Hargreave Hale AIM VCT : Unaudited Interim Results for the six months ended 31 March 2024

Cultivating opportunities

Unaudited interim results

for Hargreave Hale AIM VCT plc

for the six month period ending 31 March 2024

Contents

Background to the Company	Page
2
Investment objectives and policy	2
Financial highlights for the six month period ending 31 March 2024	3
Strategy	4
Chair's statement
Investment Manager's report	9
Investment portfolio summary	13
Top ten investments	16
Governance	19
Principal risks and uncertainties
Going concern	19
Other matters	20
Statement of Directors' responsibilities	21
Condensed financial statements	22
Condensed income statement
Condensed balance sheet	23
Condensed statement of changes in equity	24
Condensed statement of cash flows	27
Explanatory notes	28
Alternative performance measures	36
Alternative performance measures (definitions)	38
Glossary of terms	39
Shareholder information	40
Company information	42

1

Background to the Company

Hargreave Hale AIM VCT plc (the "Company") is an established Venture Capital Trust ("VCT") that aims to generate capital gains and income from its portfolio and to make distributions to shareholders from capital or income whilst maintaining its status as a VCT. Although the Company's Qualifying Investments are primarily in companies that are listed on AIM, it also has investments in private companies and the AQSE Growth Market. The Company may also make Non-Qualifying Investments in equities and exchange traded funds listed on the main market of the London Stock Exchange, fixed income securities, bank deposits, the IFSL Marlborough Special Situations Fund and the IFSL Marlborough UK Micro-Cap Fund as allowed by the VCT Rules.

Hargreave Hale AIM VCT plc was approved as a VCT by HMRC at launch in 2004. It has at all times satisfied the various tests required to maintain its status as a VCT. Canaccord Genuity Asset Management Limited ("CGAM") has been the appointed Investment Manager of the Company's assets since inception.

Investment objectives

The investment objectives of the Company are to generate capital gains and income from its portfolio and to make distributions from capital or income to shareholders whilst maintaining its status as a VCT.

Investment policy

The Company intends to achieve its investment objectives by making Qualifying Investments in companies listed on AIM, private companies and companies listed on the AQSE Growth Market, as well as Non-Qualifying Investments as allowed by the VCT Rules.

Qualifying Investments

The Investment Manager will maintain a diversified portfolio of Qualifying Investments which may include equities and fixed interest securities as permitted by the VCT Rules. Investments will primarily be made in companies listed on AIM but may also include private companies that meet the Investment Manager's criteria and companies listed on the AQSE Growth Market. These small companies will be UK based or have a UK presence and, whilst of high risk, will have the potential for significant capital appreciation.

To maintain its status as a VCT, the Company must have 80 per cent. 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. To provide some protection against an inadvertent breach of this rule, the Investment Manager targets a threshold of approximately 85 per cent.

Non-Qualifying Investments

The Non-Qualifying Investments must be permitted by the VCT Rules and may include equities and exchange traded funds listed on the main market of the London Stock Exchange, fixed income securities, bank deposits that are readily realisable, the IFSL Marlborough Special Situations Fund and the IFSL Marlborough UK Micro-Cap Fund. Subject to the investment controls below, the allocation to each of these investment classes will vary to reflect the Investment Manager's view of the market environment and the deployment of funds into Qualifying Companies. The market value of the Non-Qualifying Investments (excluding bank deposits) will vary between nil and 50 per cent. of the net assets of the Company. The value of funds held in bank deposits will vary between nil and 30 per cent. of the net assets of the Company.

Investment controls

The Company may make co-investments in investee companies alongside other funds, including other funds managed by the Investment Manager. Other than bank deposits, no individual investment shall exceed 10 per cent. of the Company's net assets at the time of investment.

Borrowings

The Company's Articles of Association (the "Articles") permit the Company to borrow up to 15 per cent. of its adjusted share capital and reserves (as defined in the Articles). However, it is not anticipated that the Company will have any borrowings in place and the Directors do not intend to use this authority.

