Strategic Review and Special Dividend
09/05/2024 15:41
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RNS Number : 8621N Amati AIM VCT PLC 09 May 2024
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATON FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For immediate release
9 May 2024
Amati AIM VCT plc
Strategic Review and Special Dividend
In March, the Board announced that it was considering the Company's strategic
options in the light of the ongoing challenges in the Alternative Investment
Market ("AIM") and the resultant impact on the Company's performance. As part
of this review, the Board has been working with the Company's investment
manager, Amati Global Investors Limited (the "Investment Manager") on a
proposal to widen the Company's investment strategy to facilitate investments
in a broader range of securities while continuing to comply with the rules
applicable to venture capital trusts ("VCTs"). While this opportunity has not
concluded, the Board is continuing to review the strategic direction of the
Company, with a view to evaluating whether there are any alternative options
which may be available to the Company and in the best interests of
shareholders.
As part of the review work undertaken to date, the Board has considered what
(if any) action the Company may take to benefit shareholders in the near term.
Following a review of the Company's current high cash levels, limited new
investment opportunities on AIM and ongoing realisations from the portfolio,
the Board has decided that it is appropriate to return excess cash to
shareholders and so today to declare a special dividend of 10p per share, a
yield of 10.9 per cent. on the Company's net asset value ("NAV") of 92.16p per
share as at 30 April 2024, expected to be paid on 10 June 2024 (the "Special
Dividend"). Further information on the reasons for, and the timing of, the
Special Dividend are given below.
Background
The Company invests primarily in AIM traded companies. Throughout 2023 and
continuing into 2024, the Company undoubtedly faced one of the most hostile
markets for junior AIM companies since the financial crisis of 2008. There has
been much comment in the financial press in the past few weeks about the
difficulties being experienced in the UK stock markets with no end yet in
sight. This feels particularly acute in an election year where paralysis of
decision making appears to have set in. Both major parties have signalled
their ambitions to address the problems of delisting and their intention to
create a better environment to maximise the potential for young and growing UK
companies to thrive once again in public markets. There is also an apparent
desire to encourage more direct investment from pension funds into the smaller
growth segment of the UK market. Any such new policies will inevitably take
time to work their way through to the AIM sector. At the same time and
somewhat contrarily, both the major parties have made reference to the tax
advantageous status of AIM regarding inheritance tax and their desire to
tackle or even abolish it. This is continuing to have an unsettling effect on
the future of the AIM market itself.
While the Board is hopeful that clarity and progress on such matters will
emerge during the course of the election year, the outlook remains cautious.
With this in mind, the Board is continuing to consider the Company's strategy
from a number of points of view and it is important that such matters are
given due time and consideration. Therefore, the strategic review remains
ongoing.
Special Dividend
The Board aims to pay annual dividends of around 5% of the Company's Net Asset
Value at its immediately preceding financial year end, subject to the
Company's distributable reserves and cash resources, and with the authority to
increase or decrease this level at the Directors' discretion. As at 31 January
2024, the NAV was 94.7p. The Company paid an interim dividend of 2.5p per
share in November and a second interim dividend of 2.5p per share in January,
making a total for the year of 5.0p per share, which was 5.3% of year end NAV.
In the period since the Company's year end, the level of cash and current
asset investments held by the Company has remained high and, as at 30 April
2024, was sitting at £42.8m. Cash and current asset investments are held
mainly in a combination of interest bearing overnight bank deposits and money
market funds. While such holdings have the benefit of liquidity, they do not
generate exposure to the investment opportunities shareholders have entrusted
the Company to find.
With the combination of the Company's cash levels remaining high, ongoing
realisations in the portfolio and quality AIM investment opportunities
remaining scarce, the Board has considered how best to utilise the Company's
current cash levels. Following discussion with the Investment Manager and the
Company's advisers, the Board has today decided to make a distribution to
shareholders by way of the Special Dividend of 10p per share representing a
yield of 10.9 per cent on the NAV of 92.16p per share as at 30 April 2024.
The Special Dividend will be paid on 10 June 2024 to shareholders on the
Company's register of members at close of business on 17 May 2024. The
Company's shares will go ex-dividend on 16 May 2024.
Dividend Re-Investment Scheme ("DRIS")
There will be no DRIS available with the Special Dividend.
Annual General Meeting ("AGM")
The AGM this year will be held at Barber-Surgeons' Hall, Monkwell Square, Wood
Street, London EC2Y 5BL starting at 2pm on Thursday 13 June 2024. This will be
followed by presentations from the Investment Manager and investee companies.
Further details, together with the Notice of AGM, are contained in the
Company's Annual Report.
The Board recognises that the Company's AGM represents an important forum for
shareholders to put questions to the Directors, to express their views on
governance and to become fully informed about matters relating to the AGM
resolutions. We understand that attending in person may not be possible for
all shareholders who wish to attend. Therefore, the Company intends to also
make available a live stream facility to allow shareholders to watch and
listen to the AGM and the presentations which follow. If shareholders wish to
use this facility, please register your interest by emailing
info@amatiglobal.com and shortly ahead of the event the Investment Manager
will post a link and instructions on how to join the event on its homepage at
www.amatiglobal.com. Shareholders watching the AGM will not be counted towards
the quorum of the meeting and will not be able to participate in the formal
business of the meeting, including asking questions and voting on the day. The
Board encourages shareholders to engage with the Board and the Investment
Manager. In addition to asking questions at the AGM, shareholders can email
any questions they may have on the business of the AGM to info@amatiglobal.com
by 7 June 2024. The Investment Manager will publish questions together with
answers on the page dedicated to the AGM on the Investment Manager's website
prior to the AGM being held. The Investment Manager will reply to any
individual shareholder questions submitted by the deadline of 7 June 2024,
before the AGM.
Contact us
The Board is always keen to hear from shareholders. You can contact the Chair
at: AmatiAIMVCTChair@amatiglobal.com.
You can also find regularly updated information on the Company, including a
factsheet and performance data on the Company's website: www.amatiglobal.com
(http://www.amatiglobal.com) .
Enquiries:
Fiona Wollocombe, Chair
Amati AIM VCT plc
Email: info@amatiglobal.com (mailto:info@amatiglobal.com)
Important Information
This announcement is released by the Company and the information contained
within this announcement is deemed by the Company to constitute inside
information for the purposes of Article 7 of the UK version of the EU Market
Abuse Regulation (Regulation (EU) No.596/2014) which forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended. Upon the
publication of this announcement via a Regulatory Information Service, such
information is now considered to be in the public domain.
Legal Entity Identifier (LEI): 213800HAEDBBK9RWCD25
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