Annual Financial Report

Octopus Titan VCT plc ("Titan" and "the Company")

Annual Report and Accounts for the year ended 31 December 2020

Titan today announces the final results for the year to 31 December 2020 as below.

These results were approved by the Board of Directors on 23 April 2021.

You may view the Annual Report in full at www.octopusinvestments.com shortly. All other statutory information will also be found there.

Octopus Titan VCT plc (‘Titan’ or ‘the Company’) is a venture capital trust (‘VCT’) which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominantly unquoted companies. The Company is managed by Octopus Investments Limited (‘Octopus’ or ‘Portfolio Manager’) and Octopus AIF Management Limited (the ‘Manager’).

Financial Summary

	As at 31 December 2020	As at 31 December 2019
Net assets (£’000)	1,043,235	905,840
Profit after tax (£’000)	75,323	67,280
Net asset value (‘NAV’) per share	97.0p	95.2p
Cumulative dividends paid since launch	81.0p	76.0p
NAV plus cumulative dividends paid (‘Total Value’)	178.0p	171.2p
Total return*	6.8 p	7.1p
Total return**	7.1%	7.6%
Dividends paid in the period	5.0 p	5.0p
Further dividend declared***	3.0p	3.0p

*Total return is an alternative performance measure calculated as movement in NAV per share in the period plus dividends paid in the period, divided by the NAV per share at the beginning of the period.

**Calculated as total return/opening NAV.

***Payable on 30 April 2021 to those shareholders on the share register on 16 April 2021.

Key Dates

Interim dividend payment date                                        30 April 2021

Annual General Meeting                                                7 June 2021

Interim Results to 30 June 2021 published                       September 2021

Chairman's Statement

I am pleased to present the annual results for Octopus Titan VCT for the twelve months ended 31 December 2020.

The NAV per share at 31 December 2020 was 97.0p which, adjusting for dividends paid, represents a 7.1% increase from 31 December 2019, a 10.6% increase from the NAV per share at 30 June 2020, and a 12.5% increase from the NAV per share low of 88.0p in April 2020.  This increase reflects impressive performance across a number of portfolio companies, despite the challenges of the Coronavirus pandemic, and is testament to the efforts of the Octopus Ventures team and the pioneering management teams of the investment companies. The tax-free annual compound return for the original shareholders since Titan’s launch in October 2007 is now 5.1%.

Subsequent to the year end, we reviewed the portfolio in March in advance of share allotments relating to the most recent share offer, and we were delighted to announce a further increase to the NAV per share to 104.0p at 29 March 2021. There was a further review in April in advance of the Dividend Reinvestment Scheme (DRIS) allotment and certain Share Buybacks which resulted in an additional increase to the NAV per share to 105.5p at 23 April 2021 (net of the 3.0p dividend due to be paid on 30 April 2021 and which went ex-dividend on 15 April 2021). These increases reflect movements in some of the material holdings within the portfolio since the year end.

Despite the macro environment, we were pleased to raise £124 million in last year’s fundraise which closed on 8 April 2020. On 21 October 2020, we launched a new offer to raise up to £80 million, with an over-allotment facility of up to £40 million. We are pleased that this offer was closed, fully subscribed on 3 March 2021 and further details, including the position at 31 December 2020, can be found under the Fundraise section of my Statement. We would like to take this opportunity to welcome all new shareholders and thank all existing shareholders for their continued support.

In addition to cash from our fundraise, we generated a total of £60 million from realisations in the year (£24 million from direct holdings and £36 million from the Calastone sale in Zenith Holding Company). In the twelve months to 31 December 2020, we utilised £182 million of our cash resources, comprising £96 million in new and follow-on investments, £46 million in dividends, £20 million in share buybacks and £20 million in investment management fees and other running costs. Together, this utilised 65% of our cash and cash equivalents at 31 December 2019. The cash balance of £272 million at 31 December 2020 represents 26% of net assets at that date, compared to 31% at 31 December 2019 (this includes cash held in Zenith Holding Company and Corporate Bonds).  

Investment Portfolio Review

I am pleased to report a net uplift in the value of the portfolio of £109 million since 31 December 2019, excluding additions and disposals, representing a 17% return on the value of the portfolio at the start of the year.

During the year, the uplift in valuation has been driven by the strength of performance of a number of companies in the portfolio, which are detailed in the Portfolio Manager’s Review. In particular, Amplience, Bought By Many, Cazoo, Depop and WaveOptics have all achieved material increases in value. Collectively, 34 investee companies drove an uplift of £225 million. Many of our portfolio companies have made great progress over this period and hit exciting milestones, including launching in new markets, rolling out new products and winning significant accolades. In particular for example, Cazoo became the fastest British business to reach unicorn status in June 2020 and announced it intends to list on the NYSE in the third quarter of 2021 through a $7.0 billion business combination with a special purpose acquisition company (subject to shareholder approval of both companies, and regulatory approvals). Alongside the strong performance of some individual companies, some sectors have seen impressive growth trends during the period, which means the quantitative metrics (such as revenue multiples) used to value businesses in such sectors have also increased. For example, Software-as-a-Service (or SaaS) businesses are currently trading at a premium. These increased metrics have in turn been taken into account in our valuation processes where relevant when determining fair value.

In addition to the profitable realisations from We Got Pop and UltraSoC Technologies previously reported, we announced in October that Titan has also benefitted from the sale of Calastone to The Carlyle Group during the year, which represented an 18x return on the initial investment. We first invested in Calastone in 2008, participating in the company’s seed round and a number of subsequent funding rounds. Titan has held its interest in Calastone via Zenith Holding Company Limited since 2013. The realisation of Titan’s investment in Calastone yielded proceeds of £40.5 million over it’s lifetime(compared to a cost of £7 million), a small proportion of which is deferred and expected to be paid within 12 months.

Conversely, as is to be expected, 41 companies saw a collective decrease in valuation of £117 million. The significant contributors over the 12 month period were Secret Escapes, Uniplaces, The Plum Guide and Appear Here where performance has been more challenging due to the sectors in which they operate being deeply affected by the Coronavirus pandemic. 10 of these 41 companies saw a reduction in value of 5% or less, typically reflecting changes in the holding value of investments denominated in currencies other than sterling due to the appreciation of sterling in the year. The Portfolio Manager believes that a number of these companies have the potential to overcome the issues they face and is working with them to realise their ambitious growth plans. This will, where appropriate, include providing further funding to ensure the company has sufficient capital to execute on its strategy. This can be seen with Uniplaces, where Titan has invested further despite Titan’s holdings in the company being valued at less than cost at the period end.

Unfortunately, following a period of underperformance and having explored and exhausted all other options, Katalyst Inc accepted an offer for its assets and liabilities in December 2020. This allowed the company to continue trading, but did not result in any distribution to Titan as this would have been non-compliant with the VCT rules. Despite this being an unfavourable outcome for Titan, the sale was in the best interests of the company and its customers. In addition, despite all Octopus’ and the management team’s efforts, GTN was placed into Administration during the period having failed to grow sufficiently or secure further funding.

