Half-yearly Financial Report
29/03/2023 16:31
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230329:nGNE3trl10&default-theme=true
Crown Place VCT PLC
LEI number: 213800SYIQPA3L3T1Q68
As required by the UK Listing Authority's Disclosure Guidance and Transparency
Rule 4.2, Crown Place VCT PLC (the “Company”) today makes public its
information relating to the Half-yearly Financial Report (which is unaudited)
for the six months to 31 December 2022. This announcement was approved by the
Board of Directors on 29 March 2023.
The full Half-yearly Financial Report for the period to 31 December 2022 will
shortly be sent to shareholders and will be available on the Albion Capital
Group LLP website by clicking www.albion.capital/funds/CRWN/31Dec22.pdf.
Investment policy
The Company invests in a broad portfolio of smaller, unquoted growth
businesses across a variety of sectors including higher risk technology
companies. Investments take the form of equity or a mixture of equity and
loans.
Whilst allocation of funds is determined by the investment opportunities
which are available, efforts are made to ensure that the portfolio is
diversified both in terms of sector and stage of maturity of investee
businesses. Funds held pending investment or for liquidity purposes will be
held principally as cash on deposit.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within enture
capital trust qualifying industry sectors using a mixture of securities, as
permitted. The maximum amount which the Company will invest in a single
portfolio company is 15 per cent. of the Company's assets at cost thus
ensuring a spread of investment risk. The value of an individual investment
may increase over time as a result of trading progress and it is possible that
it may grow in value to a point where it represents a significantly higher
proportion of total assets prior to a realisation opportunity being available.
The Company's maximum exposure in relation to gearing is restricted to the
amount of its adjusted share capital and reserves. The Directors do not have
any intention of utilising long-term gearing.
Financial calendar
Record date for second interim dividend 10 March 2023
Payment date of second interim dividend 31 March 2023
Financial year end 30 June 2023
Financial summary
Six months ended Six months ended Year ended
31 December 202 2 31 December 2021 30 June 2022
(pence per share) (pence per share) (pence per share)
Opening net asset value 33.70 34.79 34.79
Capital (loss)/return ( 1. 20) 1.25 1.95
Revenue return 0.0 6 0.0 9 0.14
Total (loss)/return (1.14) 1.34 2.09
Dividends paid ( 0.84 ) (2.37) (3.21)
Impact from share capital movements 0.07 - 0.03
Closing net asset value 31.79 33.76 33.70
Shareholder return and shareholder value ( pence per share )
Shareholder return from launch to April 200 5 :
Total dividends paid to 6 April 2005 ((i)) 24.93
Decrease in net asset value (56.60)
Total shareholder return to 6 April 2005 (31.67)
Shareholder return from April 2005 to 31 December 20 2 2 (period that Albion Capital has been investment manager) :
Total dividends paid 42.46
Decrease in net asset value (11.61)
Total shareholder return from April 2005 to 31 December 2022 30.85
Shareholder value since launch:
Total dividends paid to 31 December 2022 ((i)) 67.39
Net asset value as at 31 December 2022 31.79
Total shareholder value as at 31 December 2022 99.18
Notes
(i) Prior to 6 April 1999, Venture Capital Trusts were able to add
20 per cent. to dividends and figures for the period up until 6 April 1999 are
included at the gross equivalent rate actually paid to shareholders.
In addition to the dividends above, the Board has declared a second interim
dividend for the year ending 30 June 2023 of 0.79 pence per share to be paid
on 31 March 2023 to shareholders on the register on 10 March 2023. Further
details on the dividends paid by the Company can be found at
www.albion.capital/funds/CRWN under ‘Dividend History’.
Interim management report
Results
In the six-month period to 31 December 2022, your Company delivered a total
loss of 1.14 pence per share, representing a 3.2% fall on the opening net
asset value. This relatively small decrease reflects the multiple headwinds
which all businesses currently face. Despite the ongoing uncertainty resulting
from rising interest rates, high levels of inflation and the war in Ukraine,
many of our portfolio companies continue to show resilience through the
underlying quality of their business offering.
Following the payment of the 0.84 pence per share dividend during the period,
the net asset value as at 31 December 2022 was 31.79 pence per share (30 June
2022: 33.70 pence per share).
Portfolio review
The total loss on investments for the six months to 31 December 2022 was £2.4
million (31 December 2021: gain of £3.7 million). The challenging economic
environment has resulted in falling valuations in some technology and
healthcare companies, which has consequently led to some write-downs in our
portfolio. The largest valuation movements in the period were: a £0.8 million
decrease in uMotif; a £0.7 million decrease in Black Swan Data; and a £0.5
million decrease in Oviva. These were partially offset by uplifts of £0.8
million in Threadneedle Software Holdings (trading as Solidatus) and £0.6
million in Convertr Media.
