Final Results

LONDON--()--

Hargreave Hale AIM VCT1 plc

Preliminary Announcement of Final Results for the year ending 30 September 2014.

INVESTMENT MANAGER AND INVESTMENT OBJECTIVES

The Company is managed by Hargreave Hale Limited, a fund manager with approximately £3.9 billion under management. Hargreave Hale has been managing investments in UK Small and Micro Cap companies for 16 years and VCTs for 10 years.

The Company's investment objectives are:

  • to invest in a diversified portfolio of small UK based companies on a high risk, medium term capital growth basis, primarily being companies which are traded on AIM and which have the opportunity for significant value appreciation;
  • to invest in smaller companies which may not be readily accessible to private individuals and which also tend to be more risky;
  • to maximise distributions to shareholders from capital gains and income generated from the Company's funds;
  • targeted investment in equities which are non-qualifying investments on an opportunistic basis to boost the performance of the Ordinary Shares; and
  • to maintain the Company’s exposure to small companies through an initial investment of new capital into the Marlborough Special Situations Fund pending investment into Qualifying Companies.

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 30 September):   2014   2013
 
Net asset value per share 80.31p 71.87p
Cumulative distributions paid per share since launch 33.75p 29.75p
Total return 114.06p 101.62p
 
Annual Returns per share:
Revenue return (0.41)p (0.24)p
Capital return 10.91p 14.05p
Combined Return 10.50p 13.81p
 
Dividends per share:
Interim paid 1.75p 1.5p
Final proposed 2.50p 2.25p
Total dividend for year 4.25p 3.75p
 
Performance Benchmark:
Total Return 120% 107%
FTSE AIM All-share Index 78% 82.3%
(results rebased to 100 at 29 October 2004)

CHAIRMAN’S STATEMENT

Introduction

At 30 September 2014 the NAV was 80.31 pence which after adding back the dividends paid gives a total return since inception of 114.06 pence. The gain per ordinary share for the year was 10.50 pence per share (comprising revenue loss of 0.41 pence and capital gains of 10.91 pence).

Investments

The Investment Manager, Hargreave Hale Limited, invested a further £5.00 million in 24 qualifying companies during the year. The Fair Value of qualifying investments at 30 September 2014 was £23.27 million invested in 54 AIM companies and 7 unquoted companies. £6.18 million was held in a mix of cash, fixed income and other non-qualifying equities.

Dividend

An interim dividend of 1.75 pence was paid on 4 July 2014 (Interim 2013 – 1.50 pence).

A final dividend of 2.50 pence is proposed (2013 – 2.25 pence) which, subject to shareholder approval at the AGM will be paid on 28 January 2015, to ordinary shareholders on the register on 30 December 2014.

The directors have maintained a dividend policy of at least 5% of the year end NAV. Subject to market conditions they expect that this will continue.

Buybacks

We were pleased that we were able to maintain our policy of offering our shareholders an efficient exit route through the buyback scheme. In total, 530,852 shares were purchased during the year at an average price of 77.08 pence per share.

Issue of Equity

The joint offer for subscription (together with Hargreave Hale AIM VCT 2) closed on 25 September 2014 and resulted in funds being received for Hargreave Hale AIM VCT 1 of £7.58 million and the issue of 9.27 million shares.

New Joint Offer for Subscription of Ordinary Shares

After our success this year, on the 3 October 2014 the Directors of Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc announced the launch of a new joint offer for subscription of new shares in both VCT’s to raise up to £10 million into each company.

The offer for subscription was approved by shareholders of the Company at a General Meeting on 7 November 2014 and is open to both new and existing shareholders. Since its launch the offer has resulted at 17 December 2014 in funds being received of £2.37 million and the issue of 3.02 million shares.

Cancellation of Share Premium and Capital Redemption Reserve

At the Annual General Meeting of the Company held on 22 January 2014, a special resolution was passed approving the cancellation of an amount standing to the credit of the Company's share premium account and capital redemption reserve. The Court approved the cancellation on 9 April 2014.

The Company is pleased to announce that, following the approval of the Court and the subsequent registration of the Court order with the Registrar of Companies, the cancellation has now become effective. £15,363,291 and £912,025, previously held in the share premium account and capital redemption reserve respectively, has been transferred to the Company's special reserve account.

Treasury Stock

The Company also cancelled 2,711,134 treasury shares on 27 January 2014 in accordance with the provisions of section 729 of the Companies Act 2006.

VCT Status

To maintain its VCT qualifying status we must invest at least 70% of the net funds raised in any one accounting period in qualifying investments within three years. At the year end we have achieved 95.80% per cent and have satisfied all the relevant tests.

Outlook

The last 18 months have been kind to the fund which has grown substantially on the back of a rising stock market and with input of successful fund raising. The market has risen on the back of an improving economy and the prospect of improving company results. During the last few months we have seen this growth stutter and fall back a little. Whether this is simply the market taking a “breather” whilst it waits for the results to catch up with expectations or a more permanent adjustment is hard to tell.

