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2017-05-19 17:10 CEST
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Octopus AIM VCT PLC : Final Results

Octopus AIM VCT plc

Final Results

19 May 2017

Octopus AIM VCT plc, managed by Octopus Investments Limited, today announces the final results for the year ended 28 February 2017.

These results were approved by the Board of Directors on 19 May 2017.

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

Financial Summary

  28 February
29 February
Net assets (£'000s) 99,915 77,224
Net profit after tax (£'000s) 15,123 742
Net asset value (NAV)  per share 114.4p 101.6p
Ordinary Dividends per share paid in year 5.0p 5.3p
Special Dividend per share paid in year - 4.0p
Proposed Final Dividend per share* 3.0p 2.5p
Total Return** 17.5% 0.6%

* Subject to shareholder approval at the Annual General Meeting, the proposed final dividend will be paid on 4 August 2017 to shareholders on the register on 7 July 2017.

**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 2017 has included a number of events which, in the opinion of many commentators, should have upset the stock market.  They included the UK's decision to leave the European Union, the outcome  of the US presidential election and widespread forecasts of a slowing rate of economic growth in the UK. However, that has not been the case. Both the Net Asset Value (NAV) and general market indices have made progress, and more recent forecasts have suggested that the UK's economic prospects might now be improving.

During the year your company raised £14.3 million by the issue of new shares and a further £4.3 million has been raised since the year end. Your Company continued to buy back from selling shareholders.

Board Composition
As you will be aware, there were changes to the Board in the year following the retirement of Michael Reeve and Marion Sears. I would like to thank them both for their counsel and particularly acknowledge the role played by my predecessor in the growth of your Company since its inception which I believe has been in the interests of all shareholders, both past and present.  We are happy to have welcomed two new board directors, Joanne Parfrey and Neal Ransome, to join the Board.  Neal is Chairman of the Audit Committee.

Against a backdrop of generally improving market sentiment, the NAV has been able to make good progress in the year to 28 February 2017. Adding back the 5.0p of ordinary dividends paid out in the year, the NAV per share rose by 17.5%.  This compares with a rise in the AIM index of 33.1%, a rise in the FTSE All Share Index of 22.8% and a rise in the FTSE Smallcap Index ex Investment Trusts of 21.2%, all on a total return basis.

In the interim accounts I reported that we had invested £2.1 million in qualifying holdings. In the second half of the year we invested a further £1.3 million in qualifying investments which comprised of a new holding in FreeAgent Holdings Plc together with two further follow-on investments into Microsaic Systems plc and Futura Medical plc. In addition we invested £8.9 million in non-qualifying holdings in the year, in order to put the funds raised to work in the market. We made disposals totalling £3.5 million realising a gain on prior year opening value of £1.2million.

Further details of performance are contained in the Investment Manager's Review below.

New VCT Rules
It is now well over a year since the latest VCT regulations began to take effect and our Managers have adjusted to the new environment.  At this stage there has been little impact on the portfolio itself and no need to change investment policies.  That is a situation that may vary in the future, but any modification is likely to be evolutionary.  At present 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, given their early stage of development.

Making follow-on investments has proved difficult on occasions and is one concern for the sector as a whole, which needs to be addressed by the authorities, since the inability to support existing investments seems to invalidate much of the purpose of VCTs and to undermine the potential for growth in the UK economy.

An interim dividend of 2.5p was paid to shareholders in January 2017 in addition to the 2.5p final dividend that had been paid in July 2016. It is your 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 February 2017 your 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 higher than an annualised yield of 5%, based on the share price of 108.75p on 28 February 2017.

Dividend Reinvestment scheme
In common with many other VCTs in the industry, your Company has established a Dividend Reinvestment Scheme (DRIS).  Some shareholders have already taken advantage of this opportunity. For investors who do not need 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 467,393 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 2017 your Company continued to buy back shares in the market from selling shareholders and purchased 2,059,061 Ordinary shares for a total consideration of £2,054,339. We have maintained a discount of approximately 4.5% (equating to a 5.0% discount to the selling shareholder after costs), which your 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 your Company to grow. As such therefore I hope you will all support the appropriate resolution at the AGM.

Share Issues
In the year to 28 February 2017 we have raised a total of £14.3 million of new capital in two offers. A prospectus was published on 21 December 2015, which allowed for a maximum of £20 million to be raised. This offer closed on 3 October 2016 having raised £18 million in total, although only £14 million of this fell into the Company's accounting year.

