TIDMOEC1
Octopus Eclipse VCT plc
Unaudited Half-Yearly Report for the Six Months Ended 31 March 2016
Octopus Eclipse VCT plc, managed by Octopus Investments Limited, today
announces the Half-Yearly results for the six months ended 31 March
2016.
These results were approved by the Board of Directors on 24 May 2016.
You may shortly view the Half-Yearly Report in full at
www.octopusinvestments.com. All other statutory information will also be
found there.
Octopus Eclipse VCT plc is a venture capital trust which aims to provide
shareholders with attractive tax-free dividends and long-term capital
growth, by investing in a diverse portfolio of unquoted and AIM-quoted
companies.
Financial Headlines
32.5p Net asset value ('NAV') as
at 31 March 2016
79.7p* Cumulative dividends paid
since launch
112.2p Total Value (NAV plus
cumulative dividends paid) as at 31 March 2016
1.0p** Interim dividend declared
for the half-year to 31 March 2016
*This includes the 2015 final 1p dividend paid on 1 April 2016 to
shareholders on the register on 4 March 2016.
**This will be paid on 24 June 2016 to shareholders on the register as
at 10 June 2016.
Financial Summary
Six months to Six months to Year to
31 March 2016 31 March 2015 30 September 2015
Net assets (GBP'000s) 32,614 34,666 35,089
Profit/(loss) after tax
(GBP'000s) (233) (284) 66
Net asset value per share 32.5p 35.2p 34.7p
('NAV')
Cumulative dividends paid 79.7p* 76.7p 77.7p
since launch
Total Value (NAV plus 112.2p 111.9p 112.4p
cumulative dividends
paid)
Dividends declared** 1.0p 1.0p 3.0p
* Includes 1p final dividend paid on 1 April 2016
** Year to 30 September 2015 includes a 1p interim, 1p special and 1p
final dividend
Chairman's Statement
I present your Company's results for the six month period ended 31 March
2016 which show a modest decrease in Total Value from 112.4p to 112.2p,
primarily due to the standard operating costs incurred during the
period.
In the period Swiftkey was sold to Microsoft generating a profit of
GBP485,000 on a cost of GBP765,000 in a 9 month period and Reading Room
was sold to IDOX generating a profit of GBP569,000 on a cost of
GBP834,000 over a 10 year investment term.
The Board's strategy is to maintain an appropriate level of liquidity of
circa 20% in the balance sheet to allow the Company to continue to
achieve its four overarching aims:
-- to support a consistent dividend flow;
-- to support further investment in existing portfolio companies, if
required;
-- to take advantage of new investment opportunities as they arise; and
-- to provide liquidity in the shares through the buyback facility.
During the six month period the Investment Manager continued to source a
broad range of new investments to create a balanced portfolio between
early stage high growth opportunities, later stage development capital
prospects and attractive AIM company placings. We expect that this
strategy will continue for the foreseeable future allowing proceeds from
realisations to be recycled back into new portfolio investments and,
when prudent, enhanced dividends to be paid to shareholders.
By value, 65% of the VCT's net assets are in unquoted investments, 16%
in AIM-traded investments and 19% of the VCT's net assets are currently
in cash or near-cash equivalents.
Dividend and Dividend Policy
It is your Board's policy to maintain a regular dividend flow which is
dependent upon the level of profitable realisations and available cash
reserves. Your Board has targeted an annual 5% dividend yield on net
asset value plus further special dividend distributions when
realisations permit.
Your Board therefore declares an interim dividend of 1.0p per share for
the period ended 31 March 2016. The dividend will be paid on 24 June
2016 to shareholders who are on the register as at 10 June 2016. This is
in addition to the 1p special dividend paid on 26 February to
shareholders on the register on 29 January as a result of profitable
portfolio realisations, and the 2015 final dividend paid on 1 April to
shareholders on the register on 4 March.
As shown in the Financial Summary above the three 1p dividends paid in
respect of the year to 30 September 2015 represent a yield of 8.2%, and
the 1p declared interim dividend in respect of the current period to 31
March 2016 represents an annualised yield of 5.8%.
