TIDMHHVT
Preliminary Announcement of Final Results for the year ended 28 February
2017
FINANCIAL HIGHLIGHTS
Ordinary Shares (as at 28/29 February): 2017 2016
Net asset value per share 109.86p 101.18p
Cumulative distributions paid per share since launch 49.00p 43.00p
Total return per share 158.86p 144.18p
Annual Returns per share (basic and diluted):
Revenue return (0.43)p (0.98)p
Capital return 14.97p (2.41)p
Combined return 14.54p (3.39)p
Dividends per share:
Interim paid 2.00p 2.00p
Final proposed/paid 4.00p 4.00p
Total dividend for year 6.00p 6.00p
Ongoing Expense Ratio* 1.82% 2.28%
Performance Benchmark:
FTSE AIM All-share Index (results rebased to 100 at
6 April 2007) 78.38 66.01
*Calculated as total expenses minus ad hoc legal costs
and adjusted for trail commission written off, divided
by year-end net assets
CHAIRMAN'S STATEMENT
INTRODUCTION
Following the success of our joint offer for subscription I would like
to welcome a large number of new shareholders.
At 28 February 2017 the Net Asset Value (NAV) was 109.86 pence which
after adjusting for the dividends paid gives a total return since
inception of 158.86 pence. The gain per ordinary share for the year was
14.54 pence per share (comprising a revenue loss of 0.43 pence and
capital gains of 14.97 pence). Total return for the period increased by
10.2% compared to a gain of 33.1% in the FTSE AIM All-share Total Return
Index. Given the constraints placed on managers of VCT funds we are
pleased with this performance.
INVESTMENTS
The investment manager, Hargreave Hale Limited, invested a further
GBP5.52 million in 21 qualifying companies during the year. The fair
value of Qualifying Investments at 28 February 2017 was GBP21.39 million
invested in 64 AIM companies and 7 unquoted companies. GBP24.16 million
was held in a mix of cash, fixed income and other non-qualifying
equities; more detail can be found in the investment manager's report.
DIVID
An interim dividend of 2.00 pence was paid on 2 December 2016 (Interim
2016: 2.00 pence).
A final dividend of 4.00 pence is proposed (2016: 4.00 pence) which,
subject to shareholder approval at the Annual General Meeting will be
paid on 25 July 2017, to ordinary shareholders on the register on 16
June 2017.
Provided the underlying investment performance of the Company remains
acceptable and the liquidity position allows, it remains our policy to
target a 5% distribution yield referenced to the year end NAV per share
of the Company.
BUYBACKS
In total, 312,908 shares were purchased during the year at a weighted
average price of 99.25 pence per share. A further 341,473 shares have
been purchased since the year end at a weighted average price of 109.70
pence.
The Board continues to target a share price discount of 5% to the NAV
per share (as measured against the mid-price) for market purchases. It
should be emphasised that this target is non-binding and dependent on
circumstances including the Company's liquidity from time to time and
market conditions.
JOINT OFFER FOR SUBSCRIPTION - 2015
On 17 November 2016 the joint offer for subscription for new shares in
Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc (launched
in December 2015) was closed with GBP11.5 million raised for Hargreave
Hale AIM VCT 2 plc.
JOINT OFFER FOR SUBSCRIPTION - 2016
The Directors of the Company announced on 14 December 2016 the launch of
a new joint offer for subscription for shares in both Hargreave Hale AIM
VCTs to raise up to GBP10 million in Hargreave Hale AIM VCT 1 plc and up
to GBP10 million in the Company. The offer was approved by shareholders
of the Company at a general meeting on 12 January 2017 and was open to
both new and existing shareholders.
The offer was fully subscribed and resulted in gross funds being
received of GBP10 million and the issue of 8.96 million new shares in
the Company.
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
by the start of the accounting period containing the third anniversary
of the date on which the funds were raised. I am pleased to report that
we continue to make good progress against this test and, at the year end,
we had achieved 88.88% and have satisfied all the relevant tests.
VCT REGULATION
In order to comply with EU regulations regarding State Aid, the VCT
rules were subject to substantial changes in the budget on 8 July 2015,
which came into effect on 18 November 2015. In the round we do not think
these rules have greatly affected the Company, although we will no
longer be able to make non-qualifying investments in companies listed on
AIM or UK government bonds. We are able to continue to invest via the
Marlborough Special Situations Fund and we are free to invest in
companies listed on the main market.
BOARD CHANGES
Giles Hargreave stepped down as a director of the Company on 13 December
2016. I would like to take this opportunity to thank Giles for all his
hard work on the Board. Following the resignation of Giles Hargreave,
Oliver Bedford was appointed as a non-executive director of the Company
on 13 December 2016.
ELECTRONIC COMMUNICATIONS
Following approval at a general meeting on 12 January 2017, the Company
has adopted electronic communications. Your Board believes this is
beneficial to the Company and its shareholders and will result in
substantial cost savings and improved timeliness and transparency of
communications.
CAPITAL REDUCTION
Following approval at a general meeting on 12 January 2017 the balance
of the share premium account was cancelled on 18 May 2017 resulting in
GBP37.5 million being transferred to the special reserve Reserves
available for distribution as at the date of this document are GBP7.9
million.
AUDIT TER
Mandatory audit tendering legislation states that the maximum period for
which a firm can be appointed auditor of a public listed entity is 10
years. BDO LLP are approaching the maximum term and as such a tender
process will be completed in the current financial year.
OUTLOOK
The year has started well with a further increase in NAV up until 31 May
2017 of 9.72 pence equivalent to 8.8%. Further successful fundraising
during the past year has increased our net assets as at the present date
to around GBP45m for the first time. This has led to greater diversity
in our portfolio.
So far the investment climate post Brexit has remained surprisingly
benign. However, it would be dangerous to be too complacent. Company
valuations have benefited from the steady economic upswing of the past
few years and AIM in particular has attracted interest, and consequently
higher valuations, from investors seeking Inheritance Tax relief.
Less than half of our net assets at 28 February were invested in
qualifying assets. Our main challenge therefore is to identify and
invest in more high quality, VCT qualifying, opportunities. To this end
we have been more active investing in private companies which now
account for 8.8% of the portfolio. We are seeing some exciting
opportunities in this field but will take a measured approach
recognising that the work involved in this style of investment is more
time consuming and these investments are typically early stage high risk
companies; also there is rarely any secondary market liquidity until
there is a change of control or a public market listing.
David Hurst-Brown
Chairman
Date: 5 June 2017
STRATEGIC REPORT
The purpose of the strategic report is to inform shareholders on key
matters and help them to assess how the Directors have performed in
their duty to promote the success of the Company. The report has been
prepared by the Directors in accordance with the requirements of Section
414A of the Companies Act 2006. The Company's independent auditor is
required by law to report on whether the information given within the
strategic report is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements.
THE COMPANY AND ITS BUSINESS MODEL
The Company was incorporated and registered in England and Wales on 20
September 2006 under the Companies Act 1985, registered number 5941261.
The Company has been approved as a Venture Capital Trust by HMRC under
section 259 of the Income Taxes Act 2007. The shares of the Company were
first admitted to the Official List of the UK Listing Authority and
trading on the London Stock Exchange on 6 April 2007 and can be found
under the TIDM code "HHVT". The Company is premium listed.
In common with many other VCTs, the Company revoked its status as an
investment company as defined in section 266 of the Companies Act 1985
on 20 September 2007 to facilitate the payment of dividends out of
capital profits.
The Company's principal activity is to invest in a diversified portfolio
of qualifying small UK based companies, primarily trading on AIM, with a
view to maximising tax free dividend distributions to shareholders.
