TIDMOOA
Octopus AIM VCT plc
Final Results
27 May 2016
Octopus AIM VCT plc, managed by Octopus Investments Limited, today
announces the final results for the year ended 29 February 2016.
These results were approved by the Board of Directors on 27 May 2016.
You may, in due course, view the Annual Report in full at
www.octopusinvestments.com by navigating to Investors, and selecting
Octopus AIM VCT plc from the drop down menu. All other statutory
information will also be found there.
Financial Summary
As at As at
29 February 2016 28 February 2015
Net assets (GBP'000) 77,224 72,612
Net profit/(loss) after tax (GBP'000) 742 (5,226)
Net asset value (NAV) per share 101.6p 110.2p
Ordinary Dividends per share paid in 5.3p 5.5p
year
Special Dividend per share paid in year 4.0p -
Proposed Final Dividend per share* 2.5p 2.8p
* Subject to shareholder approval at the Annual General Meeting, the
proposed final dividend will be paid on 22 July 2016 to shareholders on
the register on 24 June 2016.
Chairman's Statement
Introduction
The year to 29 February 2016 was characterised by an unsettled stock
market which had the effect of dampening the enthusiasm for share prices
even when companies demonstrated good business progress. The year opened
with worries about an impending General Election which turned briefly to
euphoria on the news of a single party majority in May before
international political and economic concerns once again created the
conditions for market volatility. This uncertainty has continued into
2016, with attention now on the European Referendum in June. Against
this background performance was rather muted with the 9.3p of dividends
paid out in the year only just exceeding the fall in the Net Asset Value
(NAV) to give a small positive total return. Some of the mature holdings
in the portfolio have seen their share prices advance on good news but
it has been significantly harder for the earlier stage companies which
have yet to make a profit. Their shares have tended to fare much worse
in a risk averse market even when they have met expectations.
Royal Assent was also given to the second Finance Act of the year in
November, bringing new VCT regulations which reconcile with EU State Aid
rules. Your Managers are not expecting to have to change their approach
in any substantial way as a result of these new regulations.
During the year your company raised GBP12.4 million by the issue of new
shares and a further GBP8.7million has been raised since the year end.
Your Company continued to buy back from selling shareholders.
Performance
Adding back the 5.3p of ordinary and 4p special dividends paid out in
the year, the Net Asset value rose marginally, by 0.6%. This compares
with a fall in the AIM index of 1.7%, a fall in the FTSE All Share Index
of 7.3% and a rise in the Smallcap Index ex Investment Trusts of 1.6%,
all on a total return basis.
As these figures suggest it has been smaller companies' shares which
have performed relatively well, reflecting the fact that larger
companies are perceived to be more exposed to international concerns
about Chinese growth and the weak oil price as well as political worries
around the Eurozone and the effects of the immigration crisis. However,
within the portfolio, performance has tended to polarise with the better
established and profitable companies seeing their share prices advance
on good news, and those yet to make a profit struggling to get investor
attention and seeing their share prices under pressure, particularly
those thought to be in need of further funding.
There have been signs that the appetite for takeovers has started to
revive. In the year under review, the cash offer for Advanced Computer
software completed and Chime Communications, Synabor and Enables IT were
all subject to takeover bids. Several other portfolio companies have
accelerated their growth through acquisitions during the year.
2016 did not match the previous year for the amount raised by new issues
on AIM although secondary fundraisings were even more in evidence. In
the year under review AIM has raised GBP5.4 billion in new capital,
fulfilling its purpose of providing additional growth capital for its
members. After a strong December and January for fundraisings, February
was quieter although the pipeline of new companies looking to float on
AIM seems to be steady.
In the interim accounts I reported that we had invested GBP4 million in
qualifying holdings. In the second half of the year we invested a
further GBP1.9 million in qualifying investments which included three
new holdings in Scientific Digital Imaging, Tyratech and Haydale
Graphene together with two further follow-on investments into Microsaic
and Nektan. The last was in the format of a convertible loan note. In
addition we invested GBP5.2 million in non-qualifying holdings in the
year, in order to put the funds raised to work in the market. We made
disposals totalling GBP5.9 million at a net profit of GBP4.3 million.
Further details of performance are contained in the Investment Managers'
Review.
New VCT Regulations
VCTs have always been subject to UK regulations, not least as they
confer tax benefits on investors. In recent years these regulations
have become subject themselves to European State Aid rules. The
Chancellor proposed new rules in his Summer Budget in July 2015 and,
following discussions with European authorities in Brussels, these
became law following the granting of Royal Assent in November 2015.
These are in addition to existing rules which already limited investment
to companies with gross assets of no more than GBP15 million, 250
employees and where no more than GBP5 million of State Aided funds had
been raised within the past 12 months.
The new rules now in force relate to the age of companies receiving a
first investment, a lifetime limit on State Aided funds and rules
designed to target any funds raised on a company's growth. They also
recognise that there is a class of company which is 'knowledge
intensive' and therefore hungrier for capital, and some of the limits
are more generous for these types of companies.
