AI Terminal
OCTOPUS AIM VCT PLC
Interim / Quarterly Report • Nov 7, 2024
4774_ir_2024-11-07_b22b626e-32aa-4695-a618-2117f90cec38.pdf
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Unaudited half-yearly report for the six months ended 31 August 2024
Company number: 03477519
For UK investors only
Octopus AIM VCT plc (the 'Company') is a venture capital trust (VCT) which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominantly AIM-traded companies. The Company is managed by Octopus Investments Limited ('Octopus' or the 'Investment Manager').
Contents
| Financial summary and key dates | 1 |
|---|---|
| Interim management report • Chair's statement |
2 |
| • Investment Manager's review |
4 |
| Investment portfolio | 6 |
| Directors' responsibilities statement | 11 |
| Income statement | 12 |
| Balance sheet | 13 |
| Statement of changes in equity | 14 |
| Cash flow statement | 17 |
| Notes to the financial statements | 18 |
| About Octopus AIM VCT plc | 22 |
| Shareholder information and | |
| contact details | 23 |
| Directors and advisers | 24 |
| Glossary of terms | 25 |
Financial summary
| Six months to 31 August 2024 |
Six months to 31 August 2023 |
Year to 29 February 2024 |
|
|---|---|---|---|
| Net assets (£'000) | 117,750 | 120,131 | 129,109 |
| Profit/(Loss) after tax (£'000) | 2,521 | (15,972) | (17,734) |
| Net asset value (NAV) per share (p) | 57.2 | 67.2 | 63.3 |
| Total return (%)1 | 2.1 | (11.2) | (13.0) |
| Dividends per share paid in the period (p) | 7.4 | 2.5 | 5.0 |
| Special dividend declared (p) | – | – | 4.9 |
| Dividend declared (p)2 | 2.5 | 2.5 | 2.5 |
1 Total return is an alternative performance measure calculated as movement in NAV per share in the period plus dividends paid in the period, divided by the NAV per share at the beginning of the period.
2 The interim dividend of 2.5p will be paid on 10 January 2025 to those shareholders on the register on 20 December 2024.
Key dates
| Interim dividend payment date | 10 January 2025 |
|---|---|
| Annual results to 28 February 2025 | June 2025 |
| Interim results to 31 August 2025 | November 2025 |
Chair's statement
The six months to 31 August 2024 marked the beginning of a positive shift in market sentiment, albeit a gradual one. Some of the key drivers of this shift included better than expected UK GDP figures, a tempering of investor outflows and ongoing corporate activity as private equity funds continued to seek opportunities on public markets taking advantage of lower valuations. Furthermore, lower inflation figures paved the way for an interest rate cut in August, with further cuts anticipated by the end of the year. In summary, the more stable macroeconomic outlook provided a much needed and expected boost to UK capital markets in late Spring and early Summer. The more recent volatility due to uncertainty related to potential measures in the Labour Government's first Budget, and more specifically possible adjustments to Business Property Relief, have dampened any momentum in positive UK market sentiment, particularly for the AIM market. As a result, by the end of the period under review, the market had given back some of the gains made earlier in the year.
The Net Asset Value (NAV) of the VCT grew by 2.1% during the six-month period, after adding back the final dividend of 2.5p and special dividend of 4.9p. This growth lagged the AIM index which grew by 5.8%. It is encouraging to see the Company return to growth following a lengthy period of negative performance. Furthermore, we anticipate that more recent positive macroeconomic indicators, coupled with the prospect of further interest rate reductions, should benefit the operational performance of companies within your portfolio. Encouragingly, market commentators generally believe that the early signs of recovery evident in the late Spring and early Summer will re-emerge once the fog of uncertainty surrounding the new Government's first Budget clears.
Encouragingly, the number of IPOs and follow on fundraisings on AIM continued at a steady pace over the period. As a result, the Company made four qualifying investments at a total cost of £2.1 million, an increase on the £0.5 million invested in the corresponding period last year. Three of the qualifying investments made in the period were follow-on investments into existing holdings (Abingdon Health, Cambridge Cognition and PCI Pal). One new investment was made into GETECH Group plc, a world-leading locator of subsurface resources including critical metals vital for the world's energy transition.
Transactions with the Investment Manager
Details of amounts paid to the Investment Manager are disclosed in Note 8 to the half-yearly report.
Share buybacks
In the six months to 31 August 2024, the Company bought back 2,761,321 Ordinary shares for a total consideration of £1,663,000. It is evident from the conversations that the Investment Manager has that this facility remains an important consideration for investors. The Board remains committed to maintaining its policy of buying back shares at a discount of approximately 5.0% to the selling shareholder after costs.
Share issues
In this period 4,779,938 new shares were issued, 4,742,400 of these being issued through the Dividend Reinvestment Scheme (DRIS).
New share offer
Since the period end the Company has launched a new combined offer for subscription alongside Octopus AIM VCT 2 plc to raise up to £20 million with an over allotment of up to a further £10 million.
Dividends
On 15 August 2024, the Company paid a dividend of 2.5p and 4.9p per share, being the final and special dividend for the year ended 29 February 2024. For the period to 31 August 2024, the Board has declared an interim dividend of 2.5p. This will be paid on 10 January 2025 to shareholders on the register on 20 December 2024. It remains the Board's intention to maintain a minimum annual dividend payment of 5.0p per share or a 5% yield based on the prior year-end share price, whichever is the greater. This will usually be paid in two instalments during each year.
Board composition
As anticipated in my statement in the Annual Report and Accounts for the year ended 29 February 2024, Stephen Hazell-Smith, who had been a director of the Company since 1998, stepped down from the Board with effect from the Annual General Meeting held on 18 July 2024. I thank Stephen for his extensive contribution to the success of the Company since its inception. Louise Nash has joined the Board as a director with effect from 1 July 2024. Louise brings to the Board her deep experience as a former fund manager specialising in UK small and mid-cap companies.
Principal risks and uncertainties
The principal risks and uncertainties faced by the Company are set out in Note 7 to the half-yearly report on page 19.
Outlook
The UK's improving macroeconomic conditions and rising investor confidence following the recent Autumn Budget should create a more stable market environment in the short to medium term. The focus is now on the timing of further interest rate cuts and their anticipated boost to market certainty and sentiment over the next six months. If this materialises, we expect a re-rating of UK smaller company valuations and an increased appetite for risk, positively impacting the performance of UK smaller growth company shares, including those in your portfolio. Additionally, your VCT is invested in a widely diversified portfolio of companies, and the recent fundraising announcement means our Investment Manager is wellpositioned to invest in new opportunities as they arise.
Neal Ransome Chair 6 November 2024
Investment Manager's review
Overview
Following a prolonged period of market and economic uncertainty, investor sentiment in the six months to 31 August 2024 began on a more optimistic note. Improved UK macroeconomic data strengthened market commentators' belief that the threat of a recession had diminished, high inflation was less of a concern, and interest rates had reached their peak. With the UK economy returning to growth this year, driven primarily by improvements in the service and manufacturing sectors, rising consumer confidence, and a robust employment market, the backdrop for market recovery appeared stronger than it had been for a while. In August 2024, the Bank of England cut interest rates for the first time in four years and further boosted market confidence. More recently, since the end of the half year positive market sentiment has tempered. This was fuelled by uncertainty surrounding the future of Business Property Relief and its potential negative impact on AIM and UK capital markets, in the run-up to the new Labour Government's first Budget.
