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2018-05-15 18:09 CEST
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Octopus AIM VCT PLC : Annual Financial Report

Octopus AIM VCT plc

Final Results

15 May 2017

Octopus AIM VCT plc, managed by Octopus Investments Limited, today announces the final results for the year ended 28 February 2018.

These results were approved by the Board of Directors on 15 May 2018.

You may view the Annual Report in full at in due course. All other statutory information will also be found there.

Financial Summary

  Year to 28 February 2018 Year to 28 February 2017
Net assets (£'000s) 127,070 99,915
Net profit after tax (£'000s) 6,476 15,123
Net asset value (NAV)  per share 116.1p 114.4p
Ordinary Dividends per share paid in year 5.5p 5.0p
Proposed Final Dividend per share* 3.0p 3.0p
Total Return** 6.3% 17.5%

*Subject to shareholder approval at the Annual General Meeting, the proposed final dividend will be paid on 20 July 2018 to shareholders on the register on 22 June 2018.

**Total return is calculated as (movement in NAV + dividends paid in the period) divided by the NAV at the beginning of the period.

Chairman's Statement

The year to 28 February 2018 was another period during which smaller companies outperformed the stockmarket as a whole demonstrating considerable resilience despite some significant challenges that surfaced during the year. The political agenda continued to be dominated by Brexit with little time for any other business and the uncertain mood was exacerbated by the unexpected General Election result in June. Despite almost daily negative press, the economy continued to grow in 2017, helped by an international economic recovery which acted as a counter to some of the headwinds caused by a squeeze on the domestic consumer. There was increased stockmarket volatility in the second half of the period and the portfolio was not immune to this. However, it is encouraging to report another year of positive total returns as a result of the progress made by many of the companies in our portfolio.

During the year your Company raised £27.2 million net of costs by the issue of new shares and continued to buy back shares from shareholders wishing to sell.

Adding back the 5.5p of dividends paid out in the year, the Net Asset Value per share total return was +6.3%. In the same twelve months the FTSE All Share Index rose by 4.4%, the FTSE SmallCap (excluding investment companies) Index by 7.9% and the FTSE AIM All Share Index by 16%, all on a total return basis. In the year the AIM market has raised £6.9 billion of new capital for companies.

In the interim accounts I reported that we had invested £5.3 million in qualifying holdings. In the second half of the year we invested a further £3.1 million in qualifying investments which comprised four new holdings and one follow-on investment. This total of £8.4 million compares with £3.4 million in the previous year. In addition we invested £15.3 million in non-qualifying holdings in the year in order to put the funds raised to work prior to finding appropriate qualifying investments. We made disposals totalling £4.9 million realising a £0.5 million gain on prior year opening value.

Further details of performance are contained in the Investment Managers' Review of the Annual Report and Accounts.

New VCT Rules
The latest November budget came at the end of the Patient Capital Review that was designed to see where funding gaps for small growing companies exist and address them. It has resulted in some further amendments to VCT legislation, mostly around increasing the speed at which new money raised needs to be invested and raising the overall percentage to be held in qualifying companies from 70% to 80%. This is covered in detail in the Manager's section of the report. At this stage there has been little impact on the portfolio itself and no need to change our investment policy. This situation may alter in the future, with change more likely to be evolutionary than immediate, although there are signs of a developing trend towards investing in smaller and earlier stage companies which fit the HMRC regulations. These may take a few years to contribute meaningfully to performance, not least because the companies will invariably require second stage additional capital.

An interim dividend of 2.5p was paid to shareholders in January 2018 in addition to the 3.0p final dividend that had been paid in July 2017. It is the Board's intention to continue to pay a minimum of 2.5p each half year and to adjust the final dividend annually, based on the year-end share price, so that shareholders receive either 5p per annum or a 5% yield, whichever is the greater at the time. This will enable dividends to progress with a rising NAV, whilst maintaining the minimum historic level. With respect to the year to 28 February 2018 the Board has so far declared and paid an interim dividend of 2.5p and now has pleasure in recommending a final dividend of 3.0p, which brings the total dividend for the year to 5.5p which is a 5% yield based on the share price of 110.0p on 28 February 2018 and greater than the targeted minimum of 5p.

Dividend Reinvestment Scheme
In common with many other VCTs in the industry, the Company has established a Dividend Reinvestment Scheme (DRIS). Some shareholders have already taken advantage of this opportunity. For investors who do not require income, but value the additional tax relief on their reinvested dividends, this is an attractive scheme and I hope more shareholders will find it useful. In the course of the year 635,361 new shares have been issued under this scheme. The dividend referred to above will be eligible for the DRIS.

