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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Octopus Titan Vct Plc | LSE:OTV2 | London | Ordinary Share | GB00B28V9347 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 59.50 | 58.00 | 61.00 | 59.50 | 59.50 | 59.50 | 1,030 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | -120.61M | -149.5M | -0.0966 | -6.16 | 921.23M |
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Octopus Titan VCT plc ("Titan" and "the Company")
Unaudited half-yearly report for the six months ended 30 April 2018
Company number: 06397765
Today the Company announces the half-yearly results for the six month
period to 30 April 2018 as below.
These results were approved by the Board of Directors on 20 June 2018.
You may view the Half-yearly Report in full at
www.octopusinvestments.com shortly. All other statutory information will
also be found there.
Octopus Titan VCT plc 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 predominantly
unquoted companies. The Company is managed by Octopus Investments
Limited ('Octopus' or 'Portfolio Manager') and Octopus AIF Management
Limited (the 'Manager').
Financial Summary
Six months to Six months to Year to
30 April 2018 30 April 2017 31 October 2017
Net assets (GBP'000s) 617,759 425,402 432,703
Profit after tax (GBP'000s) 6,603 1,876 16,181
NAV 94.3p 95.2p 96.4p
Cumulative dividends paid
since launch 69.0p 64.0p 66.0p
Total Value 163.3p 159.2p 162.4p
Total Return (*) 0.9p 0.3p 3.5p
Total Return % (**) 0.9% 0.3% 3.6%
Dividends paid in the period 3.0p 3.0p 5.0p
Dividend declared *** 2.0p 2.0p 3.0p
(*) Calculated as the change in NAV in the period plus dividends paid in
the period.
**Calculated as total return/opening NAV.
*** The 2.0p interim dividend will be paid on 24 August 2018 to
shareholders on the register as at 3 August 2018.
Chairman's Statement
I am pleased to present the unaudited half-yearly report for Octopus
Titan VCT for the six months ended 30 April 2018.
We were delighted to have raised over GBP203 million before expenses in
our fund raising which closed to new applications on 23 March 2018.
Following this, we raised a further GBP5 million from the shares
allotted through the dividend reinvestment scheme associated with the
dividend paid on 27 April. With Titan's net assets now totalling some
GBP620 million, we remain committed to investing in early stage
technology companies which embody the overall objectives of the VCT
scheme. We would like to take this opportunity to welcome all new
shareholders and to thank all existing shareholders for their continued
support.
As is to be expected following such a large fundraising, we now have
un-invested cash, totalling over GBP240 million as at 30 April 2018
(compared to GBP130 million as at October 2017, excluding shareholders'
funds awaiting allotment). This gives us confidence in our ability to
continue to support our portfolio of high-growth businesses for the
immediate future, many of which need further funding to achieve their
ambitious plans. In the six-month period to 30 April 2018, we have
deployed a total of GBP86 million comprising GBP55 million in new and
follow-on investments, GBP20 million in dividends, GBP4 million in share
buybacks and GBP7 million in running costs. Together, this therefore
accounted for the deployment of 66% of the cash or cash equivalents we
had available as at October 2017.
The increase in NAV in the period was 0.9p per share and the Total Value
(NAV plus cumulative dividends paid per share since launch) at the end
of the period is 163.3p, following the payment of a dividend in April of
3.0p per share. This return brings the tax-free annual compound return
to original shareholders to 5.6% since Titan's launch.
The transactions within the portfolio are summarised in the Investment
Portfolio Review below, but I would particularly like to highlight the
acquisition of a majority stake in Tails.com (Tailsco Ltd) by
Nestlé Purina PetCare in April. Launched in 2014, Tails.com brought
tailored dog nutrition to consumers at competitive prices through
digital technology. Having first invested in 2013, Titan realised its
investment as part of the transaction, which saw total proceeds
(including a future retention) of almost GBP9 million attributed to
Titan (cost GBP1.5 million). Tails.com is a great example of a business
Titan only gained access to due to Octopus' proprietary deal flow
channels - the founding team included a founder of Graze.com, another
highly successful Titan investee company. We are proud to be able to add
this success to our history of profitable realisations.
