Half-yearly Financial Report
28/02/2024 10:57
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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 2023. This announcement was approved by the
Board of Directors on 28 February 2024.
The full Half-yearly Financial Report for the period to 31 December 2023 will
shortly be sent to shareholders and will be available on the Albion Capital
Group LLP website by clicking www.albion.capital/funds/CRWN/31Dec23.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 Venture
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% 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 dividend 8 March 2024
Payment date of second dividend 28 March 2024
Financial year end 30 June 2024
Financial summary
Movements in net asset value
Six months ended Six months ended Year ended
31 December 2023 31 December 2022 30 June 2023
(pence per share) (pence per share) (pence per share)
Opening net asset value 33.13 33.70 33.70
Capital (loss)/return (1.39) (1.20) 0.92
Revenue return 0.10 0.06 0.13
Total (loss)/return (1.29) (1.14) 1.05
Dividends paid (0.83) (0.84) (1.63)
Impact from share capital movements 0.02 0.07 0.01
Closing net asset value 31.03 31.79 33.13
Total shareholder value Pence per share
Shareholder return from launch to April 2005:
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 2023 (period that Albion Capital has been investment manager):
Total dividends paid 44.08
Decrease in net asset value (12.37)
Total shareholder return from April 2005 to 31 December 2023 31.71
Shareholder value since launch:
Total dividends paid to 31 December 2023 (()(i)()) 69.01
Net asset value as at 31 December 2023 31.03
Total shareholder value as at 31 December 2023 100.04
Notes
(i) Prior to 6 April 1999, Venture Capital Trusts were able to add
20% 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 dividend
for the year ending 30 June 2024 of 0.78 pence per share to be paid on 28
March 2024 to shareholders on the register on 8 March 2024. 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 2023, your Company delivered a total
loss of 1.29 pence per share, representing a 3.9% decrease on the opening net
asset value. This is a result of the difficult macroeconomic and geopolitical
backdrop currently being faced. Despite the ongoing uncertainty, the Board
remains encouraged by the prospects of the portfolio.
Following the payment of the 0.83 pence per share dividend during the period,
the net asset value as at 31 December 2023 was 31.03 pence per share (30 June
2023: 33.13 pence per share).
Portfolio review
The total net loss on investments for the six months to 31 December 2023 was
£3.2 million (31 December 2022: loss of £2.4 million). Our two hydro
renewable energy assets, Chonais River Hydro and Gharagain River Hydro saw
their valuations decrease by £1.1 million and £0.3 million respectively
after a reduction in the forecast annual energy generation based on historic
production. The challenging economic environment and the general decline in
comparable market prices across the technology sector has resulted in the
valuations of some of the technology and healthcare companies in the portfolio
falling, including: a £0.6 million decrease in Threadneedle Software Holding
(T/A Solidatus); and a £0.4 million decrease in Healios. These were partially
offset by uplifts of £0.3 million in Oviva and £0.3 million in Proveca.
During the period the Company made a partial disposal of its holding in
Quantexa, delivering 9.4 times return on its weighted average cost on the
shares sold. It also sold its investment in Ophelos, delivering a return of
2.1 times cost. Further information and other realisations in the period can
be found in the realisations table below.
During the period, the Company deployed a total of £4.9 million into new and
existing investments (31 December 2022: £7.5 million), with £1.7m
representing investments into five new portfolio companies, as listed below:
• £0.7 million into OpenDialog AI, which allows organisations to
create and deploy AI powered chatbots and virtual assistants in a no-code
environment, to allow for conversational experiences with customers and
employees across a variety of communication channels;
• £0.4 million into GridCog International, a SaaS platform which
provides project modelling software to plan, track and optimise Distributed
Energy Resources (DERs) across multiple sites and asset types integrated
together;
• £0.4 million into Phasecraft, which develops new algorithms to
make use of early quantum computers for materials science problems;
• £0.1 million into Kennek Solutions, a vertical end to end
software for non-bank lenders that allows them to manage the full value chain
of lending in a single platform; and
• £0.1 million into Mondra Global, a provider of a proprietary
environmental digital twin to automate environmental product Lifecycle
Assessments (LCA), allowing global retailers to measure, manage and reduce
carbon emissions in their supply chains.
