The valuation of investments held by Albion Development VCT declined by 15 per cent over 2008, according to the company.

The valuation of investments held by Albion Development VCT declined by 15 per cent over 2008, according to the company.

Attributed to lower market valuation multiples and the continuing recession, the decline compares favourably with a 32.8 per cent fall in the FTSE All-Share Index over the same period, though it is due mainly to unrealised writedowns.

The sale of occupational health specialist Grosvenor Health for a capital profit of £3.5 million helped the VCT increase dividend payments to 12p per share over 2008, compared to 4.3p for the previous year. However, the total return for the year remains negative and chairman Geoffrey Vero has warned investors that only one dividend payment will be made in 2009.

Vero states, ‘Despite pressure on certain of our investee companies, the portfolio as a whole remains cash-generative and it remains our policy for investee companies to have no external bank borrowings.’

The VCT holds more than a quarter (27 per cent) of its assets in cash, a further 26 per cent in leisure businesses and pubs, 19 per cent in business services and 16 per cent in healthcare and health technology. Over the past year, its investments in the lesiure sector have suffered from falling property values and the decline in consumer spending, while returns on cash have been hit by lower interest rates.

Earlier this year, Albion Ventures’ managing director Patrick Reeve announced a buy-out of the business from its parent group Close Brothers.