Interim / Quarterly Report • May 31, 2013
Interim / Quarterly Report
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Octopus Second AIM VCT PLC (the "Company" or "Fund") is a venture capital trust ("VCT") which aims to provide shareholders with attractive tax-free dividends and long-term capital growth.
The Investment Manager is Octopus Investments Limited ("Octopus" or "Manager"). The Company was launched as Close IHT AIM VCT PLC and raised £25 million in March 2006 through an offer for subscription.
On 12 August 2010 the Company acquired the assets and liabilities of Octopus Third AIM VCT plc (formerly Octopus Second AIM VCT plc) ("the merger") and changed its name from Octopus IHT AIM VCT plc to Octopus Second AIM VCT plc. Shareholders of Octopus Third AIM VCT received 0.48356191 Ordinary shares in the Company for each Ordinary share they held prior to the merger. Prior to July 2009 Octopus Third AIM had two classes of shares, Ordinary and C shares. The C shares converted into Ordinary shares in July 2009 and C shareholders received 2.4313 Ordinary shares for each C share held.
A Top-up offer launched on 6 February 2012 and which closed on 5 April 2012 raised £1.3 million for the Company. A Top-up offer launched on 25 April 2012 and which closed on 31 July 2012 raised a further £0.5 million for the Company.
On 1 February 2013, the Board launched an offer for subscription with the target of raising £10.0 million for the Company. This had raised a total of £2.6 million at the date of this report and remains open until the end of January 2014.
| Year to | |||
|---|---|---|---|
| Six months to | Six months to | 30 November | |
| 31 May 2013 | 31 May 2012 | 2012 | |
| Net assets (£'000s) | 33,431 | 27,483 | 28,712 |
| Net profit/(loss) after tax (£'000s) | 4,244 | 1,045 | 2,862 |
| Net asset value per share ('NAV') | 74.3p | 63.6p | 66.3p |
The tables below depict the Net Asset Value (NAV) per share and the dividends that have been paid since the launch of Octopus Second AIM VCT plc for the different share classes. The figures represent the NAV, rebased to assume
investment (including initial charge) at 100p, and adjusted in accordance with the relevant conversion factors. Investment has been assumed at the first allotment of each tax year:
Octopus Second AIM VCT plc I Half-Yearly Report I 2013
| Dividends paid during financial year ending November |
Octopus Second AIM VCT Ordinary shares 2011/12 |
Octopus Second AIM VCT Ordinary shares 2010/11 |
Octopus Second AIM VCT (formerly Octopus IHT AIM VCT A&B shares) 2005/06 |
Octopus Third AIM VCT C&D shares 2005/6 (formerly Octopus Second AIM VCT) |
Octopus Third AIM Ordinary shares 2000/1 shares (formerly Octopus Second AIM VCT plc) |
|---|---|---|---|---|---|
| 2003 | – | – | – | – | 1.6 |
| 2004 | – | – | – | – | – |
| 2005 | – | – | – | – | – |
| 2006 | – | – | 1.4 | – | 1.0 |
| 2007 | – | – | 2.0 | 0.8 | 7.0 |
| 2008 | – | – | 2.0 | 2.2 | 11.0 |
| 2009 | – | – | 2.0 | 2.0 | 2.0 |
| 2010 | – | – | 2.5 | 5.4 | 2.2 |
| 2011 | – | 4.7* | 3.3 | 3.8* | 1.6* |
| 2012 | 4.7* | 4.6* | 3.2 | 3.8* | 1.5* |
| 2013 | 2.5* | 2.4* | 1.7 | 1.9* | 0.8* |
| Cumulative dividends paid (p) NAV as at 31 May 2013 (p) |
7.2 109.1* |
11.7 106.8* |
18.1 74.3 |
19.9 87.4* |
28.7 35.9* |
| NAV plus cumulative dividends paid (p) |
116.3*** | 118.5*** | 92.4 | 107.3*** | 64.6*** |
Following the merger with Octopus Third AIM VCT plc and various share re-organisations, there is now only one share class, Ordinary shares. For Octopus Third AIM VCT Ordinary shares and 'C' & 'D' shares, the figures above represent a notionally adjusted NAV per share in accordance with the relevant conversion factors.