To the extent that any future changes to the Company's investment policy are considered to be material, shareholder consent to such changes will be sought.

2

Financial highlights

for the six month period ending 31 March 2024

Net asset value	NAV total return	Tax free dividends	Share price total	Ongoing charges
("NAV") per share		paid in the period	return	ratio
43.64p(1)	-2.59%(1)	1.50p	1.63%(1)	2.45%(1)

• £5.9 million invested in Qualifying Companies in the period.
• 93.48% invested by VCT tax value in Qualifying Investments at 31 March 2024.
• Offer for subscription closed having raised £20.3 million. The Board decided to utilise the over-allotment facility only to the extent that valid applications were received by 5pm on 22 March 2024.
• Final dividend of 1.50 pence per share paid 15 February 2024.
• Interim dividend of 1 penny and special dividend of 1.50 pence per share approved by the Board.

	Six months	Six months	Year
Summary financial data	ending	ending	ending
31-Mar-24	31-Mar-23	30 Sept-23
NAV (£m)	155.74	174.72	151.92
NAV per share (p)(1)	43.64	52.84	46.34
NAV total return (%)(1)	-2.59	-5.57	-14.70
Market capitalisation (£m)	150.60	165.35	140.96
Share price (p)	42.20	50.00	43.00
Share price discount to NAV per share (%)(1)	-3.30	-5.37	-7.21
Share price 5 year average discount to NAV per share (%)(1)	-5.83	-5.56	-5.64
Share price total return (%)(1)	1.63	-13.94	-23.51
Loss per share for the period (p)	-1.22	-3.72	-9.32
Dividends paid per share (p)	1.50	4.00	5.00
Ongoing charges ratio (%)(1)	2.45	2.17	2.24

(1) Alternative performance measure illustrations and definitions can be found on pages 36 to 38.

Financial Calendar
Record date for interim and special dividend	28 June 2024
Payment of interim and special dividend	26 July 2024
Announcement of annual results for the year ending 30 September 2024	December 2024
Annual General Meeting	February 2025
Payment of final dividend (subject to approval by shareholders at the AGM)	February 2025

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Chair's statement

Introduction

May I once again start by welcoming the many new shareholders who have joined us by way of the recent successful fundraise and of course by thanking all shareholders for their continuing support, which is greatly appreciated.

We started the financial year on a difficult note with rapid increases in the yield of the US 10-year Treasury Note causing significant alarm and pushing down hard on equity markets. Not for the first time, October was a difficult month. Dovish statements from several members of the Federal Open Market Committee and soothing words from the Treasury Secretary took yields lower and laid the foundations for a strong rally into Christmas, helped by reports of falling inflation in the UK, US and the Eurozone. Investors priced in significant easing of monetary policy in the US, starting from early 2024. Whilst this did not come to pass, the markets have thus far absorbed the reset without undue stress and instead focused on the resilience of the US economy.

Within the UK, many consumer facing companies endured a tough period of trading either side of Christmas as the UK economy briefly dipped into recession. However, with inflation falling rapidly and confidence gradually returning, the outlook began to improve at the margins. Unfortunately, this did not substantially improve the narrative around the UK stock market within the period, which continued to endure a difficult time with continued outflows and an almost total absence of new initial public offerings ("IPOs"). Low valuations and a weak currency continue to attract buying interest from private equity and trade buyers with five takeovers within the period.

Of these, Abcam and Instem were notable having developed into global leaders in their respective fields and been a feature within the qualifying portfolio for more than ten years in each case. In the case of Abcam, the exit valuation of $5.7bn resulted in a gain of 5,603% over book cost. The Instem exit valued the company at £203m, a gain of 376% over book cost.

We have seen an unusually wide dispersion of outcomes over the period under review. Some companies have excelled, others have struggled. The defence and technology sectors have been very strong, the healthcare sector is recovering, travel was robust but food and beverage was weak. Retail outcomes have varied according to product and channel. For some companies, the experience of the last two or more years might have felt quite Darwinian: improve, adapt or fail.

