Octopus AIM VCT PLC : Half-yearly report

Octopus AIM VCT PLC

 

Half-yearly Results

13 October 2015

Octopus AIM VCT plc, managed by Octopus Investments Limited, today announces the half-yearly results for the six months ended 31 August 2015.

These results were approved by the Board of Directors on 13 October 2015.

Octopus AIM VCT plc is a venture capital trust which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominately AIM-quoted companies. The Company's investments are managed by Octopus Investments Limited.

The Company's Objective

The objective of the Company is to invest in a broad range of predominantly AIM-quoted companies in order to generate income and long-term capital growth. Investments are made selectively across a range of sectors in companies that have the potential to grow and enhance their value.

The Company offers investors exposure to the AIM market through a mature portfolio which takes a long term view. This enables investors to benefit from the tax advantages of investing in a VCT.

The investment portfolio

The Company's funds are managed by Octopus Investments Limited within a VCT-qualifying structure and the objective is to invest in a diversified portfolio of smaller companies principally listed on AIM. Investments are selected for their growth potential, dividend prospects and quality management teams which have a clear business plan to create growth. VCT regulation prevents material investment into asset backed companies, such as resource stocks and as a result, promotes investment into knowledge intensive and earlier stage companies.

Although the investment philosophy takes a long term view, the Company operates a buy back policy so that shareholders can exit their investment if they wish to. Shares are repurchased at a 5% discount to NAV and cancelled.

Tax benefits

Shareholders who buy shares in a new offer by the Company receive up to 30% up-front income tax relief on investments up to £200,000 per tax year providing the shares are held for five years.  Dividends are tax free irrespective of whether they purchased their shares in the secondary market or through a new share offer. It is your Board's intention to continue to pay a minimum dividend of 2.5p each half year. At the year-end our intention is to adjust the final dividend so that on an annual basis, and based on the year-end share price, shareholders receive either 5p per annum or a 5% yield, whichever is greater at the time. This will enable dividends to progress with a rising NAV, whilst maintaining the minimum historic level. 
  
Shareholders can sell shares through the Company-operated buy back policy and all disposals are free of Capital Gains Tax.

The Manager

The Octopus Investments Limited Smaller Companies Team is one of the most experienced AIM fund managers in the market. Octopus is a fast growing fund management company and currently manages £5 billion in funds making it the UK's biggest VCT provider.

Financial Headlines

105.6p	Net Asset Value at 31 August 2015
2.5p	*Interim dividend proposed for half year to 31 August 2015.

*An interim dividend of 2.5p will be paid on 14 January 2016 to those shareholders on the register on 18 December 2015. This is eligible for DRIS.

Financial Summary

	Six months to 31 August 2015	Six months to 31 August 2014	Year to 28 February 2015
Net assets (£'000s)	77,363	64,726	72,612
Net profit /(loss) after tax (£'000s)	1,895	(5,515)	(5,226)
Net asset value per share ("NAV")	105.6p	112.5p	110.2p
Dividends paid in the period	6.8p	3.0p	5.5p
Total return*	2.0%	(7.7)%	(7.6)%

* The total return is calculated as the (movement in NAV + Dividends paid in the period) divided by the NAV at the beginning of period

DISCRETE ANNUAL PERFORMANCE TO 31 AUGUST 2015

	Year to 31 August 2015	Year to 31 August 2014	Year to 31 August 2013	Year to 31 August 2012	Year to 31 August 2011
Octopus AIM VCT NAV Performance - Total Return	2.1%	13.0%	25.9%	6.0%	12.5%
FTSE AIM Total Return	(4.6)%	4.7%	11.4%	(11.0)%	12.7%
FTSE All Share Total Return	(2.3)%	10.3%	18.9%	10.2%	7.3%
Octopus AIM VCT Share Performance - Total Return	0.7%	13.9%	36.1%	3.0%	25.1%

Sources: Octopus, Lipper. VCT performance shown is a simple return comparison between the NAV at the beginning of the period and the NAV, plus any dividends paid out, at the end of the period. VCT share price performance shown includes reinvested dividends. NAV stated after the deduction of fees.