Your Board also launched a small £4.3 million Top-up issue on 6 February 2017, which closed fully subscribed on 27 February 2017 and was well supported by existing shareholders. This resulted in the issue of 3,649,371 new Ordinary shares.  It would be the Board's present intention to have a fund raising each year and details will be sent to you when they are next available.

VCT Status
PricewaterhouseCoopers LLP provides your Board and Investment Manager with advice concerning continuing compliance with HMRC regulations for VCTs. Your 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. As at 28 February 2017 some 88.61% of the portfolio as measured by HMRC rules was invested in qualifying investments.

Risks and uncertainties
In accordance with the Listing Rules under which your Company operates your 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 your Company's assets to be invested in qualifying holdings. Other risks include economic conditions which impact particularly on smaller companies in which your 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 within the full Annual Report and Accounts.

Annual General Meeting
The Annual General Meeting will be held on 20 July 2017. 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 2022 in order to preserve the VCT status of the Company for the benefit of both existing shareholders and new investors participating in the present share offer.

There are a number of short term uncertainties at present which make forecasting more difficult than usual. We must hope that they do not combine to undermine investor confidence, although it seems unlikely that they will disrupt the good trading of many of your Company's holdings in the remainder of this new financial year.  It is encouraging that the NAV has continued to rise since the year end and was 119.5p as at 30 April 2017.  The flow of VCT qualifying deals has also picked up after a slow start to 2017, and your Manager has made four further qualifying investments totalling £2.6 million since the year end.

I look forward to seeing as many of you as possible at the Annual General Meeting at 11 am on 20 July 2017.

Roger Smith
19 May 2017 

Investment Manager's Review

In a year in which some significant economic and political events have taken markets by surprise, the expectation that volatility would follow as a consequence has been confounded by a stronger market, particularly towards the end of the year to 28 February 2017. All indices have risen, particularly in the last few months of the year. Large companies with overseas earnings had a particularly strong period of performance after the Referendum in June 2016 as Sterling fell and the oil price began to recover. However, smaller companies have also performed well, so we are pleased to report a rise in the NAV and the maintenance of the 5% yield objective.

The year to 28 February 2017 has continued to see AIM raise new capital for companies, both already quoted and new flotations and your Company has invested steadily throughout the year as well as raising new capital for future investments. The prospectus offer closed in October 2016 and we have recently closed the Top-Up offer for £4.3 million to give existing and new shareholders a chance to invest in the current tax year. We are starting to see the number of VCT qualifying investment opportunities rise, after a slow start to this year.

The Alternative Investment Market
Despite some volatility in the first half of the financial year, the FTSE AIM All-Share Index rose in that period. The rise in the second half of the year was more consistent and felt stronger, but in fact the rise in the second half of 14.6% compared with an increase of 14.1% in the first half. Contributing particularly strongly to the rise in the AIM index were both the oil and resources sectors, whose indices rose by approximately 57% and 71%. Share trading volumes also picked up, helped by a sense of stability, if not outright confidence, despite the result of the Referendum to leave the EU.  Smaller companies continued to be seen as an increasingly attractive asset class.

In addition, September 2016 saw a reasonable results season confirming that for many smaller companies the economy remained supportive. Against that background the number of AIM companies has shrunk further, to 973 at 28 February 2017, compared to 1,029 a year earlier. However, we believe that the quality has continued to rise and see nothing fundamentally wrong with AIM just because it has fewer companies on the market. New issues in the last twelve months include such names as Joules, the clothing manufacturer and retailer, and Hotel Chocolat, the chocolatier.  AIM remains the UK stock market of choice for smaller growing companies.

AIM listed companies have continued to raise new capital throughout the year. In the twelve months to 28 February 2017 AIM raised a further £3.6 billion of new capital for existing companies and a total of £1.1 billion for new companies floating on the market. Although the level of fundraising for existing companies was lower than last year, these figures show conclusively that AIM remains open for the funding of good growth companies and continues to attract 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 17.5%. This compares with a total return for the FTSE Smallcap Index ex Investment Trusts of 21.2% and for AIM of 33.1% and the FTSE All Share Index of 22.8% in the twelve month period.  Individual months in the year under review saw share prices suffering significant bouts of volatility and the market has generally remained wary for most of the year of smaller companies which have yet to make a profit, although more established companies, which have outperformed expectations, have been well rewarded by rising prices. While the rise in NAV is encouraging, it fell short of the performance of the AIM Index, which has been driven particularly by some sectors, such as resources and oil and gas, in which your Company is unable under VCT rules to make direct investments, and which have risen by 57% and 71% respectively. The FTSE Smallcap Index ex Investment Trusts, which rose less than the AIM Index, is probably more representative of the types of companies in which this VCT invests, as we have remarked before, and its performance was more comparable to the rise in the NAV. The FTSE Smallcap Index ex Investment Trusts is made up of fully-listed stocks and does not, therefore, have the smaller pre-profit companies that we have in your portfolio.

