Last checked at 
27 Apr 2007 14:33
UNICORN AIM VCT PLC
PRELIMINARY RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007
Chairman's Statement
I am pleased to present to Shareholders the Interim Results of the Company for the six months ended 31 March 2007 and to report that the Funds continue to make solid progress.
Net Asset Value
As at 31 March 2007 the net asset value (NAV) at bid prices for the OrdinaryShare Fund was 103.4 pence per share. Since the launch of the Ordinary ShareFund in November 2001, the total return to shareholders from initial NAV(including dividends but excluding tax reliefs) has been 45.4%.
As at 31 March 2007 the net asset value (NAV) at bid prices for the S2 Share Fund was 127.5 pence per share. Since the launch of the S2 Share Fund in February 2004, the total return to shareholders from initial NAV (including dividends but excluding tax reliefs) has been 42.1%.
Ordinary Share Fund
Over the six months there was a net gain on investments of ‚£3.98 million (‚£1.97million for the six months ended 31 March 2006) the total return on ordinaryactivities after taxation was ‚£3.62 million, the equivalent of 11.48 pence pershare. During the period 865,000 Ordinary Shares were bought back forcancellation at an average price of 93.23 pence per share and at an averagediscount of 10% to the NAV per share.
The deficit on the revenue account for the Ordinary Share Fund was ‚£95,000 (‚£ 141,000 deficit for the six months ended 31 March 2006).
S2 Share Fund
Over the six months there was a net gain on investments of ‚£2.07 (‚£2.38 millionfor the period ended 31 March 2006) the total return on ordinary activitiesafter taxation was ‚£1.91 million, the equivalent of 12.22 pence per share.During the period 30,000 S2 Shares were bought back for cancellation at a priceof 116 pence per share representing a discount of 10% to the NAV per share.
The deficit on the revenue account for the S2 Share Fund was ‚£36,000 (‚£43,000 deficit for the six months ended 31 March 2006).
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.
An interim dividend of 7.5 pence per share was paid to Ordinary Fund Shareholders on 28 February 2007, bringing total dividends paid since the launch of the Fund to 33.95 pence per share.
As proposed in the latest Report and Accounts, a final dividend of 5 pence pershare for the year ended 30 September 2006 was paid to S2 Fund Shareholders on31 January 2007. Total dividends paid since the launch of the S2 Fund nowamount to 6.75 pence per share.
Both the above dividends distributed during the period under review were paid out of capital profits realised on the sale of investments.
Qualifying Investments
In the period under review, the Ordinary Share Fund co-invested with the Series2 ("S2") Fund in three new qualifying investments. The Ordinary Share Fundportfolio now comprises thirty-two qualifying investments, whilst the S2 ShareFund portfolio holds twenty-eight qualifying stocks. Each Fund completed thedisposal of two holdings during the six months to 31 March 2007. As normal, theFunds continue to hold cash reserves in order to finance an active sharebuyback programme and to enable the purchase of further qualifying investmentsas and when appropriate.Following the third anniversary of the S2 Fund on 30 September 2006, the twoFunds are now combined for the purpose of measuring the 70% qualifying targetset by HM Revenue & Customs. As a consequence, at the end of March 2007, thevalue of the portfolios which was invested in VCT qualifying investmentsrepresented 83% of the total value of both Funds combined. All other HM Revenue& Customs tests have been complied with and your Board has been advised thatthe Company has maintained its venture capital trust status.
Offer of S3 Shares
The Company launched an Offer for Subscription for Series 3 Ordinary Shares of1p ("S3 Shares") on 19 February 2007 ("the Offer"). As at the date of thisReport a total of ‚£ 4.7 million has been raised under the Offer and the Offeris expected to remain open for subscription until 31 May 2007, although theDirectors do reserve the right to close the Offer before this date. For furtherinformation and a copy of the Securities Note please contact Unicorn AssetManagement, tel. 020 7253 0889 or visit www.unicornam.com.
