Octopus Apollo VCT Plc
Half-Yearly Results
21 September 2018
Octopus Apollo VCT plc, managed by Octopus Investments Limited, today announces the unaudited half-yearly results for the six months ended 31 July 2018.
These results were approved by the Board of Directors on 21 September 2018.
You may, in due course, view the Half-Yearly report in full at www.octopusinvestments.com. All other statutory information can also be found there.
Financial Headlines
| Six months to 31 July 2018 | Six months to 31 July 2017 | Year to 31 January 2018 | |
| Net assets (£’000s) | 122,252 | 155,341 | 130,377 |
| Return on ordinary activities after tax (£’000s) | (3,038) | 1,799 | 3,699 |
| Net asset value per share (‘NAV’) | 47.9 | 62.2 | 50.6 |
| Cumulative dividends paid since launch (p per share) | 69.6 | 55.7 | 68.0 |
| NAV plus cumulative dividends paid (p) | 117.5 | 117.9 | 118.6 |
| Total return %* | (2.2) | 1.0 | 2.2 |
| Ordinary dividend paid in period (p) | 1.6 | 1.7 | 3.3 |
| Special dividend paid in the period (p) | – | - | 10.7 |
| Ordinary dividend declared in the period (p) | 1.5 | 1.6 | 1.6 |
Total return is calculated as (movement in NAV + dividends paid in the period) divided by the NAV at the beginning of the period.
The interim dividend will be paid on 14 December 2018 to shareholders on the register at 23 November 2018.
Chairman’s Statement
I am pleased to present the half-yearly report of Octopus Apollo VCT for the six months ended 31 July 2018.
During the period the majority of the portfolio performed broadly in line with expectations. However a small number of investments performed below expectations resulting in an overall loss on the portfolio of £3.2 million for the period.
The NAV Total Return including the 1.6p dividend paid in the period decreased by 2.2% during the six months. Despite the current period performance the Company has sufficient reserves to maintain its target dividend policy. In keeping with this policy, the Board has declared an interim dividend of 1.5p which will be paid to shareholders in December.
The Company invested over £9 million into new companies in the period, as well as investing follow-on funding into four existing investments. The investment team has been expanded during the period, which has helped to further increase the pipeline of new investment opportunities and assist with the execution of new investments. Although the overall performance in the period has been disappointing and political and economic uncertainty resulting from Brexit negotiations still persists, I remain cautiously optimistic for the future.
Murray Steele
Chairman
21 September 2018
Interim Management Report
Performance
In the six months under review the Total Return has decreased 2.2%. This disappointing performance is mainly attributable to adverse movements in fair value of four assets in the period, offset by a continuation of the strong interest yield from loans made to portfolio companies, gains on investment exits, and positive fair value movements across the rest of the portfolio.
Portfolio Activity
In the period under review the value of the portfolio has decreased by £3.2 million, excluding additions and disposals. This decrease is driven by Eve Sleep plc (£1.3 million valuation decrease), Coupra Limited (trading as ISG Technology) (£1.1 million valuation decrease), Valloire Power Limited (£0.6 million valuation decrease), and Red Poll Power Limited (£0.4 million valuation decrease), as a result of specific trading performance issues within each business during the period, with Eve Sleep plc’s share price falling 84%.
During the period £10.2 million was invested, £9.3 million of which was into the following new investments:
• Natterbox Limited (£5.0 million) – a B2B cloud-based telephony provider, whose offering seamlessly integrates with customer relationship management (“CRM”) software;
• City Pantry Ltd (£2.2 million) – an online marketplace facilitating the provision of high-quality food catering from local specialist independent food vendors to corporate customers; and
• Ubisecure Limited (£2.1 million) – a customer identity and access management software provider to enable customers to effectively manage their end-users’ digital identities and automate authentication and encryption.
The remaining £0.9 million invested was to provide growth funding to four existing portfolio companies, including £0.4 million invested into Oxifree to continue to support its growth plans.