To summarise the changes, in order to qualify companies must:
-- have fewer than 250 full time equivalent employees; and
-- have less than GBP15 million of gross assets at the time of investment
and no more than GBP16 million immediately post investment; and
-- be less than seven years old (or 10 years if a knowledge intensive fund)
if raising State Aided funds for the first time; and
-- have raised no more than GBP5 million of State Aided funds in the
previous 12 months and less than the lifetime limit of GBP12 million (or
GBP20 million if a knowledge intensive fund); and
-- produce a business plan to show that its funds are being raised for
growth.
Follow-on investments are allowed to provide further capital for an
existing investment up to the lifetime limit, and in certain
circumstances a company may obtain clearance to raise money to develop a
new business or market. Money raised from VCTs is not allowed to be used
for acquisitions, or to buy out debt or existing equity. In addition,
non-qualifying purchases of AIM shares are no longer allowed.
Draft clarification notes to go with the VCT legislation have just been
published and so it is still too early to come to any conclusions about
what effect these new rules will have on VCT qualifying deal flow for
AIM companies. Your VCT has made two investments since the rules became
law and has seen a steady flow of qualifying opportunities. At 88%, the
VCT is well above the minimum 70% qualifying requirement and therefore
under no immediate pressure to invest its cash.
Dividends
An interim dividend of 2.5p was paid to shareholders in January 2016. It
is your Board's intention to continue to pay a minimum of 2.5p each half
year and to adjust annually, based on the year-end share price, the
final dividend so that shareholders receive either 5p per annum or a 5%
yield, whichever is the greater at the time. This will enable dividends
to progress with a rising NAV, whilst maintaining the minimum historic
level. With respect to the year to February 2016 your Board has so far
declared and paid an interim dividend of 2.5p and now has pleasure in
recommending a final dividend of 2.5p, which brings the total dividend
for the year to 5p which is higher than an annualised yield of 5%, based
on the share price of 95.875p on 29 February 2016.
Special dividends are by definition special and do not form part of the
minimum payment. A 4p special dividend was paid in respect of the year
to 28 February 2015 following the exceptional profit realised on the
takeover of Advanced Computer Software. No special dividend is proposed
for the year ended 29 February 2016.
Dividend Reinvestment scheme
In common with many other VCTs in the industry, your Company has started
a Dividend Reinvestment Scheme (DRIS). Some shareholders have already
taken advantage of this opportunity. For investors who do not need
income, but value the additional tax relief on their reinvested
dividends, this is an attractive scheme and I hope more shareholders
will find it useful. In the course of the year 468,005 new shares have
been issued under this scheme. The dividend referred to above will be
eligible for the DRIS.
Share Buy Backs
In the year ended 29 February 2016 we bought back 1,494,656 shares for
cancellation. The average month end discount to Net Asset Value at
which your shares have traded through the year has been 5.1% compared to
the closing monthly bid price in line with the Board's policy of 5%.
Share Issues
In the year to 29 February 2016 we have raised a total of GBP12.4
million of new capital. This figure is made up, first, of GBP8.5
million raised under the combined offer with Octopus AIM VCT 2 plc ("AIM
VCT 2") which launched on 29 August 2014. This offer closed, fully
subscribed, on 1 July 2015. A further combined fundraise with AIM VCT 2
was launched on 21 December 2015 to raise up to GBP20 million, with an
overallotment facility of GBP10 million. By the year end GBP3.9 million
had been raised under this offer. At the date of this report a further
GBP8.7 million had been raised in the period since 29 February 2016. The
offer remains open and the Company can raise up to a further GBP5.4
million before reaching the maximum of GBP18 million.
VCT Status
PricewaterhouseCoopers LLP provides your Board and Investment Manager
with advice concerning continuing compliance with HMRC regulations for
VCTs. Your Board has been advised that Octopus AIM VCT is in compliance
with the conditions laid down by HMRC for maintaining approval as a VCT.
A key requirement is to maintain at least a 70% qualifying investment
level. As at 29 February 2016 some 88% of the portfolio as measured by
HMRC rules was invested in qualifying investments.
Risks and uncertainties
In accordance with the Listing Rules under which your Company operates
your Board has to comment on the potential risks and uncertainties which
could have a material impact on the Company's performance. A risk arises
from the requirement to maintain compliance with HMRC regulations
requiring 70% of your Company's assets to be invested in qualifying
holdings. Other risks include economic conditions which impact
particularly on smaller companies in which your Company invests and this
could have an adverse impact on share prices.
Annual General Meeting
The Annual General Meeting will be held on Thursday, 7 July 2016. I very
much hope that you will be able to come. After the formal business our
Investment Managers will make a presentation. At the Annual General
Meeting, a resolution will be proposed to extend the life of the Company
until 2022 in order to preserve the VCT status of the Company for the
benefit of both existing shareholders and new investors participating in
the present share offer. I have been Chairman since the formation of the
Company and will be retiring at the Annual General Meeting. I am
delighted to announce that Roger Smith will be succeeding me. We will
seek to appoint a new non-executive director during the course of the
year.