* Notional dividends assuming investment at100p and adjusting for conversion of various share classes into Second AIM VCT plc Ordinary shares.
** NAV assuming investment at 100p and adjusting for conversion of various share classes into Second AIM VCT plc Ordinary shares.
*** NAV plus cumulative dividends adjusting for conversion, assuming investment at 100p showing the notional return to shareholders based on their original investment share class.
Notes
• Octopus Third AIM VCT 'D' shares converted into 'C' shares in May 2009, in accordance with a conversion factor of 1 'C' share for each 'D' share.
• Octopus Third AIM VCT 'C' shares converted into Octopus Third AIM VCT Ordinary shares in May 2009, in accordance with a conversion factor of 2.4313 Ordinary shares for each 'C' share.
• Octopus IHT AIM VCT 'B' shares converted into 'A' shares in May 2009, in accordance with a conversion factor of 1 'A' share for each 'B' share.
• In August 2010, Octopus IHT AIM VCT was renamed Octopus Second AIM VCT and Octopus Second AIM VCT was renamed Octopus Third AIM VCT.
• Octopus Third AIM Ordinary shares converted into Octopus Second AIM Ordinary shares in August 2010, in accordance with a conversion factor of 0.48356191 Octopus Second AIM Ordinary shares, for each Octopus Third AIM Ordinary share.
The period under review reflected the increasing confidence of equity markets that growth is finally returning to the agenda and that although there are still economic issues to be overcome, the chances of a very serious upset has diminished. Smaller companies performed well in this environment, with the FTSE Smaller Companies Index (Ex. Investment Trusts) appreciating by 23.4% in the six months to 31 May 2013. AIM was still held back by resource stocks and so achieved a more pedestrian 5.4% growth.
As with the previous period, the flow of investment opportunities was steady rather than spectacular in the first half of the year, although there is now a real sense of returning momentum, particularly of new issues. It is notable that all three qualifying investments made in the first half of the year were new issues. Your manager has made one further new investment in a private company, which is hoping to float towards the end of the calendar year, since the period end. The fact that so many flotations from 2012 have landed positively has encouraged both brokers and potential new candidates and it is very encouraging that the AIM market remains firmly open as a source of funding for small and growing companies.
Against the background of a steadily improving environment for smaller company shares, the NAV of the Fund rose in each of the first six months of the financial year, ending the period up 14.6% if the 1.7p dividend paid in May is added back. This was achieved as a result of positive news flow from individual investee
companies helped by definite signs of a more general enthusiasm for growth and smaller companies in the market.
The investments the fund has made over the past eighteen months have had a very positive impact on performance in the period. Mycelx, the water treatment group, announced results showing strong growth, new contract momentum and a move into profitability and was rewarded with a jump in its shares. WANDisco, a software company which floated on AIM a year ago was once again a very good performer in the period as the market became excited by the 'Big Data' opportunity for its technology. Among more recent investments Fusionex, DP Poland and Quixant were also significant contributors to performance in the period.
Among the larger, more established holdings, Advanced Computer Software and Breedon Aggregates were once again strong positive contributors to performance. Both made acquisitions in the period as well as showing good progress with their existing businesses. We have taken some profits in Advanced Computer Software in the period, although it remains the fund's largest position. Other established holdings which have done well for the fund include Netcall, Tasty, Judges Scientific, Futura Medical, Cello and Omega Diagnostics. In the nonqualifying part of the portfolio Staffline, Matchtech, Chime and SQS all performed well reflecting their good results and trading.
There have, inevitably, been some holdings which have had setbacks in the period. Brady, Idox and Plastics Capital all saw their shares settle back after a good run and Craneware, Corero and Enteq are still suffering from delays in their
growth plans caused by customer deferrals in orders. Things are expected to improve as the year progresses.