Summary
In the past six months the AIM Index has continued to recover from a period ofsustained underperformance relative to the main market. The AIM is a dynamicand often volatile market. When compared to the main market, investor appetitefor AIM quoted companies can change rapidly, often resulting in magnifiedfluctuations in the overall value of the AIM Index. However, with over 1,600companies currently listed giving a combined market value in excess of ‚£90billion as at the end of 2006, there can be no argument with the phenomenallysuccessful growth of the AIM over the past decade. This success has enabled theAIM to become the market of choice for young, growing companies. It istherefore unsurprising that during the course of 2006 alone almost 350entrepreneurial management teams chose the AIM as the natural market on whichto list their companies for the first time.Your Investment Manager has always adopted a highly selective approach to newVCT qualifying investments on average rejecting nine out of every ten potentialinvestment opportunities. The Board believes that by maintaining thisdisciplined approach the Investment Manager can continue to deliverconsistently superior absolute returns to shareholders over the long er term.Peter DicksChairman
For further information please contact:
Unicorn Asset Management Limited, Tel: 020 7253 0889
UNAUDITED NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY SHARE AND THE S2 SHARE FUNDS
Profit and Loss Accounts for the six months ended 31 March 2007
Ordinary Share Fund S2 Share Fund Revenue Capital Total Revenue Capital Total ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ Unrealised gains on - 3,528,153 3,528,153 - 1,414,679 1,414,679investments Gains on realisation of - 451,023 451,023 - 659,767 659,767investments Income 161,387 - 161,387 92,492 - 92,492 Investment management (86,651) (259,955) (346,606) (41,407) (124,221) (165,628)fees Other expenses (170,015) - (170,015) (87,527) - (87,527) ------------- ------------- -------------
------------- ------------- -------------
(Loss)/profit on ord (95,279) 3,719,221 3,623,942 (36,442) 1,950,225 1,913,783inary activities before income tax Tax on ordinary - - - - - -activities ------------- ------------- -------------
------------- ------------- -------------
(Loss)/profit (95,279) 3,719,221 3,623,942 (36,442) 1,950,225 1,913,783attributable to equity shareholders ======= ======= ======= ======= ======= ======= (Loss)/earnings per 1p (0.30)p 11.78 p 11.48 p (0.23)p 12.45 p 12.22 pshare ------------- ------------- -------------
------------- ------------- -------------
Total of both funds (per Statutory Profit and Loss account) Revenue Capital Total ‚£ ‚£ ‚£ - 4,942,832 4,942,832 - 1,110,790 1,110,790 253,879 - 253,879 (128,058) (384,176) (512,234) (257,542) - (257,542)
----------------- ----------------- -----------------
(131,721) 5,669,446 5,537,725 - - -
----------------- ----------------- -----------------
(131,721) 5,669,446 5,537,725 ========== ========== ==========
Balance sheets as at 31 March 2007
Ordinary Share Fund S2 Share Fund ‚£ ‚£ ‚£ ‚£ Non current assets Investments 31,647,768 17,845,903 Current assets Debtors and prepayments 94,329 13,893 Current investments 569,940 2,161,672 Cash at bank 66,366 55,614 ---------------- ---------------- ---------------- ---------------- 730,635 2,231,179 Creditors: amounts (345,179) (140,678) falling due within one year ---------------- ---------------- ---------------- Net current assets/ 385,456 2,090,501(liabilities) ---------------- ---------------- Net assets 32,033,224 19,936,404 ---------------- ---------------- Share capital and reserves Called up share capital 309,771 156,355 Share premium account - 10,148 Revaluation reserve 9,566,943 4,351,802 Capital redemption 40,226 1,380reserve Special distributable 19,716,744 13,941,754reserve Profit and loss account 2,399,540 1,474,965 ---------------- ---------------- Equity shareholders' 32,033,224 19,936,404funds ---------------- ---------------- Number of Shares in 30,977,172 15,635,524Issue: Net asset value per 1p 103.4p 127.5pshare: Adjustments Total of both Funds (see note below) (per Statutory Balance Sheet) ‚£ ‚£ ‚£ Non current assets Investments 49,493,671 Current assets Debtors and prepayments (30,330) 77,892 Current investments 2,731,612 Cash at bank 121,980 ---------------- ---------------- (30,330) 2,931,484 Creditors: amounts 30,330 (455,527) falling due within one year ---------------- Net current assets/ 2,475,957(liabilities) ---------------- ----------------- Net assets - 51,969,628 ---------------- ---------------- Share capital and reserves Called up share capital 466,126 Share premium account 10,148 Revaluation reserve 13,918,745 Capital redemption 41,606reserve Special distributable 33,658,498reserve Profit and loss account 3,874,505 ---------------- Equity shareholders' 51,969,628funds ----------------
Note: The adjustment above nets off the inter-fund debtor and creditor balances, so that the "Total of both Funds" balance sheet agrees to the Statutory Balance Sheet below.
