Full year Results and Notice of AGM
18/12/2024 07:00
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18 December 2024
HARGREAVE HALE AIM VCT PLC
(the “Company” or the “VCT”)
Full Year Results and Notice of AGM
Hargreave Hale AIM VCT plc announces its results for the year ended 30
September 2024.
The Company also announces that its 2025 Annual General Meeting will be held
at 12.30pm on 6 February 2025 at 88 Wood Street, London, EC2V 7QR.
The Company’s Annual Report and Financial Statements for the year ended 30
September 2024 and the formal Notice of the Annual General Meeting will be
posted to shareholders who have elected to receive hard copies and in
accordance with UK Listing Rule 6.4.1 copies of the documents will shortly be
available to view on the Company's corporate website
at https://www.hargreaveaimvcts.co.uk and have also been submitted to the UK
Listing Authority and will be available for inspection from the National
Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Strategic report
The report has been prepared by the Directors in accordance with the
requirements of Section 414A of the Companies Act 2006.
Financial highlights for the year ended 30 September 2024
Net asset value (“NAV”) per share NAV total return Tax free dividends paid in the period Share price total return Ongoing charges ratio (“OCR”)
40.55p -3.86% ((1)) 4.00p 0% ((1)) 2.43% ((1))
• £9.2 million invested in Qualifying Companies in the year.
• 100% invested by VCT tax value in Qualifying Investments at
30 September 2024.
• Final dividend of 1.25 pence per share proposed for the year end
and special dividend of 1.50 pence per share approved by the Board.
• Offer for subscription closed having raised £20.3 million. The
Board decided to utilise the over-allotment facility only to the extent that
valid applications were received by 5pm on 22 March 2024.
• New Offer for subscription launched on 9 October 2024 to raise
up to £20 million.
Summary financial data 2024 2023
NAV (£m) 148.01 151.92
NAV per share (p) 40.55 46.34
NAV total return (%) ((1)) -3.86 -14.70
Market capitalisation (£m) 142.34 140.96
Share price (p) 39.00 43.00
Share price discount to NAV per share (%) ((1)) -3.82 -7.21
Share price 5 year average discount to NAV per share (%) ((1)) -5.79 -5.64
Share price total return (%) ((1)) 0.00 -23.51
Loss per share for the year (p) -1.86 -9.32
Dividends paid per share (p) 4.00 5.00
Ongoing charges ratio (%) ((1)) 2.43 2.24
(1) Alternative performance measure definitions and illustrations can
be found in this report.
Financial calendar
Record date for final dividend 3 January 2025
Payment of final and special dividends 14 February 2025
Annual General Meeting 6 February 2025
Announcement of half-yearly results for the six months ending 31 March 2025 June 2025
Payment of interim dividend (subject to Board approval) July 2025
Chair’s statement
Introduction
Once again, I would like to welcome Shareholders who joined us as a result of
the recent offers for subscription. As always, we are grateful to new and
existing Shareholders who continue to support the VCT, despite the difficult
times we continue to live through.
For much of the 2024 financial year, investor sentiment improved as UK
inflation (Consumer Price Index) returned to the Bank of England’s target of
2%, drawing to a close a 3-year inflation cycle that was very difficult for UK
consumers and households and bringing with it hope that the United Kingdom can
finally move on from the cost-of-living crisis. The economy has withstood the
pressure better than many had predicted. All the same, businesses and
households had to navigate an immensely difficult period of high inflation and
stagnating economic activity. With inflation now on target and the Bank of
England starting to reduce interest rates, many businesses and households can
look forward to reduced borrowing costs.
Although the Investment Association continues to report sustained outflows
from UK equity funds, there was an improvement in the flow dynamic within UK
small companies after the UK economy returned to growth in early 2024 and UK
inflation returned to target. More recent updates highlight a deteriorating
trend in the run up to the 2024 Autumn Budget as markets responded to the
Government’s very negative messaging and potential changes to fiscal policy.
It is premature to take a definitive position on the impact of the
Government’s 2024 Autumn Budget on our portfolio companies. Clearly, changes
to National Insurance Contributions are going to weigh heavily on certain
companies, particularly those in high service, low margin industries such as
those in leisure and hospitality. There are a number of portfolio companies
that will feel the impact. However, their response is likely to include price
increases, less employment and downward pressure on wages as companies look to
mitigate the additional tax burden. However, for most our investments, the
change will not significantly impact performance. As ever, profits and losses
will (for the most part) be determined by the success of management teams as
they seek to develop and then commercialise new products and services.
After a period of improving economic activity, the economy notably softened
through the summer with economic indicators and news flow clearly signalling
that we were working our way through a soft patch. Falls in business and
consumer confidence ahead of the budget gave an early indication of the likely
impact of higher taxation. That having been said, the significant increase in
Government spending announced at the budget is expected to lift the economy in
2025 and 2026, albeit at a cost.
Consistent with our updates of the last few years, generating performance
remains very difficult in the short term. Whilst we entered the second half of
the financial year with grounds for optimism, the uncertainty created by the
election, the potential for a radically different approach to fiscal policy by
the new Government and its stark messaging again undermined confidence in UK
small companies. Whilst we believe investors still recognise the value
opportunity within the UK stock market, and specifically within small
companies, many adopted a wait and see approach pending the outcome of the
2024 Autumn Budget. Three years of outflows from UK funds have weighed heavily
on performance. We continue to believe that the sector is in deep value
territory. There is a saying within the stock market that ‘value will
out’; unfortunately, it is proving very difficult to forecast when that
might happen. For the time being, we will need to remain patient.
The fog of uncertainty that hung over the UK markets ahead of the 2024 Autumn
Budget continues to weigh on the primary markets through which companies raise
new capital. With valuations so depressed and very little capital available
for investment (away from VCTs), very few companies have undertaken an initial
public offering (“IPO”). On AIM there were just two VCT qualifying IPOs
within the year. Ironically, neither IPO succeeded in raising any funds from
the established AIM VCTs. After a difficult third quarter, we are pleased to
report a stronger final quarter in which we deployed capital into VCT
qualifying companies in line with our revised budget. The improved activity
levels have continued into the new financial year and the Investment Manager
reports that its network of investment banks and corporate advisers are
signalling that interest in IPOs is starting to recover and activity is
expected to pick up in 2025.
Performance
As described in more detail in the Investment Manager’s report, this has
been a third year of difficult performance. After notable rallies in UK small
companies (including those on AIM) in late 2023 and the early summer of 2024,
the tone in the market changed in late May with the calling of the UK General
Election. The final quarter was a difficult one for companies on AIM, in
particular those favoured by investors looking for Business Property (IHT)
Relief or where investors had accumulated significant gains. Trading volumes
on AIM increased by 99% in the 3 months to 30 September 2024 when compared
to the same period in 2023 as many investors chose to exit the market. This
selling pressure weighed on our portfolio of AIM investments in the final
quarter of the financial year and, as a result, we are disappointed to report
small losses across the year from that element of the portfolio. There was
also a slight downward adjustment to the value of the qualifying investments
held in private companies; however, this was not a significant factor in
performance more broadly. The portfolio of investments in private companies is
quite heavily skewed towards the UK consumer discretionary sector, where peer
group valuations remain low.
At 30 September 2024, the NAV per share was 40.55 pence which, after
adjusting for the dividends paid in the year of 4.00 pence, gives a NAV total
return for the year of -3.86%((1)) which compares with +3.90% in the FTSE AIM
All-Share Index Total Return (calculated on a dividends Index reinvested
basis). The Directors consider this to be the most appropriate benchmark from
a Shareholder’s perspective, however, due to the range of assets held within
the investment portfolio and the investment restrictions placed on a VCT it is
not wholly comparable.
The earnings per share total return for the year was a loss of 1.86 pence
(comprising a revenue profit of 0.20 pence and a capital loss of
2.06 pence). Revenue income increased by 8.9% to £2.9m as a result of a
full-year contribution from the non‑qualifying investment grade corporate
bonds, unit trust accumulations and bank interest. There was a reduction in
the interest accrued on loan note instruments after the Investment Manager
(acting on behalf of the VCT) agreed to convert some of the outstanding Kidly
loan notes and reduce the balance of accrued interest in exchange for new
preference shares in Kidly as part of a refinancing plan. Income received into
the revenue account exceeded expenses, resulting in a revenue profit for the
year of 0.20 pence per share (FY23: 0.27 pence per share).
The share price decreased from 43.00 pence to 39.00 pence over the reporting
period which, after adjusting for dividends paid of 4.00 pence per share,
gives a share price total return of nil((1)).
Investments
The Investment Manager invested £9.2 million into seven Qualifying Companies
during the period. The fair value of Qualifying Investments at 30 September
2024 was £82.8 million (56.0% of NAV) invested in 55 AIM companies and
8((2)) unquoted companies. At the year end, the fair value of non-qualifying
equities, the IFSL Marlborough UK Micro-Cap Growth Fund and the IFSL
Marlborough Special Situations Fund were £12.0 million (8.1% of NAV),
£10.4 million (7.0% of NAV) and £9.4 million (6.3% of NAV) respectively,
with most of the non-qualifying equities listed within the FTSE 350 and
offering good levels of liquidity should the need arise. £19.1 million
(12.9% of NAV) was held in short-dated investment grade corporate bonds,
£0.7 million (0.4% of NAV) was invested in VanEck Gold Miners UCITS exchange
traded fund and £13.7 million((3)) (9.3% of NAV) held in cash at the period
end (including £8.8m held with the Custodian). Further information can be
found in the Investment Manager’s report.
Dividend
The Directors continue to maintain their policy of targeting a tax free
dividend yield equivalent to 5% of the year end NAV per share.
In the 12-month period to 30 September 2024, the Company paid dividends
totalling 4.00 pence (2023: 5.00 pence). A final dividend of 1.50 pence
(2022: 2.00 pence) in respect of the 2023 financial year was paid on
15 February 2024 and an interim dividend of 1 penny along with a special
dividend of 1.50 pence (2023: 1 penny) was paid on 26 July 2024. The
payment of the special dividend reflected the receipt of proceeds from the
sale of Abcam plc and Instem plc.
A final dividend of 1.25 pence is proposed (2023: 1.50 pence) which,
subject to Shareholder approval at the forthcoming AGM, will be paid on
14 February 2025 to ordinary Shareholders on the register on 3 January 2025.
A special dividend of 1.50 pence per share has been approved by the Board.
The distribution will return to Shareholders the proceeds from various exits
and disposals. The special dividend will be paid together with the final
dividend on 14 February 2025.
Dividend re-investment scheme (“DRIS”)
Shareholders may elect to reinvest their dividend by subscribing for new
shares in the Company. Further information can be found in the Shareholder
Information section.
On 15 February 2024, 1,100,783 ordinary shares were allotted at a price of
44.58 pence per share, which was calculated in accordance with the terms and
conditions of the DRIS, on the basis of the last reported NAV per share as at
26 January 2024, to shareholders who elected to receive shares as an
alternative to the final dividend for the year ended 30 September 2023
announced on 19 December 2023.
On 26 July 2024, 2,235,192 ordinary shares were allotted at a price of
42.49 pence per share, which was calculated in accordance with the terms and
conditions of the DRIS, on the basis of the last reported NAV per share as at
5 July 2024, to Shareholders who elected to receive shares as an alternative
to the interim and special dividend for the year ended 30 September 2024.
Share buybacks
To maintain compliance with the discount control and management of share
liquidity policy, the Company purchased through share buybacks 10,657,350
ordinary shares (nominal value £106,574) during the 2024 financial year at a
cost of £4,472,418 (average price: 41.97 pence per share).
As at 17 December 2024, a further 3,559,262 shares have been repurchased post
the year end at a cost of £1,361,156 (average price: 38.24 pence per
share).
Share price discount
The Company aims to improve liquidity and to maintain a discount of
approximately 5 per cent. to the last published NAV per share (as measured
against the mid-price) by making secondary market purchases of its shares in
accordance with parameters set by the Board.
We continued to operate the discount control and management of share liquidity
policy effectively during the period. As at 30 September 2024, the Company
had one and five year average share price discounts of 5.46%((1)) and
5.79%((1)) respectively.
The Company’s share price was trading at a discount of 3.82%((1)) as at
30 September 2024 compared to a discount of 7.21%((1)) as at 30 September
2023, this being calculated using the closing mid-price of the Company’s
shares on 30 September 2024 as a percentage of the year end NAV per share, as
published on 10 October 2024.
As at 17 December 2024, the discount to NAV was 4.69% of the last published
NAV per share.
Offer for subscription
The Directors of the Company announced on 7 September 2023 the launch of an
offer for subscription for shares to raise up to £20 million, together with
an over-allotment facility of up to a further £20 million. On 22 March
2024, the Company announced it had received valid applications of
approximately £20 million. The Board decided to utilise the over-allotment
facility only to the extent that valid applications under the offer were
received by 5pm on 22 March 2024. The offer closed on 22 March 2024 at 5pm.
The offer resulted in gross funds being received of £20.3 million and the
issue of 44.5 million shares.
New offer for subscription
The Directors of the Company announced on 9 October 2024 the launch of a new
2024/2025 offer for subscription for shares to raise up to £20 million. The
offer was approved by shareholders of the Company at a general meeting on
12 November 2024.
By 17 December 2024, the Company had allotted 5.9 million shares raising
gross proceeds of £2.4 million. As at the date of this document, the Company
has received valid applications for a further £0.2 million.
Cost efficiency
The Board reviews costs incurred by the Company on a regular basis and is
focused on maintaining a competitive OCR. The year end OCR was 2.43%((1))
(FY23: 2.24%((1))) when calculated in accordance with the Association of
Investment Companies’ (“AIC”) “Ongoing Charges” methodology.
The increase in the OCR is principally driven by the fall in the average net
assets across the year that followed the drop in the NAV per share and the
payment of special dividends. Other material factors include increases in some
of the fixed costs of the Company such as the administration, auditor and
company secretarial fees, and the increased investment in the IFSL Marlborough
UK Micro‑Cap Growth Fund and the IFSL Marlborough Special Situations Funds.
The Ongoing Charges methodology divides ongoing expenses by average net
assets.
Board remuneration
Following a review of Board remuneration, and taking into account peer group
analysis and inflation, the Board has agreed to increase its remuneration by
3.2%, effective from 1 October 2024. The annual remuneration of the Chair
will increase to £42,500, the independent non-executive directors to £33,000
and the non-independent non-executive director, Oliver Bedford, to £30,500.
An additional fee of £1,500 will continue to be paid to the Chair of the
MSPEC. The Chair of the Audit Committee will continue to receive an additional
fee of £3,000.
Annual General Meeting
Shareholders are invited to attend the Company’s AGM to be held at 12.30 pm
on 6 February 2025 at 88 Wood Street, London, EC2V 7QR.
Those Shareholders who are unable to attend the AGM in person are encouraged
to raise any questions in advance with the Company Secretary at
HHV.CoSec@jtcgroup.com. The deadline for the advance submission of questions
is 5.00 p.m. on 30 January 2025. Answers will be published on the
Company’s website on 6 February 2025.
Angela Henderson has notified the Board of her intention not to seek
re-election as an Independent Non-Executive Director of the Company at the
forthcoming AGM. I wish to take this opportunity to thank Angela for her
valuable contribution over the years. The Company has decided that, due to the
current size of the Board, there is no intention to appoint an additional
Non-Executive Director at the present time.
Shareholder engagement
Shareholder engagement is given a high priority by the Board. The Company
provides a significant amount of information, including recorded content,
about its activities and performance through its website
(www.hargreaveaimvcts.co.uk).
The website also allows Shareholders to request (by email) updates on
Shareholder events, the performance of the fund (interim management
statements, fact sheets and video updates) and information on the Company’s
fundraising activities.
Reflecting our wish to improve the flow of information to our Shareholders
whilst simultaneously reducing costs and waste, we launched a major drive to
upgrade and expand our database of Shareholders who opt in for email and
digital communications. Please do register your consent with us through the
website.
Whilst the Board strongly encourages Shareholders to make use of everything
the website has to offer, the Directors recognise that it is not for everyone.
Should you prefer, you can of course continue to communicate with the Chair,
any other member of the Board or the Investment Manager by writing to the
Company, for the attention of the Company Secretary.
The Board also wants to provide Shareholders with regular opportunities to
meet directly with the Directors and the CGAM VCT investment management team.
As a result, the Company held four in-person events (including the 2024 Annual
General Meeting) and a webinar in the 12 months to 30 September 2024.
The first of these was our annual Shareholder event on 28 November 2024, once
again held at Everyman Cinema Broadgate, City of London. The event included a
presentation by the Investment Manager covering the 12 months to
30 September 2024, along with presentations, pre-recorded interviews and a
panel discussion with several guest speakers and a number of portfolio
companies. The event concluded with the screening of a feature film. Summary
recordings of the Investment Manager’s presentations are available to view
on the Company’s website (www.hargreaveaimvcts.co.uk).
In the new financial year, we expect to hold 3 in-person events (including the
Annual General Meeting) and two webinars. The next Shareholder events include
the forthcoming AGM to be held at the Investment Manager’s offices at 88
Wood Street, London EC2V 7QR at 12.30 pm on 6 February 2025 and a separate
Shareholder webinar at 4.30 pm on Monday 10 February 2025. Shareholders are
asked to register their interest in attending Shareholder events through the
Company’s website
(www.hargreaveaimvcts.co.uk) or by emailing aimvct@canaccord.com.
Electronic communications and digital dividends
As ever, we are asking Shareholders to opt in to electronic communications and
update their dividend payment preference from cheque to bank transfer.
With this in mind, we intend to bring to a close the use of bank cheques for
the payment of dividends. The last dividend payment by bank cheque will be in
July 2025. Thereafter, all future dividends will be paid by bank transfer. We
are therefore asking all Shareholders currently receiving dividends by bank
cheque to provide their bank account details ahead of the payment of the final
dividend in respect of the year to 30 September 2025, due in February 2026.
Switching to the digital delivery of Shareholder communications and dividend
distributions is more cost efficient, secure and faster whilst also helping to
reduce our environmental footprint.
The Company no longer prints and distributes interim reports to Shareholders.
The interim results continue to be available for download on the Company’s
website (www.hargreaveaimvcts.co.uk) and a summary of the results are
published via a Regulatory Information Service on the London Stock Exchange.
Where necessary, the Administrator can produce and send out a hard copy.
Shareholders are also encouraged to make use of the shareview portal operated
by the Registrar, which can be used to monitor their investment, review their
transaction history, see information on dividend payments and update their
communication preferences.
Electronic voting
Electronic proxy voting is available for Shareholders to register the
appointment of a proxy and voting instructions for any general meeting of the
Company once notice has been given. This service assists the Company to make
further printing and production cost savings, reduce our environmental
footprint and streamline the voting process for investors.