There are plenty of circumstances that could unsettle the economy. These include the General Election in less than six months with no clear favourite; the position of the UK in the EU; and the fact that we are still running a multi-billion pound budget deficit.

However there are plenty of good things such as lower oil prices that should be good for the economy. Giles and his team have selected many well run companies which have significantly outperformed their peers and which are well placed to weather any storm and should continue to give the fund better than average performance.

Sir Aubrey Brocklebank

Chairman

Date: 17 December 2014

The Directors each confirm to the best of their knowledge that:

a) the financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b) the Annual Report, to be published shortly, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

DIRECTORS’ REMUNERATION

The Directors’ Remuneration Report was approved by the Board of Directors on 17 December 2014 and will be further subject to a binding vote at the AGM being held on the 22 January 2015 and every year thereafter.

INCOME STATEMENT

For the year ended 30 September 2014

Note  
Revenue   Capital   Total
£000 £000 £000
Net gain on investments held at fair value through profit or loss - 3,953 3,953
Income 230 - 230
-------- -------- --------
230 3,953 4,183
-------- -------- --------
Management fee (101) (302) (403)
Other expenses (266) - (266)
-------- -------- --------
(367) (302) (669)
-------- -------- --------
(Loss)/Profit on ordinary activities before taxation (137) 3,651 3,514
Taxation - - -
-------- -------- --------
(Loss)/Profit after taxation (137) 3,651 3,514
-------- -------- --------
(Loss)/Profit per share (pence) 2 (0.41) 10.91 10.50

 

-------- -------- --------

INCOME STATEMENT

For the year ended 30 September 2013

Note  
Revenue   Capital   Total
£000 £000 £000
Net gain on investments held at fair value through profit or loss - 3,910 3,910
Income 213 - 213
-------- -------- --------
213 3,910 4,123
-------- -------- --------
Management fee (65) (194) (259)
Other expenses (212) - (212)
-------- -------- --------
(277) (194) (471)
-------- -------- --------
(Loss)/Profit on ordinary activities before taxation (64) 3,716 3,652
Taxation - - -
-------- -------- --------
(Loss)/Profit after taxation (64) 3,716 3,652
-------- -------- --------
(Loss)/Profit per share (pence) 2 (0.24) 14.05 13.81
-------- -------- --------

The total column of these statements is the income statement of the Company. All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than the profit for the year.

BALANCE SHEET Company registration number: 5206425

As at 30 September 2014 (in England and Wales)

2014 2013
Note    
£000 £000
 
Fixed assets
Investments at fair value through profit or loss 26,248 18,000
-------- --------
 
Current assets
Debtors 35 32
Cash at bank 3,203 2,077
-------- --------
3,238 2,109
 
Creditors: amounts falling due within one year (193) (179)
-------- --------
Net current assets 3,045 1,930
-------- --------
Net assets 29,293 19,930
-------- --------
 
Capital and Reserves
Called up share capital 365 304
Share Premium 1,308 9,186
Special reserve 24,734 10,188
Capital reserve – realised (4,917) (5,606)
Capital reserve – unrealised 7,958 4,996
Revenue reserve (159) (22)
Capital redemption reserve 4 884
-------- --------
Equity shareholders’ funds 29,293 19,930
-------- --------
 
Net asset value per share 3 80.31p 71.87p

These financial statements were approved and authorised for issue by the Board of Directors on 17 December 2014 and signed on its behalf by

Sir Aubrey Brocklebank Bt

Chairman

CASH FLOW STATEMENT

For the year ending 30 September 2014

  2014 2013
 
  £000   £000
Net cash (outflow) from operating activities (428) (256)
Net cash (outflow)/inflow from investment activities (4,295) 531
Dividends paid (1,320) (853)
--------- ---------
(6,043) (578)
 
Net cash inflow from financing activities 7,169 1,792
--------- ---------
Increase in cash 1,126 1,214
--------- ---------

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS

For the year ending 30 September 2014

 

 

Share
Capital

 

Share
Premium

 

Capital
Redemption
Reserve

 

Capital
Reserve
Realised

 

Capital
Reserve
Unrealised

 

Special
Reserve

 

Revenue
Reserve

 

Total
 

£000 £000 £000 £000 £000 £000 £000 £000
At 1 October 2013 304 9,186 884 (5,606) 4,996 10,188 (22) 19,930
 
Share buybacks (32) 32 (409) (409)
Subscriptions 93 7,485 7,578
Capital Reduction (15,363) (912) 16,275 -
Equity dividends paid                       (1,320)       (1,320)
Realised gains on investments 991 991
Unrealised gains on investments 2,962 2,962
Management fee charged to capital (302) (302)
Revenue loss after taxation for the year                           (137)   (137)
Total profit after taxation 689 2,962 (137) 3,514
 
------ --------- ------ --------- --------- --------- ------ ---------
At 30 September 2014 365 1,308 4 (4,917) 7,958 24,734 (159) 29,293
------ --------- ------ --------- --------- --------- ------ ---------

Reserves available for distribution are capital reserve realised, special reserve and revenue reserve.

