Kings Arms Yard VCT PLC
LEI Code 213800DK8H27QY3J5R45
As required by the UK Listing Authority’s Disclosure Guidance and Transparency Rule 4.2, Kings Arms Yard VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 30 June 2021. This announcement was approved by the Board of Directors on 17 September 2021.
The full Half-yearly Financial Report (which is unaudited) for the period to 30 June 2021, will shortly be sent to shareholders and will be available on the Albion Capital Group LLP website by clicking www.albion.capital/funds/KAY/30Jun2021.pdf.
Investment policy
Kings Arms Yard VCT PLC is a Venture Capital Trust and the investment policy is intended to produce a regular and predictable dividend stream with an appreciation in capital value.
The Company will invest in a broad portfolio of higher growth businesses across a variety of sectors of the UK economy including higher risk technology companies. Allocation of assets will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified both in terms of sector and stage of maturity of company.
Funds held pending investment or for liquidity purposes are held as cash on deposit or similar instruments with banks or other financial institutions with high credit ratings assigned by international credit rating agencies.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within venture capital trust qualifying industry sectors using a mixture of securities. The maximum amount which the Company will invest in a single portfolio company is 15 per cent. of the Company�s assets at cost, thus ensuring a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is possible that it may grow in value to a point where it represents a significantly higher proportion of total assets prior to a realisation opportunity being available.
The Companys maximum exposure in relation to gearing is restricted to the amount equal to its adjusted capital and reserves.
Financial calendar
| Record date for second interim dividend and special dividend | 1 October 2021 |
| Payment date of second interim dividend and special dividend | 29 October 2021 |
| Financial year end | 31 December |
Financial highlights
| Unaudited six months ended 30 June 2021 | Unaudited six months ended 30 June 2020 | Audited year ended 31 December 2020 | ||||
| (pence per share) | (pence per share) | (pence per share) | ||||
| Opening net asset value | 21.84 | 22.02 | 22.02 | |||
| Capital return/(loss) | 3.00 | (1.31) | 0.59 | |||
| Revenue (loss)/return | (0.03) | 0.15 | 0.32 | |||
| Total return/(loss) | 2.97 | (1.16) | 0.91 | |||
| Dividends paid | (0.60) | (0.60) | (1.11) | |||
| Impact from share capital movements | (0.22) | 0.04 | 0.02 | |||
| Net asset value | 23.99 | 20.30 | 21.84 | |||
| Shareholder return and shareholder value | (pence per share) |
| Shareholder value from launch to 1 January 2011: | |
| Subscription price per share at launch | 100.00 |
| Total dividends paid to 1 January 2011 | 58.66 |
| Decrease in net asset value | (83.40) |
| Total shareholder value to 1 January 2011 | 75.26 |
| Shareholder return from 1 January 2011 to 30 June 2021 (period that Albion Capital has been investment manager): | |
| Total dividends paid | 10.78 |
| Increase in net asset value | 7.39 |
| Total shareholder return from 1 January 2011 to 30 June 2021 | 18.17 |
| Shareholder value since launch: | |
| Total dividends paid to 30 June 2021 | 69.44 |
| Net asset value as at 30 June 2021 | 23.99 |
| Total shareholder value as at 30 June 2021 | 93.43 |
The Directors have declared a second dividend of 0.60 pence per share for the year ending 31 December 2021, which will be paid on 29 October 2021 to shareholders on the register on 1 October 2021. The Board has also declared a special dividend of 1.14 pence per share, also payable on 29 October 2021 to shareholders on the register on 1 October 2021. Further details can be found in the Interim management report below.
The above financial summary is for the Company, Kings Arms Yard VCT PLC only. Details of the financial performance of the various Quester, SPARK and Kings Arms Yard VCT 2 PLC companies, which have been merged into the Company, can be found at www.albion.capital/funds/KAY under the Financial summary for previous funds section.
Interim management report
Introduction
The Company has had a strong six months to 30 June 2021, with a total return of 2.97 pence per share, and the net asset value (NAV) increasing to 23.99 pence per share, representing a 13.6% return on opening NAV (after adjusting for the dividend paid). Despite the challenging period for many companies as a result of the Coronavirus pandemic, our portfolio companies are truly showing how valuable their businesses are to their customers and this has been reflected by the strong return for the period.
Portfolio review
Total gain on investments for the six month period was £14.4 million (30 June 2020: loss of £4.3 million). Hugely successful externally led fundraisings for Quantexa (Series D) and Oviva (Series C) resulted in a combined uplift of £6.0 million to the portfolio. In addition to this, Proveca continues to trade well both within the UK and the EU resulting in an uplift in valuation of £1.3 million. In addition, one of our portfolio companies, Arecor Therapeutics, listed on the AIM stock exchange during the period and led to an increase in value of £0.3 million. It is very reassuring and pleasing to see many of our portfolio companies trading strongly as we navigate out of the pandemic.
There have been write-downs in our portfolio, the largest being Avora (£0.3 million) and Abcodia (£0.3 million), both due to growth slower than hoped.
There have also been a number of successful exits during the period which generated proceeds of £19.8 million. The bulk of the exit proceeds came from the sale of the Companys three care homes for the elderly; Active Lives Care, Ryefield Court Care, and Shinfield Lodge Care. The first investments in the homes were made over 5 years ago and the sale generated proceeds of £14.7 million which represents a 2.4x return on cost (including interest received), an excellent result for the Company. The homes were built from nothing (greenfield sites) into mature businesses. During the period, the Company also completed the sale of OmPrompt Holdings and Perpetuum generating proceeds of £3.2 million and £1.4 million respectively. Since the period end, the Company has sold its holdings in Elateral and Antenova.
Further details of the portfolio of investments and investment realisations can be found below.
