REG-OBERON AIM VCT PLC Half-year Report
16/09/2024 07:00
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Half-year Report
Oberon AIM VCT plc
For the six months to 30 June 2024
Chairman’s Statement
At its recent AGM, the Company (Trust/OVCT/Fund) changed its name from New
Century AIM VCT2 plc to Oberon AIM VCT plc on 3( )July 2024. The new ticker
for the Company is OVCT.
The board see this as a new dawn for the Trust.
There are very few attractive tax efficient investments in the UK market,
however, with the UK government having recently approved the extension of the
‘sunset clause’ for the VCT regime for a further 10 years until 5 April
2035 (which has also recently been ratified by the EU), the VCT sector is one
of them.
Furthermore, while there are numerous VCTs investing in unlisted equities,
there are currently only 7 VCTs in existence that invest in listed (i.e.
stockmarket) AIM stocks. The board’s view is that the transparency of the
underlying investments in an AIM VCT, (and daily valuations), give investors
an attractive, transparent and understandable tax efficient investment (which
is arguably more attractive than other non-listed VCT competitors).
Prior to the AGM we wrote to shareholders explaining that we, as a board,
wished to use the opportunity to create an attractive vehicle into which
current and new shareholders could invest.
Our proposal was to relaunch the VCT, by committing resources into the VCT’s
long term future to enable us to provide an attractive and tax efficient
investment proposition for our shareholders. The resolutions were strongly
supported with over 75% of shareholders voting for all resolutions, backing us
to expand the Trust and invest in its future.
Following this approval by the Company’s shareholders, we are now looking to
grow the VCT and take advantage of what the directors feel is the over-due end
of a long bear market in smaller companies. The AIM market has been
under-performing over a long period and, as with almost all cycles, we believe
this will change and the small cap/AIM market should begin to recover. As a
result, the Oberon VCT is one of the few companies, with very attractive tax
incentives, in a position to take advantage of this situation.
The AIM Allshare index has performed relatively poorly over the last one,
three and five years, however the board believe (as has been experienced in
most market cycles over the last few decades) that the tide is turning and
that opportunities are now beginning to appear. We do not believe that the
small cap and entrepreneurial market is dead nor do we think that for some
reason this time is ‘different’- we firmly believe this sector will
recover.
As part of this drive to grow your company, provide more opportunities, and
make the Trust more attractive, I am pleased to say that your board, in
partnership with Oberon Investments Limited (OIL), our Investment Manager, has
come to an agreement that Oberon will charge no investment management fees for
the next 12 months. Oberon will also be underwriting the directors’ costs
(which we have continually kept very low) to the tune of £5,000. As a result,
the directors have agreed to take no remuneration from the Company for the
next 12 months as we grow the Trust to a commercial level.
To take advantage of this, we are now implementing a number of changes:
1. Towards the end of 2024, we expect to issue a new prospectus, outlining the
new approach of the Fund and the potential opportunity these tax incentives
and the current levels of the AIM market may offer. This will give the Trust
the option to bring in new investors, which, in turn, will provide new
opportunities and liquidity to take advantage of new issues in the AIM market.
2. The result of a successful fundraise will also reduce the costs of the Company
as a percentage of our market capitalisation.
3. We understand that OIL will be giving further guidance on its commitment and
investment into our Fund offering, both with regard to a new, larger
investment team, under the guidance of Simon Like (the Investment Manager),
along with further financial support to the Trust as it grows to a commercial
size.
4. In addition OIL is looking to invest in the expansion of the research and
investment capability of the Trust by underwriting research and due diligence
costs on its new investments.
5. We will also look to add to the board composition under the guidance of myself
as Chairman and the current team of directors.
As a result of the combined efforts of the board and our colleagues at OIL, we
feel there is now a fantastic opportunity for the Trust. While there is no
certainty about the future, following a number of years of underperformance of
small caps and the AIM market, the board feels that history is in our favour
and that we may be coming towards the end of a long bear market cycle. Should
this be the case, we feel the re-launch of the Trust is well timed and your
Fund is well placed to profit from this.