In April we saw the successful disposal of Tailsco Limited, an investment the Company acquired in the merger with Eclipse VCT plc, to Nestle Purina Petcare. This exit resulted in proceeds of £1.6 million (including a potential future retention of £0.3 million), a gain of £1.2 million on the merger acquisition price. We also sold our remaining investment in Tanfield plc, as well as part of our holding in Timeout plc, making a small loss on both.
Transactions with Manager
Details of amounts paid to the Manager are disclosed in note 7 to the financial statements.
Share Buybacks
The Company has continued to buy back shares as required. In the six months to July 2018, the Company bought back 3,567,465 shares for total consideration of £1.7 million.
Share Issues and Fundraising
Following the successful exit of a number of investments in the last 18 months, the Company has sufficient cash to meet new investment opportunities and is not currently open to new shareholders.
Dividend and Dividend Policy
It is the 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.
The Board has declared an interim dividend of 1.5p per share in respect of the period ended 31 July 2018. The dividend will be payable on 14 December 2018 to shareholders on the register at 23 November 2018.
During the six months to July 2018 1,453,722 shares were issued in lieu of cash dividends to those shareholders participating in the Dividend Reinvestment Scheme (“DRIS”). This remains an attractive scheme for investors, and the dividend referred to above will be eligible for the DRIS.
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 set by HMRC for maintaining approval as a VCT.
A key requirement is to ensure that at least 70% of the assets of the fund are in VCT qualifying investments. As at 31 July 2018, 87% of the portfolio, as measured by HMRC rules, was invested in VCT qualifying investments.
The Autumn Budget announced in November 2017 introduced a few further changes to VCT legislation. The most notable of these is that from 6 April 2019, the proportion of the VCT’s HMRC value that must be invested in qualifying investments will increase from 70% to 80%. Additionally, from 6 April 2018 VCTs will have to invest 30% of funds raised into qualifying investments within 12 months.
Typically the structure of the Company’s investments has been weighted more heavily towards loan based instruments as opposed to equity, with such investments providing fixed returns and payments are generally ranked above most other creditors, allowing for future visibility and security.
The recent changes to the VCT legislation are such that future new investments are likely to be more heavily weighted towards equity, and less towards loan instruments. These new VCT rules will not affect the majority of the existing investment portfolio but will impact future new investments.
Principal Risks and Uncertainties
The principal risks and uncertainties are set out in note 6 to the financial statements.
Summary and Future Prospects
The political and economic environment continues to be uncertain as a result of exit negotiations with the European Union. However to date there has been little, if any, negative economic impact that would affect the portfolio or the investment team’s ability to continue to invest. While the overall portfolio has underperformed during the period, the newly expanded investment team has made several new investments and continues to have an active pipeline of new investment opportunities, and we believe we can continue to find suitable VCT qualifying investments.
Grant Paul-Florence
Octopus Investments Limited
21 September 2018
Investment Portfolio
| Sector | Investment cost as at 31 July 2018 £’000 | Movement in fair value to 31 July 2018 £’000 | Fair value as at 31 July 2018 £’000 | Movement in fair value in period £’000 | % equity held by Apollo VCT | % equity held by all funds managed by Octopus | |
| Fixed asset investments | |||||||
| Healthcare and Services Technology Limited | Healthcare & Education | 7,186 | 716 | 7,902 | 143 | 10 | 10 |
| Natterbox Limited | Technology & Communication | 4,990 | 206 | 5,196 | 206 | 9 | 9 |
| Anglo European Group Limited | Manufacturing & Engineering | 5,000 | (23) | 4,977 | 167 | 26.7 | 26.7 |