On a positive note, the growing stability of the UK macroeconomic environment has led to improved operational performance for many companies in your portfolio. Additionally, confidence in imminent further interest rate cuts has grown following the recent announcement that inflation is well below the Bank of England's target, now standing at 1.7%. However, the quantum of interest rate cuts this year remains unclear.
We continue to believe that UK equities remain significantly undervalued compared to global peers, despite the intermittent signs of market recovery this year. This is evident in the opportunistic corporate activity, particularly on AIM. Furthermore, the steady rise in IPOs and further fundraisings across UK capital markets this year had begun to renew interest and investment in UK equity markets that had not been seen for a while.
Performance
In the period under review, the NAV total return grew by 2.1% in the six months to 31 August 2024. This compares to a 5.8% rise in the AIM Index, a 19.4% increase of the FTSE Small Cap Index (ex-Investment Trusts) and a 12.6% rise in the FTSE All-Share Index, all on a total return basis. The FTSE All-Share and FTSE Small Cap Index (ex-Investment Trusts) outperformed, reflecting a higher weighting in larger companies (particularly tech companies) which are more liquid and began to see a re-rating this year due to the improved economic and market environment. Despite the improved performance of the larger indices during the period under review, there remains a relative lack of appetite for small growth stocks, which your portfolio is invested in. The UK market continues to experience outflows, with speculation over the Budget adding significant uncertainty to AIM. Potential investors were hesitant, awaiting the implications of the new Labour Government's planned tax changes. Now that this uncertainty has been resolved, we believe the attractive valuations of companies within our
universe will gradually draw investors back, leading to a rerating of smaller company shares over time.
There were several positive contributors to the Company's performance this half. Beeks Financial Cloud Group plc which has now secured contracts with three major global exchanges for its Exchange Cloud product and has a strong pipeline of opportunities with other significant exchanges. The company has also secured a Proximity Cloud contract win and was awarded preferred cloud computing and connectivity vendor status for one of the world's largest banking groups. Mattioli Woods plc was subject to a bid approach by Pollen Street Capital at a 34% premium to the last traded share price prior to the announcement. The bid was approved by shareholders and completed post the period end. This company contributed strongly over many years to the portfolio with this final price representing over six times the original book cost. We are always disappointed to see companies leave public markets, but this continued corporate activity is a clear demonstration of the wide discount that exists in UK equities, which corporates and private equity are taking advantage of. Breedon Group plc continued to perform strongly across its markets, with construction confidence indicators in the UK and Ireland on the rise. Excitingly, during the period, the company acquired US based BMC for \$300 million establishing a footprint in the US, offering new markets particularly in the Mid-West. GENinCode plc announced a NICE recommendation for its ROCA ovarian cancer test, as the preferred test for surveillance of ovarian cancer in high-risk individuals not undertaking surgery. GB Group plc performed well over the period, finishing the year strongly with operating profit and cash exceeding market expectations.
Among the detractors from performance over the period was Equipmake Holdings plc which reported disappointing results. The company achieved its revenue forecast but incurred significantly higher costs than expected to deliver on its contracted pipeline of orders. This weighed heavily on its share price, particularly as it had reduced market expectations earlier in the year. Verici Dx plc's share price declined over the period despite ongoing operational progress, including achieving a significant commercial milestone through its partnership with Thermo Fisher. In its half-year trading update, Learning Technologies Group plc highlighted that reduced corporate spend and hiring activity continued to plague large US customers, further exacerbated by unfavourable foreign exchange rates. Despite these headwinds, profitability remains stable and its focus on improved margins should bear fruit once the current macro headwinds subside.
Portfolio activity
In the first half of the year the Company made four qualifying investments totalling £2.1 million, up from £0.5 million in the same period the year before. Three of these were follow-on investments in existing holdings: £1.1 million in Abingdon Health plc, a diagnostic tests business, to support the development of the company's lab capacity, £0.2 million in PCI-Pal plc, a payments solutions and services business, to bolster its US expansion, and £0.5 million in Cambridge Cognition Holdings plc, a provider of digital solutions to assess brain health, to support the growth of its commercial strategy. We made a new investment of £0.3 million in existing AIM company GETECH Group plc, a world-leading locator of subsurface resources, including critical metals for the world's energy transition. The new money raised by GETECH Group plc will be used to fund business development and R&D.
We also invested £4.0 million into non-qualifying, main list stocks to increase our UK equity market exposure. We invested £0.6 million into GSK plc a multinational pharmaceutical and biotechnology company; £0.6 million into Wise plc a global payments solutions business; £0.5 million into JTC plc a global professional services business, £0.5 million into Bytes Technology Group plc an IT solutions and services business, £0.6 million into Ricardo plc a global strategic, environmental and engineering consultancy group, £0.6 million into Cranswick plc a leading UK food producers and £0.6 million into Bloomsbury Publishing plc a leading independent publisher.
We made a number of disposals in the period which resulted in a net overall loss of £2.7 million over book cost. These included the disposals of our entire holdings in Renalytix plc, LoopUp Group plc, Cordel Group plc, Cirata plc, Spectral AI and Eluceda as well as a partial disposal of Beeks Financial Cloud Group plc where we took profits.
During the interim period, £0.4 million was invested in the FP Octopus Future Generations Fund. The investments in FP Octopus Microcap and FP Octopus Multi Cap have positively impacted performance in the period. We anticipate these funds will continue to generate positive returns once stock markets stabilise and equity valuations recover.
Unquoted investments
The Company is able to make investments in unquoted companies intending to float. At 31 August 2024 8.7% (31 August 2023: 7.1% and 29 February 2024: 7.6%) of the Company's net assets were invested in unquoted companies. This uplift reflects an increase in the valuation of Hasgrove Limited, which continues to trade strongly.
Outlook
The improving macroeconomic conditions in the UK, provide a stronger foundation for continued market recovery. The recent Autumn Budget announcement reaffirmed the new government's commitment to a growth agenda. According to the Office of Budget Responsibility, the UK economy is projected to grow by just over 1% this year, rising to 2% by 2025, before stabilising at 1.5% thereafter. With the uncertainty surrounding the Budget now behind us, there is greater clarity regarding the direction of the new government's tax agenda in the short and medium term, which will enhance investor confidence. Additionally, the Chancellor has expressed strong support of VCT legislation, highlighting the importance of VCTs as a vital funding source for small growth companies and raising awareness of their impact within UK capital markets. This, coupled with the anticipated continuation of monetary easing measures this year, is expected to lead to a more vibrant IPO and further fundraising environment, which had already sparked optimism in UK markets earlier this year.
The portfolio's strength is that it is well diversified both in terms of sector exposure and of individual company concentration. At the period end it contained 85 holdings (31 August 2023: 87 holdings and 29 February 2024: 88 holdings) across a range of businesses with exposure to some exciting new technologies in the environmental and healthcare sectors. The Company currently has funds available for new investments as well as supporting those which are still on their journey to profitability. These are challenging times, but the balance of the portfolio towards profitable companies remains, and the Investment Manager is confident that there will continue to be sufficient opportunities to invest our funds in good companies seeking more growth capital at attractive valuations, which we expect will result in improved future returns.
