Half-yearly report

Octopus AIM VCT plc
Half-Yearly Results

28 October 2009

Octopus AIM VCT plc, managed by Octopus Investments Limited, today
announces the Half-Yearly results for the six months ended 31 August
2009.

These results were approved by the Board of Directors on 28 October
2009.

You may view the Half-Yearly Report in full at
www.octopusinvestments.com by navigating to the VCT Meetings &
Reports under the 'Services' section.

Financial Summary


                                 Six months Six months to     Year to
                                      to 31            31 28 February
                                August 2009   August 2008        2009

  Net assets (£'000s)                22,737        26,958      19,443
  Net profit/(loss)  after  tax
  (£'000s)                            4,371       (5,744)    (11,141)
  Net  asset  value  per  share
  ("NAV")                             76.8p         88.4p       64.5p
  Proposed dividend                   2.50p         2.50p       2.50p




Dividends paid in             New Ordinary Ordinary C shares D shares
the period ended                    shares   shares
28 February 1999                         -     1.88        -
29 February 2000                         -     3.13        -
28 February 2001                         -    37.25        -
28 February 2002                         -     6.50     2.55
28 February 2003                         -     3.50     1.50
29 February 2004                         -     0.50     0.50
28 February 2005                         -     0.50     0.50     0.50
28 February 2006                         -     2.15     2.31     2.25
28 February 2007                         -     4.20     4.52     3.30
31 August 2007                           -     2.50     2.69     2.50
29 February 2008                         -     2.50     2.69     2.50
31 August 2008                           -     2.50     2.69     2.50
28 February 2009                      2.50    1.36*    1.47*    2.50*
31 August 2009                        2.50    1.36*    1.47*    2.50*
Total dividends (capital and          5.00    69.83    22.89    18.55
revenue)
NAV plus cumulative                      -   111.65     67.9    92.85
dividends**

*Notional dividends adjusting for conversion
** NAV plus cumulative dividends based on NAV adjusting for
conversion

Notes

  * The Ordinary Shares were first listed on 17 March 1998.
  * Dividends paid before 5 April 1999 were paid to qualifying
    shareholders inclusive of the associated tax credit.
  * The D Shares were first listed on 17 March 2004.
  * The C Shares were converted into Ordinary Shares on 31 May 2004,
    in accordance with the conversion factor of 1.0765 Ordinary
    Shares for each C Share.
  * The Ordinary Shares were converted into D Shares on 31 May 2008,
    in accordance with the conversion factor of 0.5448 D Shares for
    each Ordinary Share.
  * New D Shares issued between 6 January 2005 and 8 April 2005, did
    not rank for the final dividend.
  * All dividends paid by the Company are free of income tax. It is
    an HM Revenue & Customs requirement that dividend vouchers
    indicate the tax element should dividends have been subject to
    income tax. Investors should ignore this figure on their dividend
    voucher and need not disclose any income they receive from a VCT
    on their tax return.
  * The above table excludes the tax benefits investors received upon
    subscription.
  * The net asset value of the Company is not its share price as
    quoted on the official list of the London Stock Exchange. The
    share price of the Company can be found in the Investment
    Companies section of the Financial Times on a daily basis.
    Investors are reminded that it is common for shares in VCTs to
    trade at a discount to their net asset value, primarily as a
    result of the initial tax relief which is non-transferable.


Chairman's Statement

The six months to 31 August was another extraordinary period for
financial markets.  The beginning of the period, at the end of
February, almost exactly coincided with the recent low point in the
stock market, and was a time when fear dominated.  The change in
sentiment in the subsequent six months has resulted in a dramatic
recovery in share prices, starting with the banks, and gradually
trickling down to the shares of very small companies in which your
Company invests. During this time, the Government has created cash
incentives for new car purchases and the Bank of England has
maintained base rates at 0.5% and introduced quantitative easing.
Despite this, unemployment has risen and corporate liquidators are
enjoying boom conditions.  Against this background, I am glad to be
able to report that the total net asset value of the portfolio
increased by 17% to £22.7m.  Taking into account the 1.35m shares
bought back and placed in Treasury, and adding back the 2.5p dividend
paid out, the NAV per share rose by 22.7%.  This compares with a rise
in the AIM Index of 52.4% and of the Smaller Companies ex Investment
Trusts of 67.1%.  Because of the relative illiquidity of underlying
holdings in your fund, individual shares tend to move when news is
announced rather than participating in general market rallies, muting
the rise in NAV.