| Countrywide Healthcare Services Limited | Healthcare & Education | 2,675 | 2,229 | 4,904 | 39 | 20.7 | 20.7 |
| Coupra Limited | Information Technology | 5,000 | (1,013) | 3,987 | (1,098) | 9.8 | 9.8 |
| Dyscova Limited | Healthcare & Education | 4,700 | (1,626) | 3,074 | – | 62.2 | 62.2 |
| Kabardin Limited | Energy | 2,450 | – | 2,450 | – | 49 | 100 |
| City Pantry Ltd | Travel & Leisure | 2,200 | 204 | 2,404 | 204 | 8 | 8 |
| Winnipeg Heat Limited | Anaerobic Digestion | 3,719 | (1,457) | 2,262 | (1) | 49 | 100 |
| Ubisecure Limited | Technology & Communication | 2,125 | 64 | 2,189 | 64 | 10 | 10 |
| Other* | Various | 42,096 | (4,363) | 37,733 | (2,960) | ||
| Total fixed asset investments | 82,141 | (5,063) | 77,078 | (3,236) | |||
| Current asset investments | |||||||
| Octopus Portfolio Manager – Cash | 19,188 | 73 | 19,261 | 36 | |||
| Octopus Portfolio Manager – Cash Plus | 14,410 | 194 | 14,604 | 1 | |||
| Octopus Portfolio Manager – Defensive Capital Growth | 7,396 | 240 | 7,636 | 1 | |||
| Total current asset investments | 40,994 | 507 | 41,501 | 38 | |||
| Total fixed and current asset investments | 118,579 | ||||||
| Cash at bank | 2,960 | ||||||
| Debtors less creditors | 713 | ||||||
| Total net assets | 122,252 | ||||||
*Comprises 41 other investments: Acquire Your Business Limited, Angelico Solar Limited, Artesian Solutions Limited, Augean plc, Barrecore Limited, Behaviometrics AB, Bramante Solar Limited, British Country Inns plc, Canaletto Solar Limited, Cello Group plc, CurrencyFair Limited, Ecrebo Limited, EKF Diagnostics Holdings plc, Ergomed plc, Eve Sleep plc, Hasgrove Limited, Leonardo Solar Limited, Luther Pendragon Limited, Mi-Pay Group plc, MIRACL Limited, Modigliani Solar Limited, Nektan plc, Origami Energy Limited, Oxifree Group Holding Limited, Pirlo Solar Limited, Plastics Capital plc, Red Poll Power Limited, Secret Escapes Limited, Segura Systems Limited, Sourceable Limited (Swoon Editions), Spiralite Holdings Limited, Superior Heat Limited, Tanganyika Heat Limited, Time out Group plc, Tintoretto Solar Limited, Tiziano Solar Limited, Trafi Limited, Valloire Power Limited, Vertu Motors plc, Yu Group plc, Zynstra Limited.
Directors’ Responsibilities Statement
We confirm that to the best of our knowledge:
• the half-yearly financial statements have been prepared in accordance with the Financial Reporting Standard 104 “Interim Financial Reporting” issued by the Financial Reporting Council;
• the half-yearly financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company;
• the half-yearly report includes a fair review of the information required by the Financial Conduct Authority’s 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
Murray Steele
Chairman
21 September 2018
Income Statement
| Unaudited | Unaudited | Audited | |||||||
| Six months to 31 July 2018 | Six months to 31 July 2017 | Year to 31 January 2018 | |||||||
| Revenue £’000 | Capital £’000 | Total £’000 | Revenue £’000 | Capital £’000 | Total £’000 | Revenue £’000 | Capital £’000 | Total £’000 | |
| Gain on disposal of fixed asset investments | – | 889 | 889 | – | 3,701 | 3,701 | – | 4,186 | 4,186 |
| Loss on disposal of current asset investments | - | (6) | (6) | _ | _ | _ | _ | _ | _ |
| Change in fair value of fixed asset investments | – | (3,236) | (3,236) | – | (1,274) | (1,274) | – | 1,063 | 1,063 |
| Change in fair value of current asset investments | – | 38 | 38 | – | 190 | 190 | – | 469 | 469 |
| Investment income | 1,638 | – | 1,638 | 2,061 | – | 2,061 | 3,627 | 3,627 | |
| Investment management fees | (310) | (929) | (1,239) | (341) | (1,406) | (1,747) | (724) | (2,858) | (3,582) |
| Other expenses | (1,122) | – | (1,122) | (1,136) | – | (1,136) | (2,068) | – | (2,068) |
| FX translation | – | – | – | – | 4 | 4 | – | 4 | 4 |
| Return on ordinary activities before tax | 206 | (3,244) | (3,038) | 584 | 1,215 | 1,799 | 835 | 2,864 | 3,699 |
| Taxation on return on ordinary activities | – | – | – | – | – | – | – | – | – |
| Return on ordinary activities after tax | 206 | (3,244) | (3,038) | 584 | 1,215 | 1,799 | 835 | 2,864 | 3,699 |
| Earnings per share – basic and diluted | 0.1p | (1.3)p | (1.2)p | 0.2p | 0.5p | 0.7p | 0.3p | 1.2p | 1.5p |
- 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 those disclosed in the income statement.
