Octopus VCT 2 plc
Half-Yearly Results

11 August 2015

Octopus VCT 2 plc, managed by Octopus Investments Limited, today announces the half-yearly results for the six months ended 30 June 2015.

The results were approved by the Board of Directors on 11 August 2015

Financial Summary

	Six months to 30 June 2015	Six months to 30 June 2014	Year to 31 December 2014
Net assets (£'000s)	19,083	18,831	19,222
Return on ordinary activities after tax (£'000s)	338	42	506
Net asset value ("NAV") per share	100.0p	98.3p	100.7p
Cumulative dividends paid	5.0p	2.5p	2.5p
NAV plus cumulative dividends paid	105.0p	100.8p	103.2p

Chairman's Statement

I am pleased to present the half-yearly report for Octopus VCT 2 plc for the period ended 30 June 2015.

Performance
The NAV plus cumulative dividends paid of the Company has increased from 103.2p as at 31 December 2014 to 105.0p as at 30 June 2015, including payment of the final dividend of 2.5p per share in June. The period under review saw realised gains on disposals totalling £475,000 and an uplift in the value of the portfolio of £45,000, offset by an accrual for management fees of £152,000.

Investment Portfolio
The 6 months to 30 June 2015 saw the exit of fourteen of the Company's solar investments. This resulted in £9.8 million of proceeds for the Company and an overall capital gain of £2.5 million, including the unrealised gains recognised as at 31 December 2014.

On 31 March 2015 the Company invested £1,550,000 into Tanganyika Heat Limited and £950,000 into Winnipeg Heat Limited, both in the anaerobic digestion sector. In addition, on 20 February 2015, an investment of £2.5 million was made into Coupra Limited, a company set up to pursue investment opportunities.

As at 30 June 2015 the investment portfolio comprised 21% in solar, 24% in anaerobic digestion, 7% in ground source heat, 9% in media and 4% in business services.

Cash and Liquid Resources
Uninvested cash is deposited in carefully selected banks and money market funds with good credit ratings to mitigate the risk of loss.

Principal Risks and Uncertainties
Risks faced by the Company include economic, investment and strategic, regulatory, reputational, operational and financial risks. These risks, and the ways in which they are managed, are described in more detail in the Company's Annual Report and Accounts for the year ended 31 December 2014.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs.  The Board has been advised that the Company is compliant with the conditions laid down by HMRC for achieving provisional approval as a VCT. 

As the Company has passed the end of its third accounting period it must ensure that at least 70% of its investments comprise qualifying holdings on an ongoing basis in order to maintain HMRC approval as a VCT. It is pleasing to report that, as at 30 June 2015, 100% of the portfolio, as measured by HMRC rules, was invested in VCT qualifying investments. The Board is confident that this 70% threshold will be maintained.

Outlook
We are delighted to have achieved the profitable exits in the solar sector and to see an uplift in the valuation of a number of the portfolio companies which has led to the rise in the NAV of the Company.  We are seeing an ongoing strong performance in our renewable energy portfolio and were pleased to have invested a further £2.5m in the anaerobic digestion sector in March.

Ian Pearson                                          
Chairman
11 August 2015

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 Services Authority Disclosure and Transparency Rules, being:

• an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
   
• a description of the principal risks and uncertainties for the remaining six months of the year; and
   
• a description of related party transactions that have taken place in the first six months of the current financial year, that may have materially affected the financial position or performance of the Company during that period and any changes in the related party transactions described in the last annual report that could do so.

On behalf of the Board

Ian Pearson
Chairman

Income Statement

	Six months to 30 June 2015			Six months to 30 June 2014			Year to 31 December 2014
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Realised gain on disposal of fixed asset investments	-	475	475	-	-	-	-	-	-
Fixed asset investment holding gains	-	45	45	-	80	80	-	532	532
Other income	108	-	108	106	-	106	255	-	255
Management fees	(38)	(114)	(152)	-	-	-	-	-	-
Other expenses	(138)	-	(138)	(144)	-	(144)	(281)	-	(281)
Return on ordinary activities before tax	(68)	406	338	(38)	80	42	(26)	532	506
Taxation on ordinary activities	-	-	-	-	-	-	-	-	-
Return on ordinary activities after tax	(68)	406	338	(38)	80	42	(26)	532	506
Return per share - basic and diluted	(0.4p)	2.2p	1.8p	(0.2p)	0.4p	0.2p	(0.1p)	2.8p	2.7p

• 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 accompanying notes are an integral part of the half-yearly report.

Reconciliation of Movements in Shareholders' Funds
	Six months ended 30 June 2015	Six months ended 30 June 2014	Year to  31 December 2014
	£'000	£'000	£'000
Shareholders' funds at start of period	19,222	19,337	19,337
Return on ordinary activities after tax	338	42	506
Purchase of own shares	-	(69)	(142)
Dividends paid	(477)	(479)	(479)
Shareholders' funds at end of period	19,083	18,831	19,222

Balance Sheet
	As at 30 June 2015		As at 30 June 2014		As at 31 December 2014
	£'000	£'000	£'000	£'000	£'000	£'000
Fixed asset investments*		14,297		15,841		18,593
Current assets:
Debtors	189		81		140
Cash at bank	4,802		3,003		527
	4,991		3,084		667
Creditors: amounts falling due within one year	(205)		(94)		(38)
Net current assets		4,786		2,990		629
Net assets		19,083		18,831		19,222
Called up equity share capital		191		192		191
Special distributable reserve		17,360		17,433		17,360
Capital redemption reserve		3		2		3
Capital reserve - gains/(losses) on disposal		1,764		(168)		(168)
- holding (losses)/gains		(181)		1,370		1,822
Revenue reserve		(54)		2		14
Total equity shareholders' funds		19,083		18,831		19,222
Net asset value per share		100.0p		98.3p		100.7p

*Held at fair value through profit and loss

The statements were approved by the Directors and authorised for issue on 11 August 2015 and are signed on their behalf by:

Ian Pearson
Chairman

Company Number: 07484406

Cash flow statement
	Six months to 30 June 2015	Six months to 30 June 2014	Year  to 31 December 2014
	£'000	£'000	£'000
Net cash outflow from operating activities	(64)	(16)	(107)
Financial investment:
Purchase of fixed asset investments	(5,000)	-	(2,500)
Sale of fixed asset investments	9,816	1,000	1,200
Tax paid	-	-	(12)
Financing:
Dividends paid	(477)	(479)	(479)
Purchase of own shares	-	(69)	(142)
Increase/(decrease) in cash resources at bank	4,275	436	(2,040)

Reconciliation of return before taxation to cash flow from operating activities
	Six months to 30 June 2015	Six months to 30 June 2014	Year  to 31 December 2014
	£'000	£'000	£'000
Return on ordinary activities before tax	338	42	506
Gain on disposal of fixed asset investments	(475)	-	-
Gain on valuation of fixed asset investments	(45)	(80)	(532)
(Increase)/decrease in debtors	(49)	5	(54)
Increase/(decrease) in creditors	167	17	(27)
Outflow from operating activities	(64)	(16)	(107)

Reconciliation of net cash flow to movement in net funds
	Six months to 30 June 2015	Six months to 30 June 2014	Year  to 31 December 2014
	£'000	£'000	£'000
Increase/(decrease) in cash resources at bank	4,275	436	(2,040)
Opening net cash resources	527	2,567	2,567
Net funds at period end	4,802	3,003	527