Results
The Net Asset Value at 30 April 2018 was 94.3p, a net increase of 0.9p
per share from 31 October 2017 after accounting for the dividend of 3.0p
per share which was paid in April.
Investment Portfolio Review
I am pleased to report a net uplift in the value of the portfolio of
GBP14 million during the period, excluding additions and disposals.
We set out below the cost and valuation of the top ten holdings which
account for over 52% of the value of the portfolio. In total the
portfolio now consists of 64 companies, of which two have been added
since 30 April representing a further investment of GBP6 million.
Valuation at
Investment cost at 30 April 2018(*) 30 April 2018
Investments (GBP'000) (GBP'000)
Zenith Holding Company
Limited** 8,963 45,908
Secret Escapes Limited 4,256 35,534
Amplience Limited 13,499 25,758
Sourceable Limited
(trades as Swoon
Editions) 6,957 18,018
Sofar Sounds Limited 7,705 13,837
MIRACL Limited 14,223 11,258
LHE Holdings Limited
(trades as Property
Partner) 10,402 10,866
Uniplaces Limited 7,621 10,194
Semafone Limited 3,594 9,816
Conversocial Limited 4,165 8,803
Total 81,385 189,992
(*) Investment cost reflects the amount invested into each investee
company from Titan's 1 - 5 before the 2014 merger and from Titan after
the merger. This is different to the book cost which includes the
holding gains and losses on assets which transferred from Titan's 1, 3,
4 & 5 to Titan 2 (now Titan) during the merger, as Titan purchased these
assets at fair value.
** Zenith Holding Company holds shares in Calastone, graze and Secret
Escapes inherited from Titans 1&2.
During the six months to 30 April 2018, the uplift in valuation has been
driven by the strength of performance of a number of companies in the
portfolio in aggregate. In particular, Secret Escapes, Amplience and
Sofar Sounds have all achieved material increases in value. These three
investee companies and 12 others together drove an uplift of GBP28
million. In contrast, while there have been no realised losses from the
portfolio during this period, 18 companies saw a collective decrease in
valuation of GBP14 million where performance has been more challenging,
and the current valuations have been adjusted accordingly in line with
the valuation policy. Octopus believes many of these businesses have the
potential to overcome the issues they have faced and continues to work
closely with them to secure a return to their high growth plans. Where
appropriate, this may include providing further funding to ensure the
business has sufficient capital to execute on its strategy. This can be
seen in the cases of both MIRACL Limited and Uniplaces Limited, which
Titan invested into further during the period despite the companies'
prior investments being valued at less than the cost of that investment.
Turning to investments made during the previous six months, GBP32
million was invested into 10 new companies (listed below) and GBP23
million was invested into 13 follow-on investments as listed in the
Investment Portfolio below. As anticipated by Octopus, given the volume
of high quality investment opportunities available in the UK and Europe,
this is a significant increase in investment rate compared to the six
months to October 2017, during which a total of GBP7 million was
invested into 3 new companies and GBP21 million was invested into 12
follow-on investments.
We have been pleased to welcome the following companies to the portfolio
during the period:
-- Phoelex Ltd - new technology for components used to connect
servers in large datacentres;
-- Katalyst Inc - offers premium boutique full body Electro Muscular
Stimulation fitness;
-- PLU&M Limited (trading as The Plum Guide) - handpicks the world's
most inspiring accommodation and hosts, using a mix of algorithms and
visits by experts;
-- Rook Wealth Limited (trading as Multiply) - provides automated,
personalised and holistic financial plans for those who historically
have not had access to financial advice;
-- DePop Limited - a social marketplace for unique things;
-- Memrise Inc - a language learning platform;
-- Mush Limited - a local social network for new and expectant mums;
-- Picsoneye Segmentation Innovation Limited (trading as Pixoneye) -
uses computer-understanding to analyse on-device user-data;
-- OpenSignal Inc - building a platform to become the global 'gold
standard' for mobile network coverage mapping; and
-- GTN Ltd - technology used in the hunt for new drugs which
combines and builds upon techniques from machine learning and quantum
physics to simulate, filter and search for drug-like molecules,
previously entirely hidden from view.