Dividends and results
In line with our dividend policy targeting around 5% of NAV per annum the Company paid a dividend of 0.60 pence per share during the period to 30 June 2021 (30 June 2020: 0.60 pence per share). The Company will pay a second dividend for the financial year ending 31 December 2021 of 0.60 pence per share on 29 October 2021 to shareholders on the register on 1 October 2021, being 2.5% of the 30 June 2021 NAV.
As a result of the significant disposals, in particular the care homes, made by the Company during the period the Board are pleased to declare a special dividend of 1.14 pence per share. This will be paid alongside the second interim dividend on 29 October 2021 to shareholders on the register on 1 October 2021.
This will bring the total dividends paid for the year ending 31 December 2021 to 2.34 pence per share, which equates to a 10.7% yield on the opening NAV of 21.84 pence per share.
Dividend Reinvestment Scheme (DRIS)
The Company continues to offer a DRIS whereby shareholders can elect to receive dividends in the form of new shares. For shareholders not currently in the DRIS, the Company is offering shareholders the option to elect for a one-off sign up to have this combined special dividend and second interim dividend reinvested into new shares through the DRIS. Shareholders can take advantage of this by emailing KAYchair@albion.capital before midday on 14 October 2021. To elect for the reinvestment, please ensure your email contains your full name, Shareholder Reference Number, telephone number and confirms you have read the DRIS terms and conditions. Shareholders can also elect for the DRIS by logging into their account at www.investorcentre.co.uk. Please note that shareholders who hold their shares in CREST will need to contact their CREST service provider.
By re-investing the combined special dividend and second interim dividend in the capital of the Company, shareholders would be expected to broadly maintain the level of relative income they have been receiving from the Company under the variable dividend policy. The terms and conditions for the DRIS can be found on the Companys webpage on the Managers website at www.albion.capital/funds/KAY under the Fund reports section.
Investment activity
During the period the Company has invested £5.0 million into new and existing portfolio companies, with new investments comprising:
A further £1.6 million was invested in existing portfolio companies, the largest being £0.6 million into uMotif, a patient engagement and data capture platform for use in real world and observational research, and £0.5 million into Healios to continue providing psychological care to children and adolescents using a family centric approach.
The pie chart at the end of this announcement illustrates the composition of the portfolio by industry sector as at 30 June 2021.
Cancellation of share premium and capital redemption reserve
Given the current amount of distributable reserves and the announcement of the special dividend to be paid on 29 October 2021, by way of a General Meeting, the Board is proposing a special resolution to increase the Companys distributable reserves through a reduction of the Companys share premium account and capital redemption reserve, subject to shareholder approval and confirmation by the Court. This procedure is relatively common amongst investment companies, and the proposed resolution would create additional distributable reserves of approximately £60 million.
It is the Boards policy to pay regular dividends to shareholders as the Directors believe that this is a key source of shareholder value. The Company also has a policy of buying back its own shares for cancellation or for holding as treasury shares, when such purposes are considered to be to the advantage of the Company and shareholders as a whole. The additional distributable reserves will facilitate those objectives.
The General Meeting will be held at noon on 25 November 2021 at the Companys registered office, 1 Benjamin Street, London, EC1M 5QL. The General Meeting will be live streamed for shareholders and registration details will be available at www.albion.capital/funds/KAY prior to the Meeting.
The Board has carefully considered the business to be approved at the General Meeting and recommends shareholders to vote in favour of the resolution which will be proposed.
Further details of the General Meeting can be found in the Circular accompanying this Half-yearly Financial Report.
Share buy-backs
It remains the Boards primary objective to maintain sufficient resources for investment in new and existing portfolio companies and for the continued payment of dividends to shareholders. The Boards policy is to buy-back shares in the market, subject to the overall constraint that such purchases are in the Companys interest. It is the Boards intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit. The Board continues to review the use of buy-backs and is satisfied that it is an important means of providing market liquidity for shareholders.
Transactions with the Manager
Details of transactions with the Manager for the reporting period can be found in note 4. Details of related party transactions can be found in note 10.
Risks and uncertainties
The longer term implications of the Covid-19 crisis is the key risk facing the Company, including its impact on the UK and Global economies. The risk of potential implications of the UKs departure from the European Union adversely affecting our underlying portfolio companies appears to be reducing. The Manager is continually assessing the exposure to such risks for each portfolio company, and where possible appropriate mitigating actions are being taken.
Other risks and uncertainties are detailed in note 12 below.
Albion VCTs Top Up Offers 2020/21
As announced in the Annual Report and Financial Statements for the year ended 31 December 2020, the Board was pleased to close the 2020/21 Offer fully subscribed having raised £15 million.
The proceeds are being used to provide support to our existing portfolio companies and to enable us to take advantage of new and exciting investment opportunities as they arise, five of which are detailed above. Details on the share allotments during the period can be found in note 8.
Shareholder seminar
The Board is pleased to report that the current intention of the Manager, Albion Capital, is to host a physical rather than virtual shareholder seminar this year on 12 November 2021, in central London with the venue to be confirmed. This will be dependent on government guidelines and any changes thereof, and we will keep shareholders informed as the date approaches. The Board and Manager are keen to interact with shareholders and look forward to sharing with you further portfolio updates, as well as answering any questions.
More details will shortly be available on the Albion Capital website: www.albion.capital.
Prospects
The Board is extremely encouraged by the performance of the portfolio as a whole and the prospects for its portfolio companies. The dynamic pipeline of new investments is strong, demonstrated by the number of new investments in the past six months, and despite a clear shift to digital adoption, valuation will remain important. We therefore believe that the Companys portfolio continues to have the potential to deliver attractive returns to shareholders over the long term.
Fiona Wollocombe
Chairman
17 September 2021
Responsibility statement
The Directors, Fiona Wollocombe, Thomas Chambers and Martin Fiennes, are responsible for preparing the Half-yearly Financial Report. In preparing these condensed Financial Statements for the period to 30 June 2021 we, the Directors of the Company, confirm that to the best of our knowledge:
(a) the condensed set of Financial Statements, which has been prepared in accordance with Financial Reporting Standard 104 Interim Financial Reporting, gives a true and fair view of the assets, liabilities, financial position and profit and loss of the Company as required by DTR 4.2.4R;
(b) the Interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the Interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein).
