Half-yearly report

Octopus Protected VCT 1 plc
Half-Yearly Results

28 September 2009

Octopus Protected VCT 1 plc, managed by Octopus Investments Limited,
today announces the Half-Yearly results for the six months ended 31
July 2009.

These results were approved by the Board of Directors on 25 September
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 to Six months to    Year to
                                     31 July       31 July 31 January
                                        2009          2008       2009

Net assets (£'000s)                   24,592        25,754     25,139
Net  profit/(loss)  after  tax
(£'000s)                               (124)            50      (101)
Net  asset  value  per   share
("NAV")                                90.2p         94.2p      92.2p
Cumulative dividends since
launch - paid and
proposed                                 6.0          3.0p       4.5p


Octopus Protected VCT plc ("Protected," "Company" or "Fund") is a
venture capital trust ("VCT") and is managed by Octopus Investments
Limited ("Octopus").

The Fund was launched in July 2006 and raised over £27.1 million
(£25.9 million net of expenses) through an offer for subscription by
the time it closed on 5 April 2008. The objective of the Fund is to
invest in a diversified portfolio of UK smaller companies in order to
generate income and capital growth over the long-term.

The table below  shows the movement  in NAV per  share and lists  the
dividends that  have  been paid  and  proposed since  the  launch  of
Protected:


                            Dividends paid
Period Ended            NAV      in period NAV + cumulative dividends
31 January 2007      93.70p              -                     93.70p
31 July 2007         94.90p              -                     94.90p
31 January 2008      95.50p              -                     95.50p
31 July 2008         94.20p          1.50p                     95.70p
31 January 2009      92.20p          1.50p                     95.20p
31 July 2009         90.20p          1.50p                     94.70p


Chairman's Statement

Introduction
I am pleased to present the half year report of Octopus Protected VCT
plc for the period ended 31 July 2009.

Performance
At 31 July 2009 the total return (being NAV plus cumulative dividends
paid) of the fund was 94.7p, which compares to 95.2p at 31 January
2009. The performance of the Fund has been relatively stable because
a large proportion of its assets are held in cash and cash equivalent
securities. Investments have been made as discussed below but these
are unchanged in value at the period end.

Investment Portfolio
As mentioned in the Annual Report, since 31 January 2009 six
investments have been made. The Fund invested £1 million into CSL
Dualcom Limited and £1 million into Diagnos Limited. Furthermore, a
total of £4 million was invested into four companies that have been
established to seek suitable qualifying investments across a range of
sectors.

Over the period, we have focused on providing support to existing
portfolio companies. We contributed a small investment into portfolio
company Bruce Dunlop as part of a rights issue and continue to work
with all companies to help steer them through the downturn.

In the context of the tough economic environment, most portfolio
companies are making progress or holding steady. Furthermore, since
the end of the period, the Board is pleased to announce the
successful sale of Funeral Services Partnerships.  In total the
investment returned circa 1.4 times the initial investment of £1
million.  Further details of this exit will be provided in the Annual
Report for the year ended 31 January 2010.

New Investments
CSL DualCom Limited
CSL DualCom (www.csldual.com) is the UK's leading supplier of dual
path signalling devices, which link burglar alarms to the police or a
private security firm. The devices communicate using a telephone line
or broadband connection and a wireless link from Vodafone, which has
been a partner since 2000.

Diagnos Limited
Diagnos (www.autologic-diagnos.co.uk) develops and sells
sophisticated automotive diagnostic software and hardware that
enables independent mechanics, dealerships and garages to service and
repair vehicles. Mechanics require a diagnostic tool to communicate
with the in-car computer in order to measure, monitor and, where
necessary, fix the electronic process or system.

In terms of new investments, we're seeing reasonable deal flow and
are at offer stage for a number of new deals.

Investment Strategy
The Fund is being invested on the basis of taking less risk than a
typical VCT.  Typically the Fund will receive its return from
interest paid on secured loan notes as well as an exposure to the
value of the shares of a company.   The investment strategy is to
derive sufficient return from the secured loan notes to achieve the
Fund's investment aims and to use the equity exposure to boost
returns.  As portfolio companies are unquoted the Fund will receive a
return from an equity holding when a company is sold.

The Manager of the Fund aims to reduce risk by investing in well
managed and profitable businesses with strong recurring cash-flows.
Furthermore with the majority of the investment being made in the
form of a secured loan, in the event of the business failing, the
Fund will rank ahead of unsecured creditors and equity investors.

Dividend and 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. However, given
the prevailing economic climate this cannot be guaranteed. That said,
for the period ended 31 July 2009, the Board has declared an interim
dividend of 1.5 pence per share, payable from Capital reserves. This
dividend will be paid to shareholders, on 30 October 2009, who are on
the register on 9 October 2009.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice on the ongoing compliance with HMRC rules and regulations
concerning VCTs.   As at 31 July 2009, over 43.2% of the portfolio
(as measured by HMRC rules) was invested in VCT qualifying
investments.  The Manager does not foresee any issues with reaching
the required investment hurdle of 70% before the third anniversary of
the end of the financial year in which investors subscribed to the
Fund.

