Interim Management Statement


 
TIDMUAVT 
 
Unicorn AIM VCT II plc 
 
Interim Management Statement 
 
For the period from 1 July 2009 to 31 October 2009 
 
Introduction 
 
The Company has prepared this Interim Management Statement (IMS) in accordance 
with the Disclosure and Transparency Rules of the UK Listing Authority. The IMS 
covers the four month period ended 31 October 2009, together with relevant 
information up to the date of publication. 
 
Investment Objective 
 
The objective of the Company is to provide Shareholders with an attractive 
return from a diversified portfolio of investments, predominantly in the shares 
of AIM quoted companies, by maximising the stream of dividend distributions to 
Shareholders from the income and capital gains generated by the portfolio. 
 
It is also the objective that the Company should continue to qualify as a 
Venture Capital Trust, so that Shareholders benefit from the taxation 
advantages that this brings. To achieve this at least 70% of the Company's 
total assets are to be invested in qualifying investments of which 30% by value 
must be in ordinary shares carrying no preferential rights to dividends or 
return of capital and no rights to redemption. 
 
Performance 
 
Equity markets continued to recover strongly in the period under review. In the 
four months to 31 October 2009 the FTSE AIM AllShare Index rose by 22.4%, 
whilst the FTSE AllShare Index ended the period up by 19.0%. 
 
The recovery has been predominantly driven by two specific factors. Firstly, 
there has been a significant recovery in commodity prices worldwide, which in 
turn has driven a strong rebound in the value of Industrial Metals, Mining & 
Resource stocks. Secondly, the level of refinancing activity has increased 
dramatically. In recent months, many of the UK's most financially distressed 
quoted companies have successfully strengthened their balance sheets through 
the issue of new equity at deeply discounted prices. 
 
In both cases this has led to substantial short term returns for those 
investors willing and able to invest in these higher risk assets. The Funds do 
not have direct exposure to these types of companies, partly because they do 
not typically qualify as VCT qualifying investments under HMRC rules and partly 
because they tend not to meet the Manager's investment criteria. 
 
Over the four months to 31 October 2009, the Net Asset Value of the Ordinary 
Share Fund increased by 8.4% (30 June 2009: 74.1p per share, 31 October 2009: 
80.3p per share), whilst the Net Asset Value of the C Share Fund rose by 5.5% 
(30 June 2009: 63.1p per share, 31 October 2009: 66.6p per share). 
 
Material Transactions 
 
There have been a number of material transactions in both the Ordinary and the 
C Share Funds during the period. 
 
The Ordinary and the C Share Funds completed VCT qualifying, secondary 
investments in Kiotech and Invu. The latter investment was made in the form of 
convertible loan stock with an attractive yield. 
 
The Ordinary Share Fund also made new non-qualifying investments in Augean, a 
provider of hazardous waste management services, Glisten, a manufacturer of 
confectionery and snack foods, and Supporta, a domiciliary care and outsourced 
services provider. The C Share Fund participated in the investment in 
Supporta.The total cost of new investments made in the period was GBP1m and GBP 
350,000 respectively. 
 
Holdings in Claimar Care, a domiciliary care provider, and Concateno, were 
realised after each company was acquired by a competitor. Claimar Care and 
Concateno were held in both the Ordinary and the C Share Fund. The Ordinary 
Share Fund also made partial disposal of holdings in Abcam and ACM Shipping. 
 
Capital realisations amounted to GBP1.3m in the Ordinary Share Fund and GBP455,000 
in the C Share Fund. 
 
Top 10 Equity Holdings at 31 October 2009 
 
          Ordinary Share Fund             Percentage of Fund 
 
Abcam                                           13.5% 
 
Cohort                                           5.6% 
 
Mattioli Woods                                   5.1% 
 
Unicorn UK Smaller Companies Fund                4.8% 
 
Pressure Technologies                            4.5% 
 
Animalcare Group                                 4.0% 
 
Brulines                                         3.7% 
 
SnackTime                                        3.6% 
 
Kiotech                                          3.4% 
 
Melorio                                          3.1% 
 
             C Share Fund                 Percentage of Fund 
 
Unicorn UK Income Fund                          10.3% 
 
Unicorn UK Smaller Companies Fund                8.6% 
 
Animalcare Group                                 5.5% 
 
Cohort                                           4.5% 
 
Kiotech                                          4.3% 
 
Snacktime                                        3.4% 
 
Melorio                                          3.3% 
 
Tracsis                                          2.8% 
 
Pressure Technologies                            2.6% 
 
IS Pharma                                        2.3% 
 
Material Events 
 
Other than described above, there were no material events during the period 
from 1 July 2009 to 31 October 2009. 
 
 
END
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