Octopus Titan VCT 2 PLC : Final Results
Octopus Titan VCT 2 plc
Final Results
28 January 2014
Octopus Titan VCT 2 plc ("Titan"), managed by Octopus Investments Limited ("Octopus"), today announces the final results for the year ended 31 October 2013.
These results were approved by the Board of Directors on 28 January 2014.
You may, in due course, view the Annual Report in full at www.octopusinvestments.com.
Octopus Titan VCT 2 plc
Annual Report & Accounts for the year ended 31 October 2013
Octopus Titan VCT 2 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 unquoted companies and is managed by Octopus Investments Limited
Financial Summary
| As at 31 October 2013 | As at 31 October 2012 | |
| Net assets (£'000s) | 20,924 | 21,361 |
| Return on ordinary activities after tax (£'000s) | 2,093 | 5,737 |
| Net asset value (NAV) per share | 95.2p | 121.9p |
| Cumulative dividends paid since launch | 42.5p | 6.0p |
| NAV plus cumulative dividends paid to 31 October 2013 | 137.7p | 127.9p |
| Special dividend proposed | - | 34.0p |
| Final dividend proposed | 2.5p | - |
Key Dates
Final dividend payment date 4 April 2014
Annual General Meeting 26 March 2014 (2.15 pm at 20 Old Bailey, London EC4M 7AN)
Half-yearly results to 30 April 2014 published June 2014
Annual results to 31 October 2014 announced February 2015
Annual Report and financial statements published February/March 2015
Chairman's Statement
I am pleased to present the annual results for Octopus Titan VCT 2 plc for the year ended 31 October 2013.
Performance
I am delighted that the Net Asset Value has increased 7.3p per share after taking account of the special dividend of 34.0p which was paid on 28 March 2013. During the year the Total Return of the Company, being the Net Asset Value (NAV) plus cumulative dividends paid, has increased by 7.7% from 127.9 pence per share to 137.7 pence per share. This appreciation, building on last year's 34.6% rise in total return, reflects another year of strong performance of the investment portfolio.
The continued success has ensured the status of the Company as being one of the top performers amongst its peers and we remain quietly confident that our portfolio will continue to realise above average returns through the continuing hard work of our Investment Manager.
Dividend and Dividend Policy
It remains your Board's policy to strive to maintain a regular dividend, whilst maintaining the appropriate level of liquidity in the VCT. As a result of the performance of the investment portfolio during the year, the Board proposes a final dividend of 2.5 pence per share (2012 special dividend: 34.0 pence per share) which, subject to approval at the Annual General Meeting, is to be paid on 4 April 2014 to those shareholders who are on the register on 7 March 2014. This takes the total dividends declared and proposed for the year to 5.0 pence per share (2012: 35.5 pence per share).
Investment Portfolio
The value of the portfolio has seen an overall increase of £2,359,000 during the year, largely due to Zenith Holding Company which saw a large rise in fair value of £3,203,000.
As explained in our interim report, the success of our investments in Zoopla Property Group (now part of a larger group), Calastone and Nature Delivered (which had been sold but part of the proceeds had been reinvested) led to significant concerns that the Company may no longer maintain its VCT qualifying status. These investments were sold to Zenith Holding Company, which was created in order for the VCT to maintain its qualifying status, to return cash to the VCT and to allow investors to participate in the future growth of the investee companies. Zenith Holding Company has performed strongly during the period with the underlying companies seeing significant growth.
Unfortunately, given the nature of funding small companies, there are a few investments that have fallen short of budgets and forecasts and where we have taken write downs in the year. Your Investment Manager is working hard alongside these companies to ensure they stabilise and improve performance.
During the year the Fund focused on supporting the existing portfolio companies during the year by making 7 follow-on investments amounting to £4,687,000. The Fund also made 5 new investments totalling £5,553,000 of which £4,894,000 was in respect of the Zenith transaction. Further information can be seen in the Investment Managers report.
As can be seen from the pie charts on pages X and X, we have a well spread portfolio. 'Other' is accountable for 31% and relates to Zenith Holding Company which, as previously mentioned, holds a stake in assets in different sectors.
Fund raise and Buy-backs
As mentioned in the interim report, the Company successfully raised £4,580,000 net of costs during the year. The majority of the funds raised are being used to support existing portfolio companies where the Investment Manager sees the opportunity for business growth.
The Board announced another opportunity to invest into the Titan VCTs through a linked new share offer to raise £7m on 3 September 2013. On 12 December 2013, £3,137,000 was allotted net of costs.