The Company is an externally managed fund with a Board comprising of
three non-executive directors. Hargreave Hale Limited acts as investment
manager, administrator and custodian to the Company and provide the
company secretary.
The Board has overall responsibility for the Company's affairs including
the determination of its investment policy, however, the Board may
exercise these responsibilities through delegation to Hargreave Hale as
it considers appropriate.
The Directors have managed and continue to manage the Company's affairs
in such a manner as to comply with Section 259 of the Income Taxes Act
2007.
INVESTMENT OBJECTIVES
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; 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.
ASSET ALLOCATION
The Company will have a range of investments in four distinct asset
classes:
-- Equity investments in qualifying companies, referred to as "Qualifying
Investments". Qualifying Investments will:
-- comprise qualifying holdings for a VCT as defined in Chapter 4
Part 6 of the Income Tax Act 2007;
-- primarily be made in AIM companies, but the Company's investment
manager will also consider NEX Exchange-quoted companies (formerly
ISDX) and private companies that meet the investment criteria
summarised below; and
-- vary in size from GBP50,000 to GBP1 million.
-- Quasi-sovereign debt, bonds and other fixed income securities;
-- Bank deposits that are readily realisable; and
-- Non qualifying equity exposure in the form of equity exposure to UK and
international equities through targeted investments made on an
opportunistic basis or through an investment into the Marlborough Special
Situations Fund.
INVESTMENT MANAGER
The Company is managed by Hargreave Hale Limited, a fund manager with
approximately GBP8.6 billion under administration and GBP7.5 billion
under managed accounts. Hargreave Hale has been managing investments in
UK Small and Micro Cap companies for 19 years and VCTs for 13 years. It
has a long established reputation that stems from its management of the
Marlborough Special Situations Fund and the Marlborough UK Micro Cap
Fund, and more recently the VCTs. It has won numerous awards for its
management of small cap funds. In accordance with the investment policy,
both Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 have made
investments in the Marlborough Special Situations Fund, which has
returned 2,498% (to 28 February 2017) since Giles Hargreave took
responsibility for it in July 1998.
The investments of the Company are co-managed by Giles Hargreave and
Oliver Bedford, with support from the rest of the firm's investment team
together comprising a total investment team of 14. The investment team
manages approximately GBP4.0 billion, of which approximately GBP2.6
billion is invested in small companies, many of which are quoted on AIM.
The breadth of the investment team, the scale of investment in small
companies and the investment manager's track record help attract deal
flow.
INVESTMENT STRATEGY
QUALIFYING INVESTMENTS
The investment manager will maintain a diversified and fully invested
portfolio of Qualifying Investments, primarily in small UK companies
with a quotation on AIM. The primary purpose of the investment strategy
is to ensure the Company maintains its status as a VCT. To achieve this,
the Company must have 70% of all funds raised from the issue of shares
invested in Qualifying Investments throughout accounting periods of the
VCT beginning no later than three years after the date on which those
shares are issued.
Although VCTs are required to invest and maintain a minimum of 70% of
their funds invested in Qualifying Investments as measured by the VCT
rules, it is likely that the investment manager will target a higher
threshold of approximately 80% in order to provide some element of
protection against an inadvertent breach of the VCT rules. The Company's
maximum exposure to a single Qualifying Investment is limited to 15% of
net assets.
The key selection criteria used in deciding which Qualifying Investments
to make include, inter alia:
-- the strength and credibility of the management team;
-- the business plan;
-- the risk/reward profile of the investment opportunity;
-- the quality of the finance function and budgetary process;
-- the strength of the balance sheet relative to anticipated cash flow from
operations; and
-- the existing balance of investments within the portfolio of Qualifying
Investments.
The investment manager follows a stock specific, rather than sector
specific, investment approach and is more likely to provide expansionary
capital than seed capital.
The investment manager will primarily focus on investments in companies
with a quotation on AIM or plans to trade on AIM. The investment manager
prefers to participate in secondary issues of companies that are quoted
on AIM as such companies have an established track record that can be
more readily assessed and greater disclosure of financial performance.
Secondary issues are often priced at an attractive discount to the
market price.
NON-QUALIFYING INVESTMENTS
The Company will have additional non-qualifying equity exposure to UK
and international equities through targeted investments made on an
opportunistic basis. This will vary in accordance with the investment
manager's view of the equity markets and may fluctuate between nil and
30% of the net assets of the Company. The investment manager will also
invest in other fixed income securities and cash.
The investment manager may invest up to 75% of the net proceeds of any
issue of new shares into the Marlborough Special Situations Fund subject
to a maximum of 20% of the gross assets of the Company. This will enable
the Company to maintain their exposure to small companies indirectly,
whilst the investment manager identifies opportunities to invest
directly into small UK companies through a suitable number of Qualifying
Investments.
The allocation between asset classes in the non-qualifying portfolio
will vary depending upon opportunities that arise with a maximum
exposure of 100% of the non-qualifying portfolio to any individual asset
class.
BUSINESS REVIEW
The chairman's statement and investment manager's report contain a
balanced and comprehensive analysis of the business during the financial
year and the position of the investments at the year end. The financial
position of the Company at 28 February 2017 was strong with no debt or
gearing.
KEY PERFORMANCE INDICATORS
At each board meeting, the Directors consider a number of performance
measures to assess the investment manager's performance, thereby helping
shareholders to assess how the Company is performing against its
objectives. The key performance indicators (KPIs) are established
industry measures and are as follows:
-- Net asset value;
-- Total return;
-- Ongoing expense ratio;
-- Earnings and dividend per share; and
-- Percentage invested in Qualifying Companies
Commentary on the performance of these KPIs has been discussed in the
chairman's statement and investment manager's report. In addition to the
above, the Board considers peer group comparative performance.
Performance is also measured against the Company's closest benchmark,
the FTSE AIM All-share Index. The performance measures for the year are
included in the financial highlights.
OVERVIEW OF THE YEAR
In the financial year under review, net assets increased from GBP29.9m
to GBP45.4m. In this period the NAV per share increased from 101.18p to
109.86p. This resulted in a gain to ordinary shareholders of 14.68 pence
per share after adjusting for dividends paid of 6.00 pence per share.
ONGOING EXPENSES
The ongoing charges of the Company for the financial year under review
represented 1.82% (2016: 2.28%) of year end net assets, which remains
competitive when compared with other AIM focused VCTs. Shareholders
should note that this ratio has been calculated as total expenses minus
ad hoc legal costs, adjusted for trail commission written off in the
year and divided by year-end net assets.
EARNINGS PER SHARE
The Company's earnings per share for the year ended 28 February 2017 was
14.54 pence per share (2016: loss -3.39 pence per share). The Board
remains pleased with the Company's performance.
DIVIDS
An interim dividend of 2.00 pence was paid on 2 December 2016 and a
final dividend of 4.00p has been proposed.
INVESTMENTS
As a whole, during the year, the qualifying portfolio increased from
GBP13.4m to GBP21.4m. The Company made 22 qualifying investments at a
cost of GBP5.5m, of which 15 were investments into new Qualifying
Companies.
For further details please refer to the investment manager's report.
BORROWINGS
It is not the Company's present intention to have any borrowings. The
Company does, however, have the ability to borrow a maximum amount up to
15% of the "Adjusted Capital and Reserves" amount (as such term is
defined in the Articles of Association of the Company), which is
effectively the aggregate of the nominal capital of the Company issued
and paid up and the amount standing to the credit of the consolidated
reserves of the Company, less specified adjustments, exclusions and
deductions. There are no plans to utilise this ability at the current
time.