The Octopus Quoted Companies team Octopus Investments 6 November 2024
Investment portfolio
| Portfolio company | Sector | Book cost as at 31 August 2024 £'000 |
Cumulative change in fair value £'000 |
Fair value as at 31 August 2024 £'000 |
Movement in period £'000 |
% equity held by Octopus AIM VCT plc |
% equity held by all funds managed by Octopus |
Fair value as a % of Octopus AIM VCT's NAV |
|---|---|---|---|---|---|---|---|---|
| Breedon Group plc | Construction and Materials |
859 | 5,137 | 5,996 | 723 | 0.42% | 0.69% | 5.09% |
| Judges Scientific plc | Electronic and Electrical Equipment |
256 | 3,860 | 4,116 | (123) | 0.62% | 1.03% | 3.50% |
| Learning Technologies Group plc |
Software and Computer Services |
1,051 | 2,154 | 3,205 | (631) | 0.59% | 8.47% | 2.72% |
| Mattioli Woods plc | Investment Banking and Brokerage Services |
529 | 2,631 | 3,160 | 942 | 0.74% | 1.18% | 2.68% |
| Brooks Macdonald Group plc |
Investment Banking and Brokerage Services |
746 | 2,334 | 3,080 | 498 | 0.94% | 14.80% | 2.62% |
| Craneware plc | Health Care Providers | 183 | 2,784 | 2,967 | 69 | 0.39% | 4.94% | 2.52% |
| GB Group plc | Software and Computer Services |
505 | 2,339 | 2,844 | 506 | 0.33% | 6.83% | 2.42% |
| Idox plc | Software and Computer Services |
353 | 2,462 | 2,815 | (141) | 1.02% | 11.57% | 2.39% |
| Netcall plc | Software and Computer Services |
308 | 2,357 | 2,665 | (118) | 1.80% | 3.36% | 2.26% |
| Intelligent Ultrasound Group plc |
Medical Equipment and Services |
2,156 | 49 | 2,205 | 376 | 6.58% | 10.96% | 1.87% |
| Beeks Financial Cloud Group plc |
Software and Computer Services |
435 | 1,765 | 2,200 | 771 | 1.30% | 2.17% | 1.87% |
| PCI-Pal plc | Software and Computer Services |
1,294 | 638 | 1,932 | 307 | 4.68% | 8.70% | 1.64% |
| Vertu Motors plc | Retailers | 1,265 | 637 | 1,902 | 147 | 0.80% | 1.81% | 1.62% |
| Next Fifteen Communications Group plc |
Media | 453 | 1,394 | 1,847 | (113) | 0.22% | 11.41% | 1.57% |
| Diaceutics plc | Health Care Providers | 930 | 660 | 1,590 | 428 | 1.44% | 2.76% | 1.35% |
| MaxCyte Inc. | Pharmaceuticals, Biotechnology |
1,035 | 496 | 1,531 | (222) | 0.47% | 1.23% | 1.30% |
| Animalcare Group plc | Pharmaceuticals, Biotechnology |
306 | 1,169 | 1,475 | 297 | 0.91% | 2.36% | 1.25% |
| SDI Group plc | Electronic and Electrical Equipment |
179 | 1,227 | 1,406 | (179) | 2.13% | 3.56% | 1.19% |
| GENinCode plc | Medical Equipment and Services |
2,001 | (782) | 1,219 | 506 | 10.60% | 17.66% | 1.04% |
| Equipmake Holdings plc | Electronic and Electrical Equipment |
2,121 | (920) | 1,201 | (1,682) | 4.71% | 7.93% | 1.02% |
| Pulsar Group plc | Software and Computer Services |
678 | 499 | 1,177 | 302 | 1.25% | 2.13% | 1.00% |
| EKF Diagnostics Holdings plc |
Medical Equipment and Services |
767 | 404 | 1,171 | (4) | 0.96% | 2.31% | 0.99% |
| Sosandar plc | Retailers | 1,853 | (706) | 1,147 | (302) | 4.86% | 11.37% | 0.97% |
| Abingdon Health plc | Medical Equipment and Services |
1,615 | (497) | 1,118 | (17) | 6.08% | 10.13% | 0.95% |
| Gamma Communications plc |
Telecommunications Service Providers |
274 | 823 | 1,097 | 213 | 0.07% | 6.90% | 0.93% |
| Portfolio company | Book cost as at |
Cumulative | Fair value as at |
% equity held by |
% equity held by |
Fair value as a % of |
||
|---|---|---|---|---|---|---|---|---|
| Sector | 31 August 2024 £'000 |
change in fair value £'000 |
31 August 2024 £'000 |
Movement in period £'000 |
Octopus AIM VCT plc |
all funds managed by Octopus |
Octopus AIM VCT's NAV |
|
| Nexteq plc | Technology Hardware and Equipment |
507 | 573 | 1,080 | (408) | 1.71% | 2.86% | 0.92% |
| Eden Research plc | Chemicals | 1,620 | (623) | 997 | (374) | 4.67% | 7.79% | 0.85% |
| Cambridge Cognition Holdings plc |
Health Care Providers | 1,075 | (175) | 900 | (13) | 4.88% | 9.03% | 0.76% |
| Itaconix plc | Industrial Support Services |
1,588 | (704) | 884 | (174) | 4.62% | 10.73% | 0.75% |
| Verici Dx plc | Pharmaceuticals, Biotechnology |
1,551 | (715) | 836 | (643) | 5.30% | 8.92% | 0.71% |
| Haydale Graphene Industries plc |
Industrial Materials | 1,857 | (1,100) | 757 | (353) | 14.02% | 23.37% | 0.64% |
| Gear4music Holdings plc | Leisure Goods | 529 | 213 | 742 | 209 | 1.81% | 3.02% | 0.63% |
| Cranswick plc | Travel and Leisure | 606 | 44 | 650 | 44 | 0.02% | 0.06% | 0.55% |
| Oberon Investments Group plc |
Investment Banking and Brokerage Services |
864 | (220) | 644 | 184 | 2.68% | 8.34% | 0.55% |
| Bloomsbury Publishing plc | Media | 629 | 14 | 643 | 14 | 0.11% | 0.92% | 0.55% |
| GSK plc | Pharmaceuticals, Biotechnology |
603 | 23 | 626 | 24 | 0.00% | 0.00% | 0.53% |
| Ricardo plc | Construction and Materials |
602 | 4 | 606 | 4 | 0.20% | 2.30% | 0.51% |
| Wise plc | Industrial Support Services |
606 | (4) | 602 | (3) | 0.01% | 0.02% | 0.51% |
| JTC plc | Investment Banking and Brokerage Services |
529 | 68 | 597 | 67 | 0.03% | 0.49% | 0.51% |
| TPXimpact Holdings plc | Software and Computer Services |
979 | (410) | 569 | 93 | 1.44% | 2.39% | 0.48% |
| Feedback plc | Medical Equipment and Services |
1,500 | (956) | 544 | (212) | 7.55% | 12.59% | 0.46% |
| Restore plc | Industrial Support Services |
256 | 283 | 539 | 97 | 0.14% | 12.89% | 0.46% |
| DP Poland plc | Travel and Leisure | 1,016 | (519) | 497 | 47 | 0.51% | 0.86% | 0.42% |
| Ilika plc | Electronic and Electrical Equipment |
1,058 | (573) | 485 | (274) | 1.26% | 2.10% | 0.41% |
| Gooch & Housego plc | Technology Hardware and Equipment |
422 | 51 | 473 | (4) | 0.40% | 11.47% | 0.40% |
| Mears Group plc | Industrial Support Services |
139 | 327 | 466 | 34 | 0.13% | 0.26% | 0.40% |
| Advanced Medical Solutions Group plc |
Medical Equipment and Services |
284 | 155 | 439 | 72 | 0.08% | 13.17% | 0.37% |
| RWS Holdings plc | Industrial Support Services |
143 | 292 | 435 | (68) | 0.07% | 5.59% | 0.37% |