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
For and on behalf of the Board
Fiona Wollocombe
Chairman
17 September 2021
Portfolio of investments
| As at 30 June 2021 | ||||||
| Fixed asset investments | % voting rights | Cost(1) £000 | Cumulative movement in value £000 | Value £000 | Change in value for the period(2) £000 | |
| Proveca Limited | 15.1 | 2,259 | 7,276 | 9,535 | 1,342 | |
| Quantexa Limited | 1.4 | 1,329 | 7,771 | 9,100 | 4,800 | |
| Egress Software Technologies Limited | 4.8 | 1,644 | 4,074 | 5,718 | 366 | |
| Antenova Limited | 28.7 | 1,733 | 3,517 | 5,250 | 2,802 | |
| Chonais River Hydro Limited | 6.5 | 2,428 | 853 | 3,281 | (7) | |
| Oviva AG | 1.9 | 659 | 1,415 | 2,074 | 1,231 | |
| MyMeds&Me Limited | 15.4 | 1,459 | 430 | 1,889 | 501 | |
| The Street by Street Solar Programme Limited | 10.0 | 1,040 | 785 | 1,825 | (140) | |
| Sift Limited | 42.1 | 2,291 | (569) | 1,722 | 537 | |
| Phrasee Limited | 2.8 | 648 | 1,041 | 1,689 | 815 | |
| Black Swan Data Limited | 4.5 | 1,293 | 310 | 1,603 | 649 | |
| Regenerco Renewable Energy Limited | 9.8 | 988 | 585 | 1,573 | (110) | |
| Academia Inc. | 2.8 | 351 | 1,172 | 1,523 | 566 | |
| Alto Prodotto Wind Limited | 11.1 | 829 | 515 | 1,344 | (69) | |
| The Evewell Group Limited | 3.4 | 671 | 629 | 1,300 | 460 | |
| Healios Limited | 2.6 | 684 | 416 | 1,100 | (54) | |
| Dragon Hydro Limited | 17.2 | 655 | 419 | 1,074 | (12) | |
| uMotif Limited | 3.7 | 979 | 47 | 1,026 | – | |
| Threadneedle Software Holdings Limited (T/A Solidatus) | 1.5 | 917 | – | 917 | – | |
| Gravitee Topco Limited (T/A Gravitee.io) | 3.8 | 833 | – | 833 | – | |
| Gharagain River Hydro Limited | 5.0 | 620 | 180 | 800 | (2) | |
| NuvoAir AB | 2.5 | 763 | – | 763 | – | |
| Panaseer Limited | 1.4 | 510 | 243 | 753 | (14) | |
| Symetrica Limited | 3.7 | 685 | 19 | 704 | – | |
| Cantab Research Limited (T/A Speechmatics) | 1.1 | 460 | 227 | 687 | 227 | |
| AVESI Limited | 14.8 | 484 | 157 | 641 | (62) | |
| Arecor Therapeutics PLC (previously Arecor Limited) | 0.9 | 304 | 266 | 570 | 267 | |
| Brytlyt Limited | 3.4 | 566 | – | 566 | – | |
| MPP Global Solutions Limited | 1.7 | 550 | – | 550 | – | |
| Convertr Media Limited | 3.0 | 482 | 17 | 499 | 2 | |
| Elliptic Enterprises Limited | 0.6 | 488 | 9 | 497 | 9 | |
| Beddlestead Limited | 5.1 | 606 | (150) | 456 | 55 | |
| Limitless Technology Limited | 1.4 | 383 | 38 | 421 | – | |
| Seldon Technologies Limited | 2.1 | 418 | – | 418 | – | |
| Greenenerco Limited | 8.6 | 244 | 156 | 400 | (20) | |
| Locums Nest Limited | 3.6 | 375 | 23 | 398 | 46 | |
| Koru Kids Limited | 1.6 | 345 | 36 | 381 | – | |
| Aridhia Informatics Limited | 2.1 | 409 | (36) | 373 | 73 | |
| InCrowd Sports Limited | 2.1 | 272 | 98 | 370 | 103 | |
| The Voucher Market Limited (T/A WeGift) | 0.9 | 361 | – | 361 | – | |
| Elateral Group Limited | 47.9 | 5,488 | (5,138) | 350 | (57) | |
| Accelex Technology Limited (T/A Accelex) | 3.6 | 323 | – | 323 | – | |
| Innovation Broking Group Limited | 4.5 | 45 | 278 | 323 | 186 | |
| Concirrus Limited | 0.6 | 308 | – | 308 | – | |
| Imandra Inc. | 1.0 | 91 | 187 | 278 | 187 | |
| Cisiv Limited | 3.1 | 278 | (11) | 267 | 88 | |
| Celoxica Holdings plc | 4.4 | 513 | (255) | 258 | – | |
| Anthropics Technology Limited | 13.8 | 19 | 214 | 233 | (110) | |
| Xperiome Limited (previously Raremark) | 2.4 | 322 | (121) | 201 | (176) | |
| Avora Limited | 2.8 | 510 | (317) | 193 | (317) | |
| Credit Kudos Limited | 0.9 | 185 | – | 185 | – | |
| TransFICC Limited | 1.0 | 156 | – | 156 | – | |
| uMedeor Limited (T/A uMed) | 1.4 | 152 | – | 152 | – | |
| Erin Solar Limited | 5.7 | 160 | (31) | 129 | (9) | |
| Zift Channel Solutions Inc. | 0.6 | 321 | (231) | 90 | 31 | |
| Harvest AD Limited(i) | – | 70 | (1) | 69 | (2) | |
| Sandcroft Avenue Limited (T/A Hussle) | 5.1 | 1,026 | (967) | 59 | (81) | |
| Xention Limited | 10.6 | 38 | (28) | 10 | – | |
| Abcodia Limited | 4.3 | 761 | (755) | 6 | (280) | |
| Forward Clinical Limited (T/A Pando) | 1.5 | 184 | (179) | 5 | (46) | |
| Other holdings (3 companies) | 2 | 1 | 3 | – | ||
| Mirada Medical Limited | 1.8 | 390 | (390) | – | (192) | |
| Total fixed asset investments | 44,357 | 24,225 | 68,582 | 13,583 | ||
(1) Amounts shown as cost represent the acquisition cost in the case of investments originally made by the Company and/or the valuation attributed to the investments acquired from Quester VCT 2 plc and Quester VCT 3 plc at the date of the merger in 2005, and those acquired from Kings Arms Yard VCT 2 PLC at the merger on 30 September 2011, plus any subsequent acquisition costs, as reduced in certain cases by amounts written off as representing an impairment value.