Further investments were made into a number of existing portfolio companies to
support their continuing growth, most notably: £0.6 million into Panaseer, a
provider of cyber security services; and £0.6 million into Gravitee TopCo
(T/A Gravitee.io), an API management platform.
Further details of the portfolio of investments can be found below.
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 2023.
Change of Auditor
As announced on 30 October 2023, following a formal audit tender process, the
Company appointed Johnston Carmichael LLP (“Johnston Carmichael”) as
Auditor with immediate effect. Johnston Carmichael will conduct the audit of
the Annual Report and Financial Statements for the year ended 30 June 2024.
The Company and the Manager would like to express their appreciation and
gratitude to BDO for its diligent service over the last 16 years.
Board composition
On 22 November 2023, Penny Freer retired from the Board and I became Chairman.
I would like to thank Penny for her invaluable contribution, guidance and
leadership throughout her time as Director, and wish her well in her future
endeavours.
As part of the Board’s succession planning, we were pleased to welcome Tony
Ellingham as a Director on 1 September 2023 and with effect from 22 November
2023 Tony became the Audit & Risk Committee Chairman. Tony brings extensive
finance experience with excellent knowledge of regulatory reporting,
particularly with public companies.
Dividends
In line with the variable dividend policy targeting an annual dividend yield
of 5% on the prevailing net asset value, the first dividend for the current
financial year of 0.83 pence per share was paid on 30 November 2023. A second
dividend of 0.78 pence per share will be paid on 28 March 2024 to shareholders
on the register on 8 March 2024, being 2.5% of the 31 December 2023 net asset
value.
Risks and uncertainties
The Company faces a number of significant risks including high interest rates,
high levels of inflation, the ongoing impact of geopolitical tensions and an
expected period of low economic growth in the UK. Our investment portfolio,
while concentrated principally in the technology and healthcare sectors,
remains diversified in terms of both sub-sector and stage of maturity. As well
as this, the Manager is continually assessing the exposure to these risks for
each portfolio company and mitigating actions, where possible, are being
implemented.
In accordance with the Disclosure Guidance and Transparency Rules (“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 2023. There remains
high levels of uncertainty but this has not changed the nature of the
principal risks. The Board considers that the present processes for mitigating
those risks remain appropriate.
The principal risks faced by the Company are:
• Investment, performance, technology and valuation risk;
• VCT approval and regulatory change risk;
• Regulatory and compliance risk;
• Operational and internal control risk;
• Cyber and data security risk;
• Economic and political risk;
• Environmental, social and governance (“ESG”) risk; and
• Liquidity 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 2023
on pages 23 to 25, 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 a total of 4,068,839 shares, of
which 2,502,101 shares are held in treasury and 1,566,738 shares have been
cancelled. This was at a total cost of £1,265,000.
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 Top Up Offers
Your Board, in conjunction with the Boards of four other VCTs managed by
Albion Capital Group LLP, published a Prospectus Top Up Offer of new Ordinary
Shares on 15 December 2023. The Offer launched to applications on 2 January
2024 and is expected to close no later than 30 September 2024 (unless fully
subscribed by an earlier date or previously closed). The amount targeted to be
raised by the Company is £7.5 million.
Move to electronic communications
The Board wishes to minimise the environmental impact of how the Company
communicates with its shareholders. With this in mind, those shareholders that
continue to receive physical copies of the Annual Report and other
documentation, will receive a letter alongside this Half-Yearly Financial
Report explaining the forthcoming move to electronic communications.
Outlook and prospects
The Board remains encouraged by the longer-term prospects for our portfolio
companies. The elevated interest rate environment and ongoing geopolitical
tensions, and their impact on corporate investment, will likely continue to
weigh on the performance of the portfolio in the short-term, however we also
expect the continuing technological innovation to create attractive long-term
investment opportunities. Indeed, we are seeing an encouraging increase in
exciting young companies looking for funding. Our focus on technology and
healthcare, thus minimising exposure to discretionary consumer expenditure, is
designed to help the Company weather uncertain times.