In the period, the Company made three new qualifying investments totalling £1.1 million. All of these were new issues. Fusionex is a profitable enterprise software solutions provider based in Malaysia with a consequent low cost advantage in its international markets. Cambridge Cognition specialises in brain health diagnostics and has developed a new mobile test for Alzheimer's which can be easily used by doctors in surgery. Quixant manufactures a specialist computer which sits inside gaming slot machines and enables the machine to meet local regulations in different markets. It also allows players to switch between games more quickly than existing technologies.
Your managers have continued to use nonqualifying investments with the objective of enhancing performance. In the period they added to existing holdings in Cello, GB Group and Mycelx as well as selling the entire holding in Hargreaves, where a series of setbacks had left the shares struggling with investor confidence.
There were a number of disposals in the six months realising £1,237,000 in total. Following strong runs in their shares, we took some profits in Advanced Computer Software, WANDisco and Mycelx although all three remain significant holdings. The size of the holding in Omega was reduced and in addition to Hargreaves Services, the holding in Daisy was disposed of in its entirety.
In January 2013 the Company announced that pursuant to the policy of managing the discount at which your shares stand in the market and to assist in providing some liquidity in your shares, the Company would now buy back at a 5% discount rather than the 10% previously. The Company continues to buy back shares. Details of the shares bought back can be found on page 19 of this report.
In October last year your Board offered shareholders the opportunity to participate in an Enhanced Buy Back Facility. Some 52% of shareholders who had already held their shares for at least five years took advantage of this facility.
The object of the Board's dividend policy, when it was set at the time of the merger in 2010, was that shareholders should benefit as the NAV rose. With the rise in the NAV over the last year, the Board has declared progressively higher dividends, and I am delighted to say that this trend continues. The Board, in line with its annualised 5% yield target, has declared an interim dividend of 1.8p. This will be paid on 18 October 2013 to shareholders on the register on 20 September 2013.
This is the second consecutive rise in the dividend and is the result of the rising NAV. The Board would expect that the dividend amount will continue to increase as the NAV rises further.
It is now three years since the merger of the two AIM VCTs, which make up this Company, and the portfolio is beginning to mature. It is therefore the Board's intention to maintain a minimum annual dividend payment of 3.6p per share, which we would expect to pay in two instalments each year.
In February your Company also issued a prospectus to raise up to £10 million by the issue of new shares. This had raised a total of £2.6 million at the date of this report and remains open until the end of January 2014 for all shareholders wishing to subscribe, unless fully subscribed earlier.
Your Board believes there remains great potential within AIM. The proposal in this year's budget to exempt AIM quoted shares from stamp duty from 2014 and the current consultation on including AIM shares in ISAs, which appears to be moving towards a favourable conclusion, should help to focus attention back onto smaller companies and the benefits that can be derived from investing in them. It should also help to provide welcome capital to small and growing businesses and benefit the VCT by expanding the pool of qualifying companies seeking investment.
It is now approaching three years since this VCT was formed by a merger of two existing VCTs
and many of the companies in your portfolio have already grown to a substantial size. In fact 80% of the holdings by value have forecast average profits in 2013 of more than £7 million, demonstrating the maturing of some of the earlier investments in the portfolio which are now being supplemented by newer holdings funded from profit-taking, and the proceeds of new share issues. Many of our investee companies have continued their good progress of the past few years and we are optimistic that this can translate into further share price gains as their profits grow. The pick-up in new issue activity should also provide attractive opportunities to invest additional capital.
