TIDMOTV4
Octopus Titan VCT 4 plc
Half-Yearly Results
10 June 2014
Octopus Titan VCT 4 plc, managed by Octopus Investments Limited, today
announces the Half-Yearly results for the six months ended 30 April
2014.
These results were approved by the Board of Directors on 10 June 2014.
You may shortly view the Half-Yearly Report in full at
www.octopusinvestments.com. All other statutory information will also be
found there.
Financial Headlines
106.7p Net asset value (NAV) at 30 April 2014
3.0p Cumulative dividends paid
109.7p Total Return (NAV plus cumulative dividends
paid)
2.0p Dividend declared
Shareholder Information and Contact Details
Financial Calendar
The Company's financial calendar is as follows:
24 July 2014 - 2014 interim dividend paid
February 2015 - Annual results for the year to 31
October 2014 announced; Annual Report and financial statements published
March 2015 - Annual General Meeting
Dividends
Dividends will be paid by the Registrar on behalf of the Company.
Shareholders who wish to have dividends paid directly into their bank
account rather than by cheque to their registered address can complete a
mandate form for this purpose. Queries relating to dividends,
shareholdings and requests for mandate forms should be directed to the
Company's Registrar, Capita Registrars, by calling 0871 664 0300 (calls
cost 10p per minute plus network extras. Lines are open Monday-Friday
9.00am-5.30pm), or by writing to them at:
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4BR
Share Price
The Company's share price can be found on various financial websites
including www.londonstockexchange.com, with the following TIDM/EPIC
code:
Ordinary shares
TIDM/EPIC code OTV4
Latest share price (10 June 2014) 99.5p per share
Buying and Selling Shares
The Company's ordinary shares can be bought and sold in the same way as
any other company quoted on the London Stock Exchange via a stockbroker.
There may be tax implications in respect of selling all or part of your
holdings, so shareholders should contact their independent financial
adviser if they have any queries.
The Company operates a policy of buying its own shares for cancellation
as they become available. The Company is, however, unable to buy back
shares directly from shareholders. If you are considering selling your
shares or trading in the secondary market, please contact the Company's
corporate broker, Panmure Gordon (UK) Limited ('Panmure').
Panmure is able to provide details of close periods (when the Company is
prohibited from buying shares) and details of the price at which the
Company has bought shares. Panmure can be contacted as follows:
Chris Lloyd 020 7886 2716 chris.lloyd@panmure.com
Paul Nolan 020 7886 2717 paul.nolan@panmure.com
Notification of Change of Address
Communications with shareholders are mailed to the registered address
held on the share register. In the event of a change of address or other
amendment this should be notified to the Company's registrar, Capita
Asset Services, as well as Octopus Investments under the signature of
the registered holder. Their contact details are provided at the end of
the report.
Other Information for Shareholders
Previously published Annual Reports and Half-yearly Reports are
available for viewing on the Investment Manager's website at
http://www.octopusinvestments.com/investors/shareholder-information/titan-vct-4/.
All other statutory information will also be found there.
Warning to Shareholders
Many companies are aware that their shareholders have received
unsolicited phone calls or correspondence concerning investment matters.
These are typically from overseas based 'brokers' who target UK
shareholders offering to sell them what often turn out to be worthless
or high risk shares in US or UK investments. They can be very persistent
and extremely persuasive. Shareholders are therefore advised to be very
wary of any unsolicited advice, offer to buy shares at a discount or
offer for free company reports.
Please note that it is very unlikely that either the Company or the
Company's registrar would make unsolicited telephone calls to
shareholders and that any such calls would relate only to official
documentation already circulated to shareholders and never in respect of
investment 'advice'.
If you are in any doubt about the veracity of an unsolicited phone call,
please call either Octopus Investments, or the Registrar, at the numbers
provided at the back of this report.
About Octopus Titan VCT 4 PLC
Octopus Titan VCT 4 plc ('Titan 4', 'Company' or 'VCT') is a venture
capital trust ('VCT') which aims to provide shareholders with capital
growth to enable attractive tax-free dividends, by investing in a
diverse portfolio of predominately unquoted companies. The Company is
managed by Octopus Investments Limited ('Octopus' or 'Investment
Manager').
Titan 4 was incorporated on 30 September 2009 and raised a total of
GBP22.5 million (GBP21.4 million net of expenses) through an Offer for
Subscription. A further GBP6.12 million in aggregate (GBP5.81 million
net of expenses) has been raised by way of top-ups in 2012 and 2013 and
in 2014, to date, GBP9.74 million in aggregate has been allotted
(GBP9.52 million net of expenses). Titan 4 invests primarily in unquoted
UK smaller companies and aims to deliver substantial returns on its
investments over the medium to long term.
Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means for
private individuals to invest in unlisted companies in the UK.
Subsequent Finance Acts have introduced changes to VCT legislation. The
tax benefits currently available to eligible new investors in VCTs
include:
-- up to 30% up-front income tax relief;
-- exemption from income tax on dividends paid; and
-- exemption from capital gains tax on disposals of
shares in VCTs.
Titan 4 has been provisionally approved as a VCT by HM Revenue & Customs
(HMRC). In order to maintain its approval the Company must comply with
certain requirements on a continuing basis including;
-- at least 70% of the Company's investments must comprise 'qualifying
holdings'*(as defined in the legislation);
-- for cash raised pre 6 April 2011 at least 30% of the 70% of qualifying
holdings must be in eligible ordinary shares with no preferential rights;
-- for cash raised post 5 April 2011 at least 70% of the 70% of qualifying
holdings must be in eligible ordinary shares with no preferential rights;
-- no single investment can exceed 15% of the total Company value; and
-- a minimum of 10% of each Qualifying Investment must be in Ordinary shares
with no preferential rights.
*A 'qualifying holding' consists of up to GBP5 million invested in any
one year in new shares or securities in an unquoted company (or
companies quoted on AIM) which is carrying on a qualifying trade and
whose gross assets do not exceed GBP15 million at the time of
investment. The definition of a 'qualifying trade' excludes certain
activities such as property investment and development, financial
services and asset leasing. The Company will continue to ensure its
compliance with these qualification requirements.
Financial Summary
Six months to Six months to Year to 31
30 April 2014 30 April 2013 October 2013
Net assets (GBP'000s) 40,909 26,248 29,231
Return on ordinary activities
after tax (GBP'000s) 2,816 663 3,935
Net asset value per share (NAV) 106.7p 90.4p 100.7p
Dividends paid 3.0p - 1.0p
Total Return 109.7p 90.4p 101.7p
Dividends declared 2.0p 1.0p 2.0p
Chairman's Statement
I am pleased to present the results for the six month period ended 30
April 2014.
Performance and dividend
During the six month period to 30 April 2014, the total return (NAV plus
cumulative dividends paid) has increased from 101.7p to 109.7p
representing a gain of 7.9%. This is due to the strong performance of
the portfolio and OEIC's during the period which exceeded the standard
running costs of the fund, as explained in more detail below.
We believe that our shareholders place considerable importance on
dividends, particularly given their tax-free status in a period when the
top rate of tax for individuals is 45%. In view of the increase in the
value of our investments we have decided to declare an interim dividend
of 2.0 pence per share for the half year, which will be payable on 24
July 2014 to shareholders on the register on 27 June 2014.
Investment Portfolio Review
The portfolio has had an overall uplift in fair value of GBP2,971,000
during the period, with eight companies showing an increase in value.
Certivox, Artesian Solutions and Rangespan were the largest
contributors. Four companies suffered small write downs totalling
GBP263,000.
During the period, Titan 4 invested into five new portfolio businesses
totalling GBP778,000 taking the total number to 32. In addition, Titan 4
made nine follow-on investments totalling GBP3,451,000 into companies.
Since 30 April, the following new and follow-on investments were made by
your Company:
-- GBP552,000 into Sourceable
-- GBP471,000 into Zynstra
-- GBP150,000 into Origami Energy (new portfolio business)
-- GBP386,000 into Faction Collective
-- GBP271,000 into Aframe Media Group
We will continue to maintain a balanced investment portfolio, spanning
multiple industries and business sectors, which conforms to the
regulations governing VCTs.
Open Ended Investment Companies (OEICs)
Titan 4 has a holding in the CF Octopus UK Micro Cap Growth Fund which
increased by GBP364,000 (13%) in the six months to 30 April 2014.
Fund Raising
The Company, together with the other Titan funds, offered the
opportunity to invest into the VCTs through a linked new share offer.
It is pleasing to report that this offer raised GBP9,524,000 net of
costs into the Fund.
The majority of funds raised will be used to support existing portfolio
companies where the Investment Manager sees the opportunity for business
growth. Some of the cash raised may be used to invest into new
businesses as the Investment Manager continues to maintain a strong
pipeline of prospective investments.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides both the Board and Investment
Manager with advice on compliance with HMRC rules and regulations
concerning VCTs. The Board has been advised that Titan 4 continues to be
in compliance with the conditions laid down by HMRC for qualifying as a
VCT.