BUYBACKS
In total, 312,908 shares were purchased during the year at a weighted
average price of 99.25 pence per share.
PRINCIPAL RISKS AND UNCERTAINTIES
The Directors acknowledge that they are responsible for the
effectiveness of the Company's risk management and internal controls and
periodically review the principal risks faced by the Company at the
quarterly board meetings. The Board may exercise these responsibilities
through delegation to Hargreave Hale Limited as it considers
appropriate.
The principal risks facing the Company relate to the Company's
investment activities and include risks stated below:
Risk How the Board mitigates risk
Venture Capital Trust approval risk - the Company To reduce this risk, the Board has appointed the investment
operates in a complex regulatory environment and faces manager, who has significant experience in venture
a number of related risks. A breach of section 259 capital trust management and reports to the Board
of the Income Taxes Act 2007 could result in the disqualification regularly throughout the year. In addition, to provide
of the Company as a VCT and the loss of tax reliefs further formal assurance, the Board has appointed
for the Company and individual shareholders. Philip Hare & Associates LLP to monitor compliance
with regulations and provide half yearly compliance
reports to the Board.
Investment risk - Many of the Company's investments The investment manager maintains a broad portfolio
are held in high risk companies, which are either of investments and holds regular company meetings
listed on AIM or privately held. to monitor investments and identify potential risk.
Regular board meetings and dialogue with the Directors
support strong governance. Whilst tax legislation
limits each Company's maximum exposure to a single
Qualifying Investment to 15% of net assets (at book
cost), the investment manager's preference for portfolio
diversification means that Qualifying Investments
rarely exceed 5% of net assets.
Discount volatility - Venture Capital Trust shares To minimise the impact of such fluctuations, the Company
tend to trade at discounts to their underlying net has a share buyback policy whereby the Company purchases
asset values, which can fluctuate considerably. shares for cancellation.
Compliance risk - The Company is required to comply Failure to comply with these regulations could result
with the rules of the UK Listing Authority, the Companies in a delisting of the Company's shares, financial
Act, Accounting Standards and other legislation. The penalties, qualified audit report or loss of shareholder
Company is also a small registered Alternative Investment trust. Board members and the investment manager have
Fund Manager ("AIFM") and has to comply with the requirements considerable experience of operating at senior levels
of the AIFM Directive. within quoted businesses. Regulatory requirements
are continually reviewed and the Board seek legal
advice when appropriate.
Economic risk - Events such as economic recession The investment manager constantly monitors the markets
and movement in interest rates could affect smaller and the portfolio companies and reports to the Board
companies' valuations. at each meeting. The risk that the value of a security
or portfolio of securities could decline in the future
is mitigated by holding a diversified portfolio, across
a broad range of sectors.
Fraud - Fraud may occur enacted by a third party, Internal controls are documented and periodically
the investment manager or administrator. reviewed on a quarterly basis by senior management.
The investment management and administration functions
are segregated by department and location.
Operational risk - Failure of the investment manager/administrator's The Board regularly reviews the system of internal
systems or disruption to their business could result controls, both financial and non-financial, operated
in the inability to provide accurate reporting. by the Company and Hargreave Hale Ltd. Hargreave Hale
Ltd has in place its own internal policies and procedures
including a documented business continuity plan and
a regularly tested disaster recovery plan to mitigate
risk.
Reputational risk - Inadequate or failed controls The investment manager operates a robust risk management
might result in breaches of regulations or loss of system which is reviewed regularly to ensure controls
shareholder trust. remain effective in mitigating risks to the Company.
Details of the Company's internal controls are included
in the corporate governance statement.
Liquidity risk - Investments in small companies are The funds liquidity is monitored on a monthly basis.
often illiquid and may be difficult to realise.
Outsourcing risk - Any task outsourced to an external Reputable firms used and documents reviewed internally.
company.
Additional risks and further details of the above risks and how they are
managed are explained in Note 16 of the financial statements. Trends
affecting future developments are discussed in the chairman's statement
and in the investment manager's report.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY
The Board conducts the Company's affairs responsibly and expects the
investment manager to consider social and environmental matters when
appropriate, particularly with regard to investment decisions. The
Company offers electronic communications where acceptable to reduce the
volume of paper it uses.
HUMAN RIGHTS
The Board conducts the Company's affairs responsibly and expects the
investment manager to consider human rights when fulfilling their role,
particularly with regard to investment decisions.
LONG TERM VIABILITY STATEMENT
In accordance with provision C.2.2 of the UK Corporate Governance Code,
the Directors have carried out a robust assessment of the principal
risks relating to the Company. This assessment has been carried out over
a longer period than the 12 months required by the 'Going Concern'
provision. The Board conducted this review for a period of five years,
which was selected because it:
-- falls in line with the Company continuation vote and investors minimum
holding period to retain tax relief; and
-- covers a sufficient period for all funds raised to comply with HMRC
investment test rules.
The Board consider the viability of the Company as part of their
continuing programme of monitoring risk. The Company has a detailed risk
control framework, documented procedures and forecasting model in place
to reduce the likelihood and impact of risk taking that exceeds the
agreed levels by the Board. These controls are reviewed by the Board and
Hargreave Hale on a quarterly basis.
The Board has considered severe but reasonable scenarios and the effect
of any mitigating actions, the potential impact of these risks on the
business model, future performance and liquidity of the Company.
The Directors consider the Company to be viable for a further five years
for the following reasons:
-- The Company maintains a broad portfolio of investments including
approximately GBP15.0 million invested in non-qualifying investments and
a further GBP9.0 million in cash. The Company therefore has sufficient
liquidity and this is monitored on a monthly basis;
-- The Company is well invested against the VCT status test and ended the
year at 88.88% invested in qualifying companies. The Board anticipate
that there will continue to be suitable qualifying investments available
over the next five years;
-- The ongoing expense ratio of the Company for the year end was 1.82%,
which is competitive for the VCT sector;
-- The financial position of the Company at 28 February 2017 was strong with
no debt or gearing; and
-- The Company has sufficient procedures in place to identify, monitor and
control risk.
Based on this assessment the Directors have a reasonable expectation
that the Company will be able to continue in operation and meet its
liabilities as they fall due over the next five years.
PROSPECTS
The prospects and future development of the Company are discussed in
detail in the outlook section of the chairman's statement.
ADDITIONAL DISCLOSURES REQUIRED BY THE COMPANIES ACT
EMPLOYEES
The Company had no employees during the year. Board members are
appointed according to knowledge and expertise. The Board currently
comprises of three male non-executive directors who confirm they will
consider gender diversity when making future appointments
By order of the Board of Directors.
STUART BROOKES
Company Secretary
Date: 5 June 2017
INVESTMENT MANAGER'S REPORT
INTRODUCTION
This report covers the 2016/17 financial year, 1 March 2016 to 28
February 2017. The manager's report contains references to movements in
the Net Asset Value (NAV) per share and Total Return per share (NAV per
share plus distributed earnings per share). Movements in the NAV per
share do not necessarily mirror the earnings per share (EPS) reported in
the accounts and elsewhere, which convey the profit after tax within the
company within the reported period as a function of the weighted average
number of shares in issue for the period.
INVESTMENT REPORT
Global equity markets had a strong year against a backdrop of
significant political uncertainty and change. Politics aside, global
economic growth was largely strong, with US GDP growth and low interest
rates leading developed markets higher. Emerging markets also performed
well, supported by recovering commodity prices.
The UK's decision to leave the European Union dominated the year;
doubtless it will continue to do so this year and next. The decline in
Sterling provided welcome support to the major UK indices as investors
moved to re-price those companies with significant overseas earnings.