We will be issuing updates on a regular basis over the next few months and we
look forward to what we feel is a very exciting opportunity.
Finally, I would like to thank the board, all our partners and suppliers and
our shareholders, all of whom have been very supportive.
Geoffrey Gamble
Chairman
13 September 2024
Investment Manager’s Review
The Net Asset Value (NAV) of your fund declined by 16.2% to 33.2p, compared to
the FSTE AIM Allshare index which was essentially flat over the same period.
It should be borne in mind that your Company can not invest in some of the
strongly performing areas of the market such as the Oil & Gas and Mining
sectors.
We made two new investments in the period, investing in Directa Plus plc and
EDX Medical plc. We feel both investments offer exciting growth opportunities
for your Fund.
Directa Plus plc is a leading producer and supplier of graphene nanoplatelets
based products for use in consumer and industrial markets. The company
currently has a patent portfolio of 98 granted patents plus 38 patents
pending. The company is transitioning from a learning and discovery company to
one with a greater focus on becoming more commercial and a growth business. We
have participated in a fundraising for this company to assist with growth
capital to accelerate its path to profitability.
EDX Medical plc develops innovative digital diagnostic products and services
to support personalised treatments for cancer, heart disease and infectious
diseases. The business was founded by Professor Sir Christopher Evans OBE, a
medical and life sciences entrepreneur with more than 30 years’ experience.
This company seeks to efficiently improve the detection and characterisation
of diseases in order to personalise treatment in a timely manner. Early
detection of diseases is considered to be the most impactful way of reducing
deaths and lowering the cost of healthcare globally.
We also increased our holdings in two existing investments, being Strip
Tinning plc and Seeen plc.
We sold holdings in five companies where we either exited or top-sliced a
holding.
Since the period end, we have continued to top slice and bank profits on five
investments and we have also made three further investments. We have added to
the position in Abingdon Health plc and have invested in 2 new companies,
being Getech Group plc and Earnz plc. The investments in both Getech Group plc
and Abingdon Health plc are pleasingly at a premium to the price recently
invested in, and Earnz plc is currently level. We are excited about these
investments and believe they will add value to the portfolio in the months
ahead.
One of the fund’s existing investments, Intelligent Ultrasound Group plc
announced in July 2024 that it had agreed to sell part of its business for
£40.5m to GE Healthcare Technologies Inc, which was a substantial premium to
its value at the time. Indeed, the company is still only valued at £32.8m, a
discount of 19% to the value of the business being sold, and that ignores the
value of the remaining businesses within the company. It is situations like
this which, in our view, highlight some of the outstanding undervalued
opportunities that are currently available in the AIM Market.
Oberon AIM VCT plc
For the six months to 30 June 2024
Unaudited Balance Sheet
Interim Accounts Final Accounts Interim Accounts
as at 30 June as at 31 December 2023* as at 30 June
2024
2023
£'000 £'000 £'000 £'000 £'000 £'000
Fixed Assets
Investments 1,686 1,994 1,838
Current Assets
Debtors 172 172 243 243 405 405
Current Liabilities
Creditors: amounts due
within one year (8 ) (30 ) (34 )
1,850 2,207 2,209
Capital and Reserves
Share capital 557 557 557
Share premium 547 547 547
Capital redemption reserve 171 171 171
Special distributable reserve 2,775 2,775 2,915
Capital reserve - realised (227 ) (287 ) (281 )
Capital reserve - unrealised (1,695 ) (1,309 ) (1,487 )
Revenue reserve (278 ) (247 ) (213 )
1,850 2,207 2,209
Net Asset Value per share 33.2p 39.6p 39.6p
*Audited
Unaudited Statement of Comprehensive Income
(incorporating the revenue account)
6 month period ended 30 June 2024 Year to 31 December 2023* 6 month period ended 30 June 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments
Realised - 6 6 - 145 145 - 27 27
Unrealised - (324 ) (324 ) - (318 ) (318 ) - (381 ) (381 )
Income 11 - 11 29 - 29 11 - 11
Investment management fees (2 ) (7 ) (9 ) (6 ) (17 ) (22 ) (3 ) (8 ) (11 )
Other expenses (40 ) - (40 ) (115 ) - (115 ) (66 ) - (66 )
Return on ordinary activities (32 ) (325 ) (357 ) (92 ) (190 ) (282 ) (58 ) (362 ) (420 )
Tax on ordinary activities - - - - - - - - -
Return on ordinary activities
after taxation (32 ) (325 ) (357 ) (92 ) (190 ) (282 ) (58 ) (362 ) (420 )
Return per ordinary share in pence (0.57 ) (5.84 ) (6.41 ) (1.72 ) (3.55 ) (5.27 ) (1.14 ) (7.06 ) (8.20 )
*Audited
All revenue and capital items in the above statement are from continuing
operations in the current six month period. No operations were acquired or
discontinued in the current period. Other than that shown above, the Company
had no recognised gains or losses. Accordingly, the above represents the total
comprehensive income for the period.
