RNS Number : 9972G
Octopus Second AIM VCT PLC
30 October 2008
Octopus Second AIM VCT plc
Interim Results
30 October 2008
Octopus Second AIM VCT plc (the "Company"), managed by Octopus Investments Limited, today announces the Half-Yearly results for the six
months ended 31 August 2008.
These results were approved by the Board of Directors on 29 October 2008.
You may view the Half-Yearly Report in full at www.octopusinvestments.com and navigating to the VCT Annual and Interim Reports under the
'Learn More' section.
Financial Highlights
Ordinary shares Six months to Six months to Year to
31 August 2008 31 August 2007 29 February 2008
Net assets ('000) �2,533 �3,731 �3,036
Net loss after tax ('000) �(331) �(335) �(910)
Net asset value per share 34.85p 48.650p 40.18p
("NAV")
Cumulative dividends paid 31.60p 19.60p 20.60p
since launch
Total return (NAV plus 66.45p 68.25p 60.78p
dividends paid)
C & D shares Six months to Six months to Year to
31 August 2008 31 August 2007 29 February 2008
Net assets ('000) �16,036 �19,673 �18,065
Net (loss)/profit after tax �(1,770) �413 �(993)
('000)
Net asset value per share 79.52p 97.20p 89.25p
("NAV")
Cumulative dividends paid 5.17p 1.96p 2.96p
since launch
Total return (NAV plus 84.69p 99.16p 92.21p
dividends paid)
Shareholder return per share since launch
Period Ended Ordinary shares C shares (pence per share) D shares (pence per share)
(pence per share)
28 February 2003 1.60 - -
28 February 2006 1.00 - -
28 February 2007 7.00 0.75 0.75
31 August 2007 10.00 1.21 1.21
29 February 2008 11.00 2.21 2.21
31 August 2008 1.00 1.00 1.00
Total dividends (capital and 31.60 5.17 5.17
revenue)
Net asset value as at 31 34.85 79.52 79.52
August 2008
Total return as at 31 August 66.45 84.69 84.69
2008
Ordinary shares
The board has declared an interim dividend to be paid on Ordinary shares of 1.0 pence per share for the six months ending 31 August
2008. 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.
C & D shares
The board has declared an interim dividend to be paid on C & D shares of 1.0 pence per share for the six months ending 31 August 2008.
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.
Interim Management Report
Following the move of Andrew Buchanan and Kate Tidbury from Close Investments to Octopus Investments with whom they have joined forces
to form a larger and better resourced team, the company changed its name to Octopus Second AIM VCT plc at an Extraordinary General Meeting
in September. Shareholders should note that existing share certificates remain valid.
While there was a small recovery in stock market sentiment during April and May, the story has been one of growing concern, of
continuing selling pressure on small company share prices and of increasing difficulties in the financial sector, culminating, since the
period end, in the part nationalisation of several banks. The result when overlaid with the events in the finance sector worldwide has been
poor liquidity in the smaller company market and of low share prices, which reflect a lack of interest in this investment class. It has been
a particularly poor period in which to announce any shortfall of previous expectations. Although smaller growing companies cannot reasonably
be expected always to comply with their business plan, some share price reactions in the market as a whole have been very savage. Needless
to say, your company's portfolio has not been immune from these conditions.
As a result of the volatility and fear which dominated the stock market in the six months to 31 August, the AIM All Share index fell by
21.4%. To some extent this fall can be attributed to the lower share prices of many resource companies, which were for so long the reason
for this index's rise. As shareholders will recall, this sector is one which the VCT rules preclude from investment, which is why the AIM
index is not a good comparison. The FTSE SmallCap Index (excluding investment trusts) fell by 14.5% in the period.