During the six month period, the Company deployed a total of £7.5 million
into new and existing investments (31 December 2021: £1.8 million). Of this
amount, the Company made investments into 11 new portfolio companies during
the period, totaling £5.3 million. The largest of these were:
• £1.2 million into Peppy Health, an employee digital
healthcare platform;
• £1.0 million into Toqio FinTech Holdings, a provider of
embedded FinTech solutions;
• £0.6 million into GX Molecular (trading as CS Genetics), a
developer of single-cell sequencing solutions; and
• £0.5 million into OutThink, a SaaS platform to measure and
manage human risk for enterprises.
Further investments were made into a number of existing portfolio companies to
support their continuing growth, most notably: £0.9 million into Healios, an
online platform delivering family centric psychological care; and £0.8
million into WeGift, a cloud platform that enables corporates to purchase
digital gift cards.
Further details of the portfolio of investments can be found below.
Updated NAV Announcement post period end
On 2 March 2023, a NAV update was announced with a pleasing 1.72 pence per
share uplift, representing a 5.41% increase on the 31 December 2022 unaudited
NAV announced on 23 February 2023. This update resulted from a company within
the portfolio undergoing an external fundraising process after the period end
which required us to revalue the holding.
Investment portfolio by sector
The chart at the end of this announcement illustrates the composition of the
portfolio by industry sector as at 31 December 2022.
Dividends
In line with the variable dividend policy targeting an annual dividend yield
of 5% on the prevailing net asset value, the first interim dividend for the
current financial year of 0.84 pence per share, was paid on 30 November 2022.
A second interim dividend of 0.79 pence per share will be paid on 31 March
2023 to shareholders on the register on 10 March 2023, being 2.5% of the 31
December 2022 net asset value.
Dividends are paid free of tax to shareholders. Qualifying shareholders who
elect to participate in the Dividend Reinvestment Scheme will be able, in
respect of further dividends, to receive their dividends in the form of new
shares rather than cash, which will entitle them to income tax relief at the
current rate of 30% (new shares have to be held for at least five years to
retain the tax relief). Further details of the Dividend Reinvestment Scheme
can be found on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/CRWN.
Risks and uncertainties
The UK is experiencing its highest level of inflation in decades, increased
interest rates, and uncertainty over the future course, and global impact, of
Russia’s invasion of Ukraine. Our investment portfolio, while concentrated
principally in the technology and healthcare sectors, remains diversified in
terms of both sub-sector and stage of maturity.
In accordance with DTR 4.2.7, the Board confirms that the principal risks and
uncertainties facing the Company have not materially changed from those
identified in the Annual Report and Financial Statements for the year ended 30
June 2022. The Board considers that the present processes for mitigating those
risks remain appropriate.
The principal risks faced by the Company are:
• Investment, performance and valuation risk;
• VCT approval risk;
• Regulatory and compliance risk;
• Operational and internal control risk (including cyber and
data security);
• Economic, political and social risk;
• Liquidity risk; and
• Environmental, social and governance (“ESG”) risk.
A detailed explanation of the principal risks facing the Company can be found
in the Annual Report and Financial Statements for the year ended 30 June 2022
on pages 17 to 20, copies of which are available on the Company’s webpage on
the Manager’s website at www.albion.capital/funds/CRWN under the
‘Financial Reports and Circulars’ section.
Share buy-backs
It remains the Board’s primary objective to maintain sufficient resources
for investment in existing and new portfolio companies and for the continued
payment of dividends to shareholders. The Board’s policy is to buy back
shares in the market, subject to the overall constraint that such purchases
are in the Company’s interest, and it is the Board’s intention for such
share buy-backs to be in the region of a 5% discount to net asset value, so
far as market conditions and liquidity permit.
During the period, the Company bought back and held in treasury 2,794,142
shares at a total cost of £887,000, in line with the share buy-back policy.
Transactions with the Manager
Details of the transactions that took place with the Manager in the period can
be found in note 5.
Albion VCTs Prospectus Top Up Offers
Your Board, in conjunction with the boards of other VCTs managed by Albion
Capital Group LLP, launched a prospectus top up offer of new Ordinary shares
on 10 October 2022. The Board announced on 11 January 2023 that, following
strong demand for the Company’s shares, it had elected to exercise its £3.5
million over-allotment facility, taking the total offer to £11.5 million.
The first allotment of the shares under the Offer was on 2 December 2022 where
15,392,377 shares were allotted. After the period end, the Company announced
the closure of the Offer on 10 March 2023. Details of the allotment on 2
December 2022 can be found in note 8. The proceeds of the Offer will be used
to provide further resources at a time when a number of attractive investment
opportunities are being seen.
Outlook and prospects
Whilst noting the small loss for the period, the Board remains encouraged by
the longer-term prospects for our portfolio companies against a backdrop of
multiple macroeconomic and geopolitical uncertainties. These uncertainties may
continue to impact the portfolio in the short-term, however we also expect
them to create attractive long-term investment opportunities. Our focus on
technology and healthcare, thus minimising exposure to discretionary consumer
expenditure, is designed to help the Company weather uncertain times.
Importantly the Company has the cash resources to support the existing
portfolio and capitalise on exciting new investment opportunities being seen
by the Manager.