By and large, VCT regulations channel us into small domestically
focussed growth companies, so we were unable to fully benefit from the
trend that persisted through the second half of our financial year,
although we did derive some benefit through parts of our non-qualifying
portfolio. The final quarter saw a notable uptick in risk sentiment
within small cap equities.
The new financial year has already thrown up several risks, the French
and UK elections being the most recent examples. No doubt there will be
more; however, for now the UK economy feels strong enough, although we
have seen some evidence of weakness within the housing market and
elements of the casual dining sub-sector. We expect the UK consumer to
be more challenged this year as real wage growth turns negative, with
some weakness already showing up in consumer confidence data. On balance,
the macro picture remains workable and we find most companies to be
positive about the outlook; there seems to be reasonable demand for new
capital to support their growth and development.
PERFORMANCE
In the twelve months to 28 February 2017, the NAV increased from 101.18p
to 109.86p. 6.0p in dividends were paid, giving investors a total return
of 14.68 pence per share, which translates to a gain of 14.5%. During
the same period the FTSE AIM All-Share Total Return gained 33.1%.
The qualifying investments made a net contribution of 9.91 pence per
share with 42 out of the 77 making gains, 6 marking time and 29 losing
ground. The non-qualifying investments contributed 6.16 pence per share.
The balance was a mixture of costs, income and small gains made through
share buy backs.
DP Poland was the top performing qualifying investment (+115.4%, +1.87
pence per share). The company reported a series of strong updates over
the year whilst demonstrating material traction as they roll out the
Domino's Pizza proposition across Poland. In February, they announced
seventeen consecutive quarters of double digit like for like system
sales growth, with thirty-nine operational sites in fourteen towns and
cities. The recent equity raise was well received and they are now on
track to finish 2017 with fifty operational sites. Quixant (+98.9%,
+1.32 pence per share) announced a very good set of 2016 interim results
that featured strong organic sales growth, a better than expected
contribution from the Densitron acquisition and cash flows ahead of
expectations. Post (our) year end, the company has since released its
2016 full year results which, once again, came in ahead of market
expectations and triggered further upgrades to forecasts for this
financial year. Ideagen (+70.2%, +1.24 pence per share) and Science in
Sport (+91.7%, +1.18 pence per share) also performed well.
The biggest losses within the period came from TrakM8 (-99.7%, -1.86
pence per share), which announced a material profit downgrade after
contract deferrals left the company exposed to an overhead that was
outsized relative to the revised revenue outcome. Other losses came
from Intercede (-59.3%, -0.57 pence per share), Mirada (-57.1%, -0.38
pence per share) and Microsaic (-85.1%, -0.36 pence per share), all of
which posted poor updates.
We made 22 qualifying investments over the year, which included 7
additional investments into existing qualifying companies (1 private); 4
secondary placings into listed companies; 7 IPOs; and 4 private
investments. We invested a total of GBP5.52m into qualifying investments
over the year.
Within the qualifying portfolio, a number of our investee companies
experienced strong runs in the market, which led us to make partial
disposals in Creo, Directa Plus, DP Poland, ECSC, Imaginatik, Loop Up,
Maxcyte and Surface Transforms. Due to continued poor performance, we
exited investments in Sphere Medical, Tangent Communications (via an
MBO), Nektan and Outsourcery.
PORTFOLIO STRUCTURE
The VCT is comfortably through the HMRC defined investment test and
ended the period at 88.88% invested as measured by the HMRC investment
test. By market value, the VCT had a 47.2% weighting to qualifying
investments.
The allocation to non-qualifying equity investments increased from 18.4%
to 20.6%, representing the funds on-going participation in
non-qualifying equity investments. In line with the investment policy,
we continued to make use of the Marlborough Special Situations Fund as a
temporary home for proceeds from fundraising. The allocation marginally
decreased from 13.1% last year to 12.0% this year. Fixed income as a
percentage of the fund fell from 0.9% to 0.4% and cash fell from 23.4%
to 20.3%
The HMRC investment tests are set out in Chapter 3 of Part 6 Income Tax
Act 2007, which should be read in conjunction with this section of the
investment manager's report. Funds raised by VCTs are first included in
the investment tests from the start of the accounting period containing
the third anniversary of the date on which the funds were raised.
Therefore, the allocation of qualifying investments as defined by the
legislation can be different to the portfolio weighting as measured by
market value relative to the net assets of the VCT.
POST YEAR UPDATE
Deal flow has been solid since year end with 5 additional qualifying
investments being made in Dorcaster plc, Eagle Eye Solutions Group plc,
Portr Ltd, Velocity Composites plc and Zoo Digital Group plc. We have a
strong pipeline of deals we expect to complete in the coming weeks.
NAV performance has also been good post period end, with the NAV per
share gaining 8.8% to 119.58 pence per share.
For further information please contact:
STUART BROOKES
Company Secretary
Registered office:
Hargreave Hale AIM VCT 2 plc,
Accurist House,
44 Baker Street
London W1U 7AL
01253 754740
Date: 5 June 2017
STATEMENT OF DIRECTORS' RESPONSIBILITIES
In respect of the financial statements
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
They are also responsible for ensuring that the annual report includes
information required by the Listing Rules of the Financial Conduct
Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors are required to
prepare the financial statements and have elected to prepare the
Company's financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice ("UK GAAP") (United Kingdom
Accounting Standards and applicable law). Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of
the Company and of the profit or loss for the Company for that period.
In preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are
reasonable and prudent;
-- state whether they have been prepared in accordance with UK GAAP; subject
to any material departures disclosed and explained in the financial
statements;
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and
-- prepare a director's report, a strategic report and director's
remuneration report which comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for ensuring that the annual report and
accounts, taken as a whole, are fair, balanced, understandable and
provide the information necessary for shareholders to assess the
Company's position and performance, business model and strategy.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual report and the
financial statements are made available on a website. Financial
statements are published on the Company's website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the Company's
website is the responsibility of the Directors. The Directors'
responsibility also extends to the ongoing integrity of the financial
statements contained therein.
DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO DTR4
David Hurst-Brown (Chairman), Philip Cammerman and Oliver Bedford, the
Directors, confirm to the best of their knowledge that:
-- The financial statements have been prepared in accordance with UK GAAP
and give a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company.
-- The annual report includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that
it faces.
For and on behalf of the Board
DAVID HURST-BROWN
Chairman
Date: 5 June 2017
DIRECTORS' REMUNERATION
The directors' remuneration report was approved by the Board of
Directors on 5 June 2017 and will be further subject to an advisory vote
at the Annual General Meeting being held on 20 July 2017 and every year
thereafter.
INCOME STATEMENT
For the year ended 28 February 2017
Note
Revenue Capital Total
GBP000 GBP000 GBP000
Net gain on investments held at fair value through
profit or loss - 5,537 5,537
Income 286 15 301
-------- -------- --------
286 5,552 5,838
Management fee (129) (387) (516)
Other expenses (305) (28) (333)
-------- -------- --------
(434) (415) (849)
-------- -------- --------
(Loss)/gain on ordinary activities before taxation (148) 5,137 4,989
Taxation - - -
-------- -------- --------
(Loss)/gain after taxation (148) 5,137 4,989
-------- -------- --------
(Loss)/gain per share basic and diluted 2 (0.43)p 14.97p 14.54p
-------- -------- --------
INCOME STATEMENT
For the year ended 29 February 2016 (Comparative Information)
Note
Revenue Capital Total
GBP000 GBP000 GBP000
Net loss on investments held at fair value through
profit or loss - (300) (300)
Income 146 - 146
-------- -------- --------
146 (300) (154)
-------- -------- --------
Management fee (103) (308) (411)
Other expenses (291) - (291)
-------- -------- --------
(394) (308) (702)
-------- -------- --------
(Loss) on ordinary activities before taxation (248) (608) (856)
Taxation - - -
-------- -------- --------
(Loss) after taxation (248) (608) (856)
-------- -------- --------
(Loss) per share basic and diluted 2 (0.98)p (2.41)p (3.39)p
-------- -------- --------
The total column of these statements is the income statement of the
Company. All revenue and capital items in the above statements derive
from continuing operations. There was no other comprehensive income
other than the gain/loss for the year.