| Bytes Technology Group plc |
Software and Computer Services |
489 | (69) | 420 | (69) | 0.04% | 0.09% | 0.36% |
| Tan Delta Systems plc | Electronic and Electrical Equipment |
453 | (35) | 418 | 122 | 2.38% | 3.97% | 0.35% |
| MyCelx Technologies Corporation |
Oil, Gas and Coal | 1,470 | (1,055) | 415 | 90 | 3.35% | 23.55% | 0.35% |
Investment portfolio continued
| Portfolio company | Sector | Book cost as at 31 August 2024 £'000 |
Cumulative change in fair value £'000 |
Fair value as at 31 August 2024 £'000 |
Movement in period £'000 |
% equity held by Octopus AIM VCT plc |
% equity held by all funds managed by Octopus |
Fair value as a % of Octopus AIM VCT's NAV |
|---|---|---|---|---|---|---|---|---|
| GETECH Group plc | Oil, Gas and Coal | 300 | 90 | 390 | 90 | 9.84% | 16.40% | 0.33% |
| Velocity Composites plc | Aerospace and Defense |
799 | (413) | 386 | 94 | 1.76% | 2.93% | 0.33% |
| Creo Medical Group plc | Medical Equipment and Services |
1,471 | (1,136) | 335 | (12) | 0.33% | 1.56% | 0.28% |
| Ixico plc | Pharmaceuticals, Biotechnology |
1,046 | (729) | 317 | – | 7.72% | 12.87% | 0.27% |
| Rosslyn Data Technologies plc |
Software and Computer Services |
969 | (666) | 303 | (70) | 13.20% | 22.01% | 0.26% |
| Crimson Tide plc | Software and Computer Services |
567 | (312) | 255 | (19) | 2.87% | 4.79% | 0.22% |
| Northcoders Group plc | Software and Computer Services |
380 | (127) | 253 | 70 | 1.58% | 2.63% | 0.21% |
| KRM22 plc | Closed End Investments |
681 | (463) | 218 | 34 | 1.91% | 3.18% | 0.19% |
| Libertine Holdings plc | Industrial Engineering | 3,000 | (2,805) | 195 | (405) | 10.77% | 17.96% | 0.17% |
| Gelion plc | Electronic and Electrical Equipment |
1,140 | (959) | 181 | 39 | 0.58% | 0.96% | 0.15% |
| LungLife AI Inc. | Pharmaceuticals, Biotechnology |
2,079 | (1,931) | 148 | (325) | 3.85% | 6.42% | 0.13% |
| Staffline Group plc | Industrial Support Services |
334 | (208) | 126 | 24 | 0.26% | 0.26% | 0.11% |
| ENGAGE XR Holdings plc | Software and Computer Services |
1,879 | (1,756) | 123 | (216) | 2.94% | 11.56% | 0.10% |
| Strip Tinning Holdings plc | Electronic and Electrical Equipment |
506 | (397) | 109 | 14 | 1.50% | 2.50% | 0.09% |
| XP Factory plc | Travel and Leisure | 988 | (893) | 95 | (15) | 0.42% | 0.70% | 0.08% |
| TheraCryf plc | Pharmaceuticals, Biotechnology |
1,050 | (965) | 85 | (33) | 3.07% | 5.12% | 0.07% |
| Enteq technologies plc | Oil, Gas and Coal | 1,032 | (965) | 67 | (31) | 1.44% | 2.40% | 0.06% |
| 1Spatial plc | Software and Computer Services |
300 | (238) | 62 | 6 | 0.08% | 3.61% | 0.05% |
| DXS International plc | Medical Equipment and Services |
300 | (255) | 45 | – | 5.86% | 9.76% | 0.04% |
| Fusion Antibodies plc | Health Care Providers | 746 | (719) | 27 | (6) | 0.93% | 1.56% | 0.02% |
| Tasty plc | Travel and Leisure | 516 | (500) | 16 | 5 | 0.62% | 1.19% | 0.01% |
| Genedrive Plc | Pharmaceuticals, Biotechnology |
217 | (211) | 6 | (7) | 0.05% | 0.08% | 0.01% |
| Microsaic Systems plc | Electronic and Electrical Equipment |
1,384 | (1,384) | – | – | 0.02% | 0.04% | 0.00% |
| Sorted Group Holdings Plc | Software and Computer Services |
763 | (763) | – | – | 0.01% | 0.01% | 0.00% |
| Cloudified Holdings Limited |
Software and Computer Services |
900 | (900) | – | (20) | 5.70% | 9.50% | 0.00% |
| ReNeuron Group plc | Pharmaceuticals, Biotechnology |
1,485 | (1,485) | – | – | 3.03% | 5.06% | 0.00% |
| Portfolio company | Sector | Book cost as at 31 August 2024 £'000 |
Cumulative change in fair value £'000 |
Fair value as at 31 August 2024 £'000 |
Movement in period £'000 |
% equity held by Octopus AIM VCT plc |
% equity held by all funds managed by Octopus |
Fair value as a % of Octopus AIM VCT's NAV |
|---|---|---|---|---|---|---|---|---|
| The British Honey Company plc |
General Retailers | 1,321 | (1,321) | – | – | 7.12% | 11.86% | 0.00% |
| Trackwise Designs Plc | Electronic and Electrical Equipment |
1,934 | (1,934) | – | – | 0.42% | 0.70% | 0.00% |
| Total quoted investments | 71,614 | 3,458 | 75,072 | 276 | 63.76% | |||
| Unquoted investments | ||||||||
| Hasgrove Limited | 88 | 6,651 | 6,739 | 490 | 2.84% | 17.07% | 5.72% | |
| Popsa Holdings Limited | 1,590 | 1,573 | 3,163 | (53) | 6.23% | 10.39% | 2.69% | |
| Alusid Limited | 300 | – | 300 | – | 3.14% | 5.23% | 0.25% | |
| Airnow plc | 1,257 | (1,257) | – | – | 0.41% | 0.73% | 0.00% | |
| Rated People Ltd | 354 | (354) | – | – | 0.11% | 0.32% | 0.00% | |
| The Food Marketplace Ltd | 300 | (300) | – | – | 6.60% | 10.99% | 0.00% | |
| Total unquoted investments | 3,889 | 6,313 | 10,202 | 437 | 8.66% | |||
| Loan note investments | ||||||||
| Strip Tinning Holdings plc | Electronic and Electrical Equipment |
900 | – | 900 | – | N/A | N/A | 0.76% |
| Rosslyn Data Technologies | Software and Computer Services |
180 | – | 180 | – | N/A | N/A | 0.15% |
| Total loan notes | 1,080 | – | 1,080 | – | 0.92% | |||
| Current asset investments | ||||||||
| FP Octopus UK Micro Cap Growth Fund |
7,518 | 1,670 | 9,188 | 1,015 | N/A | N/A | 7.80% | |
| FP Octopus UK Multi Cap Income Fund |
4,051 | 999 | 5,050 | 664 | N/A | N/A | 4.29% | |
| FP Octopus UK Future Generations Fund |
1,878 | 39 | 1,917 | 172 | N/A | N/A | 1.63% | |
| Total current asset investments | 13,447 | 2,708 | 16,155 | 1,851 | 13.72% | |||
| Total fixed and current asset investments | 102,509 | 87.06% | ||||||
| Money market funds | 13,267 | 11.27% | ||||||
| Cash at bank | 2,389 | 2.03% | ||||||
| Debtors less creditors | (415) | (0.36%) | ||||||
| Total net assets | 117,750 | 100.00% |
Investment portfolio continued
Sector analysis
The graph below shows the top ten sectors the equity portfolio was invested in by value as at 31 August 2024. It also shows the sectors of the AIM Market as a whole as at 31 August 2024.
