Half-yearly report

 
TIDMOTV4 
 
Octopus Titan VCT 4 plc 
Half-Yearly Results 
 
30 June 2010 
 
Octopus Titan VCT 4 plc, managed by Octopus Investments Limited, today announces 
the Half-Yearly results for the period ended 30 April 2010. 
 
These results were approved by the Board of Directors on 29 June 2010. 
 
The Half-Yearly Report will shortly be available atwww.octopusinvestments.com by 
navigating to Services, Investor Services, Venture Capital Trusts, Octopus Titan 
VCT 4. All other statutory information will also be found there. 
 
 
About Octopus Titan VCT 4 PLC 
 
Octopus Titan VCT 4 plc ("Titan 4," "Company" or "Fund") 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 
predominately unquoted companies.  The Company is managed by Octopus Investments 
Limited ("Octopus" or "Manager"). 
 
Titan 4 was incorporated on 30 September 2009 with the first allotment of equity 
being 1 February 2010. The total amount raised by 30 April 2010 was  GBP19.3 
million.  The Offer for new subscriptions for shares is open until 31 August 
2010.The Company will invest primarily in unquoted UK smaller companies and aims 
to deliver absolute returns on its investments. 
 
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-front income tax relief of 30% 
  * exemption from income tax on dividends paid 
  * exemption from capital gains tax on disposals of shares in VCTs 
 
 
The Company has been approved as a VCT by HM Revenue & Customs.  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  GBP1 million invested in any one year in new shares or securities in an 
unquoted company (including companies listed on AIM) which is carrying on a 
qualifying trade and whose gross assets do not exceed  GBP7 million at the time of 
investment, and whose total number of employees is less than 50, also at the 
time of investment.  The Company will continue to ensure its compliance with 
these qualification requirements. 
 
 
Financial Summary 
 
                                                     Period to 30 April 2010 
 
 
 
 Net assets ( GBP'000s)                                                  18,147 
 
 Return on ordinary activities before tax ( GBP'000s)                     (109) 
 
 Net asset value per share ("NAV")                                     94.0p 
 
 
 
Chairman's Statement 
 
I am delighted to be presenting to you in my capacity as Chairman the first 
half-yearly report for Octopus Titan VCT 4 plc for the period to 30 April 2010. 
 
In the period to 30 April 2010, the Company raised gross proceeds of  GBP19.2 
million and a further  GBP1.5 million has been raised between 1 May 2010 and the 
signing of this report.  The Offer for new subscriptions for shares closes on 
31 August 2010. 
 
Investment Policy 
The investment policy of Titan 4 is designed to provide investors with exposure 
to a range of UK smaller companies with the aim of generating a substantial 
level of returns over the medium to long term.  In order to achieve this, the 
Fund will focus on providing early stage, development and expansion funding to 
unquoted companies with a typical deal size of  GBP0.2 million to  GBP2 million. It is 
expected that the portfolio of holdings that will be built by the Fund will 
encompass investments in 20-30 unquoted companies. 
 
Net Asset Value 
As at 30 April 2010 the Company's net asset value per share (NAV) has declined 
from the initial NAV of 94.5p to 94.0p at the period end.  This has been due to 
 GBP81,000 of running costs incurred by the Fund since its formation. Over the 
longer term as the underlying portfolio of investments is created, the Company's 
NAV will be linked increasingly to the value of the investments in the portfolio 
companies. 
 
Investment Portfolio 
No investments had been made in the period under review or have been since the 
period to which this report relates, and the date of publication. 
 
The Investment Manager has a number of investment propositions under review by 
the Titan family of funds which will enable Titan 4 to commence investing 
shortly.  We look forward to updating you as the Fund starts to deploy funds 
through investments into qualifying businesses. 
 
When investments are made, they will be held and valued in accordance with the 
International Private Equity and Venture Capital valuation guidelines and 
Financial Reporting Standards and are therefore subject to regular valuation 
reviews. 
 
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 will be described in more detail in the Company's 
Annual Report and Accounts for the period ended 31 October 2010. 
 
VCT Qualifying Status 
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice 
on the ongoing compliance with Her Majesty's Revenue & Customs (HMRC) rules and 
regulations concerning VCTs.  The Manager does not foresee any issues with 
reaching the required investment hurdle of 70% before the third anniversary of 
the end of the financial period in which investors subscribed to the Fund. 
 
Outlook 
The Investment Manager is currently seeing a strong deal flow and it is in 
active negotiations with several companies in which it hopes to invest. Your 
Board remains confident that the Fund will be able to meet its investment 
objectives and produce returns for shareholders that are consistent with the 
objectives of the Fund.  The imperative is to provide early stage, development 
and expansion funding to unquoted companies who have the potential to create a 
large business by taking a relatively modest market share. 
 