During the period, the Company repurchased 718,101 shares. Further details can be found in Note 14 of the accounts. The Board continues to buy-back shares from shareholders at a 5% discount to NAV. The Board will continue to monitor the volume of shares bought back and at present intends to maintain the existing limit of the share capital that it buys-back and cancels each year at 5%. This policy will continue to operate at the Board's discretion. However, it is the Board's intention that shareholders should be able to sell their shares back to the VCT in the absence of an active secondary market.
Your Board believes that this makes the VCT an attractive investment for both existing and new shareholders.
Investment Strategy
Following the Zenith transaction and the 2013 fundraising, the Fund has liquid resources of over £5 million to which we hope to add a further £7 million in the 2014 fund raising. This will allow The Company to join with the other Titan Funds in new investment opportunities as well as continuing to support our existing investments. As I have previously reported, we may also make investments in some new or existing unquoted companies which are or have become non-qualifying for VCT purposes but where your Board believes that it will be in shareholders' interests to invest, not least to avoid dilution and to protect value in existing portfolio companies.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides both the Board and the Investment Manager with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs. The Board has been advised that the Company is in compliance with the conditions laid down by HMRC for maintaining approval as a VCT.
A key requirement is for 70% of the portfolio to remain continually invested in qualifying investments. As at 31 October 2013, over 86% of the portfolio (as measured by HMRC rules) was invested in VCT qualifying investments.
Alternative Investment Fund Managers Directive (AIFMD)
AIFMD was introduced under EU Legislation to bring consistency of reporting across all fund types. In accordance with this legislation, the Company has applied to the Financial Conduct Authority to register as its own Alternative Investment Fund Manager (AIFM). I expect this authority to be granted by 22 July 2014 after which the Company will be required to make an annual report, which will include investments made, principal exposures, liquidity and risk management.
Annual General Meeting
The Company's Annual General Meeting will take place on 26 March 2014. I look forward to welcoming you to the meeting which will be held at the offices of Octopus Investments Limited, at 20 Old Bailey, London, EC4M 7AN.
Outlook
We are beginning to see signs of recovery in the economy with confidence slowly being restored. The portfolio has seen significant growth over the last 18 months and as the economy improves we are confident that the portfolio companies will take advantage of the conditions to continue to grow.
I would like to thank existing shareholders who have subscribed for our new offers and welcome new shareholders. The tax treatment of VCT shares and dividends continues to make our shares attractive where the current tax free yield based on the current share price is 5.5%.
Our interests remain focused on boosting growth and profitability in the underlying portfolio and striving to make further realisations where the new confidence in the IPO market should be a helpful factor. New investment dealflow remains strong and we are confident that our cash resources will allow us to continue to attract exciting new opportunities. Your Board, as well as your Investment Manager, view the future of our portfolio with confidence and are working hard alongside the portfolio companies to continue to build on the strong foundations the Fund has made.
John Hustler
Chairman
28 January 2014
Investment Manager's Review
Personal Service
At Octopus , we focus on both managing your investments and keeping you informed throughout the investment process. We are committed to providing our investors with regular and open communication. Our updates are designed to keep you informed about the progress of your investment.
Octopus was established in 2000 and has a strong commitment to both smaller companies and to VCTs. We currently manage 13 VCTs, including this VCT, and manage over £340 million in the VCT sector. Octopus has over 250 employees and was voted 'Best VCT Provider of the Year' by the financial adviser community in 2006 to 2010.
Investment Strategy Implementation
The investee companies are those that we believe have great potential but need some financial support to realise it. Each company that we target has the potential to create a large business by taking a relatively modest market share. We are particularly interested in businesses that address current market trends and are able to be innovative in mature markets. We have created a balanced investment portfolio spanning multiple industries and business sectors.
Having reached the level of invested funds required by HMRC, our focus has now shifted to managing the portfolio and developing growth in the investee companies. The current portfolio of holdings built by the Company now encompass investments in 22 unquoted companies and one AIM-quoted company.
As Investment Manager, we have typically purchased a significant minority equity stake in these qualifying companies, providing financial capital to the business to build and grow its operations with the objective to sell to an acquirer at some point in the future. These entrepreneurial early stage businesses, which we invest in, frequently face challenges as they seek to establish themselves in their market, often developing new products and services. The amount of capital we initially deploy is intended to be only the first investment that we will make into a business, prior to seeing if the company meets or exceeds its initial objectives.