Regulatory update
There were no major changes to VCT legislation during the period under review.
Through the Finance Act 2024, the Government extended the sunset clause for
the VCT scheme from 5 April 2025 to 5 April 2035, allowing investors to
claim income tax relief for subscriptions for new VCT shares for a further
10 years. The Treasury Order was laid before Parliament on 3 September 2024,
meaning the sunset clause has now been officially extended to 5 April 2035.
Administration agreement
With effect from 1 October 2024, the administration agreement was novated
from CGWL to CGAM. Under the terms of the novation agreement, the
administration fees paid by the Company were unchanged at £250,000 (plus
VAT). Notwithstanding the novation, CGWL will continue to receive a fee of
£30,000 per annum in relation to its appointment as the Custodian. Any future
initial or trail commissions paid to Financial Intermediaries will be paid by
CGAM.
Consumer duty
The Consumer Duty regulation is designed to improve the standard of care
provided by firms that are involved in the manufacture or supply of products
and services to retail clients.
As the Company is not regulated by the FCA, it falls outside of the Consumer
Duty regulation. However, CGAM and CGWL are regulated companies and were in
scope, respectively as the designated manufacturer and distributor of the
Company during the financial year. In its capacity as manufacturer, CGAM has
conducted a fair value assessment and a target market assessment. Having
reviewed both reports, the Board is satisfied that CGAM and CGWL continued to
comply with their obligations throughout the period.
As a consequence of the novation of the administration agreement, CGAM became
both the designated manufacturer and distributor of the Company with effect
from 1 October 2024.
VCT status
I am pleased to report that the Company continues to perform well against the
requirements of the VCT Rules and at the period end, the investment test was
100% (2023: 91.65%) against an 80% requirement when measured using HMRC’s
methodology. The increase in the investment test percentage reflects progress
made in deploying capital into Qualifying Companies and the return of capital
to Shareholders through the payment of a 1.50 pence per share special
dividend on 26 July 2024 following receipt of proceeds from the sale of
Abcam plc and Instem plc. The Company satisfied all other tests relevant to
its status as a Venture Capital Trust.
Key information document (“KID”)
In accordance with the PRIIPs regulations, the Company’s KID is published on
the Company’s website at www.hargreaveaimvcts.co.uk/ document-library/.
Risk review
The Board has reviewed the risks facing the Company. Further detail can be
found in the principal and emerging risks and uncertainties section.
Outlook
Once again, we have endured a difficult start to the financial year, albeit
for very different reasons. The Government’s unhelpfully stark messaging in
the run up to the budget has weighed on economic activity with GDP data and
PMI surveys both highlighting a notable softening in UK economy through the
late Summer and Autumn. Measures of UK consumer and business confidence both
dipped, suggesting that households and companies were becoming increasingly
cautious ahead of and subsequent to the Autumn 2024 Budget. However, in large
part due to the very significant increase in public spending expected next
year, we expect to see economic activity pick up as we head into next year.
The Office for Budget Responsibility forecasts GDP to increase from 1.1% in
2024 to 2.0% in 2025.
The FTSE AIM All-Share Index has been noticeably weak post period end with
potential changes to Business Property Relief weighing heavily on the index
ahead of the Autumn 2024 Budget. In the end, when viewed through the narrow
lens that we apply to the VCT, the budget was substantially better than many
had feared. That is not to downplay the pain that many households and
businesses will feel. However, the changes to National Insurance Contributions
(“NICs”), the source of much post-budget commentary, is unlikely to be a
major factor in shaping the outcomes for many of our investments with the
impact muted by the spread of investments we hold.
We are pleased to report that deal flow has started to improve. Post period
end, we have invested £1.8 million across 3 qualifying investments. We are
active on a large number of deals across both public and private markets,
including a limited number of IPOs. It is too early to say that the tide has
turned decisively but we can see clear evidence that green shoots might
finally start to emerge.
David Brock
Chair
17 December 2024
The Company and its business model
The Company was incorporated and registered in England and Wales on 16 August
2004 under the Companies Act 1985, registered number 05206425.
The Company has been approved as a Venture Capital Trust by HMRC under
Section 259 of the Income Taxes Act 2007. The shares of the Company were
first admitted to the Official List of the UK Listing Authority and trading
on the London Stock Exchange on 29 October 2004 and can be found under the
TIDM code “HHV”. The Company is premium listed.
In common with many other VCTs, the Company revoked its status as an
investment company, as defined in Section 266 of the Companies Act 1985, on
23 May 2006 to facilitate the payment of dividends out of capital profits.
The Company’s principal activity is to invest in a diversified portfolio of
qualifying small UK based companies, primarily trading on AIM, with a view to
generating capital returns and income from its portfolio and to make
distributions from capital and income to Shareholders whilst maintaining its
status as a VCT.
The Company is registered as a small UK AIFM with a Board comprising six
non-executive directors, five of whom are independent. CGAM acts as Investment
Manager and (from 1 October 2024) Administrator, whilst CGWL acts as
Custodian (and, until 30 September 2024, the Administrator) of the Company.
JTC (UK) Limited is engaged as the Company Secretary.
The Board has overall responsibility for the Company’s affairs including the
determination of its investment policy. However, the Board exercises these
responsibilities through delegation to the Investment Manager, the
Administrator, the Custodian and the Company Secretary as it considers
appropriate.
The Directors have managed and continue to manage the Company’s affairs in
such a manner as to comply with Section 259 of the Income Taxes Act 2007.
Investment objectives, policy and strategy
Investment objectives
The investment objectives of the Company are to generate capital gains and
income from its portfolio and to make distributions from capital or income to
Shareholders whilst maintaining its status as a Venture Capital Trust.
Investment policy
The Company intends to achieve its investment objectives by making Qualifying
Investments in companies listed on AIM, private companies and companies listed
on the AQSE Growth Market, as well as Non-Qualifying Investments as allowed by
the VCT Rules.
Qualifying Investments
The Investment Manager will maintain a diversified portfolio of Qualifying
Investments which may include equities and fixed income securities as
permitted by the VCT Rules. Investments will primarily be made in companies
listed on AIM but may also include private companies that meet the Investment
Manager’s criteria and companies listed on the AQSE Growth Market. These
small companies have a permanent establishment in the UK and, whilst of high
risk, will have the potential for significant capital appreciation.
To maintain its status as a VCT, the Company must have 80 per cent. by value,
as measured by the VCT Rules, of all of its investments in Qualifying
Investments throughout accounting periods of the VCT beginning no later than
three years after the date on which those shares are issued. To provide some
protection against an inadvertent breach of this rule, the Investment Manager
targets a threshold of approximately 85 per cent.
Non-Qualifying Investments
Non-Qualifying Investments must be permitted by the VCT Rules and may include
equities and exchange traded funds listed on the main market of the London
Stock Exchange, fixed income securities, bank deposits that are readily
realisable, the IFSL Marlborough Special Situations Fund and the IFSL
Marlborough UK Micro-Cap Growth Fund. Subject to the investment controls
below, the allocation to each of these investment classes will vary to reflect
the Investment Manager’s view of the market environment and the deployment
of funds into Qualifying Companies. The market value of the Non‑Qualifying
Investments (excluding bank deposits) will vary between nil and 50 per cent.
of the net assets of the Company.
The value of funds held in bank deposits will vary between nil and 30 per
cent. of the net assets of the Company.
Investment controls
The Company may make co-investments in investee companies alongside other
funds, including other funds managed by the Investment Manager.
Other than bank deposits, no individual investment shall exceed 10 per cent.
of the Company’s net assets at the time of investment.
Borrowings
The Articles permit the Company to borrow up to 15 per cent. of its adjusted
share capital and reserves (as defined in the Articles). However, it is not
anticipated that the Company will have any borrowings in place and the
Directors do not intend to utilise this authority.
To the extent that any future changes to the Company’s investment policy are
considered to be material, Shareholder consent to such changes will be sought.
Such consent applies to the formal investment policy described above and not
the investment process set out below.
Investment process and strategy
The Investment Manager follows a stock specific investment approach based on
fundamental analysis of the investee company.
The Investment Manager’s fund management team has significant reach into the
market and meets with large numbers of companies each week. These meetings
provide insight into investee companies, their end markets, products and
services, and competition. Investments are monitored closely and the
Investment Manager usually meets or engages with their senior leadership team
at least twice each year. Where appropriate, the Company may co-invest
alongside other funds managed by the Investment Manager.
The key selection criteria used in deciding which investments to make include,
inter alia:
• the strength and depth of the management team;
• the business strategy;
• a prudent approach to financial management and forecasting;
• a strong balance sheet;
• profit margins, cash flows and the working capital cycle;
• barriers to entry and the competitive landscape; and
• the balance of risk and reward over the medium and long term.
Qualifying Investments
Investments are made to support the growth and development of a Qualifying
Company. The Investment Manager will maintain a diversified portfolio that
balances opportunity with risk and liquidity. Qualifying Investments will
primarily be made in companies listed on AIM but may also include private
companies and companies listed on the AQSE Growth Market. Seed funding is
rarely provided and only when the senior leadership team includes proven
business leaders known to the Investment Manager.
Working with advisers, the Investment Manager will screen opportunities, often
meeting management teams several times prior to investment to gain a detailed
understanding of the company. Investments will be sized to reflect the risk
and opportunity over the medium and long term. In many cases, the Investment
Manager will provide further funding as the need arises and the investment
matures. When investing in private companies, the Investment Manager will
shape the investment to meet the investee company’s needs whilst balancing
the potential for capital appreciation with risk management.
Investments will be held for the long term unless there is a material adverse
change, evidence of structural weakness, or poor governance and leadership.
Partial realisations may be made where necessary to balance the portfolio or,
on occasion, to capitalise on significant mispricing within the stock market.
Non-Qualifying Investments
The Investment Manager’s VCT team works closely with the Investment
Manager’s wider fund management team to deliver the investment strategy when
making Non-Qualifying Investments, as permitted by the VCT Rules. The
Investment Manager will vary the exposure to the available asset classes to
reflect its view of the equity markets, balancing the potential for capital
appreciation with risk management, liquidity and income.
The Non-Qualifying Investments will typically include a focused portfolio of
direct investments in companies listed on the main market of the London Stock
Exchange. The portfolio will mix long term structural growth with more
tactical investment to exploit short term mispricing within the market. The
use of the IFSL Marlborough Special Situations Fund and the IFSL Marlborough
UK Micro-Cap Fund enables the Company to maintain its exposure to small UK
companies whilst the Investment Manager identifies opportunities to invest the
proceeds of fundraisings into Qualifying Companies.
The Investment Manager may use certain exchange traded funds listed on the
Main Market of the London Stock Exchange to gain exposure to asset classes not
otherwise accessible to the Company.
Environmental, social and governance considerations
Approach
The Company regards the development of a clearly defined and integrated ESG
management system as an important pillar for the long-term success of its
business, as well as for its investee companies.
The Investment Manager believes that companies with strong governance, durable
business models and balanced workforces are more likely to create value over
the long term whilst reducing investment risk, benefiting the wider UK economy
and society and generating positive Shareholder returns.
ESG in the investment process
Holding meaningful stakes in investee companies provides the Investment
Manager with the opportunity and responsibility to positively influence
investee company behaviour, both at the point of investment and during the
time in which the Company is a shareholder.
Due diligence
The Investment Manager assesses ESG factors across the portfolio. For
Qualifying Companies, the Investment Manager will use the information provided
to develop, over time, an individualised ESG risk map to identify issues and
track behavioural themes. The Investment Manager regularly engages with senior
management teams and boards to identify and raise issues of note, provide a
forum for positive feedback and promote change where necessary.
Engagement, exclusions and divestment policies
As part of its investment strategy, the Company has adopted policies covering
exclusions and divestment to describe behaviours that fall outside of the
Company’s expectations of investee companies. The Investment Manager has
adopted an engagement policy to create a clear framework that defines how it
will interact with investee companies.
The Investment Manager
The Investment Manager adheres to its own ESG investment and stewardship
policies. These include an ESG Policy, an Engagement Policy, a Conflicts of
Interest Policy and a Stewardship Policy that, together with the investment
mandate and the Company’s ESG approach, inform the Company’s approach.
CGAM is a signatory of the United Nations Principles of Responsible Investment
and HM Treasury’s Women in Finance Charter.
Risk management
The structure of the Company’s investment portfolio and its investment
strategy has been developed to mitigate risk where possible. Key risk
mitigation strategies are as follows:
• The Company has a broad portfolio of investments to reduce stock
specific risk;
• Flexible allocations to non-qualifying equities, exchange traded
funds listed on the Main Market of the London Stock Exchange, fixed income
securities, bank deposits that are readily realisable, the IFSL Marlborough
Special Situations Fund and the IFSL Marlborough UK Micro-Cap Fund allow the
Investment Manager to adjust portfolio risk without compromising liquidity;
• Regular meetings with investee companies aid the close monitoring
of investments to identify potential risks and allow corrective action where
possible; and
• Regular Board meetings and dialogue with the Directors, along
with policies to control conflicts of interest and co-investment with the IFSL
Marlborough fund mandates support strong governance.
Key performance indicators
The Directors consider the following KPIs to assess whether the Company is
achieving its strategic objectives. The Directors believe these measures help
Shareholders assess how effectively the Company is applying its investment
policy and are satisfied the results give a fair indication of whether the
Company is achieving its investment objectives and policy. The KPIs are
established industry measures.
Further commentary on the performance of these KPIs has been provided in the
Chair’s statement and Investment Manager’s report.
1 NAV and share price total returns
The Board monitors NAV and share price total return to assess how the Company
is meeting its objective of generating capital gains and income from its
portfolio and making distributions to Shareholders. The NAV per share
decreased from 46.34 pence to 40.55 pence resulting in a loss to ordinary
Shareholders of -1.79 pence per share (-3.86%)(()(1)() )after adjusting for
dividends paid in the year.
The Board considers peer group and benchmark comparative performance. Due to
the very low number of AIM VCTs, the Board reviews performance against the
generalist VCTs as well as the AIM VCTs to provide a broader peer group for
comparison purposes. Performance is also measured against the FTSE AIM
All-Share Index Total Return. With 48.3% of the NAV in companies listed on
AIM, the Directors consider this to be the most appropriate benchmark.
However, HMRC derived investment restrictions and investments in private
companies, main market listed companies and bonds mean that the index is not a
wholly comparable benchmark for performance.
Rolling Returns to end Sep 2024 1Y 3y 5y 10y
NAV total return ((1)) -3.86% -44.02% -7.08% 8.33%
Share price total return 0.00% -41.24% -3.68% 13.18%
NAV total return (dividends reinvested) ((2)) -4.21% -48.03% -16.53% -3.23%
Share price total return (dividends reinvested) ((2)) -0.18% -46.69% -12.94% 2.41%
FTSE AIM All-Share Index Total Return 3.90% -39.74% -9.13% 13.40%
Source: CGAM
(1) Reflecting the significant return of capital through
regular and special dividends in recent years, which materially exceeds the
dividends paid by the FTSE AIM All-Share Index, the Board of the view that it
is more accurate to report performance against the benchmark on a (simple)
total return basis rather than on a dividends re-invested basis. The Board
also notes that approximately 90% of Shareholders do not participate in the
Company’s DRIS, making the simple total return (without dividends
reinvested) more reflective of Shareholder returns as experienced by the vast
majority of Shareholders. The definition and illustration of this alternative
performance measure can be found in this report.
(2) The NAV total return (dividends reinvested) and share price total
return (dividends reinvested) measures have been included to improve
comparability with the FTSE AIM All-Share Index Total Return which is also
calculated on that basis. The definitions and illustrations of these
alternative performance measures can be found in this report.
Reflecting the difficult market conditions that continued to weigh on the NAV
through the financial year, and in common with the AIM VCT peer group, the
Company reported a modest reduction in the NAV per share. The NAV total return
fell behind the benchmark over one and three years; however, it remains ahead
of the benchmark over five years but behind the average of the AIM VCT peer
group over the same time horizons. The steep falls in valuations of companies
listed on AIM, which have heavily impacted the performance of the Company and
its AIM VCT peers, have not been mirrored in the Generalist VCT sector, which
has reported an average gain of +3.47% over the period under review
(source: Morningstar). The divergence of performance across the two peer
groups is particularly notable across the three years since the start of the
bear market with the AIM VCT sector returning an average loss of -42.9%
against the average gain within the Generalist VCT sector of +3.35%. AIM has
fallen by -39.7% over the same three-year period. It is difficult to account
for the strongly divergent performance although the possible use of preferred
investment structures not accessible to investors in public companies may
account for some of the difference. The steady sell-off of investments on AIM
ahead of the 2024 Autumn Budget will have also been a factor.
Further detailed information on peer group performance is available through
Morningstar
(https://www.morningstar.co.uk) and the AIC
(https://www.theaic.co.uk/aic/find-compare-investment-companies).
2. Share price discount to NAV per share
The Company uses secondary market purchases of its shares to improve the
liquidity in its shares and support the discount. The discount to NAV per
share is an important influence on a selling Shareholder’s eventual return.
The Company aims to maintain a discount of approximately 5 per cent. to the
last published NAV per share (as measured against the mid-price).
The Company’s shares traded at a discount of 3.82%((1)) as at 30 September
2024 (2023: 7.21%((1))) when calculated with reference to the 30 September
2024 NAV per share. The one and five year average share price discounts were
5.46%((1)) and 5.79((1)) respectively.
The Company’s shares are priced against the last published NAV per share
with the market typically adjusting the price to reflect the NAV after its
publication. In line with the Company’s valuation policy, the Company aims
to publish the quarter end NAV per share within seven business days of the
period end to allow time for the Investment Manager and Board to review and
agree the valuation of the private companies held within the investment
portfolio.
The Company’s share price on 30 September 2024 reflected the last published
NAV per share prior to the year end, which was released on 1 October 2024.
The 30 September 2024 NAV was reported on 10 October 2024, following the
review of the valuations of the private companies.
As at 17 December 2024, the discount to NAV was 4.69% of the last published
NAV per share.
3. Ongoing charges ratio
The ongoing charges of the Company were 2.43%((1)) (2023: 2.24%((1))) of the
average net assets of the Company during the financial year to 30 September
2024.
The increase in the OCR is principally driven by the fall in the average net
assets across the year that followed the drop in the NAV per share and the
payment of special dividends. Other material factors include increases in some
of the fixed costs of the Company such as administration, auditor and company
secretarial fees, along with the increased investment in the IFSL Marlborough
UK Micro-Cap Growth Fund and the IFSL Marlborough Special Situations Funds.
The Ongoing Charges methodology divides ongoing expenses by average net
assets.
The Company’s OCR remains competitive against the wider VCT industry but
marginally higher than the other AIM VCTs. This ratio is calculated using the
AIC’s “Ongoing Charges” methodology and, although based on historical
information, it provides Shareholders with an indication of the likely future
cost of managing the fund.
