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Octopus Eclipse VCT 2 plc (OEC2)

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Thursday 29 September, 2011

Octopus Eclipse VCT 2 plc

Half-yearly report






Octopus Eclipse VCT 2 plc
Half-Yearly Results

29 September 2011

Octopus Eclipse VCT 2 plc, managed by Octopus Investments Limited, today
announces the Half-Yearly results for the six months ended 31 July 2011.

These results were approved by the Board of Directors on 29 September 2011.

You may shortly view the Half-Yearly Report in full atwww.octopusinvestments.com
by navigating to Services, Investor Services, Venture Capital Trusts, Octopus
Eclipse VCT 2. All other statutory information will also be found there.

About Octopus Eclipse VCT 2 plc
Octopus Eclipse VCT 2 plc ('Eclipse 2', 'Company' or 'VCT') 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
unquoted and AIM-quoted companies. The Company is managed by Octopus Investments
Limited ('Octopus' or 'Investment Manager').

Eclipse 2 was launched in January 2005 and raised over £18.4 million (£17.7
million net of expenses) through an Offer for Subscription. The VCT has raised a
further £2.3 million (£2.2 million net of expenses) by way of 'top-ups' and
bought back a total of 1.97m shares (consideration of £1.5m) since the VCT was
launched. Eclipse 2 co-invests with other funds managed by Octopus which allows
the VCT to invest in a wider range of opportunities and in larger and more
developed companies than are typically available to a single VCT.

Further details of the VCT's progress are discussed in the Chairman's Statement
on pages X to X.

Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means for private
individuals to invest in unlisted companies in the UK. Subsequent Finance Acts
have introduced changes to VCT legislation. The tax benefits currently available
to eligible new investors in VCTs include:

  * up to 30% up-front income tax relief;
  * exemption from income tax on dividends paid; and
  * exemption from capital gains tax on disposals of shares in VCTs.


Eclipse 2 has been approved as a VCT by HM Revenue & Customs (HMRC). In order to
maintain its approval the Company must comply with certain requirements on a
continuing basis. By the end of the Company's third accounting period at least
70% of the Company's investments must comprise 'qualifying holdings' of which at
least 30% must be in eligible ordinary shares. A 'qualifying holding' consists
of up to £1 million invested in any one year in new shares or securities in an
unquoted company (or companies quoted on AIM) which is carrying on a qualifying
trade and whose gross assets do not exceed £7 million at the time of investment.
The definition of a 'qualifying trade' excludes certain activities such as
property investment and development, financial services and asset leasing. The
Company will continue to ensure its compliance with these qualification
requirements.

Financial Summary

                                     Six months to Six months to         Year to
                                      31 July 2011  31 July 2010 31 January 2011
--------------------------------------------------------------------------------
Net assets (£'000s)                         12,661        14,861          13,779

Net return after tax (£'000s)                (673)           332           (196)

Net asset value per share (NAV)              67.2p         76.8p           72.2p

Cumulative dividends since launch -
paid and proposed                            28.5p         25.5p           27.0p
--------------------------------------------------------------------------------

Chairman's Statement

Please find below the half-year results for the six month period ended 31 July
2011 for Octopus Eclipse VCT 2 plc.

This has proven to be an even more challenging period than had been expected at
the time of the year end accounts. The green shoots seen in 2010 have withered
as economic growth rates have disappointed and high debt levels across the globe
weigh heavily on governments, companies, the banking market and individuals
alike. Against this backdrop, the Investment Manager's time has continued to be
spent protecting and nurturing the portfolio and it has not yet proved to be an
attractive time to make new investments.

Results
Given the backdrop sketched above and the relative vulnerability of small
companies, it may not come as a surprise that the portfolio has not developed as
strongly as had previously been hoped for. In the six months to 31 July 2011,
Eclipse 2 reported a negative total return (being the change in NAV plus
cumulative dividends paid) of 3.6%. By comparison, the FTSE Small Cap total
return was 1.5%. After accounting for the dividend paid of 1.5p, the NAV
decreased by 3.5p which was largely attributable to a decrease in the value of
the unquoted portfolio, as detailed below.