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS

For the year ending 30 September 2013

 

 

Share
Capital

 

Share
Premium

 

Capital
Redemption
Reserve

 

Capital
Reserve
Realised

 

Capital
Reserve
Unrealised

 

Special
Reserve

 

Revenue
Reserve

 

Total

£000 £000 £000 £000 £000 £000 £000 £000
At 1 October 2012 277 6,667 871 (5,786) 1,460 11,808 42 15,339
 
Share buybacks (13) - 13 - - (767) - (767)
Subscriptions 40 2,519 - - - - - 2,559
Equity dividends paid   -   -   -   -   -   (853)   -   (853)
Realised gains on investments - - - 374 - - - 374
Unrealised gains on investments - - - - 3,536 - - 3,536
Management fee charged to capital - - - (194) - - - (194)
Revenue loss after taxation for the year   -   -   -   -   -   -   (64)   (64)
Total profit after taxation - - - 180 3,536 - (64) 3,652
 
------ --------- ------ --------- --------- --------- ------ ---------
At 30 September 2013 304 9,186 884 (5,606) 4,996 10,188 (22) 19,930
------ --------- ------ --------- --------- --------- ------ ---------

Notes to the preliminary announcement

1. The financial information set out in this preliminary announcement does not constitute the Company’s statutory accounts for the years ended 30 September 2014 or 30 September 2013. Statutory accounts for the year ended 30 September 2013 have been filed with the Registrar of Companies and those of the year ended 30 September 2014 will be delivered to the Registrar in due course; both have been reported on by the Independent Auditors. The independent auditor’s reports on the Statutory accounts for the years ended 30 September 2013 and 30 September 2014 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The financial information in this preliminary announcement has been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with UK GAAP and with the Statement of Recommended Practice (SORP) for Financial Statements of Investment Trust Companies issued in January 2009. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the year ended 30 September 2014. The full statutory annual accounts will be published in December 2014. Copies may in due course be obtained during normal business hours from Hargreave Hale Limited, 9-11 Neptune Court, Hallam Way, Blackpool, FY4 5LZ.

The Annual General Meeting of the Company will be held at the Company’s registered office on 22 January 2015 at 14.00pm.

2. Revenue return per ordinary share based on a net revenue loss on ordinary activities after taxation of £136,659 (2013 - £63,935 loss) and on 33,452,489 (2013 – 26,446,613) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share based on a net capital profit of £3,650,579 (2013 – £3,715,983) for the year and on 33,452,489 (2013 – 26,446,613) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

3. The net asset value per ordinary share at 30 September 2014 of 80.31p (2013 – 71.87p) is based on net assets of £29,293,115 (2013 - £19,930,424) and on 36,473,134 (2013 – 27,730,188 not including 2,711,134 shares held as treasury) ordinary shares being the number of shares in issue at year end.