Where does this leave us as we look forward? The portfolio is leaner with a good spread of investments across different asset classes. Portfolio maturity is improving, profit expectations have been reset and valuations are attractive. We feel we are well positioned to deliver positive returns over the medium term as and when the market recovers. In the meantime, we will continue to work diligently to identify and invest in tomorrow's success stories.

Performance

At 31 March 2024, the NAV per share was 43.64 pence which, after adjusting for the dividends paid in the half year of 1.50 pence, gives a NAV total return for the period of -2.59%. The NAV total return (dividends reinvested) for the half year was -2.67% compared with 3.25% for the FTSE AIM All-Share Index Total Return (also calculated on a dividends reinvested basis). The Directors consider this to be the most appropriate benchmark from a shareholder's perspective, however, due to the investment restrictions placed on a VCT it is not wholly comparable.

Rolling Returns to end March 2024	Six months	1Y	3Y	5Y	10Y
NAV total return	-2.59%	-12.68%	-38.84%	-4.22%	4.59%
Share price total return	1.63%	-10.60%	-36.56%	-3.28%	7.85%
NAV total return (dividends reinvested) (1) (2)	-2.67%	-12.94%	-43.63%	-13.47%	-5.57%
Share price total return (dividends reinvested) (1) (2)	1.66%	-10.67%	-41.32%	-12.00%	-1.22%
FTSE AIM All-Share Index Total Return	3.25%	-6.32%	-35.11%	-13.31%	-0.09%

Source: Canaccord Genuity Asset Management/Bloomberg

1. Alternative performance measure illustrations and definitions can be found on pages 36 to 38.
2. The NAV total return (dividends reinvested) and Share price total return (dividends reinvested) measures have been included to improve comparability with the FTSE AIM All-Share Index Total Return which is also calculated on that basis.

The earnings per share total return for the year was a loss of -1.22 pence (comprising a capital loss of -1.22 pence and a de minimis revenue profit). Revenue income in the period increased by 26.00% to £1.3m following additional investment into investment grade corporate bonds and higher bank interest received.

The share price decreased from 43.00 pence to 42.20 pence over the reporting period which, after adjusting for dividends paid, gives a share price total return of 1.63% with the gain driven by a narrowing of the share price discount to the NAV per share.

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Investments

The Investment Manager invested £5.9 million into 5 Qualifying Companies during the period. The fair value of Qualifying Investments at 31 March 2024 was £82.7 million (53.1% of NAV), invested across 56 AIM companies and 5(1) unquoted companies. At the half-year end, the fair value of non-qualifying equities, the IFSL Marlborough UK Micro-Cap Growth Fund and the IFSL Marlborough Special Situations Fund were £13.5 million (8.7% of NAV), £9.8 million (6.3% of NAV), and £8.9 million (5.7% of NAV) respectively, with most of the non-qualifying equities listed within the FTSE 350 index and offering good levels of liquidity should the need arise. £21.0 million (13.5% of NAV) was held in short-dated investment grade corporate bonds and £19.9 million(2) (12.7% of NAV) was held in cash at the period end.

Dividend

The Directors continue to maintain their policy of targeting a tax free dividend yield equivalent to 5% of the year end NAV per share (see page 20 for the full policy).

A final dividend for the year ending 30 September 2023 of 1.50 pence was paid on 15 February 2024.

An interim dividend of 1 penny along with a special dividend of 1.50 pence per share (2023: 1 penny) will be paid on 26 July 2024, with an ex-dividend date of 27 June 2024 and a record date of 28 June 2024. The payment of the special dividend reflects the receipt of proceeds from the sale of Abcam plc and Instem plc. The final dividend will be determined at the year end.

Dividend re-investment scheme

Shareholders may elect to reinvest their dividends by subscribing for new shares in the Company. Further information can be found in the shareholder information section on page 40.

