Half-yearly report

Octopus IHT AIM VCT PLC Half-Yearly Results 30 July 2009 Octopus IHT AIM VCT PLC, managed by Octopus Investments Limited, today announces the Half-Yearly results for the six months ended 31 May 2009. These results were approved by the Board of Directors on 30 July 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. About Octopus IHT AIM VCT PLC Octopus IHT AIM VCT PLC (the "Company" or "Fund") is a venture capital trust ("VCT") which aims to provide shareholders with attractive tax-free dividends and long-term capital growth. The Investment Manager is Octopus Investments Limited ("Octopus" or "Manager"). The Company was launched as Close IHT AIM VCT PLC in March 2006 and raised £25 million through an offer for subscription. Following your Company's change in name and management agreement, shareholders should be made aware that existing share certificates have not been replaced and remain valid. Financial Summary Year to Six months to Six months to 30 November 31 May 2009 31 May 2008 2008 Net assets (£'000s) 16,726 22,068 16,049 Net Profit/(loss) after tax (£'000s) 1,266 (1,200) (6,901) Net asset value per share ("NAV") 68.4p 88.4p 64.6p Dividend per share - paid in the period 1.0p 1.0p 2.0p Cumulative dividends since launch - paid and proposed 7.4p 5.4p 6.4p A Shares pence per share Total dividends paid during the period to 30 November 2006* 1.4p Total dividends paid during the period to 31 May 2007 1.0p Total dividends paid during the period to 30 November 2007 1.0p Total dividends paid during the period to 31 May 2008 1.0p Total dividends paid during the period to 30 November 2008 1.0p Total dividends paid during the period to 31 May 2009 1.0p Total dividends 6.4p Net asset value at 31 May 2009 68.4p Total cumulative return at 31 May 2009 74.8p * Investors subscribing by 17 January 2006 were entitled to this dividend. Investors subscribing thereafter were not entitled to this first dividend. In addition to the dividends above, the Directors have declared a dividend of 1.0 pence per A Ordinary Share, payable from capital reserves. This dividend is subject to HM Revenue & Customs approval. The record date and payment date of this dividend will be announced on the London Stock Exchange RNS service, once approved by HMRC Chairman's Statement Overview The six months to 31 May 2009 have been a busy period for your Company. Four investments have brought the level of qualifying holdings up to 80% of the Fund, which raises the possibility of taking some profits in more successful holdings if, as we expect, opportunities for new investments appear at attractive prices. The Distribution in Specie process was well underway at the end of the May, and as I write this it has been completed. After a torrid period in the markets, though market sentiment has remained fragile, sense has finally begun to prevail and small and growing companies have seen the size of the discount at which they trade relative to larger more liquid companies narrow. This has allowed the net asset value per share ("NAV") of your Company to rise from its lows in March to 68.4p at the end of the period. Performance Over the six months to 31 May 2009, adding back the 1p dividend paid in the period, the NAV increased by 7.4%. In comparison, the FTSE All-Share Index increased by 7.0% and the FTSE AIM All-Share Index increased by 30.3%. The recovery of the NAV has been more muted than the AIM and Smaller Company indices because of the limited universe of stocks in which the Fund can invest. Also, the Fund has high cash balances which protected the Fund from the worst of the falls on the way down. While we are aware that the NAV remains at a considerable discount to pre-2008 levels, the Manager has witnessed a significant shift in appetite for risk since the equity markets bottomed in March of this year, and this has at least put a stop to the persistent selling pressure on the share prices of small companies. News from existing investee companies has been mixed, with those suffering from high levels of debt on their balance sheet proving more vulnerable to downgrades in profit expectations, particularly when they are also cyclical in nature. However, some companies in the portfolio have been trading well despite market conditions, and both Advanced Computer Software and Vertu Motors have had recent successful share issues, raising money to accelerate their growth through acquisitions. This optimism has remained selective not percolating throughout VCT qualifying issues where the majority of fundraisings have been desperate calls for cash for survival, with management often unwilling to raise enough through fear of dilution. In the absence of many attractive VCT qualifying issues of shares, and