Hargreave Hale AIM 2 Hargreave Hale Aim Vct 2 Plc : Annual Financial Report
05 Junio 2017 - 11:58AM
UK Regulatory
TIDMHHVT
Hargreave Hale AIM VCT 2 plc announced its results for the year ended 28
February 2017 on 5 June 2017. The full Financial Statements can be
accessed on the Company's website http://www.hargreaveaimvcts.co.uk or
alternatively by following the link at the bottom of this report.
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.
DIVIDEND
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 TENDER
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
For further information, please contact:
Stuart Brookes
Company Secretary
Hargreave Hale AIM VCT 2 Plc
01253 754740
Annual Report and Accounts - Year ended 28 February 2017:
https://hargreaveaimvcts.co.uk/application/files/7514/9668/0617/Hargreave_Hale_Annual_Report_A4_May_2017_Single_pages_050617_4_FINAL2.pdf
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 12:58 ET (16:58 GMT)
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