Given that your company has to maintain a high exposure to equities to maintain VCT status, it is not surprising that the Ordinary share
portfolio Net Asset Value ("NAV") fell by 13.3%, to 34.85p per share during the period. Adding back the 1p of dividend paid, the total
return was -10.8%. With a slightly higher proportion of cash as it achieves the required level of investment, the C & D portfolio saw its
NAV reduce by 11.0%, a total return of -9.8% if the 1p dividend is added back. Your board believes that this is a reasonable performance in
the circumstances. The tumultuous times, through which we are living, call for rational behaviour. For the C & D portfolio therefore, there
is the potential opportunity to invest in the next few months at values which will prove very rewarding in the years ahead. In the meantime,
it would be wrong to assume that all companies in the two portfolios are themselves trading poorly. That would not seem to be the case for
many holdings as far as the recent results, which your managers have seen.
Dividends
Your board has declared a first interim dividend of 1p per Ordinary share and also of 1p per C & D share. Both these dividends are
subject to HM Revenue & Customs approval and the record date and payment date will be announced on the London Stock Exchange RNS service.
Portfolio
It should surprise nobody that there have been no new holdings in the Ordinary portfolio in the six months covered by this report.
Perhaps it is more surprising that some sound companies have been raising new capital, but they have and the C & D portfolio has made four
new investments in the period totalling �2.9m. These are Essentially Group, IS Pharma, Advanced Computer Software and Optare. Essentially is
a profitable company, operating in the sports management area, with players, teams and events under contract. IS Pharma, also profitable,
distributes medicines, both its own and other parties, to hospitals in both America and Europe. Advanced Computer Software is the vehicle of
an established management team, set up to consolidate software companies in the healthcare sector and Optare is a bus manufacturer formed
out of two existing operators in the sector.
Despite the prevailing conditions, your company's manager expects to make other investments in the next few months.
In Specie Distribution
The prospectus for the C & D share issues allowed D shareholders the choice of having a portfolio of the VCT's investments established
for them, which, under present legislation, should qualify for Inheritance Tax relief after a further two years or to convert their D shares
into C shares. This process is expected to be completed next summer. D shareholders will be written to shortly setting out the process in
more detail.
VAT on Management Fees
The Government has recently announced that VCT's will be exempt from paying VAT on investment management fees with effect from 1 October
2008. This follows a European Court of Justice judgement against the Government in a case relating to VAT payable by investment trusts. It
is now almost certain a VAT repayment will be obtained for VAT paid on management fees for the last three years. However, given the change
in manager in the period, it is not yet clear to what magnitude this may be or when a repayment is likely, but as the situation progresses
we would very much hope to be in a position to report on the magnitude and timing of the VAT repayment in the annual financial statements
for the year ended 28 February 2009.
Outlook
Everyone has seen some quite shocking events, particularly in the last few weeks, but also in the six months directly covered by this
report. Major financial institutions, especially in America, have been rescued by the government. The same has also been true of European
countries and, of course, of the UK. Throughout this period sentiment has worsened and fear has escalated. The consequence has been falling
share prices and, while fear remains the dominant force in the stock market, it seems reasonable to assume that prices will remain low and
indeed volatile. The AIM index has fallen by a further 47% since the end of August to the time of writing and the FTSE SmallCap index by 35%
in the same period. As at 22 October 2008 the Ordinary share NAV was 30.0p per share and for a C & D share NAV was 70.3p per share.
To some extent falling share prices reflect the expectation that economic conditions will continue to deteriorate further and talk of
recession has grown more prevalent in the last few weeks.
None of this describes optimism in the short term and it is difficult to escape the conclusion that small companies' share prices now
seem to discount an outright and prolonged recession. With most major companies trading at greatly reduced share prices liquidity in smaller
stocks is almost non existent and many are now trading on low single figure price earnings ratios. It is difficult to predict what will
cause confidence to return, sentiment to become positive and when this might happen.
