News Column

Annual Financial Report

May 27, 2014

LONDON--(BUSINESS WIRE)--

Hargreave Hale AIM VCT2 plc announced its results for the year ended 28 February 2014 on 27 May 2014. The full Financial Statements can be accessed on the Company's website at http://www.hargreave-hale.co.uk/fund-management/venture-capital-trusts/hargreave-hale-aim-vct-2/factsheets-and-reports/ or alternatively by following the link at the bottom of this report.

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 28 February):   2014   2013
 
Net asset value per share 120.24p 95.69p
Cumulative distributions paid per share since launch 31p 26p
Total return per share 151.24p 121.69p
 
 
Annual Returns per share:
Revenue return (1.73)p (2.28)p
Capital return 33.61p 6.31p
Combined Return 31.88p 4.03p
 
Dividends per share:
Interim paid 2.0p 2.0p
Final proposed 4.0p 3.0p
Total dividend for year 6.0p 5.0p
 
Performance Benchmark:
Total Return 159.2% 128%
FTSE AIM All-share Index 77.1% 64%
(results rebased to 100 at 6 April 2007)
 


CHAIRMAN’S STATEMENT

Introduction

We are pleased to report on a successful year. The fund has performed well and our recent equity raising efforts have more than doubled the size of assets under management creating a much more cost effective business to the benefit of all our shareholders. I would like to welcome all our new shareholders.

At 28 February 2014 the NAV was 120.24 pence which after adjusting for the dividends paid gives a total return since inception of 151.24 pence. The profit per ordinary share for the year was 31.88 pence per share (comprising revenue losses of 1.73 pence and capital gains of 33.61 pence). During the financial year as a whole the FTSE AIM All Share Index rose by 20.5% and the FTSE All-share index rose by 9.5%. Whilst the FTSE AIM All-Share index is the only sensible benchmark, it is not strictly comparable as it has a high proportion of large mining and commodities stocks in which a VCT cannot invest.

Investments

The Investment Manager, Hargreave Hale Limited, invested a further £2.3 million in 20 qualifying companies during the year. The Fair Value of qualifying investments at 28 February 2014 was £10.4 million invested in 39 AIM companies and 5 unquoted companies. The balance of the fund, £6.4 million was held in a mix of cash, fixed income and other non-qualifying equities.

Dividend

An interim dividend of 2 pence was paid on 8 November 2013 (2012 – 2 pence).

A final dividend of 4 pence is proposed (2013 – 3 pence) which, subject to shareholder approval at the AGM will be paid on 10 July 2014, to ordinary shareholders on the register on 6 June 2014.

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 NAV of the Company.

Buybacks

In total, 438,700 shares were purchased during the year at an average price of 94.41 pence per share.

The Board continues to target a discount of 5% for market purchases. It should be emphasised that this target is non-binding and dependent on circumstances including the funds liquidity from time to time and market conditions.

Issue of Equity

The joint offer for subscription (together with Hargreave Hale AIM VCT 1) closed on 25 September 2013 and resulted in funds being received for Hargreave Hale AIM VCT 2 of £2.74 million and the issue of 2.82 million shares.

New Joint Offer for Subscription of Ordinary Shares

The Directors of the Company announced on 1 November 2013 the launch of a new joint offer for subscription for new shares in both VCT’s to raise up to £10 million into each company. The Offer was approved by shareholders of the Company at a General Meeting on 31 October 2013 and is open to both new and existing shareholders.

Since its launch on 1 November 2013 the offer has resulted in funds being received of £4.28 million and the issue of 3.88 million shares. The Offer will close at 12pm on 31 October 2014 or earlier if the maximum subscription has been reached before then. Since the year end a further £1.97m has been received under the Offer, bringing the total raised to £6.25m.

VCT Status

To maintain its VCT qualifying status we must invest at least 70% of the net funds raised in any one accounting period in qualifying investments within three years. I am pleased to report that at the year-end we had achieved 88.97% and have satisfied all the relevant tests.

Cancellation of Share Premium and Capital Redemption Reserve

At the Annual General Meeting of the Company held on 8 July 2013, a special resolution was passed approving the cancellation of an amount standing to the credit of the Company's share premium account and capital redemption reserve, subject to the approval of the Court.

The Company is pleased to announce that, following the approval of the Court and the

subsequent registration of the Court order with the Registrar of Companies, the cancellation has now become effective. £7,813,065 and £24,923, previously held in the share premium account and capital redemption reserve respectively, has been transferred to the Company's special reserve account.

Outlook

Over the past 12 months we have enjoyed most favourable investment conditions. The UK economy has surprised many with its strong growth. Inflation and interest rates have been benign and Eurozone worries have abated – for the moment. Against this background the AIM market has done especially well stimulated by a number of Government initiatives such as their eligibility for inclusion in ISA funds and more recently their exemption from Stamp Duty.

Nonetheless there remain huge political and economic uncertainties both internationally and nearer to home. The next 12 months will see the Scottish Referendum and a General Election in the UK. Markets are likely to be nervous ahead of both these milestones because, in each case their outcome could significantly change the business environment. Against this backdrop we expect further, perhaps greater market volatility.

We feel in a good position to operate in these conditions. As of the end of February 2014, our larger fund was invested 88.97% in Qualifying companies (as defined under the HMRC rules) and yet the Non Qualifying portfolio accounted for 37.5% by value of the fund. For the immediate future we therefore have no great pressure to make any further Qualifying investments and at the same time we have ample potential liquidity should our view of the markets become more defensive.

David Hurst-Brown

Chairman

Date: 23 May 2014

For further information, please contact:

Stuart Brookes
Company Secretary
Hargreave Hale AIM VCT2 Plc
01253 754740


Annual Report and Accounts - Year ended 28 February 2014




Hargreave Hale AIM 2

Source: Hargreave Hale AIM 2


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Source: Business Wire (UK Regulatory)


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