Chairman's Statement

INTRODUCTION

The temporary euphoria of a majority single party government in May has since been followed by worries over the slowdown in Chinese economic growth, the continuing hiatus in the Eurozone and the political difficulties caused by the European immigrant crisis as well as concerns about the timing of interest rate rises. Not surprisingly larger companies' share prices, the constituents of the FTSE 100 index, have been volatile. Smaller companies have been much more resilient, but it would be wrong to suggest that they can avoid the mood swings entirely, even though their exposure to China's difficulties, for example, are peripheral rather than direct.

In the six months since the year end to 31 August smaller companies have shown considerable resilience in contrast to their larger brethren and that has provided a reasonable background against which companies have continued to raise new capital.  Valuations have been more realistic than they were a year ago and your company has invested a total of £4m in VCT qualifying holdings in the first half of the year.  Also in the period the proceeds from the take-over of Advanced Computer Software were received and your company has paid a total dividend of 6.8p per share, which comprised a special dividend of 4p and an ordinary dividend, in line with the board's policy of 2.8p per share. 

PERFORMANCE

It is hardly surprising, in the context of the jolt to the market in the later summer, that the indices for larger companies were lower at the end of August compared to February. The total return on the FTSE All Share Index was -6.2% in the six month period and the FTSE 100 Index was down almost 8%. Smaller companies however, have weathered the storm in rather better style. The total return on the FTSE SmallCap (excluding investment companies) Index was 6.4% and the FTSE AIM All Share Index was up 3.5%. The Net Asset Value (NAV) was 105.6p at the end of August, but that is after paying the 6.8p dividend.  Adding this back to the period end NAV gives a value of 112.4p, compared to the NAV of 110.2p at the end of February, a rise of 2%.  Amongst portfolio constituents, there have been good performance contributions from the more mature and established holdings such as Brooks Macdonald, Staffline, Gooch & Housego, Adept Telecoms, GB Group, Mattioli Woods, Iomart and Craneware.  The share price of Chime Communications has benefitted from the recommended bid for the company. However, these have been counterbalanced by poor share price performance from some of the earlier stage companies, where the nervousness of the market has impacted share prices, particularly those that are still potentially needing further finance to get them to profitability.  Proxama, Sphere Medical, Nektan, Wandisco and Oxford Pharmascience all fell into this category and Mycelx continued to perform badly against the background of a weak oil price. Tasty, RWS, and Judges Scientific also performed badly in the six months although all of these are profitable and dividend paying and have seen their shares recover since the period end. 

DIVIDEND

Your board has a policy of an annualised 5% yield target and the ordinary 2.8p dividend referred to above was paid in line with this policy. Your board would like to continue this policy and therefore has declared an interim dividend of 2.5p per share.  This will be paid to shareholders, who are on the share register on 18 December 2015, on 14 January 2016.

INVESTMENT ACTIVITY

Your managers have invested £4m in qualifying investments in the six months to the end of August.  That comprises £1.1m into two existing holdings, Learning Technologies and Nektan. The balance of almost £3m has been invested into new holdings, Sphere Medical, Gear4Music, Oxford Pharmascience and ReNeuron.   Gear4Music is a leading UK online retailer of musical instruments, both branded and its own brands.  At present it has one showroom in York and is opening another in London with the proceeds from its float. The other three new holdings are all involved in medical science in one form or another. Sphere Medical is developing a novel bedside blood analyser product for use on patients in intensive care. Oxford Pharmascience is redeveloping existing pain relief medicines, such as aspirin and ibuprofen, to reduce side effects and Reneuron is developing stem cell treatments.  Much of this science is inevitably long term in nature and of course will face many problems, not least regulatory and financial, along the way, before being finally accepted into practical use in health services around the world. However, the companies have substantial cash resources and a good chance of successful progress and are very much what VCTs should be investing in.
There were three take-overs in the six months. The first, which was mentioned in the report and accounts, was of Advanced Computer Software.  The proceeds of this transaction were received in March out of which a special 4p dividend was paid in August and the balance was available for investment.  The second take-over was of the small holding in Enables IT, for which shares in 1Spatial were accepted.  As a result this VCT has a small holding now in 1Spatial.  Finally Synarbor, a delisted AIM company and a small unlisted holding in the portfolio, was successfully sold by its directors.

