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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Octopus T. 4 | LSE:OTV4 | London | Ordinary Share | GB00B5467F20 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 92.50 | 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 Titan VCT 4 plc
Half-Yearly Results
25 June 2012
Octopus Titan VCT 4 plc, managed by Octopus Investments Limited, today announces
the Half-Yearly results for the six months ended 30 April 2012.
These results were approved by the Board of Directors on 25 June 2012.
You may shortly view the Half-Yearly Report in full at
www.octopusinvestments.com/vctarchive/titan4.html. All other statutory
information will also be found there.
About Octopus Titan VCT 4 PLC
Octopus Titan VCT 4 plc ('Titan 4', '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
predominately unquoted companies. The Company is managed by Octopus Investments
Limited ('Octopus' or 'Investment Manager').
Titan 4 was incorporated on 30 September 2009 and raised a total of GBP22.5
million ( GBP21.4 million net of expenses) through an Offer for Subscription. A
further GBP1.30million in aggregate ( GBP1.23million net of expenses) has been raised
by way of a top-up. Titan 4 invests primarily in unquoted UK smaller companies
and aims to deliver a substantial level of returns on its investments over the
medium to long term.
Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means for private
individuals to invest in unquoted 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.
Titan 4 has been provisionally 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 GBP5 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 a
prescribed limit 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
30 April 2012 30 April 2011 October 2011
=------------------------------------------------------------------------------
Net assets ( GBP'000s) 20,919 20,870 20,086
Return on ordinary activities after
tax ( GBP'000s) (400) (301) (1,085)
Net asset value per share (NAV) 87.2p 92.4p 89.0p
=------------------------------------------------------------------------------
Chairman's Statement
I am pleased to present the results for the six month period ended 30 April
2012.
Performance
During the six month period to 30 April 2012, the net asset value per share
(NAV) has declined from 89.0p to 87.2p representing a decrease of 2.0%. This
fall in NAV is due to a reduction in value of the investment portfolio and to
the standard running costs of the VCT continuing to exceed the yield on the
portfolio from income received. The decline in NAV was partially offset by an
uplift in the Open Ended Investment Companies over the period of GBP79,000.
Titan 4 remains in the early stages of investment with 46% of the portfolio
being in qualifying investments as at 30 April 2012. As mentioned in the latest
Annual Report, the NAV will be linked increasingly to the value of the
investments in the portfolio companies as the VCT becomes fully invested.
Investment Portfolio Review
During the period to 30 April 2012, Titan 4 invested GBP1,739,000 into four new
companies and GBP921,000 into six follow-on companies. This took the number of
companies in the portfolio to 18 and there are a number of further new
investments in the pipeline which we expect to complete in the coming months as
we move towards the 70% qualifying investment level prior to 31 October 2012.
Titan 4 invested in the following new companies: Rangespan, a supply chain
management company; Artesian Solutions, a business software company and Aframe,
an electronic data storage company. In addition, the company also invested into
Semafone, which is a telecommunications data protection company. These additions
in the period ensure we continue to create a balanced investment portfolio
spanning multiple industries and business sectors.
The company also invested GBP921,000 into the following companies within the
portfolio: Vega-Chi, Amplience, True Knowledge, Bowman Power and PrismaStar.
It is expected at this early stage for some of the companies to fall behind
trading expectations, exacerbated by the current economic circumstances.
Investments performing behind plan are reduced in fair value to reflect their
adjusted prospects which led to an overall reduction in fair value of GBP177,000
during the period. This was largely attributable to PrismaStar and Elonics which
suffered a combined decrease in fair value of GBP227,000. On the other hand, it
was encouraging to see an uplift in fair value in Vega-Chi of GBP50,000. Despite
the difficult trading conditions affecting many companies, we remain confident
that the portfolio will make progress as it matures.
Open Ended Investment Companies (OEICs)
Titan 4 continues to hold investments in four OEICs which saw an overall uplift
in fair value in the six months to 30 April 2012. Having increased by GBP228,000
in the year ended 31 October 2011, there was a further GBP79,000 uplift in value
in this reporting period. The best performance continued to be in the CF Octopus
UK Micro Cap Growth Fund which increased by 8.5%.