Investment Portfolio Review
The Company has investments in 23 unquoted and 10 AIM-traded companies
at 31 March (including one unquoted investment in liquidation). The
primary focus continues to be on the existing portfolio, which is being
actively managed concurrently with the search for new investment
opportunities.
There were eight investments made in the period totalling GBP1,826,000,
of which seven were into new investments. The new investments include:
-- GBP361,000 into Eve Sleep Limited. Eve is an online mattress retailer and
brand. It makes the buying process easier for customers by offering a
single product (currently only one mattress in six sizes), combined with
a hassle-free and intuitive online sales experience.
-- GBP312,000 into Tailsco Limited. Tails.com is an online pet nutrition
service that provides tailor-made food designed to deliver perfectly
optimised nutrition for dogs.
-- GBP301,000 into Origami Energy Limited. Origami is developing technology
that will help energy providers actively manage the way they generate,
store and deliver electricity. Origami's technology will enable assets to
communicate with each other so that energy can be delivered where and
when it is needed in a more efficient, money-saving way for consumers
that will also be better for the environment.
-- GBP300,000 into Nektan Plc. Nektan listed on AIM in November 2014. The
company has developed a B2B mobile gaming platform called Evolve. The
company can also provide a white label mobile casino for its customers
and develop unique gaming content.
-- GBP205,000 into Yu Group plc. Yu Group is a challenger energy supplier to
the business market, targeting SMEs in verticals such as healthcare,
hotels & leisure and construction. The company obtained its supply
license in 2013 and commenced supply operations under a controlled market
entry in 2014.
-- GBP188,000 into Segura Systems Limited. Segura Systems has created a
software solution called Segura Order Manager, which aims to solve the
problem of supply chain visibility. Segura Order Manager facilitates the
order process beyond just the direct retailer and primary manufacturer
relationship, to include the entire extended supply chain; and
-- GBP130,000 into Zynstra Limited. Zynstra offers technology infrastructure
to small and medium-sized businesses on a subscription basis using 'cloud
computing' that is available with the installation of minimal hardware.
By leveraging hybrid cloud technologies, Zynstra offers the services of a
corporate-grade IT infrastructure at an affordable cost.
During the period under review the Company made two unquoted disposals
in full, one part disposal from the AIM-traded portfolio and two loan
repayments from Tristar and The History Press. A summary of these
transactions is shown in the following table:
Total Full or
Cost Proceeds profit Profit in the period part
Company GBP'000 GBP'000 GBP'000 GBP'000 disposal
Touchtype * 765 1,250 485 126 Full
Reading
Room 834 1,403 569 31 Full
Plastics
Capital
Plc 577 852 275 (14) Part
Loan
Tristar 500 500 - - repayment
The History Loan
Press 30 30 - - repayment
Total 2,706 4,035 1,329 143
* Trades as Swiftkey
The unquoted portfolio saw an increase in value of GBP198,000 during the
period, excluding additions and disposals. This was mainly attributable
to increases in Tristar, Eve Sleep and Swoon Editions.
The AIM-traded portfolio saw a decrease in value of GBP157,000 during
the period, excluding additions and disposals. This was predominantly
attributable to decreases in the value of Plastics Capital, Vertu Motors
and Mi-Pay Group, but offset by uplifts in Cello Group and Yu Group.
Post-Balance Sheet Events
I am pleased to report that since the period end:
-- Small part disposals were made in Vianet Group Plc and Plastics Capital
Plc, and
-- Three follow-on investments have been made into MIRACL (GBP73,000),
Zynstra (GBP154,000) and CurrencyFair (GBP41,000).
VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice on the ongoing compliance with HMRC's rules and regulations
concerning VCTs. The Board has been advised that Eclipse is in
compliance with the conditions laid down by HMRC for maintaining
approval as a VCT. As at 31 March 2016, over 80% of the portfolio (as
measured by HMRC rules) was invested in VCT qualifying investments as
reviewed and confirmed by PwC. There is an ongoing requirement to
maintain the level of qualifying investments above the 70% threshold
which will be supported by the continuing deal flow from the Investment
Manager.