Following the year end, Titan also realised its investment in e-Therapeutics plc at a loss. Unfortunately, the company saw a reasonably sustained decline in share price over the past few years reaching a low toward the end of 2019, and, as a result, Octopus elected to realise Titan’s investment when the price reached a five-year high and liquidity was available. While it is disappointing to see unprofitable realisations in the portfolio, we know that some such losses are to be expected when making investments into early stage, high growth companies and we remain confident that the high performers in the portfolio will outweigh the failures. It is worthwhile remembering that, when we have an unsuccessful exit, we only lose the cost of that investment, but when there is a successful realisation in the portfolio, we benefit from a multiple on our original investment.

Turning to investments made during the twelve months to 31 December 2020, £51 million was invested into 15 new companies (further detailed in the Portfolio Manager’s Review) and £45 million was invested in 30 follow-on investments into existing portfolio companies as listed on page 11 of the Annual Report and Accounts. We are delighted that the volume and quality of investment opportunities was so strong during this period despite the Coronavirus pandemic. At the year end, the portfolio is well diversified, comprising 86 technology or tech-enabled companies, across seven broad sectors.

In addition, there have been nine new investments and three follow-on investments totalling £40.0 million since 31 December 2020. Details of the new investments can be found in the Portfolio Manager’s Review.

Performance Incentive fees

Titan’s performance since 31 December 2019 has meant that a performance fee of £18 million has been charged. The performance fee is calculated as 20% on all gains above the High Water Mark, the highest total value as at previous year ends, of 171.2p as at 31 December 2019. See Note 19 of the financial statements for further details.

Dividends

Following careful consideration, I am pleased to confirm that the Board has decided to declare a further interim dividend of 3p per share in respect of the year ending 31 December 2020. This will be paid on 30 April 2021 to shareholders on the register as at 16 April 2021, resulting in full year dividends of 5p. This represents a tax-free yield of 5.3% on the opening NAV. As shareholders will know, our ambition is to pay an annual dividend of 5.0p per share, supplemented by special dividends when appropriate.

As announced in the interim report, the Dividend Reinvestment Scheme (DRIS) was reinstated in respect of the interim dividend declared in that report. As such, if you are one of the 27% of shareholders who take advantage of the DRIS, your dividend will be receivable in Titan shares.

Fundraise and Buybacks

As previously stated, Titan successfully raised £124 million (£121 million net of up-front fees) in the period to April 2020. Titan launched a further fundraise of up to £80 million (plus a potential over-allotment facility of a further £40 million) in October 2020. £65 million (£64 million net of costs) had been allotted under this offer and additional unallotted applications totalling £4 million had been received as at 31 December 2020. On 3 March, the Board announced that the offer was fully subscribed and had closed. As always, we would like to thank shareholders for their ongoing support, particularly during the more recent challenging macro environment.

During the period, Titan repurchased and cancelled 23 million shares (representing 2% of the net asset value as at 31 December 2019). Further details can be found in Note 14 of the financial statements. The Board continues to buy back shares from shareholders at no greater than a 5% discount to NAV per share. Whilst we are seeking shareholder approval to increase the limit on buy backs to 14.99% of share capital, we do not currently envisage increasing the use of this authority above the current published cap of 5% of the share capital.

Board of Directors

Mark Hawkesworth has taken the decision  to retire from the Board and will, therefore, not stand for re-election  at the forthcoming AGM. Mark was a Director and Chairman of Octopus Titan VCT 3 plc from March 2008 to November 2014 when the five Titan VCTs were merged, and has since been a Director of Titan VCT. He has also been the Chairman of Titan’s Audit Committee since the merger. I have particularly valued Mark’s experience and advice and, on behalf of  the Board and shareholders, I would like to take this opportunity to thank him for his many years working with us. We wish him well in his retirement.

Tom Leader has agreed to assume the Chair of the Audit Committee on Mark’s retirement.

We recognise the importance of ensuring the Board remains independent, and collectively has sufficient breadth of experience and expertise to appropriately represent Titan’s shareholders’ best interests, particularly given the continued growth of Titan. As a result, as part of our succession and refreshment plans, the Board has recently announced the appointment of Lord Anthony Rockley as a Director and he will offer himself for re-election at the forthcoming AGM. We have also identified a further Director appointment, Gaenor Bagley, but due to our current authority in respect of Directors’ Remuneration, this appointment will be delayed pending approval of the Resolution at the AGM to increase our authority in this regard. Full details of Lord Rockley and Gaenor are included on page 29 of the Annual Report and Accounts.

Investing alongside other Octopus funds

The Octopus Ventures team has previously invested funds from Titan alongside and into other Octopus-managed products or services and sometimes alongside Octopus itself. Going forward, when investing into new companies and some of those already in the portfolio, it is expected that Titan will invest along with funds from Octopus’ new Enterprise Investment Scheme (EIS) service, Octopus Ventures EIS, launched in Autumn 2020.

Titan will retain its pre-emption rights, including right of first refusal, on all existing holdings.  Investments into new companies made by Octopus Ventures will be allocated between Titan and any co-investing Octopus-managed funds and services in accordance with an allocation policy which has been agreed with the Board. Any changes to this policy which may impact Titan will require Board approval.

The first such co-investment was made after the year end, in March 2021.

Principal Risks and Uncertainties

The Board continues to regularly review the risk environment in which Titan operates. There have been no significant changes to the key risks which are fully described on pages 22 to 24 of the Annual Report and Accounts. The Board does not anticipate there will be significant changes to these risks.

VCT Qualifying Status

PricewaterhouseCoopers LLP (PwC) provides both the Board and Octopus with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs and have advised that Titan continues to be in compliance with the conditions laid down by HMRC for maintaining approval as a VCT.

As at 31 December 2020, over 98% of the portfolio (as measured by HMRC rules) was invested in VCT-qualifying investments, significantly above the 80% current VCT-qualifying threshold.

Annual General Meeting (‘AGM’)

Following government guidelines, our AGM will be held remotely at 11.00am on 7 June 2021. Full details of the business to be conducted at the AGM are given in the Notice of the Meeting on pages 76 and 77 of the of the Annual Report and Accounts.

We will also be hosting a virtual shareholder event prior to the AGM on Wednesday 26 May 2021 at 10.00am. This will enable shareholders to receive an update from the Portfolio Manager and provide an opportunity for questions to the Board and the Portfolio Manager. You can register for the event at octopusinvestments.com/titan-shareholder-event/.

Shareholders’ views are important, and the Board encourages shareholders to vote on the resolutions within the Notice of Annual General Meeting on pages 76 and 77 of the of the Annual Report and Accounts using the proxy form, or electronically at www.investorcentre.co.uk/eproxy as there may be no opportunity to vote in person. The Board has carefully considered the business to be approved at the Annual General Meeting and recommends shareholders to vote in favour of all the resolutions being proposed. We encourage shareholders to submit their votes by proxy.