The accompanying notes are an integral part of these financial
statements.
BALANCE SHEET Company registration number: 5941261
As at 28 February 2017 (in England and Wales)
2017 2016
Note
GBP000 GBP000
Fixed assets
Investments at fair value through profit or loss 36,359 23,031
-------- --------
Current assets
Debtors 37 20
Cash at bank 9,190 6,994
-------- --------
9,227 7,014
Creditors: amounts falling due within one year (219) (191)
-------- --------
Net current assets 9,008 6,823
-------- --------
Total assets less current liabilities 45,367 29,854
-------- --------
Capital and reserves
Called up share capital 413 295
Share premium 34,246 21,484
Capital redemption reserve 10 7
Special reserve 2,891 5,250
Capital reserve - realised 628 1,367
Capital reserve - unrealised 8,529 2,653
Revenue reserve (1,350) (1,202)
-------- --------
Total shareholders' funds 45,367 29,854
-------- --------
Net asset value per share 3 109.86p 101.18p
These financial statements were approved and authorised for issue by the
Board of Directors on 5 June 2017 and signed on its behalf by
David Hurst-Brown
Chairman
5 June 2017
The accompanying notes are an integral part of these financial
statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2017
Called up
Share Capital Redemption Capital Reserve Capital Reserve Revenue
Capital Share Premium Reserve Special Reserve Realised Unrealised Reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1
March
2016 295 21,484 7 5,250 1,367 2,653 (1,202) 29,854
Share
buybacks (3) 3 (313) (313)
Share Issues 121 13,034 13,155
Issue Costs (272) (272)
Equity
dividends
paid (2,046) (2,046)
Realised
losses on
investments (339) (339)
Unrealised
gains on
investments 5,876 5,876
Management
fee charged
to capital (387) (387)
Arrangement
Fee Income 15 15
Due
Diligence
investment
costs (28) (28)
Revenue loss
after
taxation
for the
year (148) (148)
Total gain
after
taxation (739) 5,876 (148) 4,989
------ --------- --------- --------- --------- --------- ------ ---------
At 28
February
2017 413 34,246 10 2,891 628 8,529 (1,350) 45,367
------ --------- --------- --------- --------- --------- ------ ---------
Reserves available for distribution are capital reserve realised,
special reserve and revenue reserve. Total distributable reserves at 28
February 2017 were GBP2.17 million. The accompanying notes are an
integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 29 February 2016 (Comparative Information)
Called up Capital
Share Share Redemption Capital Reserve Capital Reserve Revenue
Capital Premium Reserve Special Reserve Realised Unrealised Reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At
1
March
2015 219 13,118 3 7,124 (1) 4,629 (954) 24,138
Share
buybacks (4) 4 (372) (372)
Share Issues 80 8,536 8,616
Issue Costs (170) (170)
Equity
dividends
paid (1,502) (1,502)
Realised
gains on
investments 1,676 1,676
Unrealised
losses on
investments (1,976) (1,976)
Management
fee charged
to capital (308) (308)
Revenue loss
after
taxation
for the
year (248) (248)
Total loss
after
taxation 1,368 (1,976) (248) (856)
------ --------- --------- --------- --------- --------- ------ ---------
At 29
February
2016 295 21,484 7 5,250 1,367 2,653 (1,202) 29,854
------ --------- --------- --------- --------- --------- ------ ---------
Reserves available for distribution are capital reserve realised,
special reserve and revenue reserve. Total distributable reserves at 29
February 2016 were GBP5.42 million. The accompanying notes are an
integral part of these financial statements.
STATEMENT OF CASH FLOWS
For the year ended 28 February 2017
2017 2016
GBP000 GBP000
Total gain/(loss) on ordinary activities before
taxation 4,989 (856)
Realised loss/(gain) on investments 339 (1,676)
Unrealised (gain)/loss on investments (5,876) 1,976
(Increase)/Decrease in debtors (17) 6
Increase in creditors 28 50
---------- ----------
Net cash (outflow) from operating activities (537) (500)
---------- ----------
Purchase of investments (16,778) (11,321)
Sale of investments 8,987 5,534
---------- ----------
Net cash (outflow) from investment activities (7,791) (5,787)
---------- ----------
Share buybacks (313) (372)
Issue of share capital 12,883 8,446
Dividends paid (2,046) (1,502)
---------- ----------
Net cash inflow from financing activities 10,524 6,572
---------- ----------
Increase in cash 2,196 285
---------- ----------
Opening cash 6,994 6,709
Cash movement 2,196 285
---------- ----------
Closing cash 9,190 6,994
The accompanying notes are an integral part of these financial
statements.
Notes to the preliminary Announcement
1. Basis of Preparation
The financial information set out in this preliminary announcement does
not constitute the Company's statutory accounts for the years ended 28
February 2017 or 29 February 2016. Statutory accounts for the year ended
29 February 2016 have been filed with the Registrar of Companies and
those of the year ended 28 February 2017 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 29 February 2016 and 28 February 2017 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 accounts of the Company are prepared in accordance with Accounting
Standards applicable in the United Kingdom. The Company's financial
statements are prepared in accordance with FRS 102 and the Statement of
Recommended Practice (SORP) for Financial Statements of Investment Trust
Companies issued in November 2014.
The accounting policies used in preparing this preliminary announcement
are consistent with those used in the preparation of the financial
statements.
All AIM investments are valued at bid price. Unquoted companies are
included at fair value. Where cost is no longer considered appropriate
the Company will use a value indicated by a material arms-length
transaction by an independent third party in the shares of a company.
Where no such transaction exists the Company will use the most
appropriate valuation technique including discounted cash flow analysis,
earnings multiples, net assets and industry valuation benchmarks. The
fair value of such assets or liabilities will be reviewed on a 6 monthly
basis and more frequently if events occur that could have a material
impact on the investment.
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
years ended 28 February 2017 and 29 February 2016. The full statutory
annual accounts will be published in June 2017. Copies may in due course
be obtained during normal business hours from Hargreave Hale Limited,
Talisman House, Boardmans Way, Blackpool, FY4 5FY.
The Annual General Meeting of the Company will be held at the Company's
registered office on 20 July 2017 at 1.30pm.
1. Earnings per share (basic and diluted)
Revenue return per ordinary share is based on a net revenue loss on
ordinary activities after taxation of GBP148,026 (2016: GBP247,629) and
on 34,327,158 (2016: 25,200,417) ordinary shares, being the weighted
average number of ordinary shares in issue during the year. Capital
return per ordinary share is based on a net capital gain of GBP5,137,499
(2016: loss GBP608,113) for the year and on 34,327,158 (2016:
25,200,417) ordinary shares, being the weighted average number of
ordinary shares in issue during the year. Total return per ordinary
share is based on a net gain of GBP4,989,474 for the year and on
34,327,158 (2016: 25,200,417) ordinary shares, being the weighted
average number of ordinary shares in issue during the year.