A number of new non-qualifying holdings have been established, which include Clinigen and CityFibre Infrastructure Holdings, as well as adding to existing holdings such as Ergomed and Ideagen.  Your managers are looking for opportunities to add to the non-qualifying portfolio in order to put the cash raised under the offer to work while it is waiting for new qualifying opportunities.

SHARE ISSUES AND BUY-BACKS

As the report and accounts mentioned, the share offer remained open at that time, although it closed on 1 July. In the period since the financial year end, your company raised £9m of additional capital, to make a total of £18m raised under last year's prospectus.

In the six months to the end of August, your company bought back 311,574 shares and these have all been cancelled. There are no share held in treasury.

In addition 323,669 new ordinary shares were issued in August to shareholders who participate in the share reinvestment scheme.

VCT REGULATIONS

In the summer Budget, as shareholders may be aware, a number of changes to VCT regulations were introduced, which will become effective when Royal Assent is given to the Finance Bill. This is expected shortly. To the extent that these proposals affect this VCT, your board is discussing the potential consequences with your manager.  Given the established nature of the portfolio, any changes are unlikely to be immediate. It is probable that over time the investment focus will be refined and we will set out any detailed implications of this in the next annual report once we have examined the new regulations.

RISKS AND UNCERTAINTIES

The principal risks and uncertainties are set out in Note 6 to this half yearly report on page X.

OUTLOOK

The current economic headlines are dominated by a number of well-documented international concerns, which do not really impact directly on smaller UK companies although they do affect market sentiment and therefore share prices.  The most important factor for companies in your portfolio is the growth in the UK economy and the prospects for its continuation. In the wake of the recent results seen during September, it is clear that many portfolio companies are trading well, enjoying the benefits of the UK's growth and continuing to invest and innovate. The exceptions to this relatively rosy view are those companies facing export market and foreign exchange difficulties, as well as any exposed to the resource sector although your managers would argue that these issues are now reflected in the relevant share prices. However, at the end of September the unaudited NAV had risen to 106.5p, compared to 105.6p a month earlier. The market will continue to worry about the effects of any interest rate rises.  However, with inflation still below the Bank of England's 2% target it does not look to be a near prospect.

The pipeline of VCT qualifying investment opportunities has been a little slower to recover from the seasonal summer lull than usual.  This is probably partly due to the volatile state of larger company share prices but also not helped by the process of companies and advisers adjusting to the new VCT legislation which was outlined in the summer budget and will be finalised in the next month.  Your company still has relatively high levels of cash and has made two small follow on investments into existing holdings since the end of the period and is now starting to see more opportunities on the horizon.  We expect the number to rise for as long as the current economic confidence persists. 

