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Octopus Apollo VCT plc : Final Results

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Octopus Apollo VCT Plc  

 

Final Results

29 May 2015

Octopus Apollo VCT plc, managed by Octopus Investments Limited, today announces the final results for the year ended 31 January 2015.

These results were approved by the Board of Directors on 29 May 2015.

You may, in due course, view the Annual Report in full at www.octopusinvestments.com. All other statutory information can also be found there.

 

 

Financial Summary - Ordinary shares

  Year to 31 January 2015 Year to 31 January 2014
     
Net assets (£'000s) 68,810 63,905
Return on ordinary activities after tax (£'000s) 2,270 1,751
Net asset value per share (NAV) 84.8p 86.8p
Cumulative dividends paid since launch 27.5p 22.5p
Total return (NAV plus cumulative dividends paid) 112.3p 109.3p
Proposed final dividend 2.5p 2.5p

A final dividend of 2.5p per Ordinary share will be paid on 31 July 2015 to shareholders on the register on 3 July 2015.

Financial Summary - C Ordinary shares

  Year to 31 January 2015
   
Net assets (£'000s) 50,753
Return on ordinary activities after tax (£'000s) 22
Net asset value per share (NAV) 98.0p
Cumulative dividends paid since launch 7.0p
Total return (NAV plus cumulative dividends paid) 105.0p

Reconciliation of the Movement in NAV per share - Ordinary shares

NAV as at 1 February 2014 86.8p
 

Income
 

3.5p
General Expenses (1.2p)
Management fees (1.4p)
Performance fees (0.6p)
Unrealised gains on investments 1.7p
Realised gains on investments 1.0p
Dividends paid (5.0p)
 

NAV as at 31 January 2015
 

84.8p

Reconciliation of the Movement in NAV per share - C shares

NAV on acquisition as at 28 November 2014 97.8p*
 

Income
 

1.0p
General Expenses (0.2)p
Management fees (1.5p)
Unrealised losses on investments (0.1)p
Realised gains on investments 1.0p
 

NAV as at 31 January 2015
 

98.0p

*the C Ordinary shares were created as part of the acquisition of the assets and liabilities of Octopus VCT plc ("OVCT"). Shareholders in OVCT were issued 1 C Ordinary share for every 1 OVCT share held.

Chairman's Statement

Introduction
I am pleased to present the annual report of Octopus Apollo VCT plc for the year ended 31 January 2015 and I should like to welcome all new shareholders following the acquisition of assets and liabilities of Octopus VCT plc.

It has been a positive year for the Company. In addition to raising nearly £4.1 million by way of a top up offer in February 2014, the Company launched an Offer for Subscription to raise up to £20 million, with an over allotment facility of a further £10 million, in October 2014. At the time of writing £19.5 million had been raised under the Offer.

In November 2014 the Company acquired the assets of Octopus VCT plc ("OVCT"), increasing the net assets of the Company by £50.7 million and making it one of the largest VCTs in the country. OVCT was established in 2009 as a limited life VCT seeking to deliver a total return to shareholders at the end of the five year qualifying holding period of at least 105p per share. The commercial arrangement in respect of the C Ordinary shares is that no annual management fee has yet been paid to Octopus and will only be paid after five years and once shareholders have received dividends and distributions totalling or exceeding 105p per share. The total return rose above 105p per share in the period under review and, as such, an accrual of £777,000 has been made in the accounts to reflect the fee payable on the amount over and above 105p.

The Company created a new C Ordinary share class through the issue of 52,035,840 C shares to the former shareholders of OVCT and the investment portfolio is currently separately accounted for under this share class.  The C share class structure has been established to enable the Board to monitor the performance of the C share assets to ascertain whether the 105p total return target referred to above is achieved and therefore whether any management fee is payable to Octopus in respect of the C share portfolio. C shareholders will soon be offered the opportunity to realise their investment or to convert their shares into Ordinary shares. We will be writing to them in the summer setting out details of this process.
                                                               
Board
Following the acquisition of OVCT's assets and liabilities ("transaction") I am delighted to welcome James Otter, the former Chairman of OVCT to the Board. James brings with him a wealth of knowledge both of OVCT, as well as of VCTs and smaller companies in general. I am also pleased that Chris Powles and Matt Cooper have continued as directors of the Company, retaining their considerable experience. I should also like to take this opportunity to thank Tony Morgan, who resigned following the transaction, for his outstanding contribution to the Company. Tony was appointed Chairman of the Company at launch in July 2006 and held that position until its transaction with Octopus Apollo VCT 1 plc, Octopus Apollo VCT 2 plc and Octopus Apollo VCT 4 plc in September 2012, whereupon he stood down as Chairman but remained as a director. This continuity and Tony's input has been invaluable. Resolutions to appoint James Otter and to re-elect Matt Cooper will be proposed at the forthcoming AGM.

Performance
The net asset value ('NAV") of the Ordinary share class has fallen from 86.8p per Ordinary share as at 31 January 2014 to 84.8p per share as at 31 January 2015. After adding back the 5.0p of dividends paid in the year, the total return (NAV plus cumulative dividends paid) has risen by 2.7%, from 109.3p per share as at 31 January 2014 to 112.3p per share as at 31 January 2015.

The C Ordinary shares were issued on completion of the transaction on 28 November 2014 at a deemed issue price of 97.8p per C share. As at 31 January 2015 the NAV per share of the C shares had risen to 98.0p.

Dividend and Dividend Policy
It is your Board's policy to maintain a regular dividend flow where possible in order to take advantage of the tax free distributions a VCT is able to provide.

Given the performance of the Company your Board has proposed a final dividend of 2.5 pence per Ordinary share in respect of the year ended 31 January 2015.  This will bring the total dividends paid on the Ordinary share class in respect of the year to 5 pence. The dividend will be payable on 31 July 2015 to Ordinary shareholders on the register at 3 July 2015.