Furthermore, since 30 April 2018, 2 more new and 4 follow-on investments
have been made, amounting to GBP17 million. The new investments were
into Seatfrog UK Holdings limited, a company allowing travellers to
upgrade from standard to first class travel through a live auction
offered through a mobile app, and Patch Gardens Ltd, an ecommerce site
aimed at urban dwellers, enabling them to discover appropriate plants
for their space, purchase, and then help care for their plants during
their lifetimes.
Dividends
As shareholders will know, our ambition is to pay an annual dividend of
5.0p per share. Following careful consideration, I am pleased to confirm
that your Board has now decided to declare an interim dividend of 2.0p
(2017 2.0p) per share in respect of the current financial year, which
will be paid on 24 August 2018 to shareholders on the register as at 3
August 2018.
VCT Qualifying Status
PricewaterhouseCoopers LLP (PwC) provides both the Board and Octopus
with advice concerning ongoing compliance with HMRC rules and
regulations concerning VCTs. The Board has been advised that Titan
continues to be in compliance with the conditions laid down by HMRC for
maintaining approval as a VCT.
As at 30 April 2018, over 95% of the portfolio (as measured by HMRC
rules) was invested in VCT-qualifying investments as reviewed and
confirmed by PwC, significantly above the 70% current VCT-qualifying
threshold.
Change to the Directors of the Board
We recognise that ensuring the Board of your VCT remains independent and
robust is of the utmost importance to our shareholders. To this end,
your Board have decided to appoint an additional Non-Executive Director,
and we expect to announce an appointment shortly once the selection
process has been concluded.
As recently announced, as at 9 April 2018, Nicola Board resigned as
Company Secretary and Parisha Kanani was subsequently appointed. The
Board would like to thank Nicola for her hard work over the past three
years, and welcome Parisha.
Auditor to the Fund
At the recent AGM, James Cowper Kreston, our Auditor for the last five
years, was re-appointed. However, they have since informed us that they
have taken the decision to withdraw from auditing certain Public
Interest Entities including VCTs for the time being because of the
increasing regulatory landscape and associated costs. Your Board has,
therefore, carried out a tender process to appoint new Auditors and it
has been decided to appoint BDO, pending their re-appointment at the
next AGM. We would like to thank James Cowper Kreston for their
excellent service over the last five years and we look forward to
working with BDO in the future.
Principal Risks and Uncertainties
The Board continues to regularly review the risk environment in which
Titan operates. There have been no significant changes to the key risks
which were fully described on pages 8 and 9 of the Annual Report for the
year ended 31 October 2017 and the Board does not anticipate there will
be significant changes to these risks for the remaining six months of
the financial year.
Outlook
The last six months have been a particularly busy period for Titan.
We are delighted by another very positive response to Titan's most
recent fundraising efforts, and excited about the ability this gives us
to continue to support both the most compelling opportunities within the
portfolio, as well as the brightest new technology businesses and
entrepreneurial teams emerging from the UK and Europe.
While the macro environment remains somewhat uncertain in the medium
term, your Board also undertook a review of the non-qualifying portfolio
with Octopus during the period. Following this, we have elected to make
a number of adjustments with the aim of reducing the risk profile
associated with this part of Titan's assets.
In the meantime, through Octopus, Titan continues to gain access to
opportunities showing great promise as demonstrated by the investment
rate over the past six months, and your Board remains positive about the
prospects of the existing portfolio. We look forward to following the
investee companies as they drive forward with their ambitious growth
plans and hope this will crystallise into a number of profitable
realisations in the coming years. However, this is expected to require
some patience. Shareholders should bear in mind that the typical period
from investment until realisation for early stage technology businesses
is normally at least seven years, and as a result, we are still likely
to see some businesses fall by the wayside prior to such successes. As
noted earlier in my report, Titan is now paying targeted regular annual
dividends of 5p. In the case of particularly profitable realisations
from the portfolio, we also aim to pay special dividends, although it
may not always be in the best interests of Titan to pay a special
dividend after a profitable realisation.
Your Board believes there are many reasons to remain confident about the
future for Titan, and, as a result, it is our intention to seek further
funds to support our investee portfolio later in the year.
I would like to conclude by thanking Octopus, on behalf of all
shareholders, for their hard work, without which our investment strategy
would not achieve the success we are seeing.