(2) The column shows the movement in the period from the opening balance as at 1 January 2021 to the closing balance as at 30 June 2021 after adjustments for additions and disposals.
(i) Early stage investment of convertible loan stock.
| Realisations in the period to 30 June 2021 | Cost £000 | Opening carrying value £000 | Disposal proceeds £000 | Realised gain/(loss) on cost | Gain/(loss) on opening or acquired value £000 |
| Disposals: | |||||
| Active Lives Care Limited | 4,395 | 7,971 | 7,839 | 3,444 | (132) |
| Ryefield Court Care Limited | 3,070 | 5,814 | 5,753 | 2,683 | (61) |
| OmPrompt Holdings Limited | 1,377 | 3,049 | 3,152 | 1,775 | 103 |
| Perpetuum Limited | 3,136 | 1,254 | 1,413 | (1,723) | 159 |
| Shinfield Lodge Care Limited | 535 | 1,162 | 1,138 | 603 | (24) |
| SBD Automotive Limited | 173 | 361 | 360 | 187 | (1) |
| Loan stock repayments and other: | |||||
| Alto Prodotto Wind Limited | 27 | 40 | 40 | 13 | – |
| Sift Limited | 16 | 16 | 16 | – | – |
| Greenenerco Limited | 7 | 11 | 11 | 4 | – |
| Escrow adjustments and other* | 23 | 2 | 102 | 79 | 100 |
| Total | 12,759 | 19,680 | 19,824 | 7,065 | 144 |
*These comprise fair value movements on deferred consideration on previously disposed investments, release of the G. Network Communications discount which is treated as a financing transaction, and expenses which are incidental to the purchase or disposal of an investment.
| Total change in value of investments for the period | 13,583 | ||||
| Movement in loan stock accrued interest | 628 | ||||
| Unrealised gains on fixed asset investments sub-total | 14,211 | ||||
| Realised gains in current period | 144 | ||||
| Total gains on investments as per Income statement | 14,355 | ||||
Condensed income statement
| Unaudited six months ended 30 June 2021 | Unaudited six months ended 30 June 2020 | Audited year ended 31 December 2020 | ||||||||
| Note | Revenue £000 | Capital £000 | Total £000 | Revenue £000 | Capital £000 | Total £000 | Revenue £000 | Capital £000 | Total £000 | |
| Gains/(losses) on investments | 2 | – | 14,355 | 14,355 | – | (4,286) | (4,286) | – | 3,333 | 3,333 |
| Investment income | 3 | 646 | – | 646 | 917 | – | 917 | 1,922 | – | 1,922 |
| Investment management fee | 4 | (225) | (675) | (900) | (185) | (554) | (739) | (377) | (1,132) | (1,509) |
| Performance incentive fee | 4 | (353) | (1,058) | (1,411) | – | – | – | – | – | – |
| Other expenses | (203) | – | (203) | (182) | – | (182) | (362) | – | (362) | |
| Profit/(loss) on ordinary activities before tax | (135) | 12,622 | 12,487 | 550 | (4,840) | (4,290) | 1,183 | 2,201 | 3,384 | |
| Tax on ordinary activities | – | – | – | – | – | – | – | – | – | |
| Profit/(loss) and total comprehensive income attributable to shareholders | (135) | 12,622 | 12,487 | 550 | (4,840) | (4,290) | 1,183 | 2,201 | 3,384 | |
| Basic and diluted return/(loss) per share (pence)* | 6 | (0.03) | 3.00 | 2.97 | 0.15 | (1.31) | (1.16) | 0.32 | 0.59 | 0.91 |
*adjusted for treasury shares
The accompanying notes below form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2020 and the audited statutory accounts for the year ended 31 December 2020.
The total column of this Condensed income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies Statement of Recommended Practice.
Condensed balance sheet
| Note | Unaudited 30 June 2021 £000 | Unaudited 30 June 2020 £000 | Audited 31 December 2020 £000 | |||
| Fixed asset investments | 68,582 | 61,160 | 69,652 | |||
| Current assets | ||||||
| Trade and other receivables | 1,569 | 105 | 1,293 | |||
| Cash and cash equivalents | 37,739 | 15,554 | 11,266 | |||
| 39,308 | 15,659 | 12,559 | ||||
| Total assets | 107,890 | 76,819 | 82,211 | |||
| Payables: amounts falling due within one year | ||||||
| Trade and other payables | (2,291) | (461) | (502) | |||
| Total assets less current liabilities | 105,599 | 76,358 | 81,709 | |||
| Equity attributable to equity holders | ||||||
| Called-up share capital | 7 | 5,051 | 4,333 | 4,346 | ||
| Share premium | 59,774 | 45,253 | 45,481 | |||
| Capital redemption reserve | 11 | 11 | 11 | |||
| Unrealised capital reserve | 24,076 | 10,387 | 16,786 | |||
| Realised capital reserve | 14,654 | 8,680 | 9,322 | |||
| Other distributable reserve | 2,033 | 7,694 | 5,763 | |||
| Total equity shareholders funds | 105,599 | 76,358 | 81,709 | |||
| Basic and diluted net asset value per share (pence)* | 23.99 | 20.30 | 21.84 |
*excluding treasury shares
The accompanying notes below form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2020 and the audited statutory accounts for the year ended 31 December 2020.