1. Net asset value per ordinary share
The net asset value per ordinary share at 28 February 2017 of 109.86
pence (2016: 101.18 pence) is based on net assets of GBP45,366,681 at
the year-end (2016: GBP29,854,033) and on 41,296,035 ordinary shares,
being the number of shares in issue at year end (2016: 29,507,084).
1. Principal Risks and Uncertainties
The principal risks facing the Company relate to the Company's
investment activities and include venture capital trust approval risk,
Investment risk, discount volatility, compliance risk, economic risk,
fraud, operational risk, reputational risk, liquidity risk and
outsourcing risk. Other risks faced by the Company include market risk,
currency risk, interest rate risk and credit risk. These risks and the
way in which they are managed are described in more detail in the
Strategic Report.
5. Related party transactions
Hargreave Hale Limited
Hargreave Hale Limited is considered to be a related party to the
Company. Oliver Bedford, a non-executive director of the Company and a
member of its key management personnel, is an employee of Hargreave Hale
Limited. In addition Hargreave Hale Limited acts as investment manager,
administrator and custodian to the Company and it provides the company
secretary. All of the support functions performed by Hargreave Hale
Limited are segregated by department and location and are independent of
each other.
Hargreave Hale Limited in its capacity as investment manager of the fund
receives annual fees of 1.5% per annum of the net asset value of the
Company, calculated and payable quarterly in arrears. Fees for the year
are GBP515,272 (2016: GBP411,258) as detailed in Note 3. In relation to
the other support functions described above, Hargreave Hale Limited
received fees of GBP90,000 (2016: GBP80,000). Of those combined fees,
GBP153,253 (2016: GBP120,835) was still owed at the year end.
Hargreave Hale Limited has agreed to indemnify the Company against
annual running costs (such costs excluding VAT, any performance
incentive fee and any trail commissions the payment of which is the
responsibility of the Company) exceeding 3.5% of its net assets. No fees
were waived between 1 March 2016 and 28 February 2017 under the
indemnity.
.
6. Shares Issued
During the year, the Company issued 12,101,859 ordinary shares of 1
pence per share (nominal value GBP121,019) which resulted in funds being
received of GBP13,155,057. The 3.5% premium of GBP460,427 was payable to
Hargreave Hale Limited to cover the cost of additional shares allotted
of GBP188,425 resulting in net fees payable to Hargreave Hale Limited of
GBP272,002.
1. Capital Structure
Share capital
Ordinary shares are classed as equity. The ordinary shares in issue have
a nominal value of one pence and carry one vote each. Substantial
holdings in the Company are disclosed in the directors' report.
Share premium
This reserve represents the difference between the issue price of shares
and the nominal value of shares at the date of issue, net of related
issue costs.
Capital redemption reserve
This reserve is used for the cancellation of shares bought back under
the buyback facility.
Special reserve
Distributable reserve used to pay dividends and re-purchase shares under
the buyback facility.
Capital reserve realised
Gains/losses on disposal of investments, due diligence costs and income
from private company investments, permanent impairment of financial
assets and 75% of the investment management fee are accounted for in the
capital reserve realised.
Capital reserve unrealised
Unrealised gains and losses on investments held at the year-end arising
from movements in fair value are taken to the capital reserve
unrealised.
Revenue reserve
Net revenue profits and losses of the Company.
INVESTMENT PORTFOLIO SUMMARY
Ordinary Share Fund
As at 28 February 2017
Cost Valuation Valuation Net Assets
Qualifying Investments GBP000 GBP000 % % Sector
Consumer
Mexican Grill Ltd (A Preference Shares)** 277 1,154 3.17 2.54 Discretionary
Information
Ideagen plc 190 1,100 3.03 2.43 Technology
Information
Learning Technologies Group plc 534 1,068 2.94 2.36 Technology
Consumer
DP Poland plc 324 987 2.72 2.18 Discretionary
Information
Portr Ltd** 538 950 2.61 2.09 Technology
Consumer
Quixant plc 120 908 2.50 2.00 Discretionary
Science in Sport plc 518 885 2.43 1.95 Consumer Staples
Information
Zappar Ltd** 701 700 1.93 1.54 Technology
AnimalCare Group plc 100 664 1.83 1.46 Health Care
Creo Medical Group plc 559 660 1.82 1.46 Health Care
Fulcrum Utility Services Ltd 100 620 1.70 1.37 Utilities
Consumer
Infinity Reliance Ltd (My 1(st) Years)** 501 500 1.38 1.10 Discretionary
Maxcyte Inc 142 467 1.28 1.03 Health Care
Information
Gfinity plc 290 446 1.23 0.98 Technology
Hardide plc 227 420 1.16 0.93 Materials
Information
Aquis Exchange Ltd** 401 400 1.10 0.88 Technology
Information
ECSC Group plc 301 378 1.04 0.83 Technology
Information
Loopup Group plc 237 349 0.96 0.77 Technology
Information
ULS Technology plc 139 340 0.94 0.75 Technology
Faron Pharmaceuticals Oy 260 336 0.92 0.74 Health Care
Tristel plc 79 330 0.91 0.73 Health Care
Information
Laundrapp Ltd** 301 300 0.82 0.66 Technology
Information
Sanderson Group plc 200 280 0.77 0.62 Technology
Information
TrakM8 Holdings plc 91 273 0.75 0.60 Technology
Information
Eagle Eye Solutions Group plc 385 269 0.74 0.59 Technology
Information
Freeagent Holdings plc 185 268 0.74 0.59 Technology
Premaitha Health plc 330 262 0.72 0.58 Health Care
Plastics Capital plc 202 261 0.72 0.58 Materials
Information
CentralNic Group plc 207 241 0.66 0.53 Technology
Surface Transforms plc 201 238 0.65 0.52 Industrials
Consumer
Everyman Media Group plc 172 233 0.64 0.51 Discretionary
Belvoir Lettings plc 335 232 0.64 0.51 Real Estate
Paragon Entertainment Ltd 200 227 0.63 0.50 Industrials
Consumer
TLA Worldwide plc 150 225 0.62 0.50 Discretionary
Angle plc 252 213 0.59 0.47 Health Care
Information
Osirium Technologies plc 301 212 0.58 0.47 Technology
Information
Lombard Risk Management plc 92 201 0.55 0.44 Technology
Information
E G Solutions plc 200 200 0.55 0.44 Technology
Telecommunication
Satellite Solutions Worldwide Group plc 103 195 0.53 0.43 Services
Clearstar Inc 360 189 0.52 0.42 Industrials
Ilika plc 203 186 0.51 0.41 Industrials
Reneuron Group plc 262 183 0.50 0.40 Health Care
EKF Diagnostics Holdings plc 150 180 0.49 0.40 Health Care
Consumer
Electric Word plc 185 179 0.49 0.39 Discretionary