James Agnew
Chairman
28 February 2024
Portfolio of investments
As at 31 December 2023
Portfolio company % voting rights Cost £'000 Cumulative movement in value £'000 Value £'000 Change in value for the period* £'000
Quantexa 1.3 1,776 13,983 15,759 -
Proveca 5.6 1,643 3,371 5,014 269
Radnor House School (TopCo) 8.7 1,592 1,882 3,474 (100)
Oviva 1.9 1,766 1,107 2,873 309
Runa Network 2.7 2,152 588 2,740 109
The Evewell Group 5.1 1,240 1,141 2,381 (91)
Chonais River Hydro 14.0 1,549 827 2,376 (1,062)
Gravitee TopCo (T/A Gravitee.io) 3.1 1,724 292 2,016 -
Healios 5.0 1,877 10 1,887 (382)
Cantab Research (T/A Speechmatics) 1.8 1,521 150 1,671 (117)
Gharagain River Hydro 15.0 1,116 484 1,600 (327)
Panaseer 1.9 1,147 334 1,481 92
Egress Software Technologies 0.9 306 1,075 1,381 220
Convertr Media 4.3 680 636 1,316 10
Elliptic Enterprises 0.8 1,255 2 1,257 2
Seldon Technologies 3.5 1,193 - 1,193 -
Peppy Health 1.3 1,157 - 1,157 -
Threadneedle Software Holdings (T/A Solidatus) 2.0 1,239 (105) 1,134 (605)
TransFICC 2.4 1,066 - 1,066 (209)
Beddlestead 8.2 1,060 (33) 1,027 57
Toqio FinTech Holdings 2.0 1,017 - 1,017 -
Accelex Technology 2.3 655 311 966 78
The Street by Street Solar Programme 4.4 461 356 817 16
NuvoAir Holdings 1.7 707 59 766 (231)
OpenDialog AI 2.5 742 - 742 -
uMedeor (T/A uMed) 3.2 598 76 674 -
GX Molecular (T/A CS Genetics) 2.1 615 - 615 -
InCrowd Sports 2.4 374 157 531 (96)
Regenerco Renewable Energy 3.4 344 179 523 5
OutThink 2.0 505 - 505 -
Aridhia Informatics 2.3 442 44 486 10
Locum’s Nest 4.1 482 (10) 472 32
MHS 1 6.9 481 (17) 464 (47)
PerchPeek 2.4 755 (302) 453 (302)
Diffblue 1.8 425 - 425 -
GridCog International 2.2 423 - 423 -
PeakData 1.5 685 (271) 414 (311)
Alto Prodotto Wind 4.1 248 163 411 (15)
Phasecraft 0.6 358 - 358 -
PetsApp 1.9 354 - 354 -
5Mins Al 1.6 284 - 284 -
Koru Kids 1.4 434 (200) 234 (82)
Imandra 1.1 155 70 225 -
Cisiv 2.1 278 (54) 224 (66)
Ramp Software 1.5 217 - 217 -
Tem-Energy 1.5 193 - 193 -
AVESI 3.8 123 28 151 2
Kennek Solutions 0.5 147 - 147 -
Mondra Global 0.1 141 - 141 -
Arecor Therapeutics PLC 0.3 93 42 135 (35)
Neurofenix 2.1 432 (303) 129 (59)
Regulatory Genome Development 0.8 128 (27) 101 (71)
Mirada Medical 2.0 511 (424) 87 -
Infact Systems 1.4 75 - 75 -
Greenenerco 1.9 43 31 74 (3)
Brytlyt 2.3 499 (438) 61 (320)
Symetrica 0.2 57 (3) 54 -
Kew Green VCT (Stansted) 2.0 22 26 48 (3)
Black Swan Data 2.1 1,471 (1,449) 22 (1)
DySIS Medical 1.0 1,038 (1,035) 3 (166)
Other holdings 422 37 459 -
Total fixed asset investments 44,493 22,790 67,283 (3,490)
* As adjusted for additions and disposals between the two accounting periods.