The Financial Statements were approved by the Board of Directors, and authorised for issue on 17 September 2021 and were signed on its behalf by
Fiona Wollocombe
Chairman
Company number: 03139019
Condensed statement of changes in equity
| Called–up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve | Realised capital reserve* | Other distributable reserve* | Total | |
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
| At 1 January 2021 | 4,346 | 45,481 | 11 | 16,786 | 9,322 | 5,763 | 81,709 |
| Profit/(loss) and total comprehensive income for the period | – | – | – | 14,211 | (1,589) | (135) | 12,487 |
| Transfer of previously unrealised gains on disposal of investments | – | – | – | (6,921) | 6,921 | – | – |
| Purchase of own shares for treasury | – | – | – | – | – | (939) | (939) |
| Issue of equity | 705 | 14,671 | – | – | – | – | 15,376 |
| Cost of issue of equity | – | (378) | – | – | – | – | (378) |
| Dividends paid | – | – | – | – | – | (2,656) | (2,656) |
| At 30 June 2021 | 5,051 | 59,774 | 11 | 24,076 | 14,654 | 2,033 | 105,599 |
| At 1 January 2020 | 3,883 | 35,825 | 11 | 14,707 | 9,200 | 9,830 | 73,456 |
| (Loss)/profit and total comprehensive income for the period | – | – | – | (4,305) | (535) | 550 | (4,290) |
| Transfer of previously unrealised gains on disposal of investments | – | – | – | (15) | 15 | – | – |
| Purchase of own shares for treasury | – | – | – | – | – | (447) | (447) |
| Issue of equity | 450 | 9,662 | – | – | – | – | 10,112 |
| Cost of issue of equity | – | (234) | – | – | – | – | (234) |
| Dividends paid | – | – | – | – | – | (2,239) | (2,239) |
| At 30 June 2020 | 4,333 | 45,253 | 11 | 10,387 | 8,680 | 7,694 | 76,358 |
| At 1 January 2020 | 3,883 | 35,825 | 11 | 14,707 | 9,200 | 9,830 | 73,456 |
| Profit/(loss) and total comprehensive income for the period | – | – | – | 3,013 | (812) | 1,183 | 3,384 |
| Transfer of previously unrealised gains on disposal of investments | – | – | – | (934) | 934 | – | – |
| Purchase of own shares for treasury | – | – | – | – | – | (1,100) | (1,100) |
| Issue of equity | 462 | 9,892 | – | – | – | – | 10,354 |
| Cost of issue of equity | – | (236) | – | – | – | – | (236) |
| Dividends paid | – | – | – | – | – | (4,150) | (4,150) |
| At 31 December 2020 | 4,346 | 45,481 | 11 | 16,786 | 9,322 | 5,763 | 81,709 |
*The total distributable reserves are £16,687,000 (30 June 2020: £16,374,000; 31 December 2020: £15,085,000).
The accompanying notes below form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2020 and the audited statutory accounts for the year ended 31 December 2020.
Condensed statement of cash flows
| Unaudited six months ended 30 June 2021 £000 | Unaudited six months ended 30 June 2020 £000 | Audited year ended 31 December 2020 £000 | ||||
| Cash flow from operating activities | ||||||
| Investment income received | 1,248 | 656 | 1,467 | |||
| Deposit interest received | 1 | 25 | 25 | |||
| Dividend income received | 25 | 49 | 220 | |||
| Investment management fee paid | (796) | (745) | (1,499) | |||
| Other cash payments | (242) | (198) | (359) | |||
| UK corporation tax paid | – | – | – | |||
| Net cash flow from operating activities | 236 | (213) | (146) | |||
| Cash flow from investing activities | ||||||
| Purchase of fixed asset investments | (5,026) | (1,363) | (3,990) | |||
| Disposal of fixed asset investments | 19,562 | 60 | 639 | |||
| Net cash flow from investing activities | 14,536 | (1,303) | (3,351) | |||
| Cash flow from financing activities | ||||||
| Issue of share capital | 14,627 | 9,588 | 9,588 | |||
| Cost of issue of equity | (18) | (2) | (4) | |||
| Purchase of own shares (including costs) | (640) | (447) | (1,100) | |||
| Equity dividends paid* | (2,268) | (1,936) | (3,588) | |||
| Net cash flow from financing activities | 11,701 | 7,203 | 4,896 | |||
| Increase in cash and cash equivalents | 26,473 | 5,687 | 1,399 | |||
| Cash and cash equivalents at start of period | 11,266 | 9,867 | 9,867 | |||
| Cash and cash equivalents at end of period | 37,739 | 15,554 | 11,266 |
* The equity dividends paid shown in the cash flow are different to the dividends disclosed in note 5 as a result of the non-cash effect of the Dividend Reinvestment Scheme.
The accompanying notes below form an integral part of this Half-yearly Financial Report.
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2020 and the audited statutory accounts for the year ended 31 December 2020.
Notes to the condensed Financial Statements
1. Accounting policies
Basis of accounting
The condensed Financial Statements have been prepared in accordance with applicable United Kingdom law and accounting standards, including Financial Reporting Standard 102 (FRS 102), Financial Reporting Standard 104 Interim Financial Reporting (FRS 104), and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts (SORP) issued by The Association of Investment Companies (AIC). The Financial Statements have been prepared on a going concern basis.
The preparation of the Financial Statements requires management to make judgements and estimates that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The most critical estimates and judgements relate to the determination of carrying value of investments at fair value through profit and loss (FVTPL) in accordance with FRS 102 sections 11 and 12. The Company values investments by following the International Private Equity and Venture Capital Valuation (IPEV) Guidelines as updated in 2018 and further detail on the valuation techniques used are outlined below.
