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Octopus AIM VCT 2 plc (OSEC)

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Monday 11 February, 2019

Octopus AIM VCT 2 plc

Annual Financial Report

Annual Financial Report

Octopus AIM VCT 2 plc


Final Results


11 February 2019

Octopus AIM VCT 2 plc, managed by Octopus Investments Limited, today announces the final results for the year ended 30 November 2018.

These results were approved by the Board of Directors on 8 February 2019.

You may view the Annual Report in full at in due course. All other statutory information will also be found there.

Financial Summary

 30 November 201830 November 2017
Net assets (£’000s)90,63086,911
Profit/(Loss) on ordinary activities for the year after tax (£’000s)(3,234)8,192
Net asset value (“NAV”)  per share 80.8p87.1p
Ordinary Dividends per share – paid in year4.2p4.1p
Final Dividend per share proposed*2.1p2.1p
Total Return**(2.4)%13.2%

* The proposed final dividend will, if approved by shareholders, be paid on 24 May 2019 to shareholders on the register on 3 May 2019.
**Total return is calculated as movement in NAV in the period plus dividends paid in the period, divided by the NAV at the beginning of the period.

Chairman’s Statement

I am pleased to present the Annual Report of AIM VCT 2 for the year ended 30 November 2018 and I should like to welcome all new shareholders who have joined the share register and I do hope that I will see some of you at the AGM on 18 April 2019.

The year under review has seen the challenges around international trade politics and visibility of any Brexit settlement intensify, with the result that stock markets became increasingly nervous and volatile as the year progressed, a situation that has persisted post the November year end. The result of this has been that investors have become less comfortable with risk, and as a consequence smaller companies underperformed as an asset class. It was not all bad news, however, despite almost daily negative press, the economy continued to grow in 2018 and employment levels remain high. At the micro-level many companies in the portfolio reported good figures in the September results season. The level of fundraisings on AIM remained buoyant, with support for existing companies exceeding the amounts raised for new issues. Against this background the VCT made £8.0m of new VCT qualifying investments in the year up from £4.2 million in the previous year.

The NAV on 30 November 2018 was 80.8p per share, a decrease on the NAV of 87.1p reported at 30 November 2017. Adding back the 4.2p of dividends paid in the year, to adjust the year end NAV to 85.0p, gives a total negative return of 2.4%. In the same twelve months, the FTSE All Share Index fell by 1.5%, the FTSE SmallCap (excluding investment companies) Index fell by 8.2% and the FTSE AIM All Share Index fell by 8.2%, all on a total return basis.

Once again stock specific factors had a significant impact on performance, both positive and negative, and these are covered in more detail in the Investment Manager’s Review. In addition, there was a reduction in the valuation of growth stocks towards the end of the period, and this caused the fund to reverse the unrealised gains that had been reported in the half-yearly report.

In the year under review AIM has raised £6.2 billion of new capital, an increase on the £5.9 billion raised in the previous year, demonstrating its ability to provide additional growth capital for its members.

In October 2018 an interim dividend of 2.1p was paid to all shareholders. The Board is recommending a final dividend in respect of the year to 30 November 2018 of 2.1p per share, making 4.2p in total paid in respect of the year. Subject to the approval of shareholders at the AGM the dividend will be paid on 24 May 2019 to shareholders on the register on 3 May 2019.

It remains the Board’s intention to maintain a minimum annual dividend payment of 3.6p per share or a 5% yield based on the prior year end share price, whichever is greater. This will usually be paid in two instalments during each year. However, despite the recent share price movement the Board is maintaining the final dividend on this occasion.

Dividend Reinvestment Scheme
In common with a number of other VCTs, the Company has established a Dividend Reinvestment Scheme (DRIS) following approval at the AGM in 2014. Some shareholders have already taken advantage of this opportunity. For investors who do not need income, but value the additional tax relief on their reinvested dividends, this is an attractive scheme and I hope that more shareholders will find it useful. In the course of the year 754,621 new shares have been issued under this scheme, returning £0.7 million to the Company. The final dividend referred to above will be eligible for the DRIS.

