witha similar interest obtains information that is confidential to a third party,the Director will not be obliged to disclose that information to the Company,or to use the information in relation to the Company's affairs, where to do sowould amount to a breach of that confidence;
122A.1.4 the terms of the authority shall be recorded in writing (but the authority shall be effective whether or not the terms are so recorded); and
122A.1.5 the Board may withdraw such authority at any time.
122A.2 A Director is entitled to accept a benefit from a thirdparty, even if the benefit was conferred by reason of his being a Director, ifthe receipt of the benefit is disclosed to and approved by the Board within areasonable time of its receipt or the value or nature of the benefit or seriesof benefits taken as a whole is such that it cannot reasonably be regarded(including by reference to any scale or categorisation of benefits that theBoard may from time to time prescribe for the purpose) as likely to give riseto a conflict of interest. BY ORDER OF THE BOARD Matrix-Securities Limited SecretaryRegistered OfficeOne Jermyn StreetLondon SW1Y 4UH28 April 2008NOTES:(i) A person entitled to receive notice of, attend and vote at the abovemeeting is entitled to appoint one or more proxies to attend and on a poll,vote in his place. A proxy need not be a member of the Company. You mayappoint more than one proxy provided each proxy is appointed to exerciserights attached to different shares. You may not appoint more than one proxyto exercise rights attached to any one share. To appoint more than one proxy,you may copy the proxy form, clearly stating on each copy the shares to whichthe proxy relates, or alternatively contact the Company's registrars, CapitaRegistrars, on 0871 664 0300 (calls cost 10p per minute including VAT plusnetwork costs) to request additional copies of the proxy form.
(ii) In accordance with section 325 of the Companies Act 2006 ("the 2006 Act"), the right to appoint proxies does not apply to persons nominated to receive information rights under section 146 of the 2006 Act.
Persons nominated to receive information rights under section 146of the 2006 Act who have been sent a copy of this notice of meeting are herebyinformed, in accordance with Section 149 (2) of the 2006 Act, that they mayhave a right under an agreement with the registered member by whom they werenominated to be appointed, or to have someone else appointed, as a proxy forthis meeting. If they have no such right, or do not wish to exercise it, theymay have a right under such an agreement to give instructions to the member asto the exercise of voting rights. Nominated persons should contact theregistered member by whom they were nominated in respect of these.(iii) To be valid the enclosed form of proxy for the Extraordinary GeneralMeeting, together with the power of attorney or other authority, if any, underwhich it is signed or a notarially certified or office copy thereof must bedeposited no less than 48 hours (excluding weekends) prior to the time fixedfor the holding of the meeting or any adjournment of the said meeting at theoffices of the Company's registrars, Capita Registrars, Proxy department, POBox 25, Beckenham, Kent BR3 4BR.
(iv) Completion and return of the enclosed form of proxy will not prevent you from attending and voting in person at the Extraordinary General Meeting.
(v) Addresses (including electronic addresses) in this document are included strictly for the purposes specified and not for any other purpose.
(vi) As at 28 April 2008, the Company's issued share capital comprised 31,129,485 Ordinary Shares, 14,769,905 S2 Shares and 4,958,036 S3 Shares. Each share carries one vote at a general meeting of the Company and, therefore, the total voting rights in the Company as at 24 April 2008 is 50,857,426.
(vii) The Company, pursuant to Regulation 41 of the UncertifiedSecurities Regulations 2001, specifies that only those Shareholders registeredin the Register of Members of the Company as at midnight on 21 July 2008 or,in the event that the meeting is adjourned, in the Register of Members 48hours before the time of any adjourned meeting, shall be entitled to attend orvote at the Extraordinary General Meeting in respect of the number of sharesregistered in their name at the relevant time. Changes to entries in theregister of Members after midnight on 21 July 2008 or, in the event that themeeting is adjourned, in the Register of Members less than 48 hours before thetime of any adjourned meeting, shall be disregarded in determining the rightsof any person to attend or vote at the meeting.
ENDS
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