If the business is unsuccessful in meeting these first objectives, we strive to minimise the financial exposure the Company faces without committing further money to the investment, as is commonly referred to as "good money after bad". Other businesses which meet some of their objectives, but not necessarily all, will require more time to prove their concept and these businesses will typically be reduced in value prior to our making a further investment. This is in order for us to see them progress forward and prove their business model and opportunity. Finally, there are those that meet and exceed the expectations originally set. It is these businesses in which we wish to increase our investment exposure as they remain on course to create a large business.
We maintain liquidity in the Company to ensure adequate resources are available to support further portfolio funding needs as they arise. This situation should be further aided following the linked prospectus offer for new shares as described in the Chairman's Statement, and it is an important feature of our model in delivering returns to shareholders.
Portfolio Review
As at 31 October 2013 the Total return (being the NAV plus cumulative dividends) was 137.7p per share, compared to 127.9p per share at 31 October 2012. This represents a considerable increase of 7.7%. The performance of the portfolio was strong during the year especially in Zenith Holding Company.
Zenith Holding Company, which owns a stake in Calastone, Zoopla Property Group, Nature Delivered and Secret Escapes, through its interest in the Zenith fund, in particular performed very well with the individual investment holdings delivering significant growth. As discussed in the interim report, these holdings were sold to Zenith in order to maintain the qualifying status of the VCT, deliver cash back to the Company and ensure that a stake could be held by the Fund so that it may continue to share in the growth of the underlying assets. Zenith currently comprises 38.7% of the total net assets of the Fund.
As expected with the nature of the businesses we invest in, some of the portfolio companies have fallen behind expectations and budgets resulting in reductions in fair value of the companies. We are working hard alongside these companies to stabilise the performance and rebuild the businesses. Further details can be seen later in the Investment Managers report.
The Company now holds over 86% of its assets in qualifying holdings from an HMRC perspective and we continue to work with each portfolio business as they develop capital growth in their respective markets.
New additions
As Investment Manager, it is our continued intention to take those businesses in which we have invested into, and invest further as they meet or exceed the initial milestone objectives we agreed with them.
Your Investment Manager is always looking for opportunities to invest into new companies where capital growth can be achieved. The Company made 4 new investments which meets this description as detailed below. In addition, an investment was made into Zenith Holding Company:
| Investment company | Cost, £'000 | Value*, £'000 |
| Zenith Holding Company Limited | 4,894 | 8,097 |
| Aframe Media Group Limited | 281 | 281 |
| Amplience Limited | 172 | 172 |
| Uniplaces Limited | 106 | 106 |
| Zynstra Limited | 100 | 100 |
| Total | 5,553 | 8,756 |
*as at 31 October 2013
Zenith Holding Company was created to hold a stake in Zoopla Property Group, Nature Delivered, Secret Escapes and Calastone. This company has ensured that the qualifying status of the Fund has been maintained as well as ensuring that the Fund is able to continue holding a stake in each of the businesses. These underlying businesses have all performed very well during the year contributing to the large increase in the value of the portfolio.
All 5 Titan Funds made new investments into Uniplaces and Zynstra whereas Aframe and Amplience were already invested into by other Titan Funds within the family.
Follow-on investments
It is important to support the investment portfolio, where appropriate to build growth and alleviate working capital pressure. During the year 7 follow on investments were made as below:
| Investment company | Cost, £'000 |
| Nature Delivered Limited | 2,121 |
| Calastone Limited | 1,044 |
| TouchType Limited | 841 |
| UltraSoC Limited | 333 |
| Metrasens Limited | 151 |
| Bowman Power Limited | 110 |
| Mi-Pay Limited | 87 |
| Total | 4,687 |
The follow on investment into Nature Delivered comprised new shares and a loan received as part of the disposal on 30 November 2012.
Realisations in the year
As detailed in the 2012 accounts, the Company disposed of its holding in Nature Delivered Limited, realising £5,884,000 of which £3,764,000 was paid in cash and £2,120,000 was reinvested.
On 21 June 2013 Calastone, Zoopla Property Group and Nature Delivered were fully disposed following shareholder approval in exchange for cash and a stake in Zenith Holding Company.
Post year end
Since the balance sheet date 3 new investments have been made and the Company has continued to support investee companies by investing a further £401,000 into 4 portfolio companies. Further details can be seen in note 17.
Outlook
Despite continued challenges on small companies, there remain opportunities for those entrepreneurs who are looking to disrupt the market by moving quickly. We continue to see a huge number of potential opportunities and with new companies being invested into during the year and post year end, the portfolio is developing and further diversifying.
