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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Octopus 4 | LSE:OCV4 | London | Ordinary Share | GB00B6QM2B64 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.40 | 0.90 | 3.90 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Octopus VCT 4 plc
Final Results
21 June 2018
Octopus VCT 4 plc, managed by Octopus Investments Limited, today
announces its final results for the year ended 28 February 2018.
Financial Summary
As at As at
28 February 2018 31 August 2016
Net assets (GBP'000s) 7,558 6,605
Net return on ordinary activities after tax (GBP'000s) 1,377 (49)
Net asset value (NAV) per share 91.7p 80.1p
Cumulative dividends paid since launch 20.0p 15.0p
NAV plus cumulative dividends paid 111.7p 95.1p
Dividends paid in period 5.0p 5.0p
Proposed final dividend for the period - 5.0p
Chairman's Statement
Introduction
I am pleased to present the Annual Report of Octopus VCT 4 plc
("Company") for the period ended 28 February 2018.
Update on the Sale Process and Performance
The Company was originally established as a VCT with a 25-year limited
life. On 9 August 2017 in line with the Board's recommendation the
Shareholders approved a proposal to conduct an orderly wind up of the
VCT, through the sale of the Company's assets ("Assets") to return
capital to its Shareholders in 2018. The Investment Manager has been
managing the sale process with approvals from the Board during each
phase. In November, following the completion of a competitive tender
process for the Assets, the Board approved a bilateral phase of
negotiation and due diligence with the preferred bidder. Subsequently,
the due diligence process was completed and a sale ("Sale") of the
Assets finalised on 2 May 2018. The value achieved from the sale of the
Assets was higher than the previous valuations, increasing the
underlying NAV from 74.3 per share on 31 August 2017 to 91.7p as at 28
February 2018. The Total Value per share, which includes the underlying
NAV and dividends paid to date of 20p, now stands at 111.7p, up from
94.3 on 31 August 2017. The Prospectus indicated a potential return at
this stage of 110p per share.
No dividends have been paid since February 2017 as a result of the sale
and orderly wind up process. Most of the cash from the sale of the
Assets will be paid to Shareholders as a dividend by the end of July
2018. A small amount of capital will be retained by the Company for a
period of three to four months following the sale of the Assets, to
cover potential liabilities and unforeseen costs, in accordance with the
sales agreement. The remaining capital will then be distributed to
Shareholders as a second dividend, however, this is expected to be
minimal.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and the Investment Manager
with advice concerning ongoing compliance with HMRC's rules and
regulations concerning VCTs. The Board has been advised that the
Company is compliant with the conditions laid down by HMRC for
maintaining approval as a VCT. A key requirement for VCTs is to
maintain at least a 70% Qualifying Investment level. As at 28 February
2018, 86.3% of the portfolio, as measured in accordance with HMRC's
rules, was invested in VCT Qualifying Investments. In order to ensure
the Company continues to comply with the VCT qualification requirement
to hold at least 30% of its portfolio in equity, the Company invested in
a new issue of VCT qualifying shares by an AIM traded company.
Annual General Meeting
The Directors look forward to meeting as many shareholders as possible
at our Annual General Meeting on 31 August 2018, to be held at the
offices of Octopus Investments Limited, 6th Floor, 33 Holborn, London,
EC1N 2HT. The AGM will start at 4.00 p.m.
Outlook
The Board is not proposing to pay a final dividend in respect of the
period ended 28 February 2018. However, as the sale of the Assets has
now completed, your Board is proposing to pay a dividend to the
Company's Shareholders in July. As noted previously, a small amount of
cash will be retained to accommodate for any potential liabilities, VCT
wind up costs and VCT running costs up to the point of liquidation.
Following the expiry of three to four months, the remaining value will
be distributed as a second dividend. The process for the liquidation of
the company is expected to commence following the 2018 AGM on 31 August
2018.
Graham Paterson
Chairman
21 June 2018
Investment Manager's Review (Unaudited)
Personal Service
At Octopus we have a dual focus, on managing investments and keeping
Shareholders informed throughout the investment cycle and process. We
are committed to providing the VCT's Shareholders with regular and open
communication. Our updates are designed to keep Shareholder's informed
about the progress of their investments.