In view of the forthcoming liquidity event for holders of the Company's C Ordinary shares no dividend has been proposed in respect of this share class.

Dividend Reinvestment Scheme (DRIS)
In common with a number of VCTs, the Company has introduced a dividend reinvestment scheme following approval at the general meeting held on 21 November 2014. This is an attractive scheme for investors who do not need income, but would prefer to benefit from additional income tax relief on their re-invested dividend. I hope that shareholders will find this scheme beneficial.

Share Buybacks
Your Company has continued to buy back shares as required. Subject to shareholder approval at the forthcoming annual general meeting this facility will remain in place to provide liquidity to investors who may wish to sell their shares.

Investment Portfolio 
The transaction with Octopus VCT plc ("OVCT") on 28 November 2014 resulted in the Company acquiring its £50.3m investment portfolio which had been invested under a capital preservation mandate.

In January 2015, both share classes participated in Project Radiate in which the Company disposed of seven of its solar sector investments generating proceeds for the Company of £12.5m. Other exits and repayments in the year totalled £9.9m for the Ordinary shares and £0.1m for the C shares.

During the year the Company made £13.2m of new investments and rolled over its entire £10.9m investment in Clifford Thames into a new management buyout deal. It also reinvested its partnership gains of £0.5m into Terido, a trading partnership managed by Octopus Investments which supports a range of secured asset backed lending in sectors including residential property and solar and typically generates returns for the Company of approximately 4%. This brings the total investment in Terido to £15.2m as at 31 January 2015.

The Company, by the year end, had invested sufficiently in order to meet all the requirements for it to fully qualify as a VCT. Following the recent exits and fundraising the Investment Manager now has the opportunity to make further investments with the aim of accelerating the NAV of the Company over the foreseeable future.


Investment Strategy
As set out in the prospectus, the aim of the Company is to make investments that focus more on capital preservation than a typical VCT. To date the Investment Manager has been successful in achieving this aim, as evidenced by the positive return on ordinary activities.

Typically the structure of the investments is weighted more heavily towards loan based instruments as opposed to equity. Such investments provide fixed returns and payments are generally ranked above most other creditors, allowing for future visibility and security. This strategy also reduces the downward risk that is an intrinsic element of an equity investment.

Having passed its five year qualifying period, it is the intention of the Board that the Company should remain as a VCT and continue to invest in accordance with the original investment mandate. The C Ordinary share portfolio will also continue to invest under the same mandate.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice concerning ongoing compliance with Her Majesty's Revenue & Customs ('HMRC') rules and regulations concerning VCTs. The Board has been advised that the Company is in compliance with the conditions laid down by HMRC for maintaining approval as a VCT.

A key requirement is now to maintain the 70% qualifying investment level. As at 31 January 2015, 90.0% of the portfolio, as measured by HMRC rules, was invested in VCT qualifying investments.

Alternative Investment Fund Managers Directive (AIFMD)
The AIFMD, an EU directive, came into effect during the year with the aim of delivering consistency of reporting across all fund types. In accordance with the legislation the Company applied to the Financial Conduct Authority to register as an Alternative Investment Fund Manager (AIFM). Confirmation of the Company's entry in the register of small registered UK AIFMs was received on 10 April 2014. As such, the Company is required to submit an annual report to the FCA setting out various information relating to its investments, principal exposures and liquidity, amongst other things.

Annual General Meeting
The Company's Annual General Meeting will take place on 14 July 2015 at 3.00 p.m. I look forward to welcoming you to the meeting which will be held at the new offices of Octopus Investments Limited at 33 Holborn, London, EC1N 2HT. Directions to their office can be found by visiting their website at: www.octopusinvestments.com.

Electronic Communications
Based on feedback from shareholders, and in order to reduce the cost of printing and the consequential impact on the environment, we now offer shareholders the opportunity to forgo their printed report and account documents in favour of receiving electronic or mail notification with details of how to view the documents online.

Outlook
Since the Company's launch we have seen significant Government changes to the subsidy regime for the renewable energy sector and an economy which has until recently struggled to grow following the global financial crisis.  However the returns to shareholders have increased steadily year on year, which is testament to the prudent investment approach adopted by the Investment Manager.  The general economic outlook is now more certain, the portfolio has been performing well and your Board and Investment Manager believe we can continue to find suitable investments to support the Company's mandate.

Murray Steele
Chairman                                           
29 May 2015

Investment Manager's Review

Personal Service
At Octopus we have dual focus on managing your investments and keeping you informed throughout the investment process.  We are committed to providing our investors with regular and open communication.  Our updates are designed to keep you informed about the progress of your investment.

Octopus was established in 2000 and has a strong commitment to both smaller companies and to VCTs.  We currently manage eight VCTs, including this one, and manage over £480 million in the VCT sector. Octopus has over 300 employees.  The investment team that manages the portfolio of your Company is comprised of 8 managers, with additional support from specialist investment teams and support staff.

Investment Policy
The investment approach of Octopus Apollo VCT plc is to invest with a focus on capital preservation.  The majority of companies in which Apollo invests operate in sectors where there is a high degree of predictability.  Ideally, we seek companies that have contractual revenues from financially sound customers that will provide an exit to the Company within three to five years.

Performance
The Company made a net return per Ordinary share of 2.9%  between 31 January 2014 and 31 January 2015. Whilst the NAV per Ordinary share decreased slightly from 86.8p to 84.8p, 5.0p of dividends were paid over the period, bringing cumulative dividends paid to date to 27.5p and the total return (NAV plus cumulative dividends) to 112.3p pence per share.

The C Ordinary shares were issued on completion of the transaction on 28 November 2014 at a deemed issue price of 97.8p per C Ordinary share. As at 31 January 2015 the NAV of the C Ordinary shares had risen to 98.2p per share.