bearing in mind the need to raise the overall qualifying level in the Fund comfortably above 70%, there was little opportunity to trade in existing holdings. The Manager sold the holding in Optimisa during February this year and were disappointed to have realised a loss on the investment, although the subsequent announcement regarding the company wishing to de-list from AIM fulfilled the Manager's fears. Two new investments totalling £1.1 million, were made in, Praesepe and Managed Support Services, and a further investment of £400,000 in Brulines, an existing portfolio company, and also £200,000 in Lombard Technology Systems. Lombard Medical Technologies was a follow-on investment in a convertible format to finance ongoing trials of the aorfix stent, used to repair abdominal aneurisms. Both of the new investments involved backing management teams which had already demonstrated success in previous VCT qualifying companies. Praesepe buys and operates high street gaming outlets, a sector which is just beginning to recover from the effect of the smoking ban, and Managed Support Services has a small buildings services operation and is looking to grow by acquisition. Dividend Policy It is your Board's policy to strive to maintain a regular dividend flow where possible and this primarily relies on the level of profitable realisations and available cash reserves. For the period ended 31 May 2009, the Board has declared an interim dividend of 1 p per A Ordinary Share, payable from capital reserves. This dividend is subject to approval from HMRC. Strategy The Board retains liquidity in the balance sheet to achieve four aims: * to take advantage of new investment opportunities as they arise; * to support further investment in existing portfolio companies if required; * to assist liquidity in the Company's shares through the buy back facility; * to support a consistent dividend flow over time. B Share Conversion and Distribution in Specie A circular was posted to all B shareholders in May giving those shareholders the option to proceed with the Distribution in Specie whereby they would end up with a portfolio of underlying holdings from the VCT as set out in the original prospectus or the chance to elect to convert to A Ordinary Shares and remain in the VCT. A General Meeting was held on 3 June for B shareholders to approve the process and the resolution was passed. I can report that of the 17,125,400 B Ordinary Shares in existence at the start of this process, 8,984,075 converted into A Ordinary Shares, and that the assets in the remaining B Ordinary Share portfolio have now been distributed to the underlying shareholders. At the end of this process, there are now 16,283,536 A Ordinary Shares in issue, giving a Fund size of approximately £11.2 million at the end of June. Principal Risks and Uncertainties The principal risks and uncertainties are set out in note 7 of the Notes to the Half-Yearly Report on page 14. Outlook Since March 2009, both share prices and liquidity have improved across smaller company markets, although more recently there has been a pause for breath. Perhaps of even more significance has been the recent support for companies raising additional funds. Investors have been prepared to look through the fragile nature of the recovery in order to back entrepreneurial management teams of small companies that have identified the opportunity to enhance their market position in the current economic climate either organically or via acquisition. Reiterating what I said in the Annual Report in March, the Manager remains confident that the portfolio will provide attractive returns to investors with a medium to long-term horizon. The investment strategy for your Company remains focused on the delivery of positive returns and a regular tax-free dividend stream for investors. Whilst the portfolio has been significantly impacted by the credit crunch, the Board still considers the portfolio as a whole to be well positioned to benefit from any improvement in the overall financial outlook. With approximately 23% of the assets in cash or cash equivalents, there should be scope to make additional investments at attractive prices as and when opportunities arise. Keith Richard Mullins Chairman 30 July 2009 Investment Portfolio % equity held by Valuation Change in % all Cost of as at 31 valuation equity funds AIM-quoted investment Unrealised May in the held by managed qualifying as at 31 profit/(loss) 2009 period Octopus by Investments Sector May 2009 (£'000) (£'000) (£'000 IHT Octopus Advanced Comp Software & Software plc Computer Services 750 825 1,575 825 1.4% 5.6% Pharmaceuticals & IS Pharma plc Biotechnology 1,000 (65) 935 26 2.8% 8.7% Melorio plc Support Services 612 294 