UNAUDITED PROFIT AND LOSS ACCOUNTfor the six months ended 31 March 2007 Six months ended 31 March 2007 Six months ended 31 March 2006 Revenue Capital Total Revenue Capital Total ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ Unrealised gains on - 4,942,832 4,942,832 - 3,841,051 3,841,051investments Gains on realisations of - 1,110,790 1,110,790 - 500,890 500,890investments Income 253,879 - 253,879 179,884 - 179,884 Investment management (128,058) (384,176) (512,234) (124,857) (374,573) (499,430)fees Other expenses (257,542) - (257,542) (239,468) - (239,468) ------------- ------------- -------------
------------- ------------- -------------
(Loss)/profit on (131,721) 5,669,446 5,537,725 (184,441) 3,967,368 3,782,927ordinary activities before income tax Tax on ordinary - - - - - -activities ------------- ------------- -------------
------------- ------------- -------------
(Loss)/profit on (131,721) 5,669,446 5,537,725 (184,441) 3,967,368 3,782,927ordinary activities after taxation for the financial period ------------- ------------- -------------
------------- ------------- -------------
Earnings per share: Ordinary Shares 11.48p 4.62p S2 Shares 12.22p 14.29p Year ended 30 September 2006 Revenue Capital Total ‚£ ‚£ ‚£ Unrealised gains - 1,829,372 1,829,372on investments Gains on - 2,330,712 2,330,712realisations of investments Income 502,211 - 502,211 Investment (244,997) (747,006) (992,003)management fees Other expenses (478,714) - (478,714) ------------- ------------- ------------- (Loss)/profit on (221,500) 3,413,078 3,191,578ordinary activities before income tax Tax on ordinary - - -activities ------------- ------------- ------------- (Loss)/profit on (221,500) 3,413,078 3,191,578ordinary activities after taxation for the financial period ------------- ------------- ------------- Earnings per share: Ordinary Shares 3.91p S2 Shares 12.20p
All the items in the above statement derive from continuing operations
UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31 March 2007
Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 Total Total Total ‚£ ‚£ ‚£ Profit on ordinary 5,537,725 3,782,927 3,191,578activities after taxation Effect of changes in - (1,385,827) (1,385,827)accounting policies from the introduction of FRS 25 and FRS 26 --------------- --------------- --------------- Total recognised gains 5,537,725 2,397,100 1,805,751during the period --------------- --------------- ---------------
UNAUDITED NOTE OF HISTORICAL COST PROFITS AND LOSSES
for the six months ended 31 March 2007
Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 Total Total Total ‚£ ‚£ ‚£ Profit on ordinary 5,537,725 3,782,927 3,191,578activities before taxation Less: unrealised gains on (4,942,832) (3,841,051) (1,829,372)investments Realisation of revaluation 1,278,004 200,656 985,122gains/(losses) of previous years --------------- --------------- --------------- Historical cost profit on 1,872,897 142,532 2,347,328ordinary activities before taxation --------------- --------------- --------------- Historical cost (loss)/ (1,272,292) (3,349,325) (1,123,278)profit for the year after taxation and dividends --------------- --------------- ---------------UNAUDITED BALANCE SHEETas at 31 March 2007 As at As at As at 31 March 2007 31 March 2006 30 September 2006 (audited) ‚£ ‚£ ‚£ Non current assets Investments 49,493,671 49,311,852 46,025,340 Current assets Debtors and prepayments 77,892 26,267 101,481 Current investments 2,731,612 3,126,556 2,937,946 Cash at bank 121,980 99,634 1,649,942 ---------------- ---------------- ---------------- 2,931,484 3,252,457 4,689,369