- The accompanying notes are an integral part of the half-yearly report.
Balance Sheet
| Unaudited As at 31 July 2018 | Unaudited As at 31 July 2017 | Audited As at 31 January 2018 | ||||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Fixed asset investments | 77,078 | 78,386 | 71,326 | |||
| Current assets: | ||||||
| Investments | 41,501 | 70,190 | 53,469 | |||
| Debtors | 2,307 | 2,245 | 2,074 | |||
| Cash at bank | 2,960 | 6,067 | 5,455 | |||
| 46,768 | 78,502 | 60,998 | ||||
| Creditors: amounts falling due within one year | (1,594) | (1,547) | (1,947) | |||
| Net current assets | 45,174 | 76,955 | 59,051 | |||
| Net assets | 122,252 | 155,341 | 130,377 | |||
| Share capital | 25,537 | 25,138 | 25,748 | |||
| Share premium | 52,729 | 48,308 | 52,162 | |||
| Special distributable reserve | 34,690 | 71,149 | 40,489 | |||
| Capital redemption reserve | 3,482 | 2,958 | 3,125 | |||
| Capital reserve realised | 10,164 | 7,714 | 9,445 | |||
| Capital reserve unrealised | (4,556) | (520) | (602) | |||
| Revenue reserve | 206 | 584 | – | |||
| Translation reserve | - | 10 | 10 | |||
| Total equity shareholders’ funds | 122,252 | 155,341 | 130,377 | |||
| Net Asset Value per share | 47.9p | 62.2p | 50.6p | |||
The statements were approved by the Directors and authorised for issue on 21 September 2018 and are signed on their behalf by:
Murray Steele
Chairman
Company Number: 05840377
Statement of Changes in Equity
| Share Capital £’000 | Share Premium £’000 | Special distributable reserves £’000 | Capital Redemption Reserve £’000 | Capital reserve realised £’000 | Capital reserve unrealised £’000 | Revenue reserve £’000 | Translation reserve £’000 | Total £’000 | |
| Six months to 31 July 2018 | |||||||||
| As at 1 February 2018 | 25,748 | 52,162 | 40,489 | 3,125 | 9,445 | (602) | – | 10 | 130,377 |
| Comprehensive income for the period: | |||||||||
| Management fee allocated as capital expenditure | – | – | – | – | (929) | – | – | – | (929) |
| Current period gains on disposal | – | – | – | – | 883 | – | – | – | 883 |
| Current period losses on fair value of investments | – | – | – | – | – | (3,199) | – | – | (3,199) |
| Profit on ordinary activities after tax | – | – | – | – | – | – | 206 | – | 206 |
| Total comprehensive income for the period | – | – | – | – | (46) | (3,199) | 206 | – | (3,039) |
| Contributions by and distributions to owners: | |||||||||
| Repurchase and cancellation of own shares | (357) | – | (1,706) | 357 | – | – | – | – | (1,706) |
| Issue of shares | 146 | 567 | – | – | – | – | – | – | 713 |
| Dividends paid | – | – | (4,093) | – | – | – | – | – | (4,093) |
| Total contributions by and distributions to owners | (211) | 567 | (5,799) | 357 | – | – | – | – | (5,086) |
| Other movements: | |||||||||
| Prior period holding gains/losses now realised | – | – | – | – | 765 | (755) | – | (10) | – |
| Total other movements | – | – | – | – | 765 | (755) | – | (10) | – |
| As at 31 July 2018 | 25,537 | 52,729 | 34,690 | 3,482 | 10,164 | (4,556) | 206 | – | 122,252 |
| Share Capital £’000 | Share Premium £’000 | Special distributable reserves £’000 | Capital Redemption Reserve £’000 | Capital reserve realised £’000 | Capital reserve unrealised £’000 | Revenue reserve £’000 | Translation reserve £’000 | Total £’000 | |
| Six months to 31 July 2017 | |||||||||
| As at 1 February 2017 | 22,603 | 34,231 | 76,144 | 2,832 | (1,537) | 7,520 | - | 6 | 141,799 |
| Comprehensive income for the period: | |||||||||
| Management fee allocated as capital expenditure | – | – | – | – | (1,406) | – | – | – | (1,406) |
| Current period gains on disposal | – | – | – | – | 3,701 | – | – | – | 3,701 |
| Current period losses on fair value of investments | – | – | – | – | – | (1,084) | – | – | (1,084) |