Electrical Geodesics Inc 145 167 0.46 0.37 Health Care
Omega Diagnostics Group plc 129 159 0.44 0.35 Health Care
MartinCo plc 113 157 0.43 0.35 Real Estate
Consumer
Medaphor Group plc 251 139 0.38 0.31 Discretionary
Information
Intercede Group plc 91 138 0.38 0.30 Technology
Consumer
Mexican Grill Ltd (Ordinary Shares)** 31 128 0.35 0.28 Discretionary
Telecommunication
Cloudcall Group plc 234 128 0.35 0.28 Services
Information
Kalibrate Technologies plc 161 120 0.33 0.27 Technology
Information
Imaginatik plc 164 114 0.31 0.25 Technology
Information
WANDisco plc 53 114 0.31 0.25 Technology
Information
APC Technology Group plc 350 105 0.29 0.23 Technology
Information
Mirada plc 95 95 0.26 0.21 Technology
Verona Pharma plc 71 93 0.25 0.20 Health Care
Information
Audioboom plc 126 87 0.24 0.19 Technology
Lidco Group plc 146 84 0.23 0.19 Health Care
TP Group plc 125 71 0.20 0.16 Industrials
Consumer
Porta Communications plc 200 70 0.19 0.15 Discretionary
Midatech Pharma plc 150 69 0.19 0.15 Health Care
Information
Fusionex International plc 69 68 0.19 0.15 Technology
Haydale Graphene Industries plc 64 68 0.19 0.15 Materials
Genedrive plc 140 67 0.18 0.15 Health Care
Directa Plus plc 45 65 0.18 0.14 Materials
Flowgroup plc 54 54 0.15 0.12 Industrials
Synairgen plc 90 45 0.12 0.10 Health Care
Mycelx Technologies Corporation plc (Com SHS $0.025
REG S+ shares) 150 36 0.10 0.08 Industrials
Information
Mporium Group plc 23 23 0.06 0.05 Technology
Information
Microsaic Systems plc 20 20 0.06 0.05 Technology
Brigantes Energy Ltd* - - - - Energy
Total Qualifying Investments 14,895 21,393 58.83 47.16
Cost Valuation Valuation Net Assets
Non-Qualifying Investments GBP000 GBP000 % % Sector
MFM Special Situations Fund** 4,542 5,462 15.02 12.04
Total - Unit Trusts 4,542 5,462 15.02 12.04
UK Treasury Stock 0.0125% 2068 154 159 0.44 0.35
Total - UK gilts 154 159 0.44 0.35
RPC Group plc 588 689 1.89 1.52 Materials
Melrose Industries plc 444 660 1.82 1.46 Industrials
Dechra Pharmaceuticals plc 462 515 1.42 1.14 Health Care
BP plc 502 499 1.37 1.10 Energy
Atkins (WS) plc 463 495 1.36 1.09 Industrials
NMC Health plc 426 488 1.34 1.08 Health Care
Royal Dutch Shell plc 379 478 1.31 1.05 Energy
Cohort plc 176 462 1.27 1.02 Industrials
Consumer
On the Beach Group plc 376 429 1.18 0.94 Discretionary
Consumer
Merlin Entertainments plc 386 428 1.18 0.94 Discretionary
Sanne Group plc 331 421 1.16 0.93 Financials
Consumer
JD Sports Fashion plc 265 316 0.87 0.70 Discretionary
Fulcrum Utility Services Ltd 56 302 0.83 0.67 Utilities
FCFM Group Ltd** 150 283 0.78 0.62 Financials
Lloyds Banking Group plc 285 275 0.76 0.61 Financials
Consumer
Taylor Wimpey plc 299 261 0.72 0.57 Discretionary
Consumer
DFS Furniture plc 288 248 0.68 0.55 Discretionary
Consumer
Hilton Food Group plc 252 235 0.65 0.52 Discretionary
Consumer
Clipper Logistics plc 234 227 0.63 0.50 Discretionary
Consumer
Wizz Air Holdings plc 220 200 0.55 0.44 Discretionary
Information
Learning Technologies Group plc 80 185 0.51 0.41 Technology
Information
Micro Focus International plc 121 175 0.48 0.39 Technology
Consumer
Sportech plc 130 156 0.43 0.34 Discretionary
Finsbury Food Group plc 70 137 0.38 0.30 Consumer Staples
Consumer
Everyman Media Group plc 85 113 0.31 0.25 Discretionary
Horizon Discovery Group plc 124 110 0.30 0.24 Health Care
Regent Pacific Group Ltd 93 82 0.22 0.18 Health Care
Egdon Resources plc 140 79 0.22 0.17 Energy
Amerisur Resources plc 167 66 0.18 0.15 Energy
Consumer
The Fulham Shore plc 38 65 0.18 0.14 Discretionary
Midatech Pharma plc 134 61 0.17 0.13 Health Care
Plexus Holdings plc 125 43 0.12 0.09 Energy
Reneuron Group plc 41 38 0.10 0.08 Health Care
Information
Eagle Eye Solutions Group plc 44 33 0.09 0.07 Technology
Flowgroup plc 30 30 0.08 0.07 Industrials
Information
Audioboom plc 31 25 0.07 0.06 Technology
Mycelx Technologies Corporation plc (Com SHS $0.025
+ (D1) shares) 170 23 0.06 0.05 Industrials
Consumer
Mexican Grill Ltd (A Preference Shares)** 3 10 0.03 0.02 Discretionary
Genagro Ltd** 22 2 0.01 - Industrials
Mycelx Technologies Corporation plc (Com SHS $0.025
REG S+ shares) 8 1 - - Industrials
Total - Non-Qualifying equities 8,238 9,345 25.71 20.59
Total -Non-Qualifying Investments 12,934 14,966 41.17 32.98
Total investments 27,829 36,359 100.00 80.14
Cash at bank 9,190 20.26
Prepayments & Accruals (182) (0.40)
Net Assets 45,367 100.00
* Unquoted Company holding of less than GBP500
**Unquoted Companies
The majority of listed investments held within the portfolio are listed,
headquartered and registered in the UK with the exception of the
following:
Listed Headquartered Registered
AIM listed Investments:
Audioboom plc UK UK Jersey
Clearstar Inc UK Cayman Cayman
Islands Islands
Electrical Geodesics Inc UK USA USA
Faron Pharmaceuticals Oy UK Finland Finland
Fulcrum Utility Services Ltd UK UK Cayman
Islands
Fusionex International plc UK UK Jersey
Maxcyte Inc UK USA USA
Mycelx Technologies Corporation plc (Com SHS $0.025 UK USA USA
+ (D1) shares)
Mycelx Technologies Corporation plc (Com SHS $0.025 UK USA USA
REG S+ shares)
Paragon Entertainment Ltd UK Cayman Cayman
Islands Islands
Regent Pacific Group Ltd UK Hong Kong UK
Royal Dutch Shell plc UK Netherlands UK
Sanne Group plc UK Jersey Jersey
WANDisco plc UK UK Jersey
Wizz Air Holdings plc UK Jersey Jersey
Unlisted private companies:
Aquis Exchange Ltd - UK UK
Brigantes Energy Ltd - UK UK
FCFM Group Ltd - UK UK
Genagro Ltd - Jersey Jersey
Laundrapp Ltd - UK UK
Mexican Grill Ltd (A Preference Shares) - UK UK
Mexican Grill Ltd (Ordinary Shares) - UK UK
Infinity Reliance Ltd (My 1(st) Years) - UK UK
Portr Ltd - UK UK
Zappar Ltd - UK UK
Authorised unit trust:
Marlborough Special Situations Fund - UK UK
TOP TEN INVESTMENTS
As at 28 February 2017 (By Market Value)
The top 10 equity investments are shown below; each is valued by
reference to the bid price, or in the case of unquoted companies, values
are either based on the last arm's length transaction or valuation
techniques, such as earnings multiples. Forecasts, where given, are
drawn from a combination of broker research and/or Bloomberg consensus
forecasts and exclude amortisation, share based payments and exceptional
items. Forecasts are in relation to a period end for which the company
results are yet to be released. Forecasts are not shown for private
companies. The net asset figures are drawn from audited accounts and
net cash values are from published accounts in most cases.