Portfolio
Eclipse 2 is currently invested in 16 unquoted and 12 AIM-quoted companies. By
value, 67.9% of the VCT's net assets are in unquoted investments, 12.4% in AIM-
quoted investments and 19.7% are in cash or cash equivalents.

Your Board continues to maintain an appropriate level of liquidity in the
balance sheet to achieve four aims:

  * to support further investment in existing portfolio companies if required;
  * to support a regular dividend flow;

  * to assist liquidity in the shares through the buy-back facility; and

  * to take advantage of new investment opportunities as they arise.


Liquidity in the VCT is primarily driven by capital realisations. There have
been no significant realisations since the exit of James Harvard, which is a
reflection of the current uncertainty in the economic climate and, after
balancing the objectives above, it is envisaged that there will only be limited
new additions to the portfolio in the near future.

Unquoted
The most significant uplift in fair value during the period related to Tristar
which is trading ahead of budget and operational improvements within the company
have allowed it to achieve and surpass its targets. Smaller uplifts have also
been seen at AVM, Convivial and Hydrobolt; each continues to progress
satisfactorily. Unfortunately, this uplift has been offset by downward
valuations in a number of portfolio companies resulting in an overall decrease
of £838,000 in the value of the unquoted portfolio. Perfect Pizza continued to
experience a very challenging market and, despite a number of changes put in
place by the Investment Manager, competition and pricing pressures in the sector
at large meant the business continued to struggle. It has now been sold through
an administration process, resulting in a full provision for the VCT. Further
provisions of note have also been taken against T4, Brandspace and First Sports
and these movements have predominately been based on calculations by reference
to reported earnings and discounted market multiples in accordance with the
valuation guidelines, as detailed in the report.

T4 had a difficult first half of 2011 due to cut backs in public sector spending
on advertising, and Brandspace continued to be impacted by weak results in the
poster media business. First Sports, like other retail companies, has
experienced falling sales due to the tough economic backdrop. However, the
management team has performed a full review of the business which has resulted
in a number of changes to the organisation and the strategy and these changes
have allowed management to start exploring new revenue streams. Therefore, we
remain optimistic that progress will be made in the coming period.

On a more positive note, as mentioned in the last annual report, CSL Dualcom
redeemed 50% of the Eclipse 2 loan notes in the period and paid a redemption
premium and accrued interest, which realised an overall gain of £239,000.

Whilst conditions are still tough across most business sectors a number of the
portfolio companies are showing strength in their markets and we remain
cautiously optimistic that these companies will take advantage of the economic
environment and provide the VCT with exit and future investment opportunities.

AIM-quoted
The AIM-quoted element of the portfolio has seen an overall increase in
valuation of £297,000 in the six months to 31 July 2011. This uplift is
primarily due to the holding in Plastics Capital which has continued to trade
well. The remaining companies in Eclipse 2's portfolio have performed
consistently during the reporting period with slight uplifts to fair value in
the holdings in Cohort, CBG Group and Tanfield. There were no investments or
disposals in the reporting period although the Investment Manager is regularly
reviewing the position of the investee companies to ensure that further
investments and exits are made at the appropriate time.

As discussed in the last annual report, we remain confident that the AIM
companies in the portfolio are valued at low ratings so expect there to be
further appreciation over time and intend to retain the majority of the holdings
in order to see additional value returning to the companies. Since the period
end the holding in CBG has been realised, following a takeover of the company,
recovering a small premium to book value for this stock.

Principal Risks and Uncertainties
The principal risks and uncertainties are set out in note 6 of the Notes to the
Half-Yearly Report on page X.

Dividend and Dividend Policy
As noted above, it is your Board's policy to strive to maintain a regular
dividend flow whilst maintaining an appropriate level of liquidity in the VCT.
Taking this into account, for the six months ended 31 July 2011, the Board is
pleased to announce an interim dividend of 1.5p per share. This dividend will be
paid on 18 November 2011 to those shareholders on the register on 21 October
2011.

Outlook
The economic climate remains uncertain and this continues to challenge our
portfolio of investee companies. However, the Investment Manager is working hard
to support the portfolio, working closely with the individuals managing the
businesses and making changes where necessary. The Board has also asked the
Investment Manager to redouble its efforts to look out for realisations in order
to allow the VCT to maintain its dividend policy.