Cost control and efficiency continues to be a key focus for the Board.
Although the OCR increased within the year, the Board is pleased to report
that the Company’s expenses incurred within the year were below budget.
4. Dividends per share
The Company’s policy is to target a tax free dividend yield equivalent to 5%
of the year end NAV per share. The Board remains committed to maintaining a
steady flow of dividend distributions to Shareholders.
A total of 4.00 pence per share (2023: 5.00 pence) of dividends was paid
during the year, comprising a final dividend of 1.50 pence in respect of the
previous financial year (2022: 2.00 pence) paid on 15 February 2024, a
special dividend of 1.50 pence per share paid on 26 July 2024 and an interim
dividend of 1 penny (2023: 1 penny) also paid on 26 July 2024.
A final dividend of 1.25 pence per share will be proposed at the forthcoming
AGM. If approved by Shareholders, the payment of the interim, final and
special dividends in respect of the financial year to 30 September 2024 would
represent a distribution to Shareholders of 9.2% of the 30 September 2024 NAV
per share. A special dividend of 1.50 pence per share has been approved by
the Board. The distribution will return to Shareholders proceeds from various
exits and disposals. The special dividend will be paid together with the final
dividend on 14 February 2025.
The below table demonstrates how the Board has been able to consistently pay
dividends in line with the 5% target and the Company’s dividend policy.
Dividends paid/payable by financial year
Year Year end NAV Dividends Yield Additional information
pence per share
2010/11 61.14 4.00 6.5%
2011/12 61.35 3.25 5.3%
2012/13 71.87 3.75 5.2%
2013/14 80.31 4.25 5.3%
2014/15 74.64 4.00 5.4%
2015/16 75.93 4.00 5.3%
2016/17 80.82 4.00 4.9%
2017/18 87.59 5.40 6.2% Including special dividend of 1 penny.
2018/19 70.60 3.75 5.3%
2019/20 73.66 5.40 7.3% Including a special dividend of 1.75 pence.
2020/21 100.39 7.40 7.4% Including a special dividend of 2.50 pence.
2021/22 60.19 3.00 5.0%
2022/23 46.34 4.50 9.7% Including a special dividend of 2.00 pence.
2023/24 40.55 3.75 9.2% Including a special dividend of 1.50 pence and proposed final dividend of 1.25 pence.
5. Compliance with VCT Rules
A VCT must be approved by HMRC at all times and, in order to retain its
status, the Company must meet a number of tests as set out by the VCT Rules, a
summary of which can be found in this report. Throughout the year ended
30 September 2024 the Company continued to meet these tests.
The investment test increased from 91.65% to 100% in the financial year. The
increase in the investment test percentage reflects progress made in deploying
capital into Qualifying Companies and the return of capital to Shareholders
through the payment of a 1.50 pence per share special dividend on 26 July
2024 following receipt of proceeds from the sale of Abcam plc and
Instem plc. The investment test remains comfortably ahead of the 80%
threshold that applies to the Company and ahead of the target of 85% as set
out in the Company’s investment policy.
The Company invested £9.2 million into seven Qualifying Companies, three of
which were investments into new Qualifying Companies.
The Board believes that the Company will continue to meet the HMRC defined
investment test and other qualifying criteria on an ongoing basis.
For further details please refer to the Investment Manager’s report.
Principal and emerging risks and uncertainties
The Directors acknowledge that they are responsible for the effectiveness of
the Company’s risk management and internal controls and periodically review
the principal risks faced by the Company. The Board may fulfil these
responsibilities through delegation to CGAM and CGWL as it considers
appropriate. The principal risks facing the Company, together with mitigating
actions taken by the Board, are set out below:
Risk Potential consequence How the Board mitigates risk Changes during the year
Venture Capital Trust approval risk. The Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 259 of the Income Taxes Act 2007 could result in the disqualification of the Company as a VCT. Loss of VCT approval could lead to the Company losing its exemption from corporation tax on capital gains, Shareholders losing their tax reliefs and, in certain circumstances, being required to repay the initial tax relief on their investment. To reduce this risk, the Board has appointed an Investment Manager with significant experience in the management of venture No change.
capital trusts. The Investment Manager regularly provides the Board with written and verbal reports. The Board also appointed
Philip Hare & Associates LLP to monitor compliance with regulations and provide half-yearly compliance reports to the Board.
Investment risk. Many of the Company’s investments are held in small, high risk companies which are either listed on AIM or privately held. Investment in poor quality companies could reduce the capital and income return to Shareholders. Investments in small companies are often illiquid and may be difficult to realise. The Board has appointed the Investment Manager which has significant experience of investing in small companies. The Investment No change. The UK economy is forecast to grow by 2.0% in 2025 (source: Office for Budget Responsibility). The Bank of England is expected to continue to reduce interest rates. In both cases, this should improve consumer and business confidence and encourage investment into growth. Offsetting this, the Autumn Budget 2024 introduced a significantly tighter fiscal policy that will increase the cost of employment, limit private sector wage growth, depress profitability and reduce investment by the private sector. Whilst changes to Business Property Relief may make AIM less attractive to investors seeking to mitigate Inheritance Tax, the Budget and the recent extension of Sunset Clause confirmed the Government’s support for two important groups of investors on AIM.
Manager maintains a broad portfolio of investments across a wide range of industries and sectors. Individual Qualifying
Investments rarely exceed 5% of net assets. The Investment Manager holds regular company meetings to monitor investments and
identify potential risk. The VCT’s liquidity is monitored on a regular basis by the Investment Manager and reported to the Board
quarterly and as necessary.
Compliance risk. The Company is required to comply with the FCA UK Listing Rules and the Disclosure Guidance and Transparency Rules, the Companies Act 2006, Accounting Standards, the General Data Protection Regulation and other legislation. The Company is also a small registered UK AIFM and has to comply with the requirements of the AIFM Directive. Failure to comply with these regulations could result in a delisting of the Company’s shares, financial penalties, a qualified audit report and/or loss of Shareholder trust. Board members have considerable experience of operating at senior levels within quoted businesses. They have access to a range No change.
of advisers including solicitors, accountants and other professional bodies and take advice when appropriate. CGWL provides
compliance oversight to both the Administrator and the Investment Manager and reports to the Board on a quarterly basis.
Operational risk and outsourcing. Failure in the Investment Manager, Administrator, Custodian, Company Secretary or other appointed third-party systems and controls or disruption to their respective businesses as a result of operational failure, environmental hazards or cyber security attacks. Failures could put the assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or Shareholders. Quality standards may be reduced through lack of understanding or loss of control. The Company has in place a risk matrix and a set of internal policies which are reviewed on a regular basis. It has written No change.
agreements in place with its third-party service providers. The Board receives regular reports from the Investment Manager,
Administrator and Custodian to provide assurance that they operate appropriate control and oversight systems and have in place
training and other defence measures to mitigate the risk of cyber attack. Additionally, the Board receives a control report from
the Registrars on an annual basis. Where tasks are outsourced to other third parties, reputable firms are used and performance
is reviewed periodically by the MSPEC.
Key personnel risk. A change in the key personnel involved in the management of the portfolio. Potential impact on investment performance. The Board discusses key personnel risk and resourcing with the Investment Manager periodically. To mitigate this risk, the VCT No change.
team within the Investment Manager has a large team comprising two fund managers, a portfolio manager, an investment analyst and
a legal counsel.
Exogenous risks such as economic, political, geopolitical financial, climate change and health. Economic risks include recession and sharp changes in interest rates. Political risks include a change in government policy causing the VCT scheme to be brought to an end, changes to economic or fiscal policy or the introduction of tariffs or other restrictions that might impact upon a company’s operational model, reduce revenues, depress profit margins and increase the cost of capital. Geopolitical risks include the impact of wars or conflicts. Climate change presents environmental, geopolitical, regulatory and economic risks. Health risks include the possibility of another pandemic. Instability or changes arising from these risks could have an impact on stock markets and the value of the Company’s investments so reducing returns to Shareholders. Companies may face restrictions on emissions, water consumption and increased risk of environmental hazards. Regular dialogue with the Investment Manager provides the Board with assurance that the Investment Manager is following the No change. On 3 September 2024, a Treasury Order was laid before Parliament extending the sunset clause until 5 April 2035. The Bank of England has started to reduce interest rates, decreasing the cost of debt for companies and households. Interest rates are expected to fall further during 2025. However, the wars in Ukraine and the Middle East present a range of risks that may have profound economic and social consequences if they impact access to certain commodities or much higher prices. The incoming US administration may adjust US trade policy, including the introduction of new tariffs on countries exporting goods and services into the US, impacting revenues and profitability.
investment policy agreed by the Board and appraises the Board of the portfolio’s current positioning in the light of prevailing
market conditions. The Company’s investment portfolio is well diversified and the Company has no gearing. The Board regularly
reviews investment test forecasts and liquidity analysis, including under stress scenarios, to monitor current and anticipate
future performance against HMRC legislation and to ensure the Company has, and will continue to have, access to sufficient
liquidity and distributable reserves to maintain compliance with its key policies. The Board keeps abreast of current thinking
through contact with industry associations and its advisers. The Investment Manager undertakes a review of ESG factors as part
of the investment process. Climate change, or the need to limit its impact, will result in technological innovation as young
companies seek to develop solutions and create opportunities for value creation for existing or new Qualifying Companies.
Additional risks and further details of the above risks and how they are
managed are explained in note 15 of the financial statements. Trends
affecting future developments are discussed in the Chair’s statement and the
Investment Manager’s report.
Long-term viability statement
In accordance with provision 36 of the AIC Code, the Directors have carried
out a robust assessment of the Company’s current position and its emerging
and principal risks, further details can be found in the principal and
emerging risks and uncertainties section. This assessment has been carried out
over a longer period than the 12 months required by the ‘Going Concern’
provision. The Board conducted this review for a period of five years, which
was selected because it:
• is consistent with investors’ minimum holding period to retain
the 30% income tax relief;
• exceeds the time allowed to deploy funds raised under the current
offer in accordance with the VCT Rules; and
• is challenging to forecast beyond five years with sufficient
accuracy to provide actionable insight.
The Board considers the viability of the Company as part of its continuing
programme of monitoring risk. The Company has a detailed risk control
framework, documented procedures and forecasting model in place to reduce the
likelihood and impact of risk taking that exceeds the levels agreed by the
Board. These controls are reviewed by the Board and Investment Manager on a
regular basis.
The Board has considered the Company’s financial position and its ability to
meet its liabilities as they fall due over the next five years. Forecasts and
stress tests have been used to support their assessment and the following
factors have been considered in relation to the Company’s future viability:
• the Company maintains a highly diversified portfolio of
Qualifying Investments;
• the Company is well invested against the HMRC investment test
(100% at 30 September 2024) and the Board believes the Investment Manager
will continue to have access to sufficient numbers of investment opportunities
to maintain compliance with the HMRC investment test;
• the Company held £13.6 million in cash at the year end
(includes £8.8m held with the Custodian);
• the Company has distributable reserves of £106.6 million at
30 September 2024, equivalent to 29 pence per share;
• the Company has a portfolio of Non-Qualifying Investments, most
of which are listed in the FTSE 350 and offer good levels of liquidity should
the need arise;
• the financial position of the Company at 30 September 2024 was
strong with no debt or gearing;
• the offer for subscription launched on 9 October 2024 has
provided further liquidity for deployment in line with the Company’s
policies and to meet future expenses;
• the OCR of the Company at the year end was 2.43%;
• the Company has procedures and forecast models in place to
identify, monitor and control risk, portfolio liquidity and other factors
relevant to the Company’s status as a VCT; and
• the Investment Manager and the Company’s other key service
providers have contingency plans in place to manage operational disruptions.
In assessing the Company’s future viability, the Board has assumed that
investors will wish to continue to have exposure to the Company’s
activities, that performance will be satisfactory and the Company will
continue to have access to sufficient capital.
Based on this assessment, the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the next five years.
Other matters
Dividend policy
The Company’s dividend policy is to target a tax free dividend yield
equivalent to 5 per cent. of the year end NAV per share. The ability to pay
dividends is dependent on the Company’s available distributable reserves and
cash resources, the Companies Act 2006, the UK Listing Rules and the VCT
Rules. The policy is non-binding and at the discretion of the Board. Dividend
payments may vary from year to year in both quantum and timing. The level of
dividend paid each year will depend on the performance of the Company’s
portfolio. In years where there is strong investment performance, the
Directors may consider a higher dividend payment, including the payment of
special dividends. In years where investment performance is not as strong, the
Directors may reduce or even pay no dividend.
Discount control policy and management of share liquidity
The Company aims to improve liquidity and to maintain a discount of
approximately 5 per cent. to the last published NAV per share (as measured
against the mid-price) by making secondary market purchases of its shares in
accordance with parameters set by the Board.
This policy is non-binding and at the discretion of the Board. Its operation
depends on a range of factors including the Company’s liquidity, Shareholder
permissions, market conditions and compliance with all laws and regulations.
These factors may restrict the effective operation of the policy and prevent
the Company from achieving its objectives.
Diversity
The Board comprises three male non-executive directors and three female
non-executive directors with a diverse range of experience, skills, length of
service and backgrounds. The Board will always appoint the best person for the
job. However the Board considers diversity when reviewing Board composition
and has made a commitment to consider diversity when making future
appointments. It will not discriminate on the grounds of gender, race,
ethnicity, religion, sexual orientation, age or physical ability.
Environmental Social and Governance (“ESG”) and Considerations
The Board seeks to maintain high standards of conduct with respect to ESG
issues and to conduct the Company’s affairs responsibly.
The Company does not have any employees or offices and so the Board does not
maintain any specific policies regarding employee, human rights, social and
community issues but does expect the Investment Manager to consider them when
fulfilling its role. The Company qualifies for an exemption from the
Streamlined Energy and Carbon Reporting requirements as a low energy use
company with regards to greenhouse gas emissions (producing less than
40,000kWh of energy per year) and, therefore, is not obliged to report
emissions from its operations.
The Company, whilst exempt, continues to monitor and develop its approach to
the recommendations of the Task Force on Climate related Financial
Disclosures.
The management of the Company’s investment portfolio has been delegated to
its Investment Manager, CGAM. The Company has adopted specific policies on
divestment and excluded activities and it expects the Investment Manager to
take account of ESG considerations in its investment process for the selection
and ongoing monitoring of underlying investments. The Board has also given the
Investment Manager discretion to exercise voting rights on resolutions
proposed by investee companies. The Investment Manager continues to strengthen
its approach to ESG issues. Further detail regarding the Investment
Manager’s approach to ESG issues can be found in this report.
To minimise the direct impact of its activities, the Company offers electronic
communications where acceptable to reduce the volume of paper it uses and uses
Carbon Balanced paper manufactured at a FSC accredited mill to print its
financial reports. Vegetable based inks are used in the printing process where
appropriate.
Prospects
The prospects and future development of the Company are discussed in detail in
the outlook section of the Chair’s statement.
The Strategic Report is approved, by order of the Board of Directors.
David Brock
Chair
17 December 2024
Summary of VCT regulations
To maintain its status as a VCT, the Company must be approved by HMRC and
comply with a number of conditions. A summary of the most important conditions
are detailed below:
VCTs’ obligations
VCTs must:
• have 80 per cent. (by VCT tax value) of all funds raised from
the issue of shares invested in Qualifying Investments throughout accounting
periods of the VCT beginning no later than 3 years after the date on which
those shares are issued;
• have at least 70 per cent. by VCT tax value of Qualifying
Investments in Eligible Shares which carry no preferential rights (unless
permitted under VCT Rules);
• have at least 30 per cent. of all new funds raised by the
Company invested in Qualifying Investments within 12 months of the end of the
accounting period in which the Company issued the shares;
• have no more than 15 per cent. by VCT tax value of its
investments in a single company (as valued in accordance with the VCT
Rules at the date of investment);
• derive most of its income from shares and securities, and, must
not retain more than 15 per cent. of its income derived from shares and
securities in any accounting period; and
• have their shares listed on the main market of the London Stock
Exchange or a European regulated Stock Exchange.
VCTs must not:
• make a Qualifying Investment in any company that:
○ has (as a result of the investment or otherwise) received more
than £5 million from State aid investment sources in the 12 months prior to
the investment (£10 million for Knowledge Intensive Companies);
○ has (as a result of the investment or otherwise) received more
than £12 million from State aid investment sources in its lifetime (or
£20 million for Knowledge Intensive Companies);
○ in general has been generating commercial revenues for more than
seven years (or ten years for Knowledge Intensive Companies); or
○ will use the investment to fund an acquisition of another company
(or its trade and assets).
• make any investment which is not a Qualifying Investment unless
permitted by section 274 ITA; and/or
• return capital to Shareholders before the third anniversary of
the end of the accounting period during which the subscription for shares
occurs.
Qualifying Investments
A Qualifying Investment consists of new shares or securities issued directly
to the VCT by a Qualifying Company that at the point of investment:
• has gross assets not exceeding £15 million prior to investment
and £16 million post investment;
• carries out activities which are regarded as a Qualifying Trade;
• is a private company or is listed on AIM or the AQSE Growth
Market;
• has a permanent UK establishment;
• is not controlled by another company;
• will deploy the money raised for the purposes of the organic
growth and development of a Qualifying Trade within 2 years;
• has fewer than 250 employees (or fewer than 500 employees in the
case of certain Knowledge Intensive Companies);
• in general, has not been generating commercial sales for more
than seven years (ten years for Knowledge Intensive Companies);
• has not received more than the permitted annual and lifetime
limits of risk finance State aid investment; and
• has not been set up for the purpose of accessing tax reliefs or
is in substance a financing business.
The Finance Act 2018 introduced a principles-based approach known as the risk
to capital condition to establish whether the activities or investments of an
investee company can qualify for VCT tax reliefs. This condition has two
parts:
• whether the investee company has an objective to grow and develop
over the long term; and
• whether there is a significant risk that there could be a loss of
capital to the investor of an amount exceeding the net return.
Investment Manager’s report
Introduction
This report covers the 2023/24 financial year, 1 October 2023 to
30 September 2024. The Investment Manager’s report contains references to
movements in the NAV per share and NAV total return per share. Movements in
the NAV per share do not necessarily mirror the earnings per share reported in
the accounts and elsewhere, which convey the profit after tax of the Company
within the reported period as a function of the weighted average number of
shares in issue for the period.
Investment performance measures contained in this report are calculated on
a pence per share basis and include realised and unrealised gains and losses.
Investment report
The UK economy bounced back strongly after experiencing a shallow recession in
late 2023. For much of the year, the economy has proven to be surprisingly
resilient with GDP better than expected, healthy employment markets, strongly
positive real wage growth and, as a result, increasing consumer confidence.