Company information can be found on page 2 of the Half-yearly Financial Report.
Fixed asset investments
The Companys business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment policy, and information about the portfolio is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those undertakings in which the Company holds more than 20% of the equity as part of an investment portfolio are not accounted for using the equity method. In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments, including loan stock, are designated by the Company as FVTPL and are included at their initial fair value, which is cost (excluding expenses incidental to the acquisition which are written off to the Income statement).
Subsequently, the investments are valued at fair value, which is measured as follows:
Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.
Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the Income statement when a share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more than one year), payables and cash are carried at amortised cost, in accordance with FRS 102. Debtors due after more than one year meet the definition of a financing transaction held at amortised cost, and interest will be recognised through capital over the credit period using the effective interest method. There are no financial liabilities other than payables.
Investment income
Equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.
Unquoted loan stock income
Fixed returns on non-equity shares and debt securities are recognised when the Companys right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.
Investment management fee, performance incentive fee and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the other distributable reserve except the following which are charged through the realised capital reserve:
Taxation
Taxation is applied on a current basis in accordance with FRS 102. Current tax is tax payable (refundable) in respect of the taxable profit (tax loss) for the current period or past reporting periods using the tax rates and laws that have been enacted or substantively enacted at the financial reporting date. Taxation associated with capital expenses is applied in accordance with the SORP.
Deferred tax is provided in full on all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. As a VCT the Company has an exemption from tax on capital gains. The Company intends to continue meeting the conditions required to obtain approval as a VCT in the foreseeable future. The Company therefore, should have no material deferred tax timing differences arising in respect of the revaluation or disposal of investments and the Company has not provided for any deferred tax.
Share capital and reserves
Called-up share capital
This reserve accounts for the nominal value of the shares.
Share premium
This reserve accounts for the difference between the price paid for the Companys shares and the nominal value of those shares, less issue costs.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the Companys own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the period end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were combined in 2012 to form a single reserve named other distributable reserve.
This reserve accounts for movements from the revenue column of the Income Statement, the payment of dividends, the buy-back of shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single operating segment of business, being investment in smaller companies principally based in the UK.
2. Gains/(losses) on investments
| Unaudited six months ended 30 June 2021 £000 | Unaudited six months ended 30 June 2020 £000 | Audited year ended 31 December 2020 £000 | ||||
| Unrealised gains/(losses) on fixed asset investments | 14,211 | (4,305) | 3,013 | |||
| Realised gains on fixed asset investments | 144 | 19 | 320 | |||
| 14,355 | (4,286) | 3,333 | ||||
3. Investment income
| Unaudited six months ended 30 June 2021 £000 | Unaudited six months ended 30 June 2020 £000 | Audited year ended 31 December 2020 £000 | |||
| Loan stock interest | 620 | 844 | 1,678 | ||
| Dividends | 25 | 49 | 220 | ||
| Bank interest | 1 | 24 | 24 | ||
| 646 | 917 | 1,922 |
4. Investment management fee and performance incentive fee
| Unaudited six months ended 30 June 2021 £000 | Unaudited six months ended 30 June 2020 £000 | Audited year ended 31 December 2020 £000 | |||
| Investment management fee charged to revenue | 225 | 185 | 377 | ||
| Investment management fee charged to capital | 675 | 554 | 1,132 | ||
| Performance incentive fee charged to revenue | 353 | – | – | ||
| Performance incentive fee charged to capital | 1,058 | – | – | ||
| 2,311 | 739 | 1,509 |
Further details of the Management agreement under which the investment management fee and performance incentive fee are paid are given in the Strategic report on page 13 of the Annual Report and Financial Statements for the year ended 31 December 2020.
During the period, services with a value of £900,000 (30 June 2020: £739,000; 31 December 2020: £1,509,000) and £25,000 (30 June 2020: £25,000; 31 December 2020: £50,000) were purchased by the Company from Albion Capital Group LLP in respect of management and administration fees respectively. At the period end, the amount due to Albion Capital Group LLP in respect of these services disclosed as accruals was £504,000 (30 June 2020: £385,000; 31 December 2020: £400,000). For the period to 30 June 2021, a performance incentive fee of £1,411,000 has been accrued, however any performance incentive fee is calculated on year end results and payable in line with the Management agreement (30 June 2020: £nil; 31 December 2020: £nil).
Albion Capital Group LLP is, from time to time, eligible to receive arrangement fees and monitoring fees from portfolio companies. During the period, fees of £145,000 (30 June 2020: £155,000; 31 December 2020: £183,000) attributable to the investments of the Company were paid pursuant to these arrangements.
Albion Capital Group LLP, its partners and staff hold 1,864,783 Ordinary shares in the Company as at 30 June 2021.
The Company entered into an offer agreement relating to the Offers with the Companys investment manager Albion Capital Group LLP, pursuant to which Albion Capital received a fee of 2.5% of the gross proceeds of the Offers and out of which Albion Capital paid the costs of the Offers, as detailed in the Prospectus.
5. Dividends
| Unaudited six months ended 30 June 2021 £000 | Unaudited six months ended 30 June 2020 £000 | Audited year ended 31 December 2020 £000 | |
| Second dividend of 0.51 pence per share paid on 30 October 2020 | – | – | 1.910 |
| First dividend of 0.60 pence per share paid on 30 April 2021 (30 April 2020: 0.60 pence per share) | 2,656 | 2,256 | 2,256 |
| Unclaimed dividends returned to the Company | – | (16) | (16) |
| 2,656 | 2,239 | 4,150 |
The Directors have declared a second dividend of 0.60 pence per share for the year ending 31 December 2021, which will be paid on 29 October 2021 to shareholders on the register on 1 October 2021.