In the short term there remains a risk of further setbacks from some of the more
vulnerable portfolio companies, although the Investment Manager has done much to
strengthen the teams and support the businesses which are believed to have
positive long term potential. The timing of any kind of meaningful recovery in
the UK and wider economy remains rather uncertain and we are all having to
exercise much patience whilst the global financial markets continue to try and
find the kind of equilibrium which will hopefully lead to calmer waters in due
course. As I write it appears as if, for the first time, there might be the
beginnings of an international political will to meet the challenges ahead even
though I am equally sure that you will share with the Board a sense of déjà vu
about the resolve of the politicians to lead the way out of the current mess.

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




Marc Vlessing
Chairman
29 September 2011

+----------------------------------------------------------------------------------------+
|                                                                                       %|
|                                                                                  equity|
|                                                                                 held by|
|                                                      Carrying Change in       %     all|
|                               Investment             value at valuation  equity   funds|
|                                  at cost     Holding  31 July    in the held by managed|
|Unquoted                          31 July gain/(loss)    2011     period Eclipse      by|
|Investments Sector             2011 £'000       £'000    £'000     £'000       2 Octopus|
+----------------------------------------------------------------------------------------+
|CSL DualCom Technology &              399       1,214    1,613      (42)    7.3%   45.8%|
|Limited     Telecommunications                                                          |
|                                                                                        |
|The History                                                                             |
|Press       Publishing              1,480        (71)    1,409      (73)    9.7%   60.0%|
|Limited                                                                                 |
|                                                                                        |
|Luther      Media & Marketing                                                           |
|Pendragon   Services                1,000         150    1,150         -   20.9%   41.7%|
|Limited                                                                                 |
|                                                                                        |
|The Kendal                                                                              |
|Group       Consumer Products         414         377      791         -    5.7%   16.0%|
|Limited                                                                                 |
|                                                                                        |
|Brandspace  Media & Marketing         825        (93)      732     (101)    5.1%   40.5%|
|Limited     Services                                                                    |
|                                                                                        |
|Audio                                                                                   |
|Visual      Technology &              454         277      731        30    6.4%   40.4%|
|Machines    Telecommunications                                                          |
|Limited                                                                                 |
|                                                                                        |
|Tristar                                                                                 |
|Worldwide   Transport Services        446         200      646       200    4.5%   30.0%|
|Limited                                                                                 |
|                                                                                        |
|First                                                                                   |
|Sports      General Retail          1,350       (950)      400     (275)   17.6%   38.0%|
|Group                                                                                   |
|Limited                                                                                 |
|                                                                                        |
|Hydrobolt   Engineering &             258         124      382        37    3.0%   43.5%|
|Limited     Machinery                                                                   |
|                                                                                        |
|Convivial                                                                               |
|London Pubs Leisure & Hotels          350        (85)      265         5    2.0%    7.8%|
|plc                                                                                     |
|                                                                                        |
|T4 Holdings Media & Marketing         752       (587)      165     (273)    9.4%   53.3%|
|Limited     Services                                                                    |
|                                                                                        |
|Bruce                                                                                   |
|Dunlop &    Media & Marketing         211        (83)      128         -    1.7%   31.9%|
|Associates  Services                                                                    |
|Limited                                                                                 |
|                                                                                        |
|Lilestone                                                                               |
|Holdings    General Retail            977       (855)      122         -    5.6%   18.8%|
|Limited                                                                                 |
|                                                                                        |
|Blanc                                                                                   |
|Brasseries  Leisure & Hotels           61           -       61         -   0.58%   2.90%|
|Holdings                                                                                |
|plc                                                                                     |
|                                                                                        |