Keith Mullins Chairman 29 July 2013
| Investee Company | Sector | Book cost as at 31 May 2013 (£'000) |
Cumulative change in fair value (£'000) |
Fair value as at 31 May 2013 (£'000) |
% equity held by Second |
% equity held by all Funds managed AIM VCT by Octopus |
|---|---|---|---|---|---|---|
| Advanced Computer | Software & | |||||
| Software plc MyCelx Technologies plc |
Computer Services Oil Equipment |
681 580 |
1,241 884 |
1,922 1,464 |
0.5% 2.1% |
3.3% 7.3% |
| Idox plc | Software & | |||||
| Computer Services | 356 | 1,012 | 1,368 | 1.1% | 3.8% | |
| EKF Diagnostics plc | Healthcare Equipment | 870 | 470 | 1,340 | 1.7% | 6.0% |
| Breedon Aggregates Limited | Construction & Materials | 602 | 727 | 1,329 | 0.5% | 1.3% |
| Animalcare Group plc | Pharmaceuticals & Biotech | 870 | 442 | 1,312 | 4.6% | 8.1% |
| Brooks MacDonald Group plc | General Financial | 609 | 438 | 1,047 | 0.6% | 2.5% |
| Sinclair Pharma plc | Pharmaceuticals & Biotech | 920 | 113 | 1,033 | 0.8% | 1.2% |
| Escher Group Holdings plc | Software & | |||||
| Netcall plc | Computer Services Software & |
752 | 242 | 994 | 2.4% | 5.5% |
| WANdisco plc | Computer Services Software & |
421 | 500 | 921 | 2.1% | 5.1% |
| Computer Services | 178 | 739 | 917 | 0.5% | 2.7% | |
| Tasty plc | Travel & Leisure | 335 | 468 | 803 | 2.3% | 4.9% |
| Quixant plc | Technology Hardware | 479 | 291 | 770 | 1.6% | 6.2% |
| Vertu Motors plc | General Retailers | 777 | (27) | 750 | 0.9% | 8.7% |
| Matchtech Group plc | Support Services | 442 | 302 | 744 | 1.0% | 11.1% |
| Chime Communications plc | Media | 541 | 146 | 687 | 0.3% | 0.5% |
| TLA Worldwide plc | Media | 538 | 148 | 686 | 3.1% | 11.4% |
| Omega Diagnostics Group plc GB Group plc |
Healthcare Equipment Software & |
439 | 224 | 663 | 4.1% | 9.0% |
| Computer Services | 329 | 328 | 657 | 0.6% | 2.0% | |
| Vianet Group plc | Support Services | 867 | (221) | 646 | 2.6% | 4.6% |
| Plastics Capital plc | Chemicals | 485 | 144 | 629 | 2.6% | 17.0% |
| Craneware plc | Software & | |||||
| Computer Services | 479 | 123 | 602 | 0.6% | 1.2% | |
| RWS Holdings plc | Support Services | 249 | 300 | 549 | 0.2% | 3.9% |
| Futura Medical plc | Pharmaceutical & Biotech | 408 | 118 | 526 | 0.9% | 4.3% |
| Staffline Recruitment Group plc Brady plc |
Support Services Software & |
225 | 289 | 514 | 0.5% | 12.4% |
| Computer Services | 394 | 113 | 507 | 0.8% | 2.0% | |
| DP Poland plc Cambridge Cognition |
Travel & Leisure | 364 | 85 | 449 | 2.5% | 6.4% |
| Holdings plc | Healthcare Equipment | 400 | 40 | 440 | 3.4% | 18.1% |
| Judges Scientific plc | Electronic & Electrical | 200 | 235 | 435 | 0.6% | 1.6% |
| Enteq Upstream plc | Oil Equipment | 687 | (261) | 426 | 1.2% | 3.8% |
| Gooch & Housego plc | Electronic & Electrical | 326 | 70 | 396 | 0.4% | 3.5% |
| Hasgrove plc Lombard Medical |
Media | 436 | (69) | 367 | 2.1% | 13.2% |
| Technologies plc | Healthcare Equipment | 589 | (230) | 359 | 0.7% | 0.7% |
| Adept Telecom plc | Telecommunications | 501 | (154) | 347 | 1.7% | 4.1% |
| Fusionex International plc | Software & | |||||
| Access Intelligence plc | Computer Services Software & |
186 | 145 | 331 | 0.3% | 1.4% |
| Computer Services | 544 | (217) | 327 | 4.7% | 10.0% |