Share Buybacks
During the year to 28 February 2018 the Company continued to buy back shares in the market from selling shareholders and purchased 1,586,953 Ordinary shares for a total consideration of £1,792,616. We have maintained a discount of approximately 4.5% (equating to a 5.0% discount to the selling shareholder after costs), which the Board monitors and intends to retain as a policy which fairly balances the interests of both remaining and selling shareholders. Buybacks remain an essential practice for VCTs, as providing a means of selling is an important part of the initial investment decision and has enabled the Company to grow. As such I hope you will all support the appropriate resolution at the AGM.

Share Issues
In the year to 28 February 2018 we have raised a total of £28.9 million of new capital in two offers. A small £4.3 million net of costs Top-up issue was launched on 6 February 2017, which closed fully subscribed on 27 February 2017 with the new shares issued in early March. This was well supported by existing shareholders. A prospectus was published on 16 June 2017, which allowed for a maximum of £24 million net of costs to be raised. This offer closed in November 2017 having raised the full amount.

VCT Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice concerning continuing compliance with HMRC regulations for VCTs. The Board has been advised that Octopus AIM VCT is in compliance with the conditions laid down by HMRC for maintaining approval as a VCT. A key requirement is to maintain at least a 70% qualifying investment level which will rise to 80% for financial years ending after 6 April 2019. As at 28 February 2018 some 87.3% of the portfolio as measured by HMRC rules was invested in qualifying investments.

Risks and Uncertainties
In accordance with the Listing Rules under which the Company operates the Board has to comment on the potential risks and uncertainties which could have a material impact on the Company's performance. A risk arises from the requirement to maintain compliance with HMRC regulations requiring 70% of the Company's assets to be invested in qualifying holdings which will rise to 80% by the year to 28 February 2020. Other risks include economic conditions which impact particularly on smaller companies in which the Company invests and this could have an adverse impact on share prices. Further details of the risks faced by the Company and the processes in place to mitigate them are set out in the Business Review of the Annual Report and Accounts.

Annual General Meeting
The Annual General Meeting will be held on 3 July 2018. I very much hope that you will be able to come. After the formal business our Investment Managers will make a presentation. At the Annual General Meeting, a resolution will be proposed to extend the life of the Company until 2024 in order to preserve the VCT status of the Company.

Against a background of continued, albeit subdued, growth in the last year, smaller companies have generally managed to prosper. All the uncertainties around Brexit, political stability and the resilience of domestic economic growth that we have talked about previously are still unresolved and will remain so in the foreseeable future, and these, together with recent heightened international tensions could very well lead to further bouts of increased market volatility in the coming year.  However, global growth has been rising and this has provided some support for our economy. It is to be hoped that smaller, well funded and managed companies can continue to grow without being upset by changes in external economic conditions.

Roger Smith
15 May 2018

Investment Manager's Review

Despite being a year filled with newspaper headlines predicting economic gloom and emphasising an unstable political situation caused by a minority government post the June General Election, equity markets showed surprising resilience in the year to 28 February 2018. Although there were bouts of volatility, notably in the second half, all indices rose, with smaller companies outperforming their larger peers. The pound has remained relatively weak, but the initial impact of its fall on overseas earners in the FTSE100 immediately post the referendum has washed through and smaller companies have generally seen their businesses grow faster and been rewarded with higher share prices in the year under review. There have been some notable contributors to the portfolio, both positive and negative, but we are pleased to report a rise in the NAV and the maintenance of the 5% yield objective.

In the year to 28 February 2018 AIM has continued to raise new capital for companies, both already quoted and new flotations, and your Company has deployed existing cash steadily throughout the year as well as raising new cash for future investments. The latest prospectus offer closed in November 2017 having raised the full £24 million net, which added to the cash already raised made a total of £28.9 million net for the year. The investment rate picked up in 2017 and although the new year fundraising season has been slower getting into full swing we have already seen some companies with ambitions to float later in 2018, as well as some earlier stage companies looking to raise money now with the intention of floating at some time in the future, many of which will be VCT qualifying. We have invested £2m since the year end.