Against this background, your manager will continue to invest in sound companies, to support holdings that merit capital for sensible
expansion plans and to take advantage of lower valuations, in the belief that the long term view, which a VCT affords, will be able to reap
rewards for shareholders in due course
Elizabeth Kennedy
Chairman
29 October 2008
Investment Portfolio
AIM quoted investments - Investment at cost Unrealised Carrying value at Change in valuation Carrying value as
a
Ordinary shares ('�000) profit/(loss) 31 August 2008 in the period % of
total
(�'000) (�'000) (�'000) investments and
cash
Research Now plc 73 112 185 36
7.2%
Mears Group plc 130 46 176 20
6.9%
Brooks MacDonald Group plc 100 59 159 (35)
6.2%
Mattioli Woods plc 61 62 123 (10)
4.8%
Atlantic Global plc 187 (67) 120 15
4.7%
Concateno plc 77 38 115 8
4.5%
Bond International Software 43 67 110 (14)
4.3%
plc
Cello Group plc 145 (48) 97 (57)
3.8%
Clerkenwell Ventures plc 122 (27) 95 3
3.7%
Brulines (Holdings) plc 68 20 88 10
3.4%
Zetar plc 65 21 86 (76)
3.4%
Datong Electronics plc 100 (22) 78 (1)
3.1%
Melorio plc 82 (6) 76 (15)
3.0%
Vertu Motors plc 150 (85) 65 (38)
2.5%
Medical House plc 167 (115) 51 (6)
2.0%
Win plc 87 (37) 49 (13)
1.9%
Clapham House Group plc 46 (1) 45 (45)
1.8%
Altitude Group plc 100 (58) 42 (13)
1.6%
Strategic Thought Group plc 54 (15) 39 26
1.5%
Craneware plc 21 12 33 7
1.3%
Media Square plc 108 (77) 31 (20)
1.2%
Pilat Media Global plc 88 (58) 31 (29)
1.2%
Optimisa plc 68 (51) 17 (33)
0.7%
Independent Media Support plc 150 (135) 14 (10)
0.6%
Playgolf (Holdings) plc 150 (137) 14 (23)
0.5%
Freedom4 Comm plc 9 1 11 (23)
0.4%
Total AIM quoted investments 2,451 (501) 1,950 (336)
76.3%
Floating rate notes - - - -
-
Total investments 2,451 (501) 1,950 (336)
76.3%
Cash 606 - 606 -
23.7%
Total investments and cash 3,057 (501) 2,556 (336)
100.%
AIM quoted investments - C & D Investment at cost Unrealised Carrying value at Change in valuation Carrying value as
a
shares ('�000) profit/(loss) 31 August 2008 in the period % of
total
(�'000) (�'000) (�'000) investments and
cash
IS Pharma plc 902 (187) 715 (187)
4.6%
Research Now plc 600 60 660 130
4.3%
Advanced Comp Soft plc 650 (38) 612 (38)
4.0%
Neuropharm Group plc 502 102 604 (67)
3.9%
Pressure Technologies plc 302 250 553 110
3.6%
Optare plc 750 (225) 525 (225)
3.4%
Essentially Group plc 571 (51) 520 (51)
3.4%
Animalcare Group plc 485 (18) 467 (44)
3.0%
Melorio plc 490 (34) 456 (93)
3.0%
Clerkenwell Ventures plc 550 (139) 411 15
2.7%
Mount Engineering plc 431 (31) 400 (18)
2.6%
Idox plc 189 151 340 69
2.2%
Hexagon Human Capital plc 507 (175) 332 (71)
2.2%
Plastics Capital plc 464 (150) 314 (93)
2.1%
Brulines Holdings plc 204 61 265 30
1.7%
Vertu Motors plc 601 (341) 260 (150)
1.7%
Craneware plc 140 79 219 46
1.4%
Telephonetics plc 364 (214) 150 9
1.0%
Twenty plc 500 (356) 144 (56)
0.9%
Lombard Medical Technologies 300 (161) 139 (139)
0.9%
plc
Fishworks Plc 220 (92) 128 (92)
0.8%
Optimisa plc 443 (330) 113 (215)
0.7%
Individual Restaurant plc 175 (70) 105 (35)
0.7%
Bglobal plc 151 (57) 94 (24)
0.6%
Claimar Care Group plc 402 (361) 40 (361)
0.3%
Total AIM quoted investments 10,893 (2,327) 8,566 (1,550)
55.6%
Floating rate notes 5,004 (101) 4,903 (34)
31.8%
Total investments 15,897 (2,428) 13,469 (1,584)
87.4%
Cash 1,936 - 1,936 -
12.6%
Total investments and cash 17,833 (2,428) 15,405 (1,584)
100.0%
Directors' Responsibilities
We confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in accordance with the Statement "Half-yearly financial reports"
issued by the UK Accounting Standards Board;
* the Interim Management Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency
Rules, being an indication of the significant events that have occurred during the first six months of the financial year and their impact
on the condensed set of financial statements.