We always welcome questions from our shareholders at the AGM but this year, to ensure we can respond to any questions you may have for either the Portfolio Manager or Titan VCT Board, please send these via email to [e-mail].

Outlook

The Coronavirus pandemic has resulted in an unprecedented and challenging period, but thanks to the support of our shareholders, Titan has been in a position of strength to help our investee companies weather this storm. Octopus Ventures acted swiftly, and the portfolio’s entrepreneurs have reacted impressively.

With the completion of the Brexit transition period on 31 December 2020 and the Government unveiling its four-stage plan to lift Coronavirus restrictions, the hope is that 2021 should offer a more stable period and allow for some further recovery.  We recognise however that the road to recovery may not be smooth and is likely to take some time in a number of sectors, so we are pleased the Chancellor recognises the valuable contribution VCTs has and will continue to make to small firms, which will be a pillar of the recovery.

We are, of course, pleased to report that the NAV has recovered and now significantly exceeds its 31 December 2019 value. We have a well-diversified portfolio of more than 85 companies, the average age of which is 7.5 years and the average holding period being just over four years. We believe that the average holding period in the portfolio is likely to be 7-10 years in future.

Our key targets as part of the long-term strategy of the fund remain to pay an annual dividend of at least 5p per share whilst maintaining the NAV per share at 90 pence or more over a typical economic cycle. To this, we have agreed an additional target for all cash outlays, excluding new and follow-on investments, to be funded by  realisations. This would mean that all funds raised in our Share Offers will be used exclusively for new and follow-on investments. We recognise that the timing of realisations is often outside our control and we may need some patience to achieve this goal.

Together with Octopus, we also believe that backing entrepreneurs who think their businesses can not only be commercially valuable, but environmentally and socially valuable to the world we live in, have the potential to deliver some of the best returns. We understand this is important to our shareholders too, and continue to work with Octopus to further embed appropriate ESG considerations into the investment process when selecting the best opportunities in which to invest Titan.

Following the closing of our latest fundraising offer, we now have £283 million in cash and cash equivalents as at 31 March 2021. This will allow us to continue to support the most promising companies in our portfolio, as well as seeking the UK and Europe’s most pioneering entrepreneurs intent on building world-changing businesses in which to invest. To support this, Octopus Ventures has increased the investment team significantly and has added further operational support to ensure it continues to be able to make new investments and manage the expanding portfolio appropriately. Further details, including the appointment of Emma Davies as Co-CEO of Octopus Ventures, are detailed in the Portfolio Manager’s report.

Octopus Ventures’ investment team ‘pods’ structure continues to expand, with the latest additions of Consumer and Growth pods during 2020 to Health, Fintech, and Deep Tech. This further enhances speciality knowledge to allow the teams to be able to seek the best investment opportunities in these spaces. The team looks to make Titan the lead investor in these new opportunities. As the companies grow in line with their initial plans, Octopus Ventures aims to purchase a significant minority equity stake from the funds under its management (including Titan)  and will often seek third party co-investors to lead later rounds. This helps ensure those companies with the highest growth potential have access to sufficient sources of further funding to achieve their potential.

I hope you will agree that your investment in Titan has, over the years, provided you with a good return. In recent years we have paid annual tax free dividends of at least 5.0p per share whilst broadly maintaining the capital value. I recognise some shareholders would prefer capital returns rather than dividends and would again suggest that our DRIS scheme, which converts dividends to shares at NAV, together with the benefit of 30% up front tax relief, is an ideal way to achieve this objective.

Regardless of the evolving macro environment, Octopus Ventures continues to work closely with the portfolio to ensure a good understanding of the opportunities and risks associated with each company and your Board believes that the outlook for our portfolio remains very positive.

I would like to conclude by thanking both the Board and the Octopus Ventures team on behalf of all shareholders for their hard work, without which our fund would not continue to achieve such performance.

John Hustler
Chairman
23 April 2021

Portfolio Manager's Review

Personal Service

At Octopus, we focus on both managing your investments and providing investors with open communication. Our annual and interim 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 four VCTs, including Titan, and manage over £1.6 billion in the VCT sector.

Investment Strategy

Octopus Ventures helps pioneers change the world. We use the term ‘pioneers’ very deliberately to carve out that subset of entrepreneurs who are truly breaking new ground. Since 2008, we have backed well over 100 teams, some of which sold their companies to the world’s largest businesses including Google, Amazon, Microsoft and Twitter. The quality of our deal flow means that we are typically able to select the most talented teams leading technology or technology-enabled businesses to achieve this. The opportunity here is significant: back in 2010, there were only two European technology companies formed since 2000 valued at more than a billion dollars. By 2014, it had risen to 30, and in 2020, there were over 116, with more than 30 of them based in the UK. With second and third places held by Israel (with 20 such companies) and Germany (with 16 such companies), this makes the UK the largest producer of billion-dollar companies in Europe by some margin. Titan provides VCT investors with exposure to this exciting investment opportunity. We’re proud to have achieved a number of successes in the portfolio and multiple high-profile exits, contributing to Titan’s total return of 7.1% and tax-free dividends totalling 5.0p in the year.

Within the VCT rules of a maximum annual investment of £10 million per company and a lifetime limit of £20 million for Knowledge Intensive companies (which most Titan portfolio companies qualify as), we look to lead the first round of Titan’s investment into a business, setting the terms and purchasing a significant minority equity stake in the company.  If a company goes on to achieve milestones agreed with the management team and needs further funding to continue its growth, we will typically look to maintain our stake in that company, and in many cases seek a co-investor to participate in further investment rounds. Many portfolio companies meet and exceed the expectations initially set. In these situations and where a company demonstrates its ability to create a significant and valuable businesses, we may seek to increase our stake.

Our investment provides the capital for businesses to grow their teams, enhance their products and expand into new markets. We usually expect to realise our investments through trade sales (for example, to a larger technology company such as Amazon, Google or Microsoft, all acquirers of former Titan portfolio companies), private equity sales (such as that of Calastone to Carlyle Group in 2020) or listings on public markets. Our view is that if we remain able to identify, support and realise investments from category-leading businesses, the returns we can generate for Titan shareholders can be significant, particularly with the UK continuing to show such leadership for successful entrepreneurism in Europe.

Whilst many of our investments go on to become very successful companies and sometimes household names, it is inevitable that some companies will not perform. We typically look to take a board seat when we make an investment which enables us to closely monitor progress and bring in the appropriate support from within our team or wider network to help each portfolio company reach its potential. In situations where a company is performing less well and not meeting the pre-agreed milestones, we will usually take one of a few courses of action. We may work with the company to help them secure funding from a new investor and still invest alongside that investor to maintain Titan’s holding in the business. This helps to expand the company’s potential sources of help and funding which can help maximise its chances for success. In other cases, we may have to make more difficult decisions. Where performance and progress continue to lag behind expectations, we may decide not to invest further, and will seek to recover value where possible. 