The Alternative Investment Market
AIM performed exceptionally well in the twelve months to 28 February 2018, producing a total return of 16%, well ahead of the 4.4% achieved by the FTSE All share Index. This reflected a general enthusiasm for smaller company shares as well as some particularly strong performances from some of the larger constituents of the AIM index such as Fevertree, Hutchison China Medtech, ASOS, Plus 500 and IQE. Without these top five contributors AIM's performance would have been 9.3 percentage points lower over the year and more in line with the FTSE Smallcap Index (excluding investment companies) which achieved a total return of 7.9%. Share trading volumes were once again higher, helped by smaller companies continuing to be seen as an attractive asset class. In addition, September once again saw a reasonable results season confirming that for many smaller companies the economy remained supportive despite the volatility seen in the aftermath of the surprise General Election result in June. Although the total number of AIM companies has shrunk further, to 950 at 28 February 2018 compared with 973 a year earlier, we believe that the quality has continued to rise. The number of new issues once again rose, and included a mixture of early stage companies accessing state aided finance and some already well established companies.

Companies have continued to raise new capital throughout the year. In the twelve months to 28 February 2018 AIM raised a further £5.3 billion of new capital for existing companies as well as a total of £1.6 billion for new companies floating on the market, demonstrating AIM's ability to provide finance for good growth companies as well as attracting new entrants. VCTs play a significant part in that funding process and we identify below the companies we have invested in during the second half of the year.

Adding back the dividends paid during the year to show the total return, the Net Asset Value increased in the year, giving a total return of 6.3% (2017: 17.5%). This compares with a total return for the FTSE SmallCap Index ex Investment Trusts of 7.9% and for AIM of 16.0% and the FTSE All Share Index of 4.4%. The NAV didn't manage to keep pace with the AIM Index in a year when some particularly large constituents in the index dominated and drove its superior returns. It was also a year of two halves and the NAV didn't advance in the second half in less certain market conditions when some shares that had performed well in the first half paused for breath. Individual months in the year under review saw share prices suffering significant bouts of volatility and once again the market generally remained wary of smaller companies that have yet to make a profit (of which there are several in the VCT) although more established companies exceeding expectations once again performed well. Cash rose as a result of the successful fundraising and a proportion of this was invested in Octopus Portfolio Manager and the Octopus UK Micro-Cap  Growth fund ahead of being deployed in order to reduce any drag on performance.

The market continued to reward companies that met or exceeded expectations with higher share prices and this resulted in some very good contributions to performance from many of the more established and profitable companies in the portfolio, as well as from some of the more recent investments whose businesses made significant progress in the year. Among the larger holdings, GB Group, RWS, Quixant, Learning Technologies and Craneware were significant contributors to performance for the year as a whole. The particular factors that drove the individual share prices were as ever stock specific, with Quixant and Craneware demonstrating strong organic growth leading to forecast upgrades and GB Group, RWS and Learning Technologies supplementing organic growth with earnings enhancing acquisitions. For example, as a result of the latest acquisition of Moravia, RWS has moved into a new market providing localisation and translation services to some of the largest software companies in the world. As well as adding a new leg to the business, there should be plenty of opportunities to cross-sell its core patent translation to these clients in the future, further underpinning the on-going opportunity to grow organically. Learning Technologies and GB Group also benefitted from acquisitions that they had already made, and recognition of the opportunities that these opened up for future growth. Thus, although these shares have all performed very well we continue to hold them for the longer-term growth opportunities that we still feel they have. Among some of the more recent investments, Yu Group, the alternative energy supplier to small and medium sized corporates and Loop-up, the software company providing sophisticated yet simple to use conference call services, both demonstrated that they could continue the strong growth in profits they had enjoyed post-flotation, and their shares performed exceptionally well in the period.

Some companies suffered from specific headwinds which resulted in poor share price performance. The biggest detractor from performance in the year was IDOX, which was beset by problems in the second half of the year. A statement that profits would fall short of expectations for the year to October was followed a month later by the news that there had been an attempt in one part of the business to book some revenue early. The Chief Executive subsequently left on health grounds with the previous Chief Executive stepping into the breach. The company has since had a clean audit and published lower than originally expected figures. Profit expectations for the current year have been reined in. This remains a substantial business with important public sector customers but the shares will need some time to recover from this episode.