Share Buybacks
During the year to 30 November 2018 the Company continued to buy back shares in the market from selling shareholders and purchased 1,852,240 ordinary shares for a total consideration of £1,579,000. We have maintained a discount of approximately 4.5% (equating to a 5.0% discount to the selling shareholder after costs), which the Board monitors and intends to retain as a policy which fairly balances the interests of both remaining and selling shareholders. Buybacks remain an essential practice for VCTs, as providing a means of selling is an important part of the initial investment decision and has enabled the Company to grow. As such I hope you will all support the appropriate resolution at the AGM.

Share Issues
An offer to raise up to £8 million with an overallotment facility of up to a further £4 million alongside the Octopus AIM VCT plc was launched 3 August 2018. The offer closed to new applications on 28 September 2018 fully subscribed, having raised £12 million. As at 30 November 2018 there was still £0.2m outstanding under this issue in the applications account to be allotted in the new tax year.

Risks and Uncertainties
In accordance with the Listing Rules and the Companies Act 2006 under which the Company operates, the Board has to comment on potential risks and uncertainties, which could have a material impact on the Company’s performance.

A risk arises from the requirement to maintain compliance with HMRC regulations (70% of the Company’s assets invested in qualifying holdings, rising to 80% from 30 November 2019). Other risks include economic conditions, which impact particularly on smaller companies in which the Company invests, and this could have an adverse impact on share prices.

VCT Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice concerning continuing compliance with HMRC regulations for 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 to maintain at least 70% qualifying investment level, rising to 80% at the next year end. As at 30 November 2018, the qualifying investment level was at 91% for the Company.

Annual General Meeting
The AGM will take place on 18 April 2019 at 11 a.m. I hope to meet as many shareholders as possible at this event, which provides an opportunity for you to meet the Board, Investment Managers and to get an update on the Company’s activities and future plans. At the AGM, a resolution will be proposed to extend the life of the Company until 2024 in order to preserve the VCT status of the Company for the benefit of both existing shareholders and new investors who participated in the recent share offer. We will do our best to address as many shareholder questions as possible in this meeting.

The newspapers are still dominated by negative stories about international trade tensions, domestic politics and the problem of what our future relationship with the European Union might look like after March 2019. The heightened level of uncertainty now appears to be having an impact on business confidence, with reports of some companies deciding to delay investment. This has fuelled the recent increase in volatility in domestic stock market indices which were already unnerved by stock market falls elsewhere in the world. This volatility is likely to continue at least until the Brexit position becomes clearer although it is encouraging that UK economic growth has remained positive if unexciting in 2018, with a similar outlook currently being forecast for 2019.

The portfolio now contains 77 holdings across a range of sectors and many of them have already demonstrated their management’s ability to grow their businesses successfully in difficult economic conditions. The balance of the portfolio towards profitable companies remains, and the cash available for new investments will allow us to take advantage of any future lowering of valuations resulting from the current period of share price weakness.

Keith Mullins
8 February 2019

Investment Manager’s Review

The tendency of the market to reward growth companies that exceeded expectations with higher share prices and higher ratings came to an end in the second half of the year as attention focused increasingly on risk in the face of heightened uncertainty about the future international trade and possible repercussions of Brexit. Against this background smaller companies underperformed with investors favouring the relative security of the FTSE 100 with its superior liquidity and exposure to foreign currency earnings. This had an impact on the NAV which gave up its unrealised gains reported at the interim stage, producing a small negative total return for the year of 2.4%. There have been some notable contributors to the portfolio, both positive and negative, and while it is disappointing to have to report a negative return for the year, we are pleased to report the maintenance of the 5% yield objective.

In the year to 30 November 2018 AIM has continued to raise new capital for companies, both already quoted and new flotations, and the Company has deployed existing cash steadily throughout the year as well as raising new cash for future investments. The latest prospectus offer closed in September 2018 having raised the full £12 million. The investment rate picked up in 2018 and we were still seeing companies in December that were looking to float on AIM in the first quarter of 2019 and beyond, giving us some confidence in the pipeline despite the volatility of the market.

The Alternative Investment Market
After two years of outperformance, AIM trailed larger company indices in 2018, producing a total return of -8.2% in the twelve months to November, in line with the Smaller Companies Index (excluding Investment Trusts). This reflected growing concerns about the possible effects on the domestic economy of a disorderly Brexit added to fears about international growth prospects which resulted in a much more cautious attitude to perceived risky assets. Although the September results season was broadly supportive, attention focused on the valuations of some of the more highly rated growth stocks on AIM which had been large contributors to the Index’s previous rise.