John Hustler
Chairman
20 June 2018
Investment Portfolio
Amount invested in the six months ending 30 April
Investment cost at 2018
Investments Sector 30 April 2018(*) (GBP'000) (GBP'000)
MIRACL Limited Security 14,223 2,045
Business
Amplience Limited Software 13,499 2,513
LHE Holdings Limited
(trades as Property
Partner) Property 10,402 3,492
Zenith Holding Company
Limited ** Other 8,963 -
UltraSoC Technologies
Limited Hardware 8,361 -
Business
Zynstra Limited Software 8,317 -
Oxcis Aviation Limited Leisure &
(trades as Stratajet) Consumer 7,817 -
Leisure &
Sofar Sounds Limited Consumer 7,705 -
Uniplaces Limited Property 7,621 -
Financial
CurrencyFair Limited Services 7,551 805
Sourceable Limited
(trades as Swoon
Editions) Ecommerce 6,957 -
Origami Energy Limited Hardware 5,533 3,500
Artesian Solutions Business
Limited Software 5,481 -
Business
Iovox Limited Software 5,272 2,000
Antidote Technologies Health &
Ltd Medical 5,096 2,107
DePop Limited Ecommerce 5,000 5,000
Business
OpenSignal Inc software 4,862 4,862
Health &
Katalyst Inc Medical 4,820 4,820
Chiaro Technology Health &
Limited Medical 4,739 1,969
Michelson Diagnostics Health &
Limited Medical 4,702 158
Financial
Token, Inc Services 4,398 -
Leisure &
Memrise Inc Consumer 4,375 4,375
Leisure &
Secret Escapes Limited Consumer 4,256 -
Digital Shadows Inc. Security 4,225 -
Picsoneye Segmentation Business
Innovation Limited software 4,200 4,200
Business
Conversocial Limited Software 4,165 -
Appear Here Limited Property 3,814 -
Wave Optics Limited Hardware 3,774 -
Smartkem Limited Hardware 3,714 -
Business
Semafone Limited Software 3,594 -
PLU&M limited (trades as
Plum Guide) Ecommerce 3,500 3,500
Behaviometrics AB Security 3,336 2,735
Health &
Big Health Limited Medical 3,276 -
Chronext AG Ecommerce 3,164 -
Financial
Mi-Pay Group plc services 3,011 -
The Faction Collective
SA Ecommerce 2,968 -
Business
BridgeU Inc. Software 2,935 -
Business
Ecrebo Limited Software 2,857 -
Financial
Bought By Many Limited Services 2,780 -
Health &
Medisafe Project Limited Medical 2,713 -
Metrasens Limited Hardware 2,688 -
Business
Affectv Limited Software 2,627 -
Health &
e-Therapeutics plc Medical 2,415 -
Eve Sleep Plc Ecommerce 2,394 -
Bowman Power Limited Hardware 2,305 -
Leisure &
Trafi Limited Consumer 2,288 -
Impatients N.V. (trades Health &
as myTomorrows) Medical 2,090 -
Elliptic Enterprise
Limited Security 2,084 423
Surrey NanoSystems
Limited Hardware 1,993 -
Streethub Limited Ecommerce 1,980 -
Business
Permutive Inc. Software 1,863 1,473
Phoelex Ltd Hardware 1,525 1,525
Leisure &
Mush Limited Consumer 1,500 1,500
Business
Pop Global Limited Software 1,500 -
Business
Segura Systems Limited Software 1,470 -
Business
Fluidly Limited Software 1,400 -
Rook Wealth Limited Financial
(trades as Multiply) Services 1,000 1,000
Business
Streetbees.com Limited Software 890 -
Health &
GTN Ltd Medical 800 800
Leisure &
Time Out Group PLC Consumer 349 -
Excession Technologies Business
Limited Software 298 90
Phasor Inc. Hardware 250 -
Total 253,685 54,892
(*) Investment cost reflects the amount invested into each investee
company from Titan's 1 - 5 before the 2014 merger and from Titan after
the merger. This is different to the book cost which includes the
holding gains and losses on assets which transferred from Titan's 1, 3,
4 & 5 to Titan 2 (now Titan) during the merger, as Titan purchased these
assets at fair value.
(**) Owns stakes in Nature Delivered Limited (trades as graze), Secret
Escapes Limited and Calastone Limited.