We wrote about Tasty in the interim report and unfortunately the second half of the year was just as challenging in terms of cost pressures and a consumer squeezed by the effects of inflation. Recovery in the shares still seems some way off. The other underperformer in the same sector that we wrote about in the interim report was DP Poland which operates the Dominos Pizza franchise in Poland. Although not yet profitable, it has demonstrated that it can roll out both owned and sub-franchised stores and that the model produces profitable stores. The shares have been affected in the short term by worries over competition, but we believe that the share price will recover once it achieves critical mass. The other company to suffer from internal problems was TLA. Its shares were suspended in June following the discovery of accounting irregularities. It finally produced its results for 2016 in November, and its shares were re-listed at a far lower level than the suspension price. A new finance director has been appointed in early 2018 and the latest report from the company indicates that it is trading profitably despite all the problems. The shares have started to recover but will probably need further reassurance in the shape of clean figures showing the expected recovery in profitability before that process is complete.

Elsewhere, early stage companies yet to reach profitability were responsible for most of the drag on performance, some of which had setbacks or found themselves in need of cash to achieve the next milestone. Futura Medical, Microsaic, Oxford Pharmascience, Midatech Pharma and Sphere Medical all came into that category. Sphere Medical found that it was unable to raise sufficient funds on AIM and so announced the decision to de-list. The proposed structure would have been non-qualifying and so we had no choice but to sell the shares at a loss.

There are a number of more recent constituents of the portfolio that have yet to make an impression in public markets and whose shares have been dull awaiting evidence of progress in their businesses. These include some very recent holdings such as appScatter, Beeks Financial and Escape Hunt as well as some investments from the previous year such as Osirium and Free Agent. Investing for a VCT involves backing companies when they are small and still at an early stage of development, and share price progress depends on them being noticed by a wider circle of investors as they produce results and develop their businesses. Although the earlier stage companies in the portfolio represent a relatively small proportion by value we expect them to contribute to future performance when they start to demonstrate growth in their businesses. In the year under review there were some examples of companies that demonstrated that they had started to achieve that and whose share outperformed. These included Cambridge Cognition, Ergomed, Nasstar, Wandisco and Mycelx. The last of these companies was helped by a recovery in the oil price and increased demand for its technology to clean hydrocarbons out of water.

The non-qualifying element of the equity portfolio also did well in the year as our earlier strategy of investing in larger more liquid, profitable companies to counterbalance new earlier stage qualifying holdings continued to pay off. Further investments were made into Octopus Portfolio Manager and the Octopus UK Micro Cap Growth funds to manage liquidity while cash is awaiting investment.

Portfolio Activity
Having made seven new qualifying investments in Escape Hunt, Faron Pharmaceuticals, Maxcyte, Velocity Composites, DP Poland, appScatter and FairFX at a total cost of £5.3 million in the first half of the year, we added four further new qualifying holdings at a cost of £2.6 million in the second half, as well as a follow-on qualifying investment of £0.4 million into Faron Pharmaceuticals. Total investment of £8.4 million in qualifying investments for the year was considerably higher than last year's £3.4 million, reflecting a more buoyant AIM market. Four of the five new qualifying investments were new issues. Beeks Financial Cloud Group provides direct connection to exchange servers for foreign exchange and derivatives traders. It is expanding its operations into new markets and is expected to return to profitability in 2018. Fusion Antibodies is a Northern Ireland based contract research organisation servicing the pharmaceutical industry and specialising in the humanisation of antibodies. PCI-Pal has developed software for call centres to protect customers from fraud when they are making payments over the telephone and is launching this through re-seller partners in the US. Popsa is an earlier stage private company which is looking to float on AIM in the future. It has a mobile app which enables customers to create albums of photos on their phones easily. The follow-on investment in Faron Pharmaceuticals is to invest in the development of its next products which will follow on from Traumakine, the drug currently undergoing Phase III trials.

The manager continued to use non-qualifying investments to manage liquidity while awaiting new qualifying investment opportunities. We have held onto existing AIM holdings where we see the opportunity for further development but have invested any new funds raised into a mixture of the Octopus managed portfolios with a small proportion going into the FP Octopus UK Micro Cap Growth fund. This strategy is designed to obtain a better return on funds awaiting investment than the very low rates available on cash.

There were no major sales in the year although we took the opportunity to take some profits in Quixant, Wandisco, Restore, Netcall, and Gooch and Housego. We sold the entire holding in Ideagen after the shares had a very good run. SQS, a non-qualifying holding, was taken over for cash and we tendered our shares in Tyratech at book cost after it disposed of the revenue generating portion of its business. The disposal of Gordon Dadds resulted from an existing investment in Work Group which had ceased to be qualifying when it turned itself into a cash shell and de-listed. We sold the shares at a loss after they re-listed once the deal was done and Gordon Dadds reversed into it. Other significant losses came from the disposals of Sphere and Oxford Pharmascience both of which were unable to be held under VCT rules post significant corporate actions. In all disposals raised £4.9 million in cash.