Companies have continued to raise new capital throughout the year. In the twelve months to 30 November 2018 AIM raised a further £4.5 billion of new capital for existing companies as well as a total of £1.7 billion for new companies floating on the market. Both figures were slightly higher than last year, demonstrating AIM’s continuing ability to provide finance for good growth companies as well as attracting new entrants. New issues included a mixture of early stage companies accessing state aided finance and some already well-established companies reflecting the fact that AIM is still seen as the market of choice for ambitious growth companies. VCTs play a significant part in that funding process and we identify below the companies we have invested in during the year.

Adding back the 4.2p of dividends paid in the year, the NAV decreased by 2.4%. This compares with a total return for the FTSE All Share Index of -1.5%, the FTSE SmallCap (excluding investment companies) of -8.2% and the FTSE AIM All Share Index of -8.2%. It was a year of two halves and the fund reversed all of its first half gains in the second half in much more volatile market conditions when smaller companies underperformed. Once again the market generally remained wary of smaller companies that have yet to make a profit (of which there are several in the VCT), although even more established companies meeting expectations were not immune from bouts of share price weakness, particularly those perceived as growth stocks on higher than average ratings. Breedon Aggregates, a top ten holding underperformed in the year for this reason despite delivering on profit expectations. Investors were less forgiving of companies that disappointed by missing market expectations.

Despite the recent headwinds, the market was still prepared to reward companies that met or exceeded expectations with higher share prices and this resulted in some good contributions to performance from some of the more established and profitable companies in the portfolio, as well as from some of the more recent investments whose businesses made significant progress in the year.

Learning Technologies and Craneware were significant contributors to performance for the year as a whole. Having demonstrated a successful integration of NetDimensions, Learning Technologies acquired Peoplefluent in 2018, expanding its footprint in the US and increasing its proportion of recurring revenues and exposure to a wider share of the budgets of human resource departments. The shares performed extremely well over the summer but have given back some of these gains since. The company has ambitious growth targets in place and we expect progress from the current levels in the medium to longer term.

Craneware was another company that caught investors’ attention as it started to demonstrate some initial revenues from its newly developed Trisus software platform. This extends the number of products that it can offer to US hospitals to increase their efficiency and is expected to lead to increased revenues per hospital account. Despite being well off their highs at the period end, the shares were still a very good contributor to performance in the year.

Among the larger and more established companies, Staffline, RWS, GB Group, Gamma and Next Fifteen Communications were all positive contributors in the year and we continue to hold them for the longer-term growth opportunities that we still feel they have. Among the more recent investments Creo Medical shares have performed very well since we participated in the placing.

Individual companies suffered from specific headwinds which resulted in poor share price performance. We wrote about Animalcare and Idox in the half-yearly report. They have both appointed new Chief Executives who are now in the process of turning around the business in each case and we expect the shares to start to recover when the changes made are reflected in the figures.

The biggest disappointment in the year was Yu Group, the supplier of energy to small and medium sized businesses. Post its listing on AIM in 2016, it had reported strong growth in revenue and profits, and had produced a confident statement with its interim results in September. However, this was followed by a statement that the accounts and accounting practices were being reviewed at the instigation of the newly appointed finance director and that the Group would be loss-making for the year to December. A further announcement in December did not clarify the extent of the problem and in view of headwinds being reported by other alternative suppliers we sold the shares at a loss post the period end.

Two other negative contributors were Velocity, which had a series of downgrades to forecasts followed by management changes and DP Poland which has reported increased competition from takeaway delivery aggregators raising fears of a slower path to breakeven. Gear4 Music saw its share price weaken as it reported lower gross margins with its interim figures and Quixant shares underperformed as the market awaited upgrades to forecasts.

Elsewhere, early stage companies yet to reach profitability once again held back performance of the NAV, some of which had setbacks or found themselves in need of cash to achieve the next milestone. Futura Medical, Osirium, Microsaic, Midatech Pharma and Haydale Graphene all came into that category.