Portfolio Review
The £50.3m portfolio of assets of Octopus VCT plc acquired in November 2014 was made up predominantly of investments in the solar and other renewable energy sectors. These assets are currently being accounted for separately from the assets held by the Ordinary shares, in a new class of share known as the C Ordinary shares, until all C shareholders have reached the fifth anniversary of their investment, later in 2015.

In the year under review the Company invested £3.8m in Vista Retail Support, a company that provides repairs and maintenance services for tills and chip and pin devices and £2.7m in Countrywide Healthcare Supplies, a nationwide supplier of products to the care home industry.  The £10.9m investment in Clifford Thames was reinvested to provide continued support to the business following a management buyout led by Lloyds Development Capital.  The Company also provided £2.5m of funding to Byena Limited and £4.2m to Aquaso Limited, two acquisition vehicles which have been set up ahead of acquiring qualifying trading businesses.

During the year, the Company increased its investment in Terido, a trading partnership managed by Octopus Investments which supports a diverse range of secured asset backed lending in sectors including residential property and solar.  The purpose of investing in Terido is improve returns on surplus cash which would otherwise be on bank deposit awaiting VCT qualifying investment opportunities.  Terido has been delivering net returns to Apollo of c. 4% per annum and funds can be withdrawn relatively quickly, as required.  As at 31 January 2015 £15.2m was held in Terido.

In January 2015 both share classes participated in Project Radiate in which the Company disposed of investments in Gretel Solar, Hedwig Solar, Klara Solar, Jutta Solar, Gerde Solar, Sula Power and Shakti. These disposals generated proceeds for the Company of £12.5m, resulting in an overall gain since initial investment of £2.2m, with £1.7m attributable to the Ordinary shares and £0.5m attributable to the C Ordinary shares.

The Ordinary share portfolio also exited the following investments during the year: Borro Loan 2 was repaid and the Company received back £3.5m along with all the outstanding loan interest, resulting in an IRR of 14.6%; Hydrobolt was exited for proceeds of £1.5m; and a partial loan repayment of £1.3m was also received from Callstream Group in the year under review. The decision was taken to call in the loan to Bruce Dunlop and Associates International as a result of continued deterioration in its outlook.  The Company received proceeds of £0.4m which was slightly higher than the valuation and so therefore the NAV was not adversely impacted.  Over the period of investment a further £0.4m of the original £2.0m investment was repaid.  The C share portfolio received a loan repayment of £99,000 from Michabo Power Limited. 

The Company's investment portfolio is set out below.  It continues to hold appropriate investments to meet all the requirements for it to fully qualify as a VCT. The Investment Manager now has the opportunity to make a limited number of further investments with the aim of accelerating the NAV of the Company over the foreseeable future.


Outlook
We remain optimistic about the outlook for the portfolio and future investment prospects.

Following the transaction with OVCT the Company has a large and diverse portfolio constructed on a basis of capital preservation.  It has weathered the difficult economic conditions of the past few years and has been growing in value. 

The investment team has been increasingly active in the search for new opportunities and has seen the pipeline of potential deals steadily increase.  Although lending banks are getting more aggressive, they have been less active in smaller deals and many companies continue to be attracted to the partnership approach offered by Apollo.    

The current fundraising and recent exits provide significant financial capacity for new investments and, as one of the largest VCTs in the country, Apollo has the ability to pursue larger deals than most VCTs and provide significant follow-on investment, which is a strong competitive advantage. 

If you have any questions on any aspect of your investment, please call one of the team on 0800 316 2295.

Grant Paul-Florence
Octopus Investments Limited
29 May 2015

 

Valuation Methodology

Initial measurement
With one exception the investments held by Apollo are all unquoted and as such there is no trading platform from which prices can be easily obtained. Financial assets are measured at fair value.  The initial best estimate of fair value of a financial asset that is either quoted or not quoted in an active market is the transaction price of the recent round (i.e. cost).

Subsequent measurement
Subsequent adjustment to the fair value of unquoted investments has been made using sector multiples where applicable, based on information as at 31 January 2015.  In some cases the multiples have been compared to equivalent companies where it is believed that this is more appropriate than a sector multiple.  In instances where an investment has predictable future cash flows, discounted cash flow valuations are used to support the fair value.

In accordance with our interpretation of the International Private Equity and Venture Capital ('IPEVC') valuation guidelines, investments made within 12 months are usually kept at cost, unless performance indicates that fair value has changed.

If you would like to find out more regarding the IPEVC valuation guidelines, please visit their website at: www.privateequityvaluation.com.

Investment Portfolio - Ordinary shares

Investments Sector Investment cost as at 31 January 2015 (£'000) Movement in fair value to 31 January 2015 (£'000) Fair value as at 31 January 2015 (£'000) Movement in fair value in year (£'000) % equity held by Ordinary shares
Terido LLP * Asset backed lending 15,222 - 15,222 - 0.0%
Clifford Thames Group Limited Automotive software & data 7,197 1,111 8,308 713 7.6%
CSL DualCom Holdings Limited Security devices 6,911 63 6,974 16 2.0%
Vista Retail Support Limited Retail support services 3,758 - 3,758 - 10.4%
Countrywide Healthcare Services Limited Healthcare 2,675 - 2,675 - 20.7%
Byena Limited Acquisition vehicle 2,500 - 2,500 - 49.9%
Healthcare Services and Technology Limited Acquisition vehicle 2,500 - 2,500 - 49.9%
Aquaso Limited Acquisition vehicle 2,100 - 2,100 - 49.9%
Mablaw 555 Limited Crack Detection Systems 2,000 44 2,044 14 6.6%
Tanganyika Heat Limited Anaerobic digestion 2,000 - 2,000 - 49.9%
Winnipeg Heat Limited Anaerobic digestion 2,000 - 2,000 - 49.9%
Resilient Corporate Services Limited Solar 2,000 (29) 1,971 223 41.2%
Project Tristar Limited Chauffeur services 798 694 1,492 537 3.9%
Callstream Group Limited Telecommunications 472 222 694 10 6.5%
3AM Music Limited Media 500 48 548 3 33.3%
Atlantic Screen International Limited Media 600 (140) 460 (174) 3.0%
British Country Inns plc Restaurants & bars 44 (24) 20 (2) 1.3%
Total investments 53,277 1,989 55,266 1,340
Money market funds -
Cash at bank 21,264
Debtors less creditors (7,720)
Net assets       68,810  