Octopus Investments Limited was established in 2000 and has a strong
commitment to both smaller companies and to VCTs. Octopus also acts as
Investment Manager to five other VCTs and currently has over GBP6
billion of funds under management. Octopus has around 800 employees.
Portfolio Review
The Company was invested in a portfolio of seven individual solar
companies, each of which owned and operated a solar site in the 1-2MWp
range. The first five sites were accredited for FIT and the remaining
two sites were accredited under ROCs.
Octopus has managed the performance of the solar sites on behalf of the
Company in order to maximise the value to the VCT's Shareholders. This
has included overseeing construction and the resolution of various
technical issues following the insolvency of a construction contractor.
All of these works were disclosed to the buyer of the sites and checked
by a technical advisor. The portfolio of the seven sites has overall
been performing in line with expectations since the start of the
operations.
Company Performance
Between 31 August 2016 and 28 February 2018, the NAV increased due to
the price achieved on sale of the Assets. The table below shows the
movements between the two periods:
Changes in NAV between August 2016 and February 2018
NAV at 31 August 2016 80.1
Cash distributions from solar companies 5.9
Revaluation of solar companies 15.4
VCT running costs (4.7)
Dividends paid (5.0)
NAV at 28 February 2018 91.7
Company Outlook
With the successful completion of the sale of the seven solar assets,
the Investment Manager no longer manages the sites. The team was
heavily involved in sharing information with the buyer and answering all
legal, technical and financial due diligence queries during the sale
process. The Investment Manager's team is happy to have negotiated on
behalf of the Shareholders the sale of the assets at a level that
exceeded the holding value. The process for the liquidation of the
company is expected to commence following the 2018 AGM on 31 August
2018.
If you have any questions on any aspect of your investment, please call
one of the team on 0800 316 2295.
Matt Setchell
Octopus Investments Limited
21 June 2018
Investment Portfolio
Movement % Equity
Investment in fair Fair held by
cost as at value to value as % equity all
28 28 at 28 held by funds
February February February Movement Octopus managed
2018 2018 2018 in period VCT 4 by
Investments Sector (GBP'000) (GBP'000) (GBP'000) (GBP'000) plc Octopus
Delambre
Energy Solar 1,383 151 1,534 211 49.9% 100.0%
Huygens
Energy Solar 1,202 221 1,423 266 49.9% 100.0%
Adala Solar Solar 721 259 980 205 49.9% 100.0%
Daubree
Energy Solar 773 192 965 223 49.9% 100.0%
Debes Energy Solar 838 118 956 226 49.9% 100.0%
Lacaille
Energy Solar 727 134 861 172 49.9% 100.0%
Akycha Power Solar 700 131 831 74 49.9% 100.0%
Beeks
Financial
Cloud Group
Plc Software 4 - 4 - 50.0% NA
Current asset
investments 6,348 1,206 7,554 1,377
Cash at bank 78
Debtors less creditors (74)
Total net assets 7,558
Valuation Overview
Investments are regularly reviewed to ensure that the fair values are
appropriately stated. Quoted investments are valued in accordance with
the bid-price on the relevant date, unquoted investments are valued in
accordance with current International Private Equity and Venture Capital
(IPEVC) valuation guidelines. The sale of the Assets has resulted in a
positive variance between previous valuations compared to the final
sales price.
Valuation Methodology
As at 28 February 2018 these assets are valued at the consideration
offered by the Buyer. The price was agreed on 2 May 2018 for a
consideration of GBP15.1m across both VCTs (Octopus VCT 3 plc and
Octopus VCT 4 plc). As a result, the valuation methodology has changed
from discounted cash flows method to the fair value as indicated by the
sale price of the assets. The total consideration is split between each
of the assets based on site capacity.
Investment Portfolio
Adala Solar Limited
Adala Solar constructed a 1.24MWp solar site near Congresbury in
Somerset in July 2012. The site has been fully operational for over four
years and is receiving revenues from the FIT, as well as the sale of the
electricity it produces on the wholesale market.