Performance

The Total Value has seen a significant increase since Titan’s first year end (31 October 2008) as shown on the graph, from 89.9p to 178.0p at 31 December 2020. This represents an increase of 98% in value since the first full year of Titan, and dividends paid or announced since inception of 81p. Since launch, a total of over £194 million has been distributed back to Titan shareholders in the form of tax-free dividends.

As at 31 December 2020, the NAV was 97.0p per share, compared to 95.2p per share as at 31 December 2019 which represents an increase in NAV of 6.8p per share after adding back dividends paid during the year of 5.0p (2019: 5.0p) per share. When compared to the NAV announced on 30 June 2020 of 89.5p per share, it is reassuring to see the value of the portfolio recovering following the widespread uncertainty caused by the Coronavirus pandemic during 2020. The performance of the portfolio has been encouraging this year given the macro environment, with uplifts in fair value which totalled over £225 million. Downward revaluations in the year totalled £117 million.

The performance over the five years to 31 December 2020 is shown below:

	31/10/2016	31/10/2017	31/10/2018	31/12/2019	31/12/2020
NAV, p	97.9	96.4	93.1	95.2	97.0
Dividends paid, p	61.0	66.0	71.0	76.0	81
Total value, p	158.9	162.4	164.1	171.2	178.0
Total return	4.1%	3.6%	1.8%	7.6%	7.1%
Dividend yield	8.8%	5.1%	5.2%	5.4%	5.3%
Equivalent dividend yield for a higher rate tax payer	13.0%	7.6%	7.7%	8.0%	7.8%

The return on Titan’s cash and cash equivalent investments was £4.8 million in the year to 31 December 2020. The Board’s objective of these investments is to generate sufficient returns to cover costs, at limited risk to capital.

The Board recently declared a second interim dividend of 3.0p per share for the year ended 31 December 2020. The record date for the dividend is 16 April 2021 with payment to be made on 30 April 2021. It is not anticipated that any further dividends will be declared in respect of this year.   

Portfolio Review

The current portfolio encompasses investments in 81 companies (79 unquoted and two quoted, excluding two companies in liquidation and two in administration, but including the two underlying companies in Zenith).  

Portfolio	Active
31/12/2019	79
Additions	15
Disposals	(3)
Liquidations and administrations	(5)
31/12/2020	86

The progress made by many of the portfolio companies in the last twelve months has been impressive, particularly given the background of the Covid-19 pandemic. Within the portfolio, some highlights include;

• Amplience, which offers a headless content management system which powers retailers’ digital channels, has been categorised as a ‘Strong Performer’ in the latest CMS Forrester report;
• Big Health, a digital medicine company that creates apps to deliver cognitive behavioural therapy (CBT) to sufferers of mental health problems was added by CVC Health to its point solutions management program. In 2020, the company also successfully raised $39 million;
• Bought By Many, an award winning InsurTech company with a specific focus on providing better pet insurance for everyone, completed a £78 million funding round led by FTV Capital, and is now one of the largest pet insurance companies in the UK, insuring over 300,000 pets after only four years;
• Cazoo, the latest venture from the founder of Zoopla, Alex Chesterman, is looking to transform how 8 million used cars are bought each year in the UK by putting the entire process online and offering home delivery. It reached “unicorn” status in record time being valued at over two billion pounds in 2020, and in April 2021 announced it intends to list on the NYSE in the third quarter of 2021 through a $7.0 billion business combination with a special purpose acquisition company;
• Elvie, which develops products to improve women’s lives through smarter technology, was listed at number seven in the 2020 Sunday Times Sage Tech Track 100 and launched two new breastfeeding products to great market reception; Elvie Curve and Elvie Catch;
• The CEO of Depop, a social marketplace for selling unique things, has been added to the 2021 TIME100 list of most influential people in the world, and in 2021 Depop was recognised in Fast Company’s Annual List of the World’s Most Innovative Companies as one of the top five most innovative retail companies in the world;
• Wave Optics, a business that designs a critical component, known as a waveguide, for use in augmented reality (AR) glasses, has been shortlisted in the Vision Technology category at the Prism Awards 2021;
• Skin + Me, delivering dermatologist-designed skincare, prescribed specifically for the individual, has increased its product line to include treatments for rosacia and skin pigmentation, with existing customers leaving 95% five star reviews on Trustpilot; and
• Opensignal, which combines real-world measurements with scientific analysis to provide independent insights on mobile connectivity globally, boosted the capabilities of its two signal testing apps, allowing customers to see what video streaming quality they can expect depending on their mobile carrier.

Not all companies have been so successful however, with some underperforming versus budget, including a number impacted by the Coronavirus pandemic to differing degrees. More can be found on such companies and the impact on NAV in the Chairman’s Statement.

Disposals

Titan made three profitable full disposals in the year  (We Got POP, UltraSoC and Calastone), one at a partial loss (BridgeU), and two at a full loss (GTN and Katalyst) resulting in total proceeds of £60 million in the year (£24 million from direct holdings and £36 million from the Calastone sale in Zenith Holding Company).

In March, We Got POP, a software platform for workforce and production management in the entertainment industry, was acquired by Entertainment Partners, an established global leader in this segment, which yielded proceeds of £9 million to Titan. Octopus first invested in We Got POP in 2017, provided further funding in 2019 and was the largest institutional investor in the business.

In June, it was announced that UltraSoC, which develops monitoring and self-analytics technology for use in the silicon chips that power today’s consumer electronic, computing and communications products, was acquired by Siemens. Octopus first invested in UltraSoC in 2010 and participated in a number of subsequent funding rounds and six months prior to the acquisition the company was valued at less than cost. The realisation yielded proceeds of £11 million (compared to a cost of £9 million) which were received in July, with a further proportion expected within the following 18 months.

In December, Calastone, a global funds transaction network, was acquired by The Carlyle Group.  We first invested in Calastone in 2008, participating in the company’s seed round and several subsequent funding rounds. The realisation represented an 18x return on Titan’s initial investment. The realisation of Titan’s investment in Calastone yielded proceeds of £40.5 million over it’s lifetime (compared to a cost of £7 million), a small proportion of which is deferred and expected to be paid within 12 months. It is a great example of our strategy of investing in unusually talented entrepreneurs addressing large markets and industries ripe for disruption.

BridgeU helps to bridge the transition between secondary and higher education for students by providing an individually adaptive university preparation and application platform, which helps to match students with the universities that are the best fit for them. It was acquired early in 2020 by Kaplan, the largest for-profit corporation that provides educational services to colleges, universities and businesses. Titan completed its first investment in August 2015 and participated in a number of follow-on funding rounds.

Further information on GTN and Katalyst are available in the Chairman’s Statement. It is always disappointing for both Octopus and shareholders when a portfolio company is not successful, but is an inevitable risk associated with a venture capital portfolio.

New and follow-on investments

Titan completed follow-on investments into 30 companies and made 15 new investments, together totalling £96 million (comprising £45 million invested into the existing portfolio and £51 million into new companies). This compares to a 14 month period in 2019 when Titan made 14 new investments and 48 follow-on investments, together totalling £127 million.