|Perfect                                                                                 |
|Pizza       Leisure & Hotels        1,185     (1,185)        -     (346)   19.7%   65.0%|
|Limited *                                                                               |
|                                                                                        |
|Sweet Cred                                                                              |
|Holdings    Consumer Products         935       (935)        -         -     n/a     n/a|
|Limited *                                                                               |
+----------------------------------------------------------------------------------------+
|Total                                                                                   |
|unquoted                           11,097     (2,502)    8,595     (838)                |
|investments                                                                             |
+----------------------------------------------------------------------------------------+
|AIM-quoted                                                                              |
|Investments                                                                             |
|                                                                                        |
|Plastics    Engineering &           1,068       (138)      930       235    3.9%   16.5%|
|Capital plc Machinery                                                                   |
|                                                                                        |
|Interquest  Recruitment               138          25      163         5    0.8%    5.2%|
|plc                                                                                     |
|                                                                                        |
|Hasgrove    Media & Marketing         200       (103)       97         5    0.7%   13.3%|
|plc         Services                                                                    |
|                                                                                        |
|Vertu       General Retail            150        (80)       70       (4)    0.1%    5.0%|
|Motors plc                                                                              |
|                                                                                        |
|Autoclenz                                                                               |
|Holdings    Support Services          206       (142)       64         2    1.6%   11.6%|
|plc                                                                                     |
|                                                                                        |
|Cohort plc  Engineering &              86        (24)       62        19    0.2%    4.3%|
|            Machinery                                                                   |
|                                                                                        |
|CBG Group   Financial Services        312       (252)       60        15    1.4%   17.2%|
|plc                                                                                     |
|                                                                                        |
|Tanfield    Engineering &             132        (79)       53        19    0.1%    1.9%|
|Group plc   Machinery                                                                   |
|                                                                                        |
|Brulines    Support Services           59        (12)       47       (1)    0.2%    4.6%|
|Group plc                                                                               |
|                                                                                        |
|Northern    Construction &            200       (179)       21         2    0.8%    6.0%|
|Bear plc    Materials                                                                   |
|                                                                                        |
|Cantono plc Technology &              300       (300)        -         -     n/a     n/a|
|*           Telecommunications                                                          |
|                                                                                        |
|Hexagon                                                                                 |
|Human       Support Services          431       (431)        -         -     n/a     n/a|
|Capital plc                                                                             |
|*                                                                                       |
+----------------------------------------------------------------------------------------+
|Total AIM-                                                                              |
|quoted                              3,282     (1,715)    1,567       297                |
|investments                                                                             |
+----------------------------------------------------------------------------------------+
|Total                              14,379     (4,217)   10,162    (541)                 |
|investments                                                                             |
|                                                                                        |
|Money                                                                                   |
|market                              2,381           -    2,381                          |
|securities                                                                              |
|                                                                                        |
|Cash at                               201           -      201                          |
|bank                                                                                    |
+----------------------------------------------------------------------------------------+
|Total investments and cash at      16,961     (4,217)   12,744                          |
|bank                                                                                    |
|                                                                                        |
|Net current                                               (83)                          |
|assets                                                                                  |
+----------------------------------------------------------------------------------------+
|Total net                                               12,661                          |
|assets                                                                                  |
+----------------------------------------------------------------------------------------+