During the six months under review, the market for VCT qualifying
issues has been slower than we had hoped.  New issues remain very
rare, although there are signs that this market may start to recover
over the next six months.  What we had hoped for was a string of
attractively price opportunities to invest in existing companies
replacing bank debt or funding expansion.  These have not really
materialised in the VCT qualifying space, with most opportunities
either being much smaller or much bigger.  Your Fund is currently
comfortably above the HMRC requirement for qualifying holdings and
has liquid funds giving plenty of scope for participating in these
opportunities when they appear, as we still expect them to do.

Portfolio
Many of our investments recorded substantial increases in market
value in the period with Vertu motors and Claimar up by 200%, Bond
International Software up by 90%, Advanced Computer Software up by
60% and Research Now up by 49%.  These rises reflect the depths to
which smaller company share prices had fallen in February of this
year, which were in most cases not justified by the fundamental
outlook for the businesses.  Current valuations are more normal,
although many share ratings at the smaller end of the market still
reflect caution rather than any expectation of accelerating growth.

The flow of news from the portfolio has been generally better than
expected, although cyclical businesses with debt, such as Colliers,
Twenty, Cello and Individual Restaurant Group have found trading very
tough, with very little visibility of future revenues.  More recent
trading statements support the view that the worst appears to be
over, although management teams remain cautious.  Some, such as
Portrait Group and Bond International Software are reporting marked
increases in inquiries, which are now showing some signs of
translating into orders.  Others, such as Mears, Brooks MacDonald
Group, Mattioli Woods, Animalcare and Research Now have continued
along what have become established growth trajectories.  Advanced
Computer Software and Vertu Motors have both managed to raise large
war chests to take advantage of prevailing market conditions and make
earnings enhancing acquisitions.

During the period five new investments were made at a cost of £1.7m.
Only one of these, Innovision, was VCT qualifying reflecting the
general lack of new attractive opportunities to invest in.  It was an
investment into an existing AIM company.  The other four in System C,
Matchtech Group, Immunodiagnostic Systems and Hargreaves Services
were all non-qualifying investments designed to take advantage of
prevailing low share prices in order to earn a higher return on the
non-qualifying portion of the portfolio.  Between them they represent
just under 10% of the fund.  All these new investments have shown
positive increases in value during the period.

Disposals realised £2.2m.  These included Concateno and Pilat Media,
which were both the subject of bids from other companies as well as
the sale of our stake in Clipper Ventures, BGlobal and some of our
Neuropharm.  The last three did not develop in the way we had
expected, and we realised a loss.  We also took some profits in
Advanced Computer Software.

Principal Risks and Uncertainties
The principal risks and uncertainties are set out in note 6 of the
Notes to the Half-Yearly Report on page 13.

Dividend
It is your board's policy to strive to maintain an annual dividend of
at least 5p per share.  It has therefore declared an interim capital
dividend of 2.5p per share.  This dividend is subject to approval by
HM Revenue & Customs.  The record date and payment date of this
dividend will be announced on the London Stock Exchange RNS service
in due course.

With the introduction of a new higher rate tax band from April 2010,
tax free income from a VCT will become more attractive.  With this in
mind, your board has asked your manager to explore the possibility of
a scrip dividend.  This should have two benefits, firstly,
shareholders will be entitled to income tax relief on the shares
issued in lieu of a dividend, and secondly the Company will benefit
from having the assets retained in the fund for reinvestment.  I hope
to be able to report that this is in place by the time final results
for the year to February are announced.

Top Ups
Having extended the life of your company to 2016 and in line with the
shareholder authority renewed at the AGM, up to 10% of capital is now
available for investment in the form of new shares which would
attract income tax relief for individuals.  Shareholders and others
are invited to contact Octopus on 0800 316 2298 should they be
interested.

Outlook
Although the outlook might seem rather brighter than it did six
months ago, there is no doubt that the credit squeeze has made life
more challenging for the majority of smaller companies and there
remains the large black cloud of UK indebtedness overhanging us all.
Tough policies will be required by whichever government is in power
to deal with this cloud over quite a long period.  Nevertheless, it
now appears that the worst possible outcome of the financial crisis
has been averted, and growth as a concept has returned to the
economic debate.  Even if the pace of recovery is sluggish, this
represents a better backdrop for small growing companies, justifying
the growth in profits and earnings which we expect from many of your
investee companies over the next year or two.

Your board remains committed to take advantage of investment
opportunities as they arise, to support companies in the existing
portfolio, to maintain a buy back policy to assist liquidity in the
company's shares and to continue a consistent dividend flow.  With
26% of assets in liquid form, we are well placed to take advantage of
opportunities as they appear.