There are a number of more recent constituents of the portfolio that have yet to make an impression in public markets and whose shares have underperformed while awaiting evidence of progress in their businesses. These include some recent new holdings from the past two years such as Trackwise Designs, Maestrano, Maxcyte and Escape Hunt. Investing for a VCT involves backing companies when they are small and still at an early stage of development and share price progress depends on them being noticed by a wider circle of investors as they produce results and develop their businesses over time.

Although the earlier stage companies in the portfolio represent a relatively small proportion by value we expect them to contribute to future performance when they start to demonstrate growth in their businesses. In the year under review there were some examples of companies that demonstrated that they had started to achieve that in the period and whose shares outperformed including Fair FX, Beeks Financial Cloud, and Mycelx. The latter was helped by a stronger oil price and increased demand for its technology to clean hydrocarbons out of water which led to several upgrades to revenues during the year and the restoration of profitability.

Portfolio Activity
Having made ten qualifying investments at a total cost of £4.4 million in the first half of the year, we added five further new qualifying holdings at a cost of £3.3 million in the second half, as well as two further qualifying investments of £0.2 million into Microsaic Systems and £0.1 million into Access Intelligence, both of which were follow-on investments in existing holdings. This made a total investment of £8.0 million in qualifying investments for the year which was considerably higher than last year’s £4.2 million, reflecting a healthy AIM market.

Three of the five new qualifying investments were new issues. Immotion creates out of home virtual reality experiences combining its creative software with advanced motion platforms which are then installed in public spaces such as theme parks. Trackwise Designs is a manufacturer of specialist printed circuit boards which are supplied to the telecoms, satellite and aerospace industries. Its improved harness technology can be used to replace heavy wiring and to take cost and weight out of satellites, aircraft and vehicles. The Panoply comprises four agencies specialising in the digital transformation of businesses. Creo Medical is a medical device company that was already quoted on AIM and received confirmation of its knowledge intensive status. It has a Food and Dug Administration (FDA) approved device which enables non-invasive surgery using an endoscope. Falanx has been an AIM company for some time and has recently appointed new management team that are now focused on building recurring revenues in its cyber-software business with the latest round of funds.

The Investment Manager continued to use non-qualifying investments to manage liquidity while awaiting new qualifying investment opportunities. We have held onto existing AIM holdings where we see the opportunity for further development and have invested a proportion of the new funds raised into a mixture of the Octopus managed portfolios with a small proportion going into the FP Octopus UK Micro Cap Growth fund. This strategy is designed to obtain a better return on funds awaiting investment than the very low rates available on cash. In the period under review an additional £300,000 was invested in the FP Octopus Micro-Cap Growth fund.

During the year we took realised profits in holdings in Gooch and Housego, Learning Technologies, Quixant, GB Group and Beeks Financial Cloud after good perfomances as well as disposing of some of the holding in Futura Medical. We disposed of the entire holding in TLA at a small profit on the news of management changes. We also sold the entire holding in Faron Pharmaceuticals at a loss after news that the phase III drugs trial for Traumakine had failed to demonstrate efficacy against a placebo. In all disposals made a £2 million profit over original cost and generated £6.1 million of cash proceeds.

New VCT Regulations

The budget in November 2018 contained no significant changes to the VCT regulations. As a reminder, the current requirements are that any funds raised after 6th April 2019 should be 30% invested in qualifying holdings within 12 months, and for financial years ending after 6 April 2019 the portfolio will also have to maintain a minimum of 80% invested at cost in qualifying holdings. We are determined to maintain a threshold of quality and to invest where we see the potential for returns from growth. However, the emphasis of the new regulations is definitely to encourage investment into earlier stage companies and to that extent, it seems likely over a number of years, that the portfolio will see a rise in the number of smaller companies receiving our initial investment. We would expect to invest further in those companies as they demonstrate their ability to grow.

At present there has been little change to the profile of the portfolio, as we continue to hold the larger market capitalisation companies, in which we invested several years ago as qualifying companies, or which we bought in the market prior to the rule changes where we see the potential for them to continue to grow.