Realisations in the period to 31 December 2023 Cost £’000 Opening carrying value £’000 Disposal proceeds £’000 Total realised gain/(loss) £’000 (Loss)/gain on opening value £’000
Disposals:
Quantexa 21 1,177 1,176 1,155 (1)
Ophelos 521 956 1,069 548 113
Arecor Therapeutics PLC 50 91 76 26 (15)
uMotif 1,022 1 1 (1,021) -
Limitless Technology 412 - - (412) -
Loan stock repayments and other:
Alto Prodotto Wind 13 19 19 6 -
Greenenerco 2 3 3 1 -
Escrow adjustments and other* 292 302 330 38 28
Total fixed asset investment realisations 2,333 2,549 2,674 341 125
* These comprise loan stock investments converted to equity and fair value
movements on deferred consideration on previously disposed investments and
expenses which are incidental to the purchase or disposal of an investment.
£’000
Total change in value of investments (3,490)
Movement in loan stock accrued interest 38
Unrealised losses sub-total (3,452)
Realised gains in current period 125
Finance income from the unwinding of discount on deferred consideration 125
Total losses on investments as per condensed income statement (3,202)
Responsibility statement
The Directors, James Agnew, Tony Ellingham, 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 2023 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
James Agnew
Chairman
28 February 2024
Condensed income statement
Unaudited Unaudited Audited
six months ended 31 December 2023 six months ended 31 December 2022 year ended 30 June 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments 3 - (3,202) (3,202) - (2,405) (2,405) - 3,846 3,846
Investment income 4 640 - 640 448 - 448 936 - 936
Investment Manager’s fees 5 (80) (717) (797) (76) (679) (755) (153) (1,380) (1,533)
Other expenses (273) - (273) (213) - (213) (432) - (432)
Profit/(loss) on ordinary activities before tax 287 (3,919) (3,632) 159 (3,084) (2,925) 351 2,466 2,817
Tax on ordinary activities - - - - - - - - -
Profit/(loss) and total comprehensive income attributable to shareholders 287 (3,919) (3,632) 159 (3,084) (2,925) 351 2,466 2,817
Basic and diluted earnings/(loss) per Ordinary share (pence)* 7 0.10 (1.39) (1.29) 0.06 (1.20) (1.14) 0.13 0.92 1.05
* Adjusting for treasury shares.
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 December 2022 and the audited
statutory accounts for the year ended 30 June 2023.
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 2023 31 December 2022 30 June 2023
Note £’000 £’000 £’000
Fixed asset investments 67,283 61,926 68,000
Current assets
Trade and other receivables 1,808 1,667 1,684
Cash and cash equivalents 18,549 22,228 25,006
20,357 23,895 26,690
Payables: amounts falling due within one year
Trade and other payables (542) (499) (721)
Net current assets 19,815 23,396 25,969
Total assets less current liabilities 87,098 85,322 93,969
Equity attributable to equity holders
Called up share capital 8 3,265 3,070 3,269
Share premium 47,414 40,782 47,067
Capital redemption reserve 16 - -
Unrealised capital reserve 22,735 19,680 26,402
Realised capital reserve 8,925 10,349 9,177
Other distributable reserve 4,743 11,441 8,054
Total equity shareholders’ funds 87,098 85,322 93,969
Basic and diluted net asset value per share (pence)* 31.03 31.79 33.13
* Excluding treasury shares.
Comparative figures have been extracted from the unaudited Half-yearly
Financial Report for the six months ended 31 December 2022 and the audited
statutory accounts for the year ended 30 June 2023.
