Octopus AIM VCT 2 plc : Half-yearly report

Half-yearly Results
26 July 2017

Octopus AIM VCT 2 plc, managed by Octopus Investments Limited, today announces the half-yearly results for the six months ended 31 May 2017.
These results were approved by the Board of Directors on 26 July 2017.

You may shortly view the half-yearly report in full by visiting https://www.octopusinvestments.com/investor/our-products/venture-capital-trusts/octopus-aim-vcts. All other statutory information will also be found there.

Financial Summary

	Six months to 31 May 2017	Six months to 31 May 2016	Year to 30 November 2016
Net assets (£'000s)	75,653	56,631	63,005
Net profit after tax (£'000s)	10,523	138	3,184
Net asset value per share ('NAV')	91.8p	78.5p	80.6p
NAV Total Return (%)*	16.4	(0.1)	5.0
Dividends paid	2.0p	2.0p	4.0p
Interim dividend**	2.1p	2.0p	2.0p

*NAV Total Return is calculated as (movement in NAV + dividends paid in the period) divided by the NAV at the beginning of the period.
**The interim dividend will be paid on 29 September 2017 to shareholders on the register on 15 September 2017.

Chairman's Statement

I am pleased to present the half-yearly results for the Octopus AIM VCT 2 plc. In the past my interim statement has incorporated information about, for example, performance and portfolio activity, but this has now been set out separately in the Interim Management Report below. However, it seems sensible to make a few overall remarks.

The six months to 31 May 2017 saw the upward trend in stock market indices that we reported on in the Annual Report continue. Smaller companies enjoyed a particularly strong start to 2017 after a period when they had underperformed the FTSE 100, which had benefitted from its high exposure to foreign earnings in the final quarter of 2016. The outperformance of smaller companies was supported by some very good results in the March reporting season and was achieved despite a considerable degree of political uncertainty around the mechanics of Brexit and the announcement of a General Election at the end of April.

Your Board has declared a dividend of 2.1p, which will be paid at the end of September.

Your Manager has made a number of new investments in the six month period and these are more fully explained in their report below. There also is a healthy pipeline of potential new investments, so at this stage it is probable that there will be more new holdings made in the second half of the year.

Shareholders will be aware that your Board launched a new public offer of shares in June and the first allotment is scheduled for 4 August 2017. On the basis of current evidence it seems that there may be good investment opportunities for the new funds, despite the fact that the market will be more prone to bouts of uncertainty as the Brexit negotiations unfold. Nevertheless, the broad economic background currently remains favourable and your Board therefore hopes that the NAV can continue to rise.

Keith Mullins
Chairman
26 July 2017

Interim Management Report

Overview
Fundraisings on AIM got off to a slower start in 2017 although they picked up as the period went on and remain strong as this report goes to press. Once again, further fundraisings for existing business exceeded those for new issues, demonstrating that AIM continues to support its existing members. Against this background we announced a top-up offer to raise £4.3 million which closed fully subscribed at the beginning of March, well before the end of the tax year. We have now announced a further fundraising for the new tax year of up to £16 million as we believe that the flow of opportunities will continue to pick up as market participants become more familiar with current VCT rules.

Performance
Adding back the 2p paid out in dividends in the period, the Net Asset Value has increased by 16.4% in the six months to 31 May 2017. This compares with a 17.8% rise in the Smaller Companies Index (ex Investment Trusts), a 13.6% increase in the FTSE All Share Index and a 22.1% rise in AIM, all on a total return basis. Smaller companies performed slightly better as they caught up with a strong performance from the FTSE100 in the aftermath of the Brexit vote and weaker sterling. Performance remained stock specific and heavily influenced by the announcement of news with the market remaining wary of the majority of early stage companies not yet making a profit, of which we hold a number in the portfolio, particularly in the pharmaceutical, medical device and technology sectors.

Of the good performers in the portfolio, quite a few saw their share prices react positively to corporate developments, either internally generated or as a result of acquisitions. Breedon's share price continued to benefit from the perceived upside as a result of the 2016 acquisition of Hope Cement which doubled the size of the business; GB Group made a significant earnings enhancing acquisition which strengthens its ambitions to become a global supplier of verification and identification services; and RWS acquired a US business which gives it a commanding position in servicing the life sciences sector and the ability to cross-sell its patent translation services to new clients. Learning Technologies also made a significant acquisition as well as announcing strong growth in its core business. Gear 4 Music's shares were exceptionally strong performers, as they reported profits and revenue growth ahead of expectations with rapid expansion of the European leg of the business demonstrating the potential for a much larger international business. Ergomed also made an important acquisition in the pharmacovigilance space, increasing its exposure towards profitable growth and providing a balance with the earlier stage co-development in drug discovery. Quixant was another holding that continued to perform well, with several upgrades to profits in the period as it demonstrated the widening of its customer base.