Creditors: amounts falling
due within one year Other creditors (175,976) (556,497) (50,170) Accruals (279,551) (304,457) (242,666) ---------------- ---------------- ---------------- (455,527) (860,954) (292,836) ---------------- ---------------- ---------------- Net current assets 2,475,957 2,391,503 4,396,533 ---------------- ---------------- ---------------- Net assets 51,969,628 51,703,355 50,421,873 ---------------- ---------------- ----------------
Share capital and reserves
Share capital 466,126 482,875 475,076 Share premium account 10,148 10,148 10,148 Revaluation reserve 13,918,745 13,050,062 10,253,917 Capital redemption reserve 41,606 24,857 32,656 Special distributable 33,658,498 36,448,294 35,139,500reserve Profit and loss account 3,874,505 1,687,119 4,510,576 ---------------- ---------------- ---------------- Equity shareholders' funds 51,969,628 51,703,355 50,421,873 ---------------- ---------------- ---------------- Net asset value per share of 1p each Ordinary Shares 103.4p 99.7p 99.2p S2 Shares 127.5p 122.3p 120.3pUNAUDITED STATEMENT OF CASH FLOWSfor the six months to 31 March 2007 Six months ended Six months Year ended ended 31 March 2007 30 September 31 March 2006 2006 (audited) ‚£ ‚£ ‚£ Operating activities Investment income received 280,603 451,300 703,646 Investment management fees (512,234) (499,430) (979,989)paid Other cash payments (182,685) (171,454) (512,656) --------------- --------------- --------------- Net cash outflow from (414,316) (219,584) (788,999)operating activities Investing activities Purchase of investments (1,830,064) (5,085,850) (6,915,409) Sale of investments 4,417,129 6,804,676 11,410,257 --------------- --------------- --------------- Net cash inflow from 2,587,065 1,718,826 4,494,848investing activities Dividends Dividends paid (3,145,189) (3,491,857) (3,491,856) --------------- --------------- --------------- Cash outflow before (972,440) (1,992,615) 213,993financing and liquid resource management Financing Share capital re-purchased (761,856) (624,807) (1,469,717) --------------- --------------- --------------- (761,856) (624,807) (1,469,717) Management of liquid resources Decrease in monies held 206,334 2,638,028 2,826,638pending investment --------------- --------------- --------------- (Decrease)/increase in cash (1,527,962) 20,606 1,570,914 ========= ========= =========
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 31 March 2007
Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 (audited) ‚£ ‚£ ‚£ Opening shareholders' 50,421,873 53,521,519 51,696,874funds Restated for application - (1,385,827) 438,818of new accounting policies ---------------- ---------------- ---------------- At 1 October 2006 50,421,873 52,135,692 52,135,692 Net share capital bought (844,781) (723,407) (1,434,791)back in the period Profit for the period 5,537,725 3,782,927 3,191,578 Dividends paid in period (3,145,189) (3,491,857) (3,470,606) ---------------- ---------------- ---------------- Closing Shareholders' 51,969,628 51,703,355 50,421,873funds ========= ========= =========Notes
1. The accounts have been prepared under the historical cost convention,
modified to include the revaluation of investments, and in accordance with
applicable accounting standards and, to the extent that it does not conflict with the Companies Act 1985, the 2003 Statement of Recommended Practice, `Financial Statements of Investment Trust Companies', revised 2005.