The growth within the portfolio over the last 18 months is very pleasing and with the more upbeat mood in the market, we are optimistic that the portfolio will continue to mature and ensure further capital growth.
If you have any questions on any aspect of your investment, please call one of the team on 0800 316 2295.
Alex Macpherson
Octopus Investments Limited
28 January 2014
Investment Portfolio
| Fixed asset investments | Sector | Investment cost as at 31 October 2013 (£'000) | Movement in fair value to 31 October 2013 (£'000) | Fair value as at 31 October 2013 (£'000) | Movement in fair value in year to 31 October 2013(£'000) | % voting rights held by The Company | % equity held by all funds managed by Octopus |
| Zenith Holding Company Limited | Other | 4,894 | 3,203 | 8,097 | 3,203 | 33.30% | 100.00% |
| TouchType Limited | Telecommunications | 1,226 | 1,007 | 2,233 | 463 | 5.53% | 18.52% |
| UltraSoC Technologies Limited | Technology | 825 | 44 | 869 | 45 | 13.63% | 55.11% |
| e-Therapeutics plc | Consumer lifestyle and wellbeing | 631 | 75 | 706 | (120) | 0.91% | 3.28% |
| Mi-Pay Limited | Telecommunications | 935 | (299) | 636 | (200) | 9.49% | 20.31% |
| Getlenses Limited | Consumer lifestyle and wellbeing | 508 | 89 | 597 | 17 | 5.75% | 14.50% |
| Metrasens Limited | Consumer lifestyle and wellbeing | 490 | 81 | 571 | (57) | 5.01% | 17.28% |
| Surrey NanoSystems Limited | Technology | 485 | 43 | 528 | - | 4.19% | 14.26% |
| Bowman Power Limited | Environmental | 421 | (42) | 379 | - | 2.70% | 10.70% |
| Aframe Media Group Limited | Media | 281 | - | 281 | - | 3.58% | 33.19% |
| Executive Channel Europe Limited | Media | 529 | (257) | 272 | (333) | 6.15% | 25.14% |
| Semafone Limited | Telecommunications | 496 | (299) | 197 | (370) | 7.34% | 24.70% |
| Michelson Diagnostics Limited | Consumer lifestyle and wellbeing | 442 | (266) | 176 | (45) | 5.18% | 20.50% |
| Amplience Limited | Technology | 172 | - | 172 | - | 1.89% | 30.74% |
| Uniplaces Limited | Consumer lifestyle and wellbeing | 106 | - | 106 | - | 3.47% | 16.47% |
| Zynstra Limited | Technology | 100 | - | 100 | - | 1.23% | 8.12% |
| Phasor Solutions Limited | Technology | 100 | (50) | 50 | 25 | 1.00% | 1.65% |
| AQS Holdings Limited | Environmental | 655 | (655) | - | - | 14.20% | 50.70% |
| The Key Revolution Limited | Telecommunications | 641 | (641) | - | - | 12.36% | 35.88% |
| Phase Vision Limited | Technology | 474 | (474) | - | (145) | 10.09% | 42.96% |
| PrismaStar Inc. | Media | 424 | (424) | - | (124) | 2.58% | 10.30% |
| Diverse Energy Limited | Environmental | 414 | (414) | - | - | 5.47% | 29.76% |
| Elonics Limited | Technology | 305 | (305) | - | - | 3.11% | 19.54% |
| Total fixed asset investments | 15,554 | 416 | 15,970 | 2,359 | |||
| Money market securities | 331 | - | 331 | - | |||
| Cash at bank | 3,394 | - | 3,394 | - | |||
| Total investments | 19,279 | 416 | 19,695 | 2,359 | |||
| Debtors less creditors | 1,229 | ||||||
| Total net assets | 20,924 | ||||||
Valuation Methodology
Initial measurement
Financial assets are measured at fair value. The initial best estimate of fair value of a financial asset that is either quoted or not quoted in an active market is the transaction price (i.e. cost).
Subsequent measurement
Further funding rounds are a good indicator of fair value and this measure is used where appropriate. Subsequent adjustment to the fair value of unquoted investments can be made using sector multiples based on information as at 31 October 2013, where applicable. In some cases the multiples can be compared to equivalent companies, especially where a particular sector multiple does not appear appropriate. It is currently industry norm to discount the quoted earnings multiple to reflect the lack of liquidity in the investment, there being no ready market for our holding. Typically the discount is between 20 and 30% but this can be increased where the relevant multiple appears too high. A lower discount would also be possible if an investment was close to an exit event.