* the Statement of Principal Risks and Uncertainties on page 7 is a fair summary of the information required by DTR 4.2.7R, being an
account of the principal risks and uncertainties for the remaining six months of the year; and
* the financial statements include a fair review on the information required by the DTR 4.2.8R of the Disclosure and Transparency
Rules, being related party transactions that have taken place in the first six months of the financial year, have materially affected the
financial situation of your Company and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board
Elizabeth Kennedy
Chairman
29 October 2008
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 Venture
Capital Trust, 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 29 February 2008. The Company's
principal risks and uncertainties have not changed materially since the date of that report.
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. This is described in more detail under Note 17
in the Annual Report and Accounts for the year ended 29 February 2008. During the period, the Company incurred management fees of �31,000
payable to Octopus. At the period end there was �31,000 outstanding to Octopus.
Prior to 1 August 2008, Close Investments Limited acted as the investment manager of the Company. During the period 1 March 2008 to 31
July 2008, the Company incurred management fees of �194,000 payable to Close. At the period end there was �Nil outstanding to Close.
No Director has, or during the period had, a contract of service with the Company. Elizabeth Kennedy is a divisional Director of Brewin
Limited, the Company's broker. Other than this exception, no Director was party to, or had an interest in, any contract or arrangement with
the Company at any time during the period under review or as at the date of this report.
Income Statement
Ordinary Shares
Six months to 31 August 2008 Six months to 31 August 2007 Year to 29 February 2008
Revenue Capital Total Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Gain on disposal of investments - 25 25 - 274 274 - 258 258
Loss on valuation of investments - (336) (336) - (608) (608) - (1,147) (1,147)
Income 25 - 25 34 - 34 55 - 55
Investment management fees (8) (23) (31) (13) (38) (51) (22) (67) (89)
Other expenses (16) - (16) (14) - (14) (30) - (30)
Profit/(loss) on ordinary activities before tax 1 (334) (333) 7 (372) (365) 3 (956) (953)
Taxation on profit/(loss) on ordinary activities 2 - 2 1 29 30 3 40 43
Profit/(loss) on ordinary activities after tax 3 (334) (331) 8 (343) (335) 6 (916) (910)
Earnings/(loss) per share - basic and diluted 0.04p (4.49)p (4.45)p 0.10p (4.44)p (4.34)p 0.08p (11.95)p (11.87)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 financial statements
* 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.
Income Statement
C & D Shares
Six months to 31 August 2008 Six months to 31 August 2007 Year to 29 February 2008
Revenue Capital Total Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
(Loss)/gain on disposal of investments - (192) (192) - (11) (11) - 188 188
(Loss)/gain on valuation of investments - (1,584) (1,584) - 324 324 - (1,342) (1,342)
Income 269 - 269 421 - 421 774 - 774
Investment management fees (48) (146) (194) (58) (176) (234) (113) (340) (453)
Other expenses (67) - (67) (57) - (57) (117) - (117)
Profit/(loss) on ordinary activities before tax 154 (1,922) (1,768) 306 137 443 544 (1,494) (950)
Tax (charge)/credit on profit on ordinary (27) 25 (2) (77) 47 (30) (130) 87 (43)
activities
Profit/(loss) on ordinary activities after tax 127 (1,897) (1,770) 229 184 413 414 (1,407) (993)
Earnings/(loss) per share - basic and diluted 0.63p (9.39)p (8.76)p 1.13p 0.91p 2.04p 2.05p (6.95)p (4.9)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 financial statements
* 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.
