Unicorn Asset Management Regulatory News (UAV)

Unicorn AIM VCT plc ("the Company")

Interim Management Statement

For the period from 1 October 2022 to 31 December 2022

Introduction

This voluntary Interim Management Statement ("IMS") covers the three-month period ended 31 December 2022, together with relevant information up to the date of publication. 

Investment Objective

The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady flow of dividend distributions to Shareholders from the income as well as capital gains generated by the portfolio.

It is also the objective that the Company should continue to qualify as a Venture Capital Trust ("VCT"), so that Shareholders benefit from the taxation advantages that this brings. To achieve this, at least 80% of the Company's total assets are to be invested in qualifying investments of which 70% by VCT value (30% in respect of investments made before 6 April 2018 from funds raised before 6 April 2011) must be in ordinary shares, which carry no preferential rights (save as permitted under VCT rules) to dividends or return of capital and no rights to redemption.

Performance

The performance of the portfolio was flat in the three-month period under review, as the Company's net asset value per Share increased by just 0.1% from 134.8p per Share to 135.0p per Share (unaudited).

In comparison, the FTSE AIM All-Share Index posted a total return of +3.6% during the same period.

The outperformance of the FTSE AIM All-Share Index in the first quarter of the Company's financial year was partly due to a recovery in the valuation of AIM-listed businesses that operate within the financial services sector, to which the investment portfolio has relatively low exposure. In addition, the share price of MaxCyte, a life sciences business in which the Company holds a meaningful stake, remained under pressure during the period, despite having released very positive news.

We are confident that the modest relative underperformance recorded during the first quarter can be reversed during the remainder of the Company's current financial year.

Outlook

Despite recent economic headwinds, the operational performance of many of our AIM-listed companies has been reassuringly resilient. A large proportion of our investee companies are well established, profitable and cash generative businesses, which sell highly specialised products and services for which there is typically continuing, strong demand. While the immediate outlook for less mature companies remains challenging, it is reasonable to anticipate positive returns from these businesses once market conditions become more favourable.

Against this backdrop, our approach to backing new companies remains highly selective.

We remain confident that we will continue to find exciting investment opportunities that, over time, are capable of delivering a combination of tax-free dividend income and capital growth. We are also confident that, once economic and political stability returns, the FTSE AIM All-Share Index and the Company's carefully selected portfolio of investments will recover in value.

In the meantime, we continue to nurture the promising portfolio of existing investments, and are confident that most of our investee companies can withstand an extended period of economic hardship, and, in many cases, have the potential to become valuable businesses within the next 5-10 years.

As at 31 December 2022, an estimated 99.0% of total assets (by VCT value and excluding new capital) were invested in VCT qualifying companies. This figure is significantly above the 80% threshold that the Company is required, by HMRC, to maintain.

Material Transactions

Capital was committed to two investments in the three-month period ended 31 December 2022. These investments were:-

· A new investment of £2.0 million in Oxford Biodynamics PLC in October 2022 and;

· A follow-on investment of £0.1 million in SulNOx Group PLC, which completed in January 2023

Top Ten VCT Qualifying Holdings as at 31 December 2022

Share Buy-Backs

No share buybacks were undertaken in the period under review.

Offer for Subscription

A new Offer for Subscription to raise up to £10 million, with an over-allotment facility to raise up to a further £5 million was launched on 24 January 2023. Details of this offer are set out in a Prospectus issued by the Company on 24 January 2023, which is available online at https://www.unicornaimvct.co.uk. The Offer will open for applications at 9.00 a.m. on 6 February 2023 and will close for applications at 5.30 p.m. on 30 March 2023 (or, if earlier, as soon as the Offer is fully subscribed or otherwise at the board's discretion). Applications in relation to this Offer can only be made for the 2022/2023 tax year.

Dividends

As advised in the Annual Report, the Board has recommended a final dividend of 3.5 pence per share in respect of the Company's financial year ended 30 September 2022. Subject to receiving Shareholder approval at the Annual General Meeting on 7 February 2023, this dividend will be paid on 14 February 2023 to eligible Shareholders who were on the register on 6 January 2023.

Material Events

There were no material events during the period from 1 October 2022 to 31 December 2022.

Chris Hutchinson

Unicorn Asset Management

Investment Director

30 January 2023