As at 30 April 2014, over 95% of the portfolio (as measured by HMRC
rules) was invested in VCT qualifying investments.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed-rate interest
investments, cash and liquid resources. The principal risks and the ways
they are managed are stated within the Company's Annual Reports. The
Company's principal risks and uncertainties have not changed materially
since the date of the last Annual Report.
Outlook
The portfolio has continued to perform well with a further significant
uplift in value for the period. Your Investment Manager continues to
identify good investment opportunities for the deployment of the newly
raised capital and this, combined with the progress of the current
portfolio, gives us confidence that your Company has the potential to
make further significant gains in the medium to long term.
Gregor Michie
Chairman
10 June 2014
Investment Portfolio
Change in
valuation % voting % equity
Investment Unrealised Carrying in the rights managed
Qualifying cost profit/ (loss) value period held by by
investments Sector (GBP'000) (GBP'000) (GBP'000) (GBP'000) Titan 4 Octopus
Secret Escapes Consumer lifestyle
Limited and well being 2,567 6,454 9,021 (159) 10.20% 17.45%
Certivox
Limited Technology 2,054 567 2,621 1,387 17.45% 30.74%
TouchType
Limited Telecommunications 1,226 1,007 2,233 - 3.88% 14.17%
Artesian
Solutions
Limited Technology 1,229 544 1,773 544 10.74% 23.70%
Rangespan Consumer lifestyle
Limited and well being 1,125 283 1,408 533 6.08% 12.15%
Vega-Chi
Limited Technology 1,107 293 1,400 243 21.29% 55.11%
UltraSoC
Technologies
Limited Technology 1,277 86 1,363 - 8.82% 16.70%
Conversocial
Limited Technology 1,288 (4) 1,284 (4) 12.75% 30.59%
Amplience
Limited Technology 1,175 (16) 1,159 - 18.55% 26.33%
Aframe Media
Group Limited Media 1,262 (186) 1,076 - 13.56% 31.00%
Leanworks
Limited Consumer lifestyle
(Yplan) and well being 715 351 1,066 - 6.01% 9.41%
Iovox Limited Telecommunications 1,043 - 1,043 - 9.35% 13.62%
The Faction Consumer lifestyle
Collective SA and well being 785 94 879 61 17.28% 29.90%
Semafone
Limited Telecommunications 756 (60) 696 120 3.56% 26.17%
Michelson
Diagnostics Consumer lifestyle
Limited and well being 921 (391) 530 - 8.36% 24.95%
Affectv Limited Media 500 - 500 - 6.79% 13.66%
Bowman Power
Limited Environmental 519 (54) 465 (12) 2.69% 9.14%
Sourceable
Limited Consumer lifestyle
(Decoholic) and well being 149 297 446 296 4.60% 4.05%
Executive
Channel Europe
Limited Media 753 (325) 428 - 8.26% 30.00%
Consumer lifestyle
Kabbee Limited and well being 400 - 400 - 1.55% 7.74%
Adbrain Limited Media 300 - 300 - 1.65% 9.23%
TrialReach Consumer lifestyle
Limited and well being 350 (88) 262 (88) 5.44% 10.00%
Shopa Limited Media 175 - 175 - 5.35% 9.96%
Zynstra Limited Technology 100 50 150 50 1.23% 8.12%
Uniplaces Consumer lifestyle
Limited and well being 106 - 106 - 5.81% 27.49%
Consumer lifestyle
Tailsco Limited and well being 39 - 39 - 0.77% 1.16%
Streethub Consumer lifestyle
Limited and well being 26 - 26 - 0.90% 4.21%
Sofar Sounds Consumer lifestyle
Limited and well being 14 - 14 - 0.37% 1.85%
Applied
Superconductor
Limited Environmental 765 (765) - -
Lifebook Consumer lifestyle
Limited and well being 556 (556) - -
PrismaStar Inc. Media 424 (424) - -
Elonics Limited Technology 305 (305) - -
Total qualifying investments 24,011 6,852 30,863 2,971
Money market securities 5,683 - 5,683
OEICs 1,581 1,586 3,167
Cash at bank 1123 - 1123
Total investments 32,398 8,438 40,836
Net current assets 73
Total net assets 40,909
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 Conduct Authority Disclosure and Transparency Rules,
being:
-- an indication of the important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements;
-- a description of the principal risks and uncertainties for the remaining
six months of the year; and
-- a description of related party transactions that have taken place in the
first six months of the current financial year, that may have materially
affected the financial position or performance of the Company during that
period and any changes in the related party transactions described in the
last annual report that could do so.