| SQS Software plc Software & Computer Services 207 112 319 0.3% 10.3% Augean plc Support Services 291 14 305 1.0% 5.3% Bond International Software plc Software & Computer Services 303 (35) 268 1.1% 3.4% Tangent Communications plc Support Services 385 (145) 240 1.4% 6.0% Cello Group plc Media 205 30 235 0.5% 7.2% Active Risk Group plc Software & Computer Services 535 (301) 234 3.3% 8.6% Immunodiagnostic Systems plc Healthcare Equipment 454 (234) 220 0.2% 2.6% Corac plc Industrial Engineering 252 (42) 210 0.5% 1.8% Goals Soccer Centres plc Travel & Leisure 148 42 190 0.3% 2.4% Mattioli Woods plc General Financial 96 37 133 0.3% 3.4% Corero Network Security plc Software & Computer Services 360 (243) 117 1.0% 3.2% Marwyn Management plc Investment Companies 670 (560) 110 1.2% 1.9% Jelf Group plc General Financial 122 (19) 103 0.1% 0.8% Woodspeen plc Support Services 250 (167) 83 3.9% 11.4% Mears Group plc Support Services 51 17 68 0.0% 0.2% In-Deed Online plc General Retailers 201 (148) 53 2.3% 5.8% Altitude Group plc Support Services 24 18 42 0.6% 4.5% Work Group plc Support Services 473 (435) 38 2.1% 6.3% Datong plc Electronic & Electrical 29 8 37 0.6% 3.4% Snacktime plc Food & Drug Retailers 367 (339) 28 1.5% 7.5% 23,482 6,808 30,290 Fully realised investments still held 573 (573) – Total investments 24,055 6,235 30,290 Money market funds 1,833 Total fixed asset investments and money market funds 32,123 Cash at bank 1,224 Debtors less creditors 84 Total net assets 33,431 |
Investee Company | Sector | Book cost as at 31 May 2013 (£'000) |
Cumulative change in fair value (£'000) |
Fair value as at 31 May 2013 (£'000) |
% equity held by Second |
% equity held by all Funds managed AIM VCT by Octopus |
|---|---|---|---|---|---|---|---|
The graph below shows the sectors the Fund is invested in by value as at 31 May 2013:
The graph below shows the sectors the Fund is invested in by value as at 31 May 2012:
We confirm that to the best of our knowledge:
– 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.
On behalf of the Board
Keith Mullins Chairman 29 July 2013
| Six months to 31 May 2013 | |||
|---|---|---|---|
| Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | |
| Gain/(loss) on disposal of fixed asset investments |
– | 217 | 217 |
| Gain/(loss) on valuation of fixed asset investments |
– | 4,292 | 4,292 |
| Income | 154 | – | 154 |
| Investment management fees | (74) | (222) | (296) |
| Other expenses | (123) | – | (123) |
| Profit/(loss) on ordinary activities before tax Taxation on profit/(loss) on ordinary activities |
(43) – |
4,287 – |
4,244 – |
| Profit/(loss) on ordinary activities after tax |
(43) | 4,287 | 4,244 |
| Return per share – basic and diluted |
(0.1)p | 9.9p | 9.8p |
| Six months to 31 May 2012 | Year to 30 November 2012 | |||||
|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Gain/(loss) on disposal of fixed asset investments |
– | 148 | 148 | – | 318 | 318 |
| Gain/(loss) on valuation of fixed asset investments |
– | 1,080 | 1,080 | – | 2,920 | 2,920 |
| Income | 175 | – | 175 | 363 | – | 363 |
| Investment management fees | (66) | (199) | (265) | (138) | (412) | (550) |
| Other expenses | (93) | – | (93) | (189) | – | (189) |
| Profit/(loss) on ordinary activities before tax Taxation on profit/(loss) on ordinary activities |
16 – |
1,029 – |
1,045 – |
36 – |
2,826 – |
2,862 – |
| Profit/(loss) on ordinary activities after tax |
16 | 1,029 | 1,045 | 36 | 2,826 | 2,862 |
| Return per share – basic and diluted |
0.0p | 2.4p | 2.4p | 0.1p | 6.5p | 6.6p |
| Six months to 31 May 2013 £'000 |
Six months to 31 May 2012 £'000 |
Year to 30 November 2012 £'000 |
|
|---|---|---|---|
| Shareholders' Funds at start of period | 28,712 | 26,590 | 26,590 |
| Profit/(loss) on ordinary activities after tax Purchase of own shares Issue of shares Shares to be issued Dividends paid |
4,244 (7,935) 9,174 – (764) |
1,045 (689) 1,238 – (701) |
2,862 (1,074) 1,736 – (1,402) |
| Shareholders' Funds at end of period | 33,431 | 27,483 | 28,712 |
| As at | As at | As at | |||||
|---|---|---|---|---|---|---|---|