Akycha Power Limited
Akycha Power constructed a 1.05MWp solar site near Newport on the Isle
of Wight in July 2012. The site has been fully operational for over four
years and is receiving revenues from the FIT, as well as the sale of the
electricity it produces on the wholesale market.
Daubree Energy Limited
Daubree Energy constructed a 1.22MWp solar site near Cullompton in Devon
in July 2012. The site has been fully operational for over four years
and is receiving revenues from the FIT, as well as the sale of the
electricity it produces on the wholesale market.
Debes Energy Limited
Debes Energy constructed a 1.21MWp solar site near Tiverton in Devon in
July 2012. The site has been fully operational for over four years and
is receiving revenues from the FIT, as well as the sale of the
electricity it produces on the wholesale market.
Delambre Energy Limited
Delambre Energy constructed a 1.94MWp solar site near Ivybridge in Devon
in March 2013. The site has been fully operational for around three and
half years and is receiving revenues from the sale of the ROCs, as well
as the sale of the electricity it produces on the wholesale market.
However, due to some poorly installed cables during construction, and
the subsequent insolvency of the EPC, this company has taken on an
additional liability for rectification works.
Huygens Energy Limited
Huygens Energy constructed a 1.80MWp solar site near Cullompton in Devon
in March 2013. The site has been fully operational for around three and
half years and is receiving revenues from the sale of the ROCs, as well
as the sale of the electricity it produces on the wholesale market.
Rectification works were completed over the winter of 2015 and it
returned to being fully operational in the summer of 2016.
Lacaille Energy Limited
Lacaille Energy constructed a 1.09MWp solar site near Crediton in Devon
in July 2012. The site is receiving revenues from the FIT, as well as
the sale of the electricity it produces on the wholesale market.
Beeks Financial Cloud Group plc
Beeks Financial is a niche cloud computing and connectivity provider for
financial markets. In order to ensure that the VCTs continue to comply
with the VCT qualification requirement to hold 30% of their respective
portfolios in equity until they are placed into members' voluntary
liquidation the Company invested in Beeks Financial.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Strategic Report,
Directors' Report, Directors' Remuneration Report and the financial
statements in accordance with applicable law and regulations. They are
also responsible for ensuring that the annual report includes
information required by the Listing Rules of the Financial Conduct
Authority.
Company law requires the Directors to prepare financial statements for
each financial period. Under that law the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice ("GAAP"), including Financial
Reporting Standard 102 - "The Financial Reporting Standard Applicable in
the United Kingdom and Republic of Ireland ("FRS 102"), (United Kingdom
accounting standards and applicable law). 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
and 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 judgements 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 a going concern basis unless it is
inappropriate to do so;
-- prepare a Strategic Report, 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 and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements and
the Directors' Remuneration report 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 confirm that:
-- so far as each Director is aware, there is no relevant audit information
of which the Company's auditor is unaware;
-- the Directors have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that
information; and
-- the Directors do not consider the going concern basis to be appropriate
and these financial statements have therefore been prepared on a basis
other than going concern.
The Directors are responsible for preparing the annual report in
accordance with applicable law and regulations. Having taken advice from
the Audit Committee, the Directors consider the annual report and the
financial statements, taken as a whole, provide the information
necessary to assess the Company's performance, business model and
strategy and is fair, balanced and understandable.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
The Directors confirm, to the best of their knowledge:
-- that the financial statements, prepared in accordance with United Kingdom
Generally Accepted Accounting Practice , including FRS 102, give a true
and fair view of the assets, liabilities, financial position and profit
or loss of the Company; and
-- the annual report, including the strategic report, includes a fair review
of the development and performance of the business and the position of
the Company, together with a description of the principal risks and
uncertainties that it faces.