In accordance with the International Private Equity and Venture Capital (IPEVC) valuation guidelines, investments made within 12 months are usually kept at cost unless performance indicates that fair value has changed.
Quoted investments are valued at market bid price. No discounts are applied.
If you would like to find out more regarding the IPEVC valuation guidelines, please visit their website at: www.privateequityvaluation.com.
Review of Investments
During the year seven follow-on investments were made, amounting to £5,554,000 and 5 new investments amounting to £4,686,000.
Quoted and unquoted investments are valued in accordance with the accounting policy set out in accounting note 1 which takes account of current industry guidelines for the valuation of venture capital portfolios and is compliant with IPEVC Valuation guidelines and current financial reporting standards.
Listed below are details of the Company's 10 largest investments by value.
Zenith Holding Company Limited
Zenith Holding Company has a holding in Octopus Zenith LP, an Octopus managed fund, which holds stakes in Secret Escapes, Zoopla Property Group, Nature Delivered (Graze) and Calastone as formally held by Titan 1-3.
Graze.com delivers tasty nutritious snacks to grazers up and down the country. All boxes are hand picked from over 100 delicious snacks and delivered in the post. Founded in 2007 and launched in 2009, graze.com was created to solve office snacking for the better. Delivered directly to customers' desks or home in the UK and US, each graze box is packed with four snacks, from flavoured nuts, traditional rice crackers and exotic dried fruits to freshly baked bread, marinated olives and dips.
Calastone is the global fund transaction network. More than 400 customers are live and processing transactions across Calastone's multi-award winning transaction network from 17 domiciles including the UK, Switzerland, Hong Kong, Taiwan, Singapore and Australia. Any party involved in the production, distribution or management of funds, of any size, located around the world using Calastone is able to transact electronically without the need for complex implementations or investment in new technology and processes. Calastone offers a range of services including order routing, settlement, reconciliations and valuations, re-registrations, trade notifications, pricing reporting, BIC Hosting, e-Dealing and STP consulting to support customers in their move towards STP efficiency.
Zoopla Property Group Limited owns and operates some of the UK's leading online property brands including Zoopla.co.uk and Primelocation.com. Over 16,000 estate agent and lettings agent branches across the UK advertise on the company's websites each month, in addition to all the leading new homes developers, attracting over 28 million visitors a month and generating over 2 million enquiries per month for the member estate/letting agents and property developers. In addition to operating its own websites, Zoopla Property Group Ltd exclusively powers the property search facility on a number of the UK's biggest websites including
The Times, The Telegraph, Independent, Evening Standard, The Daily Mail, Homes & Property, AOL, MSN, Globrix, Homes24 and many more. Zoopla Property Group Ltd launched in 2008 and has since acquired and integrated a number of brands.
Secret Escapes offers exclusive rates (up to 70% off) on members-only flash sales for luxury travel. All of the hotels and holidays are hand-picked by a team of travel experts and while the flash sales are live on Secret Escapes, members will be guaranteed a rate cheaper than anywhere else online. Secret Escapes has over four million members in the UK alone and, in 2013, launched in Sweden and Germany.
Initial investment date: June 2013
Cost: £4,894,000
Valuation: £8,097,000
Last submitted audited accounts: n/a
Turnover n/a
Profit before tax: n/a
Net assets: n/a
TouchType Limited
TouchType is a leader in the development of artificial intelligence and machine learning technologies, encapsulated in its Fluency prediction engine, a patent pending set of software algorithms. Its first product, SwiftKey(TM), a text prediction technology designed to significantly boost the accuracy, fluency and speed of text entry on mobile and computing devices, resulting in users having to make less than half the number of keystrokes compared to a standard QWERTY keyboard. SwiftKey(TM) has enjoyed tremendous success as both an Android App, with over 10 million downloads to date, and as the installed text prediction technology on a increasing range of smartphones and tablets. It has won several high profile industry awards, including a prestigious Global Mobile Award for the "Most Innovative App" and the Guardian Digital Innovation Award for the "Best Startup Business".