906 520 1.0% 5.9% Animalcare Pharmaceutical & Group plc Healthcare 601 273 874 143 4.0% 12.8% Managed Support Maintenance Services plc Contractor 550 206 756 - 2.8% 12.1% Praesepe plc Gambling & betting 550 165 715 - 2.2% 10.6% CBG Group plc Financial services 952 (317) 635 (396) 3.4% 17.9% Tasty plc Travel & Leisure 500 83 583 116 2.9% 4.8% Hasgrove plc Media 652 (74) 578 (108) 2.1% 10.5% Brulines plc Support Services 653 (129) 524 267 1.3% 8.0% Mount Engineering Industrial plc Engineering 539 (62) 477 31 2.1% 8.2% Vertu Motors plc General Retailers 750 (338) 412 241 0.9% 7.7% Software & IDOX plc Computer Services 236 158 394 111 0.6% 3.1% Pressure Technologies Industrial plc Engineering 352 23 375 (152) 1.4% 11.0% Research Now plc Marketing 315 53 368 87 0.8% 4.9% Lombard Medical Technologies Pharmaceutical & plc Healthcare 375 (31) 344 324 1.8% 6.5% Software & Craneware plc Computer Services 174 142 316 32 0.4% 1.6% Essentially Group ltd Media 659 (454) 205 (176) 2.0% 5.7% Lombard Medical Technologies plc (convertible Pharmaceutical & loan note) Healthcare 200 - 200 - - - Plastics Capital plc Manufacturing 535 (374) 161 (54) 1.3% 18.1% Telephonetics plc Telecommunications 456 (296) 160 (11) 1.4% 7.6% Industrial Optare plc Engineering 850 (701) 149 (191) 1.7% 6.6% Adept Telecom Fixed Line plc Telecommunications 750 (627) 123 43 1.7% 4.6% Jelf Group plc Financial services 180 (65) 115 (14) 0.2% 1.2% Hexagon Human plc Support Services 632 (525) 107 (150) 1.2% 13.9% Work Group plc Support Services 707 (619) 88 - 2.1% 9.4% Neuropharm Pharmaceuticals & plc Biotechnology 400 (324) 76 (286) 0.7% 4.3% Twenty plc Media 750 (684) 66 (9) 4.5% 18.7% Health care Claimar Care Equipment & Group plc Services 500 (445) 55 15 0.6% 4.8% Individual Restaurant plc Restaurants 217 (177) 40 (17) 0.4% 1.9% Clerkenwell Ventures plc Restaurants 93 (57) 36 (415) 1.4% 7.9% B Global plc Support Services 200 (178) 22 (42) 0.2% 2.1% Total AIM- quoted qualifying investments 16,690 (4,320) 12,370 760 Non-qualifying AIM-quoted investments 397 (19) 378 Total AIM-quoted investments 17,087 (4,339) 12,748 Money market funds 3,825 (100)* 3,725 Cash at bank 97 - 97 Total investments 21,009 (4,439) 16,570 Net current assets 156 Total net assets 16,726 * Realised loss 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 Keith Richard Mullins Chairman 28 July 2009 Income Statement Six months to 31 May Six months to 31 May Year to 30 November 2009 2008 2008 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 - 215 215 - (252) (252) - (252) (252) Gain/(loss) on disposal of current asset investments - 21 21 - (9) (9) - (459) (459) Gain/(loss) on valuation of fixed asset investments - 1,162 1,162 - (814) (814) - (5,904) (5,904) Gain/(loss) on valuation of current asset investments - 94 94 - (96) (96) - (399) (399) Income 95 - 95 304 - 304 564 - 564 Investment management fees (40) (119) (159) (64) (194) (258) (103) (310) (413) VAT management fee rebate - - - - - - 26 79 105 Other expenses (162) - (162) (72) - (72) (134) - (134) (Loss)/profit on ordinary activities before tax (107) 1,373 1,266 168 (1,365) (1,197) 353 (7,245) (6,892) Taxation on (loss)/profit on ordinary activities - - - (26) 23 (3) (59) 50 (9) Loss)/profit on ordinary activities after tax (107) 1,373 1,266 142 (1,342) (1,200) 294 (7,195) (6,901) Return per share - basic and diluted (0.4)p 5.6p 5.1p 0.6p (5.3)p (4.7)p 1.2p (28.8)p (27.6)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 no recognised gains or losses other than those disclosed in the income statement. Reconciliation of Movements in Shareholders' Funds Six months to Six months to Year to 30 31 May 2009 31 May 2008 November 2008 £'000 £'000 £'000 Shareholders' funds at start of period 16,049 23,518 23,518 Profit/(Loss) on ordinary activities after tax 1,266 (1,200) (6,901) Purchase of own shares (343) - (69) Dividends paid (246) (250) (499) Shareholders' funds at end of period 16,726 22,068 16,049 Balance Sheet As at 31 May As at 31 May As at 30 2009 2008 November 2008 £'000 £'000 £'000 £'000 £'000 £'000 Fixed asset investments 12,748 11,264 10,340 Current assets: Money market securities 3,725 6,235 5,049 Debtors 297 53 293 Cash at bank 97 4,599 427 4,119 10,887 5,769 Creditors: amounts falling due within one year (141) (83) (60) Net current assets 3,978 10,804 5,709 Net assets 16,726 22,068 16,049 Called up equity share capital 2 3 3 Special distributable reserve 23,300 23,604 22,828 Capital redemption reserve - - - Own shares held in treasury (110) - - Capital reserve - Realised (1,834) (176) (6,882) - Unrealised (4,613) (1,504) (69) Revenue reserve (19) 141 169 Total equity shareholders' funds 16,726 22,068 16,049 Net asset value per share 68.4p 88.4p 64.6p Cash Flow Statement