*Participation in trading partner representing 29.0% of the LLP at 31 January 2015

Investment Portfolio - C shares

Investments Sector Investment cost as at 31 January 2015 (£'000) Movement in fair value to 31 January 2015 (£'000) Fair value as at 31 January 2015 (£'000) Movement in fair value in year (£'000) % equity held by C shares
Clifford Thames Group Limited Automotive software & data 6,121 - 6,121 - 6.4%
CSL DualCom Holdings Limited Security devices 3,895 (13) 3,882 (13) 1.4%
Healthcare Services and Technology Limited Acquisition vehicle 2,500 - 2,500 - 49.9%
Aquaso Limited Acquisition vehicle 2,100 - 2,100 - 49.9%
Tanganyika Heat Limited Anaerobic digestion 2,000 - 2,000 - 49.9%
GreenCo Services 2 Limited Solar 1,600 129 1,729 129 40.9%
3AM Music Limited Media 1,500 144 1,644 144 49.9%
Mablaw 555 Limited Crack Detection Systems 1,172 (150) 1,022 (150) 3.3%
Superior Heat Limited Ground source heat 1,000 - 1,000 - 49.9%
Winnipeg Heat Limited Anaerobic digestion 1,000 - 1,000 - 49.9%
Huitzilopochtli Limited Solar 1,000 - 1,000 - 49.9%
5AM Music Limited Media 850 136 986 136 49.9%
Healthcare Education Business Services Limited Solar 992 (6) 986 (6) 30.2%
Resilient Corporate Services Limited Solar 973 12 985 12 18.2%
Horrebow Energy Limited Solar 973 12 985 12 49.9%
Mallina Power Limited Solar 973 12 985 12 49.9%
Misae Power Limited Solar 973 12 985 12 49.9%
Paivatar Power Limited Solar 973 12 985 12 49.9%
MediaCo Business Services Limited Solar 973 12 985 12 30.2%
Personnel Advisory Services Limited Solar 973 12 985 12 30.2%
Saas Business Services Limited Solar 973 12 985 12 30.2%
Jokim Limited Solar 952 22 974 22 49.9%
Acquire Your Business Limited Business services 842 (7) 835 (7) 48.9%
Atlantic Screen International Limited Media 1,057 (289) 768 (289) 49.9%
Howbery Solar Park Limited Solar 707 39 746 39 49.9%
Nima Power Limited Solar 614 12 626 12 12.5%
Tuwale Power Limited Solar 614 12 626 12 12.5%
Gnowee Power Limited Solar 614 10 624 10 17.9%
Hella Solar Limited Solar 614 9 623 9 19.3%
Helaku Power Limited Solar 609 10 619 10 25.0%
EFK Diagnostics Holdings plc Healthcare 679 (175) 504 (175) 1.0%
Cyrah Power Limited Solar 500 - 500 - 16.7%
Evaki Power Limited Solar 500 - 500 - 16.7%
Grian Power Limited Solar 500 - 500 - 12.5%
Intina Power Limited Solar 500 - 500 - 12.5%
Yata Power Limited Solar 500 - 500 - 16.7%
Teruko Power Limited Solar 500 (34) 466 (34) 17.9%
Tonatiuh Trading 2 Limited Solar 500 (52) 448 (52) 17.8%
PTB Films Limited Media 222 3 225 3 12.5%
Quickfire 2 Films Limited Media 180 (22) 158 (22) 6.5%
Quickfire Films Limited Media 157 (16) 141 (16) 6.5%
Michabo Power Limited Solar 40 - 40 - 0.0%
Total investments   44,915 (142) 44,773 (142)
Money market funds -
Cash at bank -
Debtors less creditors 5,980
Net assets       50,753  

Investment Portfolio - Ordinary shares and C shares combined  

Investments Sector Investment cost as at 31 January 2015 (£'000) Movement in fair value to 31 January 2015 (£'000) Fair value as at 31 January 2015 (£'000) Movement in fair value in year (£'000) % equity held by Apollo Ords % equity held by Apollo C's % equity held by all funds managed by Octopus
Terido LLP * Asset backed lending 15,222 - 15,222 - 0.0% 0.0% 0.0%
Clifford Thames Group Limited Automotive software & data 13,318 1,110 14,428 713 7.6% 6.4% 14.0%
CSL DualCom Holdings Limited Security devices 10,806 51 10,857 3 2.0% 1.4% 3.4%
Healthcare Services and Technology Limited Acquisition vehicle 5,000 - 5,000 - 49.9% 49.9% 100.0%
Aquaso Limited Acquisition vehicle 4,200 - 4,200 - 49.9% 49.9% 100.0%
Tanganyika Heat Limited Anaerobic digestion 4,000 - 4,000 - 49.9% 49.9% 100.0%
Vista Retail Support Limited Retail support services 3,758 - 3,758 - 10.4% 0.0% 10.4%
Mablaw 555 Limited Crack Detection Systems 3,172 (105) 3,067 (136) 6.6% 3.3% 9.9%
Winnipeg Heat Limited Anaerobic digestion 3,000 - 3,000 - 49.9% 49.9% 100.0%
Resilient Corporate Services Limited Solar 2,973 (17) 2,956 235 41.2%