As mentioned in the Annual Report to 31 October 2011, our holding in the
Absolute European fund was sold during the period realising a small gain of
GBP3,000. The proceeds have been placed in a money market fund where it will be
readily available for investment in qualifying investments. As the VCT nears the
70% qualifying investment level on 31 October 2012, there will be further cash
requirements beyond the funds held on deposit and in money market accounts and,
therefore, we will continue to realise these investments to maintain the
necessary degree of liquidity.
Top-up
The Company, together with the other Titan funds, offered the opportunity to
invest into the VCTs through a Top-up fund raising. It is pleasing to report
that this offer was fully subscribed ahead of the closing date, raising
GBP1,300,000 of new capital.
The Budget
The 2012 budget, which has now received State Aid approval from Brussels,
provided with effect from 6 April 2012 for the increase in the gross asset limit
for investee companies from GBP7 million to GBP15 million and for the maximum
permitted number of employees to be raised from 50 to 250. Both this lessening
of investment restriction and the increase in the annual investment limit from
GBP2 million to GBP5 million are welcome measures which allow greater flexibility
for VCTs in selecting investments.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides both the Board and Investment Manager with
advice on the ongoing compliance with HMRC rules and regulations concerning
VCTs. The Board has been advised that Titan 4 continues to be in compliance with
the conditions laid down by HMRC for qualifying as a VCT.
A key requirement is to achieve the 70% qualifying investment level prior to 31
October 2012. As at 30 April 2012, over 46% of the portfolio (as measured by
HMRC rules) was invested in VCT qualifying investments. In view of the current
investment activity, the Board continues to be confident that the 70% target
will be met by the required date. Octopus has a number of investment
propositions under review and the flow of new business opportunities continues
to be reasonably strong.
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 ways in which they are
managed, are described in more detail in the Company's Annual Report and
Accounts for the period ended 31 October 2011. The Company's principal risks and
uncertainties have not changed materially since the date of that report.
Outlook
A number of new investments have been made in the last six months, taking the
total number of companies in the portfolio to 18. We anticipate that significant
investments will be made in new additions to the portfolio and in follow-on
investments in the existing holdings to assist them in their strategic
development. We are required to invest a further GBP4.7 million before 31 October
to meet the 70% threshold and are confident that the Investment Manager will
achieve this target whilst continuing to exercise due diligence and quality
control to mitigate risk.
There are continuing concerns regarding the economic climate and the volatile
condition of public finances within the UK, which provide an uncertain
environment affecting many businesses. It is expected that some of our
investments will experience challenges during this period. Despite this, we
remain confident that we are building a strong and diverse portfolio of
companies that will be able to respond to market conditions quickly due to their
small size and to take advantage of market opportunities.
I look forward to writing to you again at the year end to provide a more
detailed review of the portfolio.
Gregor Michie
Chairman
25 June 2012
Investment Portfolio
%
Carrying Change in equity %
Investment value at valuation held equity
cost at 30 Unrealised 30 April in the by managed
Qualifying April 2012 profit/ (loss) 2012 period Titan by
investments Sector ( GBP'000) ( GBP'000) ( GBP'000) ( GBP'000) 4 Octopus
=-----------------------------------------------------------------------------------------------
Secret Escapes Consumer lifestyle
Limited and well being 646 86 732 - 7.93% 17.13%
Executive
Channel Europe
Limited Media 641 60 701 - 7.42% 36.76%
Vega-Chi
Limited Technology 641 50 691 50 5.54% 16.69%
True Knowledge
Limited Technology 681 (10) 671 - 3.00% 54.01%
Michelson
Diagnostics Consumer lifestyle
Limited and well being 650 - 650 - 7.16% 37.53%
Certivox
Limited Technology 584 15 599 - 9.43% 30.01%
TouchType
Limited Telecommunications 385 164 549 - 4.20% 20.07%
Rangespan Consumer lifestyle
Limited and well being 500 - 500 - 6.43% 25.71%
Artesian
Solutions