Income Statement
Unaudited Unaudited
Six months to 30 April 2018 Six months to 30 April 2017
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on
disposal of
portfolio
investments - 2,945 2,945 - 511 511
Gains on
disposal of
OEIC
investments - 3,739 3,739 - - -
Portfolio
investment
holding gains - 14.300 14,300 - 3,906 3,906
OEIC investment
holding
losses/(gains) - (6,058) (6,058) - 2,861 2,861
Investment
income 190 - 190 107 - 107
Investment
management
fees (1,201) (3,604) (4,805) (870) (2,609) (3,479)
Performance fee - (1,592) (1,592) - (259) (259)
Other expenses (1,850) - (1,850) (1,268) - (1,268)
FX translation - (266) (266) - (503) (503)
Profit/(loss)
before tax (2,861) 9,464 6,603 (2,031) 3,907 1,876
Taxation - - - - - -
Profit/(loss)
after tax (2,861) 9,464 6,603 (2,031) 3,907 1,876
Earnings per
share - basic
and diluted (0.5)p 1.7p 1.2p (0.5)p 1.0p 0.5p
-- 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.
Titan has no other comprehensive income for the period.
Balance Sheet
Unaudited Audited
Six months to 30 April 2018 Year to 31 October 2017
GBP'000 GBP'000 GBP'000 GBP'000
Portfolio
investments 364,442 301,791
Current assets:
OEICs 72,466 104,484
Cash at bank 93,202 23,290
Applications cash* 300 39,272
Debtors 16,122 5,821
Money market
securities 76,269 2,453
258,359 175,320
Current
liabilities (5,042) (44,408)
Net current assets 253,317 130,912
Net assets 617,759 432,703
Called up equity
share capital 65,479 44,899
Share premium 295,277 114,404
Special
distributable
reserve 186,106 211,122
Capital redemption
reserve 1,495 1,071
Capital reserve -
gains on
disposals 9,405 2,284
Capital reserve -
holding gains 74,869 70,668
Revenue reserve (14,724) (11,863)
Translation
reserve (148) 118
Total equity
shareholders'
funds 617,759 432,703
Net asset value 94.3p 96.4p
per share
(*) Cash held but not yet allotted.
The statements were approved by the Directors and authorised for issue
on 20 June 2018 and are signed on their behalf by:
John Hustler
Chairman
Statement of Changes in Equity
Unaudited Audited Unaudited
Six months to Year ended Six months to
30 April 2018 31 October 2017 30 April 2017
GBP'000 GBP'000 GBP'000
Shareholders' funds at start
of year 432,703 315,976 315,976
Profit after tax 6,603 16,181 1,876
Issue of equity (net of
expenses) 201,877 125,744 122,571
Purchase of own shares (3,905) (2,926) (1,694)
Dividends paid (19,519) (22,272) (13,327)
Shareholders' funds at end
of period 617,759 432,703 425,402
Cash Flow Statement
Unaudited Unaudited
Six months to Six months to
30 April 2018 30 April 2017
GBP'000 GBP'000
Reconciliation of profit to cash flows from operating
activities
Profit before tax 6,603 1,876
(Increase)/decrease in debtors (10,301) 8,844
Decrease in creditors (39,366) (20,405)
Gains on disposal of fixed asset investments (2,945) (511)
Gains on valuation of fixed asset investments (14,300) (3,906)
Surplus funds received from fixed asset investments - 513
Outflow from operating activities (60,309) (13,589)
Cash flows from investing activities
Purchase of fixed asset investments (54,892) (31,867)
Sale of fixed asset investments 9,486 110
Zenith distribution - 9,182
Outflow from investing activities (45,406) (22,575)
Cash flows from financing activities
Dividends paid (19,519) (13,327)
Purchase of own shares (3,905) (1,694)
Issue of equity (net of expenses) 201,877 122,571
Inflow from financing activities 178,453 107,550
Increase in cash and cash equivalents 72,738 71,386
Opening cash and cash equivalents 169,499 100,644
Closing cash and cash equivalents 242,237 172,030
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 Titan VCT plc via Globenewswire
http://www.octopusinvestments.com
(END) Dow Jones Newswires
June 21, 2018 05:34 ET (09:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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