Octopus Eclipse VCT plc
Half-Yearly Results

21 May 2015

Octopus Eclipse VCT plc, managed by Octopus Investments Limited, today announces the Half-Yearly results for the six months ended 31 March 2015.

These results were approved by the Board of Directors on 21 May 2015.

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

 

Unaudited Half-Yearly Report for the Six Months Ended 31 March 2015

Company Number: 05074325

Financial Headlines

111.9p               Total Return (NAV plus cumulative dividends paid) as at 31 March 2015

35.2p                 Net asset value (NAV) as at 31 March 2015

76.7p                 Cumulative dividends paid since launch

1p                       Interim dividend declared for the half-year to 31 March 2015

Shareholder Information and Contact Details

Financial Calendar

The Company's financial calendar is as follows:

                  10 July 2015            -            2015 interim dividend to be paid
                 January 2016            -            Annual results for the year to 30 September 2015 to be announced; Annual Report and financial statements to be published
                   March 2016            -            2015 final dividend payment

Dividends
Dividends will be paid by the Registrar on behalf of the Company. Shareholders who wish to have dividends paid directly into their bank account rather than by cheque to their registered address can complete a mandate form for this purpose. Queries relating to dividends, shareholdings and requests for mandate forms should be directed to the Company's Registrar, Capita Asset Services, by calling 0871 664 0324 (calls cost 10p per minute plus network charges), or by writing to them at:

Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

The table below shows the net asset value per share (NAV) and lists the dividends that have been paid since the launch of Octopus Eclipse VCT plc:

Period Ended	NAV	Dividends paid in period	NAV + cumulative dividends paid (total return)
30 November 2004	96.0p	-	96.0p
31 May 2005	96.8p	-	96.8p
30 November 2005	94.2p	1.45p	95.7p
31 May 2006	96.8p	-	98.3p
30 November 2006	113.5p	1.25p	116.2p
31 May 2007	126.1p	4.00p	132.8p
30 November 2007	118.9p	4.00p	129.6p
31 May 2008	104.8p	3.00p	118.5p
30 November 2008	83.7p	7.00p	104.4p
31 July 2009	80.7p	5.00p	106.4p
31 January 2010	77.9p	5.00p	108.6p
31 July 2010	76.5p	5.00p	112.2p
31 January 2011	71.8p	5.00p	112.5p
31 July 2011	66.2p	2.00p	108.9p
31 January 2012	56.8p	4.00p	103.5p
30 September 2012	49.2p	8.00p	103.9p
31 March 2013	38.7p	11.00p	104.4p
30 September 2013	39.4p	1.00p	106.1p
31 March 2014	46.1p	1.00p	113.8p
30 September 2014	36.4p	8.00p	112.1p
31 March 2015	35.2p	1.00p	111.9p

The interim dividend of 1p per share for the six months ending 31 March 2015 will be paid on 10 July 2015 to those shareholders on the register on 12 June 2015.

Share Price
The Company's share price can be found on various financial websites including www.londonstockexchange.com, with the following TIDM/EPIC code:

	Ordinary shares
TIDM/EPIC code	OEC1
Latest share price(21 May 2015)	34p per share

                                               
Buying and Selling Shares
The Company's ordinary shares can be bought and sold in the same way as any other company quoted on the London Stock Exchange via a stockbroker. There may be tax implications in respect of selling all or part of your holdings, so shareholders should contact their independent financial adviser if they have any queries.

The Company operates a policy of buying its own shares for cancellation as they become available. The Company is, however, unable to buy back shares directly from shareholders. If you are considering selling your shares or trading in the secondary market, please contact the Company's corporate broker, Panmure Gordon (UK) Limited ('Panmure').

Panmure is able to provide details of close periods (when the Company is prohibited from buying shares) and details of the price at which the Company has bought shares. Panmure can be contacted as follows:

Chris Lloyd      020 7886 2716               chris.lloyd@panmure.com

Paul Nolan       020 7886 2717              paul.nolan@panmure.com

Notification of Change of Address
Communications with shareholders are mailed to the registered address held on the share register. In the event of a change of address or other amendment this should be notified to the Company's Registrar, Capita Asset Services, as well as Octopus Investments under the signature of the registered holder. Their contact details are provided at the end of this document.

Other Information for Shareholders
Previously published Annual Reports and Half-yearly Reports are available for viewing on the Investment Manager's website at www.octopusinvestments.com. All other statutory information will also be found there.