   
Michael Reeve
13 October 2015

Investment Portfolio

Investments	Sector	Book cost as at 31 August 2015 (£'000)	Cumulative change in fair value (£'000)	Fair Value at 31 August 2015 (£'000)	Movement in year ('£000)	% equity held by AIM VCT plc	% equity held by all funds managed by Octopus
Staffline Recruitment Plc	Support Services	342	4,987	5,329	2,038	1.4%	11.2%
Breedon Aggregates Limited	Construction & Building	859	2,790	3,649	233	0.7%	1.1%
Brooks MacDonald Group Plc	Finance	746	1,946	2,692	551	1.1%	7.5%
GB Group plc	Support Services	714	1,877	2,591	691	1.0%	8.6%
Mattioli Woods Plc	Finance	528	1,788	2,316	309	1.6%	2.4%
TLA Worldwide plc	Media	807	1,483	2,290	555	3.0%	6.4%
Quixant plc	Technology Hardware	697	1,498	2,195	46	2.3%	6.4%
Idox Plc	Software	353	1,570	1,923	24	1.3%	3.6%
Tasty Plc	Leisure & Hotels	621	1,194	1,815	(238)	2.8%	5.2%
Vertu Motors Plc	General Retailers	1,265	475	1,740	180	0.8%	5.9%
Netcall plc	Telecommunication Services	437	1,218	1,655	(481)	2.6%	4.5%
Ergomed Plc	Pharmaceuticals & Biotech	1,440	137	1,577	122	3.1%	10.7%
Brady plc	Software	947	519	1,466	186	1.8%	3.1%
Learning Technologies Group (formerly In-Deed Online Plc)	Support Services	1,317	82	1,399	175	1.6%	2.7%
EKF Diagnostics Plc	Health	931	301	1,232	(83)	1.3%	2.4%
Nektan plc (formerly Nektan Limited)	Software	1,145	59	1,204	(316)	2.8%	16.4%
Cello Group Plc	Media	895	231	1,126	36	1.4%	5.9%
Adept Telecom Plc	Telecommunication Services	600	514	1,114	497	1.9%	3.8%
Animalcare Group Plc	Health	306	795	1,101	55	2.6%	6.8%
Escher Group Holdings plc	Software	1,003	58	1,061	30	3.2%	5.5%
Oxford Pharmascience Group plc	Pharmaceuticals & Biotech	1,350	(304)	1,046	(304)	1.1%	3.5%
Gooch & Housego Plc	Electronic & Electrical	489	520	1,009	187	0.5%	10.9%
Bond International Plc	Software	354	636	990	157	2.2%	3.3%
Skyepharma plc	Pharmaceuticals & Biotech	672	269	941	63	0.3%	0.6%
RWS Holdings Plc	Support Services	367	489	856	(269)	0.3%	6.3%
Craneware Plc	Software	183	672	855	145	0.5%	1.9%
Restore Plc	Support Services	467	386	853	(141)	0.4%	10.3%
CityFibre Infrastructure Holdings Plc	Telecommunication Services	1,025	(234)	791	(234)	1.6%	3.6%
SQS Software Plc	Software	291	476	767	15	0.4%	12.2%
Judges Scientific Plc	Electronic & Electrical	314	447	761	(96)	0.8%	1.4%
Nasstar plc	Software	480	264	744	(72)	2.6%	7.4%
Clinigen Group plc	Pharmaceuticals & Biotech	619	110	729	110	0.1%	3.0%
DP Poland Plc	Leisure & Hotels	546	127	673	(209)	3.8%	6.4%
Cambridge Cognition Group plc	Health	600	43	643	69	5.0%	17.8%
Fusionex International plc	Software	282	351	633	(56)	0.4%	1.5%
Sinclair Pharma Plc	Pharmaceuticals & Biotech	765	(151)	614	48	0.4%	0.6%
Midatech Pharma Plc	Pharmaceuticals & Biotech	600	2	602	(54)	0.8%	3.6%
Omega Diagnostics Plc	Health	464	99	563	38	3.5%	6.1%
Gear4Music Holdings plc	Media	557	(4)	553	(4)	2.0%	5.1%
Ideagen plc	Software	419	115	534	78	0.7%	5.6%
Sphere Medical	Health	600	(113)	487	(113)	2.6%	4.4%
Mears Group Plc	Support Services	139	348	487	(50)	0.1%	0.1%
Access Intelligence Plc	Software	495	(56)	439	131	2.7%	5.3%
Plastics Capital Plc	Engineering & Machinery	400	20	420	(20)	1.1%	11.7%
Goals Soccer Centres Plc	Leisure & Hotels	205	179	384	(84)	0.3%	2.3%
MyCelx Technologies plc	Oil Services	1,470	(1,087)	383	(631)	5.3%	11.5%
Proxama plc	Software	763	(382)	381	(168)	3.0%	12.1%
Iomart Group Plc	Software	268	95	363	58	0.1%	7.2%
ReNeuron Group Plc	Pharmaceuticals & Biotech	324	16	340	16	0.2%	1.2%
Chime Communications Plc	Media	194	132	326	87	0.1%	0.3%
Microsaic Systems Plc	Engineering & Machinery	325	-	325	(12)	1.2%	7.6%
Futura Medical Plc	Pharmaceuticals & Biotech	613	(291)	322	(48)	1.1%	5.2%
Vianet Group Plc	Support Services	359	(83)	276	36	1.1%	4.7%
WANdisco Plc	Software	241	(12)	229	(304)	0.5%	0.8%
Altitude Group Plc	Media	600	(400)	200	(67)	3.9%	4.5%
Corac Plc	Engineering & Machinery	648	(462)	186	(27)	1.3%	6.4%
Lombard Medical Technologies Plc	Health	408	(265)	143	(63)	0.4%	0.7%
Synarbor Plc	Support Services	15	124	139	117	0.8%	0.8%
Tangent Communications Plc	Support Services	578	(448)	130	(43)	2.1%	4.7%
Enteq Upstream Plc	Oil Services	1,032	(908)	124	(26)	1.7%	3.8%
Hasgrove Plc	Media	88	(9)	79	-	2.2%	13.0%
Dods Group Plc	Media	203	(138)	65	10	0.2%	0.2%
Enables IT Group plc (1spatial)	Software	300	(241)	59	(16)	0.1%	0.2%
Work Group Plc	Support Services	943	(890)	53	6	4.1%	6.1%
Tanfield Group Plc	Engineering & Machinery	226	(174)	52	(10)	0.2%	0.6%
Rated People Limited	Software	354	(322)	32	(322)	0.5%	1.5%
Clean Air Power Limited	Industrial	485	(454)	31	(130)	2.0%	8.8%
Total investments		39,073	22,014	61,087	2,404
Money market funds				5,257
Total fixed asset investments and money market funds				66,344
Cash at bank				11,049
Debtors less creditors				(30)
Total net assets				77,363