Michael Reeve
Chairman
28 October 2009

Investment Portfolio

The 10 largest qualifying holdings by value in the New Ordinary share
portfolio as at 31 August 2008 are shown below:


                                                                Carrying
                                                     Carrying      value
                                                     value at  as a % of
                                          Unrealised       31      total
                            Investment                 August
                                    at profit/(loss)     2009 investment
                                  cost
Company       Activity         (£'000)       (£'000)  (£'000)   and cash
Advanced
Computer      Healthcare
Software      software             639           491    1,130       5.0%
              Housing
              maintenance/
Mears Group   refurbishment        171           839    1,010       4.5%
              Vocational
Melorio       training             816           163      979       4.2%
              Online
              fieldwork and
              panel
Research Now  provider             454           466      920       4.1%
Mattioli      Pensions
Woods         consultancy          523           326      849       3.8%
Brooks
MacDonald     Wealth
Group         management           333           460      793       3.5%
              General
Vertu Motors  retailers          1,000         (333)      667       3.0%
Praesepe      Gaming sector        550             -      550       2.4%
Bond          Recruitment
International software             270           255      525       2.3%
System C      Healthcare
Healthcare    software             386           104      490       2.2%
Total                            5,142         2,771    7,913      35.1%
Other equity
investments   Various           19,198      (10,291)    8,907      39.6%
Total equity
investments                     24,340       (7,520)   16,820      74.0%
Money market
securities                       5,580             -    5,580      24.5%
Cash at bank                       110             -      110       0.5%
Total
investments                     30,030       (7,520)   22,510
Net current
assets                               -                    227
Total net
assets                                                 22,737


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


Michael Reeve
Chairman
28 October 2009



Income Statement

                Six months to 31    Six months to 31 August    Year to 28 February
                   August 2009               2008                     2009
              Revenue Capital Total Revenue Capital   Total Revenue  Capital    Total
                £'000   £'000 £'000   £'000   £'000   £'000   £'000    £'000    £'000

Gain/(loss)
on disposal
of fixed
asset
investments         -     507   507       -     139     139       -  (2,608)  (2,608)
Gain on
disposal of
current asset
investment                 37    37       -       -       -       -        -        -

Gain/(loss)
on valuation
of fixed
asset
investments         -   4,016 4,016       - (5,744) (5,744)       -  (8,725)  (8,725)
Loss on
valuation of
current asset
investments         -       -     -       -       -       -       -      (2)      (2)

Income            108       -   108     366       -     366     544        -      544

Investment
management
fees             (52)   (155) (207)    (89)   (266)   (355)   (112)    (335)    (447)
VAT
management
fee rebate          -       -     -                              78      236      314

Other
expenses         (90)       -  (90)   (150)       -   (150)   (197)        -    (197)

(Loss)/profit
on ordinary
activities
before tax       (34)   4,405 4,371     127 (5,871) (5,744)     313 (11,434) (11,121)

Taxation on
profit/(loss)
on ordinary
activities          -       -     -     (3)       3       -    (28)        8     (20)

(Loss)/profit
on ordinary
activities
after tax        (34)   4,405 4,371     124 (5,868) (5,744)     285 (11,426) (11,141)
Earnings per
share - basic
and
diluted        (0.1p)   14.7p 14.6p    0.3p (15.6)p (15.3)p    0.8p  (33.6)p    32.8p




  * 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 no recognised gains or losses other than those
    disclosed in the income statement.

Reconciliation of Movements in Shareholders' Funds

                                    Six months Six months
                                         ended      ended     Year to
                                     31 August  31 August 28 February
                                          2009       2008        2009
                                         £'000      £'000       £'000
Shareholders' funds at start of
period                                  19,443     34,783      17,437
Profit/(loss) on ordinary
activities after tax                     4,371    (5,744)    (11,141)
Shares purchased and held in
Treasury                                 (342)      (981)     (1,049)
Transfer between share class                 -          -      16,055
Dividends paid                           (735)    (1,100)     (1,859)
Shareholders' funds at end of
period                                  22,737     26,958      19,443



Balance Sheet

                          As at 31 August       As at 31        As at 28
                                     2009    August 2008   February 2009
                             £'000  £'000   £'000  £'000    £'000  £'000

Fixed asset investments            16,820         19,548          12,821
Current assets:
Money market securities      5,580          6,158           6,163
Debtors                        369            126             485
Cash at bank                   110          1,271             167
                             6,059           7555           6,815
Creditors: amounts
falling due within one
year                         (142)          (145)           (193)
Net current assets                  5,917          7,410           6,622