Within the portfolio there was once again a good contribution from the more established and already profitable companies which includes many of the individual non-qualifying holdings such as RWS, Abcam, Next Fifteen and Gooch and Housego. However, the polarisation we talked about in the interim statement persisted with companies deemed to be exposed to the 'Brexit effect', such as Staffline and Vertu Motors, continuing to underperform despite producing decent figures and encouraging trading statements.  In addition Tasty's exposure to rising costs caused it to re-evaluate some of its new opening pipeline and raise extra funds to reduce its debt financing, all of which caused its shares to underperform.  We do not share the market's current pessimism about these companies, which have been held in the portfolio for a number of years and where the management teams have successfully grown in challenging economic conditions in the past. We believe that their share prices will recover as they deliver on their growth plans.

Elsewhere, underperformance came from the earlier stage companies in the portfolio, particularly those that had setbacks or showed themselves in need of further cash to reach profitability. Nektan, Oxford Pharmascience and Microsaic all performed poorly in the year.  Nektan raised new capital in December and Microsaic had a fundraising where we made a further investment to support the management team who believe they now have a product which they can sell.  Oxford Pharmascience is trading at around the £21 million value of cash in the balance sheet reflecting disappointment that it has so far failed to negotiate a licensing deal for its taste masking technology for NSAIDS. The other poor performers were TLA where a bid and a move to Nasdaq had boosted the shares for much of 2016 and Midatech, which has now raised £16 million in new funds which should be sufficient to finance the business to profitability.

There were several corporate developments during the year. Breedon completed the acquisition of Hope, doubling the size of the business and giving it a much prized cement railhead into London. GB Group also made an important acquisition in scanning technology and, although its shares suffered a setback on the news that revenue growth would be affected by the slow roll-out of a UK Government contract, the holding remained a strong performer. Ergomed raised money and acquired another pharmacovigilance business in a very earnings enhancing deal, which was much better received by the market than its earlier acquisition of Haemostatix, and the shares have started to recover.  Idox, EKF and Animalcare were all positive contributors to performance after their core businesses started to show growth after a period of consolidation. In EKF's case this was after the business was pared back to its core and re-focussed under the direction of the new Chairman.

Several shares performed particularly well as the underlying businesses demonstrated that they were delivering on, or ahead of, their plans at the time that we invested.  Gear4music is now a profitable business with a third of its revenues coming from Europe and growing at more than 50% in the current year.  DP Poland has also finally demonstrated that the Domino's model works in Poland and is now signing up sub-franchisees for new sites.  Quixant has also increased its customer base and has had several upgrades to its forecasts this year, making it the biggest positive contributor to the fund's performance this year. Craneware has also re-established its growth credentials although it has had more of a roller-coaster performance as it outperformed on the back of weak sterling before underperforming on fears over changes to the US healthcare market under President Trump, although the shares have since recovered helped by news of new contracts.

The non-qualifying element of the equity portfolio also did well in the year as our existing strategy of investing in larger more liquid, profitable companies to counterbalance new earlier stage qualifying holdings continued to pay off. We have now supplemented these with holdings in Octopus Portfolio Manager and the FP Octopus Micro Cap Growth funds to manage liquidity, while cash is awaiting investment.

Portfolio Activity
Having made four new qualifying investments in the first half of the year, we added three further qualifying holdings in the second half.  Of these one was new, FreeAgent Holdings, into which we invested just under £0.3 million in a popular issue and the others were additions to Microsaic and Futura Medical. These two added up to just under £1 million. This made a total investment of £3.4 million in qualifying investments in the year to 28 February 2017, which was considerably lower than last year's £5.9 million reflecting slightly lower levels of fundraising activity on AIM and the short term effects of digesting the new VCT rules.  The new holding, FreeAgent, is a supplier of cloud based accounting software sold as a service to enable sole traders and small businesses to file their tax returns on line or via mobile.  It is expected to be profitable for the year to March 2019.

We have also invested a proportion of our newly raised cash in non-qualifying holdings with a view to improving returns by putting liquid assets to work. In total we invested £8.9 million into new non-qualifying holdings in the year.

