Octopus VCT 2 PLC Octopus Vct 2 Plc : Half-yearly Report
12 August 2014 - 6:23PM
UK Regulatory
TIDMOVC2
Octopus VCT 2 plc
Half-Yearly Results
12 August 2014
Octopus VCT 2 plc, managed by Octopus Investments Limited, today
announces the half-yearly results for the six months ended 30 June 2014.
The results were approved by the Board of Directors on 12 August 2014.
Financial Summary
Six months to Six months to Year to
30 June 2014 30 June 2013 31 December 2013
Net assets (GBP'000s) 18,831 18,046 19,337
Return on ordinary activities
after tax (GBP'000s) 42 (134) 1,222
Net asset value ("NAV") per 98.3p 93.5p 100.6p
share
Cumulative dividends paid 2.5p - -
Total return 100.8p 93.5p 100.6p
Chairman's Statement
I am pleased to present the half-yearly report for Octopus VCT 2 plc for
the period ended 30 June 2014.
Performance
The total return ("NAV plus cumulative dividends paid") of the Company
has increased from 100.6p as at 31 December 2013 to 100.8p as at 30 June
2014. This increase in total return is the result of an overall increase
in the value of the Company's portfolio of GBP80,000, offset by a
revenue loss for the period of GBP38,000.
Investment Portfolio
On 19 February 2014, the loan to Borro Loan 2 Limited for GBP1,000,000
was fully repaid along with all interest accrued to that date. As a
result, the Company has a comfortable cash position and the Manager
continues to seek investments in suitable unquoted companies.
Investments will only be made where the Octopus team is confident that
investments can be structured with a higher level of capital security,
with the objective of maintaining a portfolio of investments that focus
on capital preservation.
Whilst the Company has the ability to invest in a variety of sectors and
technologies, the focus is to maintain a portfolio of investments in the
renewable energy sector.
Of the current investment portfolio, valued at GBP15.8 million as at 30
June 2014, GBP14.0 million has been invested in the renewable energy
sector and comprises twenty solar power companies, one anaerobic
digestion company and one ground source heat pump company. The remaining
GBP1.8 million is invested in media and business services. The renewable
energy investments have enjoyed a successful period with an increase in
their combined valuations of GBP203,000 in the six months to 30 June
2014. Acquire Your Business Limited has also seen an increase in its
valuation of GBP27,000 whilst 5AM Music Limited, one of the Company's
two investments in the Media sector, has seen its valuation decrease by
GBP150,000.
Cash and Liquid Resources
Uninvested cash is deposited in carefully selected banks and money
market funds with capital preservation being the main criteria.
Principal Risks and Uncertainties
Risks faced by the Company include economic, investment and strategic,
regulatory, reputational, operational and financial risks. These risks,
and the ways in which they are managed, are described in more detail in
the Company's Annual Report and Accounts for the year ended 31 December
2013.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice concerning ongoing compliance with HMRC rules and
regulations concerning VCTs. The Board has been advised that the
Company is compliant with the conditions laid down by HMRC for achieving
provisional approval as a VCT.
As the Company has now passed the end of its third accounting period it
must ensure that at least 70% of its investments comprise qualifying
holdings on an ongoing basis in order to maintain HMRC approval as a
VCT. A key requirement was to achieve a 70% qualifying investment level
prior to 31 December 2013. This was achieved and it is pleasing to
report that, as at 30 June 2014, 80.6% of the portfolio, as measured by
HMRC rules, was invested in VCT qualifying investments. The Board is
confident that this 70% threshold will be maintained.
Outlook
The economy is growing strongly and we are delighted to see the ongoing
strong performance of our solar and renewable energy investments, with
many of them seeing an uplift in their valuation in the six months to 30
June 2014. This, despite a revenue loss in the period, led to a modest
rise in the total return of the Company.
Your Board and Investment Manager remain confident there will be further
progress in the Company.