The weighted average number of shares in issue during the period was
5,574,403.
Unaudited Consolidated Statement of Changes in Equity
Share Premium account Capital Redemption reserve Special distributable Capital Capital Revenue reserve
£’000
£’000
reserve
£’000
Called-up share capital
£’000 realised unrealised
£’000
£’000
£’000 Total
£’000
As at 1 January 2024 557 547 171 2,775 (287 ) (1,309 ) (247 ) 2,207
Realised gains on disposals in period - - - - 6 - - 6
Unrealised losses - - - - - (325 ) - (325 )
Transfer of unrealised gain to realised on disposal of investment - - 61 (61 ) -
- - -
Net revenue before tax - - - - - - (32 ) (32 )
New shares issued - - - - - - - -
Capital element of investment management fee - - - - (7 ) - - (7 )
At 30 June 2024 557 547 171 2,775 (227 ) (1,695 ) (278 ) 1,850
As at 1 January 2023 507 382 171 2,915 (62 ) (1,345 ) (155 ) 2,413
Realised loss on disposals - - - - 145 - - 145
Unrealised losses - - - - - (318 ) - (318 )
Transfer of unrealised gain to realised on disposal of investment - - - (354 ) 354 -
- -
Net revenue before tax - - - - - - (92 ) (92 )
New shares issued 50 165 - - - - - 215
Capital element of investment management fee - - - - (17 ) - - (17 )
Dividends paid - - - (139 ) - - - (139 )
At 31 December 2023 557 547 171 2,775 (287 ) (1,309 ) (247 ) 2,207
Unaudited Consolidated Statement of Changes in Equity (continued)
Share Premium account Capital Redemption reserve Special distributable Capital Capital Revenue reserve
£’000
£’000
reserve
£’000
Called-up share capital
£’000 realised unrealised
£’000
£’000
£’000 Total
£’000
As at 1 January 2023 507 382 171 2,915 (62 ) (1,345 ) (155 ) 2,413
Realised gains on disposals - - - - 27 - - 27
Unrealised gains - - - - - (381 ) - (381 )
Transfer of unrealised loss to realised on disposal of investment - - (238 ) 238 -
- - -
Net revenue before tax - - - - - - (58 ) (58 )
New shares issued 51 165 - - - - - 216
Capital element of investment management fee - - - - (8 ) - - (8 )
At 30 June 2023 557 547 171 2,915 (281 ) (1,487 ) (213 ) 2,209
Oberon AIM VCT plc
For the six months to 30 June 2024
Investment Portfolio
Security Cost Valuation % %
30 June 2024 Cost Valuation
Qualifying Investments 3,349,645 1,677,014 94.30 90.31
Non-qualifying Investments 31,273 8,584 0.88 0.46
Uninvested funds 171,312 171,312 4.82 9.23
3,552,230 1,856,912 100.00 100.00
Qualifying Investments
AIM Quoted
Abingdon Health plc 35,218 3,650 0.99 0.20
Actual Experience plc 63,174 0 1.78 0.00
AFC Energy plc 50,254 52,438 1.41 2.82
Audioboom Group plc 39,287 38,796 1.11 2.09
Aurrrigo International plc 75,387 67,500 2.12 3.64
Belluscura plc 52,263 17,333 1.47 0.93
Blackbird plc 18,845 17,775 0.53 0.96
Brighton Pier Group plc 35,379 9,680 1.00 0.52
Clean Power Hydrogen plc 50,253 10,811 1.41 0.58
Cloudbuy plc 41,896 0 1.18 0.00
Cloudified Holdings plc 85,234 0 2.40 0.00
Coral Products plc 25,104 27,103 0.71 1.46
Cordel Group plc 30,656 21,858 0.86 1.18
Creo Medical Group plc 20,504 8,589 0.58 0.46
CyanConnode Holdngs plc 204,219 6,404 5.75 0.34
Deepverge plc 93,203 0 2.62 0.00
Destiny Pharma 175,882 28,540 4.95 1.54
