Unicorn Asset Management Regulatory News (UAV)

Unicorn AIM VCT plc ("the Company")

LEI: 21380057QDV7D34E9870

Interim Management Statement 

For the period from 1 October 2017 to 31 December 2017

Introduction

This voluntary Interim Management Statement (IMS) covers the three month period ended 31 December 2017, 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 capital gains as well as income 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 VCT value (70% for funds raised after 6 April 2011) must be in ordinary shares carrying no preferential rights (save as permitted under VCT rules) to dividends or return of capital and no rights to redemption.

Performance

The performance of UK equity markets was strong during the final quarter of 2017.

The FTSE All Share Index recorded a total return of +5.0% during the period under review, while the FTSE AIM All Share Index ended the quarter up by +4.9%, on the same total return basis.

UK equity indices continued to rise, despite ongoing uncertainty surrounding BREXIT and a relatively weak domestic economy. Much of the gains in the main and alternative markets have come from larger companies that operate on a global scale as they continue to benefit from the ongoing weakness of Sterling relative to the world's other major currencies.

The Company's overall performance was modestly positive during the period under review, with Net Asset Value per share increasing by 0.8%. Having started the period at 163.1 pence per share, the unaudited NAV per share as at 31 December 2017 was 164.4 pence per share.

VCT Qualifying Investments

Of the 75 VCT qualifying investments held in the portfolio, 34 recorded share price gains during the period under review. Of these, 14 investments generated capital gains in excess of £150,000 each.

Of particular note were the five largest contributors to performance, which generated a combined total of over £6.3 million in realised and unrealised capital gains in the period under review.

In absolute terms, the five stocks that delivered the greatest contribution were:-

AB Dynamics (+73.7%), a company engaged in the design, manufacture and supply of advanced testing and measurement products to the global automotive industry.

Fusion Antibodies (+159.8%), a contract research organisation providing a range of antibody engineering services.

Tracsis (+17.1%), a group that specialises in solving a variety of data capture, and resource optimisation problems, predominantly for the transport sector.

ULS Technology (+16.8%), a provider of online technology solutions for the UK conveyancing market.

Wey Education (+94.9%), a provider of online educational services worldwide.

Thirteen VCT qualifying holdings delivered negative contributions of more than £150,000 each.

Of these, three investee companies experienced share price falls that were directly related to unexpectedly poor trading or specific operational issues, while the remainder experienced share price weakness linked to market uncertainty and weak investor sentiment.

In absolute terms the five largest detractors from performance were:-

Animalcare (-12.9%), a veterinary medicines and animal products business.

Cohort (-16.5%), a holding company for a group of businesses supplying advanced technology products and services to the defence, security and transport markets  

IDOX (-43.6%), a leading supplier of specialist information management solutions and services.

Mattioli Woods (-8.4%), one of the UK's leading providers of Wealth Management and Employee Benefit Services.

Totally (-40.3%), a provider of healthcare services designed to offer improved care for those whose conditions can be better treated at home, locally, or in the community.

Non-Qualifying Investments

The overall performance of the non-qualifying investments was stable during the period under review, with an absence of notable newsflow on which to report.

Material Transactions

Three new VCT qualifying investments have been made during the period. In total, £4.8 million of new capital was allocated to these investments.

Additional VCT qualifying shares, to the value of £0.6 million, were acquired in Hardide, as part of a placing of new shares.

The only outright sale in the period was Greene King, which was a non-qualifying investment.

A number of partial disposals were made during the period. The purpose of such disposals is threefold; to help manage liquidity requirements, to ensure stock specific risk is contained and to lock in capital profits for future distribution to Shareholders via dividend payments.

Top Ten VCT Qualifying Holdings at 31 December 2017

Share Buy-Backs

During the period from 1 October 2017 to 31 December 2017, the Company bought back 509,200 of its own Ordinary Shares for cancellation, at an average price of 140.14 pence per share.

There were 118,889,237 Ordinary Shares in issue as at 31 December 2017.

Dividends

The Board has recommended a final dividend of 3.5 pence per share for the financial year ended 30 September 2017. The proposed dividend was approved by Shareholders at the Company's Annual General Meeting, which was held on 11 January 2018, and will be paid on 2 February 2018 to Shareholders on the register on 12 January 2018.

An interim dividend of 3.0 pence per share was paid on 11 August 2017. Total dividends paid in respect of the financial year ended 30 September 2017, will therefore amount to 6.5 pence per share (2016: 6.25 pence per share).

Material Events

On 17 November 2017, the Board announced the closure of the Offer for Subscription launched on 25 July 2017, which raised £33.6 million net of costs.

There were no other material events during the period from 1 October 2017 to 31 December 2017.

Chris Hutchinson

Unicorn Asset Management

Investment Manager

16 January 2018