Octopus Titan VCT plc
Unaudited Half-Yearly Report for the Six Months Ended 30 April 2017
Octopus Titan VCT plc, managed by Octopus Investments Limited, today announces the Half-Yearly results for the six months ended 30 April 2017.
These results were approved by the Board of Directors on 14 June 2017.
You may shortly view the Half-Yearly Report in full at www.octopusinvestments.com . All other statutory information will also be found there.
Octopus Titan VCT plc ('Titan' or '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 predominately unquoted companies..
Financial Headlines
95.2p Net asset value per share ('NAV') as at 30 April 2017
64.0p Cumulative dividends paid per share since launch
159.2p NAV plus cumulative dividends paid per share since launch ('Total Value') as at 30 April 2017
2.0p* Interim dividend declared for the half-year to 30 April 2017
* This will be paid on 25 August 2017 to shareholders on the register as at 4 August 2017.
Financial Summary
Six months to Six months to Year to 31 30 April 2017 30 April 2016 October 2016 -------------------------------------------------------------------------------
Net assets (£'000s) 425,402 309,060 315,976
Profit after tax (£'000s) 1,876 621 14,227
NAV 95.2p 95.7p 97.9p
Cumulative dividends paid since launch 64.0p 59.0p 61.0p
Total Value 159.2p 154.7p 158.9p
Total Return * 0.3p 0.0p 4.2p
Total return % ** 0.3% 0.0% 4.1%
Dividends paid in the period 3.0p 7.0p 9.0p
Dividends declared 2.0p 2.0p 3.0p -------------------------------------------------------------------------------
*Calculated as the change in NAV in the year plus dividends paid in the year. **Calculated as total return / opening NAV.
Chairman's Statement
I am pleased to present the unaudited half-yearly report for Octopus Titan VCT for the six months ended 30 April 2017.
As shareholders will be aware, we have successfully raised £119.3 million before expenses in our fund raising which closed on 6 March 2017 following which we have raised a further £7.5 million from a small top-up and the shares allotted through the dividend reinvestment scheme associated with the recent dividend. With net assets of £425 million, we are proud that Titan is, by some margin, the largest VCT and that we are firmly committed to the overall objectives to which the VCT scheme is intended, namely investing in young and early stage technology companies.
Following the fund raising, we have liquid resources of over £172 million. In the six month period to 30 April 2017 we have deployed a total of £52 million through £32 million in new and follow-on investments, £13 million in dividends, £2 million in share buybacks and £5 million in running costs. Whilst our cash resources are therefore significant I would point out that they only equate to around 18 months cash outflow and we regard this as entirely necessary given the fast growing portfolio, with most companies still loss making and requiring additional future investment to achieve profitability.
The increase in NAV in the period was 0.3p per share and the Total Value (NAV plus cumulative dividends paid per share since launch) at the end of the period is 159.2p, following the payment of a dividend in April of 3.0p per share. This return brings the average tax-free annual compound return to original shareholders to 5.9% on their original investment of £1. I believe these returns justify the support shown by our existing and new shareholders in the recent fund raisings and I would like to express the Board's thanks to all those who participated.
Details of transactions within the portfolio are set out below in the Investment Portfolio Review but I would particularly like to highlight the flotation of Eve Sleep, where we first invested in May 2015, and which has seen our investment multiple increase to almost 17x between then and flotation last month. In addition we have also sold the last remaining shares in ZPG plc (previously Zoopla Property Group plc) which were held by Zenith LP, the partnership into which Zenith Holding Company is invested. ZPG was the first VCT backed company to achieve a £1 billion market valuation and the sale price of the last remaining shares represented a multiple of over 33x the price we paid originally. We are proud to have contributed to these successes.
Results The Net Asset Value at 30 April 2017 was 95.2p, an increase of 0.3p per share from 31 October 2016 after accounting for the dividend of 3.0p per share which was paid in April. This represented a capital profit of 0.8p per share principally accounted for by the uplift in the value of our venture capital portfolio and the OEIC portfolio, offset by investment management fees charged to capital, and a revenue loss for the period of 0.5p per share.
Investment Portfolio Review I am pleased to report a net uplift in the value of the portfolio of £3.9 million during the period, excluding additions and disposals. This comprised an uplift of £17.9 million and a decrease of £14.0 million in revaluations.
We set out below the cost and valuation of the top ten holdings which account for over 60% of the value of the unquoted portfolio.