| 31 May 2013 | 31 May 2012 | 30 November 2012 | |||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Fixed asset investments* | 30,290 | 23,081 | 25,652 | ||||
| Current assets: | |||||||
| Investments* | 1,833 | 3,330 | 2,850 | ||||
| Debtors | 142 | 42 | 274 | ||||
| Cash at bank | 1,224 | 1,408 | 135 | ||||
| 3,199 | 4,780 | 3,259 | |||||
| Creditors: amounts falling | |||||||
| due within one year | (58) | (378) | (199) | ||||
| Net current assets | 3,141 | 4,402 | 3,060 | ||||
| Net assets | 33,431 | 27,483 | 28,712 | ||||
| Called up equity share capital | 4 | 5 | 4 | ||||
| Share premium | 10,929 | 1,257 | 1,756 | ||||
| Special distributable reserve | 22,672 | 30,992 | 30,607 | ||||
| Capital redemption reserve | 1 | – | – | ||||
| Capital reserve | |||||||
| – realised | (6,772) | (5,176) | (6,363) | ||||
| – unrealised | 6,808 | 593 | 2,876 | ||||
| Revenue reserve | (211) | (188) | (168) | ||||
| Total equity shareholders' Funds | 33,431 | 27,483 | 28,712 | ||||
| Net asset value per share | 74.3p | 63.6p | 66.3p |
*Held at fair value through profit and loss
The statements were approved by the Directors and authorised for issue on 29 July 2013 and are signed on their behalf by:
Keith Mullins Chairman Company Number: 05528235
| Year to | |||
|---|---|---|---|
| Six months to | Six months to | 30 November | |
| 31 May 2013 | 31 May 2012 | 2012 | |
| £'000 | £'000 | £'000 | |
| Net Cash (outflow)/inflow from | |||
| operating activities | (274) | 464 | (140) |
| Taxation: UK Corporation tax paid | – | – | – |
| Financial investment: | |||
| Purchase of fixed asset investments | (1,366) | (1,246) | (2,409) |
| Disposal of fixed asset investments | 1,238 | 1,136 | 1,737 |
| Management of liquid resources: | |||
| Purchase of current asset investments | (2,201) | (1,375) | (5,159) |
| Disposal of current asset investments | 3,217 | 1,945 | 6,210 |
| Equity dividends paid: | |||
| Dividends paid | (764) | (701) | (1,402) |
| Financing: | |||
| Proceeds from issue of shares | 9,174 | 1,238 | 1,736 |
| Purchase of own shares | (7,935) | (689) | (1,074) |
| Increase/(decrease) in cash at bank | 1,089 | 772 | (501) |
| Year to | |||
|---|---|---|---|
| Six months to | Six months to | 30 November | |
| 31 May 2013 | 31 May 2012 | 2012 | |
| £'000 | £'000 | £'000 | |
| Gain/(loss) on ordinary activities before tax | 4,244 | 1,045 | 2,862 |
| (Gain)/loss on disposal of fixed asset investments | (217) | (148) | (318) |
| (Gain)/loss on valuation of fixed asset investments | (4,292) | (1,080) | (2,920) |
| Decrease/(increase) in debtors | 132 | 464 | 232 |
| (Decrease)/increase in creditors | (141) | 183 | 4 |
| Net cash (outflow)/inflow from operating activities | (274) | 464 | (140) |
| Year to | |||
|---|---|---|---|
| Six months to | Six months to | 30 November | |
| 31 May 2013 | 31 May 2012 | 2012 | |
| £'000 | £'000 | £'000 | |
| Increase/(decrease) in cash at bank | 1,089 | 772 | (501) |
| Movement in cash equivalents | (1,017) | (571) | (1,051) |
| Opening net cash resources | 2,985 | 4,537 | 4,537 |
| Net cash resources at end of period | 3,057 | 4,738 | 2,985 |
The unaudited half-yearly results which cover the six months to 31 May 2013 have been prepared in accordance with the Accounting Standard Board's (ASB) statement on half-yearly financial reports (July 2007) and adopting the accounting policies set out in the statutory accounts of the Company for the year ended 30 November 2012, which were prepared under UK GAAP and in accordance with the Statement of Recommended Practice for Investment Companies issued by the Association of Investment Companies in January 2009.