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 28 February 2024 and were signed on its behalf by:
James Agnew
Chairman
Company number: 03495287
Condensed statement of changes in equity
Called up share capital £'000 Share premium £'000 Capital redemption reserve £'000 Unrealised capital reserve £'000 Realised capital reserve* £'000 Other distributable reserve* £'000 Total £'000
As at 1 July 2023 3,269 47,067 - 26,402 9,177 8,054 93,969
(Loss)/profit and total comprehensive income - - - (3,452) (467) 287 (3,632)
Transfer of previously unrealised gains on disposal of investments - - - (215) 215 - -
Dividends paid - - - - - (2,333) (2,333)
Purchase of shares for treasury (including costs) - - - - - (791) (791)
Purchase of shares for cancellation (including costs) (16) - 16 - - (474) (474)
Issue of equity 12 367 - - - - 379
Cost of issue of equity - (20) - - - - (20)
As at 31 December 2023 3,265 47,414 16 22,735 8,925 4,743 87,098
As at 1 July 2022 2,905 35,522 - 20,384 12,729 14,299 85,839
(Loss)/profit and total comprehensive income - - - (2,460) (624) 159 (2,925)
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) - - - - - (887) (887)
Issue of equity 165 5,394 - - - - 5,559
Cost of issue of equity - (134) - - - - (134)
As at 31 December 2022 3,070 40,782 - 19,680 10,349 11,441 85,322
As at 1 July 2022 2,905 35,522 - 20,384 12,729 14,299 85,839
Profit/(loss) and total comprehensive income - - - 3,803 (1,337) 351 2,817
Transfer of previously unrealised losses on disposal of investments - - - 2,216 (2,216) - -
Dividends paid - - - - - (4,237) (4,237)
Purchase of shares for treasury (including costs) - - - - - (2,359) (2,359)
Issue of equity 364 11,854 - - - - 12,218
Cost of issue of equity - (309) - - - - (309)
As at 30 June 2023 3,269 47,067 - 26,402 9,177 8,054 93,969
* Included within these reserves is an amount of £9,077,000 (31 December
2022: £21,176,000; 30 June 2023: £12,804,000) which is considered
distributable.
Condensed statement of cash flows
Unaudited six months ended 31 December 2023 £’000 Unaudited six months ended 31 December 2022 £’000 Audited year ended 30 June 2023 £’000
Cash flow from operating activities
Loan stock income received 307 255 550
Income from fixed term funds received 170 50 145
Deposit interest received 171 29 138
Dividend income received 54 10 39
Investment Manager’s fees paid (823) (1,337) (2,081)
Other cash payments (234) (217) (425)
Corporation tax paid - - -
Net cash flow from operating activities (355) (1,210) (1,634)
Cash flow from investing activities
Purchase of fixed asset investments (5,012) (7,456) (7,870)
Proceeds from disposals of fixed asset investments 2,324 547 1,139
Net cash flow from investing activities (2,688) (6,909) (6,731)
Cash flow from financing activities
Issue of share capital - 5,075 11,226
Cost of issue of equity (20) - (37)
Equity dividends paid* (1,941) (1,722) (3,517)
Purchase of own shares for treasury or cancellation (including costs) (1,442) (1,030) (2,325)
Net cash flow from financing activities (3,403) 2,323 5,347
Decrease in cash and cash equivalents (6,457) (5,796) (3,018)
Cash and cash equivalents at the start of the period 25,006 28,024 28,024
Cash and cash equivalents at the end of the period 18,549 22,228 25,006
*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 4 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% 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.
Fixed term funds income
Income from fixed term funds is recognised on an accruals basis using the
agreed rate of interest.
Bank deposit 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 consideration 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 six months ended 31 December 2023 £’000 Unaudited six months ended 31 December 2022 £’000 Audited year ended 30 June 2023 £’000
Unrealised (losses)/gains on fixed asset investments (3,452) (2,460) 3,803
Realised gains/(losses) on fixed asset investments 125 (51) (178)
Unwinding of discount on deferred consideration 125 106 221
(3,202) (2,405) 3,846
4. Investment income
Unaudited six months ended 31 December 2023 £’000 Unaudited six months ended 31 December 2022 £’000 Audited year ended 30 June 2023 £’000
Loan stock interest 270 299 569
Bank interest 170 29 138
Income from fixed term funds 160 50 145
Dividend income 40 70 84
640 448 936
5. Investment management fees
Unaudited six months ended 31 December 2023 Unaudited six months ended 31 December 2022 Audited year ended 30 June 2023
Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000 Revenue £’000 Capital £’000 Total £’000
Investment management fee 80 717 797 76 679 755 153 1,380 1,533
Further details of the management agreement under which the
investment management fee is paid are given on page 18 of the Strategic report
in the Annual Report and Financial Statements for the year ended 30 June 2023.