Outlook
Markets have been generally more volatile in the last few months in the
face of more pronounced fears about global economic growth. While many
of the widely reported international concerns are of less relevance to
smaller UK companies such as those in the portfolio, the EU Referendum
is now casting a shadow over the market which will continue until the
result is known at the end of June.
Despite this background there is no reason to be disheartened as far as
smaller companies are concerned, and the performance of your portfolio
depends as ever, more on the progress made by individual companies
rather than any macro-economic or political factors. There are several
holdings in the healthcare and technology sector expected to move into
profit over the next two or more years and among the more mature
holdings a number have produced good results in the recent March results
season.
Michael Reeve
Chairman
27 May 2016
Investment Manager's Review
Introduction
Smaller company share prices proved resilient during the year to 29
February 2016 in contrast to the FTSE 100 which saw some steep declines
in some of its members exposed to a weak oil price and international
markets. At the interim stage we reported that the wider stock market
had once again become a more difficult place after an initial burst of
enthusiasm following the General Election result in May had passed. This
more cautious tone persisted for the remainder of the year, with the
result that the NAV total return was slightly down in the second half
although it remained just in positive territory for the year as a whole.
It was the share prices of earlier stage companies needing cash to
fulfil growth plans that were most affected and we talk about some
examples in the portfolio later on in this report. More established and
profitable companies saw their share prices advance despite market
conditions and these contributed positively to performance in the year.
Overall it seems quite likely, at this stage, that similar conditions
will prevail through 2016, with companies only seeing their share prices
advance as a result of positive results rather than on any general
market trends.
While AIM itself has had some criticism in 2015, it has continued to
support existing companies even though the number of new flotations was
lower than in the previous twelve months. The benefit of increased
market nervousness is that valuations have tended to be more realistic,
which bodes well for investing the cash being raised under the current
offer.
The Alternative Investment Market
The year to 29 February 2016 started well with the AIM Index
participating in a general rise in the stock market. However, its higher
exposure to resource stocks meant that it could not sustain this rise as
worries about a Chinese slowdown intensified and it ended 1.7% down by
the end of the period, behind smaller companies generally although still
well ahead of the FTSE 100.
Despite this volatility, and a lower level of new listings on AIM than
in 2014, the market raised a very substantial sum, GBP5.4 billion, for
existing AIM listed companies for the year as a whole. That is the
highest level of secondary fundraising on AIM since 2010 and is proof
that the market will support companies with good reasons for asking for
additional growth capital. The ability of AIM to attract a range of new
issues and to raise further funds for small growing companies is its
most important characteristic as far as the VCT is concerned.
2015 finished with a large number of companies testing the temperature
of the water, as they examined the possibility of floating in the first
quarter of 2016. These are beginning to come through in the form of
prospectus's landing on our desks although this has been slower than we
expected at the end of 2015, probably as a result of more turbulent
market conditions. However, assuming that owners and managers set a
higher priority on growth than some arbitrary valuation, we would expect
to see a healthy flow of new companies coming to AIM in 2016. We also
expect to see many existing AIM companies continue to use their listing
to raise finance for further growth.
Performance
Dividend payments in the year were higher than usual as a result of a
special dividend paid out of the profit from the Advanced Computer
Software holding which was taken over in March 2015. Adding these back
to show the total return, the Net Asset Value decreased in the year by
slightly less than the 9.8p of dividends paid out, giving a total return
of 0.6%. This compares with a total return for the FTSE Smallcap Index
of 1.6% and for AIM of -1.7%. The FTSE All Share Index was affected by a
sell-off in larger companies perceived to be exposed to global growth
and a weak oil price and it underperformed returning -7.3% in the twelve
month period. The portfolio benefited from its exposure to small
growing companies many of which are operating in a domestic economy that
has been enjoying better growth than many of its international
counterparties.
Within the portfolio it was the older, more established and already
profitable companies that tended to perform best in these market
conditions, with a number of the not yet profitable earlier stage
companies seeing their share prices decline. Among the latter Mycelx,
highlighted in the accounts a year ago, continued to suffer from a weak
share price as a result of fears about the prolonged effect of a low oil
price. The management has cut costs and is preserving its cash. Several
other earlier stage companies had a negative impact on the performance
of the NAV in the year including Oxford Pharmascience and Proxama.
Oxford Pharmascience has a technology that reduces the harmful effects
of drugs on the stomach through slow release of the active ingredients.
Although the share price has performed poorly, the company raised GBP20
million in 2015 and so has cash to fund further trials if it should
prove necessary. Proxama, a company with near field communications
technology to allow people to transact by tapping their mobile phone,
has seen its share price decline on fears that it will need more money
in order to execute its strategy. It has recently announced a series of
contracts that indicate that it may now be managing to get some sales
traction.