INVESTMENT PORTFOLIO SUMMARY

Ordinary Share Fund

As at 30 September 2014

  Book Cost   Valuation   Valuation
Qualifying investments £000 £000 %
 
Advanced Computer Software Group plc 204 1,384 5.27
Intercede Group plc 247 1,298 4.94
Cohort plc 716 1,084 4.13
Flowgroup plc 577 1,084 4.13
Audioboom Group plc 173 998 3.80
Pressure Technologies Corporation plc 225 975 3.71
Abcam plc 67 804 3.06
Mexican Grill Ltd (A Preference Shares) 185 769 2.93
Idox plc 135 743 2.83
K3 Business Technology Group plc 270 687 2.62
Hardide plc 635 612 2.33
Craneware plc 150 598 2.28
TLA Worldwide plc 300 570 2.17
Vertu Motors plc 600 555 2.11
AnimalCare Group plc 220 548 2.09
Quixant plc 160 522 1.99
Mycelx Technologies Corporation plc 300 507 1.93
Kalibrate Technologies plc 323 469 1.79
Microsaic Systems plc 350 453 1.72
EKF Diagnostic Holdings plc 300 450 1.71
TrakM8 Holdings plc 133 448 1.71
Mirada plc 444 444 1.69
Clearstar Inc 449 433 1.65
Premaitha Health plc 263 407 1.55
Science in Sport plc 240 400 1.52
Porta Communications plc 505 391 1.49
Tasty plc 288 313 1.19
Egdon Resources plc 158 290 1.11
APC Technology Group plc 148 272 1.04
ULS Technology plc 221 271 1.03
Fusionex International plc 138 270 1.03
Plastics Capital plc 250 270 1.03
Tangent Communications plc 400 256 0.98
Instem plc 297 235 0.89
MartinCo plc 225 229 0.87
Belvoir Lettings plc 301 225 0.86
Lidco Group plc 220 220 0.84
Reneuron Group plc 368 218 0.83
Getlenses plc 205 205 0.78
Everyman Media Group plc 172 184 0.70
Jelf Group plc 148 176 0.67
Ilika plc 98 171 0.65
Imaginatik plc 250 170 0.65
Universe Group plc 210 165 0.63
Nektan Ltd 130 155 0.59
WANdisco plc 89 150 0.57
Eagle Eye Solutions Group plc 141 149 0.57
Progressive Digital Media Group plc 173 137 0.52
Synairgen plc 140 132 0.50
Proxama plc 105 128 0.49
Sphere Medical Holdings plc 300 92 0.35
Mexican Grill Ltd (Ordinary shares) 21 85 0.33
Outsourcery Group Ltd 650 80 0.31
Corac Group plc 185 73 0.28
Synety Group plc 109 72 0.27
Verona Pharma plc 127 69 0.26
Redcentric plc 214 65 0.25
Corfe Energy Ltd 50 50 0.19
Brigantes Energy Ltd 50 25 0.10
Mopowered Group plc 301 20 0.08
Invocas Group plc 169 12 0.05
Infoserve Group plc** 200 0 0.00
-------- --------- -------
Total qualifying investments 15,422 23,267 88.64
 
Non-Qualifying investments
 
Marlborough Special Situations Fund 276 285 1.09
-------- --------- -------
Total – Unit Trusts 276 285 1.09
 
Scottish Amicable Finance 8.5% 2049 256 284 1.08
Petrobras International Finance 6.25% 2026 247 258 0.98
Nationwide Building Society 7.971% 2049 242 255 0.97
-------- --------- -------
Total – UK corporate bonds 745 797 3.03
 
FC Fund Managers Ltd 300 300 1.14
Horizon Discovery Group plc 219 188 0.72
BooHoo.com plc 179 171 0.65
Quixant plc 159 169 0.64
FDM Group Holdings plc 115 142 0.54
Tarsus Group plc 134 130 0.50
Plethora Solutions Holdings plc 149 124 0.47
Restore plc 73 124 0.47
Reneuron Group plc 104 118 0.45
Mexican Grill Ltd (A Preference Shares) 34 103 0.39
Synairgen plc 102 101 0.39
Hydrodec Group plc 100 89 0.34
Amerisur Resources plc 91 85 0.32
Eagle Eye Solutions Group plc 44 43 0.17
Helius Energy plc 40 10 0.04
Hardide plc 1 1 0.01
TrakM8 Holdings plc 1 1 0.00
APC Technology Group plc** 1 0 0.00
WANdisco plc** 1 0 0.00
-------- --------- -------
Total – non-qualifying equities 1,847 1,899 7.24
 
-------- --------- -------
Total – non-qualifying investments 2,868 2,981 11.36
 
--------- --------- -------
Total investments 18,290 26,248 100.00
--------- --------- -------
 
** These are actual holdings of less than £500.

The majority of investments held within the portfolio are listed and/or headquartered in the UK with the exception of the following:

Quoted Investments

  • Audioboom: a UK listed company that was incorporated and registered in Jersey;
  • BooHoo.com plc: UK listed and headquartered, but registered and incorporated in Jersey;
  • Clearstar: UK listed but incorporated in the Cayman Islands and headquartered in the USA;
  • Fusionex International plc: UK listed, registered in Jersey but headquartered in Selangor, Malaysia;
  • Mycelx Technologies Corporation: UK listed but headquartered in USA;
  • Petrobras International Finance: Listed in Sao Paulo and New York but headquartered in Brazil;
  • Wandisco plc: UK listed, registered and domiciled in St Helier, Jersey but headquartered in Sheffield;
  • Nektan Ltd: UK listed but headquartered in Gibraltar – listed on 26 October.

Unquoted Investments

  • Brigantes: a private company that is incorporated and registered in the UK;
  • Corfe Energy: a private company that is incorporated and registered in the UK;
  • GetLenses: A private company that is incorporated and registered in the UK;
  • Infoserve: a private company that is incorporated and registered in the UK;
  • Invocas: A private company that is incorporated and registered in the UK;
  • Mexican Grill: A private company that is in incorporated and registered in the UK.

Date: 18 December 2014
For further information please contact:
Stuart Brookes
Company Secretary
Hargreave Hale AIM VCT1 plc
01253 754740

Short Name: Hargreave Hale AIM 1
Category Code: FR
Sequence Number: 445479
Time of Receipt (offset from UTC): 20141218T154041+0000

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