 * in administration




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

We confirm that to the best of our knowledge:

  * the half-yearly financial statements have been prepared in accordance with
    the statement 'Half-Yearly Financial Reports' issued by the UK Accounting
    Standards Board;


  * the half-yearly report includes a fair review of the information required by
    the Financial Services Authority Disclosure and Transparency Rules, being:


  * an indication of the important events that have occurred during the first
    six months of the financial year and their impact on the condensed set of
    financial statements;


  * a description of the principal risks and uncertainties for the remaining six
    months of the year; and


  * a description of related party transactions that have taken place in the
    first six months of the current financial year, that may have materially
    affected the financial position or performance of the Company during that
    period and any changes in the related party transactions described in the
    last annual report that could do so.


On behalf of the Board


Marc Vlessing
Chairman
29 September 2011


Income Statement

              +----------------------+
              |Six months to 31 July |Six months to 31 July   Year to 31 January
              |         2011         |        2010                   2011
              |                      |
              |Revenue Capital  Total|Revenue Capital Total Revenue Capital  Total
              |                      |
              |  £'000   £'000  £'000|  £'000   £'000 £'000   £'000   £'000  £'000
--------------+----------------------+--------------------------------------------
              |                      |
              |                      |
Realised      |                      |
gain/(loss) on|                      |
disposal of   |                      |
fixed asset   |                      |
investments   |      -      67     67|      -   (169) (169)       -   (199)  (199)
              |                      |
Realised gain |                      |
on disposal of|                      |
current asset |                      |
investments   |      -       -      -|      -       -     -       -       5      5
              |                      |
              |                      |
              |                      |
Fixed asset   |                      |
investment    |                      |
holding       |                      |
(losses)/gains|      -   (541)  (541)|      -     687   687       -     235    235
              |                      |
Current asset |                      |
investment    |                      |
holding gains |      -       -      -|      -       4     4       -       -      -
              |                      |
              |                      |
              |                      |
Other income  |     74       -     74|    137           137     383       -    383
              |                      |
              |                      |
              |                      |
Investment    |                      |
management    |                      |
fees          |   (34)   (103)  (137)|   (43)   (129) (172)    (81)   (245)  (326)
              |                      |
              |                      |
              |                      |
Other expenses|  (136)       -  (136)|  (155)         (155)   (294)       -  (294)
              |                      |
              |                      |
--------------+----------------------+--------------------------------------------
Return on     |                      |
ordinary      |                      |
activities    |                      |
before tax    |   (96)   (577)  (673)|   (61)     393   332       8   (204)  (196)
              |                      |
              |                      |
              |                      |
Taxation on   |                      |
return on     |                      |
ordinary      |                      |
activities    |      -       -      -|      -       -     -       -       -      -
              |                      |
              |                      |
--------------+----------------------+--------------------------------------------
Return on     |                      |
ordinary      |                      |
activities    |                      |
after tax     |   (96)   (577)  (673)|   (61)     393   332       8   (204)  (196)
--------------+----------------------+--------------------------------------------
Earnings per  |                      |
share - basic |                      |
and diluted   | (0.5)p  (3.0)p (3.5)p| (0.3)p    2.1p  1.8p    0.0p  (1.0)p (1.0)p
              +----------------------+


  * The 'Total' column of this statement is the profit and loss account of the
    Company; the supplementary revenue return and capital return columns have
    been prepared under guidance published by the Association of Investment
    Companies.
  * All revenue and capital items in the above statement derive from continuing
    operations.
  * The Company has only one class of business and derives its income from
    investments made in shares and securities and from bank and money market
    funds.
  * The Company has no recognised gains or losses other than the results for the
    period as set out above.
  * The accompanying notes are an integral part of the Half-Yearly Report.



Reconciliation of Movements in Shareholders' Funds

                        +-----------------+
                        |Six months to 31 | Six months to 31  Year to 31 January
                        |        July 2011|         July 2010               2011
                        |                 |
                        |            £'000|             £'000              £'000
------------------------+-----------------+-------------------------------------
Shareholders' funds at  |                 |
start of period         |           13,779|            15,476             15,476
                        |                 |
Return on ordinary      |                 |
activities after tax    |            (673)|               332              (196)
                        |                 |
Issue of equity (net of |                 |
expenses)               |                -|               619                619
                        |                 |
Purchase of own shares  |            (161)|             (192)              (374)
                        |                 |
Dividends paid          |            (284)|           (1,374)            (1,746)
------------------------+-----------------+-------------------------------------
Shareholders' funds at  |                 |
end of period           |           12,661|            14,861             13,779
                        +-----------------+




