Unicorn AIM VCT plc · thorough and detailed analysis Smaller dividend paying companies are attracting attention from institutional investors, as dividend growth from the UK’s largest

Unicorn AIM VCT plc

January 2015

Introduction to AIM

The Alternative Investment Market (AIM) is the world’s leading market for smaller, growing companies from across the globe. It offers companies from any sector the chance to go public at an earlier stage in their development

Since AIM’s inception in 1995, over 3,524 admissions have been completed and more than £87.77 billion raised, helping companies to fund future growth and expansion

AIM market (as at end June 2014):

Total number of companies: 1,104

UK companies: 882

Non-UK companies: 222 (57 countries)

What does an AIM quotation offer?

A flexible regulatory regime; access to a unique, globally respected market; access to a wide pool of capital; increased status and credibility; easier rules on acquisition

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Introduction to AIM

A large number of the +1,100 companies listed on AIM will be at an early development stage. However, there are also many mature, profitable and dividend paying companies

It is therefore important to be highly selective when picking AIM companies, conducting thorough and detailed analysis

Smaller dividend paying companies are attracting attention from institutional investors, as dividend growth from the UK’s largest companies becomes harder to find

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3 17

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136 127

179 208

139 145

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100

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Over1,000

500 -1,000

250 -500

100 -250

50 -100

25 -50

10 -25

5 - 102 - 50 - 2

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Market value range £m

Distribution of companies by equity market value

Why AIM Companies?

Smaller quoted companies offer the potential for high growth and can often deliver that growth regardless of economic conditions

Following the financial crisis and subsequent recession, many smaller companies now operate with no debt and often hold substantial cash balances, increasing their ability to grow dividends

Smaller companies are often under-researched which creates opportunities for experienced and specialised investment managers like Unicorn

AIM stocks are listed on an official exchange – valuations are therefore transparent, since share prices are marked to market on a daily basis

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Unicorn AIM VCT

Unicorn Asset Management

Independently owned and managed company established in 2000

Specialists in UK equity small cap and AIM markets

Experienced, committed, and well-resourced investment team with >100 years combined experience

Assets under management c.£850m*

Aims to generate consistent long term outperformance – be the “best” rather than the “biggest”

Market leading managers of Unicorn AIM VCT since 2001

* Source: Unicorn Asset Management, 31 December 2014

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Unicorn Investment Team

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Chris Hutchinson

Director Senior Fund Manager

Peter Walls

Fund Manager Paul Harwood

Non-Executive Director, Investment Committee

Chairman

Fraser Mackersie

Fund Manager Simon Moon

Fund Manager

Philip John

Director Finance & Operations

Max Ormiston Junior Fund Manager

Alex Game Junior Fund Manager

Unicorn Investment Philosophy

Team based, systematic investment process

Bottom-up fundamental stock selection - rigorously analysed in-house

UK only, equity only, long only

Small Cap, Mid Cap & AIM specialists

High conviction approach - benchmark agnostic

Investment style – long term, conservative, low risk approach

Private Equity approach - owner / managed business model

Investment Managers invest in the funds they manage

Consistent application of investment philosophy across all funds

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Unicorn AIM VCT – Investee Criteria

Profitability

Cash generation

Balance sheet strength

Leading positions in specialist but growing markets

International exposure

Track record of achieving market expectations

High levels of recurring revenue

Low levels of customer concentration

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Unicorn AIM VCT - Investment Objectives

Our objectives are simple & clear:

Short term – Capital Preservation

Medium term – Attractive & Sustainable Dividend Income

Long term – Capital Growth & Superior Total Returns

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VCT Performance – Dividend History

The VCT has declared dividends amounting to 26 pence per share over the last five financial years*

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* Source: Unicorn Asset Management, 30 Sep 2009 to 31 Dec 2014. Past performance is not a guide to future performance.

Financial Year Dividend Declared

Ending 30 Sep 2010 4p per share





The dividend distribution policy is designed to allow for gentle progressive, annual dividend payments, while ensuring the dividends remain sustainable over the longer term

VCT Performance – One Year to 31 December 2014

• Net assets c. £100m

• Net Asset Value as at 31 Dec 2014 = 144.6p (145.7p as at 31 Dec 2013)

• Positive NAV total return (+3.4% after adding back dividends paid*)

• Strong relative performance (FTSE AIM Index -16.5%, FTSE All Share Index +1.0% over same period*)

• Portfolio of investee companies performing robustly - few material disappointments - operating performance generally strong and trading conditions improving

• Revenue growth opportunities are emerging, which translates into improved confidence in earnings forecasts

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* Source: Financial Express / Unicorn Asset Management, Financial Express, 1 Jan 2014 to 31 Dec 2014. Past performance is not a guide to future performance

Unicorn AIM VCT - Current Portfolio

50 VCT qualifying investments representing c.75% of total assets

c.80% of these companies generate positive free cash flows

c.65% have net cash on balance sheet

c.90% are operating with net gearing of less than 25%

c.85% are forecast to deliver profit growth in their current financial year

c.60% have paid a dividend within the past 12 months

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Source: Unicorn Asset Management, 31 December 2014

VCT Top Ten Holdings

Source: Unicorn Asset Management, 31 December 2014

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Abcam Leading supplier of protein research tools to the life sciences research market 8.5%

Tracsis A provider of hardware, operational planning software & data capture services to the transportation sector

7.5%

Anpario Manufacturer of high performance natural feed additives 6.1%

Mattioli Woods One of the UK’s leading providers of pension consultancy & wealth management services 4.6%