Responsibility Statement of the Directors in respect of the Half-Yearly Report

We confirm that to the best of our knowledge:

• the half-yearly financial statements have been prepared in accordance with the statement "Interim Financial Reporting" issued by the Financial Reporting Council;

• the half-yearly report includes a fair review of the information required by the Financial Conduct Authority's 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

Michael Reeve
Chairman
13 October 2015

Income Statement
	Six months to 31 August 2015			Six months to 31 August 2014			Year to 28 February 2015
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Realised (loss) on disposal of fixed asset investments	-	(33)	(33)	-	(120)	(120)	-	(298)	(298)
Unrealised gain/(loss) on valuation of fixed asset investment	-	2,408	2,408	-	(4,940)	(4,940)	-	(4,005)	(4,005)
Income	385	-	385	363	-	363	703	-	703
Investment management fees	(173)	(519)	(692)	(149)	(447)	(596)	(302)	(906)	(1,208)
Other expenses	(173)	-	(173)	(222)	-	(222)	(418)	-	(418)
Profit/(loss) on ordinary activities before tax	39	1,856	1,895	(8)	(5,507)	(5,515)	(17)	(5,209)	(5,226)
Taxation on (loss)/profit on ordinary activities		-	-	-	-	-	-	-	-
Profit/(loss) on ordinary activities after tax	39	1,856	1,895	(8)	(5,507)	(5,515)	(17)	(5,209)	(5,226)
Earnings per share - basic and diluted	0.1p	2.6p	2.7p	-	(9.6p)	(9.6p)	0.0p	(8.8p)	(8.8p)

• 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 accompanying notes are an integral part of the half-yearly report.
• The Company has no recognised gains or losses other than those disclosed in the income statement.

Reconciliation of Movements in Shareholders' Funds
	Six months ended 31 August 2015	Six months ended 31 August 2014	Year to 29 February 2015
	£'000	£'000	£'000
Shareholders' funds at start of period	72,612	69,730	69,730
Profit/(loss) on ordinary activities after tax	1,895	(5,515)	(5,226)
Shares purchased and cancelled	(328)	(332)	(771)
Issue of equity	8,143	2,573	13,194
Increase/(decrease) in shares to be issued	-	-	(1,008)
Dividends paid	(4,959)	(1,730)	(3,307)
Shareholders' funds at end of period	77,363	64,726	72,612

Balance Sheet
	As at 31 August 2015		As at 31 August 2014		As at 28 February 2015
	£'000	£'000	£'000	£'000	£'000	£'000
Fixed asset investments*		61,087		56,925		57,711
Current assets:
Money market securities*	5,257		453		454
Debtors	63		64		203
Cash at bank	11,049		7,466		14,992
	16,369		7,983		15,649
Creditors: amounts falling due within one year	(93)		(182)		(748)
Net current assets		16,276		7,801		14,901
Net assets		77,363		64,726		72,612
Called up equity share capital		733		575		656
Shares to be issued		-		-		319
Share premium account		17,675		4,742		13,951
Capital redemption reserve		12		5		9
Special distributable reserve		68,014		64,123		63,684
Capital reserve realised		(31,461)		(29,082)		(29,810)
Capital reserve unrealised		22,016		24,019		23,468
Revenue reserve		374		344		335
Total equity shareholders' funds		77,363		64,726		72,612
Net asset value per share		105.6p		112.5p		110.2p

*Held at fair value through profit & loss

The accompanying notes form an integral part of the financial statements.