The more optimistic tone that took hold in the third quarter (of the financial
year) was also showing up in measures of UK business confidence and indices
that measure economic data points relative to expectations. Unfortunately,
more recently these same yardsticks are now signalling that the negative
messaging of the new Government is starting to weigh on the economy. It has
been an unusual and clumsy start for a government that is keen to promote
itself as pro-growth.
If there has been huge uncertainty about the outlook for US interest rates,
the same has not been true for UK monetary policy. Interest rates have started
to come down broadly as expected with two 25 basis point reductions in August
and in November, providing relief to many households and companies. Interest
rates are expected to decline further as we head through the next year,
potentially down to 4.00% by September 2025.
We have frequently flagged the impact of sustained fund outflows on UK
equities, which have remained negative across the year. That having been said,
we and other small cap managers saw an improvement in the flow dynamic within
UK small companies in the early summer. Unfortunately, the improving picture
did not survive the 2024 Autumn Budget with UK equity fund flows turning more
deeply negative.
Although bookended by two periods of notably poor performance, for the most
part the AIM All-Share Index has been on an improving trend. After a difficult
start to the financial year, positive momentum was building as the year
progressed, right through to the announcement on 21 May 2024 that the UK
would hold a general election. Concerns about potential changes to fiscal
policy had an immediate and strongly negative impact on AIM that continued
through to year end and beyond. Although the net outcome was a gain of 3.90%
in the FTSE AIM All-Share Index for the 12 months to 30 September 2024, the
index lagged the FTSE UK Small Cap Index (excluding Investment Trusts) by
18.47% across the year, with most of that (13.07%) underperformance occurring
since the 2024 General Election was called.
Performance
In the 12 months to 30 September 2024, the NAV per share decreased from
46.34 pence to 40.55 pence, a NAV total return to investors of -1.79 pence
per share after adding back the 4.00 pence of dividends paid in the year,
this translates to a loss of -3.86%.
The qualifying investments made a net loss of -2.73 pence per share whilst
the non-qualifying investments made a net gain of 1.17 pence per share. The
-0.23 pence adjusting balance was the net of running costs and investment
income.
The contribution to NAV is split out in further detail below:
Notwithstanding the more negative mood that has set in since the 2024 General
Election, corporate news flow steadily improved as the year progressed and the
economy recovered from the recession in late 2023. For many retailers and
consumer facing companies, the key Christmas trading period and the months
that followed were challenging. More broadly speaking, we observed an
increasing number of companies reporting trading that was in line with their
expectations, with fewer companies reducing their guidance.
The 2024 Autumn Budget cast a long shadow over AIM, undermining performance
and introducing idiosyncratic factors that have distorted valuations: the
composition of the Shareholder register became an unusually important
determinant of share price performance.
Whilst market distortions have, in our opinion, weighed on performance within
the year, they have not been a factor in those companies that have made the
most significant individual contributions to performance. As is nearly always
the case, management execution has been the dominant driver of the outcome for
most of the ten companies we highlight below.
Looking forward, we believe that the qualifying portfolio remains well set and
attractively priced. We continue to expect investor interest in small UK
companies to return, following the lead of those private equity and trade
investors that continue to exploit market inefficiencies. There is plenty of
opportunity for those able and willing to make a long term investment in UK
innovation and growth.
Beeks Group (+177%, +0.83 pence per share) reported excellent FY24 results
with strong revenue and EBITDA growth of 27% and an 18% increase in annualised
committed monthly recurring revenue to £28m. The company is successfully
winning large contracts for its Exchange Cloud and Proximity cloud offering.
Beeks Group’s multi-year contract with one of the world’s largest
exchanges received regulatory approval in August 2024 and is expected to
launch in FY25 and drive considerable revenue growth. The company has a strong
balance sheet with net cash of £6.6m.
Cohort (+93%, +0.60 pence per share) issued several positive trading updates
over the year and reported record April FY24 results with revenues increasing
11% to £202.5m and operating profit of £21.1m. Several contract wins,
including a £135m 10-year contract from the Ministry of Defence to supply the
Royal Navy with its Trainable Decoy Launcher System, contributed to a very
strong order intake of £392m over the year (+78% over the prior year). The
last-reported order book of £575m provides over 90% cover for April FY25
revenue forecasts as well as visibility out to 2037.
Intercede (+349%, +0.45 pence per share) delivered exceptionally strong
results for the year to March 2024 with revenue growth of 65% to £20.0m and
profit before tax of £5.6m. This included a record contract with a large US
Federal Agency for over $8m, which was treated as an exceptional item. This
good operating momentum has continued into the current year and Intercede has
announced several more contract wins for its MyID credential management system
which underpin the forecasts for FY25. The company has a strong balance sheet
with £16.2m net cash.
Shares in Learning Technology Group (+48%, +0.40 pence per share) re-rated
over the early part of the year as investor sentiment towards the stock
improved. Whilst the company reported that weak end markets were weighing on
revenues, a strong margin performance has moderated the impact on profit
guidance. Good cash generation, coupled with the sale of Vector VMS, has left
the company with a substantially stronger unlevered (net cash) balance sheet.
In September 2024, the company announced an approach by private equity firm
General Atlantic with a possible cash offer at 100p alongside an option for
LTG Shareholders to re-invest a portion of their holding into the private
acquisition vehicle.
Skillcast (+137%, +0.31 pence per share) reported strong 2023 results with
revenues growing 15% to £11.3m. 2024 interim results showed further progress
as revenues grew 24% to £6.4m and the company broke even at the EBITDA level.
Annualised recurring revenues have increased by over 50% from £6.8m in
December 2022 to £10.3m in June 2024. The balance sheet is strong, with net
cash of £8.3m.
Equipmake (-72%, -1.63 pence per share) reported FY24 revenues of £8.1m, 60%
growth on the prior year. EBITDA losses were higher and cash lower than
forecast due to a revenue miss, cost overruns and working capital movements.
The company has invested into a new management team over the year, appointing
a more experienced COO, CFO and business development director. Revised
guidance reflects the pivot to a higher margin less capital intensive business
model that should result in reduced losses in FY25 and bring forward the
transition to profit in FY26. Equipmake has established relationships with
several high-calibre original equipment manufacturer (OEM) for its components
and drivetrain solutions and looks to build on this and announce further
partnership deals in due course. The company raised a further £3m in October
to support its working capital requirements.
Surface Transforms (-99%, -0.76p pence per share) faced significant
production issues over the period as the company sought to scale-up production
rates to meet customer demand. As a result, revenues were significantly below
target and costs also exceeded plans. In May 2024, the company raised £8.5m
of additional funding for working capital and capex in a deeply discounted
fundraise that was not VCT qualifying and very dilutive to existing
Shareholders. The investment was sold post period end.
Engage XR (-71%, -0.49 pence per share) warned in December 2023 that profits
would be below expectations due to project delays. In April 2024, the company
reported revenues of €3.7m (-5% year on year), and an EBITDA loss of
€-4.0m for the 12 months to December 2023. The balance sheet is strong
with net cash of €7.9m following the €10.5m fundraise earlier in 2023.
More recently, the company announced its first €1m+ contract with a Middle
East based education and training company through its partnership with PWC and
appointed an experienced non-executive chair to the board.
Children’s products and clothing retailer Kidly (-54%, -0.42 pence per
share) experienced a difficult trading environment through Christmas 2023 and
early 2024 that was compounded by balance sheet constraints. Although revenue
performance was below budget, operational efficiencies resulted in
significantly lower losses. Trading improved as the year progressed.
Reflecting the need for additional funding, the fair value of the equity was
reduced to nil and the value of the debt heavily impaired. Subsequently, Kidly
secured new funding as part of a financial restructuring that included a
partial conversion of the loan note instrument into new preferred shares. The
reduction in risk allowed a partial recovery in the fair value of the
convertible loan note instrument.
In a significant announcement, Arecor Therapeutics (-67%, -0.23 pence per
share) reported that its ultra-concentrated and ultra-rapid acting insulin
candidate AT278 demonstrated superiority to the current best-in-class insulins
in a Phase 1 clinical trial for patients with Type 2 diabetes and high BMI.
However, supply chain issues in its subsidiary Tetris Pharma negatively
impacted revenues and cash flow. Despite a more challenging fundraising
environment for life-sciences companies on AIM, the company successfully
raised £6.4m to continue its insulin development programmes and provide
working capital funding for Tetris Pharma.
Reflecting the very difficult market, there were no funds raised from AIM VCTs
by companies undertaking an IPO on AIM in the year under review. Despite this,
we invested £9.2m into seven Qualifying Companies including one new
investment into a company listed on AIM, one new investment into a company
listed on the AQSE APEX market, three follow on investments into existing
portfolio companies listed on AIM, one follow on investment into a company
listed on the AQSE APEX market and one new investment into a private company.
The three new investments included Abingdon Health plc, Oberon Investments
Group plc and Qureight Ltd. The follow on investments included Eden
Research plc, Equipmake plc, PCI Pal plc and Strip Tinning plc. We reduced
our investments in Blackbird plc, Team Internet Group plc and made complete
exits from Abcam plc, Instem plc, Osirium plc and Renalytix plc,
Smoove plc and Velocys plc. Bidstack Group plc was placed into
administration.
Portfolio structure
The VCT is comfortably above the HMRC defined investment test and ended the
period at 100% invested as measured by the HMRC investment test. By market
value, the weighting to qualifying investments decreased from 58.7% to 56.0%
following several disposals of qualifying companies.
The allocation at the year end to non-qualifying equity investments decreased
from 10.1% to 8.1%. In line with the investment policy, we made investments in
the IFSL Marlborough Special Situations Fund and the IFSL Marlborough UK
Micro-Cap Growth Fund as temporary homes for proceeds from fundraising; the
allocations increased from 5.4% to 13.4% and returned +0.57 pence per share
in the period.
The non-qualifying direct equity investments, which are mostly held in
FTSE 350 companies contributed +0.37 pence per share. Within the period, the
largest contributors to non-qualifying gains were Chemring (+32.3%,
+0.12 pence per share), Hollywood Bowl (+25.3%, + 0.11 pence per share) and
TP ICAP (+38.7%, +0.10 pence per share). The largest non-qualifying losses
came from XP Power (-55.4%, -0.12 pence per share), Energean (-13.5%,
-0.04 pence per share) and Bodycote (-7.7%, -0.03 pence per share).
We have maintained a substantial investment in short-dated investment grade
corporate bonds. Within the year, we reinvested the proceeds from the
redemption of one Marks & Spencer’s bond into another Mark & Spencer’s
bond, acquired a new Unilever bond which was subsequently redeemed just prior
to year end and made a small investment into a second Next bond. In the round,
the allocation increased from 11.4% to 12.9%. The average yield to maturity at
year end was 4.7%. Our cash weighting dropped from 12.7% to 9.3%(()(1)()).
The Company invests across all available investment sectors, although VCT
Rules tends to promote investment into sectors such as technology, healthcare
and consumer discretionary. In respect of the Qualifying Investment portfolio,
the weightings to these three sectors changed slightly over the year as a
consequence of additional investment and share price performance, taking their
respective shares to 40.4%, 21.0% and 11.8%. There is also a 13.8% weighting
to industrials.
The HMRC investment tests are set out in Chapter 3 of Part 6 Income Tax
Act 2007, which should be read in conjunction with this investment
manager’s report. Funds raised by VCTs are first included in the investment
tests from the start of the accounting period containing the third anniversary
of the date on which the funds were raised. Therefore, the allocation of
qualifying investments as defined by the legislation can be different to the
portfolio weighting as measured by market value relative to the net assets of
the VCT.
Share buy backs & discount control
10,657,350 shares were acquired in the year at an average price of
41.97 pence per share. The share price decreased from 43.00p to 39.00p and
traded at a discount of 6.78% following the publication of the 30 September
2024 NAV on 10 October 2024.
Post period end update
The NAV per share has decreased from 40.55 pence to 40.29 pence in the
period to 6 December 2024, a decrease of 0.6%.
As at 17 December 2024, the share price of 38.40 pence represented a
discount of 4.69% to the last published NAV per share. Economic activity has
noticeably slowed since the early summer with the economy growing by a meagre
+0.1% in the 3 months to October 2024, having peaked at +0.7% in the
3 months to May 2024. Business and consumer confidence has dipped and
corporate newsflow has noticeably softened, although trading continues to vary
markedly by sector. However, this period of weaker activity is not expected to
last and the economy should pick up momentum as we head through 2025.
Whilst many businesses (and business owners) are understandably frustrated by
changes to NICs, Business Property Relief and Business Asset Disposal Relief,
households and consumers should at least benefit from lower borrowing costs
and, at least within the public sector, substantially positive real wage
growth.
For most portfolio companies, the outlook is not significantly altered by the
Autumn 2024 Budget. Increases in employment taxes, whilst unhelpful, are not a
significant factor within the portfolio and we remain confident that our
portfolio companies can continue to build value through good execution. When
and how that crystallises remains difficult to forecast in the short-term.
Deal flow has improved noticeably since the Autumn 2024 budget and we are
active on a large number of deals. We are also seeing signs of a recovery in
the pipeline of companies looking to undertake an IPO.
For further information please contact:
Oliver Bedford
Lead Fund Manager
17 December 2024
Investment portfolio summary
As at 30 September 2024
Net Assets % at 30.09.24 Cost £000 Cumulative movement in value £000 Valuation £000 Change in value for the year £000 ((1)) Market COI ((2))
Equity Qualifying Investments
Beeks Financial Cloud Group plc 3.11 1,038 3,569 4,607 2,945 AIM Yes
Cohort plc 3.04 619 3,884 4,503 2,166 AIM Yes
Learning Technologies Group plc 2.89 2,238 2,037 4,275 1,388 AIM No
Eagle Eye Solutions Group plc 2.69 1,642 2,340 3,982 (563) AIM Yes
PCI-PAL plc 2.43 2,703 890 3,593 (706) AIM Yes
The Property Franchise Group plc 2.31 1,139 2,287 3,426 1,753 AIM Yes
Infinity Reliance Ltd (My 1st Years) ((3)) 2.10 2,500 607 3,107 364 Unlisted Yes
Diaceutics plc 1.82 1,550 1,141 2,691 591 AIM Yes
Qureight Ltd 1.69 2,500 — 2,500 — Unlisted No
Equipmake Holdings plc 1.57 4,162 (1,834) 2,328 (5,803) AIM No
Maxcyte Inc 1.47 1,270 905 2,175 300 AIM Yes
Intercede Group plc 1.40 305 1,767 2,072 1,611 AIM Yes
Craneware plc 1.29 125 1,786 1,911 470 AIM Yes
Skillcast Group plc 1.29 1,570 340 1,910 1,104 AIM No
Aquis Exchange plc 1.21 765 1,024 1,789 — AIM Yes
Abingdon Health plc 1.14 1,823 (140) 1,683 (140) AIM No
Fadel Partners, Inc 1.13 2,300 (623) 1,677 (623) AIM No
Team Internet Group plc 1.05 565 997 1,562 4 AIM No
XP Factory plc 1.04 4,068 (2,520) 1,548 (581) AIM Yes
Itaconix plc 1.04 3,025 (1,483) 1,542 (107) AIM No
Zoo Digital Group plc 1.04 2,159 (619) 1,540 (220) AIM No
Intelligent Ultrasound Group plc 0.93 1,550 (173) 1,377 (275) AIM No
AnimalCare Group plc 0.91 720 630 1,350 332 AIM Yes
SCA Investments Ltd (Gousto) 0.89 2,484 (1,166) 1,318 (237) Unlisted No
Oberon Investments Group plc 0.85 1,461 (208) 1,253 (209) AIM No
Zappar Ltd 0.81 1,600 (400) 1,200 (229) Unlisted No
Tortilla Mexican Grill plc 0.81 1,125 75 1,200 (550) AIM Yes
Eden Research plc 0.80 1,855 (674) 1,181 (336) AIM No
Equals Group plc 0.77 750 396 1,146 51 AIM No
C4X Discovery Holdings Ltd 0.75 2,300 (1,193) 1,107 (693) Unlisted No
Idox plc 0.73 135 949 1,084 (58) AIM Yes
EKF Diagnostics Holdings plc 0.61 565 335 900 96 AIM No
Ilika plc 0.57 1,636 (785) 851 (259) AIM No
Blackbird plc 0.56 594 238 832 (117) AIM No
Globaldata plc 0.55 173 635 808 211 AIM Yes
BiVictriX Therapeutics Ltd 0.58 1,600 (828) 772 (408) Unlisted No
Tristel plc 0.51 543 217 760 (93) AIM No
Engage XR Holdings plc 0.47 3,453 (2,762) 691 (1,727) AIM No
One Media iP Group plc 0.44 1,141 (489) 652 (244) AIM Yes
Science in Sport plc 0.39 1,479 (902) 577 289 AIM Yes
Nexteq plc 0.38 1,209 (649) 560 (170) AIM No
Creo Medical Group plc 0.37 2,329 (1,777) 552 (161) AIM Yes
Crimson Tide plc 0.35 1,260 (735) 525 (231) AIM Yes
Tan Delta Systems plc 0.33 504 (20) 484 19 AIM No
Verici DX plc 0.31 1,939 (1,476) 463 (71) AIM No
Arecor Therapeutics plc 0.27 1,687 (1,290) 397 (819) AIM No
Rosslyn Data Technologies plc 0.27 1,345 (951) 394 (322) AIM Yes
Faron Pharmaceuticals Oy 0.25 1,133 (763) 370 (125) AIM No
Hardide plc 0.23 3,566 (3,218) 348 (290) AIM Yes
Everyman Media Group plc 0.16 600 (369) 231 25 AIM No
K3 Business Technology Group plc 0.14 270 (60) 210 (120) AIM Yes
Eneraqua Technologies plc 0.14 1,401 (1,194) 207 (298) AIM No
Strip Tinning Holdings plc 0.13 1,054 (866) 188 (154) AIM No
Angle plc 0.12 1,158 (974) 184 (149) AIM No
Crossword Cybersecurity plc 0.09 2,039 (1,906) 133 (573) AIM No
Polarean Imaging plc 0.07 2,081 (1,978) 103 (587) AIM No
Mycelx Technologies Corporation 0.05 361 (282) 79 (51) AIM Yes
Trakm8 Holdings plc 0.03 486 (432) 54 (80) AIM No
Surface Transforms plc 0.02 1,744 (1,709) 35 (2,639) AIM No
Fusion Antibodies plc 0.02 624 (597) 27 (9) AIM No
Gfinity plc — 2,026 (2,021) 5 (23) AIM No
Bidstack Group plc — 2,733 (2,733) — (314) Unlisted No
Kidly Ltd ((3)) — 2,660 (2,660) — (326) Unlisted No
Laundrapp Ltd ((3)) — 2,450 (2,450) — — Unlisted No
Airportr Technologies Ltd ((3)) — 1,888 (1,888) — — Unlisted No
Mporium Group plc — 33 (33) — — Unlisted No
Flowgroup plc — 26 (26) — — Unlisted No
Infoserve Group plc ((4)) — — — — — Unlisted No
Total – equity Qualifying Investments 53.41 101,836 (22,807) 79,029 (7,971)
Qualifying fixed income investments
Strip Tinning Holdings plc (convertible loan notes) 1.45 2,000 158 2,158 158 Unlisted No
Kidly Ltd (convertible loan notes) 0.85 1,400 (138) 1,262 (1,138) Unlisted No
Rosslyn Data Technologies plc (convertible loan notes) 0.24 300 58 358 58 Unlisted No
Total qualifying fixed income investments 2.54 3,700 78 3,778 (922)
Total Qualifying Investments 55.95 105,536 (22,729) 82,807 (8,893)
Non-qualifying funds
IFSL Marlborough UK Micro-Cap Growth fund 7.01 9,339 1,044 10,383 1,044 Unlisted No
IFSL Marlborough Special Situations fund 6.34 9,833 (448) 9,385 1,001 Unlisted No
Vaneck Gold Miners UCITS ETF 0.44 634 22 656 22 Main No
Total non-qualifying funds 13.79 19,806 618 20,424 2,067
Equity non-qualifying investments
Hollywood Bowl Group plc 1.26 1,566 294 1,860 375 Main Yes
Bodycote plc 0.91 1,534 (179) 1,355 (114) Main No
National Grid plc 0.90 1,229 101 1,330 162 Main No
TP ICAP Group plc 0.89 1,022 300 1,322 369 Main Yes
Chemring Group plc 0.84 1,023 217 1,240 405 Main Yes
WH Smith plc 0.79 1,220 (54) 1,166 91 Main Yes
Rotork plc 0.63 944 (10) 934 59 Main No
BAE Systems plc 0.63 593 334 927 246 Main Yes
Wickes Group plc 0.59 950 (75) 875 167 Main Yes
Shell plc 0.49 804 (77) 727 (77) Main No
Tortilla Mexican Grill plc 0.09 161 (30) 131 (60) AIM Yes
Mycelx Technologies Corporation 0.06 298 (206) 92 (60) AIM Yes
Genagro Services Ltd — — — — 2 Unlisted Yes
Total – equity non-qualifying investments 8.08 11,344 615 11,959 1,565
Non-qualifying fixed income – bonds
British Telecommunications 5.75% SNR BDS 07/12/2028 2.12 3,130 2 3,132 174 Main No
Marks and Spencer plc 3.75% SNR EMTN 19/05/2026 2.06 3,032 17 3,049 17 Main No
Natwest Markets plc 6.375% SNR EMTN 08/11/2027 2.05 3,017 18 3,035 140 Main No
Royal Bank of Canada 5% SNR NTS 24/01/2028 2.05 3,036 (8) 3,028 153 Main No
Next Group plc 4.375% SNR BDS 02/10/2026 2.01 2,987 (12) 2,975 96 Main No
Barclays plc 3.25% SNR NTS 12/02/2027 1.95 2,912 (25) 2,887 145 Main No
Next Group plc 3% GTD SNR BDS 26/08/2025 0.66 969 12 981 13 Main No
Total non-qualifying fixed income – bonds 12.90 19,083 4 19,087 738
Total – non-qualifying investments 34.77 50,233 1,237 51,470 4,370
Total investments 90.72 155,769 (21,492) 134,277 (4,523)
Cash at bank 3.2 4,766
Funds held with Custodian 6.0 8,846
Prepayments & accruals 0.08 120
Net assets 100.00 148,009
(1) The change in fair value has been adjusted for additions and
disposals in the year and as such does not reconcile to the unrealised total
in note 7. The difference is £0.8 million which is the total of 17 full
investment disposals in the year.