On behalf of the Board
Gregor Michie
Chairman
10 June 2014
Income Statement
Six months to 30 April Six months to 30 April
2014 2013 Year to 31 October 2013
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised
gain on
disposal of
fixed asset
investments - 10 10 - - - - 45 45
Realised
gain on
disposal of
current
asset
investments - - - - - - - - -
Fixed asset
investment
holding
gains - 2,971 2,971 - 754 754 - 4,031 4,031
Current
asset
investment
holding
gains - 364 364 - 287 287 - 627 627
Other income 6 - 6 7 - 7 15 - 15
Investment
management
fees (73) (219) (292) (54) (162) (216) (105) (315) (420)
Other
expenses (243) - (243) (169) - (169) (363) - (363)
Return on
ordinary
activities
before tax (310) 3,126 2,816 (216) 879 663 (453) 4,388 3,935
Taxation on
return on
ordinary
activities - - - - - - - - -
Return on
ordinary
activities
after tax (310) 3,126 2,816 (216) 879 663 (453) 4,388 3,935
Earnings per
share (0.9)p 9.5p 8.6p (0.9)p 3.6p 2.7p (1.7)p 16.3p 14.6p
-- The 'Total' columns of this statement represent the profit and loss
account of the Company; the supplementary revenue return and capital
return columns have been prepared under guidance published by the
Association of Investment Companies.
-- All revenue and capital items in the above statement derive from
continuing operations.
-- The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market
funds.
-- The Company has no recognised gains or losses other than the results for
the period as set out above.
-- The accompanying notes are an integral part of the half-yearly report.
Reconciliation of Movements in Shareholders' Funds
Six months to 30 Six months to 30 Year to 31 October
April 2014 April 2013 2013
GBP'000 GBP'000 GBP'000
Shareholders'
funds at start of
period 29,231 21,023 21,023
Return on ordinary
activities after
tax 2,816 663 3,935
Issue of equity
(net of expense) 9,524 4,580 4,580
Redemption of
shares - (18) (17)
Dividends paid (662) - (290)
Shareholders'
funds at end of
period 40,909 26,248 29,231
Balance Sheet
As at 30 April As at 30 April As at 31 October
2014 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset investments* 30,863 15,298 23,663
Current assets:
Money market securities and other
deposits* 8,850 9,115 5,082
Debtors 134 138 250
Cash at bank 1,123 1,764 281
10,107 11,017 5,613
Creditors: amounts falling due
within one year (61) (67) (45)
Net current assets 10,046 10,950 5,568
Net assets 40,909 26,248 29,231
Called up equity share capital 3,835 2,904 2,904
Share premium 8,593 5,173 5,172
Special distributable reserve 23,948 19,065 18,776
Capital redemption reserve 12 11 12
Capital reserve - losses on
disposal (1,924) (834) (922)
-
holding
gains 8,155 1,092 4,689
Revenue reserve (1,710) (1,163) (1,400)
Total equity shareholders' funds 40,909 26,248 29,231
Net asset value per share 106.7p 90.4p 100.7p
*at fair value through profit and loss
The statements were approved by the Directors and authorised for issue
on 10 June 2014 and are signed on their behalf by:
Gregor Michie
Chairman
Company Number: 07035434
Cash flow statement
Six months to 30 Six months to 30 Year to 31 October
April 2014 April 2013 2013
GBP'000 GBP'000 GBP'000
Net cash outflow
from operating
activities (397) 271 (253)
Financial
investment:
Purchase of fixed
asset investments (4,229) (1,132) (6,220)
Sale of fixed asset
investments 10 - -
Management of liquid
resources:
Purchase of current
asset investments (7,004) (3,846) (4,852)
Disposal of current
asset investments 3,600 1,818 7,242
Dividends paid (662) - (290)
Financing:
Issue of equity 9,524 4,580 4,580
Redemption of shares - (18) (17)
Increase/(decrease)
in cash resources
at bank 842 1,673 190
Reconciliation of net cash flow to movement in net
funds
Six months to Six months to
30 April 2014 30 April 2013 Year to 31 October 2013
GBP'000 GBP'000 GBP'000
Increase/(decrease)
in cash resources
at bank 842 1,673 190
Movement in cash
equivalents 3,768 2,315 (1,718)
Opening net cash
resources 5,363 6,891 6,891
Net funds at period
end 9,973 10,879 5,363
Reconciliation of return before taxation to cash flow
from operating activities
Six months to Six months to
30 April 2014 30 April 2013 Year to 31 October 2013
GBP'000 GBP'000 GBP'000
Return on ordinary
activities before
tax 2,816 663 3,935
Gain on disposal of
current asset
investments - - (45)
Loss on disposal of
fixed assets (10) - -
(Gain)/loss on
valuation of fixed
asset investments (2,971) (754) (4,031)
Gain on valuation of
current asset
investments (364) (287) (627)
Decrease/(increase)
in debtors 116 642 530
Increase/(decrease)
in creditors 16 7 (15)
Inflow/outflow from
operating
activities (397) 271 (253)
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 30 April
2014 have been prepared in accordance with the Accounting Standard
Board's (ASB) statement on half-yearly financial reports (July 2007) and
adopting the accounting policies set out in the statutory accounts of
the Company for the period ended 31 October 2013, which were prepared
under UK GAAP and in accordance with the Statement of Recommended
Practice for Investment Companies issued by the Association of
Investment Companies in January 2009.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 30 April 2014
do not constitute statutory accounts within the meaning of Section 415
of the Companies Act 2006. The comparative figures for the period ended
31 October 2013 have been extracted from the audited financial
statements for that year, which have been delivered to the Registrar of
Companies. The independent auditor's report on those financial
statements, in accordance with chapter 3, part 16 of the Companies Act
2006, was unqualified. This half-yearly report has not been reviewed by
the Company's auditor.