 
18.2% 100.0%
Countrywide Healthcare Supplies Limited Healthcare 2,675 - 2,675 - 20.7% 0.0% 20.7%
Byena Limited Acquisition vehicle 2,500 - 2,500 - 49.9% 49.9% 100.0%
3AM Music Limited Media 2,000 192 2,192 147 33.3% 49.9% 100.0%
GreenCo Services 2 Limited Solar 1,600 129 1,729 129 0.0% 40.9% 100.0%
Project Tristar Limited Chauffeur services 798 693 1,491 537 3.9% 0.0% 35.0%
Atlantic Screen International Limited Media 1,657 (430) 1,227 (464) 3.0% 49.9% 100.0%
Huitzilopochtli Limited Solar 1,000 - 1,000 - 0.0% 49.9% 100.0%
Superior Heat Limited Ground source heat 1,000 - 1,000 - 0.0% 49.9% 100.0%
5AM Music Limited Media 850 137 987 137 0.0% 49.9% 100.0%
Healthcare Education Business Services Limited Solar 992 (6) 986 (6) 0.0% 30.2% 90.6%
Horrebow Energy Limited Solar 973 12 985 12 0.0% 49.9% 100.0%
Mallina Power Limited Solar 973 12 985 12 0.0% 49.9% 100.0%
MediaCo Business Services Limited Solar 973 12 985 12 0.0% 30.2% 90.6%
Misae Power Limited Solar 973 12 985 12 0.0% 49.9% 49.9%
Paivatar Power Limited Solar 973 12 985 12 0.0% 49.9% 49.9%
Personnel Advisory Services Limited Solar 973 12 985 12 0.0% 30.2% 90.6%
Saas Business Services Limited Solar 973 12 985 12 0.0% 30.2% 90.6%
Jokim Limited Solar 952 22 974 22 0.0% 49.9% 100.0%
Acquire Your Business Limited Business services 842 (7) 835 (7) 0.0% 48.9% 100.0%
Howbery Solar Park Limited Solar 707 40 747 40 0.0% 49.9% 100.0%
Callstream Group Limited Telecommunications 472 222 694 10 6.5% 0.0% 6.5%
Nima Power Limited Solar 614 12 626 12 0.0% 12.5% 100.0%
Tuwale Power Limited Solar 614 12 626 12 0.0% 12.5% 100.0%
Gnowee Power Limited Solar 614 10 624 10 0.0% 17.9% 100.0%
Hella Solar Limited Solar 614 10 624 9 0.0% 19.3% 100.0%
Helaku Power Limited Solar 609 10 619 10 0.0% 25.0% 50.0%
EKF Diagnostics Holdings plc Healthcare 678 (176) 502 (176) 0.0% 1.0% 6.3%
Cyrah Power Limited Solar 500 - 500 - 0.0% 16.7% 100.0%
Evaki Power Limited Solar 500 - 500 - 0.0% 16.7% 100.0%
Grian Power Limited Solar 500 - 500 - 0.0% 12.5% 100.0%
Intina Power Limited Solar 500 - 500 - 0.0% 12.5% 100.0%
Yata Power Limited Solar 500 - 500 - 0.0% 16.7% 100.0%
Teruko Power Limited Solar 500 (34) 466 (34) 0.0% 17.9% 100.0%
Tonatiuh Trading 2 Limited Solar 500 (52) 448 (52) 0.0% 17.8% 100.0%
PTB Films Limited Media 222 3 225 3 0.0% 12.5% 100.0%
Quickfire 2 Films Limited Media 180 (22) 158 (22) 0.0% 6.5% 99.9%
Quickfire Films Limited Media 157 (16) 141 (16) 0.0% 6.5% 99.7%
Michabo Power Limited Solar 40 - 40 - 0.0% 0.0% 0.0%
British Country Inns plc Restaurants & bars 44 (24) 20 (2) 1.3% 0.0% 1.3%
%Total investments   98,191 1,848 100,039 1,198  
Money market funds -  
Cash at bank 21,264  
Debtors less creditors (1,740)  
Net assets       119,563    


*Participation in trading partner representing 29.0% of the LLP at 31 January 2015

Review of Investments
At 31 January 2015 Apollo's portfolio comprised investments in 48 unquoted companies and one AIM-traded investment. The unquoted investments are in Ordinary shares with full voting rights as well as loan note securities and a participation in a limited liability partnership.

Unquoted investments are valued in accordance with guidelines for the valuation of venture capital portfolios and is compliant with IPEVC Valuations guidelines and current financial reporting standards.

Ten Largest Holdings
Listed below are the ten largest investments by value as at 31 January 2015:

Terido LLP
Terido is a trading partnership managed by Octopus Investments which supports a range of secured asset backed lending in sectors including residential property and solar. Terido invests in a significant number of individual companies in order to ensure diversification for the partnership. Apollo's investment in Terido can be accessed at short notice should Apollo require these funds to make other investments or pay running costs of the Company.

Asset class   Cost (£'000)   Valuation (£'000)
Participation   £15,222   £15,222
Total   £15,222   £15,222

Investment date:                                               June 2013
Equity held:                                                        0.0%
Last audited accounts:                                  31 March 2014
Revenues:                                                           £21.8 million
Profit before interest & tax:                           £20.0 million
Net assets:                                                          £174.5 million
Income receivable recognised in year:     £618,000
Valuation basis:                                                Transaction cost

Clifford Thames Group Limited (Clifford Thames)
Clifford Thames is a market-leading provider of consultancy, business outsourcing, software and data services for the automotive industry, and is a key partner of most of the world's leading car manufacturers.  With offices in eight countries, Clifford Thames has a well-established and impressive client list including Ford, GM Europe, Jaguar Land Rover, Mazda and Fiat. Further information can be found at the company's website www.clifford-thames.com.