(2) COI – Co investments with other funds managed by the Investment
Manager at 30 September 2024.
(3) Different classes of shares held in unlisted companies within the
portfolio have been aggregated.
(4) Impaired fully through the profit and loss account and therefore
shows a zero cost.
The investments listed below are either listed, headquartered or registered
outside the UK:
Listed Headquartered Registered
Listed Investments:
Fadel Partners, Inc UK USA USA
Faron Pharmaceuticals Oy UK/Finland Finland Finland
Itaconix plc UK USA UK
Maxcyte Inc UK/USA USA USA
Mycelx Technologies Corporation UK USA USA
Polarean Imaging plc UK USA UK
Unlisted private companies:
Genagro Ltd ((1)) — UK Jersey
(1) Companies awaiting liquidation.
Top ten investments
As at 30 September 2024 (by market value)
The top ten investments are shown below. Each investment is valued by
reference to the bid price or, in the case of unquoted companies, the IPEV
guidelines using one or more valuation techniques according to the nature,
facts and circumstances of the investment. Forecasts, where given, are drawn
from a combination of broker research and/or Bloomberg consensus forecasts and
exclude amortisation, share based payments and exceptional items. Forecasts
are in relation to a period end for which the company results are yet to be
released. Published accounts are used for private companies or public
companies with no published broker forecasts. The net asset figures and net
cash values are from published accounts in most cases.
Beeks Financial Cloud Group plc Share Price: 244.0p
Investment date November 2017 Forecasts for the year to June 2025
Equity held 2.84% Turnover (£’000) 39,600
Av. Purchase Price 55.0p Profit before tax (£’000) 6,100
Cost (£’000) 1,038 Net cash June 2024 (£’000) 7,100
Valuation (£’000) 4,607 Net assets June 2024 (£’000) 37,495
Company description
Beeks Financial Cloud Group plc is a cloud-based connectivity provider of
technology solutions to the financial services sector. The company’s
Infrastructure-as-a-Service model is optimised for low-latency private cloud
compute, connectivity and analytics, providing the flexibility to deploy and
connect to exchanges, trading venues and public cloud for a true hybrid cloud
experience. The company serves over 1,000 enterprise clients from its global
network of data centres.
Cohort plc Share Price: 948.0p
Investment date February 2006 Forecasts for the year to April 2025
Equity held 1.14% Turnover (£’000) 241,200
Av. Purchase Price 130.2p Profit before tax (£’000) 25,800
Cost (£’000) 619 Net cash October 2024 (£’000) 37,900
Valuation (£’000) 4,503 Net assets October 2024 (£’000) 111,203
Company description
Cohort provides electronic and surveillance technology solutions. The company
offers electronic warfare operational support, secure communication systems
and networks, test systems and data management. Cohort serves defence and
security, transport, offshore energy and other commercial markets.
Learning Technologies Group plc Share Price: 95.0p
Investment date July 2015 Forecasts for the year to December 2024
Equity held 0.57% Turnover (£’000) 477,000
Av. Purchase Price 49.7p Profit before tax (£’000) 77,000
Cost (£’000) 2,238 Net (debt) June 2024 (£’000) (57,524)
Valuation (£’000) 4,275 Net assets June 2024 (£’000) 443,743
Company description
Learning Technologies Group provides workplace digital learning and talent
management software and services to corporate and government clients. The
group offers end-to-end learning and talent solutions ranging from strategic
consultancy, through a range of content and platform solutions to analytical
insights that enable corporate and government clients to meet their
performance objectives.
Eagle Eye Solutions Group plc Share Price: 460.0p
Investment date April 2014 Forecast for the year to June 2025
Equity held 2.92% Turnover (£’000) 55,500
Av. Purchase Price 189.7p Profit before tax (£’000) 6,200
Cost (£’000) 1,642 Net cash June 2024 (£’000) 10,404
Valuation (£’000) 3,982 Net assets June 2024 (£’000) 34,056
Company description
Eagle Eye is a SaaS technology company that creates digital connections
enabling personalised, real-time marketing solutions for large retailers.
Through Eagle Eye AIR, the company’s loyalty and promotions omnichannel SaaS
platform, companies connect all aspects of the customer journey in real time,
unlocking the capability to deliver personalisation, streamline marketing
execution and open up new revenue streams through promotions, loyalty apps,
subscriptions and gift services.
PCI Pal plc Share price: 46.80p
Investment date January 2018 Forecast for the year to June 2025
Equity held 10.58% Turnover (£’000) 22,400
Av. Purchase Price 35.2p Profit before tax (£’000) 800
Cost (£’000) 2,703 Net (debt) June 2024 (£’000) 4,332
Valuation (£’000) 3,593 Net (liabilities) June 2024 (£’000) (1,970)
Company description
PCI PAL plc is a provider of SaaS solutions that allows companies to take
payments from their customers securely. Its products secure payments and data
in any business communications environment including voice, chat, social,
email, and contact centre and is integrated to, and resold by, business
communications vendors and payment service providers.
The Property Franchise Group plc Share price: 415.0p
Investment date December 2013 Forecast for the year to December 2024
Equity held 2.56% Turnover (£’000) 68,700
Av. Purchase Price 138.0p Profit before tax (£’000) 22,300
Cost (£’000) 1,139 Net (debt) June 2024 (£’000) (14,302)
Valuation (£’000) 3,426 Net assets June 2024 (£’000) 143,972
Company description
The Property Franchise Group is the UK’s largest property franchise business
and manages the second largest estate agency network and portfolio of lettings
properties in the UK. The group has 1,946 outlets, manages more than 152k
tenanted properties and is expected to sell in excess of 28k properties per
annum. The group also includes an established financial services business.
Infinity Reliance Ltd (My First Years) Unquoted
Investment date May 2018 Results for the year to December 2023
Voting rights held 9.66% Turnover (£’000) 20,973
Av. Purchase Price 4,670.4p Profit before tax (£’000) 2,885
Cost (£’000) 2,500 Net cash December 2023 (£’000) 6,221
Valuation (£’000) 3,107 Net assets December 2023 (£’000) 9,121
Income recognised in period (£) —
Company description
My 1st Years is a European retail platform that focusses on the sale of
personalised baby and children’s gifts primarily through e-commerce
channels. The product range includes bespoke presents for newborn babies to
seven year olds, for christenings, birthdays and Christmas.
Diaceutics plc Share price: 132.0p
Investment date July 2019 Forecast for the year to December 2024
Equity held 2.41% Turnover (£’000) 30,100
Av. Purchase Price 76.0p (Loss) before tax (£’000) (2,800)
Cost (£’000) 1,550 Net cash June 2024 (£’000) 16,749
Valuation (£’000) 2,691 Net assets June 2024 (£’000) 38,740
Company description
The Diaceutics proprietary diagnostic commercialisation platform (“DXRX”)
integrates real-world diagnostic testing data from a global network of
laboratories to enable the supply of precision medicine therapeutics to
patients. The company provides its solutions to leading pharmaceutical and
biotech companies in Europe and the USA.
Qureight Ltd Unquoted
Investment date March 2024 Results for the year to December 2023
Voting rights held 15.10% Turnover (£’000) ((1)) —
Av. Purchase Price 7,394.0p Profit/(loss) before tax (£’000) ((1)) —
Cost (£’000) 2,500 Net cash December 2023 (£’000) 380
Valuation (£’000) 2,500 Net assets December 2023 (£’000) 846
Income recognised in period (£) —
(1) Company has total exemption from full accounts.
Company description
Qureight’s proprietary technology uses artificial intelligence to analyse
medical images of the respiratory system through its innovative approach to
clinical data curation and artificial intelligence-powered digital biomarkers.
This approach enables researchers and scientists to analyse disease
progression and drug responses in patients across a range of complex
conditions.
Strip Tinning Holdings plc ((1)) Share price: 33.0p
Investment date February 2022 Forecast for the year to December 2024
Equity held 3.13% Turnover (£’000) 9,000
Av. Purchase Price 118.8p (Loss) before tax (£’000) (3,700)
Cost (£’000) 3,054 Net (debt) June 2024 (£’000) (2,247)
Valuation (£’000) 2,346 Net assets June 2024 (£’000) 4,240
(1) Holding inclusive of equity and convertible loan
note investments.
Company description
Strip Tinning manufactures specialist flexible electrical connectors related
primarily to heating and antennae systems embedded within automotive glazing
and to the connection of the cells within electric vehicle battery packs,
increasingly using flexible and lightweight printed circuit technology.
For further information please contact:
Oliver Bedford
Lead Fund Manager
17 December 2024
Canaccord Genuity Asset Management Limited
88 Wood Street
London
EC2V 7QR
0207 523 4837
aimvct@canaccord.com
Statement of directors’ responsibilities in respect of the financial
statements
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations. They
are also responsible for ensuring that the annual report includes information
required by the UK Listing Rules of the Financial Conduct Authority.
The Companies Act 2006 (and related legislation) requires the Directors to
prepare financial statements for each financial year. Under that law the
Directors are required to prepare the financial statements and have elected to
prepare the company financial statements in accordance with UK GAAP and the
Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Company and
of the profit or loss for the Company for that period.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable and
prudent;
• state whether they have been prepared in accordance with
UK GAAP, subject to any material departures disclosed and explained in the
financial statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
• prepare a directors’ report, a strategic report and
directors’ remuneration report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions, and disclose with
reasonable accuracy at any time the financial position of the Company, and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for ensuring that the annual report and
accounts, taken as a whole, are fair, balanced and understandable, and provide
the information necessary for Shareholders to assess the Company’s position
and performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the annual report and the financial
statements are made available on a website. The Company’s website address is
https://www.hargreaveaimvcts.co.uk. Financial statements are published on the
Company’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Directors’ responsibility statement pursuant to DTR4
Each of the Directors, David Brock (Chair), Oliver Bedford, Angela Henderson,
Justin Ward, Megan McCracken and Busola Sodeinde, confirms to the best of
their knowledge that:
• the financial statements have been prepared in accordance with
UK GAAP and give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company; and
• the annual report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that it
faces.
Disclosure of information to the Auditor
The Directors confirm that:
• so far as each Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• the Directors have taken all the steps that they ought to have
taken as Directors in order to make themselves aware of any relevant audit
information and to establish that the Auditor is aware of that information.
For and on behalf of the Board.
David Brock
Chair
17 December 2024
Income statement
Year to 30 September 2024 Year to 30 September 2023
Note Revenue £000 Capital £000 Total £000 Revenue £000 Capital £000 Total £000
Net loss on investments held at fair value through profit or loss 7 — (5,341) (5,341) — (28,455) (28,455)
Income 2 2,849 — 2,849 2,616 — 2,616
2,849 (5,341) (2,492) 2,616 (28,455) (25,839)
Management fee 3 (641) (1,924) (2,565) (699) (2,098) (2,797)
Other expenses 4 (1,485) (43) (1,528) (1,052) (39) (1,091)
(2,126) (1,967) (4,093) (1,751) (2,137) (3,888)
Profit/(loss) on ordinary activities before taxation 723 (7,308) (6,585) 865 (30,592) (29,727)
Taxation 5 — — — — — —
Profit/(loss) after taxation 723 (7,308) (6,585) 865 (30,592) (29,727)
Basic and diluted earnings/(loss) per share 6 0.20p (2.06)p (1.86)p 0.27p (9.59)p (9.32)p
The total column of these statements is the income statement of the Company.
All revenue and capital items in the above statements derive from continuing
operations. There was no other comprehensive income other than the loss for
the year.
The accompanying notes are an integral part of these financial statements.
Balance sheet
As at 30 September 2024
Company Registration Number 5206425 (In England and Wales)
Note 2024 £000 2023 £000
Fixed assets
Investments at fair value through profit or loss 7 134,277 132,120
Current assets
Debtors 9 1,047 1,475
Funds held with Custodian ((1)) 15 8,846 8,119
Cash at bank and in hand ((1)) 4,766 11,112
14,659 20,706
Creditors: amounts falling due within one year 10 (927) (906)
Net current assets 13,732 19,800
Total assets less current liabilities 148,009 151,920
Capital and Reserves
Called up share capital 11 3,649 3,278
Share premium 21,222 286
Capital redemption reserve 379 272
Capital reserve – unrealised 16,046 13,640
Special reserve 159,022 177,762
Capital reserve – realised (50,785) (41,071)
Revenue reserve (1,524) (2,247)
Total Shareholders’ funds 148,009 151,920
Net asset value per share (basic and diluted) 12 40.55p 46.34p
(1) Cash at bank and in hand in the Balance Sheet has been restated
to show separately Funds held with Custodian for the year ended 30 September
2023, to conform with the requirements of the Companies Act 2006 – Statutory
format of the Balance Sheet. There is no impact on other line items in the
Balance Sheet nor the total net current assets.
The accompanying notes are an integral part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 17 December 2024 and signed on its behalf by
David Brock
Chair
17 December 2024
Statement of changes in equity
For the year ending 30 September 2024
Non-distributable reserves Distributable reserves ((1))
Note Share Capital £000 Share Premium £000 Capital Redemption Reserve £000 Capital Reserve Unrealised £000 Special Reserve £000 Capital Reserve Realised £000 Revenue Reserve £000 Total £000
At 1 October 2023 3,278 286 272 13,640 177,762 (41,071) (2,247) 151,920
Profit and total comprehensive income for the year
Realised (losses) on investments 7 — — — — — (3,570) — (3,570)
Unrealised (losses) on investments 7 — — — (1,771) — — — (1,771)
Management fee charged to capital 3 — — — — — (1,924) — (1,924)
Transaction costs charged to capital — — — — — (33) — (33)
Income allocated to capital 2 — — — — — — — —
Due diligence investments costs 4 — — — — — (10) — (10)
Revenue profit after taxation for the year — — — — — — 723 723
Total (loss) after taxation for the year — — — (1,771) — (5,537) 723 (6,585)
Contributions by and distributions to owners
Subscription share issues 11 445 19,876 — — — — — 20,321
Issue costs 11 — (347) — — — — — (347)
Share buybacks 11 (107) — 107 — (4,472) — — (4,472)
DRIS share issues 11 33 1,407 — — — — — 1,440
Equity dividends paid 16 — — — — (14,268) — — (14,268)
Total contributions by and distributions to owners 371 20,936 107 — (18,740) — — 2,674
Other movements
Capital reduction 11 — — — — — — — —
Diminution in value — — — 4,177 — (4,177) — —
Total other movements
At 30 September 2024 3,649 21,222 379 16,046 159,022 (50,785) (1,524) 148,009
Reserves available for distribution are capital reserve realised, special
reserve and revenue reserve. Total distributable reserves at 30 September
2024 were £106.6 million, adjusted to remove £0.1 million accumulation
income included in the revenue reserve but not distributable
(2023: £134.4million). The accompanying notes are an integral part of these
financial statements.
(1) The Income Taxes Act 2007 restricts distribution of capital from
reserves created by the conversion of the share premium account into a special
(distributable) reserve until the third anniversary of the share allotment
that led to the creation of that part of the share premium account. As at
30 September 2024, £108.9 million of the special reserve is subject to this
restriction.