Crawshaw Group Chain of Yorkshire based retail butchers 4.0%

Cohort A group of companies applying advanced technology in defence, security & related markets 3.1%

Animalcare Group A leading supplier of veterinary medicines 2.1%

WYG WYG, the global programme, project management and technical consultancy 2.1%

Unicorn Mastertrust Fund Fund of investment trusts 2.1%

IDOX A supplier of software solutions and services to the UK public and corporate sectors 2.0%

Total 42.1%

Investee Company Profiles - Abcam

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Company Profile:

Global supplier of protein research tools

Highly cash generative, debt free, dividend paying

Net cash of £56.9m

Significant overseas earnings (91%)

Leading position in niche market

Strong record of organic growth

Highly focused management team Latest Results (30 Jun 2014)

Forecast Results FY 2015

Sales (£m) 128.0 122.3

PBT (£m) 44.8 48.2

EPS (p) 18.2 19.5

P/E ratio 25.6x 23.9x

Share price 467p Market Cap £938m

Forecast Yield 8.3p (1.8%)

Source: Unicorn Asset Management and Alpha Terminal 5 January 2015

Anpario

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Company Profile:

Manufacture and marketing of natural feed additives for global agricultural markets

Cash generative and debt free

£4.8m net cash

Significant overseas earnings (76%)

Strengthening position in growing market

Strong & consistent organic growth

Latest Results (31 Dec 2013)


Sales (£m) 26.3 28.0

PBT (£m) 2.9 3.4

EPS (p) 13.3 13.6


Share price 290p

Market Cap £58m

Forecast Yield 4p (1.4%)


Crawshaw Group

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Company Profile:

Established retail butcher with a strong reputation

Cash generative, debt free, dividend paying

£10.1m net cash

Long standing, trusted relationships with suppliers

Varied product range with competitive pricing and loyal customer base

Growing number of consumers buying meat from local community butchers

Latest Results (31 Jan 2014)


Sales (£m) 21.0 25.2

PBT (£m) 1.0 1.4

EPS (p) 1.3 1.4


Share price 54p

Market Cap £43m Forecast Yield 0.3p (0.5%)


Tracsis

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Company Profile:

Resource optimisation software & hardware for the transport industry

Develops software, hardware and services that replace existing cumbersome, manual processes delivering cost savings in excess of 10%

Cash generative, debt free, dividend paying

Following success in UK Rail, Tracsis is moving into new geographies and sectors

Latest Results (31 Jun 2014)


Sales (£m) 22.4 23.6

PBT (£m) 5.0 5.5

EPS (p) 15.5 16.5


Share price 447p

Market Cap £118m

Forecast Yield 1p (0.2%)


Summary and Outlook

• Positive total return performance continues (+3.4% in year to 31 Dec 2014)

• Further growth potential as economic recovery gathers pace

• Management teams of investee companies increasingly optimistic

• Investee companies’ free cash-flows are improving & balance sheets strengthening

• Improved flow of attractive investment opportunities – c.£7.5m of capital committed to 7 new VCT qualifying investments in last calendar year

• Proven & selective approach to new investments to be maintained

• Substantial capital reserves to support future dividend payments

Unicorn AIM VCT named ‘Best VCT 2014’ by What Investment Magazine

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Highly rated by Independent Reviewers

Highest rated AIM focused VCT in Martin Churchill’s Tax Efficient Review (87 out of 100):

“With an established and diversified portfolio and a flexible structure, the Company now displays many of the characteristics of a smaller companies investment trust… The Unicorn AIM VCT benefits from scale, a mature well diversified portfolio and results lately have been good…. Our top rated AIM based VCT this tax year”

“Performance to date of the management team has been good, as is their record of making tax free dividends...the Company already has the potential to deliver capital growth and a tax free dividend stream from a developed portfolio of existing investments”

Highest 5* rating from Tilney Bestinvest

Strong rating from Allenbridge Tax Shelter Report

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Unicorn AIM VCT – Offer Details

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Offer Size £15m

Investment Objective To provide capital preservation together with attractive, sustainable dividend income and potential for long term capital growth

Minimum Investment £2,000

Maximum Investment None, but maximum amount for which an investor can claim tax relief is £200,000 per tax year

Initial Charge 2.5% (plus up to 3% IFA commission / facilitation fee)

AMC 2%

TER c. 2.3%

Offer Opened 17 September 2014

Offers Closes 1 April 2015 (for investment in 2014/15 tax year)

30 June 2015 (for investment in 2015/16 tax year if not fully subscribed beforehand)

Regulatory Notice

This document is an advertisement and not a prospectus. It has been issued by Unicorn Asset Management Limited and constitutes a financial promotion under Section 21 of the Financial Services and Markets Act 2000.

Any decision to invest in the Unicorn AIM VCT plc should be made solely by reference to the information, terms and conditions contained in the prospectus and application form.

This document should not be regarded as constituting advice in respect of legal, taxation, investment or any other matters. Prospective investors are advised to consult their bank manager, stockbroker, solicitor, accountant or independent financial adviser before considering any investment.

Please remember that the value of shares and the income derived from them can go down as well as up and you may not get back the full amount invested.

Issued by Unicorn Asset Management Limited, First Floor Office, Preacher’s Court, The Charterhouse, Charterhouse Square, London, EC1M 6AU.

Authorised and Regulated by the Financial Conduct Authority.

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Unicorn AIM VCT plc · thorough and detailed analysis Smaller dividend paying companies are attracting attention from institutional investors, as dividend growth from the UK’s largest