Asset class   Cost (£'000)   Valuation (£'000)
'P' shares   £5,498   £5,498
'B' preference shares   £26   £26
Loan stock   £7,794   £8,904
Total   £13,318   £14,428

Investment date:                                               January 2010
Equity held:                                                        14.0%
Last audited accounts:                                  31 March 2014
Revenues:                                                           £19.8 million
Profit before interest & tax:                           £0.6 million
Net assets:                                                          £11.6 million
Income receivable recognised in year:     £419,000
Valuation basis:                                                Earnings multiple

CSL DualCom Limited ('CSL')
CSL is the UK's leading supplier of dual path signalling devices, which link burglar alarms to the police or a private security firm. The devices communicate using both a telephone line or broadband connection and a wireless link. CSL has developed a number of new products for the sector, which have enabled the business to steadily grow its market share of new connections and its profitability since the initial investment. Further information can be found at the company's website www.csldual.com.

Asset class   Cost (£'000)   Valuation (£'000)
Ordinary shares   £106   £157
Loan stock   £10,700   £10,700
Total   £10,806   £10,857

Investment date:                                               February 2009
Equity held:                                                        3.4%
Last audited accounts:                                  31 March 2014
Revenues:                                                           £14.1 million
Profit before interest & tax:                           £2.4 million
Net assets:                                                          £10.3 million
Income receivable recognised in year:     £585,000
Valuation basis:                                                Earnings multiple

Healthcare Services and Technology Limited
Healthcare Services and Technology is an acquisition vehicle seeking a qualifying investment in the healthcare sector.

Asset class   Cost (£'000)   Valuation (£'000)
Ordinary shares   £500   £500
Loan stock   £4,500   £4,500
Total   £5,000   £5,000

Investment date:                                               February 2013
Equity held:                                                        99.8%
Last unaudited accounts:                             28 February 2014
Revenues:                                             £nil
Loss before interest & tax:                              £835
Net assets:                                                            £500,835
Income receivable recognised in year:     £nil
Valuation basis:                                                Transaction cost

Aquaso Limited
Aquaso Limited is an acquisition vehicle seeking a qualifying investment on behalf of the Company.

Asset class   Cost (£'000)   Valuation (£'000)
Ordinary shares   £410   £410
Loan stock   £3,790   £3,790
Total   £4,200   £4,200

Investment date:                                               November 2014
Equity held:                                                        99.8%
Last unaudited accounts:                             N/A
Revenues:                                             N/A
Loss before interest & tax:                              £N/A
Net assets:                                                            £N/A
Income receivable recognised in year:     £nil
Valuation basis:                                                Transaction cost

Tanganyika Heat Limited ('Tanganyika')
Tanganyika is in the process of constructing, and will operate, an anaerobic digestion plant in Lincolnshire.

Asset class   Cost (£'000)   Valuation (£'000)
Ordinary shares   £1,200   £1,200
Loan stock   £2,800   £2,800
Total   £4,000   £4,000

Investment date:                                               April 2012
Equity held:                                                        99.8%
Last unaudited accounts:                             28 February 2014
Revenues:                                                            £nil
Loss before interest & tax:                            £73,000
Net assets:                                                           £1.1 million
Income receivable recognised in year:     £215,000
Valuation basis:                                                Transaction cost

Vista Retail Support Limited
Vista is a leading IT service and support company operating within the retail market.

Asset class   Cost (£'000)   Valuation (£'000)
A Ordinary shares   £104   £104
B Ordinary shares   £272   £272
Loan stock   £3,382   £3,382
Total   £3,758   £3,758

Investment date:                                               May 2014
Equity held:                                                        10.4%
Last unaudited accounts:                             31 August 2014
Revenues:                                                            £14.3 million
Profit before interest & tax:                           £1.3 million
Net assets:                                                           £3.8million
Income receivable recognised in year:     £77,000
Valuation basis:                                                Transaction cost

Mablaw 555 Limited ('Technical Software Consultants')
Technical Software Consultants designs and manufactures equipment to solve a range of oil and gas industry inspection needs, including crack sizing, structural monitoring and stress mapping. Further information can be found at the company's website www.tscinspectionsystems.com.  

Asset class   Cost (£'000)   Valuation (£'000)
A Ordinary shares   £100   £23
B Ordinary shares   £372   £344
Loan stock   £2,700   £2,700
Total   £3,172   £3,067

Investment date:                                               April 2012
Equity held:                                                        9.9%
Last audited accounts:                                  31 March 2014
Revenues:                                                           £5.4m
Profit before interest & tax:                           £0.8m
Net assets:                                                           £0.7m
Income receivable recognised in year:     £207,000
Valuation basis:                                                Earnings multiple

Winnipeg Heat Limited ('Winnipeg')
Winnipeg is in the process of constructing, and will operate, an anaerobic digestion plant in Yorkshire.

Asset class   Cost (£'000)   Valuation (£'000)
Ordinary shares   £900   £900
Loan stock   £2,100   £2,100
Total   £3,000   £3,000

Investment date:                                               April 2012
Equity held:                                                        99.8%
Last unaudited accounts:                             28 February 2014
Revenues:                                                           £nil
Loss before interest & tax:                            £94,000
Net assets:                                                           £1.1 million
Income receivable recognised in year:     £184,000
Valuation basis:                                                Transaction cost

Resilient Corporate Services Limited
Resilient is a UK based solar company operating 14 solar sites on farms across France.