The statements were approved by the Directors and authorised for issue on 13 October 2015 and are signed on their behalf by:

Michael Reeve
Chairman
Company No: 03477519

Cash Flow Statement
	Six months to 31 August 2015	Six months to 31 August 2014	Year to 28 February 2015
	£'000	£'000	£'000
Net cash outflow from operating activities	(995)	(257)	(298)
Financial investment :
Purchase of fixed asset investments	(6,014)	(2,363)	(5,291)
Disposal of fixed asset investments	5,012	946	3,845
Management of cash equivalent resources:
Purchase of current asset investment	(4,802)	-	(1)
Disposal of current asset investment	-	-	-
Net cash outflow from investing activities	(6,799)	(1,674)	(1)
Dividends paid	(4,959)	(1,730)	(3,307)
Financing:
Shares to be issued	-	-	(1,008)
Issue of equity	8,143	2,573	13,194
Shares re-purchased	(328)	(332)	(771)
	2,856	511	11,415
(Decrease)/increase in cash at bank	(3,943)	(1,163)	6,363

Reconciliation of Net Cash Flow to Movement in Net Funds
	Six months to 31 August 2015	Six months to 31 August 2014	Year to 28 February 2015
	£'000	£'000	£'000
(Decrease)/increase in cash at bank	(3,943)	(1,163)	6,363
Increase in cash equivalents	4,803	-	1
Opening net liquid resources	15,446	9,082	9,082
Net cash resources at end of period	16,306	7,919	15,446

Reconciliation of Profit before Taxation to Cash Flow from Operating Activities
	Six months to 31 August 2015	Six months to 31 August 2014	Year to 29 February 2015
	£'000	£'000	£'000
Profit/(loss) on ordinary activities before tax	1,895	(5,515)	(5,226)
Loss on realisation of investments	33	120	298
(Gain)/loss on valuation of investments	(2,408)	4,940	4,005
Decrease in debtors	140	190	51
(Decrease)/increase in creditors	(655)	8	574
Net cash outflow from operating activities	(995)	(257)	(298)

Notes to the Half-Yearly Report

1.         Basis of preparation
The unaudited half-yearly results which cover the six months to 31 August 2015 have been prepared in accordance with the Financial Reporting Council's (FRC) Financial Reporting Standard 104 Interim Financial Reporting (March 2015) and the Statement of Recommended Practice for Investment Companies issued by the Association of Investment Companies in November 2014.

2.         Publication of non-statutory accounts
The unaudited interim results for the six months ended 31 August 2015 do not constitute statutory accounts within the meaning of s.415 of the Companies Act 2006 and have not been delivered to the Registrar of Companies.  The comparative figures for the year ended 28 February 2015 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies.  The independent auditor's report on those financial statements, in accordance with chapter 3 of part 16 of the Companies Act 2006, was unqualified. This half-yearly report has not been reviewed by the Company's auditor.

3.         Earnings per share
The earnings per share at 31 August 2015 is calculated on the basis of 71,101,373 (28 February 2015: 59,233,368 and 31 August 2015: 57,199,373) shares, being the weighted average number of shares in issue during the period.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted return per share figures are relevant. The basic and diluted earnings per share are therefore identical.

4.         Net asset value per share
The calculation of net asset value per share is based on the net assets at 31 August 2015 and on 73,251,687 (28 February 2015: 65,898,868 (being the sum of 65,624,466 Ordinary shares in issue plus 274,422 shares to be issued at that date) and 31 August 2014: 57,544,424) shares being the number of shares in issue, excluding shares held in Treasury, at the same date.

5.         Dividends
The interim dividend declared of 2.5 pence per Ordinary share will be paid on 14 January 2016 to those shareholders on the register on 18 December 2015.