During the period, services of a total value of £822,000 (31 December 2022:
£780,000; 30 June 2023: £1,583,000) were purchased by the Company from
Albion Capital Group LLP; comprising £797,000 management fee and £25,000
administration fee. At the financial period end, the amount due to Albion
Capital Group LLP disclosed as payable or accrued was £395,500
(administration fee: £12,500, management fee: £383,000) (31 December 2022:
£388,500; 30 June 2023: £422,500).
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 2023, fees of £89,000 attributable to the investments
of the Company were received pursuant to these arrangements (31 December 2022:
£137,000; 30 June 2023: £299,000).
Albion Capital Group LLP, its partners and staff hold 2,413,255 Ordinary
shares in the Company as at 31 December 2023.
6. Dividends
Unaudited six months ended 31 December 2023 £’000 Unaudited six months ended 31 December 2022 £’000 Audited year ended 30 June 2023 £’000
First dividend of 0.83 pence per share paid on 30 November 2023 (30 November 2022: First dividend of 0.84 pence per share) 2,333 2,130 2,130
Second dividend of 0.79 pence per share paid on 31 March 2023 - - 2,120
Unclaimed dividends - - (13)
2,333 2,130 4,237
In addition, the Board has declared a second dividend of 0.78
pence per share for the year ending 30 June 2024. This will be paid on
28 March 2024 to shareholders on the register on 8 March 2024.
This is expected to amount to approximately £2,190,000.
7. Basic and diluted (loss)/return per share
Unaudited six months ended 31 December 2023 Unaudited six months ended 31 December 2022 Audited year ended 30 June 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
(Loss)/return attributable to equity shares (£’000) 287 (3,919) (3,632) 159 (3,084) (2,925) 351 2,466 2,817
Weighted average shares in issue (adjusting for treasury shares) 282,620,005 256,695,682 266,724,287
(Loss)/return attributable per Ordinary share (pence) (basic and diluted) 0.10 (1.39) (1.29) 0.06 (1.20) (1.14) 0.13 0.92 1.05
The (loss)/return per share has been calculated after adjusting for treasury
shares of 45,787,992 (31 December 2022: 38,617,058; 30 June 2023: 43,285,891).
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 2023 Unaudited 31 December 2022 Audited 30 June 2023
Number of shares 326,515,116 307,032,867 326,884,706
Nominal value of allotted shares (£’000) 3,265 3,070 3,269
Voting rights (number of shares net of treasury shares) 280,727,124 268,415,809 283,598,815
During the period to 31 December 2023 the Company purchased 4,068,839 Ordinary
shares (nominal value £41,000) at a cost of £1,265,000. From this, 2,502,101
shares were purchased for treasury and 1,566,738 shares have been cancelled.
The total number of Ordinary shares held in treasury as at 31 December 2023
was 45,787,992 (31 December 2022: 38,617,058; 30 June 2023: 43,285,891)
representing 14.0% of the Ordinary shares in issue as at 31 December 2023.
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 2023 1,197,148 12 31.64 359 30.10
9. Contingencies and guarantees
As at 31 December 2023 the Company had no financial commitments in respect of
investments (31 December 2022: £nil; 30 June 2023: £nil).
There are no external contingencies or guarantees of the Company as at 31
December 2023 (31 December 2022: £nil; 30 June 2023: £nil).
10. Post balance sheet events
Since 31 December 2023 the Company has not made any material
investment transactions.
The Company received £1.7 million of deferred consideration
from the historic disposal of G.Network Communications that was included in
trade and other receivables at 31 December 2023.
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 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 pages 88 and 89 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 in 2021.
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 2023
and 31 December 2022 and is unaudited. The financial information for the year
ended 30 June 2023 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 2023
(https://ml-eu.globenewswire.com/Resource/Download/50277ff9-eeec-4005-9ede-15a7b1fbfe2b)