As previously reported, we have proactively increased the size of our investment team over the last 5 years to enable us to increase the rate of new investments and appropriately manage the growing portfolio. The team is now organised into five ‘pods’; Health, Fintech, Deep Tech, Consumer and Growth. The specialist knowledge developed within these ‘pods’, assists them in attracting and selecting the best investment opportunities in their respective areas. The funds raised during the year have given us the capability to ensure we continue to invest sufficiently into the highest quality investment opportunities we are seeing in the market, including those already in our portfolio, and we are on target to deploy the capital raised in line with our budget.

The 15 new investments in the twelve months to December 2020 were into:

• Altitude Angel: A cloud platform which provides an air traffic management system for autonomous, commercial drones
• Quit Genius: Offering cognitive behavioural therapy and app-based programmes to treat substance addiction;
• Katkin: Bringing personalised, fresh and perfectly portioned meal plans for cats to their owner’s doors;
• Minimum: Links spending data to personal carbon emissions enabling tracking and offsetting of consumer carbon footprint as it’s created;
• Orbex Space: designing and constructing an orbital space launch vehicle to service the small satellite launch market;
• Ori Biotech: Unlocks scalable and automated biomanufacturing of cell and gene therapy;
• Pexxi: A wholistic and personalised women’s health platform;
• Quantum Motion Technologies: Developing a scalable silicon-based quantum computer that solves for fault tolerance;
• skew: A provider of financial data, tools and services related to crypto assets for institutional clients;
• Stackin: An SMS-based recommendation engine that combines financial education and personalised products;
• TaxScouts: Offering self-assessment tax return automation technology;
• ThoughtRiver: A contract pre-screening automation tool targeted at the legal sector;
• VitessePSP: A global domestic settlement and liquidity management system to hold funds and execute cross border payments;
• WeFarm: A farmer-to-farmer digital network; and
• Whirli: A subscription service for toys.

Subsequent to the year end 9 new investments and 3 follow-on investments have been made, totalling £40.0 million. Further details can be seen in Note 17 of the financial statements.

Supporting our portfolio companies

Backing entrepreneurs and helping them reach their ambitions goes well beyond just providing finance. We give them a platform to succeed, providing practical support to the companies, helping them find and hire the right people and introducing them to valuable contacts, among other activities.

Since Titan was launched, we’ve built the Octopus Ventures team, which manages the Titan portfolio, from five people to more than 40. Octopus Ventures now has a combined investment experience of over 140 years and brings together a wide range of specialist skills and individual insights – more than 50% of the investment team have founded a business themselves. Most notably, the team has recently welcomed Emma Davies as Co-CEO. She has over 20 years of institutional fund management expertise and experience from a variety of roles at The Wellcome Trust, Big Society Capital, Perry Capital and Marylebone Partners. Emma will focus on Product, Operations, Corporate Development and Impact.

Early-stage companies often need nurturing. So, we don’t just make an investment, we also actively participate in the company’s growth journey. Usually someone from Octopus Ventures sits on the board of the company, which allows them to play a prominent role in the company’s ongoing development, and supporting those teams through the often perilous activity of company building.

Some of the ways we help the entrepreneurs we back include holding workshops on strategy, advising on sales and marketing, as well as providing connections to other companies who may be helpful.  It is our belief that the quality of a management team can make or break a business, so we’ve grown our own in-house talent team in response to this and are looking to expand it further. They are solely focused on partnering and supporting our portfolio company leaders with building and developing the teams around them. We have often introduced people who go on to become key members of senior management teams within our portfolio companies. They lend their own specialist knowledge and contacts to the portfolio management teams, and work with external consultants, experts and recruiters to assist the companies on their growth journeys.

We are also in a great position to help companies expand internationally. Octopus Ventures itself is spread between offices in London and New York, so we can better help companies understand both the opportunities and challenges of expanding globally.

The team is bolstered by a group of Venture Partners, a select group of entrepreneurs and business experts who offer expertise in areas such as strategy, product and go-to-market. Their purpose is to help Titan portfolio companies reach their full potential. As well as helping businesses with specific challenges, the Venture Partners have also held sessions with CEOs on a variety of topics, including ‘how to lead in a crisis’ which was invaluable to many portfolio companies in helping them navigate the Coronavirus pandemic.

The support we provide our portfolio companies should help them weather periods of disruption and drive future success. Furthermore, access to this kind of expertise can be an advantage in winning the most competitive investment opportunities and proving our value beyond simply investment.

Outlook

Despite the last twelve months’ being extremely challenging, the entrepreneurial ecosystem in the UK and across Europe remains a very exciting one, and the more recent focus to our five ‘pods’ has allowed us to deepen our knowledge and access to some of the most exciting and pioneering opportunities within it. Regardless of sector, technology remains a driving force behind many businesses as they look to disrupt, replace or reinvent industries. The best companies have thrived in this uncertain environment as the speed of adoption of new technology has rapidly accelerated. However, as is to be expected, there has also been some turbulence within the portfolio which has resulted in some losses or downward revisions to valuation.  Ensuring Titan’s investee companies continue to have sufficient funds to drive for growth and capitalise on any appropriate new prospects, as well as providing support through our own team and wider network of experienced advisors, continues to be important to the potential future success of our companies.

As mentioned earlier, we offer a suite of assistance which is highly valued by the teams seeking funding for their ambitious ideas, which not only helps add value to the existing companies in the portfolio in a practical way, but also helps attract and secure some of the best investment opportunities in the market. As a result, we’re proud to be known as a trusted and valued partner for entrepreneur’s intent on building global businesses valued in the billions. Whilst there are a number of portfolio companies which have been very successful already and delivered significant value to Titan and its shareholders, we are confident many more have the potential to build on, and even exceed that level of success.

We continue to be delighted by the support from investors and the resulting success of the fundraising which closed in April 2020 and have already closed the fundraise launched in October 2020, raising £121 million in aggregate. We’d like to take this opportunity to thank existing shareholders and welcome new shareholders for their support in our fundraising efforts.

Valuation Methodology

Overview

Each unquoted portfolio investment will be valued at least twice a year, usually at the Titan interim and year end dates (30 June and 31 December, respectively), although this may vary according to fund raising schedules. The portfolio investments are valued in accordance with the latest International Private Equity and Venture Capital (IPEV) valuation guidelines. This means the investments are valued at fair value. In March 2020, these guidelines were updated with special valuation guidance in relation to Coronavirus. This clarified that fair value is based on what is known and knowable at the measurement date, and our valuations take account this the new guidance. The value of the unquoted portfolio investments is combined with the value of the quoted portfolio investments, together with the value of the Fund’s other assets, investments and liabilities to generate the overall Net Asset Value of the Fund. 