New VCT Regulations
The budget in November 2017 contained some further adjustments to the VCT regulations in the light of the Patient Capital Review, a year-long consultation which was published at around the same time. We do not believe that there needs to be any material change to our investment approach although the new requirements are that any funds raised after 6th April 2018 should be 30% invested in qualifying holdings within 12 months, and for financial years ending after 6 April 2019 the portfolio will have to maintain a minimum qualifying investment of 80% (currently 70%).

We are determined to maintain a threshold of quality and to invest where we see the potential for returns from growth. However, the emphasis of the new regulations is definitely to encourage investment into earlier stage companies, and to that extent it seems likely that over a number of years the portfolio will see a rise in the number of younger companies receiving an initial investment. We would expect to invest further in those companies as they demonstrate their ability to grow.

At present there has been little change to the profile of the portfolio, as we continue to hold the larger market capitalisation companies, in which we invested several years ago as qualifying companies, or which we bought in the market prior to the rule changes where we see the potential for them to continue to grow.

In order to qualify companies must:

  • have fewer than 250 full time equivalent employees; and
  • have less than £15 million of gross assets at the time of investment and no more than £16 million immediately post investment; and
  • be less than seven years old from the date of their first commercial sale (or 10 years if a knowledge intensive company) if raising State Aided (ie VCT) funds for the first time; and
  • have raised no more than £5 million of State Aided funds in the previous 12 months and less than the lifetime limit of £12 million (or from 6th April 2018 £10 million in 12 months and a £20 million lifetime limit if a knowledge intensive company); and
  • produce a business plan to show that the funds are being raised for growth and development.

The latest changes are to encourage VCTs to keep their investment rate up after raising money - hence the 70% limit will rise to 80% from our year ending 28 February 2020. However, allowing knowledge intensive companies to raise up to £10m of the £20m lifetime limit in a twelve month period rather than the existing £5m will improve flexibility as will the proposed change to the amount of time allowed for re-investment of cash from sales of qualifying holdings from six to twelve months.

Outlook and Future Prospects
The uncertainty that has dominated market sentiment for some time continues, with the key unknown, about the nature of our eventual relationship with the EU and the consequent impact on our economy, yet to be resolved.  The recent rise in geopolitical tensions in the Middle East and Russia could be an added threat to short term market stability as could the prospect of a further increase in interest rates from the current historically low levels. A rise in the rate of inflation has exacerbated the longer term squeeze on UK consumers and this dampened the rate of economic growth towards the end of 2017, which has been further affected by poor weather in the first quarter of 2018.  However, international growth has been picking up and so we still believe that the UK economy can continue its subdued growth of around 1.4%, in line with the Bank of England's most recent forecasts. Barring any capital market shocks, this would seem to be a reasonable background for smaller companies to make progress.

The portfolio now contains 76 holdings with investments across a range of sectors including several such as Craneware, Gooch and Housego, Gear4music, Clinigen, Cello, DP Poland and GB Group that have significant international exposure, providing some balance. Domestic companies such as Breedon, Vertu and Staffline have already demonstrated their management's ability to grow their businesses successfully in difficult economic conditions and there are a number of newer holdings that we expect to demonstrate progress over the coming twelve months. The balance of the portfolio towards profitable companies remains. The VCT currently has funds available for new investments which should allow us to take advantage of any dip in valuations should sentiment weaken in the future and we remain selective when viewing new investment opportunities.

Directors' Responsibility Statement

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the financial statements and have elected to prepare the Company's financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 - "The Financial Reporting Standard applicable in the UK and Republic of Ireland". Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.

In preparing these financial statements, the Directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and accounting estimates that are reasonable and prudent;
  • state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
  • prepare a Strategic Report, a Director's Report and Director's Remuneration Report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Website Publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' Responsibility Statement pursuant to DTR4
Roger Smith (Chairman), Stephen Hazell-Smith, Joanne Parfrey and Neal Ransome the Directors, confirm to the best of their knowledge that:

·      the financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland ("FRS 102") and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company.