Statement of changes in equity
For the year ending 30 September 2023
Non-distributable reserves Distributable reserves ((1))
Note Share Capital £000 Share Premium £000 Capital Redemption Reserve £000 Capital Reserve Unrealised £000 Special Reserve £000 Capital Reserve Realised £000 Revenue Reserve £000 Total £000
At 1 October 2022 2,666 93,660 201 23,935 63,931 (20,774) (3,112) 160,507
Profit and total comprehensive income for the year
Realised (losses) on investments 7 — — — — — (8,245) — (8,245)
Unrealised (losses) on investments 7 — — — (20,210) — — — (20,210)
Management fee charged to capital 3 — — — — — (2,098) — (2,098)
Income allocated to capital 2 — — — — — — — —
Due diligence investments costs 4 — — — — — (39) — (39)
Revenue profit after taxation for the year — — — — — — 865 865
Total (loss) after taxation for the year — — — (20,210) — (10,382) 865 (29,727)
Contributions by and distributions to owners
Subscription share issues 11 659 39,277 — — — — — 39,936
Issue costs 11 — (742) — — — — — (742)
Share buybacks 11 (71) — 71 — (3,637) — — (3,637)
DRIS share issues 11 24 1,276 — — — — — 1,300
Equity dividends paid 16 — — — — (15,717) — — (15,717)
Total contributions by and distributions to owners 612 39,811 71 — (19,354) — — 21,140
Other movements
Capital reduction 11 — (133,185) — — 133,185 — — —
Diminution in value — — — 9,915 — (9,915) — —
Total other movements
At 30 September 2023 3,278 286 272 13,640 177,762 (41,071) (2,247) 151,920
Reserves available for distribution are capital reserve realised, special
reserve and revenue reserve. Total distributable reserves at 30 September
2023 were £134.4 million following the capital reduction of £133.2m
(2022: £40 million). The accompanying notes are an integral part of these
financial statements.
(1) The Income Taxes Act 2007 restricts distribution of capital from
reserves created by the conversion of the share premium account into a special
(distributable) reserve until the third anniversary of the share allotment
that led to the creation of that part of the share premium account. As at
30 September 2023, £108.9 million of the special reserve is subject to this
restriction.
Statement of cash flows
Note 2024 £000 2023 £000
Total loss on ordinary activities before taxation (6,585) (29,727)
Realised losses on investments 7 3,570 8,245
Unrealised losses on investments 7 1,771 20,210
Decrease/(increase) in debtors 428 (1,067)
Increase/(decrease) in creditors 21 (94)
Amortisation for discount/premium on bonds (129) (24)
Unclaimed dividend forfeiture 4 —
Non-cash distributions 2 (143) —
Net cash (outflow) from operating activities ((1)) (1,063) (2,457)
Purchase of investments 7 (27,582) (57,699)
Sale of investments 7 20,356 16,336
Net cash (used in) investing activities (7,226) (41,363)
Share buybacks 11 (4,472) (3,637)
Issue of share capital 11 20,321 39,936
Issue costs 11 (347) (742)
Dividends paid 16 (12,832) (14,417)
Net cash provided by financing activities 2,670 21,140
Net (decrease) in cash and cash equivalents (5,619) (22,680)
Opening cash and cash equivalents ((2)) 19,231 41,911
Closing cash and cash equivalents ((3)) 13,612 19,231
((1)) The Company received cash dividends of £977,491 (2023: £1,178,059)
and interest of £1,711,217 (2023: £599,735).
((2)) The opening cash and cash equivalents includes £8,119,302
(2023: £16,786,442) of funds held with Custodian.
((3)) The closing cash and cash equivalents includes £8,845,455
(2023: £8,119,302) of funds held with Custodian.
The accompanying notes are an integral part of these financial statements.
Notes to the financial statements
Hargreave Hale AIM VCT plc is a company incorporated in England and Wales
under the Companies Act 2006. The address of the registered office is given
in the company information in the report and the nature and principal business
activities are set out in the Strategic Report.
Basis of preparation
The financial statements have been prepared in accordance with UK GAAP,
including FRS 102 and with the Companies Act 2006 and the SORP.
Going Concern
The financial statements have been prepared on a going concern basis and on
the basis that the company maintains its VCT status.
The Directors have assessed the Company’s ability to continue as a going
concern and are satisfied that the Company has adequate resources to continue
in operational existence for a period of 12 months from the date these
financial statements were approved.
The Company has sufficient cash at bank, funds held with Custodian
(£4.8 million and £8.8 million respectively at 30 September 2024) and
liquid assets held across a diversified portfolio of investments in listed
companies to meet obligations as they fall due. The Company is a closed-ended
fund, where assets are not required to be liquidated to meet day-to-day
redemptions. The major driver of cash outflows (dividends, buybacks and
investments) are managed in accordance with the Company’s key policies at
the discretion of the Board or, in the case of the Company’s investments,
the Investment Manager.
The Board has reviewed forecasts and stress tests to assist them with their
going concern assessment. These tests have included the modelling of a 15%
reduction in NAV, whilst also considering ongoing compliance with the VCT
investment test. It was concluded that in a plausible downside scenario the
Company would continue to meet its liabilities.
The Directors have carefully considered the principal risk factors facing the
Company, as described in this report and their potential impact on income into
the portfolio and the NAV. The Directors are of the opinion that the Company
has sufficient cash and other liquid assets to continue to operate as a going
concern, including under a stress scenario.
The Investment Manager has a team of four dedicated fund managers and analysts
with multi-year experience working for the VCT and one dedicated legal
counsel. The Investment Manager and the Company’s other key service
providers have contingency plans in place to manage operational disruptions.
The Directors have not identified any material uncertainties related to events
or conditions that may cast significant doubt about the ability of the Company
to continue as a going concern. Therefore, they are satisfied that the Company
should continue to operate as a going concern and report its financial
statements on that basis.
Key judgements and estimates
The preparation of the financial statements requires the Board to make
judgements and estimates that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The most critical
judgements and estimates mainly relate to the determination of the fair
valuation of unquoted investments. The policies for these are set out in the
notes to the financial statements. The IPEV Guidelines describe a range of
valuation techniques, as described in the “financial instruments” section.
The nature of estimation means that the actual outcomes could differ from
those estimates. Estimates and underlying assumptions are under continuous
review with particular attention paid to the carrying value of the
investments.
Key judgements when determining the fair value of unquoted investments
include:
• selecting risk factors to include in the valuation model;
• peer group selection; and
• loan note conversion scenarios.
Key estimates involved in determining the fair value of unquoted investments
include:
• forecast compliance within the appropriate financial metric;
• future working capital requirements;
• liquidity risk;
• determining the appropriate discount to apply to peer group
selection; and
• the probabilities applied to the loan note conversion scenarios.
Further areas requiring judgement are the allocation of income and expenses,
recognition and classification of unusual or special dividends as either
capital or revenue in nature, the permanent impairment of investments and
categorisation of public companies between level 1 and level 2 of the fair
value hierarchy.
1. Accounting policies
A summary of the principal accounting policies, all of which have been applied
consistently throughout the year, is set out below:
Financial instruments
All investments are classified as fair value through profit or loss.
Investments are measured initially and subsequently at fair value which is
deemed to be market bid prices for listed investments and investments traded
on AIM. Unquoted investments are valued using the most appropriate methodology
recommended by the IPEV Guidelines published in December 2022. Investments
deemed to be associates due to the shareholding and level of influence exerted
over the portfolio company are measured at fair value using a consistent
methodology to the rest of the trust’s portfolio as permitted by FRS 102
and Para. 32 of the SORP.
Where no active market exists for the particular asset, the Company holds the
investment at fair value as determined by the Investment Manager and approved
by the Board. Valuations of unquoted investments are reviewed on a quarterly
basis and more frequently if events occur that could have a material impact on
the investment.
In estimating fair value for an unquoted investment, the Investment Manager
will apply one or more valuation techniques according to the nature, facts and
circumstances of the investment. The Investment Manager will use reasonable
current market data and inputs combined with market participant assumptions.
The assessment of fair value will reflect the market conditions at the
measurement date irrespective of which valuation technique is used. The IPEV
Guidelines describe a range of valuation techniques, including but not limited
to relevant observable market multiples, independent arms-length transactions,
income, discounted cash flows and net assets. The fair value of convertible
loan notes is estimated by aggregating the Net Present Value of the bond
component and the derivative value of the option to convert into equity. The
derivative value of the option to convert a particular loan note is the
probable weighted average of the present value of each conversion scenario
described in the loan note instrument as calculated using the Black Scholes
option pricing model.
Investments are recognised and derecognised at trade date where a purchase or
sale is under a contract whose terms require delivery within the time frame
established by the market concerned. Purchases and sales of unlisted
investments are recognised when the contract for acquisition or sale becomes
unconditional. Until 30 September 2023, transaction costs were included in
the initial cost or deducted from the disposals proceeds of investments.
However, from 1 October 2023 transaction costs in relation to the purchase or
sale of investments have been recognised as a capital expense.
These investments will be managed and their performance evaluated on a fair
value basis in accordance with a documented investment strategy and
information about them is provided internally on that basis to the Board.
Gains and losses arising from changes in fair value (realised and unrealised)
are included in the net profit or loss for the period as a capital item in the
income statement and are taken to the unrealised capital reserve or realised
capital reserve as appropriate.
If an investment has been impaired such that there is no realistic expectation
that there will be a full return from the investment, the loss is treated as a
diminution in value and transferred to the capital reserve realised. The
Company conducts impairments reviews on a quarterly basis. In the case of
equity investments, impairment reviews are triggered when unrealised losses
exceed 50% of book cost, or if the loss when realised would lead to a material
reduction in the Company’s distributable reserves. Fixed income investments
are reviewed for impairment if the issuing company’s ability to repay is
uncertain unless there are reasonable grounds to believe that the loan could
be recovered through the sale of the company or its trading assets.
Other financial assets and liabilities comprise receivables, payables and cash
and cash equivalents which are measured at amortised cost. There are no
financial liabilities other than payables.
Cash at bank and in hand
For the purposes of the Balance Sheet, cash at bank and in hand is cash held
in bank accounts subject to immediate access.
Funds held with Custodian
For the purposes of the Balance Sheet, funds held with Custodian is cash held
at CGWL (see note 15). Cash held with CGWL is to meet short term liquidity
requirements and is available on demand with no restrictions or penalties.
For the purposes of the Statement of Cash Flows, cash comprises cash at bank
and in hand and funds held with Custodian as defined above.
Income
Equity dividends are analysed to consider if they are revenue or capital in
nature on a case-by-case basis and are taken into account on the ex-dividend
date, net of any associated tax credit. Fixed returns on non-equity shares and
debt securities are recognised on a time apportionment basis so as to reflect
the effective yield, provided there is no reasonable doubt that payment will
be received in due course. All other income is recognised on an accruals
basis. Other income is treated as a repayment of capital or revenue depending
on the facts of each particular case.
Expenditure
All expenditure is accounted for on an accruals basis.
Where a clear connection with the maintenance or enhancement of value of the
investments can be demonstrated, expenses are allocated to capital.
Accordingly, of investment management fees, 75% are allocated to the capital
reserve realised and 25% to the revenue account in line with the Board’s
expected long-term split of investment returns in the form of capital gains to
the capital column of the income statement. Due diligence costs incurred for
prospective private company purchases and transaction costs in relation to the
purchase and sale of investments are charged to capital. Prior to 1 October
2023, transaction costs were included within the cost and/or deducted from
disposal proceeds of investment.
All other expenditure is charged to the revenue account.
Capital reserves
Realised profits and losses on the disposal of investments, due diligence
costs, income that is capital in nature, losses realised on investments
considered to be diminished in value and 75% of investment management fees are
accounted for in the capital reserve realised.
Increases and decreases in the valuation of investments held at the year end
are accounted for in the capital reserve unrealised.
Operating segments
There is considered to be one operating segment being investment in equity and
debt securities.
Taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not yet reversed at the balance sheet date. Deferred tax assets
are only recognised to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other future
taxable profits.
Current tax is expected tax payable on the taxable profit for the period using
the current tax rate and laws that have been enacted or substantially enacted
at the reporting date. The tax effect of different items of income and
expenditure is allocated between capital and revenue on the same basis as the
particular item to which it relates.
Approved VCTs are exempt from tax on capital gains from the sale of fixed
asset investments. The Directors intend that the Company will continue to
conduct its affairs to maintain its VCT status, no deferred tax has been
provided in respect of any capital gains or losses arising from the
revaluation or disposal of investments.
Dividends
Only dividends recognised during the year are deducted from revenue, capital
or special reserves. Equity dividends are recognised in the accounts when they
become legally payable.
Interim dividends are approved by the Board of Directors and may be varied or
rescinded at any time before payment, therefore the liability is only
established when the dividend is actually paid. Final dividends are subject to
approval at the AGM. Where a dividend is stated to be payable on a future
date, the liability is established on that date.
Functional currency
The Company is required to nominate a functional currency, being the currency
in which the Company predominantly operates. The Board has determined that
sterling is the Company’s functional currency. Sterling is also the currency
in which these accounts are presented.
Capital structure
Share Capital
Ordinary shares are classed as equity. The ordinary shares in issue have a
nominal value of one penny and carry one vote each. Substantial holdings in
the Company are disclosed in the Directors’ Report.
Share Premium
This reserve represents the difference between the issue price of shares and
the nominal value of shares at the date of issue, net of related issue costs.
Capital Redemption Reserve
This reserve is used for the cancellation of shares bought back under the
buyback facility.
Special Reserve
Distributable reserve used to pay dividends and re-purchase shares under the
buyback facility.
Capital Reserve Realised
Gains/losses on disposal of investments, due diligence and transaction costs,
income that is capital in nature, diminishment of financial assets and 75% of
the investment management fee are accounted for in the capital reserve
realised.
Capital Reserve Unrealised
Unrealised gains and losses on investments held at the year end arising from
movements in fair value are taken to the capital reserve unrealised.
Revenue Reserve
Net revenue profits and losses of the Company.
2. Income
2024 £000 2023 £000
Income from investments:
Revenue:
Dividend income 973 1,247
Interest from bonds 1,031 579
Interest from loan notes 171 ((1)) 288
Bank interest 531 502
Accumulation fund income 143 ((2)) —
Total revenue income 2,849 2,616
(1) The amount of loan stock interest recognised in the period is
lower than prior year, largely because of the Kidly loan interest being fully
impaired in the period.
(2) Accumulation income from the IFSL Marlborough Special Situations
and Marlborough UK Micro-Cap Growth funds (2023: nil).
No capital income was recognised in the year (2023: nil).
3. Management fees
2024 Revenue £000 2024 Capital £000 2024 Total £000 2023 Revenue £000 2023 Capital £000 2023 Total £000
Management fees 641 1,924 2,565 699 2,098 2,797
The IMA terminates on 12 months’ notice, subject to earlier termination in
certain circumstances. In the event of termination by the Company on less than
the agreed notice period, compensation may be payable to the Investment
Manager in lieu of the unexpired notice period. No notice had been given by
the Investment Manager or by the Board to terminate the agreement as at the
date of approval of these accounts.
The Investment Manager receives an investment management fee of 1.7% per annum
of the NAV of the Company, calculated and payable quarterly in arrears. At
30 September 2024, £615,231 (2023: £645,397) was owed in respect of
management fees. The Company receives a reduction to the annual management fee
for investments in other funds managed by the Investment Manager, being any
investment in the IFSL Marlborough Special Situations Fund and/or the IFSL
Marlborough UK Micro-Cap Growth Fund so the Company is not charged twice for
these services. This amounted to £75,184 for the year to 30 September 2024
(2023: £49,931). The Investment Manager has agreed to indemnify the Company
against annual running costs exceeding 3.5% of its net assets. No fees were
waived between 1 October 2023 and 30 September 2024 and no fees were waived
between 1 October 2022 and 30 September 2023 under the indemnity.
4. Other expenses
2024 £000 2023 £000
Other revenue expenses:
Administration fee 250 195
Directors’ fees 216 205
Legal & professional 27 39
London Stock Exchange fees 83 84
Registrar’s fee 46 47
Website and marketing 36 60
Printing, postage and stationary 42 40
Auditors’ remuneration – for audit services 63 55
VCT monitoring fees 14 15
Company secretarial fees 73 57
Custody fee 30 30
Directors’ and officers’ liability insurance 27 36
Broker’s fee 5 5
VAT 128 115
Other expenses ((1)) 76 104
Provision against income receivable 368 ((2)) (35)
Total other revenue expenses 1,485 1,052
Other capital expenses:
Due diligence costs 9 32
VAT on due diligence costs 1 7
Transaction costs on investment transactions charged to capital ((3)) 33 —
Total other capital expenses 43 39
Total other expenses 1,528 1,091
(1) Other expenses include FCA fees, AIC membership fees, VCT
Association fees, recruitment costs, professional subscriptions, license
costs, Shareholder event costs and other nominal expenses.
(2) Kidly loan stock interest impairment of £362,795 and XP
Power plc cancelled dividend of £5,700.
(3) During the year the Company incurred transaction costs of
£23,907 (2023: £97,493) and £9,439 (2023: £15,710) on purchases and
sales respectively. These amounts are included in capital expenses;
(2023: included in the losses on investments as disclosed in the income
statement.
The Directors’ remuneration above includes national insurance contributions.
Directors’ remuneration excluding employer’s national insurance
contributions is detailed in the directors’ remuneration report.
The maximum aggregate directors’ emoluments authorised by the Articles are
detailed in the Directors’ Remuneration Report.
5. Tax on ordinary activities
The tax charge for the year is based on the standard rate of UK Corporation
Tax of 25% (2023: 22%((1))).
2024 Total £000 2023 Total £000
Loss on ordinary activities before taxation (6,585) (29,727)
UK Corporation Tax: 25% (2023: 22%) (1,646) (6,540)
Effect of non taxable losses on investments 1,335 6,260
Effect of non taxable UK dividend income (242) (274)
Effect of disallowed costs 8 —
Deferred tax not recognised 545 554
Current tax charge — —
(1) Average rate of corporation tax applicable for the period.
At the 30 September 2024 the Company had tax losses carried forward of
£26,556,949 (2023: £24,379,001). It is unlikely that the Company will
generate enough taxable income in the future to use these expenses to reduce
future tax charges and therefore no deferred tax asset has been recognised.
There is no taxation charge in relation to capital gains or losses. No asset
or liability has been recognised in relation to capital gains or losses on
revaluing investments. The Company is exempt from such tax as a result of its
intention to maintain its status as a Venture Capital Trust.