EKF Diagnostics was the other holding that performed particularly badly
in the year. Difficulties with its US molecular diagnostics laboratory
were compounded by some lumpy order patterns in its point of care
diagnostics business, and the company ended up announcing a strategic
review which resulted in a potential bid. When any formal bid failed to
materialise, the company announced that it would be cutting costs and
concentrating its efforts on restoring shareholder value through
focusing on the point of care business.
On a positive note some of the more established holdings in the
portfolio enjoyed strong share price gains in the year and more than
compensated for the poor share price performance of anything considered
by the market to be small and early stage. Breedon, Staffline, Brooks
Macdonald, Idox, Vertu Motors and GB Group all saw their share prices
respond well to good figures showing strong progress in their respective
businesses with the promise of further growth to come. In particular,
Breedon has made a takeover bid for Hope Group, a rival UK aggregates
and cement business which will double its size, making it the largest
independent UK based aggregates business and give it a much coveted
entry into the London cement market. It is awaiting the approval of the
Competition and Markets Authority. They are all now well established,
and by VCT standards, sizeable businesses.
Encouragingly, several other portfolio companies saw their businesses
develop significantly in the year and were rewarded with share price
gains. Tasty, a restaurant operator, has now built its estate to more
than 50 outlets and has the funding to grow it by 15 units a year out of
existing resources. This fund first invested in 2007 and it took three
years before the company reached profitability, since then it has
accelerated its growth plans. Adept Telecom made a significant
acquisition, increasing its ability to win business with larger
customers and Animalcare demonstrated that it could successfully launch
several new animal medicines into the market in a twelve month period.
DP Poland, which owns the Dominos Pizza franchise in Poland, is still a
long way from profitability but it has now demonstrated a financial
model that works, and the shares have strengthened as a result.
Learning Technologies also reaped the benefit of several acquisitions
made since it reversed the business of Epic into Indeed On-line and is
now bidding for and winning substantial government contracts.
Among the non-qualifying holdings Skyepharma was the best performer, and
is now subject to a takeover bid from Vectura, another mid-sized
pharmaceutical company specialising in the respiratory sector. The
combined Group will be cash generative as well as having a portfolio of
products in development providing potential for future growth. RWS,
Restore and Gooch and Housego all performed well in the year.
Portfolio Activity
In addition to the GBP4 million invested in six qualifying investments
in the first half of the year, we invested a further GBP1.9 million in
five further qualifying investments in the second half. Two of these
were follow on investment into Nektan and Microsaic, both of which have
yet to generate any significant sales and are still proving their
business models. All of the new investments were in existing AIM
companies. Among them, only Scientific Digital Imaging is already
profitable although Tyratech is already selling its head lice treatment
based on natural plant extracts to WalMart in the US and Boots in the UK
and will be using the funds raised to accelerate its sales towards
profitability. Haydale also has existing sales. It has a technology to
functionalise graphene to enable its properties of strength and
conductivity to be used in conjunction with other substances.
We have also invested a proportion of our newly raised cash in
non-qualifying holdings with a view to improving returns by putting
liquid assets to work. We invested in a number of larger AIM companies,
which we know well and which, as relatively developed profitable and
dividend paying companies, represent a balance to the risk, which the
younger qualifying companies necessarily inject into the portfolio. In
total we invested GBP5.2 million into new non-qualifying holdings in the
year. In aggregate therefore we have invested over GBP11.1 million in
the year to February 2016, which compares with the GBP12.4 million
raised by the company.
During the year we made disposals of GBP5.9 million realising an overall
profit over book cost of GBP4.3 million. The major sale in the year was
the disposal of Advanced Computer Software Group, which we covered in
the interim statement. In the second half of the year Chime
Communications and Synabor were taken over for cash. Enables IT was
also taken over, and as a result the fund now has a holding in 1 Spatial,
a software Group which specialises in managing vast quantities of
geospatial data. The holding in Staffline was trimmed, but the only
other holding which was sold entirely in the second half was Goals
Soccer Centres, which had always been a non-qualifying holding and
produced a small profit.
Outlook
Markets have had a very unsettled start to 2016, with worries about a
further slowdown in China, continuing weakness in the oil price and
worries about the possibility of rising interest rates exacerbated by a
new uncertainty posed by the EU referendum in June. Despite the US
raising rates in December, the prospect of a rate rise in the UK still
seems to be some way off, and forecasts remain for slow economic growth.
As far as the domestic economy is concerned this is a similar outlook to
this time last year and goes some way to explain why many smaller UK
focused companies have continued to publish encouraging trading
statements which have often been followed by upgrades to analysts'
forecasts. On a more cautious note, it has become apparent in the
recent reporting season that the market is very nervous about companies
disappointing with some share prices falling substantially on bad news.
Inevitably it is the still unprofitable companies perceived to need
further funding that are most vulnerable in this situation, with the
specific risk increased where VCTs are no longer able to follow their
money at a lower price under new regulations and therefore at risk of
returns being diluted. We believe that share price performance will
continue to be driven by the progress of individual companies and take
comfort from the fact that 85% by value of the equity portfolio is
represented by profitable companies and 70% by dividend paying
companies.