Penny Freer
Chairman
29 March 2023
Responsibility statement
The Directors, Penny Freer, James Agnew, Pam Garside and Ian Spence, are
responsible for preparing the Half-yearly Financial Report. In preparing these
condensed Financial Statements for the period to 31 December 2022 we, the
Directors of the Company, confirm that to the best of our knowledge:
(a) the condensed set of Financial Statements, which has been prepared in
accordance with Financial Reporting Standard 104 “Interim Financial
Reporting”, gives a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company as required by DTR 4.2.4R;
(b) the Interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year); and
(c) the Interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties’ transactions and
changes therein).
This Half-yearly Financial Report has not been audited or reviewed by the
Auditor.
For and on behalf of the Board
Penny Freer
Chairman
29 March 2023
Portfolio of investments
As at 31 December 20 2 2 (unaudited) As at 30 June 2022 (audited) Change in value for the period* £’000
Portfolio company Nature of business % voting rights Cost £’000 Value £’000 Cost £’000 Value £’000
Quantexa Network analytics platform to detect financial crime 1.7 1,797 10,119 1,797 10,119 -
Proveca Reformulation of medicines for children 6.1 974 3,993 974 3,908 85
Chonais River Hydro Owner and operator of a 2 MW hydro-power scheme in the Scottish Highlands 14.0 1,549 3,175 1,549 3,297 (122)
Radnor House School (TopCo) Independent school for children aged 2-18 years 8.7 1,592 3,081 1,592 3,130 (49)
Oviva AG A technology enabled service business in Medical Nutritional Therapy (MNT) 1.9 1,766 2,818 1,766 3,332 (514)
The Evewell Group Operator and developer of women’s health centres focusing on fertility 5.1 1,240 2,451 1,240 2,415 36
The Voucher Market (T/A WeGift) A cloud platform that enables corporates to purchase digital gift cards 2.6 1,652 2,131 828 1,308 -
Cantab Research (T/A Speechmatics) Provider of low footprint automated speech recognition software 1.8 1,521 2,001 1,521 2,423 (422)
Threadneedle Software Holdings (T/A Solidatus) Provider of data lineage software 2.0 1,239 1,993 1,239 1,239 754
Healios Provider of an online platform delivering family centric psychological care 2.6 1,580 1,972 688 1,081 -
Gharagain River Hydro Owner and operator of a 1 MW hydro-power scheme in the Scottish Highlands 15.0 1,116 1,754 1,116 1,807 (53)
Gravitee TopCo (T/A Gravitee.io) API management platform 2.7 1,140 1,432 1,140 1,432 -
Convertr Media Digital lead generation software 4.3 680 1,330 680 711 619
TransFICC A provider of a connectivity solution, connecting financial institutions with trading venues via a single API 2.1 1,066 1,275 1,066 1,275 -
Egress Software Technologies Encrypted email and file transfer service provider 0.9 306 1,183 306 1,102 81
Peppy Health Provider of support for underserved areas of health and wellness 1.3 1,157 1,157 - - -
Elliptic Enterprises Provider of anti-money laundering services to digital asset institutions 0.8 1,114 1,114 1,114 1,529 (415)
NuvoAir Holdings Digital therapeutics and decentralised clinical trials for respiratory conditions 1.7 707 1,048 707 1,040 8
Seldon Technologies Software that enables enterprises to deploy Machine Learning models in production 2.2 1,039 1,039 1,039 1,039 -
Toqio FinTech Holdings Provider of an orchestration platform to any business large or small which wishes to launch a financial product 1.4 1,017 1,017 - - -
Beddlestead Developer and operator of a dedicated wedding venue 8.2 1,060 1,006 1,060 1,203 (197)
Panaseer Provider of cyber security services 1.4 510 880 510 753 127
The Street by Street Solar Programme Owner and operator of photovoltaic systems on domestic properties 4.4 461 848 461 829 19
Black Swan Data Data analysis that supports corporate decision making 2.9 1,471 796 1,298 1,355 (733)
PerchPeek App which coordinates every aspect of relocations 2.4 755 755 672 672 -
PeakData Platform that provides insights and analytics for the world’s top pharmaceutical companies 1.5 685 736 685 709 27
Locum’s Nest Provider of a technology solution for the management of locum doctors for the NHS 4.1 482 701 482 817 (116)
GX Molecular (T/A CS Genetics) Developer of a wet-phase approach to single cell indexing in a single tube 2.1 615 615 - - -
Regenerco Renewable Energy Generator of renewable energy from roof top solar installations 3.4 344 568 344 562 6
Aridhia Informatics Healthcare informatics and analysis provider 2.3 442 548 442 539 9
InCrowd Sports Developer of mobile apps for professional sports clubs 2.4 374 531 318 451 23
Ophelos Provider of a new standard for organisations customer debt management 2.0 521 521 521 521 -
MHS 1 Education 6.9 481 511 481 402 109
OutThink SaaS platform to measure and manage human risk for enterprises 2.0 505 505 - - -
Brytlyt GPU database 2.3 475 475 396 396 -
Alto Prodotto Wind Owner and operator of community scale wind energy projects 4.1 273 443 284 479 (18)