Six months Six months to to 31 May Year to 30 31 May 2009 2008 November 2008 £'000 £'000 £'000 Net Cash (outflow)/inflow from operating activities (149) 55 (4) Return on investments and servicing of finance Interest paid - (1) - Taxation: UK Corporation tax paid - (15) (15) Financial investment Purchase of fixed asset investments (1,796) (4,192) (9,581) Disposal of fixed asset investments 2,544 6,793 9,709 Settlement creditor - - (810) Management of liquid resources Purchase of current asset investments (340) Equity dividends paid Capital / Revenue dividends paid (246) (250) (499) Financing Purchase of own shares (343) - (69) Overpayment of shares purchased - - (58) (Decrease)/increase in cash at bank (330) 2,390 (1,327) Reconciliation of Net Cash Flow to Movement in Net Cash Resources Six months to Six months to Year to 30 31 May 2009 31 May 2008 November 2008 £'000 £'000 £'000 (Decrease)/increase in cash at bank (330) 2,845 (1,327) Decrease in cash equivalents (1,324) (6,463) (7,648) Opening net cash resources 5,476 14,451 14,451 Net cash resources at end of period 3,822 10,833 5,476 Reconciliation of Operating Profit before Taxation to Cash Flow from Operating Activities Six months Six months to to 31 May Year to 30 31 May 2009 2008 November 2008 £'000 £'000 £'000 Gain/(loss) on ordinary activities before tax 1,266 (1,200) (6,892) (Gain)/loss on disposal of fixed asset investments (215) 252 252 (Gain)/loss on disposal of current asset investments (21) 9 459 (Gain)/loss on valuation of fixed asset investments (1,162) 814 5,904 (Gain)/loss on valuation of current asset investments (94) 96 399 (Increase)/decrease in debtors (4) 69 (112) (Decrease)/increase in creditors 81 15 (14) Net cash (outflow)/inflow from operating activities (149) 55 (4) Notes to the Half-Yearly Report 1. Basis of preparation The unaudited half-yearly results which cover the six months to 31 May 2009 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 year ended 30 November 2008, 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 31 May 2009 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. The comparative figures for the year ended 30 November 2008 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 Section 235 of the Companies Act 1985 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 May 2009 are calculated on the basis of 24,637,783 (30 November 2008: 24,967,724 and 31 May 2008: 24,980,111) being the weighted average number of A & B Ordinary Shares, in issue during the period (excluding Treasury Shares). There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant. 4. Net asset value per share The net asset value per share is based on net assets as at 31 May 2009 divided by 24,233,398 (30 November 2008: 24,864,861 and 31 May 2008: 24,980,111) A & B Ordinary Shares in issue at that date (excluding Treasury Shares). 5. Dividends The Directors have declared a dividend of 1.00 pence per A Ordinary share, payable from capital reserves. This dividend is subject to HM Revenue & Customs approval. The record date and payment date of this dividend will be announced on the London Stock Exchange RNS service, once approved by HMRC. A final dividend, for the year ending 30 November 2008, of 1 pence per A & B Ordinary Share was paid on 22 May 2009 to shareholders who were on the register on 24 April 2009, comprising 0.35p of revenue and 0.65p of capital. 6. Buybacks During the six months ended 31 May 2009 the Company repurchased the following shares: * 76,213 A Ordinary Shares to be held in treasury, at a weighted average price of 53.6p * 555,250 B Ordinary Shares for cancellation at a weighted average price of 54.4 pence per share. No shares were issued during the period. 8. Principal risks and uncertainties The Company's assets consist of equity and floating-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 30 November 2008. The Company's principal risks and uncertainties have not changed materially since the date of that report. 9. Related party transactions Octopus 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 £159,000. (30 November 2008: £413,000 and 31 May 2008: £258,000) Prior to 1 August 2008, Close acted as the Investment Manager of the Company, post this date all management fees have been payable to Octopus. At the period end there was £nil (30 November 2008: £9000 and 31 May 2008: Nil) outstanding to Octopus. Furthermore, Octopus also provides company secretarial services to the Company. Octopus receives a fee of £10,000 per annum for company secretarial services. 10. 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. ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Companies

Octopus AIM VCT 2 (OSEC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today