On 15 February 2024, 1,100,783 ordinary shares were allotted at a price of 44.58 pence per share, which was calculated in accordance with the terms and conditions of the dividend re-investment scheme ("DRIS"), on the basis of the last reported NAV per share as at 26 January 2024, to shareholders who elected to receive shares as an alternative to the final dividend for the year ended 30 September 2023, announced on 19 December 2023.

Share buybacks

In total, 5,858,590 shares (nominal value: £58,586) were repurchased during the six month period ending

31 March 2024 at a cost of £2,496,726 (average price: 42.62 pence per share). As at 18 June 2024, a further 2,248,121 shares have been repurchased at a cost of £948,234 (average price of 42.18 pence per share).

Share price discount

The Company aims to improve liquidity and maintain a discount of approximately 5 per cent. to the last published NAV per share (as measured against the mid-price) by making secondary market purchases of its shares in accordance with parameters set by the Board (see page 20 for the full policy).

Share price discount to NAV

6.0%

4.0%

2.0%

0.0%

(2.0%)

(4.0%)

(6.0%)

(8.0%)

(10.0%)

(12.0%)

(14.0%)

(16.0%)

(18.0%)	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24
Mar-19

1. Excluding companies in administration or at risk of administration with zero value.
2. Net of prepayments and accruals.

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We continued to operate the discount control and management of share liquidity policy effectively during the period. The Company has 1 and 5 year average share price discounts of 5.89% and 5.83% respectively.

The share price discount as at 31 March 2024 was -3.30% compared to a discount of -7.21% at 30 September 2023.

As at 18 June 2024 the discount to NAV is 5.14% of the last published NAV per share.

Offer for subscription

The Directors of the Company announced on 7 September 2023 the launch of an offer for subscription for shares to raise up to £20 million, together with an over-allotment facility of up to a further £20 million. On 22 March 2024, the Company announced it had received valid applications of approximately £20 million. The Board decided to utilise the over-allotment facility only to the extent that valid applications under the offer were received by 5pm on 22 March 2024. The offer closed on 22 March 2024 at 5pm.

The offer resulted in gross funds being received of £20.3 million and the issue of 44.5 million shares.

Cost efficiency

The Board reviews costs incurred by the Company on a regular basis and is focused on maintaining a competitive ongoing charges ratio. The period end ongoing charges ratio was 2.45% (30 Sept 2023; 2.24%) when calculated in accordance with the Association of Investment Companies ("AIC") "Ongoing Charges" methodology, which is based on the average net assets of the fund within the period (and its comparator). In absolute terms, the fixed costs of the Company have declined by 0.70%.

Shareholder engagement

The Investment Manager has continued to record quarterly video updates and interviews with senior managers of the VCT's portfolio companies all of which are available through the website (www.hargreaveaimvcts.co.uk). Improving our shareholder communication has been a big focus of the last 12 months and I strongly encourage you to visit the website and review the content.

In a similar vein, we have continued to run a series of shareholder events with two in person events held in the first half of the financial year and a third held post period end. Responding to shareholder comments, we held an event in Manchester, the first time we have run an event outside of London. Whilst the London events continue to attract good attendance, only a small number of shareholders were able to join us in Manchester reflecting the challenge of communicating with shareholders who are yet to opt in to email communications. Whilst we would always prefer the opportunity to engage with our shareholders in person, we recognise this is difficult for many of you. We therefore plan to run our first shareholder webinar at 12pm on Thursday 20 June 2024.

Reflecting our wish to encourage increased participation in digital communications, we are launching a major drive to upgrade and expand our database of shareholders who opt in for email and digital communications. Please do register your consent with us through the website.

As noted above we will continue to give shareholders an opportunity to engage with the Investment Manager and Board in person. The next shareholder presentation will be held at the Investment Manager's offices at 88 Wood Street, London on 22 August 2024. For those who cannot attend in person, the Investment Manager will post a recorded video update on the website. The final event of 2024 will be held at the Everyman Cinema in Broadgate, London on Thursday 28 November 2024. This event will include a review of the 12 months to 30 September 2024 and presentations from various guest speakers. Shareholders are asked to register their attendance at events via email at [e-mail].