Among the more mature and profitable businesses which still account for more than 80% of the equity investments in the VCT by value, the majority helped performance with Animalcare, Idox, Brooks Macdonald and Craneware all reacting well to positive news in the results season. Animalcare has since announced a successful fundraising and acquisition that expands the group into Europe and increases the size and scope of the business. The major exception was Tasty, whose exposure to rising costs caused it to re-evaluate some of its new opening pipeline and raise extra funds to reduce its debt financing, all of which caused its shares to underperform as there were also significant downgrades to short term profit expectations. Vertu Motors continued to see its share price suffer bouts of pressure from fears around Brexit although the shares ended the period higher than they started, and Staffline recovered from its lows and was a good performer in the period. The Managers do not share the market's current pessimism about these three companies which have been held in the portfolio for a number of years and where the management teams have successfully dealt with economic challenges in the past.

Elsewhere, most of the drag on performance came from the earlier stage companies in the portfolio, particularly those that had setbacks or showed themselves in need of further cash to reach profitability. Nektan, Proxama, Oxford Pharmascience, Sphere and Microsaic all fall into this category with several of them publicly highlighting a need for further cash investment in order to achieve the necessary momentum in their businesses.

Portfolio Activity
In the period under review, the Company made four new qualifying investments totalling £1.76 million. The new investments were Escape Hunt, Faron Pharmaceuticals, Maxcyte Group and Velocity Composites plc. Escape Hunt is a leisure company operating live escape games in premises around the world both through its own outlets and franchisees. Faron Pharmaceuticals is a drug development company with a drug in phase III trials to treat the often lethal Acute Respiratory Distress Syndrome suffered by trauma victims in A&E. Maxcyte is a pharmaceutical services company with particular technological expertise in the discovery, development, manufacture and commercialisation of cell-based medicines. Velocity Composites manages the supply of raw composite materials in prepared form to the production lines of Tier 1 aircraft component manufacturers. Since the period end we have made a further investment of £0.3 million in DP Poland, which raised funds to continue its roll out of managed and franchised sites across Poland.

Your Manager continued to use non-qualifying investments to manage liquidity while awaiting new qualifying investment opportunities. Existing holdings for this purpose include some AIM non-qualifying stocks but we have added two holdings in UP Global Sourcing and Medica, fully listed stocks and therefore allowed under the new regulations. In the period we also invested a further £2 million of the cash balances into Octopus managed portfolios of mixed equity and bond funds and £0.3 million into the FP Octopus UK Micro-Cap Fund, with the objective of obtaining a better return on our cash awaiting investment.

A number of disposals were made, which were profit-taking from existing holdings, with the exception of Bond International where the company has sold its assets and put itself into liquidation and paid shareholders out. A small balance is due next year. The result has been a net gain of £578,000.

Transactions with Manager
Details of amounts paid to the Manager are disclosed in Note 8 to the half-yearly report.

Share Buybacks
In the six months to May 2017, the Company bought back 936,478 Ordinary shares for total consideration of £767,000. It is evident from the conversations which your Manager has that this facility remains an important consideration to investors. Your Board remains committed to maintaining its policy of buying back shares at a 5% discount to NAV. 

Share Issues and Fundraising
The Top-Up offer to raise up to £4.3 million was announced on 6 February 2017, and closed fully subscribed on 28 February 2017. 4,989,732 shares were issued under the offer and £4.3 million was raised, net of costs.

Your Board announced the launch of a new prospectus offer on 16 May 2017 to raise up to £30 million with a possible £10m extension in combination with the Octopus AIM VCT plc. This would involve a fundraising of up to £16 million for this VCT, The offer launched on 16 June 2017 and the first allotment is due to take place on 4 August 2017. 

Dividend
On 28 April 2017, the Company paid a dividend of 2p per share, being the final dividend for the year ended 30 November 2016.