Initial investment date: August 2010
Cost: £1,226,000
Valuation: £2,233,000
Voting rights held by Fund: 5.53%
Equity held by all funds managed by Octopus: 18.52%
Last submitted group accounts: 31 December 2012 (abbreviated)
Turnover not disclosed
Loss before tax: not disclosed
Net liabilities: (£635,793)
UltraSoC Limited
UltraSoC Technologies Ltd is a pioneering company developing advanced debugging technology for the embedded electronic systems increasingly used in many everyday products from cars to mobile phones. The company is currently developing its first product which will be licensable silicon IP called UltraDebug. UltraSoC was originally spun-out from the universities of Essex and Kent in 2008 after being founded by Cambridge entrepreneur Dr Karl Heeks, now chief executive, Professor Klaus McDonald-Maier and Dr Andrew Hopkins, now chief technical officer.
Initial investment date: September 2010
Cost: £825,000
Valuation: £869,000
Voting rights held by Fund: 13.63%
Equity held by all funds managed by Octopus: 55.11%
Last submitted audited group accounts: 31 December 2012 (abbreviated)
Turnover not disclosed
Loss before tax: not disclosed
Net assets: £605,100
e-Therapeutics plc
e-Therapeutics is an AIM-quoted drug discovery and development company. It pioneered and exploits 'network pharmacology' to evaluate swiftly and accurately how medicines interact with cells in the body. This approach optimises the probability of identifying drug candidates with desirable efficacy and minimal side effects. Network pharmacology has many applications, and is particularly suited to addressing complex diseases in which current treatment options are few and ineffective. e-Therapeutics' current drug discovery programmes are focused mainly on areas of high unmet medical need, such as neurodegeneration and oncology. Four drugs resulting from e-Therapeutics' earlier discovery projects are now in clinical development.
Initial investment date: March 2009
Cost: £631,000
Valuation: £706,000 (bid price)
Voting rights held by Fund: 0.91%
Equity held by all funds managed by Octopus: 3.28%
Last submitted audited group accounts: 31 January 2013
Turnover £nil
Loss before tax: (£5,024,000)
Net assets: £10,580,000
Mi-Pay Limited
Mi-Pay was founded in 2004 with its objective to establish itself as a leading processor of payments for the fast-emerging mobile money sector. The service enables customers to 'top-up' their pre-paid mobile phone directly online, or via their mobile phone, rather than using indirect brand channels such as PayPoint or bank ATMs. Benefits of the direct service include cost reductions for mobile network operators and a more personal engagement with customers, removing the anonymity of customer relationships and allowing for substantial improvements in customer retention.
Mi-Pay continues to make progress in a very dynamic and fast moving market, most recently agreeing terms with several tier one European, Middle Eastern and African mobile operators to provide its direct top up service.
Initial investment date: February 2010
Cost: £935,000
Valuation: £636,000
Voting rights held by Fund: 9.49%
Equity held by all funds managed by Octopus: 20.31%
Last submitted group accounts: 31 December 2012
Turnover £2,807,768
Loss before tax: (£2,114,411)
Net assets: (£279,664)
Getlenses Limited
GetOptics Ltd is an online retailer of contact lenses and related products with sales in seven European countries through GetLenses branded websites. It was formed through the acquisition of Getlenses and Postoptics and is the largest online retailer of contact lenses in the UK with run rate turnover of circa £9.5 million and 25-30% market share of the online market. The company uses its scale to generate cost savings and operating efficiencies, including securing best prices and terms with contact lens manufacturers. It is looking to grow the online market in the UK, building on its market leading position, as well as developing its local language sites in Europe.
Initial investment date: September 2009
Cost: £508,000
Valuation: £597,000
Voting rights held by Fund: 5.75%
Equity held by all funds managed by Octopus: 14.50%
Last submitted group accounts: 31 August 2012
Turnover £8,181,679
Loss before tax: (£501,095)
Net assets: £4,837,462
Metrasens Limited
Metrasens is a technology business specialising in metal detection products for the healthcare and security markets. It was founded in June 2005 by two former employees of QinetiQ, a company specialising in defence security and technology. Metrasens' products work by detecting magnetic material. Its Ferroguard® MRI (magnetic resonance imaging) detection system provides visual and audio alarms at entry points to MRI rooms in hospitals. The Ferroguard system not only increases safety but also decreases potential costs, through reducing the likelihood of injuries and damage from projectiles in the MRI units. The company has also developed the FG1 Portable Security Pole, designed for multiple niche applications, such as street knife detection and mobile detection in prisons.
Initial investment date: February 2010
Cost: £490,000
Valuation: £571,000
Voting rights held by Fund: 5.01%
Equity held by all funds managed by Octopus: 17.28%
Last submitted audited group accounts: 31 October 2012 (abbreviated)
Turnover not disclosed
Loss before tax: not disclosed
Net assets: £1,242,627
Surrey NanoSystems Limited
Surrey NanoSystems has developed a leading technology portfolio addressing the needs of the global nanoelectronics sector. Its proven technologies deliver precise, ordered nanomaterial structures for advanced manufacturing processes, meeting the scaling challenges of the semiconductor industry.