Mexican Grill Ltd 8550.0p
Results for the year
Investment date October 2009 to December 2015
Equity held 4.25% Turnover (GBP'000) 21,314
Profit/(loss) before
Av. Purchase Price 2059.1p tax (GBP'000) (475)
Cost (GBP'000) 311 Net Cash (GBP'000) (668)
Net Assets December
Valuation (GBP'000) 1,292 2015 (GBP'000) 4,337
Income recognised in
period (GBP) 0
COMPANY DESCRIPTION
Mexican Grill is a private company that operates 36
fast casual California-Mexican restaurants that provide
fresh, made to order cuisine for eat in or take-away,
making it among the largest chains within its niche.
Learning Technology Group plc 42.0p
Investment date April 2014 Forecasts for the year to December 2017
Equity held 0.55% Turnover (GBP'000) 49,600
Profit/(loss) before tax
Av. Purchase Price 20.6p (GBP'000) 10,000
Cost (GBP'000) 614 Net Cash (GBP'000) (8,486)
Net Assets December 2016
Valuation (GBP'000) 1,253 (GBP'000) 30,710
COMPANY DESCRIPTION
Learning Technologies Group (LTG) provides a comprehensive
and integrated range of e-learning services and technologies
to corporate and government clients. LTG is making
good progress towards its goal of establishing a substantial
global organisation of specialist digital learning
businesses from Europe, US, Latin America and Asia
to form a market-leading technologies agency.
Ideagen plc 80.0p
Investment date March 2011 Forecasts for the year to April 2017
Equity held 0.75% Turnover (GBP'000) 27,100
Profit/(loss) before tax
Av. Purchase Price 13.8p (GBP'000) 6,910
Cost (GBP'000) 190 Net Cash (GBP'000) 6,317
Valuation (GBP'000) 1,100 Net Assets April 2016 (GBP'000) 33,683
COMPANY DESCRIPTION
Ideagen is a supplier of compliance based information
management software with operations in the UK and
the United States. The company specialises in enterprise
governance, risk and compliance and healthcare solutions
for organisations operating within highly regulated
industries. Ideagen provides complete content lifecycle
solutions that enable organisations to meet their
regulatory and quality compliance standards, helping
them to reduce costs and improve efficiency.
DP Poland plc 56.0p
Forecasts for the year
Investment date November 2012 to December 2017
Equity held 1.28% Turnover (GBP'000) 10,900
Profit/(loss) before tax
Av. Purchase Price 18.4p (GBP'000) (1,900)
Cost (GBP'000) 324 Net Cash (GBP'000) 6,001
Net Assets December 2016
Valuation (GBP'000) 987 (GBP'000) 11,210
COMPANY DESCRIPTION
DP Poland (Domino's Pizza Poland) is a fast food company
that operates a sub-franchise of the Domino's Pizza
brand in Poland. The company operate in fourteen Polish
cities, with 16 corporate and 23 sub-franchised stores.
They continue to roll out and anticipate finishing
the current year with 50 operational sites, with a
longer-term ambition of 100 stores by 2020.
Portr Ltd 1058.0p
Investment date July 2015 Results for the year to December 2015
Equity held 3.17% Turnover (GBP'000) -
Profit/(loss) before
Av. Purchase Price 599.5p tax (GBP'000) -
Cost (GBP'000) 538 Net Cash (GBP'000) 816
Net Assets December
Valuation (GBP'000) 950 2015 (GBP'000) 819
Income recognised in
period (GBP) 0
COMPANY DESCRIPTION
Portr run's AirPortr, London's same day luggage transfer
service. In its most basic form they deliver luggage
from London Airports to your hotel, office or home
and vice versa. They recently launched an off airport
check in solution in partnership with British Airways,
allowing you to check in your bag from your house,
hotel or office for an outbound flight from London
airports.
Fulcrum Utility Services Ltd 62.0p
Investment date July 2010 Forecasts for the year to March 2017
Equity held 0.89% Turnover (GBP'000) 35,500
Profit/(loss) before tax
Av. Purchase Price 10.5p (GBP'000) 6,520
Cost (GBP'000) 156 Net Cash (GBP'000) 8,323
Valuation (GBP'000) 922 Net Assets March 2016 (GBP'000) 5,837
COMPANY DESCRIPTION
Fulcrum Utility Services provides utility infrastructure
solutions. The company offers solutions that include
gas connection, multi utility, meter installation,
outlet pipe work, and gas disconnection services,
renewable energy solutions and consulting services.
Quixant plc 348.0p
Investment date May 2013 Forecasts for the year to December 2017
Equity held 0.40% Turnover ($'000) 102,300
Profit/(loss) before tax
Av. Purchase Price 46.0p ($'000) 15,800
Cost (GBP'000) 120 Net Cash ($'000) (69)
Net Assets December 2016
Valuation (GBP'000) 908 ($'000) 34,306
COMPANY DESCRIPTION
Quixant designs and manufactures complete advanced
hardware and software solutions for the pay-for-play
gaming and slot machine industry. Quixant's specialised
products provide an all-in-one solution, based on
PC technology but with additional hardware features
and operating software developed specifically to address
the requirements of the gaming industry.
Science in Sport plc 92.0p
Investment date April 2014 Forecasts for the year to December 2017
Equity held 2.22% Turnover (GBP'000) 15,200
Profit/(loss) before tax
Av. Purchase Price 53.9p (GBP'000) (1,700)
Cost (GBP'000) 518 Net Cash (GBP'000) 6,130
Net Assets December 2016
Valuation (GBP'000) 885 (GBP'000) 10,819
COMPANY DESCRIPTION
Science in Sport manufactures and sells sports nutrition
products. The company develops and distributes food,
nutritional supplements, and beverages formulated
to hydrate, energise, recover, and enhance sports
performance.
Zappar Ltd 7445.0p
Investment date December 2016 Results for the year to March 2016
Equity held 3.12% Turnover (GBP'000) -
Profit/(loss) before tax
Av. Purchase Price 7460.0p (GBP'000) -
Cost (GBP'000) 701 Net Cash (GBP'000) 884
Net Assets March 2016
Valuation (GBP'000) 700 (GBP'000) 248
Income recognised in
period (GBP) 0
COMPANY DESCRIPTION
Zappar is a small UK company in the rapidly evolving
market for AR-enabling (Augmented Reality) product
and infotainment experiences on handheld devices.
Using proprietary patented technology, Zappar works
closely with leading brands, license partners and
retailers across the world to produce innovative,
customisable solutions that link the digital world
to the physical world.
RPC Group plc 912.5p
Investment date August 2015 Forecasts for the year to March 2017
Equity held 0.02% Turnover (GBP'000) 2,714,000
Profit/(loss) before tax
Av. Purchase Price 778.4p (GBP'000) 256,667
Cost (GBP'000) 588 Net Cash (GBP'000) (775,000)
Valuation (GBP'000) 689 Net Assets March 2016 (GBP'000) 893,900
COMPANY DESCRIPTION
RPC Group is a design and engineering company specialising
in polymer conversion with centres worldwide. The
company offers product design capabilities across
all conversion technologies, and through its global
manufacturing base provides a wide range of consumer
products and technical components for the packaging
and non-packaging markets.
Co-Investment
As at 28 February 2017, other funds managed by Hargreave
Hale Ltd were also invested in all of the investments
held within the Company's portfolio with the exception
of the following: Electric Word plc, Omega Diagnostics
Group plc, Paragon Entertainment Ltd, UK Treasury
Stock 0.0125% 2068 and Tristel plc .
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Hargreave Hale AIM VCT 2 plc via Globenewswire
https://hargreaveaimvcts.co.uk/
(END) Dow Jones Newswires
June 05, 2017 12:51 ET (16:51 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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