The graph below shows the top ten sectors the equity portfolio was invested in by value as at 31 August 2023. It also shows the sectors of the AIM Market as a whole as at 31 August 2023:
1 Other includes Technology, Industrial Engineering, Alternative Energy, Media, Telecommunications, Leisure Goods, Travel and Leisure, Oil, Coal and Gas, Closed End Investments, Aerospace and Defence, Industrial Materials and Automobiles and Parts.
Directors' responsibilities statement
We confirm that to the best of our knowledge:
- the half–yearly financial statements have been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting' issued by the Financial Reporting Council;
- the half–yearly financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company;
- the half–yearly report includes a fair review of the information required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, being:
- we have disclosed an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
- we have disclosed a description of the principal risks and uncertainties for the remaining six months of the year; and
- we have disclosed a description of related party transactions that have taken place in the first six months of the current financial year that may have materially affected the financial position or performance of the Company during that period and any changes in the related party transactions described in the last annual report that could do so.
By Order of the Board
Neal Ransome Chair 6 November 2024
Income statement
| Unaudited Six months to 31 August 2024 |
Unaudited Six months to 31 August 2023 |
Audited Year to 29 February 2024 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| (Loss)/gain on disposal of fixed asset investments |
– | (41) | (41) | – | 139 | 139 | – | 813 | 813 |
| Loss on disposal of current asset investments |
– | – | – | – | (52) | (52) | – | (246) | (246) |
| Gain/(loss) on valuation of fixed asset investments |
– | 713 | 713 | – | (13,719) | (13,719) | – | (16,322) | (16,322) |
| Gain/(loss) on valuation of current asset investments |
– | 1,851 | 1,851 | – | (1,794) | (1,794) | – | (1,137) | (1,137) |
| Investment income | 1,370 | – | 1,370 | 920 | – | 920 | 2,060 | – | 2,060 |
| Investment management fees | (270) | (810) | (1,080) | (304) | (912) | (1,216) | (555) | (1,666) | (2,221) |
| Other expenses | (292) | – | (292) | (250) | – | (250) | (681) | – | (681) |
| Profit/(loss) before tax | 808 | 1,713 | 2,521 | 366 | (16,338) | (15,972) | 824 | (18,558) | (17,734) |
| Tax | – | – | – | – | – | – | – | – | – |
| Profit/(loss) after tax | 808 | 1,713 | 2,521 | 366 | (16,338) | (15,972) | 824 | (18,558) | (17,734) |
| Earnings per share – basic and diluted |
0.4p | 0.8p | 1.2p | 0.2p | (9.1p) | (8.9p) | 0.4p | (10.0p) | (9.6p) |
• The 'Total' column of this statement represents the statutory Income Statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AIC Statement of Recommended Practice.
• All revenue and capital items in the above statement derive from continuing operations.
• The Company has no recognised gains or losses other than those disclosed in the Income Statement.
• The Company has no other comprehensive income for the period.
• The accompanying notes are an integral part of the half-year report.
Balance sheet
| Unaudited As at 31 August 2024 |
Unaudited As at 31 August 2023 |
Audited As at 29 February 2024 |
||||
|---|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Fixed asset investments | 86,354 | 87,322 | 80,350 | |||
| Current assets: | ||||||
| Investments | 16,155 | 14,873 | 13,897 | |||
| Money market funds | 13,267 | 16,485 | 33,641 | |||
| Debtors | 266 | 282 | 666 | |||
| Cash at bank | 2,389 | 1,921 | 1,276 | |||
| Applications cash1 | 5 | 4 | 4 | |||
| 32,082 | 33,565 | 49,484 | ||||
| Creditors: amounts falling due within one year |
(686) | (756) | (725) | |||
| Net current assets | 31,396 | 32,809 | 48,759 | |||
| Total assets less current liabilities | 117,750 | 120,131 | 129,109 | |||
| Called-up equity share capital | 2,058 | 1,789 | 2,038 | |||
| Share premium | 20,707 | 19,807 | 18,041 | |||
| Capital redemption reserve | 369 | 301 | 341 | |||
| Special distributable reserve | 107,619 | 112,000 | 124,213 | |||
| Capital reserve realised | (28,174) | (24,586) | (24,622) | |||
| Capital reserve unrealised | 15,735 | 12,650 | 10,470 | |||
| Revenue reserve | (564) | (1,830) | (1,372) | |||
| Total equity shareholders' funds | 117,750 | 120,131 | 129,109 | |||
| NAV per share – basic and diluted | 57.2p | 67.2p | 63.3p |
1 Cash held but not yet allotted
The statements were approved by the Directors and authorised for issue on 6 November 2024 and are signed on their behalf by:
Neal Ransome Chair Company No: 03477519
Statement of changes in equity
| Share capital £'000 |
Share premium £'000 |
Capital redemption reserve £'000 |
Special distributable reserves1 £'000 |
Capital reserve realised1 £'000 |
Capital reserve unrealised £'000 |
Revenue reserve1 £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|---|
| As at 1 March 2024 | 2,038 | 18,041 | 341 | 124,213 | (24,622) | 10,470 | (1,372) | 129,109 |
| Total comprehensive profit for the period |
– | – | – | – | (851) | 2,564 | 808 | 2,521 |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares |
(28) | – | 28 | (1,663) | – | – | – | (1,663) |
| Issue of shares | 48 | 2,666 | – | – | – | – | – | 2,714 |
| Share issue costs | – | – | – | – | – | – | – | – |
| Dividends paid | – | – | – | (14,931) | – | – | – | (14,931) |
| Total contributions by and distributions to owners |
20 | 2,666 | 28 | (16,594) | – | – | – | (13,880) |
| Other movements: | ||||||||
| Cancellation of share premium |
– | – | – | – | – | – | – | – |
| Prior years' holding losses now realised |
– | – | – | – | (2,701) | 2,701 | – | – |
| Total other movements | – | – | – | – | (2,701) | 2,701 | – | – |
| As at 31 August 2024 | 2,058 | 20,707 | 369 | 107,619 | (28,174) | 15,735 | (564) | 117,750 |
1 The sum of these reserves is an amount of £78,881,000 (31 August 2023: £85,584,000 and 29 February 2024: £98,219,000) which is considered distributable to shareholders.