Accelex Technology Data extraction and analytics technology for private capital markets 2.4 433 433 433 433 -
Neurofenix Provider of neurorehabilitation for patients recovering from stroke, TBI and spinal cord injury 2.1 432 432 - - -
Diffblue Developer of software using AI 1.8 425 425 - - -
Arecor Therapeutics PLC Development of biopharmaceuticals through the application of a formulation technology platform 0.6 221 417 290 760 (160)
Koru Kids Online marketplace connecting parents and nannies 1.3 421 354 421 610 (256)
PetsApp Vertical software for the vet industry 1.9 354 354 - - -
5Mins Al Provider of a platform which provides personalised, video based, bite-sized workplace learning 1.6 284 284 - - -
Imandra Provider of automated software testing and an enhanced learning experience for artificial neural networks 1.1 155 236 155 234 2
uMedeor (T/A uMed) Middleware technology platform that enables life science organisations to conduct medical research programmes 1.4 228 230 152 152 2
Ramp Software Platform for forecasting and analytics for consumer companies 1.4 217 217 - - -
Limitless Technology Provider of a customer service platform powered by the crowd and machine learning technology 1.5 412 208 412 237 (29)
Tem-Energy Provides the ability for SMEs to purchase renewable energy by connecting them directly from renewable energy generators 1.5 193 193 - - -
Cisiv Software and services for non-interventional clinical trials 3.0 278 166 278 402 (236)
AVESI Owner and operator of photovoltaic systems on domestic properties 3.8 123 164 123 162 2
DySIS Medical Medical devices for the detection of cervical cancer 1.4 1,038 157 1,038 224 (67)
Zift Channel Solutions Business collaboration and communication solutions 1.6 321 118 321 108 10
Regulatory Genome Development SaaS provider of ‘structured regulatory content’ using deep tech 0.8 116 116 116 116 -
uMotif A patient engagement and data capture platform for use in research 3.3 1,022 111 1,022 912 (801)
Mirada Medical Developer of medical imaging software 2.0 511 87 511 87 -
Greenenerco Owner and operator of a 500kW wind project 1.9 47 79 48 84 (3)
Infact Systems Provider of technology for credit assessment 1.4 75 75 - - -
Symetrica A designer and manufacturer of radiation detection equipment 0.2 50 40 50 40 -
Kew Green VCT (Stansted) Operator of a Holiday Inn Express hotel at Stansted Airport 2.0 22 38 22 29 9
Oxsensis Developer and producer of high temperature sensors 2.0 439 10 439 240 (230)
Forward Clinical (T/A Pando) A secure mobile communication and collaboration platform in healthcare 1.5 184 - 184 3 (3)
Other holdings 422 460 422 380 80
Total fixed asset investments 42,1 29 61,926 34,753 57,088 (2, 416 )
* As adjusted for additions and disposals between the two accounting periods.
The total comparative cost and valuations for 30 June 2022 do not agree to the
Annual Report and Financial Statements for the year ended 30 June 2022 as the
above list does not include brought forward investments that were fully
disposed of in the period.
Realisations in the period to 31 December 20 2 2 Cost £’000 Opening carrying value £’000 Disposal proceeds £’000 Total realised (loss)/ gain £’000 ( L oss) /gain on opening value £’000
Disposals:
Arecor Therapeutics PLC 69 182 156 87 (26)
memsstar 65 45 65 - 19
Palm Tree 102 6 - (102) (6)
Avanti Communications PLC 136 1 - (136) (1)
Abcodia 315 1 - (315) (1)
Avora 510 - - (510) -
Concirrus 831 29 - (831) (29)
Loan stock repayments and other:
Alto Prodotto Wind 12 17 17 5 -
Greenenerco 2 3 3 1 -
Escrow adjustments and other* - - (7) (7) (7)
Total fixed asset investment realisations 2,04 2 28 4 23 4 (1,80 8 ) ( 51 )
* These comprise fair value movements on deferred consideration on previously
disposed investments and expenses which are incidental to the purchase or
disposal of an investment.
Total change in value of investments (2, 416 )
Movement in loan stock accrued interest (44)
Unrealised losses sub-total (2,460)
Realised losses in current period (51)
Finance income from the unwinding of discount on deferred consideration 106
Total losses on investments as per c ondensed income statement (2,405)
Condensed income statement
Unaudited Unaudited Audited
s ix months ended 31 December 20 2 2 six months ended 31 December 2021 year ended 30 June 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments 3 - (2,405) (2,405) - 3,736 3,736 - 6,386 6,386
Investment income 4 448 - 4 48 453 - 453 853 - 853
Investment Manager’s fees 5 ( 76 ) ( 679 ) ( 755 ) (67) (947) (1,014) (137) (1,822) (1,959)
Other expenses ( 213 ) - ( 213 ) (196) - (196) (391) - (391)
(Loss)/p rofit on ordinary activities before tax 1 59 (3,084) ( 2,9 25) 190 2,789 2,979 325 4,564 4,889
Tax on ordinary activities - - - - - - - - -
(Loss)/ Profit and total comprehensive income attributable to shareholders 1 59 (3,084) (2,925) 190 2,789 2,979 325 4,564 4,889
Basic and diluted (loss)/ earnings per Ordinary share (pence)* 7 0.0 6 ( 1.2 0) ( 1. 1 4 ) 0.09 1.25 1.34 0.14 1.95 2.09
* Adjusting for treasury shares.