Gregor Michie 
Chairman 
29 June 2010 
 
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 
Gregor Michie 
Chairman 
29 June 2010 
 
 
Income Statement 
                                                Period to 30 April 2010 
 
                                            Revenue        Capital         Total 
 
                                               GBP'000           GBP'000          GBP'000 
 
 
 
Investment management fees                      (9)           (28)          (37) 
 
Other expenses                                 (72)              -          (72) 
 
 
 
Loss on ordinary activities 
before tax                                     (81)           (28)         (109) 
 
 
 
Taxation on loss on 
ordinary activities                               -              -             - 
 
 
 
Loss on ordinary activities 
after tax                                      (81)           (28)         (109) 
 
Loss per share - basic and 
diluted                                      (1.0)p         (0.4)p        (1.4)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 accompanying notes are an integral part of the half-yearly report 
  * 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 those disclosed in 
    the income statement. 
 
 
 
Reconciliation of Movements in Shareholders' Funds 
 
 
                                             Period to 30 April 2010 
 
                                                                GBP'000 
 
 Shareholders' funds at start of period                            - 
 
 
 
 Return on ordinary activities after tax                       (109) 
 
 Issue of equity (net of expense)                             18,313 
 
 Repurchase of own shares                                       (57) 
 
 Shareholders' funds at end of period                         18,147 
 
 
 
Balance Sheet 
                                                   As at 30 April 2010 
 
                                                      GBP'000        GBP'000 
 
 
 
  Current assets: 
 
  Debtors                                              127 
 
  Cash at bank                                      18,097 
 
                                                    18,224 
 
  Creditors: amounts falling due within one year      (77) 
 
  Net current assets                                            18,147 
 
 
 
  Net assets                                                    18,147 
 
 
 
  Called up equity share capital                     1,930 
 
  Share premium                                     16,320 
 
  Capital redemption reserve                             6 
 
  Capital reserve 
     - gains/(losses) on disposal                     (28) 
 
     - holding gains/(losses)                            - 
 
  Revenue reserve                                     (81) 
 
  Total equity shareholders' funds                              18,147 
 
  Net asset value per share                                      94.0p 
 
 
 
*At fair value through profit and loss 
 
Company Number: 07035434 
 
Cash flow statement 
                                               Period to 30 April 2010 
 
                                                                  GBP'000 
 
 
 
  Net cash outflow from operating activities                     (159) 
 
 
 
  Financing: 
 
  Issue of equity                                               19,269 
 
  Share issue expenses                                           (956) 
 
  Repurchase of own shares                                        (57) 
 
  Increase in cash resources at bank                            18,097 
 
 
 
Reconciliation of net cash flow to movement in liquid resources 
 
                                       Period to 30 April 2010 
 
                                                          GBP'000 
 
  Increase in cash resources at bank                    18,097 
 
  Movement in cash equivalents                               - 
 
  Opening net liquid resources                               - 
 
  Net funds at period end                               18,097 
 
 
 
Reconciliation of profit before taxation to cash flow from operating activities 
 
                                             Period to 30 April 2010 
 
                                                                GBP'000 
 
 Return on ordinary activities before tax                      (109) 
 
 Increase in debtors                                           (127) 
 
 Increase in creditors                                            77 
 
 Net cash inflow from operating activities                     (159) 
 
 
 
Notes to the Half Yearly Report 
 
1.   Basis of preparation 
The unaudited half-yearly results which cover the period to 30 April 2010 have 
been prepared in accordance with the Accounting Standard Board's (ASB) statement 
on half-yearly financial reports (July 2007). 
 
2.   Publication of non-statutory accounts 
The unaudited half-yearly results for the period ended 30 April 2010 do not 
constitute statutory accounts within the meaning of Section 240 of the Companies 
Act 1985 and have not been delivered to the Registrar of Companies. 
 
3.   Earnings per share 
The earnings per share is based on 7,824,319 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 returns 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 30 April 2010 is based on 19,297,301 
shares in issue at that date. 
 
5.   Share Issues and buy-backs 
During the period, the Company issued 19,297,301 Ordinary shares at a price of 
100.0p per share. 
 
On 29 April 2010, the Company purchased 60,000 Ordinary shares for cancellation 
at a price of 94.5p per share. 
 
6.   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  GBP37,000 payable to Octopus. At 
the period end there was  GBPnil outstanding to Octopus. 
 
 
 
[HUG#1428669] 
 
 
 
 
 
 
 
 
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Source: Octopus Titan VCT 4 PLC via Thomson Reuters ONE