General Principles

For all portfolio companies, we will consider several triangulated valuation methodologies including recent funding rounds, relevant trading comparables, recent M&A comparables and investment comparables to inform the company valuation and may adjust up or down accordingly. For companies that have raised funds  recently, the price of the most recent funding round may be an indicator of fair value. However, it may be appropriate to update this value, if this value is no longer deemed to be fair value. This may include both downward revisions reflecting underperformance, or valuation increases.  .

The investment costs and amounts invested in the year for each portfolio company are tabulated below.

Investment Portfolio

Fixed asset investments	Sector	Investment cost as at 31 December 2020 (£’000)1	Amount invested in the year ending 31 December 2020 (£’000)
Wave Optics Limited	AI, Robotics & Hardware	15,997	2,421
Amplience Limited3	Business Services	13,634	134
LHE Holdings Limited (trading as Property Partner)	Fintech and Insurance	13,600	-
Permutive Inc.	Business Services	11,839	2,000
Sofar Sounds Limited	Consumer and Social	10,918	-
Smartkem Limited	AI, Robotics & Hardware	10,753	2,985
Big Health Limited	Life Science, Health & Wellbeing	10,571	2,302
PLU&M limited	Consumer and Social	10,500	3,000
Streethub Limited (trading as Trouva)	Consumer and Social	10,363	1,129
Bought By Many Limited	Fintech and Insurance	9,978	-
Digital Shadows Ltd	Security	9,702	-
Uniplaces Limited	Consumer and Social	9,304	870
Zenith Holding Company Limited2	Other	8,963	-
Ometria Limited	Business Services	8,800	-
DePop Limited3	Consumer and Social	8,766	-
Appear Here Limited	Business Services	8,509	-
Token.IO Ltd	Fintech and Insurance	8,422	2,827
CurrencyFair Limited	Fintech and Insurance	8,381	-
Antidote Technologies Ltd	Life Science, Health & Wellbeing	8,251	1,601
Seatfrog UK Holdings Limited	Consumer and Social	7,800	2,627
Chronext AG	Consumer and Social	7,708	-
Iovox Limited	Communications and Infrastructure	7,206	943
Surrey NanoSystems Limited	AI, Robotics & Hardware	6,918	-
Stackin Inc	Fintech and Insurance	6,840	6,840
By Miles Limited	Fintech and Insurance	6,732	3,860
Allplants Limited	Consumer and Social	6,650	1,650
Digital Therapeutics (trading as Quit Genius)	Life Science, Health & Wellbeing	6,494	6,494
Chiaro Technology Limited (trading as Elvie)3	Life Science, Health & Wellbeing	6,417	-
Context-Based 4Casting (C-B4) Ltd	Business Services	6,096	-
Conversocial Limited	Communications and Infrastructure	6,064	-
Phoelex Ltd	AI, Robotics & Hardware	6,025	4,500
Picsoneye Segmentation Innovation Limited (trading as Pixoneye)	AI, Robotics & Hardware	5,808	1,108
Origami Energy Limited3	Communications and Infrastructure	5,533	-
Artesian Solutions Limited	Business Services	5,481	-
Memrise Inc	Consumer and Social	5,144	769
Cazoo Limited3	Consumer and Social	5,000	-
Elliptic Enterprises Limited	Fintech and Insurance	4,913	-
OpenSignal Inc	Communications and Infrastructure	4,862	-
Michelson Diagnostics Limited	Life Science, Health & Wellbeing	4,795	-
Casual Speakers Limited (trading as Jolt)	Consumer and Social	4,770	-
Impatients N.V. (trading as MyTomorrows)	Life Science, Health & Wellbeing	4,705	-
Orbital Express Launch Limited	Communications and Infrastructure	4,550	4,550
Olio Exchange Limited	Consumer and Social	4,500	-
ThoughtRiver Limited	Business Services	4,500	4,500
The Faction Collective SA	Consumer and Social	4,461	-
We Farm	Communications and Infrastructure	4,350	4,350
Secret Escapes Limited3,4	Consumer and Social	4,256	-
Behaviometrics AB	Security	4,229	892
Patch Gardens Limited	Consumer and Social	4,172	-
Eve Sleep Plc	Consumer and Social	4,151	-
Mr & Mrs Oliver Ltd (trading as Skin+Me)	Life Science, Health & Wellbeing	4,000	-
AudioTelligence Limited	AI, Robotics & Hardware	4,000	-
Positron Technologies Limited	Fintech and Insurance	4,000	4,000
vHive Tech Ltd	Business Services	3,996	496
Glofox	Business Services	3,812	-
Altitude Angel Ltd	AI, Robotics & Hardware	3,800	3,800
Dead Happy Limited	Fintech and Insurance	3,700	1,000
Medisafe Project Limited	Life Science, Health & Wellbeing	3,664	-
Semafone Limited	Fintech and Insurance	3,594	-
Dogtooth Technologies Limited	AI, Robotics & Hardware	3,278	-
Anikin Ltd	Consumer and Social	3,000	3,000
Whirli Limited	Consumer and Social	3,000	3,000
Unmade Ltd	Business Services	3,000	-
Trafi Limited3	Communications and Infrastructure	2,965	677
Ecrebo Limited3	Business Services	2,857	-
Metrasens Limited	AI, Robotics & Hardware	2,819	131
Mosaic Smart Data Limited	Fintech and Insurance	2,780	-
Skew	Fintech and Insurance	2,713	2,713
Vitesse PSP Ltd	Fintech and Insurance	2,679	2,679
Slamcore Limited	AI, Robotics & Hardware	2,550	1,800
Inrupt Inc.	Business Services	2,372	-
Fluidly Limited	Fintech and Insurance	2,299	-
Streetbees.com Limited	Business Services	2,086	143
CRED Investment Holdings Limited	Fintech and Insurance	2,000	-
Uniq Health Limited	Life Science, Health & Wellbeing	1,900	1,900
Ori Biotech	Life science, Health & Wellbeing	1,548	1,548
Thirdeye Labs Limited	Security	1,500	-
Quantum Motion Technologies Limited	AI, Robotics & Hardware	1,498	1,498
Segura Systems Limited3	Business Services	1,470	-
Aire Labs Limited	Fintech and Insurance	1,332	-
Multiply AI Limited	Fintech and Insurance	1,283	-
Minimum Corporation	Fintech and Insurance	759	759
e-Therapeutics plc	Life Science, Health & Wellbeing	679	-
M10	Fintech and Insurance	626	-
Intrepid Owls Limited (trading as Rest-Less)	Consumer and Social	550	-
Excession Technologies Limited	Security	298	-
Total fixed asset investments		456,788	91,496

¹ Investment cost reflects the amount invested into each investee company from Titan’s 1 – 5 before the 2014 merger and from Titan after the merger. This is different to the book cost which includes the holding gains/(losses) on assets which transferred from Titan’s 1, 3, 4 and 5 to Titan 2 (now Titan) during the 2014 merger, as Titan purchased these assets at fair value.

² Owns stakes in Secret Escapes Limited and formerly in Calastone Limited.

³ These companies have also been invested into by other funds managed by Octopus.

⁴ The figures for Secret Escapes relate to Titan’s direct investment only.