Income Statement
Total
Six months to 31 August 2008 Six months to 31 August 2007 Year to 29 February 2008
Revenue Capital Total Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
(Loss)/gain on disposal of investments - (167) (167) - 263 263 - 446 446
Loss on valuation of investments - (1,920) (1,920) - (284) (284) - (2,489) (2,489)
Income 294 - 294 455 - 455 829 - 829
Investment management fees (56) (169) (225) (71) (214) (285) (135) (407) (542)
Other expenses (83) - (83) (71) - (71) (147) - (147)
Profit/(loss) on ordinary activities before tax 155 (2,256) (2,101) 313 (235) 78 547 (2,450) (1,903)
Tax (charge)/credit profit on ordinary (25) 25 - (76) 76 - (127) 127 -
activities
Profit/(loss) on ordinary activities after tax 130 (2,231) (2,101) 237 (159) 78 420 (2,323) (1,903)
* 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 financial statements
* 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.
Reconciliation of Movements in Shareholders' Funds
Ordinary shares
Six months ended 31 Six months ended 31 August Year to 29 February 2008
August 2008 2007
�'000 �'000 �'000
Shareholders' funds at start 3,036 4,889 4,889
of period
Loss for the period (332) (335) (910)
Shares purchased for - (55) (55)
cancellation
Shares purchased and held in (97) - (44)
Treasury
Dividends paid (74) (768) (844)
Shareholders' funds at end of 2,533 3,731 3,036
period
Reconciliation of Movements in Shareholders' Funds
C & D shares
Six months ended 31 Six months ended 31 August Year to 29 February 2008
August 2008 2007
�'000 �'000 �'000
Shareholders' funds at start 18,065 19,505 19,505
of period
(loss)/profit for the period (1,770) 413 (993)
Shares purchased and held in (56) - -
Treasury
Dividends paid (202) (245) (447)
Shareholders' funds at end of 16,037 19,673 18,065
period
Reconciliation of Movements in Shareholders' Funds
Total
Six months ended 31 Six months ended 31 August Year to 29 February 2008
August 2008 2007
�'000 �'000 �'000
Shareholders' funds at start 21,101 24,394 24,394
of period
(Loss)/profit for the period (2,102) 78 (1,903)
Shares purchased for - (55) (55)
cancellation
Shares purchased and held in (153) - (44)
Treasury
Dividends paid (276) (1,013) (1,291)
Shareholders' funds at end of 18,570 23,404 21,101
period
Balance Sheet
Ordinary Shares
As at 31 August 2008 As at 31 August 2007 As at 29 February 2008
�'000 �'000 �'000 �'000 �'000 �'000
Fixed asset investments 1,950 2,986 2,426
Current assets:
Money market securities - 300 -
Debtors 8 14 48
Cash at bank 606 463 577
614 777 625
Creditors: amounts falling due (31) (32) (15)
within one year
Net current assets 583 745 610
Net assets 2,533 3,731 3,036
Called up equity share capital 383 383 383
Special distributable reserve 7,333 7,333 7,333
Capital redemption reserve 61 61 61
Capital reserve - realised (4,194) (4,014) (4,124)
Capital reserve - unrealised (501) 377 (162)
Own shares held in treasury (141) - (44)
Revenue Reserve (408) (409) (411)
Total equity shareholders' 2,533 3,731 3,036
funds
Net asset value per share 34.9p 48.7p 40.2p
Balance Sheet
C & D Shares
As at 31 August 2008 As at 31 August 2007 As at 29 February 2008
�'000 �'000 �'000 �'000 �'000 �'000
Fixed asset investments 8,566 5,831 7,356
Current assets:
Money market securities 4,903 11,195 8,475
Debtors 698 110 85
Cash at bank 1,936 3,195 2,263
7,537 14,500 10,823
Creditors: amounts falling due (67) (658) (114)
within one year
Net current assets 7,470 13,842 10,709
Net assets 16,036 19,673 18,065
Called up equity share capital 1,012 1,012 1,012
Special distributable reserve 18,077 18,077 18,077
Capital redemption reserve - - -
Capital reserve - realised (709) (377) (302)
Capital reserve - unrealised (2,428) 729 (937)
Own shares held in treasury (56) - -
Revenue Reserve 139 232 215
Total equity shareholders' 16,036 19,673 18,065
funds
Net asset value per share 79.5p 97.2p 89.3p
Balance Sheet
Total
As at 31 August 2008 As at 31 August 2007 As at 29 February 2008
�'000 �'000 �'000 �'000 �'000 �'000
Fixed asset investments 10,516 8,817 9,782
Current assets:
Money market securities 4,903 11,945 8,475
Debtors 706 124 133