Principal Risks and Uncertainties
The Company's assets consist of equity and fixed-rate interest
investments, cash and cash equivalents. The associated risks are
valuation, investment and liquidity risk. Other risks faced by the
Company include loss of approval as a VCT, regulatory, reputational,
operational and financial risks. These risks, and the ways in which they
are managed, are described in more detail in the Company's Annual Report
and Accounts for the year ended 30 September 2015. The Company's
principal risks and uncertainties have not changed materially since the
date of that report.
Outlook
Following a period of uncertainty around the interpretation of recent
VCT legislation, we are pleased that there is now clarity on the
Government's approach and are confident in Eclipse's eligibility to make
new investments under the new VCT rules. We have continued to exit
legacy investments and believe that the portfolio is judiciously
balanced and diversified.
Continued restrictions to the amount investors can tax-efficiently save
into their pensions are thrusting VCTs into the limelight as an
attractive way to complement other forms of retirement saving. Last year
saw many VCT articles published in the mainstream media for the first
time and inflows across the industry reached a 10 year high of GBP457
million in the 2015/16 tax year.
With bright prospects for the VCT industry as a whole, and an exciting
investment pipeline appearing for Eclipse, we are in discussions with
the Manager about instigating a fundraising early in the next calendar
year. This could fund a range of new investments and help reinvigorate
portfolio performance over the coming years. We will be in contact with
shareholders to provide more detail in the coming months. In the
meantime I would like to thank you all for your continued support.
Alex Hambro
Chairman
24 May 2016
Investment Portfolio
Carrying
Investment value at Unrealised % equity
cost at 31 Unrealised 31 March profit/(loss) % equity managed
Unquoted March 2016 profit/(loss) 2016 in period held by by
investments Sector (GBP'000) (GBP'000) (GBP'000) (GBP'000) Eclipse Octopus
Tristar
Worldwide
Limited Transport 3,605 1,811 5,416 475 28.0% 35.3%
Dyscova Investment
Limited company 2,500 - 2,500 - 49.9% 99.8%
Spiralite
Holdings
Limited Manufacturing 2,200 - 2,200 - 36.1% 70.0%
Oxifree UK
Limited Manufacturing 1,774 - 1,774 - 42.1% 42.1%
Luther Media &
Pendragon Marketing
Limited Services 2,380 (630) 1,750 (595) 29.5% 29.5%
History
Press
Limited Publishing 4,188 (2,828) 1,360 (20) 46.9% 50.7%
Artesian
Solutions Technology &
Limited Communications 1,010 321 1,331 - 4.9% 33.3%
Secret
Escapes Consumer
Limited Products 542 448 990 - 0.4% 26.9%
Sourceable Consumer
Limited* Products 395 370 765 226 1.8% 31.0%
Eve Sleep Consumer
Limited Products 361 240 601 240 1.9% 27.6%
Other** 3,642 (1,275) 2,367 (128)
Total unquoted investments 22,597 (1,543) 21,054 198
AIM-traded investments
Plastics
Capital
plc Engineering 1,810 183 1,993 (82) 5.8% 8.9%
Vertu Motors
plc Transport 685 273 958 (49) 0.4% 5.0%
Pharmaceuticals
Ergomed plc & Biotech 750 23 773 (15) 1.6% 10.6%
Media &
Cello Group Marketing
plc Services 362 (37) 325 37 0.4% 5.4%
Technology &
Nektan plc Communications 300 (17) 283 (16) 0.1% 16.2%
Consumer
Vianet Plc Products 293 (25) 268 (2) 1.0% 4.6%
Consumer
Yu Group plc Products 205 28 233 28 0.8% 9.8%
Mi-Pay Group
plc Support Services 448 (302) 146 (25) 1.5% 3.1%
Augean plc Support Services 500 (375) 125 (16) 0.3% 1.5%
Tanfield
Group plc Engineering 290 (214) 76 (17) 0.4% 0.6%
Total AIM-traded investments 5,643 (463) 5,180 (157)
Total investments 28,240 (2,006) 26,234 41
Money market securities 2,046 - 2,046
Cash at bank 4,261 - 4,261
Total investments and cash at
bank 34,547 (2,006) 32,541
Debtors less creditors 73
Total net assets 32,614
* Trades as Swoon Editions
** Comprises 11 investments: Leanworks Limited (trades as Yplan),
Hasgrove Limited, Tailsco Limited, Origami Energy Limited, Ecrebo
Limited, CurrencyFair Limited, Segura Systems Limited, Trafi Limited,
Zynstra Limited, MIRACL Limited, Behaviometrics AB. In addition to this
there is one company in liquidation, Shopa Limited, and one company held
at nil value, T4 Media Limited.