·      the Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Roger Smith
15 May 2018

Income Statement

    Year to 28 February 2018 Year to 28 February 2017
Gain on disposal of fixed asset investments - 477 477 - 1,178 1,178
Gain on valuation of fixed asset investments - 6,943 6,943 - 14,258 14,258
Gain on valuation of current asset investments - 541 541 - 668 668
Investment income 843 - 843 858 - 858
Investment management fees (432) (1,296) (1,728) (353) (1,059) (1,412)
Other expenses (600) - (600) (427) - (427)
Net return on ordinary activities before taxation (189) 6,665 6,476 78 15,045 15,123
Taxation - - - - - -
Net return on ordinary activities after taxation (189) 6,665 6,476 78 15,045 15,123
Earnings per share - basic and diluted (0.2p) 6.7p 6.5p 0.1p 17.7p 17.8p

·      The 'Total' column of this statement represents the statutory Income Statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AIC Statement of Recommended Practice

·      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, as well as OEIC funds.

The Company has no recognised gains or losses other than the results for the period as set out above. Accordingly a Statement of Comprehensive Income is not required.

Balance Sheet

  As at 28 February 2018 As at 28 February 2017
  £'000 £'000 £'000 £'000
Fixed asset investments   91,247    79,919
Current assets:        
Investments 29,259    14,858  
Debtors 52    332  
Cash at bank 7,475    13,679  
  36,786    28,869  
Creditors: amounts falling due within one year (963)   (8,873)  
Net current assets   35,823    19,996
Net assets   127,070    99,915
Called up equity share capital   1,094    873
Share premium   63,098    35,422
Capital redemption reserve   61    45
Special distributable reserve   46,483    53,717
Capital reserve realised   (29,277)   (28,020)
Capital reserve unrealised   45,367   37,445
Revenue reserve   244   433
Total equity shareholders' funds   127,070   99,915
Net asset value per share - basic and diluted   116.1p   114.4p

The statements were approved by the Directors and authorised for issue on 15 May 2018 and are signed on their behalf by:

Roger Smith

Company number: 03477519

Statement of changes in Equity

  Share Capital
Share Premium
Capital redemption reserve
Special distributable reserves*
Capital reserve realised*
Capital reserve unrealised
Revenue reserve*
As at 1 March 2016 760 21,643 24 60,062 (26,518) 20,898 355 77,224
Total comprehensive income for the year - - - - (1,502) 16,547 78 15,123
Contributions by and distributions to owners:                
Repurchase and cancellation of own shares (21) - 21 (2,054) - - - (2,054)
Issue of shares 134 14,413 - - - - - 14,547
Share issue costs - (634) - - - - - (634)
Dividends paid - - - (4,291) - - - (4,291)
Balance as at 28 February 2017 873 35,422 45 53,717 (28,020) 37,445 433 99,915
As at 1 March 2017 873 35,422 45 53,717 (28,020) 37,445 433 99,915
Total comprehensive income for the year - - - - (1,257) 7,922 (189) 6,476
Contributions by and distributions to owners:                
Repurchase and cancellation of own shares (16) - 16 (1,792) - - - (1,792)
Issue of shares 237 29,399 - - - - - 29,636
Share issue costs - (1,723) - - - - - (1,723)
Dividends paid - - - (5,442) - - - (5,442)
Balance as at 28 February 2018 1,094 63,098 61 46,483 (29,277) 45,367 244 127,070

*Included in these reserves is an amount of £17,450,000 (2017: £26,130,000) which is considered distributable to shareholders.

Cash Flow Statement

  Year to 28 February 2018
Year to 28 February 2017
Cash flows from operating activities    
Return on ordinary activities before tax 6,476  15,123
Adjustments for:    
Decrease/(increase) in debtors 280  (284)
(Decrease)/increase in creditors (7,910)  6,451
Gain on disposal of fixed assets (477)  (1,178)
Gain on valuation of fixed asset investments (6,943)  (14,258)
Gain on valuation of current asset investments (541) (668)
Cash from operations (9,115)  5,186
Cash flows from investing activities    
Purchase of fixed asset investments (8,947)  (3,391)
Net investment in current asset investments (14,850)  (8,900)
Sale of fixed asset investments 5,039  3,486
Net cash flows from investing activities (18,758)  (8,805)
Cash flows from financing activities    
Purchase of own shares (1,792)  (2,054)
Share issues 27,164  13,422
Dividends paid (4,693)  (3,800)
Net cash flows from financing activities 20,679  7,568
(Decrease)/increase in cash and cash equivalents (7,194)  3,949
Opening cash and cash equivalents 18,969  15,020
Closing cash and cash equivalents 11,775  18,969
Cash and cash equivalents comprise    
Cash at Bank 7,475  13,679
Money Market Funds 4,300  5,290
  11,775  18,969