Half-yearly report
01 July 2010 - 12:34AM
UK Regulatory
TIDMOTV4
Octopus Titan VCT 4 plc
Half-Yearly Results
30 June 2010
Octopus Titan VCT 4 plc, managed by Octopus Investments Limited, today announces
the Half-Yearly results for the period ended 30 April 2010.
These results were approved by the Board of Directors on 29 June 2010.
The Half-Yearly Report will shortly be available atwww.octopusinvestments.com by
navigating to Services, Investor Services, Venture Capital Trusts, Octopus Titan
VCT 4. All other statutory information will also be found there.
About Octopus Titan VCT 4 PLC
Octopus Titan VCT 4 plc ("Titan 4," "Company" or "Fund") is a venture capital
trust ("VCT") which aims to provide shareholders with attractive tax-free
dividends and long-term capital growth, by investing in a diverse portfolio of
predominately unquoted companies. The Company is managed by Octopus Investments
Limited ("Octopus" or "Manager").
Titan 4 was incorporated on 30 September 2009 with the first allotment of equity
being 1 February 2010. The total amount raised by 30 April 2010 was GBP19.3
million. The Offer for new subscriptions for shares is open until 31 August
2010.The Company will invest primarily in unquoted UK smaller companies and aims
to deliver absolute returns on its investments.
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-front income tax relief of 30%
* exemption from income tax on dividends paid
* exemption from capital gains tax on disposals of shares in VCTs
The Company has been approved as a VCT by HM Revenue & Customs. In order to
maintain its approval the Company must comply with certain requirements on a
continuing basis. By the end of the Company's third accounting period at least
70% of the Company's investments must comprise 'qualifying holdings'of which at
least 30% must be in eligible Ordinary shares. A 'qualifying holding'consists
of up to GBP1 million invested in any one year in new shares or securities in an
unquoted company (including companies listed on AIM) which is carrying on a
qualifying trade and whose gross assets do not exceed GBP7 million at the time of
investment, and whose total number of employees is less than 50, also at the
time of investment. The Company will continue to ensure its compliance with
these qualification requirements.
Financial Summary
Period to 30 April 2010
Net assets ( GBP'000s) 18,147
Return on ordinary activities before tax ( GBP'000s) (109)
Net asset value per share ("NAV") 94.0p
Chairman's Statement
I am delighted to be presenting to you in my capacity as Chairman the first
half-yearly report for Octopus Titan VCT 4 plc for the period to 30 April 2010.
In the period to 30 April 2010, the Company raised gross proceeds of GBP19.2
million and a further GBP1.5 million has been raised between 1 May 2010 and the
signing of this report. The Offer for new subscriptions for shares closes on
31 August 2010.
Investment Policy
The investment policy of Titan 4 is designed to provide investors with exposure
to a range of UK smaller companies with the aim of generating a substantial
level of returns over the medium to long term. In order to achieve this, the
Fund will focus on providing early stage, development and expansion funding to
unquoted companies with a typical deal size of GBP0.2 million to GBP2 million. It is
expected that the portfolio of holdings that will be built by the Fund will
encompass investments in 20-30 unquoted companies.
Net Asset Value
As at 30 April 2010 the Company's net asset value per share (NAV) has declined
from the initial NAV of 94.5p to 94.0p at the period end. This has been due to
GBP81,000 of running costs incurred by the Fund since its formation. Over the
longer term as the underlying portfolio of investments is created, the Company's
NAV will be linked increasingly to the value of the investments in the portfolio
companies.
Investment Portfolio
No investments had been made in the period under review or have been since the
period to which this report relates, and the date of publication.
The Investment Manager has a number of investment propositions under review by
the Titan family of funds which will enable Titan 4 to commence investing
shortly. We look forward to updating you as the Fund starts to deploy funds
through investments into qualifying businesses.