Net assets                         22,737         26,958          19,443

Called up equity share
capital                     15,965         15,965          15,965
Share premium account        8,209          8,209           8,209
Capital redemption
reserve                      3,727          3,727           3,727
Special distributable
reserve                     16,412         16,411          16,412
Capital reserve -
Realised                  (12,115)        (8,235)        (11,052)
                        -
Unrealised                 (7,520)        (7,837)        (12,361)
Own shares held in
treasury                   (1,978)        (1,420)         (1,636)
Revenue reserve                 37            138             199
Total equity
shareholders' funds                22,737         26,958          19,443
Net asset value per share           76.8p          88.4p           64.5p



Cash Flow Statement
                              Six months to Six months to     Year to
                                  31 August     31 August 28 February
                                       2009          2008        2009
                                      £'000         £'000       £'000

Net cash outflow from
operating activities                  (124)           (1)        (23)

Financial investment :
Purchase of fixed asset
investments                         (1,704)       (1,152)     (1,706)
Disposal of fixed asset
investments                           2,228         1,862       1,213

Management of cash equivalent
resources:
Purchase of current asset
investment                          (5,580)             -           -
Disposal of current asset
investment                            6,200

Dividends paid                        (735)       (1,100)     (1,859)

Financing:
Shares purchased and held in
Treasury                              (342)         (981)     (1,049)
Interclass transfer                       -             -       2,159
Decrease in cash at bank               (57)       (1,372)     (1,265)




Reconciliation of Net Cash Flow to Movement in Net Funds

                         Six months to Six months to
                             31 August     31 August          Year to
                                  2009          2008 28 February 2009
                                 £'000         £'000            £'000
Decrease in cash at bank          (57)       (1,372)          (2,476)
Decrease in cash
equivalents                      (583)           (7)              (2)
Opening net liquid
resources                        6,330         8,808            8,808
Net cash resources at
end of period                    5,690         7,429            6,330




Reconciliation of Profit before Taxation to Cash Flow from Operating
Activities

                                  Six months  Six months
                                          to          to      Year to
                                   31 August   31 August  28 February
                                        2009        2008         2009
                                       £'000       £'000        £'000
(Loss)/profit on ordinary
activities before tax                  4,371     (5,744)     (11,121)
(Gain)/loss  on  realisation  of
investments                            (544)       (139)        2,608
(Gain)/loss on valuation of
investments                          (4,016)       5,744        8,727
Decrease/(increase) in debtors           116         116        (370)
(Decrease)/increase in creditors        (51)          22          133
Net cash outflow from operating
activities                             (124)         (1)         (23)



Notes to the Half-Yearly Report

1. Basis of preparation
The unaudited interim results which cover the six months to 31 August
2009 have been prepared in accordance with applicable accounting
standards and adopting the accounting policies set out in the
statutory accounts of the Company for the year ended 28 February
2009.

2. Publication of non-statutory accounts
The unaudited interim results for the six months ended 31 August 2009
do not constitute statutory accounts within the meaning of Section
435 of the Companies Act 2006 and have not been delivered to the
Registrar of Companies.  The comparative figures for the year ended
28 February 2009 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 under Sections 495, 496 and 497 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 at 31 August 2009 is calculated on the basis
of 29,963,634 (28 February 2008: 33,947,228 and 31 August 2008:
37,521,889) shares, being the weighted average number of shares in
issue during the year.

There are no potentially dilutive capital instruments in issue and,
therefore, no diluted return per share figures are relevant. The
basic and diluted earnings per share are therefore identical.

4. Net asset value per share
The calculation of net asset value per share is based on the net
assets at 31 August 2009 and on 29,615,480 (28 February 2009:
30,148,687 and 31 August 2008: 30,486,468) shares being the number of
shares in issue, excluding shares held in Treasury, at the same date.

5. Dividends
The interim dividend declared of 2.5 pence per New Ordinary share for
the six months ending 31 August 2009 is subject to approval by HM
Revenue & Customs.  The record date and payment date of this dividend
will be announced on the London Stock Exchange RNS service in due
course.

6.  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 way in which they are managed,
are described in more detail in the Company's Annual Report and
Accounts for the year ended 31 January 2009. The Company's principal
risks and uncertainties have not changed materially since the date of
that report.

7. Ordinary share conversion
The Ordinary shares were converted into D shares on 31 May 2008 at a
conversion ratio of 0.5448 D shares for each Ordinary share.  This
single share class was subsequently renamed 'New Ordinary shares'.

8. During the six months ended 31 August 2009 there were no share
issues.  For New Ordinary shares, 533,207 (29 February 2009: 385,760)
shares were bought back in the period at an average price of 64.0p
(28 February 2009: 82.3p) per share; these shares are currently held
in treasury.

9. Copies of this statement are being sent to all shareholders.
Copies are also available from the registered office of the Company
at 8 Angel Court, London, EC2R 7HP, and will also be available to
view on the Investment Manager's website at
www.octopusinvestments.com.

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