REG - Unicorn AIM VCT PLC - Interim Management Statement

Unicorn AIM VCTAnnouncement

30/01/2023 11:30

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RNS Number : 2740O  Unicorn AIM VCT PLC  30 January 2023

Unicorn AIM VCT plc ("the Company")

Interim Management Statement

For the period from 1 October 2022 to 31 December 2022

 

Introduction

 

This voluntary Interim Management Statement ("IMS") covers the three-month
period ended 31 December 2022, together with relevant information up to the
date of publication.

 

Investment Objective

 

The Company's objective is to provide Shareholders with an attractive return
from a diversified portfolio of investments, predominantly in the shares of
AIM quoted companies, by maintaining a steady flow of dividend distributions
to Shareholders from the income as well as capital gains generated by the
portfolio.

 

It is also the objective that the Company should continue to qualify as a
Venture Capital Trust ("VCT"), so that Shareholders benefit from the taxation
advantages that this brings. To achieve this, at least 80% of the Company's
total assets are to be invested in qualifying investments of which 70% by VCT
value (30% in respect of investments made before 6 April 2018 from funds
raised before 6 April 2011) must be in ordinary shares, which carry no
preferential rights (save as permitted under VCT rules) to dividends or return
of capital and no rights to redemption.

 

Performance

 

The performance of the portfolio was flat in the three-month period under
review, as the Company's net asset value per Share increased by just 0.1% from
134.8p per Share to 135.0p per Share (unaudited).

 

In comparison, the FTSE AIM All-Share Index posted a total return of +3.6%
during the same period.

 

The outperformance of the FTSE AIM All-Share Index in the first quarter of the
Company's financial year was partly due to a recovery in the valuation of
AIM-listed businesses that operate within the financial services sector, to
which the investment portfolio has relatively low exposure. In addition, the
share price of MaxCyte, a life sciences business in which the Company holds a
meaningful stake, remained under pressure during the period, despite having
released very positive news.

 

We are confident that the modest relative underperformance recorded during the
first quarter can be reversed during the remainder of the Company's current
financial year.

 

Outlook

 

Despite recent economic headwinds, the operational performance of many of our
AIM-listed companies has been reassuringly resilient. A large proportion of
our investee companies are well established, profitable and cash generative
businesses, which sell highly specialised products and services for which
there is typically continuing, strong demand. While the immediate outlook for
less mature companies remains challenging, it is reasonable to anticipate
positive returns from these businesses once market conditions become more
favourable.

 

Against this backdrop, our approach to backing new companies remains highly
selective.

 

We remain confident that we will continue to find exciting investment
opportunities that, over time, are capable of delivering a combination of
tax-free dividend income and capital growth. We are also confident that, once
economic and political stability returns, the FTSE AIM All-Share Index and the
Company's carefully selected portfolio of investments will recover in value.

 

In the meantime, we continue to nurture the promising portfolio of existing
investments, and are confident that most of our investee companies can
withstand an extended period of economic hardship, and, in many cases, have
the potential to become valuable businesses within the next 5-10 years.

 

As at 31 December 2022, an estimated 99.0% of total assets (by VCT value and
excluding new capital) were invested in VCT qualifying companies. This figure
is significantly above the 80% threshold that the Company is required, by
HMRC, to maintain.

Material Transactions

Capital was committed to two investments in the three-month period ended 31
December  2022. These investments were:-

·    A new investment of £2.0 million in Oxford Biodynamics PLC in
October 2022 and;

 

·    A follow-on investment of £0.1 million in SulNOx Group PLC, which
completed in January 2023

Top Ten VCT Qualifying Holdings as at 31 December 2022

 Stock               % of Net Assets
 Hasgrove            9.1
 Tracsis             7.2
 Abcam               6.8
 MaxCyte             4.8
 Anpario             4.1
 Avingtrans          3.7
 Surface Transforms  3.1
  Keywords Studios   3.0
  Tristel            2.8
  Cohort plc         2.7

 Total               47.3

 

Share Buy-Backs

 

No share buybacks were undertaken in the period under review.

 

Offer for Subscription

 

A new Offer for Subscription to raise up to £10 million, with an
over-allotment facility to raise up to a further £5 million was launched on
24 January 2023. Details of this offer are set out in a Prospectus issued by
the Company on 24 January 2023, which is available online at
https://www.unicornaimvct.co.uk (http://www.unicornaimvct.co.uk) . The Offer
will open for applications at 9.00 a.m. on 6 February 2023 and will close for
applications at 5.30 p.m. on 30 March 2023 (or, if earlier, as soon as the
Offer is fully subscribed or otherwise at the board's discretion).
Applications in relation to this Offer can only be made for the 2022/2023 tax
year.

 

Dividends

As advised in the Annual Report, the Board has recommended a final dividend of
3.5 pence per share in respect of the Company's financial year ended 30
September 2022. Subject to receiving Shareholder approval at the Annual
General Meeting on 7 February 2023, this dividend will be paid on 14 February
2023 to eligible Shareholders who were on the register on 6 January 2023.

Material Events

There were no material events during the period from 1 October 2022 to 31
December 2022.

 

Chris Hutchinson

Unicorn Asset Management

Investment Director

 

30 January 2023

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