There were no major disposals in the year, although we took the opportunity to dispose of some of the smaller holdings that were not contributing to performance. Thus we sold Vianet, Tanfield and Lombard Medical each at a loss and accepted the offer for Tangent Communications, also realising a loss. We also sold Altitude realising a profit and, at the end of a protracted process, accepted the offer for Bond International.  All being well this sale will produce a very small further sum in 2018. We have taken profits from a number of holdings, such as Vectura, Abcam, WANdisco and Futura, although in this latter case we subsequently re-invested in the company's most recent fundraising. In total during the year we made disposals of £3.5 million realising a gain on prior year opening value of £1.2m.

Since the year end, we have seen a pick up in the number of fundraisings on AIM and have invested in four new qualifying holdings.  They are Escape Hunt, a leisure company, into which we have invested £1 million, Velocity Composites where we invested £0.8 million, Maxcyte, a healthcare company, where we invested £0.5 million and  Faron Pharmaceuticals where we invested £0.3 million. Further details of the post year end transactions are provided in Note 18 to the financial statements.

New VCT Regulations
During the year under review, to 28 February 2017, we were required to assimilate the consequences of the new rules established in the Summer Budget of 2015. We have not found that there needed to be any material change to our investment approach.  We are determined to maintain a threshold of quality and to invest where we see returns from growth. However, the emphasis of the regulations is definitely to encourage investment into earlier stage companies and to that extent, it seems highly likely over a number of years, that the portfolio will see a rise in the number of smaller companies receiving our initial investment. We would hope and expect to invest further in those companies as they grow.

To summarise the changes, 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 its 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 £20 million if a knowledge intensive company); and
  • produce a business plan to show that the funds are being raised for growth and development.

Although there is a longer period and higher funding limit allowed for knowledge intensive companies, it seems possible that a new funding gap will open up for smaller companies, which reach their funding limit, but which are still in a development phase.  This would particularly affect a company which has failed, for whatever reason, to qualify as a knowledge intensive one. It is also possible that capital intensive companies, which potentially form a key part of the new government's industrial strategy, will face funding challenges as VCTs will not be able to follow on with further investment and the companies may be too small to attract investment from more conventional and larger institutional investors. This financing issue is probably a long way down any government department's list of priorities, but it is to be hoped that the funding gap fails to materialise for any of our holdings. One of our major and consistent reasons for refusing to invest is the belief that a company is not raising enough capital at a particular time.  We will persist with that criterion.

Outlook & Future Prospects
Markets have enjoyed a strong start to 2017, buoyed by better than expected economic growth figures and a sense of relief that the immediate disaster predicted by those opposing the decision to exit the European Union has not materialised.  However, political and macro-economic issues remain and newspaper headlines are still dominated by speculation about Brexit's eventual impact on our economy as well as the shape of our future relationships with Europe and the rest of the world. These questions are unlikely to be settled quickly, and it seems therefore that investors have to be prepared for bouts of uncertainty and volatility. On the plus side, the rising level of confidence has resulted in an increased interest in smaller companies and support for fundraisings through March and April, and there are no immediate signs of this reversing. We remain confident that smaller companies can continue to grow. The dominant theme of the recent reporting season with a few exceptions was confident trading statements that led to forecast upgrades.  In the immediate future there is no economic upset to that trend, and any impact from Brexit itself will be felt much further into the future than February 2018.

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, which have significant international exposure. 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 the latter two should see scope for further share price recovery if they continue to meet market expectations.  The balance of the portfolio still remains towards profitable companies, with several expected to start paying dividends in 2017.  The top-up fundraising for £4.3 million adds to the funds available for new investments and allows us to take advantage of any dip in valuations should sentiment weaken in the future. We will, as we have in the past, remain selective when viewing new investment opportunities.