A relatively positive UK economic outlook is also a reason to believe
that capital raising and flotations will remain a significant feature of
AIM this year. In those circumstances we would expect to invest the
present cash balance profitably for shareholders in new qualifying
holdings.
The AIM Team
Octopus Investments Limited
27 May 2016
Investment Portfolio
% equity
Fair held by
Cost as Value at all
at 29 Cumulative 29 % equity funds
February change in February Movement held by managed
Quoted 2016 fair value 2016 in year AIM VCT by
Investments Sector (GBP'000) (GBP'000) (GBP'000) ('GBP000) plc Octopus
Staffline
Recruitment
plc Support Services 334 4,626 4,960 1,756 1.3% 11.0%
Breedon
Aggregates Construction &
Limited Building 859 3,971 4,830 1,413 0.6% 1.2%
GB Group plc Support Services 715 2,220 2,935 1,034 0.9% 9.0%
Brooks
MacDonald
Group plc Finance 746 1,979 2,725 583 1.1% 8.3%
Technology
Quixant plc Hardware 697 1,952 2,649 500 2.3% 6.4%
Tasty plc Leisure & Hotels 622 1,834 2,456 402 2.8% 5.2%
Idox plc Software 353 2,040 2,393 493 1.3% 3.6%
Mattioli Woods
plc Finance 529 1,740 2,269 261 1.6% 2.4%
Learning
Technologies
Group plc Support Services 1,320 782 2,102 876 1.5% 2.4%
Vertu Motors
plc General Retailers 1,265 449 1,714 153 0.7% 5.0%
TLA Worldwide
plc Media 807 888 1,695 (40) 2.8% 6.1%
Telecommunication
Netcall plc Services 438 1,236 1,674 (463) 2.6% 4.5%
Pharmaceuticals &
Ergomed plc Biotech 1,440 31 1,471 15 3.1% 10.7%
RWS Holdings
plc Support Services 367 885 1,252 127 0.3% 6.7%
Pharmaceuticals &
Skyepharma plc Biotech 672 448 1,120 241 0.3% 0.6%
Animalcare Food Producers &
Group plc Processors 306 806 1,112 66 2.6% 6.8%
Restore Group
plc Support Services 467 605 1,072 78 0.4% 9.6%
Gooch & Housego Electronic &
plc Electrical 489 549 1,038 216 0.5% 11.9%
Cello Group plc Media 895 122 1,017 (73) 1.4% 5.4%
Craneware plc Software 183 831 1,014 303 0.5% 1.9%
Nektan Limited Software 845 (340) 505 (714) 2.6% 16.2%
Pharmaceuticals &
Abcam Plc Biotech 895 109 1,004 109 0.1% 2.1%
Clinigen Group Pharmaceuticals &
plc Biotech 935 47 982 47 0.1% 3.3%
DP Poland plc Leisure & Hotels 546 401 947 64 2.8% 4.7%
Adept Telecom Telecommunication
plc Services 601 321 922 304 1.9% 3.8%
Escher Group
Holdings plc Software 1,003 (119) 884 (147) 3.2% 5.5%
Bond
International
plc Software 353 496 849 17 2.2% 3.3%
Brady plc Software 947 (99) 848 (432) 1.8% 3.0%
CityFibre
Infrastructure Telecommunication
Holdings Plc Services 1,025 (201) 824 (201) 0.6% 1.6%
Advanced
Medical Pharmaceuticals &
Solutions Biotech 757 48 805 48 0.2% 7.7%
Nasstar plc Software 481 312 793 (24) 2.5% 7.1%
Judges
Scientific Electronic &
plc Electrical 314 443 756 (101) 0.8% 1.4%
Next Fifteen
plc Media 688 45 733 45 0.5% 7.0%
SQS Software
plc Software 291 404 695 (57) 0.4% 13.1%
Oxford
Pharmascience Pharmaceuticals &
Group plc Biotech 1,350 (709) 641 (709) 1.1% 3.5%
Sinclair Pharma Pharmaceuticals &
plc Biotech 765 (151) 614 48 0.3% 0.6%
EKF Diagnostics
plc Health 931 (322) 609 (706) 1.3% 2.4%
Tyratech Chemicals 600 - 600 - 5.5% 19.9%
Cambridge
Cognition
Group plc Health 601 (43) 558 (17) 5.0% 17.8%
Ideagen plc Software 419 139 558 102 0.7% 5.4%
Omega
Diagnostics
plc Health 465 90 555 29 3.5% 6.2%
Gear4Music
Holdings plc Media 557 (44) 513 (44) 2.0% 5.1%
Gamma
Communications Telecommunication
Plc Services 488 24 512 24 0.1% 7.3%
Haydale
Graphene Plc Chemicals 598 (131) 467 (131) 2.5% 9.0%
Mears Group plc Support Services 139 320 459 (78) 0.1% 0.1%
Iomart Group
plc Software 268 122 390 86 0.1% 8.1%
Plastics Engineering &
Capital plc Machinery 400 (16) 384 (56) 1.1% 9.1%
Midatech Pharma Pharmaceuticals &
plc Biotech 600 (218) 382 (274) 0.7% 3.0%
Access
Intelligence
plc Software 375 (19) 356 169 2.7% 5.3%
Engineering &
Microsaic plc Machinery 625 (314) 311 (325) 2.3% 8.6%
Proxama plc Software 763 (458) 305 (244) 3.0% 12.1%
Vianet Group
plc Support Services 359 (77) 282 42 1.1% 4.6%