Income Statement
Six months to 31 March 2016 Six months to 31 March 2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised gains
on disposal of
fixed asset
investments - 143 143 - 28 28
Fixed asset
investment
holding
(losses)/gains - 41 41 - 74 74
Investment
income 207 - 207 266 - 266
Investment
management
fees (88) (263) (351) (87) (262) (349)
Other expenses (273) - (273) (303) - (303)
Loss before tax (154) (79) (233) (124) (160) (284)
Taxation - - - - - -
Loss after tax (154) (79) (233) (124) (160) (284)
Earnings per
share - basic
and diluted (0.1)p (0.1)p (0.2)p (0.1)p (0.2)p (0.3)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 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 other comprehensive income for the period.
Statement of Changes in Equity
Six months to 31 Year ended 30 Six months to 31
March 2016 September 2015 March 2015
GBP'000 GBP'000 GBP'000
Shareholders'
funds at start of
period* 35,089 35,084 34,949
(Loss)/Profit
after tax (233) 66 (284)
Purchase of own
shares (914) (739) (314)
Net proceeds from
share issues 714 2,646 1,290
Dividends paid (2,042) (1,968) (975)
Shareholders'
funds at end of
period 32,614 35,089 34,666
*Shareholders' funds at the start of the period for the year ended 30
September 2015 and the six months to 31 March 2015 do not match because
a prior period adjustment was made in the 2015 annual accounts
(explained in note 2 therein) in relation to the prior period figures.
This adjustment has not been retrospectively applied to the prior year's
comparative period in the final column above.
Balance Sheet
Six months to 31 March 2016 Year to 30 September 2015
GBP'000 GBP'000 GBP'000 GBP'000
Fixed asset
investments* 26,234 28,259
Current assets:
Money market
securities* 2,046 2,042
Debtors 286 136
Cash at bank 4,261 4,853
6,593 7,031
Creditors: amounts
falling due
within one year (213) (201)
Net current assets 6,380 6,830
Net assets 32,614 35,089
Called up equity
share capital 10,044 10,122
Share premium 2,401 1,893
Special
distributable
reserve 17,677 20,633
Capital redemption
reserve 6,044 5,760
Capital reserve -
realised losses (482) (1,548)
Capital reserve -
holding losses (2,006) (861)
Revenue reserve (1,064) (910)
Total equity
shareholders'
funds 32,614 35,089
Net asset value 32.5p 34.7p
per share
*Held at fair value through profit or loss
The statements were approved by the Directors and authorised for issue
on 24 May 2016 and are signed on their behalf by:
Alex Hambro
Chairman
Company Number: 05074325
Cash flow statement
Six months Six months
to 31 to 31
March March
2016 2015
GBP'000 GBP'000
Reconciliation of profit to cash flows from operating
activities
Loss before tax (233) (284)
(Increase)/Decrease in debtors (150) 92
Increase in creditors 12 57
Gains on disposal of fixed assets (143) (28)
Gains on valuation of fixed asset investments (41) (74)
Outflow from operating activities (555) (237)
Cash flows from investing activities
Purchase of fixed asset investments (3,826)* (814)
Sale of fixed asset investments 6,035* 2,438
Inflow from investing activities 2,209 1,624
Cash flows from financing activities
Dividends paid (2,042) (975)
Purchase of own shares (914) (314)
Net proceeds from share issues 714 1,290
(Outflow)/Inflow from financing activities (2,242) 1
(Decrease)/Increase in cash and cash equivalents (588) 1,388
Opening cash and cash equivalents 6,895 8,641
Closing cash and cash equivalents 6,307 10,029
* These include GBP2m invested into Terido LLP, an Octopus managed
partnership, and the subsequent repayment of this amount in the period.
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 Eclipse VCT plc via Globenewswire
HUG#2015144
(END) Dow Jones Newswires
May 24, 2016 12:47 ET (16:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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