For the period to 31 May 2017, the Board has declared an interim dividend of 2.1p. This will be paid on 29 September 2017 to shareholders on the register on 15 September 2017.

It remains the Board's intention to maintain a minimum annual dividend payment of 3.6p per share or a 5% yield based on the period end share price, whichever is the greater. This will usually be paid in two instalments during each year.

Risks, Uncertainties
The principal risks and uncertainties are set out in Note 7 to the half-yearly report.

Outlook
Politics continues to dominate the news and a Minority Government post the General Election is not obviously helpful to negotiating our way successfully out of the European Union.  All of this has made the market more volatile since the period end and the NAV has given back some of its strong rise in the first five months of the year.  Although it is only to be expected that the market will be more prone to bouts of uncertainty as the Brexit negotiations unfold, it remains the case that the economic Armageddon predicted by many in the immediate aftermath of the vote a year ago has not materialised and any effects of Brexit itself will be felt much further into the future than 2018.

In the first six months of the year we have seen some good results and a number of encouraging trading statements from companies in the portfolio with more news to come with the interim results season in September.  The portfolio now contains 75 holdings across a range of sectors with the balance weighted towards profitable companies which are continuing to pursue growth. The current fundraising will make cash available for new investments giving the VCT the chance to take advantage of any lowering of valuations in the new issue market that may result from the current uncertainty.  With the VCT 87% invested in qualifying companies for HMRC purposes your Manager can afford to be selective about new investments.