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 December 2021 and the audited
statutory accounts for the year ended 30 June 2022.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
The total column of this condensed income statement represents the profit and
loss account of the Company. The supplementary revenue and capital columns are
prepared under guidance published by The Association of Investment Companies.
Condensed balance sheet
Unaudited Unaudited Audited
31 December 20 2 2 31 December 2021 30 June 2022
Note £’000 £’000 £’000
Fixed asset investments 61,926 55,124 57,170
Current assets
Trade and other receivables 1, 667 1,938 1,869
Cash and cash equivalents 22,228 19,147 28,024
23,895 21,085 29,893
Total assets 85,821 76,209 87,063
Payables: amounts falling due within one year
Trade and other payables ( 499 ) (771) (1,224)
Total assets less current liabilities 8 5 ,322 75,438 85,839
Equity attributable to equity holders
Called up share capital 8 3,070 2,547 2,905
Share premium 40,782 23,814 35,522
Unrealised capital reserve 19,680 22,192 20,384
Realised capital reserve 10,34 9 9,145 12,729
Other distributable reserve 11,44 1 17,740 14,299
Total equity shareholders’ funds 85,322 75,438 85,839
Basic and diluted net asset value per share (pence)* 31.79 33.76 33.70
* Excluding treasury shares.
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 December 2021 and the audited
statutory accounts for the year ended 30 June 2022.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
These Financial Statements were approved by the Board of Directors, and
authorised for issue on 29 March 2023 and were signed on its behalf by:
Penny Freer
Chairman
Company number: 03495287
Condensed statement of changes in equity
Called up share capital £’000 Share premium £’000 Unrealised capital reserve £’000 Realised capital reserve* £’000 Other distributable reserve* £’000 Total £’000
As at 1 July 202 2 2,905 35,522 20,384 12,729 14,299 85,839
(Loss)/Profit and total comprehensive income - - (2,460) ( 62 4 ) 159 (2,92 5 )
Transfer of previously unrealised losses on disposal of investments - - 1,756 (1,756) - -
Dividends paid - - - - ( 2,130 ) ( 2,130 )
Purchase of shares for treasury (including costs) - - - - ( 88 7 ) ( 88 7 )
Issue of equity 165 5, 394 - - - 5, 559
Cost of issue of equity - (134) - - - ( 134 )
As at 31 December 202 2 3,070 40,782 19,680 10,34 9 11,44 1 85,322
As at 1 July 2021 2,521 23,011 18,643 9,905 23,570 77,650
Profit/(loss) and total comprehensive income - - 3,600 (811) 190 2,979
Transfer of previously unrealised gains on disposal of investments - - (51) 51 - -
Dividends paid - - - - (5,263) (5,263)
Purchase of shares for treasury (including costs) - - - - (757) (757)
Issue of equity 25 821 - - - 846
Cost of issue of equity - (17) - - - (17)
As at 31 December 2021 2,547 23,814 22,192 9,145 17,740 75,438
As at 1 July 2021 2,521 23,011 18,643 9,905 23,570 77,650
Profit/(loss) and total comprehensive income - - 2,756 1,808 325 4,889
Transfer of previously unrealised gains on disposal of investments - - (1,015) 1,015 - -
Dividends paid - - - - (7,384) (7,384)
Purchase of shares for treasury (including costs) - - - - (2,212) (2,212)
Issue of equity 384 12,834 - - - 13,218
Cost of issue of equity - (323) - - - (323)
As at 30 June 2022 2,905 35,522 20,384 12,729 14,299 85,839
* Included within these reserves is an amount of £21,176,000 (31 December
2021: £26,885,000; 30 June 2022: £24,165,000) which is considered
distributable.
Condensed statement of cash flows
Unaudited six months ended 31 December 20 2 2 £’000 Unaudited six months ended 31 December 2021 £’000 Audited year ended 30 June 2022 £’000
Cash flow from o perating activities
Loan stock income received 255 223 671
Deposit interest received 79 1 17
Dividend income received 10 - 64
Investment Manager’s fees paid ( 1,337 ) (1,504) (2,162)
Other cash payments ( 21 7 ) (217) (390)
Corporation tax paid - - -
Net cash flow from operating activities (1, 2 10 ) (1,497) (1,800)
Cash flow from investing activities
Purchase of fixed asset investments ( 7 , 456 ) (2,514) (7,510)
Proceeds from disposals of fixed asset investments 547 1,072 6,643
Net cash flow from investing activities ( 6,909 ) (1,442) (867)
Cash flow from financing activities
Issue of share capital 5,075 - 11,710
Cost of issue of equity - (2) (36)
Equity dividends paid* ( 1,722 ) (4,417) (6,176)
Purchase of own shares for treasury (including costs) ( 1,030 ) (921) (2,233)
Net cash flow from financing activities 2,32 3 (5,340) 3,265
(Decrease)/increase in cash and cash equivalents ( 5,796 ) (8,279) 598
Cash and cash equivalents at the start of the period 28,024 27,426 27,426
Cash and cash equivalents at the end of the period 22,228 19,147 28,024
* The equity dividend paid in the cash flow is different to the dividends
disclosed in note 6 due to the non-cash effect of the Dividend Reinvestment
Scheme.