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 12.

Outlook
While the Fund is insulated from the stock market, all companies face
challenging trading conditions. In this environment, it is the good
companies with strong management teams and sound business models,
such as those in your portfolio, that have the best chance of
succeeding.

The Investment Manager is in a strong position to provide the support
that companies need, which is especially crucial while banks refuse
to lend or impose high lending terms. Our strategy is focused on
strengthening businesses for the future through guidance and funding.
In these ways, we are working to ensure ongoing value from your VCT
investment.

If you have any questions on any aspect of your investment, please
call one of the team on 0800 316 2347.


Tony Morgan
Chairman
25 September 2009

Investment Portfolio


                                                                                  %
                                                                             equity
                                                     Carrying               held by
                                                     value at                   all
                           Investment   Unrealised         31                 funds
Unquoted                           at       profit       July    % equity   managed
qualifying                       cost      /(loss)       2009     held by        by
investments  Sector           (£'000)      (£'000)    (£'000)   Protected   Octopus
Bruce Dunlop
Associates   Media              1,500            -      1,500        1.7%     33.3%
Vulcan
Services II  Oil & Gas
Limited      Services           1,000            -      1,000       24.5%     49.0%
Diagnos
Limited      Automotive         1,000            -      1,000         N/A       N/A
             Security
CSL Dualcom  devices            1,000            -      1,000         N/A       N/A
Tristar      Chauffeur
Limited      Services           1,000            -      1,000        2.5%     35.0%
Funeral
Services     Funeral
Partnerships Services           1,000            -      1,000        2.5%      6.8%
Salus
Services I
Limited      Healthcare         1,000            -      1,000       24.5%     49.0%
PubCo
Services
Limited      Restaurants        1,000            -      1,000       24.5%     49.0%
GreenCo
Services
Limited      Environmental      1,000            -      1,000       24.5%     49.0%
BusinessCo
Services     Business
Limited      services           1,000            -      1,000       24.5%     49.0%
Hydrobolt
Limited      Manufacturing        606            -        606        2.7%     48.1%
British
Country Inns Restaurants &
plc          Bars                 100         (16)         84        1.3%      1.3%
Total unquoted qualifying
investments                    11,206         (16)     11,190
Bonds                           1,273           65      1,338
Floating
rate notes                      1,983        (141)      1,842
Money market
funds                          10,598        (399)     10,199
Cash at bank                      114            -        114
Total fixed
income
securities                     13,968        (475)     13,493
Total
investments                    25,174        (491)     24,683
Net current
assets                              -            -       (91)
Total net
assets                                                 24,592




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


Tony Morgan
Chairman
25 September 2009


Income Statement
              Six months to 31 July  Six months to 31 July   Year to 31 January
                       2009                  2008                   2009
              Revenue Capital  Total Revenue Capital Total Revenue Capital  Total
                £'000   £'000  £'000   £'000   £'000 £'000   £'000   £'000  £'000

Gain on
disposal of
fixed asset
investments         -       -      -       -       -     -       -      58     58
(Loss)/gain
on disposal
of current
asset
investments         -    (49)   (49)       -       1     1       -       -      -

Loss on
valuation of
fixed asset
investments         -       -      -       -       -     -       -    (16)   (16)
Gain/(loss)
on valuation
of current
asset
investments         -      60     60       -   (115) (115)       -   (595)  (595)

Income            269       -    269     600       -   600   1,453       -  1,453

Investment
management
fees             (62)   (186)  (248)    (77)   (229) (306)   (147)   (444)  (591)
VAT
management
fee rebate          -       -      -       -       -     -      27      83    110

Other
expenses        (156)       -  (156)   (130)       - (130)   (338)       -  (338)

Profit/(loss)
on ordinary
activities
before tax         51   (175)  (124)     393   (343)    50     995   (914)     81

Taxation on
profit/(loss)
on ordinary
activities          -       -      -       -       -     -   (413)     231  (182)

Profit/(loss)
on ordinary
activities
after tax          51   (175)  (124)     393   (343)    50     582   (683)  (101)
Return per
share - basic
and diluted      0.2p  (0.6)p (0.4)p    1.4p  (1.2)p  0.2p    2.1p  (2.5)p (0.4)p




  * The 'Total' column of this statement is the profit and loss
    account of the Company; the supplementary revenue return and
    capital return columns have been prepared under guidance
    published by the Association of Investment Companies.
  * all revenue and capital items in the above statement derive from
    continuing operations
  * the accompanying notes are an integral part of the half-yearly
    report
  * The Company has no recognised gains or losses other than those
    disclosed in the income statement.