The AIM Team
Octopus Investments
26 July 2017

Investment Portfolio

Quoted Investments
Investee Company	Sector	Book cost as at 31 May 2017	Cumulative change in Fair Value	Fair Value as at 31 May 2017	Movement in period	Equity held by Octopus AIM VCT 2 plc	Equity held by all funds managed by Octopus
		£	£	£	£	%	%
Breedon Group plc	Construction & Building	573	3,627	4,200	704	0.34%	2.32%
Quixant plc	Technology Hardware	465	3,501	3,966	737	1.53%	6.03%
Animalcare Group plc	Pharmaceuticals & Biotech	824	2,606	3,430	761	4.12%	6.72%
GB Group plc	Support Services	477	2,631	3,108	1,207	0.51%	9.44%
IDOX plc	Software	356	2,379	2,735	468	0.92%	3.14%
Gear4music Holdings plc	Media	372	1,780	2,152	1,051	1.28%	5.48%
Craneware plc	Software	479	1,537	2,016	453	0.58%	1.80%
Learning Technologies Group plc	Support Services	880	1,008	1,888	662	0.71%	1.89%
Brooks Macdonald Group plc	Finance	610	1,213	1,823	595	0.53%	11.29%
Staffline Recruitment Group plc	Support Services	225	1,540	1,765	693	0.44%	13.60%
RWS Holdings plc	Support Services	249	1,393	1,642	418	0.19%	7.03%
Netcall plc	Telecommunication Services	356	1,081	1,437	227	1.55%	3.68%
Adept Telecom plc	Telecommunication Services	502	716	1,218	322	1.51%	3.90%
Ergomed plc	Pharmaceuticals & Biotech	960	228	1,188	356	1.46%	7.45%
DP Poland plc	Leisure & Hotels	364	764	1,128	(231)	1.62%	4.82%
Gooch & Housego plc	Electronic & Electrical	326	784	1,110	349	0.33%	14.61%
Yu Group plc	Utilities	470	572	1,042	229	1.81%	9.54%
Restore plc	Support Services	311	703	1,014	116	0.21%	9.95%
Clinigen Group plc	Pharmaceuticals & Biotech	625	295	920	137	0.09%	4.20%
EKF Diagnostics Holdings plc	Health	864	43	907	155	0.95%	2.15%
Advanced Medical Solutions Group plc	Pharmaceuticals & Biotech	505	384	889	190	0.15%	9.00%
Next Fifteen Communications Group plc	Media	458	417	875	189	0.30%	9.99%
Vertu Motors plc	General Retailers	777	71	848	89	0.47%	4.82%
Plastics Capital plc	Engineering & Machinery	485	347	832	-	1.86%	7.68%
Escher Group Holdings plc	Software	753	65	818	111	2.35%	5.49%
CityFibre plc	Telecommunication Services	739	40	779	112	0.44%	1.59%
Brady plc	Software	647	127	774	61	1.22%	3.01%
Omega Diagnostics Group plc	Health	318	440	758	243	2.63%	6.15%
TLA Worldwide plc	Media	538	188	726	(215)	1.88%	4.69%
Ideagen plc	Software	280	433	713	269	0.40%	4.48%
Escape Hunt plc	Leisure & Hotels	659	-	659	-	2.41%	6.02%
Tasty plc	Leisure & Hotels	336	311	647	(893)	1.87%	4.36%
Futura Medical plc	Pharmaceuticals & Biotech	645	(23)	622	(17)	0.94%	7.90%
Cello Group plc	Media	205	391	596	165	0.43%	3.98%
Judges Scientific plc	Electronic & Electrical	209	381	590	146	0.55%	1.37%
Abcam plc	Pharmaceuticals & Biotech	358	229	587	91	0.03%	2.50%
Cambridge Cognition Holdings plc	Health	400	171	571	172	2.79%	13.96%
Nasstar plc	Software	320	224	544	-	1.12%	4.63%
Velocity Composites plc	Industrial	533	-	533	-	1.75%	4.93%
Faron Pharmaceuticals Oy	Pharmaceuticals & Biotech	230	269	499	269	0.24%	0.72%
LoopUp Group plc	Software	320	170	490	102	0.78%	3.90%
Gamma Communications plc	Telecommunication Services	326	161	487	84	0.09%	8.96%
Vectura Group plc	Pharmaceuticals & Biotech	332	138	470	(102)	0.06%	0.15%
Haydale Graphene Industries plc	Chemicals	399	50	449	7	1.27%	6.99%
SQS Software Quality Systems AG	Software	207	201	408	(177)	0.30%	15.72%
Mattioli Woods plc	Finance	101	289	390	40	0.19%	2.17%
Scientific Digital Imaging plc	Electronic & Electrical	119	245	364	126	1.67%	9.97%
Sinclair IS Pharma plc	Pharmaceuticals & Biotech	274	74	348	(17)	0.22%	0.54%
Maxcyte Inc	Pharmaceuticals & Biotech	340	(19)	321	(19)	1.70%	7.16%
Iomart Group plc	Software	178	123	301	17	0.09%	10.59%
Access Intelligence plc	Software	366	(72)	294	(37)	2.54%	5.15%
Osirium Technologies plc	Electronic & Electrical	500	(208)	292	(228)	3.08%	15.36%
UP Global Sourcing Holdings plc	Household Goods & Textiles	182	105	287	105	0.17%	0.57%
WANdisco plc	Software	96	152	248	157	0.15%	0.38%
FreeAgent Holdings plc	Media	185	46	231	59	0.54%	3.38%
TP Group plc	Engineering & Machinery	452	(222)	230	46	0.87%	5.86%
MyCelx Technologies Corporation	Oil Equipment	980	(679)	301	198	2.89%	9.19%
Microsaic Systems plc	Engineering & Machinery	722	(534)	188	(83)	3.99%	11.82%
Sphere Medical Holding plc	Health	400	(219)	181	(69)	1.76%	4.41%
Enteq Upstream plc	Oil Services	687	(516)	171	52	1.13%	2.83%
Midatech Pharma plc	Pharmaceuticals & Biotech	400	(243)	157	(19)	0.31%	2.40%
Nektan Limited	Software	563	(420)	143	8	1.17%	10.61%
Oxford Pharmascience Group plc	Pharmaceuticals & Biotech	900	(765)	135	(14)	0.75%	3.31%
Tyratech Inc	Chemicals	400	(280)	120	(80)	3.64%	19.87%
Medica Group plc	Health	63	41	104	41	0.04%	0.15%
Alfa Financial Software Holdings plc	Software	81	19	100	19	0.01%	0.03%
Mears Group plc	Support Services	51	44	95	9	0.02%	0.14%
ReNeuron Group plc	Pharmaceuticals & Biotech	216	(134)	82	(58)	0.14%	1.17%
Genedrive Plc	Pharmaceuticals & Biotech	140	(70)	70	(26)	0.94%	2.34%
Fusionex International plc	Software	188	(132)	56	(143)	0.23%	1.02%
Proxama plc	Software	509	(470)	39	(155)	0.84%	5.02%
1Spatial plc	Software	200	(178)	22	6	0.08%	0.21%
Work Group plc	Support Services	379	(365)	14	(2)	1.88%	5.63%
Bond International Software plc	Software	4	-	4	-	n/a	n/a
Total Quoted Investments		30,943	29,198	60,141	10,238
Unquoted Investments
Hasgrove plc	Media	153	59	212	68	0.71%	4.38%
Rated People Limited	Software	236	(178)	58	-	0.34%	1.49%
Total Unquoted Investments		389	(119)	270	68
Loan Notes
Nektan Limited (loan)	Software	330	-	330	-
Access Intelligence plc (loan)	Software	80	-	80	-
Total Loan Notes		410		410
Current Asset Investments
Octopus Portfolio Manager - Conservative Capital Growth		3,600	187	3,787	131
Octopus Portfolio Manager - Defensive Capital Growth		3,600	267	3,867	165
Octopus UK Micro Cap Growth Fund		1,100	296	1,396	280
Total Current Asset Investments		8,300	750	9,050	576
Total Fixed and Current Asset Investments				69,870
Money Market Funds				4,425
Cash at Bank				1,690
Debtors less Creditors				(332)
Total Net Assets				75,653