| Current period currency gains | – | – | – | – | – | – | – | 4 | 4 |
| Profit on ordinary activities after tax | – | – | – | – | – | – | 584 | – | 584 |
| Total comprehensive income for the period | – | – | – | – | 2,295 | (1,084) | 584 | 4 | 1,799 |
| Contributions by and distributions to owners: | |||||||||
| Repurchase and cancellation of own shares | (126) | – | (754) | 126 | – | – | – | – | (754) |
| Issue of shares | 2,661 | 14,077 | – | – | – | – | – | – | 16,738 |
| Dividends paid | – | – | (4,241) | – | – | – | – | – | (4,241) |
| Total contributions by and distributions to owners | 2,535 | 14,077 | (4,995) | 126 | – | – | – | – | 11,743 |
| Other movements: | |||||||||
| Prior period holding gains/losses now realised | – | – | – | – | 6,956 | (6,956) | – | – | – |
| Total other movements | – | – | – | – | 6,956 | (6,956) | – | – | – |
| As at 31 July 2017 | 25,138 | 48,308 | 71,149 | 2,958 | 7,714 | (520) | 584 | 10 | 155,341 |
| Share Capital £’000 | Share Premium £’000 | Special distributable reserves £’000 | Capital Redemption Reserve £’000 | Capital reserve realised £’000 | Capital reserve unrealised £’000 | Revenue reserve £’000 | Translation reserve £’000 | Total £’000 | |
| Year to 31 January 2018 | |||||||||
| As at 1 February 2017 | 22,603 | 34,231 | 76,144 | 2,832 | (1,537) | 7,520 | - | 6 | 141,799 |
| Comprehensive income for the year: | |||||||||
| Management fee allocated as capital expenditure | – | – | – | – | (2,858) | – | – | – | (2,858) |
| Current year gains on disposal | – | – | – | – | 4,186 | – | – | – | 4,186 |
| Current year gains on fair value of investments | – | – | – | – | – | 1,532 | – | – | 1,532 |
| Current year currency gains | – | – | – | – | – | – | – | 4 | 4 |
| Profit on ordinary activities after tax | – | – | – | – | – | – | 835 | – | 835 |
| Total comprehensive income for the year | – | – | – | – | 1,328 | 1,532 | 835 | 4 | 3,699 |
| Contributions by and distributions to owners: | |||||||||
| Repurchase and cancellation of own shares | (293) | – | (1,639) | 293 | – | – | – | – | (1,639) |
| Issue of shares | 3,594 | 17,931 | – | – | – | – | – | – | 21,525 |
| Dividends paid | – | – | (34,172) | – | – | – | (835) | – | (35,007) |
| Total contributions by and distributions to owners | 3,301 | 17,931 | (35,811) | 293 | – | – | (835) | – | (15,121) |
| Other movements: | |||||||||
| Prior year holding gains/losses now realised | – | – | – | – | 9,654 | (9,654) | – | – | – |
| Cancellation of Deferred Shares – D shares | (156) | – | 156 | – | – | – | – | – | – |
| Total other movements | (156) | - | 156 | – | 9,654 | (9,654) | – | – | – |
| As at 31 January 2018 | 25,748 | 52,162 | 40,489 | 3,125 | 9,445 | (602) | – | 10 | 130,377 |
Cash Flow Statement
| Unaudited Six months to 31 July 2018 £’000 | Unaudited Six months to 31 July 2017 £’000 | Audited Year to 31 January 2018 £’000 | |
| Cash flows from operating activities: | |||
| (Loss)/Return on ordinary activities after tax | (3,038) | 1,799 | 3,699 |
| Adjustments for: | |||
| (Increase)/decrease in debtors | (233) | 1,832 | 2,003 |
| Decrease in creditors | (353) | (2,844) | (2,444) |
| Gain on disposal of fixed assets | (889) | (3,701) | (4,186) |
| Loss/(Gain) on revaluation of fixed asset investments | 3,236 | 1,274 | (1,063) |
| Loss on disposal of current assets | 6 | – | – |
| Gain on revaluation of current asset investments | (38) | (190) | (469) |
| Cash from operations | (1,309) | (1,830) | (2,460) |
| Cash flows from investing activities: | |||
| Purchase of fixed asset investments | (10,176) | (1,348) | (2,051) |
| Purchase of current asset investments | – | (72,000) | (53,000) |
