8 June 2026
HARGREAVE HALE AIM VCT PLC
(the "Company")
Interim Management Statement
H1 2026
Introduction
This interim management statement covers the first half of the 2025/26 financial year, 1 October 2025 to 31 March 2026. Investment performance measures contained in this report include realised and unrealised gains and losses and income.
Overview
The first half of financial year 2026 proved to be a highly eventful period. In keeping with recent times, the United States was a dominant factor in the news cycle as the administration applied pressure to anyone or anything opposed to its agenda. Those on the receiving end were as varied as hostile states, allies, institutions and even the BBC. Of the many interventions and threats, the attack on Iran by US and Israeli forces was by far the most profound and a significant escalation. The long-term impact remains highly uncertain and will depend on efforts to reach a mediated agreement that allows safe passage of ships in the Gulf region or attempts to re-open the Strait of Hormuz through force.
Whilst this might be a source of considerable concern for many observers, investors, companies and households, the administration’s unorthodox approach did not meaningfully weigh on the US economy, which bounced back from a weak final quarter of 2025 to report annualised growth of 2.0% in the first quarter of 2026. This relative resilience reflects the country’s energy self‑sufficiency and the comparatively limited role that exports and imports play in overall economic activity, along with the boost the economy is getting from investment into artificial intelligence and related infrastructure spend.
In contrast, the United Kingdom is more exposed to constraints in global energy markets. The delayed Autumn Budget heavily influenced business and consumer confidence throughout the period with confidence measures of both weakening into the budget. Households became increasingly cautious about employment prospects and the potential for higher taxes. Whilst the economy improved post budget, the war in the Middle East added to the pressure on business and consumer confidence.
UK GDP declined from 1.3% in the third quarter of 2025 (on an annualised basis) to 0.6% in the first quarter of 2026. The rate of growth is forecast to decline again in the second quarter and then flatline throughout the rest of 2026. Currently, the market is forecasting UK GDP growth of just 0.8% through 2026, significantly lower than prior expectations. For context, the Office for Budget Responsibility’s most recent forecast, published shortly after the outbreak of the war, was for growth of 1.1% in 2026.
Although the February reading for unemployment showed a slight improvement to 4.9%, it then returned to 5.0% in March. Unemployment is expected to remain above 5% for the rest of 2026, with risks of a more meaningful increase should global energy markets remain tight and force companies into corrective actions to offset higher input costs and/or reduced demand.
With uncertainty at home and disruption abroad, this translated into a challenging period for domestically focussed UK indices: weak into the budget, subsequently strong through to the end of February and then sharply lower in March. Highlighting the negative impact of event risk on UK indices, both the FTSE 250 and AIM All-Share had strong periods of performance, each returning approximately 8% in the three months between the 2025 Autumn Budget and the start of the war in the Middle East. To our frustration, this performance was subsequently lost during a period of significant volatility that followed the outbreak of hostilities. As a consequence, the AIM index(1) fell –6.0% over the six months to 31 March 2026. Subsequent performance has improved and the losses incurred in March were recovered by the end of May; however, market sentiment remains highly event driven.
Performance
In the six months to 31 March 2026, the unaudited NAV per share decreased from 36.46 pence per share to 30.62 pence. A final dividend for the financial year to 30 September 2025 of 1.00 pence and a special dividend of 2.00 pence were paid on 13 February 2026, giving a NAV total return to shareholders of -2.84 pence per share, which translates to a NAV total return to shareholders of -7.79%.
The qualifying investments returned -2.50 pence per share whilst the non-qualifying investments were unchanged over the period.
Qualifying Investments
Positive Contributors
Hardide (+342.9%, +£1.39m) delivered a series of very strong updates. In October, the company reported FY25 trading was slightly ahead of expectations. Brokers published initial guidance for FY26. This was followed by a sequence of contract wins that delivered four revenue and profit upgrades and resulted in FY26 revenue guidance increasing by 77% to £12.4m and EBITDA guidance increasing by 152% to £3.8m. In its March AGM statement, the company confirmed that revenues had grown by 61% to c.£4.5m in the six months to 31 March 2026, with EBITDA of c.£1.3m and operating margins of c.20%, driven by energy, aerospace and power generation contracts.
Tortilla Mexican Grill (+97.1%, +£0.85m) continued its recovery through H1 FY26 following confirmation of a resilient FY25 outcome, with group revenues up 8.5% to £73.8m and UK like‑for‑like sales growth of 6.2%, materially ahead of the wider casual dining market. The period also saw a comprehensive board and management refresh aimed at strengthening execution. Founder Brandon Stephens has been appointed as Group CEO and has begun implementing a detailed recovery plan.
Abingdon Health (+31.6%, +£0.71m) reported strong interim results with revenues +45% to £4.6m and an EBITDA loss of £1.7m. The company reported that it expects to be profitable and operating cash flow positive in the second half of the financial year. Subsequently, the company announced contract wins totaling £4.8m. FY26 and FY27 revenue forecasts were maintained at £12.2m and £15.1m respectively. In October 2025, the VCT participated in a £3.4m equity fundraise at 6p per share, materially extending cash runway and providing investment to support growth in the UK and USA.