The AIM Team
Octopus Investments Limited
19 May 2017

Directors' Responsibilities 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
19 May 2017

Income Statement

    Year to 28 February 2017 Year to 29 February 2016
    Revenue Capital Total Revenue Capital Total
    £'000 £'000 £'000 £'000 £'000 £'000
Gain on disposal of fixed asset investments   - 1,178 1,178 - 59 59
Gain on valuation of fixed asset investments   - 14,258 14,258 - 1,684 1,684
Gain on valuation of current asset investments   - 668 668 - - -
Investment income   858 - 858 816 - 816
Investment management fees   (353) (1,059) (1,412) (340) (1,021) (1,361)
Other expenses   (427) - (427) (456) - (456)
Net return on ordinary activities before taxation   78 15,045 15,123 20 722 742
Taxation   - - - - - -
Net return on ordinary activities after taxation   78 15,045 15,123 20 722 742
Earnings per share - basic and diluted   0.1p 17.7p 17.8p 0.0p 1.0p 1.0p
  • 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

As at 29 February

    £'000 £'000 £'000 £'000
Fixed asset investments      79,919   64,578
Current assets:          
Investments    14,858   5,269  
Debtors    332   48  
Cash at bank    13,679   9,751  
     28,869   15,068  
Creditors: amounts falling due within one year   (8,873)   (2,422)  
Net current assets      19,996   12,646
Net assets      99,915   77,224
Called up equity share capital      873   760
Share premium      35,422   21,643
Capital redemption reserve      45   24
Special distributable reserve      53,717   60,062
Capital reserve realised     (28,020)   (26,518)
Capital reserve unrealised      37,445   20,898
Revenue reserve     433   355
Total equity shareholders' funds     99,915   77,224
Net asset value per share - basic and diluted     114.4p   101.6p

The statements were approved by the Directors and authorised for issue on 19 May 2017 and are signed on their behalf by:

Roger Smith
Company number: 03477519

Statement of Changes in Equity

  Share Capital Share Premium Shares to be issued Capital redemption reserve Special* distributable reserves Capital* reserve realised Capital reserve unrealised Revenue* reserve Total
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 March 2015 656 13,951 319 9 63,684 (29,810) 23,468 335 72,612
Management fee allocated as capital expenditure - - - - - (1,021) - - (1,021)
Current year gains on disposal - - - - - 59 - - 59
Current period gains on fair value of investments - - - - - - 1,684 - 1,684
Prior years' holding gains/losses now realised - - - - - 4,254 (4,254) - -
Net Revenue on ordinary activities after tax - - - - - - - 20 20
Cancellation of Share Premium - (4,658) - - 4,658 - - - -
Total comprehensive income for the year - (4,658) - - 4,658 3,292 (2,570) 20 742
Contributions by and distributions to owners:                  
Repurchase and cancellation of own shares (15) - - 15 (1,499) - - - (1,499)
Issue of shares 119 12,989 (319) - - - - - 12,789
Share issue costs - (639) - - - - - - (639)
Dividends paid - - - - (6,781) - - - (6,781)
Balance as at 29 February 2016 760 21,643 - 24 60,062 (26,518) 20,898 355 77,224
As at 1 March 2016 760 21,643 - 24 60,062 (26,518) 20,898 355 77,224
Management fee allocated as capital expenditure - - - - - (1,059) - - (1,059)
Current year gains on disposal - - - - - 1,178 - - 1,178
Current period gain on fair value of investments - - - - - - 14,926 - 14,926
Prior years' holding gains/losses now realised - - - - - (1,621) 1,621 - -
Net Revenue on ordinary activities after tax - - - - - - - 78 78
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

*Included in these reserves is an amount of £26,130,000 (2016: £33,899,000) which is considered distributable to shareholders.

Cash Flow Statement

    Year to 28
February 2017
Year to 29 February
    £'000 £'000
Cash flows from operating activities      
Return on ordinary activities before tax     15,123   742
Adjustments for:      
(Increase)/decrease in debtors     (284)   155
Increase in creditors     6,451   1,674
(Gain) on disposal of fixed assets     (1,178)   (59)
(Gain) on valuation of fixed asset investments     (14,258)   (1,684)
(Gain) on valuation of current asset investments   (668) -
Cash from operations     5,186   828
Cash flows from investing activities      
Purchase of fixed asset investments     (3,391)   (11,043)
Purchase of current asset investments     (8,900) -
Sale of fixed asset investments     3,486   5,919
Net cash flows from investing activities     (8,805)   (5,124)
Cash flows from financing activities      
Purchase of own shares     (2,054)   (1,499)
Share issues     13,913   12,469
Decrease in shares to be issued     -   (319)
Dividends Paid     (4,291)   (6,781)
Net cash flows from financing activities     7,568   3,870
Increase/(decrease) in cash and cash equivalents     3,949   (426)
Opening cash and cash equivalents     15,020   15,446
Closing cash and cash equivalents     18,969   15,020
Cash and cash equivalents comprise      
Cash at Bank     13,679   9,751
Money Market Funds     5,290   5,269
      18,969   15,020