| Sale of fixed asset investments | 2,076 | 38,273 | 48,858 |
| Sale of current asset investments | 12,000 | 2,000 | – |
| Net cash flows from investing activities | 3,900 | (33,075) | (6,193) |
| Cash flows from financing activities: | |||
| Purchase of own shares | (1,706) | (754) | (1,639) |
| Share issues | – | 16,738 | 21,525 |
| Dividends Paid | (3,380) | (4,241) | (35,007) |
| Net cash flows from financing activities | (5,086) | 11,743 | (15,121) |
| Decrease in cash and cash equivalents | (2,495) | (23,162) | (23,774) |
| Opening cash and cash equivalents | 5,455 | 29,229 | 29,229 |
| Closing cash and cash equivalents | 2,960 | 6,067 | 5,455 |
Notes to the Half-Yearly Report
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 31 July 2018 have been prepared in accordance with the Financial Reporting Council’s (FRC) Financial Reporting Standard 104 “Interim Financial Reporting” (March 2018) and the Statement of Recommended Practice for Investment Companies, re-issued by the Association of Investment Companies in February 2018.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 31 July 2018 do not constitute Statutory Accounts within the meaning of s.415 of the Companies Act 2006. The comparative figures for the year ended 31 January 2018 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The independent auditor’s report on those financial statements, in accordance with chapter 3 of 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 earnings per share is based on 256,759,529 shares, being the weighted average number of shares in issue during the period (31 January 2018: 248,105,555; 31 July 2017: 243,295,650).
There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are therefore identical.
4. Net asset value per share
| 31 July 2018 | 31 July 2017 | 31 January 2018 | |
| Net Assets (£) | 122,252,000 | 155,341,000 | 130,377,000 |
| Shares in Issue | 255,369,857 | 249,818,756 | 257,483,600 |
| Net Asset Value per share (p) | 47.9 | 62.2 | 50.6 |
5. Dividends
A final dividend, for the year ended 31 January 2018, of 1.6p per share was paid on 27 July 2018 to shareholders on the register on 29 June 2018.
The interim dividend of 1.5p per share for the six months ending 31 July 2018 will be paid on 14 December 2018, to those shareholders on the register on 23 November 2018.
6. Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company are described in detail within the strategic report in the Company’s annual report for the year ended 31 January 2018.
The principal risks include loss of VCT status, investment risk, valuation risk, financial risk, internal control risk and price risk.
7. Related Party Transactions
Octopus 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.
The Company has incurred management fees of £1,239,000 during the period to 31 July 2018 (31 July 2017: £1,494,000; 31 January 2018: £2,895,000).
No performance fee has been incurred during the period to 31 July 2018 (31 July 2017: £253,000; 31 January 2018: £687,000).
Octopus also 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 £20,000 per annum for company secretarial services.
The Company currently holds £41.5 million of investments in Octopus managed funds, being the Octopus Portfolio Manager funds. To ensure the Company is not double charged management fees on these products, the Company receives a reduction in the management fee as a percentage of the value of these investments.
8. Other Information
A version of this statement will be made available to all shareholders. Copies will also be available from the registered office of the Company at 33 Holborn, London, EC1N 2HT, and will also be available to view on the Investment Manager’s website at
www.octopusinvestments.com.