Negative Contributors
Property Franchise Group (-28.0%, -£1.36m) shares declined during the period despite further strong results and upgraded guidance for FY26. FY25 results showed revenue growth of 25% to £84.3m, adjusted PBT growth of 39% to £31.0m and operating cash flow of £22.1m, supported by a high-quality revenue base with over 50% of revenues recurring. The de‑rating was driven by macro and UK housing policy concerns, with management reiterating confidence in further growth supported by scale, cash generation and an asset‑light model.
Beeks Financial Cloud (-29.2%, -£1.19m) underperformed as reported results reflected headwinds from contract timing effects and the transition towards revenue‑share Exchange Cloud contracts. Although annualised committed monthly recurring revenues increased 15% to £32.8m and the total contract value of new contracts rose 23% to £11.9m, revenues declined by 7.2% to £14.7m in the six months to December, with underlying EBITDA falling by 28.2% to £4.1m. The company maintained its FY26 forecasts, underpinned by expectations for a stronger second half.
Intercede (-56.6%, -£1.00m) issued a profit warning as US federal procurement delays negatively affected revenue phasing. The company’s year‑end update confirmed FY26 revenues of £17.2m, 9% below expectations and a decline of 2.8% year on year. With very high gross margins, the drop through to FY26 EBITDA was more pronounced with forecasts reduced by 18% to £3.8m. Subscription and support revenues continued to grow, representing 66% of total revenues, and cash ended modestly ahead of expectations at £20.0m. Post period end, the company subsequently announced $3.8m in new orders, helping to underpin expectations for FY27.
Non-Qualifying Investments
Within the non-qualifying portfolio, the IFSL Marlborough UK Micro-Cap Growth Fund and IFSL Marlborough Special Situations Fund declined by £0.15m over the period. The non-qualifying direct equity investments returned -£0.07m. Defence company Chemring pulled back following a very strong run in the defence sector and Trustpilot was impacted by a short-seller publishing a low-quality report which drove negative sentiment. Offsetting this, National Grid continued to perform well despite the uncertain geopolitical backdrop. The fixed income portfolio returned £0.27m.
Portfolio structure
The Company is comfortably above the HMRC defined investment test and ended the period at 93.91% invested, as measured by the HMRC venture capital trust ("VCT") investment test. By market value, the weighting to qualifying investments increased from 54.0% to 63.4%.
We were encouraged to see some activity returning to the market for initial public offerings (IPO) with two companies raising funds from AIM VCTs through an IPO on AIM in the six months under review. We were also encouraged to see early signals that the new increased value-based limits (gross assets, annual allowance and lifetime allowance) are likely to have a strong positive impact on our investable universe. Two large deals were agreed for completion once the new rules came into effect post period end.
Within the qualifying portfolio, we completed two new investments into AIM listed companies, Vulcan Two and KRM22 and two new investments into private companies, LabGenius and Xampla. We made follow-on investments into three AIM listed companies Abingdon Health, Fusion Antibodies and Eden Research. There was one disposal, a complete exit from Polarean Imaging.
By market value, the VCT had a reduced 10.5% (Sep 25: 15.7%) weighting to non-qualifying fixed income, an increased combined 11.3% (Sep 25: 10.9%) weighting to the IFSL Marlborough UK Micro-Cap Growth Fund and IFSL Marlborough Special Situations Fund and an increased 7.2% (Sep 25: 6.3%) weighting to non-qualifying direct equities. The VCT had a reduced 7.6%(2) weighting to cash (Sep 25: 12.2%(2)). The VCT sold its position in the VanEck Gold Miners ETF.
The HMRC VCT investment tests are set out in Chapter 3 of Part 6 Income Tax Act 2007, which should be read in conjunction with this interim management statement. Funds raised by VCTs are first included in the investment tests from the start of the accounting period containing the third anniversary of the date on which the funds were raised. Therefore, the allocation of qualifying investments as defined by the legislation can be different to the portfolio weighting as measured by market value relative to the net assets of the VCT.
Share Buy Backs & Discount
The Company acquired 7.5 million of its own shares in the quarter at an average price of 32.32 pence per share. The share price decreased from 34.40 to 29.90 pence per share and on 31 March 2026 traded at a discount of 2.35% to the last published NAV per share (as at 31 March 2026), published on 13 April 2026.
Post Period End
The Company’s unaudited NAV per share increased from 30.62 pence to 33.31 pence as at 29 May 2026, an increase of 8.8%. AIM(1) increased by 13.0% over the same period.
END
For further information please contact:
Oliver Bedford, Canaccord Asset Management
Tel: 020 7523 4837
LEI: 213800LRYA19A69SIT31
Notes
1: As measured by the Deutsche Numis Alternative Markets (excluding investment companies) Total Returns Index.
2: Net of prepayments and accruals.