6. Basic and diluted earnings/(loss) per share
2024 Revenue £000 2024 Capital £000 2024 Total £000 2023 Revenue £000 2023 Capital £000 2023 Total £000
Return (£) 723 (7,308) (6,585) 865 (30,592) (29,727)
Earnings/(loss) per ordinary share 0.20p (2.06)p (1.86)p 0.27p (9.59)p (9.32)p
The earnings per share is based on 353,964,930 ordinary shares
(2023: 318,946,009), being the weighted average number of shares in issue
during the year.
7. Investments
Quoted investments ((1)) 2024 £000 Unquoted investments 2024 £000 Total investments 2024 £000 Quoted investments ((1)) 2023 £00 Unquoted investments 2023 £000 Total investments 2023 £000
Opening Valuation 122,567 9,553 132,120 108,630 10,558 119,188
Purchases at cost 23,082 4,500 27,582 56,199 1,500 57,699
Non-cash distribution 143 — 143 — — —
Sale proceeds (19,554) (802) (20,356) (16,336) — (16,336)
Realised gains/(losses) (471) (3,099) (3,570) ((2)) (8,245) — (8,245)
Unrealised losses (2,106) 335 (1,771) ((2)) (17,705) (2,505) (20,210)
Amortisation for discount/premium on bonds 129 — 129 24 — 24
Re-Classification Adjustment (3,294) 3,294 — — — —
Closing valuation 120,496 13,781 134,277 122,567 9,553 132,120
Cost at 30 September 129,295 26,474 155,769 132,600 19,241 151,841
Unrealised gains/(losses) 16,845 (799) 16,046 14,981 (1,341) 13,640
Diminution in value ((3)) (25,644) (11,894) (37,538) (25,014) (8,347) (33,361)
Closing valuation 120,496 13,781 134,277 122,567 9,553 132,120
(1) Includes the IFSL Marlborough Special Situations Fund and the
IFSL Marlborough UK Micro-Cap Fund with valuations of £9.4m (2023: £8.3m)
and £10.4m (2023: nil) respectively as at 30 September 2024. Whilst
unlisted, the two investments are UCITS funds with daily dealing and daily
published pricing.
(2) The net loss on investments held at fair value through profit or
loss in the income statement of £5,341k (2023: loss £28,455k) is the sum of
the realised and unrealised losses for the year as detailed in the table
above.
(3) Diminishments of £11,899,074 (2023: £14,762,893) were made in
the year. Once adjusted for disposals/dissolutions (£7,373,105)
(2023: £4,617,026) and diminishment reversals (£349,248) (2023: £230,000)
the net movement for the year is £4,176,721 (2023: £9,915,867).
Diminishments carried forward are £37,538,163 (2023: £33,361,442).
Transaction Costs
During the year the Company incurred transaction costs of £23,907
(2023: £97,493) and £9,439 (2023: £15,710) on purchases and sales
respectively. These amounts are included in capital expenses; (2023: included
in the losses on investments as disclosed in the income statement).
Fair Value Measurement Hierarchy
The table below sets out fair value measurements using FRS 102 (appendix to
section 2 fair value measurement) fair value hierarchy. The Company has one
class of assets, being at fair value through profit or loss.
• Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2: Inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• Level 3: Valued by reference to valuation techniques using
inputs that are not based on observable market data.
2024 Level 1 £’000 2024 Level 2 £’000 2024 Level 3 £’000 2024 Total £’000 2023 Level 1 £’000 2023 Level 2 £’000 2023 Level 3 £’000 2023 Total £’000
Investments 91,496 29,000 13,781 134,277 82,565 40,002 9,553 132,120
Transfers between level 3 and level 1 occur when a previously unquoted
investment undertakes an initial public offering, resulting in its equity
becoming quoted on an active market. There have been no instances in the
current period (2023: none). Transfers between level 1 and/or 2 and 3 would
occur when a quoted investment’s market becomes inactive, or the portfolio
company elects to delist. There has been one transfer from level 1 to level 3
in the current year for £1.1m in relation to C4X Discovery Holdings Ltd
(2023: none) and one transfer from level 2 to level 3 for £0.8m in relation
to BiVictriX Therapeutics Ltd (2023: none). Transfer values at 30 September
2024.
There were transfers of £53.6k between level 1 and level 2 in the current
period where the investments market is not sufficiently active
(2023: £20.2m). There were transfers between level 2 and level 1 of £3.8m
(2023: none). Transfer values at 30 September 2024.
Level 3 financial assets
2024 Equity shares £’000 2024 Preference shares £’000 ((1)) 2024 Loan notes £’000 2024 Total £’000 2023 Equity shares £’000 2023 Preference shares £’000 ((1)) 2023 Loan notes £’000 2023 Total £’000
Opening balance 2,984 3,069 3,500 9,553 4,740 3,861 1,957 10,558
Transfer from Level1 and 2 3,294 ((2)) — — 3,294 — — — —
Purchases at cost — 2,500 2,000 4,500 — — 1,500 1,500
Sale proceeds (2) — (800) (802) — — — —
Realised (losses) ((3)) (2,199) (600) (300) (3,099) — — — —
Unrealised (losses)/gains 319 638 (622) 335 (1,756) (792) 43 (2,505)
Closing valuation 4,396 5,607 3,778 13,781 2,984 3,069 3,500 9,553
(1) The preference shares held are in the nature of equity.
(2) BiVictriX Therapeutics Ltd and C4X Discovery Holdings Ltd
delisted on 11 September 2024 and 26 April 2024 respectively. Bidstack
Group plc was placed into administration and delisted on 23 April 2024. The
transfer value of the delisted investments included in the table is the
brought forward value as at 30 September 2023.
(3) Honest Brew Limited was dissolved on 19 September 2024.
The following table sets out the basis of valuation for the material Level 3
investments and those where the value has materially changed during the year,
held within the portfolio at 30 September 2024.
In assessing fair value, the Investment Manager considered a range of
valuation methodologies including EV/Sales, and EV/EBITDA multiples for the
current and next financial year. Where appropriate, the Investment Manager
also assessed value using discounted cash flow analysis. Where observable
market multiples were available, these were used as part of peer group
analysis. Market based multiples were taken as reference points with discounts
applied (where appropriate) to reflect liquidity and forecast risk.
The manager also undertook sensitivity analysis to consider the impact of a
30% movement in the peer group multiples, both higher and lower. The use of
alternative investment structures such as convertible loan stock by the
Company or other investors can lead to asymmetric movements in value in
response to different upside and downside scenarios. For further information
on sensitivities, please see note 15.
Level 3 Unquoted Investments
Infinity Reliance Ltd (My 1st Years) Trading continues to be positive with the company reporting revenue growth despite the weaker consumer environment. EBITDA growth in 2024 will be limited by investments designed to increase the addressable market in the medium term. The fair value of the
investment increased as the valuation rolled forward into the financial year ending December 2024. The valuation was reviewed against EV/Sales multiples across a peer group of listed companies which was broadly static.
BiVictriX Therapeutics Ltd On 12 August 2024, BiVictriX announced the proposed cancellation of admission of its ordinary shares to trading on AIM and re-registration as a private limited company after the directors concluded that the company’s market capitalisation did not fully
reflect the positive achievements nor the underlying prospects of the business and was a potential barrier to future growth and funding, as well as potential partnership and licensing opportunities. The directors believe that, as a private company,
BiVictriX would be able to access a greater pool of investors who are more likely to support clinical development. The company has engaged a US healthcare investment bank with significant experience in the antibody drug-conjugate (“ADC”) space to assist
the company in securing additional capital. The cancellation took effect from 11 September 2024. Given the short period since the delisting the investment is held at the closing bid price on the last day of trading on AIM.
Bidstack Group plc Following a protracted period of underperformance, failed fundraising efforts, and a strategic review which also failed to solicit a buyer for the company’s assets, Bidstack entered administration on 22 March 2024. Following this, shares in the company
were cancelled from trading on AIM on 23 April 2024.
C4X Discovery Holdings Ltd On 27 March 2024, C4X Discovery announced the proposed cancellation of admission of its ordinary shares to trading on AIM and re-registration as a private limited company. Having reviewed the company’s opportunities for value creation and optimal capital
structure, the directors determined that, as a private company, C4X would have access to a larger quantum of funding than has historically been available through its AIM listing and that would allow it to pursue a greater number of opportunities to key
value inflexion points. The cancellation took effect from 26 April 2024. The valuation of the investment is taken from the closing bid price on the last day of trading on AIM; however it was also tested against a composite valuation that included the
closing bid price prior to delisting and a risked net present value analysis of the company’s balance sheet cash and partnered drug development assets.
Kidly Ltd A difficult trading environment through Christmas 2023 and early 2024 was compounded by balance sheet constraints. Although revenue performance was below budget, operational efficiencies resulted in significantly lower losses. Trading has improved as the
year progressed. Reflecting the need for additional funding, the fair value of the equity was reduced to nil and the value of the debt heavily impaired. Subsequently, Kidly secured new funding as part of a financial restructuring that included a partial
conversion of the loan note instrument into new preferred shares. The reduction in risk allowed a partial recovery in the fair value of the convertible loan note instrument. The value of the conversion options and equity remain nil. The outstanding
principal of the convertible loan note instrument is valued according to an assessment of recovery. There is no value attributed to the conversion option, which is valued using the Black Scholes option pricing model.
Qureight Ltd The investment into Qureight Ltd completed on 19 March 2024. The valuation was set with reference to FY25 EV/Sales multiples and assessed against listed peers.
SCA Investments Ltd (Gousto) The company closed 2023 strongly with EBITDA ahead of budget. EBITDA and cash flow generation improved significantly over the course of the year. Margin growth is expected to support further increases in EBITDA and cash flow in 2024. The fair value of the
investment was reduced slightly within the period we moved away from EV/Sales to EV/EBITDA as the primary valuation metric and several members of the peer group reported difficult trading, leading to a reduction in peer group multiples.
Zappar Ltd Trading conditions remained challenging over the period as the arrival of new headset technologies sparked increased interest in immersive experiences at the expense of augmented reality. Weakness in the US digital marketing sector provided an additional
headwind and revenues and profits were below budget. The valuation of the investment was reviewed against listed peers using EV/Sales multiple, and was reduced to reflect the weaker outlook. The investment was valued on a composite basis that took into
account both the assessment of value on an ongoing basis as an independent company (based upon peer group EV/Sales multiples) and the potential sale of the company to Infinite Reality. Despite the potential acquisition of the company the fair value
assessment was reduced slightly to reflect the more difficult trading environment.
Rosslyn Data Technologies plc – convertible loan note Rosslyn Data Technologies experienced challenging trading conditions in FY24 predominantly due to extended sales cycles for sizable new clients. However, on 21 August 2024 the company announced a material contract win with a leading global technology
company. Post period end, Rosslyn Data Technologies secured additional equity and convertible loan note funding. As part of this fundraise, the Company committed to converting the current 2023 convertible loan note into equity and investing into a new 2024
convertible loan note. There was a non-material change to the fair value of the convertible loan notes with the value of the conversion option calculated using the Black-Scholes option pricing model.
Strip Tinning plc – convertible loan note On 17 January 2024, Strip Tinning completed a £5.1m fundraising through the issue of new shares and convertible loan notes to fund its EV growth strategy. As part of the funding round, the Company invested £2.0m through the new convertible loan notes.
Whilst there have been short-term trading challenges in the automotive sector, the company has announced two record contract wins to supply Smart Glass Connectors for new EV platforms and a £43m strategic nomination for the supply of a cell contacting
system for the battery pack of an autonomous vehicle being developed by one of the world’s largest corporations, based in the USA. The fair value of the convertible loan notes have increased modestly since the investment with the value of the conversion
option calculated using the Black-Scholes option pricing model.
8. Significant interests
At the year end the Company held 3% or more of the issued share capital of the
following investments:
Investment
Holding % Investment Holding %
Rosslyn Data Technologies plc 20.27% Tortilla Mexican Grill plc 6.47%
Engage XR Holdings plc 16.45% Crimson Tide plc 6.39%
Abingdon Health plc 14.76% Oberon Investments plc 6.08%
PCI-PAL plc 10.58% Eden Research plc 5.44%
Equipmake Holdings plc 9.13% Skillcast Group plc 4.74%
Itaconix plc 8.80% Intelligent Ultrasound Group plc 4.21%
Fadel Partners Inc 7.89% Zoo Digital Group plc 3.37%
XP Factory plc 7.39% Strip Tinning Holdings plc 3.13%
One Media iP Group plc 7.33% Blackbird plc 3.07%
9. Debtors
2024 £000 2023 £000
Prepayments 29 40
Accrued income 949 1,430
Other debtors 69 5
1,047 1,475
10. Creditors: amounts falling due within one year
2024 £000 2023 £000
Trade Creditors 12 21
Accruals 915 885
927 906
11. Called up share capital
2024 £000 2023 £000
Allotted, called-up and fully paid: 364,977,848
(2023: 327,813,939) ordinary shares of 1p each. 3,650 3,278
During the year 10,657,350 (2023: 7,183,338) ordinary shares were purchased
through the buyback facility at a cost of £4,472,418 (2023: £3,636,841).
The repurchased shares represent 3.25% (2023: 2.7%) of ordinary shares in
issue on 1 October 2023. The acquired shares have been cancelled.
During the year, the Company issued 44,485,284 ordinary shares of 1 penny
(nominal value £444,853) in an offer for subscription, representing 13.57% of
the opening share capital at prices ranging from 44.80p to 47.10p per share.
Gross funds of £20,321,529 were received. The 3.5% premium of £711,254
payable to CGWL under the terms of the offer was reduced by £264,162, being
the discount awarded to investors in the form of additional shares. A further
reduction of £470 introductory commission was made resulting in fees payable
to CGWL of £446,622 which were used to pay other costs associated with the
prospectus and marketing. In accordance with the offer agreement, the Company
was entitled to a rebate of £100,000 from CGWL reducing the net fees payable
to CGWL to £346,622.
On 15 February 2024, 1,100,783 ordinary shares were allotted at a price of
44.58 pence per share, which was calculated in accordance with the terms and
conditions of the DRIS, on the basis of the last reported NAV per share as at
26 January 2024, to Shareholders who elected to receive shares under the DRIS
as an alternative to the final dividend for the year ended 30 September 2023.
On 26 July 2024, 2,235,192 ordinary shares were allotted at a price of
42.49 pence per share, which was calculated in accordance with the terms and
conditions of the DRIS, on the basis of the last reported NAV per share as at
5 July 2024, to Shareholders who elected to receive shares under the DRIS as
an alternative to the interim dividend for the year ended 30 September 2024.
Further details of the Company’s capital structure can be seen in note 1.
Income entitlement
The revenue earnings of the Company are available for distribution to holders
of ordinary shares by way of interim, final and special dividends (if any) as
may from time to time be declared by the Directors.
Capital entitlement
The capital reserve realised and special reserve of the Company are available
for distribution to holders of ordinary shares by way of interim, final and
special dividends (if any) as may from time to time be declared by the
Directors.
Voting entitlement
Each ordinary Shareholder is entitled to one vote on a show of hands and on a
poll to one vote for each ordinary share held. Notices of meetings and proxy
forms set out the deadlines for valid exercise of voting rights and other than
with regard to Directors not being permitted to vote on matters upon which
they have an interest, there are no restrictions on the voting rights of
ordinary Shareholders.
Transfers
There are no restrictions on transfers except dealings by Directors, persons
discharging managerial responsibilities and their persons closely associated
which may constitute insider dealing or is prohibited by the rules of the FCA.
The Company is not aware of any agreements with or between Shareholders which
restrict the transfer of ordinary shares, or which would take effect or alter
or terminate in the event of a change of control of the Company.
12. Net asset value per ordinary share
30 September 2024 30 September 2023
Net assets (£’000) 148,009 151,920
Shares in issue 364,977,848 327,813,939
NAV per share (p) 40.55 46.34
There are no potentially dilutive capital instruments in issue and as such,
the basic and diluted NAV per share are identical.
13. Contingencies, guarantees and financial commitments
There were no contingencies, guarantees or financial commitments of the
Company at the year end (2023: nil).
14. Related party transactions and conflicts of interest
The remuneration of the Directors, who are key management personnel of the
Company, is disclosed in the Directors’ Remuneration Report and in note 4.
Transactions with the Investment Manager
As the Company’s Investment Manager, CGAM is a related party to the Company
for the purposes of the UK Listing Rules. As CGAM and CGWL are part of the
same CGWL group, CGWL also falls into the definition of related party.
Oliver Bedford, a non-executive director of the Company is also an employee of
the Investment Manager which received fees of £29,500 for the year ended
30 September 2024 in respect of his position on the Board (2023: £28,000).
Of these fees £7,375 was still owed at the year end. Oliver Bedford’s
non-executive directorship fees will increase to £30,500 per annum, with
effect from 1 October 2024.
CGWL acted as Administrator and Custodian for the year ended 30 September
2024. On 7 September 2023, the Company entered into an amended administration
agreement with CGWL. Under the terms of the agreement the fees to be paid to
CGWL were increased to £250,000 per annum (previously £195,000) with effect
from 1 October 2023.
With effect from 1 October 2024, the administration agreement between the
Company and CGWL was novated to CGAM. Under the terms of the novation
agreement, the administration fees paid by the Company were unchanged at
£250,000 (plus VAT). Notwithstanding the novation, CGWL will continue to
receive a fee of £30,000 per annum in relation to its appointment as the
Custodian. Any future initial or trail commissions paid to Financial
Intermediaries will be paid by CGAM.
For the year ended 30 September 2024, CGWL received fees for the support
functions as follows:
30 September 2024 30 September 2023
Custody 30,000 30,000
Administration 250,000 195,000
Total 280,000 225,000
Still owed at the year end 69,585 55,765
Under an offer agreement dated 7 September 2023, CGWL was appointed by the
Company to administer an offer for subscription in the 2023/24 tax year and
acted as receiving agent in relation to the offer. Under the terms of the
agreement CGWL received a fee of 3.5 per cent. of the gross proceeds of the
offer for providing these services. The Administrator agreed to discharge
commissions payable to financial advisers in respect of accepted applications
for offer shares submitted by them, including any trail commission.
The Administrator also agreed to discharge and/or reimburse all costs and
expenses of and incidental to the offer and the preparation of the prospectus,
including without limitation to the generality of the foregoing, FCA vetting
fees in relation to the prospectus, sponsor and legal fees, expenses of the
Company and CGWL, the Company’s tax adviser’s fees and expenses,
registrar’s fees, costs of printing, postage, advertising, publishing and
circulating the prospectus and marketing the offer, including any introductory
commission and discounts to potential investors. However, the Administrator
was not responsible for the payment of listing fees associated with the
admission of the ordinary shares to the premium segment of the Official List
and to trading on the main market of the London Stock Exchange.
During the year, the Company issued 44,485,284 ordinary shares of 1 penny
(nominal value £444,853) in an offer for subscription, representing 13.57% of
the opening share capital at prices ranging from 44.80p to 47.10p per share.