In order to qualify companies must:

•      have fewer than 250 full time equivalent employees; and

•      have less than £15 million of gross assets at the time of investment and no more than £16 million immediately post investment; and

•      be less than seven years old from the date of its first commercial sale (or 10 years if a knowledge intensive company) if raising State Aided (i.e. VCT) funds for the first time; and

•      have raised no more than £5 million of State Aided funds in the previous 12 months and less than the lifetime limit of
£12 million (or since 6th April 2018 £10 million in 12 months £20 million lifetime limit if a knowledge intensive company); and

•      produce a business plan to show that the funds are being raised for growth and development.

The latest changes are to encourage VCTs to keep their investment rate up after raising money – hence the 70% limit rises to 80% from 30 November 2019 for the Company. However, allowing knowledge intensive companies to raise up to £10 million of the £20 million lifetime limit in a twelve month period rather than the existing £5 million has improved flexibility as will the proposed change to the amount of time allowed for re-investment of cash from sales of qualifying holdings from six to twelve months from April 2019.

Equity markets have got off to a better start in 2019, however all of the uncertainties around Brexit, political instability and the resilience of our economic growth that we have talked about previously are still very much present challenges, and they have produced the much more volatile market conditions we are currently experiencing. The deterioration of China’s relations with the US and some disappointments in the latest round of US earnings reports combined with downgrades to Chinese growth expectations have spooked global stock markets and led the recent share price falls. In the UK, a Brexit deal is now perceived to be crucial to immediate economic prospects with the implicit threat that a failure to achieve this will derail the current forecasts for continued slow economic growth.

The portfolio now contains 77 holdings with investments across a range of sectors including several such as Craneware, Gooch and Housego, RWS, Clinigen, Cello, DP Poland, EKF Diagnostics, Mycelx and GB Group that have significant international exposure. The balance of the portfolio towards profitable companies remains. Following the recent fundraise, the VCT has funds available for new investments which should allow us to take advantage of any dip in valuations resulting from current weak sentiment and we remain selective when viewing new investment opportunities.

The AIM Team
Octopus Investments Limited
8 February 2019

Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report and the Accounts in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (“FRS 102”). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements the Directors are required to:

•      select suitable accounting policies and then apply them consistently;

•      make judgments and accounting estimates that are reasonable and prudent;

•      state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

•      prepare a strategic report, a Directors’ report and Directors’ remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions, to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the Annual Report and Accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.

The Directors are responsible for ensuring the Annual Report and Accounts are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors’ responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:

•      the financial statements, prepared in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (“FRS 102”), give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and

•      the Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description or the principal risks and uncertainties that it faces.

On Behalf of the Board

Keith Mullins
8 February 2019


The financial information set out below does not constitute the Company's statutory accounts for the years ended 30 November 2018 or 30 November 2017 but is derived from those accounts. Statutory accounts for the year ended 30 November 2017 have been delivered to the Registrar of Companies and statutory accounts for the year ended 30 November 2018 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

Income Statement

 Year to 30 November 2018Year to 30 November 2017 
Gain/(loss) on disposal of fixed asset investments  - 1,266   1,266   - 223   223  
Gain/(loss) on valuation of fixed asset investments   -  (3,185)   (3,185)   - 8,351   8,351  
Gain/(loss) on valuation of current asset investments   -  (155)   (155)   - 672   672  
Investment Income  510 245   755   561 -   561  
Investment management fees  (364)  (1,093)   (1,457)   (282)  (847)  (1,129)  
Other expenses  (458)   -   (458)   (486)   -  (486)  
Return on ordinary activities before tax  (312)  (2,922)   (3,234)   (207) 8,399   8,192  
Taxation on return on ordinary activities  -   -   -   - -   -  
Return on ordinary activities after tax  (312)  (2,922)   (3,234)   (207) 8,399   8,192  
Earnings per share – basic and diluted -0.3p  -2.9p  -3.2p  -0.3p  10p  9.7p  

There is no other comprehensive income for the period.

  • the ‘Total’ column of this statement represents the statutory income statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AIC Statement of Recommended Practice
  • 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, as well as OEIC funds.