| Share capital £'000 |
Share premium £'000 |
Capital reserve £'000 |
Special distributable reserves1 £'000 |
Capital reserve realised1 £'000 |
Capital reserve unrealised £'000 |
Revenue reserve1 £'000 |
Total £'000 |
|---|---|---|---|---|---|---|---|
| 1,798 | 18,924 | 279 | 118,015 | (23,143) | 27,545 | (2,196) | 141,222 |
| – | – | – | (825) | (15,513) | 366 | (15,972) | |
| – | (1,564) | – | – | – | (1,564) | ||
| 13 | 883 | – | – | – | – | 896 | |
| – | – | – | – | – | – | – | |
| – | – | (4,451) | – | – | – | (4,451) | |
| 883 | 22 | (6,015) | – | – | – | (5,119) | |
| – | – | – | – | – | – | – | – |
| – | – | – | (618) | 618 | – | – | |
| – | – | – | (618) | 618 | – | – | |
| 1,789 | 19,807 | 112,000 | (24,586) | 12,650 | (1,830) | 120,131 | |
| Contributions by and distributions to owners: (22) (9) |
redemption – 22 – – – – – 301 |
1 The sum of these reserves is an amount of £85,584,000 which is considered distributable to shareholders.
Statement of changes in equity continued
| Share capital £'000 |
Share premium £'000 |
Capital redemption reserve £'000 |
Special distributable reserves1 £'000 |
Capital reserve realised1 £'000 |
Capital reserve unrealised £'000 |
Revenue reserve1 £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|---|
| As at 1 March 2023 | 1,798 | 18,924 | 279 | 118,015 | (23,143) | 27,545 | (2,196) | 141,222 |
| Comprehensive income for the year: | ||||||||
| Management fee allocated as capital expenditure |
– | – | – | – | (1,666) | – | – | (1,666) |
| Current year gains on disposal |
– | – | – | – | 571 | – | – | 571 |
| Current period gains on fair value of investments |
– | – | – | – | – | (17,459) | – | (17,459) |
| Capital investment income | – | – | – | – | – | – | – | – |
| Profit after tax | – | – | – | – | – | – | 824 | 824 |
| Total comprehensive loss for the year |
– | – | – | – | (1,095) | (17,459) | 824 | (17,730) |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares |
(62) | – | 62 | (4,083) | – | – | – | (4,083) |
| Issue of shares | 302 | 20,082 | – | – | – | – | – | 20,384 |
| Share issue costs | – | (1,158) | – | – | – | – | – | (1,158) |
| Dividends paid | – | – | – | (9,526) | – | – | – | (9,526) |
| Total contributions by and distributions to owners |
240 | 18,924 | 62 | (13,609) | – | – | – | 5,617 |
| Other movements: | ||||||||
| Cancellation of share premium |
– | (19,807) | – | 19,807 | – | – | – | – |
| Prior years' holding gains now realised |
– | – | – | – | 2,871 | (2,871) | – | – |
| Transfer in reserves | – | – | – | – | (3,255) | 3,255 | – | – |
| Total other movements | – | (19,807) | – | 19,807 | (384) | 384 | – | – |
| Balance as at 29 February 2024 |
2,038 | 18,041 | 341 | 124,213 | (24,622) | 10,470 | (1,372) | 129,109 |
1 The sum of these reserves is an amount of £98,219,000 which is considered distributable to shareholders.
Cash flow statement
| Unaudited six months to 31 August 2024 £'000 |
Unaudited six months to 31 August 2023 £'000 |
Audited year to 29 February 2024 £'000 |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit/(loss) before tax | 2,521 | (15,972) | (17,734) |
| Adjustments for: | |||
| Decrease in debtors | 400 | 72 | 131 |
| (Decrease) in creditors | (39) | (105) | (134) |
| Loss/(gain) on disposal of fixed assets | 41 | (139) | (813) |
| Loss on disposal of current assets | – | 52 | 246 |
| (Gain)/loss on valuation of fixed asset investments | (713) | 13,719 | 16,322 |
| (Gain)/loss on valuation of current asset investments | (1,851) | 1,794 | 1,137 |
| Net cash generated by/(used) in operating activities | 359 | (579) | (845) |
| Cash flows from investing activities | |||
| Purchase of fixed asset investments | (6,129) | (453) | (7,149) |
| Purchase of current asset investments | (408) | (1,259) | (1,080) |
| Proceeds from sale of fixed asset investments | 797 | 2,218 | 13,517 |
| Proceeds from sale of current asset investments | – | 728 | 1,988 |
| Net cash (used in)/generated by investing activities | (5,740) | 1,234 | 7,276 |
| Cash flows from financing activities | |||
| Movement in applications account | 1 | 1 | (1) |
| Purchase of own shares | (1,663) | (1,564) | (4,083) |
| Proceeds from share issues | 24 | 28 | 18,558 |
| Share issues costs | – | – | (1,157) |
| Dividends paid (net of DRIS) | (12,241) | (3,583) | (7,700) |
| Net cash (used in)/generated by financing activities | (13,879) | (5,118) | 5,617 |
| (Decrease)/increase in cash and cash equivalents | (19,260) | (4,463) | 12,048 |
| Opening cash and cash equivalents | 34,921 | 22,873 | 22,873 |
| Closing cash and cash equivalents | 15,661 | 18,410 | 34,921 |
| Cash and cash equivalents comprise | |||
| Cash at bank | 2,389 | 1,921 | 1,276 |
| Applications cash | 5 | 4 | 4 |
| Money market funds | 13,267 | 16,485 | 33,641 |
| Total cash and cash equivalents | 15,661 | 18,410 | 34,921 |
Notes to the financial statements
1. Basis of preparation
The unaudited financial statements which covers the six months to 31 August 2024 has been prepared in accordance with the Financial Reporting Council's (FRC) Financial Reporting Standard 104 'Interim Financial Reporting' (September 2024) and the Statement of Recommended Practice (SORP) for Investment Companies re–issued by the Association of Investment Companies in July 2022.
The principal accounting policies have remained unchanged from those set out in the Company's 2024 Annual Report and Accounts.
2. Publication of non–statutory accounts
The unaudited financial statements for the six months ended 31 August 2024 does not constitute statutory accounts within the meaning of Section 415 of the Companies Act 2006 and has not been delivered to the Registrar of Companies. The comparative figures for the year ended 29 February 2024 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The independent auditor's report on those financial statements, in accordance with chapter 3, part 16 of the Companies Act 2006, was unqualified. This half-yearly report has not been reviewed by the Company's auditor.
3. Earnings per share
The earnings per share is calculated on the basis of 202,899,157 Ordinary shares (31 August 2023: 178,768,443 and 29 February 2024: 185,664,255), being the weighted average number of shares in issue during the period.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted return per share figures are relevant. The basic and diluted earnings per share are therefore identical.
4. Net asset value per share
The net asset value per share is based on net assets as at 31 August 2024 divided by 205,846,926 shares in issue at that date (31 August 2023: 178,882,114 and 29 February 2024: 203,828,309).
| 31 August 2024 | 31 August 2023 | 29 February 2024 | |
|---|---|---|---|
| Net assets (£'000) | 117,750 | 120,131 | 129,109 |
| Shares in issue | 205,846,926 | 178,882,114 | 203,828,309 |
| Net asset value per share | 57.2p | 67.2p | 63.3p |
5. Dividends
The interim dividend declared of 2.5p per Ordinary share will be paid on 10 January 2025 to those shareholders on the register on 20 December 2024.
6. Buybacks and share issues
During the six months ended 31 August 2024 the Company repurchased the following shares.
| Date | No. of shares | Price (p) | Cost (£) |
|---|---|---|---|
| 21 March 2024 | 691,776 | 62.1 | 429,600 |
| 25 April 2024 | 406,159 | 61.2 | 248,600 |
| 23 May 2024 | 346,056 | 63.2 | 218,700 |
| 20 June 2024 | 428,126 | 61.7 | 264,100 |
| 18 July 2024 | 230,467 | 62.3 | 143,600 |
| 15 August 2024 | 658,737 | 54.4 | 358,400 |
| Total | 2,761,321 | 1,663,000 |
The weighted average price of all buybacks during the period was 60.2p per share.