Balance Sheet

                          +----------------+
                          |   As at 31 July|   As at 31 July    As at 31 January
                          |            2011|            2010                2011
                          |                |
                          |  £'000    £'000|  £'000    £'000   £'000       £'000
--------------------------+----------------+------------------------------------
                          |                |
                          |                |
Fixed asset investments*  |          10,162|          11,408              10,931
                          |                |
Current assets:           |                |
                          |                |
Money market securities   |                |
and other deposits*       |  2,381         |  2,977            2,783
                          |                |
Debtors                   |     23         |     18               40
                          |                |
Cash at bank              |    201         |    534              194
--------------------------+----------------+------------------------------------
                          |  2,605         |  3,529            3,017
                          |                |
Creditors: amounts falling|                |
due within one year       |  (106)         |   (76)            (169)
--------------------------+----------------+------------------------------------
Net current assets        |           2,499|           3,453               2,848
--------------------------+----------------+------------------------------------
                          |                |
--------------------------+----------------+------------------------------------
Net assets                |          12,661|          14,861              13,779
--------------------------+----------------+------------------------------------
                          |                |
                          |                |
Called up equity share    |                |
capital                   |  1,884         |  1,936            1,909
                          |                |
Share premium             |  1,941         |  1,940            1,941
                          |                |
Special distributable     |                |
reserve                   | 12,245         | 12,589           12,406
                          |                |
Capital redemption reserve|    223         |    171              198
                          |                |
Capital reserve -         |                |
gains/(losses) on disposal|    660         |  1,593              808
                          |                |
                          |                |
 - holding gains/(losses) |(4,218)         |(3,321)          (3,505)
                          |                |
Revenue reserve           |   (74)         |   (47)               22
--------------------------+----------------+------------------------------------
Total equity shareholders'|                |
funds                     |          12,661|          14,861              13,779
--------------------------+----------------+------------------------------------
Net asset value per share |           67.2p|           76.8p               72.2p
                          +----------------+

*Held at fair value through profit and loss


The statements were approved by the Directors and authorised for issue on 29
September 2011 and are signed on their behalf by:



Marc Vlessing
Chairman

Company Number: 5260491


Cash flow statement
                           +----------------+
                           |   Six months to|Six months to 31        Year to 31
                           |    31 July 2011|        July 2010      January 2011
                           |                |
                           |           £'000|            £'000             £'000
---------------------------+----------------+-----------------------------------
                           |                |
                           |                |
Net cash (outflow)/inflow  |                |
from operating activities  |           (245)|            1,849               249
                           |                |
                           |                |
                           |                |
Return on investment and   |                |
servicing of finance       |               -|                -             1,624
                           |                |
                           |                |
                           |                |
Financial investment       |                |
                           |                |
Purchase of fixed asset    |                |
investments                |           (134)|             (28)             (250)
                           |                |
Sale of fixed asset        |                |
investments                |             430|              394               612
                           |                |
                           |                |
                           |                |
Management of liquid       |                |
resources                  |                |
                           |                |
Purchase of current asset  |                |
investments                |           (146)|          (3,459)           (5,886)
                           |                |
Sale of current asset      |                |
investments                |             547|            2,618             5,239
                           |                |
                           |                |
                           |                |
Taxation                   |               -|                -                 -
                           |                |
                           |                |
                           |                |
Dividends                  |           (284)|          (1,374)           (1,746)
                           |                |
                           |                |
                           |                |
Financing                  |                |
                           |                |
Issue of shares            |               -|              655               655
                           |                |
Share issue expenses       |               -|             (36)              (36)
                           |                |
Purchase of own shares     |           (161)|            (192)             (374)
---------------------------+----------------+-----------------------------------
Increase in cash resources |                |
at bank                    |               7|              427                87
                           +----------------+




Reconciliation of net cash flow to movement in net funds
                     +-------------------+
                     |  Six months to 31 | Six months to 31   Year to 31 January
                     |          July 2011|         July 2010                2011
                     |                   |
                     |              £'000|             £'000               £'000
---------------------+-------------------+--------------------------------------
Increase in cash at  |                   |
bank                 |                  7|               427                  87
                     |                   |
Movement in money    |                   |
market funds         |              (402)|               845                 652
                     |                   |
Opening net funds    |              2,977|             2,238               2,238
---------------------+-------------------+--------------------------------------
Net funds at 31 July |              2,582|             3,510               2,977
                     +-------------------+




Reconciliation of return before taxation to cash flow from operating activities

                             +----------------+
                             |   Six months to|   Six months to      Year to 31
                             |    31 July 2011|    31 July 2010     January 2011
                             |                |
                             |           £'000|           £'000            £'000
-----------------------------+----------------+---------------------------------
Return on ordinary activities|                |
before tax                   |           (673)|             332            (196)
                             |                |
(Gain)/loss on disposal of   |                |
fixed asset investments      |            (67)|             169              199
                             |                |
Gain on disposal of current  |                |
asset investments            |               -|               -              (5)
                             |                |
Loss/(gain) on valuation of  |                |
fixed asset investments      |             541|           (687)            (235)
                             |                |
Gain on valuation of current |                |
asset investment             |               -|             (4)                -
                             |                |
Decrease in debtors          |              17|           2,024             378*
                             |                |
(Decrease)/increase in       |                |
creditors                    |            (63)|              15              108
-----------------------------+----------------+---------------------------------
(Outflow)/inflow from        |                |
operating activities         |           (245)|           1,849              249
                             +----------------+