Cash at bank 2,542 3,658 2,840
8,151 15,277 11,448
Creditors: amounts falling due (97) (690) (129)
within one year
Net current assets 8,053 14,857 11,319
Net assets 18,570 23,404 21,101
Called up equity share capital 1,396 1,395 1,395
Special distributable reserve 25,411 25,410 25,410
Capital redemption reserve 61 61 61
Capital reserve - realised (4,903) (4,391) (4,426)
Capital reserve - unrealised (2,929) 1,106 (1,099)
Own shares held in treasury (197) (44)
Revenue Reserve (269) (177) (196)
Total equity shareholders' 18,570 23,404 21,101
funds
Cash Flow Statement
Ordinary shares
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
Net cash inflow/(outflow) from 34 32 (9)
operating activities
Financial investment :
Purchase of fixed asset - (66) (221)
investments
Sale of fixed asset 166 692 869
investments
Management of cash equivalent
resources :
Net sale of cash equivalents - - 300
Dividends paid (74) (768) (844)
Financing :
Intercompany account movement - 47 -
Own shares held in treasury (97) - (44)
Repurchase of own shares - (55) (55)
Increase/(decrease) in cash 29 (118) (4)
resources
Reconciliation of Net Cash Flow to Movement in Liquid Resources
Ordinary shares
Six months to Six months to Year to 29 February 2008
31 August 2008 31 August 2007
�'000 �'000 �'000
Increase/(decrease) in cash at 29 (118) (4)
bank
Decrease in cash equivalents - - (300)
Opening net liquid resources 577 881 881
Net liquid resources at 31 606 763 577
August/29 February
Reconciliation of Profit before Taxation to Cash Flow from Operating Activities
Ordinary shares
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
Loss on ordinary activities (333) (365) (953)
before tax
Decrease in debtors 40 41 50
Increase in creditors 16 22 5
Gain on realisation of (25) (274) (258)
investments
Loss on valuation of 336 608 1,147
investments
Inflow/(outflow) from 34 32 (9)
operating activities
Cash Flow Statement
C & D shares
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
Net cash (outflow)/inflow from (652) 186 231
operating activities
Financial investment :
Purchase of fixed asset (2,877) (1,983) (5,675)
investments
Sale of fixed asset - - 377
investments
Management of cash equivalent
resources :
Net sale of cash equivalents 3,460 4,993 7,487
Dividends paid (202) (245) (447)
Financing :
Intercompany account movement - (47)
Issue of share capital - 5 4
Own shares held in treasury (56) - -
(Decrease)/increase in cash (327) 2,909 1,977
resources
Reconciliation of Net Cash Flow to Movement in Liquid Resources
C & D shares
Six months to Six months to Year to 29 February 2008
31 August 2008 31 August 2007
�'000 �'000 �'000
(Decrease)/Increase in cash at (327) 2,909 1,977
bank
Decrease in cash equivalents (3,572) (7,462) (7,685)
Opening net liquid resources 10,739 16,447 16,447
Net liquid resources at 31 6,840 11,894 10,739
August/29 February
Reconciliation of Profit before Taxation to Cash Flow from Operating Activities
C & D shares
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
(Loss)/Profit on ordinary (1768) 443 (950)
activities before tax
(Increase)/decrease in debtors (613) 20 44
(Decrease)/increase in (47) 36 (17)
creditors
Loss/(Gain) on realisation of 192 11 (188)
investments
Loss/(gain) on valuation of 1,584 (324) 1,342
investments
(Outflow)/Inflow from (652) 186 231
operating activities
Cash Flow Statement
Total
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
Net cash (outflow)/inflow from (618) 218 222
operating activities
Financial investment :
Purchase of fixed asset (2,877) (2,049) (5,896)
investments
Sale of fixed asset 166 692 (1,246)
investments
Management of cash equivalent
resources :
Net sale of cash equivalents 3.460 4,993 7,787
Dividends paid (276) (1,013) (1,291)
Financing :
Issue of share capital - 5 4
Own shares held in treasury (97) - (44)
Repurchase of own shares (56) (55) (55)
(Decrease)/Increase in cash (298) 2,791 1,973
resources
Reconciliation of Net Cash Flow to Movement in Liquid Resources
Total
Six months to Six months to Year to 29 February 2008
31 August 2008 31 August 2007
�'000 �'000 �'000
(Decrease)/Increase in cash at (298) 2,791 1,973