Asset class   Cost (£'000)   Valuation (£'000)
A Ordinary shares   £2,973   £2,956
Loan stock   £-   £-
Total   £2,973   £2,956

Investment date:                                               March 2010
Equity held:                                                        59.4%
Last unaudited accounts:                             31 December 2014
Revenues:                                                            £18,000
Profit before interest & tax:                           £281,000
Net assets:                                                           £5.6 million
Income receivable recognised in year:     £nil
Valuation basis:                                                Discounted cash flow

Directors' Responsibilities Statement

The Directors are responsible for preparing the Strategic Report, Directors' Report, Directors' Remuneration 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 have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) 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 and profit or loss of 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; and
  • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

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 and the Directors' Remuneration Report 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 confirm that:

  • so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
  • the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The Directors are responsible for preparing the annual report in accordance with applicable law and regulations. Having taken advice from the Audit Committee, the Directors consider the annual report and the financial statements, taken as a whole, provide the information necessary to assess the Company's performance, business model and strategy and is fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

To the best of our knowledge:

  • the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
  • the annual report, including the strategic report, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Murray Steele
Chairman
29 May 2015

Statutory Income Statement

 
    Year ended 31 January 2015
    Revenue Capital Total
    £'000 £'000 £'000
         
Realised gain on disposal of fixed asset investments   - 1,311 1,311
         
Change in fair value of fixed asset investments   - 1,198 1,198
         
Investment income   3,366 - 3,366
         
Investment management fees   (460) (1,844) (2,304)
         
Other expenses   (1,247) - (1,247)
         
Return on ordinary activities before tax   1,659 665 2,324
         
Taxation on return on ordinary activities   (286) 254 (32)
         
Return on ordinary activities after tax   1,373 919 2,292
Earnings per share - basic and diluted   1.8p 1.2p 3.0p

  • The 'Total' column of this statement is the profit and loss account of the Company; the revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies
  • All revenue and capital items in the above statement derive from continuing operations
  • The Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds.

The Company has no other comprehensive income for the period.


 

Statutory Income Statement

 
    Year ended 31 January 2014
    Revenue Capital Total
    £'000 £'000 £'000
         
Realised gain on disposal of fixed asset investments   - (10) (10)
         
Change in fair value of fixed asset investments   - 1,116 1,116
         
Investment income   2,979 - 2,979
         
Investment management fees   (273) (1,194) (1,467)
         
Other expenses   (707) - (707)
         
Return on ordinary activities before tax   1,999 (88) 1,911
         
Taxation on return on ordinary activities   (400) 240 (160)
         
Return on ordinary activities after tax   1,599 152 1,751
Earnings per share - basic and diluted   2.3p 0.2p 2.5p
         

  • The 'Total' column of this statement is the profit and loss account of the Company; the 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 year as set out above.

The Company had no other comprehensive income for the period.

Non statutory Income Statement - Ordinary Shares

    Period ended 31 January 2015
    Revenue Capital Total
    £'000 £'000 £'000
         
Realised gain on disposal of fixed asset investments   - 795 795
         
Change in fair value of fixed asset investments   - 1,340 1,340
         
Investment income   2,819 - 2,819
         
Investment management fees   (266) (1,261) (1,527)
         
Other expenses   (1,125) - (1,125)
         
Return on ordinary activities before tax   1,428 874 2,302
         
Taxation on return on ordinary activities   (286) 254 (32)
         
Return on ordinary activities after tax   1,142 1,128 2,270
Earnings per share - basic and diluted   1.5p 1.4p 2.9p
  • The 'Total' column of this statement is the profit and loss account of the Ordinary Shares; the revenue and capital 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
Non statutory Income Statement - C Class Shares

 
    Period ended 31 January 2015
    Revenue Capital Total
    £'000 £'000 £'000
         
Realised gain on disposal of fixed asset investments   - 516 516
         
Change in fair value of fixed asset investments   - (142) (142)
         
Investment income   547 - 547
         
Investment management fees   (194) (583) (777)
         
Other expenses   (122) - (122)
         
Return on ordinary activities before tax   231 (209) 22
         
Taxation on return on ordinary activities   - - -
         
Return on ordinary activities after tax   231 (209) 22
Earnings per share - basic and diluted   2.5p (2.3p) 0.2p
  • The 'Total' column of this statement is the profit and loss account of the C Class Shares; the revenue and capital 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
Statutory Balance Sheet

 
    As at 31 January 2015 As at 31 January  2014
    £'000 £'000 £'000 £'000
           
Fixed asset investments*     100,039   54,306
Current assets:          
Debtors   2,625   1,653  
Investments - money market funds*   -   4,254  
Cash at bank   21,264   7,910  
    23,889   13,817  
Creditors: amounts falling due within one year   (4,365)   (4,218)  
Net current assets     19,524   9,599
Total assets less current liabilities     119,563   63,905
           
Called up equity share capital     8,636   7,362
Share premium     54,306   35,140
Special distributable reserve     53,989   19,116
Capital redemption reserve     2,101   2,704
Capital reserve gains & losses on disposal     (2,019)   (2,445)
Capital reserve holding gains & losses     2,521   2,028
Revenue reserve     29   -
Total shareholders' funds     119,563   63,905

*Held at fair value through profit or loss

The statements were approved by the Directors and authorised for issue on 29 May 2015 and are signed on their behalf by:

Murray Steele
Chairman
Company number: 05840377

Non statutory Balance Sheet - Ordinary Shares

 
    As at 31 January 2015 As at 31 January  2014
    £'000 £'000 £'000 £'000
           
Fixed asset investments*     55,266   54,306
Current assets:          
Debtors   1,743   1,653  
Investments - money market funds*   -   4,254  
Cash at bank   21,264   7,910  
    23,007   13,817  
Creditors: amounts falling due within one year   (9,463)   (4,218)  
Net current assets     13,544   9,599
Total assets less current liabilities     68,810   63,905
           
Called up equity share capital     8,118   7,362
Share premium     3,893   35,140
Special distributable reserve     54,243   19,116
Capital redemption reserve     2,099   2,704
Capital reserve gains & losses on disposal     (1,952)   (2,445)
Capital reserve holding gains & losses     2,409   2,028
Revenue reserve     -   -
Total shareholders' funds     68,810   63,905
Net asset value per share     84.8p   86.8p