Direct Plus plc 30,158 26,667 0.85 1.44
DP Poland plc 25,631 17,850 0.72 0.96
Eden Research plc 29,852 19,647 0.84 1.06
EDX Medical Group plc 50,002 34,375 1.41 1.85
Feedback plc 100,511 43,104 2.83 2.32
Fusion Antibodies plc 7,540 258 0.21 0.01
Gfinity plc 33,229 414 0.94 0.02
Haydale Graphine Industries plc 75,387 44,850 2.12 2.42
Huddled Group 33,420 12,976 0.94 0.70
i-Nexus Global plc 30,153 949 0.85 0.05
Inspired Energy plc 33,641 76,650 0.95 4.13
Intelligent Ultrasound Group plc 124,786 83,823 3.51 4.51
Kinovo plc 52,465 51,300 1.48 2.76
Libertine Holdings plc 125,628 9,313 3.54 0.50
LifeSafe Holdings plc 75,387 42,188 2.12 2.27
Light Science Technologies Holdings plc 25,127 71,625 0.71 3.86
LungLife AI Inc 20,104 1,705 0.57 0.09
Investment Portfolio continued
Security Cost Valuation % %
30 June 2024 Cost Valuation
M Winkworth plc 52,260 123,500 1.47 6.65
Marechale Capital plc 75,752 10,500 2.13 0.57
Microsaic Systems plc 142,261 53 4.00 0.00
Mirriad Advertising Ltd 30,154 561 0.85 0.03
MyHealthChecked plc 103,202 38,766 2.91 2.09
N4 Pharma plc 40,204 1,600 1.13 0.09
Nexteq plc 8,091 22,400 0.23 1.21
PHSC plc 40,203 36,800 1.13 1.98
Polarean Imaging plc 7,539 823 0.21 0.04
The Property Franchise Group plc 25,114 98,100 0.71 5.28
Pulsar Group plc 10,053 22,250 0.28 1.20
Rosslyn Data Technologies plc 98,606 27,126 2.78 1.46
Scancell Holdings plc 20,877 16,125 0.59 0.87
SEEEN plc 125,640 53,333 3.54 2.87
SkinBio Therapeutics plc 75,383 34,460 2.12 1.86
Solid State plc 19,459 118,000 0.55 6.35
Sorted Group Holdings plc 72,643 3,491 2.05 0.19
SRT Marine Systems plc 4,523 7,600 0.13 0.41
Strip Tinning Holdings plc 66,148 73,450 1.86 3.96
SysGroup plc 45,232 25,500 1.27 1.37
Tan Delta Systems plc 11,239 5,160 0.32 0.28
Trellus Health plc 25,128 963 0.71 0.05
Verici Dx plc 101,506 21,813 2.86 1.17
XP Factory plc 31,006 3,199 0.87 0.17
3,202,000 1,593,742 90.14 85.83
Qualifying Investments
AQSE Quoted
SulNOx Grp plc 17,204 39,375 0.49 2.12
TruSpine Technology plc 100,283 26,250 2.82 1.41
117,487 65,625 3.31 3.53
Qualifying Investments
Unlisted Investments
LightwaveRF plc 30,158 17,647 0.85 0.95
30,158 17,647 0.85 0.95
Total qualifying investments 3,349,645 1,677,014 94.30 90.31
Investment Portfolio continued
Security Cost Valuation % %
30 June 2024 Cost Valuation
Non Qualifying Investments
AIM Quoted
Audioboom Group plc 1,163 244 0.03 0.01
1,163 244 0.03 0.01
Non Qualifying Investments
UK Listed
Twentyfour Income Fund Ltd 9,852 8,340 0.28 0.45
9,852 8,340 0.28 0.45
Non Qualifying Investments
Unlisted Investments
Mar City plc 10,053 0 0.28 0.00
Sorbic International plc 10,205 0 0.29 0.00
20,258 0 0.57 0.00
Total non-qualifying investments 31,273 8,584 0.88 0.46
Notes to the Accounts
This interim financial information and the unaudited interim accounts for the
six months to 30 June 2024 from which it has been extracted, are the
responsibility of the directors and were approved by them on 5 September 2024,
do not constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006 and have not been delivered to the Registrar of Companies.