When investments are made, they will be held and valued in accordance with the
International Private Equity and Venture Capital valuation guidelines and
Financial Reporting Standards and are therefore subject to regular valuation
reviews.
Principal Risks and Uncertainties
Risks faced by the Company include economic, investment and strategic,
regulatory, reputational, operational and financial risks. These risks, and the
ways in which they are managed will be described in more detail in the Company's
Annual Report and Accounts for the period ended 31 October 2010.
VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice
on the ongoing compliance with Her Majesty's Revenue & Customs (HMRC) rules and
regulations concerning VCTs. 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 period in which investors subscribed to the Fund.
Outlook
The Investment Manager is currently seeing a strong deal flow and it is in
active negotiations with several companies in which it hopes to invest. Your
Board remains confident that the Fund will be able to meet its investment
objectives and produce returns for shareholders that are consistent with the
objectives of the Fund. The imperative is to provide early stage, development
and expansion funding to unquoted companies who have the potential to create a
large business by taking a relatively modest market share.
Gregor Michie
Chairman
29 June 2010
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
Gregor Michie
Chairman
29 June 2010
Income Statement
Period to 30 April 2010
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Investment management fees (9) (28) (37)
Other expenses (72) - (72)
Loss on ordinary activities
before tax (81) (28) (109)
Taxation on loss on
ordinary activities - - -
Loss on ordinary activities
after tax (81) (28) (109)
Loss per share - basic and
diluted (1.0)p (0.4)p (1.4)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 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 those disclosed in
the income statement.
Reconciliation of Movements in Shareholders' Funds
Period to 30 April 2010
GBP'000
Shareholders' funds at start of period -
Return on ordinary activities after tax (109)
Issue of equity (net of expense) 18,313
Repurchase of own shares (57)
Shareholders' funds at end of period 18,147
Balance Sheet
As at 30 April 2010
GBP'000 GBP'000
Current assets:
Debtors 127
Cash at bank 18,097
18,224
Creditors: amounts falling due within one year (77)
Net current assets 18,147
Net assets 18,147
Called up equity share capital 1,930
Share premium 16,320
Capital redemption reserve 6
Capital reserve
- gains/(losses) on disposal (28)
- holding gains/(losses) -
Revenue reserve (81)
Total equity shareholders' funds 18,147
Net asset value per share 94.0p
*At fair value through profit and loss
Company Number: 07035434
Cash flow statement
Period to 30 April 2010
GBP'000
Net cash outflow from operating activities (159)
Financing:
Issue of equity 19,269
Share issue expenses (956)
Repurchase of own shares (57)
Increase in cash resources at bank 18,097
Reconciliation of net cash flow to movement in liquid resources
Period to 30 April 2010
GBP'000
Increase in cash resources at bank 18,097
Movement in cash equivalents -
Opening net liquid resources -
Net funds at period end 18,097
Reconciliation of profit before taxation to cash flow from operating activities
Period to 30 April 2010
GBP'000
Return on ordinary activities before tax (109)
Increase in debtors (127)
Increase in creditors 77
Net cash inflow from operating activities (159)
Notes to the Half Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the period to 30 April 2010 have
been prepared in accordance with the Accounting Standard Board's (ASB) statement
on half-yearly financial reports (July 2007).
2. Publication of non-statutory accounts
The unaudited half-yearly results for the period ended 30 April 2010 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.
3. Earnings per share
The earnings per share is based on 7,824,319 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 2010 is based on 19,297,301
shares in issue at that date.
5. Share Issues and buy-backs
During the period, the Company issued 19,297,301 Ordinary shares at a price of
100.0p per share.
On 29 April 2010, the Company purchased 60,000 Ordinary shares for cancellation
at a price of 94.5p per share.
6. 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 GBP37,000 payable to Octopus. At
the period end there was GBPnil outstanding to Octopus.
[HUG#1428669]
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Source: Octopus Titan VCT 4 PLC via Thomson Reuters ONE
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