Surrey NanoSystems works with its partners to deliver practical nano-materials and technologies to the semiconductor, renewable-energy and clean technology industries. This partnering approach facilitates the migration of materials and processes developed on Surrey NanoSystems bespoke research platforms to production-ready tooling.
Initial investment date: July 2009
Cost: £485,000
Valuation: £528,000
Voting rights held by Fund: 4.19%
Equity held by all funds managed by Octopus: 14.26%
Last submitted group accounts: 30 June 2012
Turnover £496,335
Loss before tax: (£970,967)
Net assets: £4,607,727
Bowman Limited
Bowman Power is a clean power generation company. It has developed a turbo generator which recovers waste heat from engines, boosting power and efficiency and reducing emissions. Its primary market currently is power generation plants using renewable fuels qualifying for Feed in Tariffs, but diesel generators are the larger market in the medium term. Heavy duty hybrid electric vehicles may provide an additional market in the longer term, but likely to be outside investment horizon.
Initial investment date: July 2010
Cost: £421,000
Valuation: £379,000
Voting rights held by Fund: 2.70%
Equity held by all funds managed by Octopus: 10.70%
Last submitted audited group accounts: 31 December 2012
Turnover £7,849,194
Loss before tax: (£2,153,804)
Net assets: £2,595,920
Aframe Media Group Limited
Aframe is a cloud asset management solution and tagging service with capabilities in collaboration, review and approval and archive. Aframe software and websites run on Aframe owned servers, so data is stored on Aframe dedicated storage arrays. Communication and transfers occur over Aframe networks. Video streaming is a feature that enables users of the system to preview clips and sequences.
Initial investment date: September 2013
Cost: £281,000
Valuation: £281,000
Voting rights held by Fund: 3.58%
Equity held by all funds managed by Octopus: 33.19%
Last submitted audited group accounts: 31 December 2012 (abbreviated)
Turnover not disclosed
Loss before tax: not disclosed
Net assets: £3,975,719
Income Statement | ||||||
| Year to 31 October 2013 | ||||||
| Revenue | Capital | Total | ||||
| Notes | £'000 | £'000 | £'000 | |||
| Gain on disposal of fixed asset investments | 10 | - | 670 | 670 | ||
| Gain on disposal of current asset investments | - | 91 | 91 | |||
| Fixed asset investment holding gains | 10 | - | 2,359 | 2,359 | ||
| Current asset investment holding gains | - | - | - | |||
| Other income | 2 | 316 | - | 316 | ||
| Investment management fees | 3 | (107) | (321) | (428) | ||
| Performance fee incentive | 19 | - | (538) | (538) | ||
| Other expenses | 4 | (377) | - | (377) | ||
| Return on ordinary activities before tax | (168) | 2,261 | 2,093 | |||
| Taxation on return on ordinary activities | 6 | - | - | - | ||
| Return on ordinary activities after tax | (168) | 2,261 | 2,093 | |||
| Earnings per share - basic and diluted | 8 | (0.8) | 11.2 | 10.4 | ||
- 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.
The accompanying notes form an integral part of the financial statements.
Income Statement | ||||||
| Year to 31 October 2012 | ||||||
| Revenue | Capital | Total | ||||
| Notes | £'000 | £'000 | £'000 | |||
| Realised gain on disposal of current asset investments | - | 259 | 259 | |||
| Loss on disposal of current asset investments | - | (15) | (15) | |||
| Fixed asset investment holding gains | - | 7,120 | 7,120 | |||
| Current asset investment holding gains | - | 78 | 78 | |||
| Other income | 2 | 66 | - | 66 | ||
| Investment management fees | 3 | (74) | (223) | (297) | ||
| Performance fee incentive | 19 | - | (1,222) | (1,222) | ||
| Other expenses | 4 | (252) | - | (252) | ||
| Return on ordinary activities before tax | (260) | 5,997 | 5,737 | |||
| Taxation on return on ordinary activities | 6 | - | - | - | ||
| Return on ordinary activities after tax | (260) | 5,997 | 5,737 | |||
| Earnings per share - basic and diluted | 8 | (1.5)p | 35.3p | 33.8p | ||
- 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 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 had no recognised gains or losses other than the results for the period as set out above.