The Directors have declared a special dividend of 1.14 pence per share, which will also be paid on 29 October 2021 to shareholders on the register on 1 October 2021.
6. Basic and diluted return/(loss) per share
| Unaudited six months ended 30 June 2021 | Unaudited six months ended 30 June 2020 | Audited year ended 31 December 2020 | ||||
| Revenue | Capital | Revenue | Capital | Revenue | Capital | |
| Profit/(loss) attributable to shareholders (£000) | (135) | 12,622 | 550 | (4,840) | 1,183 | 2,201 |
| Weighted average shares in issue (adjusted for treasury shares) | 420,341,284 | 369,249,306 | 372,282,416 | |||
| Return/(loss) attributable per equity share (pence) | (0.03) | 3.00 | 0.15 | (1.31) | 0.32 | 0.59 |
The weighted average number of Ordinary shares is calculated after adjusting for treasury shares of 65,014,675 (30 June 2020: 57,096,607; 31 December 2020: 60,491,609).
There are no convertible instruments, derivatives or contingent share agreements in issue so basic and diluted return/(loss) per share are the same.
7. Called–up share capital
| Allotted, called–up and fully paid Ordinary shares of 1 penny each | Unaudited 30 June 2021 | Unaudited 30 June 2020 | Audited 31 December 2020 |
| Number of shares | 505,145,955 | 433,336,785 | 434,557,477 |
| Nominal value of allotted shares (£000) | 5,051 | 4,333 | 4,346 |
| Voting rights (number of shares net of treasury shares) | 440,131,280 | 376,240,178 | 374,065,868 |
The Company operates a share buy-back programme, as detailed in the Interim management report above. During the period the Company purchased 4,523,066 Ordinary shares with a nominal value of £45,231 (30 June 2020: 2,373,607; 31 December 2020: 5,768,609) representing 0.9% of the issued called-up share capital as at 30 June 2021, at a cost of £939,000 (30 June 2020: £447,000; 31 December 2020: £1,100,000), including stamp duty, to be held in treasury. The Company holds a total of 65,014,675 Ordinary shares in treasury, representing 12.9% of the issued Ordinary share capital as at 30 June 2021.
During the period from 1 January 2021 to 30 June 2021, the Company issued the following new Ordinary shares of 1 penny each under the terms of the Dividend Reinvestment Scheme Circular dated 19 April 2011:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares | Issue price (pence per share) | Net invested (£000) | Opening market price on allotment date (pence per share) |
| 30 April 2021 | 1,831,899 | 18 | 21.24 | 371 | 20.30 |
Under the terms of the Albion VCTs Prospectus Top Up Offers 2020/21, the following new Ordinary shares of nominal value 1 penny each were allotted during the period to 30 June 2021:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares | Issue price (pence per share) | Net consideration received (£000) | Opening market price on allotment date (pence per share) |
| 26 February 2021 | 5,412,326 | 54 | 21.60 | 1,151 | 20.10 |
| 26 February 2021 | 1,536,392 | 15 | 21.70 | 327 | 20.10 |
| 26 February 2021 | 59,778,526 | 598 | 21.80 | 12,706 | 20.10 |
| 9 April 2021 | 528,417 | 5 | 22.20 | 116 | 20.70 |
| 9 April 2021 | 29,596 | – | 22.30 | 6 | 20.70 |
| 9 April 2021 | 1,471,322 | 15 | 22.40 | 321 | 20.70 |
| 68,756,579 | 14,627 |
8. Commitments, contingencies and guarantees
As at 30 June 2021, the Company had no financial commitments (30 June 2020: £nil; 31 December 2020: £nil).
There were no contingent liabilities or guarantees given by the Company as at 30 June 2021 (30 June 2020: £nil; 31 December 2020: £nil).
9. Post balance sheet events
Since 30 June 2021, the Company has had the following post balance sheet events:
10. Related party disclosures
Other than transactions with the Manager as disclosed in note 4, there are no related party transactions or balances requiring disclosure.
11. Going concern
The Board has conducted a detailed assessment of the Companys ability to meet its liabilities as they fall due. Cash flow forecasts are updated and discussed quarterly at Board level and have been stress tested to allow for the forecasted impact of Coronavirus (Covid-19). The Board has revisited and updated their assessment of liquidity risk and concluded that it remains unchanged since the last Annual Report and Financial Statements. Further details can be found on page 68 of those accounts.
The portfolio of investments is diversified in terms of sector and the major cash outflows of the Company (namely investments, dividends and share buy-backs) are within the Companys control. Accordingly, after making diligent enquiries, the Directors have a reasonable expectation that the Company has adequate cash and liquid resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing this Half-yearly Financial Report and this is in accordance with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council in September 2014, and the subsequent updated Going concern, risk and viability guidance issued by the FRC due to Covid-19 in 2020.
12. Risks and uncertainties
In addition to the risks and uncertainties outlined in the Interim management report, the Board confirms that the following major risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Financial Statements for the year ended 31 December 2020. The impact of the Coronavirus (Covid-19) pandemic has created heightened uncertainty but has not changed the nature of these risks. The Board considers that the processes for mitigating these risks remain appropriate.
1. Investment, performance and valuation risk
The risk of investment in poor quality businesses, which could reduce the returns to shareholders, and could negatively impact on the Companys current and future valuations.
By nature, smaller unquoted businesses, such as those that qualify for Venture Capital Trust purposes, are more volatile than larger, long established businesses.
The Companys investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.
To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its track record over many years of making successful investments in this segment of the market. In addition, the Manager operates a formal and structured investment appraisal and review process, which includes an Investment Committee, comprising investment professionals from the Manager for all investments, and at least one external investment professional for investments greater than £1 million in aggregate across all the Albion managed VCTs. The Manager also invites and takes account of comments from non-executive Directors of the Company on matters discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards), including the level of diversification in the portfolio, and the Board receives detailed reports on each investment as part of the Managers report at quarterly board meetings. The Board and Manager regularly review the deployment of investments and cash resources available to the Company in assessing liquidity required for servicing the Companys buy-backs, dividend payments and operational expenses.