Electronic communications

As ever, we are asking shareholders to opt into electronic communications and update their dividend payment preference from cheque to bank transfer. Switching to the digital delivery of shareholder communications and dividend distributions is more cost efficient, secure and faster whilst also helping to reduce our environmental footprint.

The Company no longer prints and distributes interim reports to shareholders. The interim results continue to be available to download on the Company's website (www.hargreaveaimvcts.co.uk) and a summary of the results are also published via a Regulatory Information Service on the London Stock Exchange. Where necessary, the Administrator can produce and send out a hard copy.

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The Company publishes regular updates from the Investment Manager and portfolio companies on its website. Updates are also available for distribution by email. You can register your interest in (and opt out of) email updates through the Company's website.

Shareholders are also encouraged to make use of Equiniti's shareview portal, which can be used to monitor their investment, review their transaction history, see information on dividend payments and update their communication preferences.

Regulatory update

There were no major changes to VCT legislation during the period under review.

On 23 September 2022, the Government announced that it intended to extend the sunset clause that was first introduced as part of the 2015 EU State aid review. If not otherwise repealed or extended, the sunset clause will result in the withdrawal of the upfront 30% income tax relief for new investment into VCTs from 6 April 2025.

The sunset clause does not affect the Capital Gains Tax relief or tax free dividend payments, nor does it affect investors' income tax relief on VCT investments made before 6 April 2025. On 22 November 2023, the Chancellor of the Exchequer announced as part of the Autumn Statement the intention to extend the VCT and EIS schemes to 5 April 2035.

Through the Finance Act 2024, the Government extended the sunset clause for the VCT scheme from 5 April 2025 to 5 April 2035, allowing investors to claim income tax relief for subscriptions for new VCT shares for a further 10 years. Whilst this is welcome news, the extension is not likely to come into effect without EU approval. The timetable for this is not yet known.

Consumer Duty

The Financial Conduct Authority (the "FCA") introduced Consumer Duty Regulation on 31 July 2023 to improve the standard of care provided by firms that are involved in the manufacture or supply of products and services to retail clients.

As the Company is not regulated by the FCA, it falls outside of the FCA's new Consumer Duty regulation. However, CGAM and Canaccord Genuity Wealth Limited ("CGWL") are regulated companies and in scope, respectively

as the designated manufacturer and distributor of the Company. In its capacity as manufacturer, CGAM has conducted a fair value assessment and a target market assessment. Having reviewed both reports, the Board is satisfied that CGAM and CGWL continue to comply with their obligations.

VCT status

I am pleased to report that we continue to perform well against the requirements of the legislation and at the period end, the investment test was 93.48% (2023: 95.79%) against an 80% requirement when measured using HMRC's methodology. The Company met all other tests relevant to its status as a VCT.

Key information Document ("KID")

In accordance with the Packaged Retail Investment and Insurance Products regulations, the Company's KID is published on the Company's website at www.hargreaveaimvcts.co.uk.

Risk review

The Board has reviewed the risks facing the Company. Further detail can be found in the principal risks and uncertainties section on page 19.

7

Outlook

Although trading continues to vary quite widely by sector, there are signs that sectors that struggled in 2023 and early 2024 are starting to feel more confident. In general, corporate news flow across the portfolio is improving. UK Purchasing Managers' Indices also continue to point to a further expansion of economic activity. Retail remains a weak spot despite UK consumer confidence reaching a 2 year high. Defence companies continue to report very strong trading and rapidly growing order books.

AIM has started to recover, posting two months of strong performance post period end. There are, at last, signs of a return of investor interest in small UK companies, with the tone markedly improved since the March 2024 GDP print. Although fund outflows from UK equities continue to overshadow the market, the flow picture is improving for UK small cap managers. Deal flow remains very quiet; however, there are signs that the market for initial public offerings is re-opening. It remains early days and we will need to see several more months of improving sentiment and increased activity before we can be more confident that the market is normalising.

David Brock

Chair

Date: 18 June 2024

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