bank
Decrease in cash equivalents (3,572) (7,462) (7,985)
Opening net liquid resources 11,316 17,328 17,328
Net liquid resources at 31 7,446 12,657 11,316
August/29 February
Reconciliation of Profit before Taxation to Cash Flow from Operating Activities
Total
Six months to Six months to Year to 29 February
31 August 2008 31 August 2007 2008
�'000 �'000 �'000
(Loss)/Profit on ordinary (2,101) 78 (1903)
activities before tax
(Increase)/decrease in debtors (573) 61 94
(Decrease)/Increase in (31) 58 (12)
creditors
Loss/(Gain) on realisation of 167 (263) (446)
investments
Loss/(gain) on valuation of 1920 284 2489
investments
(Outflow)/Inflow from (618) 218 222
operating activities
Notes to the Interim Financial Statements
1. Basis of preparation
The unaudited interim results which cover the six months to 31 August 2008 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 29 February 2008.
2. Publication of non-statutory accounts
The unaudited interim results for the six months ended 31 August 2008 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 29
February 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
Ordinary Shares
The revenue return per Ordinary share is based on the net profit on ordinary activities after taxation of �3,000, (31 August 2007 net
profit of �8,000, 29 February 2008 net profit of �6,000). Whilst the capital return is based on the capital loss on ordinary activities
after taxation of �(334,000), (31 August net loss of �(343,000), 29 February 2008 net loss of �(916,000)). This is in respect of 7,451,750
Ordinary Shares (31 August 2008 7,709,176 shares and 29 February 2007 7,668,121 shares), being the weighted average number of Ordinary
shares, excluding shares held in treasury, in issue during the year.
There are no potentially dilutive capital instruments in issue and, therefore, no diluted returns per share figures are relevant.
C & D Shares
The revenue return per C & D share is based on the revenue return on ordinary activities after taxation of �127,000 (31 August 2007 net
profit of �229,000, 29 February 2008 net profit of �414,000). Whilst the capital return is based on the capital loss on ordinary activities
after taxation of �(1,897,000), (31 August net profit of �184,000, 29 February 2008 net loss of �(1,407,000)). This is in respect of
20,216,744 (31 August 2007 20,240,793 shares and 29 February 2008 20,240,793 shares), being the weighted average number of C & D shares in
issue during the year.
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
Ordinary Shares
The calculation of net asset value per share is based on the net assets at 31 August 2008 and on 7,267,837 shares being the number of
shares in issue, excluding shares held in Treasury, at the same date (31 August 2007: 7,669,349 and 29 February 2008: 7,555,693).
C & D Shares
The calculation of net asset value per share is based on the net assets at 31 August 2008 and on 20,165,793 shares being the number of
shares in issue, excluding shares held in Treasury, at the same date (31 August 2007: 20,240,793 and 29 February 2008: 20,240,793).
5. Dividends
Ordinary Shares
The interim dividend declared of 1.0 pence per Ordinary share for the six months ending 31 August 2008 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. A final dividend of 1.0 pence per share, relating to the year ended 29 February 2008, was paid on 8 August 2008 to shareholders on
the register on 11 July 2008.
C& D Shares
The interim dividend declared of 1.0 pence per C&D share for the six months ending 31 August 2008 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. A
final dividend of 1.0 pence per share, relating to the year ended 29 February 2008, was paid on 25 July 2008 to shareholders on the register
on 27 June 2008.
6. During the six months ended 31 August 2008 there were no share issues. For Ordinary shares 287,856 shares were bought
back in the period; these shares are currently held
by treasury. For C & D shares there were no buy-backs in the period.
7. 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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