Scientific Healthcare
Digital equipment 179 89 268 89 3.5% 12.0%
Futura Medical Pharmaceuticals &
plc Biotech 613 (371) 242 (129) 1.1% 5.2%
Fusionex
International
plc Software 282 (44) 239 (451) 0.4% 1.3%
Sphere Medical Health 600 (375) 225 (375) 2.6% 4.4%
ReNeuron Group Pharmaceuticals &
Plc Biotech 324 (146) 178 (146) 0.2% 1.2%
Tangent
Communications
plc Support Services 578 (419) 159 (14) 2.1% 4.7%
WANdisco plc Software 241 (88) 153 (379) 0.4% 0.7%
Altitude Group
plc Media 600 (450) 150 (117) 3.9% 4.5%
Engineering &
TP Group plc Machinery 648 (502) 146 (66) 1.3% 6.3%
Enteq Upstream
plc Oil Services 1,032 (908) 124 (26) 1.7% 3.7%
MyCelx
Technologies
plc Oil Equipment 1,470 (1,369) 101 (912) 5.3% 11.5%
Dods Group plc Media 203 (114) 89 34 0.2% 0.2%
1Spatial plc Software 300 (253) 47 (28) 0.1% 0.2%
Tanfield Group Engineering &
plc Machinery 226 (182) 44 (17) 0.6% 0.6%
Lombard Medical
Technologies
plc Health 408 (368) 40 (166) 0.3% 0.7%
Work Group plc Support Services 943 (911) 32 (15) 4.1% 6.2%
Clean Air Power
Limited Industrial 485 (485) - (161) 2.0% 8.8%
Total Quoted Investments 42,619 21,157 63,777 1,936
% equity
Fair held by
Cost as Value at all
at 29 Cumulative 29 % equity funds
February change in February Movement held by managed
Unquoted 2016 fair value 2015 in year AIM VCT by
Investments Sector (GBP'000) (GBP'000) (GBP'000) ('GBP000) plc Octopus
Hasgrove plc Media 88 62 150 70 2.2% 13.0%
Rated People
Limited Software 354 (322) 32 (322) 0.5% 1.5%
Total Unquoted Investments 442 (260) 182 (252)
% equity
Fair held by
Cost as Value at all
at 29 Cumulative 29 % equity funds
February change in February Movement held by managed
Loan Note 2016 fair value 2015 in year AIM VCT by
Investments Sector (GBP'000) (GBP'000) (GBP'000) ('GBP000) plc Octopus
Nektan Limited Software 500 - 500 - N/A 16.2%
Access
Intelligence
plc Software 120 - 120 - N/A 5.3%
Total Loan Note Investments 620 - 620 -
Total Investments 43,681 20,897 64,578 1,684
Money Market Funds 5,269
Total fixed asset investments and
money market funds 69,847
Cash at bank 9,751
Debtors less creditors (2,374)
Total net assets 77,224
Top ten holdings
Listed below are the ten largest investments, valued at bid price, as at
29 February 2016:
Staffline Recruitment Plc
Staffline is a provider of labour to employers.
Initial investment date: December 2004
Cost: GBP334,000
Valuation: GBP4,960,000
Equity held: 1.3%
Last audited accounts: 31 December 2015
Revenue: GBP702.2 million
Profit before tax: GBP5.5 million
Net assets: GBP73.2 million
Breedon Aggregates Limited
Breedon Aggregates supplies a diverse range of products to the
construction and building sectors from a number of quarries and other
sites in the Midlands and Scotland.
Initial investment date: August 2010
Cost: GBP859,000
Valuation: GBP4,830,000
Equity held: 0.6%
Last audited accounts: 31 December 2015
Revenue: GBP318 million
Profit before tax: GBP31.3 million
Net assets: GBP233 million
GB Group Plc
GB Group specialises in ID verification to help customers avoid ID theft
and fraud and to verify the age and circumstances of both customers and
employees for regulatory and commercial reasons.
Initial investment date: November 2011
Cost: GBP715,000
Valuation: GBP2,935,000
Equity held: 1.0%
Last audited accounts: 31 March 2015
Revenue: GBP57.3 million
Profit before tax: GBP5.9 million
Net assets: GBP46.1 million
Brooks MacDonald Group Plc
Brooks MacDonald is a provider of asset management and financial
consulting services with a particular emphasis on the pensions market.
Initial investment date: March 2005
Cost: GBP746,000
Valuation: GBP2,725,000
Equity held: 1.1%
Last audited accounts: 30 June 2015
Revenue: GBP77.7 million
Profit before tax: GBP11.4 million
Net assets: GBP74.2 million
Quixant Plc
Quixant designs and manufactures advanced PC based computer systems for
the gaming industry.