During the six months ended 31 August 2024 the Company issued the following shares.
| Date | No. of shares | Price (p) | Gross proceeds (£) |
|---|---|---|---|
| 16 May 20241 | 37,538 | 65.1 | 24,000 |
| 15 August 2024 (DRIS) | 4,742,400 | 56.7 | 2,690,000 |
| Total | 4,779,938 | 2,714,000 |
1 Shares issued as a result of reduced adviser charges.
The weighted average allotment price of all shares issued during the period was 56.8p per share.
7. Principal risks and uncertainties
The Company's principal risks are investment performance, VCT qualifying status risk, operational risk, information security, economic and price risk, regulatory and reputational/legislative risk, liquidity/cash flow risk and valuation risk. These risks, and the way in which they are managed, are described in more detail in the Company's Annual Report and Accounts for the year ended 29 February 2024. The Board has also considered emerging risks, including geo–political protectionism and climate change. The Board seeks to mitigate risks by setting policy and reviewing performance. Otherwise, the Company's principal risks and uncertainties have not changed materially since the date of that report.
8. Related party transactions
The Company has employed Octopus Investments Limited throughout the period as Investment Manager. Octopus has also been appointed as Custodian of the Company's investments under a Custodian Agreement. The Company has been charged £1,080,000 by Octopus as a management fee in the period to 31 August 2024 (31 August 2023: £1,216,000 and 29 February 2024: £2,221,000). The management fee is payable quarterly and is based on 2% of net assets at six–month intervals.
The Company has invested a further £0.4 million in Octopus managed funds (31 August 2023: £1.3 million and 29 February 2024: £1.9 million), being the Multi Cap Income Fund, Micro Cap Growth Fund and Future Generations Fund. The Company had no disposals of its holding in the Multi Cap Income Fund (31 August 2023: £0.7 million and 29 February 2024: £2.6 million) and has made no loss over book cost (31 August 2023: £0.02 million and 29 February 2024: £0.2 million). To make sure the Company is not double charged management fees on these products, the Company receives a reduction in the management fee as a percentage of the value of these investments. This amounted to £43,000 in the period to 31 August 2024 (31 August 2023: £43,000 and 29 February 2024: £80,000). For further details please refer to the Company's Annual Report and Accounts for the year ended 29 February 2024.
In the period, Octopus Investments Nominees Limited (OINL) purchased shares in the Company from shareholders to correct administrative issues, on the understanding that shares will be sold back to the Company in subsequent share buybacks at the prevailing market price. As at 31 August 2024, OINL held nil shares (31 August 2023: nil shares and 29 February 2024: nil shares) in the Company as beneficial owner, with a nil book cost (31 August 2023: £nil and 29 February 2024: £nil). Throughout the period to 31 August 2024 OINL purchased nil shares (31 August 2023: 2,657 shares and 29 February 2024: 2,791 shares) at a cost of £nil (31 August 2023: £2,372 and 29 February 2024: £2,000) and sold nil shares (31 August 2023: 10,255 shares and 29 February 2024: 10,389 shares) for proceeds of £nil (31 August 2023: £7,238 and 29 February 2024: £7,000). This is classed as a related party transaction as Octopus, the Investment Manager and OINL are part of the same group of companies. Any such future transactions, where OINL takes over the legal and beneficial ownership of Company shares, will be announced to the market and disclosed in annual and financial statements.
9. Fixed asset investments
Accounting policy
The Company's principal financial assets are its investments and the policies in relation to those assets are set out below.
Purchases and sales of investments are recognised in the financial statements at the date of the transaction (trade date).
These investments will be managed and their performance evaluated on a fair value basis in accordance with a documented investment strategy and information about them has to be provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the investments are measured as being fair value through profit or loss on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented investment strategy. The Company's investments are measured at subsequent reporting dates at fair value.
Notes to the financial statements continued
In the case of investments quoted on a recognised stock exchange, fair value is established by reference to the closing bid price on the relevant date or the last traded price, depending upon convention of the exchange on which the investment is quoted. This is consistent with the International Private Equity and Venture Capital Valuation (IPEV) guidelines.
Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the Income Statement and allocated to the capital reserve unrealised. All investments are initially recognised at transaction price and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement.
In the preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the performance of the investee companies.
Fair value hierarchy
Paragraph 34.22 of FRS 102 suggests following a hierarchy of fair value measurements for financial instruments measured at fair value in the Balance Sheet, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). This methodology is adopted by the Company and requires disclosure of financial instruments to be dependent on the lowest significant applicable input, as laid out below:
Level 1: The unadjusted, fully accessible and current quoted price in an active market for identical assets or liabilities that an entity can access at the measurement date.
Level 2: Inputs for similar assets or liabilities other than the quoted prices included in Level 1 that are directly or indirectly observable, which exist for the duration of the period of investment.
Level 3: This is where inputs are unobservable, where no active market is available and recent transactions for identical instruments do not provide a good estimate of fair value for the asset or liability.
There have been no reclassifications between levels in the year. The change in fair value for the current and previous year is recognised through the profit and loss account.
Disclosure
| Level 1: Quoted equity investments £'000 |
Level 3: Unquoted investments £'000 |
Total £'000 |
|
|---|---|---|---|
| Cost as at 1 March 2024 | 68,725 | 5,268 | 73,993 |
| Opening unrealised gain at 1 March 2024 | 780 | 5,577 | 6,357 |
| Valuation at 1 March 2024 | 69,505 | 10,845 | 80,350 |
| Purchases at cost | 6,129 | – | 6,129 |
| Disposal proceeds | (789) | (8) | (797) |
| Gain on realisation of investments | (49) | 8 | (41) |
| Change in fair value in year | 276 | 437 | 713 |
| Closing valuation at 31 August 2024 | 75,072 | 11,282 | 86,354 |
| Cost at 31 August 2024 | 71,614 | 4,969 | 76,583 |
| Closing unrealised gain at 31 August 2024 | 3,458 | 6,313 | 9,771 |
| Valuation at 31 August 2024 | 75,072 | 11,282 | 86,354 |
Level 1 valuations are valued in accordance with the bid–price on the relevant date. Further details of the fixed asset investments held by the Company are shown within the Investment Manager's review.
Level 3 investments are reported at fair value in accordance with FRS 102 Sections 11 and 12, which is determined in accordance with the latest IPEV guidelines. In estimating fair value, there is an element of judgement, notably in deriving reasonable assumptions, and it is possible that, if different assumptions were to be used, different valuations could have been attributed to some of the Company's investments.
Level 3 investments include £1,080,000 (31 August 2023: £600,000 and 29 February 2024: £1,080,000) of convertible loan notes held at cost, which is deemed to be current fair value. In addition to this the Company holds eight unquoted investments which are classified as level 3 in terms of fair value hierarchy. These are valued based on a range of valuation methodologies, determined on an investment specific basis. The price of recent investment is used where a transaction has occurred sufficiently close to the reporting date to make this the most reliable indicator of fair value. Where recent investment is not deemed to indicate the most reliable indicator of fair value i.e. the most recent investment is too distant from the reporting date for this to be deemed a reasonable indicator, other market–based approaches including earnings multiples, annualised recurring revenues, discounted cash flows or net assets are used to determine a fair value for the investments.