The unaudited half-yearly results for the six months ended 31 May 2013 do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The comparative figures for the year ended 30 November 2012 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 under Section 235 of the Companies Act 1985 was unqualified. This half-yearly report has not been reviewed by the Company's auditor.
The earnings per share at 31 May 2013 are calculated on the basis of 43,522,952 (31 May 2012: 42,481,048 and 30 November 2012: 43,151,333) shares, being the weighted average number of Ordinary shares in issue during the period.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant.
The net asset value per share is based on net assets as at 31 May 2013 divided by 45,000,517 (31 May 2012: 43,225,974 and 30 November 2012: 43,331,328) Ordinary shares in issue at that date.
The Directors have declared a dividend of 1.8 pence per Ordinary share, payable from capital reserves. This dividend will be paid on 18 October 2013 to those shareholders on the register at 20 September 2013.
A final dividend for the year ended 30 November 2012 of 1.7 pence per Ordinary share was paid from capital reserves on 24 May 2013 to shareholders who were on the register on 26 April 2013.
During the six months ended 31 May 2013 the Company repurchased the following shares:
| Date | No. of shares | Price (p) |
|---|---|---|
| 19 December 2012 | 115,430 | 60.75 |
| 10 January 2013 | 68,510 | 61.0 |
| 28 February 2013 | 30,000 | 69.0 |
| 1 March 2013 | 300,885 | 69.0 |
| 25 March 2013 | 157,108 | 68.25 |
| 15 May 2013 | 75,567 | 70.25 |
The weighted average price of all buybacks during the period was 67.0 pence per share.
During the six months ended 31 May 2013 the Company issued the following shares:
| Date | No. of shares | Price (p) |
|---|---|---|
| 5 April 2013 | 2,612,275 | 76.2 |
| 3 May 2013 | 301,305 | 77.0 |
The weighted average price of all shares issued during the period was 67.0 pence per share.
On 1 February 2013, existing shareholders were notified of an offer to subscribe for Ordinary shares aimed to raise a further £10 million of funds for this VCT.
On 20 February 2013, as part of the Enhanced Buyback, in total 10,470,985 shares were sold back to the Company and 9,974,094 shares were reissued.
The Company's assets consist of equity, cash and liquid resources. Its principal risks are therefore market risk, credit risk and liquidity risk. Other risks faced by the Company include economic, loss of approval as a VCT, investment and strategic, regulatory, reputational, operational and financial risks. 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 30 November 2012. The Company's principal risks and uncertainties have not changed materially since the date of that report.
Octopus acts as the investment manager of the Company. Under the management agreement, Octopus receives a fee of 2.0 per cent per annum of the net assets of the Company for the investment management services. During the period, the Company incurred management fees of £296,000 (31 May 2012: £265,000 and 30 November 2012: £550,000).
Keith Richard Mullins (Chairman) Andrew Paul Raynor FCA Elizabeth Anita Kennedy Alastair James Ritchie
Patricia Standaloft ACIS 20 Old Bailey London EC4M 7AN Registered in England No: 05528235
Octopus Investments Limited 20 Old Bailey London EC4M 7AN Tel: 0800 316 2295 www.octopusinvestments.com
Octopus Investments Limited 20 Old Bailey London EC4M 7AN
HSBC Bank plc 31 Holborn London EC1N 2HR
BDO LLP Farringdon Place 20 Farringdon Road London EC1M 3AP
PricewaterhouseCoopers UK 1 Embankment Place London WC2N 6RH
PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH
Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Tel: 0871 664 0324 (Calls cost 10p per minute plus network extras) www.capitaregistrars.com
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