Notes to the unaudited condensed Financial Statements
1. Basis of preparation
The condensed Financial Statements have been prepared in accordance with
applicable United Kingdom law and accounting standards, including Financial
Reporting Standard 102 (“FRS 102”), Financial Reporting Standard 104 –
Interim Financial Reporting (“FRS 104”), and with the Statement of
Recommended Practice “Financial Statements of Investment Trust Companies and
Venture Capital Trusts” (“SORP”) issued by The Association of Investment
Companies (“AIC”). The Financial Statements have been prepared on a going
concern basis.
The preparation of the Financial Statements requires management to make
judgements and estimates that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The most critical
estimates and judgements relate to the determination of carrying value of
investments at Fair Value Through Profit and Loss (“FVTPL”) in accordance
with FRS 102 sections 11 and 12. The Company values investments by following
the International Private Equity and Venture Capital Valuation (“IPEV”)
Guidelines as updated in 2022 and further detail on the valuation techniques
used are outlined in note 2 below.
The Half-yearly Financial Report has not been audited, nor has it been
reviewed by the auditor pursuant to the FRC’s guidance on Review of interim
financial information.
Company information is shown on page 2 of the full Half-yearly Financial
Report.
2. Accounting policies
Fixed asset investments
The Company’s business is investing in financial assets with a view to
profiting from their total return in the form of income and capital growth.
This portfolio of financial assets is managed and its performance evaluated on
a fair value basis, in accordance with a documented investment policy, and
information about the portfolio is provided internally on that basis to the
Board.
In accordance with the requirements of FRS 102, those undertakings in which
the Company holds more than 20 per cent. of the equity as part of an
investment portfolio are not accounted for using the equity method. In these
circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments, including
loan stock, are classified by the Company as FVTPL and are included at their
initial fair value, which is cost (excluding expenses incidental to the
acquisition which are written off to the Income statement).
Subsequently, the investments are valued at ‘fair value’, which is
measured as follows:
* Investments listed on recognised exchanges are valued at their bid prices at
the end of the accounting period or otherwise at fair value based on published
price quotations;
* Unquoted investments, where there is not an active market, are valued using
an appropriate valuation technique in accordance with the IPEV Guidelines.
Indicators of fair value are derived using established methodologies including
earnings multiples, revenue multiples, the level of third party offers
received, cost or price of recent investment rounds, net assets and industry
valuation benchmarks. Where price of recent investment is used as a starting
point for estimating fair value at subsequent measurement dates, this has been
benchmarked using an appropriate valuation technique permitted by the IPEV
guidelines;
* In situations where cost or price of recent investment is used,
consideration is given to the circumstances of the portfolio company since
that date in determining fair value. This includes consideration of whether
there is any evidence of deterioration or strong definable evidence of an
increase in value. In the absence of these indicators, other valuation
techniques are employed to conclude on the fair value as of the measurement
date. Examples of events or changes that could indicate a diminution include:
* the performance and/or prospects of the underlying business are
significantly below the expectations on which the investment was based;
* a significant adverse change either in the portfolio company’s business or
in the technological, market, economic, legal or regulatory environment in
which the business operates; or
* market conditions have deteriorated, which may be indicated by a fall in the
share prices of quoted businesses operating in the same or related sectors.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of
an investment.
Dividend income is not recognised as part of the fair value movement of an
investment, but is recognised separately as investment income through the
other distributable reserve when a share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more than one year), payables and
cash are carried at amortised cost, in accordance with FRS 102. Debtors due
after more than one year meet the definition of a financing transaction held
at amortised cost, and interest will be recognised through capital over the
credit period using the effective interest method. There are no financial
liabilities other than payables.
Investment income
Equity income
Dividend income is included in revenue when the investment is quoted
ex-dividend.
Unquoted loan stock income
Fixed returns on non-equity shares and debt securities are recognised when the
Company’s right to receive payment and expect settlement is established.
Where interest is rolled up and/or payable at redemption then it is recognised
as income unless there is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest
agreed with the bank.
Investment management fee, performance incentive fee and other expenses
All expenses have been accounted for on an accruals basis. Expenses are
charged through the other distributable reserve except the following which are
charged through the realised capital reserve:
* 90% of management fees and 100% of performance incentive fees, if any, are
allocated to the realised capital reserve.
* expenses which are incidental to the purchase or disposal of an investment
are charged through the realised capital reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS 102. Current tax
is tax payable (refundable) in respect of the taxable profit (tax loss) for
the current period or past reporting periods using the tax rates and laws that
have been enacted or substantively enacted at the financial reporting date.
Taxation associated with capital expenses is applied in accordance with the
SORP.