Directors' Responsibilities Statement

We confirm that to the best of our knowledge:

• the half-yearly financial statements have been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting' issued by the Financial Reporting Council;
   
• the half-yearly report includes a fair review of the information required by the Financial Conduct 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

Keith Mullins
Chairman
26 July 2017

Income Statement
	Unaudited			Unaudited			Audited
	Six months to 31 May 2017			Six months to 31 May 2016			Year to 30 November 2016
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gain on disposal of fixed asset investments	-	134	134	-	87	87	-	300	300
Gain on valuation of fixed asset investments	-	10,307	10,307	-	355	355	-	3,389	3,389
Gain on valuation of current asset investments	-	575	575	-	-	-	-	174	174
Investment income	243	-	243	289	-	289	597	-	597
Investment management fees	(119)	(357)	(476)	(104)	(312)	(416)	(225)	(676)	(901)
Other expenses	(260)	-	(260)	(177)	-	(177)	(375)	-	(375)
Profit/(loss) on ordinary activities before tax	(136)	10,659	10,523	8	130	138	(3)	3,187	3,184
Taxation on profit/(loss) on ordinary activities	-	-	-	-	-	-	-	-	-
Profit/(loss) on ordinary activities after tax	(136)	10,659	10,523	8	130	138	(3)	3,187	3,184
Return per share - basic and diluted	(0.2)p	13.3p	13.1p	0.0p	0.2p	0.2p	0.0p	4.5p	4.5p

• 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 no recognised gains or losses other than those disclosed in the income statement.
• 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, as well as OEIC funds.

Balance Sheet
	Unaudited		Unaudited		Audited
	As at 31 May 2017		As at 31 May 2016		As at 30 November 2016
	£'000	£'000	£'000	£'000	£'000	£'000
Fixed asset investments		60,820		46,226		49,737
Current assets:
Investments	13,475		5,410		10,594
Debtors	22		62		49
Cash at bank	1,690		5,168		2,984
	15,187		10,640		13,627
Creditors: amounts falling due within one year	(354)		(235)		(359)
Net current assets		14,833		10,405		13,268
Net assets		75,653		56,631		63,005
Called up equity share capital		8		7		8
Share premium		27,945		18,032		23,405
Special distributable reserve		28,098		32,559		30,513
Capital reserve - realised		(9,947)		(8,916)		(10,168)
- unrealised		29,826		15,079		19,388
Revenue reserve		(277)		(130)		(141)
Total equity shareholders' Funds		75,653		56,631		63,005
Net asset value per share		91.8p		78.5p		80.6p

The statements were approved by the Directors and authorised for issue on 26 July 2017 and are signed on their behalf by:

