Albion Venture Capital Trust : AAVC Annual Report and Financial Statements for the year ended 31 March 2024

Albion Venture Capital Trust PLC

Annual Report and Financial Statements for the year ended 31 March 2024

Albion Venture Capital Trust PLC

Annual Report and Financial Statements for the year ended 31 March 2024

COMPANY INFORMATION

Company name

Albion Venture Capital Trust PLC (the "Company")

Directors

Richard Glover, Chairman

Ann Berresford ACA

Neeta Patel CBE

Richard Wilson

Manager, company secretary, AIFM and registered office

Albion Capital Group LLP

1 Benjamin Street

London, EC1M 5QL

Taxation adviser

Philip Hare & Associates LLP

6 Snow Hill

London, EC1A 2AY

Country of incorporation

United Kingdom

Company number

03142609

Registrar

Computershare Investor Services

PLC

The Pavilions

Bridgwater Road

Bristol, BS99 6ZZ

Legal adviser

Howard Kennedy LLP

1 London Bridge

London, SE1 9BG

Legal form

Public Limited Company

Auditor

Johnston Carmichael LLP

7-11 Melville Street

Edinburgh, EH3 7PE

Corporate broker

Panmure Liberum Limited

Ropemaker Place, Level 12

​25 Ropemaker Street

London, EC2Y 9LY

Depositary

Ocorian Depositary (UK) Limited

Level 5, 20 Fenchurch Street

London, EC3M 3BY

Albion Venture Capital Trust PLC is a member of The Association of Investment Companies (www.theaic.co.uk).

Shareholder information	Financial adviser information
For help relating to dividend payments, shareholdings	For enquiries relating to the performance of the
and share certificates please contact Computershare	Company, and information for financial advisers,
Investor Services PLC:	please contact the Business Development team at
Tel: [phone] (UK National Rate call, lines are	Albion Capital Group LLP:
open 8.30am - 5.30pm; Mon - Fri, calls are recorded)	Email: [e-mail]
Website: www.investorcentre.co.uk	Tel: [phone] (lines are open 9.00am - 5.30pm;
Shareholders can access holdings and valuation	Mon - Fri; calls are recorded)
information regarding any of their shares held with	Website: www.albion.capital
Computershare by registering on Computershare's
website.
Shareholders can also contact the Chairman directly
on: [e-mail]

Please note that these contacts are unable to provide financial or taxation advice.

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Contents

Strategic

Investment policy and Financial calendar	7
Financial summary	8
Chairman's Statement	10
Strategic Report	14
Portfolio of investments	27
Portfolio companies	29

Governance

The Board of Directors	35
The Manager	37
Environmental, Social and Governance ("ESG") report	40
Directors' report	44
Statement of Directors' responsibilities	51
Statement of corporate governance	52
Directors' remuneration report	59
Independent auditor's report	63

Company information and Financials

Income statement	71
Balance sheet	72
Statement of changes in equity	73
Statement of cash flows	74
Notes to the Financial Statements	75
Notice of Annual General Meeting	89

Strategic

STRATEGIC

INVESTMENT POLICY

The Company is a Venture Capital Trust and the investment policy is intended to produce a regular dividend stream with an appreciation in capital value.

Investment policy

The Company will invest in a broad portfolio of smaller, unquoted growth businesses across a variety of sectors including higher risk technology companies. Investments may take the form of equity or a mixture of equity and loans.

Allocation of funds will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified both in terms of sector and stage of maturity of company. Funds held pending investment or for liquidity purposes will be held as cash on deposit.

Risk diversification and maximum exposures

Risk is spread by investing in a number of different businesses within Venture Capital Trust qualifying industry sectors. The maximum amount which the Company will invest in a single portfolio company is 15% of the Company's assets at cost, thus ensuring a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is possible that it may grow in value to a point where it represents a significantly higher proportion of total assets prior to a realisation opportunity being available.

		Gearing
		The Company's maximum exposure in relation to
		gearing is restricted to 10% of the adjusted share
		capital and reserves.
FINANCIAL CALENDAR
5 July 2024	Record date for first dividend
31 July 2024	Payment of first dividend
Noon on 17 September 2024	Annual General Meeting
December 2024	Announcement of Half-yearly results for the six months ending 30 September 2024
31 January 2025	Payment of second dividend (subject to Board approval)

Albion Venture Capital Trust PLC

7

STRATEGIC

FINANCIAL SUMMARY

(6.9)%

Shareholder loss for

the year ended

31 March 2024†

(2023: return of 0.3%)

2.46p

Total tax-free dividend per share paid during the year ended

31 March 2024

(2023: 2.65p)

44.93p

Net asset value per

share as at

31 March 2024

(2023: 50.88p)