The unquoted investments held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines as updated in 2018. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. The valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board.
2. VCT approval risk
The Company must comply with section 274 of the Income Tax Act 2007 which enables its investors to take advantage of tax relief on their investment and on future returns. Breach of any of the rules enabling the Company to hold VCT status could result in the loss of that status.
To reduce this risk, the Board has appointed the Manager, which has a team with significant experience in Venture Capital Trust management, and are used to operating within the requirements of the Venture Capital Trust legislation. In addition, to provide further formal reassurance, the Board has appointed Philip Hare & Associates LLP as its taxation adviser, who report quarterly to the Board to independently confirm compliance with the Venture Capital Trust legislation, to highlight areas of risk and to inform on changes in legislation. Each investment in a portfolio company is also pre-cleared with our professional advisers or H.M. Revenue & Customs. The Company monitors closely the extent of qualifying holdings and addresses this as required.
3. Regulatory and compliance risk
The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Companys shares, or other penalties under the Companies Act or from financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior levels within or advising quoted companies. In addition, the Board and the Manager receive regular updates on new regulation, including legislation on the management of the Company, from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks through the Managers compliance officer, and any issues arising from compliance or regulation are reported to its own board on a monthly basis. These controls are also reviewed as part of the quarterly Board meetings, and also as part of the review work undertaken by the Managers compliance officer. The report on controls is also evaluated by the internal auditors.
4. Operational and internal control risk
The Company relies on a number of third parties, in particular the Manager, for the provision of investment management and administrative functions. Failures in key systems and controls within the Managers business could place assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or to shareholders.
The Company and its operations are subject to a series of rigorous internal controls and review procedures exercised throughout the year, and receives reports from the Manager on its internal controls and risk management, including on matters relating to cyber security.
The Audit Committee reviews the Internal Audit Reports prepared by the Managers internal auditors, PKF Littlejohn LLP and has access to the internal audit partner of PKF Littlejohn LLP to provide an opportunity to ask specific detailed questions in order to satisfy itself that the Manager has strong systems and controls in place including those in relation to business continuity and cyber security.
From 1 October 2018, Ocorian Depositary (UK) Limited was appointed as Depositary to oversee the custody and cash arrangements and provide other AIFMD duties. The Board reviews the quarterly reports prepared by Ocorian Depositary (UK) Limited to ensure that Albion Capital is adhering to its duties as a full-scope Alternative Investment Fund Manager under the AIFMD.
In addition, the Board regularly reviews the performance of its key service providers, particularly the Manager, to ensure they continue to have the necessary expertise and resources to deliver the Companys investment policy. The Manager and other service providers have also demonstrated to the Board that there is no undue reliance placed upon any one individual.
4. Economic, political and social risk
Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events, such as the impact of Brexit, and other factors could substantially and adversely affect the Companys prospects in a number of ways. This also includes risks of social upheaval, including from infection and population re-distribution, as well as economic risk challenges as a result of healthcare pandemics/infection.
The current significant exogenous risk to the Company, the wider population and economy, is the Covid-19 pandemic.
The Company invests in a diversified portfolio of companies across a number of industry sectors and in addition often invests in a mixture of instruments in portfolio companies and has a policy of minimising any external bank borrowings within portfolio companies.
At any given time, the Company has sufficient cash resources to meet its operating requirements, including share buy-backs and follow on investments.
In common with most commercial operations, exogenous risks over which the Company has no control are always a risk and the Company does what it can to address these risks where possible, not least as the nature of the investments the Company makes are long term.
The Board and Manager are continuously assessing the resilience of the portfolio, the Company and its operations and the robustness of the Companys external agents during the health crisis, as well as considering longer term impacts on how the Company might be positioned in how it invests and operates. Ensuring liquidity in the portfolio to cope with exigent and unexpected pressures on the finances of the portfolio and the Company is an important part of the risk mitigation in these uncertain times. The portfolio is structured as an all-weather portfolio with c.66 companies, which are diversified as discussed above. Exposure is relatively small to at-risk sectors that include leisure, hospitality, retail and travel.
5. Market value of Ordinary shares
The market value of Ordinary shares can fluctuate. The market value of an Ordinary share, as well as being affected by its net asset value and prospective net asset value, also takes into account its dividend yield and prevailing interest rates. As such, the market value of an Ordinary share may vary considerably from its underlying net asset value. The market prices of shares in quoted investment companies can, therefore, be at a discount or premium to the net asset value at different times, depending on supply and demand, market conditions, general investor sentiment and other factors, including the ability to exercise share buybacks. Accordingly, the market price of the Ordinary shares may not fully reflect their underlying net asset value.
The Company operates a share buyback policy, which is designed to limit the discount at which the Ordinary shares trade to around 5 per cent. to net asset value, by providing a purchaser through the Company in absence of market purchasers. From time to time buy-backs cannot be applied, for example when the Company is subject to a close period, or if it were to exhaust and could not renew any buyback authorities.
New Ordinary shares are issued at sufficient premium to net asset value to cover the costs of issue and to avoid asset value dilution to existing investors.
6. Reputational risk
The Company relies on the judgement and reputation of the Manager which is itself subject to the risk of losses.
The Board regularly questions the Manager on its ethics, procedures, safeguards and investment philosophy, which should consequently result in the risk to reputational damage being minimised.
13. Other information
The information set out in this Half-yearly Financial Report does not constitute the Companys statutory accounts within the terms of section 434 of the Companies Act 2006 for the periods ended 30 June 2021 and 30 June 2020, and is unaudited. The information for the year ended 31 December 2020 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 and is derived from the statutory accounts for that financial year, which have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.
14. Publication
This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion.capital/funds/KAY, where the Report can be accessed from the ‘Financial Reports and Circulars’ section.
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