Investment cost at Valuation at 30 April 2017 * 30 April 2017 Investments (£'000) (£'000) ------------------------------------------------------------------------------- Zenith Holding Company Limited 14,701 32,361
Secret Escapes Limited 4,256 25,739
Amplience Limited 10,236 19,096
Sourceable Limited (trades as Swoon Editions) 6,957 18,018
Uniplaces Limited 4,657 10,628
Eve Sleep Limited (now Eve Sleep plc) 2,394 9,871
London House Exchange Limited (trades as 6,909 9,832 Property Partner)
Semafone Limited 3,594 9,220
Sofar Sounds Limited 7,705 8,927
Conversocial Limited 4,165 7,683
Other 118,298 100,640 ------------------------------------------------------------------------------- Total 183,872 252,015 -------------------------------------------------------------------------------
* Investment cost reflects the amount invested into each investee company from Titan's 1 - 5 before the 2014 merger and from Titan after the merger. This is different to the book cost which includes the holding gains and losses on assets which transferred from Titan's 1, 3, 4 & 5 to Titan 2 (now Titan) during the merger, as Titan purchased these assets at fair value.
During the six months to 30 April 2017, almost £32 million was invested into five new companies (Appear Here Limited, Token, Inc, Chiaro Technology Limited, Medisafe Project Limited and Impatients N.V.) and 16 follow-on investments. Since 30 April 2017, four more follow-on investments have been made into Adbrain, Chronext, Ultrasoc and MIRACL, amounting to £6.1 million.
As mentioned above, the final ZPG shares held in Zenith LP were sold and a £9 million dividend was paid by Zenith Holding Company to Titan.
Dividends As shareholders will know, our ambition at the time of the merger in 2014 was to pay an annual dividend of 5.0p per share with effect from the 2017 financial year. I am delighted that we have achieved this ambition a year early and your Board has now decided to declare an interim dividend of 2.0p (2016 2.0p) per share in respect of the current financial year, which will be paid on 25 August 2017 to shareholders on the register as at 4 August 2017.
VCT Qualifying Status PricewaterhouseCoopers LLP (PwC) provides both the Board and Octopus with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs. The Board has been advised that Titan continues to be in compliance with the conditions laid down by HMRC for maintaining approval as a VCT.
As at 30 April 2017, over 95% of the portfolio (as measured by HMRC rules) was invested in VCT-qualifying investments as reviewed and confirmed by PwC, significantly above the 70% VCT-qualifying threshold.
Principal Risks and Uncertainties The Board continues to regularly review the risk environment in which Titan operates. There have been no significant changes to the key risks which were fully described on pages 9 and 10 of the Annual Report for the year ended 31 October 2016 and the Board does not anticipate there will be significant changes to these risks for the remaining six months of the financial year.
Outlook As shareholders will discern from my report, the last six months have been a particularly busy period for our Investment Manager.
We are delighted with the response to Titan's recent fundraising which will allow us to continue our mission to seek out and invest in tomorrow's emerging technology companies and support the existing portfolio of companies with further investment where appropriate. Our Investment Manager continues to see a vibrant deal flow which it will seek to take advantage of through new investments and is also positive about the prospects of the existing portfolio, albeit mindful of the macro uncertainty that is likely to prevail for the next year or so.
Your Board also views the future for Titan with confidence and it is our intention to seek further funds to support our investee portfolio later in the year.
As noted earlier in my report, Titan is now paying regular annual dividends of 5p, and will aim to pay special dividends following significant profitable realisations, bearing in mind that the typical period from investment until realisation for early stage technology businesses is normally at least 7 years.
I would like to conclude by thanking our Investment Manager, on behalf of all shareholders, for their hard work, without which our investment strategy would not achieve the success we now see.