Gross funds of £20,321,529 were received. The 3.5% premium of £711,254
payable to CGWL under the terms of the offer was reduced by £264,162,
being the discount awarded to investors in the form of additional shares. A
further reduction of £470 introductory commission was made resulting in fees
payable to CGWL of £446,622 which were then used to pay other costs
associated with the prospectus and marketing. In accordance with the offer
agreement, the Company was entitled to a rebate of £100,000 from CGWL
reducing the net fees payable to CGWL to £346,622.
CGAM is appointed as Investment Manager to the Company and receives an
investment management fee of 1.7% per annum.
Investment management fees for the year are £2,565,844 (2023: £2,797,377)
as detailed in note 3. Of these fees £615,231 (2023: £645,397) were still
owed at the year end. As the Investment Manager to the Company and the
investment adviser to the IFSL Marlborough Special Situations Fund and the
IFSL Marlborough UK Micro-Cap Fund (in which the Company may and does invest),
the Investment Manager makes an adjustment as necessary to its investment
management fee to ensure the Company is not charged twice for their services.
Upon completion of an investment, the Investment Manager is permitted under
the IMA to charge private investee companies a fee equal to 1.5 per cent. of
the investment amount. This fee is subject to a cap of £40,000 per investment
and is payable directly from the investee company to the Investment Manager.
The Investment Manager may also recover external due diligence and transaction
services costs directly from private investee companies. Fees of £37,502
(2023: nil) were charged to investee companies in the year under this
agreement.
Total commission of £31,925 was paid to CGWL in the year for broker services
(2023: £63,318).
The Investment Manager has agreed to indemnify the Company and keep
indemnified the Company in respect of the amount by which the annual running
costs of the Company exceed 3.5 per cent. of the net assets of the Company,
such costs shall exclude any VAT payable thereon and any payments to financial
intermediaries, the payment of which is the responsibility of the Company. No
fees were waived by the Investment Manager in the financial year under the
indemnity.
The Company also held £8,845,455 in the client account held at CGWL at
30 September 2024 (2023: £8,119,302).
15. Financial instruments
Risk management policies and procedures
The investment objectives of the Company are to generate capital gains and
income from its portfolio and to make distributions from capital or income to
Shareholders whilst maintaining its status as a Venture Capital Trust.
The Company intends to achieve its investment objectives by making Qualifying
Investments in companies listed on AIM, private companies and companies listed
on the AQSE Growth Market, as well as Non-Qualifying Investments as allowed by
the VCT Rules.
At least 80% of the Company’s funds have been invested in qualifying
holdings during the year under the HMRC investment test definition. The
balance of the Company’s funds were invested in liquid assets (such as
non-qualifying equities, fixed income securities and bank deposits). The
Company is managed as a VCT in order that Shareholders may benefit from the
tax relief available.
This strategy exposes the Company to certain risks, which are summarised
below.
The structure in place to manage these risks is set out in the Corporate
Governance Report.
A detailed review of the investment portfolio is contained in the Chair’s
Statement and Investment Manager’s Report.
Classification of financial instruments
The investments at year end comprise two types of financial instruments. The
basis of valuation is set out below:
• Equities – fair value through the profit and loss account.
• Fixed income securities – fair value through the profit and
loss account
Other financial assets comprise cash at bank and in hand of £4,766,381
(2023: £11,111,865), funds held with Custodian of £8,845,455
(2023: £8,119,302), accrued income and debtors of £1,017,944
(2023: £1,434,688), which is classified as ‘loans and receivables measured
at amortised cost’. Financial liabilities consist of trade creditors and
accruals of £926,784 (2023: £905,897) which are classified as ‘financial
liabilities measured at amortised cost’.
Market risk
Market price risk arises from any fluctuations in the value of investments
held by the Company. Adherence to investment policies mitigates the risk of
excessive exposure to any particular type of security or issuer. In
particular, other than bank deposits, no individual investment shall exceed
10 per cent. of the Company’s net assets at the time of investment.
However, many of the investments are in small companies traded on the AIM
market which by virtue of their size carry more risk than investments in
larger companies listed on the main market of the London Stock Exchange.
Market risk is monitored by the Board on a quarterly basis and on an ongoing
basis, through the Investment Manager.
The following table summarises exposure to price risk by asset class at year
end date:
Change in Fair Value of Investments
Asset class 30% market increase 2024 £’000 30% market decrease 2024 £’000 Aggregate value 2024 £’000 Aggregate value 2023 £’000
AIM Qualifying Investments ((1)) 13,234 -12,993 71,541 80,673
Unquoted Qualifying Investments ((2)) 1,450 -2,389 11,265 8,453
Quoted Non-Qualifying Investments 3,613 -3,613 11,959 17,366
Authorised unit trusts 2,125 -2,125 19,768 8,268
Quoted Non-Qualifying fixed income securities 338 -338 19,087 17,360
Vaneck Gold Miners UCITS ETF 229 -229 656 —
20,989 -21,687 134,277 132,120
(1) Includes variances in the value of CLN issued by Rosslyn Data
Technologies plc and Strip Tinning plc.
(2) Including variances in the value of CLNs issued by Kidly Ltd.
If market prices had been 30% higher or lower while all other variables
remained unchanged the return attributable to ordinary Shareholders for the
year ended 30 September 2024 would have increased by £20,988,954
(2023: £22,164,436) or decreased by £21,686,392 (2023: £22,671,676)
respectively.
The assessment of market risk is based on the Company’s equity and fixed
income portfolio including private company investments, as held at the year
end. The assessment uses the AIM All-Share Index and the FTSE 250 Index as
proxies for the AIM Qualifying Investments and quoted Non-Qualifying
Investments and illustrates, based on historical price movements and their
relationship to movements in the FTSE 100 index, their potential change in
value in relation to change in value of the reference index.
The review has also examined the potential impact of a 30% move in the market
on the convertible loan note investments held by the Company, whose values
will vary according to the price of the underlying security into which the
loan note instrument has the option to convert.
Currency risk
The Company is not directly exposed to currency risk and does not invest in
currencies other than sterling. There are indirect exposures through movements
in the foreign exchange market as a consequence of investments held in
companies who report in foreign currencies, the impact of such exposure would
be insignificant.
Interest rate risk
The Company is fully funded through equity and has no debt; therefore,
interest rate risk is not considered a material risk.
The Company’s financial assets and liabilities are denominated in sterling
as follows:
30 September 2024
Fixed Rate £000 Variable Rate £000 Non-Interest Bearing £000 Total £000
Investments 22,866 — 111,411 134,277
Cash at bank and in hand — 4,766 — 4,766
Funds held with Custodian — 8,846 — 8,846
Other current assets (net) 823 — 224 ((1)) 1,047
Other current liabilities (net) — — (927) (927)
Net assets 23,689 13,612 110,708 148,009
30 September 2023
Fixed Rate £000 Variable Rate £000 Non-Interest Bearing £000 Total £000
Investments 20,860 — 111,260 132,120
Cash at bank and in hand — 11,112 — 11,112
Funds held with Custodian — 8,119 — 8,119
Other current assets (net) 1,293 — 182 ((2)) 1,475
Other current liabilities (net) — — (906) (906)
Net assets 22,153 19,231 110,536 151,920
(1) Includes prepayments of £29k which is not considered a financial
asset.
(2) Includes prepayments of £40k which is not considered a financial
asset.
Interest rate risk exposure relates to cash and cash equivalents (bank
deposits) where interest income is primarily linked to bank base rates.
Interest rate risk exposure on debt instruments is reflected in the market
risk and since these securities are valued at fair value, no additional
disclosure is made in this respect. Movements in interest rates on cash and
cash equivalents are not considered a material risk.
Liquidity risk
Liquidity risk is the risk that the Company is unable to meet obligations as
they fall due. The Company has no debt and maintains sufficient investments in
cash or cash equivalents, or readily realisable securities to pay trade
creditors and accrued expenses (£926,784 as at 30 September 2024). Liquidity
risk is not considered material. As at 30 September 2024 the Company held
£13,611,835 in cash or cash equivalents.
Credit risk
Credit risk relates to the risk of default by a counterparty. The Company may
have credit risk through investments made in unsecured loan stock issued by
Qualifying Companies or through Non-Qualifying Investments in fixed income
securities and exchange traded funds. No assets are past the due date for
payment.
An investment will be impaired if the investee company is loss making and does
not have sufficient funds available to transition into profit and in the
opinion of the Investment Manager may fail to secure sufficient equity or debt
funding to transition into profit, or if the borrower defaults or is expected
to default on payment of accrued interest or repayment of the principal sum.
The maximum credit risk exposure equates to the carrying value of assets at
the balance sheet date:
2024 £000 2023 £000
Fixed income securities;
—Qualifying Investments (convertible loan notes) 3,778 3,500
—Non-qualifying investments (investment grade corporate bonds) 19,088 17,361
—Non-qualifying investments (UK gilt exchange traded fund) — 1,978
Total fixed income securities 22,866 22,839 ((1))
Cash at bank and in hand 4,766 11,112
Funds held at Custodian 8,846 8,119
Other assets 1,047 1,475
37,525 43,545
(1) Includes UK gilt exchange traded fund as underlying investments
are fixed income securities.
Cash held with Custodian comprises bank deposits held through CGWL (trading as
CGWM) of £8.8 million (2023: £8.1 million). Funds are held with banks
that are authorised and regulated to carry on banking or deposit-taking
business. All these meet the requirements of the UK’s FCA CASS rules.
Through its treasury function, CGWM uses a tiered level approach to
counterparty selection to reflect different maturities of cash held on
deposit.
Funds held on deposit through CGWL, are pooled with cash deposits from other
clients of CGWL and diversified across a specified panel of banks. CGWM’s
treasury function reviews panel members ahead of selection and prioritises the
safety of client assets with the panel selection process placing an emphasis
on quality and security. Participating banks must be rated as investment grade
by at least two international credit rating agencies. CGWM will also consider
the expertise and market reputation of the bank; review a bank’s financial
statements and consider its capital and deposit base; consider the
geographical location of the parent; monitor a bank’s credit default swaps;
and ask the bank to complete a due diligence questionnaire. The CGWM treasury
function maintains regular contact with panel banks, typically meeting them
every 6 months or so. There are no withdrawal restrictions on the Company’s
cash held with CGWL.
Fair value of financial assets and financial liabilities
Equity investments are held at fair value. No investments are held for trading
purposes only.
Capital management policies and procedures
The current policy is to fund investments through equity. No future change to
this policy is envisaged. As a public limited company, the Company is required
to hold a minimum £50,000 share capital.
The Company’s capital is summarised in notes 1 and 11 to these accounts.
The Company has no debt and is fully funded by equity.
16. Dividends
2024 Ord £000 2023 Ord £000
Paid per share: Special capital dividend of 2.00 pence for the year ended 30 September 2023 – 6,216
Paid per share: Final capital dividend of 2.00 pence for year ended 30 September 2022 – 6,216
Paid per share: Interim capital dividend of 1.00 penny for year ended 30 September 2023 – 3,298
Paid per share: Final capital dividend of 1.50 pence for the year ended 30 September 2023 5,149 –
Paid per share: Interim capital dividend of 1 penny for year ended 30 September 2024 3,649 –
Paid per share: Special capital dividend of 1.50 pence for year ended 30 September 2024 5,474 –
Dividends unclaimed (4) ((2)) (13) ((2))
14,268 ((1)) 15,717 ((3))
Proposed per share: Final capital dividend of 1.25 pence for the year ended 30 September 2024 4,591 –
Proposed per share: Special capital dividend of 1.50 pence for the year ended 30 September 2025 5,510 –
Paid per share: Final capital dividend of 1.50 pence for the year ended 30 September 2023 – 5,151
(1) The difference between total dividends paid for the period ending
30 September 2024 and the cash flow statement is £1,436,000 which reflects
the amount of dividends reinvested under the DRIS of £1,440,000 less the
£4,000 due to the Company for unclaimed dividends for a period over
12 years.
(2) Unclaimed dividends for a period of 12 years due/reverted to the
Company.
(3) The difference between total dividends paid for the period ending
30 September 2023 and the cash flow statement is £1,300,000 which reflects
the amount of dividends reinvested under the DRIS.
17. Post balance sheet events
Share buybacks
As at 17 December 2024, 3,559,262 ordinary shares have been purchased at an
average price of 38.24 pence per share and a total cost of £1,361,156.
Offer for subscription and shares issued
Under an offer agreement dated 9 October 2024, CGAM was appointed by the
Company to administer a new offer for subscription for the 2024/25 tax year
and act as receiving agent in relation to the offer. Under the terms of the
agreement CGAM will receive a fee of 3.5 per cent. of the gross proceeds of
the offer for providing these services. The Administrator has agreed to
discharge commissions payable to financial advisers in respect of accepted
applications for Offer Shares submitted by them, including any trail
commission.
The Administrator has also agreed to discharge and/or reimburse all costs and
expenses of and incidental to the offer and the preparation of the prospectus,
including without limitation to the generality of the foregoing, FCA vetting
fees in relation to the prospectus, sponsor and legal fees, expenses of the
Company and CGAM, the Company’s tax adviser’s fees and expenses,
registrar’s fees, costs of printing, postage, advertising, publishing and
circulating the prospectus and marketing the offer, including any introductory
commission and discounts to potential investors. However, the Administrator
will not be responsible for the payment of listing fees associated with the
admission of the Offer Shares to the premium segment of the Official List and
to trading on the main market of the London Stock Exchange.
If following the final admission under the offer, the aggregate fee that has
been paid to CGAM exceeds the costs and expenses referred to above by more
than £25,000, then CGAM will rebate any surplus to the Company subject to a
maximum rebate of £100,000.
As at 17 December 2024, 5,907,854 Offer Shares have been issued through the
offer for subscription raising gross proceeds of £2,394,990.
New investments
The Company has made the following investments since the period end:
Amount invested £000 Investment into existing company
Qualifying Investments
Feedback plc 750 No
Ixico plc 710 No
Rosslyn Data Technologies plc 10% unsecured loan notes 2029 400 Yes
Non-Qualifying Investments
Disposals
The Company has made the following full disposals since the period end:
Proceeds £000
Qualifying Investments
Gfinity plc 5
Surface Transforms plc 24
Non-Qualifying Investments
Bodycote plc 1,248
Corporate Actions
On 25 October 2024, the Company invested a further £400,000 into a new 2029
convertible loan note instrument whilst also converting £300,000 (plus
accrued interest) of the 2028 convertible loan note instrument into new
ordinary shares in Rosslyn Data Technologies plc.
On 11 November 2024, Aquis Exchange plc announced a recommended cash offer
by SIX Exchange Group AG for 727 pence per share in cash. The acquisition
remains subject to approval by a majority of shareholders.
On 4 December 2024, Learning Technologies Group plc announced a recommended
cash offer by General Atlantic (through Leopard UK Bidco Ltd) for 100 pence
per share in cash. The acquisition remains subject to approval by a majority
of shareholders.
On 3 December 2024, Zappar Ltd announced that its acquisition by Infinite
Reality had not completed.
Alternative performance measures
Alternative performance measures
An APM is a financial measure of the Company’s historic or future financial
performance, financial position or cash flows which is not defined or
specified in the applicable financial reporting framework.
The Directors assess the Company’s performance against a range of criteria
which are viewed as particularly relevant for a VCT.
The definition of each APM is in the glossary of terms. Where the calculation
of the APM is not detailed within the financial statements, an explanation of
the methodology employed is below:
NAV total return
30 September 2024 30 September 2023
Opening NAV per share A 46.34p 60.19p
Special dividend paid B 1.50p 2.00p
Final dividend paid C 1.50p 2.00p
Interim dividend paid D 1.00p 1.00p
Closing NAV per share E 40.55p 46.34p
NAV total return ((B+C+D+E-A)/A)*100 -3.86% -14.70%
NAV total return (dividends reinvested)
30 September 2024 % Return
Opening NAV per share (30 September 2023) A 46.34p
Closing NAV per share (30 September 2024) 40.55p
Final dividend for year paid February 2024 1.50p
Interim dividend July 2024 1.00p
Special dividend July 2024 1.50p
Total dividend payments 4.00p
Closing NAV per share plus dividends paid 44.55p -3.86% (-14.70% 30 September 2023)
In year performance of reinvested dividends -0.16p
NAV total return (dividends reinvested) ((B-A)/A)*100 B 44.39p -4.21% (-15.93% 30 September 2023)
Share price total return
30 September 2024 30 September 2023
Opening share price A 43.00p 62.75p
Special dividend paid B 1.50p 2.00p
Final dividend paid C 1.50p 2.00p
Interim dividend paid D 1.00p 1.00p
Closing share price E 39.00p 43.00p
Share price total returns ((B+C+D+E-A)/A)*100 0.00% -23.51%
Share price total return (dividends reinvested)
30 September 2024 % Return
Opening share price (30 September 2023) A 43.00p
Closing share price (30 September 2024) 39.00p
Final dividend for year paid February 2024 1.50p
Interim dividend July 2024 1.00p
Special dividend July 2024 1.50p
Total dividend payments 4.00p
Closing share price plus dividends paid 43.00p 0.00% (-23.51% 30 September 2023)
In year performance of reinvested dividends -0.08p
Share price total return (dividends reinvested) ((B-A)/A)*100 B 42.92p -0.18% (-24.80% 30 September 2023)
Ongoing charges ratio
The OCR has been calculated using the AIC’s “Ongoing Charges”
methodology.
30 September 2024 £000 30 September 2023 £000
Investment management fee 2,565 2,797
Other expenses 1078 ((1)) 1,035
VCT proportion of IFSL Marlborough funds expenses 153 65
Ongoing charges A 3,796 3,897
Average net assets B 156,509 174,334
Ongoing charges ratio (A/B)*100 2.43% 2.24%
(1) Other expenses exclude London Stock Exchange fees of £49,110 for
admission of shares under the offer for subscription and prior year recognised
loan stock interest and dividends not receivable of £368,495 expensed through
the income statement as the Board do not consider these costs to be ongoing
costs to the fund. As per the AIC’s “Ongoing Charges” methodology,
transaction costs are also excluded.
Share price discount
30 September 2024 30 September 2023
Share price A 39.00p 43.00p
Net asset value per share B 40.55p 46.34p
Discount ((A/B)-1)*100 -3.82% -7.21%
The 1-year average discount of -5.46% is calculated by taking the average of
the share price discount at each month end between 1 October 2023 and
30 September 2024.
The 5-year average discount of -5.79% is calculated by taking the average of
the share price discount at each month end between 1 October 2019 and
30 September 2024.
END
For further information, please contact:
JTC (UK) Limited Uloma Adighibe Alexandria Tivey HHV.CoSec@jtcgroup.com +44 203 832 3877 +44 203 832 3891
LEI: 213800LRYA19A69SIT31
1 Net of prepayments and accruals