239.38p

Total shareholder value per share from launch to 31 March 2024† (2023: 242.87p)

Total shareholder return relative to the FTSE All-Share Index total return from

1 April 2014 to 31 March 2024 (in both cases with dividends reinvested)

Return (pence per share)

200

180

160

140

120

100

80

Apr 2014

Mar 2015

Mar 2016

Mar 2017

Mar 2018

Mar 2019

Mar 2020

Mar 2021

Mar 2022

Mar 2023

Mar 2024

Total shareholder return

FTSE All-Share Index total return

Methodology: The total shareholder return including original amount invested from 1 April 2014 (rebased to 100) assuming that dividends were reinvested at the net asset value of the Company at the time that the shares were quoted ex-dividend. Transaction costs are not taken into account.

†These are considered Alternative Performance Measures, see notes 2 and 3 on page 17 of the Strategic report for further explanation.

8 Albion Venture Capital Trust PLC

	Financial summary
Albion Venture Capital Trust PLC - Total return to shareholders	53.7%

(6.9)% 3.0% 7.1%

1 year return	3 year return	5 year return	10 year return
	(average 1.0% p.a.)	(average 1.4% p.a.)	(average 5.4% p.a.)

The chart above shows the one year, three year, five year and ten year total return to shareholders. This return comprises dividends paid and the change in net asset value over the relevant periods.

Movements in net asset value

		31 March 2024		31 March 2023
	(pence per share)	(pence per share)
Opening net asset value	50.88	53.38
Capital loss	(4.06)		(0.34)
Revenue return	0.53		0.44
Total (loss)/return	(3.53)	0.10
Dividends paid	(2.46)	(2.65)
Impact of share capital movements	0.04	0.05
Net asset value	44.93	50.88

Total shareholder value

	Ordinary shares
	(pence per share)
Total dividends paid to 31 March 2024	194.45
Net asset value on 31 March 2024	44.93
Total shareholder value to 31 March 2024	239.38

A more detailed breakdown of the dividends paid per year can be found at www.albion.capital/funds/AAVC under the 'Dividend History' section.

The financial highlights above are for Albion Venture Capital Trust PLC Ordinary shares only. Details of the financial performance of the C shares and Albion Prime VCT PLC, which have been merged into the Company, can be found at www.albion.capital/funds/AAVC under the 'Financial summary for previous funds' section.

In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2025 of 1.12 pence per share to be paid on 31 July 2024 to shareholders on the register on

5 July 2024.

Albion Venture Capital Trust PLC

9

STRATEGIC

CHAIRMAN'S

STATEMENT

Richard Glover

During the last year, the Company's portfolio has continued to be met with a persistently challenging economy, characterised by heightened geopolitical uncertainties, as well as high inflation and interest rates. This instability has seen valuations of quoted technology companies fluctuating amidst difficult trading conditions across the market. As a result of this, the Company returned a disappointing loss of 3.49 pence per share for the year ended 31 March 2024, which represents a 6.9% loss on opening net asset value.

Whilst these results are disappointing, the Board is mindful that it is not unusual for a venture capital portfolio to experience periods of volatility, especially given the immaturity of our technology portfolio, and remains confident that the portfolio has the potential to deliver longer term returns.

Results and dividends

As at 31 March 2024, the net asset value ("NAV") was £62.0 million or 44.93 pence per share, compared to £71.0 million or 50.88 pence per share as at 31 March 2023. The total loss before taxation was £4.9 million compared to a return of £0.1 million for the previous year. Further details of the progress of a number of our portfolio companies are discussed later in this statement.

In line with the variable dividend policy targeting around 5% of NAV per annum, the Company paid dividends totalling 2.46 pence per share during the year ended 31 March 2024 (31 March 2023: 2.65 pence per share).

The Board has declared a first dividend for the year ending 31 March 2025 of 1.12 pence per share to be paid on 31 July 2024 to shareholders on the register on 5 July 2024.

Investment performance and progress

The results for the year showed a net loss on investments of £4.8 million, compared with a total uplift of £0.6 million in the previous year. This loss is largely due to unrealised losses across the portfolio, with a number of write-downs including: Seldon Technologies (£1.0m), Threadneedle Software Holdings (T/A Solidatus) (£0.8m) and PeakData (£0.5m), all as a result of difficult trading conditions. The valuation of the Company's investment in Chonais River Hydro was written down by £0.7m following a re-evaluation of the future generation potential of the hydro scheme.

It is important to put these results into context. In August 2018, in response to a shift in government policy towards investing in young innovative companies, the Company changed its investment policy to invest in a broad portfolio of smaller, unquoted

10 Albion Venture Capital Trust PLC