2. 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 valuewhich, unless another methodology gives a better indication of fair value, willbe at cost, in the absence of overriding factors.
(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, in the absence of overriding factors.
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); Where overriding factors apply, alternative methods of valuation will be used. These will include, cost less provision for impairment, discounted cash flow, or a net asset basis.
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.
v. Unquoted investments will not normally be re-valued upwards for a period of
at least twelve months from the date of acquisition. For early stage
investments where a company's underperformance against plan indicates a
diminution in the value of the investment, provision against cost is made,
as appropriate.
3. In line with the expected long-term split of returns from the investment
portfolios of the Company, the Directors have charged 75% of the investment
management fee to the capital reserve.
4. Earnings and return per share
Six months ended 31 March 2007 Six months ended 31 March 2006 Ordinary Share S2 Share Fund Total Ordinary Share S2 Share Fund Total Fun d Fund ‚£ ‚£ ‚£ ‚£ ‚£ ‚£ Total earnings after 3,623,942 1,913,783 5,537,725 1,532,435 2,250,492 3,782,927taxation: Basic earnings per 11.48p 12.22p 4.62p 14.29p share -------------- -------------- -------------
-------------- -------------- -------------
Net revenue from (95,279) (36,442) (140,955) (43,486) ordinary activities after taxation Revenue return per (0.30)p (0.23)p (0.43)p (0.28)p share -------------- -------------- -------------
-------------- -------------- -------------
Net realised capital 451,023 659,767 419,981 84,692 gains Net unrealised 3,528,153 1,414,679 1,546,436 2,294,615 capital gains Capital expenses (259,955) (124,221) (293,027) (85,329) -------------- -------------- -------------
-------------- -------------- -------------
Total capital return 3,719,221 1,950,225 1,673,390 2,293,978 Capital return per 11.78p 12.45p 5.05p 14.57p share -------------- -------------- -------------
-------------- -------------- -------------
Weighted average 31,568,187 15,661,238 33,121,844 15,743,314 number of shares in issue in the year Year ended 30 September 2006 Ordinary Share S2 Share Fund Total Fund (audited) (audited) (audited) ‚£ ‚£ ‚£ Total earnings 1,273,523 1,918,055 3,191,578after taxation: Basic earnings 3.91p 12.20p per share -------------- -------------- ------------- Net revenue from (112,214) (109,286) ordinary activities after taxation Revenue return (0.34)p (0.70)p per share -------------- -------------- ------------- Net realised 1,980,710 350,002 capital gains Net unrealised (38,713) 1,868,085 capital gains Capital expenses (556,260) (190,746) -------------- -------------- ------------- Total capital 1,385,737 2,027,341 return Capital return 4.25p 12.90p per share -------------- -------------- ------------- Weighted average 32,643,425 15,715,395 number of shares in issue in the year
5. Net asset value per Ordinary Fund Share is based on net assets at 31 March
2007 and on 30,977,172 (at 31 March 2006: 32,544,234; at 30 September 2006:
31,842,172) Ordinary Fund Shares, being the number of Ordinary Fund Shares
in issue on that date.
Net asset value per S2 Fund Share is based on net assets at 31 March 2007, andon 15,635,524 (at 31 March 2006: 15,743,314; at 30 September 2006: 15,655,524)S2 Fund Shares, being the number of S2 Fund Shares in issue on that date.
6. The financial information for the six months ended 31 March 2007 and the
six months ended 31 March 2006 has not been audited. The accounting
policies used by Unicorn AIM VCT plc in preparing the Interim Report are
consistent with those used in preparing the statutory accounts for the year
ended 30 September 2006.
The information for the year ended 30 September 2006 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 2006 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.
7. 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.
UNICORN AIM VCT PLC