Balance Sheet

 As at 30 November 2018As at 30 November 2017
Fixed asset investments* 59,871  59,634
Current assets:    
Investments*20,340  21,176  
Debtors65  98  
Cash at bank11,546  6,507  
 31,951  27,781  
Creditors: amounts falling due within one year (1,192)   (504)  
Net current assets 30,759  27,277
Net assets 90,630  86,911
Called up equity share capital 11  10
Share premium 57,045  44,186
Capital redemption reserve 1  -
Special distributable reserve 19,536    25,444
Capital reserve realised  (9,898)   (11,071)
Capital reserve unrealised   24,595  28,690
Revenue reserve  (660)   (348)
Total equity shareholders’ funds 90,630  86,911
Net asset value per share 80.8p  87.1p

The statements were approved by the Directors and authorised for issue on 8 February 2019 and are signed on their behalf by:

Keith Mullins

Company No: 05528235

Statement of changes in Equity

 Share CapitalShare PremiumSpecial distributable reservesCapital reserve realisedCapital reserve unrealisedCapital Redemption Reserve Revenue reserveTotal
As at 1 December 2017  10   44,186   25,444   (11,071)   28,690   -   (348)   86,911
Management fee allocated as capital expenditure- -   -   (1,093)   -   -   -  (1,093)
Current year gains on disposal   - -   -   1,266   -   -   - 1,266
Current period gain on fair value of investments  - -   -   -   (3,340)   -   -  (3,340)
Capital investment income---245---245
Prior years’ holding gains/losses now realised  - -   -   755   (755)   -    - -
Loss on ordinary activities after tax  -   -   -   -   -   -   (312)   (312)
Repurchase and cancellation of own shares  (1) -   (1,579)   -   -   1   -  (1,579)
Issue of shares  2 13,662   -   -   -   -   - 13,664
Share issue costs  -  (803)   -   -   -   -   -  (803)
Dividends paid  - -   (4,329)   -   -   -   -  (4,329)
Balance as at 30 November 2018  11 57,045   19,536   (9,898)   24,595   1   (660) 90,630

 Share CapitalShare PremiumSpecial distributable reservesCapital reserve realisedCapital reserve unrealisedRevenue reserveTotal
As at 1 December 20168 23,405   30,513   (10,168) 19,388   (141)   63,005
Management fee allocated as capital expenditure- -   -   (847)   -   -   (847)
Current year gains on disposal- -   -   223    -   -   223
Current period gain on fair value of investments- -   -   -   9,023   -   9,023
Prior years’ holding gains/losses now realised---(279)279--
Loss on ordinary activities after tax- -   -   -   -   (207)   (207)
Repurchase and cancellation of own shares- -   (1,527)    -   -   -   (1,527)
Issue of shares2 22,086   -   -   -   -   22,088
Share issue costs-  (1,305)   -   -   -   -   (1,305)
Dividends paid- -   (3,542)    -   -   (3,542)
Balance as at 30 November 201710 44,186   25,444   (11,071) 28,690   (348)   86,911

Cash Flow Statement

 Year to 30 November 2018Year to 30 November 2017
Cash flows from operating activities  
Return on ordinary activitites before tax  (3,234)    8,192
Adjustments for:  
Decrease/(increase) in debtors  33   (49)
(Decrease)/increase in creditors  35    145
Gain/(loss) on disposal of fixed assets  (1,266)   (223)
(Gain)/loss on valuation of fixed asset investments  3,185   (8,351)
(Gain)/loss on valuation of current asset investments  155   (672)
EKF In-specie dividend Renaltyx  (245)  
Cash from operations   (1,337)   (958)
Income taxes paid  -   -
Net cash generated from operating activities  (1,337)    (1,916)
Cash flows from investing activities  
Purchase of fixed asset investments  (7,413)   (4,541)
Sale of fixed asset investments  6,155    3,218
Purchase of current asset investments  (300)   (9,900)
Net cash flows from investing activities  (1,558)   (11,223)
Cash flows from financing activities  
Purchase of own shares  (1,579)   (1,527)
Share issues  12,183   20,299
Dividends Paid  (3,651)   (3,058)
Net cash flows from financing activities  6,953   15,714
(Decrease)/Increase in cash and cash equivalents  4,058   3,533
Opening cash and cash equivalents   10,937   7,404
Closing cash and cash equivalents   14,995   10,937
Cash and cash equivalents comprise  
Cash at Bank  11,546   6,507
Money Market Funds  3,449    4,430
   14,995   10,937

a d v e r t i s e m e n t