Final Results -2-
17 Maggio 2011 - 10:31AM
UK Regulatory
running of the business and hope the Company will trade its way back to budget
in the coming years. This decrease in fair value amounts to a reduction in value
of GBP24,000, against a total cost of GBP509,000, with the remainder of our funds
being invested in debt that ranks ahead of all other investors on exit. This is
an example of how the structure of the investments made in this VCT are heavily
sheltered from the downside risk of investing into small companies.
The majority of investments are loan based on which a steady flow of interest is
received into the Company. This is now nearing the level whereby interest
receipts offset the running costs of the Company. This income versus expenditure
parity will allow for any profits on realisations and loan note redemption
premiums to be paid out directly to shareholders, or recognised as an uplift to
the value of your investment.
Portfolio Review
We have been successful during the year in deploying the funds held by Vulcan
Services II into Bluebell Telecom, and have also made a small, non-qualifying
investment into Carebase (Col). We believe both investments follow the
investment mandate of this VCT; Bluebell has strong recurring cash flows and a
good management team and Carebase (Col) is asset backed.
Further to this, post year end, we have used the funds held in GreenCo Services
to further our investment into CSL DualCom, and the funds of PubCo Services to
acquire Salus Services, injecting further capital into the company to enable the
business to build another care home. GreenCo and PubCo were initially intending
to invest into the environmental sector and the restaurant and bar sector
respectively. However at the time, no suitable opportunities were found in these
sectors. We have also invested amounts totalling GBP266,000 into Evaki Power and
Kala Power, companies involved in the construction of solar power units.
Investments made post year end into CSL DualCom and PubCo Services have been
into businesses that we have already invested into, and therefore, we know well
and are confident of their continued success. In addition to investing more
funds into CSL DualCom, we have significantly increased the return on our
investment. We believe we have done so without taking significantly more risk.
Outlook
We remain cautious about the year ahead and continue to be on the lookout for
potential difficulties in the portfolio to enable ourselves to be prepared and
plan appropriately. However in general we are confident that the investee
companies are well positioned to weather the uncertain times ahead and we remain
optimistic that your Company's NAV will be able to make progress, despite the
economic environment in which we find ourselves.
If you have any questions on any aspect of your investment, please call one of
the team on 0800 316 2347.
Stuart Nicol
Investment Director
Octopus Investments
16 May 2011
Investment Portfolio
Movement
Cost of in fair Fair %
investment value to value equity %
Unquoted at 31 31 at 31 held equity
qualifying January January January Movement by managed
fixed asset 2011 2011 2011 in year Apollo by
investments Sector ( GBP'000) ( GBP'000) ( GBP'000) ( GBP'000) 1 Octopus
=-----------------------------------------------------------------------------------
Clifford
Thames Group
Limited Automotive 965 152 1,117 152 1.4% 7.4%
Diagnos
Limited* Automotive 825 - 825 - 0.0% 0.0%
Pubco
Services
Limited Restaurants & bars 750 - 750 - 11.4% 56.9%
CSL DualCom
Limited* Security devices 700 16 716 16 0.0% 0.0%
Salus
Services 1
Limited Care homes 615 - 615 - 15.7% 100.0%
Tristar
Worldwide
Limited Chauffeur services 500 - 500 - 1.3% 35.0%
Greenco
Services
Limited Environmental 500 - 500 - 8.2% 57.4%
Bruce Dunlop
& Associates
International
Limited Media 509 (24) 485 (24) 1.7% 30.0%
Bluebell
Telecom
Services
Limited Telecommunications 225 25 250 25 0.5% 6.5%
Hydrobolt
Limited Manufacturing 197 26 223 26 0.9% 43.3%
Businessco 2
Services
Limited Business services 200 - 200 - 5.0% 49.0%
Ticketing
Services 1
Limited Ticketing 200 - 200 - 25.3% 100.0%
Ticketing
Services 2
Limited Ticketing 200 - 200 - 25.3% 100.0%
=-----------------------------------------------------------------------------------
Total qualifying fixed asset
investments 6,386 195 6,581 195
Non-
qualifying
investments 110 - 110 -
Total fixed
asset
investments 6,496 195 6,691 195
=-----------------------------------------------------------------------------------
Money market
funds 1124
Cash at bank 153
=-----------------------------------------------------------------------------------
Total
investments 7,968
Debtors less
creditors 52
=-----------------------------------------------------------------------------------
Total net
assets 8,020
*Debt based investment
Valuation Methodology
The investments held by the Company are all unquoted and as such there is no
trading platform from which prices can be easily obtained. As a result, the
methodology used in fair valuing the investments is initially the transaction
price of the recent investment round. Subsequent adjustment to the fair value
has then been made according to any significant under or over performance of the
business.
If you would like to find out more regarding the International Private Equity
and Venture Capital (IPEVC) valuation guidelines, please visit their website at:
www.privateequityvaluation.com.
Investments are valued in accordance with the accounting policy set out on page
x, which takes account of current industry guidelines for the valuation of
venture capital portfolios and is compliant with IPEVC valuation Guidelines and
current financial reporting standards.
Investment Portfolio - Ten Largest Qualifying Portfolio Holdings
Clifford Thames Group Limited
Clifford Thames is a market leading provider of consultancy and business
outsourcing 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 websitewww.clifford-thames.com.
+-------------------+---+----------+---+------------+
| Asset class | | Cost | | Valuation |
+-------------------+---+----------+---+------------+
| A Ordinary shares | | GBP222,000 | | GBP222,000 |
+-------------------+---+----------+---+------------+
| Loan stock | | GBP743,000 | | GBP895,000 |
+-------------------+---+----------+---+------------+
| Total | | GBP965,000 | | GBP1,117,000 |
+-------------------+---+----------+---+------------+
Investment date: January 2009
Equity held: 1.4%
Last audited accounts: 31 March 2010
Revenues: GBP31.6 million
Profit before interest & tax: GBP2.7 million
Net assets: GBP10.1
million
Income receivable recognised in year: GBP67,000
Valuation basis: Earnings
multiple
Diagnos Limited
Diagnos develops and sells sophisticated automotive diagnostic software and
hardware that enables independent mechanics, dealerships and garages to service
and repair vehicles. Mechanics require a diagnostic tool to communicate with the
in-car computer in order to measure, monitor and, where necessary, fix the
electronic process or system. Further information can be found at the company's
websitewww.autologic-diagnos.co.uk.
+-------------------+---+----------+---+-----------+
| Asset class | | Cost | | Valuation |
+-------------------+---+----------+---+-----------+
| B Ordinary shares | | GBP41,000 | | GBP41,000 |
+-------------------+---+----------+---+-----------+
| C Ordinary shares | | GBP41,000 | | GBP41,000 |
+-------------------+---+----------+---+-----------+
| Loan stock | | GBP743,000 | | GBP743,000 |
+-------------------+---+----------+---+-----------+
| Total | | GBP825,000 | | GBP825,000 |
+-------------------+---+----------+---+-----------+
Investment date: February 2009
Equity held: 0.0%
Last audited accounts: 31 December 2009
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