Reconciliation of Movements in Shareholders' Funds
                                   Six months   Six months    Year to
                                        ended        ended 31 January
                                 31 July 2009 31 July 2008       2009
                                        £'000        £'000      £'000
Shareholders' funds at start of
period                                 25,139       26,114     26,114
(Loss)/profit on ordinary
activities after tax                    (124)           50      (101)
Cancellation of own shares               (14)            -       (54)
Dividends paid                          (409)        (410)      (820)
Shareholders' funds at end of
period                                 24,592       25,754     25,139




Balance Sheet
                            As at 31 July As at 31 July      As at 31
                                     2009          2008  January 2009
                             £'000  £'000  £'000  £'000  £'000  £'000

Fixed asset investments            11,190         3,706         4,690
Current assets:
Money market securities     13,379        21,692        16,847
Debtors                        153           280           212
Cash at bank                   114           112         3,685
                            13,646        22,084        20,744
Creditors: amounts falling
due within one year          (244)          (36)         (295)
Net current assets                 13,402        22,048        20,449
Net assets                         24,592        25,754        25,139

Called up equity share
capital                      2,726         2,734         2,727
Capital redemption reserve      13             5            11
Special distributable
reserve                     23,025        23,092        23,039
Capital reserve - Realised   (570)         (556)         (868)
                         -
Unrealised                   (490)            12          (16)
Revenue reserve              (112)           467           246
Total equity shareholders'
funds                              24,592        24,754        25,139
Net asset value per share           90.2p         94.2p         92.2p




Cash Flow Statement
                                                Six months
                                     Six months         to    Year to
                                             to    31 July 31 January
                                   31 July 2009       2008       2009
                                          £'000      £'000      £'000

Net cash (outflow)/inflow from
operating activities                      (127)         14        647

Taxation                                      -          -       (18)

Financial investment :
Purchase of fixed asset
investments                             (6,500)      (606)    (1,606)

Management of liquid resources:
Purchase of current asset
investments                             (6,457)          -   (13,249)
Sale of current asset investments         9,936      1,098     18,769

Dividends paid                            (409)      (410)      (820)

Financing:
Cancellation of own shares                 (14)          -       (54)
(Decrease)/increase in cash at
bank                                    (3,571)         96      3,669





Reconciliation of net cash flow to movement in net funds
                                                Six months    Year to
                                Six months to           to 31 January
                                 31 July 2009 31 July 2008       2009
                                        £'000        £'000      £'000
(Decrease)/increase in cash at
bank                                  (3,571)           96      3,669
Decrease in cash equivalents          (3,468)      (1,212)    (6,057)
Opening net cash resources             20,532       22,920     22,920
Net cash resources at end of
period                                 13,493       21,804     20,532





Reconciliation of profit before taxation to cash flow from operating
activities
                                                Six months
                                                        to    Year to
                                  Six months to    31 July 31 January
                                   31 July 2009       2008       2009
                                          £'000      £'000      £'000
(Loss)/profit on ordinary
activities before tax                     (124)         50         81
Gain on disposal  of fixed  asset
investments                                   -          -       (58)
(Loss)/gain   on   disposal    of
current asset investments                    49        (1)          -
Loss on valuation of fixed asset
investments                                   -          -         16
(Gain)/loss on valuation of
current asset investments                  (60)        115        595
Decrease/(increase) in debtors               59       (28)         40
Decrease in creditors                      (51)      (122)       (27)
Net cash (outflow)/inflow from
operating activities                      (127)         14        647




Notes to the Half-Yearly Report

1.             Basis of preparation
The unaudited half-yearly results which cover the six months to 31
July 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 31 January 2009,
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 July
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 31 January 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.             (Loss)/Earnings per share
The loss per share at 31 July 2009 are calculated on the basis of
27,268,387 (31 January 2009: 27,324,977 and 31 July 2008: 27,336,344)
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 net asset value per share is based on net assets as at 31 July
2009 divided by 27,256,003 (31 January 2009: 27,272,119 and 31 July
2008: 27,336,344) Shares in issue at that date.

5.             Dividends
The interim dividend of 1.5 pence per share for the six months ending
31 July 2009 will be paid on 30 October 2009, to those shareholders
on the register on 9 October 2009. This will be paid from Capital
reserves.

A final dividend, for the year ending 31 January 2009, of 2 pence per
share was paid on 25 June 2009 to shareholders on the register on 29
May 2009. This was paid with 0.5p from revenue reserves and 1.5p from
capital reserves.

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.             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
£248,000 (31 January 2009: £591,000 and 31 July 2008: £306,000)
payable to Octopus. At the period end there was £Nil (31 January
2008: Nil and 31 July 2008: Nil) outstanding to Octopus.
Furthermore, Octopus Investments Limited provides administration and
company secretarial services to the Company.  Octopus Investments
Limited receives a fee of 0.3 per cent per annum of net assets of the
Company for administration services and £7,500 per annum for company
secretarial services.

8.             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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