6.          Risks and uncertainties

The Company's assets consist of equity and fixed-rate interest investments, 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 28 February 2015. The Company's principal risks and uncertainties have not changed materially since the date of that report.  

7.         Related Party Transactions
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 £692,000 (28 February 2015: £1,208,000 and 31 August 2014: £596,000) payable to Octopus. At the period end there was £Nil (28 February 2015: £Nil and 31 August 2014: £Nil) outstanding to Octopus.

8.         Post Balance Sheet Events
                  ·         On 15 September 2015 7,500 shares in Gamma Communications plc were purchased for a total consideration of £22,000
                  ·         On 24 September 2015 367,647 shares in Synarbor Plc were disposed for a total consideration of £138,000
                  ·         On 25 September 2015 300,000 shares in Advance Medical Solutions Group Plc were purchased for a total consideration of £457,000.

9.         Other Information
This statement will be made available to all shareholders. Copies are also available from the registered office of the Company at 33 Holborn, London, EC1N 2HT, and will also be available to view on the Octopus website at www.octopusinvestments.com.

About Octopus AIM VCT PLC

Octopus AIM VCT plc ("the Company or Fund") was launched as Close AIM VCT PLC in the spring of 1998 and raised £10.1 million from private investors through an issue of Ordinary shares.

Between October 2000 and March 2001 a further £20.0 million was raised through an issue of C shares. Furthermore, between 16 March 2004 and final closing on 5 April 2004 the Company raised £3.3 million by way of a D share issue.

The C Shares were merged and converted into Ordinary shares on 31 May 2004 at a conversion ratio determined by a price mechanism related to the respective net assets per share of both the Ordinary shares and C shares at 29 February 2004 (which resulted in C Shareholders receiving 1.0765 Ordinary shares for each C share held).

A further £15.0 million was raised between 6 January 2005 and 8 April 2005 through an issue of New D shares.

On 31 May 2008, the Ordinary shares converted into D shares at a conversion ratio of 0.5448 D shares for each Ordinary share. All of the D shares were then re-designated into New Ordinary shares.

With effect from 1 August 2008, the management of the Company was transferred to Octopus Investments Limited.

On 4 August 2010 the share capital was restructured and each existing Ordinary share of 50 pence was subdivided into one Ordinary share of 1 pence and one Deferred share of 49 pence. The Deferred shares had no economic value and were bought back by the Company for an aggregate amount of 1 pence and cancelled.

On 12 August 2010, following approval at the Extraordinary General Meeting on 4 August 2010, shareholders of Octopus Phoenix VCT had their shares converted into Octopus AIM VCT shares on a relative net asset value basis using the conversion factor of 0.42972672. On the same day, Octopus Phoenix VCT was placed into members' voluntary liquidation.

The offer for subscription in the prospectus dated 9 July 2010 relating to the issue of new shares in connection with the merger with Octopus Phoenix VCT Plc was extended by a supplemental prospectus and closed on 19 April 2011 raising £10 million.  A subsequent offer raised £1.9 million, closing on 5 April 2012.

A further offer was launched on 25 April 2012 and closed on 31 July 2012. The offer resulted in the issue of 2,843,092 new shares, raising a total of £2.6 million.

On 23 October 2012 the Company announced an Enhanced Buyback Facility ("EBB") in respect of up to 50 per cent of the issued share capital. The EBB closed on 31 January 2013. As a result of the EBB, the Company repurchased 10,801, 537 Ordinary shares and 10,289,443 new Ordinary shares were issued.

An offer for subscription of up to £10 million, which opened on 1 February 2013 and closed on 17 December 2013, raised £9.4 million.  As mentioned in the Chairman's statement, the Board completed a fund-raise of £4.1 million by way of an issue of new shares in a non-prospectus offer that opened on 2 February 2014 and closed fully subscribed on 28 March 2014.

A combined offer for subscription with Octopus AIM VCT 2 plc was launched on 29 August 2014 with a maximum offer of £18.0 million in the Company and £12.0 million in Octopus AIM VCT 2 plc (through a £20.0 million offer and an over-allotment facility of £10.0 million which was announced on 26 March 2015). The offer closed on 1 July 2015 and total raised £18.0 million.

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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

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