All capital gains or losses on investments are classified at FVTPL (fair value through profit or loss). Given the nature of the Company's venture capital investments, the changes in fair value of such investments recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and accordingly these gains are treated as holding gains or losses.
10. Post balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements.
- A full disposal with proceeds totalling £3,180,000 completed in Mattioli Woods plc.
- On 23 September 2024, a prospectus offer was launched alongside Octopus AIM VCT 2 plc to raise a combined total of up to £20 million with a £10 million over-allotment facility. The Offer will close on 22 September 2025, or earlier if fully subscribed.
- A final order to cancel share premium amount to £18.1 million was granted on 10 September 2024.
About Octopus AIM VCT plc
Octopus AIM VCT plc (the 'Company' or 'Fund') was launched as Close AIM VCT PLC in the spring of 1998 and raised £10.1 million from private investors through an issue of Ordinary shares.
Between October 2000 and March 2001 a further £20.0 million was raised through an issue of C shares. Furthermore, between 16 March 2004 and final closing on 5 April 2004 the Company raised £3.3 million by way of a D share issue.
The C Shares were merged and converted into Ordinary shares on 31 May 2004 at a conversion ratio determined by a price mechanism related to the respective net assets per share of both the Ordinary shares and C shares at 29 February 2004 (which resulted in C Shareholders receiving 1.0765 Ordinary shares for each C share held).
A further £15.0 million was raised between 6 January 2005 and 8 April 2005 through an issue of New D shares.
On 31 May 2008, the Ordinary shares converted into D shares at a conversion ratio of 0.5448 D shares for each Ordinary share. All of the D shares were then re–designated into New Ordinary shares.
With effect from 1 August 2008, the management of the Company was transferred to Octopus Investments Limited.
On 4 August 2010 the share capital was restructured and each existing Ordinary share of 50p was subdivided into one Ordinary share of 1p and one Deferred share of 49p. The Deferred shares had no economic value and were bought back by the Company for an aggregate amount of 1p and cancelled.
On 12 August 2010, following approval at the Extraordinary General Meeting on 4 August 2010, shareholders of Octopus Phoenix VCT had their shares converted into Octopus AIM VCT shares on a relative net asset value basis using the conversion factor of 0.42972672. On the same day, Octopus Phoenix VCT was placed into members' voluntary liquidation.
The offer for subscription in the prospectus dated 9 July 2010 relating to the issue of new shares in connection with the merger with Octopus Phoenix VCT plc was extended by a supplemental prospectus and closed on 19 April 2011, raising £10 million. A subsequent offer raised £1.9 million, closing on 5 April 2012.
Since 5 April 2012 £198.5 million has been raised through various share offers launched.
Shareholder information and contact details
Dividends
Dividends will be paid by the Registrar on behalf of the Company. Shareholders who wish to have dividends paid directly into their bank account rather than by cheque to their registered address can complete a mandate form for this purpose. Queries relating to dividends, shareholdings and requests for mandate forms should be directed to the Company's Registrar, Computershare Investor Services PLC ('Computershare'), by calling 0370 703 6325 (calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate). Computershare Investor Services PLC is open between 9.00am–5.30pm, Monday to Friday, excluding public holidays in England and Wales), or by writing to them at:
The Registrar Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ
Share price
The Company's share price can be found on various financial websites, such as www.londonstockexchange.com, by typing 'Octopus AIM' in the 'Quotes Search' box.
The latest share price as at the close of business on 5 November 2024 was 50.5p per Ordinary share.
Buying and selling shares
The Company's Ordinary shares can be bought and sold in the same way as any other company quoted on the London Stock Exchange via a stockbroker. There may be tax implications in respect of selling all or part of your holdings, so shareholders should contact their independent financial adviser if they have any queries.
The Company operates a policy of buying its own shares for cancellation as they become available, and envisages that purchases will be made at up to a 5% discount to the prevailing NAV. The Company is, however, unable to buy back shares directly from shareholders. If you are considering selling your shares or trading in the secondary market, please contact Panmure Liberum Limited.
Panmure Liberum Limited is able to provide details of close periods (when the Company is prohibited from buying in shares) and details of the price at which the Company has bought its shares. Panmure Liberum Limited can be contacted as follows:
Chris Lloyd 020 7886 2716 [email protected] Paul Nolan 020 7886 2717 [email protected]
Notification of change of address
Communications with shareholders are mailed to the registered address held on the share register. In the event of a change of address or other amendment this should be notified to the Company's Registrar, Computershare, under the signature of the registered holder. Their contact details can be found at the end of this report.
Other information for shareholders
Previously published annual reports and half–yearly reports are available for viewing on the Octopus website at www.octopusinvestments.com by navigating to Services, Investors, Shareholder information, Octopus AIM VCT plc. All other statutory information will also be found there.
Warning to shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based "brokers" who target UK shareholders offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to be wary of any unsolicited advice, offer to buy shares at a discount or offer for free company reports.
Please note that it is very unlikely that either Octopus Investments Limited ('Octopus') or the Company's Registrar would make unsolicited telephone calls to shareholders. In any event any such calls would relate only to official documentation already circulated to shareholders and would never be in respect of investment "advice".
If you are in any doubt about the veracity of an unsolicited phone call, please call either Octopus, or the Registrar, at the numbers provided at the back of this report.
Directors and advisers
Board of Directors
Neal Ransome (Chair) Andrew Boteler Joanne Parfrey Louise Nash
Company number Registered in England No: 03477519
Legal Entity Identifier (LEI)
213800C5JHJUQLAFP619
Secretary and registered office
Octopus Company Secretarial Services Ltd 33 Holborn London EC1N 2HT
Investment and administration manager
Octopus Investments Limited 33 Holborn London EC1N 2HT Tel: 0800 316 2295 www.octopusinvestments.com
Custodians
Octopus Investments Limited 33 Holborn London EC1N 2HT
Bankers
HSBC Bank plc 31 Holborn London EC1N 2HR
Independent auditor
BDO LLP 55 Baker Street London W1U 7EU
Taxation adviser
James Cowper Kreston The White Building 1–4 Cumberland Place Southampton SO15 2NP
VCT status adviser
Shoosmiths LLP Apex Plaza Forbury Road Reading RG1 1AX
Registrar
Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ Tel: 0370 703 6325 (Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate.) www.computershare.com/uk www–uk.computershare.com/investor
Corporate broker
Panmure Liberum Limited Ropemaker Place, Level 12 25 Ropemaker Street London EC2Y 9LY Tel: +44 (0)20 3100 2000
Glossary of terms
Alternative performance measure (APM)
A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. These APMs will help shareholders to understand and assess the Company's progress. A number of terms within this glossary have been identified as APMs.
Net asset value or NAV
The value of the Company's total assets less liabilities. It is equal to the total shareholders' funds.
Total return (APM)
Total return is calculated as movement in NAV per share in the period plus dividends paid in the period, divided by the NAV per share at the beginning of the period. Total return on the NAV per share enables shareholders to evaluate more clearly the performance of the Company, as it reflects the underlying value of the portfolio at the reporting date.
Net asset value per share or NAV per share
The value of the Company's total assets less liabilities divided by the total number of shares in issue.
Octopus AIM VCT plc
26 Octopus AIM VCT plc half-yearly report 2024 Octopus AIM VCT plc half-yearly report 2024
0800 316 2295 [email protected] octopusinvestments.com
Octopus Investments, 33 Holborn, London EC1N 2HT