The Company is an investment company as defined in Section 833 of the
Companies Act 2006. The unaudited interim accounts have been prepared in
accordance with the Financial Reporting Council’s (FRC) Financial Reporting
Standard 104 Interim Financial Reporting (January 2022) and with the Statement
of Recommended Practice for Investment Companies re-issued by the Association
of Investment Companies in November 2014 and updated in July 2022.
The unaudited interim accounts have been prepared using accounting policies
that the Company applied in the accounts for the year ended 31 December 2023,
incorporating FRS 102 The Financial Reporting Standard applicable in the UK
and Republic of Ireland. The Company considers these accounting policies will
be used in the accounts for the year ending 31 December 2024.
Listed, AIM or AQUIS Markets - traded investments are stated at market value,
which is based upon market bid prices in an active market at the balance sheet
date. These would all meet tier 1 of the fair value hierarchy.
At the 1 January 2024 and 30 June 2024 there were 5,574,403 shares in issue.
The average weighted number of shares in issue in the period was 5,574,403.
Net Asset Value per share at 30 June 2024 was 33.2p (at 31 December 2023:
39.6p; 30 June 2023: 39.6p).
No dividend was paid in the period, but a final dividend for the year ended 31
December 2023, of 2.5p per share (totaling £139,360) was paid on 26 July
2024.
On 3 July 2024, following approval at the Company’s AGM on 28 June 2024, the
Company changed its name to Oberon AIM VCT plc. There have not been any other
significant events since the balance sheet date.
Oberon AIM VCT plc is managed by Oberon Investments Limited (‘OIL’). Under
the terms of the new management agreement, OIL is entitled to a fee (exclusive
of VAT) equal to 1% of net assets of the Company for H1’24, which will
increase to 1.25% in Q3 and Q4. This will then increase to 2.0% of net assets
from the start of calendar 2025. However, an agreement has subsequently been
reached between the Company and OIL, as mentioned in the Chairman’s
Statement, that this fee is going to be waived for the next 12 months. During
the period the management fee was £9.8k (the year ended 31 December 2023,
£22.1k; the period ended 30 June 2022, £10.7k).
Bearing in mind that the assets of the Company consist mainly of marketable
securities, the directors are of the opinion that at the time of approving
this interim financial information, the Company has adequate resources to
continue in operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing this interim
financial information.
Copies of the Interim Report to Shareholders have been sent to shareholders
and are available at the Company’s Registered Office: Tricor Secretaries
Ltd, 7th Floor, 50 Broadway, London SW1H 0DB.
Oberon AIM VCT plc
Directors, Investment Managers and Advisors
Directors Geoffrey Charles Gamble (Chairman)
John Beaumont
Ian Cameron-Mowat
Simon Like
Secretary Tricor Secretaries Ltd
and registered office 7th Floor, 50 Broadway
London
SW1H 0DB
Registrar Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
Solicitors Wedlake Bell LLP
71 Queen Victoria Street
London
EC4V 4AY
Investment Manager and Broker Oberon Investments Limited
1(st) Floor
12 Hornsby Square
Southfields Business Park
Basildon
Essex
SS15 6SD
Auditor Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
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