*Held at fair value through profit or loss

Non statutory Balance Sheet - C Shares

 
    As at 31 January 2015  
    £'000 £'000  
         
Fixed asset investments*     44,773  
Current assets:        
Debtors   7,120    
Investments - money market funds*   -    
Cash at bank   -    
    7,120    
Creditors: amounts falling due within one year   (1,140)    
Net current assets     5,980  
Total assets less current liabilities     50,753  
         
Called up equity share capital     518  
Share premium     50,413  
Special distributable reserve     -  
Capital redemption reserve     2  
Capital reserve gains & losses on disposal     (67)  
Capital reserve holding gains & losses     (142)  
Revenue reserve     29  
Total shareholders' funds     50,753  
Net asset value per share     98.0p  

*Held at fair value through profit or loss

Statutory statement of Changes in Equity - year to 31 January 2015

  Share capital Share Premium Special distributable reserve Capital redemption reserve Capital reserve realised Capital reserve unrealised Revenue reserve Total
  £'000   £'000 £'000 £'000 £'000 £'000 £'000
01 February 2014 7,362 35,140 19,116 2,704 (2,445) 2,028 - 63,905
Repurchase of own shares (225) - (1,812) 225 - - (202) (2,014)
Issue of new shares 1,499 57,717 - - - - - 59,216
Cancellation of share premium - (38,551) 38,551 - - - - -
Cancellation of capital redemption reserve - - 828 (828) - - - -
Profit on ordinary activities after tax - - - - - - 1,627 1,627
Management and performance fees - - - - (1,844) - - (1,844)
Current year gains/losses on disposal - - - - 1,311 - - 1,311
Prior period holding gains/losses now crystalised - - - - 959 (959) - -
Current period gains/losses on fair value of investments - - - - - 1,198 - 1,198
Capital expenses taken against tax charge - - - - 254 - - 254
Dividends paid - - (2,694) - - - (1,396) (4,090)
31 January 2015 8,636 54,306 53,989 2,101 (1,765) 2,267 29 119,563

The Company has no recognised gains or losses other than the results for the year as set out above.

Statutory statement of Changes in Equity - year to 31 January 2014

  Share capital Share Premium Special distributable reserve Capital redemption reserve Capital reserve realised Capital reserve unrealised Revenue reserve Total
  £'000   £'000 £'000 £'000 £'000 £'000 £'000
01 February 2013 5,350 2,488 39,911 594 (1,213) 644 - 47,774
Repurchase of own shares (224)   (1,859) 224       (1,859)
Issue of new shares 2,318 18,267           20,585
Enhanced buy back (82) 14,385 (16,926) 1,886       (737)
Cancellation of share premium               -
Profit on ordinary activities after tax             1,599 1,599
Management fees allocated as capital expenditure         (1,194)     (1,194)
Current year gains/losses on disposal         (10)     (10)
Prior period holding gains/losses now crystalised         (28) 28   -
Prior period holding gains/losses crystalised in a prior period             -

Current period gains/losses on fair value of investments
          1,116   1,116
Capital expenses taken against tax charge           240   240
Dividends paid     (2,010)       (1,599) (3,609)
31 January 2014 7,362 35,140 19,116 2,704 (2,445) 2,028 - 63,905

Non-statutory statement of Changes in Equity - Ordinary Shares

  Year ended
31 January 2015
Year ended
31 January 2014
  £'000 £'000
Shareholders' funds at start of year 63,905 47,774
Return on ordinary activities after tax 2,270 1,751
Issue of shares 8,283 20,585
Enhanced buyback - (737)
Purchase of own shares (1,812) (1,859)
Dividends paid (3,836) (3,609)
Shareholders' funds at end of year 68,810 63,905

Non-statutory statement of Changes in Equity - C Ordinary Shares

 
  Year ended
31 January 2015
 
  £'000  
Shareholders' funds at start of year -  
Return on ordinary activities after tax 22  
Issue of shares 50,933  
Purchase of own shares (202)  
Shareholders' funds at end of year 50,753  

Cash Flow Statement

 
    Year to 31 January  2015 Year to 31      January  2014
    £'000 £'000
       
Reconciliation of return on ordinary activities to cash flows from operating activities      
Return on ordinary activities before tax   2,292 1,751
Increase in debtors   (972) (717)
Increase/(decrease) in creditors   699 (17)
Debtors obtained from transaction   614 -
Creditors obtained from transaction   (324) -
(Gain)/(loss) on disposal of fixed asset investments   (1,311) 10
(Gain) on valuation of fixed asset investments   (1,198) (1,116)
Taxation   (552) -
Total cash flow from operating activities   (752) (89)
       
Cash flows from investing activities
Cash acquired from transaction
  377 -
Purchase of fixed asset investments   (15,505) (16,500)
Sale of fixed asset investments   22,547 3,276
Purchase of current asset investments   (15) (17)
Sale of current asset investments   4,269 500
Total cash flows from investing activites   11,673 (12,741)
       
Cash flows from financing activities      
Enhanced share buyback   - (737)
Purchase of own shares   (2,014) (1,859)
Cash received from fund raising top-up offer not allotted shares   - 2,497
Issue of own shares   8,283 20,585
Dividends paid   (3,836) (3,609)
Total cash flows from financing activities   2,433 16,877
       
Increase in cash and cash equivalents   13,354 4,047
       
Opening cash and cash equivalents   7,910 3,863
       
Closing cash and cash equivalents   21,264 7,910

On 28 November 2014, Octopus Apollo VCT plc acquired the assets of Octopus VCT plc. The transfer of assets from Octopus VCT plc was settled by the issue of C Ordinary shares, rather than cash.




This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Octopus Apollo VCT plc via Globenewswire

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