Deferred tax is provided in full on all timing differences at the reporting
date. Timing differences are differences between taxable profits and total
comprehensive income as stated in the Financial Statements that arise from the
inclusion of income and expenses in tax assessments in periods different from
those in which they are recognised in the Financial Statements. As a VCT the
Company has an exemption from tax on capital gains. The Company intends to
continue meeting the conditions required to obtain approval as a VCT in the
foreseeable future. The Company therefore, should have no material deferred
tax timing differences arising in respect of the revaluation or disposal of
investments and the Company has not provided for any deferred tax.
Share capital and reserves
Called up share capital
This reserve accounts for the nominal value of the shares.
Share premium
This reserve accounts for the difference between the price paid for shares and
the nominal value of the shares, less issue costs and transfers to the other
distributable reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company’s own
shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the period end
against cost, are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
* gains and losses compared to cost on the realisation of investments, or
permanent diminution in value (including gains recognised on the realisation
of investment where consolidation is deferred that are not distributable as a
matter of law);
* finance income in respect of the unwinding of the discount on deferred
consideration that is not distributable as a matter of law;
* expenses, together with the related taxation effect, charged in accordance
with the above policies; and
* dividends paid to equity holders where paid out by capital.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were
combined in 2012 to form a single reserve named other distributable reserve.
This reserve accounts for movements from the revenue column of the Income
statement, the payment of dividends, the buy-back of shares and other
non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the
liability to make the payment has been established or approved at the Annual
General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
operating segment of business, being investment in smaller companies
principally based in the UK.
3. (Losses)/gains on investments
Unaudited s ix months ended 31 December 20 2 2 £’000 Unaudited six months ended 31 December 2021 £’000 Audited year ended 30 June 2022 £’000
Unrealised (losses)/gains on fixed asset investments (2,460) 3,600 2,756
Realised gains on fixed asset investments (51) 45 3,440
Unwinding of discount on deferred consideration 106 91 190
(2,405) 3,736 6,386
4. Investment income
Unaudited s ix months ended 31 December 20 2 2 £’000 Unaudited six months ended 31 December 2021 £’000 Audited year ended 30 June 2022 £’000
Loan stock interest 299 452 763
UK dividend income 70 - 74
Bank deposit interest 79 1 16
4 48 453 853
5. Investment management fees
Unaudited six months ended 31 December 20 2 2 Unaudited six months ended 31 December 2021 Audited year ended 30 June 2022
Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000
Investment management fee 76 679 755 67 608 675 137 1,238 1,375
Performance incentive fee - - - - 339 339 - 584 584
76 679 755 67 947 1,014 137 1,822 1,959
Further details of the management agreement under which the investment
management fee is paid are given on pages 13 and 14 of the Strategic report in
the Annual Report and Financial Statements for the year ended 30 June 2022.
During the period, services of a total value of £780,000 (31 December 2021:
£700,000; 30 June 2022: £1,425,000) were purchased by the Company from
Albion Capital Group LLP; comprising £755,000 management fee and £25,000
administration fee. For the period to 31 December 2022, no performance
incentive fee has been accrued, however any performance incentive fee is
calculated on year end results and payable in line with the Management
agreement (31 December 2021: £339,000; 30 June 2022: £584,000). At the
financial period end, the amount due to Albion Capital Group LLP disclosed as
payable or accrued was £388,500 (administration fee: £12,500, management
fee: £376,000) (31 December 2021: £684,500; 30 June 2022: £971,500).
Albion Capital Group LLP is, from time to time, eligible to receive
arrangement fees and monitoring fees from portfolio companies. During the
period to 31 December 2022, fees of £137,000 attributable to the investments
of the Company were received pursuant to these arrangements (31 December 2021:
£47,000; 30 June 2022: £121,000).
Albion Capital Group LLP, its partners and staff hold 2,333,932 Ordinary
shares in the Company as at 31 December 2022.
6. Dividends
Unaudited s ix months ended 31 December 20 2 2 £’000 Unaudited six months ended 31 December 2021 £’000 Audited year ended 30 June 2022 £’000
First interim dividend of 0.84 pence per share paid on 30 November 2022 (30 November 2021: First interim and special dividend of 2.37 pence per share) 2,130 5,263 5,263
Second interim dividend of 0.84 pence per share paid on 31 March 2022 - - 2,134
Unclaimed dividends - - (13)
2,130 5,263 7,384
In addition, the Board has declared a second interim dividend of 0.79 pence
per share for the year ending 30 June 2023. This will be paid on
31 March 2023 to shareholders on the register on 10 March
2023. This is expected to amount to approximately £2,120,000.
7. Basic and diluted (loss)/return per share
Unaudited s ix months ended 31 December 20 2 2 Unaudited six months ended 31 December 2021 Audited year ended 30 June 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
(Loss)/return attributable to equity shares (£’000) 1 59 (3,084) (2,925) 190 2,789 2,979 325 4,564 4,889
Weighted average shares in issue (adjusting for treasury shares) 256,695,682 223,013,411 234,049,617
(Loss)/return attributable per Ordinary share (pence) (basic and diluted) 0.0 6 (1.20) (1.14) 0.09 1.25 1.34 0.14 1.95 2.09
The (loss)/return per share has been calculated after adjusting for treasury
shares of 38,617,058 (31 December 2021: 31,228,496; 30 June 2022: 35,822,916).