On behalf of the Board
Graham Paterson
Chairman
21 June 2018
Income Statement
Period ended 28 February 2018 Year ended 31 August 2016
Revenue Capital Total Revenue Capital Total
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss)
on
valuation
investments - 1,377 1,377 - (95) (95)
Investment
income 478 - 478 274 - 274
Investment
Management
fees (18) (54) (72) (36) (12) (48)
Other
expenses (306) (111) (417) (168) - (168)
Net return
on ordinary
activities
before tax 154 1,212 1,366 70 (107) (37)
Taxation - - - (12) - (12)
Net return
on ordinary 154 1,212 1,366 58 (107) (49)
activities
after tax
Earnings per
share - 1.9p 14.7p 16.6p 0.7p (1.3)p (0.6)p
basic and
diluted
-- The 'Total' column of this statement is the profit or 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. Accordingly a Statement of Comprehensive
Income is not required.
Balance Sheet
As at 28 February 2018 As at 31 August 2016
GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments - 6,468
Current assets:
Current asset investments 7,554 -
Debtors 195 215
Cash at bank 78 26
273 241
Creditors: amounts falling
due within one year (269) (104)
Net current assets 4 137
Net assets 7,558 6,605
Called up equity share
capital 82 82
Share Premium 99 99
Special Distributable
Reserve 6,488 6,747
Capital Redemption Reserve 2 2
Capital Reserve -
Unrealised 1,095 (171)
Capital Reserve - Realised (208) (154)
Revenue Reserve - -
Total shareholders' funds 7,558 6,605
Net asset value per share 91.7p 80.1p
The statements were approved by the Directors and authorised for issue
on 21 June 2018 and are signed on their behalf by:
Graham Paterson
Chairman
Company No: 07743878
Statement of Changes in Equity
Special Capital Capital Capital
Share Share distributable redemption reserve reserve Revenue
Capital Premium reserves reserve unrealised realised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
September
2015 82 99 7,101 2 (76) (142) - 7,066
Management fee
allocated as
capital
expenditure - - - - - (12) - (12)
Current period
losses on fair
value of
investments - - - - (95) - - (95)
Profit on
ordinary
activities
after tax - - - - - - 58 58
Total
Comprehensive
income for the
period 82 99 7,101 2 (171) (154) 58 7,017
Contributions
by and
distributions
to owners
Dividends paid - - (354) - - - (58) (412)
Balance as at
31 August
2016 82 99 6,747 2 (171) (154) - 6,605
As at 1
September
2016 82 99 6,747 2 (171) (154) - 6,605
Management fee
allocated as
capital
expenditure - - - - - (54) - (54)
Current period
gain on fair
value of
investments - - - - 1,377 - - 1,377
Capitalised
expenses on
sale - - - - (111) - - (111)
Profit on
ordinary
activities
after tax - - - - - - 154 154
Total
Comprehensive
income for the
period 82 99 6,747 2 1,095 (208) 154 7,971
Contributions
by and
distributions
to owners
Dividends paid - - (259) - - - (154) (413)
Balance as at
28 February
2018 82 99 6,488 2 1,095 (208) - 7,558
Statement of Cash Flow
Period ended 28 Year ended 31 August
February 2018 2016
GBP'000 GBP'000
Cash flows from
operating activities
Return on ordinary
activities before tax 1,366 (37)
Adjustments for:
Decrease/(Increase) in
debtors 20 (111)
Increase in creditors 177 37
(Gain)/Loss on valuation
of fixed asset
investments (1,377) 95
Cash from operations 186 (16)
Income taxes paid (11) (19)
Net cash generated from
operating activities 175 (35)
Cash flows from
investing activities
Purchase of fixed asset
investments (4) -
Receipt of loan note
principal 294 381
Net cash flows from
investing activities 290 381
Cash flows from
financing activities
Dividends Paid (413) (412)
Net cash flows from
financing activities (413) (412)
(Decrease) in cash and
cash equivalents 52 (66)
Opening cash and cash
equivalents 26 92
Closing cash and cash
equivalents 78 26
Cash and cash
equivalents comprise
Cash at Bank 78 26
78 26
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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 4 plc via Globenewswire
(END) Dow Jones Newswires
June 21, 2018 09:10 ET (13:10 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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