* Excluding James Harvard earn out debtor

Notes to the Half-Yearly Report


1.        Basis of preparation
The unaudited half-yearly results which cover the six months to 31 July 2011
have been prepared in accordance with the Accounting Standard Board's (ASB)
statement on half-yearly financial reports (July 2007) and adopting the
accounting policies set out in the statutory accounts of the Company for the
year ended 31 January 2011, which were prepared under UK GAAP and in accordance
with the Statement of Recommended Practice for Investment Companies issued by
the Association of Investment Companies in January 2009.

2.        Publication of non-statutory accounts
The unaudited half-yearly results for the six months to 31 July 2011 do not
constitute statutory accounts within the meaning of Section 415 of the Companies
Act 2006. The comparative figures for the year ended 31 January 2011 have been
extracted from the audited financial statements for that year, which have been
delivered to the Registrar of Companies. The independent auditor's report on
those financial statements, in accordance with chapter 3, part 16 of the
Companies Act 2006, was unqualified. This half-yearly report has not been
reviewed by the Company's auditor.

3.        Earnings per share
The earnings per share at 31 July 2011 is based on 19,020,809 (31 January
2011: 19,281,552 and 31 July 2010: 18,939,413) ordinary shares, being the
weighted average number of shares in issue during the period.

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

4.        Net asset value per share
The calculation of NAV per share as at 31 July 2011 is based on 18,836,626 (31
January 2011: 19,085,994 and 31 July 2010: 19,362,805) ordinary shares in issue
at that date.

5.        Dividends
The interim dividend declared for the six months to 31 July 2011 of 1.5 pence
per share will be paid on 18 November 2011, to those shareholders on the
register on 21 October 2011. This will be paid from capital reserves.

The final dividend for the year ending 31 January 2011 of 1.5 pence per share
was paid on 8 July 2011 to shareholders on the register on 10 June 2011. This
was paid wholly from capital reserves.

6.         Principal risks and uncertainties
The Company's assets consist of equity and fixed-rate interest investments, cash
and liquid resources. Its principal risks are therefore market risk, credit risk
and liquidity risk. Other risks faced by the Company include economic, loss of
approval as a VCT, investment and strategic, regulatory, reputational,
operational and financial risks. These risks, and the way in which they are
managed, are described in more detail in the Company's Annual Report and
Accounts for the year ended 31 January 2011. The Company's principal risks and
uncertainties have not changed materially since the date of that report.

7.        Buy Backs
During the six months ended 31 July 2011 the Company bought back 249,368
ordinary shares at a weighted average price of 64.6 pence per share (year ended
31 January 2011: 548,674 ordinary shares at a weighted average price of 68.2
pence per share and six months ended 31 July 2010: 271,863 ordinary shares at a
weighted average price of 70.5 pence per share). No shares were issued during
the period.

8.         Related Party Transactions
Octopus Investments Limited acts as the Investment Manager of the Company. Under
the management agreement, Octopus receives a fee of 2.0 per cent per annum of
the net assets of the Company for the investment management services. During the
period, the Company incurred management fees of £137,000 payable to Octopus (31
January 2011: £326,000 and 31 July 2010: £172,000). At the period end there was
£nil outstanding to Octopus (31 January 2011: £nil and 31 July 2010: £nil).
Furthermore, Octopus provides administration and company secretarial services to
the Company. Octopus receives a fee of 0.3 per cent per annum of net assets of
the Company for administration services and £10,000 per annum for company
secretarial services.

9.        Copies of this report are available from the registered office of the
Company at 20 Old Bailey, London, EC4M 7AN.








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Source: Octopus Eclipse VCT 2 plc via Thomson Reuters ONE

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