3. Earnings per share
The earnings per share is based on 32,661,951 (30 April 2013: 22,662,894
and 31 October 2013: 26,948,467) shares, being the weighted average
number of shares in issue during the period.
There are no potentially dilutive capital instruments in issue and
therefore no diluted returns per share figures are relevant. The basic
and diluted earnings per share are therefore identical.
4. Net asset value per share
The calculation of NAV per share as at 30 April 2014 is based on
38,346,037 (30 April 2013: 29,038,954 and 31 October 2013: 29,038,954)
ordinary shares in issue at that date.
5. Dividends
The interim dividend declared of 2.0 pence per share for the six months
ending 30 April 2014 will be paid on 24 July 2014, to those shareholders
on the register on 27 June 2014.
The final dividend of 2.0 pence per share for the year ending 31 October
2013 was paid on 4 April 2014 to those shareholders on the register on 7
March 2014.
6. Buy Backs
During the six months ended 30 April 2014 the Company there were no
Ordinary shares bought back (six months ended 30 April 2013: 20,453
Ordinary shares at a weighted average price of 86.0 pence per share and
year ended 31 October 2013: 20,453 Ordinary shares at a weighted average
price of 86.0 pence per share). During the six months to 30 April 2014,
9,307,083 shares were issued at a weighted average price of 1.02 pence
per share.
7. Related Party Transactions
Octopus Investments Limited acts as the Investment Manager of the
Company. Under the management agreement, Octopus receives a fee of 2.0
per cent per annum of the net assets of the Company for the investment
management services. During the period, the Company incurred management
fees of GBP292,000 payable to Octopus (30 April 2013: GBP216,000 and 31
October 2013: GBP420,000). At the period end there were management fees
of GBPnil stated within prepayments (30 April 2013: GBPnil and 31
October 2013: GBPnil). Furthermore, Octopus provides administration and
company secretarial services to the Company. Octopus receives a fee of
0.3 per cent per annum of net assets of the Company for administration
services and GBP15,000 per annum for company secretarial services.
In addition, Octopus is entitled to performance related incentive fees.
The incentive fees are designed to ensure that there are significant
tax-free dividend payments made to Shareholders as well as strong
performance in terms of capital and income growth, before any
performance related incentive fee payment is made. Therefore, only if by
the end of a financial year, declared distributions per Share have
reached 32p in aggregate and if the Performance Value at that date
exceeds 126p per Share, a performance incentive fee equal to 20% of the
excess of such Performance Value over 100p per Share will be payable to
Octopus.
If, on a subsequent financial year end, the Performance Value of Octopus
the Company falls short of the Performance Value on the previous
financial year end, no incentive fee will arise. If, on a subsequent
financial period end, the performance exceeds the previous best
Performance Value of Octopus the Company, the Investment Manager will be
entitled to 20% of such excess in aggregate.
No performance fee has been recognised for the period on the basis that
the liability becomes due at the point that the performance criteria are
met; this has not been achieved and therefore no liability has been
recognised.
8. Additional Information
Copies of this report are available from the registered office of the
Company at 20 Old Bailey, London, EC4M 7AN.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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 4 PLC via Globenewswire
HUG#1791800
http://www.octopusinvestments.com
Octopus T. 4 (LSE:OTV4)
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