Keith Mullins
Chairman
Company Number: 05528235

Statement of changes in equity

	Share Capital	Share Premium	Special distributable reserves	Capital reserve realised	Capital reserve unrealised	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 December 2016	8	23,405	30,513	(10,168)	19,388	(141)	63,005
Management fee allocated as capital expenditure	-	-	-	(357)	-	-	(357)
Current period gains on disposal	-	-	-	134	-	-	134
Current period gain on fair value of investments	-	-	-	-	10,882	-	10,882
Loss on ordinary activities after tax	-	-	-	-	-	(136)	(136)
Total comprehensive income for the period	-	-	-	(223)	10,882	(136)	10,523
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	-	-	(767)	-	-	-	(767)
Issue of shares	-	4,816	-	-	-	-	4,816
Share issue costs	-	(276)	-	-	-	-	(276)
Dividends paid	-	-	(1,648)	-	-	-	(1,648)
Total contributions by and distributions to owners	-	4,540	(2,415)	-	-	-	2,125
Other movements:
Prior years' holding gains now realised	-	-	-	444	(444)	-	-
Total other movements	-	-	-	444	(444)	-	-
Balance as at 31 May 2017	8	27,945	28,098	(9,947)	29,826	(277)	75,653
As at 1 December 2015	6	11,575	34,841	(8,373)	14,406	(138)	52,317
Management fee allocated as capital expenditure	-	-	-	(312)	-	-	(312)
Current period gains on disposal	-	-	-	87	-	-	87
Current period gain on fair value of investments	-	-	-	-	355	-	355
Profit on ordinary activities after tax	-	-	-	-	-	8	8
Total comprehensive income for the period	-	-	-	(225)	355	8	138
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	-	-	(849)	-	-	-	(849)
Issue of shares	1	6,675	-	-	-	-	6,676
Share issue costs	-	(218)	-	-	-	-	(218)
Dividends paid	-	-	(1,433)	-	-	-	(1,433)
Total contributions by and distributions to owners	1	6,457	(2,282)	-	-	-	4,176
Other movements:
Prior years' holding losses now realised	-	-	-	(318)	318	-	-
Total other movements				(318)	318
Balance as at 31 May 2016	7	18,032	32,559	(8,916)	15,079	(130)	56,631
As at 1 December 2015	6	11,575	34,841	(8,373)	14,406	(138)	52,317
Management fee allocated as capital expenditure	-	-	-	(676)	-	-	(676)
Current period gains on disposal	-	-	-	300	-	-	300
Current period gain on fair value of investments	-	-	-	-	3,563	-	3,563
Loss on ordinary activities after tax	-	-	-	-	-	(3)	(3)
Total comprehensive income for the period	-	-	-	(376)	3,563	(3)	3,184
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	-	-	(1,401)	-	-	-	(1,401)
Issue of shares	2	12,367	-	-	-	-	12,369
Share issue costs	-	(537)	-	-	-	-	(537)
Dividends paid	-	-	(2,927)	-	-	-	(2,927)
Total contributions by and distributions to owners	2	11,830	(4,328)	-	-	-	7,504
Other movements:
Prior years' holding losses now realised	-	-	-	(1,419)	1,419	-	-
Total other movements	-	-	-	(1,419)	1,419	-	-
Balance as at 30 November 2016	8	23,405	30,513	(10,168)	19,388	(141)	63,005

Cash Flow Statement

	Unaudited	Unaudited	Audited
	Six months to 31 May 2017	Six months to 31 May 2016	Year to 30 November 2016
	£'000	£'000	£'000
Cash flows from operating activities
Return on ordinary activities before tax	10,523	138	3,184
Adjustments for:
Decrease/(increase) in debtors	27	(8)	5
(Decrease)/increase in creditors	(5)	123	247
Gain on disposal of fixed assets	(134)	(87)	(300)
Gain on valuation of fixed asset investments	(10,307)	(355)	(3,389)
Gain on valuation of current asset investments	(575)	-	(174)
Cash from operations	(471)	(189)	(427)
Income taxes paid	-	-	-
Net cash generated from operating activities	(471)	(189)	(427)
Cash flows from investing activities
Purchase of fixed asset investments	(2,089)	(970)	(2,261)
Sale of fixed asset investments	1,447	155	1,181
Purchase of current asset investments	(2,300)	-	(6,000)
Net cash flows from investing activities	(2,942)	(815)	(7,080)
Cash flows from financing activities
Purchase of own shares	(767)	(849)	(1,401)
Share issues	4,540	6,457	11,832
Dividends paid	(1,648)	(1,433)	(2,927)
Net cash flows from financing activities	2,125	4,175	7,504
(Decrease)/increase in cash and cash equivalents	(1,288)	3,171	(3)
Opening cash and cash equivalents	7,404	7,407	7,407
Closing cash and cash equivalents	6,116	10,578	7,404
Cash and cash equivalents comprise
Cash at bank	1,690	5,168	2,984
Money Market Funds	4,426	5,410	4,420
	6,116	10,578	7,404

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Source: Octopus AIM VCT 2 plc via Globenewswire