The accompanying notes form an integral part of the financial statements.
| Reconciliation of Movements in Shareholders' Funds | ||
| Year ended 31 October 2013 | Year ended 31 October 2012 | |
| £'000 | £'000 | |
| Shareholders' funds at start of year | 21,361 | 14,833 |
| Return on ordinary activities after tax | 2,093 | 5,737 |
| Issue of equity (net of expenses) | 4,580 | 1,323 |
| Purchase of own shares | (598) | (107) |
| Dividends paid | (6,512) | (425) |
| Shareholders' funds at end of year | 20,924 | 21,361 |
The accompanying notes form an integral part of the financial statements.
| Balance Sheet | |||||
| As at 31 October 2013 | As at 31 October 2012 | ||||
| Notes | £'000 | £'000 | £'000 | £'000 | |
| Fixed asset investments* | 10 | 15,970 | 19,176 | ||
| Current assets: | |||||
| Debtors | 11 | 1,758 | 1,562 | ||
| Money market funds and other deposits* | 12 | 331 | 1,712 | ||
| Cash at bank | 3,394 | 176 | |||
| 5,483 | 3,450 | ||||
| Creditors: amounts falling due within one year | 13 | (529) | (1,265) | ||
| Net current assets | 4,954 | 2,185 | |||
| Net assets | 20,924 | 21,361 | |||
| Called up equity share capital | 14 | 2,198 | 1,751 | ||
| Share premium | 15 | 5,816 | 1,754 | ||
| Special distributable reserve | 15 | 11,552 | 12,150 | ||
| Capital redemption reserve | 15 | 98 | 27 | ||
| Capital reserve - losses on disposals | 15 | 1,518 | (1,998) | ||
| - holding gains | 15 | 419 | 8,186 | ||
| Revenue reserve | 15 | (677) | (509) | ||
| Total equity shareholders' funds | 20,924 | 21,361 | |||
| Net asset value per share | 9 | 95.2 | 121.9p | ||
*Held at fair value through profit or loss
The statements were approved by the Directors and authorised for issue on 28 January 2014 and are signed on their behalf by:
John Hustler
Chairman
Company No: 6397765
The accompanying notes form an integral part of the financial statements.
| Cash Flow Statement | |||
| Year to 31 October 2013 | Year to 31 October 2012 | ||
| Notes | £'000 | £'000 | |
| Net cash outflow from operating activities | (1,959) | (638) | |
| Financial investment: | |||
| Purchase of fixed asset investments | 10 | (10,240) | (1,061) |
| Sale of fixed asset investments | 10 | 16,475 | 666 |
| Management of liquid resources: | |||
| Purchase of current asset investments | (5,506) | (1,754) | |
| Sale of current asset investments | 6,978 | 2,081 | |
| Taxation | - | - | |
| Dividends paid | 7 | (6,512) | (425) |
| Financing: | |||
| Issue of shares | 4,580 | 1,323 | |
| Purchase of own shares | 14 | (598) | (107) |
| Increase in cash resources at bank | 3,218 | 85 | |
| Reconciliation of Return before Taxation to Cash Flow from Operating Activities | |||
| Year to 31 October 2013 | Year to 31 October 2012 | ||
| £'000 | £'000 | ||
| Return on ordinary activities before tax | 2,093 | 5,737 | |
| Gain on disposal of fixed asset investments | (91) | (259) | |
| (Gain)/loss on disposal of current asset investments | (670) | 15 | |
| Gain on valuation of fixed asset investments | (2,359) | (7,120) | |
| Gain on valuation of current asset investments | - | (78) | |
| Increase in debtors | (274) | (145) | |
| (Decrease)/increase in creditors | (658) | 1,212 | |
| Outflow from operating activities | (1,959) | (638) | |
| Reconciliation of Net Cash Flow to Movement in Net Funds | |||
| Year to 31 October 2013 | Year to 31 October 2012 | ||
| £'000 | £'000 | ||
| Increase in cash at bank | 3,218 | 85 | |
| Decrease in cash equivalents | (1,381) | (264) | |
| Opening net cash resources | 1,888 | 2,067 | |
| Net funds at 31 October | 3,725 | 1,888 | |
Net funds at 31 October comprised:
| Year to 31 October 2013 | Year to 31 October 2012 | |
| £'000 | £'000 | |
| Cash at bank | 3,394 | 176 |
| Money market funds | 331 | 743 |
| OEICs | - | 969 |
| Net funds at 31 October | 3,725 | 1,888 |
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 2 PLC via Globenewswire
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