John Hustler Chairman 14 June 2017
Investment Portfolio Amount invested in the six Investment cost at months ending 30 April 2017 * 30 April 2017 Investments Sector (£'000) (£'000) ------------------------------------------------------------------------------- Zenith Holding Company Other 14,701 - Limited **
Amplience Limited Business Software 10,236 4,250
MIRACL Limited Security 10,098 2,777
UltraSoC Technologies Hardware 7,754 - Limited
Sofar Sounds Limited Travel & Leisure 7,705 -
Sourceable Limited Ecommerce 6,957 -
London House Exchange Property 6,909 1,734 Limited
CurrencyFair Limited Financial Services 6,746 1,198
Zynstra Limited Business Software 6,083 242
Oxcis Aviation Limited Travel & Leisure 5,614 -
Artesian Solutions Business Software 5,481 642 Limited
Adbrain Limited Advertising 4,662 -
Uniplaces Limited Property 4,657 -
Michelson Diagnostics Health and 4,541 - Limited Medicinal
Token, Inc Financial Services 4,398 4,398
Secret Escapes Limited Travel & Leisure 4,256 -
Conversocial Limited Business Software 4,165 -
Appear Here Limited Financial Services 3,814 3,814
Semafone Limited Business Software 3,594 -
Big Health Limited Health and 3,276 - Medicinal
Iovox Limited Business Software 3,272 384
Mi-Pay Group plc Business Software 3,011 -
The Faction Collective Travel & Leisure 2,967 538 SA
Ecrebo Limited Business Software 2,857 706
Bought By Many Limited Financial Services 2,780 -
Chiaro Technology Health and 2,770 2,770 Limited Medicinal
Smartkem Limited Hardware 2,714 -
Medisafe Project Health and 2,713 2,713 Limited Medicinal
Metrasens Limited Hardware 2,688 -
Affectv Limited Advertising 2,627 -
e-Therapeutics plc Health and 2,415 - Medicinal
Eve Sleep Limited (now Ecommerce 2,394 - Eve Sleep plc)
Bowman Power Limited Hardware 2,305 -
Trafi Limited Travel & Leisure 2,288 1,488
Impatients N.V. Health and 2,090 2,090 Medicinal
Origami Energy Limited Hardware 2,033 -
Surrey NanoSystems Hardware 1,993 - Limited
Elliptic Enterprise Business Software 1,662 - Limited
Tailsco Limited Food 1,506 -
Segura Systems Limited Business Software 1,470 385
TrialReach Limited Health and 1,438 - Medicinal
BridgeU Inc. Business Software 1,264 285
Chronext AG Ecommerce 1,253 456
Hubbub Deliveries Food 1,133 - Limited
Streethub Limited Ecommerce 997 147
Streetbees.com Limited Business Software 890 750
Behaviometrics AB Security 602 100
Time Out Group plc Travel & Leisure 555 -
Permutive Inc. Business Software 391 -
Wave Optics Limited Hardware 362 -
Mailcloud Limited Business Software 327 -
Phasor Inc. Hardware 250 -
Excession Technologies Business Software 208 - Limited ------------------------------------------------------------------------------- Total 183,872 31,867 -------------------------------------------------------------------------------
* Investment cost reflects the amount invested into each investee company from Titan's 1 - 5 before the 2014 merger and from Titan after the merger. This is different to the book cost which includes the holding gains and losses on assets which transferred from Titan's 1, 3, 4 & 5 to Titan 2 (now Titan) during the merger, as Titan purchased these assets at fair value.
** Owns stakes in Nature Delivered Limited (trades as graze), Secret Escapes Limited and Calastone Limited.
Directors' Responsibilities Statement
The Directors confirm that to the best of their 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 Services Authority Disclosure and Transparency Rules, being:
* 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;
* a description of the principal risks and uncertainties for the remaining six months of the year; and
* 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
John Hustler Chairman 14 June 2017
Income Statement
+-----------------------+ | Unaudited | Unaudited |Six months to 30 April |Six months to 30 April | 2017 | 2016 | | |Revenue Capital Total|Revenue Capital Total | | | £'000 £'000 £'000| £'000 £'000 £'000 -------------------------------+-----------------------+----------------------- | | | | Gains/(losses) on disposal of | - 511 511| - (2,521) (2,521) fixed asset investments | | | | Fixed asset investment holding| - 3,906 3,906| - 6,855 6,855 gains | | | | OEIC investment holding gains | - 2,861 2,861| - 25 25 | | Investment income | 107 - 107| (160) - (160) | | Investment management fees | (870) (2,609) (3,479)| (611) (1,834) (2,445) | | Performance fee | - (259) (259)| - - - | | Other expenses |(1,268) - (1,268)|(1,136) 3 (1,133) | | FX Translation | - (503) (503)| - - - -------------------------------+-----------------------+----------------------- Profit/(loss) before tax |(2,031) 3,907 1,876|(1,907) 2,528 621 | | Taxation | - - -| - - - -------------------------------+-----------------------+----------------------- Profit/(loss) after tax |(2,031) 3,907 1,876|(1,907) 2,528 621 -------------------------------+-----------------------+----------------------- Earnings per share - basic and| (0.5)p 1.0p 0.5p| (0.8)p 1.0p 0.2p diluted | | +-----------------------+
* The 'Total' column of this statement is the profit and loss account of the Company; the supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies. * 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.