Limited Technology 500 - 500 - 6.04% 24.17%
Aframe Media
Group Limited Media 500 - 500 - 6.91% 20.74%
Applied
Superconductor
Limited Environmental 493 - 493 - 6.76% 20.59%
Amplience
Limited Technology 750 (259) 491 - 13.51% 63.13%
UltraSoc
Technologies
Limited Technology 361 - 361 - 10.04% 55.55%
Bowman Power
Group Limited Environmental 312 27 339 - 2.43% 15.56%
Semafone
Limited Telecommunications 239 - 239 - 3.56% 51.03%
PrismaStar
Inc. Media 424 (301) 123 (151) 4.00% 26.65%
Diverse Energy
Limited Environmental 382 (367) 15 - 5.47% 29.76%
Elonics
Limited Technology 305 (305) - (76) 3.11% 19.54%
=-----------------------------------------------------------------------------------------------
Total qualifying investments 8,994 (840) 8,154 (177)
=-----------------------------------------------------------------------------------------------
Money market securities 7,539 - 7,539
OEICs 3,999 566 4,565
Cash at bank 210 - 210
=-----------------------------------------------------------------------------------------------
Total investments 20,742 (274) 20,468
=-----------------------------------------------------------------------------------------------
Net current assets 451
=-----------------------------------------------------------------------------------------------
Total net assets 20,919
=-----------------------------------------------------------------------------------------------
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
25 June 2012
Income Statement
+----------------------+
|Six months to 30 April|Six months to 30 April
| 2012 | 2011 Year to 31 October 2011
| |
|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 | |
gain on | |
disposal of| |
fixed asset| |
investments| - - -| - - - - - -
| |
Realised | |
gain/(loss)| |
on disposal| |
of current | |
asset | |
investments| - 22 22| - - - - - -
| |
| |
| |
Fixed asset| |
investment | |
holding | |
losses | - (177) (177)| - (184) (184) - (663) (663)
| |
Current | |
asset | |
investment | |
holding | |
gains | 79 79| - 189 189 - 228 228
| |
| |
| |
Other | |
income | 23 - 23| 31 - 31 60 - 60
| |
| |
| |
Investment | |
management | |
fees | (51) (152) (203)| (53) (159) (212) (106) (318) (424)
| |
| |
| |
Other | |
expenses | (144) - (144)| (125) - (125) (286) - (286)
| |
| |
=-----------+----------------------+----------------------------------------------
Return on | |
ordinary | |
activities | |
before tax | (172) (228) (400)| (147) (154) (301) (332) (753) (1,085)
| |
| |
| |
Taxation on| |
return on | |
ordinary | |
activities | - - -| - - - - - -
| |
| |
=-----------+----------------------+----------------------------------------------
Return on | |
ordinary | |
activities | |
after tax | (172) (228) (400)| (147) (154) (301) (332) (753) (1,085)
=-----------+----------------------+----------------------------------------------
Earnings | |
per share -| |
basic and | |
diluted | (0.8)p (1.0)p (1.8)p| (0.7)p (0.7)p (1.4)p (1.5)p (3.3)p (4.8)p
+----------------------+
* The 'Total' columns of this statement represent 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 30 |Six months to 30 Year to 31
| April 2012| April 2011 October 2011
| |
| GBP'000| GBP'000 GBP'000
=------------------------+-----------------+-----------------------------------
Shareholders' funds at | |
start of period | 20,086| 21,171 21,171
| |
| |
| |
Return on ordinary | |
activities after tax | (400)| (301) (1,085)
| |
Issue of equity (net of | |
expense) | 1,242| - -
| |
Redemption of shares | (9)| - -
=------------------------+-----------------+-----------------------------------
Shareholders' funds at | |
end of period | 20,919| 20,870 20,086
+-----------------+
Balance Sheet
+----------------+
| As at 30 April |As at 30 April As at 31
| 2012 | 2011 October 2011
| |
| GBP'000 GBP'000| GBP'000 GBP'000 GBP'000 GBP'000
=-----------------------------+----------------+-------------------------------
| |
| |
Fixed asset investments* | 8,154| 3,461 5,671
| |
Current assets: | |
| |
Money market securities and | |
other deposits* |12,104 |17,399 14,363
| |
Debtors | 494 | 8 13
| |
Cash at bank | 210 | 133 107
=-----------------------------+----------------+-------------------------------
|12,808 |17,540 14,483
| |
Creditors: amounts falling | |
due within one year | (43) | (131) (68)
=-----------------------------+----------------+-------------------------------
Net current assets | 12,765| 17,409 14,415
=-----------------------------+----------------+-------------------------------
| |
=-----------------------------+----------------+-------------------------------
Net assets | 20,919| 20,870 20,086
