Amati AIM VCT AGM - held on 5 June 2020 at 2.00pm
Fund Manager Presentation & Portfolio Company Interviews
Amati Guildhall Creative Entrepreneurs' Award 2020
Amati AIM VCT plc (the "Company") - Voting Results of Annual General Meeting held on 5 June 2020 at 2.00pm
|Resolution||For & Discretionary||Against||Withheld|
|1.||To receive the Directors' Report and Financial Statements together with the Independent Auditor's Report||7,413,505||14,336||25,927|
|2.||To approve the Directors' Remuneration Policy||7,019,192||202,879||231,697|
|3.||To approve the Directors' Annual Report on Remuneration||6,958,198||230,176||265,394|
|4.||To re-appoint BDO LLP as auditor||7,176,647||96,173||180,948|
|5.||To authorise the directors to fix the remuneration of the auditor||7,351,466||37,254||65,048|
|6.||To re-elect Peter Lawrence as a director of the Company||7,208,127||84,006||161,635|
|7.||To re-elect Susannah Nicklin as a director of the Company||7,270,618||40,572||142,578|
|8.||To re-elect Julia Henderson as a director of the Company||7,244,983||66,794||141,991|
|9.||To re-elect Brian Scouler as a director of the Company||7,244,306||50,881||158,581|
|10.||To empower the directors to allot Ordinary Shares up to a maximum aggregate nominal value of £1,500,000||7,315,601||43,492||94,675|
|11.||To approve the continuation of the Company as a venture capital trust||7,410,955||32,501||10,312|
|12.||To renew the directors' authority to disapply pre-emption rights||7,110,641||264,156||78,971|
|13.||To authorise the directors to buy back shares||7,231,188||175,700||53,267|
Many thanks to those investors who wrote in with questions for our Fund Managers - please note their response below. Should there be any further questions that investors would like addressed concerning the Amati AIM VCT, please don't hesitate to contact us at email@example.com or call our investor line on 0131 503 9115.
Why have Amat AIM VCT not considered offering a virtual AGM?
The main reason for not hosting a virtual AGM is that the Articles of Association of the Company do not allow for a fully virtual meeting to be held. In order to have held one, the Articles of the Company would have to be changed which would in turn have required the approval of shareholders and involved a General Meeting. We hope to resume hosting of the AGM and Investor Event at The Guildhall School of Music & Drama next year.
Bearing in mind that liquidity on AIM has reduced by approximately 30% in the two years to 31/12/19, due to MiFID II, Woodford, etc. and most recent stock price movement have been driven by small volumes of retail trading, has this impacted your investment style and criteria and, if so, how?
The London Stock Exchange publishes detailed information on the volume of trading on AIM in their monthly factsheets. The May 2020 factsheet can be found here. This shows that the volume of trades on AIM by value was lower in 2019 than in was in the prior two years, but the drop was much less than 30% (14% lower than 2018, and 13% lower than 2017), but it was also higher than any year since the 2007, when AIM trading had seen a huge spike. So far in 2020 the value of trades on AIM has been running at record levels, around 10% ahead of 2018. So we don't see liquidity as representing a huge problem on AIM. The much publicised liquidity issues around the Woodford funds arose from holdings in private companies rather than those traded on AIM. MiFID II has changed many things, but we have not seen evidence that it has had a major impact on liquidity on AIM. It is true that small retail trades can sometimes have a big impact on stock price movements in less liquid AIM companies. However, these are not sustained if other investors believe that these price movements create opportunities.
I note that Learning Technologies is your biggest holding. Did you subscribe for the recent placing in the company? You might also like to comment on the reasons for the placing, because as a direct holder I thought the reasons given were dubious.
Amati AIM VCT was not able to take part in this placing as it did not meet the requirements of the VCT legislation for being a qualifying investment. This often happens when companies in which we have invested at an early stage become much larger. The company raised just over £80m as a "war chest" for future acquisitions. Whilst investors generally prefer companies to raise money for specific acquisitions, rather than unspecified future ones, the benefit of raising money like this in advance is that it puts the company in a strong negotiating position and enables them to move quickly if an opportunity arises. In the context of the company's strategy and successful history of growth by acquisition we were not unhappy about the company raising money in this way.
Do you anticipate that any of the portfolio companies will need to to raise additional equity either through a rights issue or a placing as a result of the COVID 19 crisis and if so have you already considered which portfolio companies you would be prepared to support?
We went through the process early on in the crisis of considering which of the portfolio companies we would be prepared to support further, and hence took part in fund raisings for six portfolio companies between March and May this year. Of the £11.3m of new qualifying investments made so far in this financial year, £9.3m was into companies already in the portfolio. In each of these fund raisings demand exceeded expectations and the companies raised more than they originally planned. This represents the bulk of the follow-on investments we anticipated. In general our portfolio companies are extremely well funded at this stage. (There is more discussion of recent qualifying investments in Paul Jourdan's video presentation.)
Do you have a feel at this stage how many companies (as a percentage of the portfolio) are likely to become insolvent before the economy returns to normal?
We are not expecting any of the companies in the portfolio (other than those held at zero value) to be become insolvent before the economy returns to whatever the new "normal" is, although ofcourse we may be mistaken about that. How much trading and wider economic damage is done by COVID-19 will depend very much on whether a second spike in cases emerges, and if so, how Governments respond to it.
Video Presentations & Portfolio Company Interviews are now available to view here