There are no convertible instruments, derivatives or contingent share
agreements in issue, and therefore no dilution affecting the (loss)/return per
share. The basic (loss)/return per share is therefore the same as the diluted
(loss)/return per share.
8. Called up share capital
Allotted, called up and fully paid Ordinary shares of 1 penny each Unaudited 31 December 20 2 2 Unaudited 31 December 2021 Audited 30 June 2022
Number of shares 307,032,867 254,666,956 290,523,837
Nominal value of allotted shares (£’000) 3,070 2,547 2,905
Voting rights (number of shares net of treasury shares) 268,415,809 223,438,460 254,700,921
During the period to 31 December 2022 the Company purchased 2,794,142 Ordinary
shares (nominal value £28,000) for treasury at a cost of £887,000. The total
number of Ordinary shares held in treasury as at 31 December 2022 was
38,617,058 (31 December 2021: 31,228,496; 30 June 2022: 35,822,916)
representing 12.6 per cent. of the Ordinary shares in issue as at 31 December
2022.
Under the terms of the Dividend Reinvestment Scheme Circular dated 26 February
2009, the following new Ordinary shares of nominal value 1 penny per share
were allotted during the period:
Allotment date Number of shares allotted Aggregate nominal value of shares (£’000) Issue price (pence per share) Net invested (£’000) Opening market price on allotment date (pence per share)
30 November 2022 1,116,653 11 32.93 350 31.30
The following new Ordinary shares of nominal value 1 penny per share were
allotted under the Albion VCTs Prospectus Top Up Offers 2022/23 during the
period:
Allotment date Number of shares allotted Aggregate nominal value of shares (£’000) Issue price (pence per share) Net consideration received (£’000) Opening market price on allotment date (pence per share)
2 December 2022 3,844,616 38 33.50 1,269 31.30
2 December 2022 616,505 6 33.70 204 31.30
2 December 2022 10,931,256 109 33.80 3,602 31.30
15,392,377 5,075
9. Contingencies and guarantees
As at 31 December 2022 the Company had no financial commitments in respect of
investments (31 December 2021: £nil; 30 June 2022: £nil).
There are no external contingencies or guarantees of the Company as at 31
December 2022 (31 December 2021: £nil; 30 June 2022: £nil).
10. Post balance sheet events
Since 31 December 2022 the Company has not made any material investment
transactions.
On 2 March 2023, a NAV update was announced with a 1.72 pence per share
uplift, representing a 5.41% increase on the 31 December 2022 unaudited NAV
(which was announced on 23 February 2023). The uplift is a result of a
portfolio company undergoing an external fundraising process, after the period
end. There is no certainty that this transaction will complete, or complete on
the basis of the proposed terms.
11. Related party transactions
Other than transactions with the Manager as disclosed in note 5, there are no
other related party transactions requiring disclosure.
12. Going concern
The Board has conducted a detailed assessment of the Company’s ability to
meet its liabilities as they fall due. Cash flow forecasts are updated and
discussed quarterly at Board level and have been stress tested to allow for
the forecasted impact of the current economic climate, high inflation, rising
interest rates and a volatile geopolitical backdrop. The Board has revisited
and updated their assessment of liquidity risk and concluded that it remains
unchanged since the last Annual Report and Financial Statements. Further
details can be found on page 75 of those accounts.
The portfolio of investments is diversified in terms of sector, and the major
cash outflows of the Company (namely investments, dividends and share
buy-backs) are within the Company’s control. Accordingly, after making
diligent enquiries, the Directors have a reasonable expectation that the
Company has adequate cash and liquid resources to continue in operational
existence for the foreseeable future. For this reason, the Directors have
adopted the going concern basis in preparing this Half-yearly Financial Report
and this is in accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by the Financial
Reporting Council in September 2014, and the subsequent updated Going concern,
risk and viability guidance issued by the FRC due to Covid-19 in 2020.
13. Other information
The information set out in the Half-yearly Financial Report does not
constitute the Company’s statutory accounts within the terms of section 434
of the Companies Act 2006 for the periods ended 31 December 2022 and 31
December 2021 and is unaudited. The financial information for the year ended
30 June 2022 does not constitute statutory accounts within the terms of
section 434 of the Companies Act 2006 and is derived from the statutory
accounts for the financial year, which have been delivered to the Registrar of
Companies. The Auditor’s report on those accounts was unqualified and did
not contain statements under s498 (2) or (3) of the Companies Act 2006.
14. Publication
This Half-yearly Financial Report is being sent to shareholders and copies
will be made available to the public at the registered office of the Company,
Companies House, the National Storage Mechanism and also electronically at
www.albion.capital/funds/CRWN.
Attachment
* Investment portfolio by sector as at 31 December 2022
(https://ml-eu.globenewswire.com/Resource/Download/1be8b1db-af1c-4c17-9705-2425e3af7809)