Ian Pearson
Chairman
12 August 2014
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 Conduct Authority's 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
Ian Pearson
Chairman
12 August 2014
Income Statement
Six months to 30 June Six months to 30 June
2014 2013 Year to 31 December 2013
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised loss
on disposal of
fixed asset
investments - - - - - - - (168) (168)
Fixed asset
investment
holding
gains/(losses) - 80 80 - (168) (168) - 1,290 1,290
Other income 106 - 106 173 - 173 388 - 388
Other expenses (144) - (144) (139) - (139) (263) - (263)
Return on
ordinary
activities
before tax (38) 80 42 34 (168) (134) 125 1,122 1,247
Taxation on
ordinary
activities - - - - - - (25) - (25)
Return on
ordinary
activities
after tax (38) 80 42 34 (168) (134) 100 1,122 1,222
Return per
share - basic
and diluted (0.2p) 0.4p 0.2p 0.2p (0.9p) (0.7p) 0.5p 5.8p 6.3p
-- 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.
Reconciliation of Movements in Shareholders' Funds
Six months ended Six months ended Year to
30 June 2014 30 June 2013 31 December 2013
GBP'000 GBP'000 GBP'000
Shareholders' funds at
start of period 19,337 18,180 18,180
Return on ordinary
activities after tax 42 (134) 1,222
Purchase of own shares (69) - (65)
Dividends paid (479) - -
Shareholders' funds at
end of period 18,831 18,046 19,337
Balance Sheet
As at 30 June As at 30 June As at 31
2014 2013 December 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments* 15,841 17,297 16,761
Current assets:
Debtors 81 165 86
Cash at bank 3,003 621 2,567
3,084 786 2,653
Creditors: amounts falling due
within one year (94) (37) (77)
Net current assets 2,990 749 2,576
Net assets 18,831 18,046 19,337
Called up equity share capital 192 193 193
Special distributable reserve 17,433 18,047 17,981
Capital redemption reserve 2 - 1
Capital reserve - losses on
disposal (168) - (168)
- holding
gains/(losses) 1,370 (168) 1,290
Revenue reserve 2 (26) 40
Total equity shareholders' funds 18,831 18,046 19,337
Net asset value per share 98.3p 93.5p 100.6p
*Held at fair value through profit and loss
The statements were approved by the Directors and authorised for issue
on 12 August 2014 and are signed on their behalf by:
Ian Pearson
Chairman
Company Number: 07484406
Cash flow statement
Six months to Six months to Year to
30 June 2013 30 June 2013 31 December 2013
GBP'000 GBP'000 GBP'000
Net cash (outflow)/inflow
from operating activities (16) (66) 119
Financial investment:
Sale of fixed asset
investments 1,000 - 1,826
Financing:
Dividends paid (479) - -
Purchase of own shares (69) - (65)
Increase/(decrease) in cash
resources at bank 436 (66) 1,880
Reconciliation of return before taxation to cash flow
from operating activities
Six months to Six months to Year to 31
30 June 2014 30 June 2013 December 2013
GBP'000 GBP'000 GBP'000
Return on ordinary
activities before tax 42 (134) 1,247
Loss on disposal of fixed
asset investments - - 168
(Gain)/loss on valuation of
fixed asset investments (80) 168 (1,290)
Decrease/(increase) in
debtors 5 (70) (3)
Increase/(decrease) in
creditors 17 (30) (3)
(Outflow)/inflow from
operating activities (16) (66) 119
Reconciliation of net cash flow to movement in net
funds
Six months to Six months to Year to 31
30 June 2014 30 June 2013 December 2013
GBP'000 GBP'000 GBP'000
Increase/(decrease) in cash
resources at bank 436 (66) 1,880
Opening net cash resources 2,567 687 687
Net funds at period end 3,003 621 2,567
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Octopus VCT 2 PLC via Globenewswire
HUG#1848390
http://www.octopusinvestments.com/
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