Initial investment date: September 2013
Cost: GBP697,000
Valuation: GBP2,649,000
Equity held: 2.3%
Last audited accounts: 31 December 2015
Revenue: $41.8 million
Profit before tax: $9.2 million
Net assets: $25.7 million
Tasty Plc
Tasty is the operator of Wildwood and Dim T restaurants in the 'casual
dining' sector.
Initial investment date: May 2007
Cost: GBP622,000
Valuation: GBP2,456,000
Equity held: 2.8%
Last audited accounts: 27 December 2015
Revenue: GBP35.8 million
Profit before tax: GBP3.1 million
Net assets: GBP19.2 million
Idox Plc
Idox is a leading software and information management solutions provider,
mainly to the public and engineering sectors.
Initial investment date: May 2008
Cost: GBP353,000
Valuation: GBP2,393,000
Equity held: 1.3%
Last audited accounts: 31 October 2015
Revenue: GBP62.6 million
Profit before tax: GBP9.8 million
Net assets: GBP53.6 million
Mattioli Woods Plc
Mattioli Woods is a financial advisor and investment manager and
administrator, particularly of pension funds.
Initial investment date: November 2005
Cost: GBP529,000
Valuation: GBP2,269,000
Equity held: 1.6%
Last audited accounts: 31 May 2015
Revenue: GBP34.6 million
Profit before tax: GBP5.3 million
Net assets: GBP39.5 million
Learning Technologies Group plc
Learning Technologies is a learning technologies agency which provides a
comprehensive and integrated range of e-learning services and
technologies to corporate and government clients.
Initial investment date: June 2011
Cost: GBP1,320,000
Valuation: GBP2,102,000
Equity held: 1.5%
Last audited accounts: 31 December 2015
Revenue: GBP19.9 million
Profit before tax: GBP1.5 million
Net assets: GBP25.5 million
Vertu Motors plc
The Vertu Motors group operates a nationwide chain of 120 franchised
motor dealerships offering sale, servicing, parts and bodyshop
facilities for new and used car and commercial vehicles.
Initial investment date: December 2006
Cost: GBP1,265,000
Valuation: GBP1,714,000
Equity held: 0.8%
Last audited accounts: 29 February 2016
Revenue: GBP2.4 billion
Profit before tax: GBP26 million
Net assets: GBP197.9 million
Directors' Responsibilities Statement
The Directors are responsible for preparing the Strategic Report,
Directors' Report, Directors' Remuneration Report and the financial
statements in accordance with applicable law and regulations. They are
also responsible for ensuring that the annual report includes
information required by the Listing Rules of the Financial Conduct
Authority.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with UK Generally
Accepted Accounting Practice ("GAAP"), including Financial Reporting
Standard 102 - 'The Financial Reporting Standard applicable in the
United Kingdom and Republic of Ireland' ("FRS 102"), (United Kingdom
accounting standards and applicable law). Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of
the Company and of the profit or loss of the Company for that period.
In preparing these financial statements the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
-- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and
-- prepare a Strategic Report, Directors' Report and Directors' Remuneration
Report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company's transactions, to
disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The directors confirm that:
-- so far as each Director is aware, there is no relevant audit information
of which the Company's auditor is unaware; and
-- the Directors have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that
information.
The Directors are responsible for preparing the annual report in
accordance with applicable law and regulations. The Directors consider
the annual report and the financial statements, taken as a whole,
provides the information necessary to assess the Company's performance,
business model and strategy and is fair, balanced and understandable.
The Directors are responsible for ensuring the annual report and the
financial statements are made available on the Company's website.
Financial statements are published on the website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The Directors' responsibility also extends to
the ongoing integrity of the financial statements contained therein.
The Directors confirm, to the best of their knowledge:
-- that the financial statements, prepared in accordance with UK GAAP,
including FRS 102, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company taken as a whole;
and
-- the annual report, including the strategic report, includes a fair review
of the development and performance of the business and the financial
position of the Company taken as a whole, together with a description of
the principal risks and uncertainties that it faces.
On Behalf of the Board
Michael Reeve
Chairman
27 May 2016
Income Statement
Year to 29 February 2016 Year to 28 February 2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(Loss) on
disposal of fixed
asset
investments - 59 59 - (298) (298)
Gain/(Loss) on
valuation of
fixed asset
investments - 1,684 1,684 - (4,005) (4,005)
Investment Income 816 - 816 703 - 703
Investment
management fees (340) (1,021) (1,361) (302) (906) (1,208)
Other expenses (456) - (456) (418) - (418)
Net return on
ordinary
activities before
taxation 20 722 742 (17) (5,209) (5,226)
Taxation - - - - - -
Net return on
ordinary
activities after
taxation 20 722 742 (17) (5,209) (5,226)
Earnings per share
- basic and
diluted 0.0p 1.0p 1.0p 0.0p (8.8p) (8.8p)
-- 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 only one class of business and derives its income from
investments made in shares and securities and from bank and money market
funds
The Company has no recognised gains or losses other than the results for
the period as set out above. Accordingly a Statement of Comprehensive
Income is not required.