Warning to Shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based 'brokers' who target UK shareholders offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offer to buy shares at a discount or offer for free company reports.

Please note that it is extremelyunlikely that either the Company or Octopus Investments would make unsolicited telephone calls to shareholders, and that any such calls would relate only to official documentation already circulated to shareholders and never in respect of investment 'advice'.

If you are in any doubt about the veracity of an unsolicited phone call, please call either Octopus Investments, or the Registrar, at the numbers provided at the back of this report.

About Octopus Eclipse VCT plc

Octopus Eclipse VCT plc ('Eclipse' or 'Company') 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 diversified portfolio of unquoted and AIM-traded companies.

Eclipse merged with Octopus Eclipse 2, 3 and 4 plc on 31 October 2012.  The Investment Manager is Octopus Investments Limited ('Octopus' or 'Investment Manager'). 

VCT Legislation
The Government announced in the Budget on 19 March 2015 some amendments to VCT legislation which are subject to EU State Aid approval. As announced in the Budget, changes to qualifying investments include the following:

• companies must be less than 12 years old when receiving their first EIS or VCT investment, except where the investment will lead to a substantial change in the company's activity;
• a cap on total investment received under the tax-advantaged venture capital schemes of £15 million, increasing to £20 million for knowledge-intensive companies; and
• an increase in the employee limit for knowledge-intensive companies to 499 employees, from the current limit of 249 employees.

The Government is working to ensure that the above UK rules, which are in line but more generous than the proposed EU limits, come into effect. Octopus has been, and continues, to work closely with the Government to help them secure the best outcome for the sector. It is good to see the Government's continued support of VCTs in this year's Budget and, while the above changes may prevent the VCT from making some investments, there is a strong pipeline investment opportunities for the Company.    

Financial Summary

	Six months to 31 March 2015	Six months to 31 March 2014	Year to 30 September 2014
Net assets (£'000s)	34,666	44,857	34,949
Net return after tax (£'000s)	(284)	7,519	5,838
Net asset value per share (NAV)	35.2p	46.1p	36.4p
Cumulative dividends paid since launch	76.7p	67.7p	75.7p
Total Return	111.9p	113.8p	112.1p
Dividend declared	1.0p	1.0p	1.0p
Special dividend declared	-	7.0p	-

Chairman's Statement

I present the results for the six month period ended 31 March 2015 which show a very slight decrease in Total Return from 112.1p to 111.9p.  There were several small increases and offsetting decreases in valuation across the total portfolio which delivered, in aggregate, a broadly stable valuation.  The very slight decrease in Total Return is therefore reflective of the operating expenses incurred during the period.

Your Board intends to maintain an appropriate level of liquidity in the balance sheet to achieve four 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 and maintain 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 as proceeds from realisations are recycled back into new portfolio investments and, when prudent, enhanced dividends to shareholders.

By value, 56% of the VCT's net assets are in unquoted investments, 22% in AIM-traded investments and 22% of the VCT's net assets are currently in cash or cash equivalents and debtors and creditors. 

Director Appointment
I am delighted to welcome Lars McBride to the Board. Lars is an experienced early stage investor and company director.  His insight and experience, particularly as a former director of Octopus Titan VCT 4 Plc, will provide additional balance to the Board. Lars will also Chair the Audit Committee.

Fundraise
Since I wrote to you in the last Annual Report the Company has raised just short of £1.8 million in a non-prospectus fundraise, £0.3m of which has been received in the new tax year. This is an encouraging achievement considering it has been 3 years since the last fundraising and demonstrates a generally positive market sentiment towards the Company's performance and its growth potential.

Dividend and Dividend Policy
It is your Board's policy to maintain a regular dividend flow where possible and this relies on the level of profitable realisations and available cash reserves. Your Board has targeted an annual 5% dividend yield plus further special distributions when realisations permit.

Your Board therefore declares an interim dividend of 1.0p per share for the period ended 31 March 2015. The dividend will be paid on 10 July 2015 to shareholders who are on the register as at 12 June 2015.

Investment Portfolio Review
The Company has investments in 20 unquoted and 8 AIM-traded companies at 31 March. The primary focus continues to be on the existing portfolio, which is being maintained concurrently with the search for new investment opportunities.