Review of Investments
Listed below are details of Titan’s ten largest investments by value.

Bought By Many Bought By Many is an award-winning insurtech company with a specific focus on providing better pet insurance for everyone. Bought by Many designed its unique policies based on more than 40,000 comments from pet owners.
Initial investment date: Investment cost: Valuation: Last submitted group accounts: Consolidated turnover: Consolidated loss before tax: Consolidated net assets:	October 2016 £9,978,000 £84,641,000 31 March 2020 £17,424,000 £(15,542,000) £1,012,000

Amplience Limited Amplience helps retailers generate profitable growth through improved online shopping experiences using smartphones, tablet and desktop computers. The Amplience Media Platform allows retailers to create campaign and product media that increases customer engagement, sales and average order values.
Initial investment date: Investment cost: Valuation: Last submitted group accounts: Consolidated turnover: Consolidated loss before tax: Consolidated net assets:	December 2010 £13,634,000 £59,897,000 30 June 2020 £5,242,000 £(2,126,000) £(6,425,000)

Depop Limited Depop is a free to download mobile and tablet app on which you can sell unique items including art, vintage and luxury fashion, illustrations, books, records and trainers.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Consolidated turnover: Consolidated loss before tax: Consolidated net assets:	January 2018 £8,766,000 £57,859,000 31 December 2019 £21,366,000 £(15,483,000) £40,128,000

Wave Optics Limited WaveOptics designs a critical component, known as a waveguide, for Augmented Reality (AR) glasses. AR superimposes a computer-generated image on a user’s view of the real world. AR glasses are used in industrial applications, such as on-site maintenance and repairs, manufacturing and logistics and it is a widely held belief that there will be a large consumer market once the technology is sufficiently mature.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Turnover: Loss before tax: Net assets:	December 2015 £15,997,000 £54,422,000 31 December 2019 £2,169,000 £(15,844,000) £17,835,000

Cazoo Cazoo is an online-only used car retailer that aims to transform the way people buy used cars in the UK. Cazoo operates as a fully integrated platform, enabling customers to research, buy, finance, and part-exchange cars through an online offering. Cazoo provides delivery to customers’ homes through a centralised inventory and fulfilment hub, whilst offering a seven day full refund policy and 90 day warranty on all transactions.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Turnover: Loss before tax: Net assets:	November 2018 £5,000,000 £53,125,000 31 December 2019 £1,176,000 £(18,922,000) £62,777,000

Zenith Holding Company Limited Zenith Holding Company has a holding in Octopus Zenith LP, an Octopus managed fund, which holds stakes in Secret Escapes and formerly in Calastone Limited, which were formerly held by Titan 1-3 prior to the merger of the five Titan VCTs in November 2014. Following the merger, Zenith Holding Company became a 100% owned investment of Titan.    Calastone was sold to The Carlyle Group during the year.   Secret Escapes provides an online vacation booking service that aims to be an exciting, enjoyable and stress-free experience. It handpicks the best hotels and holidays, making exclusive offers available to its members. The company guarantees that its ‘flash sale’ prices, which are available for limited periods, will be better than anywhere else online during that period. The business operates in the US, Europe and Asia.
Country of incorporation: Initial investment date: Investment cost: Valuation: Last submitted accounts: Loss before tax: Net assets:	The Cayman Islands June 2013 £8,963,000 £38,724,000 31 October 2019 Not disclosed Not disclosed

Permutive Permutive collects user event data and uses it to target specific marketing messages, or to trigger specific actions. For example, if a user has clicked on three links, it then prompts them to sign up for an email subscription. Permutive is currently targeting large online publishers, in addition to e-commerce businesses where there is pressure to increase marketing efficiency.
Initial investment date: Investment cost: Valuation: Last submitted group accounts: Consolidated turnover: Consolidated profit before tax: Consolidated net assets:	May 2015 £11,839,000 £26,168,000 31 December 2018 Not disclosed Not disclosed Not disclosed

Chiaro Technology Limited Elvie is looking to develop a range of products to improve women’s lives and provide support through different life stages such as pregnancy, motherhood and menopause. In so doing, the company aims to build a strong brand that consumers associate with well-designed, beautiful devices that improve women’s health.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Turnover: Profit before tax: Net assets:	November 2016 £6,417,000 £18,578,000 31 December 2019 Not disclosed Not disclosed £17,899,000

Elliptic Elliptic is a financial crime and financial risk analysis software company. Its core expertise is in interpreting transactions in the context of their network, so that a better understanding is gained about the nature of their participants. The company provides Anti-Money Laundering (AML) software, Elliptic AML, to cryptocurrency businesses as well as financial institutions. The company has also launched Elliptic Forensics, a tool which serves law enforcement and banks by enabling them to trace payments on the ledger and identify who may be behind cybercriminal activities.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Turnover: Profit before tax: Net assets:	July 2014 £4,913,000 £15,006,000 31 March 2020 Not disclosed Not disclosed £15,083,000

Trouva Trouva is an online tool for products that are sold at independent retailers’ shops. It offers services to reserve online, pick up in-store, as well as same-day and nationwide delivery. The company aggregates and displays local independent retailers across London, allowing consumers to browse the retailers’ offerings. This is done under the Trouva consumer brand.
Initial investment date: Investment cost: Valuation: Last submitted accounts: Turnover: Profit before tax: Net liabilities:	December 2013 £10,363,000 £15,000,000 31 July 2019 Not disclosed Not disclosed £(11,270,000)

If you have any questions on any aspect of your investment, please call one of the Octopus team on 0800 316 2295.

Octopus Ventures Team

23 April 2021

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the periods ended 31 December 2020 or 31 December 2019 but is derived from those accounts. Statutory accounts for the period ended 31 December 2019 have been delivered to the Registrar of Companies and statutory accounts for the year ended 31 December 2020 will be delivered to the Registrar of Companies in due course. The Auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's reports can be found in the Company's full Annual Report and Accounts at www.octopusinvestments.com

Income Statement

	Year to 31 December 2020			Period to 31 December 2019
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Gains on disposal of fixed asset investments	–	3,783	3,783	–	15,626	15,626
Losses on disposal of current asset investments	–	–	–	–	(368)	(368)
Fixed asset investments holding gains	–	104,930	104,930	–	88,302	88,302
Current asset investments holding gains	–	4,352	4,352	–	1,006	1,006
Investment income	843	–	843	1,535	–	1,535
Investment management fees	(764)	(14,508)	(15,272)	(784)	(14,890)	(15,674)
Performance fee	–	(18,402)	(18,402)	–	(16,965)	(16,965)
Other expenses	(5,070)	–	(5,070)	(6,058)	–	(6,058)
Foreign exchange translation	–	159	159	–	(124)	(124)
(Loss)/profit before tax	(4,991)	80,314	75,323	(5,307)	72,587	67,280
Tax	–	–	–	–	–	–
(Loss)/profit after tax	(4,991)	80,314	75,323	(5,307)	72,587	67,280
(Loss)/earnings per share – basic and diluted	(0.5)p	8.3p	7.8p	(0.6)p	8.6p	8.0p

•     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.