=-----------------------------+----------------+-------------------------------
| |
| |
Called up equity share | |
capital | 2,398 | 2,258 2,258
| |
Share premium | 1,100 | - -
| |
Special distributable reserve|19,083 |19,092 19,092
| |
Capital redemption reserve | 10 | 8 8
| |
Capital reserve - losses on | |
disposal | (643) | (335) (494)
| |
- | |
holding gains | (275) | 244 (196)
| |
Revenue reserve | (754) | (397) (582)
=-----------------------------+----------------+-------------------------------
Total equity shareholders' | |
funds | 20,919| 20,870 20,086
=-----------------------------+----------------+-------------------------------
Net asset value per share | 87.2p| 92.4p 89.0p
+----------------+
*At fair value through profit and loss
The statements were approved by the Directors and authorised for issue on 25
June 2012 and are signed on their behalf by:
Gregor Michie
Chairman
Company Number: 07035434
Cash flow statement
+------------------+
| Six months to 30 |Six months to 30 Year to 31 October
| April 2012| April 2011 2011
| |
| GBP'000| GBP'000 GBP'000
=----------------------+------------------+------------------------------------
| |
| |
Net cash outflow from | |
operating activities | (830)| (263) (675)
| |
| |
| |
Financial investment: | |
| |
Purchase of fixed | |
asset investments | (2,660)| (1,802) (4,492)
| |
| |
| |
Management of liquid | |
resources: | |
| |
Purchase of current | |
asset investments | (1,554)| (9,034) (13,264)
| |
Disposal of current | |
asset investments | 3,914| 11,120 18,426
| |
| |
| |
Taxation | -| - -
| |
| |
| |
Dividends paid | -| - -
| |
| |
| |
Financing: | |
| |
Issue of equity | 1,242| - -
| |
Redemption of shares | (9)| - -
=----------------------+------------------+------------------------------------
Increase in cash | |
resources at bank | 103| 21 (5)
+------------------+
Reconciliation of net cash flow to movement in net funds
+------------------+
| Six months to 30 | Six months to 30 Year to 31
| April 2012| April 2011 October 2011
| |
| GBP'000| GBP'000 GBP'000
=----------------------+------------------+------------------------------------
Increase in cash | |
resources at bank | 103| 21 (5)
| |
Movement in cash | |
equivalents | (2,259)| (1,898) (4,934)
| |
Opening net cash | |
resources | 14,470| 19,409 19,409
=----------------------+------------------+------------------------------------
Net funds at period | |
end | 12,314| 17,532 14,470
+------------------+
Reconciliation of return before taxation to cash flow from operating
activities
+---------------+
| Six months to| Six months to Year to 31
| 30 April 2012| 30 April 2011 October 2011
| |
| GBP'000| GBP'000 GBP'000
=-----------------------------+---------------+--------------------------------
Return on ordinary activities| |
before tax | (400)| (301) (1,085)
| |
Gain on disposal of current | |
asset investments | (22)| - -
| |
Loss on valuation of fixed | |
asset investments | 177| 184 663
| |
Gain on valuation of current | |
asset investments | (79)| (189) (228)
| |
(Increase)/decrease in | |
debtors | (481)| 7 2
| |
(Decrease)/increase in | |
creditors | (25)| 36 (27)
=-----------------------------+---------------+--------------------------------
Outflow from operating | |
activities | (830)| (263) (675)
+---------------+
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 30 April 2012
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
period ended 31 October 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 ended 30 April 2012 do not
constitute statutory accounts within the meaning of Section 415 of the Companies
Act 2006. The comparative figures for the period ended 31 October 2010 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 is based on 22,762,574 (30 April 2011: 22,587,706 and 31
October 2011: 22,578,706) 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 2012 is based on 28,982,316 (30
April 2011: 22,578,706 and 31 October 2011: 22,578,706) ordinary shares in issue
at that date.
5. 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 GBP203,000 payable to Octopus (30
April 2011: GBP212,000 and 31 October 2011: GBP424,000). At the period end there was
GBPnil outstanding to Octopus (30 April 2011: GBPnil and 31 October 2011: GBPnil).
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 GBP15,000 per annum for company
secretarial services.
6. Copies of this report are available from the registered office of the
Company at 20 Old Bailey, London, EC4M 7AN.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Octopus Titan VCT 4 PLC via Thomson Reuters ONE
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