There were 5 investments made in the period totalling £813,000, of which 3 were into new investments. The new investments include:

• £276,000 into Ecrebo Investments, a specialist software solution company providing targeted coupons to customers at shopping tills redeemable against future purchases.
• £184,000 into CurrencyFair, an international money transfer firm, and;
• £100,000 into Behaviosec, a technology firm which translates customer behaviour into an extra layer of security.

During the period under the review the Company made two full disposals from the AIM portfolio and had two loan repayments from Tristar and The History Press.  A summary of these transactions is shown in the following table:

Company	Cost* £'000	Proceeds £'000	Overall profit £'000	Profit in the period £'000
Interquest plc	164	272	108	(88)
Cohort plc	320	581	261	61
Tristar	500	500	-	-
The History Press	1,030	1,030	-	-
Total	2,014	2,383	369	(27)

*this refers to the cost of the shares disposed.

The unquoted portfolio saw an overall uplift in value of £285,000 during the period, excluding additions and disposals. This was attributable to uplifts in Swoon Editions, Secret Escapes, Tristar Limited and Kendal Group. These were offset by decreases in value in Certivox, Behaviosec, Luther Pendragon and History Press.

The AIM-traded portfolio saw an overall decrease in value of £211,000 during the period, excluding additions and disposals. This was attributable to decreases in the value of Plastics Capital, Cello Group, Mi-Pay Group and Augean. These were offset by uplifts in Ergomed, Vianet and Tanfield.

Taken in aggregate, the unquoted and quoted revaluations gave rise to an unrealised gain of £74,000 in the period.

Post-Balance Sheet Events
I am pleased to report that since the period end The Kendal Group was sold to another private equity buyer for £2,018,000 realising an overall gain on the investment of £1,080,000.  This sale price was reflected in the carrying value of the investment in our books as at 31^st March.

In addition new investments have been made into Swoon Editions (£104,000) and Trafi (£178,000) since 31 March.

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 2015, 71% of the portfolio (as measured by HMRC rules) was invested in VCT qualifying investments as computed 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 liquid resources. Its principal risks are therefore market risk, credit risk and liquidity risk. Other risks faced by the Company include economic, loss of approval as a VCT, investment and strategic, 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 2014. The Company's principal risks and uncertainties have not changed materially since the date of that report.

Outlook
The last six months have seen a range of economic indicators improve, suggesting that there is a generally brighter outlook for businesses.  There is still an element of uncertainty about the strength of the recovery and its timing as there are still signs of excess capacity and worries about structural imbalances. However, we believe that there are attractive investment opportunities to be found in higher growth companies with the operational agility to ride the wave of growing optimism.

The election of the majority Conservative Government is not anticipated to have a significant impact on the political landscape for VCTs. On the contrary, the Board is hopeful that the new, generally pro-business Government will strive to support small businesses and as a result Eclipse will be well-positioned to take advantage of additional investment opportunities as they arise.

I look forward to updating shareholders on progress for the year ending September 2015 and thank you for your continuing support.

Alex Hambro
Chairman
21 May 2015

Investment Portfolio

Unquoted investments	Sector	Investment cost at 31 March 2015 (£'000)	Unrealised profit/(loss) (£'000)	Carrying value at 31 March 2015 (£'000)	Unrealised profit/(loss) in period (£'000)	% equity held by Eclipse	% equity managed by Octopus
Tristar Limited	Transport services	4,105	1,257	5,362	140	27.8%	32.5%
Luther Pendragon Limited	Media & Marketing Services	2,380	304	2,684	(44)	29.5%	29.5%
The Kendal Group Limited	Consumer Products	938	1,080	2,018	120	15.4%	15.4%
History Press Limited	Publishing	4,496	(2,558)	1,938	(167)	49.0%	49.0%
Spiralite Holdings Limited	Manufacturing	1,600	-	1,600	-	36.1%	70.0%
Dualcom Holdings Limited	Technology & Telecommunications	1,183	-	1,183	-	0.0%	3.2%
Artesian Solutions Limited	Technology & Telecommunications	806	321	1,127	-	4.9%	33.5%
Reading Room Limited	Publishing	833	110	943	-	24.9%	24.9%
Secret Escapes Limited	Consumer Products	542	387	929	139	0.5%	20.3%
Sourceable Limited (Swoon Editions)	Consumer Products	237	145	382	145	1.6%	27.5%
Other*		4,841	(3,470)	1,371	(48)
Total unquoted investments		21,961	(2,424)	19,537	285
AIM-quoted investments
Plastics Capital plc	Engineering	2,408	534	2,942	(204)	8.3%	11.9%
Vertu Motors plc	General Retailers	686	148	834	-	0.4%	6.6%
Ergomed plc	Pharmaceuticals & Biotech	751	8	759	33	1.6%	9.4%
Cello Group plc	Media & Marketing Services	363	(45)	318	(7)	0.4%	6.2%
Vianet Group Plc	Support Services	294	(60)	234	11	1.0%	4.7%
Mi-Pay Group plc	Support Services	449	(303)	146	(89)	1.9%	3.8%
Augean plc	Support Services	500	(370)	130	(3)	0.3%	1.8%
Tanfield Group plc	Engineering	290	(160)	130	48	0.4%	0.6%
Total AIM-quoted investments		5,741	(248)	5,493	(211)
Total investments		27,702	(2,672)	25,030	74
Money market securities		4,559	-	4,559
Cash at bank		5,470	-	5,470
Total investments and cash at bank		37,731	(2,672)	35,059
Debtors less creditors				(393)
Total net assets				34,666