Balance Sheet
+-------------------------+ | Unaudited | Audited | Six months to 30 April | Year to 31 October | 2017 | 2016 | | | | | | | £'000 £'000| £'000 £'000 -------------------------------+-------------------------+--------------------- Fixed assets - portfolio | | investments | 252,015| 225,536 | | Current assets: | | | | OEICs |135,656 | 62,795 | | Cash at bank* | 33,922 | 30,355 | | Debtors | 3,793 | 12,637 | | Money market securities | 2,452 | 7,494 -------------------------------+-------------------------+--------------------- |175,823 | 113,281 | | Current liabilities |(2,436) |(22,841) -------------------------------+-------------------------+--------------------- Net current assets | 173,387| 90,440 -------------------------------+-------------------------+--------------------- | | -------------------------------+-------------------------+--------------------- Net assets | 425,402| 315,976 -------------------------------+-------------------------+--------------------- | | | | Called up equity share capital| 44,697| 32,262 | | Share premium | 111,571| 1,619 | | Special distributable reserve | 224,892| 240,172 | | Capital redemption reserve | 933| 749 | | Capital reserve - gains on | | disposals | 6,863| 1,777 | | Capital reserve - holding | | gains | 45,618| 46,035 | | Revenue reserve | (9,406)| (7,375) | | Translation reserve | 234| 737 -------------------------------+-------------------------+--------------------- Total equity shareholders' | | funds | 425,402| 315,976 -------------------------------+-------------------------+--------------------- Net asset value per share | 95.2p| 97.9p +-------------------------+
* Includes cash held but not yet allotted
The statements were approved by the Directors and authorised for issue on 14 June 2017 and are signed on their behalf by:
John Hustler Chairman
Statement of Changes in Equity
+-------------+ | | | Unaudited| Audited| Unaudited| |Six months to| Year ended| Six months to 30 | |30 April 2017|31 October 2016| April 2016| | | | | | £'000| £'000| £'000| ---------------------------+-------------+---------------+---------------------+ Shareholders' funds at | | 228,461| | start of year | 315,976| | 228,461| | | | | Profit after tax | 1,876| 14,227| 621| | | | | Issue of equity (net of | | 105,947| | expenses) | 122,571| | 104,134| | | | | Purchase of own shares | (1,694)| (3,922)| (1,868)| | | | | Dividends paid | (13,327)| (28,737)| (22,288)| ---------------------------+-------------+---------------+---------------------+ Shareholders' funds at end| | 315,976| | of period | 425,402| | 309,060| ---------------------------+-------------+---------------+---------------------+
Cash Flow Statement
+----------------------+ | | Unaudited | Unaudited | |Six months to 30 April|Six months to 30 April| | 2017 | 2016 | | | | | £'000| £'000| ---------------------------------+----------------------+----------------------+ | | | | | | Reconciliation of profit to cash| | | flows from operating activities | | | | | | Profit before tax | 1,876| 621| | | | Decrease/(increase) in debtors | 8,844| (7,772)| | | | Decrease in creditors | (20,405)| (9,669)| | | | (Gains)/losses on disposal of | | | fixed asset investments | (511)| 2,521| | | | Gains on valuation of fixed | | | asset investments | (3,906)| (6,855)| | | | Surplus funds received from | | | fixed asset investments | 513| -| ---------------------------------+----------------------+----------------------+ Outflow from operating | | | activities | (13,589)| (21,154)| | | | | | | | | | Cash flows from investing | | | activities | | | | | | Purchase of fixed asset | | | investments | (31,867)| (19,569)| | | | Sale of fixed asset investments | 110| 47,219| | | | Zenith distribution | 9,182| -| ---------------------------------+----------------------+----------------------+ (Outflow)/inflow from investing | | | activities | (22,575)| 27,650| | | | | | | | | | Cash flows from financing | | | activities | | | | | | Dividends paid | (13,327)| (22,288)| | | | Purchase of own shares | (1,694)| (1,868)| | | | Issue of equity (net of | | | expenses) | 122,571| 104,134| ---------------------------------+----------------------+----------------------+ Inflow from financing activities| 107,550| 79,978| | | | | | | | | | Increase in cash and cash | | | equivalents | 71,386| 86,474| | | | | | | | | | Opening cash and cash | | | equivalents | 100,644| 26,991| ---------------------------------+----------------------+----------------------+ Closing cash and cash | | | equivalents | 172,030| 113,465| +----------------------+ |
Titan is satisfied that all inside information which the Directors and Titan may have leading up to the announcement of the half year end results for the period ended 30 April 2017, has been notified to a Regulated Information Service and, therefore, Titan is not prohibited from dealing in its own securities.
For further information please contact:
Nicola Board Company Secretary 0207 776 8663
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq 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 Titan VCT plc via GlobeNewswire
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