Statement of Financial Position
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments* 64,578 57,711
Current assets:
Investments* 5,269 454
Debtors 48 203
Cash at bank 9,751 14,992
15,068 15,649
Creditors: amounts falling
due within one year (2,422) (748)
Net current assets 12,646 14,901
Net assets 77,224 72,612
Called up equity share
capital 760 656
Shares to be issued - 319
Share premium 21,643 13,951
Capital redemption reserve 24 9
Special distributable
reserve 60,062 63,684
Capital reserve realised (26,518) (29,810)
Capital reserve unrealised 20,898 23,468
Revenue reserve 355 335
Total equity shareholders'
funds 77,224 72,612
Net asset value per share 101.6p 110.2p
- basic and diluted
* held at fair value through profit & loss (FVTPL)
The statements were approved by the Directors and authorised for issue
on 27 May 2016 and are signed on their behalf by:
Michael Reeve
Chairman
Company number: 03477519
Statement of Changes in Equity
Shares Capital Special Capital Capital
Share Share to be redemption distributable reserve reserve Revenue
Capital Premium issued reserve reserves realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March
2014 547 873 1,327 2 64,455 (27,338) 29,512 352 69,730
Management fee
allocated as
capital
expenditure - - - - - (906) - - (906)
Current year
(loss) on
disposal (298) - - (298)
Current period
loss on fair
value of
investments - - - - - - (4,005) - (4,005)
Prior years'
holding
gains/losses
now realised - - - - - 2,039 (2,039) - -
Loss on
ordinary
activities
after tax - - - - - - - (17) (17)
Total other
comprehensive
income for the
year - - - - - - - - -
Contributions
by and
distributions
to owners:
Repurchase and
cancellation
of own
shares (7) - - 7 (771) - - - (771)
Issue of
shares 116 13,717 (1,327) - - - - - 12,506
Share issue
costs - (639) - - - - - - (639)
Cash received
for shares to
be issued - - 319 - - - - - 319
Dividends paid - - - - - (3,307) - - (3,307)
Balance as at
28 February
2015 656 13,951 319 9 63,684 (29,810) 23,468 335 72,612
As at 1 March
2015 656 13,951 319 9 63,684 (29,810) 23,468 335 72,612
Management fee
allocated as
capital
expenditure - - - - - (1,021) - - (1,021)
Current year
gains on
disposal - - - - - 59 - - 59
Current period
gain on fair
value of
investments - - - - - - 1,684 - 1,684
Prior years'
holding
gains/losses
now realised - - - - - 4,254 (4,254) - -
Gain on
ordinary
activities
after tax - - - - - - - 20 20
Total other
comprehensive
income for the
year - - - - - - - - -
Cancellation of
Share Premium - (4,658) - - 4,658 - - - -
Contributions
by and
distributions
to owners:
Repurchase and
cancellation
of own shares (15) - - 15 (1,499) - - - (1,499)
Issue of shares 119 12,989 (319) - - - - - 12,789
Share issue
costs - (639) - - - - - - (639)
Dividends paid - - - - (6,781) - - - (6,781)
Balance as at
29 February
2016 760 21,643 - 24 60,062 (26,518) 20,898 355 77,224
Statement of Cash Flows
For the year to 29 For the year to 28
February 2016 February 2015
GBP'000 GBP'000
Cash flows from operating
activities
Return on ordinary
activities before tax 742 (5,226)
Adjustments for:
Decrease in debtors 155 51
Increase in creditors 1,674 574
(Gain)/loss on disposal
of fixed assets (59) 298
(Gain)/loss on valuation
of fixed asset
investments (1,684) 4,005
Cash from operations 828 (298)
Income taxes paid - -
Net cash generated from
operating activities 828 (298)
Cash flows from investing
activities
Purchase of fixed asset
investments (11,043) (5,291)
Sale of fixed asset
investments 5,919 3,845
Net cash flows from
investing activities (5,124) (1,446)
Cash flows from financing
activities
Purchase of own shares (1,499) (771)
Share issues* 12,469 13,194
Decrease in shares to be
issued (319) (1,008)
Dividends Paid* (6,781) (3,307)
Net cash flows from
financing activities 3,870 8,108
(Decrease)/Increase in
cash and cash
equivalents (426) 6,364
Opening cash and cash
equivalents 15,446 9,082
Closing cash and cash
equivalents 15,020 15,446
Cash and cash equivalents
comprise
Cash at Bank 9,751 14,992
Money Market Funds 5,269 454
15,020 15,446
*Includes GBP491,000 of dividends where shares were issued under the
DRIS.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Octopus AIM VCT PLC via Globenewswire
HUG#2016108
http://www.octopusinvestments.com
(END) Dow Jones Newswires
May 27, 2016 11:45 ET (15:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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