* Comprises 10 investments

Directors' Responsibilities Statement 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 'Interim Financial Reporting' issued by Financial Reporting Council;

• the half-yearly report includes a fair review of the information required by the Financial Conduct 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

Alex Hambro
Chairman

21 May 2015   Income Statement
	Six months to 31 March 2015			Six months to 31 March 2014			Year to 30 September 2014
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Realised gains on disposal of fixed asset investments	-	28	28	-	5,967	5,967	-	6,189	6,189
Fixed asset investment holding gains /(losses)	-	74	74	-	1,934	1,934	-	371	371
Other income	266	-	266	315	-	315	609	-	609
Investment management fees	(87)	(262)	(349)	(97)	(289)	(386)	(171)	(514)	(685)
Other expenses	(303)	-	(303)	(311)	-	(311)	(646)	-	(646)
Return/(loss) on ordinary activities before tax	(124)	(160)	(284)	(93)	7,612	7,519	(208)	6,046	5,838
Taxation on return on ordinary activities	-	-	-	-	-	-	-	-	-
Return on ordinary activities after tax	(124)	(160)	(284)	(93)	7,612	7,519	(208)	6,046	5,838
Earnings per share - basic and diluted	(0.1)p	(0.2)p	(0.3)p	(0.1)p	7.8p	7.7p	(0.2)p	6.3p	6.1p

• 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 recognised gains or losses other than the results for the period as set out above.
• The Company has no other comprehensive income
• The accompanying notes are an integral part of the Half-Yearly Report.

Statement of Changes in Equity
	Six months to 31 March 2015	Six months to 31 March 2014	Year to 30 September 2014
	£'000	£'000	£'000
Shareholders' funds at start of period	34,949	38,578	38,578
Return/(loss) on ordinary activities after tax	(284)	7,519	5,838
Purchase of own shares	(314)	(270)	(766)
Issue of equity (net of expenses)	1,290	-	-
Dividends paid	(975)	(970)	(8,701)
Shareholders' funds at end of period	34,666	44,857	34,949

Balance sheet
	Six months to 31 March 2015		Six months to 31 March 2014		Year to 30 September 2014
	£'000	£'000	£'000	£'000	£'000	£'000
Fixed asset investments*		25,030		25,499		26,552
Current assets:
Money market securities and other deposits*	4,559		4,541		4,550
Debtors	178		155		270
Cash at bank	5,470		14,904		4,091
	10,207		19,600		8,911
Creditors: amounts falling due within one year	(571)		(242)		(514)
Net current assets		9,636		19,358		8,397
Net assets		34,666		44,857		34,949
Called up equity share capital	9,857		9,722		9,589
Share premium	931		-		-
Special distributable reserve	30,754		30,593		22,366
Capital redemption reserve	5,630		5,407		5,540
Capital reserve  - gains/(losses) on disposal	(8,930)		305		585
- holding losses	(2,672)		(506)		(2,352)
Revenue reserve	(904)		(664)		(779)
Total equity shareholders' funds		34,666		44,857		34,949
Net asset value per share		35.2p		46.1p		36.4p

*Held at fair value through profit or loss

The statements were approved by the Directors and authorised for issue on 21 May 2015 and are signed on their behalf by:

Alex Hambro
Chairman
Company Number: 05074325

Cash flow statement
	Six months to 31 March 2015	Six months to 31 March 2014	Year to 30 September 2014
	£'000	£'000	£'000
Net cash outflow from operating activities	(238)	(716)	(899)
Financial investment:
Purchase of fixed asset investments	(813)	(495)	(3,889)
Sale of fixed asset investments	2,438	15,592	16,592
Management of liquid resources:
Purchase of current asset investments	(9)	(8)	(17)
Sale of current asset investments	-	-	-
Dividends paid	(975)	(970)	(8,701)
Financing:
Issue of Equity	1,290	-	-
Purchase of own shares	(314)	(270)	(766)
Increase/(decrease) in cash resources at bank	1,379	13,133	2,320

  

Reconciliation of net cash flow to movement in net funds
	Six months to 31 March 2015	Six months to 31 March 2014	Year to 30 September 2014
	£'000	£'000	£'000
Increase in cash at bank	1,379	13,133	2,320
Movement in cash equivalents	9	8	17
Opening net cash resources	8,641	6,304	6,304
Net funds at period end	10,029	19,445	8,641

Reconciliation of return before taxation to cash flow from operating activities
	Six months to 31 March 2015	Six months to 31 March 2014	Year to 30 September 2014
	£'000	£'000	£'000
Return on ordinary activities before tax	(284)	7,519	5,838
Gain on disposal of fixed asset investments	(28)	(5,967)	(6,189)
Gain on disposal of current asset investments	(1)	-	-
(Gain)/loss on valuation of fixed asset investments	(74)	(1,934)	(371)
Decrease/(increase) in debtors	92	(59)	(174)
Increase/(decrease) in creditors	57	(275)	(3)
Outflow from operating activities	(238)	(716)	(899)

Notes to the Half-Yearly Report

1. Basis of preparation

The unaudited half-yearly results which cover the six months to 31 March 2015 have been prepared in accordance with the Financial Reporting Council's (FRC) Financial Reporting Standard 104 Interim Financial Reporting (March 2015) and the Statement of Recommended Practice (SORP) for Investment Companies re-issued by the Association of Investment Companies in November 2014.

2. Publication of non-statutory accounts  

The unaudited half-yearly results for the six months ended 31 March 2015 do not constitute statutory accounts within the meaning of Section 415 of the Companies Act 2006 and have not been delivered to the Registrar of Companies.  The comparative figures for the year ended 30 September 2014 have been extracted from the audited financial statements for that period, which have been delivered to the Registrar of Companies.  The independent Auditor's report on those financial statements, in accordance with chapter 3, part 16 of the Companies Act 2006, was unqualified.  This half-yearly report has not been reviewed by the Company's auditor.

3. Earnings per share

The total earnings per share is based on 96,188,656 (31 March 2014: 97,720,333 and 30 September 2014: 97,224,070) ordinary shares, being the weighted average number of ordinary 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 31 March 2015 is based on 98,567,549 (31 March 2014: 97,215,570 and 30 September 2014: 95,894,128) ordinary shares in issue at that date.
           

5. Dividends

The interim dividend of 1p per share declared for the six months ending 31 March 2015 will be paid on 10 July 2015 to those shareholders on the register on 12 June 2015.

6. Buybacks

During the six months ended 31 March 2015 the Company bought back 917,557shares at a weighted average price of 34.2p per share (six months ended 31 March 2014: 771,991 shares at a weighted average price of 36.0p per share and year ended 30 September 2014: 2,093,433 shares at a weighted average price of 36.8p per share).

7. Related Party Transactions

Octopus Investments acts as the Investment Manager of the Company. Under the management agreement Octopus receives a fee of 2.0% per annum of the net assets of the Company for the investment management services. During the period, the Company incurred management fees of £349,000payable to Octopus (31 March 2014: £386,000 and 30 September 2014: £685,000). At the period end there was £nil outstanding to Octopus (31 March 2014: £nil and 30 September 2014: £nil). Furthermore, Octopus provides administration and company secretarial services to the Company. Octopus receives a fee of 0.3% per annum of net assets of the Company for administration services and £10,000 per annum for company secretarial services.

8. Other information

Copies of this report are available from the registered office of the Company at 33 Holborn, London, EC1N 2HT.