Unicorn Asset Management Regulatory News (UAV)

2 Feb 2012 14:48

Unicorn AIM VCT plc

Interim Management Statement

For the period from 1 October 2011 to 31 December 2011

Introduction

The Company has prepared this Interim Management Statement (IMS) in accordance with the Disclosure and Transparency Rules of the UK Listing Authority. The IMS covers the three month period ended 31 December 2011, together with relevant information up to the date of publication.

Investment Objective

The objective of the Company is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maximising the stream of dividend distributions to Shareholders from the income and capital gains generated by the 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.

Performance

The final three months of 2011 was a difficult period for the Company in relative performance terms, with the portfolio delivering a negative total return of 6.1%.

As at 31 December 2011, the unaudited Net Asset Value (NAV) was 97.0 pence per share, compared to an audited NAV of 103.34 pence per share as at 30 September 2011.

The Net Asset Value as at 31 January 2012, adjusted for the payment of dividends is 93.2 pence per share.

The ongoing debt crisis and heightened concerns surrounding the strength and sustainability of economic recovery was reflected in increasingly volatile equity markets. In the face of this uncertainty, investors sought refuge in larger quoted companies with highly liquid and tradable shares. This defensive approach saw the main market deliver a strong finish to the year, whilst the share prices of many smaller quoted companies continued to drift lower. The FTSE 100 Index ended the three month period up 9.4% on a total return basis, whilst the FTSE 250 Index gained by 3.5%. By contrast, the FTSE AIM AllShare Index declined on a total return basis by almost 1% over the same period, whilst the FTSE SmallCap Index fell by 3.5%.

Although there were a number of strong share price gains recorded by investee companies including Accumuli (+22.6%), Avingtrans (+14.1%), Cohort (+13.9%), IDOX (+9.0%) andScapa (+16.1%), these gains were insufficient to counter the general de-rating of many smaller quoted companies experienced in the period.

Profit warnings issued by Green Compliance (-45.5%), Hasgrove (-28.7%), Mears Group (-20.1%) and Mattioli Woods (-16.4%) triggered significant share price declines in these investments, which accounted for over half of the total negative contribution to NAV recorded during the quarter.

The value of the residual holding in Discover Leisure was written down to zero after the company went into administration in October 2011.

Material Transactions

There were six material transactions during the period under review.

HML Holdings, a leading residential property management business, completed a placing of new VCT qualifying shares in November 2011 in order to help fund the acquisition of a complementary, privately owned, property management business based in West London. Unicorn AIM VCT originally invested in HML in July 2007 and a further £83,000 of capital was committed in this secondary fundraising round.

The non-qualifying holding in Renold, a manufacturer of industrial chain and power transmission products, was added to in the period via a secondary market purchase of stock at a total cost of almost £200,000.

The remaining non-qualifying holding in Parseq, a specialist in payments processing software, was sold at a profit in the secondary market following a take-over approach. The disposal realised £132,000 and crystallised a total return on investment of £50,000 or 23.2%.

SSE, the utility company,was disposed of in the period, generating a 7.2% total return and realising proceeds of £544,000.

The Company's remaining non-qualifying holding in Unicorn Outstanding British Companies Fund, and a large proportion of theUnicorn UK Income Fund holding were also sold in the period generating proceeds of £1.2m and an aggregate capital gain of 29.6%.

Top 10 Equity Holdings at 31 December 2011

Abcam 14.8%

Unicorn UK Smaller Companies Fund 7.9%

Animalcare Group 4.7% Mattioli Woods 3.6% Anpario 3.3% Surgical Innovations Group 3.3% Mears Group 2.9% Unicorn Mastertrust Fund 2.9% Cohort 2.3% IDOX 2.2% Total 47.9% Material Events

There were no material events during the period from 1 October 2011 to 31 December 2011.

All resolutions proposed at the Annual General Meeting (AGM) held on 2 February 2012 were approved by Shareholders and a final dividend of 5 pence per share in respect of the financial year ended 30 September 2011 is payable to shareholders on 10 February 2012.

A Top Up Offer for Subscription to raise up to £4.125m by way of an issue of New Ordinary Shares opened on 13 January 2012 in conjunction with an Enhanced Buyback Facility for existing shareholders. The Top Up Offer will close on 5 April 2012, unless fully subscribed before this date, whilst the closing date for participation in the Enhanced Buyback is 22 March 2012 (unless the Top Up Offer is fully subscribed before this date). The resolutions proposing the Top Up Offer and Enhanced Buyback Facility were approved by Shareholders at the AGM held on 2 February 2012.

Further details relating to the Top Up Offer and Enhanced Buyback Facility can be found on Unicorn Asset Management's website; www.unicornam.com.