Titan has no other comprehensive income for the period.

Balance Sheet

	As at 31 December 2020		As at 31 December 2019
	£’000	£’000	£’000	£’000
Fixed asset investments		820,699		640,109
Current assets:
Money market funds	137,170		149,210
Corporate bonds	89,882		80,325
Applications cash*	3,613		5,565
Cash at bank	9,348		52,763
Debtors	6,178		2,985
		246,191		290,848
Current liabilities	(23,655)		(25,117)
Net current assets		222,536		265,731
Net assets		1,043,235		905,840
Share capital		107,502		95,161
Share premium		564,308		559,972
Capital redemption reserve		6,377		4,074
Special distributable reserve		150,007		106,915
Capital reserve realised		(66,167)		(45,705)
Capital reserve unrealised		309,706		209,089
Revenue reserve		(28,498)		(23,666)
Total equity shareholders’ funds		1,043,235		905,840
NAV per share		97.0p		95.2p

^*Cash held but not yet allotted.

The statements were approved by the Directors and authorised for issue on 23 April 2021 and are signed on their behalf by:

John Hustler
Chairman

Company No: 6397765

Statement of Changes in Equity

	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special distributable reserve* £’000	Capital reserve realised* £’000	Capital reserve unrealised £’000	Revenue reserve* £’000	Total £’000
As at 01 November 2018	65,467	299,804	2,056	169,637	11,245	79,428	(18,235)	609,402
Comprehensive income for the period:
Management fees allocated as capital expenditure	–	–	–	–	(14,890)	–	–	(14,890)
Current year gain on disposal of fixed asset investments	–	–	–	–	15,626	–	–	15,626
Current year losses on disposal of current asset investments	–	–	–	–	(368)	–	–	(368)
Gains on fair value of fixed asset investments	–	–	–	–	–	88,302	–	88,302
Gains on fair value of current asset investments	–	–	–	–	–	1,006	–	1,006
Loss after tax	–	–	–	–	–	–	(5,307)	(5,307)
Performance fee	–	–	–	–	(16,965)	–	–	(16,965)
Total comprehensive income for the year	–	–	–	–	(16,597)	89,308	(5,307)	67,404
Contributions by and distributions to owners:
Share issue (includes DRIS)	31,712	270,113	–	–	–	–	–	301,825
Share issue costs	–	(9,945)	–	–	–	–	–	(9,945)
Repurchase of own shares	(2,018)	–	2,018	(17,597)	–	–	–	(17,597)
Dividends paid (includes DRIS)	–	–	–	(45,125)	–	–	–	(45,125)
Total contributions by and distributions to owners	29,694	260,168	2,018	(62,722)	–	–	–	229,158
Other movements:
Prior year fixed asset losses now realised	–	–	–	–	(38,010)	38,010	–	–
Prior year current asset losses now realised	–	–	–	–	(2,343)	2,343	–	–
Foreign exchange translation	–	–	–	–	–	–	(124)	(124)
Total other movements	–	–	–	–	(40,353)	40,353	(124)	(124)
Balance as at 31 December 2019	95,161	559,972	4,074	106,915	(45,705)	209,089	(23,666)	905,840

*Reserve is available for distribution.

	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special distributable reserve* £’000	Capital reserve realised* £’000	Capital reserve unrealised £’000	Revenue reserve* £’000	Total £’000
As at 01 January 2020	95,161	559,972	4,074	106,915	(45,705)	209,089	(23,666)	905,840
Comprehensive income for the year:
Management fees allocated as capital expenditure	-	-	-	-	(14,508)	-	-	(14,508)
Current year gain on disposal of fixed asset investments	-	-	-	-	3,783	-	-	3,783
Current year losses on disposal of current asset investments	-	-	-	-	-	-	-	-
Gains on fair value of fixed asset investments	-	-	-	-	-	104,930	-	104,930
Gains on fair value of current asset investments	-	-	-	-	-	4,352	-	4,352
Loss after tax	-	-	-	-	-	-	(4,991)	(4,991)
Performance fee	-	-	-	-	(18,402)	-	-	(18,402)
Total comprehensive income for the year	-	-	-	-	(29,127)	109,282	(4,991)	75,164
Contributions by and distributions to owners:
Share issue (includes DRIS)	14,644	122,292	-	-	-	-	-	136,936
Share issue costs	-	(3,552)	-	-	-	-	-	(3,552)
Repurchase of own shares	(2,303)	-	2,303	(19,994)	-	-	-	(19,994)
Dividends paid (includes DRIS)	-	-	-	(51,318)	-	-	-	(51,318)
Total contributions by and distributions to owners	12,341	118,740	2,303	(71,312)	-	-	-	62,072
Other movements:
Share premium cancellation	-	(114,404)	-	114,404	-	-	-	-
Transfer between reserves	-	-	-	-	6,402	(6,402)	-	-
Prior year fixed asset gains now realised	-	-	-	-	2,263	(2,263)	-	-
Prior year current asset losses now realised	-	-	-	-	-	-	-	-
Foreign exchange translation	-	-	-	-	-	-	159	159
Total other movements	-	(114,404)	-	114,404	8,665	(8,665)	159	159
Balance as at 31 December 2020	107,502	564,308	6,377	150,007	(66,167)	309,706	(28,498)	1,043,235

*Reserve is available for distribution.

Cash Flow Statement

	Year to 31 December 2020 £’000	Period to 31 December 2019 £’000
Reconciliation of profit to cash flows from operating activities
Profit before tax	75,323	67,280
Increase in debtors	(3,193)	(135)
Increase in creditors	490	14,737
Losses on disposal of current assets	-	368
Gains on valuation of current assets	(4,352)	(1,006)
Gains on disposal of fixed asset investments	(3,783)	(15,626)
Gains on valuation of fixed asset investments	(104,930)	(88,302)
Outflow from operating activities	(40,445)	(22,684)
Cash flows from investing activities
Purchase of current asset investments	(5,205)	(79,319)
Sale of current asset investments	-	61,213
Purchase of fixed asset investments	(95,792)	(127,618)
Sale of fixed asset investments	23,915	26,334
Outflow from investing activities	(77,082)	(119,390)
Cash flows from financing activities
Movement in applications account	(1,952)	(52,114)
Dividends paid (net of DRIS)	(46,037)	(33,187)
Purchase of own shares	(19,994)	(17,597)
Share issues	131,655	289,887
Share issue costs	(3,552)	(9,945)
Inflow from financing activities	60,120	177,044
Increase in cash and cash equivalents	(57,407)	34,970
Opening cash and cash equivalents	207,538	172,568
Closing cash and cash equivalents	150,131	207,538
Cash and cash equivalents comprise
Cash at bank	9,348	52,763
Applications cash	3,613	5,565
Money market funds	137,170	149,210
Closing cash and cash equivalents	150,131	207,538